Aptiv PLC APTV

1    Represents global vehicle production weighted to the geographic regions in which the Company generates its revenue ("AWM").

Net sales

$18,700 - $19,300

Adjusted EBITDA

$2,585 - $2,745

Adjusted EBITDA margin

13.8% - 14.2%

Adjusted operating income

$1,920 - $2,080

Adjusted operating income margin

10.3% - 10.8%

Adjusted net income per share (1)

$4.00 - $4.50

Cash flow from operations

$1,900

Capital expenditures

$950

Adjusted effective tax rate

~14.5%

(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.

APTIV PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended March 31,

2023

2022

(in millions, except per share amounts)

Net sales

$                4,818

$                4,178

Operating expenses:

Cost of sales

4,058

3,589

Selling, general and administrative

342

274

Amortization

59

37

Restructuring

11

22

Total operating expenses

4,470

3,922

Operating income

348

256

Interest expense

(67)

(43)

Other expense, net

(1)

(39)

Income before income taxes and equity loss

280

174

Income tax expense

(34)

(21)

Income before equity loss

246

153

Equity loss, net of tax

(82)

(63)

Net income

164

90

Net income attributable to noncontrolling interest

3

1

Net loss attributable to redeemable noncontrolling interest

(1)

—

Net income attributable to Aptiv

162

89

Mandatory convertible preferred share dividends

(16)

(16)

Net income attributable to ordinary shareholders

$                   146

$                     73

Diluted net income per share:

Diluted net income per share attributable to ordinary shareholders

$                  0.54

$                  0.27

Weighted average number of diluted shares outstanding

271.17

271.16

APTIV PLC
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,
2023

December 31,
2022

(Unaudited)

(in millions)

ASSETS

Current assets:

Cash and cash equivalents

$                1,100

$                1,531

Accounts receivable, net

3,564

3,433

Inventories

2,485

2,340

Other current assets

576

480

Total current assets

7,725

7,784

Long-term assets:

Property, net

3,545

3,495

Operating lease right-of-use assets

443

451

Investments in affiliates

1,651

1,723

Intangible assets, net

2,534

2,585

Goodwill

5,099

5,106

Other long-term assets

719

740

Total long-term assets

13,991

14,100

Total assets

$             21,716

$             21,884

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY

Current liabilities:

Short-term debt

$                     45

$                     31

Accounts payable

2,996

3,150

Accrued liabilities

1,467

1,684

Total current liabilities

4,508

4,865

Long-term liabilities:

Long-term debt

6,473

6,460

Pension benefit obligations

368

354

Long-term operating lease liabilities

355

361

Other long-term liabilities

740

750

Total long-term liabilities

7,936

7,925

Total liabilities

12,444

12,790

Commitments and contingencies

Redeemable noncontrolling interest

97

96

Total Aptiv shareholders' equity

8,983

8,809

Noncontrolling interest

192

189

Total shareholders' equity

9,175

8,998

Total liabilities, redeemable noncontrolling interest and shareholders' equity

$             21,716

$             21,884

APTIV PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31,

2023

2022

(in millions)

Cash flows from operating activities:

Net income

$                    164

$                      90

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

216

191

Restructuring expense, net of cash paid

(24)

7

Deferred income taxes

(7)

(1)

Loss from equity method investments, net of dividends received

82

63

Other, net

33

15

Changes in operating assets and liabilities:

Accounts receivable, net

(131)

(270)

Inventories

(144)

(298)

Accounts payable

(73)

1

Other, net

(117)

4

Pension contributions

(8)

(4)

Net cash used in operating activities

(9)

(202)

Cash flows from investing activities:

Capital expenditures

(269)

(247)

Proceeds from sale of property

—

2

Cost of business acquisitions and other transactions, net of cash acquired

(38)

(220)

Proceeds from sale of technology investments

—

2

Cost of technology investments

(1)

(1)

Settlement of derivatives

(1)

(1)

Net cash used in investing activities

(309)

(465)

Cash flows from financing activities:

Decrease in other short and long-term debt, net

(8)

(1)

