DELPHI 2013 Annual Report Download - page 112

90
Equity Securities—The fair value of equity securities is determined by direct quoted market prices on regulated financial
exchanges.
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
Real Estate Trust Fund Hedge Funds Insurance Contracts
(in millions)
Beginning balance at December 31, 2011.................... $ 43 $ 81 $ —
Actual return on plan assets:
Relating to assets still held at the reporting date... (1) 4 —
Assets assumed in acquisition.................................... — — 3
Purchases, sales, and settlements............................... — 6 —
Ending balance at December 31, 2012......................... $ 42 $ 91 $ 3
Actual return on plan assets:
Relating to assets still held at the reporting date... 2 4 —
Purchases, sales, and settlements............................... 1 (5) 1
Ending balance at December 31, 2013......................... $ 45 $ 90 $ 4
13. COMMITMENTS AND CONTINGENCIES
Environmental Matters
Delphi is subject to the requirements of U.S. federal, state, local and non-U.S. environmental and safety and health laws
and regulations. As of December 31, 2013 and December 31, 2012, the undiscounted reserve for environmental investigation
and remediation was approximately $21 million (of which $3 million was recorded in accrued liabilities and $18 million was
recorded in other long-term liabilities) and $21 million (of which $3 million was recorded in accrued liabilities and $18 million
was recorded in other long-term liabilities). Delphi cannot ensure that environmental requirements will not change or become
more stringent over time or that its eventual environmental remediation costs and liabilities will not exceed the amount of its
current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, Delphi’s results of
operations could be materially affected. At December 31, 2013, the difference between the recorded liabilities and the
reasonably possible range of loss was not material.
Ordinary Business Litigation
Delphi is from time to time subject to various legal actions and claims incidental to its business, including those arising
out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters, and employment-related
matters. It is the opinion of Delphi that the outcome of such matters will not have a material adverse impact on the consolidated
financial position, results of operations, or cash flows of Delphi. With respect to warranty matters, although Delphi cannot
ensure that the future costs of warranty claims by customers will not be material, Delphi believes its established reserves are
adequate to cover potential warranty settlements.
Brazil Matters
Delphi conducts 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 Delphi believes it complies with such
laws, they are complex, subject to varying interpretations, and the Company is often engaged in litigation with government
agencies regarding the application of these laws to particular circumstances. As of December 31, 2013, the majority of claims
asserted against Delphi in Brazil relate to such litigation. The remaining claims in Brazil relate to commercial and labor
litigation with private parties. As of December 31, 2013, claims totaling approximately $200 million (using December 31, 2013
foreign currency rates) have been asserted against Delphi in Brazil. As of December 31, 2013, the Company maintains accruals
for these asserted claims of $31 million (using December 31, 2013 foreign currency rates). The amounts accrued represent
claims that are deemed probable of loss and are reasonably estimable based on the Company’s analyses and assessment of the
asserted claims and prior experience with similar matters. While the Company believes its accruals are adequate, the final
amounts required to resolve these matters could differ materially from the Company’s recorded estimates and Delphi’s results
of operations could be materially affected.