LONDON, Feb. 13, 2020
/PRNewswire/ -- Delphi Technologies PLC (NYSE: DLPH) ("Delphi
Technologies" or the "Company") today announced financial results
for its fourth quarter and full year 2019.
Q4 2019 results
|
Revenue
|
|
Operating
Income
|
|
Operating
Income
Margin
|
|
Net Income per
Share - Diluted
|
|
Cash Flow From
Operations
|
GAAP
|
$1.1
B
|
|
$(15)
M
|
|
(1.4)%
|
|
$(0.46)
|
|
$142
M
|
vs. Q4
2018
|
(10)%
|
|
(116)%
|
|
(9.3) pts
|
|
(130)%
|
|
$16 M
|
|
|
|
|
|
|
|
|
|
|
|
Adj. Revenue
Growth
|
|
Adj. Operating
Income
|
|
Adj. Operating
Income Margin
|
|
Adj. Net
Income
per Share -
Diluted
|
|
|
Non-GAAP
|
N/A
|
|
$75
M
|
|
7.1%
|
|
$0.62
|
|
|
vs. Q4
2018
|
(8)%
|
|
(40)%
|
|
(3.6) pts
|
|
(42)%
|
|
|
Full year 2019 results
|
Revenue
|
|
Operating
Income
|
|
Operating
Income
Margin
|
|
Net Income per
Share - Diluted
|
|
Cash Flow From
Operations
|
GAAP
|
$4.4
B
|
|
$141
M
|
|
3.2%
|
|
$0.19
|
|
$292
M
|
vs. 2018
|
(10)%
|
|
(68)%
|
|
(5.7) pts
|
|
(95)%
|
|
$(127) M
|
|
|
|
|
|
|
|
|
|
|
|
Adj. Revenue
Growth
|
|
Adj. Operating
Income
|
|
Adj. Operating
Income Margin
|
|
Adj. Net
Income
per Share -
Diluted
|
|
|
Non-GAAP
|
N/A
|
|
$314
M
|
|
7.2%
|
|
$2.43
|
|
|
vs. 2018
|
(7)%
|
|
(43)%
|
|
(4.1) pts
|
|
(45)%
|
|
|
Q4 2019
- Revenue of $1.1 billion decreased
10% percent from the year-ago quarter. Adjusting for currency
exchange, revenue decreased 8%. The decline was primarily due to
lower global production, particularly in North America and Europe, the downward trend in passenger car
diesel fuel injection systems in Europe, and the closure of certain customer
production sites in North America.
This was partially offset by an increase in sales of passenger car
gasoline fuel injection systems in China.
- On a regional basis, quarterly adjusted revenue reflects
decreases of 13% in Europe, 18% in
North America, and 17% in
South America, partially offset by
an increase of 14% in Asia
Pacific.
- Operating loss was $15 million,
compared to operating income of $93
million in the year-ago quarter. Adjusted operating income
was $75 million, compared to
$125 million in the prior year
period. The year-on-year decline in adjusted operating income was
primarily due to unfavorable product mix, most notably between
higher margin passenger car diesel fuel injection systems, and
lower margin advanced gasoline direct injection fuel systems. In
addition, the decline was also impacted by lower volumes, partially
offset by the benefits of announced restructuring initiatives.
- Earnings per diluted share of $(0.46) represents a 130% decline from the
year-ago quarter. Excluding special items, earnings per diluted
share was $0.62, compared to
$1.06 in the year-ago quarter.
- Cash flow from operating activities was $142 million, compared to $126 million in the prior year period. The
year-on-year increase is primarily due to an improvement in working
capital, offset by the decrease in net income, excluding the impact
of non-cash items.
Full year 2019
- Revenue of $4.4 billion decreased
10% percent from the prior year period. Adjusting for currency
exchange, revenue decreased 7%. The decline was primarily due to
lower global production, particularly in China, the downward trend in passenger car
diesel fuel injection systems in Europe, and the closure of certain customer
production sites in North
America.
- On a regional basis, year-on-year adjusted revenue reflects
decreases of 10% in North America,
9% in Asia Pacific, 4% in
Europe and 4% in South America.
- Operating income was $141
million, compared to $434
million in the prior year period. Adjusted operating income
was $314 million, compared to
$548 million in the prior year
period. The year-on-year decline in adjusted operating income was
primarily due to unfavorable product mix, most notably between
higher margin passenger car diesel fuel injection systems, and
lower margin advanced gasoline direct injection fuel systems, as
well as lower revenues. In addition, the decline was also impacted
by lower volumes, partially offset by the benefits of announced
restructuring initiatives.
