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Aptiv Reports Record Second Quarter 2018 Financial Results; Raises Full Year Outlook

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Aptiv Reports Record Second Quarter 2018 Financial Results; Raises Full Year Outlook

PR Newswire

DUBLIN, July 31, 2018 /PRNewswire/ -- Aptiv PLC (NYSE:APTV), a global technology company enabling the future of mobility, today reported second quarter 2018 U.S. GAAP earnings from continuing operations of $1.10 per diluted share. Excluding special items, second quarter earnings from continuing operations totaled $1.40 per diluted share.

Second Quarter Highlights Include:

  • Revenue of $3.7 billion, up 12% adjusted for currency exchange, commodity movements, acquisitions and divestitures
  • U.S. GAAP net income from continuing operations of $291 million, diluted earnings per share from continuing operations of $1.10
    • Excluding special items, earnings from continuing operations of $1.40 per diluted share, up 24%
  • U.S. GAAP operating income margin of 11.4%
    • Adjusted Operating Income margin of 12.9%, up 30 basis points; Adjusted Operating Income of $474 million, up 19%
  • Generated $566 million of cash from continuing operations
  • Returned $62 million to shareholders through share repurchases and dividends
  • Completed acquisition of KUM; announced agreement to acquire Winchester Interconnect

Year-to-Date Highlights Include:

  • Revenue of $7.3 billion, up 10% adjusted for currency exchange, commodity movements, acquisitions and divestitures
  • U.S. GAAP net income from continuing operations of $598 million, diluted earnings per share from continuing operations of $2.25
    • Excluding special items, earnings from continuing operations of $2.69 per diluted share, up 22%
  • U.S. GAAP operating income margin of 10.9%
    • Adjusted Operating Income margin of 12.3%, up 40 basis points; Adjusted Operating Income of $901 million, up 20%
  • Generated $752 million of cash from continuing operations
  • Returned $270 million to shareholders through share repurchases and dividends

"During the second quarter, we delivered record double-digit revenue growth, operating income, earnings per share and free cash flow," said Kevin Clark, president and chief executive officer. "We continued to see strong new business awards, totaling $11 billion year-to-date, focused on delivering the software capabilities, advanced computing platforms and networking architecture that are making the future of mobility real. Also in the quarter, we closed on the acquisition of KUM, an accretive bolt-on to our engineered components business, and announced the acquisition of Winchester Interconnect, a leading provider of custom engineered interconnect solutions for harsh environment applications, further establishing Aptiv as a market leader of connectivity solutions and reinforcing our strategy to diversify our business. As we look to the second half of 2018, we expect our portfolio of advanced technologies to drive continued above market growth, as reflected in our increased outlook for the year."

Second Quarter 2018 Results

The Company reported second quarter 2018 revenue of $3.7 billion, an increase of 17% from the prior year period. Adjusted for currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 12% in the second quarter. This reflects growth of 15% in North America, 11% in Asia, 9% in Europe and 10% in South America.

The Company reported second quarter 2018 U.S. GAAP net income from continuing operations of $291 million and earnings from continuing operations of $1.10 per diluted share, compared to $297 million and $1.11 per diluted share in the prior year period. Second quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $372 million, or $1.40 per diluted share, an increase of 24% on a per share basis compared to $302 million, or $1.13 per diluted share in the prior year period.

Second quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $474 million, compared to $398 million in the prior year period, resulting from the continued above-market growth of our businesses across all regions. Second quarter Adjusted Operating Income margin was 12.9%, compared to 12.6% in the prior year period, reflecting sales growth and the beneficial impacts of cost reduction initiatives, partially offset by continued incremental investments for growth. Depreciation and amortization expense totaled $156 million, an increase from $130 million in the prior year period.

Interest expense for the second quarter totaled $36 million, as compared to $35 million in the prior year period.

