DELPHI 2011 Annual Report Download - page 91

Table of Contents
• The Predecessor's liabilities subject to compromise were extinguished.
• If cumulative distributions to the members of Delphi Automotive LLP under certain provisions of its limited liability partnership agreement
exceed $7.2 billion, Delphi, as disbursing agent on behalf of DPHH, is required to pay to the holders of allowed general unsecured claims against
the Predecessor, $32.50 for every $67.50 in excess of $7.2 billion distributed to the members of Delphi Automotive LLP, up to a maximum of
$300 million.
• The Predecessor's equity holders did not receive recoveries on their claims.
Reorganization items—The accounting guidance in FASB ASC 852, Reorganizations, requires reorganization items such as revenues, professional fees
directly related to the process of reorganizing the Debtors under chapter 11 of the Bankruptcy Code, realized gains and losses, provisions for losses, and
interest income resulting from the reorganization and restructuring of the business to be separately disclosed. Professional fees directly related to the
reorganization include fees associated with advisors to the Debtors, unsecured creditors, secured creditors and unions. The Predecessor's reorganization items
consisted of the following:
Predecessor
(Income)/Expense
Period from
January 1 to
October 6, 2009
(in millions)
Sale / disposition of the Predecessor $ (794)
Extinguishment of liabilities subject to compromise (11,159)
PBGC termination of U.S. pension plans (Note 13) 2,818
Salaried OPEB settlement (Note 13) (1,168)
Professional fees directly related to reorganization 68
Other 25
Total reorganization items $ (10,210)
Disposition of the Predecessor—The Predecessor sold the automotive supply business (other than the global steering business and the UAW
manufacturing facilities in the U.S. which were acquired by GM) to Delphi. Certain assets and liabilities were retained by DPHH and various liabilities were
extinguished or settled, including the settlement of approximately $3.3 billion of DIP financing and $850 million outstanding under GM liquidity support
agreements. A summary of the debt settled upon consummation of the Modified Plan is included below:
(in millions)
First Priority Revolving Credit Facility $ 230
First Priority Term Loan 310
Second Priority Term Loan 2,750
DIP financing 3,290
GM liquidity support agreements 850
Total debt settled $ 4,140
The $794 million of gain from reorganization items for the period from January 1 to October 6, 2009 primarily relate to the extinguishment of
liabilities. As these liabilities were extinguished, the respective carrying values, as noted below, were eliminated resulting in a gain from reorganization, as
follows:
• The extinguishment of accrued liabilities, resulting in a gain from reorganization items for the Predecessor of approximately $525 million. The
extinguished accrued liabilities primarily included
89