DELPHI 2015 Annual Report Download - page 64

Table of Contents
42
Income from Discontinued Operations
Year Ended December 31,
2015 2014
Favorable/
(unfavorable)
(in millions)
Income from discontinued operations, net of tax........................................................ $ 274 $ 60 $ 214
Income from discontinued operations, net of tax reflects the results of the Company's previously reported Thermal
Systems segment, which have been reclassified to discontinued operations as a result of the sale of this business. Income from
discontinued operations, net of tax increased during the year ended December 31, 2015 as compared to the year ended
December 31, 2014 primarily due the recognition of a net gain of $271 million from the sale of the Company's wholly owned
Thermal Systems business. This gain was partially offset by the net loss of $41 million on the divestiture of the Company's
interest in KDAC, which includes the $88 million impairment of this interest that was recorded prior to the sale.
Refer to Note 25. Discontinued Operations to the audited consolidated financial statements included herein for additional
information.
Results of Operations by Segment
We operate our core business along the following operating segments, which are grouped on the basis of similar product,
market and operating factors:
• Electrical/Electronic Architecture, which includes complete electrical architecture and component products.
• Powertrain Systems, which includes extensive systems integration expertise in gasoline, diesel and fuel handling and
full end-to-end systems including fuel injection, combustion, electronic controls, test and validation capabilities,
aftermarket, and original equipment service.
• 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.
• 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.
As described in Note 25. Discontinued Operations to the audited consolidated financial statements contained herein, the
Company's previously reported Thermal Systems segment has been classified as discontinued operations, which required
retrospective application to balance sheet, statement of operations and certain cash flow financial information for all periods
presented. Discontinued operations also includes the Company's thermal original equipment service business, the results of
which were previously reported within the Powertrain Systems segment. Certain operations, primarily related to contract
manufacturing services, which were previously included within the Thermal Systems segment but which were not included in
the scope of the divestiture, are reported in continuing operations and have been reclassified within the Electronics and Safety
segment for all periods presented. Amounts for shared general and administrative operating expenses that were allocated to the
Thermal Systems business in prior periods have been re-allocated to the Company's reportable operating segments.
Our management utilizes segment Adjusted Operating Income as the key performance measure of segment income or 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 acquisition and
portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio
transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on
business divestitures. The reconciliations of Adjusted Operating Income to net income attributable to Delphi for the years ended
December 31, 2015 and 2014 are as follows: