DELPHI 2011 Annual Report Download - page 73

Table of Contents
estimated cost of investigation and remediation required and the likelihood that, where applicable, other responsible parties will be able to fulfill their legal
obligations and commitments. The process of estimating environmental remediation liabilities is complex and dependent primarily on the nature and extent of
historical information and physical data relating to a contaminated site, the complexity of the site, the uncertainty as to what remediation and technology will
be required, and the outcome of discussions with regulatory agencies and, if applicable, other responsible parties. In future periods, new laws or regulations,
advances in remediation technologies and additional information about the ultimate remediation methodology to be used could significantly change our
estimates. Refer to Note 14. Commitments and Contingencies to the audited consolidated financial statements included herein for additional details. We
cannot ensure that environmental requirements will not change or become more stringent over time or that our eventual environmental costs and liabilities
will not exceed the amount of current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, our results of operations
could be materially affected.
Restructuring
Accruals have been recorded in conjunction with our restructuring actions. These accruals include estimates primarily related to employee termination
costs, contract termination costs and other related exit costs in conjunction with workforce reduction and programs related to the rationalization of
manufacturing and engineering processes. Actual costs may vary from these estimates. These accruals are reviewed on a quarterly basis and changes to
restructuring actions are appropriately recognized when identified.
Pensions
We use actuarial estimated and related actuarial methods to calculate our obligation and expense. We are required to select certain actuarial
assumptions, which are determined based on current market conditions, historical information and consultation with and input from our actuaries and asset
managers. Refer to Note 13. Pension Benefits to the audited consolidated financial statements included herein for additional details. The key factors which
impact our estimates are (1) discount rates; (2) asset return assumptions; and (3) actuarial assumptions such as retirement age and mortality which are
determined as of the current year measurement date. We review our actuarial assumptions on an annual basis and make modifications to the assumptions
based on current rates and trends when appropriate. Experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions
are amortized over the average future service period of employees.
The principal assumptions used to determine the pension expense and the actuarial value of the projected benefit obligation for the U.S. and non-U.S.
pension plans were:
Assumptions used to determine benefit obligations at December 31:
Pension Benefits
U.S. Plans Non-U.S. Plans
2011 2010 2011 2010
Weighted-average discount rate 3.30% 4.10% 5.24% 5.69%
Weighted-average rate of increase in compensation levels N/A N/A 3.66% 3.88%
Assumptions used to determine net expense for years ended December 31:
Pension Benefits
U.S. Plans Non-U.S. Plans
2011 2010 2009 2011 2010 2009
Weighted-average discount rate 4.10% 5.00% 6.16% 5.69% 5.97% 6.22%
Weighted-average rate of increase in compensation levels N/A N/A N/A 3.88% 3.89% 3.95%
Expected long-term rate of return on plan assets N/A N/A 8.25% 6.65% 7.14% 7.81%
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