Aptiv Reports Fourth Quarter 2021 Financial Results

Exceeded Full Year Revenue Outlook with Record Growth Over Market

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DUBLIN - Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported fourth quarter 2021 U.S. GAAP earnings of $0.06 per diluted share. Excluding special items, fourth quarter earnings totaled $0.56 per diluted share.

Fourth Quarter Financial Highlights Include:

• U.S. GAAP revenue of $4.1 billion, a decrease of 2%
• Revenue decreased 4% adjusted for currency exchange, commodity movements and divestitures; growth over market of 12% based on AWM¹ of (16%)

• U.S. GAAP net income of $15 million, diluted earnings per share of $0.06
• Excluding special items, diluted earnings per share of $0.56

• U.S. GAAP operating income margin of 6.3%
• Adjusted Operating Income margin of 6.6%; Adjusted Operating Income of $273 million; Adjusted EBITDA of $461 million

• Generated $669 million of cash from operations

Full Year 2021 Financial Highlights Include:

• U.S. GAAP revenue of $15.6 billion, an increase of 20%
• Revenue increased 15% adjusted for currency exchange, commodity movements and divestitures; growth over market of 15% based on flat AWM¹

• U.S. GAAP net income of $527 million, diluted earnings per share of $1.94
• Excluding special items, diluted earnings per share of $2.61

• U.S. GAAP operating income margin of 7.6%
• Adjusted Operating Income margin of 7.9%; Adjusted Operating Income of $1,230 million; Adjusted EBITDA of $2,001 million

• Generated $1,222 million of cash from operations
  

“In 2021, Aptiv continued to build on its track record of industry leadership, strong execution and financial strength, despite the continued challenging operating environment,” said Kevin Clark, president and chief executive officer. “Aptiv’s record above-market revenue growth and new business awards of $24 billion validate the strength of our industry-leading portfolio and commitment to delivering value for customers. The efforts taken to build a more sustainable and resilient business, focused on delivering electrified, software-defined vehicles, are truly making the future of mobility real. We continue to strengthen our competitiveness by investing in advanced technologies including value-enhancing transactions, such as our recently announced Wind River acquisition. Despite our expectations that supply chain disruptions will continue in 2022, I am confident that our strategically positioned portfolio and relentless focus on execution will continue to drive robust performance, reflecting our commitment to delivering sustainable revenue, earnings and cash flow growth translating to value for our shareholders.”

Fourth Quarter 2021 Results

For the three months ended December 31, 2021, the Company reported U.S. GAAP revenue of $4.1 billion, a decrease of 2% from the prior year period. Adjusted for currency exchange, commodity movements and divestitures, revenue decreased by 4% in the fourth quarter. This reflects declines of 14% in Europe and 2% in North America, partially offset by growth of 5% in Asia, which includes 9% in China, and 5% in South America, our smallest region.

The Company reported fourth quarter 2021 U.S. GAAP net income of $15 million and earnings of $0.06 per diluted share, compared to $283 million and $1.04 per diluted share in the prior year period. Fourth quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $160 million, or $0.56 per diluted share, compared to $319 million, or $1.13 per diluted share in the prior year period.

Fourth quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $273 million, compared to $476 million in the prior year period. Adjusted Operating Income margin was 6.6%, compared to 11.3% in the prior year period, reflecting the continuing adverse impacts of the worldwide semiconductor shortage on the global automotive supply chain. Depreciation and amortization expense totaled $190 million, a decrease from $208 million in the prior year period.

Interest expense for the fourth quarter totaled $36 million, as compared to $39 million in the prior year period.

Tax expense in the fourth quarter of 2021 was nil. Tax expense in the fourth quarter of 2020 was $55 million, resulting in an effective tax rate of approximately 13%.

The Company generated net cash flow from operating activities of $669 million in fourth quarter, compared to $799 million in the prior year period.

Full Year 2021 Results

For the year ended December 31, 2021, the Company reported U.S. GAAP revenue of $15.6 billion, an increase of 20% from the prior year. Adjusted for currency exchange, commodity movements and divestitures, revenue increased by 15% during the year. This reflects growth of 16% in North America, 16% in Asia, which includes 15% in China, 12% in Europe and 45% in South America, our smallest region.

For full year 2021, the Company reported U.S. GAAP net income of $527 million and earnings of $1.94 per diluted share, compared to $1,769 million and $6.66 per diluted share in the prior year. Full year 2021 Adjusted Net Income totaled $739 million, or $2.61 per diluted share, compared to $525 million, or $1.94 per diluted share, in the prior year.

The Company reported Adjusted Operating Income of $1,230 million for full year 2021, compared to $867 million in the prior year. Adjusted Operating Income margin was 7.9% for full year 2021, compared to 6.6% in the prior year. Depreciation and amortization expense totaled $773 million, an increase from $764 million in the prior year.

Interest expense for full year 2021 totaled $150 million, as compared to $164 million in the prior year.

Tax expense for full year 2021 was $101 million, resulting in an effective tax rate of approximately 11%. Tax expense for full year 2020 was $49 million, resulting in an effective tax rate of approximately 3%.

The Company generated net cash flow from operating activities of $1,222 million in 2021, compared to $1,413 million in the prior year. As of December 31, 2021, the Company had cash and cash equivalents of $3.1 billion and total available liquidity of $5.6 billion.

Reconciliations of Adjusted Revenue Growth, Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share 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. 

Prospective Change in Presentation of Non-GAAP Measures

Effective for the first quarter of 2022, the Company will exclude amortization expense of intangible assets from the calculation of Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income Per Share. Management believes that, going forward, the updated calculations of these non-GAAP financial measures will be more useful to both management and investors in their analysis of the Company’s results of operations due to recent and pending acquisitions. Amortization of intangibles is generally the result of a write-up in the value of assets in connection with an acquisition. We believe exclusion of amortization expense will facilitate more comparable operating results of the Company over time, in between periods when the Company is more or less acquisitive and allows for improved comparison with both acquisitive and non-acquisitive peer companies. The Company’s outlook for these metrics is presented below under both the new calculation basis excluding amortization expense and the previous basis including amortization expense. For comparative purposes, a recast of full year 2021 results for these measures is included on pages 17 and 18 of this release.

Full Year 2022 Outlook

The Company’s full year 2022 financial guidance is as follows:

(1) The Company’s full year 2022 financial guidance includes approximately $1.05 per diluted share for the anticipated equity losses to be recognized by Aptiv from the performance of the Motional 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 800.239.9838 (US domestic) or 323.794.2551 (international) or through a webcast at ir.aptiv.com. The conference ID number is 6190564. 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 and divestitures. Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax expense, 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 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, 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 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 U.S. GAAP purposes of calculating the weighted average number of diluted shares outstanding. Cash Flow Before Financing represents cash provided by 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.

Effective on January 1, 2022, the Company will exclude amortization expense of intangible assets from the calculation of Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income Per Share. The Company will report financial results under this new definition for the first quarter of 2022. Outlook information presented above is calculated under this new definition. The forward-looking non-GAAP measures presented in this release are reconciled under this new definition to their closest GAAP financial measure on pages 19 and 20.

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 including the potential impact of the proposed acquisition of Wind River Systems, Inc. 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 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.