Delphi Reports Second Quarter 2013 Financial Results
Delphi Reports Second Quarter 2013 Financial Results
- Second quarter U.S. GAAP diluted earnings per share of $1.17 compared to $1.01 in the prior year; Year-to-date diluted earnings per share of $2.05 compared to $2.05 in the prior year
- Excluding special items, second quarter earnings of $1.24 per diluted share, an increase of 20% compared to $1.03 per diluted share in the prior year; Year-to-date diluted earnings of $2.31 compared to $2.08 per diluted share in the prior year
- Second quarter Adjusted Operating Income and Adjusted Operating Income margin of $513 million and 12.1%, compared with $476 million and 11.9% for the same period in 2012; Year-to-date Adjusted Operating Income and Adjusted Operating Income margin of $944 million and 11.4%, compared with $946 million and 11.7% for the same period in 2012
- Second quarter Adjusted EBITDA and Adjusted EBITDA margin of $645 million and 15.2%, compared with $589 million and 14.7% for the same period in 2012; Year-to-date Adjusted EBITDA and Adjusted EBITDA margin of $1,207 million and 14.6%, compared with $1,173 million and 14.5% for the same period in 2012
- Generated year-to-date operating cash flow of $672 million
- Executed $120 million of share repurchases in the second quarter of 2013; share repurchases year-to-date of $242 million
GILLINGHAM, England & TROY, Mich.--(BUSINESS WIRE)-- Delphi Automotive PLC (NYS: DLPH) , a leading global vehicle components manufacturer, today reported second quarter 2013 revenues of $4.2 billion, an increase of 6% from the prior year period, primarily reflecting the acquisition of the Motorized Vehicles Division ("MVL") from FCI Group. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 1% inthe second quarter.
The Company reported second quarter U.S. GAAP net income of $367 million and earnings of $1.17 per diluted share, compared to $330 million and $1.01 per diluted share in the prior year period. The current year quarterly U.S. GAAP results include special items consisting of restructuring-related charges and acquisition-related integration costs. Excluding these special items, the Company reported adjusted second quarter earnings of $388 million, or $1.24 per diluted share, compared to adjusted earnings of $336 million, or $1.03 per diluted share in the prior year period.
"Delphi had another quarter of outstanding operating performance," said Rodney O'Neal, chief executive officer and president. "Our operating model and lean cost structure allowed us to achieve record margins and increase earnings per share. We continue to remain focused on leveraging our leading portfolio of innovative technology solutions to enhance shareholder value."
Second Quarter 2013 Results
The Company reported second quarter 2013 revenue of $4.2 billion, an increase of 1% compared to the second quarter of 2012, adjusting for currency exchange, commodity movements, acquisitions and divestitures. This reflects growth of 9% in Asia, 4% in North America and 13% in South America, offset by a decline in Europe of 7%.
Second quarter net income excluding restructuring, acquisition-related integration costs, and losses on extinguishment of debt ("Adjusted Net Income"), totaled $388 million, or $1.24 per diluted share, which includes the favorable impacts of a lower effective tax rate and reduced share count. Adjusted Net Income in the prior year period was $336 million, or $1.03 per diluted share.
Second quarter earnings before interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition integration costs ("Adjusted Operating Income") was $513 million, compared to $476 million in the prior year period. Adjusted Operating Income margin was 12.1% in the second quarter of 2013, compared with 11.9% in the prior year period.
Second quarter earnings before depreciation and amortization, interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition integration costs ("Adjusted EBITDA") was $645 million, compared to $589 million in the prior year period. Adjusted EBITDA margin was 15.2% in the second quarter of 2013, compared with 14.7% in the prior year period. The increase in Adjusted EBITDA reflects the increased earnings from the acquisition of MVL and continued strong performance of our businesses in the Asia Pacific region, partially offset by continued volume reductions in Europe.
Interest expense for the second quarter totaled $36 million, comparable to $33 million in the prior year period. Tax expense in the second quarter of 2013 was $73 million, resulting in an effective tax rate of approximately 16%, compared to $98 million, or an effective rate of 22%, in the prior year period. The improvement in 2013 primarily reflects the geographic mix of pretax earnings and tax planning initiatives.
The Company generated net cash flow from operating activities of $523 million in the second quarter of 2013, compared to $461 million in the prior year period.
Year-to-Date 2013 Results
For the six months ended June 30, 2013, the Company reported revenue of $8.3 billion, a decrease of 3% compared to the six months ended June 30, 2012, adjusting for currency exchange, commodity movements, acquisitions and divestitures. This reflects growth of 8% in Asia, 1% in North America and 10% in South America, offset by a decline in Europe of 12%.
For the 2013 year-to-date period, Adjusted Net Income totaled $724 million, or $2.31 per diluted share, which includes the favorable impacts of a lower effective tax rate and reduced share count. Adjusted Net Income in the prior year period was $682 million, or $2.08 per diluted share.
The Company reported Adjusted Operating Income of $944 million for the six months ended June 30, 2013, compared to $946 million in the prior year period. Adjusted Operating Income margin was 11.4% in the six months ended June 30, 2013, compared with 11.7% in the prior year period.
For the six months ended June 30, 2013, Adjusted EBITDA was $1,207 million, compared to $1,173 million in the prior year period. Adjusted EBITDA margin was 14.6% for the six months ended June 30, 2013, compared with 14.5% in the prior year period. The increase in Adjusted EBITDA reflects the increased earnings from the acquisition of MVL, partially offset by volume reductions in Europe.
