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| 8-K - 8-K - Aptiv PLC | a8-kq12014earningsrelease.htm |
Exhibit 99.1
DELPHI REPORTS FIRST QUARTER 2014 FINANCIAL RESULTS
GILLINGHAM, England - Delphi Automotive PLC (NYSE: DLPH), a leading global vehicle components manufacturer, today reported first quarter 2014 U.S. GAAP earnings of $1.04 per diluted share. Excluding special items, earnings increased 12% to $1.20 per diluted share.
Highlights include:
• | Revenue of $4.3 billion, up 6% |
• | U.S. GAAP diluted earnings per share of $1.04, up 18% |
◦ | Excluding special items, earnings of $1.20 per diluted share, up 12% |
• | Adjusted Operating Income of $483 million, up 12% |
◦ | Adjusted Operating Income margin of 11.3%, up 60 basis points |
• | Generated $136 million of cash from operations |
• | Share repurchases and dividends of $234 million |
“Overall, Delphi had an outstanding first quarter of 2014, with strong earnings on revenue growth that was in-line with our expectations," said Rodney O'Neal, chief executive officer and president. "We believe we are well-positioned for the remainder of 2014."
First Quarter 2014 Results
The Company reported first quarter 2014 revenues of $4.3 billion, an increase of 6% from the prior year period, reflecting continued strong growth in Asia and North America. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue also increased by 6% in the first quarter. This reflects growth of 12% in Asia, 8% in North America and 2% in Europe, partially offset by declines of 9% in South America.
The Company reported first quarter U.S. GAAP net income of $320 million and earnings of $1.04 per diluted share, compared to $276 million and $0.88 per diluted share in the prior year period. First quarter net income excluding special items consisting of restructuring-related charges, acquisition-related integration costs and losses on extinguishment of debt ("Adjusted Net Income"), totaled $368 million, or $1.20 per diluted share, which includes the unfavorable impact of an increased effective tax rate as well as the favorable impact of a reduced share count. Adjusted Net Income in the prior year period was $336 million, or $1.07 per diluted share.
First quarter earnings before interest expense, other income (expense), income tax expense, restructuring, acquisition-related integration costs and equity income (loss) ("Adjusted Operating Income") was $483 million, compared to $431 million in the prior year period. Adjusted Operating Income margin increased 60 basis points in the first quarter of 2014 to 11.3%, compared with 10.7% in the prior year period. The increase in Adjusted Operating Income reflects the continued strong performance and growth of our businesses in Asia and North America, as well as the benefits of our on-going European restructuring programs initiated over the past 15 months. Depreciation and amortization expense totaled $145 million in the first quarter, compared to $131 million in the prior year period.
Exhibit 99.1
Interest expense for the first quarter totaled $35 million, comparable to $36 million in the prior year period. Additionally, both the first quarter of 2014 and 2013 included net losses on the extinguishment of debt totaling $34 million and $39 million, respectively.
Tax expense in the first quarter of 2014 was $75 million, resulting in an effective tax rate of approximately 18%, compared to $37 million, or an effective rate of 11%, in the prior year period. The increase reflects higher pretax earnings, as well as the geographic mix of pretax earnings, and the favorable impact of discrete items recorded in the prior year period.
The Company generated net cash flow from operating activities of $136 million in the first quarter of 2014, compared to $149 million in the prior year period. As of March 31, 2014, the Company had cash and cash equivalents of $1 billion and access to $1.5 billion in undrawn committed revolving bank facilities, and total debt of $2.4 billion.
Increase of Quarterly Cash Dividend
On January 14, 2014, Delphi's Board of Directors approved an increase in the annual dividend rate paid on its ordinary shares from $0.68 to $1 per ordinary share, and declared a quarterly cash dividend of $0.25 per ordinary share to shareholders of record at the close of business on February 18, 2014. On February 27, 2014, $77 million was paid to shareholders of record as of February 18, 2014.
