Aptiv(US:APTV)2025-02-07 21:56Currency and Financial Instruments - The foreign currency translation adjustment loss for the year ended December 31, 2024, was $282 million, primarily due to a strengthening U.S. dollar against the Mexican Peso (18%), Euro (6%), and Chinese Yuan Renminbi (1%) [405] - As of December 31, 2024, the net fair value liability of all financial instruments with exposure to currency risk was approximately $925 million, compared to $507 million in 2023 [407] - The potential change in fair value from a hypothetical 10% adverse change in quoted currency exchange rates would result in a loss of approximately $21 million as of December 31, 2024 [407] - The Company has designated Euro-denominated Senior Notes as net investment hedges to manage foreign currency exposure [406] - The effective portion of gains or losses on net investment hedges is recognized within the cumulative translation adjustment component in the consolidated statements of comprehensive income [406] Commodity and Interest Rate Exposure - The net fair value of commodity swaps related to non-ferrous metals was a liability of $6 million as of December 31, 2024, compared to $2 million in 2023 [408] - If commodity prices changed by 10%, the fair value of commodity swaps would decrease or increase by $41 million and $43 million as of December 31, 2024 and 2023, respectively [408] - The Company had approximately $250 million of floating rate debt related to the Term Loan A Credit Agreement as of December 31, 2024 [409] - A 25 basis point increase in interest rates would increase annual interest expense by $1 million related to the Term Loan A Credit Agreement [413] Financial Performance - For the year ended December 31, 2024, Aptiv reported net sales of $19,713 million, a decrease of 1.7% from $20,051 million in 2023 [443] - Operating income for 2024 was $1,842 million, an increase of 18.1% compared to $1,559 million in 2023 [443] - Net income attributable to Aptiv for 2024 was $1,787 million, down 39% from $2,909 million in 2023 [443] - Basic net income per share attributable to ordinary shareholders decreased to $6.97 in 2024 from $10.50 in 2023, reflecting a decline of 33.3% [443] - Other comprehensive loss for 2024 was $536 million, compared to a gain of $147 million in 2023 [446] Assets and Liabilities - Total assets decreased from $24,427 million in 2023 to $23,458 million in 2024, a decline of approximately 4% [449] - Total current liabilities rose from $4,808 million in 2023 to $5,131 million in 2024, an increase of about 7% [449] - Long-term debt increased significantly from $6,204 million in 2023 to $7,843 million in 2024, a rise of approximately 26% [449] - Total shareholders' equity decreased from $11,745 million in 2023 to $8,993 million in 2024, a decline of about 23% [449] Cash Flow and Expenditures - Cash flows from operating activities increased to $2,446 million in 2024, compared to $1,896 million in 2023, an increase of approximately 29% [451] - Capital expenditures for 2024 were $830 million, down from $906 million in 2023, a decrease of approximately 8% [451] - The company reported a net cash used in investing activities of $507 million in 2024, compared to $1,002 million in 2023 [451] Shareholder Activities - The company repurchased ordinary shares totaling $4,104 million in 2024, compared to $398 million in 2023 [454] - The number of ordinary shares outstanding decreased from 99 million in 2023 to 92 million in 2024, a reduction of approximately 7% [456] - Dividend payments to minority shareholders were $23 million in 2024, compared to $18 million in 2023, indicating a slight increase [456] Goodwill and Impairment - The company's goodwill related to the Wind River reporting unit was $2,279 million as of December 31, 2024 [429] - The Company performs an annual goodwill impairment assessment in the fourth quarter, with no impairments recorded in 2024, 2023, or 2022 [502] - Goodwill for the Wind River reporting unit is valued at $2,279 million, with its fair value exceeding carrying value by less than 1% [502] Restructuring and Costs - Aptiv recorded restructuring charges totaling approximately $193 million in 2024, a decrease from $211 million in 2023, with $140 million attributed to the Signal and Power Solutions segment [566] - The company expects to incur additional restructuring costs of approximately $55 million in the next twelve months, primarily related to the Signal and Power Solutions segment [563] - Cash expenditures related to restructuring programs were approximately $238 million in 2024, compared to $128 million in 2023 [565] Debt and Financing Activities - The Company fully repaid $301 million on the Tranche A Term Loan on October 27, 2023, recognizing a loss on debt extinguishment of approximately $1 million [577] - Aptiv entered into a $2.5 billion senior unsecured bridge facility on August 1, 2024, which was fully drawn and subsequently repaid in Q3 2024, incurring a loss on debt extinguishment of approximately $11 million [578] - The Term Loan A Credit Agreement, entered on August 19, 2024, has an aggregate principal amount of $600 million, with issuance costs of approximately $2 million [579] - The Company redeemed €700 million of 1.50% Euro-denominated senior unsecured notes in December 2024, financed by the issuance of €750 million in 4.25% Euro-denominated senior unsecured notes due 2036 [586] Investments and Affiliates - Aptiv's investments in publicly traded equity securities totaled $11 million as of December 31, 2024, compared to $14 million in 2023 [469] - The company received dividends of $12 million from equity method investments in 2024, up from $5 million in both 2023 and 2022 [468] - The investment in TTTech Auto was written down to an estimated fair value of $147 million in 2024, resulting in a non-cash impairment charge of approximately $36 million [538] Research and Development - Total research and development expenses were approximately $1,097 million, $1,289 million, and $1,120 million for the years ended December 31, 2024, 2023, and 2022, respectively [479] Compliance and Controls - Aptiv maintained effective internal control over financial reporting as of December 31, 2024, based on COSO criteria [435] - As of December 31, 2024, the Company maintained a consolidated leverage ratio of not more than 3.5 to 1.0, in compliance with the Credit Agreement covenants [575]