x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Jersey
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98-1367514
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(State or other jurisdiction of
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|
(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Title of class
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Name of Each Exchange on which Registered
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Ordinary Shares. $0.01 par value per share
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New York Stock Exchange
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Page
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Part I
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Item 1.
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Supplementary Item.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
|
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Item 7A.
|
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part IV
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Item 15.
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•
|
global and regional economic conditions, including conditions affecting the credit market and those resulting from the United Kingdom referendum held on June 23, 2016 in which voters approved an exit from the European Union, commonly referred to as “Brexit”;
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•
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risks inherent in operating as a global company, such as, fluctuations in interest rates and foreign currency exchange rates and economic, political and trade conditions around the world;
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•
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the cyclical nature of automotive sales and production;
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•
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the potential disruptions in the supply of and changes in the competitive environment for raw material integral to the Company’s products;
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•
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the Company’s ability to maintain contracts that are critical to its operations;
|
•
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potential changes to beneficial free trade laws and regulations such as the North American Free Trade Agreement;
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•
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the ability of the Company to achieve the intended benefits from its separation from its former parent or from acquisitions the Company may make;
|
•
|
the ability of the Company to attract, motivate and/or retain key executives;
|
•
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the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers or suppliers;
|
•
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the ability of the Company to attract and retain customers;
|
•
|
new technologies that displace demand for our products and our ability to develop and commercialize new products to meet our customers’ needs;
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•
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changes in customer preferences and requirements, including any resultant inability to realize the sales represented by our bookings;
|
•
|
changes in the costs of raw materials;
|
•
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the Company’s indebtedness, including the amount thereof and capital availability and cost;
|
•
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the cost and outcome of any claims, legal proceedings or investigations;
|
•
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the failure or breach of information technology systems;
|
•
|
severe weather conditions and natural disasters and any resultant disruptions on the supply or production of goods or services or customer demands;
|
•
|
acts of war and/or terrorism, as well as the impact of actions taken by governments as a result of further acts or threats of terrorism; and
|
•
|
the timing and occurrence (or non-occurrence) of other events or circumstances that may be beyond our control.
|
•
|
Our gasoline fuel injection systems portfolio includes a full suite of fuel injection technologies that deliver greater efficiency for traditional and hybrid vehicles with gasoline combustion engines. Our Gasoline Direct Injection (“GDi”) technology provides high precision fuel delivery for optimized combustion, which lowers emissions and improves fuel economy.
|
•
|
Our diesel fuel injection systems portfolio provides enhanced engine performance at an attractive value. Our common rail fuel injection system is the core technology for both commercial and light vehicle applications.
|
•
|
Our ICE products also include an array of highly engineered products for traditional combustion and hybrid electric vehicles, including variable valve timing, variable valve actuation, smart remote actuators, powertrain sensors, ignition products, canisters, and fuel handling products. These products often complement and enhance the efficiency improvements delivered by our fuel injection systems technologies.
|
•
|
Our electronics portfolio consists of gasoline and diesel control modules, local control units and power electronics. The control modules, containing as much as one million lines of software code, are key components that enable the integration and operation of powertrain products throughout the vehicle. As the electrification increases, our proprietary solutions, including supervisory controllers and software, DC/DC converters and inverters, provide better efficiency, reduced weight and lower cost for our OEM customers while also making these and other components easier to integrate. Additionally, manufacturers are choosing to combine power electronic functionality into one unit, enabling more effective packaging and a lower total cost solution while increasing Delphi Technologies’ content per vehicle. These products are expected to experience increased demand as vehicle electrification accelerates.
|
•
|
Expand Leadership in Technologies that Solve Our Customers’ Most Complex Propulsion Challenges.
We are focused on providing technologies and solutions that solve some of our customers’ biggest propulsion-related challenges, including helping our customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance. We believe we have strong positions in fuel injectors, fuel pumps, and complete fuel-injection systems, including software and controls. Additionally, we provide leading technology solutions in the areas of electronics and electrification, including engine control modules and power electronics, where we see growth over the long-term driven by increasing levels of electrification. Our power electronics technologies include products such as high-voltage inverters, DC/DC converters and on-board chargers that convert electricity to enable hybrid and electric vehicle propulsion systems. Our comprehensive portfolio of powertrain products combined with our proprietary software and controls, enables industry-leading propulsion systems for internal combustion engines, hybrids and electric vehicles.
|
•
|
Focused Regional Strategies To Best Serve Our Customers’ Needs.
The combination of our global operating capabilities and our portfolio of advanced technologies help us serve our global customers’ local needs. We have a presence in all major global regions and have positioned ourselves as a leading supplier of advanced vehicle propulsion technologies, including electrification, that are tailored to satisfy our customers’ needs in each region. We believe our focus on providing customer solutions to meet increasingly stringent emissions and fuel efficiency regulations will collectively drive greater demand for our products and enable us to experience growth over the long-term.
|
•
|
Continue to Enhance Aftermarket Position
. Globally we plan to expand margins by focusing on higher value product lines such as electronics and services, which include diagnostics and remanufacturing. We expect that demand for these product lines will grow faster than the overall aftermarket industry as the electronics content of new vehicles continues to increase, providing a strong foundation to gain scale profitably in the future. In addition, we expect to benefit from Aftermarket growth in key regions around the world, especially China, as the average age of vehicles increases and expands the need for replacement products.
|
•
|
Leverage Our Lean and Flexible Cost Structure to Deliver Earnings and Cash Flow Growth
. We recognize the importance of maintaining a lean and flexible business model in order to deliver earnings and cash flow growth. We intend to improve our cost competitiveness by leveraging our enterprise operating system, continuously increasing operational efficiency, maximizing manufacturing output and rotating our facilities to best-cost countries. We have
|
Name (Age)
|
|
Present Position
(Effective Date)
|
|
Positions Held During the Past Five Years
(Effective Date)
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Richard F. Dauch (58)
|
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Chief Executive Officer (2019)
|
|
Accuride Corp., President and Chief Executive Officer (2011 - 2019)
|
Vivid Sehgal (50)
|
|
Chief Financial Officer (2017)
|
|
LivaNova PLC, Chief Financial Officer (2015 - 2017)
Allergan, Inc., Senior Vice President, Treasury, Risk and Investor Relations (2014 - 2015) |
James D. Harrington (58)
|
|
Senior Vice President, General Counsel, Secretary and Chief Compliance Officer (2017)
|
|
Tenneco Inc., Senior Vice President, General Counsel and Corporate Secretary (2009 - 2017)
|
Michael J.P. Clarke (57)
|
|
Senior Vice President, Chief Human Resources Officer (2017)
|
|
Delphi Powertrain Systems, Vice President, Human Resources (2015 - 2017)
Hertz Corporation, Vice President, Human Resources (2009 - 2015) |
Mary E. Gustanski (56)
|
|
Senior Vice President, Chief Technology Officer (2017)
|
|
Delphi Powertrain Systems, Senior Vice President, Chief Technology Officer (2017)
Delphi Powertrain Systems, Vice President, Engineering and program management (2014 - 2017) |
•
|
exposure to local economic, political and labor conditions;
|
•
|
unexpected changes in laws, regulations, trade or monetary or fiscal policy, including interest rates, foreign currency exchange rates and changes in the rate of inflation in the U.S. and other foreign countries;
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•
|
tariffs, quotas, customs and other import or export restrictions and other trade barriers;
|
•
|
expropriation, nationalization, tax and other policies that favor domestic manufacturers at the expense of international manufacturers;
|
•
|
difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems;
|
•
|
reduced intellectual property protection;
|
•
|
limitations on repatriation of earnings;
|
•
|
withholding and other taxes on remittances and other payments by subsidiaries;
|
•
|
investment restrictions or requirements;
|
•
|
export and import restrictions;
|
•
|
violence and civil unrest in local countries; and
|
•
|
compliance with the requirements of an increasing body of applicable anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws of various other countries.
|
•
|
requiring a substantial portion of our cash flow from operations to make interest payments;
|
•
|
making it more difficult to satisfy other obligations;
|
•
|
increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing;
|
•
|
increasing our vulnerability to general adverse economic and industry conditions;
|
•
|
reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our businesses;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our businesses and industries; and
|
•
|
limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase or redeem ordinary shares.
|
•
|
lose net revenue;
|
•
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incur increased costs such as warranty expense and costs associated with customer support;
|
•
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experience delays, cancellations or rescheduling of orders for our products;
|
•
|
experience increased product returns or discounts; or
|
•
|
damage our reputation.
|
•
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the generation, storage, handling, use, transportation, presence of, or exposure to hazardous materials;
|
•
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the emission and discharge of hazardous materials into the ground, air or water;
|
•
|
the incorporation of certain chemical substances into our products, including electronic equipment; and
|
•
|
the health and safety of our employees.
|
•
|
prior to the Separation, Delphi Technologies’ businesses were operated by the Former Parent as part of its broader corporate organization, rather than as an independent company. The Former Parent or one of its affiliates performed various corporate functions for Delphi Technologies such as treasury, accounting, auditing, human resources, senior management, corporate affairs and finance. Our historical financial results prior to the Separation reflect allocations of corporate expenses from the Former Parent for such functions, and are likely to be less than the expenses we would have incurred had we operated as a separate publicly-traded company. As a result of the Separation, we are responsible for the costs related to such functions previously performed by the Former Parent. The Former Parent is providing some of these functions to us pursuant to a transition services agreement. We may not be able to operate our business efficiently or at comparable costs, and our profitability may decline.
|
•
|
prior to the Separation, Delphi Technologies’ businesses were integrated with the other businesses of the Former Parent. Historically, we shared economies of scale in costs, employees, vendor relationships and customer relationships. Although we have entered into a transition services agreement with the Former Parent for certain services, these arrangements may not fully capture the benefits that we have enjoyed as a result of being integrated with the Former Parent and may result in us paying higher amounts than in the past for certain products and services. This could have an adverse effect on our business as an independent, publicly-traded company.
|
•
|
permit our board of directors to issue one or more series of preferred shares with rights and preferences designated by our board;
|
•
|
impose advance notice requirements for shareholder proposals and nominations of directors to be considered at shareholder meetings;
|
•
|
limit the ability of shareholders to remove directors without cause; and
|
•
|
require that all vacancies on our board of directors be filled by our directors.
|
|
North America
|
|
Europe
|
|
Asia Pacific
|
|
South America
|
|
Total
|
|||||
Manufacturing facilities
|
5
|
|
|
8
|
|
|
7
|
|
|
1
|
|
|
21
|
|
Technical centers
|
4
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|
12
|
|
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c)
|
|||||||
Equity compensation plans approved by security holders
|
|
739,995
|
|
(1)
|
|
$
|
—
|
|
(2)
|
|
6,561,507
|
|
(3)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Total
|
|
739,995
|
|
|
|
—
|
|
|
|
6,561,507
|
|
|
(1)
|
Includes (a) 35,366 outstanding restricted stock units granted to our Board of Directors and (b) 704,630 outstanding time- and performance-based restricted stock units granted to our executives. All grants were made under the Delphi Technologies PLC Long-Term Incentive Plan (the "PLC LTIP"). Includes accrued dividend equivalents.
|
(2)
|
The restricted stock units have no exercise price.
|
(3)
|
Remaining shares available under the PLC LTIP. This amount does not reflect the impact of 23,220 shares issued on January 5, 2019.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||
|
|
(dollars and shares in millions, except per share data)
|
|||||||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
4,858
|
|
|
$
|
4,849
|
|
|
$
|
4,486
|
|
|
$
|
4,407
|
|
|
$
|
4,540
|
|
|
Operating income
|
|
434
|
|
|
446
|
|
|
320
|
|
|
403
|
|
|
442
|
|
|
|||||
Net income
|
|
380
|
|
|
319
|
|
|
268
|
|
|
306
|
|
|
342
|
|
|
|||||
Net income attributable to noncontrolling interest
|
|
22
|
|
|
34
|
|
|
32
|
|
|
34
|
|
|
36
|
|
|
|||||
Net income attributable to Delphi Technologies
|
|
$
|
358
|
|
|
$
|
285
|
|
|
$
|
236
|
|
|
$
|
272
|
|
|
$
|
306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share data (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
4.04
|
|
|
$
|
3.22
|
|
|
$
|
2.66
|
|
|
$
|
3.07
|
|
|
$
|
3.45
|
|
|
Diluted
|
|
$
|
4.03
|
|
|
$
|
3.21
|
|
|
$
|
2.66
|
|
|
$
|
3.07
|
|
|
$
|
3.45
|
|
|
Cash dividends declared and paid
|
|
$
|
0.68
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
As of December 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014 (unaudited)
|
|
||||||||||
|
|
(in millions)
|
|||||||||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
3,893
|
|
|
$
|
3,793
|
|
|
$
|
2,899
|
|
|
$
|
3,001
|
|
|
$
|
3,141
|
|
|
Long-term debt
|
|
$
|
1,488
|
|
|
$
|
1,515
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
14
|
|
|
(1)
|
Net income per share for 2016, 2015 and 2014 were calculated using the number of shares that were distributed to Former Parent shareholders upon the Separation (88,613,262 shares).
