aptv-20220930

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 September 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 October 28, 2022, was 270,949,579.

Table of Contents

APTIV PLC

INDEX


		Page
Part I - Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Nin e Months Ended September 30, 2022 and 2021 (Unaudited)	4
	Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (Unaudited)	6
	Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
	Cautionary Statement Regarding Forward Looking Information	45
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	69
Item 4.	Controls and Procedures	70

Part II - Other Information
Item 1.	Legal Proceedings	71
Item 1A.	Risk Factors	71
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71

Item 6.	Exhibits	71

Signatures		72
Exhibits

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

APTIV PLC

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(in millions, except per share amounts)
Net sales	$	4,614	$	3,654	$	12,849	$	11,484
Operating expenses:
Cost of sales	3,821		3,138		11,027		9,639
Selling, general and administrative	275		263		835		784

Amortization	37		37		112		111
Restructuring (Note 7)	11		1		52		21

Total operating expenses	4,144		3,439		12,026		10,555
Operating income	470		215		823		929
Interest expense	(58)		(36)		(157)		(114)
Other income (expense), net (Note 16)	20		1		(44)		2
Income before income taxes and equity loss	432		180		622		817
Income tax expense	(59)		(25)		(96)		(101)
Income before equity loss	373		155		526		716
Equity loss, net of tax	(67)		(51)		(202)		(146)


Net income	306		104		324		570
Net income (loss) attributable to noncontrolling interest	5		3		(21)		11
Net income attributable to Aptiv	301		101		345		559
Mandatory convertible preferred share dividends (Note 12)	(15)		(15)		(47)		(47)
Net income attributable to ordinary shareholders	$	286	$	86	$	298	$	512






Basic net income per share:


Basic net income per share attributable to ordinary shareholders	$	1.06	$	0.32	$	1.10	$	1.89
Weighted average number of basic shares outstanding	270.93		270.51		270.88		270.44

Diluted net income per share (Note 12):


Diluted net income per share attributable to ordinary shareholders	$	1.05	$	0.32	$	1.10	$	1.89
Weighted average number of diluted shares outstanding	271.10		271.20		271.10		271.14

See notes to consolidated financial statements.

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APTIV PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(in millions)
Net income	$	306	$	104	$	324	$	570
Other comprehensive (loss) income:
Currency translation adjustments	(213)		(78)		(425)		(127)
Net change in unrecognized loss on derivative instruments, net of tax (Note 14)	(5)		(62)		(67)		(64)
Employee benefit plans adjustment, net of tax	7		6		14		36
Other comprehensive loss	(211)		(134)		(478)		(155)
Comprehensive income (loss)	95		(30)		(154)		415
Comprehensive income (loss) attributable to noncontrolling interests	3		2		(20)		10
Comprehensive income (loss) attributable to Aptiv	$	92	$	(32)	$	(134)	$	405

See notes to consolidated financial statements.

Table of Contents

APTIV PLC

CONSOLIDATED BALANCE SHEETS


	September 30, 2022		December 31, 2021
	(Unaudited)

	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	4,850	$	3,139
Restricted cash	4		—
Accounts receivable, net of allowance for doubtful accounts of $53 million and $37 million, respectively (Note 2)	3,366		2,784
Inventories (Note 3)	2,306		2,014
Other current assets (Note 4)	457		499

Total current assets	10,983		8,436
Long-term assets:
Property, net	3,157		3,294
Operating lease right-of-use assets	406		383
Investments in affiliates (Note 21)	1,772		1,797
Intangible assets, net (Note 2)	806		964
Goodwill (Note 2)	2,274		2,511
Other long-term assets (Note 4)	573		622

Total long-term assets	8,988		9,571
Total assets	$	19,971	$	18,007
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt (Note 8)	$	16	$	8
Accounts payable	2,775		2,953

Accrued liabilities (Note 5)	1,338		1,246

Total current liabilities	4,129		4,207
Long-term liabilities:
Long-term debt (Note 8)	6,336		4,059
Pension benefit obligations	399		440
Long-term operating lease liabilities	325		304
Other long-term liabilities (Note 5)	401		436

Total long-term liabilities	7,461		5,239
Total liabilities	11,590		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 September 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 September 30, 2022 and December 31, 2021, respectively	3		3
Additional paid-in-capital	3,968		3,939
Retained earnings	5,375		5,077
Accumulated other comprehensive loss (Note 13)	(1,151)		(672)
Total Aptiv shareholders’ equity	8,195		8,347
Noncontrolling interest	186		214
Total shareholders’ equity	8,381		8,561
Total liabilities and shareholders’ equity	$	19,971	$	18,007

See notes to consolidated financial statements.