- Earnings per diluted share of $0.19 represents a 95% decline from the prior
year period. Excluding special items, earnings per diluted share
was $2.43, compared to $4.38 in the prior year period.
- Cash flow from operating activities was $292 million, compared to $419 million in the prior year period. The
year-on-year decrease is primarily due to the decrease in net
income, excluding the impact of non-cash items, partially offset by
an improvement in working capital.
CEO comments
"We ended 2019 with improved momentum, exceeding our revenue,
adjusted EPS and cash flow targets for the fourth quarter. While
our performance throughout the year was impacted by ongoing
industry and macro headwinds, we have made strong progress in a
number of operational areas. During Q4, we began implementing our
cost transformation plan, which will realign and reshape Delphi
Technologies for future profitable growth. I am pleased with our
early progress, and are ahead of schedule in delivering bottom line
savings," said Richard F. Dauch,
Chief Executive Officer of Delphi Technologies.
"At the end of January, we were pleased to announce that
BorgWarner will acquire Delphi Technologies in an all-stock
transaction. Together, we plan to create a pioneering propulsion
technologies company uniquely equipped to serve OEMs and
aftermarket customers around the world. This compelling
transaction, which is expected to be completed in the second half
of the year, was unanimously approved by our board of directors and
delivers clear benefits to our stakeholders. For our shareholders,
they receive immediate value and the ability to benefit from the
future upside potential given the enhanced prospects of the
combined company."
Use of non-GAAP financial information
This press release contains information about Delphi
Technologies' financial results which are not presented in
accordance with U.S. GAAP. Specifically, Adjusted Operating Income,
Adjusted Net Income, Adjusted Net Income per Share and the Adjusted
Effective Tax Rate are non-GAAP financial measures. Adjusted
Operating Income represents net income before interest expense,
other (expense) income, net, income tax expense, equity income, net
of tax, restructuring, separation costs, transformation costs,
asset impairments and pension charges. Adjusted Operating Income
margin is defined as Adjusted Operating Income as a percentage of
net sales.
Adjusted Net Income represents net income attributable to Delphi
Technologies before restructuring and other special items,
including the tax impact thereon. Adjusted Net Income per Share
represents Adjusted Net Income divided by the weighted average
number of diluted shares outstanding for the period. Adjusted
Effective Tax Rate represents income tax expense less the income
tax related to the adjustments noted above for Adjusted Net Income,
divided by income before income taxes less adjustments.
In addition, this press release contains information about the
Company's adjusted revenue, which is presented on a constant
currency basis. The constant currency presentation, which is a
non-GAAP measure, excludes the impact of fluctuations in foreign
currency exchange rates that occurred between the comparative
periods. Constant currency net sales results are calculated by
translating current period net sales in local currency to the U.S.
dollar amount by using the currency conversion rate for the prior
comparative period. The Company consistently applies this
approach to net sales for all countries where the functional
currency is not the U.S. dollar. The Company believes that this
presentation provides useful supplemental information regarding
changes in our revenue that were not due to fluctuations in
currency exchange rates and such information is consistent with how
the Company assesses changes in its revenue between comparative
periods.
Management believes the non-GAAP financial measures used in this
press release are useful to both management and investors in their
analysis of the Company's financial position, results of operations
and liquidity. In particular, management believes Adjusted
Operating Income, Adjusted Net Income and Adjusted Net Income per
Share are useful measures in assessing the Company's ongoing
financial performance that, when reconciled to the
corresponding U.S. GAAP measure, provide improved
comparability between periods through the exclusion of certain
items that management believes are not indicative of the Company's
core operating performance and that may obscure underlying business
results and trends. Management also uses these non-GAAP
financial measures for internal planning and forecasting
purposes.
Such non-GAAP financial measures are reconciled to the most
directly comparable U.S. GAAP financial measures in the attached
supplemental schedules at the end of this press release. Non-GAAP
measures should not be considered in isolation or as a substitute
for the Company's reported results prepared in accordance with U.S.
GAAP and, as calculated, may not be comparable to other similarly
titled measures of other companies.
