Aptiv Reports Fourth Quarter 2023 Financial Results

Record Full Year Revenue, Adjusted Operating Income and Operating Cash Flow

Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported fourth quarter 2023 U.S. GAAP earnings of $3.22 per diluted share. Excluding special items, fourth quarter earnings totaled $1.40 per diluted share.

Fourth Quarter Financial Highlights Include:

  • U.S. GAAP revenue of $4.9 billion, an increase of 6%
    • Revenue increased 2% adjusted for currency exchange, commodity movements and acquisitions, compared to AWM1 of 7%
  • U.S. GAAP net income of $905 million, diluted earnings per share of $3.22
    • Excluding special items, diluted earnings per share of $1.40
  • U.S. GAAP operating income margin of 7.2%
    • Adjusted Operating Income margin of 12.2%; Adjusted Operating Income of $600 million; Adjusted EBITDA margin of 15.7%; Adjusted EBITDA of $772 million
  • Generated $624 million of cash from operations
  • Returned $300 million to shareholders through share repurchases
  • Paid-off $301 million Term Loan over two years early

Full Year 2023 Financial Highlights Include:

  • U.S. GAAP revenue of $20.1 billion, an increase of 15%
    • Revenue increased 12% adjusted for currency exchange, commodity movements and acquisitions, compared to AWM1 of 10%
  • U.S. GAAP net income of $2,909 million, diluted earnings per share of $10.39
    • Excluding special items, diluted earnings per share of $4.86
  • U.S. GAAP operating income margin of 7.8%
    • Adjusted Operating Income margin of 10.6%; Adjusted Operating Income of $2,127 million; Adjusted EBITDA margin of 13.9%; Adjusted EBITDA of $2,788 million
  • Generated $1,896 million of cash from operations
  • Returned $398 million to shareholders through share repurchases

“Aptiv delivered record revenue, adjusted operating income and operating cash flow for the year, reflecting strong growth across our portfolio and solid operational execution,” said Kevin Clark, chairman and chief executive officer. “We also achieved our third year in a row of record new business awards at over $34 billion, a testament to the quality of our portfolio of advanced technologies. As our end markets continue to transition towards a feature-rich, software-defined future, our customers will face increasing challenges involving product complexity, performance and affordability. With our flexible, full-system approach, Aptiv remains uniquely positioned to address these challenges, and we expect our commercial momentum to continue to accelerate in 2024, driving further long-term growth and margin expansion.”

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

Fourth Quarter 2023 Results

For the three months ended December 31, 2023, the Company reported U.S. GAAP revenue of $4.9 billion, an increase of 6% from the prior year period. Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 2% in the fourth quarter. This reflects growth of 10% in Asia, which includes 12% in China, and 6% in Europe, partially offset by declines of 7% in North America and 6% in South America, our smallest region.

The Company reported fourth quarter 2023 U.S. GAAP net income of $905 million and earnings of $3.22 per diluted share, compared to $233 million and $0.86 per diluted share in the prior year period. Fourth quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $395 million, or $1.40 per diluted share, compared to $361 million, or $1.27 per diluted share in the prior year period.

Fourth quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $600 million, compared to $523 million in the prior year period. Adjusted Operating Income margin was 12.2%, compared to 11.3% in the prior year period, reflecting increased global vehicle production, pricing and the continued easing of supply chain disruption costs. Depreciation and amortization expense totaled $246 million, an increase from $188 million in the prior year period.

Interest expense for the fourth quarter totaled $71 million, an increase from $62 million in the prior year period.

Tax benefit in the fourth quarter of 2023 was $680 million, which primarily reflects a deferred tax benefit of approximately $0.7 billion recognized as a result of transactions entered into as part of a reorganization of the Company’s corporate entity structure. Tax expense in the fourth quarter of 2022 was $25 million, resulting in an effective tax rate of approximately 7%.

The Company generated net cash flow from operating activities of $624 million in fourth quarter, compared to $933 million in the prior year period.

Full Year 2023 Results

For the year ended December 31, 2023, the Company reported U.S. GAAP revenue of $20.1 billion, an increase of 15% from the prior year. Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 12% in 2023. This reflects growth of 17% in Europe, 12% in Asia, which includes 12% in China, 9% in North America and 9% in South America, our smallest region.

