Financial Overview

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change (%)	Factors
Overall
Net Sales	17,023	16,463	3.4	1)
Operating Income	1,847	1,684	9.7	-

Factors
1) Net Sales
-Net sales for the fiscal year ended December 31, 2014 increased by 3.4% over the previous year to USD 17,023 million. Increased sales in North America and the Asia Pacific regions led to a sales volume increase of approximately 5%, which was partially offset by price reductions.

Divestiture

-In February 2015, the Company announced it will divest its thermal business to Mahle GmbH for cash consideration of approximately USD 727 million. The transaction is expected to close in the third quarter of 2015.

Acquisitions

-The Company announced that it has entered into a definitive agreement to acquire media connectivity module supplier, Unwired Technology LLC, expanding its data and media connectivity capabilities. Unwired's connectivity products provide two-way data connections between in-car infotainment systems and systems such as smartphones and tablets. The transaction is expected to close in the fourth quarter of 2014. (From a press release on September 30, 2014)

-The Company signed a definitive agreement to acquire Antaya Technologies Corp., a provider of on-glass connectors, to enhance its portfolio in the rapidly growing automotive electrical connectors business. Antaya is the largest manufacturer of on-glass connectors for the automotive glass industry in North America, and has a growing customer base in China and Europe. Antaya provides on-glass products such as power terminals, antenna assemblies, keyless entry and tire pressure monitoring, and other custom connector assemblies for automotive electronics. Antaya also supplies lead-free connectors, as global automakers seek more lead-free content in their vehicles. The transaction is expected to close in the fourth quarter of 2014. (From a press release on September 22, 2014)

Business Partnership

-On August 2014, ASIMCO Tianwei Fuel Injection Equipment (Beijing) Co., Ltd., a subsidiary of ASIMCO Technologies Limited, announced that it has signed an agreement to supply fuel injection products to the Company. ASIMCO's injectors, injection nozzles and other fuel system components will be delivered to the Company's global operations. (From a press release on August 11, 2014)

Recent Developments

One-millionth ESR milestone
-The Company recently sold its one millionth electronically scanning radar (ESR) since the product's launch in 2009. ESRs are currently supplied to eight automakers. ESRs precisely detect objects in two coverage areas with one radar unit. The Company's newest generation of ESRs has a long-range mode of 200 meters with a 20 degree view and a short-range mode of 60 meters with a 90 degree view. (From a press release on August 21, 2014)

Contracts

-The Company announced that its integrated Radar and Camera Sensor Fusion System (RACam) and 76 GHz short range radar would be installed on the new Volvo XC90. The Volvo XC90 is the first car in the world capable of automatic braking at intersections. (From a press release on October 2, 2014)
>>>RACam exhibited at 2014 ITS World Congress Detroit
>>>76 GHz short range radar exhibited at 2014 ITS World Congress Detroit

-Parts supplied to vehicles shown at 2014 Geneva Motor Show:

Company	Model	Parts Supplied
Audi	S1	Various connectors including SRS (safety restraint systems) connectors, Electrical center, Radiators, Ultrasonic alarm, Transponder, Immobilizer
	TT	LED module, Transponder antenna, Immobilizer components, Ultrasonic sensors, Inclination sensors, Various connectors including SRS (safety restraint systems) connectors, Compressor, Radiator, Charge air cooler
BMW	2-Series Active Tourer	Antenna, Various connectors including SRS (safety restraint systems) connectors, Powertrain cooling module (radiator, condenser, charge air cooler), Inverter for hybrids, Charger for hybrids
	4 Series Gran Coupe	Roof module, Various connectors
Citroen	C1	Heat exchanger, Condenser
	C4 Cactus	Various switches, Antenna, Body controller for trailers, Variable valve train, Ignition pencil coils, Various connectors including SRS (safety restraint systems) connectors
Ferrari	California T	Complete air conditioning system including dual-zone HVAC module, Condenser with integrated receiver drier, Compact variable compressor, Control box, Software and comfort calibration, Complete power and signal distribution system including wiring harnesses and electrical centers
Ford	Focus	Various connectors, Antennas, Adaptive cruise control using electronically scanning radar (ESR), Interior motion sensor, Alarm system
Mercedes-Benz	C-Class	Passive occupant detection system, Alarm system, DAB (digital audio broadcasting) tuner, TV tuner, Satellite digital audio reception system (SDARS) tuner and antenna, Various connectors including SRS (safety restraint systems) connectors, Ignition, Central powertrain controller, Diesel common rail
	S-Class Coupe	Passive occupant detection system, Alarm system, DAB (digital audio broadcasting) tuner, TV tuner, Satellite digital audio reception system (SDARS) tuner and antenna
Peugeot	108	Heat exchanger, Condenser
	308 SW	Valvetrain, Ignition, Gasoline direct injection system, Fuel delivery module, Canister, Wiring harnesses, Body controllers, Stop & start DC/DC converter, Various connectors including SRS (safety restraint systems) connectors, Switches, Ultrasonic alarm module
Qoros	3 Hatch	Various connectors including SRS (safety restraint systems) connectors, Engine harness, Alarm system, Ultrasonic interior protection system
Renault	Twingo	Fuse and relay box
Volkswagen	Polo	Various connectors including SRS (safety restraint systems) connectors, Diesel common rail, Electrical center, Radiators, Ultrasonic alarm, Transponder, Immobilizer, Alarm system

