DELPHI 2011 Annual Report Download - page 33

Table of Contents
Brazil Matters
We conduct significant business operations in Brazil that are subject to the Brazilian federal labor, social security, environmental, tax and customs laws,
as well as a variety of state and local laws. While we believe that we comply with such laws, they are complex, subject to varying interpretations, and we are
often engaged in litigation with government agencies regarding the application of these laws to particular circumstances. In addition, we are also a party to
commercial and labor litigation with private parties. As of December 31, 2011, related claims totaling approximately $225 million (using December 31, 2011
foreign currency rates) have been asserted against us. As of December 31, 2011, we maintain accruals for these asserted claims of approximately $40 million
(using December 31, 2011 foreign currency rates). The amounts accrued represent claims that are deemed probable of loss and are reasonably estimable based
on our analyses and assessment of the asserted claims and prior experience with similar matters. While we believe our accruals are adequate, the final
amounts required to resolve these matters could differ materially from our recorded estimates and our results of operations could be materially affected.
Romania Value Added Tax ("VAT") Assessment
During the first quarter of 2010, as a result of a tax audit for years 2006–2008, we received a tax assessment from the Romanian tax authorities in the
amount of approximately $42 million based on the taxing authority's assessment that we underpaid its VAT (mostly on export sales) by approximately $24
million and owe accrued interest and penalties of $18 million. We filed an appeal contesting the assessment and in October 2010, the Romanian tax
authorities substantially reduced the amount of the assessment and decided to re-audit us. In December 2011, the Company received $13 million from the tax
authorities related to the outstanding VAT credit. As of December 31, 2011, we maintain a reserve for this contingency that is substantially less than the
amount of the remaining balance under assessment. While we believe our reserve is adequate, the final amounts required to resolve this initial assessment
could differ materially from our recorded estimate.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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