DELPHI 2013 Annual Report Download - page 58

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36
December 31, 2013 and December 31, 2012.
Year Ended December 31, Variance Due To:
2013 2012 Favorable/
(unfavorable) Volume (a) FX Operational
performance Other Total
(dollars in millions) (in millions)
Cost of sales..................... $13,567 $12,861 $ (706) $ (405) $ (91) $ 321 $ (531) $ (706)
Gross margin.................... $ 2,896 $ 2,658 $ 238 $ (230) $ 8 $ 321 $ 139 $ 238
Percentage of net sales..... 17.6% 17.1%
(a) Presented net of contractual price reductions for gross margin variance.
The increase in cost of sales reflects increased volumes before contractual price reductions for the period, partially offset
by operational performance improvements, and the following items in Other above:
• Increased costs of approximately $515 million resulting primarily from the acquisition of MVL in October 2012,
net of other divestitures.
• The absence of a favorable customer settlement related to warranty of $25 million in the prior period.
• A gain on the disposal of property of approximately $11 million from the sale of a manufacturing site that was
closed as a result of Delphi's overall restructuring program.
Selling, General and Administrative Expense
Year Ended December 31,
2013 2012 Favorable/
(unfavorable)
(dollars in millions)
Selling, general and administrative expense............................................................... $ 963 $ 927 $ (36)
Percentage of net sales................................................................................................ 5.8% 6.0%
Selling, general and administrative expense (“SG&A”) includes administrative expenses, information technology costs
and incentive compensation related costs, and decreased as a percent of sales during the year ended December 31, 2013
compared to 2012 due to a reduction in accruals for incentive compensation, offset by costs from the acquisition of MVL in
October 2012.
Amortization
Year Ended December 31,
2013 2012 Favorable/
(unfavorable)
(in millions)
Amortization............................................................................................................... $ 104 $ 84 $ (20)
Amortization expense reflects the non-cash charge related to definite-lived intangible assets primarily recognized as part
of the Acquisition and resulting from the acquisition of MVL in October 2012. The increase in amortization during the year
ended December 31, 2013 compared to 2012 resulted primarily from the acquisition of MVL in October 2012.