Tax expense in the second quarter of 2018 was $83 million, resulting in an effective tax rate of approximately 22%, which includes $24 million, or approximately 6 points, due to the adjustment to the provisional amounts recorded for the one-time impacts of the U.S. tax reform enactment. Tax expense in the second quarter of 2017 was $38 million, resulting in an effective rate of approximately 11%.

The Company generated net cash flow from continuing operating activities of $566 million in the second quarter, compared to $414 million in the prior year period.

Year-to-Date 2018 Results

For the six months ended June 30, 2018, the Company reported revenue of $7.3 billion, an increase of 16% from the prior year period. Adjusted for currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 10% during the period. This reflects growth of 10% in North America, 10% in Asia, 8% in Europe and 14% in South America.

For the 2018 year-to-date period, the Company reported U.S. GAAP net income from continuing operations of $598 million and earnings from continuing operations of $2.25 per diluted share, compared to $517 million and $1.92 per diluted share in the prior year period. Year-to-date Adjusted Net Income totaled $715 million, or $2.69 per diluted share, an increase of 22% on a per share basis compared to $593 million, or $2.21 per diluted share in the prior year period.

The Company reported Adjusted Operating Income of $901 million for the six months ended June 30, 2018, compared to $750 million in the prior year period, resulting from the continued above-market growth of our businesses across all regions. Adjusted Operating Income margin was 12.3% for the six months ended June 30, 2018, compared to 11.9% in the prior year period, reflecting sales growth, the beneficial impacts of cost reduction initiatives and the absence of certain warranty charges recorded in the prior year period, partially offset by continued incremental investments for growth. Depreciation and amortization expense totaled $311 million, an increase from $256 million in the prior year period.

Interest expense for the six months ended June 30, 2018 totaled $70 million, as compared to $68 million in the prior year period.

Tax expense for the six months ended June 30, 2018 was $142 million, resulting in an effective tax rate of approximately 19%, which includes $24 million, or approximately 3 points, due to the adjustment to the provisional amounts recorded for the one-time impacts of the U.S. tax reform enactment. Tax expense in the prior year period was $57 million, or an effective rate of approximately 10%.

The Company generated net cash flow from continuing operating activities of $752 million in the six months ended June 30, 2018, compared to $672 million in the prior year period. As of June 30, 2018, the Company had cash and cash equivalents of $1.0 billion and total available liquidity of $3.3 billion.

Reconciliations of Adjusted Net Income, Adjusted Net Income Per Share, Adjusted Operating Income 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.

Acquisitions of KUM and Winchester Interconnect

Aptiv completed the acquisition of KUM in June 2018. KUM is a leading provider of highly engineered connectors and cable management solutions for the automotive industry. The acquisition of KUM enhances Aptiv's global market position and expands Aptiv's range of specialized connectors and cable management solutions, specifically in the Asia Pacific region.

Aptiv also agreed to acquire Winchester Interconnect ("Winchester"), a leading provider of custom engineered interconnect solutions for harsh environment applications for approximately $650 million, or approximately 10.6 times 2018 estimated EBITDA. Winchester's portfolio of precision-engineered interconnect solutions further establishes Aptiv as a market leader of connectivity solutions and is a strategic fit to its Signal and Power Solutions segment. By adding over $250 million in non-automotive revenues, this transaction establishes a broader platform to further expand into adjacent markets, leveraging Aptiv's harsh environment expertise in engineered components.

Share Repurchase Program

During the second quarter of 2018, the Company repurchased 0.04 million shares for approximately $4 million under its existing authorized share repurchase program, leaving approximately $836 million available for future share repurchases. Year-to-date, the Company repurchased 1.72 million shares for approximately $153 million. All repurchased shares were retired, and are reflected as a reduction of ordinary share capital for the par value of the shares, with the excess applied as reductions to additional paid-in-capital and retained earnings.