For full year 2023, the Company reported U.S. GAAP net income of $2,909 million and earnings of $10.39 per diluted share, compared to $531 million and $1.96 per diluted share in the prior year. Full year 2023 Adjusted Net Income totaled $1,376 million, or $4.86 per diluted share, compared to $967 million, or $3.41 per diluted share, in the prior year.

The Company reported Adjusted Operating Income of $2,127 million for full year 2023, compared to $1,585 million in the prior year. Adjusted Operating Income margin was 10.6% for full year 2023, compared to 9.1% in the prior year, reflecting our growth over market of 2%, increased global vehicle production, pricing and the results from our recent acquisitions. Depreciation and amortization expense totaled $912 million, an increase from $762 million in the prior year.

Interest expense for full year 2023 totaled $285 million, as compared to $219 million in the prior year, which includes 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 while it was outstanding during 2023.

Tax benefit for full year 2023 was $1,928 million, which primarily reflects a deferred tax benefit of approximately $2.1 billion recognized as a result of transactions entered into as part of a reorganization of the Company’s corporate entity structure. Tax expense for full year 2022 was $121 million, resulting in an effective tax rate of approximately 12%.

The Company generated net cash flow from operating activities of $1,896 million in 2023, compared to $1,263 million in the prior year. As of December 31, 2023, the Company had cash and cash equivalents of $1.6 billion and total available liquidity of $4.1 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.

Share Repurchase Program

During the fourth quarter of 2023, the Company repurchased 3.8 million shares for approximately $300 million, leaving approximately $1.6 billion available for future share repurchases. For the full year, the Company repurchased 4.7 million shares for approximately $398 million. All repurchased shares were retired.

Full Year 2024 Outlook

The Company’s full year 2024 financial guidance is as follows:

(in millions, except per share amounts)

Full Year 2024

Net sales

$21,300 - $21,900

Adjusted EBITDA

$3,200 - $3,350

Adjusted EBITDA margin

15.0% - 15.3%

Adjusted operating income

$2,475 - $2,625

Adjusted operating income margin

11.6% - 12.0%

Adjusted net income per share (1)

$5.55 - $6.05

Cash flow from operations

$2,300

Capital expenditures

$1,050

Adjusted effective tax rate

17.5%

(1) The Company’s full year 2024 financial guidance includes approximately $1.20 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 (US) or +1.323.994.2093 (international) or through a webcast at ir.aptiv.com. The conference ID number is 9145297. 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 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

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in millions, except per share amounts)

Net sales

$

4,919

 

 

$

4,640

 

 

$

20,051

 

 

$

17,489

 

Operating expenses:

 

 

 

 

 

 

 

Cost of sales

 

3,997

 

 

 

3,827

 

 

 

16,612

 

 

 

14,854

 

Selling, general and administrative

 

381

 

 

 

303

 

 

 

1,436

 

 

 

1,138

 

Amortization

 

56

 

 

 

37

 

 

 

233

 

 

 

149

 

Restructuring

 

130

 

 

 

33

 

 

 

211

 

 

 

85

 

Total operating expenses

 

4,564

 

 

 

4,200

 

 

 

18,492

 

 

 

16,226

 

Operating income

 

355

 

 

 

440

 

 

 

1,559

 

 

 

1,263

 

Interest expense

 

(71

)

 

 

(62

)

 

 

(285

)

 

 

(219

)

Other income (expense), net

 

27

 

 

 

(10

)

 

 

63

 

 

 

(54

)

Income before income taxes and equity loss

 

311

 

 

 

368

 

 

 

1,337

 

 

 

990

 

Income tax benefit (expense)

 

680

 

 

 

(25

)

 

 

1,928

 

 

 

(121

)

Income before equity loss

 

991

 

 

 

343

 

 

 

3,265

 

 

 

869

 

Equity loss, net of tax

 

(72

)

 

 

(77

)

 

 

(299

)

 

 

(279

)

Net income

 

919

 

 

 

266

 

 

 

2,966

 

 

 

590

 

Net income (loss) attributable to noncontrolling interest

 

13

 

 

 

18

 

 

 

28

 

 

 

(3

)

Net income (loss) attributable to redeemable noncontrolling interest

 

1

 

 

 

(1

)

 

 

 

 

 

(1

)

Net income attributable to Aptiv

 

905

 

 

 

249

 

 

 

2,938

 

 

 

594

 

Mandatory convertible preferred share dividends

 

