Company: APTV
Filing Date: 2025-02-07
Form Type: 10-K
Source: 0001521332-25-000010
Chunk: 125

Company: Aptiv PLC
Filing Date: 2025-02-07
Form: 10-K
Item: Item 7A
Chunk 125
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 and liabilities denominated in currencies other than the U.S. dollar.

Commodity Price Risk

Commodity swaps/average rate forward contracts are executed to offset a portion of our exposure to the potential change in prices mainly for various non-ferrous metals used in the manufacturing of automotive components, primarily copper. The net fair value of our contracts was a liability of $6 million and $2 million as of December 31, 2024 and 2023, respectively. If the price of the commodities that are being hedged by our commodity swaps/average rate forward contracts changed adversely or favorably by 10%, the fair value of our commodity swaps/average rate forward contracts would decrease or increase by $41 million and $43 million as of December 31, 2024 and 2023, respectively. A 10% change in the net fair value asset differs from a 10% change in rates on fair value due to the relative differences between the underlying commodity prices and the prices in place in our commodity swaps/average rate forward contracts. These amounts exclude the offsetting impact of the price risk inherent in the physical purchase of the underlying commodities.

Interest Rate Risk

Our exposure to market risk associated with changes in interest rates relates primarily to our debt obligations. We do not use interest rate swap or other derivative contracts to manage our exposure to fluctuations in interest rates. As of December 31, 2024, we had approximately $250 million of floating rate debt related to the Term Loan A Credit Agreement, and no floating rate debt outstanding related to the Credit Agreement. The Term Loan A Credit Agreement carries an interest rate, at our option, on loan borrowings of either (a) the ABR plus 0.25% per annum, or (b) SOFR plus 1.25% per annum. The Credit Agreement carries an interest rate, at our option, on Revolving Credit Facility borrowings of either (a) the ABR plus 0.06% per annum, or (b) SOFR plus 1.06% per annum, which includes an adjustment resulting from the Company having met the sustainability-linked targets for the 2023 calendar year. 

The interest rate period with respect to the SOFR interest rate option can be set at one-, three-, or six-months as selected by us in accordance with the terms of the Term Loan A Credit Agreement and the Credit Agreement (or other period as may be agreed by the applicable lenders), but payable no