DELPHI 2013 Annual Report Download - page 65

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43
The increase in restructuring expense is due to the initiation of various restructuring actions, primarily in Europe, in
response to lower OEM production volumes in Europe and continued economic uncertainties. The restructuring actions include
workforce reductions as well as plant closures.
Refer to Note 10. Restructuring to the audited consolidated financial statements included herein for additional
information.
Interest Expense
Year Ended December 31,
2012 2011 Favorable/
(unfavorable)
(in millions)
Interest expense .......................................................................................................... $ 136 $ 123 $ (13)
The increase in interest expense for the year ended December 31, 2012 as compared to the year ended December 31,
2011 is due to the issuance of the indebtedness under the Credit Facility and $500 million of 5.875% senior notes due 2019 and
the issuance of $500 million of 6.125% senior notes due 2021 (collectively, the “2011 Senior Notes”), in conjunction with the
redemption of the Class A and Class C membership interests in March 2011, as well as the increased borrowings under the
credit agreement in conjunction with the acquisition of MVL in October 2012.
Refer to Note 11. Debt, to the audited consolidated financial statements included herein for additional information.
Other Income, net
Year Ended December 31,
2012 2011 Favorable/
(unfavorable)
(in millions)
Other income (expense), net....................................................................................... $ 5 $ (15) $ 20
The increase in other income, net is the result of incurring approximately $44 million in transaction costs in 2011 related
to our initial public offering, partially offset by transaction costs of $13 million in 2012 related to the acquisition of MVL and
lower interest income.
Refer to Note 19. Other income, net to the audited consolidated financial statements included herein for additional
information.
Income Taxes
Year Ended December 31,
2012 2011 Favorable/
(unfavorable)
(in millions)
Income tax expense..................................................................................................... $ 212 $ 305 $ 93
The Company’s effective tax rates in both periods are affected by the tax rates in the jurisdictions in which the Company
operates, the relative amount of income earned in each jurisdiction and the relative amount of losses or income for which no tax
benefit or expense was recognized due to a valuation allowance. The Company's geographic income mix was favorably
impacted in 2012, as compared to 2011, primarily due to underlying business results, tax settlements and tax planning
initiatives.
The effective tax rate was 16% and 20% for the year ended December 31, 2012 and 2011, respectively. The effective tax
rate for the year ended December 31, 2012 was impacted by the release of $29 million of valuation allowances, a favorable tax
settlement of $26 million, a $30 million reduction in tax reserves due to resolution of open issues with tax authorities and a