Financial Overview

(in million USD)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Overall
Net Sales	15,519	16,041	(3.3)	1)
Operating Income	1,476	1,644	(10.2)	-

Factors
1) Net Sales
-Total net sales for the fiscal year that ended on December 31, 2012 decreased 3.3% compared to the year that ended on December 31, 2011.

-Although the Company experienced volume growth of approximately 1%, reported sales decreased due to unfavorable currency impacts, principally related to the Euro and Brazilian Real, and lower commodity pass-through.

-Additionally, there were increased sales of approximately USD 110 million resulting primarily from the acquisition of MVL in October 2012.

Contracts

-The Company announced that four new European electric vehicles will feature the Company's Vehicle Sound Generator by the end of the year with another vehicle in Asia including the technology during 2013. The Company's single-box vehicle sound generator is approximately three times lighter than a conventional multi-box system and uses 90 percent less power. The system provides a frequency range of 500Hz to 10 KHz and can reproduce melodies that represent the identity of individual vehicle manufacturers. (From a press release on September 14, 2012)

-The Company announced that it has entered production of its common rail technologies for heavy-duty diesel fuel injection equipment (FIE) that will meet the requirements of Euro VI. Working at up to 2,700 bar, the new systems provide a choice of three architectures: conventional remote pump common rail (F2R) and two common rail systems with distributed pumps; F2E and F2P. The Company currently provides systems that are capable of operating at up to 3,000 bar, and is investigating higher pressures. Between now and mid-2013, the Company will be entering production with each of these three systems for customers launching engines ranging from 9 to 16 liters. The Company has secured three contracts for these systems for a lifetime value expected to exceed EUR 3.7 billion. To achieve this, the Company has made significant investments in its facilities around the world, including its sites in Stonehouse and Sudbury in the UK. (From a press release on September 5, 2012)

-The Company is supplying diesel common rail systems for the Kia "Cee'd" sold in Europe. (From a press release, July 5, 2012)

-In 2012, the Company won USD 26.3 billion in new business, including USD 1.5 billion in the area of active safety and MyFi products.

Acquisitions

-The Company announced the completion of its acquisition of France-based FCI Group's Motorized Vehicles Division (MVL). The transaction is valued at EUR 765 million. MVL, which will become part of the Company's Electrical / Electronic Architecture segment (E/EA), is a provider of interconnection systems for a wide range of applications. These include connectors for the safety restraint systems (SRS) market, powertrain and electrical vehicles. MVL had revenue of EUR 692 million in the year ended December 31, 2011. The transaction will greatly enhance the Company's portfolio of connectors for hybrid and electric vehicles and strengthen the Company's position in the Asian market. (From a press release on October 26, 2012)

Business Partnership

-The Company is working together with the Bochum University for Applied Science on the design of an electric city transport vehicle ready for series production, called the BOmobil. Pre-series models will be shown at the eCarTec show in Munich, Germany. Within the framework of the project, the Company's engineers are researching and developing on the optimal electrical and electronic architecture for the high voltage harness system, on electrical connection systems and energy management, as well as on power electronics and control electronics. The BOmobil project is supported by the German state of North Rhine - Westfalia. (From a press release on October 23, 2012)

-The Company announced that it has signed a distribution agreement with TTI, Inc. in Asia Pacific. The Company's Asia Pacific customers now have the opportunity to purchase Delphi Connection Systems (DCS) products through TTI. TTI is a US-based distributor of interconnect, passive, electromechanical and discrete components. (From a press release on March 19, 2012)

Awards

-Delphi Automotive was awarded two Automotive News PACE Awards in 2012. The company won an award in the manufacturing process category for the Multi-Port Folded Tube Condenser and another in the product category for the L-Shape Crimp for .13 mm² wire size. (From a press release on April 24, 2012)

R&D Expenditure

(in billion USD)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Total	1.2	1.2	1.0

 
-The Company expects expenditures for engineering activities to be approximately USD 1.2 billion for the year ending December 31, 2013.

R&D Structure

-As of December 31, 2012, the Company employed over 18,000 scientists, engineers and technicians around the world.

