DELPHI 2012 Annual Report Download - page 32

10
Our Global Operations
Information concerning principal geographic areas for our continuing operations is set forth below. Net sales data reflects
the manufacturing location for the years ended December 31, 2012, 2011 and 2010. Net property data is as of December 31,
2012, 2011 and 2010.
Year ended
December 31, 2012 Year ended December 31, 2011 Year ended December 31, 2010
(in millions)
Net Sales Net
Property(1) Net Sales Net Property(1) Net Sales Net Property(1)
United States....................................... $ 5,193 $ 592 $ 4,993 $ 506 $ 4,529 $ 417
Other North America.......................... 151 139 118 129 76 134
Europe, Middle East & Africa(2)........ 6,364 1,455 7,264 1,107 5,892 1,045
Asia Pacific......................................... 2,827 524 2,464 422 2,177 325
South America .................................... 984 150 1,202 151 1,143 146
Total.................................................. $ 15,519 $ 2,860 $ 16,041 $ 2,315 $ 13,817 $ 2,067
(1) Net property data represents property, plant and equipment, net of accumulated depreciation.
(2) Includes our country of domicile, Jersey, and the country of our principal executive offices, the United Kingdom. We had no sales in Jersey in any
period. We had net sales of $726 million, $866 million, and $690 million in the United Kingdom for the years ended December 31, 2012, 2011 and
2010, respectively. We had net property in the United Kingdom of $191 million, $138 million, and $137 million as of December 31, 2012, 2011 and
2010, respectively.
Research, Development and Intellectual Property
We maintain technical engineering centers in major regions of the world to develop and provide advanced products,
processes and manufacturing support for all of our manufacturing sites, and to provide our customers with local engineering
capabilities and design development on a global basis. As of December 31, 2012, we employed over 18,000 scientists,
engineers and technicians around the world. Total expenditures for research and development activities, which include
engineering, were approximately $1.2 billion, $1.2 billion, and $1.0 billion for the years ended December 31, 2012, 2011 and
2010, respectively. Each year we share some engineering expenses with OEMs and government agencies. While this amount
varies from year-to-year, it is generally in the range of 20% to 25% of engineering expenses.
We believe that our engineering and technical expertise, together with our emphasis on continuing research and
development, allow us to use the latest technologies, materials and processes to solve problems for our customers and to bring
new, innovative products to market. We believe that continued engineering activities are critical to maintaining our pipeline of
technologically advanced products. Given our strong financial discipline, we seek to effectively manage fixed costs and
efficiently rationalize capital spending by critically evaluating the profit potential of new and existing customer programs,
including investment in innovation and technology. We maintain our engineering activities around our focused product portfolio
and allocate our capital and resources to those products with distinctive technologies. We expect expenditures for engineering
activities to be approximately $1.2 billion for the year ended December 31, 2013.
We maintain a large portfolio of patents in the operation of our business. While no individual patent or group of patents,
taken alone, is considered material to our business, taken in the aggregate, these patents provide meaningful protection for our
products and technical innovations. Similarly, while our trademarks (particularly those protecting the Delphi brand) are
important to identify our position in the industry, we do not believe that any of these are individually material to our business.
We are actively pursuing marketing opportunities to commercialize and license our technology to both automotive and non-
automotive industries and we have selectively taken licenses from others to support our business interests. These activities
foster optimization of intellectual property rights.
Materials
We procure our raw materials from a variety of suppliers around the world. Generally, we seek to obtain materials in the
region in which our products are manufactured in order to minimize transportation and other costs. The most significant raw
materials we use to manufacture our products include aluminum, copper and resins. As of December 31, 2012, we have not
experienced any significant shortages of raw materials and normally do not carry inventories of such raw materials in excess of
those reasonably required to meet our production and shipping schedules.
Commodity cost volatility, most notably related to copper, aluminum, petroleum-based resin products and fuel, is a
challenge for us and our industry. We are continually seeking to manage these and other material-related cost pressures using a
combination of strategies, including working with our suppliers to mitigate costs, seeking alternative product designs and