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þ |
o |
Delaware (State or other jurisdiction of incorporation or organization) | 38-3430473 (I.R.S. Employer Identification No.) | |
5725 Delphi Drive, Troy, Michigan | 48098 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company þ | |||
(Do not check if a smaller reporting company) |
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DELPHI CORPORATION
ITEM 1. | BUSINESS |
• | Electronics and Safety, which includes audio, entertainment and communications, safety systems, body controls and security systems, displays, mechatronics and power electronics, as well as advanced development of software and silicon. | |
• | Powertrain Systems, which includes extensive systems integration expertise in gasoline, diesel and fuel handling and fullend-to-end systems including fuel injection, combustion, electronics controls, exhaust handling, and test and validation capabilities. | |
• | Electrical/Electronic Architecture, which includes complete electrical architecture and component products. | |
• | Thermal Systems, which includes Heating, Ventilating and Air Conditioning (“HVAC”) systems, components for multiple transportation and other adjacent markets, and powertrain cooling and related technologies. | |
• | Automotive Holdings Group, which includes non-core product lines and plant sites that do not fit Delphi’s future strategic framework. | |
• | Corporate and Other, which includes the Product and Service Solutions business, which is comprised of independent aftermarket, diesel aftermarket, original equipment service, consumer electronics and medical systems, in addition to the expenses of corporate administration, other expenses and income of a non-operating or strategic nature, and the elimination of inter-segment transactions. |
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• | developing products and technologies that are aligned with VMs’ and aftermarket customers’ needs and expectations for value; and | |
• | managing our overall cost structure so that we preserve operational flexibility, offer products at competitive prices and continue to invest in new technologies and product development, including managing our global manufacturing footprint to ensure proper placement and workforce levels aligned with business needs, offering competitive wages and benefits, maximizing efficiencies in manufacturing processes, and reducing overall material costs. |
• | Controls & Security (Body Controllers & Security Systems, Mechatronics and Displays) | |
• | Electrical/Electronic Architecture (Electrical/Electronic Distribution Systems, Connection Systems and Electrical Centers) | |
• | Entertainment & Communications (Audio, Navigation and Telematics) | |
• | Powertrain (Diesel and Gas Engine Management Systems) | |
• | Safety (Occupant Protection Systems and Safety Electronics) | |
• | Thermal (Climate Control & Powertrain Cooling) |
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2008: | ||||||||||||||||||||||||||||
Net sales | $ | 4,048 | $ | 4,470 | $ | 5,649 | $ | 2,121 | $ | 1,348 | $ | 424 | $ | 18,060 | ||||||||||||||
Operating (loss) income | $ | (654 | ) | $ | (130 | ) | $ | (361 | ) | $ | 18 | $ | (68 | ) | $ | (286 | ) | $ | (1,481 | ) | ||||||||
OIBDAR | $ | (70 | ) | $ | 120 | $ | 96 | $ | 39 | $ | 44 | $ | 40 | $ | 269 | |||||||||||||
2007: | ||||||||||||||||||||||||||||
Net sales | $ | 5,035 | $ | 5,663 | $ | 5,968 | $ | 2,412 | $ | 2,946 | $ | 259 | $ | 22,283 | ||||||||||||||
Operating income (loss) | $ | 63 | $ | (276 | ) | $ | (36 | ) | $ | (29 | ) | $ | (393 | ) | $ | (1,274 | ) | $ | (1,945 | ) | ||||||||
OIBDAR | $ | 439 | $ | 125 | $ | 329 | $ | 84 | $ | 73 | $ | (319 | ) | $ | 731 | |||||||||||||
2006: | ||||||||||||||||||||||||||||
Net sales | $ | 5,093 | $ | 5,565 | $ | 5,365 | $ | 2,607 | $ | 3,638 | $ | 469 | $ | 22,737 | ||||||||||||||
Operating income (loss) | $ | 188 | $ | (128 | ) | $ | (110 | ) | $ | (170 | ) | $ | (488 | ) | $ | (3,834 | ) | $ | (4,542 | ) | ||||||||
OIBDAR | $ | 489 | $ | 234 | $ | 154 | $ | (6 | ) | $ | (121 | ) | $ | (864 | ) | $ | (114 | ) |
• | Controls and security products primarily consist of body computers, security systems, displays and mechatronics (interior switches, integrated center panel, gear shift sensors). |
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• | Entertainment and communications business primarily consists of advanced reception systems, digital receivers, satellite audio receivers, navigation systems, rear-seat entertainment, and wireless connectivity. |
• | Safety systems primarily consist of airbags, occupant detection systems, collision warning systems, advanced cruise control technologies, safety electronics, seat belts, and steering wheels. | |
• | Power electronics primarily consist of power modules, inverters and converters and battery packs. |
• | The gasoline EMS portfolio features fuel injection and air/fuel control, valve train, ignition, sensors and actuators, transmission control products, and powertrain electronic control modules with software, algorithms and calibration. | |
• | The diesel EMS product line offers high quality common rail system technologies. | |
• | Supply integrated fuel handling systems for gasoline, diesel, flexfuel and biofuel configurations. | |
• | Innovative evaporative emissions systems that are recognized as industry-leading technologies. |
• | High quality connectors are engineered primarily for use in the automotive and related markets, but also have applications in the aerospace and military and telematics sectors. | |
• | Electrical centers provide centralized electrical power and signal distribution and all of the associated circuit protection and switching devices, thereby optimizing the overall vehicle electrical system. | |
• | Distribution systems are integrated into one optimized vehicle electrical system utilizing smaller cable and gauge sizes and ultra-thin wall insulation. |
• | Main powertrain cooling products include condenser, radiator and fan module assemblies and components, which includes radiators, condensers and charge air cooling heat exchangers. | |
• | Climate control portfolio includes HVAC modules, with evaporator and heater core components, compressors and controls. |
• | Products manufactured include: suspension components and brake components. |
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• | Halfshaft products include products for a wide range of torque capacities to improve steering feel and enhance handling characteristics. | |
• | Steering system products include steering columns, intermediate shafts, rack & pinion gears, integral gears, power steering pumps, power steering hoses, and electric power steering. |
Total Net Sales | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Customer | $ | % | $ | % | $ | % | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||
GM-North America | $ | 3,752 | 21 | % | $ | 6,351 | 28 | % | $ | 7,443 | 33 | % | ||||||||||||
GM-International | 1,522 | 9 | % | 1,560 | 7 | % | 1,351 | 6 | % | |||||||||||||||
GM-Service Parts Organization | 251 | 1 | % | 390 | 2 | % | 550 | 2 | % | |||||||||||||||
Total GM | 5,525 | 31 | % | 8,301 | 37 | % | 9,344 | 41 | % | |||||||||||||||
Other customers | 12,535 | 69 | % | 13,982 | 63 | % | 13,393 | 59 | % | |||||||||||||||
Total net sales | $ | 18,060 | 100 | % | $ | 22,283 | 100 | % | $ | 22,737 | 100 | % | ||||||||||||
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Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | Net Sales | Net Sales | ||||||||||||||||||||||||||||||||||||||||||||||
Other | Net | Other | Net | Other | Net | |||||||||||||||||||||||||||||||||||||||||||
GM | Customers | Total | Property | GM | Customers | Total | Property | GM | Customers | Total | Property | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
North America | $ | 4,026 | $ | 3,645 | $ | 7,671 | $ | 1,425 | $ | 6,782 | $ | 4,975 | $ | 11,757 | $ | 1,906 | $ | 8,040 | $ | 5,881 | $ | 13,921 | $ | 2,024 | ||||||||||||||||||||||||
Europe, Middle East, & Africa | 885 | 6,346 | 7,231 | 1,412 | 1,002 | 6,396 | 7,398 | 1,476 | 879 | 5,463 | 6,342 | 1,539 | ||||||||||||||||||||||||||||||||||||
Asia Pacific | 104 | 1,917 | 2,021 | 429 | 76 | 2,105 | 2,181 | 341 | 71 | 1,700 | 1,771 | 367 | ||||||||||||||||||||||||||||||||||||
South America | 510 | 627 | 1,137 | 131 | 441 | 506 | 947 | 140 | 354 | 349 | 703 | 136 | ||||||||||||||||||||||||||||||||||||
Total | $ | 5,525 | $ | 12,535 | $ | 18,060 | $ | 3,397 | $ | 8,301 | $ | 13,982 | $ | 22,283 | $ | 3,863 | $ | 9,344 | $ | 13,393 | $ | 22,737 | $ | 4,066 | ||||||||||||||||||||||||
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ITEM 1A. | RISK FACTORS |
• | The chapter 11 cases may adversely affect our business prospectsand/or our ability to operate during the reorganization cases. |
• | We may have difficulty continuing to obtain and maintain contracts, including critical supply agreements, necessary to continue our operations at affordable rates with competitive terms. | |
• | We may have difficulty maintaining existing customer relationships and winning awards for new business. | |
• | We may not be able to further diversify our customer base and maintain our customer base in our non-Debtor entities, both during and assuming successful emergence from chapter 11. | |
• | Debtor entity transactions outside the ordinary course of business are subject to the prior approval of the Court, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. | |
• | The Debtors may not be able to obtain Court approval or such approval may be delayed with respect to motions made in the chapter 11 cases. | |
• | We may be unable to retain and motivate key executives and associates through the process of reorganization, and we may have difficulty attracting new employees. | |
• | The Debtors may be unable to maintain satisfactory labor relations as we seek to implement negotiated changes to our existing collective bargaining agreements with our U.S. labor unions and certain retiree benefits. Although we have reached agreements with each of our U.S. labor unions to settle our previously-filed motions under sections 1113 and 1114 of the Bankruptcy Code and to extend, with certain modifications, our collective bargaining agreements, our failure to consummate the Plan (as modified) and the transactions contemplated thereby may leave us with no choice but to reinitiate a process to reject our collective bargaining agreements. Such rejection of our labor contracts could lead those unions to authorize a strike or other form of significant work disruption. | |
• | We may have difficulty selling or exiting non-core businesses in a timely manner due to union or customer concerns. Failure to timely exit the non-core businesses may have a negative impact on future earnings and cash flows. |
• | There can be no assurance as to our ability to maintain sufficient financing sources to fund our reorganization plan and continue operating our business. For further details on Delphi’s sources and uses of liquidity and for a more detailed description of the terms of the Accommodation Agreement, as amended, including the covenants and conditions to the lenders’ continued forbearance from exercising remedies through the remainder of the accommodation period, the milestones Delphi must achieve in |
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its chapter 11 cases to avoid an early termination of the accommodation period, the conditions which must be satisfied to receive additional support through the term of the accommodation periods, and the terms and conditions in the GM Advance Agreement, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources in this Annual Report. |
• | Third parties may seek and obtain Court approval to terminate or shorten the exclusivity period for Delphi to propose and confirm one or more plans of reorganization, to appoint a chapter 11 trustee, or to convert the cases to chapter 7 cases. Pursuant to an order entered by the Court on April 30, 2008, the Debtors’ exclusivity period under the Bankruptcy Code for filing a plan of reorganization was extended until 30 days after substantial consummation of the Plan (as modified) or any modified plan and the Debtors’ exclusivity period for soliciting acceptance of the Plan (as modified) was extended until 90 days after substantial consummation of the Plan (as modified) or any modified plan. On July 23, 2008, Delphi’s Creditors’ Committee and WTC, as Indenture Trustee and a member of the UCC, filed separate complaints in the Court seeking revocation of the Court order entered on January 25, 2008 confirming Delphi’s Plan. The Creditors’ Committee had earlier advised Delphi that it intended to file the complaint to preserve its interests with regard to a180-day statutory period that would have otherwise expired on July 23, 2008. The Creditors’ Committee and WTC also advised Delphi that they do not intend to schedule a hearing on the complaints pending developments on (i) the continuation of stakeholder discussions concerning potential modifications to the Plan, which would permit Delphi to emerge from chapter 11 as soon as practicable, and (ii) Delphi’s litigation against an affiliate of lead investor, Appaloosa, and the other Investors. Notwithstanding the foregoing, pursuant to an order entered by the Court on December 17, 2008, the Debtors’ exclusive period for filing a plan of reorganization, solely as to the Creditors’ Committee and the Equity Committee is extended through and including March 31, 2009 and the Debtors’ exclusive period for soliciting acceptance of a plan of reorganization, solely as to the Creditors’ Committee and the Equity Committee is extended through and including May 31, 2009. |
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• | Court approval and approval by the U.S. District Court for the Eastern District of Michigan of the settlement agreements reached with plaintiffs in the securities and Employee Retirement Income Security Act (“ERISA”) Multidistrict Litigation; and | |
• | The Court’s entry of orders, authorizing the assumption and rejection of unexpired leases and executory contracts by Delphi. |
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• | Exposure to local economic conditions; | |
• | Expropriation and nationalization; | |
• | Withholding and other taxes on remittances and other payments by subsidiaries; | |
• | Investment restrictions or requirements; and | |
• | Export and import restrictions. |
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ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
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ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
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Name | Age | Position | ||||
Robert S. Miller | 67 | Executive Chairman of the Board | ||||
Rodney O’Neal | 55 | Chief Executive Officer & President | ||||
John D. Sheehan | 48 | Vice President & Chief Financial Officer | ||||
Mark R. Weber | 60 | Executive Vice President, Global Business Services | ||||
James A. Bertrand | 51 | Vice President & President, Delphi Automotive Holdings Group & President, Delphi Thermal Systems | ||||
Francisco A. Ordonez | 58 | Vice President & President, Delphi Product & Service Solutions | ||||
Jeffrey J. Owens | 54 | Vice President & President, Delphi Electronics & Safety & President, Delphi Asia Pacific | ||||
Ronald M. Pirtle | 54 | Vice President & President, Delphi Powertrain Systems & President, Delphi Europe, Middle East & Africa | ||||
Robert J. Remenar | 53 | Vice President & President, Delphi Steering | ||||
David M. Sherbin | 49 | Vice President, General Counsel & Chief Compliance Officer | ||||
James A. Spencer | 56 | Vice President & President, Delphi Electrical/Electronic Architecture & President, Delphi Latin America |
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ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Price Range of Common Stock | ||||||||
Year Ended December 31, 2008 | High | Low | ||||||
4th Quarter | $ | 0.08 | $ | 0.02 | ||||
3rd Quarter | $ | 0.11 | $ | 0.04 | ||||
2nd Quarter | $ | 0.14 | $ | 0.04 | ||||
1st Quarter | $ | 0.22 | $ | 0.04 |
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Price Range of Common Stock | ||||||||
Year Ended December 31, 2007 | High | Low | ||||||
4th Quarter | $ | 0.49 | $ | 0.10 | ||||
3rd Quarter | $ | 2.59 | $ | 0.44 | ||||
2nd Quarter | $ | 3.12 | $ | 1.46 | ||||
1st Quarter | $ | 3.86 | $ | 2.25 |
ITEM 6. | SELECTED FINANCIAL DATA |
Year Ended December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||
Net sales | $ | 18,060 | $ | 22,283 | $ | 22,737 | $ | 23,394 | $ | 24,731 | ||||||||||
Income (loss) from continuing operations (1) (2) (3) (4) | $ | 3,056 | $ | (2,308 | ) | $ | (5,141 | ) | $ | (2,130 | ) | $ | (4,886 | ) | ||||||
Net income (loss) (1) (2) (3) (4) | $ | 3,037 | $ | (3,065 | ) | $ | (5,464 | ) | $ | (2,357 | ) | $ | (4,818 | ) | ||||||
Basic and diluted income (loss) per share | ||||||||||||||||||||
Continuing operations | $ | 5.41 | $ | (4.11 | ) | $ | (9.16 | ) | $ | (3.80 | ) | $ | (8.71 | ) | ||||||
Discontinued operations | (0.03 | ) | (1.34 | ) | (0.58 | ) | (0.38 | ) | 0.12 | |||||||||||
Cumulative effect of accounting change | — | — | 0.01 | (0.03 | ) | — | ||||||||||||||
Basic and diluted income (loss) per share (1) (2) (3) (4) | $ | 5.38 | $ | (5.45 | ) | $ | (9.73 | ) | $ | (4.21 | ) | $ | (8.59 | ) | ||||||
Cash dividends declared per share | $ | — | $ | — | $ | — | $ | 0.045 | $ | 0.280 | ||||||||||
Ratio of earnings to fixed charges (5) | 7.1 | N/A | N/A | N/A | N/A |
As of December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Total assets | $ | 10,306 | $ | 13,667 | $ | 15,392 | $ | 17,023 | $ | 16,559 | ||||||||||
Total debt | $ | 4,229 | $ | 3,554 | $ | 3,342 | $ | 3,389 | $ | 2,976 | ||||||||||
Liabilities subject to compromise (6) | $ | 14,583 | $ | 16,197 | $ | 17,416 | $ | 15,074 | $ | — | ||||||||||
Stockholders’ deficit | $ | (14,425 | ) | $ | (13,472 | ) | $ | (12,055 | ) | $ | (6,245 | ) | $ | (3,625 | ) |
(1) | Includes non-recurring gains related to the GM settlements of $5.7 billion during 2008, as described in Note 2. Transformation Plan and Chapter 11 Bankruptcy to the consolidated financial statements. | |
(2) | Includes pre-tax impairment charges related to long-lived assets held for use of $37 million, $98 million, $172 million, $172 million and $324 million in 2008, 2007, 2006, 2005 and 2004, respectively. Includes |
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pre-tax impairment charges related to goodwill of $325 million, $390 million and $30 million in 2008, 2005 and 2004, respectively. | ||
(3) | In 2008, 2007 and 2006 Delphi incurred a pre-tax charge of $78 million, $212 million and $2,706 million, respectively, related to the U.S. employee workforce transition programs, as described in Note 16. U.S. Employee Workforce Transition Programs to the consolidated financial statements. | |
(4) | 2007 net loss includes a continuing operations tax benefit of $703 million related to gains in other comprehensive income. 2004 net loss includes $4,644 million of income tax expense recorded to provide a non-cash valuation allowance on U.S. deferred tax assets, as described in Note 8. Income Taxes to the consolidated financial statements. | |
(5) | The ratio of earnings to fixed charges for the year ended December 31, 2008 was 7.1. Fixed charges exceeded earnings by $2,765 million, $5,031 million, $2,218 million and $830 million for the years ended December 31, 2007, 2006, 2005 and 2004, respectively, resulting in a ratio of less than one. | |
(6) | As a result of the Chapter 11 Filings, the payment of prepetition indebtedness is subject to compromise or other treatment under a plan of reorganization. In accordance with “Financial Reporting by Entities in Reorganization under the Bankruptcy Code”(“SOP 90-7”) we are required to segregate and disclose all prepetition liabilities that are subject to compromise. The decrease in liabilities subject to compromise as of December 31, 2008 is due to the reductions of pension obligations, postretirement obligations and the GM claim for the U.S. employee workforce transition programs resulting from the effectiveness of the GM settlement agreements during 2008. The decrease in Liabilities Subject to Compromise as of December 31, 2007 is primarily due to the reclassification of warranty and environmental claims to accrued liabilities and other long-term liabilities as well as a portion of debt to current and long-term debt during 2007. Refer to Note 2. Transformation Plan and Chapter 11 Bankruptcy, Note 12. Liabilities and Note 14. Liabilities Subject to Compromise to the consolidated financial statements. |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
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Reorganization | Cash Received | |||||||||||||||
Gain (Loss) | from GM | Pre-Tax Earnings | Cash Received | |||||||||||||
Upon | Upon | Benefit from GM | from GM | |||||||||||||
Effectiveness | Effectiveness | Post Effectiveness | Post Effectiveness | |||||||||||||
(in millions) | ||||||||||||||||
Hourly Pension Plan Settlement: | ||||||||||||||||
Hourly Plan First Pension Transfer to GM | $ | 2,083 | $ | — | $ | — | $ | — | ||||||||
Recognition of Hourly Plan related OCI amounts | (494 | ) | — | — | — | |||||||||||
Hourly OPEB Settlement: | ||||||||||||||||
GM assumption of OPEB obligation | 6,821 | — | — | — | ||||||||||||
Recognition of OPEB related OCI amounts | 266 | — | — | — | ||||||||||||
Allowed Claims and Other: | ||||||||||||||||
Allowed GM administrative claim | (1,628 | ) | — | — | — | |||||||||||
Allowed GM general unsecured claim | (2,500 | ) | — | — | — | |||||||||||
Allowed IUE-CWA and USW claims | (129 | ) | — | — | — | |||||||||||
OPEB reimbursement from GM | 353 | 350 | 60 | 51 | ||||||||||||
Special attrition programs (Note 16) | 491 | 230 | — | 68 | ||||||||||||
Other, net | 69 | 61 | — | — | ||||||||||||
Total, net | $ | 5,332 | $ | 641 | $ | 60 | $ | 119 | ||||||||
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GM Settlement | Cash Received | Pre-Tax | Cash Received | |||||||||||||
Gain in | from GM | Earnings | from GM | |||||||||||||
Pre-Tax Earnings | Upon | Benefit Post | Post | |||||||||||||
Upon Effectiveness | Effectiveness | Effectiveness | Effectiveness | |||||||||||||
(in millions) | ||||||||||||||||
Reimbursement of hourly labor costs | $ | 272 | $ | 273 | $ | 25 | $ | 2 | ||||||||
Production cash burn breakeven reimbursement | 81 | 74 | 70 | 28 | ||||||||||||
Working capital backstop — Steering Business | — | 210 | — | — | ||||||||||||
Other | 2 | 2 | — | — | ||||||||||||
Total, net | $ | 355 | $ | 559 | $ | 95 | $ | 30 | ||||||||
Continuing operations | $ | 254 | $ | 75 | ||||||||||||
Discontinued operations | $ | 101 | $ | 20 |
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2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Long-lived asset impairment charges | $ | 37 | $ | 291 | $ | 215 | ||||||
Goodwill impairment charges | 325 | — | — | |||||||||
Employee termination benefits and other exit costs | 472 | 672 | 299 | |||||||||
U.S. employee workforce transition program charges | 82 | 244 | 2,955 | |||||||||
Total | $ | 916 | $ | 1,207 | $ | 3,469 | ||||||
Core product lines | 747 | 462 | 2,594 | |||||||||
Non-core product lines | 107 | 388 | 553 | |||||||||
Discontinued operations | 62 | 357 | 322 |
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Year Ended | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2008 | 2007 | Change | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Net sales: | ||||||||||||||||||||
General Motors and affiliates | $ | 5,525 | 31 | % | $ | 8,301 | 37 | % | $ | (2,776 | ) | |||||||||
Other customers | 12,535 | 69 | % | 13,982 | 63 | % | (1,447 | ) | ||||||||||||
Total net sales | $ | 18,060 | $ | 22,283 | $ | (4,223 | ) | |||||||||||||
Net income (loss) | $ | 3,037 | $ | (3,065 | ) | $ | 6,102 |
• | $411 million of interest expense recorded in 2007 related to certain prepetition claims that were determined to be probable of becoming an allowed claim in accordance with the Plan; | |
• | $348 million of reduced warranty expenses, primarily due to the forgiveness by GM of $112 million in warranty amounts; | |
• | $343 million of litigation charges related to the settlement agreement reached with plaintiffs in the securities and ERISA class action cases recorded during 2007; |
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• | $254 million of decreased long-lived asset impairment charges, primarily included within loss from discontinued operations in 2007; | |
• | $200 million of lower employee termination benefits and other exit costs included in costs of sales, primarily related to the exit of the manufacturing facility in Cadiz, Spain during 2007, of which $115 million is included in cost of sales, $11 million is included in selling, general and administrative expenses, and $74 million is included in loss from discontinued operations; | |
• | $162 million of decreased U.S. employee workforce transition program charges, of which $134 million is included within income from continuing operations and $28 million is included within loss from discontinued operations; | |
• | $135 million in decreased selling, general and administrative expenses, primarily due to lower costs necessary to implement information technology systems to support finance, manufacturing and product development initiatives, as well as decreased expense related to incentive compensation plans for executives; and | |
• | $95 million of PCBB and labor subsidy reimbursement from GM during 2008, of which $75 million was included within cost of sales and $20 million is included within loss from discontinued operations. |
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Year Ended | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
Favorable/ | ||||||||||||||||||||
2008 | 2007 | (Unfavorable) | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
Net sales: | ||||||||||||||||||||
General Motors and affiliates | $ | 5,525 | 31 | % | $ | 8,301 | 37 | % | $ | (2,776 | ) | |||||||||
Other customers | 12,535 | 69 | % | 13,982 | 63 | % | (1,447 | ) | ||||||||||||
Total net sales | $ | 18,060 | $ | 22,283 | $ | (4,223 | ) | |||||||||||||
Cost of sales | 17,068 | 21,066 | 3,998 | |||||||||||||||||
Gross margin | $ | 992 | 5.5 | % | $ | 1,217 | 5.5 | % | $ | (225 | ) | |||||||||
U.S. employee workforce transition program charges | 78 | 212 | 134 | |||||||||||||||||
GM settlement — MRA | (254 | ) | — | 254 | ||||||||||||||||
Depreciation and amortization | 827 | 914 | 87 | |||||||||||||||||
Long-lived asset impairment charges | 37 | 98 | 61 | |||||||||||||||||
Goodwill impairment charges | 325 | — | (325 | ) | ||||||||||||||||
Selling, general and administrative | 1,460 | 1,595 | 135 | |||||||||||||||||
Securities and ERISA litigation charge | — | 343 | 343 | |||||||||||||||||
Operating loss | $ | (1,481 | ) | $ | (1,945 | ) | $ | 464 | ||||||||||||
Interest expense | (437 | ) | (769 | ) | 332 | |||||||||||||||
Loss on extinguishment of debt | (49 | ) | (27 | ) | (22 | ) | ||||||||||||||
Other income, net | 69 | 110 | (41 | ) | ||||||||||||||||
Reorganization items: | ||||||||||||||||||||
GM settlement — GSA | 5,332 | — | 5,332 | |||||||||||||||||
Professional fees and other | (185 | ) | (163 | ) | (22 | ) | ||||||||||||||
Income (loss) from continuing operations before income taxes, minority interest and equity income | $ | 3,249 | $ | (2,794 | ) | $ | 6,043 | |||||||||||||
Income tax (expense) benefit | (166 | ) | 522 | (688 | ) | |||||||||||||||
Minority interest, net of tax | (28 | ) | (63 | ) | 35 | |||||||||||||||
Equity income, net of tax | 1 | 27 | (26 | ) | ||||||||||||||||
Income (loss) from continuing operations | $ | 3,056 | $ | (2,308 | ) | $ | 5,364 | |||||||||||||
Loss from discontinued operations, net of tax | (19 | ) | (757 | ) | 738 | |||||||||||||||
Cumulative effect of accounting change, net of tax | — | — | — | |||||||||||||||||
Net income (loss) | $ | 3,037 | $ | (3,065 | ) | $ | 6,102 | |||||||||||||
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Year Ended | |||||||||||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||||||||||
Volume and | |||||||||||||||||||||||||||||||||||||||||
Contractual | Commodity | ||||||||||||||||||||||||||||||||||||||||
