Record Revenue and Adjusted Operating
Earnings
Raising Full Year Outlook
DUBLIN, Aug. 3, 2023
/PRNewswire/ -- Aptiv PLC (NYSE: APTV), a global technology company
focused on making mobility safer, greener and more connected, today
reported second quarter 2023 U.S. GAAP earnings of $0.84 per diluted share. Excluding special items,
second quarter earnings totaled $1.25
per diluted share.
Second Quarter Financial Highlights Include:
-- U.S. GAAP revenue of $5.2
billion, an increase of 28%
- Revenue increased 25% adjusted for currency exchange,
commodity movements and acquisitions; growth over market of 10%
based on AWM1 of 15%
-- U.S. GAAP net income of $229
million, diluted earnings per share of $0.84
- Excluding special items, diluted earnings per share of
$1.25
-- U.S. GAAP operating income margin of 7.9%
- Adjusted Operating Income margin of 10.2%, Adjusted
Operating Income of $530 million;
Adjusted EBITDA margin of 13.4%; Adjusted EBITDA of $695 million
-- Generated $535 million of
cash from operations
-- Returned $28 million to
shareholders through share repurchases
Year-to-Date Financial Highlights Include:
-- U.S. GAAP revenue of $10.0
billion, an increase of 22%
- Revenue increased 20% adjusted for currency exchange,
commodity movements and acquisitions; growth over market of 8%
based on AWM1 of 12%
-- U.S. GAAP net income of $375
million, diluted earnings per share of $1.38
- Excluding special items, diluted earnings per share of
$2.16
-- U.S. GAAP operating income margin of 7.6%
- Adjusted Operating Income margin of 9.7%, Adjusted Operating
Income of $967 million; Adjusted
EBITDA margin of 12.9%; Adjusted EBITDA of $1,289 million
-- Generated $526 million of
cash from operations
-- Returned $98 million to
shareholders through share repurchases
"Aptiv delivered record revenue and adjusted operating earnings
in the second quarter, reflecting continued gains across our entire
portfolio and solid operating execution," said Kevin Clark, chairman and chief executive
officer. "We continued to achieve strong new business awards,
totaling over $20 billion
year-to-date, driven by our smart vehicle architecture solutions,
software capabilities and advanced computing platforms for the next
generation of electrified, software-defined vehicles. Our strong
first half performance demonstrates Aptiv's ability to capitalize
on key megatrends as a global technology leader and affirms our
confidence in our updated outlook for the full year."
1
|
Represents global
vehicle production weighted to the geographic regions in which the
Company generates its revenue ("AWM").
|
Second Quarter 2023 Results
For the three
months ended June 30, 2023, the Company reported U.S. GAAP
revenue of $5.2 billion, an increase
of 28% from the prior year period. Adjusted for currency exchange,
commodity movements and acquisitions, revenue increased by 25% in
the second quarter. This reflects growth of 33% in Asia, which includes an increase of 41% in
China, 28% in Europe, 19% in North
America and 20% in South
America, our smallest region.
The Company reported second quarter 2023 U.S. GAAP net income of
$229 million and earnings of
$0.84 per diluted share, compared to
a net loss of $61 million and
$0.23 per diluted share in the prior
year period. Second quarter Adjusted Net Income, a non-GAAP
financial measure defined below, totaled $356 million, or earnings of $1.25 per diluted share, compared to $62 million, or $0.22 per diluted share, in the prior year
period.
Second quarter Adjusted Operating Income, a non-GAAP
financial measure defined below, was $530
million, compared to $213
million in the prior year period. Adjusted Operating Income
margin was 10.2%, compared to 5.3% in the prior year period,
reflecting our revenue growth over market of 10%, increased global
vehicle production, pricing and the results from our recent
acquisitions. Depreciation and amortization expense totaled
$224 million, an increase from
$193 million in the prior year
period.
Interest expense for the second quarter totaled $72 million, an increase from $56 million in the prior year period, which
primarily reflects increased interest rates on our variable rate
debt.
Tax expense in the second quarter of 2023 was $30 million, resulting in an effective tax rate
of approximately 9%, which reflects favorable changes in geographic
mix and discrete impacts resulting from favorable changes in tax
law. Tax expense in the second quarter of 2022 was $16 million, resulting in an effective tax rate
of 100%, which was impacted by the geographic mix of earnings and
increased losses in certain jurisdictions where no tax benefit was
recognized, including the impact of charges resulting from the
conflict between Ukraine and
Russia.
The Company generated net cash flow from operating activities
of $535 million in the second quarter, compared to
$95 million in the prior year
period.
Year-to-Date 2023 Results
For the six months ended
June 30, 2023, the Company reported U.S. GAAP revenue of
$10.0 billion, an increase of 22%
from the prior year period. Adjusted for currency exchange,
commodity movements and acquisitions, revenue increased by 20%
during the period. This reflects growth of 26% in Europe, 19% in Asia, which includes growth of 19% in
China, 16% in North America and 16% in South America, our smallest region.
For the 2023 year-to-date period, the Company reported U.S. GAAP
net income of $375 million and
earnings of $1.38 per diluted share,
compared to $12 million and
$0.04 per diluted share in the prior
year period. Year-to-date Adjusted Net Income totaled $614 million, or $2.16 per diluted share, compared to $242 million, or $0.85 per diluted share, in the prior year
period.
The Company reported Adjusted Operating Income of $967 million for the six months ended
June 30, 2023, compared to $537
million in the prior year period. Adjusted Operating Income
margin was 9.7% for the six months ended June 30, 2023,
compared to 6.5% in the prior year period, reflecting our revenue
growth over market of 8%, increased global vehicle production,
pricing and the results from our recent acquisitions. Depreciation
and amortization expense totaled $440
million, as compared to $384
million in the prior year period.
