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1
2014 Annual Report
The future. Now.

Table of contents

  • Page 1
    2014 Annual Report The future. Now. 1

  • Page 2
    2

  • Page 3
    ... to happen. We create it. For us, the future is here and now. Equipped for accelerated change, we design and deliver for tomorrow's driver today. Our people create value through innovating and collaborating in excellence. We remain focused on our industry's core needs: Safe, Green and Connected. 3

  • Page 4
    The future. Safe. Preventing accidents, protecting people. 4

  • Page 5
    ...help vehicle manufacturers achieve higher NCAP and IIHS safety ratings at a competitive cost, which creates a significant market advantage. We equip cars with future technologies to help protect against future collisions. We envision a future of automated driving and we will get there by developing...

  • Page 6
    .... Green. More efficient, fewer emissions. "Working at Delphi isn't just a job, it's an opportunity to make a real difference. Our award-winning GDi system helps customers reduce emissions all over the world. The future of sustainable automotive technology is in our hands and that's pretty exciting...

  • Page 7
    ...ï¬,ex with the market, regardless of fuel price ï¬,uctuation. With a comprehensive portfolio of gasoline, diesel and vehicle electrification solutions, we help our customers meet new emissions reduction standards without compromising vehicle power - no matter the fuel choice. So we can confidently...

  • Page 8
    The future. Connected. Smarter vehicles, distraction-free performance. Communication is vital on the road. Everything drivers do - from braking to signaling turns - sends a message to others. And now, our cars can talk to each other as well. At Delphi, we've made that leap into the future today. ...

  • Page 9
    "Each and every team member is focused on Excellence. Their relentless pursuit of exceeding customer expectations is at the core of everything they do. This diligence results in consistent customer recognition." - Kaiyuan Wu managing director, Electrical/ Electronic Architecture China 9

  • Page 10
    ..., Delphi is focused in the best growth markets where we are able to provide service to our customers wherever they may build. Specific to our product pipeline, we invested more than $1.7 billion in engineering and development, completed two acquisitions in the high-growth connectors business, and...

  • Page 11
    ... future challenges and achieve even greater success in the long term. As for me and my time serving as your CEO, it has been a privilege and an honor. I leave here never having had a bad day. It was a journey and every step was worth taking. The company is in capable hands with the new leadership...

  • Page 12
    ... leadership created a legacy of focus and determination that will serve us well in the future. We thank him for his commitment and his many years of service to our company. Our 2014 performance gives us confidence in our plan and our approach to business. Delphi generated gross business bookings...

  • Page 13
    ...by Operating Activities Capital Expenditures 2014 17,023 1,847 1,351 4.48 2,135 855 2013 16,463 1,684 1,212 3.89 1,750 682 2012 15,519 1,476 1,077 3.33 1,478 705 2014 Revenue by Segment (in US$ Millions)1 Electrical/Electronic Architecture 8,274 Powertrain Systems Electronics & Safety Thermal...

  • Page 14
    ... Manufacturing sites Countries Major technical centers Company Diversification by region Lines of software code shipped daily 2014 sales 34% North America Europe 2014 revenue 38% 23% 5% South America Asia Pacific Annual engineering investment Parts shipped daily 2014 bookings 31% North...

  • Page 15
    ...engine management systems including fuel handling, fuel injection, combustion, electronic controls, test and validation capabilities, aftermarket, and original equipment services. We design solutions to optimize powertrain power and performance while helping our customers meet new emissions and fuel...

  • Page 16
    Designing and delivering tomorrow's technology. Innovation. Now. Delphi's 360-degree sensing systems continuously survey the vehicle's surroundings, analyzing conditions to inform safe maneuvering. Here, the vehicle detects safe activity and identifies a jaywalking pedestrian with his bike as a ...

  • Page 17
    ... to a fuel injector manufactured using a unique laser-drilling process. We are helping vehicle manufacturers meet current and future regulations with our Diesel Common Rail system, underlining a long-standing heritage of innovation. We are personalizing the car driving experience through hassle-free...

  • Page 18
    ... the same with Delphi and our customers. Together, we move vehicles and drivers around the world. As leaders in the global automotive industry, we appreciate the importance of an efficient vehicle platform strategy. Sharing aspects of the design, engineering and production process reduces costs and...

  • Page 19
    ... supplier is a cornerstone of our business. Vehicle manufacturers choose Delphi for our global scale plus the ï¬,exibility to adapt to regional variations, delivering state-of-the-art, fully-engineered solutions. It all comes back to our core vision - to collaborate globally and create solutions...

  • Page 20
    ... 70 different part families, with production runs from six pieces to 3,000; all requiring zero change over time. Complexity management also relates to the precision required by our customers. Our fuel injector manufacturing equipment in Romania, Mexico and China, runs 24 hours a day, 7 days a week...

