Aptiv Reports Third Quarter 2024 Financial Results

Record Adjusted Earnings Per Share Reflecting Strong Operating Performance

Aptiv PLC (NYSE:APTV), a global technology company focused on making the world safer, greener and more connected, today reported third quarter 2024 U.S. GAAP earnings of $1.48 per diluted share. Excluding special items, third quarter earnings totaled $1.83 per diluted share.

Third Quarter Financial Highlights Include:

• U.S. GAAP revenue of $4.9 billion, a decrease of 5%
  • Revenue decreased 6% adjusted for currency exchange and commodity movements, compared to AWM¹ of (5)%
• U.S. GAAP net income of $363 million, U.S. GAAP net income margin of 7.5%; U.S. GAAP diluted earnings per share of $1.48
  • Excluding special items, diluted earnings per share of $1.83
• U.S. GAAP operating income of $503 million, U.S. GAAP operating income margin of 10.4%
  • Adjusted Operating Income of $593 million, Adjusted Operating Income margin of 12.2%; Adjusted EBITDA of $778 million, Adjusted EBITDA margin of 16.0%
• Generated $499 million of cash from operations
• Returned $2.32 billion to shareholders through share repurchases, including $2.25 billion under the $3.0 billion Accelerated Share Repurchase Program

Year-to-Date Financial Highlights Include:

• U.S. GAAP revenue of $14.8 billion, a decrease of 2%
  • Revenue decreased 2% adjusted for currency exchange and commodity movements, compared to AWM¹ of (2)%
• U.S. GAAP net income of $1,519 million, U.S. GAAP net income margin of 10.3%; U.S. GAAP diluted earnings per share of $5.76
  • Excluding special items, diluted earnings per share of $4.53
• U.S. GAAP operating income of $1,363 million, U.S. GAAP operating income margin of 9.2%
  • Adjusted Operating Income of $1,743 million, Adjusted Operating Income margin of 11.8%; Adjusted EBITDA of $2,286 million, Adjusted EBITDA margin of 15.4%
• Generated $1,386 million of cash from operations
• Returned $3.35 billion to shareholders through share repurchases

"Aptiv delivered record adjusted earnings per share this quarter, reflecting strong operating results and benefits from our recent capital allocation actions," said Kevin Clark, chairman and chief executive officer. "Our industry-leading solutions, global capabilities and relentless focus on operational excellence continue to demonstrate our resiliency while also delivering record third quarter profitability. Our revised financial outlook reflects the impact of incremental customer schedule reductions and broader weakness in automotive production volumes. Despite near-term headwinds, we are confident in the long-term megatrends of safe, green and connected, and we are well-positioned to support our customers in this transition, while maximizing value to shareholders."

Third Quarter 2024 Results

For the three months ended September 30, 2024, the Company reported U.S. GAAP revenue of $4.9 billion, a decrease of 5% from the prior year period. Adjusted for currency exchange and commodity movements, revenue decreased by 6% in the third quarter. This reflects declines of 7% in North America, 6% in Europe, 4% in Asia, which includes declines of 6% in China, and 12% in South America, our smallest region.

The Company reported third quarter 2024 U.S. GAAP net income of $363 million, earnings of $1.48 per diluted share and net income margin of 7.5%, compared to $1,629 million, $5.76 per diluted share and 31.9% in the prior year period. Third quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $449 million, or earnings of $1.83 per diluted share, compared to $367 million, or $1.30 per diluted share, in the prior year period.

Third quarter U.S. GAAP operating income was $503 million, compared to $446 million in the prior year period. The Company reported third quarter Adjusted Operating Income, a non-GAAP financial measure defined below, of $593 million, compared to $560 million in the prior year period. Adjusted Operating Income margin was 12.2%, compared to 11.0% in the prior year period, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives. Depreciation and amortization expense totaled $241 million, an increase from $226 million in the prior year period.

Interest expense for the third quarter totaled $101 million, an increase from $75 million in the prior year period.

Tax expense in the third quarter of 2024 was $32 million, resulting in an effective tax rate of approximately 8%. Tax benefit in the third quarter of 2023 was $1,312 million, which primarily reflects a deferred tax benefit of approximately $1.4 billion recognized 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 $499 million in the third quarter, compared to $746 million in the prior year period.

Year-to-Date 2024 Results

For the nine months ended September 30, 2024, the Company reported U.S. GAAP revenue of $14.8 billion, a decrease of 2% from the prior year period. Adjusted for currency exchange, commodity movements and acquisitions, revenue decreased by 2% during the period. This reflects declines of 3% in Europe, 2% in North America and 11% in South America, our smallest region, partially offset by growth of 1% in Asia, which includes growth of 1% in China.

For the 2024 year-to-date period, the Company reported U.S. GAAP net income of $1,519 million, earnings of $5.76 per diluted share and net income margin of 10.3%, compared to $2,004 million, $7.17 per diluted share and 13.2% in the prior year period. Year-to-date Adjusted Net Income totaled $1,195 million, or $4.53 per diluted share, compared to $981 million, or $3.46 per diluted share, in the prior year period.

The Company reported U.S. GAAP operating income of $1,363 million for the nine months ended September 30, 2024, compared to $1,204 million in the prior year period. Adjusted Operating Income was $1,743 million for the nine months ended September 30, 2024, compared to $1,527 million in the prior year period. Adjusted Operating Income margin was 11.8% for the nine months ended September 30, 2024, compared to 10.1% in the prior year period, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives. Depreciation and amortization expense totaled $719 million, an increase from $666 million in the prior year period.

Interest expense for the nine months ended September 30, 2024 totaled $230 million, an increase from $214 million in the prior year period.

Tax expense for the nine months ended September 30, 2024 was $159 million, resulting in an effective tax rate of approximately 9%. Tax benefit in the prior year period was $1,248 million, which primarily reflects a deferred tax benefit of approximately $1.4 billion recognized 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 $1,386 million in the nine months ended September 30, 2024, compared to $1,272 million in the prior year period. As of September 30, 2024, the Company had cash and cash equivalents of $1.1 billion and total available liquidity of $3.9 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

During the third quarter of 2024, the Company repurchased 31.7 million shares for $2.32 billion, including 30.8 million shares repurchased under the terms of the Company's Accelerated Share Repurchase Program, with a value of $2.25 billion. Year-to-date, the Company repurchased 44.4 million shares for $3.35 billion. As of September 30, 2024, $2.52 billion remained available for future share repurchases under the existing $5.0 billion authorization. All repurchased shares were retired.

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 +1.323.994.2093 (international) or through a webcast at ir.aptiv.com. The conference ID number is 1329199. 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 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 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:

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