Q3 and Full Year 2018 Outlook
The Company's third quarter and full year 2018 financial guidance is as follows:

(in millions, except per share amounts)

Q3 2018

Full Year 2018

Net sales

$3,425 - $3,525

$14,350 - $14,550

Adjusted operating income

$410 - $430

$1,790 - $1,820

Adjusted operating income margin

12.0% - 12.2%

~12.5%

Adjusted net income per share

$1.21 - $1.26

$5.30 - $5.40

Cash flow from operations


$1,550

Capital expenditures


$750

Adjusted effective tax rate

15% - 16%

15% - 16%

Conference Call and Webcast

The Company will host a conference call to discuss these results at 8:30 a.m. (ET) today, which is accessible by dialing 888.486.0553 (US domestic) or 706.634.4982 (international) or through a webcast at ir.aptiv.com. The conference ID number is 3073989. 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 Operating Income, Adjusted Net Income, Adjusted Net Income Per Share and Cash Flow Before Financing are non-GAAP financial measures. Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, other acquisition and portfolio project costs, asset impairments, gains (losses) on business divestitures and deferred compensation related to acquisitions. Other acquisition and portfolio project costs include costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures. Adjusted Operating Income margin is defined as Adjusted Operating Income as a percentage of net sales.

Adjusted Net Income represents net income attributable to Aptiv before discontinued operations, restructuring and other special items, including the tax impact thereon. Adjusted Net Income Per Share represents Adjusted Net Income divided by the weighted average number of diluted shares outstanding for the period. Cash Flow Before Financing represents cash provided by operating activities from continuing operations plus cash provided by (used in) investing activities from continuing operations, adjusted for the purchase price of business acquisitions 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 Operating Income, 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 PLC (NYSE:APTV) is a global technology company that develops safer, greener and more connected solutions enabling the future of mobility. Headquartered in Dublin, Aptiv has approximately 150,000 employees and operates 14 technical centers, as well as manufacturing sites and customer support centers in 45 countries. 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 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 June 30,


Six Months Ended June 30,


2018


2017


2018


2017


(in millions, except per share amounts)

Net sales

$

3,684



$

3,153



$

7,314



$

6,296


Operating expenses:








   Cost of sales

2,958



2,498



5,905



5,042


   Selling, general and administrative

260



231



519



456


   Amortization

30



29



60



58


   Restructuring

15



31



35



83


Total operating expenses

3,263



2,789



6,519



5,639


Operating income

421



364



795



657


   Interest expense

(36)



(35)



(70)



(68)


   Other (expense) income, net

(7)



8



23



(15)


Income from continuing operations before income taxes and
  equity income

378



337



748



574


   Income tax expense

(83)



(38)



(142)



(57)


Income from continuing operations before equity income

295



299



606



517


   Equity income, net of tax

8



7



13



18


Income from continuing operations

303



306



619



535


   Income from discontinued operations, net of tax



80





203


Net income

303



386



619



738


Net income attributable to noncontrolling interest

12



17



21



34


Net income attributable to Aptiv

$

291



$

369



$

598



$

704










Amounts attributable to Aptiv:








   Income from continuing operations

$

291



$

297



$

598



$

517


   Income from discontinued operations



72





187


   Net income

$

291



$

369



$

598



$

704










Diluted net income per share:








   Continuing operations

$

1.10



$

1.11



$

2.25



$

1.92


   Discontinued operations



0.27





0.70


   Diluted net income per share attributable to Aptiv

$

1.10



$

1.38



$

2.25



$

2.62


   Weighted average number of diluted shares outstanding

265.48



268.03



265.96



268.78










Cash dividends declared per share

$

0.22



$

0.29



$

0.22



$

0.58


 

 

APTIV PLC

CONDENSED CONSOLIDATED BALANCE SHEETS



June 30,
 2018


December 31,
 2017


(Unaudited)



(in millions)

ASSETS




Current assets:




Cash and cash equivalents

$

970



$

1,596


Restricted cash

1



1


Accounts receivable, net

2,598



2,440


Inventories

1,265



1,083


Other current assets

506



521


Total current assets

5,340



5,641


Long-term assets:




