17. SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Basis of Presentation

In May 2011, Delphi Corporation issued the Senior Notes in a transaction exempt from registration under Rule 144A and Regulation S of the Securities Act. The Senior Notes will be exchanged for registered notes in an exchange offer expected to be completed in May 2012. Refer to Note 8. Debt for more information. All obligations under the Senior Notes are borrowed by Delphi Corporation ("Subsidiary Issuer") and are fully and unconditionally guaranteed by certain of its direct and indirect parent companies the ("Parent Companies") and by certain of Delphi Automotive PLC's direct and indirect subsidiaries (the "Guarantor Subsidiaries") on a joint and several basis, subject to customary release provisions. Subsidiaries not subject to the guarantee ("Non-Guarantor Subsidiaries") consist primarily of the non-U.S. subsidiaries of the Company.

In lieu of providing separate audited financial statements for the Guarantors, the Company has included the accompanying condensed consolidating financial statements. These condensed consolidating financial statements are presented on the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the parent's share of the subsidiary's cumulative results of operations, capital contributions and distributions and other equity changes. The Guarantor subsidiaries are combined in the condensed consolidating financial statements. The principal elimination entries are to eliminate the investments in subsidiaries and intercompany balances and transactions.

Statement of Operations Three Months Ended March 31, 2012


	Parent Companies			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net sales	$	—		$	—		$	1,442		$	3,044		$	(394	)	$	4,092
Operating expenses:
Cost of sales		—			—			1,231			2,539			(397	)		3,373
Selling, general and administrative		30			—			73			125			—			228
Amortization		—			—			14			7			—			21
Restructuring		—			—			2			4			—			6

Total operating expenses		30			—			1,320			2,675			(397	)		3,628

Operating (loss) income		(30	)		—			122			369			3			464
Interest expense		(18	)		(37	)		(8	)		(5	)		33			(35	)
Other income (expense), net		7			19			1			12			(32	)		7

(Loss) income before income taxes and equity income		(41	)		(18	)		115			376			4			436
Income tax benefit (expense)		—			7			(14	)		(68	)		(2	)		(77	)

(Loss) income before equity income		(41	)		(11	)		101			308			2			359
Equity in net income of affiliates		—			—			—			4			—			4
Equity in net income (loss) of subsidiaries		383			101			—			—			(484	)		—

Net income (loss)		342			90			101			312			(482	)		363
Net income attributable to noncontrolling interest		—			—			—			21			—			21

Net income (loss) attributable to Delphi	$	342		$	90		$	101		$	291		$	(482	)	$	342

Statement of Operations Three Months Ended March 31, 2011


	Parent Companies			Subsidiary Issuer		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net sales	$	—		$	—	$	1,358		$	2,976		$	(337	)	$	3,997
Operating expenses:
Cost of sales		—			—		1,130			2,563			(340	)		3,353
Selling, general and administrative		26			—		58			121			—			205
Amortization		—			—		12			6			—			18
Restructuring		—			—		—			9			—			9

Total operating expenses		26			—		1,200			2,699			(340	)		3,585

Operating (loss) income		(26	)		—		158			277			3			412
Interest expense		—			—		—			(6	)		—			(6	)
Other (expense) income, net		—			—		(4	)		7			—			3

(Loss) income before income taxes and equity income		(26	)		—		154			278			3			409
Income tax expense		—			—		(56	)		(58	)		(2	)		(116	)

(Loss) income before equity income		(26	)		—		98			220			1			293
Equity in net income of affiliates		—			—		—			17			—			17
Equity in net income (loss) of subsidiaries		317			98		—			—			(415	)		—

Net income (loss)		291			98		98			237			(414	)		310
Net income attributable to noncontrolling interest		—			—		—			19			—			19

Net income (loss) attributable to Delphi	$	291		$	98	$	98		$	218		$	(414	)	$	291

Statement of Comprehensive Income Three Months Ended March 31, 2012


	Parent Companies		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
Net income (loss)	$	342	$	90	$	101	$	312	$	(482	)	$	363
Other comprehensive income (loss):
Currency translation adjustments		—		—		—		78		—			78
Net change in unrecognized gain on derivative instruments, net of tax		—		—		51		—		—			51
Employee benefit plans adjustment, net of tax		—		—		—		—		—			—

