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Delphi Reports Fourth Quarter And Full Year 2012 Financial Results

BY Business Wire | 02/05/13 - 07:00 AM EST

Stock quotes in this article: DLPH

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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://delphi.com/investors. The conference ID number is 88676975. 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						Year Ended
	December 31,						December 31,
	2012			2011			2012			2011
	(in millions, except						(in millions, except
	per share amounts)						per share amounts)
Net sales	$	3,767		$	3,900		$	15,519		$	16,041
Operating expenses:
Cost of sales	3,158			3,221			12,861			13,386
Selling, general and administrative	254			234			927			901
Amortization	24			23			84			79
Restructuring	154			11			171			31
Total operating expenses	3,590			3,489			14,043			14,397
Operating income	177			411			1,476			1,644
Interest expense	(36		)	(39		)	(136		)	(123		)
Other income (expense), net	(10		)	(28		)	5			(15		)
Income before income taxes and equity income	131			344			1,345			1,506
Income tax benefit (expense)	15			(29		)	(212		)	(305		)
Income before equity income	146			315			1,133			1,201
Equity income (loss), net of tax	9			(3		)	27			22
Net income	155			312			1,160			1,223
Net income attributable to noncontrolling interest	19			22			83			78
Net income attributable to Delphi	$	136		$	290		$	1,077		$	1,145
Diluted net income per share:
Diluted net income per share attributable to Delphi	$	0.43		$	0.88		$	3.33		$	2.72
Weighted average number of diluted shares outstanding	317.38			328.34			323.29			421.26


DELPHI AUTOMOTIVE PLC
CONSOLIDATED BALANCE SHEETS

	December 31, 2012		December 31, 2011
	(unaudited)
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	1,105	$	1,363
Restricted cash	8		9
Accounts receivable, net	2,425		2,459
Inventories	1,066		1,054
Other current assets	623		616
Total current assets	5,227		5,501
Long-term assets:
Property, net	2,860		2,315
Investments in affiliates	231		257
Intangible assets, net	803		588
Goodwill	473		8
Other long-term assets	582		459
Total long-term assets	4,949		3,627
Total assets	$	10,176	$	9,128
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	140	$	107
Accounts payable	2,278		2,397
Accrued liabilities	1,241		1,208
Total current liabilities	3,659		3,712
Long-term liabilities:
Long-term debt	2,324		1,996
Pension benefit obligations	929		674
Other long-term liabilities	434		575
Total long-term liabilities	3,687		3,245
Total liabilities	7,346		6,957
Commitments and contingencies
Total Delphi shareholder's equity	2,345		1,688
Noncontrolling interest	485		483
Total shareholders’ equity	2,830		2,171
Total liabilities and shareholders’ equity	$	10,176	$	9,128


DELPHI AUTOMOTIVE PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Year Ended
	December 31,
	2012			2011
	(in millions)
Cash flows from operating activities:
Net income	$	1,160		$	1,223
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	486			475
Deferred income taxes	(63		)	(36		)
Income from equity method investments, net of dividends received	(1		)	(13		)
Other, net	165			24
Changes in operating assets and liabilities:
Accounts receivable, net	198			(149		)
Inventories	49			(64		)
Accounts payable	(153		)	98
Other, net	(294		)	(22		)
Pension contributions	(69		)	(159		)
Net cash provided by operating activities	1,478			1,377
Cash flows from investing activities:
Capital expenditures	(705		)	(630		)
Maturity of time deposits	—			550
Proceeds from sale of property / investments	20			72
Cost of acquisitions, net of cash acquired	(980		)	(17		)
(Increase) decrease in restricted cash	1			38
Loans to related parties	14			(14		)
Acquisition of minority held shares	(16		)	—
Dividends from equity method investments in excess of earnings	37			—
Other, net	(2		)	(9		)
Net cash used in investing activities	(1,631		)	(10		)
Cash flows from financing activities:
(Decrease) increase in short and long-term debt, net	345			1,689
Dividend payments of consolidated affiliates to minority shareholders	(47		)	(43		)
Repurchase of ordinary shares	(403		)	—
Distributions to Delphi equity holders	—			(93		)
Redemption of membership interests	—			(4,747		)
Net cash used in financing activities	(105		)	(3,194		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			(29		)
Decrease in cash and cash equivalents	(258		)	(1,856		)
Cash and cash equivalents at beginning of period	1,363			3,219
Cash and cash equivalents at end of period	$	1,105		$	1,363


DELPHI AUTOMOTIVE PLC
FOOTNOTES
(unaudited)