Interest expense for the six months ended June 30, 2023
totaled $139 million, as compared to
$99 million in the prior year period,
which reflects impacts from our $2.5
billion debt issuance in the first quarter of 2022 in
anticipation of the Wind River Systems, Inc. acquisition and
increased interest rates on our variable rate debt.
Tax expense for the six months ended June 30, 2023 was
$64 million, resulting in an
effective tax rate of approximately 10% which primarily reflects
favorable changes in geographic mix and discrete impacts resulting
from favorable changes in tax law. Tax expense in the prior year
period was $37 million, resulting in
an effective tax rate of approximately 19%, which was impacted by
the geographic mix of earnings and increased losses in certain
jurisdictions where no tax benefit was recognized, including the
impact of charges resulting from the conflict between Ukraine and Russia.
The Company generated net cash flow from operating activities
of $526 million in the six months ended June 30,
2023, compared to net cash flow used in operating activities of
$107 million in the prior year
period. As of June 30, 2023, the Company had cash and cash
equivalents of $1.3 billion and total available liquidity
of $3.8 billion.
Reconciliations of Adjusted Revenue Growth, Adjusted Net Income,
Adjusted Net Income Per Share, Adjusted Operating Income, Adjusted
EBITDA and Cash Flow Before Financing, which are non-GAAP measures,
to the most directly comparable financial measures, respectively,
calculated and presented in accordance with accounting principles
generally accepted in the United
States ("GAAP") are provided in the attached supplemental
schedules.
Share Repurchase Program
During the second quarter of
2023, the Company repurchased 0.3 million shares for approximately
$28 million, leaving approximately
$1.9 billion available for future
share repurchases. Year-to-date, the Company repurchased 0.9
million shares for approximately $98
million. All repurchased shares were retired.
Conversion of MCPS into Ordinary Shares
On
June 15, 2023, each outstanding share
of the Company's 5.50% Mandatory Convertible Preferred Shares,
Series A, $0.01 par value per share
(the "MCPS") converted into 1.0754 Aptiv ordinary shares. In
aggregate, the MCPS converted into approximately 12.37 million
ordinary shares.
Full Year 2023 Outlook
The Company's full
year 2023 financial guidance is as follows:
(in millions, except
per share amounts)
|
Full Year
2023
|
Net sales
|
$19,950 -
$20,250
|
Adjusted
EBITDA
|
$2,755 -
$2,855
|
Adjusted EBITDA
margin
|
13.8% -
14.1%
|
Adjusted operating
income
|
$2,075 -
$2,175
|
Adjusted operating
income margin
|
10.4% -
10.7%
|
Adjusted net income per
share (1)
|
$4.60 -
$4.90
|
Cash flow from
operations
|
$2,000
|
Capital
expenditures
|
$950
|
Adjusted effective tax
rate
|
~12.5%
|
(1) The Company's full
year 2023 financial guidance includes approximately $1.10 per
diluted share for the anticipated equity losses to be recognized by
Aptiv from the performance of the Motional autonomous driving joint
venture.
|
Conference Call and Webcast
The Company will host a
conference call to discuss these results at 8:00 a.m. (ET) today, which is accessible by
dialing +1.800.239.9838 (U.S.) or +1.323.794.2551 (international)
or through a webcast at ir.aptiv.com. The conference ID number is
7519096. A slide presentation will accompany the prepared remarks
and has been posted on the investor relations section of the
Company's website. A replay will be available two hours following
the conference call.
Use of Non-GAAP Financial Information
This press
release contains information about Aptiv's financial results which
are not presented in accordance with GAAP. Specifically, Adjusted
Revenue Growth, Adjusted Operating Income, Adjusted EBITDA,
Adjusted Net Income, Adjusted Net Income Per Share and Cash Flow
Before Financing are non-GAAP financial measures. Adjusted Revenue
Growth represents the year-over-year change in reported net sales
relative to the comparable period, excluding the impact on net
sales from currency exchange, commodity movements, acquisitions,
divestitures and other transactions. Adjusted Operating Income
represents net income before interest expense, other income
(expense), net, income tax (expense) benefit, equity income (loss),
net of tax, amortization, restructuring, other acquisition and
portfolio project costs (which includes costs incurred to integrate
acquired businesses and to plan and execute product portfolio
transformation actions, including business and product acquisitions
and divestitures), asset impairments and other related charges,
compensation expense related to acquisitions and gains (losses) on
business divestitures and other transactions. Adjusted Operating
Income margin is defined as Adjusted Operating Income as a
percentage of net sales. Adjusted EBITDA represents net income
before depreciation and amortization (including asset impairments),
interest expense, income tax (expense) benefit, other income
(expense), net, equity income (loss), net of tax, restructuring and
other special items.
Adjusted Net Income represents net income attributable to Aptiv
before amortization, restructuring and other special items,
including the tax impact thereon. Adjusted Net Income Per Share
represents Adjusted Net Income divided by the Adjusted Weighted
Average Number of Diluted Shares Outstanding for the period. The
Adjusted Weighted Average Number of Diluted Shares Outstanding
assumes the application of the if-converted method of share
dilution, if not already applied for GAAP purposes of calculating
the weighted average number of diluted shares outstanding. Cash
Flow Before Financing represents cash provided by (used in)
operating activities plus cash provided by (used in) investing
activities, adjusted for the purchase price of business
acquisitions and other transactions, the cost of significant
technology investments and net proceeds from the divestiture of
discontinued operations and other significant businesses.
