DELPHI 2013 Annual Report Download - page 63

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• A gain on the disposal of property of approximately $11 million resulting from the sale of a manufacturing site that
was closed as a result of Delphi's overall restructuring program.
• The absence of a favorable customer settlement related to warranty of $25 million in the prior period.
Consolidated Results of Operations
2012 versus 2011
The results of operations for the years ended December 31, 2012 and 2011 were as follows:
Year Ended December 31,
2012 2011 Favorable/
(unfavorable)
(dollars in millions)
Net sales......................................................................................................... $ 15,519 $ 16,041 $ (522)
Cost of sales................................................................................................... 12,861 13,386 525
Gross margin.................................................................................................. 2,658 17.1% 2,655 16.6% 3
Selling, general and administrative................................................................ 927 901 (26)
Amortization .................................................................................................. 84 79 (5)
Restructuring.................................................................................................. 171 31 (140)
Operating income................................................................................... 1,476 1,644 (168)
Interest expense...................................................................................... (136) (123) (13)
Other income (expense), net .................................................................. 5 (15) 20
Income before income taxes and equity income............................................ 1,345 1,506 (161)
Income tax expense................................................................................ (212) (305) 93
Income before equity income......................................................................... 1,133 1,201 (68)
Equity income, net of tax....................................................................... 27 22 5
Net income..................................................................................................... 1,160 1,223 (63)
Net income attributable to noncontrolling interest ........................................ 83 78 5
Net income attributable to Delphi.................................................................. $ 1,077 $ 1,145 $ (68)
Total Net Sales
Below is a summary of Delphi’s total net sales for the year ended December 31, 2012 versus December 31, 2011.
Year Ended December 31, Variance Due To:
2012 2011 Favorable/
(unfavorable)
Volume, net of
contractual
price
reductions FX
Commodity
pass-
through Other Total
(in millions) (in millions)
Total net sales ....... $ 15,519 $ 16,041 $ (522) $ 61 $ (578) $ (113) $ 108 $ (522)
Total net sales for the year ended December 31, 2012 decreased 3% compared to the year ended December 31, 2011.
Although we experienced volume growth of approximately 1%, reported sales decreased due to unfavorable currency impacts,
principally related to the Euro and Brazilian Real, and lower commodity pass-through. Additionally, included in Other above
are increased sales of approximately $110 million resulting primarily from the acquisition of MVL in October 2012.
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 decreased $525 million for the year ended December 31, 2012 compared to the year ended December 31,
2011, as summarized below.