DELPHI 2015 Annual Report Download - page 42

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We may suffer future asset impairment and other restructuring charges, including write downs of long-lived assets,
goodwill, or intangible assets.
We have taken, are taking, and may take future restructuring actions to realign and resize our production capacity and cost
structure to meet current and projected operational and market requirements. Charges related to these actions or any further
restructuring actions may have a material adverse effect on our results of operations and financial condition. We cannot assure
that any current or future restructuring will be completed as planned or achieve the desired results.
Additionally, from time to time in the past, we have recorded asset impairment losses relating to specific plants and
operations. Generally, we record asset impairment losses when we determine that our estimates of the future undiscounted cash
flows from an operation will not be sufficient to recover the carrying value of that facility's building, fixed assets and
production tooling. For goodwill, we perform a qualitative assessment of whether it is more likely than not that a reporting
unit's value is less than its carrying amount. If the fair value of the reporting unit is less than its carrying amount, we compare
its implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, the
reporting unit would recognize an impairment loss for that excess. We cannot ensure that we will not incur such charges in the
future as changes in economic or operating conditions impacting the estimates and assumptions could result in additional
impairment.
Employee strikes and labor-related disruptions involving us or one or more of our customers or suppliers may
adversely affect our operations.
Our business is labor-intensive and utilizes a number of work councils and other represented employees. A strike or other
form of significant work disruption by our employees would likely have an adverse effect on our ability to operate our
business. A labor dispute involving us or one or more of our customers or suppliers or that could otherwise affect our operations
could reduce our sales and harm our profitability. A labor dispute involving another supplier to our customers that results in a
slowdown or a closure of our customers’ assembly plants where our products are included in the assembled parts or vehicles
could also adversely affect our business and harm our profitability. In addition, our inability or the inability of any of our
customers, our suppliers or our customers’ suppliers to negotiate an extension of a collective bargaining agreement upon its
expiration could reduce our sales and harm our profitability. Significant increases in labor costs as a result of the renegotiation
of collective bargaining agreements could also adversely affect our business and harm our profitability.
We may lose or fail to attract and retain key salaried employees and management personnel.
An important aspect of our competitiveness is our ability to attract and retain key salaried employees and management
personnel. Our ability to do so is influenced by a variety of factors, including the compensation we award and the competitive
market position of our overall compensation package. We may not be as successful as competitors at recruiting, assimilating
and retaining highly skilled personnel. The loss of the services of any member of senior management or a key salaried
employee could have an adverse effect on our business.
We are exposed to foreign currency fluctuations as a result of our substantial global operations, which may affect our
financial results.
We have currency exposures related to buying, selling and financing in currencies other than the local currencies of the
countries in which we operate. Approximately 63% of our net revenue for the year ended December 31, 2015 came from sales
outside the United States, which were primarily invoiced in currencies other than the U.S. dollar, and we expect net revenue
from non-U.S. markets to continue to represent a significant portion of our net revenue. Accordingly, significant changes in
currency exchange rates, particularly the Euro, Chinese Yuan (Renminbi), British Pound and Brazilian Real, could cause
fluctuations in the reported results of our businesses’ operations that could negatively affect our results of operations. Price
increases caused by currency exchange rate fluctuations may make our products less competitive or have an adverse effect on
our margins. Currency exchange rate fluctuations may also disrupt the business of our suppliers by making their purchases of
raw materials more expensive and more difficult to finance.
Historically, we have reduced our exposure by aligning our costs in the same currency as our revenues or, if that is
impracticable, through financial instruments that provide offsets or limits to our exposures, which are opposite to the
underlying transactions. However, any measures that we may implement to reduce the effect of volatile currencies and other
risks of our global operations may not be effective.
In addition, we have significant business in Europe and transact much of this business in the Euro currency, including
sales and purchase contracts. Although not as prevalent currently, concerns over the stability of the Euro currency and the
economic outlook for many European countries, including those that do not use the Euro as their currency, persist. Given the
broad range of possible outcomes, it is difficult to fully assess the implications on our business. Some of the potential outcomes
could significantly impact our operations. In the event of a country redenominating its currency away from the Euro, the
potential impact could be material to operations. We cannot provide assurance that fluctuations in currency exposures will not