-The Company has 15 major technical centers:

• North America: 5 facilities
• Europe, Middle East and Africa: 5 facilities
• Asia Pacific: 4 facilities
• South America: 1 facility

R&D Activities

-The Company and the Interdisciplinary Centre for Security, Reliability and Trust (SnT) of the University of Luxembourg have signed a four-year agreement to cooperate on a joint research program involving electronic control systems for automotive applications. The program initially includes two research projects. One is on embedded software testing and the second focuses on embedded software safety. The research program led by the Company and the SnT is intended to develop an effective and efficient automated verification and validation technologies for ECU software systems. (From a press release on December 7, 2012)

-The Company announced that it has been awarded a USD 3.7 million grant from the U.S. Department of Energy (DOE) to develop a highly-versatile, energy-efficient method for micro-machining complex shapes. This process will utilize ultrafast laser technology to enable enhanced production of flow control holes in the Company's gas direct injection (GDi) fuel injectors. The process will increase laser machining energy efficiency up to 25 percent over standard practices while eliminating secondary processes such as etching, deburring or surface cleaning. (From a press release on June 12, 2012)

-The Company was a participant in the largest field test of vehicle-to-vehicle and vehicle-to-infrastructure communication in Ann Arbor, Michigan. The test involved placing 2,800 vehicles on the road for a year to observe the effectiveness of connected vehicle safety applications for reducing crashes. The Company contributed its software and systems integration capability as a part of the study.

Product Development

<Electrical / Electronic Architecture>
Flexible Beam Connectors
-The Company is expanding its portfolio of connection systems with its next-generation Flexible Beam Connector. Already available on GT 150 and 280 unsealed connectors, Flexible Beam Technology is now being made available for sealed GT 150 and 280 connectors. Flexible Beam Technology makes use of a single piece of plastic instead of the conventional two-piece connections. This action simplifies the wiring harness build process by minimizing complexity, assembly time and cost while retaining terminal retention force comparable to standard two-piece designs. (From a press release on March 20, 2012)

<Powertrain Systems>
Powertrain emission reducing components
-The Company announced that it will outline new solutions to the emissions challenges facing both gasoline and diesel vehicles in technical papers presented at the 21st Aachen Colloquium in Germany. The Company's first paper describes the Company's near production-ready Selective Catalytic Reduction (SCR) dosing system. The dosing system utilizes a high pressure water cooled urea doser, which simplifies the dosing system architecture. The Company's SCR system, which is suitable for passenger cars and light commercial vehicle applications, is also complemented by a new ammonia sensor. The first production application of the Company's SCR dosing system is scheduled for 2015. (From a press release on October 8, 2012)

Common rail fuel injection system - China
-The Company announced that it is developing a low-cost common rail fuel injection system for heavy duty diesel applications targeting emerging markets such as China. The new system comprises a high-pressure pump, rail assembly, electronic controller and injectors. Suitable for engines with a displacement of 9 to 16 liters, the system provides a maximum rail pressure of 1,800 bar, allowing compliance with China 4/5 emissions standards. (From a press release on September 7, 2012)

Common rail fuel injection system
-The Company has developed new common rail fuel systems for heavy-duty diesel and small engines. The Company's new heavy-duty common rail system will be available in three configurations: two Distributed Pump Common Rail Systems (DPCRS), in which the pressure is provided by a number of separate pumping units, and a Remote Pump Common Rail System (RPCRS), which is similar to traditional common rail layouts. The Company also developed its light-weight new Unit Pump Common Rail (UPCR) system, specifically designed for diesel engines with one to four cylinders. Currently in production, the system operates at 1,600 bar. The UPCR system is expected to provide an approach to meet the future requirements of Euro 7 regulations, thanks to a 2,000 bar version that is under development. (From a press release on April 25, 2012)

GDi Fuel System
-The Company's Multec Gasoline Direct Injection (GDi) system provides up to 15 percent better fuel economy when combined with other powertrain technologies. The GDi fuel system includes a high-pressure fuel pump, fuel rail and Multec multi-hole injectors.

<Electronics and Safety>
In-car information and entertainment systems
-The Company displayed the F1for3 demonstration vehicle connected with advanced in-car information and entertainment systems at the Geneva International Motor Show. The F1for3, which was developed jointly with the Italian vehicle designer Franco Sbarro, offers sophisticated infotainment systems that provide reliable high-speed connectivity and great convenience. The Delphi Sbarro F1for3 is an F1-inspired three-seat sports car with 4G capability to stream TV and Internet data to passenger's mobile devices such as a tablet PC or smartphone. The in-vehicle system includes a MyFi multi-function infotainment unit and a touch-sensitive display. (From an article in the Nikkan Jidosha Shimbun on March 13, 2012)

Wireless In-Vehicle Device Charging System
-The Company developed its new Wireless In-Vehicle Device Charging System. The system transmits power over distance to deliver a charge without precise positioning of the electronic device receiving the charge. The Wireless Device Charging System makes use of the same magnetic resonance technology as the Company's Wireless Electric Vehicle Charging System. Magnetic resonance technology in the system will be able to charge multiple devices at the same time. The Company is testing the system on research vehicles and intends to have the system be production-ready by model year 2014. (From a press release on January 5, 2012)

