aptv-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-35346

APTIV PLC

(Exact name of registrant as specified in its charter)


Jersey						98-1029562
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

5 Hanover Quay

Grand Canal Dock

Dublin, D02 VY79, Ireland

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code) 353-1-259-7013

(Former name, former address and former fiscal year, if changed since last report) N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Ordinary Shares, $0.01 par value per share

APTV

New York Stock Exchange

5.50% Mandatory Convertible Preferred Shares, Series A, $0.01 par value per share

APTV PRA

New York Stock Exchange

2.396% Senior Notes due 2025

APTV

New York Stock Exchange

1.500% Senior Notes due 2025

APTV

New York Stock Exchange

1.600% Senior Notes due 2028

APTV

New York Stock Exchange

4.350% Senior Notes due 2029

APTV

New York Stock Exchange

3.250% Senior Notes due 2032

APTV

New York Stock Exchange

4.400% Senior Notes due 2046

APTV

New York Stock Exchange

5.400% Senior Notes due 2049

APTV

New York Stock Exchange

3.100% Senior Notes due 2051

APTV

New York Stock Exchange

4.150% Senior Notes due 2052

APTV

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of the registrant’s ordinary shares outstanding, $0.01 par value per share as of July 29, 2022, was 270,932,774.

Table of Contents

APTIV PLC

INDEX


		Page
Part I - Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Operations for the Three and Six Months Ended June 30 , 2022 and 2021 (Unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30 , 2022 and 2021 (Unaudited)	4
	Consolidated Balance Sheets as of June 30 , 2022 (Unaudited) and December 31, 2021	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30 , 2022 and 2021 (Unaudited)	6
	Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 3 0 , 2022 and 2021 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
	Cautionary Statement Regarding Forward Looking Information	44
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Controls and Procedures	69

Part II - Other Information
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70

Item 6.	Exhibits	70

Signatures		71
Exhibits

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

APTIV PLC

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(in millions, except per share amounts)
Net sales	$	4,057	$	3,807	$	8,235	$	7,830
Operating expenses:
Cost of sales	3,617		3,205		7,206		6,501
Selling, general and administrative	286		266		560		521

Amortization	38		37		75		74
Restructuring (Note 7)	19		14		41		20

Total operating expenses	3,960		3,522		7,882		7,116
Operating income	97		285		353		714
Interest expense	(56)		(38)		(99)		(78)
Other (expense) income, net (Note 16)	(25)		—		(64)		1
Income before income taxes and equity loss	16		247		190		637
Income tax expense	(16)		(28)		(37)		(76)
Income before equity loss	—		219		153		561
Equity loss, net of tax	(72)		(53)		(135)		(95)


Net (loss) income	(72)		166		18		466
Net (loss) income attributable to noncontrolling interest	(27)		3		(26)		8
Net (loss) income attributable to Aptiv	(45)		163		44		458
Mandatory convertible preferred share dividends (Note 12)	(16)		(16)		(32)		(32)
Net (loss) income attributable to ordinary shareholders	$	(61)	$	147	$	12	$	426






Basic net (loss) income per share:


Basic net (loss) income per share attributable to ordinary shareholders	$	(0.23)	$	0.54	$	0.04	$	1.58
Weighted average number of basic shares outstanding	270.93		270.49		270.86		270.40

Diluted net (loss) income per share (Note 12):


Diluted net (loss) income per share attributable to ordinary shareholders	$	(0.23)	$	0.54	$	0.04	$	1.57
Weighted average number of diluted shares outstanding	270.93		271.06		271.11		271.10

See notes to consolidated financial statements.