|
•
|
Generated gross bookings of $9.8 billion, based upon expected volumes and pricing;
|
•
|
Generated
$419 million
of cash from operations and net income of
$358 million
;
|
•
|
Continued our focus on diversifying our geographic and customer mix, resulting in:
|
◦
|
44%
of our net sales generated in Europe,
28%
from North America, and
25%
from Asia Pacific;
|
◦
|
72%
of our Powertrain Systems segment’s net sales related to light vehicles and
28%
focused on commercial vehicles; and
|
◦
|
18%
of our net sales related to the Aftermarket segment.
|
•
|
Volume—changes in volume and changes in mix;
|
•
|
Contractual price reductions—changes due to contractual price reductions (which typically range from 1% to 3% of net sales);
|
•
|
Operational performance—changes to costs for materials and commodities or manufacturing variances; and
|
•
|
Other—including restructuring costs and any remaining variances not included in Volume, net of contractual price reductions or Operational performance.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(dollars in millions)
|
||||||||||
Net sales
|
$
|
4,858
|
|
|
$
|
4,849
|
|
|
$
|
9
|
|
Cost of sales
|
3,961
|
|
|
3,881
|
|
|
(80
|
)
|
|||
Gross margin
|
897
|
|
18.5%
|
968
|
|
20.0%
|
(71
|
)
|
|||
Selling, general and administrative
|
414
|
|
|
408
|
|
|
(6
|
)
|
|||
Amortization
|
14
|
|
|
16
|
|
|
2
|
|
|||
Restructuring
|
35
|
|
|
98
|
|
|
63
|
|
|||
Operating income
|
434
|
|
|
446
|
|
|
(12
|
)
|
|||
Interest expense
|
(79
|
)
|
|
(15
|
)
|
|
(64
|
)
|
|||
Other income (expense), net
|
9
|
|
|
(11
|
)
|
|
20
|
|
|||
Income before income taxes and equity income
|
364
|
|
|
420
|
|
|
(56
|
)
|
|||
Income tax benefit (expense)
|
9
|
|
|
(106
|
)
|
|
115
|
|
|||
Income before equity income
|
373
|
|
|
314
|
|
|
59
|
|
|||
Equity income, net of tax
|
7
|
|
|
5
|
|
|
2
|
|
|||
Net income
|
380
|
|
|
319
|
|
|
61
|
|
|||
Net income attributable to noncontrolling interest
|
22
|
|
|
34
|
|
|
(12
|
)
|
|||
Net income attributable to Delphi Technologies
|
$
|
358
|
|
|
$
|
285
|
|
|
$
|
73
|
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
|
|
Volume
|
|
Contractual price reductions
|
|
FX
|
|
Other
|
|
Total
|
||||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||
Total net sales
|
$
|
4,858
|
|
|
$
|
4,849
|
|
|
$
|
9
|
|
|
|
$
|
63
|
|
|
$
|
(66
|
)
|
|
$
|
88
|
|
|
$
|
(76
|
)
|
|
$
|
9
|
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
|
|
Volume
|
|
Contractual price reductions
|
|
FX
|
|
Operational
performance
|
|
Other
|
|
Total
|
||||||||||||||||||
|
(dollars in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||
Cost of sales
|
$
|
3,961
|
|
|
$
|
3,881
|
|
|
$
|
(80
|
)
|
|
|
$
|
(167
|
)
|
|
$
|
—
|
|
|
$
|
(47
|
)
|
|
$
|
43
|
|
|
$
|
91
|
|
|
$
|
(80
|
)
|
Gross margin ($)
|
$
|
897
|
|
|
$
|
968
|
|
|
$
|
(71
|
)
|
|
|
$
|
(104
|
)
|
|
$
|
(66
|
)
|
|
$
|
41
|
|
|
$
|
43
|
|
|
$
|
15
|
|
|
$
|
(71
|
)
|
Gross margin (%)
|
18.5
|
%
|
|
20.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
The absence of cost of sales related to the original equipment services business that remained with the Former Parent;
|
•
|
Reduced incentive compensation accruals of $16 million; and
|
•
|
The absence of a $17 million reduction to cost of sales during the year ended December 31, 2017 related to a commercial agreement for reimbursement of previously incurred development costs, offset by $4 million of related asset impairments, in conjunction with a program cancellation by one of the Company’s OEM customers during the year ended December 31, 2017.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(dollars in millions)
|
||||||||||
Selling, general and administrative expense
|
$
|
414
|
|
|
$
|
408
|
|
|
$
|
(6
|
)
|
•
|
The incremental costs incurred related to being a stand-alone publicly-traded company; partially offset by
|
•
|
Reduced incentive compensation accruals; and
|
•
|
Reduced one-time incremental expenses associated with becoming a stand-alone publicly-traded company, which totaled $70 million during the year ended
December 31, 2018
. This compares to $81 million of one-time costs recorded during the year ended
December 31, 2017
, associated with the Separation.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Amortization
|
$
|
14
|
|
|
$
|
16
|
|
|
$
|
2
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(dollars in millions)
|
||||||||||
Restructuring
|
$
|
35
|
|
|
$
|
98
|
|
|
$
|
63
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Interest expense
|
$
|
79
|
|
|
$
|
15
|
|
|
$
|
(64
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Other income (expense), net
|
$
|
9
|
|
|
$
|
(11
|
)
|
|
$
|
20
|
|
•
|
An increase of $4 million of interest income;
|
•
|
An increase of $3 million of rental income;
|
•
|
An increase to income of $2 million related to remeasurement of cross currency intercompany loans; and
|
•
|
A decrease of $7 million in the components of net periodic benefit cost other than service costs related to the Company’s defined benefit pension plans.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Income tax (benefit) expense
|
$
|
(9
|
)
|
|
$
|
106
|
|
|
$
|
115
|
|
•
|
Powertrain Systems, which manufactures fuel injection systems as well as various other powertrain products including valvetrain, fuel delivery modules, ignition coils, canisters, sensors, valves and actuators. This segment also offers electronic control modules and corresponding software, algorithms and calibration that provide centralized and reliable management of various powertrain components. Additionally, we provide power electronics solutions that include supervisory controllers and software, along with the DC/DC converters and inverters and on-board chargers that convert electricity to enable hybrid and electric vehicle propulsion systems.
|
•
|
Aftermarket, which sells aftermarket products to independent aftermarket and original equipment service customers. This segment also supplies a wide range of aftermarket products and services covering the fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories.
|
•
|
Eliminations and Other, which includes the elimination of inter-segment transactions.
|
|
Powertrain
Systems |
|
Aftermarket
|
|
Eliminations
and Other |
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
467
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
548
|
|
Restructuring
|
(37
|
)
|
|
2
|
|
|
—
|
|
|
(35
|
)
|
||||
Separation costs (1)
|
(61
|
)
|
|
(17
|
)
|
|
—
|
|
|
(78
|
)
|
||||
Asset impairments
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Operating income
|
$
|
368
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
434
|
|
Interest expense
|
|
|
|
|
|
|
(79
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
9
|
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
364
|
|
|||||||
Income tax benefit
|
|
|
|
|
|
|
9
|
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
7
|
|
|||||||
Net income
|
|
|
|
|
|
|
380
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
22
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
358
|
|
|
Powertrain
Systems |
|
Aftermarket
|
|
Eliminations
and Other |
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
562
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
637
|
|
Restructuring
|
(92
|
)
|
|
(6
|
)
|
|
—
|
|
|
(98
|
)
|
||||
Separation costs (1)
|
(66
|
)
|
|
(15
|
)
|
|
—
|
|
|
(81
|
)
|
||||
Asset impairments
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||
Operating income
|
$
|
392
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
446
|
|
|
Interest expense
|
|
|
|
|
|
|
(15
|
)
|
|||||||
Other expense, net
|
|
|
|
|
|
|
(11
|
)
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
420
|
|
|||||||
Income tax expense
|
|
|
|
|
|
|
(106
|
)
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
5
|
|
|||||||
Net income
|
|
|
|
|
|
|
319
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
34
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
285
|
|
(1)
|
Prior to December 4, 2017 separation costs include one-time expenses related to the separation from our Former Parent. For periods subsequent to December 4, 2017, these costs include one-time incremental expenses associated with becoming a stand-alone publicly-traded company.
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
|
|
Volume, net of contractual price reductions
|
|
FX
|
|
Other
|
|
Total
|
||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||
Powertrain Systems
|
$
|
4,274
|
|
|
$
|
4,222
|
|
|
$
|
52
|
|
|
|
$
|
(48
|
)
|
|
$
|
96
|
|
|
$
|
4
|
|
|
$
|
52
|
|
Aftermarket
|
874
|
|
|
947
|
|
|
(73
|
)
|
|
|
6
|
|
|
(2
|
)
|
|
(77
|
)
|
|
(73
|
)
|
|||||||
Eliminations and Other
|
(290
|
)
|
|
(320
|
)
|
|
30
|
|
|
|
39
|
|
|
(6
|
)
|
|
(3
|
)
|
|
30
|
|
|||||||
Total
|
$
|
4,858
|
|
|
$
|
4,849
|
|
|
$
|
9
|
|
|
|
$
|
(3
|
)
|
|
$
|
88
|
|
|
$
|
(76
|
)
|
|
$
|
9
|
|
|
Year Ended December 31,
|
||||
|
2018
|
|
2017
|
||
Powertrain Systems
|
16.3
|
%
|
|
18.5
|
%
|
Aftermarket
|
22.8
|
%
|
|
19.6
|
%
|
Eliminations and Other
|
—
|
%
|
|
—
|
%
|
Total
|
18.5
|
%
|
|
20.0
|
%
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Favorable/
(unfavorable)
|
|
|
Volume, net of contractual price reductions
|
|
Operational performance
|
|
Other
|
|
Total
|
||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||
Powertrain Systems
|
$
|
467
|
|
|
$
|
562
|
|
|
$
|
(95
|
)
|
|
|
$
|
(161
|
)
|
|
$
|
56
|
|
|
$
|
10
|
|
|
$
|
(95
|
)
|
Aftermarket
|
81
|
|
|
75
|
|
|
6
|
|
|
|
4
|
|
|
5
|
|
|
(3
|
)
|
|
6
|
|
|||||||
Eliminations and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
548
|
|
|
$
|
637
|
|
|
$
|
(89
|
)
|
|
|
$
|
(157
|
)
|
|
$
|
61
|
|
|
$
|
7
|
|
|
$
|
(89
|
)
|
•
|
Favorable foreign currency impacts of $42 million;
|
•
|
Reduced incentive compensation accruals of $29 million; and
|
•
|
Decreased costs of $3 million at our Aftermarket segment related to certain Brazilian legal matters during the year ended
December 31, 2017
; offset by
|
•
|
$63 million impact related to being a stand-alone publicly-traded company, including: the absence of the original equipment services business that remained with the Former Parent, incremental costs and inefficiencies associated with being a stand-alone publicly-traded company subsequent to the Separation and costs associated with the Transition Services Agreement and Contract Manufacturing Services Agreement entered with our Former Parent in connection with the Separation; and
|
•
|
The absence of a $17 million reduction to cost of sales during the year ended
December 31, 2017
related to a commercial agreement for reimbursement of previously incurred development costs, in conjunction with a program cancellation by one of the Company’s OEM customers during the year ended
