Aptiv PLC, a global technology company focused on making mobility safer, greener and more connected, today reported fourth quarter 2020 U.S. GAAP earnings of $1.04 per diluted share. Excluding special items, fourth quarter earnings totaled $1.13 per diluted share.
“Last year was a year like no other. Despite the industry declines caused by the COVID-19 pandemic, Aptiv delivered strong performance, validating the strength of our portfolio of market relevant technologies aligned to the safe, green and connected megatrends, resulting in over $13 billion of revenue and 10 points of growth over market in 2020,” said Kevin Clark, president and chief executive officer. “Throughout the pandemic, Aptiv kept our most important asset – our people – safe, and we were able to continue innovating and delivering for our customers. As the economic recovery takes hold, Aptiv is enabling our customers to thrive – facilitating the accelerating transition to an electrified, software-defined vehicle. We solve some of the industry’s toughest challenges, creating exceptional value for customers, which in turn generates best-in-class, sustainable returns for shareholders. In 2021, even as the industry braces for continued pandemic-related challenges, our relentless focus on execution positions Aptiv for continued outperformance.”
Fourth Quarter 2020 Results
For the three months ended Dec. 31, 2020, the company reported U.S. GAAP revenue of $4.2 billion, an increase of 17% from the prior year period, despite global vehicle production growth of 2% (1% on an Aptiv weighted market basis, which represents global vehicle production weighted to the geographic regions in which the company generates its revenue, “AWM”) over the same period. Adjusted for currency exchange, commodity movements and divestitures, revenue increased by 14% in the fourth quarter. This reflects growth of 20% in Europe, 11% in North America, 10% in Asia, which includes 9% in China, and 37% in South America, our smallest region.
The company reported fourth quarter 2020 U.S. GAAP net income of $283 million and earnings of $1.04 per diluted share, compared to $230 million and 90 cents per diluted share in the prior year period. Fourth quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $319 million, or $1.13 per diluted share, which includes losses of approximately $0.16 from the performance of the Motional joint venture and $0.05 from the dilutive impacts of the company’s preferred shares, compared to $296 million, or $1.15 per diluted share, in the prior year period.
Fourth quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $476 million, compared to $388 million in the prior year period. Adjusted Operating Income margin was 11.3%, compared to 10.8% in the prior year period, reflecting continued stabilization and recovery of global production levels and above-market sales growth, as well as the absence of the prior period impacts of the GM North American labor strike. Depreciation and amortization expense totaled $208 million, an increase from $178 million in the prior year period.
Interest expense for the fourth quarter totaled $39 million, as compared to $41 million in the prior year period.
Tax expense in the fourth quarter of 2020 was $55 million, resulting in an effective tax rate of approximately 13%. Tax expense in the fourth quarter of 2019 was $30 million, resulting in an effective tax rate of approximately 11%.
The Company generated net cash flow from operating activities of $799 million in fourth quarter, compared to $703 million in the prior year period.
Full Year 2020 Results
For the year ended December 31, 2020, the company reported U.S. GAAP revenue of $13.1 billion, a decrease of 9% from the prior year, which includes volume declines of 7% primarily resulting from the impacts of the COVID-19 pandemic in the first half of 2020, which also resulted in global vehicle production declines of 16% (19% on an AWM basis) over the same period. Adjusted for currency exchange, commodity movements and divestitures, revenue decreased by 9% during the year. This reflects declines of 17% in North America, 7% in Europe and 3% in South America, our smallest region, partially offset by growth of 1% in Asia, which includes 3% in China.
For full year 2020, the company reported U.S. GAAP net income of $1,769 million and earnings of $6.66 per diluted share, compared to $990 million and $3.85 per diluted share in the prior year. Full year 2020 Adjusted Net Income totaled $525 million, or $1.94 per diluted share, which includes losses of approximately $0.36 from the performance of the Motional joint venture, compared to $1,236 million, or $4.80 per diluted share, in the prior year.
The company reported Adjusted Operating Income of $867 million for full year 2020, compared to $1,548 million in the prior year. Adjusted Operating Income margin was 6.6% for full year 2020, compared to 10.8% in the prior year, primarily as a result of the adverse impacts of the COVID-19 pandemic, which primarily affected Aptiv in the first half of 2020, and included declines in global vehicle production and consumer demand, work stoppages, disruptions to our supply chain and other adverse global economic impacts, particularly those resulting from temporary governmental “lock-down” orders for all non-essential activities. Depreciation and amortization expense totaled $764 million, an increase from $717 million in the prior year, resulting from increases related to our acquisitions and capital investments.
Interest expense for full year 2020 totaled $164 million, as compared to $164 million in the prior year.
Tax expense for full year 2020 was $49 million, resulting in an effective tax rate of approximately 3%. Tax expense for full year 2019 was $132 million, resulting in an effective tax rate of approximately 12%.
The company generated net cash flow from operating activities of $1,413 million in 2020, compared to $1,624 million in the prior year. As of December 31, 2020, the company had cash and cash equivalents of $2.8 billion and total available liquidity of $5.2 billion.