Favorable/ | Price | Pass- | |||||||||||||||||||||||||||||||||||||||
2008 | 2007 | (Unfavorable) | Reductions | FX | Through | Other | Total | ||||||||||||||||||||||||||||||||||
(dollars in millions) | (dollars in millions) | ||||||||||||||||||||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||||||||||||||||||
General Motors and affiliates | $ | 5,525 | 31 | % | $ | 8,301 | 37 | % | $ | (2,776 | ) | $ | (2,918 | ) | $ | 108 | $ | 27 | $ | 7 | $ | (2,776 | ) | ||||||||||||||||||
Other customers | 12,535 | 69 | % | 13,982 | 63 | % | (1,447 | ) | (1,919 | ) | 424 | 40 | 8 | (1,447 | ) | ||||||||||||||||||||||||||
Total net sales | $ | 18,060 | $ | 22,283 | $ | (4,223 | ) | $ | (4,837 | ) | $ | 532 | $ | 67 | $ | 15 | $ | (4,223 | ) | ||||||||||||||||||||||
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Year Ended | |||||||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||||||
Contractual | Employee | ||||||||||||||||||||||||||||||||||||
Favorable/ | Price | Operational | Termination | ||||||||||||||||||||||||||||||||||
2008 | 2007 | (Unfavorable) | Volume | Reductions | Performance | Benefits | Other | Total | |||||||||||||||||||||||||||||
(dollars in millions) | (dollars in millions) | ||||||||||||||||||||||||||||||||||||
Gross Margin | $ | 992 | $ | 1,217 | $ | (225 | ) | $ | (1,534 | ) | $ | (393 | ) | $ | 876 | $ | 115 | $ | 711 | $ | (225 | ) | |||||||||||||||
Percentage of Sales | 5.5 | % | 5.5 | % |
• | $346 million decrease in warranty costs, primarily due to the forgiveness of $107 million due under the warranty settlement agreement with GM during 2008 and a $93 million charge in the Powertrain Systems segment related to higher than normal warranty claims on engine electronic control units in 2007; a $28 million recovery from an affiliated supplier related to previously established warranty reserves in the Thermal Systems segment during 2008; | |
• | $234 million related to decreases in pension and other postretirement and postemployment benefits and workers’ compensation costs; | |
• | $51 million of decreased expenses related to incentive compensation plans for executives; | |
• | $50 million of PCBB and $25 million of labor subsidy reimbursements from GM during 2008; and | |
• | $33 million increase due to the impact of foreign currency exchange rate fluctuations and transactions. |
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• | Electronics and Safety, which includes audio, entertainment and communications, safety systems, body controls and security systems, displays, mechatronics and power electronics, as well as advanced development of software and silicon. | |
• | Powertrain Systems, which includes extensive systems integration expertise in gasoline, diesel and fuel handling and fullend-to-end systems including fuel injection, combustion, electronics controls, exhaust handling, and test and validation capabilities. | |
• | Electrical/Electronic Architecture, which includes complete electrical architecture and component products. | |
• | Thermal Systems, which includes Heating, Ventilating and Air Conditioning (“HVAC”) systems, components for multiple transportation and other adjacent markets, and powertrain cooling and related technologies. | |
• | Automotive Holdings Group, which includes various non-core product lines and plant sites that do not fit Delphi’s future strategic framework. | |
• | The Corporate and Other category includes the expenses of corporate administration, other expenses and income of a non-operating or strategic nature, elimination of inter-segment transactions and charges related to U.S. employee workforce transition programs. Additionally, Corporate and Other includes the Product and Service Solutions business, which is comprised of independent aftermarket, diesel aftermarket, original equipment service, consumer electronics and medical systems. |
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2008: | ||||||||||||||||||||||||||||
Operating (loss) income | $ | (654 | ) | $ | (130 | ) | $ | (361 | ) | $ | 18 | $ | (68 | ) | $ | (286 | ) | $ | (1,481 | ) | ||||||||
Depreciation and amortization | 235 | 248 | 187 | 71 | 32 | 54 | 827 | |||||||||||||||||||||
Long-lived asset impairment charges | 15 | — | 2 | 10 | 10 | — | 37 | |||||||||||||||||||||
Goodwill impairment charges | 157 | — | 168 | — | — | — | 325 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 78 | 78 | |||||||||||||||||||||
GM settlement — MRA | (42 | ) | (94 | ) | (15 | ) | (88 | ) | (62 | ) | 47 | (254 | ) | |||||||||||||||
Employee termination benefits and other exit costs | 147 | 63 | 78 | 24 | 88 | 14 | 414 | |||||||||||||||||||||
Loss on divestitures | 13 | 14 | — | — | 34 | — | 61 | |||||||||||||||||||||
Other transformation and rationalization costs | 59 | 19 | 37 | 4 | — | 128 | 247 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 10 | 5 | 15 | |||||||||||||||||||||
OIBDAR | $ | (70 | ) | $ | 120 | $ | 96 | $ | 39 | $ | 44 | $ | 40 | $ | 269 | |||||||||||||
Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2007: | ||||||||||||||||||||||||||||
Operating income (loss) | $ | 63 | $ | (276 | ) | $ | (36 | ) | $ | (29 | ) | $ | (393 | ) | $ | (1,274 | ) | $ | (1,945 | ) | ||||||||
Depreciation and amortization | 267 | 266 | 175 | 61 | 63 | 82 | 914 | |||||||||||||||||||||
Long-lived asset impairment charges | 1 | 13 | 6 | — | 78 | — | 98 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 212 | 212 | |||||||||||||||||||||
Securities & ERISA litigation charge | — | — | — | — | — | 343 | 343 | |||||||||||||||||||||
Employee termination benefits and other exit costs | 36 | 55 | 132 | 48 | 239 | 30 | 540 | |||||||||||||||||||||
Loss on divestitures | — | 30 | — | — | — | — | 30 | |||||||||||||||||||||
Other transformation and rationalization costs | 72 | 37 | 52 | 4 | 5 | 77 | 247 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 81 | 211 | 292 | |||||||||||||||||||||
OIBDAR | $ | 439 | $ | 125 | $ | 329 | $ | 84 | $ | 73 | $ | (319 | ) | $ | 731 | |||||||||||||
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics and | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||
2008 Total Net Sales | $ | 4,048 | $ | 4,470 | $ | 5,649 | $ | 2,121 | $ | 1,348 | $ | 424 | $ | 18,060 | ||||||||||||||
2007 Total Net Sales | 5,035 | 5,663 | 5,968 | 2,412 | 2,946 | 259 | 22,283 | |||||||||||||||||||||
(Decrease) Increase | $ | (987 | ) | $ | (1,193 | ) | $ | (319 | ) | $ | (291 | ) | $ | (1,598 | ) | $ | 165 | $ | (4,223 | ) | ||||||||
2008 Gross Margin | $ | 51 | $ | 330 | $ | 390 | $ | 147 | $ | (2 | ) | $ | 76 | $ | 992 | |||||||||||||
2007 Gross Margin | 634 | 333 | 584 | 173 | (44 | ) | (463 | ) | 1,217 | |||||||||||||||||||
(Decrease) Increase | $ | (583 | ) | $ | (3 | ) | $ | (194 | ) | $ | (26 | ) | $ | 42 | $ | 539 | $ | (225 | ) | |||||||||
2008 Gross margin percentage | 1.3 | % | 7.4 | % | 6.9 | % | 6.9 | % | (0.1 | )% | 5.5 | % | ||||||||||||||||
2007 Gross margin percentage | 12.6 | % | 5.9 | % | 9.8 | % | 7.2 | % | (1.5 | )% | 5.5 | % |
Years Ended | |||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||
Volume and | |||||||||||||||||||||||||||||||||
Contractual | |||||||||||||||||||||||||||||||||
Favorable/ | Price | Commodity | Foreign | ||||||||||||||||||||||||||||||
2008 | 2007 | (Unfavorable) | Reductions | Pass-through | Exchange | Other | Total | ||||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||||
Electronics and Safety | $ | 1,165 | $ | 1,606 | $ | (441 | ) | $ | (460 | ) | $ | — | $ | 20 | $ | (1 | ) | $ | (441 | ) | |||||||||||||
Powertrain Systems | 1,075 | 1,563 | (488 | ) | (524 | ) | 16 | 20 | — | (488 | ) | ||||||||||||||||||||||
Electrical/Electronic Architecture | 1,440 | 1,750 | (310 | ) | (346 | ) | 6 | 30 | — | (310 | ) | ||||||||||||||||||||||
Thermal Systems | 1,083 | 1,355 | (272 | ) | (314 | ) | 5 | 28 | 9 | (272 | ) | ||||||||||||||||||||||
Automotive Holdings Group | 471 | 1,585 | (1,114 | ) | (1,124 | ) | — | 10 | — | (1,114 | ) | ||||||||||||||||||||||
Corporate and Other | 291 | 442 | (151 | ) | (150 | ) | — | 1 | (2 | ) | (151 | ) | |||||||||||||||||||||
Total | $ | 5,525 | $ | 8,301 | $ | (2,776 | ) | $ | (2,918 | ) | $ | 27 | $ | 109 | $ | 6 | $ | (2,776 | ) | ||||||||||||||
• | Decrease in volume includes approximately $636 million due to the work stoppages. | |
• | Decrease in volume also includes the impact of exiting non-core businesses totaling approximately $1,159 million in the Automotive Holdings Group segment, and decreases of $45 million and $4 million were related to the migration of our converter business to a non-consolidated venture and the sale of the Catalyst Business in our Powertrain Systems segment during 2007, respectively. | |
• | Foreign exchange fluctuations are primarily related to the Euro, Brazilian Real, Chinese Renmenbi, Polish Zloty, and the Hungarian Forint. |
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Years Ended | |||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||
Volume and | |||||||||||||||||||||||||||||||||
Contractual | |||||||||||||||||||||||||||||||||
Favorable/ | Price | Commodity | Foreign | ||||||||||||||||||||||||||||||
2008 | 2007 | (Unfavorable) | Reductions | Pass-through | Exchange | Other | Total | ||||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||||
Electronics and Safety | $ | 2,883 | $ | 3,429 | $ | (546 | ) | $ | (596 | ) | $ | — | $ | 50 | $ | — | $ | (546 | ) | ||||||||||||||
Powertrain Systems | 3,395 | 4,100 | (705 | ) | (782 | ) | 12 | 68 | (3 | ) | (705 | ) | |||||||||||||||||||||
Electrical/Electronic Architecture | 4,209 | 4,218 | (9 | ) | (254 | ) | 29 | 216 | — | (9 | ) | ||||||||||||||||||||||
Thermal Systems | 1,038 | 1,057 | (19 | ) | (74 | ) | 1 | 59 | (5 | ) | (19 | ) | |||||||||||||||||||||
Automotive Holdings Group | 877 | 1,361 | (484 | ) | (514 | ) | (2 | ) | 33 | (1 | ) | (484 | ) | ||||||||||||||||||||
Corporate and Other | 133 | (183 | ) | 316 | 301 | — | (2 | ) | 17 | 316 | |||||||||||||||||||||||
Total | $ | 12,535 | $ | 13,982 | $ | (1,447 | ) | $ | (1,919 | ) | $ | 40 | $ | 424 | $ | 8 | $ | (1,447 | ) | ||||||||||||||
• | Decrease in volume includes the impact of exiting non-core businesses in the Powertrain Systems segment of $417 million in sales due to the migration of the converter business to a non-consolidated venture during 2007 and $151 million in sales due to the sale of the Catalyst Business in the third quarter of 2007. Additionally, non-core divestitures in the Automotive Holdings Group segment sales decreased by $350 million. | |
• | Foreign exchange fluctuations are primarily related to the Euro, Brazilian Real, Chinese Renmenbi, Polish Zloty, and the Hungarian Forint. |
Years Ended | |||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||
Contractual | |||||||||||||||||||||||||||||||||
Favorable/ | Price | Operational | |||||||||||||||||||||||||||||||
2008 | 2007 | (Unfavorable) | Volume | Reductions | Performance | Other | Total | ||||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||||
Electronics and Safety | $ | (70 | ) | $ | 439 | $ | (509 | ) | $ | (502 | ) | $ | (126 | ) | $ | 142 | $ | (23 | ) | $ | (509 | ) | |||||||||||
Powertrain Systems | 120 | 125 | (5 | ) | (335 | ) | (90 | ) | 266 | 154 | (5 | ) | |||||||||||||||||||||
Electrical/Electronic Architecture | 96 | 329 | (233 | ) | (219 | ) | (127 | ) | 198 | (85 | ) | (233 | ) | ||||||||||||||||||||
Thermal Systems | 39 | 84 | (45 | ) | (118 | ) | (34 | ) | 80 | 27 | (45 | ) | |||||||||||||||||||||
Automotive Holdings Group | 44 | 73 | (29 | ) | (536 | ) | (19 | ) | 329 | 197 | (29 | ) | |||||||||||||||||||||
Corporate and Other | 40 | (319 | ) | 359 | (306 | ) | (13 | ) | 1 | 677 | 359 | ||||||||||||||||||||||
Total | $ | 269 | $ | 731 | $ | (462 | ) | $ | (2,016 | ) | $ | (409 | ) | $ | 1,016 | $ | 947 | $ | (462 | ) | |||||||||||||
• | GM’s forgiveness of $112 million of certain cash amounts due under the Warranty Settlement Agreement recorded during 2008 of $12 million, $37 million, $1 million $5 million, $51 million, and $6 million in the Electronics and Safety segment, Powertrain Systems segment, Electrical/Electronic Architecture segment, Thermal Systems segment, Automotive Holdings Group segment, and Corporate and Other segment (which includes the results of the Steering business) respectively; and | |
• | Decrease in warranty expense of approximately $30 million in the Electronics and Safety segment due to the 2007 charge for the instrument cluster product line (the instrument cluster product line was transferred to the Electronics and Safety segment effective December 2007); $93 million in the Powertrain Systems segment due to the 2007 charges related to higher than normal warranty claims on engine electronic control units and the warranty settlement agreement with GM; and $28 million in the |
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Thermal Systems segment due to a recovery from an affiliated supplier during 2008 related to previously incurred warranty costs. |
• | Foreign currency exchange impact of ($23) million, $8 million, $3 million, $9 million and $11 million in the Electronics and Safety, Powertrain Systems, Electrical/Electronic Architecture, Thermal Systems and Automotive Holdings Group segments, respectively. |
• | PCBB and labor subsidy reimbursements from GM totaling $95 million were recognized during the fourth quarter of 2008 and allocated in the amounts of $8 million, $15 million, and $8 million, and $64 million to the Electronics and Safety, Powertrain Systems, Thermal Systems and Corporate and Other segments (which includes the results of the Steering segment), respectively. Refer to Note 2. Transformation Plan and Chapter 11 Bankruptcy to the consolidated financial statements. |
• | $251 million of decreases in pension and other postretirement and postemployment benefit and workers’ compensation costs; | |
• | $196 million due to decreased expenses related to incentive compensation plans for executives; and | |
• | $41 million of decreased corporate expenses retained at Corporate and Other due to the impact of divestitures and certain plant closures. |
Year Ended | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
Favorable/ | ||||||||||||||||||||
2007 | 2006 | (Unfavorable) | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Net sales: | ||||||||||||||||||||
General Motors and affiliates | $ | 8,301 | 37 | % | $ | 9,344 | 41 | % | $ | (1,043 | ) | |||||||||
Other customers | 13,982 | 63 | % | 13,393 | 59 | % | 589 | |||||||||||||
Total net sales | $ | 22,283 | $ | 22,737 | $ | (454 | ) | |||||||||||||
Cost of sales | 21,066 | 21,966 | 900 | |||||||||||||||||
Gross margin | $ | 1,217 | 5.5 | % | $ | 771 | 3.4 | % | $ | 446 | ||||||||||
U.S. employee workforce transition program charges | 212 | 2,706 | 2,494 | |||||||||||||||||
Depreciation and amortization | 914 | 954 | 40 | |||||||||||||||||
Long-lived asset impairment charges | 98 | 172 | 74 | |||||||||||||||||
Selling, general and administrative | 1,595 | 1,481 | (114 | ) | ||||||||||||||||
Securities and ERISA litigation charge | 343 | — | (343 | ) | ||||||||||||||||
Operating loss | $ | (1,945 | ) | $ | (4,542 | ) | $ | 2,597 | ||||||||||||
Interest expense | (769 | ) | (427 | ) | (342 | ) | ||||||||||||||
Loss on extinguishment of debt | (27 | ) | — | (27 | ) | |||||||||||||||
Other income, net | 110 | 40 | 70 | |||||||||||||||||
Reorganization items | (163 | ) | (92 | ) | (71 | ) | ||||||||||||||
Loss from continuing operations before income taxes, minority interest and equity income | $ | (2,794 | ) | $ | (5,021 | ) | $ | 2,227 | ||||||||||||
Income tax benefit (expense) | 522 | (130 | ) | 652 | ||||||||||||||||
Minority interest, net of tax | (63 | ) | (34 | ) | (29 | ) | ||||||||||||||
Equity income, net of tax | 27 | 44 | (17 | ) | ||||||||||||||||
Loss from continuing operations | $ | (2,308 | ) | $ | (5,141 | ) | $ | 2,833 | ||||||||||||
Loss from discontinued operations, net of tax | (757 | ) | (326 | ) | (431 | ) | ||||||||||||||
Cumulative effect of accounting change, net of tax | — | 3 | (3 | ) | ||||||||||||||||
Net loss | $ | (3,065 | ) | $ | (5,464 | ) | $ | 2,399 | ||||||||||||
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Year Ended | |||||||||||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||||||||||
Volume and | Commodity | ||||||||||||||||||||||||||||||||||||||||
Favorable/ | Price | Pass- | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | (Unfavorable) | Reductions | FX | Through | Other | Total | ||||||||||||||||||||||||||||||||||
(dollars in millions) | (dollars in millions) | ||||||||||||||||||||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||||||||||||||||||
General Motors and affiliates | $ | 8,301 | 37 | % | $ | 9,344 | 41 | % | $ | (1,043 | ) | $ | (1,321 | ) | $ | 138 | $ | 61 | $ | 79 | $ | (1,043 | ) | ||||||||||||||||||
Other customers | 13,982 | 63 | % | 13,393 | 59 | % | 589 | (375 | ) | 618 | 259 | 87 | 589 | ||||||||||||||||||||||||||||
Total net sales | $ | 22,283 | $ | 22,737 | $ | (454 | ) | $ | (1,696 | ) | $ | 756 | $ | 320 | $ | 166 | $ | (454 | ) | ||||||||||||||||||||||
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Year Ended | |||||||||||||||||||||||||||||||||||||
December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||||||
Contractual | Employee | ||||||||||||||||||||||||||||||||||||
Favorable/ | Price | Operational | Termination | ||||||||||||||||||||||||||||||||||
2007 | 2006 | (Unfavorable) | Reductions | Volume | Performance | Benefits | Other | Total | |||||||||||||||||||||||||||||
(dollars in millions) | (dollars in millions) | ||||||||||||||||||||||||||||||||||||
Gross Margin | $ | 1,217 | $ | 771 | $ | 446 | $ | (427 | ) | $ | (548 | ) | $ | 1,739 | $ | (240 | ) | $ | (78 | ) | $ | 446 | |||||||||||||||
Percentage of Sales | 5.5 | % | 3.4 | % |
• | $100 million due to reduced costs for temporarily idled U.S. hourly workers who receive nearly full pay and benefits as a result of the U.S. employee workforce transition programs; | |
• | $121 million due to favorable foreign currency exchange impacts; and | |
• | $36 million due to the change in pension excise tax expense. |
• | $76 million in additional warranty expense, primarily in the Powertrain Systems segment; | |
• | $48 million of costs incurred to rationalize manufacturing capacity; | |
• | $32 million of benefit plan settlements in Mexico; | |
• | $30 million due to the loss on sale of our Catalyst business line in 2007; | |
• | $29 million of costs related to the write-off of excess and obsolete inventory as we consolidate and realign our manufacturing facilities to support our overall transformation; | |
• | $108 million recorded as reduction to cost of sales in 2006 as a result of the release of previously recorded postemployment benefit accruals, which did not occur in 2007. Delphi determined that certain previously recorded accruals representing the future cash expenditures expected during the period between the idling of affected employees and the time when such employees are redeployed, retire, or otherwise terminate their employment, were no longer necessary. |
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2007: | ||||||||||||||||||||||||||||
Operating income (loss) | $ | 63 | $ | (276 | ) | $ | (36 | ) | $ | (29 | ) | $ | (393 | ) | $ | (1,274 | ) | $ | (1,945 | ) | ||||||||
Depreciation and amortization | 267 | 266 | 175 | 61 | 63 | 82 | 914 | |||||||||||||||||||||
Long-lived asset impairment charges | 1 | 13 | 6 | — | 78 | — | 98 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 212 | 212 | |||||||||||||||||||||
Securities & ERISA litigation charge | — | — | — | — | — | 343 | 343 | |||||||||||||||||||||
Employee termination benefits and other exit costs | 36 | 55 | 132 | 48 | 239 | 30 | 540 | |||||||||||||||||||||
Loss on divestitures | — | 30 | — | — | — | — | 30 | |||||||||||||||||||||
Other transformation and rationalization costs | 72 | 37 | 52 | 4 | 5 | 77 | 247 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 81 | 211 | 292 | |||||||||||||||||||||
OIBDAR | $ | 439 | $ | 125 | $ | 329 | $ | 84 | $ | 73 | $ | (319 | ) | $ | 731 | |||||||||||||
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2006: | ||||||||||||||||||||||||||||
Operating income (loss) | $ | 188 | $ | (128 | ) | $ | (110 | ) | $ | (170 | ) | $ | (488 | ) | $ | (3,834 | ) | $ | (4,542 | ) | ||||||||
Depreciation and amortization | 268 | 260 | 175 | 67 | 100 | 84 | 954 | |||||||||||||||||||||
Long-lived asset impairment charges | 4 | 12 | 1 | 11 | 144 | — | 172 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 2,706 | 2,706 | |||||||||||||||||||||
Employee termination benefits and other exit costs | 18 | 58 | 82 | 73 | 27 | 11 | 269 | |||||||||||||||||||||
Other transformation and rationalization costs | 11 | 32 | 6 | 13 | 39 | 90 | 191 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 57 | 79 | 136 | |||||||||||||||||||||
OIBDAR | $ | 489 | $ | 234 | $ | 154 | $ | (6 | ) | $ | (121 | ) | $ | (864 | ) | $ | (114 | ) | ||||||||||
Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||
2007 Total Net Sales | $ | 5,035 | $ | 5,663 | $ | 5,968 | $ | 2,412 | $ | 2,946 | $ | 259 | $ | 22,283 | ||||||||||||||
2006 Total Net Sales | 5,093 | 5,565 | 5,365 | 2,607 | 3,638 | 469 | 22,737 | |||||||||||||||||||||
(Decrease) Increase | $ | (58 | ) | $ | 98 | $ | 603 | $ | (195 | ) | $ | (692 | ) | $ | (210 | ) | $ | (454 | ) | |||||||||
2007 Gross Margin | $ | 634 | $ | 333 | $ | 584 | $ | 173 | $ | (44 | ) | $ | (463 | ) | $ | 1,217 | ||||||||||||
2006 Gross Margin | 747 | 442 | 430 | 48 | (5 | ) | (891 | ) | 771 | |||||||||||||||||||
(Decrease)/Increase | $ | (113 | ) | $ | (109 | ) | $ | 154 | $ | 125 | $ | (39 | ) | $ | 428 | $ | 446 | |||||||||||
2007 Gross margin percentage | 12.6 | % | 5.9 | % | 9.8 | % | 7.2 | % | (1.5 | )% | 5.5 | % | ||||||||||||||||
2006 Gross margin percentage | 14.7 | % | 7.9 | % | 8.0 | % | 1.8 | % | (0.1 | )% | 3.4 | % |
Years Ended December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||
Volume and | |||||||||||||||||||||||||||||||||
Favorable/ | Contractual Price | Commodity | Foreign | ||||||||||||||||||||||||||||||
2007 | 2006 | (Unfavorable) | Reductions | Pass-through | Exchange(c) | Other (d) | Total | ||||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||||
Electronics and Safety | $ | 1,606 | $ | 1,587 | $ | 19 | $ | (81 | ) | $ | — | $ | 25 | $ | 75 | $ | 19 | ||||||||||||||||
Powertrain Systems | 1,563 | 1,745 | (182 | ) | (214 | ) | 17 | 24 | (9 | ) | (182 | ) | |||||||||||||||||||||
Electrical/Electronic Architecture | 1,750 | 1,772 | (22 | ) | (101 | ) | 33 | 38 | 8 | (22 | ) | ||||||||||||||||||||||
Thermal Systems | 1,355 | 1,600 | (245 | ) | (283 | ) | 9 | 26 | 3 | (245 | ) | ||||||||||||||||||||||
Automotive Holdings Group | 1,585 | 2,031 | (446 | ) | (467 | ) | 2 | 21 | (2 | ) | (446 | ) | |||||||||||||||||||||
Corporate and Other | 442 | 609 | (167 | ) | (174 | ) | — | 3 | 4 | (167 | ) | ||||||||||||||||||||||
Total | $ | 8,301 | $ | 9,344 | $ | (1,043 | ) | $ | (1,320 | ) | $ | 61 | $ | 137 | $ | 79 | $ | (1,043 | ) | ||||||||||||||
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• | Decrease in volume includes the impact of exiting non-core businesses in the Automotive Holdings Group segment totaling approximately $65 million in sales. | |
• | Foreign exchange fluctuations are primarily related to the Euro, Brazilian Real, Korean Won, and Chinese Renmenbi. |
Years Ended December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||
Volume and | |||||||||||||||||||||||||||||||||
Favorable/ | Contractual Price | Commodity | Foreign | ||||||||||||||||||||||||||||||
2007 | 2006 | (Unfavorable) | Reductions | Pass-through | Exchange | Other | Total | ||||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||||
Electronics and Safety | $ | 3,429 | $ | 3,506 | $ | (77 | ) | $ | (198 | ) | $ | — | $ | 125 | $ | (4 | ) | $ | (77 | ) | |||||||||||||
Powertrain Systems | 4,100 | 3,820 | 280 | (48 | ) | 162 | 169 | (3 | ) | 280 | |||||||||||||||||||||||
Electrical/Electronic Architecture | 4,218 | 3,593 | 625 | 335 | 92 | 206 | (8 | ) | 625 | ||||||||||||||||||||||||
Thermal Systems | 1,057 | 1,007 | 50 | (106 | ) | — | 51 | 105 | 50 | ||||||||||||||||||||||||
Automotive Holdings Group | 1,361 | 1,607 | (246 | ) | (294 | ) | 5 | 42 | 1 | (246 | ) | ||||||||||||||||||||||
Corporate and Other | (183 | ) | (140 | ) | (43 | ) | (63 | ) | — | 24 | (4 | ) | (43 | ) | |||||||||||||||||||
Total | $ | 13,982 | $ | 13,393 | $ | 589 | $ | (374 | ) | $ | 259 | $ | 617 | $ | 87 | $ | 589 | ||||||||||||||||
• | Decrease in volume includes the impact of exiting non-core businesses in the Automotive Holdings Group segment totaling approximately $233 million in sales. | |
• | Foreign exchange fluctuations are primarily related to the Euro, Brazilian Real, Korean Won, and Chinese Renmenbi. |
Years Ended December 31, | Variance Due To: | ||||||||||||||||||||||||||||||||
Contractual | |||||||||||||||||||||||||||||||||
Favorable/ | Price | Operational | |||||||||||||||||||||||||||||||
2007 | 2006 | (Unfavorable) | Volume | Reductions | Performance | Other | Total | ||||||||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||||||||||||
Electronics and Safety | $ | 439 | $ | 489 | $ | (50 | ) | $ | (64 | ) | $ | (117 | ) | $ | 160 | $ | (29 | ) | $ | (50 | ) | ||||||||||||
Powertrain Systems | 125 | 234 | (109 | ) | (177 | ) | (101 | ) | 236 | (67 | ) | (109 | ) | ||||||||||||||||||||
Electrical/Electronic Architecture | 329 | 154 | 175 | 17 | (131 | ) | 284 | 5 | 175 | ||||||||||||||||||||||||
Thermal Systems | 84 | (6 | ) | 90 | (108 | ) | (55 | ) | 181 | 72 | 90 | ||||||||||||||||||||||
Automotive Holdings Group | 73 | (121 | ) | 194 | (272 | ) | (57 | ) | 441 | 82 | 194 | ||||||||||||||||||||||
Corporate and Other | (319 | ) | (864 | ) | 545 | (8 | ) | (9 | ) | 667 | (105 | ) | 545 | ||||||||||||||||||||
Total | $ | 731 | $ | (114 | ) | $ | 845 | $ | (612 | ) | $ | (470 | ) | $ | 1,969 | $ | (42 | ) | $ | 845 | |||||||||||||
• | $30 million of increased warranty expense primarily due to the instrument clusters product line in the Electronics and Safety segment; and $66 million in additional warranty reserves in the Powertrain Systems segment; offset by | |
• | $40 million of reduced warranty expense in the Thermal Systems segment. |
• | Favorable foreign currency exchange impact of $41 million, $14 million, $17 million, and $3 million in the Electronics and Safety, Powertrain Systems, Electrical/Electronic Architecture and Automotive Holdings Group segments, respectively. |
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• | As a result of the U.S. workforce transition program, reduced costs for temporarily idled U.S. hourly workers who received nearly full pay and benefits of $22 million, $32 million, $7 million, $43 million and $33 million in the Powertrain Systems segment, Electrical/Electronic Architecture segment, Thermal Systems segment, Automotive Holdings Group segment, and Corporate and Other segment (which includes the operating results of the Steering business), respectively. |
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• | June 30, 2009, but subject to the satisfaction of certain conditions below; | |
• | Delphi’s failure to comply with its covenants under the Accommodation Agreement or the occurrence of certain other events set forth in the Accommodation Agreement; and | |
• | An event of default under the Amended and Restated DIP Credit Facility (other than the failure to repay the loans under the facility on the maturity date or comply with certain other repayment provisions). |
(a) | received binding commitments, subject to customary conditions, on or prior to April 2, 2009, for debt and equity financing sufficient for it to emerge from chapter 11 pursuant to the modified plan of reorganization which was filed with the Court on October 3, 2008, or any other plan of reorganization that provides the administrative agent and the lenders under the Amended and Restated DIP Credit Facility with the same treatment as that set forth in the modified plan of reorganization; or |
