DELPHI 2013 Annual Report Download - page 57

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2013 versus 2012
The results of operations for the years ended December 31, 2013 and 2012 were as follows:
Year Ended December 31,
2013 2012 Favorable/
(unfavorable)
(dollars in millions)
Net sales......................................................................................................... $ 16,463 $ 15,519 $ 944
Cost of sales................................................................................................... 13,567 12,861 (706)
Gross margin.................................................................................................. 2,896 17.6% 2,658 17.1% 238
Selling, general and administrative................................................................ 963 927 (36)
Amortization .................................................................................................. 104 84 (20)
Restructuring.................................................................................................. 145 171 26
Operating income................................................................................... 1,684 1,476 208
Interest expense...................................................................................... (143) (136) (7)
Other (expense) income, net .................................................................. (18) 5 (23)
Income before income taxes and equity income............................................ 1,523 1,345 178
Income tax expense................................................................................ (256) (212) (44)
Income before equity income......................................................................... 1,267 1,133 134
Equity income, net of tax....................................................................... 34 27 7
Net income..................................................................................................... 1,301 1,160 141
Net income attributable to noncontrolling interest ........................................ 89 83 6
Net income attributable to Delphi.................................................................. $ 1,212 $ 1,077 $ 135
Total Net Sales
Below is a summary of our total net sales for the years ended December 31, 2013 versus December 31, 2012.
Year Ended December 31, Variance Due To:
2013 2012 Favorable/
(unfavorable)
Volume, net
of
contractual
price
reductions FX
Commodity
pass-
through Other Total
(in millions) (in millions)
Total net sales ..... $ 16,463 $ 15,519 $ 944 $ 176 $ 99 $ (32) $ 701 $ 944
Total net sales for the year ended December 31, 2013 increased 6% compared to the year ended December 31, 2012. We
experienced volume growth of 3% for the period as a result of increased sales in North America and Asia Pacific, partially
offset by continued OEM production volume reductions in Europe. Overall net sales also increased as a result of the acquisition
of MVL in October 2012, net of other divestitures, of approximately $695 million, reflected in Other above.
Cost of Sales
Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency
exchange rates, product engineering, design and development expenses, depreciation and amortization, warranty costs and
other operating expenses. Gross margin is revenue less cost of sales and gross margin percentage is gross margin as a percent of
net sales.
Cost of sales increased $706 million for the year ended December 31, 2013 compared to the year ended December 31,
2012, as summarized below. The Company's material cost of sales was approximately 50% of net sales in both the year ended