Outlook

-The Company announced its sales targets for its operations in China for 2020. The Company expects to quadruple its 2012 sales results in China of USD 2,300 million (CNY 36,600 million). In 2013, the Company's sales in China reached USD 2,700 million, an 18% increase from 2012. The Company also hopes to boost the percentage of its revenue generated in China from its current level of 16% to 25% by 2020. The Company now has 28 plants and 3 technical centers, and employs approximately 2,900 engineers in China. Over the next 18 months, it plans to add two new plants including a USD 100 million factory located in Yantai to produce diesel injection systems. (From news releases issued by multiple sources on April 29, 2014)

Awards

-The Company was awarded a 2014 Automotive News PACE award for its ErgoMate Mechanical Assist System for mating connectors. The Company currently holds 17 PACE awards. (From a press release on April 8, 2014)

R&D Expenditure

(in billion USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Total	1.3	1.3	1.2

 
-The Company expects expenditures for engineering activities to be approximately USD 1.3 billion for the year ending December 31, 2015.

R&D Structure

-As of December 31, 2014, the Company employed over 20,000 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

Technological Alliance

-The Company will partner with Ottomatika, Inc., an automated driving software company started by Carnegie Mellon University, to jointly develop technology that will accelerate the development of automated driving. The Company will integrate its active safety technologies with Ottomatika's automated driving software to create a technology platform that enables a vehicle to make human-like decisions while driving. The platform will support V2X communications and can be upgraded through software updates. In support of the partnership, the Company will make an investment in Ottomatika. (From a press release on November 20, 2014)

-The Company and Westport Innovations Inc. announced a joint development agreement to help entrench Westport High Pressure Direct Injection (Westport HPDI) as the leading natural gas technology platform for heavy-duty engine applications. Through the agreement, Westport and the Company will co-develop and manufacture high-pressure natural gas fuel injectors designed for multiple engine original equipment manufacturers (OEMs). The first in a family of injectors to be developed will be one of the core components of Westport's recently announced HPDI 2.0 fuel system. Based on current OEM projections, the Company and Westport will invest in and develop annual production capacity in excess of 100,000 injectors within the next 4 years. (From a press release on March 3, 2014)

Product Development

V2V and V2I extended range communication technology
-The Company announced that it will be first-to-market with Vehicle-to-Vehicle (V2V) and Vehicle-to-Infrastructure (V2I) communication technology with significantly increased driver alert times. The Company's wireless vehicle communication technology extends the range of existing advanced driver assistance systems (ADAS) functionality. Radio signals transmit traffic data between cars to alert drivers of potential road hazards beyond the driver's line of sight or outside the vehicle's sensor range. This technology can warn the driver of a number of traffic situations including road condition hazards, road work, emergency vehicle warning, stationary or slow moving vehicles, traffic jams, accidents, as well as traffic signals or signage indicators. Global production is targeted for launch in 2016 for the North American market. (From a press release on September 5, 2014)

Diesel common rail systems
-The Company is launching a new family of Diesel Common Rail systems including diesel solenoid injectors, fuel pumps, Engine Control Units (ECU) and rails for light- and medium-duty applications. The new family of diesel fuel injection equipment offers improved performance with injection pressure increased up to 2,500 bar; leakage reduction; and increased multiple injection optimization with fuel injectors capable of up to nine injections per cycle. The new family of technologies will be available later this year on a new engine of a major European car manufacturer. (From a press release on May 8, 2014)

Capital Expenditure by Segment

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Electrical / Electronic Architecture	326	293	238
Powertrain Systems	315	224	304
Electronics and Safety	89	64	66
Thermal Systems	76	77	63
Eliminations and Other	49	24	34
Total	855	682	705

Capital Expenditure by Geographic Area

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
North America	237	199	210
Europe, Middle East & Africa	320	281	308
Asia Pacific	269	174	155
South America	29	28	32
Total	855	682	705

Investment Outside USA

<China>
-The Company announced that its powertrain plant in Shanghai began producing high-pressure fuel pumps for gasoline direct-injection engines, which marks the full-scale launch of local production. The Company plans to build an additional production line for these fuel pumps during the second half of 2014. (From news releases issued by multiple sources on September 17, 2014)

-The Company announced that it has opened Delphi Electronics (Suzhou) Technical Center at the Suzhou Industrial Park. The facility covers 1,500 square meters and can be expanded to 3,000 square meters in the future. Buildings for designing and testing are expected to cover 1,000 square meters. The center currently employs nearly 150 engineers and plans to add about 50 engineers by December 2014. (From news releases issued by multiple sources on May 21, 2014)

-The Company announced that it will construct a wire harness factory in Wuqing Development Area, Tianjin. The plant will have a total floor area of 22,000 square meters on 40,000 square meters of land. Investment in this project is expected to reach CNY 100 million. Wire harnesses produced at the new facility will be used in systems such as in-vehicle phones and infotainment systems for automakers such as Mercedes-Benz and Great Wall Motor. (From news releases issued by multiple sources on May 19, 2014)