DELPHI 2013 Annual Report Download - page 142

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120
23. SEGMENT REPORTING
Delphi operates its core business along the following operating segments, which are grouped on the basis of similar
product, market and operating factors:
• Electrical/Electronic Architecture, which includes complete electrical architecture and component products.
• Powertrain Systems, which includes extensive systems integration expertise in gasoline, diesel and fuel handling
and full end-to-end systems including fuel injection, combustion, electronics controls, exhaust handling, test and
validation capabilities, aftermarket, and original equipment service.
• Electronics and Safety, which includes component and systems integration expertise in infotainment and
connectivity, body controls and security systems, displays, mechatronics, passive and active safety electronics and
electric and hybrid electric vehicle power electronics, as well as advanced development of software.
• Thermal Systems, which includes heating, ventilating and air conditioning (“HVAC”) systems, components for
multiple transportation and other adjacent markets, and powertrain cooling and related technologies.
• Eliminations and Other, which includes i) the elimination of inter-segment transactions, and ii) certain other
expenses and income of a non-operating or strategic nature.
The accounting policies of the segments are the same as those described in Note 2. Significant Accounting Policies,
except that the disaggregated financial results for the segments have been prepared using a management approach, which is
consistent with the basis and manner in which management internally disaggregates financial information for the purposes of
assisting internal operating decisions. Generally, Delphi evaluates performance based on stand-alone segment net income
before depreciation and amortization (including long-lived asset and goodwill impairment), interest expense, other income
(expense), net, income tax expense, equity income, net of tax, restructuring and other acquisition-related costs (“Adjusted
EBITDA”) and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market
prices. Through December 31, 2012, the Company’s management believed that net income before depreciation and
amortization (including long-lived asset and goodwill impairment), interest expense, other income (expense), net, income tax
expense, equity income, net of tax, (“EBITDA”) was a meaningful measure of performance and it was used by management to
analyze Company and stand-alone segment operating performance. Management also used EBITDA for planning and
forecasting purposes. Effective January 1, 2013, Delphi’s management began utilizing Adjusted EBITDA as a key performance
measure and for planning and forecasting purposes because of our restructuring and other acquisition-related costs. Segment
Adjusted EBITDA and EBITDA should not be considered substitutes for results prepared in accordance with U.S. GAAP and
should not be considered alternatives to net income attributable to Delphi, which is the most directly comparable financial
measure to Adjusted EBITDA and EBITDA that is in accordance with U.S. GAAP. Segment Adjusted EBITDA and EBITDA,
as determined and measured by Delphi, should also not be compared to similarly titled measures reported by other companies.
Included below are sales and operating data for Delphi’s segments for the years ended December 31, 2013, 2012 and
2011, as well as balance sheet data as of December 31, 2013 and 2012.
Electrical/
Electronic
Architecture Powertrain
Systems Electronics
and Safety Thermal
Systems Eliminations
and Other (1) Total
(in millions)
For the Year Ended December 31, 2013:
Net sales......................................... $ 7,972 $ 4,424 $ 2,830 $ 1,468 $ (231) $ 16,463
EBITDA......................................... $ 1,194 $ 619 $ 340 $ 71 $ — $ 2,224
Adjusted EBITDA.......................... $ 1,237 $ 671 $ 396 $ 80 $ — $ 2,384
Depreciation and amortization....... $ 236 $ 188 $ 73 $ 43 $ — $ 540
Operating income (2)..................... $ 958 $ 431 $ 267 $ 28 $ — $ 1,684
Equity income (loss) ...................... $ 15 $ 4 $ — $ 18 $ (3) $ 34
Net income attributable to
noncontrolling interest................ $ 40 $ 31 $ — $ 18 $ — $ 89