Proceeds from issuance of senior notes, net of issuance costs

—

2,472

Dividend payments of consolidated affiliates to minority shareholders

—

(8)

Repurchase of ordinary shares

(68)

—

Distribution of mandatory convertible preferred share cash dividends

(16)

(16)

Taxes withheld and paid on employees' restricted share awards

(30)

(36)

Net cash (used in) provided by financing activities

(122)

2,411

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash

2

(6)

(Decrease) increase in cash, cash equivalents and restricted cash

(438)

1,738

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

$                 1,117

$                 4,877

Reconciliation of cash, cash equivalents and restricted cash and cash classified as assets held
for sale

March 31,

2023

2022

(in millions)

Cash, cash equivalents and restricted cash

$                 1,100

$                 4,877

Cash classified as assets held for sale

17

—

Total cash, cash equivalents and restricted cash

$                 1,117

$                 4,877

APTIV PLC
FOOTNOTES
(Unaudited)

1. Segment Summary

Three Months Ended March 31,

2023

2022

%

(in millions)

Net Sales

Signal and Power Solutions

$                3,464

$                3,106

12 %

Advanced Safety and User Experience

1,366

1,082

26 %

Eliminations and Other (a)

(12)

(10)

Net Sales

$                4,818

$                4,178

Adjusted Operating Income

Signal and Power Solutions

$                   374

$                   308

21 %

Advanced Safety and User Experience

63

16

294 %

Adjusted Operating Income

$                   437

$                   324

(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
per share attributable to ordinary shareholders for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

2023

2022

(in millions, except per share amounts)

Weighted average ordinary shares outstanding, basic

271.01

270.79

Dilutive shares related to RSUs

0.16

0.37

Weighted average ordinary shares outstanding, including dilutive shares

271.17

271.16

Net income per share attributable to ordinary shareholders:

Basic

$                  0.54

$                  0.27

Diluted

$                  0.54

$                  0.27

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
March 31, 2023

Reported net sales % change

15 %

Less: foreign currency exchange and commodities

(4) %

Less: acquisitions

4 %

Adjusted revenue growth

15 %

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 March 31,

2023

2022

($ in millions)

$

Margin

$

Margin

Net income attributable to Aptiv

$                   162

$                     89

Interest expense

67

43

Other expense, net

1

39

Income tax expense

34

21

Equity loss, net of tax

82

63

Net income attributable to noncontrolling interest

3

1

Net loss attributable to redeemable noncontrolling interest

(1)

—

Operating income

$                   348

7.2 %

$                   256

6.1 %

Amortization

59

37

Restructuring

11

22

Other acquisition and portfolio project costs

14

9

Compensation expense related to acquisitions

5

—

Adjusted operating income

$                   437

9.1 %

$                   324

7.8 %

Segment Adjusted Operating Income

(in millions)

Three Months Ended March 31, 2023

Signal and Power
Solutions

Advanced Safety
and User
Experience

Total

Operating income

$                   319

$                     29

$                   348

Amortization

36

23

59

Restructuring

7

4

11

Other acquisition and portfolio project costs

12

2

14

Compensation expense related to acquisitions

—

5

5

Adjusted operating income

$                   374

$                     63

$                   437

Depreciation and amortization (a)

$                   149

$                     67

$                   216

Three Months Ended March 31, 2022

Signal and Power
Solutions

Advanced Safety
and User
Experience

Total

Operating income (loss)

$                   257

$                      (1)

$                   256

Amortization

35

2

37

Restructuring

9

13

22

Other acquisition and portfolio project costs

7

2

9

Adjusted operating income

$                   308

$                     16

$                   324

Depreciation and amortization (a)

$                   146

$                     45

$                   191

(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.