Property, net

2,972



2,804


Investments in affiliates

99



91


Intangible assets, net

1,245



1,219


Goodwill

2,157



1,944


Other long-term assets

503



470


Total long-term assets

6,976



6,528


Total assets

$

12,316



$

12,169


LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Short-term debt

$

22



$

17


Accounts payable

2,307



2,227


Accrued liabilities

1,109



1,296


Total current liabilities

3,438



3,540


Long-term liabilities:




Long-term debt

4,067



4,132


Pension benefit obligations

432



454


Other long-term liabilities

621



526


Total long-term liabilities

5,120



5,112


Total liabilities

8,558



8,652


Commitments and contingencies




Total Aptiv shareholders' equity

3,523



3,299


Noncontrolling interest

235



218


Total shareholders' equity

3,758



3,517


Total liabilities and shareholders' equity

$

12,316



$

12,169


 

 

APTIV PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Six Months Ended June 30,


2018


2017


(in millions)

Cash flows from operating activities:




Net income

$

619



$

738


Income from discontinued operations, net of tax



203


Income from continuing operations

619



535


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




Depreciation and amortization

311



256


Restructuring expense, net of cash paid

(31)



23


Deferred income taxes

(11)



3


Income from equity method investments, net of dividends received

(13)



(18)


Other, net

51



51


Changes in operating assets and liabilities:




Accounts receivable, net

(91)



(65)


Inventories

(157)



(175)


Accounts payable

145



79


Other, net

(49)



(2)


Pension contributions

(22)



(15)


Net cash provided by operating activities from continuing operations

752



672


Net cash (used in) provided by operating activities from discontinued operations

(52)



217


Net cash provided by operating activities

700



889


Cash flows from investing activities:




Capital expenditures

(449)



(311)


Proceeds from sale of property / investments

6



2


Cost of business acquisitions, net of cash acquired

(512)



(40)


Cost of technology investments



(25)


Settlement of derivatives

(6)



(12)


Net cash used in investing activities from continuing operations

(961)



(386)


Net cash used in investing activities from discontinued operations



(77)


Net cash used in investing activities

(961)



(463)


Cash flows from financing activities:




Net repayments under other short-term debt agreements

(15)



(5)


Contingent consideration and deferred acquisition purchase price payments

(5)



(20)


Dividend payments of consolidated affiliates to minority shareholders



(10)


Repurchase of ordinary shares

(149)



(289)


Distribution of cash dividends

(117)



(156)


Taxes withheld and paid on employees' restricted share awards

(35)



(33)


Net cash used in financing activities

(321)



(513)


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

(44)



41


Decrease in cash, cash equivalents and restricted cash

(626)



(46)


Cash, cash equivalents and restricted cash at beginning of period

1,597



839


Cash, cash equivalents and restricted cash at end of period

$

971



$

793


Cash, cash equivalents and restricted cash of discontinued operations

$



$

78


Cash, cash equivalents and restricted cash of continuing operations

$

971



$

715


 

 

APTIV PLC

FOOTNOTES

(Unaudited)


1. Segment Summary



Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


%


2018


2017


%


(in millions)




(in millions)



Net Sales












Signal and Power Solutions

$

2,650



$

2,346



13%


$

5,267



$

4,688



12%

Advanced Safety and User Experience

1,044



823



27%


2,076



1,644



26%

Eliminations and Other (a)

(10)



(16)





(29)



(36)




Net Sales

$

3,684



$

3,153





$

7,314



$

6,296
















Adjusted Operating Income












Signal and Power Solutions

$

386



$

312



24%


$

737



$

621



19%

Advanced Safety and User Experience

88



86



2%


164



129



27%

Eliminations and Other (a)












Adjusted Operating Income

$

474



$

398





$

901



$

750
















(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 Aptiv for the three and six months ended June 30, 2018 and 2017:



Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


2018


2017


(in millions, except per share amounts)