Forward-looking statements
This press release, as well as other statements made by Delphi
Technologies PLC, contain forward-looking statements as
contemplated by the 1995 Private Securities Litigation Reform Act
that reflect, when made, the Company's current views with respect
to future events, including the proposed acquisition of the Company
by BorgWarner (the "proposed transaction") and financial
performance, or that are based on its management's current outlook,
expectations, estimates and projections, including with respect to
the combined company following the proposed transaction, if
completed. 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. In some cases, you can identify
these statements by forward-looking words such as "may," "might,"
"will," "should," "expects," "plans," "intends," "anticipates,"
"believes," "estimates," "predicts," "projects," "potential,"
"outlook" or "continue," the negatives thereof and other comparable
terminology. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are
not limited to, the following: global and regional economic
conditions, including conditions affecting the credit market and
those resulting from the United
Kingdom referendum held on June 23,
2016 in which voters approved an exit from the European
Union, commonly referred to as "Brexit"; risks inherent in
operating as a global company, such as, fluctuations in interest
rates and foreign currency exchange rates and economic, political
and trade conditions around the world; the cyclical nature of
automotive sales and production; the potential disruptions in the
supply of and changes in the competitive environment for raw
material integral to the Company's products; the Company's ability
to maintain contracts that are critical to its operations;
potential changes to beneficial free trade laws and regulations
such as the North American Free Trade Agreement; the ability of the
Company to achieve the intended benefits from its separation from
its former parent or from acquisitions the Company may make; the
ability of the Company to attract, motivate and/or retain key
executives; the ability of the Company to avoid or continue to
operate during a strike, or partial work stoppage or slow down by
any of its unionized employees or those of its principal customers;
the ability of the Company to attract and retain customers; changes
in the costs of raw materials; the Company's indebtedness,
including the amount thereof and capital availability and cost; the
cost and outcome of any claims, legal proceedings or
investigations; the failure or breach of information technology
systems; severe weather conditions and natural disasters and any
resultant disruptions on the supply or production of goods or
services or customer demands; acts of war and/or terrorism, as well
as the impact of actions taken by governments as a result of
further acts or threats of terrorism; the possibility that the
proposed transaction will not be pursued; failure to obtain
necessary regulatory approvals or required financing or to satisfy
any of the other conditions to the proposed transaction; adverse
effects on the market price of the Company's ordinary shares or
BorgWarner's shares of common stock and on the Company's or
BorgWarner's operating results because of a failure to complete the
proposed transaction; failure to realize the expected benefits of
the proposed transaction; failure to promptly and effectively
integrate the Company's businesses; negative effects relating to
the announcement of the proposed transaction or any further
announcements relating to the proposed transaction or the
consummation of the proposed transaction on the market price of the
Company's ordinary shares or BorgWarner's shares of common stock;
significant transaction costs and/or unknown or inestimable
liabilities; potential litigation associated with the proposed
transaction; general economic and business conditions that affect
the combined company following the consummation of the proposed
transaction; changes in global, political, economic, business,
competitive, market and regulatory forces; changes in tax laws,
regulations, rates and policies; future business acquisitions or
disposals; competitive developments; and the timing and occurrence
(or non-occurrence) of other events or circumstances that may be
beyond the Company's control.
Additional factors are discussed under the captions
"Forward-Looking Statements", "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 (the "SEC"). 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's forward-looking
statements speak only as of the date of this communication or as of
the date they are made. 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. All subsequent written
and oral forward-looking statements attributable to the Company or
its directors, executive officers or any person acting on behalf of
any of them are expressly qualified in their entirety by this
paragraph.
No offer or solicitation
This press release contains information about the Company's
financial results and proposed transaction. This
communication is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or
an invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to the proposed transaction or otherwise, nor shall there be any
sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. In particular, this communication
is not an offer of securities for sale into the United States. No offer of securities
shall be made in the United States
absent registration under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), or pursuant to an exemption from,
or in a transaction not subject to, such registration requirements.
Any securities issued in the proposed transaction are anticipated
to be issued in reliance upon available exemptions from such
registration requirements pursuant to Section 3(a)(10) of the
Securities Act. In connection with the proposed transaction, the
Company will file certain proxy materials, which shall constitute
the scheme document and the proxy statement relating to the
proposed transaction (the "proxy statement"). The proxy statement
will contain the full terms and conditions of the proposed
transaction, including details with respect to the Company's
shareholder vote in respect of the proposed transaction. Any
decision in respect of, or other response to, the proposed
transaction should be made only on the basis of the information
contained in the proxy statement.
Participants in the solicitation
The Company, BorgWarner and certain of their respective
directors, executive officers and employees may be deemed
"participants" in the solicitation of proxies from the Company's
shareholders in respect of the proposed transaction. Information
regarding the foregoing persons, including a description of their
direct or indirect interests, by security holdings or otherwise,
will be set forth in the proxy statement and any other relevant
documents to be filed with the SEC. You can find information about
the Company's directors and executive officers in its Annual Report
on Form 10-K for the fiscal year ended December 31, 2019, its definitive proxy statement
filed with the SEC on Schedule 14A on March
15, 2019, and certain of the Company's Current Reports on
Form 8-K filed with the SEC on January 7,
2019 and July 30, 2019.