1. Segment Summary

	Three Months Ended								Year Ended
	December 31,								December 31,
	2012			2011			%		2012			2011			%
	(in millions)								(in millions)
Net sales
Electrical/Electronic Architecture	$	1,766		$	1,630		8	%	$	6,815		$	6,642		3	%
Powertrain Systems	1,059			1,241			(15	)%	4,656			4,970			(6	)%
Electronics and Safety	640			686			(7	)%	2,732			2,931			(7	)%
Thermal Systems	349			402			(13	)%	1,541			1,755			(12	)%
Eliminations and Other (a)	(47		)	(59		)			(225		)	(257		)
Net sales	$	3,767		$	3,900				$	15,519		$	16,041

Adjusted EBITDA
Electrical/Electronic Architecture	$	231		$	182		27	%	$	945		$	880		7	%
Powertrain Systems	148			227			(35	)%	723			722			—
Electronics and Safety	91			92			(1	)%	363			374			(3	)%
Thermal Systems	16			40			(60	)%	111			174			(36	)%
Eliminations and Other (a)	—			—					—			—
Adjusted EBITDA	$	486		$	541				$	2,142		$	2,150

(a) Eliminations and Other includes the elimination of inter-segment transactions.

2. Weighted Average Number of Diluted Shares Outstanding

The Company has calculated weighted average number of diluted shares outstanding giving retrospective effect to our corporate conversion (exchange of membership interests for ordinary shares and consummation of the initial public offering). The impact of these transactions on the weighted average number of diluted shares outstanding for the three months and year ended December 31, 2011 follows:


	Three Months Ended				Year Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(in millions, except per share data)
Weighted average ordinary shares outstanding as result of the initial public offering	n/a		328.24		n/a		328.24
Redemption of Class A & C membership interests	n/a		—		n/a		86.11
Repurchase of Class B membership interests	n/a		0.10		n/a		6.91
Weighted average ordinary shares outstanding for the period	317.38		328.34		323.29		421.26

Net income attributable to Delphi	$	136	$	290	$	1,077	$	1,145
Diluted earnings per share	$	0.43	$	0.88	$	3.33	$	2.72

DELPHI AUTOMOTIVE PLC

RECONCILIATION OF NON-GAAP MEASURES

(unaudited)

In this press release the Company has provided information regarding certain non-GAAP financial measures, including "Adjusted EBITDA", "Adjusted Net Income", "Adjusted Net Income per Share" and "cash flow before financing". Such non-GAAP financial measures are reconciled to their closest GAAP financial measure in the following schedules.

Adjusted EBITDA: Adjusted EBITDA is presented as a supplemental measure of the Company's performance which is consistent with the basis and manner in which management presents financial information for the purpose of making internal operating decisions. Adjusted EBITDA is defined as net income (loss) before depreciation and amortization (including long-lived asset and goodwill impairment), interest expense, other income (expense), net, income tax expense, restructuring, acquisition integration costs and equity income (loss), net of tax. Not all companies use identical calculations of Adjusted EBITDA therefore this presentation may not be comparable to other similarly titled measures of other companies. The Company's 2013 guidance was determined using a consistent manner and methodology.


Consolidated Adjusted EBITDA
	Three Months Ended					Year Ended
	December 31,					December 31,
	2012			2011		2012			2011
	(in millions)
Net income attributable to Delphi	$	136		$	290	$	1,077		$	1,145
Income tax expense		(15	)		29		212			305
Interest expense		36			39		136			123
Other income, net		10			28		(5	)		15
Noncontrolling interest		19			22		83			78
Equity income, net of tax		(9	)		3		(27	)		(22	)
Operating income		177			411		1,476			1,644
Depreciation and amortization		146			119		486			475
EBITDA	$	323		$	530	$	1,962		$	2,119
Restructuring		154			11		171			31
Other acquisition-related costs		9			—		9			—
Adjusted EBITDA	$	486		$	541	$	2,142		$	2,150


Segment Adjusted EBITDA
(in millions)
	Electrical/
	Electronic		Powertrain		Electronics			Thermal		Eliminations
Three Months Ended December 31, 2012	Architecture		Systems		and Safety			Systems		and Other		Total
Operating income	$	127	$	79	$	(30	)	$	1	$	—	$	177
Depreciation and amortization		52		48		35			11		—		146
EBITDA	$	179	$	127	$	5		$	12	$	—	$	323
Restructuring		43		21		86			4		—		154
Other acquisition-related costs		9		—		—			—		—		9
Adjusted EBITDA	$	231	$	148	$	91		$	16	$	—	$	486

