Aptiv Reports Fourth Quarter 2022 Financial Results

Record 2022 Bookings and Revenue

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Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported fourth quarter 2022 U.S. GAAP earnings of $0.86 per diluted share. Excluding special items, fourth quarter earnings totaled $1.27 per diluted share.

Fourth Quarter Financial Highlights Include

• U.S. GAAP revenue of $4.6 billion, an increase of 12%
  • Revenue increased 19% adjusted for currency exchange, commodity movements and acquisitions; growth over market of 15% based on AWM1 of 4%
• U.S. GAAP net income of $233 million, diluted earnings per share of $0.86
  • Excluding special items, diluted earnings per share of $1.27
• U.S. GAAP operating income margin of 9.5%
  • Adjusted Operating Income margin of 11.3%; Adjusted Operating Income of $523 million; Adjusted EBITDA margin of 14.5%; Adjusted EBITDA of $674 million
• Generated $933 million of cash from operations
• Completed acquisition of Wind River and acquired an 85% interest in Intercable Automotive

Full Year 2022 Financial Highlights Include :

• U.S. GAAP revenue of $17.5 billion, an increase of 12%
  • Revenue increased 16% adjusted for currency exchange, commodity movements and acquisitions; growth over market of 11% based on AWM1 of 5%
• U.S. GAAP net income of $531 million, diluted earnings per share of $1.96
  • Excluding special items, diluted earnings per share of $3.41
• U.S. GAAP operating income margin of 7.2%
  • Adjusted Operating Income margin of 9.1%; Adjusted Operating Income of $1,585 million; Adjusted EBITDA margin of 12.5%; Adjusted EBITDA of $2,190 million
• Generated $1,263 million of cash from operations

"Our results for the year continue to demonstrate our solid operating execution, the strength of our product portfolio and our ability to provide solutions for our customers," said Kevin Clark, chairman and chief executive officer. "We achieved a second year of record new business bookings and revenues increased 16% in 2022. Despite macroeconomic uncertainty, supply disruptions and inflationary cost impacts that are likely to persist in 2023, our continued focus on operational excellence, along with our recent acquisitions of Wind River and Intercable Automotive, have positioned Aptiv for accelerated growth over the long-term."

Fourth  Quarter 2022 Results

For the three months ended December 31, 2022, the Company reported U.S. GAAP revenue of $4.6 billion, an increase of 12% from the prior year period. Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 19% in the fourth quarter. This reflects growth of 22% in Europe, 21% in North America, 12% in Asia, which includes 8% in China, and 40% in South America, our smallest region.

The Company reported fourth quarter 2022 U.S. GAAP net income of $233 million and earnings of $0.86 per diluted share, compared to $15 million and $0.06 per diluted share in the prior year period. Fourth quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $361 million, or $1.27 per diluted share, compared to $193 million, or $0.68 per diluted share in the prior year period.

Fourth quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $523 million, compared to $310 million in the prior year period. Adjusted Operating Income margin was 11.3%, compared to 7.5% in the prior year period, reflecting increased global vehicle production and the favorable impact of material cost recoveries. Depreciation and amortization expense totaled $188 million, as compared to $190 million in the prior year period.

Interest expense for the fourth quarter totaled $62 million, as compared to $36 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.

Tax expense in the fourth quarter of 2022 was $25 million, resulting in an effective tax rate of approximately 7%. Tax expense in the fourth quarter of 2021 was nil.

The Company generated net cash flow from operating activities of $933 million in fourth quarter, compared to $669 million in the prior year period.

Full Year 2022 Results

For the year ended December 31, 2022, the Company reported U.S. GAAP revenue of $17.5 billion, an increase of 12% from the prior year. Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 16% during the year. This reflects growth of 20% in North America, 15% in Asia, which includes 15% in China, 11% in Europe and 37% in South America, our smallest region.

For full year 2022, the Company reported U.S. GAAP net income of $531 million and earnings of $1.96 per diluted share, compared to $527 million and $1.94 per diluted share in the prior year. Full year 2022 Adjusted Net Income totaled $967 million, or $3.41 per diluted share, compared to $868 million, or $3.06 per diluted share, in the prior year.

The Company reported Adjusted Operating Income of $1,585 million for full year 2022, compared to $1,378 million in the prior year. Adjusted Operating Income margin was 9.1% for full year 2022, compared to 8.8% in the prior year, reflecting increased global vehicle production and the favorable impact of material cost recoveries, partially offset by the adverse impacts from COVID-19 pandemic lockdowns in China, continued adverse impacts from global inflationary pressures and the worldwide semiconductor shortage. Depreciation and amortization expense totaled $762 million, as compared to $773 million in the prior year.

Interest expense for full year 2022 totaled $219 million, as compared to $150 million in the prior year, 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.

Tax expense for full year 2022 was $121 million, resulting in an effective tax rate of approximately 12%. Tax expense for full year 2021 was $101 million, resulting in an effective tax rate of approximately 11%.

The Company generated net cash flow from operating activities of $1,263 million in 2022, compared to $1,222 million in the prior year. As of December 31, 2022, the Company had cash and cash equivalents of $1.5 billion and total available liquidity of $4.0 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.

Two Acquisitions Completed in Fourth Quarter

The Company completed the acquisition of Wind River Systems, Inc. ("Wind River") in December 2022. Wind River is a global leader in delivering software for the intelligent edge and we expect this acquisition to accelerate the journey to a software-defined future of the automotive industry.

The Company also acquired an 85% interest in Intercable Automotive Solutions S.r.l. ("Intercable Automotive") in November 2022. Intercable Automotive is an industry leader in high voltage power distribution and interconnect technology and we expect this acquisition to enhance our position as a leader in vehicle architecture systems.

Full Year 2023  Outlook

The Company's full year 2023 financial guidance is as follows:

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 (US) or +1.323.794.2551 (international) or through a webcast at ir.aptiv.com. The conference ID number is 6982101. 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, asset impairments, other charges related to the Ukraine/Russia conflict, gains (losses) on business divestitures and other transactions and compensation expense 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) 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.

Effective on January 1, 2022, the Company now excludes amortization expense of intangible assets from the calculation of Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income Per Share. Financial results reported in this release for both the current and historical period have been prepared under this new definition. Outlook information presented above is also 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 at the end of this release.

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 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.

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