DELPHI 2011 Annual Report Download - page 147

Table of Contents
acquired companies, Delphi utilized 2010 EBITDA and 2011 EBITDA multiples of 4.5x-6.25x to value the Class E-1 membership interests and VCP awards
in periods prior to the completion of the initial public offering.
In addition to the guideline public company and guideline merged or acquired company approaches, the Company considered the trading price of its
Class B membership interests by qualified institutional investors in determining the enterprise value of the Company in periods prior to the completion of the
initial public offering.
Income Approach: The income approach derives the value of a company based on assumptions about the company's future stream of cash flows. Delphi
provided its independent valuation specialist with projected net sales, expenses and cash flows for the years ended December 31, 2010, 2011 and 2012 for the
Class E-1 awards and for the years ended December 31, 2010, 2011, 2012 and 2013 for the VCP awards. These financial projections represent management's
best estimate at the time of the contemporaneous valuations. Discount rates used to determine the present value of future cash flows were based on the
weighted average cost of capital which ranged from 11.6%-13.7%.
Predecessor Plans
At the Acquisition Date, all outstanding common stock of the Predecessor, including all stock options exercisable, were cancelled. Prior to the
Acquisition Date, the Predecessor's share-based compensation programs included stock options, restricted stock units, and stock appreciation rights.
22. SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
Basis of Presentation
In May 2011, Delphi Corporation issued the Senior Notes in a transaction exempt from registration under Rule 144A and Regulation S of the Securities
Act. Refer to Note 12. Debt for more information. All obligations under the Senior Notes are borrowed by Delphi Corporation ("Subsidiary Issuer") and are
fully and unconditionally guaranteed by its direct and indirect parent companies and by certain of Delphi Automotive PLC's direct and indirect U.S.
subsidiaries (the "Parent Companies") on a joint and several basis, subject to customary release provisions. Subsidiaries not subject to the guarantee ("Non-
Guarantor Subsidiaries") consist primarily of the non-U.S. subsidiaries of the Company.
In lieu of providing separate audited financial statements for the Guarantors, the Company has included the accompanying condensed consolidating
financial statements. These condensed consolidating financial statements are presented on the equity method. Under this method, the investments in
subsidiaries are recorded at cost and adjusted for the parent's share of the subsidiary's cumulative results of operations, capital contributions and distributions
and other equity changes. The Guarantor subsidiaries are combined in the condensed consolidating financial statements. The principal elimination entries are
to eliminate the investments in subsidiaries and intercompany balances and transactions.
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