SEGMENT REPORTING

Aptiv operates its core business along the following operating segments, which are grouped on the basis of similar product, market and operating factors:


•	Signal and Power Solutions (formerly known as Electrical/Electronic Architecture), which includes complete electrical architecture and component products.


•	Advanced Safety and User Experience (formerly known as Electronics and Safety), which includes component and systems integration expertise in infotainment and connectivity, body controls and security systems, displays, passive and active safety electronics, autonomous driving software and technologies, as well as advanced development of software.


•	Eliminations and Other, which includes i) the elimination of inter-segment transactions, and ii) certain other expenses and income of a non-operating or strategic nature.

The accounting policies of the segments are the same as those described in Note 2. Significant Accounting Policies, except that the disaggregated financial results for the segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for which Aptiv’s chief operating decision maker regularly reviews financial results to assess performance of, and make internal operating decisions about allocating resources to, the segments.

Generally, Aptiv evaluates segment performance based on stand-alone segment net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments, gains (losses) on business divestitures and deferred compensation related to acquisitions (“Adjusted Operating Income”) and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Aptiv’s management utilizes Adjusted Operating Income as the key performance measure of segment income or loss to evaluate segment performance, and for planning and forecasting purposes to allocate resources to the segments, as management believes this measure is most reflective of the operational profitability or loss of Aptiv's operating segments. Segment Adjusted Operating Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Aptiv, which is the most directly comparable financial measure to Adjusted Operating Income that is prepared in accordance with U.S. GAAP. Segment Adjusted Operating Income, as determined and measured by Aptiv, should also not be compared to similarly titled measures reported by other companies.

As described in Note 25. Discontinued Operations, the Company's previously reported Powertrain Systems and Thermal Systems segments have been classified as discontinued operations for all periods presented. Discontinued operations also includes the Company's thermal original equipment service business, the results of which were previously reported within the Powertrain Systems segment. Certain operations, primarily related to contract manufacturing services, which were previously included within the Thermal Systems reporting segment but which were not included in the scope of the divestiture, and certain original equipment service businesses that were previously included within the Powertrain Systems segment but which was not included in the spin-off, are reported in continuing operations and have been reclassified within the Advanced Safety and User Experience and Signal and Power Solutions segments for all periods presented. Amounts for shared general and administrative operating expenses that were allocated to the Powertrain Systems and Thermal Systems segments in prior periods have been re-allocated to the Company's reportable operating segments. No amounts for shared general and administrative operating expense or interest expense were allocated to discontinued operations.

Included below are sales and operating data for Aptiv’s segments for the years ended December 31, 2017, 2016 and 2015, as well as balance sheet data as of December 31, 2017 and 2016.



	Signal and Power Solutions		Advanced Safety and User Experience		Eliminations and Other (1)			Total
	(in millions)
For the Year Ended December 31, 2017:
Net sales	$	9,507	$	3,446	$	(69	)	$	12,884
Depreciation and amortization	$	438	$	108	$	—		$	546
Adjusted operating income	$	1,302	$	292	$	—		$	1,594
Operating income (2)	$	1,206	$	210	$	—		$	1,416
Equity income, net of tax	$	31	$	—	$	—		$	31
Net income attributable to noncontrolling interest	$	42	$	—	$	—		$	42
Capital expenditures	$	477	$	196	$	25		$	698



	Signal and Power Solutions		Advanced Safety and User Experience		Eliminations and Other (1)			Total
	(in millions)
For the Year Ended December 31, 2016:
Net sales	$	9,319	$	3,024	$	(69	)	$	12,274
Depreciation and amortization	$	401	$	88	$	—		$	489
Adjusted operating income	$	1,272	$	351	$	—		$	1,623
Operating income (3)	$	1,099	$	440	$	—		$	1,539
Equity income, net of tax	$	35	$	—	$	—		$	35
Net income attributable to noncontrolling interest	$	34	$	—	$	—		$	34
Capital expenditures	$	458	$	131	$	68		$	657



	Signal and Power Solutions		Advanced Safety and User Experience		Eliminations and Other (1)			Total
	(in millions)
For the Year Ended December 31, 2015:
Net sales	$	8,183	$	2,756	$	(75	)	$	10,864
Depreciation and amortization	$	276	$	68	$	—		$	344
Adjusted operating income	$	1,013	$	347	$	—		$	1,360
Operating income (4)	$	924	$	311	$	—		$	1,235
Equity income, net of tax	$	16	$	—	$	—		$	16
Net income attributable to noncontrolling interest	$	39	$	—	$	—		$	39
Capital expenditures	$	353	$	102	$	48		$	503


(1)	Eliminations and Other includes the elimination of inter-segment transactions. Capital expenditures amounts are attributable to corporate administrative and support functions, including corporate headquarters and certain technical centers.


(2)	Includes charges recorded in 2017 related to costs associated with employee termination benefits and other exit costs of $67 million for Signal and Power Solutions and $62 million for Advanced Safety and User Experience.


(3)	Includes a pre-tax gain of $141 million from the divestiture of the Advanced Safety and User Experience Mechatronics business, as well as charges recorded in 2016 related to costs associated with employee termination benefits and other exit costs of $125 million for Signal and Power Solutions and $42 million for Advanced Safety and User Experience.


(4)	Includes charges recorded in 2015 related to costs associated with employee termination benefits and other exit costs of $39 million for Signal and Power Solutions and $26 million for Advanced Safety and User Experience.



