10-K/A: Aptiv Amends 10-K to Include Motional Financials, Citing Prior Unavailability

Aptiv PLC files an amendment to its annual report on Form 10-K to include the financial statements of Motional AD LLC, which were not available at the time of the original filing.

Summary

• Aptiv PLC has filed an amendment to its annual report on Form 10-K, specifically to include the financial statements of Motional AD LLC for the three years ended December 31, 2023.
• The original Form 10-K, filed on February 6, 2024, did not include these financials because they were not available at the time.
• This amendment, filed on March 28, 2024, includes the required financial statements as Exhibit 99.1.
• The amendment only supplements Item 15 of the original report and does not change any other information.
• The financial statements of Motional were audited by Ernst & Young LLP, with a report dated March 22, 2024.
• Motional's financials show a net loss of $602 million in 2023, $582 million in 2022, and $451 million in 2021.
• Motional's total assets were $2.459 billion as of December 31, 2023, and $3.025 billion as of December 31, 2022.
• Motional's total liabilities were $153 million as of December 31, 2023, and $183 million as of December 31, 2022.
• Motional's members' equity was $2.306 billion as of December 31, 2023, and $2.842 billion as of December 31, 2022.
• Motional has a going concern issue due to recurring losses and limited financial resources.

Sentiment

Score: 3

Explanation: The document reveals significant losses and a going concern issue for Motional, which is a major negative. While the inclusion of the financials is positive for transparency, the underlying financial health is concerning.

Positives

• The inclusion of Motional's financials provides a more complete picture of Aptiv's overall financial position.
• The audit by Ernst & Young LLP provides assurance on the accuracy of Motional's financial statements.

Negatives

• Motional has incurred significant net losses over the past three years, with a $602 million loss in 2023.
• Motional has a going concern issue due to recurring losses and limited financial resources.
• Motional's financial statements indicate substantial doubt about its ability to continue as a going concern.

Risks

• Motional's recurring losses and limited financial resources pose a significant risk to its operations.
• The company's ability to continue as a going concern is dependent on obtaining additional capital resources.
• There is no assurance that Motional will be successful in obtaining the necessary funding.
• Motional's substantial net operating loss carryforwards may be subject to limitations under Section 382 of the Internal Revenue Code.

Future Outlook

Motional's ability to continue as a going concern is dependent on obtaining additional capital resources, but there is no assurance that the company will be successful in doing so.

Management Comments

• Joseph R. Massaro, Vice Chairman, Business Operations and Chief Financial Officer, certified that the report does not contain any untrue statement of a material fact and fairly presents the financial condition of the company.
• Kevin P. Clark, Chairman and Chief Executive Officer, also certified that the report complies with the requirements of the Securities Exchange Act of 1934 and fairly presents the financial condition and results of operations of the company.

Industry Context

The inclusion of Motional's financials is important for investors to understand the performance of Aptiv's autonomous driving venture, which is a key area of growth and investment in the automotive technology industry. The financial results highlight the high costs and challenges associated with developing autonomous driving technology.

Comparison to Industry Standards

• Motional's financial performance is not directly comparable to established automotive suppliers due to its focus on autonomous driving technology, which is still in a development phase.
• Companies like Waymo (Alphabet) and Cruise (General Motors) are also investing heavily in autonomous driving, and their financial results, while not always directly comparable, also show significant losses during the development phase.
• The high R&D expenses and net losses are typical for companies in the early stages of developing complex technologies like autonomous driving.
• Motional's going concern issue is not uncommon for early-stage technology ventures that require significant capital investment before generating substantial revenue.

Related Party Transactions

• The Company received cash payments from Aptiv for payments to employees under its long-term incentive program.
• The Company reimbursed Aptiv for vesting of legacy Aptiv equity awards held by Motional employees.
• The Company has a related party receivable with Aptiv related to reimbursement of potential pre-JV uncertain tax positions.
• The Company maintains a receivable with Hyundai Motor Group for reimbursement of prototype components utilized for R&D and testing purposes.
• The Company purchased components and professional services from Aptiv and Hyundai Motor Group.
• Aptiv subleases office space to Motional.

Stakeholder Impact

• Shareholders of Aptiv will be concerned about the financial performance of Motional and its impact on Aptiv's overall financial health.
• Employees of Motional may be concerned about the company's ability to continue operations.
• Customers and partners of Motional will be monitoring the company's financial stability.
• Creditors of Motional will be assessing the risk of lending to the company.

Next Steps

• Motional needs to secure additional funding to continue operations.
• Aptiv will likely need to address the going concern issue of Motional.
• Investors will be closely monitoring Motional's financial performance and funding efforts.

Key Dates

Keywords

Motional, Aptiv, Financial Statements, Form 10-K, Amendment, Going Concern, Net Loss, Audit, Ernst & Young, Autonomous Driving