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APTIV PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(in millions)
Net (loss) income	$	(72)	$	166	$	18	$	466
Other comprehensive (loss) income:
Currency translation adjustments	(177)		43		(212)		(49)
Net change in unrecognized (loss) gain on derivative instruments, net of tax (Note 14)	(99)		5		(62)		(2)
Employee benefit plans adjustment, net of tax	5		23		7		30
Other comprehensive (loss) income	(271)		71		(267)		(21)
Comprehensive (loss) income	(343)		237		(249)		445
Comprehensive (loss) income attributable to noncontrolling interests	(21)		4		(23)		8
Comprehensive (loss) income attributable to Aptiv	$	(322)	$	233	$	(226)	$	437

See notes to consolidated financial statements.

Table of Contents

APTIV PLC

CONSOLIDATED BALANCE SHEETS


	June 30, 2022		December 31, 2021
	(Unaudited)

	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	4,670	$	3,139

Accounts receivable, net of allowance for doubtful accounts of $43 million and $37 million, respectively (Note 2)	3,028		2,784
Inventories (Note 3)	2,362		2,014
Other current assets (Note 4)	498		499

Total current assets	10,558		8,436
Long-term assets:
Property, net	3,211		3,294
Operating lease right-of-use assets	414		383
Investments in affiliates (Note 21)	1,863		1,797
Intangible assets, net (Note 2)	876		964
Goodwill (Note 2)	2,392		2,511
Other long-term assets (Note 4)	594		622

Total long-term assets	9,350		9,571
Total assets	$	19,908	$	18,007
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt (Note 8)	$	17	$	8
Accounts payable	2,749		2,953

Accrued liabilities (Note 5)	1,253		1,246

Total current liabilities	4,019		4,207
Long-term liabilities:
Long-term debt (Note 8)	6,433		4,059
Pension benefit obligations	421		440
Long-term operating lease liabilities	334		304
Other long-term liabilities (Note 5)	419		436

Total long-term liabilities	7,607		5,239
Total liabilities	11,626		9,446
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized; 11,500,000 shares of 5.50% Mandatory Convertible Preferred Shares, Series A, issued and outstanding as of June 30, 2022 and December 31, 2021	—		—
Ordinary shares, $0.01 par value per share, 1,200,000,000 shares authorized, 270,932,774 and 270,514,140 issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	3		3
Additional paid-in-capital	3,949		3,939
Retained earnings	5,089		5,077
Accumulated other comprehensive loss (Note 13)	(942)		(672)
Total Aptiv shareholders’ equity	8,099		8,347
Noncontrolling interest	183		214
Total shareholders’ equity	8,282		8,561
Total liabilities and shareholders’ equity	$	19,908	$	18,007

See notes to consolidated financial statements.

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APTIV PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Six Months Ended June 30,
	2022		2021

	(in millions)
Cash flows from operating activities:
Net income	$	18	$	466


Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	309		316
Amortization	75		74
Amortization of deferred debt issuance costs	4		6
Restructuring expense, net of cash paid	10		(28)
Deferred income taxes	(5)		4
Pension and other postretirement benefit expenses	16		24
Loss from equity method investments, net of dividends received	135		99

Loss on modification of debt	—		1


Share-based compensation	46		57
Other charges related to Ukraine/Russia conflict	54		—

Changes in operating assets and liabilities:
Accounts receivable, net	(244)		160
Inventories	(358)		(501)
Other assets	29		(63)
Accounts payable	(150)		23
Accrued and other long-term liabilities	(64)		(53)
Other, net	27		(24)
Pension contributions	(9)		(12)


Net cash (used in) provided by operating activities	(107)		549
Cash flows from investing activities:
Capital expenditures	(454)		(261)
Proceeds from sale of property	3		2


Cost of business acquisitions and other transactions, net of cash acquired	(220)		(45)
Proceeds from sale of technology investments	3		—
Cost of technology investments	(41)		(1)

Settlement of derivatives	4		(9)




Net cash used in investing activities	(705)		(314)
Cash flows from financing activities:
Net repayments under other short-term debt agreements	(2)		(12)
Net repayments under other long-term debt agreements	—		(8)

Proceeds from issuance of senior notes, net of issuance costs	2,472		—
Fees related to modification of debt agreements	—		(6)





