Delphi Reports First Quarter 2013 Financial Results

Delphi Reports First Quarter 2013 Financial Results

Highlights include:

  • First quarter U.S. GAAP diluted earnings per share of $0.88 compared to $1.04 in the prior year

  • Excluding special items, first quarter earnings of $1.07 per diluted share, compared with $1.05 per diluted share in the prior year

  • First quarter Adjusted EBITDA and Adjusted EBITDA margin of $562 million and 14.0%, compared with $584 million and 14.3% for the same period in 2012

  • First quarter operating cash flow of $149 million

  • Initiated regular quarterly cash dividend of $0.17 per share and executed $122 million of share repurchases in first quarter of 2013

GILLINGHAM, England & TROY, Mich.--(BUSINESS WIRE)-- Delphi Automotive PLC (NYS: DLPH) , a leading global vehicle components manufacturer, today reported first quarter 2013 revenues of $4.0 billion, a decrease of 1.7% from the prior year period, the result of continued weak business conditions in Europe, partially offset by the acquisition of the Motorized Vehicles Division ("MVL") from FCI Group. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue decreased by 6% inthe first quarter.


The Company reported first quarter U.S. GAAP net income of $276 million and earnings of $0.88 per diluted share, compared to $342 million and $1.04 per diluted share in the prior year period. The current year quarterly U.S. GAAP results include special items consisting of restructuring-related charges, acquisition-related integration costs and debt retirement charges. Excluding these special items, the Company reported adjusted first quarter earnings of $336 million, or $1.07 per diluted share, compared to adjusted earnings of $346 million, or $1.05 per diluted share in the prior year period.

"Despite continued weakness in Europe, our industry-leading cost structure as well as our diverse mix of regional and customer revenues allowed us to deliver solid first quarter financial results, grow earnings per share, and increase shareholder value," said Rodney O'Neal, chief executive officer and president.

First Quarter 2013 Results

The Company reported first quarter 2013 revenue of $4.0 billion, a decrease of 6% compared to the first quarter of 2012, adjusting for currency exchange, commodity movements, acquisitions and divestitures. This reflects growth of 8% in Asia and 7% in South America, offset by declines in Europe and North America of 17% and 2%, respectively.

First quarter net income excluding restructuring, acquisition related integration costs, and losses on extinguishment of debt ("Adjusted Net Income"), totaled $336 million, or $1.07 per diluted share, which includes the favorable impacts of a lower effective tax rate and share repurchases. Adjusted Net Income in the prior year period was $346 million, or $1.05 per diluted share.

First quarter earnings before depreciation and amortization, interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition integration costs ("Adjusted EBITDA") was $562 million, compared to $584 million in the prior year period. Adjusted EBITDA margin was 14.0% in the first quarter of 2013, compared with 14.3% in the prior year period. The reduction in Adjusted EBITDA reflects the continued volume reductions in Europe, partially offset by increased earnings from the acquisition of MVL.

First quarter earnings before interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition integration costs ("Adjusted Operating Income") was $431 million, compared to $470 million in the prior year period. Adjusted Operating Income margin was 10.7% in the first quarter of 2013, compared with 11.5% in the prior year period.

Interest expense for the first quarter totaled $36 million, comparable to $35 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 in the first quarter of 2013 was $37 million, resulting in an effective tax rate of approximately 11%, compared to $77 million, or an effective rate of 18%, 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 $149 million in the first quarter of 2013, compared to $293 million in the prior year period, and as of March 31, 2013, had cash and cash equivalents of $0.8 billion and access to $1.5 billion in undrawn committed revolving bank facilities. Total debt outstanding as of March 31, 2013 was $2.5 billion.

Initiation of Regular Quarterly Cash Dividend

On February 26, 2013, Delphi's Board of Directors approved the initiation of dividend payments on its ordinary shares and declared a regular quarterly cash dividend of $0.17 per ordinary share to shareholders of record at the close of business on March 15, 2013. On March 27, 2013, $53 million was paid to shareholders of record as of March 15, 2013.

Share Repurchase Program

In 2012, Delphi's Board of Directors authorized two share repurchase programs in the aggregate amount of $1.05 billion. During the first quarter of 2013 Delphi repurchased 2.85 million shares at an average price of $42.79 per share, which totaled approximately $122 million, bringing the total share repurchases to $525 million and leaving approximately $525 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 2013 and Full Year 2013 Outlook

The Company's second quarter and full year 2013 financial guidance is as follows:

(in millions, except per share amounts)

Q2
2013

Previous
Full Year 2013

Current
Full Year 2013

Adjusted Earnings Per Share

$1.05 - $1.15

$4.12 - $4.38

$4.15 - $4.41

Adjusted EBITDA

$600 - $630

$2,325 - $2,425

$2,325 - $2,425

Adjusted EBITDA Margin

14.5% - 14.8%

14.4% - 14.6%

14.4% - 14.6%

Revenue

$4,150 - $4,250

$16,200 - $16,600

$16,200 - $16,600

Cash Flow Before Financing

$1,000

$1,000

Capital Expenditures

$750

$750

Effective Tax Rate

16%

16%

Share Count - Diluted

317

314

Full year 2013 mid-point earnings per share guidance represents 11% growth year-over-year and assumes global vehicle production increases of 2% and European declines of 5% in 2013.