 

 

 

(16

)

 

 

(29

)

 

 

(63

)

Net income attributable to ordinary shareholders

$

905

 

 

$

233

 

 

$

2,909

 

 

$

531

 

 

 

 

 

 

 

 

 

Diluted net income per share:

 

 

 

 

 

 

 

Diluted net income per share attributable to ordinary shareholders

$

3.22

 

 

$

0.86

 

 

$

10.39

 

 

$

1.96

 

Weighted average number of diluted shares outstanding

 

281.21

 

 

 

271.40

 

 

 

282.88

 

 

 

271.18

 

APTIV PLC

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

December 31,

2023

 

December 31,

2022

 

 

 

(in millions)

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,640

 

$

1,531

Accounts receivable, net

 

3,546

 

 

3,433

Inventories

 

2,365

 

 

2,340

Other current assets

 

696

 

 

480

Total current assets

 

8,247

 

 

7,784

Long-term assets:

 

 

 

Property, net

 

3,785

 

 

3,495

Operating lease right-of-use assets

 

540

 

 

451

Investments in affiliates

 

1,443

 

 

1,723

Intangible assets, net

 

2,399

 

 

2,585

Goodwill

 

5,151

 

 

5,106

Other long-term assets

 

2,862

 

 

740

Total long-term assets

 

16,180

 

 

14,100

Total assets

$

24,427

 

$

21,884

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Short-term debt

$

9

 

$

31

Accounts payable

 

3,151

 

 

3,150

Accrued liabilities

 

1,648

 

 

1,684

Total current liabilities

 

4,808

 

 

4,865

Long-term liabilities:

 

 

 

Long-term debt

 

6,204

 

 

6,460

Pension benefit obligations

 

417

 

 

354

Long-term operating lease liabilities

 

453

 

 

361

Other long-term liabilities

 

701

 

 

750

Total long-term liabilities

 

7,775

 

 

7,925

Total liabilities

 

12,583

 

 

12,790

Commitments and contingencies

 

 

 

Redeemable noncontrolling interest

 

99

 

 

96

 

 

 

 

Total Aptiv shareholders’ equity

 

11,548

 

 

8,809

Noncontrolling interest

 

197

 

 

189

Total shareholders’ equity

 

11,745

 

 

8,998

Total liabilities, redeemable noncontrolling interest and shareholders’ equity

$

24,427

 

$

21,884

APTIV PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Year Ended December 31,

 

2023

 

2022

 

(in millions)

Cash flows from operating activities:

 

 

 

Net income

$

2,966

 

 

$

590

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

912

 

 

 

762

 

Restructuring expense, net of cash paid

 

83

 

 

 

18

 

Deferred income taxes

 

(2,164

)

 

 

(144

)

Loss from equity method investments, net of dividends received

 

304

 

 

 

284

 

Other charges related to Ukraine/Russia conflict

 

 

 

 

54

 

Other, net

 

171

 

 

 

126

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(112

)

 

 

(497

)

Inventories

 

(20

)

 

 

(258

)

Accounts payable

 

4

 

 

 

137

 

Other, net

 

(215

)

 

 

215

 

Pension contributions

 

(33

)

 

 

(24

)

Net cash provided by operating activities

 

1,896

 

 

 

1,263

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(906

)

 

 

(844

)

Proceeds from sale of property

 

4

 

 

 

4

 

Proceeds from business divestitures, net of cash sold

 

(17

)

 

 

 

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

 

(83

)

 

 

(4,310

)

Proceeds from sale of technology investments

 

 

 

 

3

 

Cost of technology investments

 

(6

)

 

 

(42

)

Settlement of derivatives

 

6

 

 

 

7

 

Net cash used in investing activities

 

(1,002

)

 

 

(5,182

)

Cash flows from financing activities:

 

 

 

Decrease in other short and long-term debt, net

 

(332

)

 

 

(5

)

Proceeds from issuance of senior notes, net of issuance costs

 

 

 

 

2,472

 

Contingent consideration payments

 

(10

)

 

 

 

Dividend payments of consolidated affiliates to minority shareholders

 

(2

)

 

 

(9

)

Repurchase of ordinary shares

 

(398

)

 

 

 

Distribution of mandatory convertible preferred share cash dividends

 

(32

)

 

 

(63

)

Taxes withheld and paid on employees’ restricted share awards

 

