Aptiv Reports Fourth Quarter 2024 Financial Results

Record Full Year Earnings Driven by Strong Operating Performance

Aptiv PLC (NYSE:APTV), a global technology company focused on making the world safer, greener and more connected, today reported fourth quarter 2024 U.S. GAAP earnings of $1.14 per diluted share. Excluding special items, fourth quarter earnings totaled $1.75 per diluted share.

Fourth Quarter Financial Highlights Include:

• U.S. GAAP revenue of $4.9 billion, consistent with the prior year period
  • Revenue decreased 1% adjusted for currency exchange and commodity movements, compared to AWM¹ of (4)%
• U.S. GAAP net income of $268 million, U.S. GAAP net income margin of 5.5%; U.S. GAAP diluted earnings per share of $1.14
  • Excluding special items, diluted earnings per share of $1.75
• U.S. GAAP operating income of $479 million, U.S. GAAP operating income margin of 9.8%
  • Adjusted Operating Income of $623 million; Adjusted Operating Income margin of 12.7%; Adjusted EBITDA of $811 million; Adjusted EBITDA margin of 16.5%
• Generated $1,060 million of cash from operations

Full Year 2024 Financial Highlights Include:

• U.S. GAAP revenue of $19.7 billion, a decrease of 2%
  • Revenue decreased 2% adjusted for currency exchange and commodity movements, compared to AWM¹ of (3)%
• U.S. GAAP net income of $1,787 million, U.S. GAAP net income margin of 9.1%; U.S. GAAP diluted earnings per share of $6.96
  • Excluding special items, diluted earnings per share of $6.26
• U.S. GAAP operating income of $1,842 million, U.S. GAAP operating income margin of 9.3%
  • Adjusted Operating Income of $2,366 million; Adjusted Operating Income margin of 12.0%; Adjusted EBITDA of $3,097 million; Adjusted EBITDA margin of 15.7%
• Generated $2,446 million of cash from operations
• Funded $4.1 billion in share repurchases

"Our full-year results validate our proven track record of operational excellence and the strength of Aptiv's product portfolio," said Kevin Clark, chairman and chief executive officer. "The company delivered record operating cash flow and strong earnings growth with 140 basis points of operating margin expansion year-over-year, reflecting continued cost discipline and solid execution. We also finished the year with record fourth quarter new business awards, resulting in our third consecutive year of $30+ billion bookings. Looking ahead, as we navigate a dynamic market environment, we will remain focused on enabling our customers as they transition to a more feature-rich, software-defined future. This year also marks a major milestone in Aptiv's evolution, as we execute on the separation of our Electrical Distribution Systems business, which will create two independent companies better positioned to address the evolving needs of our customers and further capitalize on market opportunities. With these strategic actions and continued commercial momentum, we are confident in our ability to drive further long-term growth and deliver significant value to all of our stakeholders."

Fourth Quarter 2024 Results

For the three months ended December 31, 2024, the Company reported U.S. GAAP revenue of $4.9 billion, consistent with the prior year period. Adjusted for currency exchange and commodity movements, revenue decreased by 1% in the fourth quarter. This reflects declines of 8% in Europe, partially offset by growth of 3% in North America, 3% in Asia, which includes 4% in China, and flat growth in South America, our smallest region.

The Company reported fourth quarter 2024 U.S. GAAP net income of $268 million, earnings of $1.14 per diluted share and net income margin of 5.5%, compared to $905 million, $3.22 per diluted share and 18.4% in the prior year period. Fourth quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $411 million, or $1.75 per diluted share, compared to $395 million, or $1.40 per diluted share in the prior year period.

Fourth quarter U.S. GAAP operating income was $479 million, compared to $355 million in the prior year period. The Company reported fourth quarter Adjusted Operating Income, a non-GAAP financial measure defined below, of $623 million, compared to $600 million in the prior year period. Adjusted Operating Income margin was 12.7%, compared to 12.2% in the prior year period, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives. Depreciation and amortization expense totaled $245 million, compared to $246 million in the prior year period.

