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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Delphi Technologies PLC | NYSE:DLPH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 17.02 | 0 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Jersey
|
|
98-1367514
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
Ordinary shares. $0.01 par value per share
|
DLPH
|
New York Stock Exchange
|
Large accelerated filer
|
|
☒
|
|
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
|
☐
|
|
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
||
|
|
Page
|
Part I - Financial Information
|
||
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Part II - Other Information
|
||
Item 1.
|
||
Item 1A.
|
||
Item 6.
|
||
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions, except per share amounts)
|
||||||
Net sales
|
$
|
945
|
|
|
$
|
1,151
|
|
Operating expenses:
|
|
|
|
||||
Cost of sales
|
824
|
|
|
983
|
|
||
Selling, general and administrative
|
95
|
|
|
104
|
|
||
Amortization
|
3
|
|
|
6
|
|
||
Restructuring (Note 7)
|
43
|
|
|
3
|
|
||
Total operating expenses
|
965
|
|
|
1,096
|
|
||
Operating (loss) income
|
(20
|
)
|
|
55
|
|
||
Interest expense
|
(16
|
)
|
|
(18
|
)
|
||
Other income (expense), net (Note 17)
|
2
|
|
|
(12
|
)
|
||
(Loss) income before income taxes and equity income
|
(34
|
)
|
|
25
|
|
||
Income tax expense
|
(20
|
)
|
|
(8
|
)
|
||
(Loss) income before equity income
|
(54
|
)
|
|
17
|
|
||
Equity income, net of tax
|
—
|
|
|
2
|
|
||
Net (loss) income
|
(54
|
)
|
|
19
|
|
||
Net income attributable to noncontrolling interest
|
3
|
|
|
3
|
|
||
Net (loss) income attributable to Delphi Technologies
|
$
|
(57
|
)
|
|
$
|
16
|
|
|
|
|
|
||||
Net income per share attributable to Delphi Technologies:
|
|
|
|
||||
Basic
|
$
|
(0.66
|
)
|
|
$
|
0.18
|
|
Diluted
|
$
|
(0.66
|
)
|
|
$
|
0.18
|
|
|
|
|
|
||||
Weighted average ordinary shares outstanding:
|
|
|
|
||||
Basic
|
86.17
|
|
|
88.45
|
|
||
Diluted
|
86.28
|
|
|
88.55
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Net (loss) income
|
$
|
(54
|
)
|
|
$
|
19
|
|
Other comprehensive (loss) income:
|
|
|
|
||||
Currency translation adjustments
|
(46
|
)
|
|
9
|
|
||
Net change in unrecognized gain on derivative instruments, net of tax (Note 15)
|
4
|
|
|
16
|
|
||
Employee benefit plans adjustment, net of tax
|
13
|
|
|
34
|
|
||
Other comprehensive (loss) income
|
(29
|
)
|
|
59
|
|
||
Comprehensive (loss) income
|
(83
|
)
|
|
78
|
|
||
Comprehensive income attributable to noncontrolling interests
|
1
|
|
|
4
|
|
||
Comprehensive (loss) income attributable to Delphi Technologies
|
$
|
(84
|
)
|
|
$
|
74
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
(Unaudited)
|
|
|||||
|
|
|
|
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
611
|
|
|
$
|
191
|
|
Accounts receivable, net
|
777
|
|
|
821
|
|
||
Inventories, net (Note 3)
|
450
|
|
|
447
|
|
||
Other current assets (Note 4)
|
160
|
|
|
189
|
|
||
Total current assets
|
1,998
|
|
|
1,648
|
|
||
Long-term assets:
|
|
|
|
||||
Property, net
|
1,478
|
|
|
1,509
|
|
||
Investments in affiliates
|
41
|
|
|
42
|
|
||
Intangible assets, net
|
48
|
|
|
53
|
|
||
Goodwill
|
6
|
|
|
7
|
|
||
Deferred income taxes
|
260
|
|
|
269
|
|
||
Other long-term assets (Note 4)
|
233
|
|
|
219
|
|
||
Total long-term assets
|
2,066
|
|
|
2,099
|
|
||
Total assets
|
$
|
4,064
|
|
|
$
|
3,747
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt (Note 8)
|
$
|
49
|
|
|
$
|
40
|
|
Accounts payable
|
672
|
|
|
717
|
|
||
Accrued liabilities (Note 5)
|
475
|
|
|
466
|
|
||
Total current liabilities
|
1,196
|
|
|
1,223
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt (Note 8)
|
1,935
|
|
|
1,455
|
|
||
Pension and other postretirement benefit obligations (Note 9)
|
372
|
|
|
404
|
|
||
Other long-term liabilities (Note 5)
|
195
|
|
|
210
|
|
||
Total long-term liabilities
|
2,502
|
|
|
2,069
|
|
||
Total liabilities
|
3,698
|
|
|
3,292
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
||
Ordinary shares, $0.01 par value per share, 1,200,000,000 shares authorized, 86,281,713 and 86,071,640 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
411
|
|
|
409
|
|
||
Retained earnings
|
224
|
|
|
281
|
|
||
Accumulated other comprehensive loss (Note 14)
|
(403
|
)
|
|
(376
|
)
|
||
Total Delphi Technologies shareholders’ equity
|
233
|
|
|
315
|
|
||
Noncontrolling interest
|
133
|
|
|
140
|
|
||
Total shareholders’ equity
|
366
|
|
|
455
|
|
||
Total liabilities and shareholders’ equity
|
$
|
4,064
|
|
|
$
|
3,747
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(54
|
)
|
|
$
|
19
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
53
|
|
|
47
|
|
||
Amortization
|
3
|
|
|
3
|
|
||
Amortization of deferred debt issuance costs
|
1
|
|
|
1
|
|
||
Impairment of assets
|
3
|
|
|
3
|
|
||
Restructuring expense, net of cash paid
|
10
|
|
|
(6
|
)
|
||
Deferred income taxes
|
(1
|
)
|
|
(3
|
)
|
||
