Company: APTV
Filing Date: 2025-02-07
Form Type: 10-K
Source: 0001521332-25-000010
Chunk: 232

Company: Aptiv PLC
Filing Date: 2025-02-07
Form: 10-K
Item: Item 8
Chunk 232
---
, which typically range from three to five years. There have been no impairment losses in relation to the costs capitalized. The amount of amortization to net sales was $17 million, $27 million and $28 million for the years ended December 31, 2024, 2023 and 2022, respectively.

25. LEASES

Lease PortfolioThe Company has operating and finance leases for real estate, office equipment, automobiles, forklifts and certain other equipment. The Company's leases have remaining lease terms of one year to 25 years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one year. Certain of our lease agreements include rental payments which are adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. The incremental borrowing rate is not a quoted rate and is primarily derived by applying a spread over U.S. Treasury rates with a similar duration to the Company’s lease payments. The spread utilized is based on the Company’s credit rating and the impact of full collateralization.Related Party Lease AgreementAptiv subleases certain office space to Motional, our autonomous driving joint venture, which has a remaining lease term of approximately four years as of December 31, 2024. Total income under the agreement was $3 million, $4 million and $4 million during the years ended December 31, 2024, 2023 and 2022, respectively. The sublease income and Aptiv’s associated operating lease cost are recorded to cost of sales in the consolidated statements of operations. The Company believes the terms of the lease agreement have not significantly been affected by the fact the Company and the lessee are related parties.The components of lease expense were as follows:Year Ended December 31,202420232022 (in millions)Lease cost:Finance lease cost:Amortization of right-of-use assets$4 $5 $4 Interest on lease liabilities1 1 1 Total finance lease cost5 6 5 Operating lease cost150 142 122 Short-term lease cost9 17 14 Variable lease cost22 3