Other comprehensive income		—		—		51		78		—			129

Equity in other comprehensive (loss) income of subsidiaries		128		51		—		—		(179	)		—

Comprehensive income (loss)		470		141		152		390		(661	)		492
Comprehensive income attributable to noncontrolling interests		—		—		—		22		—			22

Comprehensive income (loss) attributable to Delphi	$	470	$	141	$	152	$	368	$	(661	)	$	470

Statement of Comprehensive Income Three Months Ended March 31, 2011


	Parent Companies		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net income (loss)	$	291	$	98	$	98	$	237		$	(414	)	$	310
Other comprehensive income (loss):
Currency translation adjustments		—		—		—		67			—			67
Net change in unrecognized loss on derivative instruments, net of tax		—		—		—		(1	)		—			(1	)
Employee benefit plans adjustment, net of tax		—		—		—		2			—			2

Other comprehensive income		—		—		—		68			—			68

Equity in other comprehensive income (loss) of subsidiaries		66		—		—		—			(66	)		—

Comprehensive income (loss)		357		98		98		305			(480	)		378
Comprehensive income attributable to noncontrolling interests		—		—		—		21			—			21

Comprehensive income (loss) attributable to Delphi	$	357	$	98	$	98	$	284		$	(480	)	$	357

Balance Sheet as of March 31, 2012


	Parent Companies		Subsidiary Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	23	$	—		$	120	$	1,269		$	—		$	1,412
Restricted cash		—		—			—		13			—			13
Accounts receivable, net		—		—			813		2,041			—			2,854
Inventories		—		—			324		821			(8	)		1,137
Other current assets		—		17			141		442			—			600

Total current assets		23		17			1,398		4,586			(8	)		6,016
Long-term assets:
Property, net		—		—			531		1,872			—			2,403
Investments in affiliates		—		—			—		209			—			209
Investments in subsidiaries		3,237		262			—		—			(3,499	)		—
Intangible assets, net		—		—			424		156			—			580
Other long-term assets		3		67			23		387			—			480

Total long-term assets		3,240		329			978		2,624			(3,499	)		3,672

Total assets	$	3,263	$	346		$	2,376	$	7,210		$	(3,507	)	$	9,688

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	—	$	—		$	21	$	68		$	—		$	89
Accounts payable		3		—			615		1,851			—			2,469
Accrued liabilities		2		24			305		999			—			1,330

Total current liabilities		5		24			941		2,918			—			3,888
Long-term liabilities:
Long-term debt		—		1,982			4		10			—			1,996
Intercompany accounts, net		1,096		(1,318	)		896		(674	)		—			—
Pension benefit obligations		—		—			77		617			—			694
Other long-term liabilities		—		—			196		269			—			465

Total long-term liabilities		1,096		664			1,173		222			—			3,155

Total liabilities		1,101		688			2,114		3,140			—			7,043

Total Delphi shareholders' equity		2,162		(342	)		262		3,587			(3,507	)		2,162
Noncontrolling interest		—		—			—		483			—			483

Total shareholders' equity		2,162		(342	)		262		4,070			(3,507	)		2,645

Total liabilities and shareholders' equity	$	3,263	$	346		$	2,376	$	7,210		$	(3,507	)	$	9,688

Balance Sheet as of December 31, 2011


	Parent Companies		Subsidiary Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	53	$	—		$	186	$	1,124		$	—		$	1,363
Restricted cash		—		—			—		9			—			9
Accounts receivable, net		—		—			636		1,823			—			2,459
Inventories		—		—			294		768			(8	)		1,054
Other current assets		—		17			157		446			(4	)		616

Total current assets		53		17			1,273		4,170			(12	)		5,501
Long-term assets:
Property, net		—		—			514		1,801			—			2,315
Investments in affiliates		—		—			—		257			—			257
Investments in subsidiaries		3,302		690			—		—			(3,992	)		—
Intangible assets, net		—		—			438		158			—			596
Other long-term assets		3		71			19		364			2			459