(b) | (i) has filed on or prior to April 2, 2009, modifications to the modified plan of reorganization or any other plan of reorganization to which the administrative agent does not submit a notice, within ten business days of such filing, informing Delphi that either (A) the Required Lenders (as defined in the Accommodation Agreement) or (B) lenders party to the Accommodation Agreement holding Tranche A, Tranche B Term Loan and Tranche C Term Loan commitments and exposure representing in excess of 50% of the Tranche A, Tranche B Term Loan and Tranche C Term Loan commitments and exposure held by all lenders party to the Accommodation Agreement (the “Required Total Participant Lenders”), affirmatively oppose such modifications or plan of reorganization (a “Notice”), and |
• | replace or cash collateralize, at 105% of the undrawn amount thereof, all outstanding letters of credit under the Amended and Restated DIP Credit Facility that had not been collateralized prior to that date, and | |
• | limit the aggregate principal amounts outstanding under Tranche A borrowings to no more than $377 million. |
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Borrowings as of | Rates Effective as of | |||||||||||
December 31, | December 31, | |||||||||||
ABR plus | 2008 | 2008 | ||||||||||
Tranche A | 5.00 | % | $ | 370 | 9.25 | % | ||||||
Tranche B | 5.00 | % | $ | 500 | 9.25 | % | ||||||
Tranche C | 6.25 | % | $ | 2,750 | 10.50 | % |
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Period Ending | Global EBITDAR | |||
(in millions) | ||||
January 31, 2009 | $ | 185 | ||
February 28, 2009 | $ | (50 | ) | |
March 31, 2009 | $ | (150 | ) | |
April 30, 2009 | $ | (250 | ) | |
May 31, 2009 | $ | (350 | ) |
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(in millions) | ||||
Beginning Balance at December 31, 2007 | $ | 205 | ||
Receivables transferred | 1,496 | |||
Proceeds from new securitizations | (1,549 | ) | ||
Receivables Repurchased | (96 | ) | ||
Other | 32 | |||
Ending Balance | $ | 88 | ||
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December 31, | December 31, | |||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Long-term debt subject to compromise: | ||||||||
Senior unsecured debt with maturities ranging from 2006 to 2029 | $ | 1,984 | $ | 1,984 | ||||
Junior subordinated notes due 2033 | 391 | 391 | ||||||
Total long-term debt subject to compromise | 2,375 | 2,375 | ||||||
Short-term, other, and long-term debt not subject to compromise: | ||||||||
Amended and Restated DIP term loans | ||||||||
(Tranches B and C) | 3,250 | — | ||||||
Amended and Restated DIP revolving credit facility (Tranche A) | 370 | — | ||||||
Refinanced DIP term loans | — | 2,746 | ||||||
Accounts receivable factoring and European securitization | 352 | 589 | ||||||
Other debt | 202 | 160 | ||||||
Total short-term and other debt not subject to compromise | 4,174 | 3,495 | ||||||
Other long-term debt | 55 | 59 | ||||||
Total debt not subject to compromise | 4,229 | 3,554 | ||||||
Total outstanding debt | $ | 6,604 | $ | 5,929 | ||||
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(a) | Our minimum funding requirements as set forth by ERISA. Our minimum statutory funding requirements after 2008 are dependent on several factors as discussed in Note 17. Pension and Other Postretirement Benefits to the consolidated financial statements. |
(b) | Payments due under our other OPEB plans. These plans are not required to be funded in advance, but are “pay as you go.” For further information refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources, U.S. Pension Plans and Other Postretirement Benefits and Note 25. Subsequent Events to the consolidated financial statements in this Annual Report. |
(c) | Estimated interest costs of $188 million for 2009 through the accommodation period under the Accommodation Agreement. Amounts beyond the term of the Accommodation Agreement are unable to be estimated. |
(d) | As of December 31, 2008, the gross liability for uncertain tax positions under FIN 48 is $79 million. We do not expect a significant payment related to these obligations to be made within the next twelve months. We are not able to provide a reasonably reliable estimate of the timing of future payments relating to the non-current FIN 48 obligations. For more information, refer to Note 8. Income Taxes to the consolidated financial statements. |
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(e) | Any payments resulting from the settlement of liabilities subject to compromise. |
Payments due by Period | ||||||||||||||||||||
2010 | 2012 | |||||||||||||||||||
Total | 2009 | & 2011 | & 2013 | Thereafter | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Debt and capital lease obligations (1) | $ | 4,229 | $ | 4,174 | $ | 24 | $ | 10 | $ | 21 | ||||||||||
Operating lease obligations | 385 | 92 | 136 | 99 | 58 | |||||||||||||||
Contractual commitments for capital expenditures | 254 | 247 | 7 | — | — | |||||||||||||||
Other contractual purchase commitments, including information technology | 304 | 156 | 137 | 11 | — | |||||||||||||||
Total | $ | 5,172 | $ | 4,669 | $ | 304 | $ | 120 | $ | 79 | ||||||||||
(1) | These amounts include the $3.6 billion outstanding under the Amended and Restated DIP Credit Facility |
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Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Electronics and Safety | $ | 166 | $ | 161 | $ | 180 | ||||||
Powertrain Systems | 306 | 149 | 157 | |||||||||
Electrical/Electronic Architecture | 179 | 182 | 182 | |||||||||
Thermal Systems | 98 | 66 | 25 | |||||||||
Automotive Holdings Group | 15 | 3 | 53 | |||||||||
Corporate and Other | 33 | 19 | 25 | |||||||||
Continuing operations capital expenditures | 797 | 580 | 622 | |||||||||
Discontinued operations | 161 | 66 | 99 | |||||||||
Total capital expenditures | $ | 958 | $ | 646 | $ | 721 | ||||||
North America | $ | 261 | $ | 255 | $ | 253 | ||||||
Europe, Middle East & Africa | 373 | 217 | 275 | |||||||||
Asia Pacific | 118 | 85 | 72 | |||||||||
South America | 45 | 23 | 22 | |||||||||
Continuing operations capital expenditures | 797 | 580 | 622 | |||||||||
Discontinued operations | 161 | 66 | 99 | |||||||||
Total capital expenditures | $ | 958 | $ | 646 | $ | 721 | ||||||
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U.S. Delphi | U.S. Delphi | U.S. Delphi | U.S. Delphi | |||||||||||||
Hourly | Salaried | Subsidiaries | Total | |||||||||||||
(in millions) | ||||||||||||||||
Underfunded status at December 31, 2007 (PBO basis) | $ | (2,719 | ) | $ | (572 | ) | $ | (15 | ) | $ | (3,306 | ) | ||||
Pension contributions | 157 | 105 | 2 | 264 | ||||||||||||
2008 actual asset returns | (2,028 | ) | (1,109 | ) | (18 | ) | (3,155 | ) | ||||||||
Actuarial gain (loss) | 43 | (288 | ) | (6 | ) | (251 | ) | |||||||||
Interest and service cost | (595 | ) | (340 | ) | (7 | ) | (942 | ) | ||||||||
Impact of transfers/settlements | 2,083 | — | — | 2,083 | ||||||||||||
Impact of curtailments | — | (75 | ) | — | (75 | ) | ||||||||||
Plan amendments and other | — | 118 | — | 118 | ||||||||||||
Underfunded status at December 31, 2008 (PBO basis) | $ | (3,059 | ) | $ | (2,161 | ) | $ | (44 | ) | $ | (5,264 | ) | ||||
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• | It requires us to make assumptions about matters that were uncertain at the time we were making the estimate, and | |
• | Changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results of operations. |
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ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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Tranche B | Tranche C | |||||||||||||||
Change in Rate | Tranche A | Term Loan | Term Loan | Other(1) | ||||||||||||
(impact to interest expense in millions) | ||||||||||||||||
25 bps decrease | N/A (2 | ) | N/A (2 | ) | N/A (2 | ) | −$ | 1.1 | ||||||||
25 bps increase | +$ | 0.9 | +$ | 1.3 | +$ | 6.9 | +$ | 1.1 |
(1) | Includes European Securitization Program, Accounts Receivable Factoring and other overseas bank debt. | |
(2) | The interest rates in effect at December 31, 2008 for Tranche A, the Tranche B Term Loan and the Tranche C Term Loan were at the minimum contractual interest rates (the ABR floor of 4.25% plus 5.00%, 5.00% and 6.25% for Trance A, the Tranche B Term Loan and the Tranche C Term Loan, respectively). |
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ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
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(DEBTOR-IN-POSSESSION)
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions, except per share amounts) | ||||||||||||
Net sales: | ||||||||||||
General Motors and affiliates | $ | 5,525 | $ | 8,301 | $ | 9,344 | ||||||
Other customers | 12,535 | 13,982 | 13,393 | |||||||||
Total net sales | 18,060 | 22,283 | 22,737 | |||||||||
Operating expenses: | ||||||||||||
Cost of sales, excluding items listed below | 17,068 | 21,066 | 21,966 | |||||||||
U.S. employee workforce transition program charges (Note 16) | 78 | 212 | 2,706 | |||||||||
GM settlement (Note 2 — MRA) | (254 | ) | — | — | ||||||||
Depreciation and amortization | 827 | 914 | 954 | |||||||||
Long-lived asset impairment charges (Note 9) | 37 | 98 | 172 | |||||||||
Goodwill impairment charges (Note 10) | 325 | — | — | |||||||||
Selling, general and administrative | 1,460 | 1,595 | 1,481 | |||||||||
Securities & ERISA litigation charge (Note 18) | — | 343 | — | |||||||||
Total operating expenses | 19,541 | 24,228 | 27,279 | |||||||||
Operating loss | (1,481 | ) | (1,945 | ) | (4,542 | ) | ||||||
Interest expense (Contractual interest expense for 2008, 2007 and 2006 was $564 million, $494 million and $577 million, respectively) (Note 1) | (437 | ) | (769 | ) | (427 | ) | ||||||
Loss on extinguishment of debt | (49 | ) | (27 | ) | — | |||||||
Other income, net (Note 20) | 69 | 110 | 40 | |||||||||
Reorganization items, net: | ||||||||||||
GM settlement (Notes 2 and 3 — GSA) | 5,332 | — | — | |||||||||
Professional fees and other, net (Note 3) | (185 | ) | (163 | ) | (92 | ) | ||||||
Income (loss) from continuing operations before income taxes, minority interest and equity income | 3,249 | (2,794 | ) | (5,021 | ) | |||||||
Income tax (expense) benefit | (166 | ) | 522 | (130 | ) | |||||||
Minority interest, net of tax | (28 | ) | (63 | ) | (34 | ) | ||||||
Equity income, net of tax | 1 | 27 | 44 | |||||||||
Income (loss) from continuing operations | 3,056 | (2,308 | ) | (5,141 | ) | |||||||
Loss from discontinued operations, net of tax (Note 5) | (19 | ) | (757 | ) | (326 | ) | ||||||
Cumulative effect of accounting change, net of tax | — | — | 3 | |||||||||
Net income (loss) | $ | 3,037 | $ | (3,065 | ) | $ | (5,464 | ) | ||||
Basic and diluted income (loss) per share | ||||||||||||
Continuing operations | $ | 5.41 | $ | (4.11 | ) | $ | (9.16 | ) | ||||
Discontinued operations | (0.03 | ) | (1.34 | ) | (0.58 | ) | ||||||
Cumulative effect of accounting change | — | — | 0.01 | |||||||||
Basic and diluted income (loss) per share | $ | 5.38 | $ | (5.45 | ) | $ | (9.73 | ) | ||||
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(DEBTOR-IN-POSSESSION)
December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 959 | $ | 1,036 | ||||
Restricted cash (Note 1) | 403 | 173 | ||||||
Accounts receivable, net: | ||||||||
General Motors and affiliates | 822 | 1,257 | ||||||
Other | 1,572 | 2,637 | ||||||
Inventories, net (Note 11) | 1,285 | 1,808 | ||||||
Other current assets | 613 | 588 | ||||||
Assets held for sale (Note 5) | 497 | 720 | ||||||
Total current assets | 6,151 | 8,219 | ||||||
Long-term assets: | ||||||||
Property, net (Note 9) | 3,397 | 3,863 | ||||||
Investments in affiliates (Note 19) | 303 | 387 | ||||||
Goodwill (Note 10) | 62 | 397 | ||||||
Other | 393 | 801 | ||||||
Total long-term assets | 4,155 | 5,448 | ||||||
Total assets | $ | 10,306 | $ | 13,667 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Notes payable and current portion of long-term debt (Note 15) | $ | 554 | $ | 749 | ||||
Debtor-in-possession financing (Note 15) | 3,620 | 2,746 | ||||||
Accounts payable | 1,771 | 2,904 | ||||||
Accrued liabilities (Note 12) | 2,171 | 2,281 | ||||||
Liabilities held for sale (Note 5) | 313 | 412 | ||||||
Total current liabilities | 8,429 | 9,092 | ||||||
Long-term liabilities: | ||||||||
Long-term debt (Note 15) | 55 | 59 | ||||||
Employee benefit obligations (Note 17) | 552 | 443 | ||||||
Other (Note 12) | 973 | 1,185 | ||||||
Total long-term liabilities | 1,580 | 1,687 | ||||||
Liabilities subject to compromise (Note 14) | 14,583 | 16,197 | ||||||
Total liabilities | 24,592 | 26,976 | ||||||
Commitments and contingencies (Note 18) | ||||||||
Minority interest | 139 | 163 | ||||||
Stockholders’ deficit: | ||||||||
Common stock, $0.01 par value, 1,350 million shares authorized, 565 million shares issued | 6 | 6 | ||||||
Additional paid-in capital | 2,747 | 2,756 | ||||||
Accumulated deficit | (12,064 | ) | (14,976 | ) | ||||
Accumulated other comprehensive income (loss): | ||||||||
Employee benefit plans (Note 17) | (4,867 | ) | (1,679 | ) | ||||
Other | (241 | ) | 446 | |||||
Total accumulated other comprehensive income (loss) | (5,108 | ) | (1,233 | ) | ||||
Treasury stock, at cost (391 thousand and 1.5 million shares in 2008 and 2007, respectively) | (6 | ) | (25 | ) | ||||
Total stockholders’ deficit | (14,425 | ) | (13,472 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 10,306 | $ | 13,667 | ||||
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(DEBTOR-IN-POSSESSION)
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 3,037 | $ | (3,065 | ) | $ | (5,464 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 827 | 914 | 954 | |||||||||
Long-lived asset and goodwill impairment charges | 362 | 98 | 172 | |||||||||
Deferred income taxes | (15 | ) | (638 | ) | (55 | ) | ||||||
Pension and other postretirement benefit expenses | 611 | 905 | 1,392 | |||||||||
Equity income | (1 | ) | (27 | ) | (44 | ) | ||||||
Reorganization items (Notes 2 and 3 — GSA) | (5,147 | ) | 163 | 92 | ||||||||
GM settlement (Note 2 — MRA) | (254 | ) | — | — | ||||||||
GM warranty settlement (Note 13) | (107 | ) | — | — | ||||||||
U.S. employee workforce transition program charges | 78 | 212 | 2,706 | |||||||||
Loss on extinguishment of debt | 49 | 27 | — | |||||||||
Securities & ERISA litigation charge | — | 343 | — | |||||||||
Loss on liquidation/deconsolidation of investment | — | 79 | — | |||||||||
Loss on assets held for sale, net of gain on sale of investment | 9 | — | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable, net | 1,361 | (186 | ) | 78 | ||||||||
Inventories, net | 476 | 29 | (242 | ) | ||||||||
Other current assets | 245 | (38 | ) | (71 | ) | |||||||
Accounts payable | (1,009 | ) | 303 | 411 | ||||||||
Accrued and other long-term liabilities | (512 | ) | 747 | 428 | ||||||||
Other, net | (197 | ) | (42 | ) | 39 | |||||||
U.S. employee workforce transition program payments, net of reimbursement by GM | (219 | ) | (528 | ) | (249 | ) | ||||||
Pension contributions | (383 | ) | (304 | ) | (305 | ) | ||||||
Other postretirement benefit payments | (216 | ) | (207 | ) | (262 | ) | ||||||
Receipts (payments) for GM settlement and reorganization items, net | 1,115 | (142 | ) | (70 | ) | |||||||
Dividends from equity investments | 11 | 45 | 19 | |||||||||
Discontinued operations (Note 5) | 115 | 1,023 | 480 | |||||||||
Net cash provided by (used in) operating activities | 236 | (289 | ) | 9 | ||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (797 | ) | (580 | ) | (622 | ) | ||||||
Proceeds from sale ofnon-U.S. trade bank notes | 219 | 191 | 173 | |||||||||
Proceeds from divestitures and sale of property | 216 | 129 | 85 | |||||||||
Increase in restricted cash | (230 | ) | (22 | ) | (105 | ) | ||||||
Other, net | (37 | ) | 1 | 3 | ||||||||
Discontinued operations | (110 | ) | (58 | ) | (88 | ) | ||||||
Net cash used in investing activities | (739 | ) | (339 | ) | (554 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from amended and restateddebtor-in-possession facility, net of issuance cost of $92 million | 3,528 | — | — | |||||||||
Proceeds from refinanceddebtor-in-possession facility, net of issuance cost of $7 million | — | 2,691 | — | |||||||||
Repayments of borrowings from refinanceddebtor-in-possession facility | (2,746 | ) | — | — | ||||||||
Net repayments of borrowings under refinanceddebtor-in-possession facility | — | (250 | ) | — | ||||||||
Repayments of borrowings under prepetition term loan facility | — | (988 | ) | — | ||||||||
(Repayments) borrowings under prepetition revolving credit facility | — | (1,508 | ) | 2 | ||||||||
Repayments under cash overdraft. | — | — | (29 | ) | ||||||||
Net (repayments) borrowings under other short-term debt agreements | (203 | ) | 49 | (111 | ) | |||||||
Accommodation agreement issuance costs | (58 | ) | — | — | ||||||||
Dividend payments of consolidated affiliates to minority shareholders | (47 | ) | (50 | ) | (22 | ) | ||||||
Other, net | — | — | (4 | ) | ||||||||
Discontinued operations | (9 | ) | (2 | ) | 42 | |||||||
Net cash provided by (used in) financing activities | 465 | (58 | ) | (122 | ) | |||||||
Effect of exchange rate fluctuations on cash and cash equivalents | (39 | ) | 114 | 79 | ||||||||
Decrease in cash and cash equivalents | (77 | ) | (572 | ) | (588 | ) | ||||||
Cash and cash equivalents at beginning of year | 1,036 | 1,608 | 2,196 | |||||||||
Cash and cash equivalents at end of year | $ | 959 | $ | 1,036 | $ | 1,608 | ||||||
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Retained | Accumulated Other | |||||||||||||||||||||||||||||||||||
Common | Additional | Earnings | Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||
Stock | Paid-in | (Accumulated | Employee | Treasury | Stockholders’ | |||||||||||||||||||||||||||||||
Shares | Amount | Capital | Deficit) | Benefit Plans | Other | Total | Stock | Equity (Deficit) | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2005 | 565 | 6 | 2,744 | (6,429 | ) | (2,395 | ) | (119 | ) | (2,514 | ) | (52 | ) | (6,245 | ) | |||||||||||||||||||||
Net loss | — | — | — | (5,464 | ) | — | — | — | — | (5,464 | ) | |||||||||||||||||||||||||
Currency translation adjustments and other, net of tax | — | — | — | — | — | 231 | 231 | — | 231 | |||||||||||||||||||||||||||
Net change in unrecognized gain on derivative instruments, net of tax | — | — | — | — | — | 44 | 44 | — | 44 | |||||||||||||||||||||||||||
Minimum pension liability adjustment, net of tax | — | — | — | — | 1,281 | — | 1,281 | — | 1,281 | |||||||||||||||||||||||||||
Total comprehensive loss | (3,908 | ) | ||||||||||||||||||||||||||||||||||
Adoption of FASB Statement No. 158 | — | — | — | — | (1,927 | ) | — | (1,927 | ) | — | (1,927 | ) | ||||||||||||||||||||||||
Share-based compensation expense | — | — | 25 | — | — | — | — | — | 25 | |||||||||||||||||||||||||||
Balance at December 31, 2006 | 565 | 6 | 2,769 | (11,893 | ) | (3,041 | )(a) | 156 | (b) | (2,885 | ) | (52 | ) | (12,055 | ) | |||||||||||||||||||||
Net loss | — | — | — | (3,065 | ) | — | — | — | — | (3,065 | ) | |||||||||||||||||||||||||
Currency translation adjustments and other, net of tax | — | — | — | — | — | 294 | 294 | — | 294 | |||||||||||||||||||||||||||
Net change in unrecognized gain on derivative instruments, net of tax | — | — | — | — | — | (4 | ) | (4 | ) | — | (4 | ) | ||||||||||||||||||||||||
Employee benefit plans liability adjustment, net of tax | — | — | — | — | 1,362 | (c) | — | 1,362 | — | 1,362 | ||||||||||||||||||||||||||
Total comprehensive loss | (1,413 | ) | ||||||||||||||||||||||||||||||||||
Adoption of FIN 48 | — | — | — | (18 | ) | — | — | — | — | (18 | ) | |||||||||||||||||||||||||
Share-based compensation expense | — | ��� | 14 | — | — | — | — | — | 14 | |||||||||||||||||||||||||||
Treasury shares issued | — | — | (27 | ) | — | — | — | — | 27 | — | ||||||||||||||||||||||||||
Balance at December 31, 2007 | 565 | $ | 6 | $ | 2,756 | $ | (14,976 | ) | $ | (1,679 | )(a) | $ | 446 | (b) | $ | (1,233 | ) | $ | (25 | ) | $ | (13,472 | ) | |||||||||||||
Adoption of FASB Statement No. 158, net of tax | — | — | — | (125 | ) | (12 | ) | — | (12 | ) | — | (137 | ) | |||||||||||||||||||||||
Balance at January 1, 2008 | 565 | $ | 6 | $ | 2,756 | $ | (15,101 | ) | $ | (1,691 | )(a) | $ | 446 | (b) | $ | (1,245 | ) | $ | (25 | ) | $ | (13,609 | ) | |||||||||||||
Net income | — | — | — | 3,037 | — | — | — | — | 3,037 | |||||||||||||||||||||||||||
Currency translation adjustments and other, net of tax | — | — | — | — | — | (441 | ) | (441 | ) | — | (441 | ) | ||||||||||||||||||||||||
Net change in unrecognized loss on derivative instruments, net of tax | — | — | — | — | — | (246 | ) | (246 | ) | — | (246 | ) | ||||||||||||||||||||||||
Employee benefit plans liability adjustment, net of tax | — | — | — | — | (3,176 | ) | — | (3,176 | ) | — | (3,176 | ) | ||||||||||||||||||||||||
Total comprehensive loss | (826 | ) | ||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 10 | — | — | — | — | — | 10 | |||||||||||||||||||||||||||
Treasury shares issued | — | — | (19 | ) | — | — | — | — | 19 | — | ||||||||||||||||||||||||||
Balance at December 31, 2008 | 565 | $ | 6 | $ | 2,747 | $ | (12,064 | ) | $ | (4,867 | )(a) | $ | (241 | )(b) | $ | (5,108 | ) | $ | (6 | ) | $ | (14,425 | ) | |||||||||||||
(a) | Accumulated Other Comprehensive Loss — Employee Benefit Plans includes a loss for pension, postretirement and postemployment liabilities of $4,867 million (net of a $490 million tax effect), $1,679 million (net of a $457 million tax effect) and $3,041 million (net of a $1,213 million tax effect) for 2008, 2007 and 2006, respectively. | |
(b) | Accumulated Other Comprehensive Loss — Other includes a loss of $44 million for 2008 and a gain of $394 million and $100 million for 2007 and 2006, respectively, within currency translation adjustments and other; and a loss of $194 million for 2008 and a gain of $52 million and $56 million, for 2007 and 2006, respectively, within net change in unrecognized gain on derivative instruments, and other loss of $3 million for 2008. | |
(c) | Includes a tax benefit of $703 million related to $1.9 billion U.S. pre-tax other comprehensive income related to employee benefits. Refer to Note 8. Income Taxes for more information |
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1. | SIGNIFICANT ACCOUNTING POLICIES |
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2. | TRANSFORMATION PLAN AND CHAPTER 11 BANKRUPTCY |
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Reorganization | Cash Received | Pre-Tax Earnings | Cash Received | |||||||||||||
Gain (Loss) | from GM | Benefit from GM | from GM | |||||||||||||
Upon Effectiveness | Upon Effectiveness | Post Effectiveness | Post Effectiveness | |||||||||||||
(in millions) | ||||||||||||||||
Hourly Pension Plan Settlement: | ||||||||||||||||
Hourly Plan First Pension Transfer to GM | $ | 2,083 | $ | — | $ | — | $ | — | ||||||||
Recognition of Hourly Plan related OCI amounts | (494 | ) | — | — | — | |||||||||||
Hourly OPEB Settlement: | ||||||||||||||||
GM assumption of OPEB obligation | 6,821 | — | — | — | ||||||||||||
Recognition of OPEB related OCI amounts | 266 | — | — | — | ||||||||||||
Allowed Claims and Other: | ||||||||||||||||
Allowed GM administrative claim | (1,628 | ) | — | — | — | |||||||||||
Allowed GM general unsecured claim | (2,500 | ) | — | — | — | |||||||||||
Allowed IUE-CWA and USW claims | (129 | ) | — | — | — | |||||||||||
OPEB reimbursement from GM | 353 | 350 | 60 | 51 | ||||||||||||
Special attrition programs (Note 16) | 491 | 230 | — | 68 | ||||||||||||
Other, net | 69 | 61 | — | — | ||||||||||||
Total, net | $ | 5,332 | $ | 641 | $ | 60 | $ | 119 | ||||||||
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GM Settlement Gain | Cash Received | Pre-Tax Earnings | Cash Received | |||||||||||||
in Pre-Tax Earnings | from GM | Benefit | from GM | |||||||||||||
Upon Effectiveness | Upon Effectiveness | Post Effectiveness | Post Effectiveness | |||||||||||||
(in millions) | ||||||||||||||||
Reimbursement of hourly labor costs | $ | 272 | $ | 273 | $ | 25 | $ | 2 | ||||||||
Production cash burn breakeven reimbursement | 81 | 74 | 70 | 28 | ||||||||||||
Working capital backstop — Steering Business | — | 210 | — | — | ||||||||||||
Other | 2 | 2 | — | — | ||||||||||||
Total, net | $ | 355 | $ | 559 | $ | 95 | $ | 30 | ||||||||
Continuing operations | $ | 254 | $ | 75 | ||||||||||||
Discontinued operations | $ | 101 | $ | 20 |
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3. | REORGANIZATION ITEMS |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
GM Amended GSA settlement (Note 2) | $ | 5,332 | $ | — | $ | — | ||||||
Professional fees directly related to reorganization | (107 | ) | (169 | ) | (150 | ) | ||||||
Interest income | 7 | 11 | 55 | |||||||||
Write off of previously capitalized fees and expenses related to the EPCA | (79 | ) | — | — | ||||||||
Gain (loss) on settlement of prepetition liabilities | (1 | ) | 2 | 3 | ||||||||
Other | (5 | ) | (7 | ) | — | |||||||
Total Reorganization Items | $ | 5,147 | $ | (163 | ) | $ | (92 | ) | ||||
4. | WEIGHTED AVERAGE SHARES AND DIVIDENDS |
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2008 | 2007 | 2006 | ||||||||||
(in thousands) | ||||||||||||
Weighted average basic and diluted shares outstanding | 564,361 | 561,884 | 561,782 | |||||||||
2008 | 2007 | 2006 | ||||||||||
(in thousands) | ||||||||||||
Anti-dilutive securities | 58,953 | 74,310 | 83,904 | |||||||||
5. | DISCONTINUED OPERATIONS |
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Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Sales: | ||||||||||||
Steering Business | $ | 2,082 | $ | 2,602 | $ | 2,462 | ||||||
Interiors and Closures Business | 241 | 1,275 | 1,193 | |||||||||
Total sales | $ | 2,323 | $ | 3,877 | $ | 3,655 | ||||||
Loss before income taxes (including minority interest and equity income, net of tax) | $ | (8 | ) | $ | (749 | ) | $ | (320 | ) | |||
Provision for income taxes | (11 | ) | (8 | ) | (6 | ) | ||||||
Loss from discontinued operations | $ | (19 | ) | $ | (757 | ) | $ | (326 | ) | |||
Steering Business | (34 | ) | (677 | ) | (281 | ) | ||||||
Interiors and Closures Business | 15 | (80 | ) | (45 | ) |
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December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Current Assets: | ||||||||
Cash | $ | 20 | $ | 49 | ||||
Accounts receivable | 299 | 411 | ||||||
Inventory | 152 | 188 | ||||||
Other current assets | 24 | 8 | ||||||
Long-term assets: | ||||||||
Property, net | — | 48 | ||||||
Other long-term assets | 2 | 16 | ||||||
Assets held for sale | $ | 497 | $ | 720 | ||||
Steering Business | 497 | 594 | ||||||
Interiors and Closures Business | — | 126 | ||||||
Current Liabilities: | ||||||||
Short-term debt | $ | 30 | $ | 49 | ||||
Accounts payable | 174 | 271 | ||||||
Accrued liabilities | 68 | 53 | ||||||
Other long-term liabilities | 21 | 14 | ||||||
Minority interest | 20 | 25 | ||||||
Liabilities held for sale | $ | 313 | $ | 412 | ||||
Steering Business | 313 | 392 | ||||||
Interiors and Closures Business | — | 20 |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Charge related to assets held for sale | $ | 33 | $ | 561 | $ | — | ||||||
Long-lived asset impairment charges | — | 193 | 43 | |||||||||
Pension and other postretirement benefit expenses | 23 | 75 | 94 | |||||||||
Pension curtailment | — | 34 | — | |||||||||
U.S. employee workforce transition program charges | 4 | 32 | 249 | |||||||||
GM Amended MRA settlement (Note 2) | (101 | ) | — | — | ||||||||
Changes in net operating assets | 156 | 128 | 94 | |||||||||
Total | $ | 115 | $ | 1,023 | $ | 480 | ||||||
Steering Business | 85 | 899 | 372 | |||||||||
Interiors and Closures Business | 30 | 124 | 108 |
6. | ACQUISITIONS AND DIVESTITURES |
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7. | EMPLOYEE TERMINATION BENEFITS AND OTHER EXIT COSTS |
(1) | Realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing the Company’s strategy in the normal course of business. | |
(2) | Transformation plan activities, which support the Company’s overall transformation initiatives announced in 2006, including selling or winding down non-core product lines, transforming its salaried workforce to reduce general and administrative expenses, and modifying labor agreements with its principal unions in the U.S. |
Segment | 2008 | 2007 | 2006 | |||||||||
(in millions) | ||||||||||||
Electronics and Safety | $ | 147 | $ | 36 | $ | 18 | ||||||
Powertrain Systems | 63 | 55 | 58 | |||||||||
Electrical/Electronic Architecture | 78 | 132 | 82 | |||||||||
Thermal Systems | 24 | 48 | 73 | |||||||||
Automotive Holdings Group | 88 | 239 | 27 | |||||||||