(33

)

 

 

(36

)

Net cash (used in) provided by financing activities

 

(807

)

 

 

2,359

 

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

 

(2

)

 

 

(24

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

85

 

 

 

(1,584

)

Cash, cash equivalents and restricted cash at beginning of the year

 

1,555

 

 

 

3,139

 

Cash, cash equivalents and restricted cash at end of the year

$

1,640

 

 

$

1,555

 

 

 

 

 

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

 

 

 

 

December 31,

 

2023

 

2022

 

(in millions)

Cash, cash equivalents and restricted cash

$

1,640

 

 

$

1,531

 

Cash classified as assets held for sale

 

 

 

 

24

 

Total cash, cash equivalents and restricted cash

$

1,640

 

 

$

1,555

 

APTIV PLC

FOOTNOTES

(Unaudited)

 

1. Segment Summary

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

%

 

2023

 

2022

 

%

 

(in millions)

 

 

 

(in millions)

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

Signal and Power Solutions

$

3,574

 

 

$

3,374

 

 

6

%

 

$

14,404

 

 

$

12,943

 

 

11

%

Advanced Safety and User Experience

 

1,356

 

 

 

1,280

 

 

6

%

 

 

5,695

 

 

 

4,587

 

 

24

%

Eliminations and Other (a)

 

(11

)

 

 

(14

)

 

 

 

 

(48

)

 

 

(41

)

 

 

Net Sales

$

4,919

 

 

$

4,640

 

 

 

 

$

20,051

 

 

$

17,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income

 

 

 

 

 

 

 

 

 

 

 

Signal and Power Solutions

$

459

 

 

$

446

 

 

3

%

 

$

1,676

 

 

$

1,441

 

 

16

%

Advanced Safety and User Experience

 

141

 

 

 

77

 

 

83

%

 

 

451

 

 

 

144

 

 

213

%

Adjusted Operating Income

$

600

 

 

$

523

 

 

 

 

$

2,127

 

 

$

1,585

 

 

 

(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 and years ended December 31, 2023 and 2022:

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in millions, except per share data)

Weighted average ordinary shares outstanding, basic

 

280.95

 

 

270.95

 

 

276.92

 

 

270.90

Dilutive shares related to RSUs

 

0.26

 

 

0.45

 

 

0.17

 

 

0.28

Weighted average MCPS Converted Shares

 

 

 

 

 

5.79

 

 

Weighted average ordinary shares outstanding, including dilutive shares

 

281.21

 

 

271.40

 

 

282.88

 

 

271.18

Net income per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

Basic

$

3.22

 

$

0.86

 

$

10.50

 

$

1.96

Diluted

$

3.22

 

$

0.86

 

$

10.39

 

$

1.96

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

December 31, 2023

 

 

Reported net sales % change

6

%

Less: foreign currency exchange and commodities

1

%

Less: acquisitions

3

%

Adjusted revenue growth

2

%

 

 

 

Year Ended

December 31, 2023

 

 

Reported net sales % change

15

%

Less: foreign currency exchange and commodities

(1

)%

Less: acquisitions

4

%

Adjusted revenue growth

12

%

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

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

($ in millions)

 

$

 

Margin

 

$

 

Margin

 

$

 

Margin

 

$

 

Margin

Net income attributable to Aptiv

$

905

 

 

 

 

$

249

 

 

 

 

$

2,938

 

 

 

 

$

594

 

 

 

Interest expense

 

71

 

 

 

 

 

62

 

 

 

 

 

285

 

 

 

 

 

219

 

 

 

Other (income) expense, net

 

(27

)

 

 

 

 

10

 

 

 

 

 

(63

)

 

 

 

 

54

 

 

 

Income tax (benefit) expense

 

(680

)

 

 

 

 

25

 

 

 

 

 

(1,928

)

 

 

 

 

121

 

 

 

Equity loss, net of tax

 

72

 

 

 

 

 

77

 

 

 

 

 

299

 

 

 

 

 

279

 

 

 

Net income (loss) attributable to noncontrolling interest

 

13

 

 

 

 

 

18

 

 

 

 

 

28

 

 

 

 

 

(3

)

 

 

Net income (loss) attributable to redeemable noncontrolling interest

 

1

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

(1

)

 

 

Operating income

 

355

 

 

7.2

%

 

 

440

 

 

