DELPHI 2014 Annual Report Download - page 62

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• Electronics and Safety, which includes component and systems integration expertise in infotainment and
connectivity, 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 multiple
transportation and other adjacent markets, and powertrain cooling and related technologies.
• Eliminations and Other, which includes i) the elimination of inter-segment transactions, and ii) certain other expenses
and income of a non-operating or strategic nature.
Through December 31, 2013, we evaluated performance based on stand-alone segment Adjusted EBITDA and accounted
for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Our management
believed that Adjusted EBITDA was a meaningful measure of performance and it was used by management to analyze
Company and stand-alone segment operating performance. Management also used Adjusted EBITDA for planning and
forecasting purposes. Effective January 1, 2014, our management began utilizing segment Adjusted Operating Income as the
key performance measure of segment income of loss and for planning and forecasting purposes, as management believes this
measure is most reflective of the operational profitability or loss of our operating segments. Segment Adjusted Operating
Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered
an alternative to net income attributable to Delphi, which is the most directly comparable financial measure to Adjusted
Operating Income that is in accordance with U.S. GAAP. Segment Adjusted Operating Income, as determined and measured by
Delphi, should also not be compared to similarly titled measures reported by other companies.
The reconciliation of Adjusted Operating Income to Operating Income includes restructuring, other project and
integration costs related to acquisitions and other portfolio transactions and asset impairments. The reconciliation of Adjusted
Operating Income to net income attributable to Delphi for the years ended December 31, 2014 and 2013 are as follows:
Electrical/
Electronic
Architecture Powertrain Systems Electronics and Safety Thermal Systems Eliminations and Other Total
(in millions)
For the Year Ended December 31, 2014:
Adjusted operating income ....................... $ 1,080 $ 533 $ 352 $ 53 $ — $ 2,018
Restructuring ........................................ (56) (55)(28)(5) — (144)
Other acquisition & portfolio project
costs...................................................... (14) (3)(2)(1) — (20)
Asset impairments ................................ (2) (1)(4) — — (7)
Operating income...................................... $ 1,008 $ 474 $ 318 $ 47 $ — 1,847
Interest expense......................................... (135)
Other expense, net..................................... (7)
Income before income taxes and equity
income....................................................... 1,705
Income tax expense................................... (282)
Equity income, net of tax.......................... 17
Net income................................................ 1,440
Net income attributable to noncontrolling
interest....................................................... 89
Net income attributable to Delphi............. $ 1,351