Aptiv Reports Second Quarter 2020 Financial Results
DUBLIN, July 30, 2020 /PRNewswire/ -- Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported a second quarter 2020 U.S. GAAP loss of $1.43 per diluted share. Excluding special items, the second quarter loss totaled $1.10 per diluted share. These results include the adverse impacts of global vehicle production declines of 45% (54% on an Aptiv weighted market basis(1)) in the second quarter, largely resulting from the ongoing impacts of the novel coronavirus ("COVID-19") pandemic.
Second Quarter Highlights Include:
-- U.S. GAAP revenue of $2.0 billion, a decrease of 46%
-- Revenue decreased 43% adjusted for currency exchange, commodity
movements and divestitures; largely resulting from volume declines
associated with the adverse impacts of the COVID-19 pandemic
-- U.S. GAAP net loss of $369 million, diluted loss per share of $1.43
-- Excluding special items, diluted loss per share of $1.10
-- U.S. GAAP operating loss of $311 million
-- Adjusted Operating Loss of $229 million; Adjusted EBITDA loss of $49
million
-- Cash used in operations of $106 million
-- Executed ordinary and preferred equity offerings which generated net
proceeds of $2.23 billion; enhancing financial flexibility and
strengthening long-term position
Year-to-Date Highlights Include:
-- U.S. GAAP revenue of $5.2 billion, a decrease of 28%
-- Revenue decreased 26% adjusted for currency exchange, commodity
movements and divestitures; largely resulting from volume declines
associated with the adverse impacts of the COVID-19 pandemic
-- U.S. GAAP net income of $1,203 million, diluted earnings per share of
$4.66; which includes a gain of $5.57 per diluted share resulting from
the completion of the autonomous driving joint venture in the first
quarter
-- Excluding special items, diluted loss per share of $0.44
-- U.S. GAAP operating income of $1,308 million; which includes a gain of
$1,434 million resulting from the completion of the autonomous driving
joint venture in the first quarter
-- Adjusted Operating Income of $2 million; Adjusted EBITDA of $362
million
-- Generated $55 million of cash from operations
"I am extremely proud of how our organization came together and operated as One Aptiv during the second quarter, keeping our employees safe while delivering for our customers in the wake of the pandemic," said Kevin Clark, president and chief executive officer. "Our teams worked tirelessly to ensure Aptiv's facilities were ready to safely resume operations while also executing launches flawlessly with our customers. As a result, our second-quarter performance reflects the benefits of our strategically positioned product portfolio and our more sustainable business model. As we move forward, we are prepared for the possibility of continued variability in customer and market demand, leveraging our flexible cost structure, strong balance sheet and key growth initiatives to remain resilient in the face of these challenges while continuing to create long-term value for all of our stakeholders."
Second Quarter 2020 Results
For the three months ended June 30, 2020, the Company reported U.S. GAAP revenue of $2.0 billion, a decrease of 46% from the prior year period, which includes volume declines of 42% primarily resulting from the impacts of the COVID-19 pandemic, which also resulted in global vehicle production declines of 45% (54% on an AWM basis) over the same period. Adjusted for currency exchange, commodity movements and divestitures, revenue decreased by 43% in the second quarter. This reflects declines of 64% in North America, 51% in Europe, 1% in Asia, which includes growth of 14% in China, and 54% in South America, our smallest region.
The Company reported a second quarter 2020 U.S. GAAP net loss of $369 million and a loss of $1.43 per diluted share, compared to net income of $274 million and earnings of $1.07 per diluted share in the prior year period. Second quarter Adjusted Net Loss, a non-GAAP financial measure defined below, totaled $287 million, or a loss of $1.10 per diluted share, including the adverse impacts of the COVID-19 pandemic on global vehicle production, compared to Adjusted Net Income of $342 million, or earnings of $1.33 per diluted share, in the prior year period.
Second quarter Adjusted Operating Loss, a non-GAAP financial measure defined below, was $229 million, compared to Adjusted Operating Income of $405 million in the prior year period. Adjusted Operating margin was (11.7)%, compared to 11.2% in the prior year period, primarily as a result of declines in global vehicle production and consumer demand, work stoppages, disruptions to our supply chain and other adverse global economic impacts, particularly those resulting from governmental "lock-down" orders for all non-essential activities, due to the COVID-19 pandemic. Depreciation and amortization expense totaled $184 million, a decrease from $188 million in the prior year period.