Weighted average ordinary shares outstanding, basic

264.81



267.41



265.25



268.30


  Dilutive shares related to RSUs

0.67



0.62



0.71



0.48


Weighted average ordinary shares outstanding, including
   dilutive shares

265.48



268.03



265.96



268.78


Basic net income per share:








  Continuing operations

$

1.10



$

1.11



$

2.25



$

1.92


  Discontinued operations



0.27





0.70


  Basic net income per share attributable to Aptiv

$

1.10



$

1.38



$

2.25



$

2.62


Diluted net income per share:








  Continuing operations

$

1.10



$

1.11



$

2.25



$

1.92


  Discontinued operations



0.27





0.70


  Diluted net income per share attributable to Aptiv

$

1.10



$

1.38



$

2.25



$

2.62


 

 

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 Operating Income," "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 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, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, 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,


2018


2017


2018


2017


($ in millions)


$


Margin


$


Margin


$


Margin


$


Margin

Net income attributable to Aptiv

$

291





$

369





$

598





$

704




Interest expense

36





35





70





68




Other expense (income), net

7





(8)





(23)





15




Income tax expense

83





38





142





57




Equity income, net of tax

(8)





(7)





(13)





(18)




Income from discontinued operations, net of 
   tax





(80)









(203)




Net income attributable to noncontrolling
   interest

12





17





21





34




Operating income

$

421



11.4

%


$

364



11.5

%


$

795



10.9

%


$

657



10.4

%

Restructuring

15





31





35





83




Other acquisition and portfolio project costs

22





3





41





9




Asset impairments

1









1





1




Deferred compensation related to nuTonomy
   acquisition

15









29








Adjusted operating income

$

474



12.9

%


$

398



12.6

%


$

901



12.3

%


$

750



11.9

%

 

 

Segment Adjusted Operating Income








(in millions)








Three Months Ended June 30, 2018

Signal and
Power Solutions


Advanced
Safety and User
Experience


Eliminations
and Other


Total

Operating income

$

357



$

64



$



$

421


Restructuring

11



4





15


Other acquisition and portfolio project costs

17



5





22


Asset impairments

1







1


Deferred compensation related to nuTonomy acquisition



15





15


Adjusted operating income

$

386



$

88



$



$

474










Depreciation and amortization (a)

$

118



$

38



$



$

156










Three Months Ended June 30, 2017

Signal and
Power Solutions


Advanced
Safety and User
Experience


Eliminations
and Other


Total

Operating income

$

296



$

68



$



$

364


Restructuring

14



17





31


Other acquisition and portfolio project costs

2



1





3


Adjusted operating income

$

312



$

86



$



$

398










Depreciation and amortization (a)

$

105



$

25



$



$

130










Six Months Ended June 30, 2018

Signal and
Power Solutions


Advanced
Safety and User
Experience


Eliminations
and Other


Total

Operating income

$

679



$

116



$



$

795


Restructuring

29



6





35


Other acquisition and portfolio project costs

28



13





41


Asset impairments

1







1


Deferred compensation related to nuTonomy acquisition



29





29


Adjusted operating income

$

737



$

164



$



$

901










Depreciation and amortization (a)

$

237



$

74



$



$

311










Six Months Ended June 30, 2017

Signal and
Power Solutions


Advanced
Safety and User
Experience


Eliminations
and Other


Total

Operating income

$

587



$

70



$



$

657


Restructuring

27



56





83


Other acquisition and portfolio project costs

7



2





9


Asset impairments



1





1


Adjusted operating income

$

621



$

129



$



$

750










Depreciation and amortization (a)

$

207



$

49



$



$

256










(a) Includes asset impairments.