December 31, 2017
.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(dollars in millions)
|
||||||||||
Net sales
|
$
|
4,849
|
|
|
$
|
4,486
|
|
|
$
|
363
|
|
Cost of sales
|
3,881
|
|
|
3,689
|
|
|
(192
|
)
|
|||
Gross margin
|
968
|
|
|
797
|
|
|
171
|
|
|||
Selling, general and administrative
|
408
|
|
|
299
|
|
|
(109
|
)
|
|||
Amortization
|
16
|
|
|
17
|
|
|
1
|
|
|||
Restructuring
|
98
|
|
|
161
|
|
|
63
|
|
|||
Operating income
|
446
|
|
|
320
|
|
|
126
|
|
|||
Interest expense
|
(15
|
)
|
|
(1
|
)
|
|
(14
|
)
|
|||
Other expense, net
|
(11
|
)
|
|
(1
|
)
|
|
(10
|
)
|
|||
Income before income taxes and equity income
|
420
|
|
|
318
|
|
|
102
|
|
|||
Income tax expense
|
(106
|
)
|
|
(50
|
)
|
|
(56
|
)
|
|||
Income before equity income
|
314
|
|
|
268
|
|
|
46
|
|
|||
Equity income, net of tax
|
5
|
|
|
—
|
|
|
5
|
|
|||
Net income
|
319
|
|
|
268
|
|
|
51
|
|
|||
Net income attributable to noncontrolling interest
|
34
|
|
|
32
|
|
|
2
|
|
|||
Net income attributable to Delphi Technologies
|
$
|
285
|
|
|
$
|
236
|
|
|
$
|
49
|
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
|
|
Volume
|
|
Contractual price reductions
|
|
FX
|
|
Other
|
|
Total
|
||||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||
Total net sales
|
$
|
4,849
|
|
|
$
|
4,486
|
|
|
$
|
363
|
|
|
|
$
|
406
|
|
|
$
|
(52
|
)
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
363
|
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
|
|
Volume
|
|
Contractual price reductions
|
|
FX
|
|
Operational
performance
|
|
Other
|
|
Total
|
||||||||||||||||||
|
(dollars in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||
Cost of sales
|
$
|
3,881
|
|
|
$
|
3,689
|
|
|
$
|
(192
|
)
|
|
|
$
|
(317
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
87
|
|
|
$
|
31
|
|
|
$
|
(192
|
)
|
Gross margin ($)
|
$
|
968
|
|
|
$
|
797
|
|
|
$
|
171
|
|
|
|
$
|
89
|
|
|
$
|
(52
|
)
|
|
$
|
16
|
|
|
$
|
87
|
|
|
$
|
31
|
|
|
$
|
171
|
|
Gross margin (%)
|
20.0
|
%
|
|
17.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Decreased warranty costs of $15 million, primarily related to a $25 million settlement agreement reached in 2016 with one of our OEM customers regarding warranty claims related to certain components supplied by the Powertrain Systems segment; and
|
•
|
In conjunction with a program cancellation by one of the Company’s OEM customers during the year ended December 31, 2017, the Company entered into a commercial agreement for reimbursement of previously incurred development costs. As a result of this commercial agreement, the Company recorded a reduction of $17 million to cost of sales, offset by $4 million of related asset impairments, during the year ended December 31, 2017.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(dollars in millions)
|
||||||||||
Selling, general and administrative expense
|
$
|
408
|
|
|
$
|
299
|
|
|
$
|
(109
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Amortization
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
1
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(dollars in millions)
|
||||||||||
Restructuring
|
$
|
98
|
|
|
$
|
161
|
|
|
$
|
63
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Interest expense
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
(14
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Other expense, net
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
(10
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
||||||
|
(in millions)
|
||||||||||
Income tax expense
|
$
|
106
|
|
|
$
|
50
|
|
|
$
|
(56
|
)
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
562
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
637
|
|
Restructuring
|
(92
|
)
|
|
(6
|
)
|
|
—
|
|
|
(98
|
)
|
||||
Separation costs (1)
|
(66
|
)
|
|
(15
|
)
|
|
—
|
|
|
(81
|
)
|
||||
Asset impairments
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||
Operating income
|
$
|
392
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
446
|
|
|
Interest expense
|
|
|
|
|
|
|
(15
|
)
|
|||||||
Other expense, net
|
|
|
|
|
|
|
(11
|
)
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
420
|
|
|||||||
Income tax expense
|
|
|
|
|
|
|
(106
|
)
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
5
|
|
|||||||
Net income
|
|
|
|
|
|
|
319
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
34
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
285
|
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
418
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
512
|
|
Restructuring
|
(151
|
)
|
|
(10
|
)
|
|
—
|
|
|
(161
|
)
|
||||
Other acquisition and portfolio project costs
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Asset impairments
|
(28
|
)
|
|
(1
|
)
|
|
—
|
|
|
(29
|
)
|
||||
Operating income
|
$
|
239
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
320
|
|
|
Interest expense
|
|
|
|
|
|
|
(1
|
)
|
|||||||
Other expense, net
|
|
|
|
|
|
|
(1
|
)
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
318
|
|
|||||||
Income tax expense
|
|
|
|
|
|
|
(50
|
)
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
—
|
|
|||||||
Net income
|
|
|
|
|
|
|
268
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
32
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
236
|
|
(1)
|
Prior to December 4, 2017 separation costs include one-time expenses related to the separation from our Former Parent. For periods subsequent to December 4, 2017, these costs include one-time incremental expenses associated with becoming a stand-alone publicly-traded company.
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
|
|
Volume, net of contractual price reductions
|
|
FX
|
|
Other
|
|
Total
|
||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||
Powertrain Systems
|
$
|
4,222
|
|
|
$
|
3,837
|
|
|
$
|
385
|
|
|
|
$
|
370
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
385
|
|
Aftermarket
|
947
|
|
|
924
|
|
|
23
|
|
|
|
31
|
|
|
(8
|
)
|
|
—
|
|
|
23
|
|
|||||||
Eliminations and Other
|
(320
|
)
|
|
(275
|
)
|
|
(45
|
)
|
|
|
(47
|
)
|
|
2
|
|
|
—
|
|
|
(45
|
)
|
|||||||
Total
|
$
|
4,849
|
|
|
$
|
4,486
|
|
|
$
|
363
|
|
|
|
$
|
354
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
363
|
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
||
Powertrain Systems (1)
|
18.5
|
%
|
|
15.8
|
%
|
Aftermarket
|
19.6
|
%
|
|
20.6
|
%
|
Eliminations and Other
|
—
|
%
|
|
—
|
%
|
Total
|
20.0
|
%
|
|
17.8
|
%
|
|
Year Ended December 31,
|
|
|
Variance Due To:
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Favorable/
(unfavorable)
|
|
|
Volume, net of contractual price reductions
|
|
Operational performance
|
|
Other
|
|
Total
|
||||||||||||||
|
(in millions)
|
|
|
(in millions)
|
||||||||||||||||||||||||
Powertrain Systems
|
$
|
562
|
|
|
$
|
418
|
|
|
$
|
144
|
|
|
|
$
|
57
|
|
|
$
|
73
|
|
|
$
|
14
|
|
|
$
|
144
|
|
Aftermarket
|
75
|
|
|
94
|
|
|
(19
|
)
|
|
|
(12
|
)
|
|
14
|
|
|
(21
|
)
|
|
(19
|
)
|
|||||||
Eliminations and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
637
|
|
|
$
|
512
|
|
|
$
|
125
|
|
|
|
$
|
45
|
|
|
$
|
87
|
|
|
$
|
(7
|
)
|
|
$
|
125
|
|
•
|
$28 million of increased SG&A expense, excluding costs related to the Separation, during the year ended December 31, 2017, primarily for increased information technology costs;
|
•
|
Increased estimated cost accruals of $2 million at our Aftermarket segment related to certain Brazilian legal matters;
|
•
|
Adjusted for volume, Aftermarket incurred approximately $2 million of increased costs due to a strategic repositioning of its Europe warehousing footprint to better serve and support its customer base; and
|
•
|
The absence of a $3 million gain on the sale of unutilized land during the year ended December 31, 2016; offset by
|
•
|
Decreased warranty costs of $15 million, primarily related to a $25 million settlement agreement reached in 2016 with one of our OEM customers regarding warranty claims related to certain components supplied by the Powertrain Systems segment; and
|
•
|
In conjunction with a program cancellation by one of the Company’s OEM customers during the year ended December 31, 2017, the Company entered into a commercial agreement for reimbursement of previously incurred development costs. As a result of this commercial agreement, the Company recorded a reduction of $17 million to cost of sales during the year ended December 31, 2017.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Total number of shares repurchased
|
293,695
|
|
|
—
|
|
|
—
|
|
|||
Average price paid per share
|
$
|
34.05
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total (in millions)
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Dividend
|
|
Amount
|
||||
|
Per Share
|
|
(in millions)
|
||||
2018:
|
|
|
|
||||
Fourth quarter
|
$
|
0.17
|
|
|
$
|
15
|
|
Third quarter
|
0.17
|
|
|
15
|
|
||
Second quarter
|
0.17
|
|
|
15
|
|
||
First quarter
|
0.17
|
|
|
15
|
|
||
Total
|
$
|
0.68
|
|
|
$
|
60
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
|
LIBOR plus
|
|
ABR plus
|
|
LIBOR Plus
|
|
ABR plus
|
||||
Revolving Credit Facility
|
1.45
|
%
|
|
0.45
|
%
|
|
1.45
|
%
|
|
0.45
|
%
|
Term Loan A Facility
|
1.75
|
%
|
|
0.75
|
%
|
|
1.75
|
%
|
|
0.75
|
%
|
|
Applicable Rate
|
|
Borrowings as of December 31, 2018 (in millions)
|
|
Rates effective as of December 31, 2018
|
|||
Term Loan A Facility
|
LIBOR plus 1.75%
|
|
$
|
731
|
|
|
4.188
|
%
|
|
Payments due by Period
|
||||||||||||||||||
|
Total
|
|
2019
|
|
2020 & 2021
|
|
2022 & 2023
|
|
Thereafter
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Debt and capital lease obligations (excluding interest)
|
$
|
1,550
|
|
|
$
|
43
|
|
|
$
|
115
|
|
|
$
|
583
|
|
|
$
|
809
|
|
Estimated interest costs related to debt and capital lease obligations
|
349
|
|
|
63
|
|
|
120
|
|
|
95
|
|
|
71
|
|
|||||
Operating lease obligations
|
156
|
|
|
26
|
|
|
47
|
|
|
33
|
|
|
50
|
|
|||||
Contractual commitments for capital expenditures
|
134
|
|
|
131
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Other contractual purchase commitments, including information technology
|
52
|
|
|
40
|
|
|
5
|
|
|
4
|
|
|
3
|
|
|||||
Total
|
$
|
2,241
|
|
|
$
|
303
|
|
|
$
|
290
|
|
|
$
|
715
|
|
|
$
|
933
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Powertrain Systems
|
$
|
241
|
|
|
$
|
189
|
|
|
$
|
169
|
|
Aftermarket
|
5
|
|
|
3
|
|
|
2
|
|
|||
Eliminations and Other (1)
|
19
|
|
|
5
|
|
|
—
|
|
|||
Total capital expenditures
|
$
|
265
|
|
|
$
|
197
|
|
|
$
|
171
|
|
North America
|
$
|
61
|
|
|
$
|
53
|
|
|
$
|
50
|
|
Europe
|
126
|
|
|
72
|
|
|
82
|
|
|||
Asia Pacific
|
75
|
|
|
70
|
|
|
34
|
|
|||
South America
|
3
|
|
|
2
|
|
|
5
|
|
|||
Total capital expenditures
|
$
|
265
|
|
|
$
|
197
|
|
|
$
|
171
|
|
•
|
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.