Corporate and Other | 14 | 30 | 11 | |||||||||
Continuing Operations | 414 | 540 | 269 | |||||||||
Discontinued Operations | 58 | 132 | 30 | |||||||||
Total | $ | 472 | $ | 672 | $ | 299 | ||||||
Cost of sales | 378 | 493 | 253 | |||||||||
Selling, general and administrative expenses | 36 | 47 | 16 | |||||||||
Discontinued operations | 58 | 132 | 30 |
Employee | ||||||||||||
Termination | Other Exit Costs | |||||||||||
Benefits Liability | Liability | Total | ||||||||||
(in millions) | ||||||||||||
Accrual balance at December 31, 2006 | $ | 163 | $ | 3 | $ | 166 | ||||||
Provision for estimated expenses incurred during the period | 506 | 166 | 672 | |||||||||
Payments made during the year | (395 | ) | (65 | ) | (460 | ) | ||||||
Other | — | (79 | ) | (79 | ) | |||||||
Accrual balance at December 31, 2007 | $ | 274 | $ | 25 | $ | 299 | ||||||
Provision for estimated expenses incurred during the period | 346 | 126 | 472 | |||||||||
Payments made during the year | (415 | ) | (106 | ) | (521 | ) | ||||||
Accrual balance at December 31, 2008 | $ | 205 | $ | 45 | $ | 250 | ||||||
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• | Realignment of existing manufacturing capacity and closure of facilities.As part of Delphi’s ongoing efforts to lower costs and operate efficiently, Delphi’s Electronics and Safety and the Automotive Holdings Group segments plan to transfer core products manufactured at a shared location in Portugal to a lower cost market and exit non-core products from that facility in 2009, and recognized employee termination benefits of $51 million during 2008. Additionally, the Electronics and Safety, Electrical/Electronic Architecture, Thermal Systems and Automotive Holdings Group segments executed initiatives to realign manufacturing operations within North America to lower cost markets, and incurred approximately $118 million of employee termination benefits and other related exit costs during 2008. In addition, the Electronics and Safety segment is exiting production of a non-profitable product line and recorded $22 million of contract termination costs. European operations in the Electronics and Safety and Electrical/Electronic Architecture segments incurred $12 million of employee termination benefits and other exit costs in conjunction with headcount reductions and programs related to the rationalization of manufacturing and engineering process. Delphi’s Powertrain Systems segment transferred manual operations to lower cost markets in eastern Europe and Asia Pacific during 2008 and incurred employee termination benefits and other exit costs of $10 million. | |
• | Transformation plan activities. As part of an initiative to sell or wind down non-core product lines, Delphi incurred employee termination benefits and other exit costs of $50 million related to the closure of a manufacturing facility in Athens, Alabama during 2008, which related to the Steering Business and was recorded in discontinued operations. As part of an effort to transform its salaried workforce and reduce general and administrative expenses, Delphi identified certain salaried employees in North America during 2008 for involuntary separation and incurred $160 million in related employee termination benefits included in continuing operations, and incurred $2 million in discontinued operations. |
• | Realignment of existing manufacturing capacity and closure of facilities.As part of Delphi’s ongoing efforts to lower costs and operate efficiently, Delphi’s Electrical/Electronic Architecture segment transferred manufacturing operations from Germany, Portugal and Spain to lower cost markets in Eastern Europe and Asia Pacific during 2007. As a result, the Electrical/Electronic Architecture segment significantly reduced the number of employees at these locations, and announced involuntary employee separation packages for approximately $66 million. Additionally, the Electrical/Electronic Architecture and Thermal Systems segments executed initiatives to realign manufacturing operations within North America to lower cost markets, and incurred approximately $35 million of employee termination benefits and other related exit costs. | |
• | Transformation plan activities. As part of an initiative to sell or wind down non-core product lines, Delphi incurred employee termination benefits and other exit costs of $268 million related to the closure of a manufacturing facility in Cadiz, Spain, of which $161 million related to the Automotive Holdings Group segment and $107 million, which related to the Steering Business, was recorded in loss from discontinued operations. Refer to Note 2. Transformation Plan and Chapter 11 Bankruptcy for more information. As a part of an effort to transform its salaried workforce and reduce general and administrative expenses, Delphi identified certain salaried employees, primarily in North America, during 2007 for involuntary separation, and incurred $63 million in related employee termination benefits in the Electronics and Safety, Powertrain Systems, Electrical/Electronic Architecture, Thermal Systems, and Automotive Holdings Group segments. Additionally, Delphi is implementing a plan for consolidation and outsourcing of certain administrative functions, including financial services and information technology. During 2007, Delphi incurred $19 million related to the outsourcing plan in the Corporate and Other segment. Finally, as part of Delphi’s initiative to modify its labor agreements, |
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Delphi signed agreements with the UAW and all of its other principal U.S. labor unions during 2007. The new agreements offered certain eligible Delphi employees severance payments and supplemental unemployment benefits, among other options. Delphi incurred $56 million of employee termination benefits related to these agreements, primarily in the Powertrain Systems, Electronics and Safety, Thermal Systems and Automotive Holdings Group segments. Refer to Note 16. U.S. Employee Workforce Transition Programs. |
• | Realignment of existing manufacturing capacity and closure of facilities.During 2006, Delphi’s Thermal Systems segment transferred certain operations in France to lower cost markets within Eastern Europe, and incurred related employee termination benefit and other exit costs of approximately $65 million. Delphi’s Powertrain Systems segment transferred operations from France and various other high cost markets within Europe to lower cost markets within Eastern Europe and Asia Pacific, and incurred employee termination benefit and other exit costs of approximately $50 million related to these activities. Additionally, Delphi’s Electrical/Electronic Architecture segment transferred operations from Spain and Germany to lower cost markets in Europe, and also realigned operations within North America. The Electrical/Electronic Architecture segment incurred approximately $49 million in employee termination benefits and other exit costs in these realignment and exit activities. | |
• | Transformation plan activities. Delphi incurred employee termination benefits and other exit costs of $15 million related to involuntary separation of salaried employees, primarily in North America, in its Electronics and Safety, Powertrain Systems, Electrical/Electronic Architecture, and Automotive Holdings Group segments. |
8. | INCOME TAXES |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
U.S. income (loss) | $ | 4,030 | $ | (3,286 | ) | $ | (5,331 | ) | ||||
Non-U.S. (loss) income | (781 | ) | 492 | 310 | ||||||||
Income (loss) from continuing operations before income taxes, minority interest and equity income | $ | 3,249 | $ | (2,794 | ) | $ | (5,021 | ) | ||||
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Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Current income tax expense: | ||||||||||||
U.S. federal | $ | — | $ | — | $ | — | ||||||
Non-U.S | 176 | 166 | 124 | |||||||||
U.S. state and local | (1 | ) | (4 | ) | (17 | ) | ||||||
Total current | 175 | 162 | 107 | |||||||||
Deferred income tax (benefit) expense, net: | ||||||||||||
U.S. federal | (10 | ) | (649 | ) | (2 | ) | ||||||
Non-U.S | (5 | ) | 8 | 18 | ||||||||
U.S. state and local | — | (54 | ) | — | ||||||||
Total deferred | (15 | ) | (695 | ) | 16 | |||||||
Investment tax credits | (1 | ) | (1 | ) | (1 | ) | ||||||
Less: Income tax benefit related to minority interest | 7 | 12 | 8 | |||||||||
Total Income tax expense (benefit) | $ | 166 | $ | (522 | ) | $ | 130 | |||||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Tax at U.S. federal statutory income tax rate | $ | 1,137 | $ | (978 | ) | $ | (1,757 | ) | ||||
U.S. income taxed at other rates | 114 | (97 | ) | (62 | ) | |||||||
Non U.S. income taxed at other rates | 281 | (172 | ) | (209 | ) | |||||||
Change in valuation allowance | (1,386 | ) | 668 | 2,154 | ||||||||
Other changes in tax reserves | — | (3 | ) | (26 | ) | |||||||
Withholding taxes | 24 | 30 | 21 | |||||||||
Other adjustments | (4 | ) | 30 | 9 | ||||||||
Total income tax provision (benefit) | $ | 166 | $ | (522 | ) | $ | 130 | |||||
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Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Deferred tax assets | ||||||||
Other postretirement benefits | $ | 478 | $ | 3,630 | ||||
Pension benefits | 2,150 | 1,043 | ||||||
R&D capitalization | 1,562 | 1,864 | ||||||
Liabilities subject to compromise | 1,847 | 314 | ||||||
Net operating loss carryforwards | 847 | 782 | ||||||
Foreign tax credits | 664 | 205 | ||||||
Depreciation | 369 | 524 | ||||||
General business credits | 461 | 435 | ||||||
Other employee benefits | 218 | 248 | ||||||
Other U.S | 857 | 854 | ||||||
Other non-U.S | 391 | 370 | ||||||
Total gross deferred tax assets | 9,844 | 10,269 | ||||||
Less: valuation allowances | (9,144 | ) | (9,744 | ) | ||||
Total deferred tax assets | $ | 700 | $ | 525 | ||||
Deferred tax liabilities | ||||||||
Depreciation | $ | 219 | $ | 247 | ||||
Tax on unremitted profits | 23 | 46 | ||||||
Other U.S | 262 | 73 | ||||||
Other non-U.S | 51 | 74 | ||||||
Total gross deferred tax liabilities | 555 | 440 | ||||||
Net deferred tax assets | $ | 145 | $ | 85 | ||||
Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Current assets | $ | 96 | $ | 58 | ||||
Current liabilities | (9 | ) | (16 | ) | ||||
Long term assets | 85 | 43 | ||||||
Long term liabilities | (27 | ) | — | |||||
Total deferred tax asset | $ | 145 | $ | 85 | ||||
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Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Balance at January 1 | $ | 63 | $ | 62 | ||||
Additions related to current year | 17 | 14 | ||||||
Additions related to prior year | 2 | 5 | ||||||
Reductions related to prior year | (1 | ) | (8 | ) | ||||
Reductions due to expirations of statute of limitations | (2 | ) | (3 | ) | ||||
Settlements-cash | — | (7 | ) | |||||
Balance at December 31 | $ | 79 | $ | 63 | ||||
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9. | PROPERTY, NET |
Estimated Useful | December 31, | |||||||||||
Lives (Years) | 2008 | 2007 | ||||||||||
(in millions) | ||||||||||||
Land | — | $ | 115 | $ | 123 | |||||||
Land and leasehold improvements | 3-31 | 190 | 217 | |||||||||
Buildings | 29-40 | 1,643 | 1,818 | |||||||||
Machinery, equipment, and tooling | 3-27 | 4,581 | 6,180 | |||||||||
Furniture and office equipment | 3-15 | 710 | 726 | |||||||||
Construction in progress | — | 265 | 236 | |||||||||
Total | 7,504 | 9,300 | ||||||||||
Less: accumulated depreciation and amortization | (4,107 | ) | (5,437 | ) | ||||||||
Total property, net | $ | 3,397 | $ | 3,863 | ||||||||
Segment | 2008 | 2007 | 2006 | |||||||||
(in millions) | ||||||||||||
Electronics and Safety | $ | 15 | $ | 1 | $ | 4 | ||||||
Powertrain Systems | — | 13 | 12 | |||||||||
Electrical/Electronic Architecture | 2 | 6 | 1 | |||||||||
Thermal Systems | 10 | — | 11 | |||||||||
Automotive Holdings Group | 10 | 78 | 144 | |||||||||
Continuing operations | 37 | 98 | 172 | |||||||||
Discontinued operations | — | 193 | 43 | |||||||||
Total | $ | 37 | $ | 291 | $ | 215 | ||||||
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10. | GOODWILL |
2008 | 2007 | |||||||
(in millions) | ||||||||
Balance at January 1, | $ | 397 | $ | 378 | ||||
Acquisitions | 19 | — | ||||||
Impairment | (325 | ) | — | |||||
Currency translation | (29 | ) | 19 | |||||
Balance at December 31, | $ | 62 | (a) | $ | 397 | (b) | ||
(a) | $62 million in Corporate and Other | |
(b) | $165 million in Electrical/Electronic Architecture, $155 million in Electronics and Safety and $77 million in Corporate and Other |
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11. | INVENTORIES, NET |
December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Productive material | $ | 663 | $ | 926 | ||||
Work-in-process and supplies | 253 | 386 | ||||||
Finished goods | 369 | 496 | ||||||
Total | $ | 1,285 | $ | 1,808 | ||||
12. | LIABILITIES |
December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Payroll related obligations | $ | 207 | $ | 238 | ||||
Employee benefits, including current pension obligations | 136 | 185 | ||||||
Accrued income taxes | 72 | 54 | ||||||
Taxes other than income | 199 | 195 | ||||||
Warranty obligations (Note 13) | 128 | 244 | ||||||
U.S. employee workforce transition programs (Note 16) | 115 | 234 | ||||||
Employee termination benefits and other exit costs (Note 7) | 213 | 276 | ||||||
Interest on prepetition claims (Note 1) | 415 | 411 | ||||||
Working capital backstop — Steering Business (Note 2) | 210 | — | ||||||
Derivative financial instruments (Note 23) | 132 | 24 | ||||||
Other | 344 | 420 | ||||||
Total | $ | 2,171 | $ | 2,281 | ||||
December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Workers compensation | $ | 325 | $ | 328 | ||||
Environmental (Note 18) | 97 | 112 | ||||||
U.S. employee workforce transition programs (Note 16) | 8 | 148 | ||||||
Extended disability benefits | 60 | 72 | ||||||
Warranty obligations (Note 13) | 236 | 315 | ||||||
Payroll-related obligations | 35 | 34 | ||||||
Accrued income taxes | 71 | 55 | ||||||
Derivative financial instruments (Note 23) | 36 | — | ||||||
Other | 105 | 121 | ||||||
Total | $ | 973 | $ | 1,185 | ||||
13. | WARRANTY OBLIGATIONS |
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2008 | 2007 | |||||||
(in millions) | ||||||||
Accrual balance at beginning of year | $ | 559 | $ | 383 | ||||
Provision for estimated warranties incurred during the period | 66 | 176 | ||||||
Provision for changes in estimate for preexisting warranties | 34 | 115 | ||||||
GM warranty forgiveness | (112 | ) | — | |||||
Settlements made during the year (in cash or in kind) | (167 | ) | (128 | ) | ||||
Foreign currency translation and other | (16 | ) | 13 | |||||
Accrual balance at end of year | $ | 364 | $ | 559 | ||||
14. | LIABILITIES SUBJECT TO COMPROMISE |
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December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Pension obligations | $ | 5,321 | $ | 3,329 | ||||
Postretirement obligations other than pensions | 1,201 | 8,786 | ||||||
Allowed GM general unsecured claim (Note 2) | 2,500 | — | ||||||
Allowed GM administrative claim (Note 2) | 1,628 | — | ||||||
Allowed IUE-CWA and USW claims (Note 2) | 129 | — | ||||||
Debt and notes payable | 1,984 | 1,984 | ||||||
Accounts payable | 732 | 744 | ||||||
Junior subordinated notes due 2033 | 391 | 391 | ||||||
GM claim for U.S. employee workforce transition programs (Note 2) | — | 312 | ||||||
Securities & ERISA litigation liability (Note 18) | 351 | 351 | ||||||
Other | 346 | 300 | ||||||
Total Liabilities Subject to Compromise | $ | 14,583 | $ | 16,197 | ||||
15. | DEBT |
December 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
Subject to | Subject to | |||||||||||||||
Compromise | Debt | Compromise | Debt | |||||||||||||
(in millions) | ||||||||||||||||
6.55%, unsecured notes, due 2006 | $ | 500 | (a)(b)(c) | $ | — | $ | 500 | (a)(b)(c) | $ | — | ||||||
6.50%, unsecured notes, due 2009 | 498 | (a)(b)(c) | — | 498 | (a)(b)(c) | — | ||||||||||
6.50%, unsecured notes, due 2013 | 493 | (a)(b)(c) | — | 493 | (a)(b)(c) | — | ||||||||||
7.125%, debentures, due 2029 | 493 | (a)(b)(c) | — | 493 | (a)(b)(c) | — | ||||||||||
Junior subordinated notes due 2033 (d) | 391 | (a)(b)(c) | — | 391 | (a)(b)(c) | — | ||||||||||
Amended and restated DIP facility | — | 3,620 | (b) | — | — | |||||||||||
Refinanced DIP facility | — | — | — | 2,746 | ||||||||||||
Accounts receivable factoring and European securitization program | — | 352 | — | 589 | ||||||||||||
Capital leases and other | — | (c) | 257 | — | (c) | 219 | ||||||||||
Total debt | $ | 2,375 | $ | 4,229 | $ | 2,375 | 3,554 | |||||||||
Less: current portion | (4,174 | ) | (3,495 | ) | ||||||||||||
Long-term debt | $ | 55 | $ | 59 | ||||||||||||
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(a) | Pursuant to the requirements ofSOP 90-7 as of the Chapter 11 Filings, deferred financing fees related to prepetition debt are no longer being amortized and have been included as an adjustment to the net carrying value of the related prepetition debt at December 31, 2008 and 2007. | |
(b) | Debt in default. | |
(c) | The Chapter 11 Filings triggered defaults on substantially all prepetition debt and certain lease obligations. | |
(d) | In conjunction with the liquidation of the Delphi Trust I and Delphi Trust II on November 14, 2006, the interests of Delphi Trust I and Delphi Trust II in the junior subordinated notes were transferred to the holders of the trust preferred securities issued by the two Trusts. |
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• | June 30, 2009, but subject to the satisfaction of certain conditions below; | |
• | Delphi’s failure to comply with its covenants under the Accommodation Agreement or the occurrence of certain other events set forth in the Accommodation Agreement; and | |
• | An event of default under the Amended and Restated DIP Credit Facility (other than the failure to repay the loans under the facility on the maturity date or comply with certain other repayment provisions). |
(a) | received binding commitments, subject to customary conditions, on or prior to April 2, 2009, for debt and equity financing sufficient for it to emerge from chapter 11 pursuant to the modified plan of reorganization which was filed with the Court on October 3, 2008, or any other plan of reorganization that provides the administrative agent and the lenders under the Amended and Restated DIP Credit Facility with the same treatment as that set forth in the modified plan of reorganization; or |
(b) (i) | has filed on or prior to April 2, 2009, modifications to the modified plan of reorganization or any other plan of reorganization to which the administrative agent does not submit a notice, within ten business days of such filing, informing Delphi that either (A) the Required Lenders (as defined in the Accommodation Agreement) or (B) lenders party to the Accommodation Agreement holding Tranche A, Tranche B Term Loan and Tranche C Term Loan commitments and exposure representing in excess of 50% of the Tranche A, Tranche B Term Loan and Tranche C Term Loan commitments and exposure held by all lenders party to the Accommodation Agreement (the “Required Total Participant Lenders”), affirmatively oppose such modifications or plan of reorganization (a “Notice”), and |
(ii) | on or prior to May 2, 2009, has obtained entry of the Court’s order approving modifications to the Disclosure Statement with respect to the modified plan of reorganization, as may have been further modified, or a disclosure statement with respect to such other plan of reorganization as described above and the approval to re-solicit or solicit votes, as the case may be. The administrative agent would submit a Notice if either the Required Lenders or the Required Total Participant Lenders vote, within ten business days after the filing of the modifications to the modified plan of reorganization or the new plan of reorganization, to oppose such plan modifications (or any such other filed plan of reorganization) on the grounds that such plan was not acceptable to them. |
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• | replace or cash collateralize, at 105% of the undrawn amount thereof, all outstanding letters of credit under the Amended and Restated DIP Credit Facility that had not been collateralized prior to that date, and | |
• | limit the aggregate principal amounts outstanding under Tranche A borrowings to no more than $377 million. |
Borrowings as of | Rates Effective as of | |||||||||||
ABR Plus | December 31, 2008 | December 31, 2008 | ||||||||||
Tranche A | 5.00 | % | $ | 370 | 9.25 | % | ||||||
Tranche B | 5.00 | % | $ | 500 | 9.25 | % | ||||||
Tranche C | 6.25 | % | $ | 2,750 | 10.50 | % |
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(in millions) | ||||
Beginning Balance at December 31, 2007 | $ | 205 | ||
Receivables transferred | 1,496 | |||
Proceeds from new securitizations | (1,549 | ) | ||
Receivables Repurchased | (96 | ) | ||
Other | 32 | |||
Ending balance | $ | 88 | ||
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Debt and | ||||
Capital Lease | ||||
Year | Obligations | |||
(in millions) | ||||
2009 | $ | 4,174 | ||
2010 | 19 | |||
2011 | 5 | |||
2012 | 5 | |||
2013 | 5 | |||
Thereafter | 21 | |||
Total | $ | 4,229 | ||
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16. | U.S. EMPLOYEE WORKFORCE TRANSITION PROGRAMS |
U.S. Employee Workforce Transition Program Liability | (in millions) | |||
Balance at December 31, 2006 | $ | 830 | ||
U.S. employee workforce transition program charges | 52 | |||
Buy-down wage liability | 323 | |||
Payments | (793 | ) | ||
Pension and other postretirement benefits (Note 17) | (48 | ) | ||
Accretion and other | 18 | |||
Balance at December 31, 2007 | $ | 382 | ||
U.S. employee workforce transition program charges | 21 | |||
Buy-down wage liability adjustment | (37 | ) | ||
Payments | (219 | ) | ||
Pre-retirement program pension payment to GM | (9 | ) | ||
Pension and other postretirement benefits (Note 17) | (23 | ) | ||
Accretion and other | 8 | |||
Balance at December 31, 2008 | $ | 123 | ||
U.S. Employee Workforce Transition Program Buydown Wage Asset | (in millions) | |||
Balance at December 31, 2006 | $ | — | ||
Buy-down wage asset | 323 | |||
Amortization expense | (22 | ) | ||
Balance at December 31, 2007 | $ | 301 | ||
Buy-down wage asset adjustment | (49 | ) | ||
Amortization expense | (61 | ) | ||
Amounts reimbursed by GM upon Amended GSA effectiveness | (155 | ) | ||
Reclassified amounts as a receivable from GM under Amended GSA | (126 | ) | ||
Reorganization gain | 90 | |||
Balance at December 31, 2008 | $ | — | ||
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Reorganization | ||||||||
Amended GSA Effectiveness | Gain | Cash | ||||||
(in millions) | ||||||||
Amounts reimbursed for buyouts | $ | 68 | $ | 68 | ||||
Amounts reimbursed for retirement incentives | — | 7 | ||||||
Amounts reimbursed for buy-downs | 90 | 155 | ||||||
Forgiveness of 2006 special attrition program allowed claim | 333 | — | ||||||
Total | $ | 491 | $ | 230 | ||||
17. | PENSION AND OTHER POSTRETIREMENT BENEFITS |
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Pension Benefits | Other Postretirement | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Benefits | ||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 14,054 | $ | 14,910 | $ | 1,589 | $ | 1,635 | $ | 8,732 | $ | 9,055 | ||||||||||||
Service cost | 128 | 170 | 50 | 47 | 27 | 81 | ||||||||||||||||||
Interest cost | 814 | 851 | 90 | 81 | 428 | 542 | ||||||||||||||||||
Plan participants’ contributions | 4 | 5 | 6 | 5 | — | 3 | ||||||||||||||||||
Actuarial losses (gains) | 251 | (589 | ) | (126 | ) | (176 | ) | (1,018 | ) | (471 | ) | |||||||||||||
Benefits paid | (1,150 | ) | (1,045 | ) | (146 | ) | (108 | ) | (216 | ) | (243 | ) | ||||||||||||
Special termination benefits | — | — | — | — | — | 3 | ||||||||||||||||||
Impact of transfers / settlements | (2,623 | ) | — | 55 | 48 | (6,821 | ) | — | ||||||||||||||||
Impact of curtailments | 75 | (254 | ) | 2 | 5 | (10 | ) | (100 | ) | |||||||||||||||
Impact of adoption of SFAS 158 | — | — | 26 | — | 132 | — | ||||||||||||||||||
Plan amendments and other | (142 | ) | 6 | 59 | 5 | (53 | ) | (138 | ) | |||||||||||||||
Exchange rate movements | — | — | (363 | ) | 47 | — | — | |||||||||||||||||
Benefit obligation at end of year | $ | 11,411 | $ | 14,054 | $ | 1,242 | $ | 1,589 | $ | 1,201 | $ | 8,732 | ||||||||||||
Change in plan assets: | ||||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 10,748 | $ | 10,722 | $ | 1,146 | $ | 1,025 | $ | — | $ | — | ||||||||||||
Actual return on plan assets | (3,155 | ) | 857 | (263 | ) | 113 | — | — | ||||||||||||||||
Delphi contributions | 264 | 209 | 119 | 95 | 216 | 240 | ||||||||||||||||||
Plan participants’ contributions | 4 | 5 | 6 | 5 | — | 3 | ||||||||||||||||||
Benefits paid | (1,150 | ) | (1,045 | ) | (146 | ) | (108 | ) | (216 | ) | (243 | ) | ||||||||||||
Impact of transfers/settlements | (540 | ) | — | — | — | — | — | |||||||||||||||||
Exchange rate movements and other | (24 | ) | — | (240 | ) | 16 | — | — | ||||||||||||||||
Fair value of plan assets at end of year | $ | 6,147 | $ | 10,748 | $ | 622 | $ | 1,146 | $ | — | $ | — | ||||||||||||
Underfunded status | $ | (5,264 | ) | $ | (3,306 | ) | $ | (620 | ) | $ | (443 | ) | $ | (1,201 | ) | $ | (8,732 | ) | ||||||
Amounts recognized in the consolidated balance sheets consist of: | ||||||||||||||||||||||||
Other non-current assets (including OPEB flow-in receivable) | $ | — | $ | — | $ | — | $ | 1 | $ | — | $ | 97 | ||||||||||||
Current liabilities | — | — | (21 | ) | (13 | ) | — | — | ||||||||||||||||
Non-current liabilities | — | — | (542 | ) | (406 | ) | — | — | ||||||||||||||||
Liabilities subject to compromise | (5,264 | ) | (3,306 | ) | (57 | ) | (25 | ) | (1,201 | ) | (8,829 | ) | ||||||||||||
Total | $ | (5,264 | ) | $ | (3,306 | ) | $ | (620 | ) | $ | (443 | ) | $ | (1,201 | ) | $ | (8,732 | ) | ||||||
Amounts recognized in accumulated other comprehensive income consist of (pre-tax): | ||||||||||||||||||||||||
Actuarial loss | $ | 5,062 | $ | 1,330 | $ | 412 | $ | 311 | $ | 373 | $ | 1,176 | ||||||||||||
Prior service cost (credit) | 86 | 112 | 28 | 33 | (518 | ) | (736 | ) | ||||||||||||||||
Net transition obligation | — | — | 4 | 6 | — | — | ||||||||||||||||||
Total | $ | 5,148 | $ | 1,442 | $ | 444 | $ | 350 | $ | (145 | ) | $ | 440 |
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Primary | ||||||||||||||||
U.S. Plans | Non-U.S. Plans | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
(in millions) | ||||||||||||||||
Plans with ABO in Excess of Plan Assets | ||||||||||||||||
PBO | $ | 11,411 | $ | 14,054 | $ | 1,144 | $ | 1,499 | ||||||||
ABO | 11,409 | 14,051 | 1,002 | 1,284 | ||||||||||||
Fair value of plan assets at end of year | 6,147 | 10,748 | 557 | 1,055 |
Plans with Plan Assets in Excess of ABO | ||||||||||||||||
PBO | $ | — | $ | — | $ | 98 | $ | 90 | ||||||||
ABO | — | — | 60 | 58 | ||||||||||||
Fair value of plan assets at end of year | — | — | 65 | 91 | ||||||||||||
Total | ||||||||||||||||
PBO | $ | 11,411 | $ | 14,054 | $ | 1,242 | $ | 1,589 | ||||||||
ABO | 11,409 | 14,051 | 1,062 | 1,342 | ||||||||||||
Fair value of plan assets at end of year | 6,147 | 10,748 | 622 | 1,146 |
Pension Benefits | Other Postretirement | |||||||||||||||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Benefits | ||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||
Service cost(a) | $ | 128 | $ | 170 | $ | 268 | $ | 50 | $ | 47 | $ | 42 | $ | 27 | $ | 81 | $ | 171 | ||||||||||||||||||
Interest cost | 814 | 851 | 793 | 90 | 81 | 66 | 428 | 542 | 561 | |||||||||||||||||||||||||||
Expected return on plan assets | (833 | ) | (867 | ) | (820 | ) | (86 | ) | (81 | ) | (69 | ) | — | — | — | |||||||||||||||||||||
Special termination benefits | — | — | — | — | — | 20 | — | — | — | |||||||||||||||||||||||||||
Settlement loss (gain) | 494 | — | — | 55 | — | — | (7,087 | ) | — | — | ||||||||||||||||||||||||||
Curtailment loss (gain)-PBO | 75 | 22 | 1,518 | 2 | 60 | — | (8 | ) | — | (349 | ) | |||||||||||||||||||||||||
Curtailment loss (gain)-prior service | — | 194 | 397 | — | — | — | (74 | ) | (7 | ) | 329 | |||||||||||||||||||||||||
Amortization of transition amount | — | — | — | 1 | 1 | 1 | — | — | — | |||||||||||||||||||||||||||