Pension and other postretirement benefit expenses
|
—
|
|
|
21
|
|
||
Income from equity method investments
|
—
|
|
|
(2
|
)
|
||
Share-based compensation
|
4
|
|
|
4
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
44
|
|
|
(36
|
)
|
||
Inventories, net
|
(3
|
)
|
|
(28
|
)
|
||
Other assets
|
20
|
|
|
6
|
|
||
Accounts payable
|
(14
|
)
|
|
(6
|
)
|
||
Accrued and other long-term liabilities
|
(12
|
)
|
|
1
|
|
||
Other, net
|
(13
|
)
|
|
11
|
|
||
Pension contributions
|
(10
|
)
|
|
(14
|
)
|
||
Net cash provided by operating activities
|
31
|
|
|
21
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(85
|
)
|
|
(131
|
)
|
||
Proceeds from sale of property
|
2
|
|
|
2
|
|
||
Dividends from equity method investment
|
1
|
|
|
—
|
|
||
Cost of technology investments
|
(1
|
)
|
|
—
|
|
||
Settlement of undesignated derivatives
|
(1
|
)
|
|
(2
|
)
|
||
Net cash used in investing activities
|
(84
|
)
|
|
(131
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net repayments under short-term debt agreements
|
(2
|
)
|
|
—
|
|
||
Repayments under long-term debt agreements
|
(9
|
)
|
|
(9
|
)
|
||
Net borrowings under revolving credit facility
|
500
|
|
|
—
|
|
||
Dividend payments of consolidated affiliates to minority shareholders
|
(8
|
)
|
|
(8
|
)
|
||
Taxes withheld and paid on employees’ restricted share awards
|
(1
|
)
|
|
(1
|
)
|
||
Repurchase of ordinary shares
|
—
|
|
|
(14
|
)
|
||
Fees associated with amendments to long-term debt agreements
|
(3
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
477
|
|
|
(32
|
)
|
||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
|
(4
|
)
|
|
—
|
|
||
Increase (decrease) in cash, cash equivalents and restricted cash
|
420
|
|
|
(142
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of the period
|
191
|
|
|
360
|
|
||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
611
|
|
|
$
|
218
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||||||||||
|
Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Number of Shares
|
|
Amount
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Delphi Technologies Shareholders’ Equity
|
|
Noncontrolling Interest
|
|
Total Shareholders’ Equity
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||
Balance at December 31, 2019
|
86
|
|
|
$
|
1
|
|
|
$
|
409
|
|
|
$
|
281
|
|
|
$
|
(376
|
)
|
|
$
|
315
|
|
|
$
|
140
|
|
|
$
|
455
|
|
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
|
3
|
|
|
(54
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
|
(2
|
)
|
|
(29
|
)
|
|||||||
Dividend payments of consolidated affiliates to minority shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Taxes withheld on employees’ restricted share award vestings
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||||
Balance at March 31, 2020
|
86
|
|
|
$
|
1
|
|
|
$
|
411
|
|
|
$
|
224
|
|
|
$
|
(403
|
)
|
|
$
|
233
|
|
|
$
|
133
|
|
|
$
|
366
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||||||||||
|
Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Number of Shares
|
|
Amount
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Delphi Technologies Shareholders’ Equity
|
|
Noncontrolling Interest
|
|
Total Shareholders’ Equity
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||
Balance at December 31, 2018
|
89
|
|
|
$
|
1
|
|
|
$
|
407
|
|
|
$
|
296
|
|
|
$
|
(412
|
)
|
|
$
|
292
|
|
|
$
|
146
|
|
|
$
|
438
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
3
|
|
|
19
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
58
|
|
|
1
|
|
|
59
|
|
|||||||
Dividend payments of consolidated affiliates to minority shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||||||
Repurchase of ordinary shares
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
|
(11
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Taxes withheld on employees’ restricted share award vestings
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Balance at March 31, 2019
|
88
|
|
|
$
|
1
|
|
|
$
|
406
|
|
|
$
|
301
|
|
|
$
|
(354
|
)
|
|
$
|
354
|
|
|
$
|
142
|
|
|
$
|
496
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Productive material
|
$
|
211
|
|
|
$
|
210
|
|
Work-in-process
|
44
|
|
|
40
|
|
||
Finished goods
|
195
|
|
|
197
|
|
||
Total
|
$
|
450
|
|
|
$
|
447
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Value added tax receivable
|
$
|
86
|
|
|
$
|
107
|
|
Prepaid insurance and other expenses
|
24
|
|
|
21
|
|
||
Reimbursable engineering costs
|
19
|
|
|
19
|
|
||
Income and other taxes receivable
|
9
|
|
|
13
|
|
||
Notes receivable
|
7
|
|
|
12
|
|
||
Return assets (Note 11)
|
7
|
|
|
7
|
|
||
Derivative financial instruments (Note 15)
|
1
|
|
|
8
|
|
||
Other
|
7
|
|
|
2
|
|
||
Total
|
$
|
160
|
|
|
$
|
189
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Operating lease assets
|
$
|
101
|
|
|
$
|
107
|
|
Income and other taxes receivable
|
32
|
|
|
28
|
|
||
Derivative financial instruments (Note 15)
|
29
|
|
|
13
|
|
||
Investment in Tula Technology, Inc.
|
21
|
|
|
21
|
|
||
Value added tax receivable
|
4
|
|
|
7
|
|
||
Investment in PolyCharge
|
3
|
|
|
6
|
|
||
Debt issuance costs
|
3
|
|
|
2
|
|
||
Reimbursable engineering costs
|
3
|
|
|
1
|
|
||
Other
|
37
|
|
|
34
|
|
||
Total
|
$
|
233
|
|
|
$
|
219
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Restructuring (Note 7)
|
$
|
89
|
|
|
$
|
73
|
|
Warranty obligations (Note 6)
|
60
|
|
|
63
|
|
||
Income and other taxes payable
|
56
|
|
|
71
|
|
||
Deferred reimbursable engineering
|
47
|
|
|
45
|
|
||
Payroll-related obligations
|
37
|
|
|
48
|
|
||
Accrued rebates
|
23
|
|
|
26
|
|
||
Operating lease liabilities
|
22
|
|
|
22
|
|
||
Accrued interest
|
18
|
|
|
10
|
|
||
Freight
|
14
|
|
|
13
|
|
||
Employee benefits
|
13
|
|
|
5
|
|
||
Outside services
|
12
|
|
|
11
|
|
||
Accrued customer returns
|
11
|
|
|
7
|
|
||
Customer deposits
|
5
|
|
|
6
|
|
||
Dividends to minority shareholders
|
—
|
|
|
5
|
|
||
Other
|
68
|
|
|
61
|
|
||
Total
|
$
|
475
|
|
|
$
|
466
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Operating lease liabilities
|
$
|
86
|
|
|
$
|
93
|
|
Accrued income taxes
|
43
|
|
|
45
|
|
||
Warranty obligations (Note 6)
|
24
|
|
|
23
|
|
||
Restructuring (Note 7)
|
15
|
|
|
23
|
|
||
Deferred income taxes
|
14
|
|
|
15
|
|
||
Environmental
|
2
|
|
|
1
|
|
||
Derivative financial instruments (Note 15)
|
2
|
|
|
—
|
|
||
Other
|
9
|
|
|
10
|
|
||
Total
|
$
|
195
|
|
|
$
|
210
|
|
|
Warranty Obligations
|
||
|
|
||
|
(in millions)
|
||
Accrual balance at December 31, 2019
|
$
|
86
|
|
Provision for estimated warranties incurred during the period
|
7
|
|
|
Changes in estimate for pre-existing warranties
|
5
|
|
|
Settlements made during the period (in cash or in kind)
|
(12
|
)
|
|
Foreign currency translation and other
|
(2
|
)
|
|
Accrual balance at March 31, 2020
|
$
|
84
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Fuel Injection Systems
|
$
|
32
|
|
|
$
|
3
|
|
Powertrain Products
|
8
|
|
|
—
|
|
||
Electrification & Electronics
|
1
|
|
|
—
|
|
||
Aftermarket
|
—
|
|
|
—
|
|
||
Corporate
|
2
|
|
|
—
|
|
||
Total
|
$
|
43
|
|
|
$
|
3
|
|
|
Employee Termination Benefits Liability
|
|
Other Exit Costs Liability
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Accrual balance at December 31, 2019
|
$
|
95
|
|
|
$
|
1
|
|
|
$
|
96
|
|
Provision for estimated expenses during the period
|
43
|
|
|
—
|
|
|
43
|
|
|||
Payments made during the period
|
(33
|
)
|
|
—
|
|
|
(33
|
)
|
|||
Foreign currency and other
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Accrual balance at March 31, 2020
|
$
|
103
|
|
|
$
|
1
|
|
|
$
|
104
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
|
LIBOR plus
|
|
ABR plus
|
|
LIBOR Plus
|
|
ABR plus
|
||||
Revolving Credit Facility
|
1.525
|
%
|
|
0.525
|
%
|
|
1.450
|
%
|
|
0.450
|
%
|
Term Loan A Facility
|
1.875
|
%
|
|
0.875
|
%
|
|
1.750
|
%
|
|
0.750
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Service cost
|
$
|
2
|
|
|
$
|
7
|
|
Interest cost
|
7
|
|
|
9
|
|
||
Expected return on plan assets
|
(11
|
)
|
|
(14
|
)
|
||
Curtailment loss
|
—
|
|
|
15
|
|
||
Amortization of actuarial losses
|
2
|
|
|
4
|
|
||
Net periodic benefit cost
|
$
|
—
|
|
|
$
|
21
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in millions)
|
||||||
North America
|
$
|
260
|
|
|
$
|
338
|
|
Europe
|
418
|
|
|
542
|
|
||
Asia Pacific
|
242
|
|
|
236
|
|
||
South America
|
25
|
|
|
35
|
|
||
Total
|
$
|
945
|
|
|
$
|
1,151
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in millions)
|
||||||
Sales to OEMs and Tier 1 customers:
|
|
|
|
||||
Fuel Injection Systems
|
$
|
358
|
|
|
$
|
419
|
|
Powertrain Products
|
241
|
|
|
302
|
|
||
Electronics & Electrification products
|
172
|
|
|
237
|
|
||
Total sales to OEMs and Tier 1 customers
|
771
|
|
|
958
|
|
||
|
|
|
|
||||
Sales to independent aftermarket customers
|
121
|
|
|
141
|
|
||
Sales to original equipment service customers
|
53
|
|
|
52
|
|
||
Total sales to aftermarket customers
|
174
|
|
|
193
|
|
||
Total
|
$
|
945
|
|
|
$
|
1,151
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(dollars in millions)
|
||||||
Income tax expense
|
$
|
20
|
|
|
$
|
8
|
|
Effective tax rate