Share Repurchase Program
During the first quarter of 2014, Delphi repurchased 2.38 million shares for approximately $157 million under its existing $750 million share repurchase program, leaving approximately $33 million available for future share repurchases under this program. As previously disclosed, the Company's Board of Directors also authorized a new $1 billion share repurchase program, which will commence following the completion of the existing program. 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 2014 and Full Year 2014 Outlook
The Company's second quarter and full year 2014 financial guidance is as follows:
(in millions, except per share amounts) | Q2 2014 | Previous Full Year 2014 | Current Full Year 2014 |
Revenue | $4,375 - $4,475 | $17,200 - $17,600 | $17,200 - $17,600 |
Adjusted Operating Income | $525 - $550 | $1,950 - $2,050 | $1,975 - $2,050 |
Adjusted Operating Income Margin | 12.0% - 12.3% | 11.3% - 11.6% | 11.5% - 11.6% |
Adjusted Earnings Per Share | $1.27 - $1.35 | $4.70 - $4.95 | $4.80 - $5.00 |
Cash Flow Before Financing | $1,100 | $1,100 | |
Capital Expenditures | $800 | $800 | |
Depreciation and Amortization | $600 | $600 | |
Adjusted Effective Tax Rate | 18% | 18% | |
Share Count - Diluted | 309 | 306 | |
Full year 2014 mid-point earnings per share guidance represents 11% growth year-over-year, and assumes global vehicle production increases of 2%.
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Exhibit 99.1
Conference Call and Webcast
The Company will host a conference call to discuss these results at 9:00 a.m. (ET) today, which is accessible by dialing 888.486.0553 (US domestic) or 706.634.4982 (international) or through a webcast at http://investor.delphi.com/. The conference ID number is 24590424. 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 Delphi's financial results which are not presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures 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 Delphi
Delphi Automotive PLC (NYSE: DLPH) is a leading global supplier of technologies for the automotive and commercial vehicle markets. Headquartered in Gillingham, England, Delphi operates major technical centers, manufacturing sites and customer support services in 32 countries, with regional headquarters in Bascharage, Luxembourg; Sao Paulo, Brazil; Shanghai, China and Troy, Michigan, U.S. Delphi delivers innovation for the real world with technologies that make cars and trucks safer as well as more powerful, efficient and connected.
FORWARD-LOOKING STATEMENTS
This press release, as well as other statements made by Delphi Automotive 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.
# # #
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Exhibit 99.1
DELPHI AUTOMOTIVE PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in millions, except per share amounts) | ||||||||
Net sales | $ | 4,276 | $ | 4,024 | ||||
Operating expenses: | ||||||||
Cost of sales | 3,508 | 3,339 | ||||||
Selling, general and administrative | 261 | 230 | ||||||
Amortization | 26 | 26 | ||||||
Restructuring | 22 | 32 | ||||||
Total operating expenses | 3,817 | 3,627 | ||||||
Operating income | 459 | 397 | ||||||
Interest expense | (35 | ) | (36 | ) | ||||
Other expense, net | (16 | ) | (34 | ) | ||||
Income before income taxes and equity income | 408 | 327 | ||||||
Income tax expense | (75 | ) | (37 | ) | ||||
Income before equity income | 333 | 290 | ||||||
Equity income, net of tax | 8 | 8 | ||||||
Net income | 341 | 298 | ||||||
Net income attributable to noncontrolling interest | 21 | 22 | ||||||
Net income attributable to Delphi | $ | 320 | $ | 276 | ||||
Diluted net income per share: | ||||||||
Diluted net income per share attributable to Delphi | $ | 1.04 | $ | 0.88 | ||||
Weighted average number of diluted shares outstanding | 306.89 | 315.36 | ||||||
Cash dividends declared per share | $ | 0.25 | $ | 0.17 | ||||
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Exhibit 99.1
DELPHI AUTOMOTIVE PLC
CONSOLIDATED BALANCE SHEETS
March 31, 2014 | December 31, 2013 | |||||||
(unaudited) | ||||||||
(in millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 978 | $ | 1,389 | ||||
Restricted cash | 7 | 4 | ||||||
Accounts receivable, net | 3,066 | 2,662 | ||||||
Inventories | 1,235 | 1,093 | ||||||
Other current assets | 594 | 604 | ||||||
Total current assets | 5,880 | 5,752 | ||||||
Long-term assets: | ||||||||
Property, net | 3,251 | 3,216 | ||||||
Investments in affiliates | 229 | 234 | ||||||
Intangible assets, net | 696 | 723 | ||||||
Goodwill | 494 | 496 | ||||||
Other long-term assets | 632 | 626 | ||||||
Total long-term assets | 5,302 | 5,295 | ||||||
Total assets | $ | 11,182 | $ | 11,047 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 31 | $ | 61 | ||||