You can find information about BorgWarner's directors and executive
officers in its Annual Report on Form 10-K for the fiscal year
ended December 31, 2019 and its
definitive proxy statement filed with the SEC on Schedule 14A on
March 15, 2019.
Additional information and where to find it
This communication may be deemed solicitation material in
respect of the proposed transaction. In connection with the
proposed transaction, the Company will file with the SEC and
furnish to the Company's shareholders a proxy statement and other
relevant documents. This communication does not constitute a
solicitation of any vote or approval. Before making any voting
decision, the Company's shareholders are urged to read the proxy
statement and any other relevant documents filed or to be filed
with the SEC in connection with the proposed transaction or
incorporated by reference in the proxy statement (if any) carefully
and in their entirety when they become available because they will
contain important information about the proposed transaction and
the parties to the proposed transaction.
Investors will be able to obtain free of charge the proxy
statement and other documents filed with the SEC at the SEC's
website at http://www.sec.gov. In addition, the proxy
statement and the Company's and BorgWarner's respective annual
reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and amendments to those reports filed or
furnished pursuant to section 13(a) or 15(d) of the U.S. Securities
Exchange Act of 1934, as amended, are available free of charge
through the Company's and BorgWarner's websites at
www.delphi.com and www.borgwarner.com, respectively, as soon
as reasonably practicable after they are electronically filed with,
or furnished to, the SEC.
General
The release, publication or distribution of this communication
in or into certain jurisdictions may be restricted by the laws of
those jurisdictions. Accordingly, copies of this communication and
all other documents relating to the proposed transaction are not
being, and must not be, released, published, mailed or otherwise
forwarded, distributed or sent in, into or from any such
jurisdictions. Persons receiving such documents (including, without
limitation, nominees, trustees and custodians) should observe these
restrictions. Failure to do so may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies involved in the proposed
transaction disclaim any responsibility or liability for the
violations of any such restrictions by any person.
Any response in relation to the proposed transaction should be
made only on the basis of the information contained in the proxy
statement and other relevant documents. Company shareholders are
advised to read carefully the formal documentation in relation to
the proposed transaction once the proxy statement and other
relevant documents have been dispatched.
About Delphi Technologies
Delphi Technologies is a global provider of propulsion
technologies that make vehicles drive cleaner, better and further.
It offers pioneering solutions for internal combustion engine,
hybrid and electric passenger cars and commercial vehicles. Delphi
Technologies builds on its Original Equipment expertise to provide
leading service solutions for the aftermarket. Headquartered in
London (UK), the company operates
technical centers, manufacturing sites, customer support service
centers in 24 countries and employs more than 21,000 people around
the world. Visit www.delphi.com to learn more.
DELPHI
TECHNOLOGIES PLC
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in millions,
except per share amounts)
|
Net sales
|
$
|
1,056
|
|
$
|
1,171
|
|
$
|
4,361
|
|
$
|
4,858
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
907
|
|
959
|
|
3,728
|
|
3,961
|
Selling, general and
administrative
|
102
|
|
107
|
|
398
|
|
414
|
Amortization
|
3
|
|
5
|
|
14
|
|
14
|
Restructuring
|
59
|
|
7
|
|
80
|
|
35
|
Total operating
expenses
|
1,071
|
|
1,078
|
|
4,220
|
|
4,424
|
Operating (loss)
income
|
(15)
|
|
93
|
|
141
|
|
434
|
Interest
expense
|
(16)
|
|
(20)
|
|
(68)
|
|
(79)
|
Other income,
net
|
9
|
|
5
|
|
13
|
|
9
|
Income before income
taxes and equity income
|
(22)
|
|
78
|
|
86
|
|
364
|
Income tax (expense)
benefit
|
(14)
|
|
63
|
|
(57)
|
|
9
|
(Loss) income before
equity income
|
(36)
|
|
141
|
|
29
|
|
373
|
Equity income, net of
