Aptiv Reports Second Quarter 2024 Financial Results; Delivers Record Quarterly Operating Earnings and Earnings per Share; Announces New $5.0 Billion Share Repurchase Authorization and $3.0 Billion Accelerated Share Repurchase Program

Rhea-AI Summary

Aptiv PLC (NYSE: APTV) reported strong Q2 2024 financial results, with record quarterly operating earnings and earnings per share. Key highlights include:

- U.S. GAAP revenue of $5.1 billion, down 3% YoY
- U.S. GAAP net income of $938 million, with EPS of $3.47
- Adjusted EPS of $1.58, up from $1.25 in Q2 2023
- Adjusted Operating Income of $606 million, margin of 12.0%
- Generated $643 million cash from operations

Aptiv announced a new $5.0 billion share repurchase authorization and a $3.0 billion accelerated share repurchase program. The company also updated its full-year 2024 guidance, projecting net sales of $20.1-20.4 billion and adjusted EPS of $6.15-$6.45.

Positive

• Record quarterly operating earnings and earnings per share
• Adjusted Operating Income margin increased to 12.0% from 10.2% YoY
• Cash flow from operations improved to $643 million from $535 million YoY
• New $5.0 billion share repurchase authorization announced
• $3.0 billion accelerated share repurchase program initiated
• Year-to-date Adjusted Net Income increased to $746 million from $614 million YoY

Negative

• U.S. GAAP revenue decreased by 3% YoY to $5.1 billion
• Revenue adjusted for currency exchange and commodity movements decreased by 2% in Q2
• Declines in revenue across North America (-3%), Europe (-2%), and South America (-13%)

Insights

Financial Analyst

Aptiv's Q2 2024 results showcase a robust financial performance despite a slight revenue decline. The company reported record quarterly earnings with U.S. GAAP earnings of $3.47 per diluted share and adjusted earnings of $1.58 per diluted share. This represents a significant year-over-year improvement, driven by strong execution and cost discipline.

Key financial highlights include:

• Revenue of $5.1 billion, down 3% year-over-year
• Adjusted Operating Income margin of 12.0%, up 180 basis points
• Cash flow from operations of $643 million
• Share repurchases of $434 million

The company's focus on advanced technologies aligned with automotive megatrends (safe, green, connected) is paying off, as evidenced by multiple new business awards. The announcement of a new $5 billion share repurchase plan, including a $3 billion accelerated share repurchase program, signals management's confidence in Aptiv's future prospects and undervaluation of its stock.

However, investors should note the slight revenue decline and regional variations in performance, particularly the 13% decline in South America. The company's full-year 2024 guidance suggests continued strong profitability but modest top-line growth.

Market Research Analyst

Aptiv's Q2 results reflect the broader trends in the automotive industry, with regional disparities and ongoing supply chain challenges. The company's performance relative to its Automotive Weighted Market (AWM) metric is noteworthy:

• North America: -3% vs. AWM
• Europe: -2% vs. AWM
• Asia: Flat, with China up 1%
• South America: -13% vs. AWM

The company's outperformance in China, despite broader market challenges, is particularly impressive. This suggests Aptiv's products are well-positioned in the world's largest automotive market, especially in the rapidly growing electric vehicle segment.

The restructuring of Aptiv's ownership in Motional, reducing its stake from 50% to 15%, is a strategic move that allows the company to focus on its core business while maintaining exposure to the autonomous driving sector. This aligns with industry trends where traditional auto suppliers are reevaluating their investments in capital-intensive, long-term technology bets.

The substantial share repurchase program could significantly impact Aptiv's stock price and market perception. It represents over 25% of the company's current market capitalization, potentially providing strong support for the stock price in the near term.

Tech Industry Analyst

Aptiv's Q2 results underscore its strong position in the evolving automotive technology landscape. The company's focus on "safe, green and connected" megatrends aligns perfectly with the industry's direction towards electrification and software-defined vehicles.