Amortization of prior service costs (credit) | 26 | 52 | 107 | 7 | 4 | 3 | (108 | ) | (99 | ) | (99 | ) | ||||||||||||||||||||||||
Amortization of actuarial losses | 21 | 75 | 192 | 5 | 32 | 26 | 37 | 74 | 255 | |||||||||||||||||||||||||||
Net periodic benefit cost | $ | 725 | $ | 497 | $ | 2,455 | $ | 124 | $ | 144 | $ | 89 | $ | (6,785 | ) | $ | 591 | $ | 868 | |||||||||||||||||
(a) | Includes $23 million, $48 million and $29 million for the years ended December 31, 2008, 2007 and 2006, respectively, of costs previously accrued related to the U.S. employee workforce transition programs. |
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Pension Benefits | Other Postretirement | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Benefits | ||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Weighted-average discount rate | 6.16 | % | 6.35 | % | 6.39 | % | 5.30 | % | 6.12 | % | 6.40 | % | ||||||||||||
Weighted-average rate of increase in compensation levels | 4.50 | % | 4.04 | % | 3.97 | % | 4.16 | % | 4.50 | % | 3.31 | % |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | |||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||
Weighted-average discount rate | 6.35 | % | 5.90 | % | 5.50 | % | 5.99 | % | 4.96 | % | 4.91 | % | 6.41 | % | 6.10 | % | 5.50 | % | ||||||||||||||||||
Weighted-average rate of increase in compensation levels | 4.45 | % | 4.12 | % | 3.99 | % | 4.16 | % | 3.67 | % | 3.45 | % | 4.50 | % | 3.94 | % | 3.99 | % | ||||||||||||||||||
Expected long-term rate of return on plan assets | 8.75 | % | 8.75 | % | 8.75 | % | 8.28 | % | 8.05 | % | 8.20 | % | N/A | N/A | N/A |
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Impact on | ||||||||
Change in Assumption | Pension Expense | Impact on PBO | ||||||
25 basis point (bp) decrease in discount rate | +$ | 13 million | +$ | 300 million | ||||
25 bp increase in discount rate | −$ | 12 million | −$ | 300 million | ||||
25 bp decrease in long-term return on assets | +$ | 18 million | — | |||||
25 bp increase in long-term return on assets | −$ | 18 million | — |
Impact on | ||||||||
Impact on | Postretirement | |||||||
Change in Assumption | Postretirement Expense | Benefit Obligation | ||||||
25 basis point (bp) decrease in discount rate | +$ | 4 million | +$ | 19 million | ||||
25 bp increase in discount rate | −$ | 4 million | −$ | 18 million | ||||
1% increase in health care trend rate | +$ | 6 million | +$ | 73 million | ||||
1% decrease in health care trend rate | −$ | 5 million | −$ | 63 million |
Target Allocation | ||||||||||||||||||||
Percentage of Plan Assets at December 31, | U.S. Plans | |||||||||||||||||||
U.S. Plans | Non-U.S. Plans | |||||||||||||||||||
Asset Category | 2008 | 2007 | 2008 | 2007 | 2009 | |||||||||||||||
Equity Securities | 55 | % | 57 | % | 51 | % | 61 | % | 60 | % | ||||||||||
Fixed Income | 20 | % | 25 | % | 28 | % | 24 | % | 25 | % | ||||||||||
Private Equity | 8 | % | 6 | % | — | — | 4 | % | ||||||||||||
Real Estate | 11 | % | 8 | % | 12 | % | 14 | % | 7 | % | ||||||||||
Other | 6 | % | 4 | % | 9 | % | 1 | % | 4 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
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U.S Retiree | Non-U.S. | |||||||||||
Medical Plans | Pension Plans | Total | ||||||||||
Increase/(Decrease) | ||||||||||||
(in millions) | ||||||||||||
Pension and other postretirement benefit liabilities | $ | 132 | $ | 7 | $ | 139 | ||||||
Accumulated deficit as of January 1, 2008 | $ | 117 | $ | 12 | $ | 129 | ||||||
Accumulated other comprehensive loss as of January 1, 2008 | $ | 15 | $ | (5 | ) | $ | 10 |
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Projected Pension | ||||||||||||
Benefit Payments | Projected Postretirement | |||||||||||
U.S. Plans | Non-U.S. Plans | Benefit Payments | ||||||||||
(in millions) | ||||||||||||
2009 | $ | 941 | $ | 58 | $ | 74 | ||||||
2010 | 926 | 55 | 79 | |||||||||
2011 | 913 | 58 | 85 | |||||||||
2012 | 894 | 62 | 89 | |||||||||
2013 | 878 | 66 | 88 | |||||||||
2014 — 2018 | 4,144 | 519 | 445 |
18. | COMMITMENTS AND CONTINGENCIES |
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Minimum Future Operating | ||||
Year | Lease Commitments | |||
(in millions) | ||||
2009 | $ | 92 | ||
2010 | 73 | |||
2011 | 63 | |||
2012 | 52 | |||
2013 | 47 | |||
Thereafter | 58 | |||
Total | $ | 385 | ||
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19. | INVESTMENTS IN AFFILIATES |
As of December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Current assets | $ | 818 | $ | 1,128 | ||||
Non-current assets | 501 | 584 | ||||||
Total assets | $ | 1,319 | $ | 1,712 | ||||
Current liabilities | $ | 504 | $ | 662 | ||||
Non-current liabilities | 197 | 240 | ||||||
Stockholders’ equity | 618 | 810 | ||||||
Total liabilities and stockholders’ equity | $ | 1,319 | $ | 1,712 | ||||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Net sales | $ | 2,477 | $ | 2,926 | $ | 2,595 | ||||||
Gross profit | $ | 273 | $ | 390 | $ | 399 | ||||||
Net income | $ | 53 | $ | 99 | $ | 122 |
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Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Sales to affiliates | $ | 48 | $ | 72 | $ | 71 | ||||||
Purchases from affiliates | $ | 267 | $ | 323 | $ | 281 |
20. | OTHER INCOME (EXPENSE), NET |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | 38 | $ | 68 | $ | 50 | ||||||
Other, net | 31 | 42 | (10 | ) | ||||||||
Other income, net | $ | 69 | $ | 110 | $ | 40 | ||||||
21. | SHARE-BASED COMPENSATION |
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Stock | Weighted Average | |||||||
Options (a) | Exercise Price | |||||||
(in thousands) | ||||||||
Outstanding as of January 1, 2008 | 67,968 | $ | 13.49 | |||||
Granted | — | — | ||||||
Exercised | — | — | ||||||
Forfeited | (9,015 | ) | $ | 13.81 | ||||
Outstanding as of December 31, 2008 | 58,953 | $ | 13.43 | |||||
Options exercisable December 31, 2008 | 58,953 | $ | 13.43 |
(a) | Includes options that were granted and unvested at the time of the Chapter 11 Filings on October 8, 2005. The Company cancelled future grants of stock-based compensation under its long-term incentive plan and will not issue any shares of common stock pursuant to previously granted stock option awards that had not vested prior to the commencement of reorganization cases. |
Approved by Stockholders | ||||||||||||||||||||
Range of | Outstanding | Weighted Average | Weighted Average | Number of | Weighted Average | |||||||||||||||
Exercise Prices | Stock Options | Remaining Life | Exercise Price | Stock Options Exercisable | Exercise Price | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||
$0.00-$10.00 | 9,986 | 4.3 | $ | 8.43 | 9,986 | $ | 8.43 | |||||||||||||
$10.01-$20.00 | 33,214 | 2.6 | $ | 13.31 | 33,214 | $ | 13.31 | |||||||||||||
$20.01-$30.00 | 60 | — | $ | 20.64 | 60 | $ | 20.64 | |||||||||||||
43,260 | $ | 12.20 | 43,260 | $ | 12.20 | |||||||||||||||
Other Plans | ||||||||||||||||||||||||
Range of | Outstanding | Weighted Average | Weighted Average | Number of | Weighted Average | |||||||||||||||||||
Exercise Prices | Stock Options | Remaining Life | Exercise Price | Stock Options Exercisable | Exercise Price | |||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
$0.00-$10.00 | — | — | $ | — | — | $ | — | |||||||||||||||||
$10.01-$20.00 | 13,807 | 0.8 | $ | 16.29 | 13,807 | $ | 16.29 | |||||||||||||||||
$20.01-$30.00 | 1,886 | — | $ | 20.64 | 1,886 | $ | 20.64 | |||||||||||||||||
15,693 | $ | 16.81 | 15,693 | $ | 16.81 | |||||||||||||||||||
Weighted Average | ||||||||
Restricted | Grant Date | |||||||
Stock Units | Fair Value | |||||||
(in thousands) | ||||||||
Non-vested at January 1, 2008 | 6,342 | $ | 8.47 | |||||
Vested | (1,741 | ) | $ | 7.51 | ||||
Forfeited | (159 | ) | $ | 8.31 | ||||
Cancelled | (4,442 | ) | $ | 8.86 | ||||
Non-vested at December 31, 2008 | — | $ | — | |||||
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22. | SEGMENT REPORTING |
• | Electronics and Safety, which includes audio, entertainment and communications, safety systems, body controls and security systems, displays, mechatronics and power electronics, as well as advanced development of software and silicon. | |
• | Powertrain Systems, which includes extensive systems integration expertise in gasoline, diesel and fuel handling and full end-to-end systems including fuel injection, combustion, electronics controls, exhaust handling, and test and validation capabilities. | |
• | Electrical/Electronic Architecture, which includes complete electrical architecture and component products. | |
• | Thermal Systems, which includes Heating, Ventilating and Air Conditioning (“HVAC”) systems, components for multiple transportation and other adjacent markets, and powertrain cooling and related technologies. | |
• | Automotive Holdings Group, which includes various non-core product lines and plant sites that do not fit Delphi’s future strategic framework. | |
• | Corporate and Other, which includes the Product and Service Solutions business which is comprised of automotive aftermarket, including diesel and original equipment service, consumer electronics and medical systems, in addition to the expenses of corporate administration, other expenses and income of a non-operating or strategic nature, and the elimination of inter-segment transactions and charges related to U.S. employee workforce transition programs. |
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other(a) | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2008: | ||||||||||||||||||||||||||||
Net sales to GM and affiliates | $ | 1,165 | $ | 1,075 | $ | 1,440 | $ | 1,083 | $ | 471 | $ | 291 | $ | 5,525 | ||||||||||||||
Net sales to other customers | 2,739 | 3,009 | 4,064 | 957 | 780 | 986 | 12,535 | |||||||||||||||||||||
Inter-segment net sales | 144 | 386 | 145 | 81 | 97 | (853 | ) | — | ||||||||||||||||||||
Total net sales | $ | 4,048 | $ | 4,470 | $ | 5,649 | $ | 2,121 | $ | 1,348 | $ | 424 | $ | 18,060 | ||||||||||||||
GM settlement (Note 2 — MRA) | $ | (42 | ) | $ | (94 | ) | $ | (15 | ) | $ | (88 | ) | $ | (62 | ) | $ | 47 | $ | (254 | ) | ||||||||
Depreciation & Amortization | $ | 235 | $ | 248 | $ | 187 | $ | 71 | $ | 32 | $ | 54 | $ | 827 | ||||||||||||||
Long-lived asset impairment charges | $ | 15 | $ | — | $ | 2 | $ | 10 | $ | 10 | $ | — | $ | 37 | ||||||||||||||
Goodwill impairment charges | $ | 157 | $ | — | $ | 168 | $ | — | $ | — | $ | — | $ | 325 | ||||||||||||||
Operating income (loss)(b) | $ | (654 | ) | $ | (130 | ) | $ | (361 | ) | $ | 18 | $ | (68 | ) | $ | (286 | ) | $ | (1,481 | ) | ||||||||
OIBDAR(f) | $ | (70 | ) | $ | 120 | $ | 96 | $ | 39 | $ | 44 | $ | 40 | $ | 269 | |||||||||||||
Minority Interest | $ | — | $ | (13 | ) | $ | (12 | ) | $ | (4 | ) | $ | 1 | $ | — | $ | (28 | ) | ||||||||||
Equity income (loss) | $ | — | $ | 3 | $ | 9 | $ | 6 | $ | (22 | ) | $ | 5 | $ | 1 | |||||||||||||
2007: | ||||||||||||||||||||||||||||
Net sales to GM and affiliates | $ | 1,606 | $ | 1,563 | $ | 1,750 | $ | 1,355 | $ | 1,585 | $ | 442 | $ | 8,301 | ||||||||||||||
Net sales to other customers | 3,179 | 3,607 | 4,038 | 937 | 1,172 | 1,049 | 13,982 | |||||||||||||||||||||
Inter-segment net sales | 250 | 493 | 180 | 120 | 189 | (1,232 | ) | — | ||||||||||||||||||||
Total net sales | $ | 5,035 | $ | 5,663 | $ | 5,968 | $ | 2,412 | $ | 2,946 | $ | 259 | $ | 22,283 | ||||||||||||||
Depreciation & Amortization | $ | 267 | $ | 266 | $ | 175 | $ | 61 | $ | 63 | $ | 82 | $ | 914 | ||||||||||||||
Long-lived asset impairment charges | $ | 1 | $ | 13 | $ | 6 | $ | — | $ | 78 | $ | — | $ | 98 | ||||||||||||||
Operating income (loss)(c) | $ | 63 | $ | (276 | ) | $ | (36 | ) | $ | (29 | ) | $ | (393 | ) | $ | (1,274 | ) | $ | (1,945 | ) | ||||||||
OIBDAR(f) | $ | 439 | $ | 125 | $ | 329 | $ | 84 | $ | 73 | $ | (319 | ) | $ | 731 | |||||||||||||
Minority Interest | $ | (1 | ) | $ | (28 | ) | $ | (22 | ) | $ | (3 | ) | $ | — | $ | (9 | ) | $ | (63 | ) | ||||||||
Equity income (loss) | $ | 1 | $ | 15 | $ | (2 | ) | $ | 6 | $ | (1 | ) | $ | 8 | $ | 27 | ||||||||||||
2006: | ||||||||||||||||||||||||||||
Net sales to GM and affiliates | $ | 1,587 | $ | 1,745 | $ | 1,772 | $ | 1,600 | $ | 2,031 | $ | 609 | $ | 9,344 | ||||||||||||||
Net sales to other customers | 3,278 | 3,399 | 3,420 | 849 | 1,376 | 1,071 | 13,393 | |||||||||||||||||||||
Inter-segment net sales | 228 | 421 | 173 | 158 | 231 | (1,211 | ) | — | ||||||||||||||||||||
Total net sales | $ | 5,093 | $ | 5,565 | $ | 5,365 | $ | 2,607 | $ | 3,638 | $ | 469 | $ | 22,737 | ||||||||||||||
Depreciation & Amortization | $ | 268 | $ | 260 | $ | 175 | $ | 67 | $ | 100 | $ | 84 | $ | 954 | ||||||||||||||
Long-lived asset impairment charges | $ | 4 | $ | 12 | $ | 1 | $ | 11 | $ | 144 | $ | — | $ | 172 | ||||||||||||||
Operating income (loss)(d) | $ | 188 | $ | (128 | ) | $ | (110 | ) | $ | (170 | ) | $ | (488 | ) | $ | (3,834 | ) | $ | (4,542 | ) | ||||||||
OIBDAR(f) | $ | 489 | $ | 234 | $ | 154 | $ | (6 | ) | $ | (121 | ) | $ | (864 | ) | $ | (114 | ) | ||||||||||
Minority Interest | $ | (6 | ) | $ | (28 | ) | $ | (17 | ) | $ | 9 | $ | — | $ | 8 | $ | (34 | ) | ||||||||||
Equity income (loss) | $ | 6 | $ | 10 | $ | 18 | $ | (11 | ) | $ | 16 | $ | 5 | $ | 44 |
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group(e) | and Other(a) | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Balance as of: | ||||||||||||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||||||
Investment in affiliates | $ | 40 | $ | 57 | $ | 104 | $ | 61 | $ | 25 | $ | 16 | $ | 303 | ||||||||||||||
Goodwill | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 62 | $ | 62 | ||||||||||||||
Capital expenditures | $ | 166 | $ | 306 | $ | 179 | $ | 98 | $ | 15 | $ | 33 | $ | 797 | ||||||||||||||
Segment assets | $ | 2,651 | $ | 3,084 | $ | 3,163 | $ | 1,112 | $ | 406 | $ | (110 | ) | $ | 10,306 | |||||||||||||
December 31, 2007 | ||||||||||||||||||||||||||||
Investment in affiliates | $ | 46 | $ | 61 | $ | 130 | $ | 77 | $ | 50 | $ | 23 | $ | 387 | ||||||||||||||
Goodwill | $ | 155 | $ | — | $ | 165 | $ | — | $ | — | $ | 77 | $ | 397 | ||||||||||||||
Capital expenditures | $ | 161 | $ | 149 | $ | 182 | $ | 66 | $ | 3 | $ | 19 | $ | 580 | ||||||||||||||
Segment assets | $ | 3,610 | $ | 3,450 | $ | 4,001 | $ | 1,288 | $ | 1,261 | $ | 57 | $ | 13,667 |
(a) | Corporate and Other includes the elimination of inter-segment transactions and charges related to U.S. employee workforce transition programs in the amount of $78 million in 2008, $212 million in 2007 and $2,706 million in 2006 (Refer to Note 16. U.S. Employee Workforce Transition Programs). Corporate and Other also includes the Product and Service Solutions business, which is comprised of independent aftermarket, diesel aftermarket, original equipment service, consumer electronics and medical systems. Additionally, Corporate and Other includes assets held for sale of $497 million and $594 million within Segment assets for 2008 and 2007, respectively. | |
(b) | Includes charges recorded in 2008 related to long-lived asset and goodwill impairments and costs associated with employee termination benefits and other exit costs of $319 million for Electronics and Safety, $63 million for Powertrain Systems, $248 million for Electrical/Electronic Architecture, $34 million for Thermal Systems, $98 million for Automotive Holdings Group and $14 million for Corporate and Other. | |
(c) | Includes charges recorded in 2007 related to long-lived asset impairments and costs associated with employee termination benefits and other exit costs with $37 million for Electronics and Safety, $68 million for Powertrain Systems, $138 million for Electrical/Electronic Architecture, $48 million for Thermal Systems, $317 million for Automotive Holdings Group and $30 million for Corporate and Other. | |
(d) | Includes charges recorded in 2006 related to long-lived asset impairments and costs associated with employee termination benefits and other exit costs with $22 million for Electronics and Safety, $70 million for Powertrain Systems, $83 million for Electrical/Electronic Architecture, $84 million for Thermal Systems, $171 million for Automotive Holdings Group and $11 million for Corporate and Other. | |
(e) | Includes assets held for sale of $126 million within Segment assets for 2007. | |
(f) | Delphi’s management relies on segment OIBDAR as a key performance measure. OIBDAR is defined as operating income before depreciation and amortization, including long-lived asset and goodwill impairment charges, transformation and rationalization charges related to plant consolidations, plant wind-downs and discontinued operations. Segment OIBDAR should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to operating income, which is the most directly comparable financial measure to OIBDAR that is in accordance with U.S. GAAP. Segment OIBDAR, as determined and measured by Delphi, should also not be compared to similarly titled measures reported by other companies. |
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2008: | ||||||||||||||||||||||||||||
Operating income (loss) | $ | (654 | ) | $ | (130 | ) | $ | (361 | ) | $ | 18 | $ | (68 | ) | $ | (286 | ) | $ | (1,481 | ) | ||||||||
Depreciation and amortization | 235 | 248 | 187 | 71 | 32 | 54 | 827 | |||||||||||||||||||||
Long-lived asset impairment charges | 15 | — | 2 | 10 | 10 | — | 37 | |||||||||||||||||||||
Goodwill impairment charges | 157 | — | 168 | — | — | — | 325 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 78 | 78 | |||||||||||||||||||||
GM settlement — MRA | (42 | ) | (94 | ) | (15 | ) | (88 | ) | (62 | ) | 47 | (254 | ) | |||||||||||||||
Employee termination benefits and other exit costs | 147 | 63 | 78 | 24 | 88 | 14 | 414 | |||||||||||||||||||||
Loss on divestitures | 13 | 14 | — | — | 34 | — | 61 | |||||||||||||||||||||
Other transformation and rationalization costs | 59 | 19 | 37 | 4 | — | 128 | 247 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 10 | 5 | 15 | |||||||||||||||||||||
OIBDAR | $ | (70 | ) | $ | 120 | $ | 96 | $ | 39 | $ | 44 | $ | 40 | $ | 269 | |||||||||||||
Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2007: | ||||||||||||||||||||||||||||
Operating income (loss) | $ | 63 | $ | (276 | ) | $ | (36 | ) | $ | (29 | ) | $ | (393 | ) | $ | (1,274 | ) | $ | (1,945 | ) | ||||||||
Depreciation and amortization | 267 | 266 | 175 | 61 | 63 | 82 | 914 | |||||||||||||||||||||
Long-lived asset impairment charges | 1 | 13 | 6 | — | 78 | — | 98 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 212 | 212 | |||||||||||||||||||||
Securities & ERISA litigation charge | — | — | — | — | — | 343 | 343 | |||||||||||||||||||||
Employee termination benefits and other exit costs | 36 | 55 | 132 | 48 | 239 | 30 | 540 | |||||||||||||||||||||
Loss on divestitures | — | 30 | — | — | — | — | 30 | |||||||||||||||||||||
Other transformation and rationalization costs | 72 | 37 | 52 | 4 | 5 | 77 | 247 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 81 | 211 | 292 | |||||||||||||||||||||
OIBDAR | $ | 439 | $ | 125 | $ | 329 | $ | 84 | $ | 73 | $ | (319 | ) | $ | 731 | |||||||||||||
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Electrical/ | Automotive | |||||||||||||||||||||||||||
Electronics | Powertrain | Electronic | Thermal | Holdings | Corporate | |||||||||||||||||||||||
and Safety | Systems | Architecture | Systems | Group | and Other | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2006: | ||||||||||||||||||||||||||||
Operating income (loss) | $ | 188 | $ | (128 | ) | $ | (110 | ) | $ | (170 | ) | $ | (488 | ) | $ | (3,834 | ) | $ | (4,542 | ) | ||||||||
Depreciation and amortization | 268 | 260 | 175 | 67 | 100 | 84 | 954 | |||||||||||||||||||||
Long-lived asset impairment charges | 4 | 12 | 1 | 11 | 144 | — | 172 | |||||||||||||||||||||
Transformation and rationalization charges: | ||||||||||||||||||||||||||||
U.S. employee workforce transition program charges | — | — | — | — | — | 2,706 | 2,706 | |||||||||||||||||||||
Employee termination benefits and other exit costs | 18 | 58 | 82 | 73 | 27 | 11 | 269 | |||||||||||||||||||||
Other transformation and rationalization costs | 11 | 32 | 6 | 13 | 39 | 90 | 191 | |||||||||||||||||||||
Discontinued operations | — | — | — | — | 57 | 79 | 136 | |||||||||||||||||||||
OIBDAR | $ | 489 | $ | 234 | $ | 154 | $ | (6 | ) | $ | (121 | ) | $ | (864 | ) | $ | (114 | ) | ||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | Net Sales | Net Sales | ||||||||||||||||||||||||||||||||||||||||||||||
Other | Net | Other | Net | Other | Net | |||||||||||||||||||||||||||||||||||||||||||
GM | Customers | Total | Property | GM | Customers | Total | Property | GM | Customers | Total | Property | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
North America | $ | 4,026 | $ | 3,645 | $ | 7,671 | $ | 1,425 | $ | 6,782 | $ | 4,975 | $ | 11,757 | $ | 1,906 | $ | 8,040 | $ | 5,881 | $ | 13,921 | $ | 2,024 | ||||||||||||||||||||||||
Europe, Middle East, & Africa | 885 | 6,346 | 7,231 | 1,412 | 1,002 | 6,396 | 7,398 | 1,476 | 879 | 5,463 | 6,342 | 1,539 | ||||||||||||||||||||||||||||||||||||
Asia Pacific | 104 | 1,917 | 2,021 | 429 | 76 | 2,105 | 2,181 | 341 | 71 | 1,700 | 1,771 | 367 | ||||||||||||||||||||||||||||||||||||
South America | 510 | 627 | 1,137 | 131 | 441 | 506 | 947 | 140 | 354 | 349 | 703 | 136 | ||||||||||||||||||||||||||||||||||||
Total | $ | 5,525 | $ | 12,535 | $ | 18,060 | $ | 3,397 | �� | $ | 8,301 | $ | 13,982 | $ | 22,283 | $ | 3,863 | $ | 9,344 | $ | 13,393 | $ | 22,737 | $ | 4,066 | |||||||||||||||||||||||
23. | FAIR VALUE OF FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES |
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December 31, | December 31, | |||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Current assets | $ | 12 | $ | 40 | ||||
Non-current assets | — | 13 | ||||||
Total assets | $ | 12 | $ | 53 | ||||
Current liabilities | $ | (132 | ) | $ | 24 | |||
Non-current liabilities | (36 | ) | — | |||||
Total liabilities | $ | (168 | ) | $ | 24 | |||
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24. | FAIR VALUE MEASUREMENTS |
• | Level 1: Observable inputs such as quoted prices in active markets; | |
• | Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | |
• | Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
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Fair Value Measurements Using: | ||||||||||||||||
Significant Other | Significant | |||||||||||||||
Total as of | Quoted Prices in | Observable | Unobservable | |||||||||||||
December 31, | Active Markets | Inputs | Inputs | |||||||||||||
2008 | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Available for sale securities | $ | 32 | $ | 23 | $ | 9 | $ | — | ||||||||
Foreign currency derivatives | 12 | — | — | 12 | ||||||||||||
Total | $ | 44 | $ | 23 | $ | 9 | $ | 12 | ||||||||
Fair Value Measurements Using: | ||||||||||||||||
Significant Other | Significant | |||||||||||||||
Total as of | Quoted Prices in | Observable | Unobservable | |||||||||||||
December 31, | Active Markets | Inputs | Inputs | |||||||||||||
2008 | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Commodity derivatives | $ | 99 | $ | — | $ | — | $ | 99 | ||||||||
Foreign currency derivatives | 69 | — | — | 69 | ||||||||||||
Total | $ | 168 | $ | — | $ | — | $ | 168 | ||||||||
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Fair Value Measurement Using Significant Unobservable Inputs (Level 3): | ||||||||||||||||||||||||
Changes to | ||||||||||||||||||||||||
Total | Unrealized | |||||||||||||||||||||||
Realized / | Net Transfers | Gains / | ||||||||||||||||||||||
Fair Value | Unrealized | Net | Into / | Fair Value | (Losses) on | |||||||||||||||||||
January 1, | Gains / | Purchases / | (Out of) | December 31, | Instruments | |||||||||||||||||||
2008 | (Losses) | (Settlements) | Level 3 | 2008 | Still Held | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Commodity and foreign currency derivatives | $ | — | $ | (147 | ) | $ | (38 | ) | $ | 29 | $ | (156 | ) | $ | (163 | ) | ||||||||
Total Level 3 Fair Value | $ | — | $ | (147 | ) | $ | (38 | ) | $ | 29 | $ | (156 | ) | $ | (163 | ) | ||||||||
25. | SUBSEQUENT EVENTS |
— | Revised rolling12-month cumulative Global EBITDAR covenant levels based upon the current economic and automotive environment as follows: |
Period Ending | Global EBITDAR | |||
January 31, 2009 | $ | 185 | ||
February 28, 2009 | $ | (50 | ) | |
March 31, 2009 | $ | (150 | ) | |
April 30, 2009 | $ | (250 | ) | |
May 31, 2009 | $ | (350 | ) |
— | An additional cash collateral basket of up to $117 million (the “Basket”), which solely for purposes of the prepayment provisions in the Accommodation Agreement is considered an offset to amounts outstanding under the Revolving Facility (provided during February 2009). The Basket may be released to Delphi (and each such release may not be restored) upon the satisfaction of certain conditions described below. |
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26. | QUARTERLY DATA (UNAUDITED) |
Three Months Ended | ||||||||||||||||||||
March 31, | June 30, | Sept. 30, | Dec. 31, | Total | ||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||
2008 | ||||||||||||||||||||
Net sales | $ | 5,252 | $ | 5,234 | $ | 4,377 | $ | 3,197 | $ | 18,060 | ||||||||||
Cost of sales | 4,897 | 4,821 | 4,117 | 3,233 | 17,068 | |||||||||||||||
Gross profit (a) | $ | 355 | $ | 413 | $ | 260 | $ | (36 | ) | $ | 992 | |||||||||
U.S. employee workforce transition program charges | $ | 36 | $ | 18 | $ | 22 | $ | 2 | $ | 78 | ||||||||||
GM settlement (Note 2 — MRA) | $ | — | $ | — | $ | (254 | ) | $ | — | $ | (254 | ) | ||||||||
Long lived asset impairment charges | $ | 3 | $ | 5 | $ | 5 | $ | 24 | $ | 37 | ||||||||||
Goodwill impairment charges | $ | — | $ | 168 | $ | — | $ | 157 | $ | 325 | ||||||||||
Operating loss | $ | (267 | ) | $ | (365 | ) | $ | (96 | ) | $ | (753 | ) | $ | (1,481 | ) | |||||
(Loss) income from continuing operations (b) | $ | (530 | ) | $ | (559 | ) | $ | 5,143 | $ | (998 | ) | $ | 3,056 | |||||||
(Loss) income from discontinued operations, net of tax | (59 | ) | 8 | 75 | (43 | ) | (19 | ) | ||||||||||||
Net (loss) income | $ | (589 | ) | $ | (551 | ) | $ | 5,218 | $ | (1,041 | ) | $ | 3,037 | |||||||
Basic and diluted (loss) income per share Continuing operations | $ | (0.94 | ) | $ | (0.99 | ) | $ | 9.11 | $ | (1.77 | ) | $ | 5.41 | |||||||
Discontinued operations | (0.10 | ) | 0.01 | 0.13 | (0.07 | ) | (0.03 | ) | ||||||||||||
Basic and diluted (loss) income per share | $ | (1.04 | ) | $ | (0.98 | ) | $ | 9.24 | $ | (1.84 | ) | $ | 5.38 | |||||||
Common stock price | ||||||||||||||||||||
High | $ | 0.22 | $ | 0.14 | $ | 0.11 | $ | 0.08 | $ | 0.22 | ||||||||||
Low | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.02 | $ | 0.02 | ||||||||||
2007 | ||||||||||||||||||||
Net sales | $ | 5,682 | $ | 6,000 | $ | 5,279 | $ | 5,322 | $ | 22,283 | ||||||||||
Cost of sales | 5,306 | 5,654 | 5,111 | 4,995 | 21,066 | |||||||||||||||
Gross profit (a) | $ | 376 | $ | 346 | $ | 168 | $ | 327 | $ | 1,217 | ||||||||||
U.S. employee workforce transition program charges | $ | (6 | ) | $ | — | $ | 197 | $ | 21 | $ | 212 | |||||||||
Long lived asset impairment charges | $ | 6 | $ | 34 | $ | 14 | $ | 44 | $ | 98 | ||||||||||
Securities and ERISA litigation charge | $ | — | $ | 332 | $ | 21 | $ | (10 | ) | $ | 343 | |||||||||
Operating loss | $ | (215 | ) | $ | (644 | ) | $ | (663 | ) | $ | (423 | ) | $ | (1,945 | ) | |||||
(Loss) income from continuing operations (b) | $ | (391 | ) | $ | (808 | ) | $ | (1,149 | ) | $ | 40 | $ | (2,308 | ) | ||||||
Loss from discontinued operations, net of tax (c) | (142 | ) | (13 | ) | (20 | ) | (582 | ) | (757 | ) | ||||||||||
Net loss | $ | (533 | ) | $ | (821 | ) | $ | (1,169 | ) | $ | (542 | ) | $ | (3,065 | ) | |||||
Basic and diluted (loss) income per share Continuing operations | $ | (0.70 | ) | $ | (1.44 | ) | $ | (2.04 | ) | $ | 0.07 | $ | (4.11 | ) | ||||||
Discontinued operations | (0.25 | ) | (0.02 | ) | (0.04 | ) | (1.03 | ) | (1.34 | ) | ||||||||||
Basic and diluted loss per share | $ | (0.95 | ) | $ | (1.46 | ) | $ | (2.08 | ) | $ | (0.96 | ) | $ | (5.45 | ) | |||||
Common stock price | ||||||||||||||||||||
High | $ | 3.86 | $ | 3.12 | $ | 2.59 | $ | 0.49 | $ | 3.86 | ||||||||||
Low | $ | 2.25 | $ | 1.46 | $ | 0.44 | $ | 0.10 | $ | 0.10 |
