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Document

Joseph R. Massaro

Vice Chairman, Business Operations and Chief Financial Officer

May 13, 2024

VIA EDGAR

Eiko Yaoita Pyles

Andrew Blume

Division of Corporation Finance

Office of Manufacturing

United States Securities and Exchange Commission

Washington, D.C. 20549

Re:       Aptiv PLC

Form 10-K for the Year Ended December 31, 2023

Filed February 6, 2024

Form 8-K Furnished January 31, 2024

File No. 001-35346

Dear Staff:

This letter is in response to the comment letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC” or the “Commission”) on the above-referenced filings of Aptiv PLC (“Aptiv” or the “Company”) made in your letter dated May 1, 2024. Set forth below are the Staff’s comments in italics, followed in each case by the response of the Company.

Form 10-K for the Fiscal Year Ended December 31, 2023

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Adjusted Operating Income by Segment, page 46

1.Although we note that “Adjusted Operating Income” at the segment level represents a required ASC 280 measure, please note that the measure on a total combined basis represents a non-GAAP measure. See Question 104.04 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures (“Non-GAAP C&DI’s”). Accordingly, if you continue to present such measure outside of your consolidated financial statements, please label it as a non-GAAP financial measure and ensure that your presentation and disclosures fully comply with non-GAAP rules, including Item 10(e) of Regulation S-K and the Non-GAAP C&DI’s.

The Company acknowledges the Staff’s comment. We will revise our future filings to clearly label Adjusted Operating Income on a total basis as a non-GAAP financial measure if we continue to present it outside of our

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Tel: 353.1.259.7206     E-mail:  joseph.massaro@aptiv.com

consolidated financial statements, and will ensure any such presentation of the measure complies with Item 10(e) of Regulation S-K and the non-GAAP C&DI’s.

Notes to Consolidated Financial Statements

2. Significant Accounting Policies, Revenue Recognition, page 71

2. Please address the following comments related to your revenue recognition policies and disclosures:

•Tell us and revise your disclosures to clarify the specific nature of your performance obligations and to provide information about the methods, inputs, and assumptions used to determine transaction price, including estimating variable consideration and assessing whether an estimate of variable consideration is constrained, and, if applicable, the methods used to allocate transaction price to your performance obligations. See ASC 606-10-50-12, -50-17, and -50-20.

We respectfully advise the Staff that Aptiv’s performance obligations are discussed in greater detail in Note 24. Revenue in our Form 10-K for the year ended December 31, 2023, including disclosure of the nature of the Company’s goods and services provided in accordance with the requirements of ASC 606-10-50-12. For convenience, we have excerpted below relevant disclosures related to our performance obligations from Note 24. Revenue within our financial statements for the year ended December 31, 2023:

Nature of Goods and Services

The principal activity from which the Company generates its revenue is the manufacturing of production parts for OEM customers. Aptiv recognizes revenue for production parts at a point in time, rather than over time, as the performance obligation is satisfied when customers obtain control of the product upon title transfer and not as the product is manufactured or developed.

Although production parts are highly customized with no alternative use, Aptiv does not have an enforceable right to payment as customers have the right to cancel a product program without a notification period. The amount of revenue recognized is based on the purchase order price and adjusted for revenue allocated to variable consideration (i.e., estimated rebates and price discounts), as applicable. Customers typically pay for production parts based on customary business practices with payment terms averaging 60 days.

The Company also generates revenue from the sale of software licenses, post delivery support and maintenance and professional software services, primarily from Wind River, which the Company acquired in December 2022. Refer to Note 20. Acquisitions and Divestitures for further information on this acquisition. The Company generally recognizes revenue for software licenses and professional software services at a point in time upon delivery or when the services are provided. Revenue from post delivery support and maintenance for software contracts is generally recognized over time on a ratable basis over the contract term. Under certain of these arrangements, timing may differ between revenue recognition and billing.

Remaining Performance Obligations

For production parts, customer contracts generally are represented by a combination of a current purchase order and a current production schedule issued by the customer. There are no contracts for production parts outstanding beyond one year. Aptiv does not enter into fixed long-term supply agreements.

As permitted, Aptiv does not disclose information about remaining performance obligations that have original expected durations of one year or less for production parts.

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Customer contracts for sales of software and related services are generally represented by a sales contract or purchase order with contract durations typically ranging from one to three years. Remaining performance obligations include contract liabilities and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligation is based on the standalone selling price. The value of the transaction price allocated to remaining performance obligations under software and related service contracts as of December 31, 2023 was approximately $217 million. The Company expects to recognize approximately 55% of remaining performance obligations as revenue in the next twelve months, and the remainder thereafter.

With regard to the determination of transaction price, including any variable consideration, the Company determines the transaction price as the amount of consideration to which Aptiv is expected to be entitled to in exchange for transferring promised goods and services to a customer. The consideration may include fixed amounts, variable amounts, or both. Fixed amounts are determined per the contract and/or customer purchase order. Variable consideration, including rebates and price reductions, is determined based on the specific terms and conditions of the agreement with the customer.

In most instances, there is no estimate required to determine the amount of consideration, as all information required is known at the time revenue is recorded. As also described in our below response to the subsequent Staff comment, in limited instances not all inputs and/or assumptions are available at the time revenue is recorded, and in such cases the Company records revenue based on the most likely amount in accordance with ASC 606-10-32-8(b), with any variable consideration to be adjusted, if necessary, when final information becomes available. Inputs and/or assumptions vary depending on the type of variable consideration present in the contract, with the most common inputs including the quantity of products sold by the Company and any contracted or offered per-part discount amounts, volume discount amounts or contractual rebate amounts. As described in our response to the following Staff comment, Aptiv also assesses the likelihood that the estimated variable consideration will be reversed in accordance with ASC 606-10-32-11. Based on Aptiv’s historical experience with each customer, our estimates of price reductions are generally in-line with the ultimate negotiated amount. Consequently, the variable consideration is not constrained.