Interest expense for the second quarter totaled $44 million, as compared to $43 million in the prior year period.
Tax benefit in the second quarter of 2020 was $14 million, resulting in an effective tax rate of approximately 4%. Tax expense in the second quarter of 2019 was $31 million, resulting in an effective tax rate of approximately 10%.
Net cash flow used by operating activities totaled $106 million in the second quarter, compared to net cash flow generated by operating activities of $512 million in the prior year period.
Year-to-Date 2020 Results
For the six months ended June 30, 2020, the Company reported U.S. GAAP revenue of $5.2 billion, a decrease of 28% from the prior year period, which includes volume declines of 25% primarily resulting from the impacts of the COVID-19 pandemic, which also resulted in global vehicle production declines of 33% (37% on an AWM basis) over the same period. Adjusted for currency exchange, commodity movements and divestitures, revenue decreased by 26% during the period. This reflects declines of 36% in North America, 24% in Europe, 11% in Asia which includes a decline of 8% in China and 24% in South America, our smallest region.
For the 2020 year-to-date period, the Company reported U.S. GAAP net income of $1,203 million and earnings of $4.66 per diluted share, compared to $514 million and $1.99 per diluted share in the prior year period. Year-to-date Adjusted Net Loss totaled $114 million, or losses of $0.44 per diluted share, compared to Adjusted Net Income of $615 million, or earnings of $2.38 per diluted share, in the prior year period.
The Company reported Adjusted Operating Income of $2 million for the six months ended June 30, 2020, compared to $750 million in the prior year period. Adjusted Operating margin was nil for the six months ended June 30, 2020, compared to 10.4% in the prior year period, primarily as a result of declines in global vehicle production and consumer demand, work stoppages, disruptions to our supply chain and other adverse global economic impacts, particularly those resulting from governmental "lock-down" orders for all non-essential activities, due to the COVID-19 pandemic. Depreciation and amortization expense totaled $364 million, an increase from $361 million in the prior year period.
Interest expense for the six months ended June 30, 2020 totaled $87 million, as compared to $81 million in the prior year period.
Tax benefit for the six months ended June 30, 2020 was $4 million, resulting in an effective tax rate of nil. Tax expense in the prior year period was $64 million, resulting in an effective tax rate of approximately 11%, which included approximately 4 points for the impact of favorable discrete items recorded during the period.
The Company generated net cash flow from operating activities of $55 million in the six months ended June 30, 2020, compared to $596 million in the prior year period. As of June 30, 2020, the Company had cash and cash equivalents of $1.9 billion and total available liquidity of $4.1 billion.
Reconciliations of Adjusted Revenue Growth, Adjusted Net Income (Loss), Adjusted Net Income (Loss) Per Share, Adjusted Operating Income (Loss), 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.
Public Equity Offerings
In June 2020, the Company issued approximately 15.1 million ordinary shares resulting in net proceeds of approximately $1,115 million and concurrently issued 11.5 million of 5.50% Mandatory Convertible Preferred Shares (the "MCPS") resulting in additional net proceeds of approximately $1,115 million. Holders of the MCPS will be entitled to receive cumulative dividends quarterly at an annual rate of 5.50% commencing on September 15, 2020. The MCPS will mandatorily convert to ordinary shares on June 15, 2023. This action is in addition to previous decisive actions taken by the Company in response to the COVID-19 pandemic, including extending substantially all of its existing Revolving Credit Facility's maturity to August 2022, announcing the suspension of its annual ordinary share cash dividend payments and ceasing further share repurchases. These actions, together with the equity offerings, significantly enhance the Company's liquidity and financial flexibility, while strengthening the Company's long-term position, which the Company expects to lead to additional value creation opportunities.
Q3 and Full Year 2020 Outlook
As the Company previously communicated, the current economic environment remains highly uncertain and the continued impacts of the COVID-19 pandemic remain uncertain, including the outlook for consumer demand and potential supply chain interruptions adversely impacting vehicle production. As a result, the Company will not be providing third quarter and full year 2020 financial guidance at this time.