	Signal and Power Solutions		Advanced Safety and User Experience		Eliminations and Other (1)			Total
	(in millions)
Balance as of December 31, 2017:
Investment in affiliates	$	91	$	—	$	—		$	91
Goodwill	$	1,594	$	350	$	—		$	1,944
Total segment assets	$	9,833	$	4,225	$	(1,889	)	$	12,169
Balance as of December 31, 2016:
Investment in affiliates	$	67	$	—	$	—		$	67
Goodwill	$	1,424	$	78	$	—		$	1,502
Total segment assets	$	8,458	$	2,327	$	1,507		$	12,292


(1)	Eliminations and Other includes the elimination of inter-segment transactions, and includes assets of discontinued operations of $2,941 million as of December 31, 2016.

The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, restructuring, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments, gains (losses) on business divestitures and deferred compensation related to acquisitions. The reconciliation of Adjusted Operating Income to net income attributable to Aptiv for the years ended December 31, 2017, 2016 and 2015 are as follows:



	Signal and Power Solutions			Advanced Safety and User Experience			Eliminations and Other		Total
	(in millions)
For the Year Ended December 31, 2017:
Adjusted operating income	$	1,302		$	292		$	—	$	1,594
Restructuring	(67		)	(62		)	—		(129		)
Other acquisition and portfolio project costs	(21		)	(7		)	—		(28		)
Asset impairments	(8		)	(1		)	—		(9		)
Deferred compensation related to nuTonomy acquisition	—			(12		)	—		(12		)
Operating income	$	1,206		$	210		$	—	1,416
Interest expense									(140		)
Other expense, net									(21		)
Income from continuing operations before income taxes and equity income									1,255
Income tax expense									(223		)
Equity income, net of tax									31
Income from continuing operations									1,063
Income from discontinued operations, net of tax									365
Net income									1,428
Net income attributable to noncontrolling interest									73
Net income attributable to Aptiv									$	1,355



	Signal and Power Solutions			Advanced Safety and User Experience			Eliminations and Other		Total
	(in millions)
For the Year Ended December 31, 2016:
Adjusted operating income	$	1,272		$	351		$	—	$	1,623
Restructuring	(125		)	(42		)	—		(167		)
Other acquisition and portfolio project costs	(48		)	(9		)	—		(57		)
Asset impairments	—			(1		)	—		(1		)
Gain (loss) on business divestitures, net	—			141			—		141
Operating income	$	1,099		$	440		$	—	1,539
Interest expense									(155		)
Other expense, net									(384		)
Income from continuing operations before income taxes and equity income									1,000
Income tax expense									(167		)
Equity income, net of tax									35
Income from continuing operations									868
Income from discontinued operations, net of tax									458
Net income									1,326
Net income attributable to noncontrolling interest									69
Net income attributable to Aptiv									$	1,257



	Signal and Power Solutions			Advanced Safety and User Experience			Eliminations and Other		Total
	(in millions)
For the Year Ended December 31, 2015:
Adjusted operating income	$	1,013		$	347		$	—	$	1,360
Restructuring	(39		)	(26		)	—		(65		)
Other acquisition and portfolio project costs	(32		)	(13		)	—		(45		)
Asset impairments	(4		)	(3		)	—		(7		)
Gain (loss) on business divestitures, net	(14		)	6			—		(8		)
Operating income	$	924		$	311		$	—	1,235
Interest expense									(124		)
Other expense, net									(114		)
Income from continuing operations before income taxes and equity income									997
Income tax expense									(161		)
Equity income, net of tax									16
Income from continuing operations									852
Income from discontinued operations, net of tax									683
Net income									1,535
Net income attributable to noncontrolling interest									85
Net income attributable to Aptiv									$	1,450

Information concerning principal geographic areas is set forth below. Net sales data reflects the manufacturing location and is for the years ended December 31, 2017, 2016 and 2015. Net property data is as of December 31, 2017, 2016 and 2015.



	Year Ended December 31, 2017				Year Ended December 31, 2016				Year Ended December 31, 2015
	Net Sales		Net Property (1)		Net Sales		Net Property (1)		Net Sales		Net Property (1)
	(in millions)
United States (2)	$	4,652	$	839	$	4,800	$	733	$	4,472	$	676
Other North America	171		185		137		150		139		127
Europe, Middle East & Africa (3)	4,235		1,029		3,905		821		3,216		764
Asia Pacific (4)	3,544		698		3,212		573		2,803		522
South America	282		53		220		48		234		37
Total	$	12,884	$	2,804	$	12,274	$	2,325	$	10,864	$	2,126


(1)	Net property data represents property, plant and equipment, net of accumulated depreciation.


(2)	Includes net sales and machinery, equipment and tooling that relate to the Company's maquiladora operations located in Mexico. These assets are utilized to produce products sold to customers located in the United States.

(3)

Includes Aptiv’s country of domicile, Jersey, and the country of Aptiv’s principal executive offices, the United Kingdom. The Company had no sales in Jersey in any period. The Company had net sales of $157 million, $153 million, and $106 million in the United Kingdom for the years ended December 31, 2017, 2016 and 2015, respectively. The Company had net property in the United Kingdom of $91 million, $84 million, and $88 million as of December 31, 2017, 2016 and 2015, respectively. The largest portion of net sales in the Europe, Middle East & Africa region was $1,191 million, $944 million and $677 million in Germany for the years ended December 31, 2017, 2016 and 2015, respectively.


(4)	Net sales and net property in Asia Pacific are primarily attributable to China.