Interest expense for the six months ended June 30, 2013 totaled $72 million, comparable to $68 million in the prior year period. Additionally, the first quarter of 2013 included a net loss on retirement of debt totaling $39 million. Tax expense for the year-to-date 2013 was $110 million, resulting in an effective tax rate of approximately 14%, compared to $175 million, or an effective rate of 20%, in the prior year period. The improvement in 2013 primarily reflects the geographic mix of lower pretax earnings and tax planning initiatives.
The Company generated net cash flow from operating activities of $672 million in the six months ended June 30, 2013, compared to $754 million in the prior year period. As of June 30, 2013, the Company had cash and cash equivalents of $1.0 billion and access to $1.5 billion in undrawn committed revolving bank facilities, and total debt of $2.4 billion.
Share Repurchase Program
During the second quarter of 2013, Delphi repurchased 2.45 million shares for approximately $120 million under its existing authorized share repurchase program, leaving approximately $405 million available for future share repurchases. Year-to-date, the Company has repurchased 5.30 million shares for approximately $242 million. 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.
Q3 2013 and Full Year 2013 Outlook
The Company's third quarter and full year 2013 financial guidance is as follows:
|(in millions, except per share amounts)||
|Adjusted Earnings Per Share||$0.86 - $0.94||$4.15 - $4.41||$4.22 - $4.45|
|Adjusted EBITDA||$540 - $570||$2,325 - $2,425||$2,350 - $2,425|
|Adjusted EBITDA Margin||13.7% - 14.1%||14.4% - 14.6%||14.4% - 14.7%|
|Revenue||$3,950 - $4,050||$16,200 - $16,600||$16,300 - $16,500|
|Cash Flow Before Financing||$1,000||$1,000|
|Effective Tax Rate||16%||17%|
|Share Count - Diluted||314||313|
Conference Call and Webcast
The Company will host a conference call to discuss these results at 10:00 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 13813789. 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.
Delphi Automotive PLC (NYS: DLPH) is a leading global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Operating major technical centers, manufacturing sites and customer support facilities in 32 countries, Delphi delivers real-world innovations that make products smarter and safer as well as more powerful and efficient. Connect to innovation at www.delphi.com.
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.
DELPHI AUTOMOTIVE PLC
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
(in millions, except
per share amounts)
(in millions, except
per share amounts)
|Cost of sales||3,464||3,272||6,803||6,645|
|Selling, general and administrative||241||230||471||458|
|Total operating expenses||3,757||3,529||7,384||7,157|
|Other income (expense), net||5||5||(29||)||12|
|Income before income taxes and equity income||452||440||779||876|
|Income tax expense||(73||)||(98||)||(110||)||(175||)|
|Income before equity income||379||342||669||701|
|Equity income, net of tax||10||8||18||12|
|Net income attributable to noncontrolling interest||22||20||44||41|
|Net income attributable to Delphi||$||367||$||330||$||643||$||672|
|Diluted net income per share:|
|Diluted net income per share attributable to Delphi||$||1.17||$||1.01||$||2.05||$||2.05|
|Weighted average number of diluted shares outstanding||312.69||326.14||314.02||327.30|
DELPHI AUTOMOTIVE PLC
CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||1,001||$||1,105|
|Accounts receivable, net||2,868||2,425|
|Other current assets||597||623|
|Total current assets||5,633||5,227|
|Investments in affiliates||208||231|
|Intangible assets, net||757||803|
|Other long-term assets||611||582|
|Total long-term assets||4,918||4,949|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Total current liabilities||3,809||3,659|
|Pension benefit obligations||888||929|
|Other long-term liabilities||445||434|
|Total long-term liabilities||3,700||3,687|
|Commitments and contingencies|
|Total Delphi shareholder's equity||2,521||2,345|
|Total shareholders' equity||3,042||2,830|
|Total liabilities and shareholders' equity||$||10,551||$||10,176|
DELPHI AUTOMOTIVE PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|Six Months Ended|
|Cash flows from operating activities:|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Depreciation and amortization||263||227|
|Deferred income taxes||3||7|
|Income from equity method investments, net of dividends received||2||13|
|Loss on extinguishment of debt||39||—|
|Changes in operating assets and liabilities:|
|Accounts receivable, net||(443||)||(186||)|
|Net cash provided by operating activities||672||754|
|Cash flows from investing activities:|
|Proceeds from sale of property / investments||4||16|
|Cost of acquisitions, net of cash acquired||2||—|
|Decrease (increase) in restricted cash||3||(3||)|
|Acquisition of minority held shares||—||(16||)|
|Dividends from equity method investments in excess of earnings||—||37|
|Net cash used in investing activities||(327||)||(366||)|
|Cash flows from financing activities:|
|Decrease in short and long-term debt, net||(72||)||(38||)|
|Dividend payments of consolidated affiliates to minority shareholders||(8||)||(5||)|
|Repurchase of ordinary shares||(240||)||(150||)|
|Distribution of cash dividends||(106||)||—|
|Taxes withheld and paid on employees' restricted share awards||(14||)||—|
|Net cash used in financing activities||(440||)||(193||)|
|Effect of exchange rate fluctuations on cash and cash equivalents||(9||)||
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