a) | Gross profit is defined as net sales less cost of sales (excluding U.S. employee workforce transition program charges, GM settlement, Depreciation and amortization, Long-lived asset impairment charges and Goodwill impairment charges). |
b) | (Loss) income from continuing operations includes the reorganization gains of $5,586 million in the third quarter of 2008 related to the GM settlements, and a tax benefit of $703 million in the fourth quarter of 2007 related to credits in other comprehensive income. Refer to Note 2. Transformation Plan and Chapter 11 Bankruptcy and Note 8. Income Taxes for more information. |
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c) | Loss from discontinued operations includes a charge of $595 million related to the assets held for sale for the Steering and Interiors and Closures Businesses, including the impact of curtailment loss on pension benefits for impacted employees in the fourth quarter of 2007. |
27. | DEBTORS’ CONDENSED COMBINED FINANCIAL STATEMENTS |
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December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Payroll related obligations | $ | 39 | $ | 48 | ||||
Employee benefits, including current pension obligations | 84 | 120 | ||||||
Taxes other than income | 36 | 70 | ||||||
Warranty obligations | 74 | 173 | ||||||
U.S. employee workforce transition program | 115 | 234 | ||||||
Employee termination benefits and other exit costs | 81 | 105 | ||||||
Interest on prepetition claims | 415 | 411 | ||||||
Working capital backstop — Steering Business | 210 | — | ||||||
Other | 264 | 167 | ||||||
Total | $ | 1,318 | $ | 1,328 | ||||
December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
Workers compensation | $ | 325 | $ | 328 | ||||
Environmental | 90 | 103 | ||||||
Extended disability benefits | 60 | 72 | ||||||
Warranty | 130 | 203 | ||||||
Other | 131 | 245 | ||||||
Total | $ | 736 | $ | 951 | ||||
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Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Net sales | $ | 7,988 | $ | 11,978 | $ | 14,149 | ||||||
Operating expenses: | ||||||||||||
Cost of sales, excluding items listed below | 8,404 | 12,453 | 14,645 | |||||||||
U.S. employee workforce transition program charges | 78 | 212 | 2,706 | |||||||||
GM settlement (Note 2 — MRA) | (254 | ) | — | — | ||||||||
Depreciation and amortization | 405 | 511 | 562 | |||||||||
Long-lived asset impairment charges | 9 | 84 | 102 | |||||||||
Goodwill impairment charges | 115 | — | — | |||||||||
Selling, general and administrative | 857 | 1,008 | 1,006 | |||||||||
Securities & ERISA litigation charge | — | 343 | — | |||||||||
Total operating expenses | 9,614 | 14,611 | 19,021 | |||||||||
Operating loss | (1,626 | ) | (2,633 | ) | (4,872 | ) | ||||||
Interest expense (contractual interest expense for the year ended December 31, 2008, 2007 and 2006 was $510 million, $444 million and $526 million, respectively) | (386 | ) | (722 | ) | (378 | ) | ||||||
Loss on extinguishment of debt | (49 | ) | (27 | ) | — | |||||||
Other income (expense), net | 2 | 36 | (11 | ) | ||||||||
Reorganization items: | ||||||||||||
GM settlement (Notes 2 and 3 — GSA) | 5,332 | — | — | |||||||||
Professional fees and other, net (Note 3) | (129 | ) | (136 | ) | (70 | ) | ||||||
Income (loss) from continuing operations before income tax benefit and equity income | 3,144 | (3,482 | ) | (5,331 | ) | |||||||
Income tax (expense) benefit | (14 | ) | 691 | (1 | ) | |||||||
Equity income from non-consolidated affiliates, net of tax | 2 | 21 | 37 | |||||||||
Income (loss) from continuing operations before discontinued operations and equity income from non-Debtor affiliates | 3,132 | (2,770 | ) | (5,295 | ) | |||||||
Loss from discontinued operations, net of tax (Note 5) | (62 | ) | (695 | ) | (326 | ) | ||||||
Equity (loss) income from non-Debtor affiliates, net of tax | (33 | ) | 400 | 154 | ||||||||
Cumulative effect of accounting change | — | — | 3 | |||||||||
Net income (loss) | $ | 3,037 | $ | (3,065 | ) | $ | (5,464 | ) | ||||
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December 31, | ||||||||
2008 | 2007 | |||||||
(in millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 231 | $ | 113 | ||||
Restricted cash | 355 | 125 | ||||||
Accounts receivable, net: | ||||||||
General Motors and affiliates | 670 | 972 | ||||||
Other third parties | 385 | 623 | ||||||
Non-Debtor affiliates | 249 | 250 | ||||||
Notes receivable from non-Debtor affiliates | 77 | 278 | ||||||
Inventories, net: | ||||||||
Productive material,work-in-process and supplies | 418 | 652 | ||||||
Finished goods | 75 | 171 | ||||||
Other current assets | 204 | 385 | ||||||
Assets held for sale | 333 | 475 | ||||||
Total current assets | 2,997 | 4,044 | ||||||
Long-term assets: | ||||||||
Property, net | 1,182 | 1,446 | ||||||
Investments in affiliates | 251 | 331 | ||||||
Investments in non-Debtor affiliates | 1,104 | 3,267 | ||||||
Goodwill | 37 | 152 | ||||||
Notes receivable from non-Debtor affiliates | 1,429 | — | ||||||
Other | 183 | 512 | ||||||
Total long-term assets | 4,186 | 5,708 | ||||||
Total assets | $ | 7,183 | $ | 9,752 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities not subject to compromise: | ||||||||
Short-term debt | $ | 3,635 | $ | 2,782 | ||||
Accounts payable | 551 | 1,007 | ||||||
Accounts payable to non-Debtor affiliates | 535 | 689 | ||||||
Accrued liabilities | 1,318 | 1,328 | ||||||
Liabilities held for sale | 149 | 167 | ||||||
Total current liabilities | 6,188 | 5,973 | ||||||
Long-term debt | 20 | 24 | ||||||
Employee benefits and other | 736 | 951 | ||||||
Total long-term liabilities | 756 | 975 | ||||||
Liabilities subject to compromise | 14,664 | 16,276 | ||||||
Total liabilities | 21,608 | 23,224 | ||||||
Stockholders’ deficit: | ||||||||
Total stockholders’ deficit | (14,425 | ) | (13,472 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 7,183 | $ | 9,752 | ||||
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Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net cash used in operating activities | $ | (481 | ) | $ | (114 | ) | $ | (572 | ) | |||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (279 | ) | (224 | ) | (217 | ) | ||||||
Proceeds from divestitures and sale of property | 178 | 87 | 21 | |||||||||
Investment in joint ventures | (8 | ) | (11 | ) | — | |||||||
Increase in restricted cash | (230 | ) | (13 | ) | (102 | ) | ||||||
Proceeds from notes receivable from non-Debtor affiliates | 265 | — | — | |||||||||
Return on investment in non-Debtor affiliates | 16 | 106 | — | |||||||||
Other, net | (16 | ) | — | (7 | ) | |||||||
Discontinued operations | (26 | ) | (28 | ) | (69 | ) | ||||||
Net used in investing activities | (100 | ) | (83 | ) | (374 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from amended and restateddebtor-in-possession facility, net of issuance cost of $92 million | 3,528 | — | — | |||||||||
Proceeds from Refinanced DIP Credit Facility, net of issuance costs | — | 2,691 | — | |||||||||
(Repayments) proceeds fromdebtor-in-possession facility, net | — | (250 | ) | — | ||||||||
Repayments of borrowings under term loan | — | (988 | ) | — | ||||||||
(Repayments) proceeds from prepetition secured revolving credit facility, net | — | (1,508 | ) | 2 | ||||||||
Repayments of borrowings from refinanceddebtor-in-possession facility | (2,746 | ) | — | — | ||||||||
Accommodation agreement issuance costs | (58 | ) | — | — | ||||||||
(Repayments) proceeds under cash overdraft | — | — | (29 | ) | ||||||||
Repayments of borrowings under other debt agreements | (25 | ) | (11 | ) | (12 | ) | ||||||
Net cash provided by (used in) financing activities | 699 | (66 | ) | (39 | ) | |||||||
Increase (decrease) in cash and cash equivalents | 118 | (263 | ) | (985 | ) | |||||||
Cash and cash equivalents at beginning of period | 113 | 376 | 1,361 | |||||||||
Cash and cash equivalents at end of period | $ | 231 | $ | 113 | $ | 376 | ||||||
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Additions | ||||||||||||||||||||
Balance at | Charged to | Charged to | Balance at | |||||||||||||||||
Beginning of | Costs and | Other | End of | |||||||||||||||||
Description | Period | Expenses | Accounts | Deductions | Period | |||||||||||||||
(in millions) | ||||||||||||||||||||
December 31, 2008: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 143 | $ | 66 | $ | — | $ | (45 | ) | $ | 164 | |||||||||
Tax valuation allowance | $ | 9,744 | $ | (1,726 | ) | $ | 1,134 | $ | (8 | ) | $ | 9,144 | ||||||||
December 31, 2007: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 144 | $ | 42 | $ | — | $ | (43 | ) | $ | 143 | |||||||||
Tax valuation allowance | $ | 8,471 | $ | 1,364 | $ | (66 | ) | $ | (25 | ) | $ | 9,744 | ||||||||
December 31, 2006: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 122 | $ | 62 | $ | — | $ | (40 | ) | $ | 144 | |||||||||
Tax valuation allowance | $ | 5,891 | $ | 2,609 | $ | — | $ | (29 | ) | $ | 8,471 |
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ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
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ITEM 9B. | OTHER INFORMATION |
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ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name | Age | Position | Term | |||||
Robert S. Miller | 67 | Executive Chairman | Since 2005 | |||||
Rodney O’Neal | 55 | President & CEO | Since 2005 | |||||
Oscar de Paula Bernardes Neto | 62 | Director | Since 1999 | |||||
John D. Englar | 62 | Director | Since 2006 | |||||
David N. Farr | 54 | Director | Since 2002 | |||||
Raymond J. Milchovich | 59 | Director | Since 2005 | |||||
Craig G. Naylor | 60 | Director | Since 2005 | |||||
John H. Walker | 51 | Director | Since 2005 | |||||
Martin E. Welch | 60 | Director | Since 2006 |
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ITEM 11. | EXECUTIVE COMPENSATION |
• | Named Executive Officers — the Chief Executive Officer (“CEO”), Chief Financial Officer and the three next most highly compensated officers as identified in the Summary Compensation Table. | |
• | Executive Officers — those officers who are either in charge of one of Delphi’s principal business units or who perform a key policy making function. For a list of Delphi’s Executive Officers, see Part I, Supplementary Item in this Annual Report. Any reference to executive officers in this section includes the named executive officers. | |
• | Delphi Strategy Board (“DSB”) — 19 executives comprising Delphi’s officer group (Corporate Vice Presidents and above), which includes the Executive Officers as well as the functional and staff heads of various Corporate functions. | |
• | Non-DSB Executives — approximately 465 global executives who are eligible for compensation under Delphi’s Executive Compensation and Benefit programs. | |
• | Executives — the combined DSB and non-DSB Executives, approximately 484 executives. |
• | developing and reviewing Delphi’s compensation philosophy; | |
• | establishing annual and long-term performance goals under Delphi’s incentive plans; | |
• | overseeing periodic reviews and evaluations of corporate and individual performance of each executive officer; and | |
• | approving the individual compensation of the executive officers, as well as other members of the DSB and non-DSB officers who are subject to Section 16 of the Securities Exchange Act of 1934. |
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• | Provide competitive pay opportunities with a target total reward opportunity sufficient to attract and retain high-caliber executives who can effectively manage Delphi’s complex global businesses, taking into account the competitive marketplace as well as each executive’s experience and performance; | |
• | Link a significant portion of each executive’s compensation to performance-based at-risk incentives, annual financial and strategic goals and the creation of sustainable stakeholder value consistent with |
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Delphi’s long-term strategic goals, while recognizing that equity-based incentive award programs are not an appropriate vehicle during our chapter 11 proceedings; |
• | Ensure at-risk incentive-based compensation primarily rewards performance; | |
• | Maintain the total cost of any compensation program in line with the median range of our peer companies and also consider benchmarked companies that have filed for chapter 11; | |
• | Provide significant reward for achievement of superior individual performance, which can result in differentiated compensation among executives with similar levels of responsibilities based on individual performance; and | |
• | Provide flexibility to make other appropriate adjustments in targets and awards in light of the cyclical nature of Delphi’s businesses in recognition of the need to manage for value throughout the business cycle. |
• | Financial — the Compensation Committee focuses on financial goals that it believes are primary indicators of whether the company and its business units are achieving their annual and long-term business strategies and objectives. | |
• | Customer/Operational — the Compensation Committee evaluates customer-important operating metrics such as quality, delivery, and product launch performance as well as internal measures of efficiency such as manufacturing, engineering and safety performance. | |
• | People — the Compensation Committee periodically assesses and evaluates Delphi’s top executives’ leadership attributes, including development of people, ethical conduct and development of a diverse global workforce. |
• | total direct compensation — base salary, short-term incentive opportunities and long-term incentive opportunities | |
• | other compensation — retirement programs, perquisites and any other aspects of pay | |
• | total compensation — total direct compensation plus other compensation |
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Element | Key Features | Relationship to Objectives | ||
Direct Compensation | ||||
Base Salary | — Commensurate with responsibilities, tenure, experience and performance — Reviewed on a periodic basis for competitiveness | — Provide competitive pay opportunities to attract and retain executives | ||
Short-term Incentive | — Compensation Committee approves a target incentive pool for each performance period based on selected financial and/or operational metrics — Each executive is granted a fixed award opportunity consistent with competitive data. The amount generally varies by level of responsibility — Final executive awards are determined by the actual performance of the company which can then be adjusted to reflect individual performance | — Link a significant portion of compensation to individual and corporate achievement of specific financial and operational objectives that relate to enhanced stakeholder value | ||
Long-term Incentive | — Not being granted while in chapter 11 proceedings | — Recognizes that existing equity-based incentive award programs are not an appropriate vehicle during bankruptcy proceedings | ||
Other Compensation | ||||
Perquisites | — Named executive officers are eligible for: • Company-leased car or car allowance • Financial planning services • Supplemental life and umbrella liability insurance • Home security monitoring — Cease in the year of separation | — Ensures competitive pay opportunities at the top executive level — Must be reasonable in terms of cost | ||
Retirement Benefits | — Frozen qualified and non-qualified defined benefit pension plans — Qualified and non-qualified defined contribution retirement plans | — Provide a market competitive replacement income in retirement — Retain highly-qualified executives | ||
Employment & Change in Control (“CIC”) Agreements | — Employee agreements provide severance benefits in return for the executive’s agreement to confidentiality, non-compete and non-solicitation provisions — CIC Agreements provide for the immediate vesting and funding of certain equity awards and retirement benefits upon a CIC and additional severance benefits upon a subsequent termination of employment | — To retain highly-qualified executives at the DSB level while also protecting the company’s interest in the event the executive leaves employment prior to retirement — Ensures each DSB member’s full attention and dedication to stakeholders’ interests in the event of a CIC |
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Best Buy Co Inc. | Raytheon Co | TRW Automotive Holdings Corp. | ||
DuPont EI De Nemours | 3M Co. | Parker-Hannifin Corp. | ||
Honeywell International Inc. | Goodyear Tire & Rubber Co. | Federal Mogul | ||
Johnson Controls Inc | Lear Corp. | Borgwarner Inc | ||
International Paper Company | Visteon Corp | Kraft Foods Inc | ||
Coca-Cola Co. | Kimberly-Clark Co | Pepsico Inc. |
• | Executive Chairman — by the Compensation Committee, with the input from the Board of Directors | |
• | CEO — by the Compensation Committee with input from the Board of Directors | |
• | Each DSB Member — by the CEO, with input from direct supervisors, subject to the review and approval of the Compensation Committee | |
• | Non-DSB Executives — by their direct supervisors, subject to the review and approval of the DSB officer to whom such executive ultimately reports. A non-DSB executive who is subject to Section 16 of the Securities Exchange Act of 1934 also has his or her compensation reviewed, and in the case of equity awards, approved by the Compensation Committee |
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• | Benefits do not vest and are not payable until emergence; | |
• | An employee must be at least age 55 with 10 years of service at retirement; | |
• | Benefits will be paid over five years commencing at the eligible separation; and | |
• | Recipients must be an employee on the date of emergence, unless the company, in its sole discretion, waives this condition for employees who may voluntarily separate after October 1, 2008 and prior to emergence. Such employees are not eligible for severance payments if such condition is waived. |
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Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Non-Equity | Non-qualified | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Deferred | |||||||||||||||||||||||||||||||||
Name and | Salary | Awards | Awards | Compensation | Compensation | All Other | ||||||||||||||||||||||||||||||
Principal Position(1) | Year | ($)(2) | Bonus ($) | ($)(3) | ($)(3) | ($)(4) | Earnings($)(5) | Compensation($)(6) | Total ($) | |||||||||||||||||||||||||||
Rodney O’Neal | 2008 | $ | 1,200,000 | — | $ | 729,762 | — | — | $ | 1,143,048 | $ | 93,127 | $ | 3,165,937 | ||||||||||||||||||||||
President & Chief | 2007 | $ | 1,200,000 | — | $ | 277,129 | $ | 91,271 | $ | 2,428,125 | $ | 2,425,319 | $ | 81,816 | $ | 6,503,660 | ||||||||||||||||||||
Executive Officer, Director | 2006 | $ | 920,000 | — | $ | 383,166 | $ | 346,558 | $ | 1,340,000 | $ | 1,251,350 | $ | 96,727 | $ | 4,337,801 | ||||||||||||||||||||
John D. Sheehan (7) | 2008 | $ | 472,154 | — | $ | 98,026 | — | — | $ | 69,373 | $ | 37,001 | $ | 676,554 | ||||||||||||||||||||||
Vice President, Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
Mark R. Weber | 2008 | $ | 630,000 | — | $ | 552,882 | — | — | $ | 639,788 | $ | 32,086 | $ | 1,854,756 | ||||||||||||||||||||||
Executive Vice President, | 2007 | $ | 630,000 | — | $ | 251,879 | $ | 82,547 | $ | 951,825 | $ | 1,046,216 | $ | 35,886 | $ | 2,998,353 | ||||||||||||||||||||
Global Business Services | 2006 | $ | 630,000 | — | $ | 319,484 | $ | 314,176 | $ | 984,900 | $ | 1,110,984 | $ | 37,941 | $ | 3,397,485 | ||||||||||||||||||||
Ronald M. Pirtle (7) | 2008 | $ | 588,000 | — | $ | 383,907 | — | $ | 50,000 | $ | 410,829 | $ | 190,261 | $ | 1,622,997 | |||||||||||||||||||||
Vice President, President | ||||||||||||||||||||||||||||||||||||
Powertrain, Europe, Middle East & Africa | ||||||||||||||||||||||||||||||||||||
James A. Bertrand | 2008 | $ | 562,500 | — | $ | 383,907 | — | $ | 171,955 | $ | 332,101 | $ | 38,139 | $ | 1,488,602 | |||||||||||||||||||||
Vice President, President, | 2007 | $ | 562,500 | — | $ | 139,285 | $ | 46,340 | $ | 807,755 | $ | 467,511 | $ | 39,496 | $ | 2,062,887 | ||||||||||||||||||||
Automotive Holdings Group and President, Delphi Thermal Systems | ||||||||||||||||||||||||||||||||||||
Robert J. Dellinger (8) | 2008 | $ | 568,269 | — | — | — | — | $ | 4,162 | $ | 317,656 | $ | 890,087 | |||||||||||||||||||||||
2007 | $ | 750,000 | — | — | — | $ | 906,500 | $ | 78,440 | $ | 20,748 | $ | 1,755,688 | |||||||||||||||||||||||
2006 | $ | 750,000 | — | — | — | $ | 588,000 | $ | 76,484 | $ | 25,267 | $ | 1,439,751 |
(1) | The titles noted above are the officer’s titles as of December 31, 2008. Since October 3, 2008, and concurrent with Mr. Dellinger’s separation from the Company, Mr. Sheehan has served as Vice President and Chief Financial Officer; previously Mr. Sheehan served as Vice President and Chief Restructuring Officer. Additionally, Messrs. Pirtle and Bertrand held their current positions since May 1, 2008. Prior to that, Mr. Pirtle served as Vice President and President, Thermal Systems and Mr. Bertrand served as Vice President and President, Automotive Holdings Group (“AHG”). Mr. O’Neal was promoted to chief executive officer and president on January 1, 2007. | |
(2) | As discussed in the Compensation Discussion and Analysis, each DSB member hired or promoted prior to October 2005, including Messrs. O’Neal, Sheehan, Weber, Pirtle, and Bertrand, agreed to voluntarily waive a portion of their base pay as noted below. The base salaries without the waiver are still used for all benefit calculations. Mr. Dellinger joined Delphi at the time of Delphi’s filing and was not asked to participate in the voluntary pay waiver. Mr. Sheehan’s base pay of $472,154 reflects an increase in salary as a result of his promotion to chief financial officer and Mr. Pirtle’s base pay of $588,000 reflects an |
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adjustment in salary as a result of his promotion to president of our Powertrain division. Current annual base salaries reflecting the impact of promotional increases and prior to the waiver adjustment are reflected below: |
NEO | Annual Base Pay Prior to Waiver | % Waived | ||||||
Rodney O’Neal | $ | 1,500,000 | 20 | % | ||||
John D. Sheehan | $ | 600,000 | 10 | % | ||||
Mark R. Weber | $ | 700,000 | 10 | % | ||||
Ronald M. Pirtle | $ | 670,000 | 10 | % | ||||
James A. Bertrand | $ | 625,000 | 10 | % |
(3) | As noted above in the Compensation Discussion and Analysis, on May 20, 2008, all outstanding restricted stock units were cancelled. Delphi recognized and disclosed above the remaining compensation expense attributable to these awards, however, our executives did not receive any value from these units as a result of the cancellation. All outstanding options were previously expensed. Since the adoption of SFAS 123(R), the Company recognizes compensation expense for newly issued equity or liability instruments over the periods that an employee provides service in exchange for the award. The Company continues to follow a nominal vesting approach for all awards issued prior to the adoption of SFAS No. 123(R). See Note 21. Share-Based Compensation to the consolidated financial statements included in Part II, Item 8 of the Financial Statements and Supplementary Data of this Annual Report for more detail on the assumptions and methodology used by the Company in recognizing compensation cost, including estimating and accounting for forfeitures. During 2008, compensation expense was recognized in respect of the following prior grants of restricted stock units to the named executive officers: |
Shares | ||||||||||||||||
Related | ||||||||||||||||
to SFAS | Share | |||||||||||||||
123(R) | Price | |||||||||||||||
RSUs | Expense | on Date | ||||||||||||||
Name | Grant Date | Granted | in 2008 | of Grant | ||||||||||||
Rodney O’Neal | 1/2/2002 | 56,985 | 13,815 | $ | 13.60 | |||||||||||
4/24/2003 | 44,250 | 2,458 | $ | 8.43 | ||||||||||||
5/7/2004 | 61,200 | 23,800 | $ | 10.02 | ||||||||||||
3/1/2005 | 77,625 | 40,969 | $ | 6.90 | ||||||||||||
John D. Sheehan | 4/24/2003 | 5,645 | 314 | $ | 8.43 | |||||||||||
5/7/2004 | 9,338 | 3,631 | $ | 10.02 | ||||||||||||
3/1/2005 | 16,200 | 8,550 | $ | 6.90 | ||||||||||||
Mark R. Weber | 1/2/2002 | 51,471 | 8,579 | $ | 13.60 | |||||||||||
4/24/2003 | 40,500 | 2,250 | $ | 8.43 | ||||||||||||
5/7/2004 | 55,350 | 21,525 | $ | 10.02 | ||||||||||||
3/1/2005 | 55,350 | 29,213 | $ | 6.90 | ||||||||||||
Ronald M. Pirtle | 1/2/2002 | 40,441 | 10,110 | $ | 13.60 | |||||||||||
4/24/2003 | 25,984 | 1,444 | $ | 8.43 | ||||||||||||
5/7/2004 | 31,073 | 12,084 | $ | 10.02 | ||||||||||||
3/1/2005 | 31,073 | 16,400 | $ | 6.90 | ||||||||||||
James A. Bertrand | 1/2/2002 | 40,441 | 10,110 | $ | 13.60 | |||||||||||
4/24/2003 | 25.984 | 1,444 | $ | 8.43 | ||||||||||||
5/7/2004 | 31,073 | 12,084 | $ | 10.02 | ||||||||||||
3/1/2005 | 31,073 | 16,400 | $ | 6.90 |
(4) | Represents amounts paid out under the first and second six-month performance periods of the Revised AIP portion of the KECP. For more detail on the determination of incentive plan compensation, see the description of the Revised AIP in the Compensation Discussion and Analysis and Cash Incentive Awards narrative accompanying the Grants of Plan-Based Awards table. |
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(5) | Represents the aggregate change during the year of the actuarial present value of the named executive officer’s accumulated benefit under Delphi’s defined benefit plan (available to all salaried employees) and its non-qualified defined benefit plan, the SERP, as described in the accompanying narrative disclosure to the Pension Benefit table. On October 1, 2008 the defined benefit plans were frozen. The numbers in the tables reflect the impact of the freeze. Mr. Dellinger became ineligible for SERP benefits upon his separation from the Company. Prior to the freeze, Delphi’s executive officers also participated in the BEP, a supplemental non-qualified plan which provided benefits substantially equal to those that could not be provided under the qualified defined contribution plan because of IRS plan limits. There were no above-market or preferential earnings on the BEP in 2006, 2007 or 2008. The table below separates out the aggregate change in the named executive officer’s accumulated benefit under Delphi’s defined benefit plans for 2008. |
Change in | Change in | |||||||
Retirement | Supplemental | |||||||
Plan for | Executive | |||||||
Salaried | Retirement | |||||||
Name | Employees | Program | ||||||
Rodney O’Neal | $ | 160,343 | $ | 982,705 | ||||
John D. Sheehan | $ | 10,086 | $ | 59,287 | ||||
Mark R. Weber | $ | 212,015 | $ | 427,773 | ||||
Ronald M. Pirtle | $ | 153,657 | $ | 257,172 | ||||
James A. Bertrand | $ | 114,723 | $ | 217,378 | ||||
Robert J. Dellinger | $ | 4,162 | — |
(6) | While company aircraft is not to be used for personal reasons, Other Compensation includes the incremental cost to the Company of allowing named executive officers to use company aircraft for trips not directly and integrally related to the performance of the executive’s responsibilities directly on the behalf of Delphi. The amounts attributed to Mr. O’Neal reflect the use of the company aircraft to attend outside board meetings when the use of a commercial flight would not have been feasible in light of Delphi’s demands on his time. Further, Delphi has implemented a number of cost-savings measures and limited the use of the company aircraft to those instances when use of commercial flights is not practical so as to limit company aircraft usage to the lowest effective level. The Company continues to place its aircraft in charter. Other Compensation also includes providing vehicles under Delphi’s employee car program (determined by the monthly lease or other cash payment made by the Company to provide the employee with a vehicle, fuel, insurance and other direct expenses), flexible compensation payments payable to all employees hired prior to 2001, supplemental life insurance and umbrella liability coverage, fees paid to an outside provider for financial counseling services, amounts paid for monthly monitoring of home security systems and certain relocation costs. Amounts exceeding $25,000 or 10% of total perquisites and personal benefits are detailed below. In addition, we have separately broken out amounts paid to reimburse the named executive officers for certain taxes owed as a result of benefits under the employee car program, New York City income tax withholding payments and international assignment allowances. |