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 +1.800.367.2403 (U.S. and Canada) or +1.334.777.6978 (international) or through a webcast at ir.aptiv.com. The conference ID number is 8883735. 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 (Loss), Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) 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 and divestitures. Adjusted Operating Income (Loss) represents net income (loss) attributable to Aptiv before interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, restructuring, other acquisition and portfolio project costs, asset impairments, gains (losses) on business divestitures and other transactions and deferred compensation related to acquisitions. Other acquisition and portfolio project costs include costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures. Adjusted Operating margin is defined as Adjusted Operating Income (Loss) as a percentage of net sales. Adjusted EBITDA represents net income (loss) attributable to Aptiv before depreciation and amortization (including asset impairments), interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, restructuring and other special items.
Adjusted Net Income (Loss) represents net income (loss) attributable to Aptiv before restructuring and other special items, including the tax impact thereon. Adjusted Net Income (Loss) Per Share represents Adjusted Net Income (Loss) 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 U.S. 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 net proceeds from the divestiture of 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 (Loss), Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) 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.
(1) Represents global vehicle
production weighted to the
geographic regions in which the
Company generates its revenue
("AWM").
About Aptiv
Aptiv is a global technology company that develops safer, greener and more connected solutions enabling the 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; 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; 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 integral to the Company's products; 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; 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,
2020 2019 2020 2019
(in millions, except per share amounts)
Net sales $
1,960 $
3,627 $
5,186 $
7,202
Operating expenses:
Cost of sales 1,947 2,958 4,672 5,920
Selling, general and
administrative 217 260 469 516
Amortization 35 43 71 77
Restructuring 72 31 100 57
Gain on autonomous driving
joint venture - (1,434)
Total operating expenses 2,271 3,292 3,878 6,570
Operating (loss) income (311) 335 1,308 632
Interest expense (44) (43) (87) (81)
Other (expense) income,
net (6) 6 (7) 22
(Loss) income before
income taxes and equity
income (361) 298 1,214 573
Income tax benefit
(expense) 14 (31) 4 (64)
(Loss) income before
equity income (347) 267 1,218 509
Equity (loss) income, net
of tax (18) 4 (16) 7
Net (loss) income (365) 271 1,202 516
Net income (loss)
attributable to
noncontrolling interest 1 (3) (4) 2
Net (loss) income
attributable to Aptiv (366) 274 1,206 514
Mandatory Convertible
Preferred Share dividends (3) (3)
Net (loss) income
attributable to ordinary
shareholders $
(369) $
274 $
1,203 $
514
Diluted net (loss) income per share:
Diluted net (loss) income
per share attributable to
ordinary shareholders $
(1.43) $
1.07 $
4.66 $
1.99
Weighted average number of
diluted shares
outstanding 258.21 257.26 258.59 258.40
APTIV PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2020 2019
(Unaudited)
(in millions)
ASSETS
Current assets:
Cash and cash equivalents $
1,885 $
412
Restricted cash 32 16
Accounts receivable, net 1,834 2,569
Inventories 1,212 1,286
Other current assets 449 504
Assets held for sale - 532
Total current assets 5,412 5,319
Long-term assets:
Property, net 3,196 3,309
Operating lease right-of-use
assets 377 413
Investments in affiliates 2,073 106
Intangible assets, net 1,104 1,186
Goodwill 2,401 2,407
Other long-term assets 717 719
Total long-term assets 9,868 8,140
Total assets $
15,280 $
13,459
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $
200 $
393
Accounts payable 1,432 2,463
Accrued liabilities 1,227 1,155
Liabilities held for sale - 43
Total current liabilities 2,859 4,054
Long-term liabilities:
Long-term debt 3,946 3,971
Pension benefit obligations 468 483
Long-term operating lease
liabilities 293 329
Other long-term liabilities 588 611
Total long-term liabilities 5,295 5,394
Total liabilities 8,154 9,448
Commitments and contingencies
Total Aptiv shareholders' equity 6,942 3,819
Noncontrolling interest 184 192
Total shareholders' equity 7,126 4,011