tax
|
2
|
|
1
|
|
4
|
|
7
|
Net (loss)
income
|
(34)
|
|
142
|
|
33
|
|
380
|
Net income
attributable to noncontrolling interest
|
6
|
|
7
|
|
16
|
|
22
|
Net (loss) income
attributable to Delphi Technologies
|
$
|
(40)
|
|
$
|
135
|
|
$
|
17
|
|
$
|
358
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Delphi Technologies:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.46)
|
|
$
|
1.53
|
|
$
|
0.19
|
|
$
|
4.04
|
Diluted
|
$
|
(0.46)
|
|
$
|
1.52
|
|
$
|
0.19
|
|
$
|
4.03
|
Weighted average
ordinary shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
86.07
|
|
88.49
|
|
87.29
|
|
88.68
|
Diluted
|
86.14
|
|
88.63
|
|
87.42
|
|
88.89
|
DELPHI
TECHNOLOGIES PLC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
December
31,
|
|
2019
|
|
2018
|
|
(in
millions)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
191
|
|
$
|
359
|
Restricted
cash
|
—
|
|
1
|
Accounts receivable,
net
|
821
|
|
878
|
Inventories,
net
|
447
|
|
521
|
Other current
asset
|
189
|
|
172
|
Total current
assets
|
1,648
|
|
1,931
|
Long-term
assets:
|
|
|
|
Property,
net
|
1,509
|
|
1,445
|
Investments in
affiliates
|
42
|
|
44
|
Intangible assets and
goodwill, net
|
60
|
|
76
|
Deferred income
taxes
|
269
|
|
280
|
Other long-term
assets
|
219
|
|
117
|
Total long-term
assets
|
2,099
|
|
1,962
|
Total
assets
|
$
|
3,747
|
|
$
|
3,893
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
|
40
|
|
$
|
43
|
Accounts
payable
|
717
|
|
906
|
Accrued
liabilities
|
466
|
|
428
|
Total current
liabilities
|
1,223
|
|
1,377
|
Long-term
liabilities:
|
|
|
|
Long-term
debt
|
1,455
|
|
1,488
|
Pension and other
postretirement benefit obligations
|
404
|
|
467
|
Other long-term
liabilities
|
210
|
|
123
|
Total long-term
liabilities
|
2,069
|
|
2,078
|
Total
liabilities
|
3,292
|
|
3,455
|
Total Delphi
Technologies shareholders' equity
|
315
|
|
292
|
Noncontrolling
interest
|
140
|
|
146
|
Total shareholders'
equity
|
455
|
|
438
|
Total liabilities and
shareholders' equity
|
$
|
3,747
|
|
$
|
3,893
|
DELPHI
TECHNOLOGIES PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
(in
millions)
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
33
|
|
$
|
380
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
211
|
|
200
|
Impairment of
assets
|
35
|
|
1
|
Restructuring
expense, net of cash paid
|
31
|
|
(32)
|
Deferred income
taxes
|
9
|
|
(108)
|
Income from equity
method investments, net of dividends received
|
(4)
|
|
(7)
|
Other, net
|
24
|
|
49
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
57
|
|
162
|
Inventories
|
74
|
|
(24)
|
Accounts
payable
|
(117)
|
|
(97)
|
Other, net
|
(10)
|
|
(58)
|
Pension
contributions
|
(51)
|
|
(47)
|
Net cash provided by
operating activities
|
292
|
|
419
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(371)
|
|
(265)
|
Proceeds from sale of
property
|
12
|
|
5
|
Cost of technology
investments
|
—
|
|
(7)
|
Proceeds from
insurance settlement claims
|
—
|
|
1
|
Settlement of
undesignated derivatives
|
(2)
|
|
(8)
|
Net cash used in
investing activities
|
(361)
|
|
(274)
|
Cash flows from
financing activities:
|
|
|
|
Net repayments under
other short-term debt agreements
|
(3)
|
|
(2)
|
Repayments under
long-term debt agreements
|
(37)
|
|
(19)
|
Dividend payments of
consolidated affiliates to minority shareholders
|
(11)
|
|
(12)
|
Distribution of cash
dividends
|
—
|
|
(60)
|
Taxes withheld and
paid on employees' restricted share awards
|
(2)
|
|
(5)
|
Repurchase of
ordinary shares
|
(45)
|
|
(10)
|
Net cash used in
financing activities
|
(98)
|
|
(108)
|
Effect of exchange
rate fluctuations on cash, cash equivalents and restricted
cash
|
(2)
|
|
(16)
|
(Decrease) increase
in cash, cash equivalents and restricted cash
|
(169)
|
|
21
|
Cash, cash
equivalents and restricted cash at beginning of period
|
360
|
|
339
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
191
|
|
$
|
360
|
DELPHI TECHNOLOGIES
PLC
FOOTNOTES
(Unaudited)
1. Segment Summary
Delphi Technologies previously reported financial results based
on its two operating segments, Powertrain Systems and Aftermarket.
As a result of the change in information the Company's chief
operating decision maker (its Chief Executive Officer) regularly
reviews to allocate resources and assess performance, the Company
is reporting its financial performance based on four operating
segments.