  • Page 21
    ... Body Security Collision Mitigation Crash Sensors Intelligent View Cameras Passive Safety-Occupant Classification Systems RACam Green Air Management Aluminum Wire Diesel Common Rail Electronic Controls Gasoline Fuel Management Valvetrain Connected Connection Systems Displays Electrical Centers...

  • Page 22
    ... the priority on the personal safety of our employees; to the focus on global corporate citizenship; to the development of new innovations to help make the planet a safe environment. Creating the future. Our products make the world a better place. We have aligned our business with the megatrends of...

  • Page 23
    ... date as reported on the New York Stock Exchange). The number of the registrant's ordinary shares outstanding, $0.01 par value per share as of January 30, 2015, was 290,279,017. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive Proxy Statement related to the 2014 Annual...

  • Page 24
    ... Properties Legal Proceedings Mine Safety Disclosure Part II Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative...

  • Page 25
    ... to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company's operations and business environment, which may cause the actual results of the Company to be materially different from any future results...

  • Page 26
    ...engine management systems including fuel handling, fuel injection, combustion, electronic controls, test and validation capabilities, aftermarket, and original equipment services. We design solutions to optimize powertrain power and performance while helping our customers meet new emissions and fuel...

  • Page 27
    ... by 17% in South America in 2014 as compared to 2013. Demand for automotive parts in the OEM market is generally a function of the number of new vehicles produced, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence...

  • Page 28
    ... emissions. OEMs continue to focus on improving fuel efficiency and reducing emissions in order to meet increasingly stringent regulatory requirements in various markets. On a worldwide basis, the relevant authorities in the European Union, the United States, China, India, Japan, Brazil, South Korea...

  • Page 29
    ... global scale and strong design, engineering and manufacturing capabilities, are best positioned to benefit from this trend. OEMs are also increasingly looking to their suppliers to simplify vehicle design and assembly processes to reduce costs. As a result, suppliers that sell vehicle components...

  • Page 30
    ... of delivery, product design capability, technical expertise and development capability, new product innovation, financial viability, application of lean principles, operational flexibility, customer service and overall management. In addition, our customers generally require that we demonstrate...

  • Page 31
    ... of OEM production during such future periods, customer agreements including applicable terms and conditions do not necessarily constitute firm orders. Firm orders are generally limited to specific and authorized customer purchase order releases placed with our manufacturing and distribution centers...

  • Page 32
    ... net property in Asia Pacific are primarily attributable to China. 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...

  • Page 33
    ... 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 material specifications, combining our purchase requirements with our customers and/or suppliers, changing...

  • Page 34
    ... Systems effective February 2014. He previously was president of Delphi Connection Systems, a product business unit (PBU) of Delphi E/EA, from October 2012. He joined Delphi in 2012 after the company acquired FCI's Motorized Vehicles Division, where he had been president and general manager...

  • Page 35
    ... of Delphi and president of Delphi Electronics and Safety (E&S). He was named to his current position in February 2012 and was most recently vice president of the Infotainment & Driver Interface PBU for Delphi E&S since August 2009. He was previously general director of the Controls & Security PBU...

  • Page 36
    ... of operations or financial condition and cause our actual results to differ materially from those expressed in forward-looking statements made by the Company. Also refer to the Cautionary Statement Regarding Forward-Looking Information in this annual report. Risks Related to Business Environment...

  • Page 37
    ... future growth is dependent on our making the right investments at the right time to support product development and manufacturing capacity in areas where we can support our customer base. We have identified the Asia Pacific region, and more specifically China, as a key market likely to experience...

  • Page 38
    ... component manufacturers in the automotive industry, ship products to our customers' vehicle assembly plants throughout the world so they are delivered on a "just-in-time" basis in order to maintain low inventory levels. Our suppliers also use a similar method. However, this "just-in-time" method...

  • Page 39
    ... in their financial or business condition. If our third-party manufacturers fail to deliver products, parts and components of sufficient quality on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our commercial reputation could...

  • Page 40
    ... amounts for each year of service. Our primary funded non-U.S. plans are located in Mexico and the United Kingdom and were underfunded by $466 million as of December 31, 2014. The funding requirements of these benefit plans, and the related expense reflected in our financial statements, are affected...

  • Page 41
    ... in Asia Pacific, Eastern and Western Europe, South America and Northern Africa. We also purchase raw materials and other supplies from many different countries around the world. For the year ended December 31, 2014, approximately 67% of our net revenue came from sales outside the United States...

  • Page 42
    ... control over financial reporting in connection with the integration of an acquired company. If we fail to assimilate or integrate acquired companies successfully, our business, reputation and operating results could be materially impacted. Likewise, our failure to integrate and manage acquired...

  • Page 43
    ... a material adverse effect on our business. OEMs also require their suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. Depending on the terms under which we supply products to a vehicle manufacturer, a vehicle...