|
|
|
Credit Agreement
|
Change in Rate
|
|
(impact to annual interest
expense, in millions)
|
25 bps decrease
|
|
- $2
|
25 bps increase
|
|
+$2
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net sales
|
$
|
4,858
|
|
|
$
|
4,849
|
|
|
$
|
4,486
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
3,961
|
|
|
3,881
|
|
|
3,689
|
|
|||
Selling, general and administrative
|
414
|
|
|
408
|
|
|
299
|
|
|||
Amortization
|
14
|
|
|
16
|
|
|
17
|
|
|||
Restructuring (Note 10)
|
35
|
|
|
98
|
|
|
161
|
|
|||
Total operating expenses
|
4,424
|
|
|
4,403
|
|
|
4,166
|
|
|||
Operating income
|
434
|
|
|
446
|
|
|
320
|
|
|||
Interest expense
|
(79
|
)
|
|
(15
|
)
|
|
(1
|
)
|
|||
Other income (expense), net (Note 20)
|
9
|
|
|
(11
|
)
|
|
(1
|
)
|
|||
Income before income taxes and equity income
|
364
|
|
|
420
|
|
|
318
|
|
|||
Income tax benefit (expense)
|
9
|
|
|
(106
|
)
|
|
(50
|
)
|
|||
Income before equity income
|
373
|
|
|
314
|
|
|
268
|
|
|||
Equity income, net of tax
|
7
|
|
|
5
|
|
|
—
|
|
|||
Net income
|
380
|
|
|
319
|
|
|
268
|
|
|||
Net income attributable to noncontrolling interest
|
22
|
|
|
34
|
|
|
32
|
|
|||
Net income attributable to Delphi Technologies
|
$
|
358
|
|
|
$
|
285
|
|
|
$
|
236
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to Delphi Technologies:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.04
|
|
|
$
|
3.22
|
|
|
$
|
2.66
|
|
Diluted
|
$
|
4.03
|
|
|
$
|
3.21
|
|
|
$
|
2.66
|
|
Weighted average ordinary shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
88.68
|
|
|
88.61
|
|
|
88.61
|
|
|||
Diluted
|
88.89
|
|
|
88.66
|
|
|
88.61
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net income
|
$
|
380
|
|
|
$
|
319
|
|
|
$
|
268
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Currency translation adjustments
|
(83
|
)
|
|
72
|
|
|
(84
|
)
|
|||
Net change in unrecognized gain on derivative instruments, net of tax (Note 18)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Employee benefit plans adjustment, net of tax
|
41
|
|
|
6
|
|
|
(135
|
)
|
|||
Other comprehensive (loss) income, net of tax
|
(44
|
)
|
|
78
|
|
|
(219
|
)
|
|||
Comprehensive income
|
336
|
|
|
397
|
|
|
49
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
19
|
|
|
38
|
|
|
28
|
|
|||
Comprehensive income attributable to Delphi Technologies
|
$
|
317
|
|
|
$
|
359
|
|
|
$
|
21
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
359
|
|
|
$
|
338
|
|
Restricted cash
|
1
|
|
|
1
|
|
||
Accounts receivable, net
|
878
|
|
|
1,090
|
|
||
Inventories, net (Note 4)
|
521
|
|
|
498
|
|
||
Other current assets (Note 5)
|
172
|
|
|
131
|
|
||
Total current assets
|
1,931
|
|
|
2,058
|
|
||
Long-term assets:
|
|
|
|
||||
Property, net (Note 6)
|
1,445
|
|
|
1,316
|
|
||
Investments in affiliates
|
44
|
|
|
37
|
|
||
Intangible assets and goodwill, net (Note 7)
|
76
|
|
|
82
|
|
||
Deferred income taxes (Note 15)
|
280
|
|
|
178
|
|
||
Other long-term assets (Note 5)
|
117
|
|
|
122
|
|
||
Total long-term assets
|
1,962
|
|
|
1,735
|
|
||
Total assets
|
$
|
3,893
|
|
|
$
|
3,793
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt (Note 11)
|
$
|
43
|
|
|
$
|
20
|
|
Accounts payable
|
906
|
|
|
931
|
|
||
Accrued liabilities (Note 8)
|
428
|
|
|
445
|
|
||
Total current liabilities
|
1,377
|
|
|
1,396
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt (Note 11)
|
1,488
|
|
|
1,515
|
|
||
Pension and other postretirement benefit obligations (Note 12)
|
467
|
|
|
531
|
|
||
Other long-term liabilities (Note 8)
|
123
|
|
|
119
|
|
||
Total long-term liabilities
|
2,078
|
|
|
2,165
|
|
||
Total liabilities
|
3,455
|
|
|
3,561
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
||
Ordinary shares, $0.01 par value per share, 1,200,000,000 shares authorized, 88,491,963 and 88,613,262
issued and outstanding as of December 31, 2018 and December 31, 2017, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
407
|
|
|
431
|
|
||
Retained earnings
|
296
|
|
|
7
|
|
||
Accumulated other comprehensive loss (Note 17)
|
(412
|
)
|
|
(371
|
)
|
||
Total Delphi Technologies shareholders’ equity
|
292
|
|
|
68
|
|
||
Noncontrolling interest
|
146
|
|
|
164
|
|
||
Total shareholders’ equity
|
438
|
|
|
232
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,893
|
|
|
$
|
3,793
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
380
|
|
|
$
|
319
|
|
|
$
|
268
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
183
|
|
|
185
|
|
|
193
|
|
|||
Amortization
|
14
|
|
|
16
|
|
|
17
|
|
|||
Amortization of deferred debt issuance costs
|
4
|
|
|
—
|
|
|
—
|
|
|||
Restructuring expense, net of cash paid
|
(32
|
)
|
|
10
|
|
|
(4
|
)
|
|||
Deferred income taxes
|
(108
|
)
|
|
(7
|
)
|
|
(12
|
)
|
|||
Pension and other postretirement benefit expenses
|
43
|
|
|
47
|
|
|
30
|
|
|||
Income from equity method investments, net of dividends received
|
(7
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Gain on sale of assets
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Share-based compensation
|
9
|
|
|
17
|
|
|
19
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
162
|
|
|
(271
|
)
|
|
8
|
|
|||
Inventories
|
(24
|
)
|
|
(124
|
)
|
|
(8
|
)
|
|||
Other assets
|
(49
|
)
|
|
(82
|
)
|
|
(23
|
)
|
|||
Accounts payable
|
(97
|
)
|
|
201
|
|
|
(4
|
)
|
|||
Accrued and other long-term liabilities
|
27
|
|
|
148
|
|
|
(25
|
)
|
|||
Other, net
|
(36
|
)
|
|
(18
|
)
|
|
(31
|
)
|
|||
Pension contributions
|
(47
|
)
|
|
(48
|
)
|
|
(52
|
)
|
|||
Net cash provided by operating activities
|
419
|
|
|
388
|
|
|
372
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(265
|
)
|
|
(197
|
)
|
|
(171
|
)
|
|||
Proceeds from sale of property
|
5
|
|
|
10
|
|
|
9
|
|
|||
Cost of technology investments
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Proceeds from insurance settlement claims
|
1
|
|
|
1
|
|
|
—
|
|
|||
Settlement of undesignated derivatives
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(274
|
)
|
|
(187
|
)
|
|
(162
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net repayments under other short-term debt agreements
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Repayments under long-term debt agreements
|
(19
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of senior notes, net of discount and issuance costs
|
—
|
|
|
782
|
|
|
—
|
|
|||
Proceeds from issuance of credit agreement, net of issuance costs
|
—
|
|
|
741
|
|
|
—
|
|
|||
Dividend payments of consolidated affiliates to minority shareholders
|
(12
|
)
|
|
(10
|
)
|
|
(13
|
)
|
|||
Distribution of cash dividends
|
(60
|
)
|
|
—
|
|
|
—
|
|
|||
Taxes withheld and paid on employees’ restricted share awards
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of ordinary shares
|
(10
|
)
|
|
—
|
|
|
—
|
|
|||
Cash distributions paid to Former Parent
|
—
|
|
|
(1,328
|
)
|
|
—
|
|
|||
Other net transfers to Former Parent
|
—
|
|
|
(160
|
)
|
|
(195
|
)
|
|||
Net cash (used in) provided by financing activities
|
(108
|
)
|
|
25
|
|
|
(210
|
)
|
|||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
|
(16
|
)
|
|
12
|
|
|
(7
|
)
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
21
|
|
|
238
|
|
|
(7
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of the year
|
339
|
|
|
101
|
|
|
108
|
|
|||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
360
|
|
|
$
|
339
|
|
|
$
|
101
|
|
|
Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Number of Shares
|
|
Amount
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Former Parent’s Net Investment
|
|
Accumulated Other Comprehensive Loss
|
|
Total Delphi Technologies Shareholders’ Equity
|
|
Noncontrolling
Interest
|
|
Total Shareholders’ Equity
|
|||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||||
Balance at December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,677
|
|
|
$
|
(496
|
)
|
|
$
|
1,181
|
|
|
$
|
161
|
|
|
$
|
1,342
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
|
32
|
|
|
268
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(215
|
)
|
|
(215
|
)
|
|
(4
|
)
|
|
(219
|
)
|
||||||||
Dividend payments of consolidated affiliates to minority shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(33
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||||
Net transfers to Former Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
(195
|
)
|
||||||||
Balance at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,737
|
|
|
$
|
(711
|
)
|
|
$
|
1,026
|
|
|
$
|
156
|
|
|
$
|
1,182
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
278
|
|
|
—
|
|
|
285
|
|
|
34
|
|
|
319
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
74
|
|
|
4
|
|
|
78
|
|
||||||||
Reclassification of Former Parent's net investment and issuance of ordinary shares in connection with separation
|
89
|
|
|
1
|
|
|
430
|
|
|
—
|
|
|
(431
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Dividend payments of consolidated affiliates to minority shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||||
Net other change in Former Parent’s net investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
266
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
||||||||
Cash distributions to Former Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,328
|
)
|
|
—
|
|
|
(1,328
|
)
|
|
—
|
|
|
(1,328
|
)
|
||||||||
Balance at December 31, 2017
|
89
|
|
|
$
|
1
|
|
|
$
|
431
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
(371
|
)
|
|
$
|
68
|
|
|
$
|
164
|
|
|
$
|
232
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
358
|
|
|
—
|
|
|
—
|
|
|
358
|
|
|
22
|
|
|
380
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
(41
|
)
|
|
(3
|
)
|
|
(44
|
)
|
||||||||
Dividends on ordinary shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
||||||||
Dividend payments of consolidated affiliates to minority shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
||||||||
Separation related adjustments
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
||||||||
Repurchase of ordinary shares
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Taxes withheld on employees’ restricted share award vestings
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||||
Balance at December 31, 2018
|
89
|
|
|
$
|
1
|
|
|
$
|
407
|
|
|
$
|
296
|
|
|
$
|
—
|
|
|
$
|
(412
|
)
|
|
$
|
292
|
|
|
$
|
146
|
|
|
$
|
438
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Cost of sales
|
$
|
27
|
|
|
$
|
44
|
|
Selling, general and administrative
|
116
|
|
|
137
|
|
||
Total allocated cost from Former Parent
|
$
|
143
|
|
|
$
|
181
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Productive material
|
$
|
250
|
|
|
$
|
217
|
|
Work-in-process
|
36
|
|
|
35
|
|
||
Finished goods
|
235
|
|
|
246
|
|
||
Total
|
$
|
521
|
|
|
$
|
498
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Value added tax receivable
|
$
|
98
|
|
|
$
|
59
|
|
Reimbursable engineering costs
|
17
|
|
|
20
|
|
||
Income and other taxes receivable
|
16
|
|
|
5
|
|
||
Notes receivable
|
15
|
|
|
39
|
|
||
Prepaid insurance and other expenses
|
14
|
|
|
6
|
|
||
Return assets (Note 2)
|
7
|
|
|
—
|
|
||
Derivative financial instruments (Note 18)
|
4
|
|
|
—
|
|
||
Deposits to vendors
|
1
|
|
|
2
|
|
||
Total
|
$
|
172
|
|
|
$
|
131
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Income and other taxes receivable
|
$
|
53
|
|
|
$
|
57
|
|
Investment in Tula (Note 2)
|
21
|
|
|
21
|
|
||
Investment in PolyCharge (Note 2)
|
7
|
|
|
—
|
|
