Financial Overview

(in million USD)	FY2008	FY2007	Rate of change	Factors
Net Sales	18,060	22,283	(19%)	See "Sales Factors" below for details See also Financial Data for segement sales details
Net Income	3,037	(3,065)	-	- The increased net income reflects the reorganization gains related to the GM settlements of $5,687 million recorded during 2008. - Excluding the impact of the GM settlement gains, net loss would have been $2.7 billion

NOTE: In the Company's annual report on FY2008, the public accounting firm cited uncertainties inherent in the bankruptcy process that raise substantial doubt about the Company's ability to continue as a going concern.

Sales Factors
(1) GM Sales in 2008 (31% of Total)
- Sales to GM recorded 5,525 million USD
- Decreased by 2,776 million USD compared to FY2007
- GM sales in 2008 decreased by 33%, primarily due to reductions in GMNA volume of 19% and contractual price reductions.
- The GMNA volume reductions included approximately 636 million USD due to the work stoppages.
- Decreases due to the impact of exiting non-core businesses of 1,159 million USD resulted due to certain plant closures and divestitures in Automotive Holdings Group segment
- Decreases of 45 million USD and 4 million USD were related to the migration of its converter business to a non-consolidated venture and the sale of the Catalyst Business in Powertrain Systems segment during 2007, respectively.
- Primarily as a result of portfolio transformation related to non-core businesses and recent consumer trends and market conditions, during 2008 the Company's GM North America content per vehicle was 1,149 USD, 26% lower than the 1,562 USD content per vehicle for 2007.

(2) Other customer sales in 2008 (69% of Total)
- Sales to other customers recorded 12,535 million USD
- Decreased by 1,447 million USD or 10% compared to FY2007
- Excluding the favorable impacts of foreign currency exchange, other customer sales decreased by 13%, due primarily to decreased volume as a result of the impact of recent consumer trends and market conditions.
- Additionally $417 million of the decrease was related to the migration of its converter business to a non-consolidated venture during 2007, and $151 million was related to the sale of the Catalyst Business in the third quarter of 2007.
- Additional decreases of $350 million resulted due to certain plant closures and divestitures in Automotive Holdings Group segment.
- Other customer sales were also negatively impacted by contractual price reductions.

Contracts
- GM and US OEMs
- In May 2008, the Company won 100 percent of a major North American automaker's new data connectivity systems business and will begin supplying componentry for models built on several platforms as soon as model year 2010. The Company will provide all of the USB cable assemblies, integrated consumer ports and headers for vehicles built on a variety of platforms and slated to go into production between 2010 and 2013.

- In Nov. 2008, the Company announced that it will provide its new High-Speed Digital Data (HSDD) connectivity systems for new General Motors vehicles in Europe.

- Daimler
- In Feb. 2008, the Company announced that Mercedes-Benz is to install the Company's Battery Disconnect Safety Device (BDSD) on multiple new car lines. Several Mercedes-Benz models incorporate Delphi's BDSD, including C-Class sport coupes and luxury sedans and the M-Class sport utility vehicles.

- In Nov. 2008, the Company announced that it is providing its first prepackaged driver side airbag assembly in the steering wheel for Daimler's Smart Fortwo vehicles. The Company is also supplying the passenger side airbag and passive occupant detection system for the car. In addition, it supplies the steering wheel clock spring with integrated steering angle sensor, wash/wiper stalk, direction indicator stalk and selespeed switches on the steering wheel for the vehicle.

- In Dec. 2008, the Company announced that its diesel fuel injection system "Direct Acting Common Rail" system will be installed on the new Mercedes C250 CDI.

- Fiat
- In Oct. 2008, the Company announced that it has been selected by Ferrari S.p.A. to supply the car air conditioning system, electric and electronic components adopting wires using no environmentally hazardous substances, and variable suspension system capable of variably and quickly controlling damping force for the Italian automaker's all-new sports car, the California.

- Chery
- In Jan. 2008, the Company announced that it will demonstrate its navigation and premium audio system on a vehicle from Chery Automobile at the 2008 International Consumer Electronics Show. The Company had announced in 2007 that it would provide complete integrated navigation and occupant protection systems for several Chery platforms starting in 2009.