  • Page 44
    ...using December 31, 2014 foreign currency rates). While we believe our reserves are adequate, the final amounts required to resolve these matters could differ materially from our recorded estimates and our results of operations could be materially affected. For further information regarding our legal...

  • Page 45
    ...20% to 22%. For the year ended December 31, 2014, our effective tax rate was 17%. Taxing authorities could challenge our historical and future tax positions. The amount of tax we pay is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. We have taken and will...

  • Page 46
    ... of our major manufacturing sites by the operating segment that uses such facilities: Europe, Middle East & Africa North America Asia Pacific South America Total Electrical/Electronic Architecture...Powertrain Systems...Electronics and Safety...Thermal Systems...Total ... 29 4 3 3 39...

  • Page 47
    ... required to resolve these matters could differ materially from the Company's recorded estimates and Delphi's results of operations could be materially affected. Other Matters In 2014, Delphi identified certain payments, immaterial in amount, made by certain manufacturing facility employees in China...

  • Page 48
    ... listed and began trading on the New York Stock Exchange ("NYSE") under the symbol "DLPH." The following table sets forth the high and low sales price per share of our ordinary shares, as reported by NYSE, for 2013 and 2014. As of January 30, 2015, there were approximately 4 shareholders of record...

  • Page 49
    ... Automotive Supplier Peer Group - Russell 3000 Auto Parts Index, including American Axle & Manufacturing, BorgWarner Inc., Cooper Tire & Rubber Company, Dana Holding Corp., Delphi Automotive PLC, Dorman Products Inc., Federal-Mogul Corp., Ford Motor Co., Fuel Systems Solutions Inc., General Motors...

  • Page 50
    ... to the Company's Proxy Statement under the heading "Equity Compensation Plan Information." Repurchase of Equity Securities A summary of our ordinary shares repurchased during the quarter ended December 31, 2014, is shown below: Approximate Dollar Value of Shares that May Yet be Purchased Under the...

  • Page 51
    ...Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included elsewhere in this Annual Report. The financial information presented may not be indicative of our future performance. Year Ended December...

  • Page 52
    (1) On October 26, 2012, we completed the acquisition of the Motorized Vehicles Division ("MVL"). MVL is a leading global manufacturer of automotive connection systems with a focus on high-value, leading technology applications. Given the timing of the acquisition it is not fully reflected in our ...

  • Page 53
    ... thermal 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...

  • Page 54
    ... be successful. Collaboration with customers in our 15 major technical centers around the world helps us develop innovative product solutions designed to meet their needs. As more OEMs design vehicles for global platforms, where the same vehicle architecture is shared among different regions, we are...

  • Page 55
    ... are benefiting from the substantial increase in vehicle content and electrification requiring a complex and reliable electrical architecture and systems to operate, such as hybrid power electronics, automated driver assistance technologies, electrical vehicle monitoring, active safety systems, lane...

  • Page 56
    ..., engineers and technicians focused on developing leading product solutions for our key markets, located at 15 major technical centers in Brazil, China, France, Germany, India, Luxembourg, Mexico, Poland, South Korea, the United Kingdom and the United States. We invest approximately $1.7 billion...

  • Page 57
    ... North America and Asia Pacific, offset by OEM production volume reductions in Europe. Delphi typically experiences fluctuations in revenue due to changes in OEM production schedules, vehicle sales mix and the net of new and lost business (which we refer to collectively as volume), increased prices...

  • Page 58
    ... requirements with customers and/or other suppliers, using alternate suppliers or product designs, negotiating cost reductions and/or commodity cost contract escalation clauses into our vehicle manufacturer supply contracts, and hedging. 2014 versus 2013 The results of operations for the years ended...

  • Page 59
    Cost of Sales Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency exchange rates, product engineering, design and development expenses, depreciation and amortization, warranty costs and other operating expenses. Gross margin is ...

  • Page 60
    ... with the current automotive production levels in Europe and South America. These charges included the recognition of employee-related and other costs of $35 million during the year ended December 31, 2014 for the initiation of a new restructuring program at a European manufacturing site within the...

  • Page 61
    ... the effective tax rate for the year ended December 31, 2013 was impacted by a tax benefit of approximately $22 million related to the 2012 research and development credit in addition to the 2013 research and development credit. On July 17, 2013, the United Kingdom Finance Bill of 2013 became law as...

  • Page 62
    ...body controls and security systems, displays, mechatronics, passive and active safety electronics and electric and hybrid electric vehicle power electronics, as well as advanced development of software. Thermal Systems, which includes heating, ventilating and air conditioning systems, components for...

  • Page 63
    Electrical/ Electronic Architecture Powertrain Systems Electronics and Safety Thermal Systems Eliminations and Other Total (in millions) For the Year Ended December 31, 2013: Adjusted operating income ...$ Restructuring ...Other acquisition & portfolio project costs...Operating income ...$ ...