Three Months Ended March 31,

2023

2022

(in millions)

Net income attributable to Aptiv

$                  162

$                    89

Interest expense

67

43

Income tax expense

34

21

Net income attributable to noncontrolling interest

3

1

Net loss attributable to redeemable noncontrolling interest

(1)

—

Depreciation and amortization

216

191

EBITDA

$                  481

$                  345

Other expense, net

1

39

Equity loss, net of tax

82

63

Restructuring

11

22

Other acquisition and portfolio project costs

14

9

Compensation expense related to acquisitions

5

—

Adjusted EBITDA

$                  594

$                  478

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 March 31,

2023

2022

(in millions, except per share amounts)

Net income attributable to ordinary shareholders

$                   146

$                     73

Mandatory convertible preferred share dividends

16

16

Net income attributable to Aptiv

162

89

Adjusting items:

Amortization

59

37

Restructuring

11

22

Other acquisition and portfolio project costs

14

9

Compensation expense related to acquisitions

5

—

Impairment of equity investments without readily determinable fair value

18

—

Loss on change in fair value of publicly traded equity securities

3

32

Tax impact of adjusting items (a)

(14)

(9)

Adjusted net income attributable to Aptiv

$                   258

$                   180

Adjusted weighted average number of diluted shares outstanding (b)

283.54

283.53

Diluted net income per share attributable to ordinary shareholders

$                  0.54

$                  0.27

Adjusted net income per share

$                  0.91

$                  0.63

(a)

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.

(b)

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. 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 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 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 March 31,

2023

2022

(in millions)

Weighted average number of diluted shares outstanding

271.17

271.16

Weighted average MCPS Converted Shares

12.37

12.37

Adjusted weighted average number of diluted shares outstanding

283.54

283.53

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 March 31,

2023

2022

(in millions)

Cash flows from operating activities:

Net income

$                   164

$                     90

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

216

191

Restructuring expense, net of cash paid

(24)

7

Working capital

(348)

(567)

Pension contributions

(8)

(4)

Other, net

(9)

81

Net cash used in operating activities

(9)

(202)

Cash flows from investing activities:

Capital expenditures

(269)

(247)

Cost of business acquisitions and other transactions, net of cash acquired

(38)

(220)

Proceeds from sale of technology investments

—

2

Cost of technology investments

(1)

(1)

Settlement of derivatives

(1)

(1)

Other, net

—

2

Net cash used in investing activities

(309)

(465)

Adjusting items:

Adjustment for cost of business acquisitions and other transactions, net of cash acquired

38

220

Cash flow before financing

$                 (280)

$                 (447)

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

($ in millions)

Adjusted Operating Income

$

Margin (2)

Net income attributable to Aptiv

$                            830

Interest expense

235

Other income, net

(15)

Income tax expense

195

Equity loss, net of tax

300

Net income attributable to noncontrolling interest (3)

15

Operating income

$                         1,560

8.2 %

Amortization

230

Restructuring

110

Other acquisition and portfolio project costs

65

Compensation expense related to acquisitions

35

Adjusted operating income

$                         2,000

10.5 %

Adjusted EBITDA

Net income attributable to Aptiv

$                            830

Interest expense

235

Income tax expense

195

Net income attributable to noncontrolling interest (3)

15

Depreciation and amortization

895

EBITDA

$                         2,170

11.4 %

Other income, net

(15)

Equity loss, net of tax

300

Restructuring

110

Other acquisition and portfolio project costs

65

Compensation expense related to acquisitions

35

Adjusted EBITDA

$                         2,665

14.0 %

(1)

Prepared at the estimated mid-point of the Company's financial guidance range.

(2)

Represents operating income, Adjusted Operating Income, EBITDA and Adjusted EBITDA, respectively, as a percentage of estimated net sales.

(3)

Includes portion attributable to redeemable noncontrolling interest.

Estimated Full Year

2023 (1)

Adjusted Net Income Per Share

($ and shares in millions,
except per share amounts)

Net income attributable to ordinary shareholders

$                            800

Mandatory convertible preferred share dividends

30

Net income attributable to Aptiv

830

Adjusting items:

Amortization

230

Restructuring

110

Other acquisition and portfolio project costs

65

Compensation expense related to acquisitions

35

Tax impact of adjusting items

(60)

Adjusted net income attributable to Aptiv

$                         1,210

Adjusted weighted average number of diluted shares outstanding

284.28

Diluted net income per share attributable to ordinary shareholders

$                           2.81

Adjusted net income per share

$                           4.25

(1)

Prepared at the estimated mid-point of the Company's financial guidance range.