2008 | ||||||||||||||||||||||||
O’Neal | Sheehan | Weber | Pirtle | Bertrand | Dellinger | |||||||||||||||||||
Employee Car Program: | $ | 15,155 | $ | 22,200 | $ | 11,284 | $ | 18,475 | $ | 29,100 | $ | 15,525 | ||||||||||||
Use of Company Plane: | $ | 61,090 | — | — | — | — | — | |||||||||||||||||
Financial Counseling: | $ | 6,000 | $ | 8,000 | $ | 8,000 | $ | 6,000 | $ | 6,000 | — | |||||||||||||
Ex-Pat Payments(a): | — | — | — | $ | 158,631 | — | — | |||||||||||||||||
Reimbursement of Certain Taxes: | $ | 6,231 | $ | 6,228 | $ | 7,957 | $ | 4,116 | — | — |
(a) | Additional amounts paid to Mr. Pirtle were as a result of an overseas assignment, including certain living expenses and housing costs of $94,988 in 2008. |
(7) | Messrs. Sheehan and Pirtle became named executive officers in 2008. |
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(8) | Mr. Dellinger was separated from Delphi effective October 3, 2008. Under the terms of his separation agreement, he is entitled to receive a separation payment of $2,175,000, payable in semi-monthly installments from October 31, 2008 through April 2010. The amounts paid in 2008 are included in the All Other Compensation column of the Summary Compensation Table. |
All | All Other | |||||||||||||||||||||||||||||||||||||||||||
Other | Option | Grant | ||||||||||||||||||||||||||||||||||||||||||
Stock | Awards: | Date | ||||||||||||||||||||||||||||||||||||||||||
Awards: | Number of | Exercise | Fair | |||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | Number | Securities | or Base | Value of | |||||||||||||||||||||||||||||||||||||||
Under Non-Equity Incentive | Under Equity Incentive | of Shares | Under- | Price of | Stock | |||||||||||||||||||||||||||||||||||||||
Plan Awards | Plan Awards | of Stock | lying | Option | and | |||||||||||||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Option | ||||||||||||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | Awards | |||||||||||||||||||||||||||||||||
Rodney O’Neal | 1/1/2008 | $ | 937,500 | $ | 1,406,250 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
7/1/2008 | $ | 937,500 | $ | 1,406,250 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
John D. Sheehan | 1/1/2008 | $ | 175,000 | $ | 262,500 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
7/1/2008 | $ | 212,500 | $ | 318,750 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Mark R. Weber | 1/1/2008 | $ | 367,500 | $ | 551,250 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
7/1/2008 | $ | 367,500 | $ | 551,250 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Ronald M. Pirtle | 1/1/2008 | $ | 292,667 | $ | 439,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
7/1/2008 | $ | 300,000 | $ | 450,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
James A. Bertrand | 1/1/2008 | $ | 289,000 | $ | 433,500 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
7/1/2008 | $ | 289,000 | $ | 433,500 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Robert J. Dellinger | 1/1/2008 | $ | 350,000 | $ | 525,000 | — | — | — | — | — | — | — |
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Corporate | Corporate | Corporate | Formula | |||||||||||||
EBITDAR | EBITDAR | EBITDAR | Performance | |||||||||||||
Performance | Target | Maximum DSB | Actual | Payout | ||||||||||||
Period | Performance | Performance | Performance | Percentage | ||||||||||||
(dollars in millions) | ||||||||||||||||
January — June | $ | 872 | $ | 1,293 | $ | 629 | 0 | % | ||||||||
July — December | $ | 157 | $ | 578 | $ | (256 | ) | 0 | % | |||||||
Powertrain | Powertrain | Powertrain | Formula | |||||||||||||
OIBITDAR | OIBITDAR | OIBITDAR | Performance | |||||||||||||
Performance | Target | Maximum DSB | Actual | Payout | ||||||||||||
Period | Performance | Performance | Performance | Percentage | ||||||||||||
(dollars in millions) | ||||||||||||||||
January — June | $ | 180 | $ | 273 | $ | 180 | 100 | % | ||||||||
July — December | $ | 102 | $ | 198 | $ | (59 | ) | 0 | % | |||||||
AHG | AHG | AHG | Formula | |||||||||||||
OIBITDAR | OIBITDAR | OIBITDAR | Performance | |||||||||||||
Performance | Target | Maximum DSB | Actual | Payout | ||||||||||||
Period | Performance | Performance | Performance | Percentage | ||||||||||||
(dollars in millions) | ||||||||||||||||
January — June | $ | 12 | $ | 48 | $ | 31 | 119 | % | ||||||||
July — December | $ | (18 | ) | $ | 4 | $ | (37 | ) | 0 | % | ||||||
Thermal | Thermal | Thermal | Formula | |||||||||||||
OIBITDAR | OIBITDAR | OIBITDAR | Performance | |||||||||||||
Performance | Target | Maximum DSB | Actual | Payout | ||||||||||||
Period | Performance | Performance | Performance | Percentage | ||||||||||||
(dollars in millions) | ||||||||||||||||
January — June | $ | 91 | $ | 132 | $ | 65 | 0 | % | ||||||||
July — December | $ | 22 | $ | 64 | $ | (26 | ) | 0 | % |
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January — June 2008 | July — December 2008 | |||||||
Name | Final Incentive Award | Final Incentive Award | ||||||
Rodney O’Neal | — | — | ||||||
John D. Sheehan | — | — | ||||||
Mark R. Weber | — | — | ||||||
Ronald M. Pirtle | $ | 50,000 | — | |||||
James A. Bertrand | $ | 171,955 | — | |||||
Robert J. Dellinger | — | Not eligible |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Incentive | |||||||||||||||||||||||||||||||||||
Equity | Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||
Incentive | Plan Awards: | Market or | ||||||||||||||||||||||||||||||||||
Plan Awards: | Number | Market | Number of | Payout Value of | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | of Shares | Value of | Unearned | Unearned Shares, | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | or Units of | Shares or | Shares, | Units or | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Stock that | Units of | Units or Other | Other | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Option | Have Not | Stock That | Rights that | Rights That | ||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned | Exercise | Expiration | Vested | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Name | Exercisable (2) | Unexercisable | Options (#) | Price ($) | Date | (#)(3) | Vested ($)(3) | Vested (#) | Vested ($) | |||||||||||||||||||||||||||
Rodney O’Neal | 5,359 | — | — | $ | 18.66 | 02/04/2009 | — | — | — | — | ||||||||||||||||||||||||||
116,443 | — | — | $ | 18.66 | 02/06/2009 | — | — | — | — | |||||||||||||||||||||||||||
11,194 | — | — | $ | 17.13 | 01/06/2010 | — | — | — | — | |||||||||||||||||||||||||||
140,067 | — | — | $ | 17.13 | 01/08/2010 | — | — | — | — | |||||||||||||||||||||||||||
8,417 | — | — | $ | 11.88 | 01/01/2011 | — | — | — | — | |||||||||||||||||||||||||||
270,502 | — | — | $ | 11.88 | 01/03/2011 | — | — | — | — | |||||||||||||||||||||||||||
7,353 | — | — | $ | 13.60 | 01/01/2012 | — | — | — | — | |||||||||||||||||||||||||||
144,118 | — | — | $ | 13.60 | 01/03/2012 | — | — | — | — | |||||||||||||||||||||||||||
11,862 | — | — | $ | 8.43 | 04/23/2013 | — | — | — | — | |||||||||||||||||||||||||||
283,138 | — | — | $ | 8.43 | 04/25/2013 | — | — | — | — | |||||||||||||||||||||||||||
9,983 | — | — | $ | 10.02 | 05/06/2014 | — | — | — | — | |||||||||||||||||||||||||||
262,017 | — | — | $ | 10.02 | 05/08/2014 | — | — | — | — | |||||||||||||||||||||||||||
John D. Sheehan | 22,572 | — | — | $ | 13.29 | 06/30/2012 | — | — | — | — | ||||||||||||||||||||||||||
44,430 | — | — | $ | 13.29 | 07/02/2012 | — | — | — | — | |||||||||||||||||||||||||||
11,862 | — | — | $ | 8.43 | 04/23/2013 | — | — | — | — | |||||||||||||||||||||||||||
25,763 | — | — | $ | 8.43 | 04/25/2013 | — | — | — | — | |||||||||||||||||||||||||||
9,980 | — | — | $ | 10.02 | 05/06/2014 | — | — | — | — | |||||||||||||||||||||||||||
31,520 | — | — | $ | 10.02 | 05/08/2014 | — | — | — | — |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Incentive | |||||||||||||||||||||||||||||||||||
Equity | Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||
Incentive | Plan Awards: | Market or | ||||||||||||||||||||||||||||||||||
Plan Awards: | Number | Market | Number of | Payout Value of | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | of Shares | Value of | Unearned | Unearned Shares, | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | or Units of | Shares or | Shares, | Units or | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Stock that | Units of | Units or Other | Other | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Option | Have Not | Stock That | Rights that | Rights That | ||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned | Exercise | Expiration | Vested | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Name | Exercisable (2) | Unexercisable | Options (#) | Price ($) | Date | (#)(3) | Vested ($)(3) | Vested (#) | Vested ($) | |||||||||||||||||||||||||||
Mark R. Weber | 5,359 | — | — | $ | 18.66 | 02/04/2009 | — | — | — | — | ||||||||||||||||||||||||||
83,283 | — | — | $ | 18.66 | 02/06/2009 | — | — | — | — | |||||||||||||||||||||||||||
11,194 | — | — | $ | 17.13 | 01/06/2010 | — | — | — | — | |||||||||||||||||||||||||||
140,067 | — | — | $ | 17.13 | 01/08/2010 | — | — | — | — | |||||||||||||||||||||||||||
8,417 | — | — | $ | 11.88 | 01/01/2011 | — | — | — | — | |||||||||||||||||||||||||||
270,502 | — | — | $ | 11.88 | 01/03/2011 | — | — | — | — | |||||||||||||||||||||||||||
7,353 | — | — | $ | 13.60 | 01/01/2012 | — | — | — | — | |||||||||||||||||||||||||||
144,118 | — | — | $ | 13.60 | 01/03/2012 | — | — | — | — | |||||||||||||||||||||||||||
11,862 | — | — | $ | 8.43 | 04/23/2013 | — | — | — | — | |||||||||||||||||||||||||||
258,138 | — | — | $ | 8.43 | 04/25/2013 | — | — | — | — | |||||||||||||||||||||||||||
9,983 | — | — | $ | 10.02 | 05/06/2014 | — | — | — | — | |||||||||||||||||||||||||||
236,017 | — | — | $ | 10.02 | 05/08/2014 | — | — | — | — | |||||||||||||||||||||||||||
Ronald M. Pirtle | 5,359 | — | — | $ | 18.66 | 02/04/2009 | — | — | — | — | ||||||||||||||||||||||||||
116,443 | — | — | $ | 18.66 | 02/06/2009 | — | — | — | — | |||||||||||||||||||||||||||
11,194 | — | — | $ | 17.13 | 01/06/2010 | — | — | — | — | |||||||||||||||||||||||||||
117,377 | — | — | $ | 17.13 | 01/08/2010 | — | — | — | — | |||||||||||||||||||||||||||
8,417 | — | — | $ | 11.88 | 01/01/2011 | — | — | — | — | |||||||||||||||||||||||||||
206,718 | — | — | $ | 11.88 | 01/03/2011 | — | — | — | — | |||||||||||||||||||||||||||
7,353 | — | — | $ | 13.60 | 01/01/2012 | — | — | — | — | |||||||||||||||||||||||||||
113,823 | — | — | $ | 13.60 | 01/03/2012 | — | — | — | — | |||||||||||||||||||||||||||
11,862 | — | — | $ | 8.43 | 04/23/2013 | — | — | — | — | |||||||||||||||||||||||||||
160,763 | — | — | $ | 8.43 | 04/25/2013 | — | — | — | — | |||||||||||||||||||||||||||
9,983 | — | — | $ | 10.02 | 05/06/2014 | — | — | — | — | |||||||||||||||||||||||||||
128,117 | — | — | $ | 10.02 | 05/08/2014 | — | — | — | — | |||||||||||||||||||||||||||
James A. Bertrand | 5,359 | — | — | $ | 18.66 | 02/04/2009 | — | — | — | — | ||||||||||||||||||||||||||
83,283 | — | — | $ | 18.66 | 02/06/2009 | — | — | — | — | |||||||||||||||||||||||||||
11,194 | — | — | $ | 17.13 | 01/06/2010 | — | — | — | — | |||||||||||||||||||||||||||
117,377 | — | — | $ | 17.13 | 01/08/2010 | — | — | — | — | |||||||||||||||||||||||||||
8,417 | — | — | $ | 11.88 | 01/01/2011 | — | — | — | — | |||||||||||||||||||||||||||
206,718 | — | — | $ | 11.88 | 01/03/2011 | — | — | — | — | |||||||||||||||||||||||||||
7,353 | — | — | $ | 13.60 | 01/01/2012 | — | — | — | — | |||||||||||||||||||||||||||
113,823 | — | — | $ | 13.60 | 01/03/2012 | — | — | — | — | |||||||||||||||||||||||||||
11,862 | — | — | $ | 8.43 | 04/23/2013 | — | — | — | — | |||||||||||||||||||||||||||
160,763 | — | — | $ | 8.43 | 04/25/2013 | — | — | — | — | |||||||||||||||||||||||||||
9,983 | — | — | $ | 10.02 | 05/06/2014 | — | — | — | — | |||||||||||||||||||||||||||
128,117 | — | — | $ | 10.02 | 05/08/2014 | — | — | — | — |
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Number of | ||||||||||||||||
Securities | ||||||||||||||||
Underlying | ||||||||||||||||
Unexercised Options | Option | Option | ||||||||||||||
Name | Exercisable | Impacted Options | Exercise Price | Expiration Date | ||||||||||||
Rodney O’Neal | 11,862 | 11,862 | $ | 8.43 | 04/23/2013 | |||||||||||
283,138 | 86,472 | $ | 8.43 | 04/25/2013 | ||||||||||||
9,983 | 9,980 | $ | 10.02 | 05/06/2014 | ||||||||||||
262,017 | 171,354 | $ | 10.02 | 05/08/2014 | ||||||||||||
John D. Sheehan | 11,862 | 11,862 | $ | 8.43 | 04/23/2013 | |||||||||||
25,763 | 680 | $ | 8.43 | 04/25/2013 | ||||||||||||
9,980 | 9,980 | $ | 10.02 | 05/06/2014 | ||||||||||||
31,520 | 17,687 | $ | 10.02 | 05/08/2014 | ||||||||||||
Mark R. Weber | 11,862 | 11,862 | $ | 8.43 | 04/23/2013 | |||||||||||
258,138 | 78,138 | $ | 8.43 | 04/25/2013 | ||||||||||||
9,983 | 9,980 | $ | 10.02 | 05/06/2014 | ||||||||||||
236,017 | 154,020 | $ | 10.02 | 05/08/2014 | ||||||||||||
Ronald M. Pirtle | 11,862 | 11,862 | $ | 8.43 | 04/23/2013 | |||||||||||
160,763 | 45,680 | $ | 8.43 | 04/25/2013 | ||||||||||||
9,983 | 9,980 | $ | 10.02 | 05/06/2014 | ||||||||||||
128,117 | 82,087 | $ | 10.02 | 05/08/2014 | ||||||||||||
James A. Bertrand | 11,862 | 11,862 | $ | 8.43 | 04/23/2013 | |||||||||||
160,763 | 45,680 | $ | 8.43 | 04/25/2013 | ||||||||||||
9,983 | 9,980 | $ | 10.02 | 05/06/2014 | ||||||||||||
128,117 | 82,087 | $ | 10.02 | 05/08/2014 |
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Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares | Value | Shares | Value | |||||||||||||
Acquired on | Realized on | Acquired on | Realized on | |||||||||||||
Name | Exercise | Exercise | Vesting (1) | Vesting | ||||||||||||
Rodney O’Neal | — | — | 41,926 | $ | 5,921 | |||||||||||
John D. Sheehan | — | — | 7,473 | $ | 1,095 | |||||||||||
Mark R. Weber | — | — | 33,079 | $ | 4,572 | |||||||||||
Ronald M. Pirtle | — | — | 19,693 | $ | 2,690 | |||||||||||
James A. Bertrand | — | — | 19,693 | $ | 2,690 |
(1) | Represents total number of shares that vested. Upon distribution, Delphi withholds shares in an amount equal to pay required withholding taxes. The amounts actually received by the named executive officer, which are reflected in “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” are as follows: |
NEO | Net Shares Delivered | |||
Rodney O’Neal | 24,820 | |||
John D. Sheehan | 5,006 | |||
Mark R. Weber | 22,891 | |||
Ronald M. Pirtle | 13,628 | |||
James A. Bertrand | 13,628 |
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— | 60% of total employee contributions made before July 1, 1977, | |
— | 75% of the total contributions made between July 1, 1977 and prior to October 1, 1979, and | |
— | 100% of the total contributions made between October 1, 1979 and September 30, 2008. |
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• | Discount rate: 6.1% for the SRP and 6.3% for the SERP | |
• | Post Retirement Mortality: The mortality table used in valuing monthly pension payments was the RP2000 Male table with a one year set back projected using 50% of scale AA and the RP2000 Female table projected using 50% of scale AA. | |
• | Payment Distribution Assumptions: The valuation of benefits was based on the assumption that married executives would elect a 65% joint and survivor coverage and unmarried executives would elect a single life annuity. | |
• | Retirement Accumulation Plan (Part C of the SRP) accounts were expected to accrue interest at 5.0% per year. |
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Number of | ||||||||||||||||
Years Credited | Present Value of | Payments During | ||||||||||||||
Name | Plan Name | Service | Accumulated Benefit | Last Fiscal Year | ||||||||||||
Rodney O’Neal | Delphi SRP | 36.3 | $ | 864,736 | — | |||||||||||
SERP | 32.9 | $ | 8,514,273 | — | ||||||||||||
John D. Sheehan | Delphi SRP | 6.3 | $ | 61,083 | — | |||||||||||
SERP | 6.3 | $ | 259,564 | — | ||||||||||||
Mark R. Weber | Delphi SRP | 41.1 | $ | 1,472,963 | — | |||||||||||
SERP | 41.1 | $ | 6,950,040 | — | ||||||||||||
Ronald M. Pirtle | Delphi SRP | 34.7 | $ | 766,968 | — | |||||||||||
SERP | 29.7 | $ | 3,259,009 | — | ||||||||||||
James A. Bertrand | Delphi SRP | 29.3 | $ | 613,420 | — | |||||||||||
SERP | 29.3 | $ | 2,783,125 | — | ||||||||||||
Robert J. Dellinger(1) | Delphi SRP | 3.0 | $ | 28,474 | — | |||||||||||
SERP | — | — | — |
(1) | Mr. Dellinger became ineligible for SERP benefits upon his separation from Delphi. |
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Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||
Contributions in | Contributions in | Earnings | Withdrawals/ | Balance at | ||||||||||||||||
Last FY | Last FY | in Last FY | Distributions | Last FYE | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Rodney O’Neal | — | — | $ | 368 | — | $ | 8,104 | |||||||||||||
John D. Sheehan | — | — | $ | 8 | — | $ | 175 | |||||||||||||
Mark R. Weber | — | — | $ | 202 | — | $ | 4,450 | |||||||||||||
Ronald M. Pirtle | — | — | $ | 208 | — | $ | 4,572 | |||||||||||||
James A. Bertrand | — | — | $ | 271 | — | $ | 5,959 |
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• | All of the participant’s unvested options will vest and become immediately exercisable in accordance with their terms. As of December 31, 2008, all outstanding options are currently vested, as reported in the Outstanding Equity Awards At Year-End Table. | |
• | All of the participant’s unvested restricted stock units will vest and Delphi will deliver to the participant stock certificates and/or, at the participant’s option, cash in an amount equal to the value of the restricted stock units. As reported in the Outstanding Equity Awards at Fiscal Year-End Table above, all outstanding restricted stock units awards were cancelled on May 20, 2008. | |
• | All of the participant’s target awards, calculated based on the greater of 150% of the initial awards or 150% of the forecasted payout level at the time of the change in control, will be fully “funded” by Delphi contributing amounts equal to such awards to a “rabbi trust” and will thereafter be paid to the participant at the times contemplated by the plans under which the awards were made. In 2008, this includes 150% of the un-prorated target awards for 6 month performance period of July — December 31, 2008 as reported in the Grants of Plan-Based Awards Table above. | |
• | Any compensation previously deferred at the election of the participant, together with accrued interest or earnings, will be “funded” by Delphi contributing amounts equal to such deferrals and accrued interest or earnings to a “rabbi trust” which amounts will be paid to the participant as previously directed by the participant. This amount consists of the 2008 year-end balances in the BEP as listed in the Non-qualified Deferred Compensation Table. | |
• | Delphi will contribute to a “rabbi trust” an amount equal to the present value of the calculated SERP benefit (see discussion of SERP above and note that any amount that would be contributed would reflect the impact of the freeze of the plan on October 1, 2008) which will be paid to the participant under the terms of the SERP when his or her benefits under the SRP are paid to him or her. If the participant does not become vested in his or her retirement benefit under the SRP, then the present value SERP benefit will be paid to the participant within 30 days after his or her separation from Delphi. Solely for purposes of calculating the SERP benefit, the participant’s benefit under the SRP will be calculated with additional year(s) of service equal to a multiplier (1, 2 or 3) and with the additional compensation paid as a result of such multiplier. The additional compensation includes an increase in average monthly base compensation to reflect additional base pay that becomes payable or an increase in the average total direct compensation to reflect additional base pay and short-term incentive pay that becomes payable, dependent upon the SERP formula utilized. | |
• | A participant will be deemed fully vested in his or her benefit under any qualified defined benefit plans of Delphi so that if he or she separates from Delphi before actually becoming vested in such benefits, Delphi will pay him or her an amount equal to the present value of his or her accrued benefits under such plans (due to the freeze of the defined benefit plan, all participants are vested with respect to the benefits accrued through the freeze data, so there is no practical impact of this provision any longer); and | |
• | A participant will be deemed fully vested in his or her benefit under any qualified defined contribution plans so that if he or she separates from Delphi before actually becoming vested in such benefits, Delphi will pay him or her an amount equal to the excess of his or her account balance under such plans over the vested account balance. |
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• | Delphi terminates the participant’s employment other than “for cause,” i.e., for any reason other than the participant’s willful failure to perform substantially his or her duties or the conviction of the participant for a felony; | |
• | The participant terminates his or her employment if, without his or her consent, (i) his or her salary and other compensation or benefits are reduced for reasons unrelated to Delphi’s or the participant’s performance, (ii) his or her responsibilities are negatively and materially changed, (iii) he or she must relocate his or her work location or residence more than 25 miles from its location as of the date of the change in control or (iv) Delphi fails to offer him or her a comparable position after the change in control. |
• | Payment in cash of (i) the participant’s annual base salary through the termination date for work performed for which the participant has yet to be paid, together with accrued vacation pay and (ii) a multiple (3, in the case of each named executive officer) of the greater of (x) the participant’s annual base salary plus his or her target short-term incentive, each for the year in which the change in control occurs, or (y) the participant’s annual base salary plus his or her target short-term incentive, each for the year in which his or her employment is terminated; | |
• | Continuation of the participant’s health and life insurance coverage for 36 months after the termination date; | |
• | Reimbursement of up to $50,000 for expenses related to outplacement services; | |
• | Continued use of the participant’s company carand/or any applicable car allowance for one year after the termination date, plus payment by Delphi of any amounts necessary to offset any taxes incurred by the participant because of the car-related payments; | |
• | Provision of investment advisory services comparable to those services available to the participant as of the date of his or her change in control agreement, for two years after the termination date; and | |
• | Payment of the participant’s legal fees resulting from any dispute resolution process entered into to enforce his or her change in control agreement, plus payment of thegross-up amount necessary to offset any taxes incurred by the participant by reason of such payments. |
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• | In the event of death before retirement, the surviving spouse may elect to receive an annuity based upon the accrued pension benefits as if the named executive officer retired and elected the spousal 65% joint and survivor annuity option prior to death (50% if the named executive officer is not retirement eligible). The amount payable depends on several factors, including employee contributions and the ages of the executive and the surviving spouse. In addition, an executive must be at least 55 years of age or have at least 30 years of service for his or her spouse to receive a SERP death benefit. The annuity distributions would begin promptly following the death of the executive. | |
• | In the event a disability occurs before retirement, the named executive officer may apply and be approved for an annuity payment of accrued pension benefits payable immediately. Many factors are used to determine the amount to be received; however there is no reduction because of the early commencement of the payments (receiving payments prior to the normal retirement age). An executive must be 55 years of age and have at least 10 years of credited service to receive a SERP disability benefit. | |
• | In the event of a voluntary termination, employees who are vested in the SRP can elect when to commence benefit payments. Benefit payments under the SRP are determined using many factors such as age and credited service. Benefits under the SERP are generally forfeitable if employment terminates before age 62 for reasons other than death or disability. |
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Voluntary | ||||||||||||||||||||
Termination/ | ||||||||||||||||||||
Survivor | Voluntary | Retirement | ||||||||||||||||||
Annuity | Annuity | Termination or | Annuity | |||||||||||||||||
In Case | In Case of | Retirement | Redetermined | |||||||||||||||||
Name | Plan Name | of Death | Disability | Annuity | at Age 62 | |||||||||||||||
Rodney O’Neal | Delphi SRP | $ | 64,429 | $ | 116,059 | $ | 59,302 | $ | 67,528 | |||||||||||
SERP | $ | 406,717 | $ | 609,628 | — | — | ||||||||||||||
John D. Sheehan | Delphi SRP | $ | 3,801 | $ | 3,801 | $ | 3,801 | $ | 3,801 | |||||||||||
SERP | — | — | — | — | ||||||||||||||||
Mark R. Weber | Delphi SRP | $ | 79,941 | $ | 139,924 | $ | 112,917 | $ | 114,817 | |||||||||||
SERP | $ | 255,840 | $ | 377,508 | — | — | ||||||||||||||
Ronald M. Pirtle | Delphi SRP | $ | 60,394 | $ | 109,851 | $ | 51,757 | $ | 60,431 | |||||||||||
SERP | $ | 72,479 | — | — | — | |||||||||||||||
James A. Bertrand | Delphi SRP | $ | 47,414 | $ | 106,076 | $ | 25,109 | $ | 25,109 | |||||||||||
SERP | — | — | — | — |
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Change in | ||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||
Fees | and Nonqualified | |||||||||||||||||||||||||||
Earned or | Stock | Option | Non-Equity | Deferred | All Other | |||||||||||||||||||||||
Paid in | Awards | Awards | Incentive Plan | Compensation | Compen- | |||||||||||||||||||||||
Name | Cash ($) | ($) | ($) | Compensation ($) | Earnings ($)(1) | sation ($) | Total ($) | |||||||||||||||||||||
Oscar de Paula Bernardes Neto | �� | $ | 140,000 | — | — | — | — | — | $ | 140,000 | ||||||||||||||||||
John D. Englar | $ | 140,000 | — | — | — | — | — | $ | 140,000 | |||||||||||||||||||
David N. Farr | $ | 150,000 | — | — | — | — | — | $ | 150,000 | |||||||||||||||||||
Raymond J. Milchovich | $ | 140,000 | — | — | — | — | — | $ | 140,000 | |||||||||||||||||||
Craig G. Naylor | $ | 165,000 | — | — | — | — | — | $ | 165,000 | |||||||||||||||||||
Martin E. Welch III | $ | 150,000 | — | — | — | — | — | $ | 150,000 | |||||||||||||||||||
John H. Walker | $ | 140,000 | — | — | — | — | — | $ | 140,000 | |||||||||||||||||||
Robert Brust(2) | $ | 51,667 | — | — | — | — | $ | 4,542 | $ | 56,209 | ||||||||||||||||||
John D. Opie(3) | $ | 150,000 | — | — | — | — | — | $ | 150,000 |
(1) | There were no above-market or preferential earnings in the Delphi Board compensation that were deferred pursuant to the Director Plan. The December 31, 2008 balance of each director’s common stock units account is set forth below: |
Name | Number of Common Stock Units | |||
Oscar de Paula Bernardes Neto | 76,206 | |||
John D. Englar | — | |||
David N. Farr | 63,494 | |||
Raymond J. Milchovich | — | |||
Craig G. Naylor | 19,078 | |||
Martin E. Welch III | — | |||
John H. Walker | — | |||
John D. Opie(3) | 141,914 |
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(2) | Mr. Brust retired effective May 2008. His deferred stock unit account was valued and paid out to him in December 2008. Upon his departure, Mr. Welch assumed the responsibility of Chair of Delphi’s Audit Committee. | |
(3) | Mr. Opie retired effective October, 2008. His deferred stock unit account will be valued and paid in May 2009. Upon his retirement, Mr. Naylor assumed the responsibility of Lead Director. |
Craig G. Naylor, Chairman
John D. Englar
Raymond J. Milchovich