Accounts payable | 2,681 | 2,595 | ||||||
Accrued liabilities | 1,218 | 1,238 | ||||||
Total current liabilities | 3,930 | 3,894 | ||||||
Long-term liabilities: | ||||||||
Long-term debt | 2,418 | 2,351 | ||||||
Pension benefit obligations | 958 | 959 | ||||||
Other long-term liabilities | 382 | 409 | ||||||
Total long-term liabilities | 3,758 | 3,719 | ||||||
Total liabilities | 7,688 | 7,613 | ||||||
Commitments and contingencies | ||||||||
Total Delphi shareholder's equity | 2,961 | 2,911 | ||||||
Noncontrolling interest | 533 | 523 | ||||||
Total shareholders’ equity | 3,494 | 3,434 | ||||||
Total liabilities and shareholders’ equity | $ | 11,182 | $ | 11,047 | ||||
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Exhibit 99.1
DELPHI AUTOMOTIVE PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 341 | $ | 298 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 145 | 131 | ||||||
Deferred income taxes | 8 | (2 | ) | |||||
Income from equity method investments, net of dividends received | 2 | 1 | ||||||
Loss on extinguishment of debt | 34 | 39 | ||||||
Other, net | 13 | 30 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (404 | ) | (370 | ) | ||||
Inventories | (142 | ) | (82 | ) | ||||
Accounts payable | 218 | 194 | ||||||
Other, net | (55 | ) | (71 | ) | ||||
Pension contributions | (24 | ) | (19 | ) | ||||
Net cash provided by operating activities | 136 | 149 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (298 | ) | (213 | ) | ||||
Proceeds from sale of property / investments | 1 | 2 | ||||||
Cost of business and technology acquisitions, net of cash acquired | — | 2 | ||||||
(Increase) decrease in restricted cash | (3 | ) | 4 | |||||
Net cash used in investing activities | (300 | ) | (205 | ) | ||||
Cash flows from financing activities: | ||||||||
Increase (decrease) in short and long-term debt, net | 4 | (19 | ) | |||||
Dividend payments of consolidated affiliates to minority shareholders | (7 | ) | (8 | ) | ||||
Repurchase of ordinary shares | (153 | ) | (122 | ) | ||||
Distribution of cash dividends | (77 | ) | (53 | ) | ||||
Taxes withheld and paid on employees' restricted share awards | (8 | ) | (14 | ) | ||||
Net cash used in financing activities | (241 | ) | (216 | ) | ||||
Effect of exchange rate fluctuations on cash and cash equivalents | (6 | ) | (3 | ) | ||||
Decrease in cash and cash equivalents | (411 | ) | (275 | ) | ||||
Cash and cash equivalents at beginning of period | 1,389 | 1,105 | ||||||
Cash and cash equivalents at end of period | $ | 978 | $ | 830 | ||||
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Exhibit 99.1
DELPHI AUTOMOTIVE PLC
FOOTNOTES
(unaudited)
1. Segment Summary
Three Months Ended | ||||||||||
March 31, | ||||||||||
2014 | 2013 | % | ||||||||
(in millions) | ||||||||||
Net sales | ||||||||||
Electrical/Electronic Architecture | $ | 2,111 | $ | 1,921 | 10 | % | ||||
Powertrain Systems | 1,104 | 1,107 | — | % | ||||||
Electronics and Safety | 730 | 693 | 5 | % | ||||||
Thermal Systems | 389 | 360 | 8 | % | ||||||
Eliminations and Other (a) | (58 | ) | (57 | ) | ||||||
Net sales | $ | 4,276 | $ | 4,024 | ||||||
Adjusted Operating Income | ||||||||||
Electrical/Electronic Architecture | $ | 273 | $ | 231 | 18 | % | ||||
Powertrain Systems | 115 | 114 | 1 | % | ||||||
Electronics and Safety | 83 | 72 | 15 | % | ||||||
Thermal Systems | 12 | 14 | (14 | )% | ||||||
Eliminations and Other (a) | — | — | ||||||||
Adjusted Operating Income | $ | 483 | $ | 431 | ||||||
(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 Delphi for the three months ended March 31, 2014 and 2013:
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
(in millions, except per share data) | ||||||||
Weighted average ordinary shares outstanding, basic | 305.85 | 314.68 | ||||||
Dilutive shares related to RSUs | 1.04 | 0.68 | ||||||
Weighted average ordinary shares outstanding, including dilutive shares | 306.89 | 315.36 | ||||||
Net income per share attributable to Delphi: | ||||||||
Basic | $ | 1.05 | $ | 0.88 | ||||
Diluted | $ | 1.04 | $ | 0.88 | ||||
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Exhibit 99.1
DELPHI AUTOMOTIVE 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 performance which is consistent with the basis and manner in which management presents financial information for the purpose of making internal operating decisions. Adjusted Operating Income is defined as net income (loss) before interest expense, other income (expense), net, income tax expense, restructuring, acquisition-related integration costs and equity income (loss), net of tax. 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. The Company's 2014 guidance was determined using a consistent manner and methodology.