Key technological implications include:

• Electrification: Aptiv's expertise in high-voltage solutions positions it well as the industry transitions to electric vehicles.
• Software-Defined Vehicles: The company's capabilities in vehicle architecture and software integration are becoming increasingly valuable as cars evolve into computers on wheels.
• Advanced Driver Assistance Systems (ADAS): Despite reducing its stake in Motional, Aptiv remains well-positioned in the ADAS market, which is seeing rapid adoption.

The multiple new business awards mentioned in the release suggest that Aptiv's technology portfolio is resonating with automakers. This is important as the auto industry undergoes its most significant transformation in a century.

However, the slight revenue decline indicates that the transition to new technologies is not without challenges. As traditional ICE vehicle production potentially declines faster than EV production ramps up, suppliers like Aptiv may face temporary headwinds. The company's strong margins suggest it's navigating this transition well, but investors should monitor the pace of new technology adoption in the industry.

 

DUBLIN--(BUSINESS WIRE)-- Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported second quarter 2024 U.S. GAAP earnings of $3.47 per diluted share. Excluding special items, second quarter earnings totaled $1.58 per diluted share.

Second Quarter Financial Highlights Include:

• U.S. GAAP revenue of $5.1 billion, a decrease of 3%
  • Revenue decreased 2% adjusted for currency exchange and commodity movements, compared to AWM¹ of (1)%
• U.S. GAAP net income of $938 million, U.S. GAAP net income margin of 18.6%; U.S. GAAP diluted earnings per share of $3.47
  • Excluding special items, diluted earnings per share of $1.58
• U.S. GAAP operating income of $441 million, U.S. GAAP operating income margin of 8.7%
  • Adjusted Operating Income of $606 million, Adjusted Operating Income margin of 12.0%; Adjusted EBITDA of $788 million, Adjusted EBITDA margin of 15.6%
• Generated $643 million of cash from operations
• Returned $434 million to shareholders through share repurchases

Year-to-Date Financial Highlights Include:

• U.S. GAAP revenue of $10.0 billion, a decrease of 1%
  • Revenue adjusted for currency exchange and commodity movements was flat; growth over market of 1% based on AWM¹ of (1)%
• U.S. GAAP net income of $1,156 million, U.S. GAAP net income margin of 11.6%; U.S. GAAP diluted earnings per share of $4.24
  • Excluding special items, diluted earnings per share of $2.73
• U.S. GAAP operating income of $860 million, U.S. GAAP operating income margin of 8.6%
  • Adjusted Operating Income of $1,150 million, Adjusted Operating Income margin of 11.6%; Adjusted EBITDA of $1,508 million, Adjusted EBITDA margin of 15.2%
• Generated $887 million of cash from operations
• Returned $1,034 million to shareholders through share repurchases

“Strong execution across both segments and continued cost discipline resulted in record quarterly earnings and 180 basis points of operating margin expansion year-over-year,” said Kevin Clark, chairman and chief executive officer. “Multiple new business awards underscore the strength of our advanced product portfolio and its alignment with the safe, green and connected megatrends. As the world continues to become more electrified and software defined, we are uniquely positioned to enable this transition for our customers and are confident in our ability to deliver significant, sustainable value to our shareholders. We strongly believe Aptiv shares are an attractive investment opportunity, and as a result, we are announcing a new $5 billion share repurchase plan, representing over 25% of our current equity market capitalization, and are proceeding immediately with a $3 billion accelerated share repurchase program.”

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

Second Quarter 2024 Results

For the three months ended June 30, 2024, the Company reported U.S. GAAP revenue of $5.1 billion, a decrease of 3% from the prior year period. Adjusted for currency exchange and commodity movements, revenue decreased by 2% in the second quarter. This reflects declines of 3% in North America, 2% in Europe and 13% in South America, our smallest region, partially offset by flat growth in Asia, which includes an increase of 1% in China.