|
(59
|
)%
|
|
32
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions, except per share data)
|
||||||
Numerator:
|
|
|
|
||||
Net (loss) income attributable to Delphi Technologies
|
$
|
(57
|
)
|
|
$
|
16
|
|
Denominator:
|
|
|
|
||||
Weighted average ordinary shares outstanding, basic
|
86.17
|
|
|
88.45
|
|
||
Dilutive shares related to restricted stock units (“RSUs”)
|
0.11
|
|
|
0.10
|
|
||
Weighted average ordinary shares outstanding, including dilutive shares
|
86.28
|
|
|
88.55
|
|
||
|
|
|
|
||||
Net income per share attributable to Delphi Technologies:
|
|
|
|
||||
Basic
|
$
|
(0.66
|
)
|
|
$
|
0.18
|
|
Diluted
|
$
|
(0.66
|
)
|
|
$
|
0.18
|
|
Anti-dilutive securities share impact
|
—
|
|
|
—
|
|
|
Three Months Ended March 31, 2019
|
||
Total number of shares repurchased
|
737,917
|
|
|
Average price paid per share
|
$
|
20.33
|
|
Total (in millions)
|
$
|
15
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Foreign currency translation adjustments:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(175
|
)
|
|
$
|
(165
|
)
|
Aggregate adjustment for the period (1)
|
(44
|
)
|
|
8
|
|
||
Balance at end of period
|
(219
|
)
|
|
(157
|
)
|
||
|
|
|
|
||||
Gains (losses) on derivatives:
|
|
|
|
||||
Balance at beginning of period
|
20
|
|
|
(2
|
)
|
||
Other comprehensive income before reclassifications (net tax effect of $0 and $0)
|
6
|
|
|
18
|
|
||
Reclassification to income (net tax effect of $0 and $0)
|
(2
|
)
|
|
(2
|
)
|
||
Balance at end of period
|
24
|
|
|
14
|
|
||
|
|
|
|
||||
Pension and postretirement plans:
|
|
|
|
||||
Balance at beginning of period
|
(221
|
)
|
|
(245
|
)
|
||
Other comprehensive income before reclassifications (net tax effect of $3 and $2)
|
11
|
|
|
19
|
|
||
Reclassification to income (net tax effect $0 and $4)
|
2
|
|
|
15
|
|
||
Balance at end of period
|
(208
|
)
|
|
(211
|
)
|
||
|
|
|
|
||||
Accumulated other comprehensive loss, end of period
|
$
|
(403
|
)
|
|
$
|
(354
|
)
|
(1)
|
Includes a gain of $2 million and a loss of $3 million, for the three months ended March 31, 2020 and 2019, respectively, related to the foreign currency impact of intra-entity loans that are of a long-term investment nature. Also included are gains of $3 million and $4 million, for the three months ended March 31, 2020 and 2019, respectively, related to non-derivative net investment hedges. Refer to Note 15. Derivatives and Hedging Activities for further description of these hedges.
|
(1)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 9. Pension Benefits for additional details).
|
Foreign Currency
|
|
Quantity
Hedged |
|
Unit of
Measure |
|
Notional Amount
(USD Equivalent) |
|||
|
|
(in millions)
|
|||||||
Chinese Yuan
|
|
653
|
|
|
RMB
|
|
$
|
90
|
|
Euro
|
|
37
|
|
|
EUR
|
|
40
|
|
|
Mexican Peso
|
|
1,046
|
|
|
MXN
|
|
40
|
|
|
Polish Zloty
|
|
169
|
|
|
PLN
|
|
40
|
|
|
British Pound
|
|
21
|
|
|
GBP
|
|
30
|
|
|
Singapore Dollar
|
|
36
|
|
|
SGD
|
|
30
|
|
|
Turkish Lira
|
|
62
|
|
|
TRY
|
|
10
|
|
Three Months Ended March 31, 2020
|
Gain (Loss) Recognized in OCI
|
|
Gain Reclassified from OCI into Income
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Foreign currency derivatives
|
$
|
(12
|
)
|
|
$
|
3
|
|
Interest rate swaps
|
(11
|
)
|
|
(1
|
)
|
||
Derivatives designated as net investment hedges:
|
|
|
|
||||
Cross-currency swaps
|
29
|
|
|
—
|
|
||
Total
|
$
|
6
|
|
|
$
|
2
|
|
|
|
|
|
||||
|
|
|
Loss Recognized in Income
|
||||
|
|
|
|
||||
|
|
|
(in millions)
|
||||
Derivatives not designated
|
|
$
|
(1
|
)
|
|||
Total
|
|
$
|
(1
|
)
|
|||
|
|
|
|
||||
Three Months Ended March 31, 2019
|
Gain Recognized in OCI
|
|
Gain Reclassified from OCI into Income
|
||||
|
|
||||||
|
(in millions)
|
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Foreign currency derivatives
|
$
|
2
|
|
|
$
|
2
|
|
Derivatives designated as net investment hedges:
|
|
|
|
||||
Cross-currency swaps
|
16
|
|
|
—
|
|||
Total
|
$
|
18
|
|
|
$
|
2
|
|
|
|
|
|
||||
|
|
|
Loss Recognized in Income
|
||||
|
|
|
|
||||
|
|
|
(in millions)
|
||||
Derivatives not designated
|
|
$
|
(2
|
)
|
|||
Total
|
|
$
|
(2
|
)
|
|
Total
|
|
Quoted Prices in Active Markets