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APTIV PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Nine Months Ended September 30,
	2022		2021

	(in millions)
Cash flows from operating activities:
Net income	$	324	$	570


Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	462		472
Amortization	112		111
Amortization of deferred debt issuance costs	7		7
Restructuring expense, net of cash paid	2		(42)
Deferred income taxes	(6)		(5)
Pension and other postretirement benefit expenses	25		34
Loss from equity method investments, net of dividends received	205		152
Loss on modification of debt	—		1

Loss on sale of assets	—		1
Share-based compensation	65		76
Other charges related to Ukraine/Russia conflict	54		—

Changes in operating assets and liabilities:
Accounts receivable, net	(582)		99
Inventories	(301)		(819)
Other assets	52		50
Accounts payable	(107)		(37)
Accrued and other long-term liabilities	(5)		(64)
Other, net	38		(35)
Pension contributions	(15)		(18)


Net cash provided by operating activities	330		553
Cash flows from investing activities:
Capital expenditures	(666)		(430)
Proceeds from sale of property	3		4


Cost of business acquisitions and other transactions, net of cash acquired	(220)		(45)
Proceeds from sale of technology investments	3		14
Cost of technology investments	(42)		(2)

Settlement of derivatives	9		(11)




Net cash used in investing activities	(913)		(470)
Cash flows from financing activities:
Net repayments under other short-term debt agreements	(3)		(22)
Net repayments under other long-term debt agreements	(2)		(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	(47)		(47)

Taxes withheld and paid on employees’ restricted share awards	(36)		(45)
Net cash provided by (used in) financing activities	2,376		(128)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	(54)		(15)
Increase (decrease) in cash, cash equivalents and restricted cash	1,739		(60)
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	$	4,878	$	2,793

Reconciliation of cash, cash equivalents and restricted cash and cash classified as assets held for sale:
	September 30,
	2022		2021
	(in millions)
Cash, cash equivalents and restricted cash	$	4,854	$	2,793
Cash classified as assets held for sale	24		—
Total cash, cash equivalents and restricted cash	$	4,878	$	2,793

See notes to consolidated financial statements.

Table of Contents

APTIV PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)


	Three Months Ended September 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 June 30, 2022	271	$	3	12	$	—	$	3,949	$	5,089	$	(942)	$	8,099	$	183	$	8,282
Net income	—	—		—	—		—		301		—		301		5		306
Other comprehensive loss	—	—		—	—		—		—		(209)		(209)		(2)		(211)


Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(15)		—		(15)		—		(15)




Share-based compensation	—	—		—	—		19		—		—		19		—		19


Balance at September 30, 2022	271	$	3	12	$	—	$	3,968	$	5,375	$	(1,151)	$	8,195	$	186	$	8,381

2021
Balance at June 30, 2021	271	$	3	12	$	—	$	3,909	$	4,976	$	(566)	$	8,322	$	203	$	8,525
Net income	—	—		—	—		—		101		—		101		3		104
Other comprehensive loss	—	—		—	—		—		—		(133)		(133)		(1)		(134)
Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(15)		—		(15)		—		(15)






Share-based compensation	—	—		—	—		19		—		—		19		—		19


Balance at September 30, 2021	271	$	3	12	$	—	$	3,928	$	5,062	$	(699)	$	8,294	$	205	$	8,499


	Nine Months Ended September 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)	—	—		—	—		—		345		—		345		(21)		324
Other comprehensive (loss) income	—	—		—	—		—		—		(479)		(479)		1		(478)

Dividend payments of consolidated affiliates to minority shareholders	—	—		—	—		—		—		—		—		(8)		(8)
Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(47)		—		(47)		—		(47)
Taxes withheld on employees’ restricted share award vestings	—	—		—	—		(36)		—		—		(36)		—		(36)



Share-based compensation	—	—		—	—		65		—		—		65		—		65


Balance at September 30, 2022	271	$	3	12	$	—	$	3,968	$	5,375	$	(1,151)	$	8,195	$	186	$	8,381

2021
Balance at January 1, 2021	270	$	3	12	$	—	$	3,897	$	4,550	$	(545)	$	7,905	$	195	$	8,100
Net income	—	—		—	—		—		559		—		559		11		570
Other comprehensive loss	—	—		—	—		—		—		(154)		(154)		(1)		(155)


Mandatory convertible preferred share cumulative dividends	—	—		—	—		—		(47)		—		(47)		—		(47)
Taxes withheld on employees’ restricted share award vestings	—	—		—	—		(45)		—		—		(45)		—		(45)




Share-based compensation	1	—		—	—		76		—		—		76		—		76

Balance at September 30, 2021	271	$	3	12	$	—	$