	Electrical/
	Electronic		Powertrain		Electronics			Thermal		Eliminations
Three Months Ended December 31, 2011	Architecture		Systems		and Safety			Systems		and Other		Total
Operating income	$	144	$	172	$	64		$	31	$	—	$	411
Depreciation and amortization		34		51		26			8		—		119
EBITDA	$	178	$	223	$	90		$	39	$	—	$	530
Restructuring		4		4		2			1		—		11
Other acquisition-related costs		—		—		—			—		—		—
Adjusted EBITDA	$	182	$	227	$	92		$	40	$	—	$	541

	Electrical/
	Electronic		Powertrain		Electronics			Thermal		Eliminations
Year Ended December 31, 2012	Architecture		Systems		and Safety			Systems		and Other		Total
Operating income	$	723	$	516	$	177		$	60	$	—	$	1,476
Depreciation and amortization		164		182		97			43		—		486
EBITDA	$	887	$	698	$	274		$	103	$	—	$	1,962
Restructuring		49		25		89			8				171
Other acquisition-related costs		9		—		—			—		—		9
Adjusted EBITDA	$	945	$	723	$	363		$	111	$	—	$	2,142

	Electrical/
	Electronic		Powertrain		Electronics			Thermal		Eliminations
Year Ended December 31, 2011	Architecture		Systems		and Safety			Systems		and Other		Total
Operating income	$	737	$	515	$	264		$	128	$	—	$	1,644
Depreciation and amortization		131		195		105			44		—		475
EBITDA	$	868	$	710	$	369		$	172	$	—	$	2,119
Restructuring		12		12		5			2		—		31
Other acquisition-related costs		—		—		—			—		—		—
Adjusted EBITDA	$	880	$	722	$	374		$	174	$	—	$	2,150

DELPHI AUTOMOTIVE PLC

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS

(unaudited)

Adjusted Net Income and Adjusted Net Income Per Share: Management believes adjusted net income and adjusted net income per share, which are non-GAAP measures, are useful in evaluating the ongoing operating performance of the Company.


	Three Months Ended							Three Months Ended
	December 31, 2012							December 31, 2012
	Actual			Adjustments				Adjusted
	(in millions, except per share amounts)
Net sales	$	3,767						$	3,767
Operating expenses:
Cost of sales	3,158			(15		)	(a)	3,138
				(5		)	(b)
Selling, general and administrative	254			(4		)	(b)	250
Amortization	24							24
Restructuring	154			(154		)	(c)	—
Total operating expenses	3,590			(178		)		3,412
Operating income	177			178				355
Interest expense	(36		)					(36		)
Other income (expense), net	(10		)	13			(d)	3
Income before income taxes and equity income	131			191				322
Income tax benefit (expense)	15			(40		)	(e)	(25		)
Income before equity income	146			151				297
Equity income, net of tax	9							9
Net income	155			151				306
Net income attributable to noncontrolling interest	19							19
Net income attributable to Delphi	$	136		$	151			$	287
Diluted net income per share:
Diluted net income per share attributable to Delphi	$	0.43						$	0.90
Weighted average number of diluted shares outstanding	317.38							317.38

(a)		Represents the elimination of asset impairments.
(b)		Represents the elimination of acquisition-related integration costs.
(c)		Represents the elimination of restructuring charges.
(d)		Represents the elimination of acquisition-related advisory and transaction costs.
(e)		Represents the income tax impacts of the adjustments made for restructuring charges, asset impairments and acquisition advisory and integration costs, by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred.

DELPHI AUTOMOTIVE PLC

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS

(unaudited)


	Year Ended							Year Ended
	December 31, 2012							December 31, 2012
	Actual			Adjustments				Adjusted
	(in millions, except per share amounts)
Net sales	$	15,519						$	15,519
Operating expenses:
Cost of sales	12,861			(15		)	(a)	12,841
				(5		)	(b)
Selling, general and administrative	927			(4		)	(b)	923
Amortization	84							84
Restructuring	171			(171		)	(c)	—
Total operating expenses	14,043			(195		)		13,848
Operating income	1,476			195				1,671
Interest expense	(136		)					(136		)
Other income (expense), net	5			13			(d)	18
Income before income taxes and equity income	1,345			208				1,553
Income tax expense	(212		)	(45		)	(e)	(257		)
Income before equity income	1,133			163				1,296
Equity income, net of tax	27							27
Net income	1,160			163				1,323
Net income attributable to noncontrolling interest	83							83
Net income attributable to Delphi	$	1,077		$	163			$	1,240
Diluted net income per share:
Diluted net income per share attributable to Delphi	$	3.33						$	3.84
Weighted average number of diluted shares outstanding	323.29							323.29

(a)		Represents the elimination of asset impairments.
(b)		Represents the elimination of acquisition-related integration costs.
(c)		Represents the elimination of restructuring charges.
(d)		Represents the elimination of acquisition-related advisory and transaction costs.
(e)		Represents the income tax impacts of the adjustments made for restructuring charges, asset impairments and acquisition advisory and integration costs, by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred.