Total liabilities and
shareholders' equity $
15,280 $
13,459
APTIV PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
2020 2019
(in millions)
Cash flows from operating activities:
Net income $
1,202 $
516
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 364 361
Restructuring expense, net of cash
paid 13 (2)
Deferred income taxes (22) 1
Income from equity method
investments, net of dividends
received 16 (4)
Loss on modification of debt 4
Loss on extinguishment of debt - 6
Gain on autonomous driving joint
venture, net (1,434)
Other, net 39 56
Changes in operating assets and liabilities:
Accounts receivable, net 734 (190)
Inventories 74 (22)
Accounts payable (902) 26
Other, net (17) (131)
Pension contributions (16) (21)
Net cash provided by operating
activities 55 596
Cash flows from investing activities:
Capital expenditures (372) (451)
Proceeds from sale of property /
investments 4 9
Cost of business acquisitions and
other transactions, net (27) (23)
Cost of technology investments - (3)
Settlement of derivatives 1 (1)
Net cash used in investing
activities (394) (469)
Cash flows from financing activities:
(Decrease) increase in other short
and long-term debt, net (220) 192
Repayment of senior notes - (654)
Proceeds from issuance of senior
notes, net of issuance costs - 641
Fees related to modification of debt
agreements (18)
Proceeds from the public offering of
ordinary shares, net of issuance
costs 1,115
Proceeds from the public offering of
preferred shares, net of issuance
costs 1,115
Dividend payments of consolidated
affiliates to minority shareholders (6)
Repurchase of ordinary shares (57) (346)
Distribution of cash dividends (56) (114)
Taxes withheld and paid on
employees' restricted share awards (33) (34)
Net cash provided by (used in)
financing activities 1,840 (315)
Effect of exchange rate fluctuations
on cash, cash equivalents and
restricted cash (13) 1
Increase (decrease) in cash, cash
equivalents and restricted cash 1,488 (187)
Cash, cash equivalents and
restricted cash at beginning of the
period 429 568
Cash, cash equivalents and
restricted cash at end of the
period $
1,917 $
381
APTIV PLC
FOOTNOTES
(Unaudited)
1. Segment Summary
Three Months Ended June 30,
Six Months Ended June 30,
2020 2019 % 2020 2019 %
(in millions)
(in millions)
Net Sales
---
Signal and Power
Solutions $
1,435 $
2,585 (44)% $
3,765 $
5,147 (27)%
Advanced Safety and
User Experience 530 1,050 (50)% 1,432 2,073 (31)%
Eliminations and Other
(a) (5) (8) (11) (18)
Net Sales $
1,960 $
3,627 $
5,186 $
7,202
Adjusted Operating (Loss) Income
---
Signal and Power
Solutions $
(143) $
337 (142)% $
82 $
620 (87)%
Advanced Safety and
User Experience (86) 68 (226)% (80) 130 (162)%
Eliminations and Other
(a) -
Adjusted Operating
(Loss) Income $
(229) $
405 $
2 $
750
(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, 2020 and 2019:
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(in millions, except per share amounts)
Weighted average
ordinary shares
outstanding, basic 258.03 257.02 256.77 258.04
Dilutive shares
related to RSUs 0.18 0.24 0.25 0.36
Weighted average
MCPS Converted
Shares - 1.57
Weighted average
ordinary shares
outstanding,
including dilutive
shares 258.21 257.26 258.59 258.40
Net (loss) income per share
attributable to ordinary
shareholders:
Basic $
(1.43) $
1.07 $
4.69 $
1.99
Diluted $
(1.43) $
1.07 $
4.66 $
1.99
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 (Loss)," "Adjusted EBITDA," "Adjusted Net
Income (Loss)," "Adjusted Net Income (Loss) 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-
---
Three Months Ended
June 30, 2020
Reported net sales % (46)
change %
Less: foreign currency
exchange and %
commodities (3)
Less: divestitures and
other, net -
%
Adjusted revenue growth (43)
%
Six Months Ended
June 30, 2020
Reported net sales % (28)
change %
Less: foreign currency
exchange and %
commodities (2)
Less: divestitures and
other, net -
%
Adjusted revenue growth (26)
%
===
Adjusted Operating Income (Loss)
: Adjusted Operating Income (Loss) 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 (Loss) 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 (Loss) 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 (Loss) is defined as net income (loss) attributable to Aptiv before interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, restructuring
and other special items. Not all companies use identical calculations of Adjusted Operating Income (Loss), therefore this presentation may not be comparable to other similarly titled measures of other companies. Operating margin represents Operating income (loss) as a percentage of net sales, and Adjusted Operating margin
represents Adjusted Operating Income (Loss) as a percentage of net sales.