In addition, the Company no longer allocates to its operating
segments certain corporate costs and services that are not directly
attributable to the Company's products, technologies or operating
segments. This includes headquarter-related and other functional
expenses such as executive management, corporate finance, legal and
human resources.
Therefore, the prior period information provided below has been
recast to reflect these changes. The changes had no impact on the
consolidated financial statements.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
%
|
|
2019
|
|
2018
|
|
%
|
|
(in
millions)
|
|
|
|
(in
millions)
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Injection
Systems
|
$
|
430
|
|
$
|
450
|
|
(4)%
|
|
$
|
1,748
|
|
$
|
1,856
|
|
(6)%
|
Powertrain
Products
|
288
|
|
325
|
|
(11)%
|
|
1,231
|
|
1,361
|
|
(10)%
|
Electrification &
Electronics
|
199
|
|
251
|
|
(21)%
|
|
834
|
|
1,087
|
|
(23)%
|
Aftermarket
|
220
|
|
225
|
|
(2)%
|
|
841
|
|
874
|
|
(4)%
|
Corporate Costs and
Other (a)
|
(81)
|
|
(80)
|
|
(1)%
|
|
(293)
|
|
(320)
|
|
8%
|
Net Sales
|
$
|
1,056
|
|
$
|
1,171
|
|
|
|
$
|
4,361
|
|
$
|
4,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Injection
Systems
|
$
|
18
|
|
$
|
36
|
|
(50)%
|
|
$
|
99
|
|
$
|
186
|
|
(47)%
|
Powertrain
Products
|
49
|
|
57
|
|
(14)%
|
|
204
|
|
256
|
|
(20)%
|
Electrification &
Electronics
|
14
|
|
32
|
|
(56)%
|
|
44
|
|
126
|
|
(65)%
|
Aftermarket
|
26
|
|
28
|
|
(7)%
|
|
86
|
|
97
|
|
(11)%
|
Corporate Costs and
Other (a)
|
(32)
|
|
(28)
|
|
(14)%
|
|
(119)
|
|
(117)
|
|
(2)%
|
Adjusted Operating
Income
|
$
|
75
|
|
$
|
125
|
|
|
|
$
|
314
|
|
$
|
548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Corporate costs and
Other includes corporate related expenses not allocated to
operating segments, which primarily includes executive
administration, corporate finance, legal, human resources, supply
chain management and information technology. This row also includes
the elimination of inter-segment transactions.
|
DELPHI TECHNOLOGIES
PLC
FOOTNOTES
(Unaudited)
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 Technologies for the three months and
years ended December 31, 2019 and 2018:
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in millions,
except per share data)
|
Weighted average
ordinary shares outstanding, basic
|
86.07
|
|
88.49
|
|
87.29
|
|
88.68
|
Dilutive shares
related to RSUs
|
0.07
|
|
0.14
|
|
0.13
|
|
0.21
|
Weighted average
ordinary shares outstanding, including dilutive shares
|
86.14
|
|
88.63
|
|
87.42
|
|
88.89
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Delphi Technologies:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.46)
|
|
$
|
1.53
|
|
$
|
0.19
|
|
$
|
4.04
|
Diluted
|
$
|
(0.46)
|
|
$
|
1.52
|
|
$
|
0.19
|
|
$
|
4.03
|
DELPHI TECHNOLOGIES
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" and "Adjusted Net Income
per Share." 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 financial
performance which management believes is useful to investors in
assessing the Company's ongoing financial performance that, when
reconciled to the corresponding U.S. GAAP measure, provides
improved comparability between periods through the exclusion of
certain items that management believes are not indicative of the
Company's core operating performance and which may obscure
underlying business results and trends. Our management utilizes
Adjusted Operating Income in its financial decision making process,
to evaluate performance of the Company and for internal reporting,
planning and forecasting purposes. Management also utilizes
Adjusted Operating Income as the key performance measure of segment
income or loss and for planning and forecasting purposes to
allocate resources to our segments, as management also believes
this measure is most reflective of the operational profitability or
loss of our operating segments. Adjusted Operating Income is
defined as net income before interest expense, other income, net,
income tax benefit (expense), equity income, net of tax,
restructuring, separation costs, transformation costs, asset
impairments and pension charges. 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.
