Delphi Reports Second Quarter 2014 Financial Results

Delphi Automotive PLC (NYSE: DLPH), a leading global vehicle components manufacturer, today reported second quarter 2014 U.S. GAAP earnings of $1.26 per diluted share. Excluding special items, second quarter earnings increased 15% to $1.42 per diluted share.

Second Quarter Highlights Include:

• Revenue of $4.5 billion, up 5%
• U.S. GAAP diluted earnings per share of $1.26, up 8%
  • Excluding special items, earnings of $1.42 per diluted share, up 15%
• Adjusted Operating Income of $547 million, up 7%
  • Adjusted Operating Income margin of 12.3%, up 20 basis points

• Generated $627 million of cash from operations, up 20%
• Share repurchases and dividends of $296 million

Year-to-Date Highlights Include:

• Revenue of $8.7 billion, up 6%
• U.S. GAAP diluted earnings per share of $2.30, up 12%
  • Excluding special items, earnings of $2.62 per diluted share, up 13%
• Adjusted Operating Income of $1,030 million, up 9%
  • Adjusted Operating Income margin of 11.8%, up 40 basis points

• Generated $763 million of cash from operations, up 14%
• Share repurchases and dividends of $531 million

“Continued outstanding operating performance drove our second quarter financial results to a new quarterly record for the Company," said Rodney O'Neal, chief executive officer and president. "We remain focused on achieving our key objectives for the year and enhancing shareholder value."

Second Quarter 2014 Results

The Company reported second quarter 2014 revenue of $4.5 billion, an increase of 5% from the prior year period, reflecting strong growth in Asia and North America. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 3% in the second quarter. This reflects growth of 13% in Asia, 7% in North America and flat performance in Europe, partially offset by a decline of 24% in South America.

The Company reported second quarter U.S. GAAP net income of $382 million and earnings of $1.26 per diluted share, compared to $367 million and $1.17 per diluted share in the prior year period. Second quarter net income excluding special items consisting of restructuring-related charges, acquisition-related integration costs, asset impairments and losses on extinguishment of debt ("Adjusted Net Income"), totaled $432 million, or $1.42 per diluted share, which includes the favorable impacts of a decreased effective tax rate and a reduced share count. Adjusted Net Income in the prior year period was $388 million, or $1.24 per diluted share.

Second quarter earnings before interest expense, other income (expense), net, income tax expense, restructuring, acquisition-related integration costs, asset impairments and equity income (loss), net of tax ("Adjusted Operating Income") was $547 million, compared to $513 million in the prior year period. Adjusted Operating Income margin increased 20 basis points in the second quarter of 2014 to 12.3%, compared with 12.1% in the prior year period. The increase in Adjusted Operating Income reflects the continued strong performance and growth of our businesses in Asia and North America, as well as the benefits of our on-going European restructuring programs initiated over the past 18 months. Depreciation and amortization expense totaled $146 million in the second quarter, compared to $132 million in the prior year period.

Interest expense for the second quarter totaled $33 million, a decrease from $36 million in the prior year period, which reflects the benefits of our debt refinancing transactions in the first quarter of 2014.

Tax expense in the second quarter of 2014 was $62 million, resulting in an effective tax rate of approximately 14%, compared to $73 million, or an effective rate of 16%, in the prior year period. The decrease reflects the favorable impact of discrete items recorded in the second quarter and the geographic mix of pretax earnings, partially offset by higher pretax earnings.

The Company generated net cash flow from operating activities of $627 million in the three months ended June 30, 2014, compared to $523 million in the prior year period.

Year-to-Date 2014 Results

For the six months ended June 30, 2014, the Company reported revenue of $8.7 billion, an increase of 6% from the prior year period, reflecting continued growth in Asia and North America. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 5% during the period. This reflects growth of 13% in Asia, 8% in North America and 1% in Europe, partially offset by a decline of 16% in South America.

For the 2014 year-to-date period, the Company reported U.S. GAAP net income of $702 million and earnings of $2.30 per diluted share, compared to $643 million and $2.05 per diluted share in the prior year period. Year-to-date Adjusted Net Income totaled $800 million, or $2.62 per diluted share, which includes the unfavorable impact of an increased effective tax rate as well as the favorable impact of a reduced share count, compared to Adjusted Net Income of $724 million, or $2.31 per diluted share, in the prior year period.

The Company reported Adjusted Operating Income of $1,030 million for the six months ended June 30, 2014, compared to $944 million in the prior year period. Adjusted Operating Income margin was 11.8% for the six months ended June 30, 2014, an improvement of 40 basis points, compared with 11.4% in the prior year period. The increase in Adjusted Operating Income reflects the continued strong performance and growth of our businesses in Asia and North America, as well as the benefits of our on-going European restructuring programs initiated over the past 18 months. Depreciation and amortization expense totaled $291 million, compared to $263 million in the prior year period.

Interest expense for the six months ended June 30, 2014 totaled $68 million, a decrease from $72 million in the prior year period, reflecting the benefits of our debt refinancing transactions in the first quarter of 2014. Additionally, the six months ended June 30, 2014 and June 30, 2013 included net losses on the extinguishment of debt totaling $34 million and $39 million, respectively.