  • Page 64
    ... Year Ended December 31, Volume, net of contractual price reductions Variance Due To: 2014 2013 (in millions) Favorable/ (unfavorable) Operational performance (in millions) Other Total Electrical/Electronic Architecture...$ 1,080 Powertrain Systems...533 Electronics and Safety...352 Thermal...

  • Page 65
    ... above. Cost of Sales Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency exchange rates, product engineering, design and development expenses, depreciation and amortization, warranty costs and other operating expenses. Gross...

  • Page 66
    ... lower OEM production volumes in Europe and continued economic uncertainties, and include workforce reductions, as well as plant closures. Refer to Note 10. Restructuring to the audited consolidated financial statements included herein for additional information. Interest Expense Year Ended December...

  • Page 67
    ... the effective tax rate for the year ended December 31, 2013 was impacted by a tax benefit of approximately $22 million related to the 2012 research and development credit in addition to the 2013 research and development credit. On July 17, 2013, the United Kingdom Finance Bill of 2013 became law as...

  • Page 68
    ...: Electrical/ Electronic Architecture Powertrain Systems Electronics and Safety Thermal Systems Eliminations and Other Total (in millions) For the Year Ended December 31, 2013: Adjusted operating income ...$ Restructuring ...Other acquisition & portfolio project costs...Operating income...

  • Page 69
    ... December 31, 2013 2012 Electrical/Electronic Architecture...Powertrain Systems ...Electronics and Safety ...Thermal Systems ...Eliminations and Other ...Total... 18.3% 18.7% 17.3% 8.0% -% 17.6% 17.0% 19.2% 16.3% 10.2% -% 17.1% Adjusted Operating Income by Segment Year Ended December 31, Volume...

  • Page 70
    ... to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and to the terms of the Credit Agreement. While a substantial portion of our operating income is generated by our non...

  • Page 71
    ...certain tax benefits, which are subject to certain post-closing adjustments. The acquisition was accounted for as a business combination, with the operating results of Unwired included within the Company's Electrical/ Electronic Architecture segment from the date of acquisition. The Company acquired...

  • Page 72
    ... basis using information available, in the fourth quarter of 2012. The purchase price and related allocation were finalized in the three months ended March 31, 2013. The operating results of MVL are reported within the Electrical/Electronic Architecture segment from the date of acquisition...

  • Page 73
    ... indirect parent companies. All guarantees of Delphi Corporation's subsidiaries and all then-existing security interests were released during the first quarter of 2014 when the Company satisfied certain credit rating-related and other conditions under the terms of the Credit Agreement. Such security...

  • Page 74
    ... Federal agencies in the year ended December 31, 2014 for work performed. These programs supplement our internal research and development funds and directly support our product focus of Safe, Green and Connected. We continue to pursue many technology development programs by bidding on competitively...

  • Page 75
    ... resulting from financial contracts and commitments as of December 31, 2014. We have not included information on our recurring purchases of materials for use in our manufacturing operations. These amounts are generally consistent from year to year, closely reflect our levels of production, and are...

  • Page 76
    ... presented were: Year Ended December 31, 2014 2013 (in millions) 2012 Electrical/Electronic Architecture...Powertrain Systems...Electronics and Safety...Thermal Systems...Eliminations and Other ...Total capital expenditures...North America...Europe, Middle East & Africa...Asia Pacific ...South...

  • Page 77
    ...which generally provide benefits based on negotiated amounts for each year of service. Our primary non-U.S. plans are located in France, Germany, Mexico, Portugal and the United Kingdom ("U.K."). The U.K. and certain Mexican plans are funded. In addition, we have defined benefit plans in South Korea...

  • Page 78
    ...date of the acquisition and is recorded as part of the purchase price. This estimate is updated in future periods and any changes in the estimate, which are not considered an adjustment to the purchase price, are recorded in our consolidated statements of operations. We use all available information...

  • Page 79
    .... Actual costs incurred could differ from the amounts estimated, requiring adjustments to these reserves in future periods. It is possible that changes in our assumptions or future product recall issues could materially affect our financial position, results of operations or cash flows. Legal and...

  • Page 80
    ... years ended December 31: 2.50% N/A 3.00% N/A 3.67% 3.65% 4.58% 3.85% Pension Benefits U.S. Plans 2014 2013 2012 2014 Non-U.S. Plans 2013 2012 Weighted-average discount rate ...Weighted-average rate of increase in compensation levels...Weighted-average expected long-term rate of return on plan...

  • Page 81
    ... and review of appraisals. The key factors which impact our estimates are (1) future production estimates; (2) customer preferences and decisions; (3) product pricing; (4) manufacturing and material cost estimates; and (5) product life / business retention. Any differences in actual results from the...