The Company reported second quarter 2024 U.S. GAAP net income of $938 million, earnings of $3.47 per diluted share and net income margin of 18.6%, compared to $229 million, $0.84 per diluted share and 4.4% in the prior year period. Second quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $428 million, or earnings of $1.58 per diluted share, compared to $356 million, or $1.25 per diluted share, in the prior year period.

Second quarter U.S. GAAP operating income was $441 million, compared to $410 million in the prior year period. The Company reported second quarter Adjusted Operating Income, a non-GAAP financial measure defined below, of $606 million, compared to $530 million in the prior year period. Adjusted Operating Income margin was 12.0%, compared to 10.2% in the prior year period, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives. Depreciation and amortization expense totaled $248 million, an increase from $224 million in the prior year period.

Interest expense for the second quarter totaled $64 million compared to $72 million in the prior year period.

Tax expense in the second quarter of 2024 was $51 million, resulting in an effective tax rate of approximately 5%. Tax expense in the second quarter of 2023 was $30 million, resulting in an effective tax rate of approximately 9%.

The Company generated net cash flow from operating activities of $643 million in the second quarter, compared to $535 million in the prior year period.

Year-to-Date 2024 Results

For the six months ended June 30, 2024, the Company reported U.S. GAAP revenue of $10.0 billion, a decrease of 1% from the prior year period. Adjusted for currency exchange, commodity movements and acquisitions, revenue remained flat during the period. This reflects growth of 3% in Asia, which includes growth of 5% in China, and flat growth in North America, offset by declines of 1% in Europe and 11% in South America, our smallest region.

For the 2024 year-to-date period, the Company reported U.S. GAAP net income of $1,156 million, earnings of $4.24 per diluted share and net income margin of 11.6%, compared to $375 million, $1.38 per diluted share and 3.7% in the prior year period. Year-to-date Adjusted Net Income totaled $746 million, or $2.73 per diluted share, compared to $614 million, or $2.16 per diluted share, in the prior year period.

The Company reported U.S. GAAP operating income of $860 million for the six months ended June 30, 2024, compared to $758 million in the prior year period. Adjusted Operating Income was $1,150 million for the six months ended June 30, 2024, compared to $967 million in the prior year period. Adjusted Operating Income margin was 11.6% for the six months ended June 30, 2024, compared to 9.7% in the prior year period, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives. Depreciation and amortization expense totaled $478 million, an increase from $440 million in the prior year period.

Interest expense for the six months ended June 30, 2024 totaled $129 million, a decrease from $139 million in the prior year period.

Tax expense for the six months ended June 30, 2024 was $127 million, resulting in an effective tax rate of approximately 9%. Tax expense in the prior year period was $64 million, resulting in an effective tax rate of approximately 10%.

The Company generated net cash flow from operating activities of $887 million in the six months ended June 30, 2024, compared to $526 million in the prior year period. As of June 30, 2024, the Company had cash and cash equivalents of $1.4 billion and total available liquidity of $4.6 billion.

Reconciliations of Adjusted Revenue Growth, Adjusted Net Income, Adjusted Net Income Per Share, Adjusted Operating Income, Adjusted EBITDA and Cash Flow Before Financing, which are non-GAAP measures, to the most directly comparable financial measures, respectively, calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) are provided in the attached supplemental schedules.

Share Repurchase Program

New $5.0 Billion Authorization and $3.0 Billion Accelerated Share Repurchase Program

Aptiv announced today that its Board of Directors has authorized a new $5.0 billion share repurchase program. This program will commence following completion of the Company’s previous $2.0 billion January 2019 share repurchase program.

Under the existing and new authorizations, the Company will immediately proceed with an accelerated share repurchase program totaling $3.0 billion. The Company expects to fund the accelerated share repurchase program with cash on hand and proceeds from debt, which may include borrowings under a new unsecured bridge credit facility, issuance of new debt or borrowings under other sources of existing liquidity. The accelerated share repurchase program will be executed by Goldman Sachs International and JPMorgan Chase Bank, N.A.