Level 1 |
|
Significant Other Observable Inputs
Level 2 |
|
Significant Unobservable Inputs
Level 3 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions)
|
||||||||||||||
As of March 31, 2020:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives*
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest rate swaps*
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Cross-currency swaps*
|
51
|
|
|
—
|
|
|
51
|
|
|
—
|
|
||||
Total
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
As of December 31, 2019:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives*
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
Interest rate swaps*
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
||||
Cross-currency swaps*
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Total
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
Total
|
|
Quoted Prices in Active Markets
Level 1 |
|
Significant Other Observable Inputs
Level 2 |
|
Significant Unobservable Inputs
Level 3 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions)
|
||||||||||||||
As of March 31, 2020:
|
|
||||||||||||||
Foreign currency derivatives*
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
Total
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Interest income
|
$
|
2
|
|
|
$
|
2
|
|
Components of net periodic benefit cost other than service cost (Note 9)
|
2
|
|
|
(14
|
)
|
||
Impairment of investment in PolyCharge
|
(3
|
)
|
|
—
|
|
||
Other, net
|
1
|
|
|
—
|
|
||
Other income (expense), net
|
$
|
2
|
|
|
$
|
(12
|
)
|
Grant Date
|
|
RSUs Granted
|
|
Grant Date Fair Value
|
|
Time-Based Award Vesting Dates
|
|
Performance-Based Award Vesting Date
|
|
|
(in millions)
|
|
|
|
|
||
February 2020
|
|
1.4
|
|
$23
|
|
Annually on the anniversary grant date, 2021-2023
|
|
December 31, 2022
|
February 2019
|
|
1.0
|
|
$27
|
|
Annually on the anniversary grant date, 2020-2022
|
|
December 31, 2021
|
February 2018
|
|
0.3
|
|
$16
|
|
Annually on the anniversary grant date, 2019-2021
|
|
December 31, 2020
|
|
RSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Nonvested, January 1, 2020
|
1,608
|
|
|
$
|
26.48
|
|
Granted
|
1,374
|
|
|
16.89
|
|
|
Vested
|
(272
|
)
|
|
28.39
|
|
|
Forfeited
|
(99
|
)
|
|
29.93
|
|
|
Nonvested, March 31, 2020
|
2,611
|
|
|
21.10
|
|
•
|
Fuel Injection Systems. This segment includes gasoline and diesel fuel injection components and systems. Our gasoline fuel injection portfolio includes a full suite of fuel injection technologies – including pumps, injectors, fuel rail assemblies and complete systems – that deliver greater efficiency for traditional and hybrid vehicles with gasoline combustion
|
•
|
Powertrain Products. This segment includes an array of highly-engineered products for traditional combustion and hybrid electric vehicles, including variable valvetrain, smart remote actuators, powertrain sensors, ignition products, canisters, and fuel handling products. These products complement and enhance the efficiency improvements delivered by our fuel injection systems technologies.
|
•
|
Electrification & Electronics. Our electronics portfolio consists of engine and transmission control modules and power electronics. The control modules, containing as much as one million lines of software code, are key components that enable the integration and operation of powertrain products throughout the vehicle. As electrification increases, our proprietary solutions – including supervisory controllers, software, DC/DC converters and inverters – provide better efficiency, reduced weight and lower cost for our OEM customers, while also making these and other components easier to integrate. Manufacturers are also choosing to combine power electronic functionality into one unit, enabling more effective packaging at a lower total cost while increasing Delphi Technologies’ content per vehicle.
|
•
|
Aftermarket. Through this segment we sell products and services to independent aftermarket customers and original equipment service customers. Our aftermarket product portfolio includes a wide range of solutions covering the fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories.