||
Debt issuance costs
|
3
|
|
|
4
|
|
||
Other
|
33
|
|
|
40
|
|
||
Total
|
$
|
117
|
|
|
$
|
122
|
|
|
Estimated Useful
Lives
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||||
|
(Years)
|
|
(in millions)
|
||||||
Land
|
—
|
|
$
|
70
|
|
|
$
|
76
|
|
Land and leasehold improvements
|
3-20
|
|
26
|
|
|
26
|
|
||
Buildings
|
40
|
|
300
|
|
|
283
|
|
||
Machinery, equipment and tooling
|
3-20
|
|
1,948
|
|
|
1,810
|
|
||
Furniture and office equipment
|
3-10
|
|
81
|
|
|
64
|
|
||
Construction in progress
|
—
|
|
205
|
|
|
132
|
|
||
Total
|
|
|
2,630
|
|
|
2,391
|
|
||
Less: accumulated depreciation
|
|
|
(1,185
|
)
|
|
(1,075
|
)
|
||
Total property, net
|
|
|
$
|
1,445
|
|
|
$
|
1,316
|
|
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||
|
Estimated Useful
Lives
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
|
(Years)
|
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patents and developed technology
|
6-12
|
|
$
|
134
|
|
|
$
|
107
|
|
|
$
|
27
|
|
|
$
|
135
|
|
|
$
|
96
|
|
|
$
|
39
|
|
Customer relationships
|
3-10
|
|
110
|
|
|
94
|
|
|
16
|
|
|
97
|
|
|
90
|
|
|
7
|
|
||||||
Trade names
|
5-20
|
|
46
|
|
|
22
|
|
|
24
|
|
|
46
|
|
|
19
|
|
|
27
|
|
||||||
Total
|
|
|
290
|
|
|
223
|
|
|
67
|
|
|
278
|
|
|
205
|
|
|
73
|
|
||||||
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
—
|
|
2
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Goodwill
|
—
|
|
7
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Total
|
|
|
$
|
299
|
|
|
$
|
223
|
|
|
$
|
76
|
|
|
$
|
287
|
|
|
$
|
205
|
|
|
$
|
82
|
|
|
Year Ending December 31,
|
||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Estimated amortization expense
|
$
|
19
|
|
|
$
|
18
|
|
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Balance at January 1
|
$
|
287
|
|
|
$
|
308
|
|
Acquisitions
|
14
|
|
|
—
|
|
||
Net Former Parent transfer
|
—
|
|
|
(22
|
)
|
||
Foreign currency translation
|
(2
|
)
|
|
1
|
|
||
Balance at December 31
|
$
|
299
|
|
|
$
|
287
|
|
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Balance at January 1
|
$
|
205
|
|
|
$
|
210
|
|
Amortization
|
20
|
|
|
16
|
|
||
Net Former Parent transfer
|
—
|
|
|
(22
|
)
|
||
Foreign currency translation
|
(2
|
)
|
|
1
|
|
||
Balance at December 31
|
$
|
223
|
|
|
$
|
205
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Warranty obligations (Note 9)
|
$
|
68
|
|
|
$
|
64
|
|
Income and other taxes payable
|
63
|
|
|
63
|
|
||
Restructuring (Note 10)
|
46
|
|
|
54
|
|
||
Payroll-related obligations
|
45
|
|
|
49
|
|
||
Deferred reimbursable engineering
|
31
|
|
|
14
|
|
||
Accrued rebates
|
29
|
|
|
30
|
|
||
Freight
|
20
|
|
|
19
|
|
||
Employee benefits
|
16
|
|
|
29
|
|
||
Outside services
|
13
|
|
|
14
|
|
||
Accrued interest
|
12
|
|
|
12
|
|
||
Deferred revenue
|
5
|
|
|
10
|
|
||
Customer deposits
|
5
|
|
|
7
|
|
||
Other
|
75
|
|
|
80
|
|
||
Total
|
$
|
428
|
|
|
$
|
445
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Accrued income taxes
|
$
|
46
|
|
|
$
|
15
|
|
Warranty obligations (Note 9)
|
28
|
|
|
33
|
|
||
Restructuring (Note 10)
|
19
|
|
|
47
|
|
||
Deferred income taxes (Note 15)
|
14
|
|
|
14
|
|
||
Derivative financial instruments
|
6
|
|
|
—
|
|
||
Environmental (Note 13)
|
2
|
|
|
3
|
|
||
Other
|
8
|
|
|
7
|
|
||
Total
|
$
|
123
|
|
|
$
|
119
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Accrual balance at beginning of year
|
$
|
97
|
|
|
$
|
96
|
|
Provision for estimated warranties incurred during the year
|
40
|
|
|
37
|
|
||
Changes in estimate for pre-existing warranties
|
8
|
|
|
6
|
|
||
Settlements made during the year (in cash or in kind)
|
(44
|
)
|
|
(50
|
)
|
||
Foreign currency translation and other
|
(5
|
)
|
|
8
|
|
||
Accrual balance at end of year
|
$
|
96
|
|
|
$
|
97
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Powertrain Systems
|
$
|
37
|
|
|
$
|
92
|
|
|
$
|
151
|
|
Aftermarket
|
(2
|
)
|
|
6
|
|
|
10
|
|
|||
Total
|
$
|
35
|
|
|
$
|
98
|
|
|
$
|
161
|
|
|
Employee Termination Benefits Liability
|
|
Other Exit Costs Liability
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Accrual balance at December 31, 2016
|
$
|
79
|
|
|
$
|
4
|
|
|
$
|
83
|
|
Provision for estimated expenses incurred during the year
|
90
|
|
|
8
|
|
|
98
|
|
|||
Payments made during the year
|
(80
|
)
|
|
(8
|
)
|
|
(88
|
)
|
|||
Foreign currency and other
|
9
|
|
|
(1
|
)
|
|
8
|
|
|||
Accrual balance at December 31, 2017
|
$
|
98
|
|
|
$
|
3
|
|
|
$
|
101
|
|
Provision for estimated expenses incurred during the year
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
35
|
|
Payments made during the year
|
(64
|
)
|
|
(3
|
)
|
|
(67
|
)
|
|||
Foreign currency and other
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|||
Accrual balance at December 31, 2018
|
$
|
64
|
|
|
$
|
1
|
|
|
$
|
65
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
$750 million Term Loan A Facility, due 2022 (net of $4 and $5 unamortized issuance costs)
|
$
|
727
|
|
|
$
|
745
|
|
$800 million Senior Notes at 5.00%, due 2025 (net of $12 and $14 unamortized issuance costs and $3 and $4 discount, respectively)
|
785
|
|
|
782
|
|
||
Capital leases and other
|
19
|
|
|
8
|
|
||
Total debt
|
1,531
|
|
|
1,535
|
|
||
Less: current portion
|
(43
|
)
|
|
(20
|
)
|
||
Long-term debt
|
$
|
1,488
|
|
|
$
|
1,515
|
|
|
Debt Obligations
|
||
|
(in millions)
|
||
2019
|
$
|
43
|
|
2020
|
39
|
|
|
2021
|
76
|
|
|
2022
|
582
|
|
|
2023
|
1
|
|
|
Thereafter
|
809
|
|
|
Total
|
$
|
1,550
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
|
LIBOR plus
|
|
ABR plus
|
|
LIBOR Plus
|
|
ABR plus
|
||||
Revolving Credit Facility
|
1.45
|
%
|
|
0.45
|
%
|
|
1.45
|
%
|
|
0.45
|
%
|
Term Loan A Facility
|
1.75
|
%
|
|
0.75
|
%
|
|
1.75
|
%
|
|
0.75
|
%
|
|
Applicable Rate
|
|
Borrowings as of December 31, 2018 (in millions)
|
|
Rates effective as of December 31, 2018
|
|||
Term Loan A Facility
|
LIBOR plus 1.75%
|
|
$
|
731
|
|
|
4.188
|
%
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Benefit obligation at beginning of year
|
$
|
1,604
|
|
|
$
|
1,405
|
|
Service cost
|
37
|
|
|
34
|
|
||
Interest cost
|
36
|
|
|
34
|
|
||
Actuarial (gain) loss
|
(112
|
)
|
|
68
|
|
||
Benefits paid
|
(47
|
)
|
|
(43
|
)
|
||
Impact of curtailments
|
—
|
|
|
(20
|
)
|
||
Plan amendments and other
|
20
|
|
|
—
|
|
||
Transfer of plan obligations to Former Parent
|
—
|
|
|
(8
|
)
|
||
Exchange rate movements and other
|
(96
|
)
|
|
134
|
|
||
Benefit obligation at end of year
|
1,442
|
|
|
1,604
|
|
||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
1,074
|
|
|
880
|
|
||
Actual return on plan assets
|
(36
|
)
|
|
103
|
|
||
Contributions
|
47
|
|
|
48
|
|
||
Benefits paid
|
(47
|
)
|
|
(43
|
)
|
||
Net transfers from Former Parent
|
—
|
|
|
2
|
|
||
Exchange rate movements and other
|
(62
|
)
|
|
84
|
|
||
Fair value of plan assets at end of year
|
976
|
|
|
1,074
|
|
||
Underfunded status
|
(466
|
)
|
|
(530
|
)
|
||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
||||
Non-current assets
|
1
|
|
|
—
|
|
||
Current liabilities
|
(1
|
)
|
|
—
|
|
||
Non-current liabilities
|
(466
|
)
|
|
(530
|
)
|
||
Total
|
(466
|
)
|
|
(530
|
)
|
||
Amounts recognized in accumulated other comprehensive income consist of (pre-tax):
|
|
|
|
||||
Actuarial loss
|
285
|
|
|
356
|
|
||
Prior service cost
|
21
|
|
|
—
|
|
||
Total
|
$
|
306
|
|
|
$
|
356
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
Plans with ABO in Excess of Plan Assets
|
||||||
PBO
|
$
|
1,420
|
|
|
$
|
1,580
|
|
ABO
|
1,290
|
|
|
1,422
|
|
||
Fair value of plan assets at end of year
|
954
|
|
|
1,051
|
|
||
|
Plans with Plan Assets in Excess of ABO
|
||||||
PBO
|
$
|
22
|
|
|
$
|
24
|
|
ABO
|
18
|
|
|
18
|
|
||
Fair value of plan assets at end of year
|
22
|
|
|
23
|
|
||
|
Total
|
||||||
PBO
|
$
|
1,442
|
|
|
$
|
1,604
|
|
ABO
|
1,308
|
|
|
1,440
|
|
||
Fair value of plan assets at end of year
|
976
|
|
|
1,074
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Service cost
|
$
|
37
|
|
|
$
|
34
|
|
|
$
|
29
|
|
Interest cost
|
36
|
|
|
34
|
|
|
38
|
|
|||
Expected return on plan assets
|
(54
|
)
|
|
(47
|
)
|
|
(46
|
)
|
|||
Curtailment loss
|
—
|
|
|
—
|
|
|
3
|
|
|||
Amortization of actuarial losses
|
24
|
|
|
26
|
|
|
6
|
|
|||
Net periodic benefit cost
|
$
|
43
|
|
|
$
|
47
|
|
|
$
|
30
|
|
|
Pension Benefits
|
||||
|
2018
|
|
2017
|
||
Weighted-average discount rate
|
2.75
|
%
|
|
2.46
|
%
|
Weighted-average rate of increase in compensation levels
|
3.96
|
%
|
|
3.98
|
%
|
|
Pension Benefits
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Weighted-average discount rate
|
2.46
|
%
|
|
2.58
|
%
|
|
3.72
|
%
|
Weighted-average rate of increase in compensation levels
|
3.98
|
%
|
|
3.97
|
%
|
|
3.73
|
%
|
Weighted-average expected long-term rate of return on plan assets
|
5.50
|
%
|
|
5.50
|
%
|
|
5.75
|
%
|
Change in Assumption
|
|
Impact on
Pension Expense
|
|
Impact on PBO
|
25 basis point (“bp”) decrease in discount rate
|
|
+ $3 million
|
|
+ $69 million
|
25 bp increase in discount rate
|
|
- $5 million
|
|
- $64 million
|
25 bp decrease in long-term expected return on assets
|
|
+ $2 million
|
|
—
|
25 bp increase in long-term expected return on assets
|
|
- $2 million
|
|
—
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||
Asset Category
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash
|
|
$
|
55
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Equity mutual funds
|
|
258
|
|
|
—
|
|
|
258
|
|
|
—
|
|
||||
Bond mutual funds
|
|
464
|
|
|
—
|
|
|
464
|
|
|
—
|
|
||||
Real estate trust funds
|
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
||||
Hedge funds
|
|
85
|
|
|
—
|
|
|
2
|
|
|
83
|
|
||||
Debt securities
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
976
|
|
|
$
|
69
|
|
|
$
|
733
|
|
|
$
|
174
|
|
|
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||
Asset Category
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash
|
|
$
|
69
|
|
|
$
|
69
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Equity mutual funds
|
|
444
|
|
|
—
|
|
|
444
|
|
|
—
|
|
||||
Bond mutual funds
|
|
385
|
|
|
—
|
|
|
385
|
|
|
—
|
|
||||
Real estate trust funds
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||
Hedge funds
|
|
102
|
|
|
—
|
|
|
2
|
|
|
100
|
|
||||
Debt securities
|
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
1,074
|
|
|
$
|
84
|
|
|
$
|
840
|
|
|
$
|
150
|
|
|
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
|
||||||
|
Real Estate Trust Fund
|
|
Hedge Funds
|
||||
|
(in millions)
|
||||||
Beginning balance at January 1, 2017
|
$
|
22
|
|
|
$
|
85
|
|
Actual return on plan assets:
|
|
|
|
||||
Relating to assets still held at the reporting date
|
3
|
|
|
7
|
|
||
Purchases, sales and settlements
|
23
|
|
|
—
|
|
||
Foreign currency translation and other
|
2
|
|
|
8
|
|
||
Ending balance at December 31, 2017
|
$
|
50
|
|
|
$
|
100
|
|
Actual return on plan assets:
|
|
|
|
||||
Relating to assets still held at the reporting date
|
$
|
9
|
|
|
$
|
(2
|
)
|
Purchases, sales and settlements
|
36
|
|
|
(9
|
)
|
||
Foreign currency translation and other
|
(4
|
)
|
|
(6
|
)
|
||
Ending balance at December 31, 2018
|
$
|
91
|
|
|
$
|
83
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Internal Combustion Engine Products
|
$
|
2,935
|
|
|
$
|
2,860
|
|
|
$
|
2,634
|
|
Electronics & Electrification
|
1,049
|
|
|
1,042
|
|
|
928
|
|
|||
Independent Aftermarket
|
638
|
|
|
621
|
|
|
594
|
|
|||
Original Equipment Service
|
236
|
|
|
326
|
|
|
330
|
|
|||
Total
|
$
|
4,858
|
|
|
$
|
4,849
|
|
|
$
|
4,486
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Current income tax expense
|
$
|
99
|
|
|
$
|
113
|
|
|
$
|
62
|
|
Deferred income tax benefit, net
|
(108
|
)
|
|
(7
|
)
|
|
(12
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(9
|
)
|
|
$
|
106
|
|
|
$
|
50
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Theoretical income taxes at the U.K. weighted average rate
|
$
|
69
|
|
|
$
|
81
|
|
|
$
|
64
|
|
Income taxed at other rates
|
(42
|
)
|
|
(10
|
)
|
|
(54
|
)
|
|||
Losses not benefitted
|
9
|
|
|
28
|
|
|
24
|
|
|||
Other change in tax reserves
|
17
|
|
|
4
|
|
|
5
|
|
|||
Change in valuation allowances
|
(78
|
)
|
|
(12
|
)
|
|
—
|
|
|||
Withholding taxes
|
11
|
|
|
11
|
|
|
5
|
|
|||
Change in tax law
|
2
|
|
|
7
|
|
|
4
|
|
|||
Other adjustments
|
3
|
|
|
(3
|
)
|
|
2
|
|
|||
Total income tax (benefit) expense
|
$
|
(9
|
)
|
|
$
|
106
|
|
|
$
|
50
|
|
Effective tax rate
|
(2
|
)%
|
|
25
|
%
|
|
16
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Pension
|
$
|
83
|
|
|
$
|
94
|
|
Employee benefits
|
4
|
|
|
6
|
|
||
Net operating loss carryforwards
|
236
|
|
|
177
|
|
||
Warranty and other liabilities
|
35
|
|
|
44
|
|
||
Intangible assets
|
10
|
|
|
6
|
|
||
Fixed assets
|
—
|
|
|
1
|
|
||
Other
|
51
|
|
|
38
|
|
||
Total gross deferred tax assets
|
419
|
|
|
366
|
|
||
Less: valuation allowances
|
(124
|
)
|
|
(196
|
)
|
||
Total deferred tax assets (1)
|
$
|
295
|
|
|
$
|
170
|
|
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
$
|
16
|
|
|
$
|
—
|
|
Tax on unremitted profits of certain foreign subsidiaries
|
13
|
|
|
6
|
|
||
Total gross deferred tax liabilities
|
29
|
|
|
6
|
|
||
Net deferred tax assets
|
$
|
266
|
|
|
$
|
164
|
|
(1)
|
Reflects gross amount before jurisdictional netting of deferred tax assets and liabilities.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Long-term assets
|
$
|
280
|
|
|
$
|
178
|
|
Long-term liabilities
|
(14
|
)
|
|
(14
|
)
|
||
Total deferred tax asset
|
$
|
266
|
|
|
$
|
164
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Balance at beginning of year
|
$
|
22
|
|
|
$
|
9
|
|
|
$
|
16
|
|
Additions related to current year
|
16
|
|
|
3
|
|
|
3
|
|
|||
Additions (reductions) related to prior years
|
1
|
|
|
2
|
|
|
(10
|
)
|
|||
Transfers to/from Former Parent
|
7
|
|
|
8
|
|
|
—
|
|
|||
Balance at end of year
|
$
|
46
|
|
|
$
|
22
|
|
|
$
|
9
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income attributable to Delphi Technologies
|
$
|
358
|
|
|
$
|
285
|
|
|
$
|
236
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average ordinary shares outstanding, basic
|
88.68
|
|
|
88.61
|
|
|
88.61
|
|
|||
Dilutive shares related to RSUs
|
0.21
|
|
|
0.05
|
|
|
—
|
|
|||
Weighted average ordinary shares outstanding, including dilutive shares
|
88.89
|
|
|
88.66
|
|
|
88.61
|
|
|||
|
|
|
|
|
|
||||||
Net income per share attributable to Delphi Technologies:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.04
|
|
|
$
|
3.22
|
|
|
$
|
2.66
|
|
Diluted
|
$
|
4.03
|
|
|
$
|
3.21
|
|
|
$
|
2.66
|
|
Anti-dilutive securities share impact
|
—
|
|
|
—
|
|
|
—
|
|
|
Dividend
|
|
Amount
|
||||
|
Per Share
|
|
(in millions)
|
||||
2018:
|
|
|
|
||||
Fourth quarter
|
$
|
0.17
|
|
|
$
|
15
|
|
Third quarter
|
0.17
|
|
|
15
|
|
||
Second quarter
|
0.17
|
|
|
15
|
|
||
First quarter
|
0.17
|
|
|
15
|
|
||
Total
|
$
|
0.68
|
|
|
$
|
60
|
|
|
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Total number of shares repurchased
|
293,695
|
|
|
—
|
|
|
—
|
|
|||
Average price paid per share
|
$
|
34.05
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total (in millions)
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
(85
|
)
|
|
$
|
(419
|
)
|
|
$
|
(339
|
)
|
Aggregate adjustment for the year (1)
|
(80
|
)
|
|
68
|
|
|
(80
|
)
|
|||
Net transfers from Former Parent
|
—
|
|
|
266
|
|
|
—
|
|
|||
Balance at end of year
|
(165
|
)
|
|
(85
|
)
|
|
(419
|
)
|
|||
|
|
|
|
|
|
||||||
Gains (losses) on derivatives:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other comprehensive income before reclassifications (net tax effect of $0 million, $0 million and $0 million)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reclassification to income (net tax effect of $0 million, $0 million and $0 million)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Pension and postretirement plans:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
(286
|
)
|
|
$
|
(292
|
)
|
|
$
|
(157
|
)
|
Other comprehensive income before reclassifications (net tax effect of $5, $8 and $29)
|
22
|
|
|
(15
|
)
|
|
(140
|
)
|
|||
Reclassification to income (net tax effect of $5, $5 and $1)
|
19
|
|
|
21
|
|
|
5
|
|
|||
Balance at end of year
|
(245
|
)
|
|
(286
|
)
|
|
(292
|
)
|
|||
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss, end of year
|
$
|
(412
|
)
|
|
$
|
(371
|
)
|
|
$
|
(711
|
)
|
(1)
|
Includes a loss of
$9 million
,
$0 million
, and
$0 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively, related to the foreign currency impact of intra-entity loans that are of a long-term investment nature. Also included are losses of
$3 million
,
$0 million
and
$0 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively, related to non-derivative net investment hedges. Refer to Note 18. Derivatives and Hedging Activities for further description of these hedges.
|
(1)
|
These accumulated other comprehensive loss components are components of net periodic pension cost (see Note 12. Pension Benefits for additional details).
|
Foreign Currency
|
|
Quantity
Hedged |
|
Unit of
Measure |
|
Notional Amount
(USD Equivalent) |
|||
|
|
(in millions)
|
|||||||
Chinese Yuan Renminbi
|
|
878
|
|
|
RMB
|
|
$
|
130
|
|
Euro
|
|
83
|
|
|
EUR
|
|
100
|
|
|
Mexican Peso
|
|
901
|
|
|
MXN
|
|
50
|
|
|
Singapore Dollar
|
|
47
|
|
|
SGD
|
|
30
|
|
|
Turkish Lira
|
|
103
|
|
|
TRY
|
|
20
|
|
|
South Korean Won
|
|
5,709
|
|
|
KRW
|
|
10
|
|
|
British Pound Sterling
|
|
6
|
|
|
GBP
|
|
10
|
|
Year Ended December 31, 2018
|
Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Reclassified from OCI into Income
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Foreign currency derivatives
|
$
|
6
|
|
|
$
|
2
|
|
Interest rate swaps
|
(3
|
)
|
|
—
|
|
||
Derivatives designated as net investment hedges:
|
|
|
|
||||
Cross-currency swaps
|
(3
|
)
|
|
—
|
|
||
Total
|
$
|
—
|
|
|
$
|
2
|
|
|
|
|
|
||||
|
|
|
Loss Recognized in Income
|
||||
|
|
|
|
||||
|
|
|
(in millions)
|
||||
Derivatives not designated
|
$
|
(9
|
)
|
||||
Total
|
$
|
(9
|
)
|
|
Total
|
|
Quoted Prices in Active Markets
Level 1 |
|
Significant Other Observable Inputs
Level 2 |
|
Significant Unobservable Inputs
Level 3 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions)
|
||||||||||||||
As of December 31, 2018
|
|
||||||||||||||
Foreign currency derivatives
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Total
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
Total
|
|
Quoted Prices in Active Markets
Level 1 |
|
Significant Other Observable Inputs
Level 2 |
|
Significant Unobservable Inputs
Level 3 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in millions)
|
||||||||||||||
As of December 31, 2018
|
|
||||||||||||||
Interest rate swaps
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
Cross-currency swaps
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Interest income
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Components of net periodic benefit cost other than service cost (Note 12)
|
(6
|
)
|
|
(13
|
)
|
|
(1
|
)
|
|||
Other
|
7
|
|
|
(2
|
)
|
|
—
|
|
|||
Other income (expense), net
|
$
|
9
|
|
|
$
|
(11
|
)
|
|
$
|
(1
|
)
|
Metric
|
2018 Grant
|
|
|
2016 - 2017 Former Parent Grants
|
|
|
2013 - 2015 Former Parent Grants
|
Average return on net assets (1)
|
50%
|
|
|
50%
|
|
|
50%
|
Cumulative net income
|
25%
|
|
|
25%
|
|
|
N/A
|
Cumulative earnings per share (2)
|
N/A
|
|
|
N/A
|
|
|
30%
|
Relative total shareholder return (3)
|
25%
|
|
|
25%
|
|
|
20%
|
(1)
|
Average return on net assets is measured by the Company’s tax-affected operating income divided by average net working capital plus average net property, plant and equipment for each calendar year during the respective performance period.
|
(2)
|
Cumulative earnings per share is measured by net income attributable to Delphi Technologies divided by the weighted average number of diluted shares outstanding for the respective
three
-year performance period.
|
(3)
|
Relative total shareholder return is measured by comparing the average closing price per share of the Company’s ordinary shares for all available trading days in the fourth quarter of the end of the performance period to the average closing price per share of the Company’s ordinary shares for all available trading days in the fourth quarter of the year preceding the grant, including dividends, and assessed against a comparable measure of competitor and peer group companies.
|
Grant Date
|
|
RSUs Granted
|
|
Grant Date Fair Value
|
|
Time-Based Award Vesting Dates
|
|
Performance-Based Award Vesting Date
|
|
|
(in millions)
|
|
|
|
|
||
February 2018
|
|
0.3
|
|
$16
|
|
Annually on the anniversary grant date, 2019-2021
|
|
December 31, 2020
|
|
RSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Nonvested, January 1, 2016
|
251
|
|
|
$
|
74.66
|
|
Granted
|
155
|
|
|
68.35
|
|
|
Vested
|
(158
|
)
|
|
65.91
|
|
|
Forfeited
|
(28
|
)
|
|
74.10
|
|
|
Nonvested, December 31, 2016
|
220
|
|
|
76.54
|
|
|
Granted
|
312
|
|
|
63.71
|
|
|
Vested
|
(183
|
)
|
|
44.93
|
|
|
Forfeited
|
(25
|
)
|
|
76.18
|
|
|
Conversion and employee transfers (1)
|
388
|
|
|
|
||
Nonvested, December 31, 2017 (2)
|
712
|
|
|
37.34
|
|
|
Granted
|
591
|
|
|
47.56
|
|
|
Vested
|
(209
|
)
|
|
38.79
|
|
|
Forfeited
|
(415
|
)
|
|
48.50
|
|
|
Nonvested, December 31, 2018
|
679
|
|
|
42.70
|
|
(1)
|
Reflects the conversion of outstanding equity awards to executives and non-employee directors under the Former Parent Plan into Delphi Technologies equity awards in conjunction with the Separation, along with the transfer of certain corporate employees to Delphi Technologies.
|
(2)
|
Nonvested RSUs and the corresponding weighted average grant date fair value as of December 31, 2017 are presented on a Delphi Technologies basis using the conversion factor described above in connection with the Separation.
|
•
|
Powertrain Systems, which manufactures fuel injection systems as well as various other powertrain products including valvetrain, fuel delivery modules, ignition coils, canisters, sensors, valves and actuators. This segment also offers electronic control modules and corresponding software, algorithms and calibration that provide centralized and reliable management of various powertrain components. Additionally, we provide power electronics solutions that include supervisory controllers and software, along with DC/DC converters and inverters.
|
•
|
Aftermarket, which sells aftermarket products to independent aftermarket and original equipment service customers. This segment also supplies a wide range of aftermarket products and services covering the fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories.
|
•
|
Eliminations and Other, which includes the elimination of inter-segment transactions.