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ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Stock | ||||||||||||||||
Which May | ||||||||||||||||
Shares | Be Acquired | |||||||||||||||
Beneficially | Within 60 | |||||||||||||||
Name and Address (1) | Owned (2) | Days (3) | Total | Percent | ||||||||||||
Rodney O’Neal | 145,667 | 868,983 | 1,014,650 | * | ||||||||||||
John D. Sheehan | 9,890 | 105,918 | 115,808 | * | ||||||||||||
Mark R. Weber | 116,995 | 843,651 | 960,646 | * | ||||||||||||
Ronald M. Pirtle | 90,745 | 625,998 | 716,743 | * | ||||||||||||
James A. Bertrand | 28,135 | 625,998 | 654,133 | * | ||||||||||||
Oscar de Paula Bernardes Neto | — | — | — | * | ||||||||||||
John D. Englar | — | — | — | * | ||||||||||||
David N. Farr | — | — | — | * | ||||||||||||
Raymond J. Milchovich | — | — | — | * | ||||||||||||
Craig G. Naylor | — | — | — | * | ||||||||||||
John H. Walker | — | — | — | * | ||||||||||||
Martin E. Welch III | — | — | — | * | ||||||||||||
Appaloosa Management L.P.(4) 26 Main Street Chatham, NJ 07928 | 52,000,000 | — | 52,000,000 | 9.2 | % | |||||||||||
Highland Capital Management, L.P.(5) Two Galleria Tower 13455 Noel Road, Suite 800 Dallas, TX 75240 | 30,391,015 | — | 30,391,015 | 5.4 | % | |||||||||||
All directors and executive officers as a group (19 persons) | 544,286 | 4,509,962 | 5,054,248 | 0.9 | % |
* | Less than one percent of Delphi’s total outstanding common stock. The percentages shown in the table are based on the total number of shares of Delphi’s common stock outstanding on January 31, 2009. |
(1) | Except as otherwise indicated in the table, the business address of the beneficial owners isc/o Delphi Corporation, 5725 Delphi Drive, Troy, MI 48098. | |
(2) | Includes shares: | |
• As to which the named person has sole voting and investment power, | ||
• As to which the named person has shared voting and investment power with a spouse | ||
(3) | Includes stock options which became exercisable before October 8, 2005, the date Delphi filed for reorganization cases under Chapter 11 of the U.S. Bankruptcy Code. It does not include stock options which became or will become exercisable after October 5, 2008. | |
(4) | Based on Amendment No. 20 to Schedule 13D filed by Appaloosa Management L.P. with the Securities and Exchange Commission on April 5, 2008. | |
(5) | Based on Amendment No. 8 to Schedule 13D filed by Highland Capital Management, L.P., with the Securities and Exchange Commission on August 27, 2008. |
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Number of Securities | Number of Securities | |||||||||||
to be Issued Upon | Weighted-Average | Remaining Available | ||||||||||
Exercise of | Exercise Price of | for Future Issuance | ||||||||||
Outstanding Options | Outstanding Options | Under Equity | ||||||||||
Plan Category | and Rights | and Rights | Compensation Plans | |||||||||
(in thousands) | (in thousands) | |||||||||||
Equity compensation plans approved by stockholders | 43,260 | $ | 12.20 | — | ||||||||
Equity compensation plans not approved by stockholders | 15,693 | $ | 16.81 | — | ||||||||
Total | 58,953 | $ | 13.43 | — | ||||||||
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
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• | the director was employed by Delphi; | |
• | an immediate family member of the director was employed by Delphi as an officer; | |
• | the director was employed by or affiliated with Delphi’s independent auditor; | |
• | an immediate family member of the director was employed by Delphi’s independent auditor as a partner, principal or manager; | |
• | a Delphi executive officer was on the compensation committee (or a committee performing similar functions) of the board of directors of a company which employed the Delphi director, or which employed an immediate family member of the director as an officer; or | |
• | the director or an immediate family member of the director received more than $100,000 in direct compensation from Delphi (other than payments for current or past service as a director, or in the case of a family member, for compensation received for service as a non-executive employee of Delphi). |
• | the director is an employee of another company that does business with Delphi and the annual sales to, or purchases from, Delphi are less than two percent of the annual revenues of the company he or she serves as an employee; | |
• | the director is an employee of another company which is indebted to Delphi, or to which Delphi is indebted, and the total amount of either company’s indebtedness to the other is less than two percent of the total consolidated assets of the company he or she serves as an employee; and |
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• | the director serves as an officer, director or trustee of a charitable organization, and Delphi’s discretionary charitable contributions to the organization are less than two percent of that organization’s total annual charitable receipts. |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
2008 | 2007 | |||||||
(dollars in millions) | ||||||||
Audit Fees | $ | 17.6 | $ | 18.3 | ||||
Audit-Related Fees | 0.6 | 1.9 | ||||||
Tax Fees | 1.4 | 1.7 | ||||||
All Other Fees | — | — | ||||||
Total | $ | 19.6 | $ | 21.9 | ||||
Memo: Ratio of Tax and All Other Fees to Audit and Audit-Related Fees | 0.1:1 | 0.1:1 | ||||||
Percentage of Aggregate Fees which were Audit or Audit-Related | 93 | % | 92 | % |
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1. | Tax compliance services such as assistance with tax return filing and preparation of required documentation in certain foreign countries, totaling $0.1 million in 2008 ($0.2 million in 2007). | |
2. | Tax planning, advice and other tax-related services including assistance with tax audits and appeals, general tax advice in the U.S. and certain foreign countries, and customs reports in Mexico, totaling $1.3 million in 2008 ($1.5 million in 2007). |
248
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
Page No. | ||||||||||
(a) | 1. | Financial Statements: | ||||||||
— Report of Independent Registered Public Accounting Firm | 111 | |||||||||
— Report of Independent Registered Public Accounting Firm | 112 | |||||||||
— Consolidated Statements of Operations for the Years Ended December 31, 2008, 2007 and 2006 | 113 | |||||||||
— Consolidated Balance Sheets as of December 31, 2008 and 2007 | 114 | |||||||||
— Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007 and 2006 | 115 | |||||||||
— Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2008, 2007 and 2006 | 116 | |||||||||
— Notes to Consolidated Financial Statements | 117 | |||||||||
2. | Financial Statement Schedules - | |||||||||
— Valuation and qualifying account schedule for the Years Ended December 31, 2008, 2007 and 2006 | 208 | |||||||||
3. | Exhibits (including those incorporated by reference) |
Exhibit | ||
Number | Exhibit Name | |
(2)(a) | Confirmed Joint Plan of Reorganization of Delphi Corporation and Certain Affiliates, Debtors andDebtors-in-Possession, incorporated by reference to Exhibit 99(e) to Delphi’s Report onForm 8-K filed January 30, 2008. | |
(3)(a) | Amended and Restated Certificate of Incorporation of Delphi Corporation, incorporated by reference to Exhibit 3(a) to Delphi’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2002. | |
(3)(b) | Certificate of Ownership and Merger, dated March 13, 2002, merging Delphi Corporation into Delphi Automotive Systems Corporation, incorporated by reference to Exhibit 3(b) to Delphi’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2002. | |
(3)(c) | Amended and Restated Bylaws of Delphi Corporation, incorporated by reference to Exhibit 99(c) to Delphi’s Report onForm 8-K filed October 14, 2005. | |
(4)(a) | Rights Agreement relating to Delphi’s Stockholder Rights Plan, incorporated by reference toExhibit 4(a) to Delphi’s Annual Report onForm 10-K for the year ended December 31, 1998, as amended by the First Amendment thereto, which is incorporated by reference to Exhibit 99(a) to Delphi’s Report onForm 8-K dated May 11, 2005, as amended by the Second Amendment thereto, which is incorporated by reference to Exhibit 99(d) to Delphi’s Report onForm 8-K dated January 18, 2007, as amended by the Third Amendment thereto, dated August 2, 2007, which is incorporated by reference to Delphi’s Report onForm 10-Q, dated June 30, 2007, as amended by the Fourth Amendment thereto, dated December 10, 2007, which is incorporated by reference to Exhibit 99(b) to Delphi’s Report onForm 8-K, dated December 10, 2007. | |
(4)(b) | Indenture, dated as of April 28, 1999, between Delphi Corporation and Bank One, National Association, formerly known as The First National Bank of Chicago, as trustee, incorporated by reference to Exhibit 4(b) to Delphi Corporation’s Annual Report onForm 10-K for the year ended, December 31, 2001. |
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Exhibit | ||
Number | Exhibit Name | |
(4)(c) | Terms of the, 61/2% Notes due 2009, and 71/8% Debentures due 2029, incorporated by reference to Exhibit 4.1 to Delphi’s Current Report onForm 8-K dated April 28, 1999 and filed May 3, 1999. | |
(4)(d) | Terms of the 6.55% Notes due 2006, incorporated by reference to Exhibit 4.1 to Delphi’s Current Report onForm 8-K dated May 31, 2001 and filed June 4, 2001. | |
(4)(e) | Terms of the 6.50% Notes due 2013, incorporated by reference to Exhibit 4.1 to Delphi’s Current Report onForm 8-K dated July 22, 2003 and filed July 25, 2003. | |
(4)(f) | Form of First Supplemental Indenture to Indenture, dated as of April 28, 1999, between Delphi Corporation and Bank One, National Association, formerly known as The First National Bank of Chicago, as trustee, incorporated by reference to Exhibit 4.2 to Delphi’s Registration Statement onForm S-3 (RegistrationNo. 333-101478). | |
(4)(g) | Subordinated Indenture between Delphi Corporation and Bank One Trust Company, National Association, as trustee, incorporated by reference to Exhibit 4.1 to Delphi’s Current Report onForm 8-K dated November 21, 2003 and filed November 24, 2003. | |
(4)(h) | Terms of 81/4% junior subordinated notes due 2033, incorporated by reference to Exhibit 4.1 to Delphi’s Current Report onForm 8-K dated October 21, 2003 and filed October 23, 2003. | |
(4)(i) | Terms of adjustable rate junior subordinated notes due 2033, incorporated by reference to Exhibit 4.3 to Delphi’s Current Report onForm 8-K dated November 21, 2003 and filed November 24, 2003. | |
Instruments defining the rights of holders of debt of the registrant have been omitted from this exhibit index because the amount of debt authorized under any such instrument does not exceed 10% of the total assets of the registrant and its subsidiaries. The registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. | ||
(10)(a) | Master Separation Agreement among General Motors, Delphi, Delphi Corporation LLC, Delphi Technologies, Inc. and Delphi Corporation (Holding), Inc., incorporated by reference to Exhibit 10.1 to the Registration Statement. | |
(10)(b) | Component Supply Agreement between Delphi and General Motors, incorporated by reference to Exhibit 10.2 to the Registration Statement. | |
(10)(c) | U.S. Employee Matters Agreement between Delphi and General Motors, incorporated by reference to Exhibit 10.4 to the Registration Statement. | |
(10)(d) | Agreement for the Allocation of United States Federal, State and Local Income Taxes between General Motors and Delphi, incorporated by reference to Exhibit 10.5 to the Registration Statement. | |
(10)(e) | Amended and Restated Agreement for the Allocation of United States Federal, State and Local Income Taxes between General Motors and Delphi, incorporated by reference to Exhibit 10.6 to the Registration Statement. | |
(10)(f) | IPO and Distribution Agreement between Delphi and General Motors, incorporated by reference to Exhibit 10(g) to Delphi’s Annual Report onForm 10-K for the year ended December 31, 1998. | |
(10)(g) | Description of Delphi Non-Employee Directors Charitable Gift Giving Plan, incorporated by reference to Exhibit 10(h) to Delphi’s Annual Report onForm 10-K for the year ended December 31, 2000.* | |
(10)(h) | Delphi Corporation Stock Incentive Plan, incorporated by reference to Exhibit 10.10 to the Registration Statement.* | |
(10)(i) | Delphi Corporation Amended and Restated Deferred Compensation Plan for Non-Employee Directors, incorporated by reference to Exhibit 10(j) to Delphi’s Annual Report onForm 10-K for the year ended December 31, 2004.* |
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Exhibit | ||
Number | Exhibit Name | |
(10)(j) | Agreement, dated December 22, 1999, between Delphi Corporation and General Motors Corporation, incorporated by reference to Exhibit 10(q) to Delphi’s Annual Report onForm 10-K for the fiscal year ended December 31, 1999. | |
(10)(k) | Form of Change in Control Agreement between Delphi and its officers, incorporated by reference to Exhibit 10(a) to Delphi’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2000.* | |
(10)(l) | Supplemental Executive Retirement Program, incorporated by reference to Exhibit 4(b) to Delphi Corporation’s Annual Report onForm 10-K for the year ended, December 31, 2001.* | |
(10)(m) | Stock Option Plan for Non-Executives, incorporated by reference to Delphi Corporation’s Annual Report onForm 10-K for the year ended, December 31, 2002. | |
(10)(n) | Delphi Corporation Long-Term Incentive Plan, incorporated by reference to Exhibit 4(d) to Delphi’s Registration Statement onForm S-8 (RegistrationNo. 333-116729).* | |
(10)(o) | Delphi Corporation Annual Incentive Plan, incorporated by reference to Exhibit 10(c) to Delphi Corporation’s Quarterly Report onForm 10-Q/A for the quarter ended June 30, 2004.* | |
(10)(p) | 2005 Executive Retirement Incentive Program Agreement dated May 13, 2005 incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on May 18, 2005.* | |
(10)(q) | Special Separation Agreement & Release dated May 13, 2005 incorporated by reference toExhibit 99(b) to Delphi’s Current Report onForm 8-K filed on May 18, 2005.* | |
(10)(r) | Offer letter outlining Mr. Robert S. Miller salary and benefits dated June 22, 2005, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on June 23, 2005.* | |
(10)(s) | Form of Employment Agreement for Officers of Delphi Corporation, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on October 7, 2005.* | |
(10)(t) | Order Under 11 U.S.C. §§ 105 and 363 of the United States Bankruptcy Court for the Southern District of New York Authorizing the Debtors to Implement a Short-Term Annual Incentive Program entered February 17, 2006, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on February 23, 2006.* | |
(10)(u) | UAW-GM-Delphi Special Attrition Program agreement, dated March 22, 2006, among Delphi, General Motors Corporation and the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW”), incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on March 27, 2006. | |
(10)(v) | Supplement to UAW-GM-Delphi Special Attrition Program Agreement dated March 22, 2006, incorporated by reference to Exhibit 10(d) to Delphi’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2006. | |
(10)(w) | IUE-CWA-GM-Delphi Special Attrition program, dated June 16, 2006, incorporated by reference to Exhibit 10(e) to Delphi’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2006. | |
(10)(x) | Order Under 11 U.S.C. §§ 105 and 363 of the United States Bankruptcy Court for the Southern District of New York Authorizing the Debtors to Implement a Short-Term Annual Incentive Program entered July 21, 2006, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on July 27, 2006.* | |
(10)(y) | Revolving Credit, Term Loan, and Guaranty Agreement, dated as of January 9, 2007, among Delphi and the lenders named therein, incorporated by reference to Exhibit 99(a) to Delphi’s Report onForm 8-K filed on January 12, 2007. | |
(10)(z) | First Amendment to Revolving Credit, Term Loan, and Guaranty Agreement dated as of March 29, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on March 29, 2007. |
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Exhibit | ||
Number | Exhibit Name | |
(10)(aa) | Order Under 11 U.S.C. §§ 105 and 363 of the United States Bankruptcy Court for the Southern District of New York Authorizing the Debtors to Implement a Short-Term Annual Incentive Program entered March 29, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on March 30, 2007.* | |
(10)(ab) | Agreement between Delphi Corporation’s indirect wholly owned Spanish Subsidiary, Delphi Automotive Systems España, S.L. (“DASE”) and Adalberto Canadas Castillo and Enrique Bujidos (of PricewaterhouseCoopers Spain), and, thereafter, Fernando Gómez Martín (the “DASE Receivers”), and the workers’ councils and unions representing the affected employees, dated July 4, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed July 19, 2007. | |
(10)(ac) | Memorandum of Understanding between Delphi Corporation and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and General Motors Corporation, dated June 22, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed July 20, 2007. | |
(10)(ad) | Agreement between Delphi Corporation and Appaloosa Management L.P.; Harbinger Capital Partners Master Fund I, Ltd.; and Pardus Capital Management, L.P. as well as Merrill Lynch, Pierce, Fenner & Smith Inc.; UBS Securities LLC; and Goldman Sachs & Co., dated August 3, 2007, incorporated by reference to Exhibit 10(d) to Delphi’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007. | |
(10)(ae) | Memorandum of Understanding between Delphi Corporation and the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communication Workers of America and General Motors Corporation, dated August 5, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed August 22, 2007. | |
(10)(af) | Memorandum of Understanding between Delphi Corporation and the International Association of Machinists and Aerospace Workers and its District 10 and Tool and Die Makers Lodge 78 and General Motors Corporation, dated July 31, 2007, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed August 22, 2007. | |
(10)(ag) | Memorandum of Understanding between Delphi Corporation and the International Brotherhood of Electrical Workers and its Local 663 and General Motors Corporation, relating to Delphi Electronics and Safety, dated July 31, 2007, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed August 22, 2007. | |
(10)(ah) | Memorandum of Understanding between Delphi Corporation and the International Brotherhood of Electrical Workers and its Local 663 and General Motors Corporation, relating to Delphi’s Powertrain Systems division, dated July 31, 2007, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed August 22, 2007. | |
(10)(ai) | Memorandum of Understanding between Delphi Corporation and the International Union of Operating Engineers Local 18S and General Motors Corporation, dated August 1, 2007, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed August 22, 2007. | |
(10)(aj) | Memorandum of Understanding between Delphi Corporation and the International Union of Operating Engineers Local 101S and General Motors Corporation, dated August 1, 2007, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed August 22, 2007. | |
(10)(ak) | Memorandum of Understanding between Delphi Corporation and the International Union of Operating Engineers Local 832S and General Motors Corporation, dated August 1, 2007, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed August 22, 2007. |
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Exhibit | ||
Number | Exhibit Name | |
(10)(al) | Memorandum of Understanding between Delphi Corporation and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local Union 87L and General Motors Corporation, relating to Delphi’s operations at Home Avenue, dated August 16, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed September 4, 2007. | |
(10)(am) | Memorandum of Understanding between Delphi Corporation and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local Union 87L and General Motors Corporation, relating to Delphi’s operations at Vandalia, dated August 16, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed September 4, 2007. | |
(10)(an) | Order entered by the United States District Court to preliminarily certify the class and approving the settlement of the Multidistrict Litigation, including the Stipulation and Agreement of Settlement With Certain Defendants — Securities, Stipulation and Agreement of Settlement With Certain Defendants — ERISA Actions, and Stipulation and Agreement of Insurance Settlement, each dated August 31, 2007, incorporated by reference to Exhibit 99(a), 99(b), and 99(c), respectively, to Delphi’s Current Report onForm 8-K filed September 5, 2007. | |
(10)(ao) | Order Under 11 U.S.C. §§ 105 and 363 of the United States Bankruptcy Court for the Southern District of New York Authorizing the Debtors to Implement a Short-Term Annual Incentive Program entered October 3, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on October 5, 2007.* | |
(10)(ap) | Third Amendment to Revolving Credit, Term Loan, and Guaranty Agreement dated as of November 20, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on November 21, 2007. | |
(10)(aq) | Amendment to the Agreement between Delphi Corporation and Appaloosa Management L.P.; Harbinger Capital Partners Master Fund I, Ltd.; and Pardus Capital Management, L.P. as well as Merrill Lynch, Pierce, Fenner & Smith Inc.; UBS Securities LLC; and Goldman Sachs & Co. (together with Exhibit 10(af) in this Annual Report, the “EPCA”), dated December 10, 2007, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K/A filed on December 12, 2007. | |
(10)(ar) | Stipulation Modifying Agreement of Settlement With Certain Defendants — Securities Actions, entered into January 17, 2008, incorporated by reference to Exhibit 99(f) to Delphi’s Current Report onForm 8-K filed on January 30, 2008. | |
(10)(as) | Delphi Corporation 2007 Short-Term Incentive Plan, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed January 30, 2008.* | |
(10)(at) | Delphi Corporation 2007 Long-Term Incentive Plan, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed January 30, 2008.* | |
(10)(au) | Delphi Corporation Salaried Retirement Equalization Savings Program, incorporated by reference to Exhibit 99(d) to Delphi’s Current Report onForm 8-K filed January 30, 2008.* | |
(10)(av) | Delphi Corporation Supplemental Executive Retirement Program, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K/A filed February 20, 2008.* | |
(10)(aw) | Order Under 11 U.S.C. §§ 105 and 363 of the United States Bankruptcy Court for the Southern District of New York Authorizing the Debtors to Implement a Short-Term Annual Incentive Program entered March 19, 2008, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed on March 25, 2008.* | |
(10)(ax) | Amended and Restated Revolving Credit, Term Loan, and Guaranty Agreement dated as of May 9, 2008, incorporated by reference to Exhibit 10(f) to Delphi’s Report onForm 10-Q filed on May 9, 2008. |
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Exhibit | ||
Number | Exhibit Name | |
(10)(ay) | Agreement between Delphi Corporation and General Motors Corporation dated as of May 9, 2008, incorporated by reference to Exhibit 10(g) to Delphi’s Report onForm 10-Q filed on May 9, 2008. | |
(10)(az) | First Amendment to the Advance Agreement between Delphi Corporation and General Motors Corporation dated as of August 7, 2008, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed September 29, 2008. | |
(10)(aaa) | Delphi Corporation Supplemental Executive Retirement Program, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed September 29, 2008.* | |
(10)(aab) | Delphi Corporation Salaried Retirement Equalization Savings Program, incorporated by reference to Exhibit 99(c) to Delphi’s Current Report onForm 8-K filed September 29, 2008.* | |
(10)(aac) | Amended and Restated Global Settlement Agreement between Delphi Corporation and General Motors Corporation, dated September 12, 2008, incorporated by reference to Exhibit 10(d) to Delphi’s Quarterly Report onForm 10-Q filed on November 10, 2008. | |
(10)(aad) | First Amendment to the Amended and Restated Global Settlement Agreement, dated as of September 25, 2008, incorporated by reference to Exhibit 10(e) to Delphi’s Quarterly Report onForm 10-Q filed November 10, 2008. | |
(10)(aae) | Amended and Restated Master Restructuring Agreement between Delphi Corporation and General Motors Corporation, dated September 12, 2008, incorporated by reference to Exhibit 10(f) to Delphi’s Quarterly Report onForm 10-Q filed on November 10, 2008.** | |
(10)(aaf) | Accommodation Agreement dated as of December 12, 2008, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed December 12, 2008. | |
(10)(aag) | Second Amendment to the Advance Agreement between Delphi Corporation and General Motors Corporation dated as of December 12, 2008, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed December 12, 2008. | |
(10)(aah) | Partial Temporary Accelerated Payments Agreement between Delphi Corporation and General Motors Corporation dated as of December 12, 2008, incorporated by reference to Exhibit 99(c) to Delphi’s Current Report onForm 8-K filed December 12, 2008. | |
(10)(aai) | First Amendment to the Accommodation Agreement, dated as of January 30, 2009, incorporated by reference to Exhibit 99(a) to Delphi’s Current Report onForm 8-K filed February 4, 2009. | |
(10)(aaj) | First Amendment to the Partial Temporary Accelerated Payments Agreement between Delphi Corporation and General Motors Corporation dated as of January 30, 2009, incorporated by reference to Exhibit 99(b) to Delphi’s Current Report onForm 8-K filed February 4, 2009. | |
(10)(aak) | Third Amendment to the Advance Agreement between Delphi Corporation and General Motors Corporation dated as of January 30, 2009, incorporated by reference to Exhibit 99(c) to Delphi’s Current Report onForm 8-K filed February 4, 2009. | |
(10)(aal) | Supplemental Amendment to the Accommodation Agreement, dated as of February 24, 2009. | |
(12) | Computation of Ratios of Earnings to Fixed Charges for the Years Ended December 31, 2008, 2007, 2006, 2005, and 2004. | |
(21) | Subsidiaries of Delphi Corporation | |
(23) | Consent of Ernst & Young LLP | |
(31)(a) | Certification Pursuant to Exchange ActRules 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
(31)(b) | Certification Pursuant to Exchange ActRules 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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Exhibit | ||
Number | Exhibit Name | |
(32)(a) | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
(32)(b) | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
(99)(a) | Delphi Savings-Stock Purchase Program for Salaried Employees in the United States, incorporated by reference to Exhibit 99(a) to Delphi Corporation’s Annual Report onForm 10-K for the year ended, December 31, 2001. | |
(99)(b) | Delphi Personal Savings Plan for Hourly-Rate Employees in the United States, incorporated by reference to Exhibit 99(b) to Delphi Corporation’s Annual Report onForm 10-K for the year ended, December 31, 2001. |
* | Management contract or compensatory plan or arrangement | |
** | Portions of this exhibit have been omitted under a request for confidential treatment and filed separately with the Securities and Exchange Commission |
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By: | /s/ Rodney O’Neal |
Signature | Title | |
/s/ Rodney O’Neal | Chief Executive Officer & President (Principal Executive Officer) | |
/s/ John D. Sheehan | Vice President & Chief Financial Officer (Principal Financial Officer) | |
/s/ Thomas S. Timko | Chief Accounting Officer & Controller (Principal Accounting Officer) | |
/s/ Robert S. Miller, Jr. | Executive Chairman of the Board of Directors | |
/s/ Craig G. Naylor | Director (Lead Independent Director) | |
/s/ Oscar de Paula Bernardes Neto | Director | |
/s/ John. D. Englar | Director | |
/s/ David N. Farr | Director |
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SIGNATURES (concluded) | ||
/s/ Raymond J. Milchovich | Director | |
/s/ John H. Walker | Director | |
/s/ Martin E. Welch III | Director |
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