Dividend payments of consolidated affiliates to minority shareholders	(8)		—

Distribution of mandatory convertible preferred share cash dividends	(32)		(32)

Taxes withheld and paid on employees’ restricted share awards	(36)		(45)
Net cash provided by (used in) financing activities	2,394		(103)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	(25)		(7)
Increase in cash, cash equivalents and restricted cash	1,557		125
Cash, cash equivalents and restricted cash at beginning of the period	3,139		2,853
Cash, cash equivalents and restricted cash at end of the period	$	4,696	$	2,978

Reconciliation of cash, cash equivalents and restricted cash and cash classified as assets held for sale:
	June 30,
	2022		2021
	(in millions)
Cash, cash equivalents and restricted cash	$	4,670	$	2,978
Cash classified as assets held for sale	26		—
Total cash, cash equivalents and restricted cash	$	4,696	$	2,978

See notes to consolidated financial statements.

Table of Contents

APTIV PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)


	Three Months Ended June 30,

	Ordinary Shares			Preferred Shares

	Number of shares	Amount of shares		Number of shares	Amount of shares		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Aptiv Shareholders’ Equity		Noncontrolling Interest		Total Shareholders’ Equity

2022	(in millions)
Balance at March 31, 2022	271	$	3	12	$	—	$	3,908	$	5,150	$	(665)	$	8,396	$	204	$	8,600
Net loss	—	—		—	—		—		(45)		—		(45)		(27)		(72)
Other comprehensive (loss) income	—	—		—	—		—		—		(277)		(277)		6		(271)


Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(16)		—		(16)		—		(16)




Share-based compensation	—	—		—	—		41		—		—		41		—		41


Balance at June 30, 2022	271	$	3	12	$	—	$	3,949	$	5,089	$	(942)	$	8,099	$	183	$	8,282

2021
Balance at March 31, 2021	270	$	3	12	$	—	$	3,881	$	4,829	$	(636)	$	8,077	$	199	$	8,276
Net income	—	—		—	—		—		163		—		163		3		166
Other comprehensive income	—	—		—	—		—		—		70		70		1		71
Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(16)		—		(16)		—		(16)






Share-based compensation	1	—		—	—		28		—		—		28		—		28


Balance at June 30, 2021	271	$	3	12	$	—	$	3,909	$	4,976	$	(566)	$	8,322	$	203	$	8,525


	Six Months Ended June 30,

	Ordinary Shares			Preferred Shares

	Number of shares	Amount of shares		Number of shares	Amount of shares		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Aptiv Shareholders’ Equity		Noncontrolling Interest		Total Shareholders’ Equity

2022	(in millions)
Balance at January 1, 2022	271	$	3	12	$	—	$	3,939	$	5,077	$	(672)	$	8,347	$	214	$	8,561
Net income (loss)	—	—		—	—		—		44		—		44		(26)		18
Other comprehensive (loss) income	—	—		—	—		—		—		(270)		(270)		3		(267)

Dividend payments of consolidated affiliates to minority shareholders	—	—		—	—		—		—		—		—		(8)		(8)
Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(32)		—		(32)		—		(32)
Taxes withheld on employees’ restricted share award vestings	—	—		—	—		(36)		—		—		(36)		—		(36)



Share-based compensation	—	—		—	—		46		—		—		46		—		46


Balance at June 30, 2022	271	$	3	12	$	—	$	3,949	$	5,089	$	(942)	$	8,099	$	183	$	8,282

2021
Balance at January 1, 2021	270	$	3	12	$	—	$	3,897	$	4,550	$	(545)	$	7,905	$	195	$	8,100
Net income	—	—		—	—		—		458		—		458		8		466
Other comprehensive loss	—	—		—	—		—		—		(21)		(21)		—		(21)


Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(32)		—		(32)		—		(32)
Taxes withheld on employees’ restricted share award vestings	—	—		—	—		(45)		—		—		(45)		—		(45)




Share-based compensation	1	—		—	—		57		—		—