Consolidated Adjusted Operating Income | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Net income attributable to Delphi | $ | 320 | $ | 276 | ||||
Income tax expense | 75 | 37 | ||||||
Interest expense | 35 | 36 | ||||||
Other expense, net | 16 | 34 | ||||||
Noncontrolling interest | 21 | 22 | ||||||
Equity income, net of tax | (8 | ) | (8 | ) | ||||
Operating income | 459 | 397 | ||||||
Restructuring | 22 | 32 | ||||||
Other acquisition-related costs | 2 | 2 | ||||||
Adjusted Operating Income | $ | 483 | $ | 431 | ||||
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Exhibit 99.1
Segment Adjusted Operating Income | |||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Three Months Ended March 31, 2014 | Electrical/ Electronic Architecture | Powertrain Systems | Electronics and Safety | Thermal Systems | Eliminations and Other | Total | |||||||||||||||||
Operating income | $ | 258 | $ | 113 | $ | 77 | $ | 11 | $ | — | $ | 459 | |||||||||||
Restructuring | 13 | 2 | 6 | 1 | — | 22 | |||||||||||||||||
Other acquisition-related costs | 2 | — | — | — | — | 2 | |||||||||||||||||
Adjusted operating income | $ | 273 | $ | 115 | $ | 83 | $ | 12 | $ | — | $ | 483 | |||||||||||
Three Months Ended March 31, 2013 | Electrical/ Electronic Architecture | Powertrain Systems | Electronics and Safety | Thermal Systems | Eliminations and Other | Total | |||||||||||||||||
Operating income | $ | 218 | $ | 106 | $ | 61 | $ | 12 | $ | — | $ | 397 | |||||||||||
Restructuring | 11 | 8 | 11 | 2 | — | 32 | |||||||||||||||||
Other acquisition-related costs | 2 | — | — | — | — | 2 | |||||||||||||||||
Adjusted operating income | $ | 231 | $ | 114 | $ | 72 | $ | 14 | $ | — | $ | 431 | |||||||||||
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Exhibit 99.1
DELPHI AUTOMOTIVE PLC
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(unaudited)
Adjusted Net Income and Adjusted Net Income Per Share: Management believes adjusted net income and adjusted net income per share, which are non-GAAP measures, are useful in evaluating the ongoing operating performance of the Company. Adjusted Net Income is defined as net income (loss) before restructuring, acquisition-related integration costs and debt extinguishment costs. 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. The Company's 2014 guidance was determined using a consistent manner and methodology.
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in millions, except per share amounts) | ||||||||
Net income attributable to Delphi | $ | 320 | $ | 276 | ||||
Adjusting items: | ||||||||
Restructuring charges | 22 | 32 | ||||||
Acquisition-related integration costs | 2 | 2 | ||||||
Debt extinguishment costs | 34 | 39 | ||||||
Tax impact of adjusting items (a) | (10 | ) | (13 | ) | ||||
Adjusted net income attributable to Delphi | $ | 368 | $ | 336 | ||||
Weighted average number of diluted shares outstanding | 306.89 | 315.36 | ||||||
Diluted net income per share attributable to Delphi | $ | 1.04 | $ | 0.88 | ||||
Adjusted net income per share | $ | 1.20 | $ | 1.07 | ||||
(a) | Represents the income tax impacts of the adjustments made for restructuring charges, acquisition-related integration costs and debt extinguishment costs, by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred. |
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Exhibit 99.1
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. Cash flow before financing is defined as cash provided by (used in) operating activities plus cash provided by (used in) investing activities. 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 Company's 2014 guidance was determined using a consistent manner and methodology.
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 341 | $ | 298 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 145 | 131 | ||||||
Working capital | (328 | ) | (258 | ) | ||||
Pension contributions | (24 | ) | (19 | ) | ||||
Other, net | 2 | (3 | ) | |||||
Net cash provided by operating activities | 136 | 149 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (298 | ) | (213 | ) | ||||
Other, net | (2 | ) | 8 | |||||
Net cash used in investing activities | (300 | ) | (205 | ) | ||||
Cash flow before financing | $ | (164 | ) | $ | (56 | ) | ||
Investor Contact:
Jessica Holscott
248.813.2312
Jessica.Holscott@delphi.com
Media Contact:
Claudia Tapia
248.813.1507
Claudia.Tapia@delphi.com
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