Aptiv Reports Record First Quarter 2018 Financial Results And Raises Full Year Outlook

DUBLIN - Aptiv PLC (NYSE: APTV), a global technology company enabling the future of mobility, today reported first quarter 2018 U.S. GAAP earnings from continuing operations of $1.15 per diluted share. Excluding special items, first quarter earnings from continuing operations totaled $1.29 per diluted share.

First Quarter Highlights Include:

• Revenue of $3.6 billion, up 8% adjusted for currency exchange, commodity movements, acquisitions and divestitures
  
  
• U.S. GAAP net income from continuing operations of $307 million, diluted earnings per share from continuing operations of $1.15
  • Excluding special items, earnings from continuing operations of $1.29 per diluted share, up 19%

• U.S. GAAP operating income margin of 10.3%
  • Adjusted Operating Income margin of 11.8%, up 60 basis points; Adjusted Operating Income of $427 million, up 21%

• Generated $186 million of cash from continuing operations
  
  
• Returned $208 million to shareholders through share repurchases and dividends

"We are off to an outstanding start in 2018, with revenue and earnings above first quarter expectations," said Kevin Clark, president and chief executive officer. "Our Aptiv team delivered record financial performance, with 8% organic growth resulting from strong gains across the portfolio led by double-digit growth in our fastest-growing product lines, including active safety, infotainment and vehicle electrification. We are also announcing the acquisition of KUM, a leading provider of specialized connectors and cable management solutions for a range of harsh environment automotive applications; and the company returned $208 million of cash to shareholders through dividends and share repurchases. Our great start to the year positions us for outperformance in 2018, as reflected in our raised outlook for the year, and reinforces our strategy to deliver value to shareholders through innovation, profitable growth, strong cash flow generation and disciplined capital deployment."

First Quarter 2018 Results
The Company reported first quarter 2018 revenue of $3.6 billion, an increase of 15% from the prior year period. Adjusted for currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 8% in the first quarter. This reflects growth of 9% in Asia, 8% in Europe, 6% in North America and 19% in South America.

The Company reported first quarter 2018 U.S. GAAP net income from continuing operations of $307 million and earnings from continuing operations of $1.15 per diluted share, compared to $220 million and $0.82 per diluted share in the prior year period. First quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $343 million, or $1.29 per diluted share, an increase of 19% on a per share basis compared to $291 million, or $1.08 per diluted share in the prior year period.

First quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $427 million, compared to $352 million in the prior year period, resulting from the continued above-market growth of our businesses across all regions. First quarter Adjusted Operating Income margin was 11.8%, compared to 11.2% 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 $155 million, an increase from $126 million in the prior year period.

Interest expense for the first quarter totaled $34 million, as compared to $33 million in the prior year period.

Tax expense in the first quarter of 2018 was $59 million, resulting in an effective tax rate of approximately 16%, compared to $19 million, or an effective rate of 8%, in the prior year period. The increase in the effective tax rate reflects the geographic mix of pretax earnings and the impact of favorable discrete items recorded in the prior period.

The Company generated net cash flow from continuing operating activities of $186 million in the first quarter. As of March 31, 2018, the Company had cash and cash equivalents of $1.3 billion and total available liquidity of $3.7 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.

Share Repurchase Program
During the first quarter of 2018, the Company repurchased 1.68 million shares for approximately $149 million under its existing authorized share repurchase program, leaving approximately $840 million available for future share repurchases. 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.

Q2 and Full Year 2018 Outlook
The Company's second quarter and full year 2018 financial guidance is as follows:

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 9238578. 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 is a global technology company that develops safer, greener and more connected solutions, which enable the future of mobility. Headquartered in Dublin, Aptiv has 147,000 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.