9.5

%

 

 

1,559

 

 

7.8

%

 

 

1,263

 

 

7.2

%

Amortization

 

56

 

 

 

 

 

37

 

 

 

 

 

233

 

 

 

 

 

149

 

 

 

Restructuring

 

130

 

 

 

 

 

33

 

 

 

 

 

211

 

 

 

 

 

85

 

 

 

Other acquisition and portfolio project costs

 

35

 

 

 

 

 

13

 

 

 

 

 

80

 

 

 

 

 

26

 

 

 

Asset impairments

 

18

 

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

8

 

 

 

Other charges related to Ukraine/Russia conflict

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

54

 

 

 

Compensation expense related to acquisitions

 

6

 

 

 

 

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

Adjusted operating income

$

600

 

 

12.2

%

 

$

523

 

 

11.3

%

 

$

2,127

 

 

10.6

%

 

$

1,585

 

 

9.1

%

Segment Adjusted Operating Income

(in millions)

 

Three Months Ended December 31, 2023

Signal and

Power Solutions

 

Advanced

Safety and User

Experience

 

Total

Operating income

$

325

 

$

30

 

$

355

Amortization

 

33

 

 

23

 

 

56

Restructuring

 

60

 

 

70

 

 

130

Other acquisition and portfolio project costs

 

26

 

 

9

 

 

35

Asset impairments

 

15

 

 

3

 

 

18

Compensation expense related to acquisitions

 

 

 

6

 

 

6

Adjusted operating income

$

459

 

$

141

 

$

600

 

 

 

 

 

 

Depreciation and amortization (a)

$

174

 

$

72

 

$

246

 

 

 

 

 

 

Three Months Ended December 31, 2022

Signal and

Power Solutions

 

Advanced

Safety and User

Experience

 

Total

Operating income

$

399

 

$

41

 

$

440

Amortization

 

32

 

 

5

 

 

37

Restructuring

 

7

 

 

26

 

 

33

Other acquisition and portfolio project costs

 

8

 

 

5

 

 

13

Adjusted operating income

$

446

 

$

77

 

$

523

 

 

 

 

 

 

Depreciation and amortization (a)

$

143

 

$

45

 

$

188

 

 

 

 

 

 

Year Ended December 31, 2023

Signal and

Power Solutions

 

Advanced

Safety and User

Experience

 

Total

Operating income

$

1,379

 

$

180

 

$

1,559

Amortization

 

140

 

 

93

 

 

233

Restructuring

 

82

 

 

129

 

 

211

Other acquisition and portfolio project costs

 

60

 

 

20

 

 

80

Asset impairments

 

15

 

 

3

 

 

18

Compensation expense related to acquisitions

 

 

 

26

 

 

26

Adjusted operating income

$

1,676

 

$

451

 

$

2,127

 

 

 

 

 

 

Depreciation and amortization (a)

$

638

 

$

274

 

$

912

 

 

 

 

 

 

Year Ended December 31, 2022

Signal and

Power Solutions

 

Advanced

Safety and User

Experience

 

Total

Operating income

$

1,195

 

$

68

 

$

1,263

Amortization

 

139

 

 

10

 

 

149

Restructuring

 

30

 

 

55

 

 

85

Other acquisition and portfolio project costs

 

15

 

 

11

 

 

26

Asset impairments

 

8

 

 

 

 

8

Other charges related to Ukraine/Russia conflict

 

54

 

 

 

 

54

Adjusted operating income

$

1,441

 

$

144

 

$

1,585

 

 

 

 

 

 

Depreciation and amortization (a)

$

584

 

$

178

 

$

762

(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

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in millions)

Net income attributable to Aptiv

$

905

 

 

$

249

 

 

$

2,938

 

 

$

594

 

Interest expense

 

71

 

 

 

62

 

 

 

285

 

 

 

219

 

Income tax (benefit) expense

 

(680

)

 

 

25

 

 

 

(1,928

)

 

 

121

 

Net income (loss) attributable to noncontrolling interest

 

13

 

 

 

18

 

 

 

28

 

 

 

(3

)

Net income (loss) attributable to redeemable noncontrolling interest

 

1

 

 

 

(1

)

 

 

 

 

 

(1

)

Depreciation and amortization

 

246

 

 

 

188

 

 

 

912

 

 

 

762

 

EBITDA

$

556

 

 

$

541

 

 

$

2,235

 

 

$

1,692

 

Other (income) expense, net

 

(27

)

 

 

10

 

 

 

(63

)

 

 

54

 

Equity loss, net of tax

 

72

 

 

 

77

 

 

 

299

 

 

 

279

 

Restructuring

 

130

 

 

 

33

 

 

 

211

 

 

 

85

 

Other acquisition and portfolio project costs

 

35

 

 

 

13

 

 

 

80

 

 

 

26

 

Other charges related to Ukraine/Russia conflict

 

 

 

 

 

 

 

 

 

 

54

 

Compensation expense related to acquisitions

 

6

 

 

 

 

 

 

26

 

 

 

 

Adjusted EBITDA

$

772

 

 

$

674

 

 

$

2,788

 

 

$

2,190

 

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

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in millions, except per share amounts)

Net income attributable to ordinary shareholders

$

905

 

 

$

233

 

 

$

2,909

 

 

$

531

 

Mandatory convertible preferred share dividends

 

 

 

 

16

 

 

 

29

 

 

 

63

 

Net income attributable to Aptiv

 

905

 

 

 

249

 

 

 

2,938

 

 

 

594

 

Adjusting items:

 

 

 

 

 

 

 

Amortization

 

56

 

 

 

37

 

 

 

233

 

 

 

149

 

Restructuring

 

130

 

 

 

33

 

 

 

211

 

 

 

85

 

Other acquisition and portfolio project costs

 

35

 

 

 

13

 

 

 

80

 

 

 

26

 

Asset impairments

 

18

 

 

 

 

 

 

18

 

 

 

8

 

Other charges related to Ukraine/Russia conflict (a)

 

 

 

 

 

 

 

 

 

 

29

 

Compensation expense related to acquisitions

 

6

 

 

 

 

 

 

26

 

 

 

 

Costs associated with acquisitions and other transactions

 

 

 

 

53

 

 

 

4

 

 

 

61

 

Debt extinguishment costs

 

1

 

 

 

 

 

 

1

 

 

 

 

Impairment of equity investments without readily determinable fair value

 

 

 

 

 

 

 

18

 

 

 

 

(Gain) loss on change in fair value of publicly traded equity securities

 

 

 

 

(3

)

 

 

6

 

 

 

52

 

Tax impact of intra-entity transfers of intellectual property and other related transactions (b)

 

(723

)

 

 

 

 

 

(2,082

)

 

 

 

Tax impact of adjusting items (c)

 

(33

)

 

 

(21

)

 

 

(77

)

 

 

(37

)

Adjusted net income attributable to Aptiv

$

395

 

 

$

361

 

 

$

1,376

 

 

$

967

 

 

 

 

 

 

 

 

 

Adjusted weighted average number of diluted shares outstanding (d)

 

281.21

 

 

 

283.77

 

 

 

282.88

 

 

 

283.55

 

Diluted net income per share attributable to ordinary shareholders

$

3.22

 

 

$

0.86

 

 

$

10.39

 

 

$

1.96

 

Adjusted net income per share

$

1.40

 

 

$

1.27

 

 

$

4.86

 

 

$

3.41

 

(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)

In response to the OECD’s Pillar Two Directive, the Company initiated changes to its corporate entity structure, including intra-entity transfers of certain intellectual property to one of its subsidiaries in Switzerland during the second half of 2023. Furthermore, during the third quarter, the Company’s Swiss subsidiary was granted a ten-year tax incentive, beginning in 2024. The measurement of certain deferred tax assets and associated income tax benefits resulting from these transactions was impacted by tax legislation in Switzerland enacted in the fourth quarter of 2023, which increased the statutory income tax rate, resulting in additional deferred tax benefit impacts, net of valuation allowances. These adjustments represent the total income tax benefits recorded as a result of these transactions during the three months and year ended December 31, 2023.

(c)

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.

