DELPHI 2015 Annual Report Download - page 154

Table of Contents
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23. SEGMENT REPORTING
Delphi operates its core business along the following operating segments, which are grouped on the basis of similar
product, market and operating factors:
• Electrical/Electronic Architecture, which includes complete electrical architecture and component products.
• Powertrain Systems, which includes extensive systems integration expertise in gasoline, diesel and fuel handling and
full end-to-end systems including fuel and air injection, combustion, electronics controls, exhaust handling, test and
validation capabilities, aftermarket, and original equipment service.
• Electronics and Safety, which includes component and systems integration expertise in infotainment and
connectivity, body controls and security systems, displays, mechatronics, passive and active safety electronics and
electric and hybrid electric vehicle power electronics, as well as advanced development of software.
• Eliminations and Other, which includes i) the elimination of inter-segment transactions, and ii) certain other expenses
and income of a non-operating or strategic nature.
The accounting policies of the segments are the same as those described in Note 2. Significant Accounting Policies,
except that the disaggregated financial results for the segments have been prepared using a management approach, which is
consistent with the basis and manner in which management internally disaggregates financial information for which Delphi’s
chief operating decision maker regularly reviews financial results to assess performance of, and make internal operating
decisions about allocating resources to, the segments.
Generally, Delphi evaluates segment performance based on stand-alone segment net income before interest expense,
other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations,
net of tax, restructuring, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired
businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and
divestitures), asset impairments and gains (losses) on business divestitures (“Adjusted Operating Income”) and accounts for
inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Delphi’s management
utilizes Adjusted Operating Income as the key performance measure of segment income or loss to evaluate segment
performance, and for planning and forecasting purposes to allocate resources to the segments, as management believes this
measure is most reflective of the operational profitability or loss of Delphi's operating segments. Segment Adjusted Operating
Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered
an alternative to net income attributable to Delphi, which is the most directly comparable financial measure to Adjusted
Operating Income that is in accordance with U.S. GAAP. Segment Adjusted Operating Income, as determined and measured by
Delphi, should also not be compared to similarly titled measures reported by other companies.
As described in Note 25. Discontinued Operations, the Company's previously reported Thermal Systems segment has
been classified as discontinued operations, which required retrospective application to balance sheet, statement of operations
and certain cash flow financial information for all periods presented. Discontinued operations also includes the Company's
thermal original equipment service business, the results of which were previously reported within the Powertrain Systems
segment. Certain operations, primarily related to contract manufacturing services, which were previously included within the
Thermal Systems segment but which were not included in the scope of the divestiture, are reported in continuing operations
and have been reclassified within the Electronics and Safety segment for all periods presented. Amounts for shared general and
administrative operating expenses that were allocated to the Thermal Systems business in prior periods have been re-allocated
to the Company's reportable operating segments.
Included below are sales and operating data for Delphi’s segments for the years ended December 31, 2015, 2014 and
2013, as well as balance sheet data as of December 31, 2015 and 2014.