Q2 2024 Share Repurchases

During the second quarter of 2024, the Company repurchased 5.4 million shares for $434 million, leaving approximately $0.6 billion available for future share repurchases. Year-to-date, the Company repurchased 12.7 million shares for approximately $1,034 million. All repurchased shares were retired.

Motional Funding and Ownership Restructuring Transactions

In April 2024, Aptiv and Hyundai Motor Group (“Hyundai”) entered into an agreement to restructure Aptiv’s ownership interest in Motional, AD LLC (“Motional”) and for Hyundai to provide additional funding to Motional, eliminating any requirements for additional future funding from Aptiv. These transactions, which were completed in May 2024, resulted in the reduction of Aptiv’s common equity interest from 50% to approximately 15% as of June 30, 2024.

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	$20,100 - $20,400
U.S. GAAP net income	$1,790 - $1,890
U.S. GAAP net income margin	8.9% - 9.3%
U.S. GAAP operating income	$1,860 - $1,960
U.S. GAAP operating income margin	9.3% - 9.6%
Adjusted EBITDA	$3,105 - $3,205
Adjusted EBITDA margin	15.4% - 15.7%
Adjusted operating income	$2,375 - $2,475
Adjusted operating income margin	11.8% - 12.1%
U.S. GAAP diluted net income per share	$7.00 - $7.30
Adjusted net income per share (1)	$6.15 - $6.45
Cash flow from operations	$2,150
Capital expenditures	$900
U.S. GAAP effective tax rate	~11.6%
Adjusted effective tax rate	~16.5%
(1) The Company’s full year 2024 financial guidance includes approximately $0.50 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 (U.S.) or +1.323.794.2551 (international) or through a webcast at ir.aptiv.com. The conference ID number is 3115087. 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 include, but are not limited to, the following: global and regional economic conditions, including conditions affecting the credit market; global inflationary pressures; uncertainties created by the conflict between Ukraine and Russia, and its impacts to the European and global economies and our operations in each country; uncertainties created by the conflicts in the Middle East and their impacts on global economies; fluctuations in interest rates and foreign currency exchange rates; the cyclical nature of global automotive sales and production; the potential disruptions in the supply of and changes in the competitive environment for raw material and other components integral to the Company’s products, including the ongoing semiconductor supply shortage; the Company’s ability to maintain contracts that are critical to its operations; potential changes to beneficial free trade laws and regulations, such as the United States-Mexico-Canada Agreement; changes to tax laws; future significant public health crises; the ability of the Company to integrate and realize the expected benefits of recent transactions; the ability of the Company to attract, motivate and/or retain key executives; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers; and the ability of the Company to attract and retain customers. Additional factors are discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any income from them can go down as well as up. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.

APTIV PLC CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
	(in millions, except per share amounts)
Net sales	$	5,051			$	5,200			$	9,952			$	10,018
Operating expenses:
Cost of sales		4,083				4,336				8,106				8,394
Selling, general and administrative		405				353				771				695
Amortization		52				59				106				118
Restructuring		70				42				109				53
Total operating expenses		4,610				4,790				9,092				9,260
Operating income		441				410				860				758
Interest expense		(64	)			(72	)			(129	)			(139	)
Other income, net		10				11				25				10
Gain on Motional transactions		641				—				641				—
Income before income taxes and equity loss		1,028				349				1,397				629
Income tax expense		(51	)			(30	)			(127	)			(64	)
Income before equity loss		977				319				1,270				565
Equity loss, net of tax		(34	)			(73	)			(103	)			(155	)
Net income		943				246				1,167				410
Net income attributable to noncontrolling interest		5				4				11				7
Net loss attributable to redeemable noncontrolling interest		—				—				—				(1	)
Net income attributable to Aptiv		938				242				1,156				404
Mandatory convertible preferred share dividends		—				(13	)			—				(29	)
Net income attributable to ordinary shareholders	$	938			$	229			$	1,156			$	375
Diluted net income per share:
Diluted net income per share attributable to ordinary shareholders	$	3.47			$	0.84			$	4.24			$	1.38
Weighted average number of diluted shares outstanding		270.43				272.77				272.87				271.97