(d)

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 (method already applied for U.S. GAAP purposes of calculating the weighted average number of diluted shares outstanding for the year ended December 31, 2023) 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

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in millions)

Weighted average number of diluted shares outstanding

281.21

 

271.40

 

282.88

 

271.18

Weighted average MCPS Converted Shares

 

12.37

 

 

12.37

Adjusted weighted average number of diluted shares outstanding

281.21

 

283.77

 

282.88

 

283.55

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

 

Year Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in millions)

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

919

 

 

$

266

 

 

$

2,966

 

 

$

590

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

246

 

 

 

188

 

 

 

912

 

 

 

762

 

Restructuring expense, net of cash paid

 

79

 

 

 

16

 

 

 

83

 

 

 

18

 

Working capital

 

173

 

 

 

372

 

 

 

(128

)

 

 

(618

)

Pension contributions

 

(13

)

 

 

(9

)

 

 

(33

)

 

 

(24

)

Increase in deferred income tax assets from intra-entity transfers of intellectual property and other related transactions

 

(723

)

 

 

 

 

 

(2,082

)

 

 

 

Other, net

 

(57

)

 

 

100

 

 

 

178

 

 

 

535

 

Net cash provided by operating activities

 

624

 

 

 

933

 

 

 

1,896

 

 

 

1,263

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Capital expenditures

 

(203

)

 

 

(178

)

 

 

(906

)

 

 

(844

)

Proceeds from business divestitures, net of cash sold

 

 

 

 

 

 

 

(17

)

 

 

 

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

 

 

 

 

(4,090

)

 

 

(83

)

 

 

(4,310

)

Proceeds from sale of technology investments

 

 

 

 

 

 

 

 

 

 

3

 

Cost of technology investments

 

(5

)

 

 

 

 

 

(6

)

 

 

(42

)

Settlement of derivatives

 

 

 

 

(2

)

 

 

6

 

 

 

7

 

Other, net

 

1

 

 

 

1

 

 

 

4

 

 

 

4

 

Net cash used in investing activities

 

(207

)

 

 

(4,269

)

 

 

(1,002

)

 

 

(5,182

)

 

 

 

 

 

 

 

 

Adjusting items:

 

 

 

 

 

 

 

Adjustment for the cost of business acquisitions and other transactions, net

 

 

 

 

4,090

 

 

 

83

 

 

 

4,310

 

Adjustment for cost of significant technology investments

 

4

 

 

 

 

 

 

4

 

 

 

40

 

Cash flow before financing

$

421

 

 

$

754

 

 

$

981

 

 

$

431

 

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

 

2024 (a)

 

 

 

 

 

($ in millions)

Adjusted Operating Income

$

 

Margin (b)

Net income attributable to Aptiv

$

1,235

 

 

 

Interest expense

 

250

 

 

 

Other income, net

 

(75

)

 

 

Income tax expense

 

340

 

 

 

Equity loss, net of tax

 

330

 

 

 

Net income attributable to noncontrolling interest (c)

 

25

 

 

 

Operating income

 

2,105

 

 

9.7

%

Amortization

 

225

 

 

 

Restructuring

 

150

 

 

 

Other acquisition and portfolio project costs

 

40

 

 

 

Compensation expense related to acquisitions

 

30

 

 

 

Adjusted operating income

$

2,550

 

 

11.8

%

 

 

 

 

Adjusted EBITDA

 

 

 

Net income attributable to Aptiv

$

1,235

 

 

 

Interest expense

 

250

 

 

 

Income tax expense

 

340

 

 

 

Net income attributable to noncontrolling interest (c)

 

25

 

 

 

Depreciation and amortization

 

950

 

 

 

EBITDA

$

2,800

 

 

13.0

%

Other income, net

 

(75

)

 

 

Equity loss, net of tax

 

330

 

 

 

Restructuring

 

150

 

 

 

Other acquisition and portfolio project costs

 

40

 

 

 

Compensation expense related to acquisitions

 

30

 

 

 

Adjusted EBITDA

$

3,275

 

 

15.2

%

(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

 

 

2024 (a)

 

 

 

Adjusted Net Income Per Share

 

($ and shares in millions,

except per share amounts)

Net income attributable to Aptiv

 

$

1,235

 

Adjusting items:

 

 

Amortization

 

 

225

 

Restructuring

 

 

150

 

Other acquisition and portfolio project costs

 

 

40

 

Compensation expense related to acquisitions

 

 

30

 

Tax impact of adjusting items

 

 

(75

)

Adjusted net income attributable to Aptiv

 

$

1,605

 

 

 

 

Adjusted weighted average number of diluted shares outstanding

 

 

277.00

 

Diluted net income per share attributable to ordinary shareholders

 

$

4.45

 

Adjusted net income per share

 

$

5.80

 

(a)

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

 

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