  • Page 82
    ... events or otherwise, could have a material impact on our financial condition and results of operations. We calculate our current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years...

  • Page 83
    actual fair values different from previously estimated fair values, which could materially impact the Company's future results of operations and financial condition. We expensed the estimated fair value of the Value Creation Plan (the "VCP"), a long-term incentive plan for key employees (as defined ...

  • Page 84
    ... used in the manufacturing of automotive components. The net fair value of our contracts was a liability of approximately $27 million and approximately $8 million at December 31, 2014 and 2013, respectively. If the price of the commodities that are being hedged by our commodity swaps/average rate...

  • Page 85
    ... relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Delphi Automotive PLC's internal control...

  • Page 86
    ... the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Delphi Automotive PLC as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the three years in...

  • Page 87
    DELPHI AUTOMOTIVE PLC CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2014 2013 2012 (in millions, except per share amounts) Net sales...Operating expenses: Cost of sales ...Selling, general and administrative ...Amortization...Restructuring (Note 10)...Total operating expenses ......

  • Page 88
    ...CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2014 2013 (in millions) 2012 Net income...$ Other comprehensive (loss) income: Currency translation adjustments ...Net change in unrecognized (loss) gain on derivative instruments, net of tax (Note 17) ...Employee benefit plans...

  • Page 89
    ... AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt (Note 11)...$ Accounts payable ...Accrued liabilities (Note 8)...Total current liabilities...Long-term liabilities: Long-term debt (Note 11) ...Pension benefit obligations ...Other long-term liabilities (Note 8) ...Total long-term...

  • Page 90
    ...of issuance costs ...Dividend payments of consolidated affiliates to minority shareholders ...Repurchase of ordinary shares...Distribution of cash dividends...Taxes withheld and paid on employees' restricted share awards...Net cash used in financing activities ...Effect of exchange rate fluctuations...

  • Page 91
    ... consolidated affiliates to minority shareholders ...Taxes withheld on employees' restricted share award vestings...Repurchase of ordinary shares...Share based compensation...Assets purchased from non-controlling interests in excess of book value ...Balance at December 31, 2013 ...Net income...Other...

  • Page 92
    ... statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Nature of operations-Delphi is a leading global vehicle components manufacturer and provides electrical and electronic, powertrain, safety and thermal technology...

  • Page 93
    ... as short-term, highly liquid investments with original maturities of three months or less. Marketable securities-Marketable securities with maturities of three months or less are classified as cash and cash equivalents for financial statement purposes. Available-for-sale securities are recorded in...

  • Page 94
    ... their estimated useful lives. We have definite-lived intangible assets related to patents and developed technology, customer relationships, trade names and in-process research and development. We do not amortize indefinite-lived in-process research and development, but test for impairment annually...

  • Page 95
    ...included in the consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012, respectively. Restructuring-Delphi continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment...

  • Page 96
    ... qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria. Exposure to fluctuations in currency exchange rates, interest rates and certain commodity prices are managed by entering into...

  • Page 97
    ... at the date of initial application. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of...

  • Page 98
    ... are stated at the lower of cost, determined on a first-in, first-out basis, or market, including direct material costs and direct and indirect manufacturing costs. A summary of inventories is shown below: December 31, 2014 December 31, 2013 (in millions) Productive material...$ Work-in-process...

  • Page 99
    ... IN AFFILIATES As part of Delphi's operations, it has investments in seven non-consolidated affiliates accounted for under the equity method of accounting. These affiliates are not publicly traded companies and are located primarily in South Korea, China and Mexico. Delphi's ownership percentages...

  • Page 100
    ... year ended December 31, 2013, Delphi did not incur impairment charges related to long-lived assets held for use. For the year ended December 31, 2012, Delphi recorded $15 million of impairment charges to cost of sales related to long-lived assets held for use in its Electronics and Safety segment...

  • Page 101
    ...roll-forward of the carrying amount of goodwill, by operating segment, for the years ended December 31, 2014 and 2013 is presented below: Electrical/ Electronic Architecture Powertrain Systems (in millions) Total Balance at January 1, 2013 ...$ Foreign currency translation and other ...Balance at...

  • Page 102
    .... Delphi has recognized its best estimate for its total aggregate warranty reserves, including product recall costs, across all of its operating segments as of December 31, 2014. The estimated reasonably possible amount to ultimately resolve all matters are not materially different from the recorded...

  • Page 103
    ... summarizes the restructuring charges recorded for the years ended December 31, 2014, 2013 and 2012 by operating segment: Year Ended December 31, 2014 2013 (in millions) 2012 Electrical/Electronic Architecture...$ Powertrain Systems...Electronics and Safety...Thermal Systems...Total...$ 56 55 28...

  • Page 104
    ... liability for the years ended December 31, 2014 and 2013: Employee Termination Benefits Liability Other Exit Costs Liability (in millions) Total Accrual balance at January 1, 2013...Provision for estimated expenses incurred during the year ...Payments made during the year ...Foreign currency and...