Management believes the non-GAAP financial measures used in this
press release are useful to both management and investors in their
analysis of the Company's financial position, results of operations
and liquidity. In particular, management believes Adjusted Revenue
Growth, Adjusted Operating Income, Adjusted EBITDA, Adjusted Net
Income, Adjusted Net Income Per Share and Cash Flow Before
Financing are useful measures in assessing the Company's ongoing
financial performance that, when reconciled to the corresponding
GAAP measure, provide improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of the Company's core operating performance and that
may obscure underlying business results and trends. Management also
uses these non-GAAP financial measures for internal planning and
forecasting purposes.
Such non-GAAP financial measures are reconciled to the most
directly comparable GAAP financial measures in the attached
supplemental schedules at the end of this press release. Non-GAAP
measures should not be considered in isolation or as a substitute
for our reported results prepared in accordance with GAAP and, as
calculated, may not be comparable to other similarly titled
measures of other companies.
About Aptiv
Aptiv is a global technology company that
develops safer, greener and more connected solutions enabling a
more sustainable future of mobility. Visit aptiv.com.
Forward-Looking Statements
This press release, as well
as other statements made by Aptiv PLC (the "Company"), contain
forward-looking statements that reflect, when made, the Company's
current views with respect to current events, certain investments
and acquisitions and financial performance. Such forward-looking
statements are subject to many risks, uncertainties and factors
relating to the Company's operations and business environment,
which may cause the actual results of the Company to be materially
different from any future results. All statements that address
future operating, financial or business performance or the
Company's strategies or expectations are forward-looking
statements. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are
not limited to, the following: global and regional economic
conditions, including conditions affecting the credit market;
global inflationary pressures; uncertainties posed by the COVID-19
pandemic and the difficulty in predicting its future course and its
impact on the global economy and the Company's future operations;
uncertainties created by the conflict between Ukraine and Russia, and its impacts to the European and
global economies and our operations in each country; fluctuations
in interest rates and foreign currency exchange rates; the cyclical
nature of global automotive sales and production; the potential
disruptions in the supply of and changes in the competitive
environment for raw material and other components integral to the
Company's products, including the ongoing semiconductor supply
shortage; the Company's ability to maintain contracts that are
critical to its operations; potential changes to beneficial free
trade laws and regulations such as the
United States-Mexico-Canada Agreement; changes to tax laws;
the ability of the Company to integrate and realize the expected
benefits of recent transactions; the ability of the Company to
attract, motivate and/or retain key executives; the ability of the
Company to avoid or continue to operate during a strike, or partial
work stoppage or slow down by any of its unionized employees or
those of its principal customers; and the ability of the Company to
attract and retain customers. Additional factors are discussed
under the captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
Company's filings with the Securities and Exchange Commission. New
risks and uncertainties arise from time to time, and it is
impossible for us to predict these events or how they may affect
the Company. It should be remembered that the price of the
ordinary shares and any income from them can go down as well as up.
The Company disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events and/or otherwise, except as may be
required by law.
APTIV
PLC
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions, except per share
amounts)
|
Net sales
|
$
5,200
|
|
$
4,057
|
|
$
10,018
|
|
$
8,235
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
4,336
|
|
3,617
|
|
8,394
|
|
7,206
|
Selling, general and
administrative
|
353
|
|
286
|
|
695
|
|
560
|
Amortization
|
59
|
|
38
|
|
118
|
|
75
|
Restructuring
|
42
|
|
19
|
|
53
|
|
41
|
Total operating
expenses
|
4,790
|
|
3,960
|
|
9,260
|
|
7,882
|
Operating
income
|
410
|
|
97
|
|
758
|
|
353
|
Interest
expense
|
(72)
|
|
(56)
|
|
(139)
|
|
(99)
|
Other income
(expense), net
|
11
|
|
(25)
|
|
10
|
|
(64)
|
Income before income
taxes and equity loss
|
349
|
|
16
|
|
629
|
|
190
|
Income tax
expense
|
(30)
|
|
(16)
|
|
(64)
|
|
(37)
|
Income before equity
loss
|
319
|
|
—
|
|
565
|
|
153
|
Equity loss, net of
tax
|
(73)
|
|
(72)
|
|
(155)
|
|
(135)
|
Net income
(loss)
|
246
|
|
(72)
|
|
410
|
|
18
|
Net income (loss)
attributable to noncontrolling interest
|
4
|
|
(27)
|
|
7
|
|
(26)
|
Net loss attributable
to redeemable noncontrolling interest
|
—
|
|
—
|
|
(1)
|
|
—
|
Net income (loss)
attributable to Aptiv
|
242
|
|
(45)
|
|
404
|
|
44
|
Mandatory convertible
preferred share dividends
|
(13)
|
|
(16)
|
|
(29)
|
|
(32)
|
Net income (loss)
attributable to ordinary shareholders
|
$
229
|
|
$
(61)
|
|
$
375
|
|
$
12
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share:
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share attributable to ordinary shareholders
|
$
0.84
|
|
$
(0.23)
|
|
$
1.38
|
|
$
0.04
|
Weighted average
number of diluted shares outstanding
|
272.77
|
|
270.93
|
|
271.97
|
|
271.11
|
APTIV
PLC
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
(in millions)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,302
|
|
$
1,531
|
Accounts receivable,
net
|
3,729
|
|
3,433
|
Inventories
|
2,380
|
|
2,340
|
Other current
assets
|
661
|
|
480
|
Total current
assets
|
8,072
|
|
7,784
|
Long-term
assets:
|
|
|
|
Property,
net
|
3,592
|
|
3,495
|
Operating lease
right-of-use assets
|
470
|
|
451
|
Investments in
affiliates
|
1,581
|
|
1,723
|
Intangible assets,
net
|
2,487
|
|
2,585
|
Goodwill
|
5,140
|
|
5,106
|
Other long-term
assets
|
756
|
|
740
|
Total long-term
assets
|
14,026
|
|
14,100
|
Total
assets
|
$
22,098
|
|
$
21,884
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
37
|
|
$
31
|
Accounts
payable
|
3,028
|
|
3,150
|
Accrued
liabilities
|
1,524
|
|
1,684
|
Total current
liabilities
|
4,589
|
|
4,865
|
Long-term
liabilities:
|
|
|
|
Long-term
debt
|
6,476
|
|
6,460
|
Pension benefit
obligations
|
380
|
|
354
|
Long-term operating
lease liabilities
|
379
|
|
361
|
Other long-term
liabilities
|
752
|
|
750
|
Total long-term
liabilities
|
7,987
|
|
7,925
|
Total
liabilities
|
12,576
|
|
12,790
|
Commitments and
contingencies
|
|
|
|
Redeemable
noncontrolling interest
|
97
|
|
96
|
|
|
|
|
Total Aptiv
shareholders' equity
|
9,232
|
|
8,809
|
Noncontrolling
interest
|
193
|
|
189
|
Total shareholders'
equity
|
9,425
|
|
8,998
|
Total liabilities,
redeemable noncontrolling interest and shareholders'
equity
|
$
22,098
|
|
$
21,884
|
APTIV
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
(in millions)
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
410
|
|
$
18
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
440
|
|
384
|
Restructuring expense,
net of cash paid
|
—
|
|
10
|
Deferred income
taxes
|
(17)
|
|
(5)
|
Loss from equity
method investments, net of dividends received
|
160
|
|
135
|
Other charges related
to Ukraine/Russia conflict
|
—
|
|
54
|
Other, net
|
79
|
|
66
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
(295)
|
|
(244)
|
Inventories
|
(35)
|
|
(358)
|
Accounts
payable
|
(43)
|
|
(150)
|
Other, net
|
(159)
|
|
(8)
|
Pension
contributions
|
(14)
|
|
(9)
|
Net cash provided by
(used in) operating activities
|
526
|
|
(107)
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(491)
|
|
(454)
|
Proceeds from sale of
property
|
3
|
|
3
|
Proceeds from business
divestitures, net of cash sold
|
(17)
|
|
—
|
Cost of business
acquisitions and other transactions, net of cash
acquired
|
(83)
|
|
(220)
|
Proceeds from sale of
technology investments
|
—
|
|
3
|
Cost of technology
investments
|
(1)
|
|
(41)
|
Settlement of
derivatives
|
(1)
|
|
4
|
Net cash used in
investing activities
|
(590)
|
|
(705)
|
Cash flows from
financing activities:
|
|
|
|
Decrease in other
short and long-term debt, net
|
(10)
|
|
(2)
|
Proceeds from issuance
of senior notes, net of issuance costs
|
—
|
|
2,472
|
Contingent
consideration payments
|
(10)
|
|
—
|
Dividend payments of
consolidated affiliates to minority shareholders
|
—
|
|
(8)
|
Repurchase of ordinary
shares
|
(98)
|
|
—
|
Distribution of
mandatory convertible preferred share cash dividends
|
(32)
|
|
(32)
|
Taxes withheld and
paid on employees' restricted share awards
|
(31)
|
|
(36)
|
Net cash (used in)
provided by financing activities
|
(181)
|
|
2,394
|
Effect of exchange rate
fluctuations on cash, cash equivalents and restricted
cash
|
(8)
|
|
(25)
|
(Decrease) increase in
cash, cash equivalents and restricted cash
|
(253)
|
|
1,557
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
1,555
|
|
3,139
|
Cash, cash equivalents
and restricted cash at end of the period
|
$
1,302
|
|
$
4,696
|
|
|
|
|
Reconciliation of cash, cash equivalents and
restricted cash and cash classified as assets held for
sale
|
|
|
|
|
June 30,
|
|
2023
|
|
2022
|
|
(in millions)
|
Cash, cash equivalents
and restricted cash
|
$
1,302
|
|
$
4,670
|
Cash classified as
assets held for sale
|
—
|
|
26
|
Total cash, cash
equivalents and restricted cash
|
$
1,302
|
|
$
4,696
|
APTIV
PLC
FOOTNOTES
(Unaudited)
|
|
1. Segment
Summary
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
%
|
|
2023
|
|
2022
|
|
%
|
|
(in millions)
|
|
|
|
(in millions)
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
Signal and Power
Solutions
|
$
3,679
|
|
$
3,039
|
|
21 %
|
|
$
7,143
|
|
$
6,145
|
|
16 %
|
Advanced Safety and
User Experience
|
1,532
|
|
1,026
|
|
49 %
|
|
2,898
|
|
2,108
|
|
37 %
|
Eliminations and Other
(a)
|
(11)
|
|
(8)
|
|
|
|
(23)
|
|
(18)
|
|
|
Net Sales
|
$
5,200
|
|
$
4,057
|
|
|
|
$
10,018
|
|
$
8,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
Signal and Power
Solutions
|
$
392
|
|
$
243
|
|
61 %
|
|
$
766
|
|
$
551
|
|
39 %
|
Advanced Safety and
User Experience
|
138
|
|
(30)
|
|
560 %
|
|
201
|
|
(14)
|
|
1,536 %
|
Adjusted Operating
Income
|
$
530
|
|
$
213
|
|
|
|
$
967
|
|
$
537
|
|
|
|
|
(a)
|
Eliminations and Other
includes the elimination of inter-segment transactions.