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other (1)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
4,274
|
|
|
$
|
874
|
|
|
$
|
(290
|
)
|
|
$
|
4,858
|
|
Depreciation and amortization
|
$
|
192
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
197
|
|
Adjusted operating income
|
$
|
467
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
548
|
|
Operating income (2)
|
$
|
368
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
434
|
|
Equity income
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Net income attributable to noncontrolling interest
|
$
|
21
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
22
|
|
Capital expenditures
|
$
|
241
|
|
|
$
|
5
|
|
|
$
|
19
|
|
|
$
|
265
|
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other (1)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
4,222
|
|
|
$
|
947
|
|
|
$
|
(320
|
)
|
|
$
|
4,849
|
|
Depreciation and amortization (3)
|
$
|
194
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
201
|
|
Adjusted operating income
|
$
|
562
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
637
|
|
Operating income (4)
|
$
|
392
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
446
|
|
Equity income
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Net income attributable to noncontrolling interest
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34
|
|
Capital expenditures
|
$
|
189
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
197
|
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other (1)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
3,837
|
|
|
$
|
924
|
|
|
$
|
(275
|
)
|
|
$
|
4,486
|
|
Depreciation and amortization (5)
|
$
|
202
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
210
|
|
Adjusted operating income
|
$
|
418
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
512
|
|
Operating income (6)
|
$
|
239
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
320
|
|
Net income attributable to noncontrolling interest
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32
|
|
Capital expenditures
|
$
|
169
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
171
|
|
(1)
|
Eliminations and Other includes the elimination of inter-segment transactions. Capital expenditures amounts are attributable to corporate administrative and support functions, including corporate headquarters and certain technical centers.
|
(2)
|
Includes separation costs recorded in 2018 related to one-time incremental expenses associated with becoming a stand-alone publicly-traded company of
$61 million
for Powertrain Systems and
$17 million
for Aftermarket.
|
(3)
|
Includes asset impairment charges of
$12 million
within Powertrain Systems.
|
(4)
|
Includes charges recorded in 2017 related to costs associated with employee termination benefits and other exit costs of
$92 million
for Powertrain Systems and
$6 million
for Aftermarket.
|
(5)
|
Includes asset impairment charges of
$28 million
within Powertrain Systems.
|
(6)
|
Includes charges recorded in 2016 related to costs associated with employee termination benefits and other exit costs of
$151 million
for Powertrain Systems and
$10 million
for Aftermarket.
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other (1)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance as of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Investment in affiliates
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44
|
|
Goodwill
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Total segment assets
|
$
|
4,829
|
|
|
$
|
1,025
|
|
|
$
|
(1,961
|
)
|
|
$
|
3,893
|
|
Balance as of December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Investment in affiliates
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37
|
|
Goodwill
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Total segment assets
|
$
|
4,451
|
|
|
$
|
794
|
|
|
$
|
(1,452
|
)
|
|
$
|
3,793
|
|
(1)
|
Eliminations and Other includes the elimination of inter-segment transactions.
|
|
Powertrain
Systems |
|
Aftermarket
|
|
Eliminations
and Other |
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
467
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
548
|
|
Restructuring
|
(37
|
)
|
|
2
|
|
|
—
|
|
|
(35
|
)
|
||||
Separation costs (1)
|
(61
|
)
|
|
(17
|
)
|
|
—
|
|
|
(78
|
)
|
||||
Asset impairments
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Operating income
|
$
|
368
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
434
|
|
|
Interest expense
|
|
|
|
|
|
|
(79
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
9
|
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
364
|
|
|||||||
Income tax benefit
|
|
|
|
|
|
|
9
|
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
7
|
|
|||||||
Net income
|
|
|
|
|
|
|
380
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
22
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
358
|
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
562
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
637
|
|
Restructuring
|
(92
|
)
|
|
(6
|
)
|
|
—
|
|
|
(98
|
)
|
||||
Separation costs (1)
|
(66
|
)
|
|
(15
|
)
|
|
—
|
|
|
(81
|
)
|
||||
Asset impairments
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||
Operating income
|
$
|
392
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
446
|
|
|
Interest expense
|
|
|
|
|
|
|
(15
|
)
|
|||||||
Other expense, net
|
|
|
|
|
|
|
(11
|
)
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
420
|
|
|||||||
Income tax expense
|
|
|
|
|
|
|
(106
|
)
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
5
|
|
|||||||
Net income
|
|
|
|
|
|
|
319
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
34
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
285
|
|
|
Powertrain Systems
|
|
Aftermarket
|
|
Eliminations and Other
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
For the Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Adjusted operating income
|
$
|
418
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
512
|
|
Restructuring
|
(151
|
)
|
|
(10
|
)
|
|
—
|
|
|
(161
|
)
|
||||
Other acquisition and portfolio project costs
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Asset impairments
|
(28
|
)
|
|
(1
|
)
|
|
—
|
|
|
(29
|
)
|
||||
Operating income
|
$
|
239
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
320
|
|
|
Interest expense
|
|
|
|
|
|
|
(1
|
)
|
|||||||
Other expense, net
|
|
|
|
|
|
|
(1
|
)
|
|||||||
Income before income taxes and equity income
|
|
|
|
|
|
|
318
|
|
|||||||
Income tax expense
|
|
|
|
|
|
|
(50
|
)
|
|||||||
Equity income, net of tax
|
|
|
|
|
|
|
—
|
|
|||||||
Net income
|
|
|
|
|
|
|
268
|
|
|||||||
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
32
|
|
|||||||
Net income attributable to Delphi Technologies
|
|
|
|
|
|
|
$
|
236
|
|
(1)
|
Prior to December 4, 2017 separation costs include one-time expenses related to the separation from our Former Parent. For periods subsequent to December 4, 2017, these costs include one-time incremental expenses associated with becoming a stand-alone publicly-traded company.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Net Sales
|
|
Net
Property (1)
|
|
Net Sales
|
|
Net
Property (1)
|
|
Net Sales
|
|
Net
Property (1)
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
North America (2)
|
$
|
1,367
|
|
|
$
|
314
|
|
|
$
|
1,345
|
|
|
$
|
288
|
|
|
$
|
1,303
|
|
|
$
|
236
|
|
Europe (3)
|
2,142
|
|
|
681
|
|
|
2,030
|
|
|
677
|
|
|
1,995
|
|
|
613
|
|
||||||
Asia Pacific (4)
|
1,208
|
|
|
429
|
|
|
1,335
|
|
|
328
|
|
|
1,071
|
|
|
270
|
|
||||||
South America
|
141
|
|
|
21
|
|
|
139
|
|
|
23
|
|
|
117
|
|
|
23
|
|
||||||
Total
|
$
|
4,858
|
|
|
$
|
1,445
|
|
|
$
|
4,849
|
|
|
$
|
1,316
|
|
|
$
|
4,486
|
|
|
$
|
1,142
|
|
(1)
|
Net property data represents property, plant and equipment, net of accumulated depreciation.
|
(2)
|
Includes net sales and machinery, equipment and tooling that relate to the Company’s maquiladora operations located in Mexico. These assets are utilized to produce products sold to customers located in the United States.
|
(3)
|
Includes the Company’s country of domicile, Jersey, and the country of the Company’s principal executive offices, the United Kingdom. The Company had no sales in Jersey in any period. The Company had net sales of
$799 million
,
$733 million
, and
$674 million
in the United Kingdom for the years ended
December 31, 2018
,
2017
and
2016
, respectively. The largest portion of net sales in Europe was in the United Kingdom for all years presented. The Company had net property in the United Kingdom of
$152 million
,
$157 million
, and
$146 million
as of
December 31, 2018
,
2017
and
2016
, respectively.
|
(4)
|
Net sales and net property in Asia Pacific are primarily attributable to China.
|
|
Three Months Ended
|
|
|
||||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
Total
|
||||||||||
|
(in millions, except per share amounts)
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,296
|
|
|
$
|
1,232
|
|
|
$
|
1,159
|
|
|
$
|
1,171
|
|
|
$
|
4,858
|
|
Cost of sales
|
1,046
|
|
|
991
|
|
|
965
|
|
|
959
|
|
|
3,961
|
|
|||||
Gross profit
|
$
|
250
|
|
|
$
|
241
|
|
|
$
|
194
|
|
|
$
|
212
|
|
|
$
|
897
|
|
Operating income
|
$
|
138
|
|
|
$
|
122
|
|
|
$
|
81
|
|
|
$
|
93
|
|
|
434
|
|
|
Net income
|
105
|
|
|
90
|
|
|
43
|
|
|
$
|
142
|
|
|
380
|
|
||||
Net income attributable to noncontrolling interest
|
7
|
|
|
4
|
|
|
4
|
|
|
$
|
7
|
|
|
22
|
|
||||
Net income attributable to Delphi Technologies (1)
|
$
|
98
|
|
|
$
|
86
|
|
|
$
|
39
|
|
|
$
|
135
|
|
|
$
|
358
|
|
Basic net income per share attributable to Delphi Technologies (2)
|
$
|
1.10
|
|
|
$
|
0.97
|
|
|
$
|
0.44
|
|
|
$
|
1.53
|
|
|
$
|
4.04
|
|
Weighted average number of basic shares outstanding
|
88.71
|
|
|
88.78
|
|
|
88.74
|
|
|
88.49
|
|
|
88.68
|
|
|||||
Diluted net income per share attributable to Delphi Technologies (2)
|
$
|
1.10
|
|
|
$
|
0.97
|
|
|
$
|
0.44
|
|
|
$
|
1.52
|
|
|
$
|
4.03
|
|
Weighted average number of diluted shares outstanding
|
88.92
|
|
|
89.05
|
|
|
88.97
|
|
|
88.63
|
|
|
88.89
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,168
|
|
|
$
|
1,187
|
|
|
$
|
1,205
|
|
|
$
|
1,289
|
|
|
$
|
4,849
|
|
Cost of sales (3)
|
926
|
|
|
947
|
|
|
976
|
|
|
1,032
|
|
|
3,881
|
|
|||||
Gross profit
|
$
|
242
|
|
|
$
|
240
|
|
|
$
|
229
|
|
|
$
|
257
|
|
|
$
|
968
|
|
Operating income (4)
|
$
|
148
|
|
|
$
|
79
|
|
|
$
|
113
|
|
|
$
|
106
|
|
|
$
|
446
|
|
Net income
|
111
|
|
|
56
|
|
|
87
|
|
|
65
|
|
|
319
|
|
|||||
Net income attributable to noncontrolling interest
|
8
|
|
|
8
|
|
|
9
|
|
|
9
|
|
|
34
|
|
|||||
Net income attributable to Delphi Technologies
|
$
|
103
|
|
|
$
|
48
|
|
|
$
|
78
|
|
|
$
|
56
|
|
|
$
|
285
|
|
Basic net income per share attributable to Delphi Technologies (2)
|
$
|
1.16
|
|
|
$
|
0.54
|
|
|
$
|
0.88
|
|
|
$
|
0.63
|
|
|
$
|
3.22
|
|
Weighted average number of basic shares outstanding (5)
|
88.61
|
|
|
88.61
|
|
|
88.61
|
|
|
88.61
|
|
|
88.61
|
|
|||||
Diluted net income per share attributable to Delphi Technologies (2)
|
$
|
1.16
|
|
|
$
|
0.54
|
|
|
$
|
0.88
|
|
|
$
|
0.63
|
|
|
$
|
3.21
|
|
Weighted average number of diluted shares outstanding (5)
|
88.61
|
|
|
88.61
|
|
|
88.61
|
|
|
88.79
|
|
|
88.66
|
|
(1)
|
In the fourth quarter of 2018, as a result of the release of valuation allowances in France and the recording of a valuation allowance in Luxembourg, the Company recorded a net income tax benefit of
$78 million
.
|
(2)
|
Due to the use of the weighted average shares outstanding for each quarter for computing earnings per share, the sum of the quarterly per share amounts may not equal the per share amount for the year.
|
(3)
|
In the first quarter of 2017, as a result of a commercial agreement entered into for the reimbursement of previously incurred development costs, the Company recorded a reduction of
$13 million
to cost of sales during the three months ended March 31, 2017.
|
(4)
|
In the second quarter of 2017, the Company recorded restructuring charges totaling
$66 million
, which includes employee-related and other costs,
$53 million
of which related to the closure of a European manufacturing site.
|
(5)
|
Net income per share for periods prior to the Distribution Date were calculated using the number of shares that were distributed to Former Parent shareholders upon the Separation (
88,613,262
shares).
|
|
|
|
Page No.
|
— Report of Independent Registered Public Accounting Firm
|
|
— Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017 and 2016
|
|
— Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 2016
|
|
— Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
— Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 2016
|
|
— Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2018, 2017 and 2016
|
|
— Notes to Consolidated Financial Statements
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||
|
Balance at Beginning of Period
|
|
Charged to Costs and Expenses
|
|
Deductions
|
|
Other Activity
|
|
Balance at End of Period
|
||||||||||
|
(in millions)
|
||||||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
16
|
|
|
$
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
18
|
|
Tax valuation allowance (a)
|
$
|
196
|
|
|
$
|
71
|
|
|
$
|
(144
|
)
|
|
$
|
1
|
|
|
$
|
124
|
|
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
16
|
|
Tax valuation allowance (a)(b)
|
$
|
70
|
|
|
$
|
20
|
|
|
$
|
(12
|
)
|
|
$
|
118
|
|
|
$
|
196
|
|
December 31, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
9
|
|
Tax valuation allowance (a)
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
70
|
|
(a)
|
Additions Charged to Costs and Expenses are primarily related to taxable losses for which the tax benefit has been reserved.
|
(b)
|
Other Activity primarily represents the transfer of certain deferred tax assets and the related valuation allowance from the Former Parent as a result of the Separation.