---
Consolidated Adjusted Operating Income
(Loss)
Three Months Ended June 30,
Six Months Ended June 30,
2020 2019 2020 2019
($ in millions)
$ Margin
$ Margin
$ Margin
$ Margin
Net (loss) income
attributable to Aptiv $
(366) $
274 $
1,206 $
514
Interest expense 44 43 87 81
Other expense (income),
net 6 (6) 7 (22)
Income tax (benefit)
expense (14) 31 (4) 64
Equity loss (income), net
of tax 18 (4) 16 (7)
Net income (loss)
attributable to
noncontrolling interest 1 (3) (4) 2
Operating (loss) income $
(311) (15.9) $
335 9.2 $
1,308 25.2 $
632 8.8
%
% % %
Restructuring 72 31 100 57
Other acquisition and
portfolio project costs 2 17 16 28
Asset impairments 4 10 4 10
Deferred compensation
related to nuTonomy
acquisition 4 12 8 23
Gain on business
divestitures and other
transactions - (1,434)
Adjusted operating (loss) $
(229) (11.7) $
405 11.2 $
2 % $
750 10.4
income %
% %
===
Segment Adjusted Operating Income (Loss)
(in millions)
Three Months Ended June
30, 2020 Signal and Advanced Safety Eliminations and Total
Power Solutions and User Other
Experience
Operating loss $
(208) $
(103)
$ $
(311)
Restructuring 60 12 72
Other acquisition and
portfolio project costs 1 1 2
Asset impairments 4 4
Deferred compensation
related to nuTonomy
acquisition - 4 4
Adjusted operating loss $
(143) $
(86)
$ $
(229)
Depreciation and
amortization (a) $
143 $
41
$ $
184
Three Months Ended June
30, 2019 Signal and Advanced Safety Eliminations and Total
Power Solutions and User Other
Experience
Operating income $
302 $
33
$ $
335
Restructuring 23 8 31
Other acquisition and
portfolio project costs 11 6 17
Asset impairments 1 9 10
Deferred compensation
related to nuTonomy
acquisition - 12 12
Adjusted operating income $
337 $
68
$ $
405
Depreciation and
amortization (a) $
136 $
52
$ $
188
Six Months Ended June 30,
2020 Signal and Advanced Safety Eliminations and Total
Power Solutions and User Other
Experience
Operating (loss) income $
(9) $
1,317
$ $
1,308
Restructuring 79 21 100
Other acquisition and
portfolio project costs 8 8 16
Asset impairments 4 4
Deferred compensation
related to nuTonomy
acquisition - 8 8
Gain on business
divestitures and other
transactions - (1,434) (1,434)
Adjusted operating income
(loss) $
82 $
(80)
$ $
2
Depreciation and
amortization (a) $
282 $
82
$ $
364
Six Months Ended June 30,
2019 Signal and Advanced Safety Eliminations and Total
Power Solutions and User Other
Experience
Operating income $
559 $
73
$ $
632
Restructuring 42 15 57
Other acquisition and
portfolio project costs 18 10 28
Asset impairments 1 9 10
Deferred compensation
related to nuTonomy
acquisition - 23 23
Adjusted operating income $
620 $
130
$ $
750
Depreciation and
amortization (a) $
267 $
94
$ $
361
(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 (loss)
attributable to Aptiv before depreciation and amortization (including asset impairment), interest expense, other income (expense), net, income tax (expense) benefit, 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,
2020 2019 2020 2019
(in millions)
Net (loss) income
attributable to Aptiv $
(366) $
274 $
1,206 $
514
Interest expense 44 43 87 81
Other expense (income),
net 6 (6) 7 (22)
Income tax (benefit)
expense (14) 31 (4) 64
Equity loss (income), net
of tax 18 (4) 16 (7)
Net income (loss)
attributable to
noncontrolling interest 1 (3) (4) 2
Operating (loss) income (311) 335 1,308 632
Depreciation and
amortization 184 188 364 361
EBITDA $
(127) $
523 $
1,672 $
993
Restructuring 72 31 100 57
Other acquisition and
portfolio project costs 2 17 16 28
Deferred compensation
related to nuTonomy
acquisition 4 12 8 23
Gain on business
divestitures and other
transactions - (1,434)
Adjusted EBITDA $
(49) $
583 $
362 $
1,101
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share
: Adjusted Net Income (Loss) and Adjusted Net Income (Loss) 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 (Loss) and Adjusted Net Income (Loss) 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 (Loss) is defined as net income (loss) attributable to Aptiv