|
2. Weighted Average
Number of Diluted Shares Outstanding
|
|
The following table
illustrates the weighted average shares outstanding used in
calculating basic and diluted net income (loss) per share
attributable to ordinary shareholders for the three and six months
ended June 30, 2023 and 2022:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions, except per share
amounts)
|
Weighted average
ordinary shares outstanding, basic
|
272.69
|
|
270.93
|
|
271.86
|
|
270.86
|
Dilutive shares
related to RSUs
|
0.08
|
|
—
|
|
0.11
|
|
0.25
|
Weighted average
ordinary shares outstanding, including dilutive shares
|
272.77
|
|
270.93
|
|
271.97
|
|
271.11
|
Net income (loss) per
share attributable to ordinary shareholders:
|
|
|
|
|
|
|
|
Basic
|
$
0.84
|
|
$
(0.23)
|
|
$
1.38
|
|
$
0.04
|
Diluted
|
$
0.84
|
|
$
(0.23)
|
|
$
1.38
|
|
$
0.04
|
APTIV
PLC
|
RECONCILIATION OF
NON-GAAP MEASURES
|
(Unaudited)
|
|
In this press release
the Company has provided information regarding certain non-GAAP
financial measures, including "Adjusted Revenue Growth," "Adjusted
Operating Income," "Adjusted EBITDA," "Adjusted Net Income,"
"Adjusted Net Income Per Share" and "Cash Flow Before Financing."
Such non-GAAP financial measures are reconciled to their closest
GAAP financial measure in the following schedules.
|
|
Adjusted Revenue
Growth: Adjusted Revenue Growth is presented as a supplemental
measure of the Company's financial performance which management
believes is useful to investors in assessing the Company's ongoing
financial performance that, when reconciled to the corresponding
U.S. GAAP measure, provides improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of the Company's core operating performance and
which may obscure underlying business results and trends. Our
management utilizes Adjusted Revenue Growth in its financial
decision making process, to evaluate performance of the Company and
for internal reporting, planning and forecasting purposes. Adjusted
Revenue Growth is defined as the year-over-year change in reported
net sales relative to the comparable period, excluding the impact
on net sales from currency exchange, commodity movements,
acquisitions, divestitures and other transactions. Not all
companies use identical calculations of Adjusted Revenue Growth,
therefore this presentation may not be comparable to other
similarly titled measures of other companies.
|
|
Three Months Ended
June 30, 2023
|
|
|
Reported net sales %
change
|
28 %
|
Less: foreign currency
exchange and commodities
|
(1) %
|
Less:
acquisitions
|
4 %
|
Adjusted revenue
growth
|
25 %
|
|
|
|
Six Months Ended
June 30, 2023
|
|
|
Reported net sales %
change
|
22 %
|
Less: foreign currency
exchange and commodities
|
(2) %
|
Less:
acquisitions
|
4 %
|
Adjusted revenue
growth
|
20 %
|
Adjusted Operating
Income: Adjusted Operating Income is presented as a
supplemental measure of the Company's financial performance which
management believes is useful to investors in assessing the
Company's ongoing financial performance that, when reconciled to
the corresponding U.S. GAAP measure, provides improved
comparability between periods through the exclusion of certain
items that management believes are not indicative of the Company's
core operating performance and which may obscure underlying
business results and trends. Our management utilizes Adjusted
Operating Income in its financial decision making process, to
evaluate performance of the Company and for internal reporting,
planning and forecasting purposes. Management also utilizes
Adjusted Operating Income as the key performance measure of segment
income or loss and for planning and forecasting purposes to
allocate resources to our segments, as management also believes
this measure is most reflective of the operational profitability or
loss of our operating segments. Adjusted Operating Income is
defined as net income before interest expense, other income
(expense), net, income tax (expense) benefit, equity income (loss),
net of tax, amortization, restructuring and other special items.
Not all companies use identical calculations of Adjusted Operating
Income, therefore this presentation may not be comparable to other
similarly titled measures of other companies. Operating income
margin represents Operating income as a percentage of net sales,
and Adjusted Operating Income margin represents Adjusted Operating
Income as a percentage of net sales.
