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Delphi Reports Third Quarter 2012 Financial Results

Acquisition of Motorized Vehicles Division from FCI Group

Delphi completed the acquisition of FCI Group's Motorized Vehicles Division ("MVL") on October 26, 2012 for €765 million. MVL is a leading global manufacturer of automotive connection systems with a focus on high-value, leading technology applications. The acquisition was funded with cash on hand inclusive of additional borrowings of $363 million.

Restructuring

In order to improve Delphi's industry leading cost structure and margins and in response to the continued economic uncertainties, we initiated various restructuring programs in the fourth quarter. The programs are anticipated to total approximately $250 million ($70 million related to MVL), with approximately $175 million anticipated to be recognized in Q4 2012, and the balance to be recognized in 2013. Approximately 75% of the restructuring program costs are in Europe.

Q4 2012 and Full Year 2012 Outlook

The Company's Q4 2012 and full year financial guidance reflects our current outlook on exchange rates, which negatively impacts year over year comparisons, further reductions in European OEM production schedules, and the acquisition of MVL, excluding non-recurring MVL transaction costs and the Q4 restructuring program. The Company's updated Q4 and full year financial guidance reflects an estimated average exchange rate of $1.29 per Euro for Q4 and $1.28 per Euro for the full year, as compared to the average exchange rate for Q4 2011 and full year 2011 of $1.35 per Euro and $1.39 per Euro, respectively.

     
    Excludes non-recurring MVL transaction costs and Q4 restructuring program of approximately $0.50 per share
 

Q4

 

2 Months Impact of

 

Q4 2012

 

Full Year

(dollars in millions)

 

2012

 

MVL Acquisition

  With MVL  

2012

Earnings Per Share $0.79 - $0.89 $0.01 $0.80 - $0.90 $3.68 - $3.78
EBITDA $440 - $480 ~$22 $460 - $500 $2,100 - $2,140
EBITDA Margin 12.2% - 13.0% ~18.0% 12.3% - 13.1% 13.6% - 13.7%
Revenue $3,600 - $3,700 ~$125 $3,725 - $3,825 $15,475 - $15,575
 

Full year cash flow before financing is expected to be approximately $800 million. The Company estimates a full year tax rate of approximately 17%. The reduction in the estimated rate reflects the anticipated geographical mix of pretax earnings, the impacts of various tax planning initiatives, and the timing of discrete tax events. Quarterly tax rates can be affected by the geographic mix of pretax earnings as well as the timing of discrete tax items.

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