- AVTOVAZ
- In Aug. 2008, the Company has been awarded new business from Dimitrovgrad Avtoagregat Plant (DAAZ) of Russia to supply radiator cores to the final assembly of radiator fan modules for the AVTOVAZ Lada Kalina. In January 2009, DAAZ will begin delivering modules to the AVTOVAZ plant in Togliatti, Russia. In 2004, the Company launched the first air conditioning system on the Russian-made Chevy Niva for GM AVTOVAZ. Since 2007, Delphi has supplied the UAZ Patriot with a complete AC system.

Divestitures in 2008
The Company divested several assets and businesses in 2008 in line with the reorganization process.

- North American Brake Product Asset
- In Jan. 2008, the Company announced that it completed the divestiture of a portion of its North American brake component machining and module assembly assets (Saginaw, Michigan) to TRW Automotive, including production inventory, for approximately $40 million.

- Integrated Brake System Business
- In Jul. 2008, the Company announced the retention of W.Y. Campbell & Company, US-based investment banking firm, to explore sale opportunities for the Company's brake business. The integrated brake system provider has more than 1,000 employees globally throughout three manufacturing facilities located in Juarez, Mexico and Shanghai, China. (From a press release on Jul 14, 2008)

- Wheel Bearings Business
- In Jan. 2008, the Company announced that it has entered into an asset sale and purchase agreement with Resilience Capital Partners for the sale of its Wheel Bearings business The asset sale and purchase agreement between the Company and Resilience Capital Partners includes: machinery and equipment, inventory, intellectual property, assignment and assumption of certain customer and supplier contracts, Sandusky, OH production and engineering facility, transition of salaried and hourly workforce. (From a press release on Jan. 17, 2008)

- Bearings Business
- In Feb. 2008, the Company announced that it has entered into a purchase agreement with Kyklos, Inc., a wholly-owned subsidiary of Hephaestus Holdings, Inc. for the sale of its bearings business. The agreement follows Kyklos being declared the successful bidder in an auction conducted as part of a sale process under the United States Bankruptcy Code. (From a press release on Feb. 21, 2008)

- Steering and Halfshaft Business
- In Feb. 2008, the Company received final approval from the U.S. Bankruptcy Court for the Southern District of New York to sell its global steering and halfshaft business to Steering Solutions Corporation, an affiliate of Platinum Equity, LLC.,. The sale includes all facets of the $2.7 billion global steering and halfshaft business (From a press release on Feb. 21, 2008)

- U.S. Suspensions Asset
- In Mar. 2008, the Company and Tenneco Inc. entered into an agreement on Tenneco's acquisition of suspension (ride control) business assets and inventory at its Kettering, Ohio facility. As part of the purchase agreement, Tenneco would pay approximately $10 million for existing ride control components inventory and approximately $9 million for certain machinery and equipment. (From a press release on Mar. 10, 2008)

- Global Power Products Business
- In Dec. 2008, the Company sold Strattec Security Corp.in combination with WITTE Automotive and Vehicle Access Systems Technology (VAST), certain assets of the Company's global Power Products business for approximately 6.7 million dollars. Strattec will acquire the North American portion of the business. WITTE will acquire the European portion, and VAST will acquire the Asian portion. (From a press release on Dec 11, 2008)

- Global Exhaust Business
- In Dec. 2008, the Company announced that it received approval from the U.S. Bankruptcy Court for the sale of the company's global exhaust business to Bienes Turgon of Mexico for approximately 17 million USD. The transaction is expected to close during the first half of 2009. Although the company is divesting its exhaust business, Delphi continues to provide full engine management systems (EMS) - including air and fuel management, combustion and valvetrain technology - through its gas EMS product business unit. (From a press release on Dec 18)

Consolidation of Facilities
- In July 2008, the Company announced plans to consolidate its engineering and manufacturing facility at its Delphi Electronics & Safety Kokomo campus in Indiana. During the consolidation scheduled to begin in August 2008, the Company will make renovations and upgrades in the facilities. The moves are expected to be completed by the end of 2008. Kokomo facilities will continue to build numerous products including integrated circuits, engine controllers, safety electronics, sensors and power electronics for hybrid vehicles. (From a press release on Jul 18, 2008)

R&D Expenditure

(in billion USD)	FY2008	FY2007	FY2006
Amount	1.9	2.0	2.0

The Company expects expenditures for research and development activities to be approximately $1.5 billion in 2009.