|
Consolidated Adjusted Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
($ in millions)
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
Net income (loss)
attributable to Aptiv
|
$
242
|
|
|
|
$
(45)
|
|
|
|
$
404
|
|
|
|
$ 44
|
|
|
Interest
expense
|
72
|
|
|
|
56
|
|
|
|
139
|
|
|
|
99
|
|
|
Other (income)
expense, net
|
(11)
|
|
|
|
25
|
|
|
|
(10)
|
|
|
|
64
|
|
|
Income tax
expense
|
30
|
|
|
|
16
|
|
|
|
64
|
|
|
|
37
|
|
|
Equity loss, net of
tax
|
73
|
|
|
|
72
|
|
|
|
155
|
|
|
|
135
|
|
|
Net income (loss)
attributable to
noncontrolling interest
|
4
|
|
|
|
(27)
|
|
|
|
7
|
|
|
|
(26)
|
|
|
Net loss attributable
to redeemable
noncontrolling interest
|
—
|
|
|
|
—
|
|
|
|
(1)
|
|
|
|
—
|
|
|
Operating
income
|
$
410
|
|
7.9 %
|
|
$ 97
|
|
2.4 %
|
|
$
758
|
|
7.6 %
|
|
$
353
|
|
4.3 %
|
Amortization
|
59
|
|
|
|
38
|
|
|
|
118
|
|
|
|
75
|
|
|
Restructuring
|
42
|
|
|
|
19
|
|
|
|
53
|
|
|
|
41
|
|
|
Other acquisition and
portfolio project costs
|
11
|
|
|
|
2
|
|
|
|
25
|
|
|
|
11
|
|
|
Asset
impairments
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
3
|
|
|
Other charges related
to Ukraine/Russia conflict
|
—
|
|
|
|
54
|
|
|
|
—
|
|
|
|
54
|
|
|
Compensation expense
related to acquisitions
|
8
|
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
Adjusted operating
income
|
$
530
|
|
10.2 %
|
|
$
213
|
|
5.3 %
|
|
$
967
|
|
9.7 %
|
|
$
537
|
|
6.5 %
|
Segment Adjusted Operating
Income
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
Three Months Ended June 30,
2023
|
Signal and Power Solutions
|
|
Advanced Safety and User
Experience
|
|
Total
|
Operating
income
|
$
340
|
|
$
70
|
|
$
410
|
Amortization
|
36
|
|
23
|
|
59
|
Restructuring
|
8
|
|
34
|
|
42
|
Other acquisition and
portfolio project costs
|
8
|
|
3
|
|
11
|
Compensation expense
related to acquisitions
|
—
|
|
8
|
|
8
|
Adjusted operating
income
|
$
392
|
|
$
138
|
|
$
530
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
155
|
|
$
69
|
|
$
224
|
|
|
|
|
|
|
Three Months Ended June 30,
2022
|
Signal and Power Solutions
|
|
Advanced Safety and User
Experience
|
|
Total
|
Operating income
(loss)
|
$
136
|
|
$
(39)
|
|
$
97
|
Amortization
|
37
|
|
1
|
|
38
|
Restructuring
|
13
|
|
6
|
|
19
|
Other acquisition and
portfolio project costs
|
—
|
|
2
|
|
2
|
Asset
impairments
|
3
|
|
—
|
|
3
|
Other charges related
to Ukraine/Russia conflict
|
54
|
|
—
|
|
54
|
Adjusted operating
income (loss)
|
$
243
|
|
$
(30)
|
|
$
213
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
148
|
|
$
45
|
|
$
193
|
|
|
|
|
|
|
Six Months Ended June 30, 2023
|
Signal and Power Solutions
|
|
Advanced Safety and User
Experience
|
|
Total
|
Operating
income
|
$
659
|
|
$
99
|
|
$
758
|
Amortization
|
72
|
|
46
|
|
118
|
Restructuring
|
15
|
|
38
|
|
53
|
Other acquisition and
portfolio project costs
|
20
|
|
5
|
|
25
|
Compensation expense
related to acquisitions
|
—
|
|
13
|
|
13
|
Adjusted operating
income
|
$
766
|
|
$
201
|
|
$
967
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
304
|
|
$
136
|
|
$
440
|
|
|
|
|
|
|
Six Months Ended June 30, 2022
|
Signal and Power Solutions
|
|
Advanced Safety and User
Experience
|
|
Total
|
Operating income
(loss)
|
$
393
|
|
$
(40)
|
|
$
353
|
Amortization
|
72
|
|
3
|
|
75
|
Restructuring
|
22
|
|
19
|
|
41
|
Other acquisition and
portfolio project costs
|
7
|
|
4
|
|
11
|
Asset
impairments
|
3
|
|
—
|
|
3
|
Other charges related
to Ukraine/Russia conflict
|
54
|
|
—
|
|
54
|
Adjusted operating
income (loss)
|
$
551
|
|
$
(14)
|
|
$
537
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
294
|
|
$
90
|
|
$
384
|
|
|
(a)
|
Includes asset
impairments.
|
Adjusted EBITDA:
Adjusted EBITDA is presented as a supplemental measure of the
Company's financial performance which management believes is useful
to investors in assessing the Company's ongoing financial
performance that, when reconciled to the corresponding U.S. GAAP
measure, provides improved comparability between periods through
the exclusion of certain items that management believes are not
indicative of the Company's core operating performance and which
may obscure underlying business results and trends. Our management
utilizes Adjusted EBITDA in its financial decision making process,
to evaluate performance of the Company and for internal reporting,
planning and forecasting purposes. Adjusted EBITDA is defined as
net income before depreciation and amortization (including asset
impairments), interest expense, income tax (expense) benefit, other
income (expense), net, equity income (loss), net of tax,
restructuring and other special items. Not all companies use
identical calculations of Adjusted EBITDA, therefore this
presentation may not be comparable to other similarly titled
measures of other companies.
|
Consolidated Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions)
|
Net income (loss)
attributable to Aptiv
|
$
242
|
|
$
(45)
|
|
$
404
|
|
$
44
|
Interest
expense
|
72
|
|
56
|
|
139
|
|
99
|
Income tax
expense
|
30
|
|
16
|
|
64
|
|
37
|
Net income (loss)
attributable to noncontrolling interest
|
4
|
|
(27)
|
|
7
|
|
(26)
|
Net loss attributable
to redeemable noncontrolling interest
|
—
|
|
—
|
|
(1)
|
|
—
|
Depreciation and
amortization
|
224
|
|
193
|
|
440
|
|
384
|
EBITDA
|
$
572
|
|
$
193
|
|
$
1,053
|
|
$
538
|
Other (income)
expense, net
|
(11)
|
|
25
|
|
(10)
|
|
64
|
Equity loss, net of
tax
|
73
|
|
72
|
|
155
|
|
135
|
Restructuring
|
42
|
|
19
|
|
53
|
|
41
|
Other acquisition and
portfolio project costs
|
11
|
|
2
|
|
25
|
|
11
|
Other charges related
to Ukraine/Russia conflict
|
—
|
|
54
|
|
—
|
|
54
|
Compensation expense
related to acquisitions
|
8
|
|
—
|
|
13
|
|
—
|
Adjusted
EBITDA
|
$
695
|
|
$
365
|
|
$
1,289
|
|
$
843
|
Adjusted Net Income
and Adjusted Net Income Per Share: Adjusted Net Income and
Adjusted Net Income Per Share, which are non-GAAP measures, are
presented as supplemental measures of the Company's financial
performance which management believes are useful to investors in
assessing the Company's ongoing financial performance that, when
reconciled to the corresponding U.S. GAAP measure, provide improved
comparability between periods through the exclusion of certain
items that management believes are not indicative of the Company's
core operating performance and which may obscure underlying
business results and trends. Management utilizes Adjusted Net
Income and Adjusted Net Income Per Share in its financial decision
making process, to evaluate performance of the Company and for
internal reporting, planning and forecasting purposes. Adjusted Net
Income is defined as net income attributable to Aptiv before
amortization, restructuring and other special items, including the
tax impact thereon. Adjusted Net Income Per Share is defined as
Adjusted Net Income divided by the Adjusted Weighted Average Number
of Diluted Shares Outstanding, as reconciled below, for the period.
