DELPHI 2015 Annual Report Download - page 54

Table of Contents
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is
intended to help you understand the business operations and financial condition of the Company for the three year period ended
December 31, 2015. This discussion should be read in conjunction with Item 8. Financial Statements and Supplementary Data.
Our MD&A is presented in seven sections:
• Executive Overview
• Consolidated Results of Operations
• Results of Operations by Segment
• Liquidity and Capital Resources
• Off-Balance Sheet Arrangements and Other Matters
• Significant Accounting Policies and Critical Accounting Estimates
• Recently Issued Accounting Pronouncements
Within the MD&A, “Delphi,” the “Company,” “we,” “us” and “our” refer to Delphi Automotive PLC, a public limited
company which was formed under the laws of Jersey on May 19, 2011, together with its subsidiaries, including Delphi
Automotive LLP, a limited liability partnership incorporated under the laws of England and Wales which was formed on
August 19, 2009 for the purpose of acquiring certain assets and subsidiaries of the former Delphi Corporation (now known as
DPH Holdings Corp. (“DPHH”)), and became a subsidiary of Delphi Automotive PLC in connection with the completion of the
Company’s initial public offering on November 22, 2011. The former Delphi Corporation and, as the context may require, its
subsidiaries and affiliates, are also referred to herein as "Old Delphi.”
As further described in Note 25. Discontinued Operations to the audited consolidated financial statements included
herein, on June 30, 2015 we completed the sale of the Company's wholly owned Thermal Systems business to MAHLE GmbH
("MAHLE") for net cash proceeds of approximately $660 million. During the third quarter of 2015 we completed the sale of
our interest in the Korea Delphi Automotive Systems Corporation ("KDAC") joint venture to a separate buyer for net cash
proceeds of $70 million. We have also entered into a separate agreement for the sale of our interest in our Shanghai Delphi
Automotive Air Conditioning ("SDAAC") joint venture, which is expected to close in the first half of 2016, subject to
customary regulatory and other approvals. These joint ventures were previously reported within the Thermal Systems segment.
The divestiture of the Thermal Systems business positions us with a strategically focused product portfolio in high-growth
spaces to meet consumer preferences for products that address the industry mega-trends of Safe, Green and Connected.
Proceeds from the sale were used to fund future growth initiatives, including acquisitions, as well as share repurchases. As the
disposal of the Thermal Systems business represents a strategic shift that will have a major effect on the Company's operations
and financial results, the assets and liabilities, operating results, and operating and investing cash flows for the previously
reported Thermal Systems segment are presented as discontinued operations separate from the Company’s continuing
operations for all periods presented. This Management’s Discussion and Analysis reflects the results of continuing operations,
unless otherwise noted.
Executive Overview
Our Business
We are a leading global vehicle components manufacturer and provide electrical and electronic, powertrain and active
safety technology solutions to the global automotive and commercial vehicle markets. We are one of the largest vehicle
component manufacturers, and our customers include all 25 of the largest automotive original equipment manufacturers
(“OEMs”) in the world.
Business Strategy
We believe the Company is well-positioned for growth from increasing global vehicle production volumes, increased
demand for our Safe, Green and Connected products which are being added to vehicle content, and new business wins with
existing and new customers. We have successfully created a competitive cost structure, continued to align our product offerings
with the high-growth industry mega-trends and re-aligned our manufacturing footprint into an efficient, low-cost regional
service model, allowing us to increase our profit margins.
Our achievements in 2015 included the following:
• Generating gross business bookings of $26.2 billion, based upon expected volumes and pricing;
• Generating $1.7 billion of cash from continuing operations and net income of $1.5 billion;