APTIV PLC CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30, 2024			December 31, 2023
	(Unaudited)
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	1,409		$	1,640
Short-term investments		748			—
Accounts receivable, net		3,592			3,546
Inventories		2,370			2,365
Other current assets		710			696
Total current assets		8,829			8,247
Long-term assets:
Property, net		3,731			3,785
Operating lease right-of-use assets		515			540
Investments in affiliates		1,506			1,443
Intangible assets, net		2,263			2,399
Goodwill		5,078			5,151
Other long-term assets		2,829			2,862
Total long-term assets		15,922			16,180
Total assets	$	24,751		$	24,427
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	1,475		$	9
Accounts payable		2,915			3,151
Accrued liabilities		1,518			1,648
Total current liabilities		5,908			4,808
Long-term liabilities:
Long-term debt		5,504			6,204
Pension benefit obligations		407			417
Long-term operating lease liabilities		437			453
Other long-term liabilities		725			701
Total long-term liabilities		7,073			7,775
Total liabilities		12,981			12,583
Commitments and contingencies
Redeemable noncontrolling interest		95			99
Total Aptiv shareholders’ equity		11,467			11,548
Noncontrolling interest		208			197
Total shareholders’ equity		11,675			11,745
Total liabilities, redeemable noncontrolling interest and shareholders’ equity	$	24,751		$	24,427

APTIV PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Six Months Ended June 30,
	2024				2023
	(in millions)
Cash flows from operating activities:
Net income	$	1,167			$	410
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		478				440
Restructuring expense, net of cash paid		(34	)			—
Deferred income taxes		31				(17	)
Loss from equity method investments, net of dividends received		110				160
Gain on Motional transactions		(641	)			—
Other, net		85				79
Changes in operating assets and liabilities:
Accounts receivable, net		(46	)			(295	)
Inventories		(5	)			(35	)
Accounts payable		(110	)			(43	)
Other, net		(135	)			(159	)
Pension contributions		(13	)			(14	)
Net cash provided by operating activities		887				526
Cash flows from investing activities:
Capital expenditures		(491	)			(491	)
Proceeds from sale of property		2				3
Proceeds from business divestitures, net of cash sold		—				(17	)
Cost of business acquisitions and other transactions, net of cash acquired		—				(83	)
Cost of technology investments		(40	)			(1	)
Proceeds from the sale of equity method investment		448				—
Purchase of short-term investments		(748	)			—
Settlement of derivatives		—				(1	)
Net cash used in investing activities		(829	)			(590	)
Cash flows from financing activities:
Decrease in other short and long-term debt, net		(11	)			(10	)
Proceeds from issuance of senior notes, net of issuance costs		798				—
Contingent consideration payments		—				(10	)
Repurchase of ordinary shares		(1,030	)			(98	)
Distribution of mandatory convertible preferred share cash dividends		—				(32	)
Taxes withheld and paid on employees’ restricted share awards		(21	)			(31	)
Net cash used in financing activities		(264	)			(181	)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash		(25	)			(8	)
Decrease in cash, cash equivalents and restricted cash		(231	)			(253	)
Cash, cash equivalents and restricted cash at beginning of the period		1,640				1,555
Cash, cash equivalents and restricted cash at end of the period	$	1,409			$	1,302

APTIV PLC FOOTNOTES (Unaudited)
1. Segment Summary
	Three Months Ended June 30,											Six Months Ended June 30,
	2024				2023				%			2024				2023				%
	(in millions)											(in millions)
Net Sales
Signal and Power Solutions	$	3,512			$	3,679			(5	)%		$	6,999			$	7,143			(2	)%
Advanced Safety and User Experience		1,554				1,532			1	%			2,983				2,898			3	%
Eliminations and Other (a)		(15	)			(11	)						(30	)			(23	)
Net Sales	$	5,051			$	5,200						$	9,952			$	10,018
Adjusted Operating Income
Signal and Power Solutions	$	436			$	392			11	%		$	825			$	766			8	%
Advanced Safety and User Experience		170				138			23	%			325				201			62	%
Adjusted Operating Income	$	606			$	530						$	1,150			$	967

(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 and six months ended June 30, 2024 and 2023:
	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(in millions, except per share amounts)
Weighted average ordinary shares outstanding, basic		270.19			272.69			272.69			271.86
Dilutive shares related to RSUs		0.24			0.08			0.18			0.11
Weighted average ordinary shares outstanding, including dilutive shares		270.43			272.77			272.87			271.97
Net income per share attributable to ordinary shareholders:
Basic	$	3.47		$	0.84		$	4.24		$	1.38
Diluted	$	3.47		$	0.84		$	4.24		$	1.38

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 June 30, 2024
Reported net sales % change	(3	)%
Less: foreign currency exchange and commodities	(1	)%
Adjusted revenue growth	(2	)%
	Six Months Ended June 30, 2024
Reported net sales % change	(1	)%
Less: foreign currency exchange and commodities	(1	)%
Adjusted revenue growth	—	%

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 June 30,														Six Months Ended June 30,
	2024							2023							2024							2023
	($ in millions)
	$				Margin			$				Margin			$				Margin			$				Margin
Net income attributable to ordinary shareholders	$	938			18.6	%		$	229			4.4	%		$	1,156			11.6	%		$	375			3.7	%
Mandatory convertible preferred share dividends		—							13							—							29
Net income attributable to Aptiv	$	938			18.6	%		$	242			4.7	%		$	1,156			11.6	%		$	404			4.0	%
Interest expense		64							72							129							139
Other income, net		(10	)						(11	)						(25	)						(10	)
Gain on Motional transactions		(641	)						—							(641	)						—
Income tax expense		51							30							127							64
Equity loss, net of tax		34							73							103							155
Net income attributable to noncontrolling interest		5							4							11							7
Net loss attributable to redeemable noncontrolling interest		—							—							—							(1	)
Operating income	$	441			8.7	%		$	410			7.9	%		$	860			8.6	%		$	758			7.6	%
Amortization		52							59							106							118
Restructuring		70							42							109							53
Other acquisition and portfolio project costs		25							11							53							25
Asset impairments		14							—							14							—
Compensation expense related to acquisitions		4							8							8							13
Adjusted operating income	$	606			12.0	%		$	530			10.2	%		$	1,150			11.6	%		$	967			9.7	%

Segment Adjusted Operating Income
(in millions)
Three Months Ended June 30, 2024	Signal and Power Solutions			Advanced Safety and User Experience			Total
Operating income	$	334		$	107		$	441
Amortization		31			21			52
Restructuring		54			16			70
Other acquisition and portfolio project costs		17			8			25
Asset impairments		—			14			14
Compensation expense related to acquisitions		—			4			4
Adjusted operating income	$	436		$	170		$	606
Depreciation and amortization (a)	$	162		$	86		$	248
Three Months Ended June 30, 2023	Signal and Power Solutions			Advanced Safety and User Experience			Total
Operating income	$	340		$	70		$	410
Amortization		36			23			59
Restructuring		8			34			42
Other acquisition and portfolio project costs		8			3			11
Compensation expense related to acquisitions		—			8			8
Adjusted operating income	$	392		$	138		$	530
Depreciation and amortization (a)	$	155		$	69		$	224
Six Months Ended June 30, 2024	Signal and Power Solutions			Advanced Safety and User Experience			Total
Operating income	$	651		$	209		$	860
Amortization		62			44			106
Restructuring		76			33			109
Other acquisition and portfolio project costs		36			17			53
Asset impairments		—			14			14
Compensation expense related to acquisitions		—			8			8
Adjusted operating income	$	825		$	325		$	1,150
Depreciation and amortization (a)	$	323		$	155		$	478
Six Months Ended June 30, 2023	Signal and Power Solutions			Advanced Safety and User Experience			Total
Operating income	$	659		$	99		$	758
Amortization		72			46			118
Restructuring		15			38			53
Other acquisition and portfolio project costs		20			5			25
Compensation expense related to acquisitions		—			13			13
Adjusted operating income	$	766		$	201		$	967
Depreciation and amortization (a)	$	304		$	136		$	440