 

 

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 discontinued operations, restructuring and other special items, including the tax impact thereon. Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average number of diluted shares outstanding 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,


2018


2017


2018


2017


(in millions, except per share amounts)

Net income attributable to Aptiv

$

291



$

369



$

598



$

704


Income from discontinued operations attributable to Aptiv, net
   of tax



(72)





(187)


Income from continuing operations attributable to Aptiv

291



297



598



517


Adjusting items:








   Restructuring

15



31



35



83


   Other acquisition and portfolio project costs

22



3



41



9


   Asset impairments

1





1



1


   Deferred compensation related to nuTonomy acquisition

15





29




   Reserve for Unsecured Creditors litigation



(17)





10


   Transaction and related costs associated with acquisitions

16





5




   Tax impact of U.S. tax reform enactment

24





24




   Tax impact of adjusting items (a)

(12)



(12)



(18)



(27)


Adjusted net income attributable to Aptiv

$

372



$

302



$

715



$

593










Weighted average number of diluted shares outstanding

265.48



268.03



265.96



268.78


Diluted net income per share from continuing operations
   attributable to Aptiv

$

1.10



$

1.11



$

2.25



$

1.92


Adjusted net income per share

$

1.40



$

1.13



$

2.69



$

2.21



(a)

Represents the income tax impacts of the adjustments made for 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.

 

 

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 operating activities from continuing operations plus cash provided by (used in) investing activities from continuing operations, adjusted for the purchase price of business acquisitions 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,


2018


2017


2018


2017


(in millions)

Cash flows from operating activities:








Income from continuing operations

$

303



$

306



$

619



$

535


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








Depreciation and amortization

156



130



311



256


Restructuring expense, net of cash paid

(15)



5



(31)



23


Working capital

82



(10)



(103)



(161)


Pension contributions

(11)



(7)



(22)



(15)


Other, net

51



(10)



(22)



34


Net cash provided by operating activities from continuing
   operations

566



414



752



672










Cash flows from investing activities:








Capital expenditures

(206)



(147)



(449)



(311)


Cost of business acquisitions, net of cash acquired

(507)





(512)



(40)


Cost of technology investments



(10)





(25)


Settlement of derivatives

(6)



(12)



(6)



(12)


Other, net

3



2



6



2


Net cash used in investing activities from continuing operations

(716)



(167)



(961)



(386)










Adjusting items:








Adjustment for the cost of business acquisitions, net of cash
   acquired

507





512



40


Adjustment for settlement of derivatives related to business
   acquisitions

(4)





(4)




Cash flow before financing

$

353



$

247



$

299



$

326


 

 

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 Q3


Estimated Full Year


2018 (1)


2018 (1)


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

Adjusted Operating Income

$


Margin (2)


$


Margin (2)

Net income attributable to Aptiv

$

203





$

1,095




Interest expense

35





139




Other (income) expense, net

(6)





(41)




Income tax expense

104





307




Equity income, net of tax

(6)





(23)




Net income attributable to noncontrolling interest

11





47




Operating income

341



9.8

%


1,524



10.5

%

Restructuring

46





145




Other acquisition and portfolio project costs

19





78




Asset impairments





1




Deferred compensation related to nuTonomy acquisition

14





57




Adjusted operating income

$

420



12.1

%


$

1,805



12.5

%









Adjusted Net Income Per Share








Net income attributable to Aptiv

$

203





$

1,095




Restructuring

46





145




Other acquisition and portfolio project costs

19





78




Asset impairments





1




Deferred compensation related to nuTonomy acquisition

14





57




Transaction and related costs associated with acquisitions





5




Tax impact of U.S. tax reform enactment





24




Tax impact of adjusting items

44





17




Adjusted net income attributable to Aptiv

$

326





$

1,422












Weighted average number of diluted shares outstanding

265.65





265.89




Diluted net income per share attributable to Aptiv

$

0.76





$

4.12




Adjusted net income per share

$

1.23





$

5.35





(1)

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



(2)

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

 

 

Cision View original content:http://www.prnewswire.com/news-releases/aptiv-reports-record-second-quarter-2018-financial-results-raises-full-year-outlook-300688803.html

SOURCE Aptiv PLC

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