With regard to the allocation of transaction price, as described in Note 24. Revenue, the Company generates most of its revenue from the sale of production parts to Original Equipment Manufacturer (“OEM”) customers. The Company’s contracts for the sale of these production parts do not contain multiple performance obligations and as such, there is no allocation of transaction price to be made. For the year ended December 31, 2023 approximately 98% of the Company’s revenue was generated from the sale of such production parts.

Also as described in Note 24. Revenue, the Company generates revenues from the sale of software licenses, and in certain cases post-delivery support and maintenance and professional software services, primarily from our acquisition of Wind River Systems, Inc. in December 2022. Revenue recognized from sales of these items in total represented approximately 2% of the Company’s revenue for the year ended December 31, 2023.

In certain cases, the Company’s software license contracts include multiple performance obligations, for which the Company allocates the transaction price to each distinct performance obligation and recognizes revenue when, or as, each performance obligation is satisfied. The Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. The Company’s standalone selling prices are generally determined using observable inputs, such as prices of standalone sales and historical contract pricing.

The Company will expand its disclosures in future filings to more clearly describe the specific nature of our performance obligations and to provide additional information as described above. Set forth below is the Company’s proposed revised disclosure based on the prior disclosure included in Note 2. Significant

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Accounting Policies of the Form 10-K for the year ended December 31, 2023, with the proposed additional disclosure underlined:

Revenue recognition—Revenue is measured based on consideration specified in a contract with a customer. Customer contracts for production parts generally are represented by a combination of a current purchase order and a current production schedule issued by the customer. Substantially all of the Company's revenue is generated from the sale of manufactured production parts, wherein there is a single performance obligation. Transfer of control and revenue recognition for the Company’s sales of production parts generally occurs upon shipment or delivery of the product, which is when title, ownership, and risk of loss pass to the customer and is based on the applicable customer shipping terms. Revenue is measured based on the transaction price and the quantity of parts specified in a contract with a customer. Refer to Note 24. Revenue for further detail of the Company’s accounting for its revenue from sales of production parts.

Customer contracts for software licenses are generally represented by a sales contract or purchase order

with contract durations typically ranging from one to three years. The Company recognizes revenue when         it satisfies a performance obligation by transferring control over a product or service to a customer. Revenue from software licenses and professional software services is generally recognized at a point in time upon delivery or when the services are provided. Revenue from post delivery support and maintenance for software contracts is generally recognized over time on a ratable basis over the contract term. Certain software license contracts contain multiple performance obligations, for which the Company allocates the contract’s transaction price to each performance obligation based on the estimated relative standalone selling price of each distinct performance obligation in the contract. The standalone selling prices are generally determined based on observable inputs, such as the prices of standalone sales and historical contract pricing. Under certain of these arrangements, timing may differ between revenue recognition and billing. Refer to Note 24. Revenue for further detail of the Company’s accounting for its revenue from contracts with customers, including contract balances associated with software sales.

From time to time, Aptiv enters into pricing agreements with its customers that provide for price reductions on production parts, some of which are conditional upon achieving certain joint cost saving targets, which are accounted for as variable consideration. In these instances, revenue is recognized based on the agreed-upon price at the time of shipment if available, or in the event the Company concludes that a portion of the revenue for a given part may vary from the purchase order and requires estimation, the Company records consideration at the most likely amount that the Company expects to be entitled to based on historical experience and input from customer negotiations.

•We note that you recognize revenue “based on the agreed-upon price at the time of shipment” for agreements with customers “that provide for price reductions, some of which are conditional upon achieving certain joint cost saving targets.” Clarify what you mean by this disclosure and, in doing so, explain if the agreed-upon price is final or potentially subject to further adjustment.

We respectfully advise the Staff that this disclosure regarding price reductions refers to the practice wherein, as part of the award of a new program from a customer, in certain cases Aptiv agrees to provide annual per-part price reductions (“APR”) to the customer over the life of the program. The offer of annual price reductions in conjunction with a new business award is customary in the automotive industry. Although a customer program award letter outlines several aspects of a product program, including expected annual price reductions, the award letter itself is not legally binding and does not constitute a contract.

The offer of the APR at the time of program award is not binding. The actual price reduction ultimately agreed can vary from the targets or the price reductions that were originally offered as part of the program award due

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to a number of factors, including changes in volumes or costs. APR’s may be negotiated based on combined cost reduction targets, and may be subject to prolonged negotiations with the customer.

Aptiv and its customers negotiate pricing on an annual basis during an active program, and accordingly, in most cases Aptiv sells its products to customers at fixed, agreed-upon prices. To the extent an APR has been agreed to with the customer for a given year, the transaction price for our performance obligation is final and not subject to further adjustment.

In certain instances, APR negotiations with the customer remain on-going even after a purchase order is received and Aptiv ships production parts to the customer. In such instances, the transaction price is not final. Aptiv accounts for these transactions pursuant to the variable consideration guidance in ASC 606-10-32-5, and estimates the variable consideration using the “the most likely amount” as defined by ASC 606-10-32-8 and, in accordance with 606-10-32-9, applies this method consistently. As described above in our response to the preceding Staff comment, Aptiv also assesses the likelihood that the estimated variable consideration will be reversed in accordance with ASC 606-10-32-11. Based on Aptiv’s historical experience with each customer, our estimates of price reductions are generally in-line with the ultimate negotiated amount.

•We note your disclosure that certain payments to customers “meet the criteria to be considered a cost to obtain a contract.” Tell us how your accounting policy complies with ASC 606-10-32-25. In doing so, clarify if you receive a distinct good or servi