Consolidated
Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in
millions)
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
Net (loss) income
attributable to Delphi Technologies
|
$
|
(40)
|
|
|
|
$
|
135
|
|
|
|
$
|
17
|
|
|
|
$
|
358
|
|
|
Net income
attributable to noncontrolling interest
|
6
|
|
|
|
7
|
|
|
|
16
|
|
|
|
22
|
|
|
Net (loss)
income
|
(34)
|
|
|
|
142
|
|
|
|
33
|
|
|
|
380
|
|
|
Equity income, net of
tax
|
(2)
|
|
|
|
(1)
|
|
|
|
(4)
|
|
|
|
(7)
|
|
|
Income tax expense
(benefit)
|
14
|
|
|
|
(63)
|
|
|
|
57
|
|
|
|
(9)
|
|
|
Other income,
net
|
(9)
|
|
|
|
(5)
|
|
|
|
(13)
|
|
|
|
(9)
|
|
|
Interest
expense
|
16
|
|
|
|
20
|
|
|
|
68
|
|
|
|
79
|
|
|
Operating (loss)
income
|
(15)
|
|
(1.4)
|
%
|
|
93
|
|
7.9
|
%
|
|
141
|
|
3.2
|
%
|
|
434
|
|
8.9
|
%
|
Restructuring
|
59
|
|
|
|
7
|
|
|
|
80
|
|
|
|
35
|
|
|
Separation and
transformation costs
|
3
|
|
|
|
25
|
|
|
|
44
|
|
|
|
78
|
|
|
Asset
impairments
|
26
|
|
|
|
—
|
|
|
|
35
|
|
|
|
1
|
|
|
Pension
charges
|
2
|
|
|
|
—
|
|
|
|
14
|
|
|
|
—
|
|
|
Adjusted operating
income
|
$
|
75
|
|
7.1
|
%
|
|
$
|
125
|
|
10.7
|
%
|
|
$
|
314
|
|
7.2
|
%
|
|
$
|
548
|
|
11.3
|
%
|
Segment Adjusted
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2019
|
Fuel
Injection
Systems
|
|
Powertrain
Products
|
|
Electrification
& Electronics
|
|
Aftermarket
|
|
Corporate
Costs and
Other (1)
|
|
Total
|
Operating (loss)
income
|
$
|
(13)
|
|
$
|
26
|
|
$
|
(12)
|
|
$
|
25
|
|
$
|
(41)
|
|
$
|
(15)
|
Restructuring
|
24
|
|
12
|
|
22
|
|
1
|
|
—
|
|
59
|
Separation and
transformation costs
|
(6)
|
|
—
|
|
4
|
|
—
|
|
5
|
|
3
|
Asset
impairments
|
11
|
|
11
|
|
—
|
|
—
|
|
4
|
|
26
|
Pension
charges
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
Adjusted operating
income
|
$
|
18
|
|
$
|
49
|
|
$
|
14
|
|
$
|
26
|
|
$
|
(32)
|
|
$
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
|
41
|
|
$
|
22
|
|
$
|
10
|
|
$
|
1
|
|
$
|
—
|
|
$
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2018
|
Fuel
Injection
Systems
|
|
Powertrain
Products
|
|
Electrification
& Electronics
|
|
Aftermarket
|
|
Corporate
Costs and
Other (1)
|
|
Total
|
Operating
income
|
$
|
30
|
|
$
|
54
|
|
$
|
28
|
|
$
|
25
|
|
$
|
(44)
|
|
$
|
93
|
Restructuring
|
5
|
|
2
|
|
—
|
|
—
|
|
—
|
|
7
|
Separation and
transformation costs
|
1
|
|
1
|
|
4
|
|
3
|
|
16
|
|
25
|
Asset
impairments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted operating
income
|
$
|
36
|
|
$
|
57
|
|
$
|
32
|
|
$
|
28
|
|
$
|
(28)
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
|
31
|
|
$
|
10
|
|
$
|
9
|
|
$
|
2
|
|
$
|
—
|
|
$
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2019
|
Fuel
Injection
Systems
|
|
Powertrain
Products
|
|
Electrification
& Electronics
|
|
Aftermarket
|
|
Corporate
Costs and
Other (1)
|
|
Total
|
Operating
income
|
$
|
47
|
|
$
|
171
|
|
$
|
1
|
|
$
|
81
|
|
$
|
(159)
|
|
141
|
Restructuring
|
32
|
|
17
|
|
25
|
|
2
|
|
4
|
|
80
|
Separation and
transformation costs
|
(6)
|
|
1
|
|
16
|
|
1
|
|
32
|
|
44
|
Asset
impairments
|
13
|
|
15
|
|
2
|
|
1
|
|
4
|
|
35
|
Pension
charges
|
13
|
|
—
|
|
—
|
|
1
|
|
—
|
|
14
|
Adjusted operating
income
|
$
|
99
|
|
$
|
204
|
|
$
|
44
|
|
$
|
86
|
|
$
|
(119)
|
|
$
|
314
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
|
130
|
|
$
|
61
|
|
$
|
41
|
|
$
|
6
|
|
$
|
—
|
|
$
|
238
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2018
|
Fuel
Injection
Systems
|
|
Powertrain
Products
|
|
Electrification
& Electronics
|
|
Aftermarket
|
|
Corporate
Costs and
Other (1)
|
|
Total
|
Operating
income
|
$
|
154
|
|
$
|
248
|
|
$
|
120
|
|
$
|
94
|
|
$
|
(182)
|
|
$
|
434
|
Restructuring
|
29
|
|
6
|
|
—
|
|
(2)
|
|
2
|
|
35
|
Separation and
transformation costs
|
3
|
|
1
|
|
6
|
|
5
|
|
63
|
|
78
|
Asset
impairments
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
Adjusted operating
income
|
$
|
186
|
|
$
|
256
|
|
$
|
126
|
|
$
|
97
|
|
$
|
(117)
|
|
$
|
548
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
$
|
115
|
|
$
|
44
|
|
$
|
33
|
|
$
|
5
|
|
$
|
—
|
|
$
|
197
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes asset
impairments and excludes amortization of deferred debt issuance
costs.