Not all companies use identical calculations of Adjusted Net Income
and Adjusted Net Income Per Share, therefore this presentation may
not be comparable to other similarly titled measures of other
companies.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions, except per share
amounts)
|
Net income (loss)
attributable to ordinary shareholders
|
$
229
|
|
$
(61)
|
|
$
375
|
|
$
12
|
Mandatory convertible
preferred share dividends
|
13
|
|
16
|
|
29
|
|
32
|
Net income (loss)
attributable to Aptiv
|
242
|
|
(45)
|
|
404
|
|
44
|
Adjusting
items:
|
|
|
|
|
|
|
|
Amortization
|
59
|
|
38
|
|
118
|
|
75
|
Restructuring
|
42
|
|
19
|
|
53
|
|
41
|
Other acquisition and
portfolio project costs
|
11
|
|
2
|
|
25
|
|
11
|
Asset
impairments
|
—
|
|
3
|
|
—
|
|
3
|
Other charges related
to Ukraine/Russia conflict (a)
|
—
|
|
29
|
|
—
|
|
29
|
Compensation expense
related to acquisitions
|
8
|
|
—
|
|
13
|
|
—
|
Costs associated with
acquisitions and other transactions
|
4
|
|
2
|
|
4
|
|
2
|
Impairment of equity
investments without readily
determinable fair value
|
—
|
|
—
|
|
18
|
|
—
|
Loss on change in fair
value of publicly traded equity
securities
|
3
|
|
17
|
|
6
|
|
49
|
Tax impact of
adjusting items (b)
|
(13)
|
|
(3)
|
|
(27)
|
|
(12)
|
Adjusted net income
attributable to Aptiv
|
$
356
|
|
$
62
|
|
$
614
|
|
$
242
|
|
|
|
|
|
|
|
|
Adjusted weighted
average number of diluted shares outstanding (c)
|
283.78
|
|
283.30
|
|
283.65
|
|
283.48
|
Diluted net income
(loss) per share attributable to ordinary
shareholders
|
$
0.84
|
|
$
(0.23)
|
|
$
1.38
|
|
$
0.04
|
Adjusted net income per
share
|
$
1.25
|
|
$
0.22
|
|
$
2.16
|
|
$
0.85
|
|
|
(a)
|
Adjustment is reduced
by the portion of charges attributable to noncontrolling interest
for our former majority owned Russian subsidiary. Our interest in
this subsidiary was sold during the second quarter of 2023 and the
subsidiary was deconsolidated.
|
(b)
|
Represents the income
tax impacts of the adjustments made for amortization, restructuring
and other special items by calculating the income tax impact of
these items using the appropriate tax rate for the jurisdiction
where the charges were incurred.
|
(c)
|
In June 2020, the
Company issued $1,150 million in aggregate liquidation preference
of 5.50% Mandatory Convertible Preferred Shares (the "MCPS") and
received proceeds of $1,115 million, after deducting expenses and
the underwriters' discount of $35 million. Each share of MCPS
automatically converted on June 15, 2023 into 1.0754 Aptiv ordinary
shares. Dividends on the MCPS were payable on a cumulative basis at
an annual rate of 5.50% on the liquidation preference of $100 per
share. For purposes of calculating Adjusted Net Income Per Share,
the Company has excluded the MCPS cash dividends and assumed the
"if-converted" method of share dilution (the incremental ordinary
shares deemed outstanding applying the "if-converted" method of
calculating share dilution are referred to as the "Weighted average
MCPS Converted Shares" in the following table). The Adjusted
Weighted Average Number of Diluted Shares Outstanding calculated
below, assumes the conversion of all 11.5 million MCPS at the later
of the beginning of the period or the time of issuance, and
resulting issuance of the underlying ordinary shares applying the
"if-converted" method on a weighted average outstanding basis for
all periods subsequent to issuance of the MCPS. We believe that
using the "if-converted" method provides additional insight to
investors on the impact of the MCPS upon their
conversion.
|
Adjusted Weighted Average Number of Diluted Shares
Outstanding:
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions)
|
Weighted average number
of diluted shares outstanding
|
272.77
|
|
270.93
|
|
271.97
|
|
271.11
|
Weighted average MCPS
Converted Shares
|
11.01
|
|
12.37
|
|
11.68
|
|
12.37
|
Adjusted weighted
average number of diluted shares
outstanding
|
283.78
|
|
283.30
|
|
283.65
|
|
283.48
|
Cash Flow Before
Financing: Cash Flow Before Financing is presented as a
supplemental measure of the Company's liquidity which is consistent
with the basis and manner in which management presents financial
information for the purpose of making internal operating decisions,
evaluating its liquidity and determining appropriate capital
allocation strategies. Management believes this measure is useful
to investors to understand how the Company's core operating
activities generate and use cash. Cash Flow Before Financing is
defined as cash provided by (used in) operating activities plus
cash provided by (used in) investing activities, adjusted for the
purchase price of business acquisitions and other transactions, the
cost of significant technology investments and net proceeds from
the divestiture of discontinued operations and other significant
businesses. Not all companies use identical calculations of Cash
Flow Before Financing, therefore this presentation may not be
comparable to other similarly titled measures of other companies.
