DELPHI 2014 Annual Report Download - page 64

42
Adjusted Operating Income by Segment
Year Ended December 31, Variance Due To:
2014 2013 Favorable/
(unfavorable)
Volume, net of
contractual
price
reductions Operational performance Other Total
(in millions) (in millions)
Electrical/Electronic Architecture....... $ 1,080 $ 1,001 $ 79 $ 28 $ 158 $ (107) $ 79
Powertrain Systems............................. 533 483 50 (28) 126 (48) 50
Electronics and Safety......................... 352 323 29 (85) 139 (25) 29
Thermal Systems................................. 53 37 16 (5) 29 (8) 16
Eliminations and Other ....................... — — — — — — —
Total............................................. $ 2,018 $ 1,844 $ 174 $ (90) $ 452 $ (188) $ 174
As noted in the table above, Adjusted Operating Income for the year ended December 31, 2014 as compared to the year
ended December 31, 2013 was impacted by volume and contractual price reductions, including product mix, and operational
performance improvements, as well as the following items included in Other in the table above:
• Approximately $47 million of increased depreciation and amortization;
• $118 million of increased SG&A expenses, primarily related to accruals for incentive compensation, information
technology costs and costs for other service providers;
• The absence of a prior period gain on the disposal of property of approximately $11 million from the sale of a
manufacturing site that was closed as a result of Delphi's overall restructuring program.
Consolidated Results of Operations
2013 versus 2012
The results of operations for the years ended December 31, 2013 and 2012 were as follows:
Year Ended December 31,
2013 2012 Favorable/
(unfavorable)
(dollars in millions)
Net sales............................................................................................................... $ 16,463 $ 15,519 $ 944
Cost of sales......................................................................................................... 13,567 12,861 (706)
Gross margin........................................................................................................ 2,896 17.6% 2,658 17.1% 238
Selling, general and administrative...................................................................... 963 927 (36)
Amortization........................................................................................................ 104 84 (20)
Restructuring........................................................................................................ 145 171 26
Operating income......................................................................................... 1,684 1,476 208
Interest expense ........................................................................................... (143) (136) (7)
Other (expense) income, net........................................................................ (18) 5 (23)
Income before income taxes and equity income.................................................. 1,523 1,345 178
Income tax expense...................................................................................... (256) (212) (44)
Income before equity income .............................................................................. 1,267 1,133 134
Equity income, net of tax............................................................................. 34 27 7
Net income........................................................................................................... 1,301 1,160 141
Net income attributable to noncontrolling interest.............................................. 89 83 6
Net income attributable to Delphi........................................................................ $ 1,212 $ 1,077 $ 135