|
DELPHI TECHNOLOGIES
PLC
RECONCILIATION OF NET EARNINGS TO ADJUSTED
EARNINGS
(Unaudited)
Adjusted Net Income and Adjusted Net Income Per Share:
Adjusted Net Income and Adjusted Net Income Per Share, which are
non-GAAP measures, are presented as supplemental measures of the
Company's financial performance which management believes are
useful to investors in assessing the Company's ongoing financial
performance that, when reconciled to the corresponding U.S. GAAP
measure, provide improved comparability between periods through the
exclusion of certain items that management believes are not
indicative of the Company's core operating performance and which
may obscure underlying business results and trends. Management
utilizes Adjusted Net Income and Adjusted Net Income Per Share in
its financial decision making process, to evaluate performance of
the Company and for internal reporting, planning and forecasting
purposes. Adjusted Net Income is defined as net income attributable
to Delphi Technologies, restructuring and other special items,
including the tax impact thereon. 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.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in millions,
except per share amounts)
|
Net (loss) income
attributable to Delphi Technologies
|
$
|
(40)
|
|
$
|
135
|
|
$
|
17
|
|
$
|
358
|
Adjusting
items:
|
|
|
|
|
|
|
|
Restructuring
|
59
|
|
7
|
|
80
|
|
35
|
Asset
impairments
|
26
|
|
—
|
|
35
|
|
1
|
Separation and
transformation costs (1)
|
3
|
|
25
|
|
44
|
|
78
|
Pension charges
(2)
|
2
|
|
—
|
|
29
|
|
—
|
Tax adjustments
(3)
|
3
|
|
(73)
|
|
7
|
|
(83)
|
Adjusted net income
attributable to Delphi Technologies
|
$
|
53
|
|
$
|
94
|
|
$
|
212
|
|
$
|
389
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted shares outstanding
|
86.14
|
|
88.63
|
|
87.42
|
|
88.89
|
Diluted net income
per share attributable to Delphi Technologies
|
$
|
(0.46)
|
|
$
|
1.52
|
|
$
|
0.19
|
|
$
|
4.03
|
Adjusted net income
per share
|
$
|
0.62
|
|
$
|
1.06
|
|
$
|
2.43
|
|
$
|
4.38
|
|
|
(1)
|
Separation and
transformation costs include one-time incremental expenses
associated with becoming a stand-alone publicly-traded company and
costs and income associated with the transformation of our global
technical center footprint.
|
|
|
(2)
|
Pension charges
include a one-time plan curtailment charge, additional
contributions to defined contribution plans, other payments to
impacted employees and other related expenses resulting from the
freeze of future accruals for nearly all U.K. defined benefit
pension plans.
|
|
|
(3)
|
Represents an
adjustment to income tax expense related to the tax impact of a
one-time intercompany transaction, changes in tax law recognized at
the date of enactment, adjustments to provisional amounts recorded
in 2017 related to the U.S. Tax Cuts and Jobs Act and the income
tax impacts of the adjustments made for restructuring and other
special items by calculating the anticipated income tax impact of
these items using the appropriate tax rate for the jurisdiction
where the charges were incurred.
|
View original
content:http://www.prnewswire.com/news-releases/delphi-technologies-reports-fourth-quarter-and-full-year-2019-results-above-prior-outlook-301004539.html
SOURCE Delphi Technologies PLC