Company: APTV
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001521332-25-000051
Chunk: 39

Company: Aptiv PLC
Filing Date: 2025-10-30
Form: 10-Q
Item: Item 1
Chunk 39
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 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 nine months ended September 30, 2025 and 2024 were as follows: Three Months Ended September 30,Nine Months Ended September 30, 2025202420252024 (dollars in millions)Income tax expense$103 $32 $504 $159 Effective tax rate(42)%8 %89 %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 nine months ended September 30, 2025 includes net discrete tax expense of approximately $12 million and $253 million, respectively, primarily related to a change in valuation allowance on the Swiss tax incentive, as described below, and the tax impact of legal entity restructuring, partially offset by changes in other valuation allowances and changes in reserves. The effective tax rate for the nine months ended September 30, 2025 also includes an unfavorable impact of approximately 48 points resulting from the Wind River non-cash goodwill impairment charge, as described further in Note 2. Significant Accounting Policies, which is non-deductible for tax purposes. The Company’s effective tax rate for the three and nine months ended September 30, 2024 includes net discrete tax benefits of approximately $45 million and $65 million, respectively, primarily related to changes in valuation allowances. Also included as discrete items in the effective tax rate for the nine months ended September 30, 2024 are the beneficial impacts of a business reorganization that occurred in the second quarter of