DELPHI 2011 Annual Report Download - page 97

Table of Contents
Delphi collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with a revenue-producing
transaction between the Company and the Company's customers. These taxes may include, but are not limited to, sales, use, value-added, and some excise
taxes. Delphi reports the collection of these taxes on a net basis (excluded from revenues).
Membership interests—At the Acquisition Date, the outstanding common stock of the Predecessor was cancelled and membership interests in Delphi
Automotive LLP were issued to Delphi's owners. On March 31, 2011, all of the outstanding Class A and Class C membership interests held by GM and
PBGC were redeemed, respectively, for approximately $4.4 billion.
In conjunction with the completion of the initial public offering on November 22, 2011 of 24,078,827 ordinary shares by the selling shareholders for an
aggregate purchase price of approximately $530 million, all of the outstanding equity of Delphi Automotive LLP was exchanged for 328,244,510 ordinary
shares, par value $0.01 in Delphi Automotive PLC. As a result, Delphi Automotive LLP became a wholly-owned subsidiary of Delphi Automotive PLC.
Delphi did not receive any proceeds from this offering.
Prior to the initial public offering, total membership interests and net income (loss) were allocated among the respective classes based on the cumulative
distribution provisions of the Fourth Amended and Restated Limited Liability Partnership Agreement of Delphi Automotive LLP (the "Fourth LLP
Agreement"). Refer to Note 16. Shareholders' Equity and Net Income (Loss) Per Share for additional information.
Net income (loss) per share—Basic net income (loss) per share is computed by dividing net income (loss) attributable to Delphi by the weighted–
average number of ordinary shares outstanding during the period. Diluted net income (loss) per share reflects the weighted average dilutive impact of all
potentially dilutive securities from the date of issuance and is computed using the treasury stock method by dividing net income (loss) attributable to Delphi
by the diluted weighted-average number of ordinary shares outstanding. Share amounts included in these notes are on a diluted basis. See Note 16.
Shareholders' Equity and Net Income (Loss) Per Share for additional information including the calculation of basic and diluted net income (loss) per share.
Research and development—Costs are incurred in connection with research and development programs that are expected to contribute to future
earnings. Such costs are charged against income as incurred. Total research and development expenses (including engineering) were $1.2 billion, $1.0 billion,
$0.3 billion and $1.0 billion for the years ended December 31, 2011 and 2010, and the periods August 19 to December 31, 2009, and January 1 to October 6,
2009, respectively.
Cash and cash equivalents—Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or
less.
Time deposits—From time to time, Delphi enters into various time deposit agreements whereby certain of Delphi's funds on deposit with financial
institutions may not be withdrawn for a specified period of time. Time deposits with original maturity periods of three months or less are included as Cash and
cash equivalents in the consolidated balance sheets, while time deposits with original maturity periods greater than three months are separately stated in the
consolidated balance sheets. The carrying value of time deposits approximates fair value as of December 31, 2010. There were no time deposits at
December 31, 2011.
Marketable securities—Marketable securities with maturities of three months or less are classified as cash and cash equivalents for financial statement
purposes. Available-for-sale securities are recorded in the consolidated financial statements at market value with changes in market value included in other
comprehensive income ("OCI"). Available-for-sale securities with a cost basis of $0 million and $13 million and a carrying value of $0 million and $12
million were held as of December 31, 2011 and 2010, respectively. In the event debt or equity securities experience an other-than-temporary impairment in
value, such impairment is recognized as a loss in the consolidated statement of operations. In 2011 and 2010, Delphi recognized an other-than-temporary
impairment of $6 million and $9 million, respectively.
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