R&D Structure
-As of Dec. 2008, the Company employed approximately 16,500 engineers, scientists and technicians around the world, including 12,000 at the Company's technical centers and customer centers, with over one-third focused on electronic and high technology products, including software algorithm development.

Product Development (FY2008)
Active Safety System
In Jan. 2008, the Company announced that it is supplying an active safety system for the several new models for a prominent European automaker. The Company is providing adaptive cruise control and collision mitigation with automatic braking technologies. The system also provides Lane Departure Warning and Driver Alert. ACC helps drivers maintain speed and following distance in nearly all driving conditions. It also serves as the platform for other safety systems like collision warning and mitigation. Collision Warning with Auto Brake works in concert with the ACC to help avoid rear-ending other vehicles or helps to minimize their effect. (From a press release on Jan. 7, 2008)

Concept Dual-view Integrated Navigation Radio System
In Jan 2008, the Company demonstrated a concept dual-view integrated navigation radio system with advanced navigation and enhanced satellite radio features at the 2008 International Consumer Electronics Show. It allows a driver to view full-featured map-based navigation while the front seat passenger views video content. The Company has designed this unique system so that the driver cannot view the video when the vehicle is operating. Specially placed sensors in the vehicle will disable the unit if the driver attempts to view video.(From a press release on Jan. 9, 2008)

Battery Monitoring Device
- The Delphi Battery Monitoring Device combines an IVT sensor with software that calculates the battery state of health (SOH) and state of charge (SOC) and will alert drivers to batteries that are in need of replacement or charging. It helps ensure optimal battery performance, making more electronics possible while ensuring sufficient power for starting the engine. (From a press release on Mar. 31, 2008)

Active Stabiliser Bar System (ASBS)
- Anew Active Stabiliser Bar System (ASBS) is being developed. The system is the first to provide continuous across-centre control and is 60 percent lighter and around 65 percent more compact than the previous generation system, making it the world's most advanced roll-control technology. Generation 3 ASBS has helped the Company win some development programmes across a range of vehicle types. (From a press release on Jul 23, 2008)

- In Sept. 2008, the Company announced that it is launching the next generation of diesel fuel injectors - the Delphi Direct Acting Common Rail system. The new system is now entering production and will be available on a European car to be launched later 2008. The patented Delphi Direct Acting Common Rail system will help vehicle manufacturers meet Euro 6 Emissions Standards while improving torque, power, and fuel economy. (From a press release on Sep 2, 2008)

Technological Alliance
- In Jan. 2008, the Company announced strategic technology collaboration with Infineon Technologies. Both agreed to collaborate closely on developing a new generation of body control units based on the standard AUTOSAR (AUTomotive Open System ARchitecture). The Company is to contribute comprehensive systems and software know-how and long-standing experience in the area of body electronics, while Infineon will provide expertise in automotive microcontrollers to the co-development project. (From a press release on Jan. 9, 2008)

Joint Development Project
- In Jun. 2008, the Company announced that it has been selected by the U.S. Department of Energy (DOE) to lead an industry-government team to develop the next generation propulsion inverter for hybrid vehicles. The new smaller inverter is lower cost and will be used on the next generation high-efficiency hybrid electric vehicles (HEVs) and next generation "plug-in" hybrids (PHEVs). In the longer-term, the inverter will be used for fuel cell vehicles (FCVs). The research and design team will contribute $3 million and receive $5 million in funding from the DOE, resulting in an $8 million project, seeking to reduce the cost and size of the inverter for electric propulsion systems by 50% or more. (From a press release on Jun 10, 2008)

Capital Expenditure

(in million USD)	FY2008	FY2007	FY2006
By Product Sector
Electronics & Safety	166	161	180
Powertrain Systems	306	149	157
Electrical & Electronic Architecture	179	182	182
Thermal Systems	98	66	25
Automotive Holdings Group	15	3	53
Corporate and Other	33	19	25
Discontinued operations	161	66	99
Total capital expenditures	958	646	721
By Geographic Area
North America	261	255	253
Europe, Middle East & Africa	373	217	275
Asia-Pacific	118	85	72
South America	45	23	22
Discontinued operations	161	66	99
Total capital expenditures	958	646	721