(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.

Consolidated Adjusted EBITDA
	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
	(in millions)
Net income attributable to ordinary shareholders	$	938			$	229			$	1,156			$	375
Mandatory convertible preferred share dividends		—				13				—				29
Net income attributable to Aptiv	$	938			$	242			$	1,156			$	404
Interest expense		64				72				129				139
Income tax expense		51				30				127				64
Net income attributable to noncontrolling interest		5				4				11				7
Net loss attributable to redeemable noncontrolling interest		—				—				—				(1	)
Depreciation and amortization		248				224				478				440
EBITDA	$	1,306			$	572			$	1,901			$	1,053
Other income, net		(10	)			(11	)			(25	)			(10	)
Gain on Motional transactions		(641	)			—				(641	)			—
Equity loss, net of tax		34				73				103				155
Restructuring		70				42				109				53
Other acquisition and portfolio project costs		25				11				53				25
Compensation expense related to acquisitions		4				8				8				13
Adjusted EBITDA	$	788			$	695			$	1,508			$	1,289

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 June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
	(in millions, except per share amounts)
Net income attributable to ordinary shareholders	$	938			$	229			$	1,156			$	375
Mandatory convertible preferred share dividends		—				13				—				29
Net income attributable to Aptiv		938				242				1,156				404
Adjusting items:
Amortization		52				59				106				118
Restructuring		70				42				109				53
Other acquisition and portfolio project costs		25				11				53				25
Asset impairments		14				—				14				—
Compensation expense related to acquisitions		4				8				8				13
Costs associated with acquisitions and other transactions		—				4				—				4
Impairment of equity investments without readily determinable fair value		—				—				—				18
(Gain) loss on change in fair value of publicly traded equity securities		(3	)			3				(2	)			6
Gain on Motional transactions		(641	)			—				(641	)			—
Tax impact of adjusting items (a)		(31	)			(13	)			(57	)			(27	)
Adjusted net income attributable to Aptiv	$	428			$	356			$	746			$	614
Adjusted weighted average number of diluted shares outstanding (b)		270.43				283.78				272.87				283.65
Diluted net income per share attributable to ordinary shareholders	$	3.47			$	0.84			$	4.24			$	1.38
Adjusted net income per share	$	1.58			$	1.25			$	2.73			$	2.16

(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. 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. Prior to the conversion of the MCPS into ordinary shares in June 2023, 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 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Weighted average number of diluted shares outstanding	270.43		272.77		272.87		271.97
Weighted average MCPS Converted Shares	—		11.01		—		11.68
Adjusted weighted average number of diluted shares outstanding	270.43		283.78		272.87		283.65