|
|
Fuel Injection Systems
|
|
Powertrain Products
|
|
Electrification & Electronics
|
|
Aftermarket
|
|
Corporate Costs and Other (1)
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
For the Three Months Ended March 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net sales
|
$
|
393
|
|
|
$
|
261
|
|
|
$
|
178
|
|
|
$
|
174
|
|
|
$
|
(61
|
)
|
|
$
|
945
|
|
Depreciation & amortization
|
$
|
30
|
|
|
$
|
11
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
56
|
|
Adjusted operating income
|
$
|
18
|
|
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
(29
|
)
|
|
$
|
40
|
|
Operating income
|
$
|
(16
|
)
|
|
$
|
27
|
|
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
(44
|
)
|
|
$
|
(20
|
)
|
Equity income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income attributable to noncontrolling interest
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
Fuel Injection Systems
|
|
Powertrain Products
|
|
Electrification & Electronics
|
|
Aftermarket
|
|
Corporate Costs and Other (1)
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
For the Three Months Ended March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net sales
|
$
|
454
|
|
|
$
|
327
|
|
|
$
|
243
|
|
|
$
|
193
|
|
|
$
|
(66
|
)
|
|
$
|
1,151
|
|
Depreciation & amortization
|
$
|
28
|
|
|
$
|
14
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
53
|
|
Adjusted operating income
|
$
|
23
|
|
|
$
|
61
|
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
(29
|
)
|
|
$
|
87
|
|
Operating income
|
$
|
13
|
|
|
$
|
57
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
(42
|
)
|
|
$
|
55
|
|
Equity income
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Net income attributable to noncontrolling interest
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
(1)
|
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 column also includes the elimination of inter-segment transactions
|
|
Fuel Injection Systems
|
|
Powertrain Products
|
|
Electrification & Electronics
|
|
Aftermarket
|
|
Corporate Costs (1)
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
For the Three Months Ended March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted operating income
|
$
|
23
|
|
|
$
|
61
|
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
(29
|
)
|
|
$
|
87
|
|
Restructuring
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Separation and transformation costs (2)
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
(13
|
)
|
|
(18
|
)
|
||||||
Asset impairments
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Pension charges (4)
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Operating income
|
$
|
13
|
|
|
$
|
57
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
(42
|
)
|
|
55
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|||||||||||
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|||||||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|||||||||||
Equity income, net of tax
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|||||||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|||||||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
|
|
|
|
$
|
16
|
|
(1)
|
Corporate costs 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.
|
(2)
|
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.
|
(3)
|
Transaction related costs include charges for due diligence, integration planning and other expenses related to the Transaction with BorgWarner.
|
(4)
|
Pension charges include 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.
|
•
|
the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses, and on global supply chains;
|
•
|
uncertainties around the extent to which the COVID-19 pandemic and related impacts will continue to adversely impact our financial condition and results of operations;
|
•
|
our ability to successfully and cost-effectively restructure our global technical center footprint and reduce salaried and contract staff with minimal disruption to our business;
|
•
|
the international scale and footprint of our operations, which exposes us to a variety of political, economic and regulatory risks, including the risk of changes in government leadership and laws, political instability and economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, changes in foreign exchange rates and interest rates, and economic downturns in foreign countries, compliance with U.S. and foreign countries’ export controls and economic sanctions;
|
•
|
the cyclical nature of automotive sales and production, pricing pressures and other shifts in the competitive landscape for our products and services or changes in customer preferences and requirements;
|
•
|
price and availability of raw materials used by us and our suppliers;
|
•
|
our ability to maintain contracts that are critical to our operations;
|
•
|
our ability to attract, motivate and retain key executives;
|
•
|
our ability to manage risks associated with a strike, work stoppage or other type of conflict with labor unions and employees or those of its principal customers or suppliers;
|
•
|
the ability of the Company to attract and retain customers and to realize the sales represented by our bookings;
|
•
|
new technologies that displace demand for our products and our ability to develop and commercialize new products to meet our customers’ needs;
|
•
|
the Company’s indebtedness, including the amount thereof and capital availability and cost;
|
•
|
further downgrades of our current short- and long-term credit ratings or rating outlooks, or changes in rating application or methodology, and the related impact on our liquidity, funding profile, costs and competitive position;
|
•
|
the possibility that the proposed Transaction will not be completed;
|
•
|
the cost and outcome of any claims, legal proceedings or investigations, including any potential litigation associated with the proposed Transaction;
|
•
|
the failure or breach of information technology systems; and
|
•
|
severe weather conditions and natural disasters and any resultant disruptions on the supply or production of goods or services or customer demands.
|
•
|
Volume—changes in volume and changes in mix;
|
•
|
Contractual price changes—adjustments in price;
|
•
|
Operational performance—changes to costs for materials and commodities or manufacturing variances; and
|
•
|
Other—including restructuring costs and any remaining variances not included in Volume, net of contractual price changes or Operational performance.