Interest expense for the fourth quarter totaled $107 million, an increase from $71 million in the prior year period.

Tax expense in the fourth quarter of 2024 was $64 million, resulting in an effective tax rate of approximately 18%. Tax benefit in the fourth quarter of 2023 was $680 million, which primarily reflects the recognition of a deferred tax benefit of approximately $723 million as a result of transactions entered into as part of a reorganization of the Company's corporate entity structure.

The Company generated net cash flow from operating activities of $1,060 million in fourth quarter, compared to $624 million in the prior year period.

Full Year 2024 Results

For the year ended December 31, 2024, the Company reported U.S. GAAP revenue of $19.7 billion, a decrease of 2% from the prior year. Adjusted for currency exchange and commodity movements, revenue decreased by 2% in 2024. This reflects declines of 4% in Europe, 1% in North America and 9% in South America, our smallest region, partially offset by growth of 1% in Asia, which includes 2% in China.

The Company reported full year 2024 U.S. GAAP net income of $1,787 million, earnings of $6.96 per diluted share and net income margin of 9.1%, compared to $2,909 million, $10.39 per diluted share and 14.5% in the prior year. Full year 2024 Adjusted Net Income totaled $1,607 million, or $6.26 per diluted share, compared to $1,376 million, or $4.86 per diluted share, in the prior year.

Full year 2024 U.S. GAAP operating income was $1,842 million, compared to $1,559 million in the prior year. The Company reported full year Adjusted Operating Income of $2,366 million, compared to $2,127 million in the prior year. Adjusted Operating Income margin was 12.0%, compared to 10.6% in the prior year, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives. Depreciation and amortization expense totaled $964 million, an increase from $912 million in the prior year.

Interest expense for full year 2024 totaled $337 million, as compared to $285 million in the prior year, which primarily reflects the impacts of debt transactions in the third quarter of 2024 in part to finance our $3.0 billion accelerated share repurchase program.

Tax expense for full year 2024 was $223 million, resulting in an effective tax rate of approximately 10%. Tax benefit for full year 2023 was $1,928 million, which primarily reflects the recognition of a deferred tax benefit of approximately $2.1 billion as a result of transactions entered into as part of a reorganization of the Company's corporate entity structure.

The Company generated net cash flow from operating activities of $2,446 million in 2024, compared to $1,896 million in the prior year. As of December 31, 2024, the Company had cash and cash equivalents of $1.6 billion and total available liquidity of $3.6 billion.

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

Share Repurchase Program

During 2024, the Company repurchased 44.4 million shares for approximately $3.35 billion, including shares repurchased under the terms of the Company's Accelerated Share Repurchase Program, which will be completed by the second quarter of 2025.

As of December 31, 2024, $2.5 billion remained available for future share repurchases under the existing $5.0 billion authorization. All repurchased shares were retired.

Planned Spin-off of Electrical Distribution Systems Business

As previously announced on January 22, 2025, Aptiv intends to execute a tax-free spin-off of its Electrical Distribution Systems business into a new, independent publicly traded company, creating two highly focused public companies strategically positioned to drive incremental value for customers, shareholders and employees. The transaction is expected to be completed by March 31, 2026.

In connection with the planned spin-off of the Company's Electrical Distribution Systems business, in the first quarter of 2025 Aptiv is realigning its business into three reportable operating segments: Electrical Distribution Systems, Engineered Components Group and Advanced Safety and User Experience. The changes to Aptiv's segment reporting will be reflected in Aptiv's financial statements commencing with the first Quarterly Report on Form 10-Q of 2025.

Q1 and Full Year 2025 Outlook

The Company's first quarter and full year 2025 financial guidance is as follows:

Conference Call and Webcast

The Company will host a conference call to discuss these results at 8:00 a.m. (ET) today, which is accessible by dialing +1.800.239.9838 (US) or +1.323.794.2423 (international) or through a webcast at ir.aptiv.com. The conference ID number is 1176930. 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 Weighted Average Number of Diluted Shares Outstanding for the period. 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 focused on making the world safer, greener and more connected. 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

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.

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.

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.

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 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.

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.

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: