DELPHI 2015 Annual Report Download - page 136

Table of Contents
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As of December 31, 2015 and December 31, 2014, Delphi had no assets measured at fair value on a recurring basis and
had the following liabilities measured at fair value on a recurring basis:
Total
Quoted Prices in
Active Markets
Level 1
Significant Other
Observable Inputs
Level 2
Significant
Unobservable
Inputs
Level 3
(in millions)
As of December 31, 2015
Commodity derivatives ....................................... $ 51 $ — $ 51 $ —
Foreign currency derivatives ............................... 78 — 78 —
Contingent consideration..................................... 32 — — 32
Total................................................................ $ 161 $ — $ 129 $ 32
As of December 31, 2014
Commodity derivatives ....................................... $ 27 $ — $ 27 $ —
Foreign currency derivatives ............................... 77 — 77 —
Contingent consideration..................................... 11 — — 11
Total................................................................ $ 115 $ — $ 104 $ 11
The changes in the contingent consideration liability classified as a Level 3 measurement, which were principally due the
acquisitions of Control-Tec and Ottomatika in 2015 and the acquisition of Antaya in 2014, as described above and in Note 20.
Acquisitions and Divestitures, were as follows:
Year Ended December 31,
2015 2014
(in millions)
Fair value at beginning of year ........................................................................................... $ 11 $ —
Additions........................................................................................................................ 25 11
Payments........................................................................................................................ — —
Interest accretion............................................................................................................ 3 —
Measurement adjustments.............................................................................................. (7) —
Fair value at end of year ..................................................................................................... $ 32 $ 11
During the fourth quarter of 2015, the Company recorded a reduction to its contingent consideration liability for the
acquisition of Antaya, as payment of the previous amount was no longer considered probable as a result of the actual level of
earnings of the acquired business, as well as due to reductions to the forecast of future earnings of the acquired business during
the contractual earn-out period.
Non-derivative financial instruments—Delphi’s non-derivative financial instruments include cash and cash equivalents,
accounts and notes receivable, accounts payable, as well as debt, which consists of its accounts receivable factoring
arrangements, capital leases and other debt issued by Delphi’s non-U.S. subsidiaries, the Tranche A Term Loan, the 2013 Senior
Notes, the 2014 Senior Notes, the 2015 Euro-denominated Senior Notes and the 2015 Senior Notes. The fair value of debt is
based on quoted market prices for instruments with public market data or significant other observable inputs for instruments
without a quoted public market price (Level 2). As of December 31, 2015 and December 31, 2014, total debt was recorded at
$4,008 million and $2,426 million, respectively, and had estimated fair values of $4,025 million and $2,567 million,
respectively. For all other financial instruments recorded at December 31, 2015 and December 31, 2014, fair value
approximates book value.
Fair Value Measurements on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, Delphi also has items in its balance sheet that are
measured at fair value on a nonrecurring basis. As these items are not measured at fair value on a recurring basis, they are not
included in the tables above. Nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include
long-lived assets, assets held for sale, equity and cost method investments, intangible assets, asset retirement obligations, share-
based compensation and liabilities for exit or disposal activities measured at fair value upon initial recognition. During the year
ended December 31, 2015, Delphi recorded non-cash asset impairment charges of $16 million in cost of sales related to
declines in the fair values of certain fixed assets. During the year ended December 31, 2014, Delphi recorded non-cash asset