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Favorable/(unfavorable)
|
||||||
|
|
|
|
|
|
||||||
|
(dollars in millions)
|
||||||||||
Net sales
|
$
|
945
|
|
|
$
|
1,151
|
|
|
$
|
(206
|
)
|
Cost of sales
|
824
|
|
|
983
|
|
|
159
|
|
|||
Gross margin
|
121
|
|
12.8%
|
168
|
|
14.6%
|
(47
|
)
|
|||
Selling, general and administrative
|
95
|
|
|
104
|
|
|
9
|
|
|||
Amortization
|
3
|
|
|
6
|
|
|
3
|
|
|||
Restructuring
|
43
|
|
|
3
|
|
|
(40
|
)
|
|||
Operating (loss) income
|
(20
|
)
|
|
55
|
|
|
(75
|
)
|
|||
Interest expense
|
(16
|
)
|
|
(18
|
)
|
|
2
|
|
|||
Other income (expense), net
|
2
|
|
|
(12
|
)
|
|
14
|
|
|||
(Loss) income before income taxes and equity income
|
(34
|
)
|
|
25
|
|
|
(59
|
)
|
|||
Income tax expense
|
(20
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|||
(Loss) income before equity income
|
(54
|
)
|
|
17
|
|
|
(71
|
)
|
|||
Equity income, net of tax
|
—
|
|
|
2
|
|
|
(2
|
)
|
|||
Net (loss) income
|
(54
|
)
|
|
19
|
|
|
(73
|
)
|
|||
Net income attributable to noncontrolling interest
|
3
|
|
|
3
|
|
|
—
|
|
|||
Net (loss) income attributable to Delphi Technologies
|
$
|
(57
|
)
|
|
$
|
16
|
|
|
$
|
(73
|
)
|
|
Three Months Ended March 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||
|
2020
|
|
2019
|
|
Favorable/(unfavorable)
|
|
|
Volume
|
|
Contractual price changes
|
|
FX
|
|
Other
|
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||
Total net sales
|
$
|
945
|
|
|
$
|
1,151
|
|
|
$
|
(206
|
)
|
|
|
$
|
(170
|
)
|
|
$
|
(8
|
)
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
(206
|
)
|
|
Three Months Ended March 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||||||
|
2020
|
|
2019
|
|
Favorable/(unfavorable)
|
|
|
Volume
|
|
Contractual price changes
|
|
FX
|
|
Operational performance
|
|
Other
|
|
Total
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
(dollars in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||
Cost of sales
|
$
|
824
|
|
|
$
|
983
|
|
|
$
|
159
|
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
58
|
|
|
$
|
(2
|
)
|
|
$
|
159
|
|
Gross margin ($)
|
$
|
121
|
|
|
$
|
168
|
|
|
$
|
(47
|
)
|
|
|
$
|
(89
|
)
|
|
$
|
(8
|
)
|
|
$
|
(6
|
)
|
|
$
|
58
|
|
|
$
|
(2
|
)
|
|
$
|
(47
|
)
|
Gross margin (%)
|
12.8
|
%
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Favorable/
(unfavorable) |
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Selling, general and administrative expense
|
$
|
95
|
|
|
$
|
104
|
|
|
$
|
9
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Favorable/
(unfavorable) |
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Restructuring
|
$
|
43
|
|
|
$
|
3
|
|
|
$
|
(40
|
)
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Favorable/
(unfavorable) |
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Other income (expense), net
|
$
|
2
|
|
|
$
|
(12
|
)
|
|
$
|
14
|
|
•
|
A decrease of $16 million in the components of net periodic benefit cost other than service costs related to the Company’s defined benefit pension plans; partially offset by
|
•
|
A $3 million impairment of the Company’s investment in PolyCharge.
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Favorable/
(unfavorable) |
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Income tax expense
|
$
|
20
|
|
|
$
|
8
|
|
|
$
|
(12
|
)
|
•
|
Fuel Injection Systems. This segment includes gasoline and diesel fuel injection components and systems. Our gasoline fuel injection portfolio includes a full suite of fuel injection technologies – including pumps, injectors, fuel rail assemblies and complete systems – that deliver greater efficiency for traditional and hybrid vehicles with gasoline combustion engines. The Company’s Gasoline Direct Injection (“GDi”) technology provides high-precision fuel delivery for optimized combustion, which lowers emissions and improves fuel economy. Our diesel fuel injection systems portfolio provides enhanced engine performance. The Company’s common rail fuel injection system is the core technology for both on and off-highway commercial and light vehicle applications.
|
•
|
Powertrain Products. This segment includes an array of highly-engineered products for traditional combustion and hybrid electric vehicles, including variable valvetrain, smart remote actuators, powertrain sensors, ignition products, canisters, and fuel handling products. These products complement and enhance the efficiency improvements delivered by our fuel injection systems technologies.
|
•
|
Electrification & Electronics. Our electronics portfolio consists of engine and transmission control modules and power electronics. The control modules, containing as much as one million lines of software code, are key components that enable the integration and operation of powertrain products throughout the vehicle. As electrification increases, our proprietary solutions – including supervisory controllers, software, DC/DC converters and inverters – provide better efficiency, reduced weight and lower cost for our OEM customers, while also making these and other components easier to integrate. Manufacturers are also choosing to combine power electronic functionality into one unit, enabling more effective packaging at a lower total cost while increasing Delphi Technologies’ content per vehicle. These products are expected to experience increased demand as vehicle electrification accelerates.
|
•
|
Aftermarket. Through this segment we sell products and services to independent aftermarket customers and original equipment service customers. Our aftermarket product portfolio includes a wide range of solutions covering the fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories. Our aftermarket business provides a recurring and generally stable revenue base, as replacement of many of these products is non-discretionary in nature.
|
|
Fuel Injection Systems
|
|
Powertrain Products
|
|
Electrification & Electronics
|
|
Aftermarket
|
|
Corporate Costs (1)
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
For the Three Months Ended March 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted operating income
|
$
|
18
|
|
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
(29
|
)
|
|
$
|
40
|
|
Restructuring
|
(32
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(43
|
)
|
||||||
Separation and transformation costs (2)
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
||||||
Transaction related costs (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
||||||
Pension charges (4)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Operating (loss) income
|
$
|
(16
|
)
|
|
$
|
27
|
|
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
(44
|
)
|
|
(20
|
)
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(16
|
)
|
|||||||||||
Other income, net
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|||||||||||
Loss before income taxes and equity income
|
|
|
|
|
|
|
|
|
|
|
(34
|
)
|
|||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(20
|
)
|
|||||||||||
Equity income, net of tax
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
(54
|
)
|
|||||||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|||||||||||
Net loss attributable to Delphi Technologies
|
|
|
|
|
|
|
|
|
|
|
$
|
(57
|
)
|
|
Fuel Injection Systems
|
|
Powertrain Products
|
|
Electrification & Electronics
|
|
Aftermarket
|
|
Corporate Costs (1)
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
For the Three Months Ended March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted operating income
|
$
|
23
|
|
|
$
|
61
|
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
(29
|
)
|
|
$
|
87
|
|
Restructuring
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Separation and transformation costs (2)
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
(13
|
)
|
|
(18
|
)
|
||||||
Asset impairments
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Pension charges (4)
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Operating income
|
$
|
13
|
|
|
$
|
57
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
(42
|
)
|
|
55
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|||||||||||
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|||||||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|||||||||||
Equity income, net of tax
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|||||||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|||||||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
|
|
|
|
$
|
16
|
|
(1)
|
Corporate Costs 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.
|
(2)
|
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.
|
(3)
|
Transaction related costs include charges for due diligence, integration planning and other expenses related to the Transaction with BorgWarner.
|
(4)
|
Pension charges include 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.
|
|
Three Months Ended March 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||
|
2020
|
|
2019
|
|
Favorable/
(unfavorable) |
|
|
Volume, net of contractual price changes
|
|
FX
|
|
Other
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||
Fuel Injection Systems
|
$
|
393
|
|
|
$
|
454
|
|
|
$
|
(61
|
)
|
|
|
$
|
(48
|
)
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(61
|
)
|
Powertrain Products
|
261
|
|
|
327
|
|
|
(66
|
)
|
|
|
(61
|
)
|
|
(5
|
)
|
|
—
|
|
|
(66
|
)
|
|||||||
Electrification & Electronics
|
178
|
|
|
243
|
|
|
(65
|
)
|
|
|
(61
|
)
|
|
(4
|
)
|
|
—
|
|
|
(65
|
)
|
|||||||
Aftermarket
|
174
|
|
|
193
|
|
|
(19
|
)
|
|
|
(13
|
)
|
|
(6
|
)
|
|
—
|
|
|
(19
|
)
|
|||||||
Eliminations and Other (1)
|
(61
|
)
|
|
(66
|
)
|
|
5
|
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Total
|
$
|
945
|
|
|
$
|
1,151
|
|
|
$
|
(206
|
)
|
|
|
$
|
(178
|
)
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
(206
|
)
|
|
Three Months Ended March 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||
|
2020
|
|
2019
|
|
Favorable/
(unfavorable) |
|
|
Volume, net of contractual price changes
|
|
FX
|
|
Operational performance
|
|
Other
|
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||
Fuel Injection Systems
|
$
|
18
|
|
|
$
|
23
|
|
|
$
|
(5
|
)
|
|
|
$
|
(39
|
)
|
|
$
|
(3
|
)
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Powertrain Products
|
35
|
|
|
61
|
|
|
(26
|
)
|
|
|
(24
|
)
|
|
—
|
|
|
4
|
|
|
(6
|
)
|
|
(26
|
)
|
||||||||
Electrification & Electronics
|
1
|
|
|
17
|
|
|
(16
|
)
|
|
|
(24
|
)
|
|
(1
|
)
|
|
7
|
|
|
2
|
|
|
(16
|
)
|
||||||||
Aftermarket
|
15
|
|
|
15
|
|
|
—
|
|
|
|
(9
|
)
|
|
2
|
|
|
6
|
|
|
1
|
|
|
—
|
|
||||||||
Corporate Costs
|
(29
|
)
|
|
(29
|
)
|
|
—
|
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||
Total
|
$
|
40
|
|
|
$
|
87
|
|
|
$
|
(47
|
)
|
|
|
$
|
(96
|
)
|
|
$
|
(4
|
)
|
|
$
|
54
|
|
|
$
|
(1
|
)
|
|
$
|
(47
|
)
|
|
Three Months Ended March 31,
|
||
|
2019
|
||
Total number of shares repurchased
|
737,917
|
|
|
Average price paid per share
|
$
|
20.33
|
|
Total (in millions)
|
$
|
15
|
|
•
|
our shareholders will not receive the consideration contemplated by the Transaction Agreement;
|
•
|
our share price may decline, to the extent that the current share price reflects a market assumption that the Transaction will be consummated;
|
•
|
our ongoing business may be adversely affected and the attention of our management and employees may be diverted from day-to-day operations;
|
•
|
we may experience difficulties in obtaining financing due to changed perceptions about our competitive position, our management, our liquidity or other aspects of our business;
|
•
|
we may be unable to find a transaction partner willing to engage in a similar transaction on terms as favorable as those set forth in the Transaction Agreement with BorgWarner;
|
•
|
we will remain liable for significant transaction costs and expenses already incurred; and
|
•
|
if the Transaction Agreement is terminated under certain circumstances, we may be obligated to pay a termination fee to BorgWarner of $53.5 million.
|
Exhibit
Number
|
|
Description
|
*10.31
|
|
|
*10.32
|
|
|
*10.33
|
|
|
*31.1
|
|
|
*31.2
|
|
|
*32.1
|
|
|
*32.2
|
|
|
*101.INS
|
|
Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
|
*101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
*101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
*101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
*101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
*101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
*104
|
|
Cover Page Interactive Data File - the cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
DELPHI TECHNOLOGIES PLC
|
|
|
|
|
|
/s/ Vivid Sehgal
|
|
|
By: Vivid Sehgal
|
|
|
Chief Financial Officer
|
|
|
|
1 Year Delphi Technologies Chart |
1 Month Delphi Technologies Chart |
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