  • Page 105
    ... $2.4 billion. Under the 2012 Credit Agreement, the Company increased the Revolving Credit Facility to $1.3 billion and the Tranche A Term Loan to $574 million and used the incremental proceeds to pay a portion of the cost of acquiring MVL. On March 1, 2013, following the unsecured note issuance in...

  • Page 106
    ... indirect parent companies. All guarantees of Delphi Corporation's subsidiaries and all then-existing security interests were released during the first quarter of 2014 when the Company satisfied certain credit rating-related and other conditions under the terms of the Credit Agreement. Such security...

  • Page 107
    ...million of issuance costs in connection with the 2014 Senior Notes. Interest is payable semi-annually on March 15 and September 15 of each year to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date. Although the specific terms of each...

  • Page 108
    ...2013. Year Ended December 31, 2014 (in millions) 2013 Benefit obligation at beginning of year ...$ Interest cost ...Actuarial loss (gain) ...Benefits paid...Benefit obligation at end of year ...Change in plan assets: Fair value of plan assets at beginning of year ...Delphi contributions ...Benefits...

  • Page 109
    ... during 2014 and 2013. Year Ended December 31, 2014 (in millions) 2013 Benefit obligation at beginning of year ...$ Service cost ...Interest cost ...Actuarial loss...Benefits paid...Impact of curtailments...Exchange rate movements and other...Benefit obligation at end of year ...Change in plan...

  • Page 110
    ...years ended December 31: 2.50% N/A 3.00% N/A 3.67% 3.65% 4.58% 3.85% Pension Benefits U.S. Plans 2014 2013 2012 2014 Non-U.S. Plans 2013 2012 Weighted-average discount rate ...Weighted-average rate of increase in compensation levels ...Weighted-average expected long-term rate of return on plan...

  • Page 111
    ... and benefit payments of approximately $90 million in 2015. Delphi sponsors defined contribution plans for certain hourly and salaried employees. Expense related to the contributions for these plans was $55 million, $49 million, and $48 million for the years ended December 31, 2014, 2013 and...

  • Page 112
    ... the indirect quoted market prices on regulated financial exchanges of the underlying investments included in the fund. Real estate-The fair value of real estate properties is estimated using an annual appraisal provided by the administrator of the property investment. Management believes this is an...

  • Page 113
    ... Fund Hedge Funds (in millions) Insurance Contracts Beginning balance at December 31, 2012...$ Actual return on plan assets: Relating to assets still held at the reporting date ...Purchases, sales and settlements ...Ending balance at December 31, 2013 ...$ Actual return on plan assets: Relating...

  • Page 114
    ...these matters could differ materially from the Company's recorded estimates and Delphi's results of operations could be materially affected. Environmental Matters Delphi is subject to the requirements of U.S. federal, state, local and non-U.S. environmental and safety and health laws and regulations...

  • Page 115
    ...63) $ 256 $ 212 The current income tax payable was reduced by $9 million, $1 million and $0 million in the years ended December 31, 2014, 2013 and 2012, respectively, for excess tax deductions attributable to stock-based compensation. The related income tax benefits are recorded as increases to...

  • Page 116
    ... the effective tax rate for the year ended December 31, 2013 was impacted by a tax benefit of approximately $22 million related to the 2012 research and development credit in addition to the 2013 research and development credit. On July 17, 2013, the United Kingdom Finance Bill of 2013 became law as...

  • Page 117
    ...relate to France, Luxembourg, and Spain. The NOL carryforwards have expiration dates ranging from one year to an indefinite period. The NOL carryforwards available for use on tax returns are $723 million as of December 31, 2014, which include approximately $4 million related to windfall tax benefits...

  • Page 118
    ... the world. Taxing jurisdictions significant to Delphi include the China, Brazil, France, Germany, Mexico, Poland, the U.S. and the U.K. Open tax years related to these taxing jurisdictions remain subject to examination and could result in additional tax liabilities. In general, the Company...

  • Page 119
    ...significantly in future periods, by increasing our effective tax rate to approximately 20% to 22%. For the year ended December 31, 2014, our effective tax rate was 17%. Although the outcome currently remains uncertain, the Company continues to maintain its position that neither Delphi Automotive LLP...

  • Page 120
    ...$166 million of share repurchases remained available under the January 2014 share repurchase program. During the period from January 1, 2015 to February 5, 2015, the Company repurchased an additional $104 million worth of shares pursuant to a trading plan with set trading instructions established by...

  • Page 121
    ... addition, in January 2015, the Board of Directors declared a regular quarterly cash dividend of $0.25 per ordinary share, payable on February 27, 2015 to shareholders of record at the close of business on February 18, 2015. Other Prior to the completion of the initial public offering on November 22...

