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 December 31, 2021, 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:


Foreign Currency	Quantity Hedged	Unit of Measure	Notional Amount (Approximate USD Equivalent)
	(in millions)
Mexican Peso	21,122	MXN	$	1,030
Chinese Yuan Renminbi	2,709	RMB	425
Euro	107	EUR	120
Polish Zloty	571	PLN	140

Hungarian Forint	17,594	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 gains on cash flow hedges included in accumulated OCI as of December 31, 2021 were $22 million (approximately $22 million, net of tax). Of this total, approximately $26 million of gains are expected to be included in cost of sales within the next 12 months and approximately $4 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 years ended December 31, 2021, 2020 and 2019, the Company made net payments of $17 million, $1 million and zero, respectively, at settlement related to these series of forward contracts which matured throughout each respective year. In December 2021, the Company entered into forward contracts with a total notional amount of 1.4 billion RMB (approximately $215 million, using December 31, 2021 foreign currency rates), which mature in March 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 11. 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 years ended December 31, 2021 and 2020, $116 million of gains and $132 million of losses, respectively, were recognized within the cumulative translation adjustment component of OCI. Included in accumulated OCI related to these net investment hedges were cumulative losses of $37 million as of December 31, 2021 and $153 million as of December 31, 2020.

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.


	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


	Asset Derivatives			Liability Derivatives			Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
	Balance Sheet Location	December 31, 2020		Balance Sheet Location	December 31, 2020		December 31, 2020
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	Other current assets	$	26	Accrued liabilities	$	—
Foreign currency derivatives*	Other current assets	24		Other current assets	5		$	19
Foreign currency derivatives*	Accrued liabilities	7		Accrued liabilities	13		(6)
Commodity derivatives	Other long-term assets	9		Other long-term liabilities	—
Foreign currency derivatives*	Other long-term assets	17		Other long-term assets	4		13
Foreign currency derivatives*	Other long-term liabilities	—		Other long-term liabilities	1		(1)
Derivatives designated as net investment hedges:
Foreign currency derivatives	Other current assets	—		Accrued liabilities	2
Total derivatives designated as hedges		$	83		$	25

Derivatives not designated:

Foreign currency derivatives*	Other current assets	$	3	Other current assets	$	—	3




Total derivatives not designated as hedges		$	3		$	—

* 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.


Year Ended December 31, 2021	Gain (Loss) Recognized in OCI		Gain (Loss) Reclassified from OCI into Income
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	60	$	68
Foreign currency derivatives	(35)		(3)
Derivatives designated as net investment hedges:
Foreign currency derivatives	(17)		—
Total	$	8	$	65


Year Ended December 31, 2020	Gain (Loss) Recognized in OCI		Loss Reclassified from OCI into Income
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	31	$	(7)
Foreign currency derivatives	(23)		(14)
Derivatives designated as net investment hedges:
Foreign currency derivatives	(2)		—
Total	$	6	$	(21)


Year Ended December 31, 2019	Gain (Loss) Recognized in OCI		(Loss) Gain Reclassified from OCI into Income
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	7	$	(15)
Foreign currency derivatives	44		9
Derivatives designated as net investment hedges:
Foreign currency derivatives	(1)		—
Total	$	50	$	(6)

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 years ended December 31, 2021, 2020 and 2019.