before restructuring and other special items, including the tax impact thereon. Adjusted Net Income (Loss) Per Share is defined as Adjusted Net Income (Loss) 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 (Loss) and Adjusted Net Income (Loss) 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,
2020 2019 2020 2019
(in millions, except per share amounts)
Net (loss) income
attributable to ordinary
shareholders $
(369) $
274 $
1,203 $
514
Mandatory Convertible
Preferred Share dividends 3 3
Net (loss) income
attributable to Aptiv (366) 274 1,206 514
Adjusting items:
Restructuring 72 31 100 57
Other acquisition and
portfolio project costs 2 17 16 28
Asset impairments 4 10 4 10
Deferred compensation
related to nuTonomy
acquisition 4 12 8 23
Gain on business
divestitures and other
transactions - (1,434)
Debt modification costs 4 4
Debt extinguishment costs - 6
Gain on changes in fair
value of equity investments - (19)
Tax impact of adjusting
items (a) (7) (2) (18) (4)
Adjusted net (loss) income
attributable to Aptiv $
(287) $
342 $
(114) $
615
Adjusted weighted average
number of diluted shares
outstanding (b) 261.35 257.26 258.59 258.40
Diluted net (loss) income
per share attributable to
Aptiv $
(1.43) $
1.07 $
4.66 $
1.99
Adjusted net (loss) income
per share $
(1.10) $
1.33 $
(0.44) $
2.38
(a) Represents the income tax impacts
of the adjustments made for
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.
(b) In June 2020, the Company issued
$1,150 million in aggregate
liquidation preference of 5.50%
MCPS and received proceeds of
$1,115 million, after deducting
expenses and the underwriters'
discount of $35 million.
Dividends on the MCPS are
payable on a cumulative basis at
an annual rate of 5.50% on the
liquidation preference of $100
per share. Unless earlier
converted, each share of MCPS
will automatically convert on
June 15, 2023 into between
1.0754 and 1.3173 shares of
Aptiv's ordinary shares, subject
to further anti-dilution
adjustments. For purposes of
calculating Adjusted Net Income
(Loss) Per Share, the Company
has excluded the anticipated
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 and issuance of the
underlying ordinary shares
applying the "if-converted"
method (method already applied
for U.S. GAAP purposes of
calculating the weighted average
number of diluted shares
outstanding for the six months
ended June 30, 2020) 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 potential impact of the
MCPS once they are converted
into ordinary shares no later
than June 15, 2023.
Adjusted Weighted
Average Number of
Diluted Shares
Outstanding:
---
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(in millions)
Weighted average
number of diluted
shares outstanding 258.21 257.26 258.59 258.40
Weighted average
MCPS Converted
Shares 3.14
Adjusted weighted
average number of
diluted shares
outstanding 261.35 257.26 258.59 258.40
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 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,
2020 2019 2020 2019
(in millions)
Cash flows from operating activities:
Net (loss) income $
(365) $
271 $
1,202 $
516
Adjustments to reconcile net (loss)
income to net cash (used in) provided
by operating activities:
Depreciation and
amortization 184 188 364 361
Restructuring expense,
net of cash paid 28 3 13 (2)
Working capital (107) 59 (94) (186)
Pension contributions (7) (13) (16) (21)
Gain on autonomous
driving joint venture,
net - (1,434)
Other, net 161 4 20 (72)
Net cash (used in)
provided by operating
activities (106) 512 55 596
Cash flows from investing activities:
Capital expenditures (167) (216) (372) (451)
Cost of business
acquisitions and other
transactions, net (22) (25) (27) (23)
Cost of technology
investments - (3)
Settlement of derivatives - 1 1 (1)
Other, net 2 6 4 9
Net cash used in
investing activities (187) (234) (394) (469)
Adjusting items:
Adjustment for cost of
business acquisitions
and other transactions,
net 22 25 27 23
Cash flow before
financing $
(271) $
303 $
(312) $
150
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SOURCE Aptiv PLC