  • Page 122
    ... $33 million) ...Reclassification to income (net tax effect of $1 million, $5 million and $0 million)...Balance at end of year...Pension and postretirement plans: Balance at beginning of year...$ Other comprehensive income before reclassifications (net tax effect of $24 million, $7 million and $57...

  • Page 123
    ... 12. Pension Benefits for additional details). 17. DERIVATIVES AND HEDGING ACTIVITIES Delphi is exposed to market risk, such as fluctuations in foreign currency exchange rates, commodity prices and changes in interest rates, which may result in cash flow risks. To manage the volatility relating to...

  • Page 124
    ..., during the year ended December 31, 2014, Delphi entered into and settled treasury rate lock agreements which were designated as cash flow hedges in anticipation of issuing the 2014 Senior Notes, as further discussed in Note 11. Debt. The impacts of these agreements and the related amount of...

  • Page 125
    ...related to certain contracts. The fair value of Delphi's derivative financial instruments was in a net liability position as of both December 31, 2014 and December 31, 2013. The pre-tax effect of derivative financial instruments in the consolidated statement of operations and consolidated statement...

  • Page 126
    ... its derivative contracts using an income approach based on valuation techniques to convert future amounts to a single, discounted amount. Estimates of the fair value of foreign currency and commodity derivative instruments are determined using exchange traded prices and rates. Delphi also considers...

  • Page 127
    ... is in a net derivative liability position, estimates of peer companies' CDS rates are applied to the net derivative liability position. In certain instances where market data is not available, Delphi uses management judgment to develop assumptions that are used to determine fair value. This could...

  • Page 128
    ... cost of sales during the year ended December 31, 2012 related to long-lived assets held for use in conjunction with a European restructuring program implemented in that period. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate...

  • Page 129
    ... statements of operations from the date of acquisition within the Electrical/Electronic Architecture segment. The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the fourth quarter of 2014...

  • Page 130
    ... statements of operations from the date of acquisition within the Electrical/Electronic Architecture segment. The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the fourth quarter of 2014...

  • Page 131
    ... not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements were presented. Sale of Italian Thermal Special Application Business On April 30, 2012, Delphi completed the sale of its Thermal Special Application business located in...

  • Page 132
    ...of the grant date and the performance-based RSUs will vest at the completion of a three-year performance period at the end of 2015 if certain targets are met. In February 2014, under the time-based vesting terms of the 2012 and 2013 grants, 365,930 ordinary shares were issued to Delphi executives at...

  • Page 133
    ... related to the minimum statutory tax withholding for vested RSUs. Value Creation Plan During the second quarter of 2010, the Board of Managers approved and authorized the VCP, a long-term incentive plan designed to assist the Company in attracting, retaining, motivating and rewarding key employees...

  • Page 134
    ...the years ended December 31, 2010, 2011, 2012 and 2013 for the VCP awards. These financial projections represented 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...

  • Page 135
    ...1,351 $ 212 $ 1,489 $ (1,701) $ Statement of Operations Year Ended December 31, 2013 Parent Guarantors Subsidiary Issuer NonGuarantor Subsidiaries (in millions) Eliminations Consolidated Net sales ...$ Operating expenses: Cost of sales ...Selling, general and administrative ...Amortization...

  • Page 136
    Statement of Operations Year Ended December 31, 2012 Parent Guarantors Subsidiary Issuer NonGuarantor Subsidiaries (in millions) Eliminations Consolidated Net sales ...$ Operating expenses: Cost of sales ...Selling, general and administrative ...Amortization ...Restructuring ...Total operating ...

  • Page 137
    ... 31, 2013 Parent Guarantors Subsidiary Issuer NonGuarantor Subsidiaries (in millions) Eliminations Consolidated Net income (loss) ...$ Other comprehensive income: Currency translation adjustments...Net change in unrecognized loss on derivative instruments, net of tax ...Employee benefit plans...

  • Page 138
    ... Current liabilities: Short-term debt...$ Accounts payable ...Intercompany payables, current ...Accrued liabilities ...Total current liabilities ...Long-term liabilities: Long-term debt...Intercompany payables, long-term...Pension benefit obligations ...Other long-term liabilities ...Total long-term...

  • Page 139
    ... Current liabilities: Short-term debt...$ Accounts payable ...Intercompany payables, current ...Accrued liabilities ...Total current liabilities ...Long-term liabilities: Long-term debt...Intercompany payables, long-term...Pension benefit obligations ...Other long-term liabilities ...Total long-term...

  • Page 140
    ... on employees' restricted share awards ...Net cash (used in) provided by financing activities ...Effect of exchange rate fluctuations on cash and cash equivalents...Increase (decrease) in cash and cash equivalents...Cash and cash equivalents at beginning of year...Cash and cash equivalents at end of...