Tax expense for the 2014 year-to-date period was $137 million, resulting in an effective tax rate of approximately 16%, compared to $110 million, or an effective rate of 14%, in the prior year period. The increase reflects higher pretax earnings, as well as the geographic mix of pretax earnings and the favorable impact of discrete items recorded in the prior year period.

The Company generated net cash flow from operating activities of $763 million in the six months ended June 30, 2014, compared to $672 million in the prior year period. As of June 30, 2014, the Company had cash and cash equivalents of $1.2 billion and access to $1.5 billion in undrawn committed revolving bank facilities, and total debt of $2.5 billion.

Share Repurchase Program

During the second quarter of 2014, Delphi repurchased 3.27 million shares for approximately $220 million under its existing authorized share repurchase program, leaving approximately $813 million available for future share repurchases. Year-to-date, the Company has repurchased 5.64 million shares for approximately $378 million. All repurchased shares were retired, and are reflected as a reduction of ordinary share capital for the par value of the shares, with the excess applied as reductions to additional paid-in-capital and retained earnings.

Q3 2014 and Full Year 2014 Outlook

The Company's third quarter and full year 2014 financial guidance is as follows:

Full year 2014 mid-point earnings per share guidance represents 14% growth year-over-year, and assumes global vehicle production increases of 3%.

Conference Call and Webcast

The Company will host a conference call to discuss these results at 9:00 a.m. (ET) today, which is accessible by dialing 888.486.0553 (US domestic) or 706.634.4982 (international) or through a webcast at http://investor.delphi.com/. The conference ID number is 73068699. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Company's website. A replay will be available two hours following the conference call.

Use of Non-GAAP Financial Information

This press release contains information about Delphi's financial results which are not presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures of other companies.

About Delphi

Delphi Automotive PLC (NYSE: DLPH) is a leading global supplier of technologies for the automotive and commercial vehicle markets. Headquartered in Gillingham, England, Delphi operates major technical centers, manufacturing sites and customer support services in 32 countries, with regional headquarters in Bascharage, Luxembourg; Sao Paulo, Brazil; Shanghai, China and Troy, Michigan, U.S. Delphi delivers innovation for the real world with technologies that make cars and trucks safer as well as more powerful, efficient and connected.

Forward-Looking Statements

This press release, as well as other statements made by Delphi Automotive PLC (the “Company”), contain forward-looking statements that reflect, when made, the Company's current views with respect to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company's operations and business environment, which may cause the actual results of the Company to be materially different from any future results. All statements that address future operating, financial or business performance or the Company's strategies or expectations are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are discussed under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company's filings with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any income from them can go down as well as up. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.

2. Weighted Average Number of Diluted Shares Outstanding

The following table illustrates the weighted average shares outstanding used in calculating basic and diluted net income per share attributable to Delphi for the three and six months ended June 30, 2014 and 2013:

DELPHI AUTOMOTIVE PLC
RECONCILIATION OF NON-GAAP MEASURES
(unaudited)

In this press release the Company has provided information regarding certain non-GAAP financial measures, including "Adjusted Operating Income," "Adjusted Net Income," "Adjusted Net Income per Share" and "Cash Flow Before Financing." Such non-GAAP financial measures are reconciled to their closest GAAP financial measure in the following schedules.

Adjusted Operating Income: Adjusted Operating Income is presented as a supplemental measure of the Company's performance which is consistent with the basis and manner in which management presents financial information for the purpose of making internal operating decisions. Adjusted Operating Income is defined as net income before interest expense, other income (expense), net, income tax expense, restructuring, other acquisition-related costs, asset impairments and equity income (loss), net of tax. Not all companies use identical calculations of Adjusted Operating Income therefore this presentation may not be comparable to other similarly titled measures of other companies. The Company's 2014 guidance was determined using a consistent manner and methodology.

DELPHI AUTOMOTIVE PLC
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(unaudited)

Adjusted Net Income and Adjusted Net Income Per Share: Management believes adjusted net income and adjusted net income per share, which are non-GAAP measures, are useful in evaluating the ongoing operating performance of the Company. Adjusted Net Income is defined as net income (loss) before restructuring, acquisition-related integration costs, asset impairments and debt extinguishment costs. Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average number of diluted shares outstanding for the period. Not all companies use identical calculations of Adjusted Net Income and Adjusted Net Income Per Share, therefore this presentation may not be comparable to other similarly titled measures of other companies. The Company's 2014 guidance was determined using a consistent manner and methodology.

Cash Flow Before Financing: Cash flow before financing is presented as a supplemental measure of the Company's liquidity which is consistent with the basis and manner in which management presents financial information for the purpose of making internal operating decisions. Cash flow before financing is defined as cash provided by (used in) operating activities plus cash provided by (used in) investing activities. Not all companies use identical calculations of cash flow before financing therefore this presentation may not be comparable to other similarly titled measures of other companies. The Company's 2014 guidance was determined using a consistent manner and methodology.