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
+10.20
|
|
|
+10.21
|
|
|
+10.22
|
|
|
+10.23
|
|
|
+10.24
|
|
|
+10.25
|
|
|
*+10.26
|
|
|
+10.27
|
|
|
+10.28
|
|
|
+10.29
|
|
|
*+10.30
|
|
|
*21.1
|
|
|
*23.1
|
|
|
*31.1
|
|
|
*31.2
|
|
|
*32.1
|
|
|
*32.2
|
|
|
|
|
|
Exhibit
Number |
|
Description
|
*101.INS
|
|
XBRL Instance Document#
|
*101.SCH
|
|
XBRL Taxonomy Extension Schema Document#
|
*101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document#
|
*101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document#
|
*101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document#
|
*101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document#
|
|
|
|
|
|
DELPHI TECHNOLOGIES PLC
|
|
|
|
|
|
/s/ Vivid Sehgal
|
|
|
By: Vivid Sehgal
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ Richard F. Dauch
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Richard F. Dauch
|
|
|
|
|
|
/s/ Vivid Sehgal
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Vivid Sehgal
|
|
|
|
|
|
/s/ Jeffrey M. Sesplankis
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
Jeffrey M. Sesplankis
|
|
|
|
|
|
/s/ Timothy M. Manganello
|
|
Chairman of the Board of Directors
|
Timothy M. Manganello
|
|
|
|
|
|
/s/ Robin J. Adams
|
|
Director
|
Robin J. Adams
|
|
|
|
|
|
/s/ Joseph S. Cantie
|
|
Director
|
Joseph S. Cantie
|
|
|
|
|
|
/s/ Nelda J. Connors
|
|
Director
|
Nelda J. Connors
|
|
|
|
|
|
/s/ Gary L. Cowger
|
|
Director
|
Gary L. Cowger
|
|
|
|
|
|
/s/ David S. Haffner
|
|
Director
|
David S. Haffner
|
|
|
|
|
|
/s/ Helmut Leube
|
|
Director
|
Helmut Leube
|
|
|
|
|
|
/s/ Hari N. Nair
|
|
Director
|
Hari N. Nair
|
|
|
|
|
|
/s/ MaryAnn Wright
|
|
Director
|
MaryAnn Wright
|
|
|
1.
|
The adjusted Time-Based RSU Award represents the right to receive Delphi Technologies ordinary shares and dividend equivalents (if applicable) with respect thereto, rather than ordinary shares of Aptiv and dividend equivalents (if applicable) with respect thereto, and references to Aptiv ordinary shares will be deemed references to Delphi Technologies ordinary shares, as applicable.
|
2.
|
The number of Delphi Technologies ordinary shares subject to the adjusted Time-Based RSU Award will be adjusted as described in the Employee Matters Agreement.
|
3.
|
Where the context requires, references in the original Time-Based RSU Award to Aptiv or its subsidiaries or affiliates (or their policies or administrative entities) will be deemed references to Delphi Technologies or its subsidiaries or affiliates (or their policies or administrative entities), as applicable, except as provided below. Further, the original Time-Based RSU Award will be deemed modified to provide that any notices, requests or other communications under the adjusted Time-Based RSU Award will be delivered,
|
4.
|
If the original Time-Based RSU Award provides that it may vest on a “Change in Control,” or in the event of certain terminations of employment following a “Change in Control,” such vesting provisions will be triggered only in connection with a Change in Control of Delphi Technologies, as defined in the Delphi Technologies Equity Plan (and not a “Change in Control” of Aptiv, as defined in the applicable Aptiv Equity Plan). If applicable to those vesting provisions, references to Aptiv or the “Committee” in the definition of “Replacement Award” and in the related definitions of “Cause” and “Good Reason” in the original Time-Based RSU Award will be deemed to be references to Delphi Technologies and the Delphi Technologies Compensation Committee, respectively.
|
5.
|
In all cases (and even if the adjusted Time-Based RSU Award vests in connection with a Change in Control of Delphi Technologies), to the extent necessary to avoid a tax or penalty under Section 409A of the Internal Revenue Code (“
Section 409A
”), the payment or settlement of the adjusted Time-Based RSU Award will not be made until the earliest time permitted under the terms of such award that will not trigger a tax or penalty under Section 409A.
|
1.
|
The adjusted PRSU Award represents the right to receive Delphi Technologies ordinary shares and dividend equivalents (if any) with respect thereto, rather than ordinary shares of Aptiv and dividend equivalents (if any) with respect thereto, and references to Aptiv ordinary shares will be deemed references to Delphi Technologies ordinary shares, as applicable.
|
2.
|
The “Target” number of Delphi Technologies ordinary shares subject to the adjusted PRSU Award will be adjusted as described in the Employee Matters Agreement.
|
3.
|
The performance metrics and goals or their achievement as set forth in the original PRSU Award will be equitably adjusted and finalized or determined by Delphi Technologies’ Compensation Committee in connection with the Spin-Off.
|
4.
|
Where the context requires, references in the original PRSU Award to Aptiv or its subsidiaries or affiliates (or their policies or administrative entities) will be deemed references to Delphi Technologies or its subsidiaries or affiliates (or their policies or administrative entities), as applicable, except as provided below. Further, the original PRSU Award will be deemed modified to provide that any notices, requests or other
|
5.
|
If the original PRSU Award provides that it may vest on a “Change in Control,” or in the event of certain terminations of employment following a “Change in Control,” such vesting provisions will be triggered only in connection with a Change in Control of Delphi Technologies, as defined in the Delphi Technologies Equity Plan (and not a “Change in Control” of Aptiv, as defined in the applicable Aptiv Equity Plan). If applicable to those vesting provisions, references to Aptiv or the “Committee” in the definition of “Replacement Award” and in the related definitions of “Cause” and “Good Reason” in the original PRSU Award will be deemed to be references to Delphi Technologies and the Delphi Technologies Compensation Committee, respectively.
|
6.
|
In all cases (and notwithstanding any provisions to the contrary), the vesting and payment or settlement of the adjusted PRSU Award will be made at the time permitted under the terms of such award that will not trigger a tax or penalty under Section 409A.
|
1.
|
The adjusted RSU Award represents the right to receive Delphi Technologies ordinary shares and dividend equivalents (if applicable) with respect thereto, rather than ordinary shares of Aptiv and dividend equivalents (if applicable) with respect thereto, and references to Aptiv ordinary shares will be deemed references to Delphi Technologies ordinary shares, as applicable.
|
2.
|
The number of Delphi Technologies ordinary shares subject to the adjusted RSU Award will be adjusted as described in the Employee Matters Agreement.
|
3.
|
Where the context requires, references in the original RSU Award to Aptiv or its subsidiaries or affiliates (or their policies or administrative entities) will be deemed references to Delphi Technologies or its subsidiaries or affiliates (or their policies or administrative entities), as applicable, except as provided below. Further, the original RSU Award will be deemed modified to provide that any notices, requests or other communications under the adjusted RSU Award will be delivered, if to Delphi Technologies, to its chief human resources officer at its primary company address.
|
4.
|
With respect to the vesting provisions in the original RSU Award (except as otherwise provided in the following paragraph), each reference to a “Change in Control” is deemed to be a reference to only a Change in Control of Delphi Technologies, as defined in the Delphi Technologies Equity Plan (and not a “Change in Control” of Aptiv, as defined in the applicable Aptiv Equity Plan).
|
5.
|
In all cases (and even if the adjusted RSU Award vests in connection with a Change in Control of Delphi Technologies), to the extent necessary to avoid a tax or penalty under Section 409A, the payment or settlement of the adjusted RSU Award will not be made until the earliest time permitted under the terms of such award that will not trigger a tax or penalty under Section 409A.
|
Date:
|
(Signature) |
Entity Name
|
Jurisdiction of Formation
|
Alliance Friction Technology Private Ltd
|
India
|
AS Catalizadores Ambientales, S. de R.L. de C.V.
|
Mexico
|
Beijing Delphi Technology Development Company, Ltd.
|
China
|
Beijing Delphi Wan Yuan Engine Management Systems Company, Ltd.
|
China
|
BGMD Servicos Automotivos Ltda
|
Brazil
|
Closed Joint Stock Company "Delphi Samara"
|
Russian Federation
|
D2 Industrial Development and Production SRL
|
Romania
|
Delphi Automotive Operations UK Limited
|
England and Wales
|
Delphi Automotive Systems Australia Ltd.
|
Australia
|
Delphi Automotive Systems Luxembourg S.A.
|
Luxembourg
|
Delphi Automotive Systems Singapore Investments Pte Ltd
|
Singapore
|
Delphi Automotive Taiwan Ltd.
|
China
|
Delphi Canada Inc.
|
Ontario
|
Delphi Diesel Systems (Yantai) Co., Ltd.
|
China
|
Delphi Diesel Systems Limited
|
England and Wales
|
Delphi Diesel Systems Pension Trustees Limited
|
England and Wales
|
Delphi Diesel Systems Romania, Srl
|
Romania
|
Delphi Diesel Systems, S. de R.L. de C.V.
|
Mexico
|
Delphi Electronics Overseas Company Ltd
|
England and Wales
|
Delphi Electronics Overseas Company Pensions Trustees Ltd
|
England and Wales
|
Delphi European Holding S.a.r.l.
|
Luxembourg
|
Delphi Financial Services (UK) Limited
|
England and Wales
|
Delphi France Holding SAS
|
France
|
Delphi France SAS
|
France
|
Delphi Holdfi Holdings S.a.r.l.
|
Luxembourg
|
Delphi Japan Limited Co.
|
Japan
|
Delphi Lockheed Automotive Limited
|
England and Wales
|
Delphi Lockheed Automotive Pension Trustees Limited
|
England and Wales
|
Delphi Luxembourg Investments S.a.r.l.
|
Luxembourg
|
Delphi Netherlands BV
|
Netherlands
|
Delphi Otomotiv Sistemleri Sanayi ve Ticaret Anonim Sirket
|
Turkey
|
Delphi Powertrain APAC Financial Services Ltd.
|
England and Wales
|
Delphi Powertrain Corporation
|
Delaware
|
Delphi Powertrain International Services, LLC
|
Delaware
|
Delphi Powertrain Poland sp ,z.o.o.
|
Poland
|
Delphi Powertrain Services, LLC
|
Delaware
|
Delphi Powertrain Systems Deutschland GmbH
|
Germany
|
Delphi Powertrain Systems Holdings S.år.l.
|
Luxembourg
|
Delphi Powertrain Systems Hungary Kft
|
Hungary
|
Delphi Powertrain Systems Indústria e Comércio Ltda.
|
Brazil
|
Delphi Powertrain Systems Italia S.r.l.
|
Italy
|
Delphi Powertrain Systems Korea Ltd.
|
Korea
|
Delphi Powertrain Systems Management Limited
|
England and Whales
|
Delphi Powertrain Systems Operations Luxembourg S.år.l.
|
Luxembourg
|
Delphi Powertrain Systems Portugal S.A.
|
Portugal
|
Delphi Powertrain Systems, LLC
|
Delaware
|
Delphi Propulsion Systems Private Limited
|
India
|
Delphi Shanghai Dynamics and Propulsion Systems Co., Ltd.
|
China
|
Delphi Singapore Holdings Pte. Ltd.
|
Singapore
|
Delphi Singapore Investments Pte. Ltd.
|
Singapore
|
Delphi Technologies (Suzhou) Co., Ltd.
|
China
|
Delphi Technologies Canada Inc.
|
Ontario
|
Delphi Technologies Financing UK Limited
|
England and Wales
|
Delphi Technologies Holdings and Financing Limited
|
England and Wales
|
Delphi Technologies Holdings Luxembourg S.a.r.l.
|
Luxembourg
|
Delphi Technologies IP Limited
|
Barbados
|
Delphi Technologies Korea LLC
|
Korea
|
Delphi Technologies Malta Holdings Limited
|
Malta
|
Delphi Technologies Services Romania SRL
|
Romania
|
Delphi Trading (Shanghai) Company Limited
|
China
|
Delphi TVS – Diesel Systems Ltd
|
India
|
Hartridge Limited
|
England and Wales
|
Polycharge America, Inc.
|
Delaware
|
TecAlliance GmbH
|
Germany
|
Tula Technology, Inc
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of Delphi Technologies PLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Richard F. Dauch
|
|
Richard F. Dauch
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Delphi Technologies PLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Vivid Sehgal
|
|
Vivid Sehgal
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Richard F. Dauch
|
|
Richard F. Dauch
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Vivid Sehgal
|
|
Vivid Sehgal
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|