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 June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
	(in millions)
Cash flows from operating activities:
Net income	$	943			$	246			$	1,167			$	410
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		248				224				478				440
Restructuring expense, net of cash paid		2				24				(34	)			—
Working capital		130				(25	)			(161	)			(373	)
Pension contributions		(6	)			(6	)			(13	)			(14	)
Gain on Motional transactions		(641	)			—				(641	)			—
Other, net		(33	)			72				91				63
Net cash provided by operating activities		643				535				887				526
Cash flows from investing activities:
Capital expenditures		(226	)			(222	)			(491	)			(491	)
Proceeds from business divestitures, net of cash sold		—				(17	)			—				(17	)
Cost of business acquisitions and other transactions, net of cash acquired		—				(45	)			—				(83	)
Cost of technology investments		—				—				(40	)			(1	)
Proceeds from the sale of equity method investment		448				—				448				—
Purchase of short-term investments		(748	)			—				(748	)			—
Settlement of derivatives		—				—				—				(1	)
Other, net		2				3				2				3
Net cash used in investing activities		(524	)			(281	)			(829	)			(590	)
Adjusting items:
Adjustment for cost of business acquisitions and other transactions, net of cash acquired		—				45				—				83
Adjustment for cost of significant technology investments		—				—				40				—
Adjustment for proceeds from sale of equity method investment		(448	)			—				(448	)			—
Cash flow before financing	$	(329	)		$	299			$	(350	)		$	19

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	$	1,840			9.1	%
Interest expense		360
Other income, net		(60	)
Gain on Motional transactions		(640	)
Income tax expense		260
Equity loss, net of tax		130
Net income attributable to noncontrolling interest (c)		20
Operating income	$	1,910			9.4	%
Amortization		215
Restructuring		195
Other acquisition and portfolio project costs		65
Asset impairments		15
Compensation expense related to acquisitions		25
Adjusted operating income	$	2,425			12.0	%
Adjusted EBITDA
Net income attributable to Aptiv	$	1,840			9.1	%
Interest expense		360
Income tax expense		260
Net income attributable to noncontrolling interest (c)		20
Depreciation and amortization		960
EBITDA	$	3,440			17.0	%
Other income, net		(60	)
Gain on Motional transactions		(640	)
Equity loss, net of tax		130
Restructuring		195
Other acquisition and portfolio project costs		65
Compensation expense related to acquisitions		25
Adjusted EBITDA	$	3,155			15.6	%

(a)	Prepared at the estimated mid-point of the Company’s financial guidance range.
(b)	Represents net income attributable to Aptiv, 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	$	1,840
Adjusting items:
Amortization		215
Restructuring		195
Other acquisition and portfolio project costs		65
Asset impairments		15
Compensation expense related to acquisitions		25
Gain on Motional transactions		(640	)
Tax impact of adjusting items		(95	)
Adjusted net income attributable to Aptiv	$	1,620
Adjusted weighted average number of diluted shares outstanding		257.00
Diluted net income per share attributable to Aptiv	$	7.15
Adjusted net income per share	$	6.30

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801941548/en/

Investor Contact:

Jane Wu

+1.617.603.7941

jane.wu@aptiv.com

Source: Aptiv PLC

FAQ

What were Aptiv's (APTV) key financial results for Q2 2024?

Aptiv reported U.S. GAAP revenue of $5.1 billion, U.S. GAAP net income of $938 million, and adjusted EPS of $1.58 for Q2 2024. The company also achieved an Adjusted Operating Income of $606 million with a margin of 12.0%.

How much did Aptiv (APTV) announce in share repurchases for 2024?

Aptiv announced a new $5.0 billion share repurchase authorization and a $3.0 billion accelerated share repurchase program for 2024.

What is Aptiv's (APTV) full-year 2024 financial guidance?

Aptiv projects full-year 2024 net sales of $20.1-20.4 billion, U.S. GAAP net income of $1.79-1.89 billion, and adjusted EPS of $6.15-$6.45.

How did Aptiv's (APTV) Q2 2024 revenue compare to the previous year?

Aptiv's Q2 2024 U.S. GAAP revenue decreased by 3% year-over-year to $5.1 billion. Adjusted for currency exchange and commodity movements, revenue decreased by 2%.