Total long-term assets		3,305		761			971		2,580			(3,990	)		3,627

Total assets	$	3,358	$	778		$	2,244	$	6,750		$	(4,002	)	$	9,128

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	—	$	—		$	20	$	87		$	—		$	107
Accounts payable		2		—			565		1,830			—			2,397
Accrued liabilities		2		9			292		908			(3	)		1,208

Total current liabilities		4		9			877		2,825			(3	)		3,712
Long-term liabilities:
Long-term debt		—		1,981			5		10			—			1,996
Intercompany accounts, net		1,666		(1,307	)		296		(654	)		(1	)		—
Pension benefit obligations		—		—			78		596			—			674
Other long-term liabilities		—		—			298		275			2			575

Total long-term liabilities		1,666		674			677		227			1			3,245

Total liabilities		1,670		683			1,554		3,052			(2	)		6,957

Total Delphi shareholders' equity		1,688		95			690		3,215			(4,000	)		1,688
Noncontrolling interest		—		—			—		483			—			483

Total shareholders' equity		1,688		95			690		3,698			(4,000	)		2,171

Total liabilities and shareholders' equity	$	3,358	$	778		$	2,244	$	6,750		$	(4,002	)	$	9,128

Statement of Cash Flows for the Three Months Ended March 31, 2012


	Parent Companies			Subsidiary Issuer		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(in millions)
Net cash (used in) provided by operating activities	$	(30	)	$	—	$	(4	)	$	327		$	—	$	293

Cash flows from investing activities:
Capital expenditures		—			—		(64	)		(196	)		—		(260	)
Proceeds from sale of property/investments		—			—		2			1			—		3
Increase in restricted cash		—			—		—			(4	)		—		(4	)
Acquisition of minority held shares		—			—		—			(16	)		—		(16	)
Dividends from equity method investments in excess of earnings		—			—		—			37			—		37

Net cash used in investing activities		—			—		(62	)		(178	)		—		(240	)

Cash flows from financing activities:
Net repayments under other short-term debt agreements		—			—		—			(18	)		—		(18	)
Dividend payments to noncontrolling interests		—			—		—			(5	)		—		(5	)

Net cash used in financing activities		—			—		—			(23	)		—		(23	)

Effect of exchange rate fluctuations on cash and cash equivalents		—			—		—			19			—		19

(Decrease) increase in cash and cash equivalents		(30	)		—		(66	)		145			—		49
Cash and cash equivalents at beginning of period		53			—		186			1,124			—		1,363

Cash and cash equivalents at end of period	$	23		$	—	$	120		$	1,269		$	—	$	1,412

Statement of Cash Flows for the Three Months Ended March 31, 2011


	Parent Companies			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(in millions)
Net cash (used in) provided by operating activities	$	(7	)	$	—		$	(51	)	$	214		$	—	$	156

Cash flows from investing activities:
Capital expenditures		—			—			(40	)		(141	)		—		(181	)
Maturity of time deposits		—			—			550			—			—		550
Proceeds from sale of property/investments		—			—			—			47			—		47
Decrease in restricted cash		—			—			25			—			—		25
Acquisition of minority held shares		—			—			—			(5	)		—		(5	)
Other, net		—			—			2			(5	)		—		(3	)

Net cash provided by (used in) investing activities		—			—			537			(104	)		—		433

Cash flows from financing activities:
Net borrowings under other short-term debt agreements		—			—			—			14			—		14
Proceeds from issuance of senior secured term loans, net of issuance costs		—			2,396			—			—			—		2,396
Repayments of five-year notes		—			—			—			(57	)		—		(57	)
Intercompany dividends and net increase (decrease) in intercompany obligations		4,575			(2,396	)		(1,974	)		(205	)		—		—
Dividend payments of consolidated affiliates to minority shareholders		(4,557	)		—			—			—			—		(4,557	)

Net cash (used in) provided by financing activities		18			—			(1,974	)		(248	)		—		(2,204	)

Effect of exchange rate fluctuations on cash and cash equivalents		—			—			—			29			—		29

Increase (decrease) in cash and cash equivalents		11			—			(1,488	)		(109	)		—		(1,586	)
Cash and cash equivalents at—beginning of period		6			—			2,010			1,203			—		3,219

Cash and cash equivalents at end of period	$	17		$	—		$	522		$	1,094		$	—	$	1,633