MyFi System
-The Company demonstrated its new MyFi system at the 2012 Consumer Electronics Show in Las Vegas, Nevada, US. The Company unveiled its new MyFi feature, a cloud-based portal that uses Windows Azure. Drivers can check diagnostics such as tire pressure, engine health and brake life from a portable tablet or smart phone. The MyFi system communicates with safety sensors to provide warnings when the driver's attention needs to be redirected. (From a press release on January 4, 2012)

Safety Restraint System Connectors
-The Company recently developed the AK-2+ Electro Static Discharge (ESD) squib. The squib eliminates potential misfiring caused by electrostatic discharge with integrated grounding. Additional benefits of the AK-2+ squib include a shorter development cycle and a faster assembly time.

<Thermal Systems>
Phase Change Material (PCM) Evaporator
-The Company's new air conditioning technology, Phase Change Material (PCM) Evaporator, is intended to keep the cabin of start-stop vehicles cooler longer. When the air conditioning system is stopped, the PCM gradually liquefies or melts, drawing heat from the air. The system can reduce HVAC system fuel usage by 50 percent and also contributes to extending the electric range of hybrid/electric vehicles. The new technology is now moving from testing to its first vehicle development program and is expected on the road by 2015. (From a press release on April 25, 2012)

Unitary Heat Pump Air Conditioner (HPAC)
-The Company announced that it is developing the new Unitary Heat Pump Air Conditioner (HPAC), which integrates a refrigerant heat pump and coolant distribution system. In addition to drawing heat from the ambient air, this system can also scavenge available waste heat and provide this heat to the cabin. While suitable for all vehicle types including heavy duty commercials, it will bring particularly significant benefits to hybrid and electric vehicles by reducing battery drain so that range can be increased. Rig tests on a plug-in hybrid vehicle system have demonstrated a reduction in CO2 emissions equivalent to 3.8 grams per mile. Additionally, the Company's HPAC requires only half the refrigerant volume of a conventional system. The HPAC is expected to enter production for the 2015 model year. (From a press release on April 25, 2012)

Exhaust gas heat exchanger
-The Company's new exhaust gas heat exchanger (EGHX) will reduce CO2 emissions, provide faster cabin warm-up, improve safety and yield substantial savings during cold starts. The system also recovers heat normally lost in the exhaust system. Its product can recover 5kW to 7kW in a vehicle traveling at 35 to 45mph. The Company's EGHX will be ready for application later in 2012. (From a press release on April 25, 2012) 

Condenser Radiator Fan Module
-The Company's Folded Tube Condenser uses folded tubes formed from repeated folding of a metal strip instead of the extruded tubes used by conventional condensers. Thus, the Folded Tube Condenser has 25 percent less mass and 36 percent reduced core depth while providing equal performance. Furthermore, the Folded Tube Condenser can be manufactured in less time compared to conventional condensers.

Capital Expenditure by Segment

(in million USD)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Electrical / Electronic Architecture	238	219	202
Powertrain Systems	304	228	186
Electronics and Safety	66	100	59
Thermal Systems	63	70	35
Eliminations and Other	34	13	18
Total	705	630	500

Capital Expenditure by Geographic Area

(in million USD)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
North America	210	176	140
Europe, Middle East & Africa	308	278	236
Asia Pacific	155	118	87
South America	32	58	37
Total	705	630	500

Investment Outside USA

<China>
-The Company announced that it held a groundbreaking ceremony in Yantai, Shandong Province, China, for a new diesel fuel injection manufacturing facility. The Company is investing approximately USD 100 million (CNY 643 million) to construct and equip the facility. The new manufacturing facility, expected to start production in late 2013, will be supported by an existing Company operation in Suzhou, Jiangsu Province that will supply engine control modules. The Company currently employs 2,800 people in Yantai and expects to hire an additional 500 employees at the new facility. (From a press release on October 11, 2012)

<United Kingdom>
-The Company announced that it has entered production of its common rail technologies for heavy-duty diesel fuel injection equipment (FIE) that will meet the requirements of Euro VI. Between now and mid-2013, the Company will be entering production of three systems for customers launching engines ranging from 9 to 16 liters. The Company has secured three contracts for these systems for a lifetime value expected to exceed EUR 3.7 billion. In order to fulfill these contracts, the Company has made significant investments in its facilities around the world, including its sites in Stonehouse and Sudbury in the UK. (From a press release on September 5, 2012)