The calculation of Cash Flow Before Financing does not reflect cash
used to service debt, pay dividends or repurchase shares and,
therefore, does not necessarily reflect funds available for
investment or other discretionary uses.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
246
|
|
$
(72)
|
|
$
410
|
|
$
18
|
Adjustments to
reconcile net income to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
224
|
|
193
|
|
440
|
|
384
|
Restructuring expense,
net of cash paid
|
24
|
|
3
|
|
—
|
|
10
|
Working
capital
|
(25)
|
|
(185)
|
|
(373)
|
|
(752)
|
Pension
contributions
|
(6)
|
|
(5)
|
|
(14)
|
|
(9)
|
Other, net
|
72
|
|
161
|
|
63
|
|
242
|
Net cash provided by
(used in) operating activities
|
535
|
|
95
|
|
526
|
|
(107)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(222)
|
|
(207)
|
|
(491)
|
|
(454)
|
Proceeds from business
divestitures, net of cash sold
|
(17)
|
|
—
|
|
(17)
|
|
—
|
Cost of business
acquisitions and other transactions, net of
cash acquired
|
(45)
|
|
—
|
|
(83)
|
|
(220)
|
Proceeds from sale of
technology investments
|
—
|
|
1
|
|
—
|
|
3
|
Cost of technology
investments
|
—
|
|
(40)
|
|
(1)
|
|
(41)
|
Settlement of
derivatives
|
—
|
|
5
|
|
(1)
|
|
4
|
Other, net
|
3
|
|
1
|
|
3
|
|
3
|
Net cash used in
investing activities
|
(281)
|
|
(240)
|
|
(590)
|
|
(705)
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
Adjustment for cost of
business acquisitions and other
transactions, net of cash acquired
|
45
|
|
—
|
|
83
|
|
220
|
Adjustment for cost of
significant technology investments
|
—
|
|
40
|
|
—
|
|
40
|
Cash flow before
financing
|
$
299
|
|
$
(105)
|
|
$
19
|
|
$
(552)
|
Financial
Guidance: The reconciliation of the forward-looking non-GAAP
financial measures provided in the Company's financial guidance to
the most comparable forward-looking GAAP measure is as
follows:
|
|
Estimated Full Year
|
|
2023 (a)
|
|
($ in millions)
|
Adjusted Operating Income
|
$
|
|
Margin (b)
|
Net income attributable
to Aptiv
|
$
935
|
|
|
Interest
expense
|
285
|
|
|
Other income,
net
|
(40)
|
|
|
Income tax
expense
|
180
|
|
|
Equity loss, net of
tax
|
300
|
|
|
Net income
attributable to noncontrolling interest (c)
|
20
|
|
|
Operating
income
|
$
1,680
|
|
8.4 %
|
Amortization
|
240
|
|
|
Restructuring
|
130
|
|
|
Other acquisition and
portfolio project costs
|
45
|
|
|
Compensation expense
related to acquisitions
|
30
|
|
|
Adjusted operating
income
|
$
2,125
|
|
10.6 %
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
Net income attributable
to Aptiv
|
$
935
|
|
|
Interest
expense
|
285
|
|
|
Income tax
expense
|
180
|
|
|
Net income
attributable to noncontrolling interest (c)
|
20
|
|
|
Depreciation and
amortization
|
920
|
|
|
EBITDA
|
$
2,340
|
|
11.6 %
|
Other income,
net
|
(40)
|
|
|
Equity loss, net of
tax
|
300
|
|
|
Restructuring
|
130
|
|
|
Other acquisition and
portfolio project costs
|
45
|
|
|
Compensation expense
related to acquisitions
|
30
|
|
|
Adjusted
EBITDA
|
$
2,805
|
|
14.0 %
|
|
|
(a)
|
Prepared at the
estimated mid-point of the Company's financial guidance
range.
|
(b)
|
Represents operating
income, Adjusted Operating Income, EBITDA and Adjusted EBITDA,
respectively, as a percentage of estimated net sales.
|
(c)
|
Includes portion
attributable to redeemable noncontrolling interest.
|
|
Estimated Full Year
|
|
|
2023 (a)
|
Adjusted Net Income Per Share
|
($ and shares in
millions, except per
share amounts)
|
Net income attributable
to ordinary shareholders
|
$
905
|
Mandatory convertible
preferred share dividends
|
30
|
Net income attributable
to Aptiv
|
935
|
Adjusting
items:
|
|
Amortization
|
240
|
Restructuring
|
130
|
Other acquisition and
portfolio project costs
|
45
|
Compensation expense
related to acquisitions
|
30
|
Costs associated with
acquisitions and other transactions
|
5
|
Loss on change in fair
value of publicly traded equity securities
|
5
|
Loss on change in fair
value of equity investments without readily determinable fair
value
|
20
|
Tax impact of
adjusting items
|
(60)
|
Adjusted net income
attributable to Aptiv
|
$
1,350
|
|
|
Adjusted weighted
average number of diluted shares outstanding
|
284.00
|
Diluted net income per
share attributable to ordinary shareholders
|
$
3.25
|
Adjusted net income per
share
|
$
4.75
|
|
|
(a)
|
Prepared at the
estimated mid-point of the Company's financial guidance
range.
|
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SOURCE Aptiv PLC