DELPHI 2015 Annual Report Download - page 60

Table of Contents
38
2015 versus 2014
The results of operations for the years ended December 31, 2015 and 2014 were as follows:
Year Ended December 31,
2015 2014
Favorable/
(unfavorable)
(dollars in millions)
Net sales.............................................................................................................. $ 15,165 $ 15,499 $ (334)
Cost of sales........................................................................................................ 12,155 12,471 316
Gross margin....................................................................................................... 3,010 19.8% 3,028 19.5% (18)
Selling, general and administrative..................................................................... 1,017 1,036 19
Amortization ....................................................................................................... 93 94 1
Restructuring....................................................................................................... 177 140 (37)
Operating income .......................................................................................... 1,723 1,758 (35)
Interest expense ............................................................................................. (127) (135) 8
Other (expense) income, net.......................................................................... (88) (8) (80)
Income from continuing operations before income taxes and equity income .... 1,508 1,615 (107)
Income tax expense ....................................................................................... (263) (255) (8)
Income from continuing operations before equity income................................. 1,245 1,360 (115)
Equity income, net of tax............................................................................... 16 20 (4)
Income from continuing operations.................................................................... 1,261 1,380 (119)
Income from discontinued operations, net of tax ............................................... 274 60 214
Net income.......................................................................................................... 1,535 1,440 95
Net income attributable to noncontrolling interest ............................................. 85 89 (4)
Net income attributable to Delphi....................................................................... $ 1,450 $ 1,351 $ 99
Total Net Sales
Below is a summary of our total net sales for the years ended December 31, 2015 versus December 31, 2014.
Year Ended December 31, Variance Due To:
2015 2014
Favorable/
(unfavorable)
Volume, net of
contractual
price
reductions FX
Commodity
pass-
through Other Total
(in millions) (in millions)
Total net sales ................. $ 15,165 $ 15,499 $ (334) $ 900 $ (1,153) $ (140) $ 59 $ (334)
Total net sales for the year ended December 31, 2015 decreased 2% compared to the year ended December 31, 2014. We
experienced volume growth of 8% for the period, primarily as a result of increased sales in North America, Europe and Asia
Pacific, which was offset by decreases due to unfavorable currency impacts, primarily related to the Euro, and contractual price
reductions. Net sales also increased by a net $59 million as a result of the impact of our acquisitions and divestitures, reflected
in Other above, primarily resulting from the net sales of the Antaya and Unwired businesses that were acquired in the fourth
quarter of 2014, partially offset by a reduction in sales resulting from the divestiture of our Reception Systems business in the
third quarter of 2015.
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 revenue less cost of sales and gross margin percentage is gross margin as a
percentage of net sales.
Cost of sales decreased $316 million for the year ended December 31, 2015 compared to the year ended December 31,
2014, as summarized below. The Company's material cost of sales was approximately 50% of net sales in both the year ended
December 31, 2015 and December 31, 2014.