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 34002369. 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 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.

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.

DELPHI AUTOMOTIVE PLC

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended

March 31,

2013

2012

(in millions, except
per share amounts)

Net sales

$

4,024

$

4,092

Operating expenses:

Cost of sales

3,339

3,373

Selling, general and administrative

230

228

Amortization

26

21

Restructuring

32

6

Total operating expenses

3,627

3,628

Operating income

397

464

Interest expense

(36

)

(35

)

Other (expense) income, net

(34

)

7

Income before income taxes and equity income

327

436

Income tax expense

(37

)

(77

)

Income before equity income

290

359

Equity income, net of tax

8

4

Net income

298

363

Net income attributable to noncontrolling interest

22

21

Net income attributable to Delphi

$

276

$

342

Diluted net income per share:

Diluted net income per share attributable to Delphi

$

0.88

$

1.04

Weighted average number of diluted shares outstanding

315.36

328.47

DELPHI AUTOMOTIVE PLC

CONSOLIDATED BALANCE SHEETS

March 31,
2013

December 31,
2012

(unaudited)

(in millions)

ASSETS

Current assets:

Cash and cash equivalents

$

830

$

1,105

Restricted cash

4

8

Accounts receivable, net

2,795

2,425

Inventories

1,148

1,066

Other current assets

610

623

Total current assets

5,387

5,227

Long-term assets:

Property, net

2,843

2,860

Investments in affiliates

223

231

Intangible assets, net

766

803

Goodwill

466

473

Other long-term assets

588

582

Total long-term assets

4,886

4,949

Total assets

$

10,273

$

10,176

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term debt

$

103

$

140

Accounts payable

2,386

2,278

Accrued liabilities

1,185

1,241

Total current liabilities

3,674

3,659

Long-term liabilities:

Long-term debt

2,375

2,324

Pension benefit obligations

888

929

Other long-term liabilities

439

434

Total long-term liabilities

3,702

3,687

Total liabilities

7,376

7,346

Commitments and contingencies

Total Delphi shareholder's equity

2,398

2,345

Noncontrolling interest

499

485

Total shareholders' equity

2,897

2,830

Total liabilities and shareholders' equity

$

10,273

$

10,176

DELPHI AUTOMOTIVE PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended

March 31,

2013

2012

(in millions)

Cash flows from operating activities:

Net income

$

298

$

363

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

131

114

Deferred income taxes

(2

)

3

Income from equity method investments, net of dividends received

1

21

Loss on extinguishment of debt

39

Other, net

30

9

Changes in operating assets and liabilities:

Accounts receivable, net

(370

)

(395

)

Inventories

(82

)

(83

)

Accounts payable

194

201

Other, net

(71

)

74

Pension contributions

(19

)

(14

)

Net cash provided by operating activities

149

293

Cash flows from investing activities:

Capital expenditures

(213

)

(260

)

Proceeds from sale of property / investments

2

3

Cost of acquisitions, net of cash acquired

2

Decrease (increase) in restricted cash

4

(4

)

Acquisition of minority held shares

(16

)

Dividends from equity method investments in excess of earnings

37

Net cash used in investing activities

(205

)

(240

)

Cash flows from financing activities:

Decrease in short and long-term debt, net

(19

)

(18

)

Dividend payments of consolidated affiliates to minority shareholders

(8

)

(5

)

Repurchase of ordinary shares

(122

)

Distribution of cash dividends

(53

)

Taxes withheld and paid on employees' restricted share awards

(14

)

Net cash used in financing activities

(216

)

(23

)

Effect of exchange rate fluctuations on cash and cash equivalents

(3

)

19

(Decrease) increase in cash and cash equivalents

(275

)

49

Cash and cash equivalents at beginning of period

1,105

1,363

Cash and cash equivalents at end of period

$

830

$

1,412

DELPHI AUTOMOTIVE PLC

FOOTNOTES

(unaudited)

1. Segment Summary

Three Months Ended

March 31,

2013

2012

%

(in millions)

Net sales

Electrical/Electronic Architecture

$

1,921

$

1,730

11

%

Powertrain Systems

1,107

1,264

(12

)%

Electronics and Safety

693

741

(6

)%

Thermal Systems

360