  • Page 141
    ... paid on employees' restricted share awards ...Net cash provided by (used in) financing activities ...Effect of exchange rate fluctuations on cash and cash equivalents...Increase in cash and cash equivalents ...Cash and cash equivalents at beginning of year...Cash and cash equivalents at end of year...

  • Page 142
    ... activities: Capital expenditures...Proceeds from sale of property/investments ...Cost of acquisitions, net of cash acquired...Decrease in restricted cash ...Repayment of loans to related parties ...Acquisition of minority held shares ...Dividends from equity method investments in excess of earnings...

  • Page 143
    ...controls and security systems, displays, mechatronics, passive and active safety electronics and electric and hybrid electric vehicle power electronics, as well as advanced development of software. Thermal Systems, which includes heating, ventilating and air conditioning ("HVAC") systems, components...

  • Page 144
    ...in 2014 related to costs associated with employee termination benefits and other exit costs of $56 million for Electrical/ Electronic Architecture, $55 million for Powertrain Systems, $28 million for Electronics and Safety and $5 million for Thermal Systems. Includes charges recorded in 2013 related...

  • Page 145
    ... $ Electrical/ Electronic Architecture Powertrain Systems Electronics and Safety Thermal Systems Eliminations and Other Total (in millions) For the Year Ended December 31, 2013: Adjusted operating income ...$ Restructuring ...Other acquisition and portfolio project costs...Operating income...

  • Page 146
    ...property, plant and equipment, net of accumulated depreciation. Includes net sales and machinery, equipment and tooling that relate to the Company's maquiladora operations located in Mexico. These assets are utilized to produce products sold to customers located in the United States. Includes Delphi...

  • Page 147
    ...summary of the Company's unaudited quarterly results of continuing operations for fiscal 2014 and 2013. Three Months Ended March 31, June 30, September 30, December 31, Total (in millions, except per share amounts) 2014 Net sales...$ Cost of sales...Gross profit...$ Operating income ...$ Net income...

  • Page 148
    ... Public Accounting Firm under the section headed Financial Statements and Supplementary Data for the year ended December 31, 2014. Changes in Internal Control over Financial Reporting There were no material changes in the Company's internal controls over financial reporting during the year ended...

  • Page 149
    ... reference to the Company's Definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Company's 2014 Annual Meeting of Shareholders (the "Proxy Statement") under the heading "Other Information- Section 16(a) Beneficial Ownership Reporting Compliance." The...

  • Page 150
    ... 15. PART IV EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Form 10-K. (1) Financial Statements: Page No Reports of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the Years Ended December 31, 2014, 2013 and...

  • Page 151
    ... Current Report on Form 8K of the Company filed with the SEC on March 1, 2013). Delphi LLC Annual Incentive Plan(1)+ Delphi Corporation Supplemental Executive Retirement Program(1)+ Delphi Corporation Salaried Retirement Equalization Savings Program(1)+ Delphi Automotive PLC Long Term Incentive Plan...

  • Page 152
    ...# XBRL Taxonomy Extension Presentation Linkbase Document# 101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE * Filed herewith. + Management contract or compensatory plan or arrangement. (1) Filed with the Registration Statement on Form S-1 (File No. 333-174493) of Delphi Automotive PLC on June...

  • Page 153
    .... DELPHI AUTOMOTIVE PLC /s/ Mark J. Murphy By: Mark J. Murphy Chief Financial Officer and Executive Vice President Dated: February 9, 2015 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below as of February 9, 2015, by the following persons on...

  • Page 154
    /s/ Sean O. Mahoney Sean O. Mahoney /s/ Thomas W. Sidlik Thomas W. Sidlik /s/ Bernd Wiedemann Bernd Wiedemann /s/ Lawrence A. Zimmerman Lawrence A. Zimmerman Director Director Director Director 132

  • Page 155
    ... TO FIXED CHARGES Year ended December 31, 2014 Income before income taxes and equity income...$ Cash dividends received from non-consolidated affiliates and other ...Portion of rentals deemed to be interest...Interest and related charges on debt...Earnings available for fixed charges...$ Fixed...

  • Page 156
    ...'s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 9, 2015 /s/ Rodney O'Neal...

  • Page 157
    ...'s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 9, 2015 /s/ Mark J. Murphy...

  • Page 158
    ... the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 9, 2015 /s/ Rodney O'Neal Rodney O'Neal Chief...

  • Page 159
    ... the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 9, 2015 /s/ Mark J. Murphy Mark J. Murphy Chief...

  • Page 160

  • Page 161
    ... Relations Contact Copies of the Annual Report, Forms 10-K and 10-Q and other Delphi publications are available via our website at www.delphi.com or contact: Delphi Investor Relations Services Delphi Automotive PLC 5725 Delphi Drive Troy, MI, 48098 Phone: (248) 813-2494 Stock Exchange The company...

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