DELPHI AUTOMOTIVE PLC

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS

(unaudited)


	Three Months Ended							Three Months Ended
	December 31, 2011							December 31, 2011
	Actual			Adjustments				Adjusted
	(in millions, except per share amounts)
Net sales	$	3,900						$	3,900
Operating expenses:
Cost of sales	3,221							3,221
Selling, general and administrative	234							234
Amortization	23							23
Restructuring	11			(11		)	(a)	—
Total operating expenses	3,489			(11		)		3,478
Operating income	411			11				422
Interest expense	(39		)					(39		)
Other income (expense), net	(28		)					(28		)
Income before income taxes and equity income	344			11				355
Income tax expense	(29		)	(2		)	(b)	(31		)
Income before equity income	315			9				324
Equity loss, net of tax	(3		)					(3		)
Net income	312			9				321
Net income attributable to noncontrolling interest	22							22
Net income attributable to Delphi	$	290		$	9			$	299
Diluted net income per share:
Diluted net income per share attributable to Delphi	$	0.88						$	0.91
Weighted average number of diluted shares outstanding	328.34							328.34

(a)		Represents the elimination of restructuring charges.
(b)		Represents the income tax impacts of the adjustments made for restructuring charges, by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred.

DELPHI AUTOMOTIVE PLC

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS

(unaudited)


	Year Ended							Year Ended
	December 31, 2011							December 31, 2011
	Actual			Adjustments				Adjusted
	(in millions, except per share amounts)
Net sales	$	16,041						$	16,041
Operating expenses:
Cost of sales	13,386							13,386
Selling, general and administrative	901							901
Amortization	79							79
Restructuring	31			(31		)	(a)	—
Total operating expenses	14,397			(31		)		14,366
Operating income	1,644			31				1,675
Interest expense	(123		)					(123		)
Other income (expense), net	(15		)					(15		)
Income before income taxes and equity income	1,506			31				1,537
Income tax expense	(305		)	(7		)	(b)	(312		)
Income before equity income	1,201			24				1,225
Equity income, net of tax	22							22
Net income	1,223			24				1,247
Net income attributable to noncontrolling interest	78							78
Net income attributable to Delphi	$	1,145		$	24			$	1,169
Diluted net income per share:
Diluted net income per share attributable to Delphi	$	2.72						$	2.78
Weighted average number of diluted shares outstanding	421.26							421.26

(a)		Represents the elimination of restructuring charges.
(b)		Represents the income tax impacts of the adjustments made for restructuring charges, by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred.

Cash flow before financing: Cash flow before financing is presented as a supplemental measure of the Company's liquidity which is consistent with the basis and manner in which management presents financial information for the purpose of making internal operating decisions. Cash flow before financing is defined as cash provided by (used in) operating activities plus cash provided by (used in) investing activities, adjusted for maturities of time deposits, costs associated with the initial public offering (IPO), and the purchase price of the MVL acquisition. Not all companies use identical calculations of cash flow before financing therefore this presentation may not be comparable to other similarly titled measures of other companies. The Company's 2013 guidance was determined using a consistent manner and methodology.


	Three Months Ended						Year Ended
	December 31,						December 31,
	2012			2011			2012			2011
	(in millions)						(in millions)
Cash flows from operating activities:
Net income	$	155		$	312		$	1,160		$	1,223
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	146			119			486			475
Working capital	272			190			94			(115		)
Pension contributions	(27		)	(108		)	(69		)	(159		)
Other, net	(236		)	(45		)	(193		)	(47		)
Net cash provided by operating activities	310			468			1,478			1,377

Cash flows from investing activities:
Capital expenditures	(142		)	(176		)	(705		)	(630		)
Maturity of time deposits	—			—			—			550
Cost of MVL acquisition, net of cash acquired	(980		)	—			(980		)	—
Other, net	17			(9		)	54			70
Net cash used in investing activities	(1,105		)	(185		)	(1,631		)	(10		)

Adjustment for cost of the MVL acquisition, net of cash acquired	980			—			980			—
Adjustment for maturities of time deposits	—			—			—			(550		)
Adjustment for costs associated with initial public offering	—			42			—			42
Cash flow before financing	$	185		$	325		$	827		$	859

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