Company: APTV
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001521332-25-000040
Chunk: 190

Company: Aptiv PLC
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 8
Chunk 190
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 estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the composition and timing of actual earnings compared to annual projections. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as our tax environment changes. To the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs.The Company’s income tax expense and effective tax rates for the three and six months ended June 30, 2025 and 2024 were as follows: Three Months Ended June 30,Six Months Ended June 30, 2025202420252024 (dollars in millions)Income tax expense$45 $51 $401 $127 Effective tax rate10 %5 %50 %9 %The Company’s tax rate is affected by the fact that its parent entity was an Irish resident tax payer and became a Swiss resident tax payer in December 2024, the tax rates in Switzerland, Ireland and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate is also impacted by the receipt of certain tax incentives and holidays that reduce the effective tax rate for certain subsidiaries below the statutory rate. The Company’s effective tax rate for the three and six months ended June 30, 2025 includes net discrete tax benefits of approximately $40 million and net discrete tax expense of approximately $241 million, respectively, primarily related to a change in valuation allowance on the Swiss tax incentive, as described below, partially offset by changes in other valuation allowances and changes in reserves. The Company’s effective tax rate for the three and six months ended June 30, 2024 includes net discrete tax benefits of approximately $27 million and $20 million, respectively, primarily related to a business reorganization that occurred in the second quarter of 2024. Also included as a discrete item in the effective tax rate for the three months ended June 30, 2024 is the beneficial impact of approximately 8 points resulting from the Motional AD LLC (“Motional”) funding and ownership restructuring transactions, as described further in Note 21. Investment in Affiliates. There was no tax expense associated with