DELPHI 2013 Annual Report Download - page 128

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Fair Value Measurements on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, Delphi also has items in its balance sheet that are
measured at fair value on a nonrecurring basis. As these items are not measured at fair value on a recurring basis, they are not
included in the tables above. Nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include
long-lived assets, intangible assets, asset retirement obligations, share-based compensation and liabilities for exit or disposal
activities measured at fair value upon initial recognition. No significant impairment charges were recorded during the year
ended December 31, 2013. Delphi recognized non-cash asset impairment charges of $15 million in cost of sales during the year
ended December 31, 2012. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted
at a rate commensurate with the risk involved and a review of appraisals. As such, Delphi has determined that the fair value
measurements of long-lived assets fall in Level 3 of the fair value hierarchy.
19. OTHER INCOME, NET
Other income, net included:
Year Ended December 31,
2013 2012 2011
(in millions)
Interest income............................................................................................................................. $ 14 $ 17 $ 31
Costs associated with initial public offering................................................................................ — — (44)
Impairment - investment in available-for-sale security ............................................................... — — (6)
Loss on extinguishment of debt................................................................................................... (39)(1)(16)
Costs associated with MVL acquisition....................................................................................... — (13) —
Other, net...................................................................................................................................... 7 2 20
Other (expense) income, net................................................................................................. $ (18) $ 5 $ (15)
As further discussed in Note 11. Debt, during the year ended December 31, 2013, Delphi amended its Credit Agreement
and repaid the entire balance of the Tranche B Term Loan from the Original Credit Agreement, resulting in a loss on
extinguishment of debt of $39 million.
During the year ended December 31, 2012, Delphi incurred approximately $13 million in transaction costs related to the
acquisition of MVL that was completed in October 2012.
During the year ended December 31, 2011, Delphi incurred approximately $44 million in transaction costs related to our
initial public offering completed in November 2011. As further discussed in Note 11. Debt, Delphi paid $47 million and $177
million of the Tranche A Term Loan and Tranche B Term Loan, respectively, and paid $57 million to extinguish senior
unsecured five-year notes and recognized a loss on extinguishment of debt of $16 million during the year ended December 31,
2011.
20. ACQUISITIONS AND DIVESTITURES
Acquisition of Motorized Vehicles Division of FCI
On October 26, 2012, Delphi acquired 100% of the equity interests of MVL for €765 million, or approximately $1 billion
based on exchange rates on the acquisition date. MVL, a leading global manufacturer of automotive connection systems with a
focus on high-value, leading technology applications, is based in Guyancourt, France, had 2011 sales of €692 million
(approximately 12% to Delphi that will be eliminated on a consolidated basis) and global operations. The operating results of
MVL are reported within the Electrical/Electronic Architecture segment from the date of acquisition.
Upon completing the acquisition, Delphi incurred related transaction expenses totaling approximately $13 million, which
were recorded in other expenses in the statement of operations. The cash payments required to close the transaction were
funded using existing cash on hand, including $363 million drawn under the Credit Agreement and additional European
factoring.
The acquisition was accounted for as a business combination, with the purchase price allocated on a preliminary basis
using information available, in the fourth quarter of 2012. The purchase price and related allocation were finalized in the three
months ended March 31, 2013. The final purchase price and related allocation are shown below (in millions):