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

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."

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:

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

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 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.

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:

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