Aptiv is exposed to market risk, such as fluctuations in foreign currency exchange rates, commodity prices and changes in interest rates, which may result in cash flow risks. To manage the volatility relating to these exposures, Aptiv aggregates the exposures on a consolidated basis to take advantage of natural offsets. For exposures that are not offset within its operations, Aptiv enters into various derivative transactions pursuant to its risk management policies, which prohibit holding or issuing derivative financial instruments for speculative purposes, and designation of derivative instruments is performed on a transaction basis to support hedge accounting. The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the fair value or cash flows of the underlying exposures being hedged. Aptiv assesses the initial and ongoing effectiveness of its hedging relationships in accordance with its documented policy.

As of September 30, 2022, the Company had the following outstanding notional amounts related to commodity and foreign currency forward and option contracts designated as cash flow hedges that were entered into to hedge forecasted exposures:

Commodity

Quantity Hedged

Unit of Measure

Notional Amount
(Approximate USD Equivalent)

(in thousands)

(in millions)

Copper

118,494

pounds

415


Foreign Currency	Quantity Hedged	Unit of Measure	Notional Amount (Approximate USD Equivalent)

	(in millions)
Mexican Peso	14,478	MXN	$	720
Chinese Yuan Renminbi	2,574	RMB	360
Euro	122	EUR	120
Polish Zloty	664	PLN	135

Hungarian Forint	23,895	HUF	55

Gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated OCI, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated OCI will fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. Net losses on cash flow hedges included in accumulated OCI as of September 30, 2022 were $54 million (approximately $54 million, net of tax). Of this total, approximately $41 million of losses are expected to be included in cost of sales within the next 12 months and approximately $13 million of losses are expected to be included in cost of sales in subsequent periods. Cash flow hedges are discontinued when Aptiv determines it is no longer probable that the originally forecasted transactions will occur. Cash flows from derivatives used to manage commodity and foreign exchange risks designated as cash flow hedges are classified as operating activities within the consolidated statements of cash flows.

The Company is also exposed to the risk that adverse changes in foreign currency exchange rates could impact its net investment in non-U.S. subsidiaries. To manage this risk, the Company designates certain qualifying derivative and non-derivative instruments, including foreign currency forward contracts and foreign currency-denominated debt, as net investment hedges of certain non-U.S. subsidiaries. The gains or losses on instruments designated as net investment hedges are recognized within OCI to offset changes in the value of the net investment in these foreign currency-denominated operations. Gains and losses reported in accumulated OCI are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. Cash flows from derivatives designated as net investment hedges are classified as investing activities within the consolidated statements of cash flows.

The Company has entered into a series of forward contracts, each of which have been designated as net investment hedges of the foreign currency exposure of the Company’s investments in certain Chinese Yuan Renminbi (“RMB”)-denominated subsidiaries. During the nine months ended September 30, 2022 and 2021, the Company received $9 million and paid $11 million, respectively, at settlement related to this series of forward contracts which matured during the period. In September

2022, the Company entered into forward contracts with a total notional amount of 700 million RMB (approximately $100 million, using September 30, 2022 foreign currency rates), which mature in December 2022. Refer to the tables below for details of the fair value recorded in the consolidated balance sheets and the effects recorded in the consolidated statements of operations and consolidated statements of comprehensive income related to these derivative instruments.

The Company has designated the €700 million 2015 Euro-denominated Senior Notes and the €500 million 2016 Euro-denominated Senior Notes, as more fully described in Note 8. Debt, as net investment hedges of the foreign currency exposure of its investments in certain Euro-denominated subsidiaries. Due to changes in the value of the Euro-denominated debt instruments designated as net investment hedges, during the three and nine months ended September 30, 2022, $94 million and $191 million of gains, respectively, were recognized within the cumulative translation adjustment component of OCI. During the three and nine months ended September 30, 2021, $30 million and $74 million of gains, respectively, were recognized within the cumulative translation adjustment component of OCI. Included in accumulated OCI related to these net investment hedges were cumulative gains of $154 million and losses of $37 million as of September 30, 2022 and December 31, 2021, respectively.

In certain occasions the Company enters into certain foreign currency and commodity contracts that are not designated as hedges. When hedge accounting is not applied to derivative contracts, gains and losses are recorded to other income (expense), net and cost of sales in the consolidated statements of operations.

The fair value of derivative financial instruments recorded in the consolidated balance sheets as of September 30, 2022 and December 31, 2021 are as follows:


	Asset Derivatives			Liability Derivatives			Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
	Balance Sheet Location	September 30, 2022		Balance Sheet Location	September 30, 2022		September 30, 2022

	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	Other current assets	$	—	Accrued liabilities	$	55
Foreign currency derivatives*	Other current assets	29		Other current assets	9		$	20
Foreign currency derivatives*	Accrued liabilities	17		Accrued liabilities	21		(4)
Commodity derivatives	Other long-term assets	—		Other long-term liabilities	30
Foreign currency derivatives*	Other long-term assets	13		Other long-term assets	3		10
Foreign currency derivatives*	Other long-term liabilities	2		Other long-term liabilities	4		(2)


Total derivatives designated as hedges		$	61		$	122


	Asset Derivatives			Liability Derivatives			Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
	Balance Sheet Location	December 31, 2021		Balance Sheet Location	December 31, 2021		December 31, 2021

	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	Other current assets	$	27	Accrued liabilities	$	—
Foreign currency derivatives*	Other current assets	15		Other current assets	9		$	6
Foreign currency derivatives*	Accrued liabilities	5		Accrued liabilities	16		(11)
Commodity derivatives	Other long-term assets	2		Other long-term liabilities	—
Foreign currency derivatives*	Other long-term assets	2		Other long-term assets	1		1
Foreign currency derivatives*	Other long-term liabilities	1		Other long-term liabilities	8		(7)
Derivatives designated as net investment hedges:
Foreign currency derivatives	Other current assets	—		Accrued liabilities	1
Total derivatives designated as hedges		$	52		$	35

Derivatives not designated:
Commodity derivatives	Other current assets	$	5	Accrued liabilities	$	—

Foreign currency derivatives*	Accrued liabilities	—		Accrued liabilities	1		(1)



Total derivatives not designated as hedges		$	5		$	1

* Derivative instruments within this category are subject to master netting arrangements and are presented on a net basis in the consolidated balance sheets in accordance with accounting guidance related to the offsetting of amounts related to certain contracts.


Three Months Ended September 30, 2022	(Loss) Gain Recognized in OCI		(Loss) Gain Reclassified from OCI into Income

	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	(40)	$	(13)
Foreign currency derivatives	23		7
Derivatives designated as net investment hedges:
Foreign currency derivatives	6		—
Total	$	(11)	$	(6)


Three Months Ended September 30, 2021	Loss Recognized in OCI		Gain Reclassified from OCI into Income

	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	(16)	$	15
Foreign currency derivatives	(24)		3
Derivatives designated as net investment hedges:
Foreign currency derivatives	(4)		—
Total	$	(44)	$	18


Nine Months Ended September 30, 2022	(Loss) Gain Recognized in OCI		Gain Reclassified from OCI into Income

	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	(108)	$	7
Foreign currency derivatives	48		10
Derivatives designated as net investment hedges:
Foreign currency derivatives	10		—
Total	$	(50)	$	17


Nine Months Ended September 30, 2021	Gain (Loss) Recognized in OCI		Gain Reclassified from OCI into Income

	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	35	$	54
Foreign currency derivatives	(31)		3
Derivatives designated as net investment hedges:
Foreign currency derivatives	(11)		—
Total	$	(7)	$	57

The gain or loss recognized in income for designated and non-designated derivative instruments was recorded to cost of sales and other income (expense), net in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, respectively.