DELPHI 2014 Annual Report Download - page 46

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ITEM 2. PROPERTIES
As of December 31, 2014, we owned or leased 129 major manufacturing sites and 15 major technical centers in 33
countries. A manufacturing site may include multiple plants and may be wholly or partially owned or leased. We also have
many smaller manufacturing sites, sales offices, warehouses, engineering centers, joint ventures and other investments
strategically located throughout the world. The following table shows the regional distribution of our major manufacturing sites
by the operating segment that uses such facilities:
North America
Europe,
Middle East
& Africa Asia Pacific South America Total
Electrical/Electronic Architecture...................... 29 23 20 7 79
Powertrain Systems............................................ 4 10 6 2 22
Electronics and Safety........................................ 3 9 3 1 16
Thermal Systems................................................ 3 3 5 1 12
Total................................................................... 39 45 34 11 129
In addition to these manufacturing sites, we had 15 major technical centers: five in North America; five in Europe,
Middle East and Africa; four in Asia Pacific; and one in South America.
Of our 129 major manufacturing sites and 15 major technical centers, which include facilities owned or leased by our
consolidated subsidiaries, 83 are primarily owned and 61 are primarily leased.
We frequently review our real estate portfolio and develop footprint strategies to support our customers’ global plans,
while at the same time supporting our technical needs and controlling operating expenses. We believe our evolving portfolio
will meet current and anticipated future needs.
ITEM 3. LEGAL PROCEEDINGS
We are from time to time subject to various actions, claims, suits, government investigations, and other proceedings
incidental to our business, including those arising out of alleged defects, breach of contracts, competition and antitrust matters,
product warranties, intellectual property matters, personal injury claims and employment-related matters. It is our opinion that
the outcome of such matters will not have a material adverse impact on our consolidated financial position, results of
operations, or cash flows. With respect to warranty matters, although we cannot ensure that the future costs of warranty claims
by customers will not be material, we believe our established reserves are adequate to cover potential warranty settlements.
However, the final amounts required to resolve these matters could differ materially from our recorded estimates.
GM Ignition Switch Recall
In the first quarter of 2014, GM, Delphi’s largest customer, initiated a product recall related to ignition switches. Delphi
has received requests for information from, and is cooperating with, various government agencies related to this ignition switch
recall. In addition, Delphi has been named as a co-defendant along with GM (and in certain cases other parties) in product
liability and class action lawsuits related to this matter. During the second quarter of 2014, all of the class action cases were
transferred to the United States District Court for the Southern District of New York (the “District Court”) for coordinated
pretrial proceedings. Two consolidated amended class action complaints were filed in the District Court on October 14, 2014.
Delphi was not named as a defendant in either complaint. Delphi believes the allegations contained in the product liability
cases are without merit, and intends to vigorously defend against them. Although no assurances can be made as to the ultimate
outcome of these or any other future claims, Delphi does not believe a loss is probable and, accordingly, no reserve has been
made as of December 31, 2014.
Unsecured Creditors Litigation
Under the terms of the Fourth Amended and Restated Limited Liability Partnership Agreement of Delphi Automotive
LLP (the “Fourth LLP Agreement”), if cumulative distributions to the members of Delphi Automotive LLP under certain
provisions of the Fourth LLP Agreement exceed $7.2 billion, Delphi, as disbursing agent on behalf of DPHH, is required to pay
to the holders of allowed general unsecured claims against Old Delphi, $32.50 for every $67.50 in excess of $7.2 billion
distributed to the members, up to a maximum amount of $300 million. In December 2014, a complaint was filed in the
Bankruptcy Court alleging that the redemption by Delphi Automotive LLP of the membership interests of GM and the PBGC,
and the repurchase of shares and payment of dividends by Delphi Automotive PLC, constituted distributions under the terms of
the Fourth LLP Agreement approximating $7.2 billion. Delphi considers cumulative distributions through December 31, 2014
to be substantially below the $7.2 billion threshold, and intends to vigorously contest the allegations set forth in the complaint.
Accordingly, no accrual for this matter has been recorded as of December 31, 2014.