DELPHI TECHNOLOGIES PLC, 10-Q filed on 8/5/2020
Quarterly Report
v3.20.2
Cover - shares
6 Months Ended
Jun. 30, 2020
Jul. 31, 2020
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Entity File Number 001-38110  
Entity Registrant Name DELPHI TECHNOLOGIES PLC  
Entity Incorporation, State or Country Code Y9  
Entity Tax Identification Number 98-1367514  
Entity Address, Address Line One One Angel Court  
Entity Address, Address Line Two 10th Floor  
Entity Address, City or Town London  
Entity Address, Postal Zip Code EC2R 7HJ  
Entity Address, Country GB  
City Area Code 011-  
Local Phone Number 44-020-305-74300  
Title of 12(b) Security Ordinary shares. $0.01 par value per share  
Trading Symbol DLPH  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   86,349,731
Entity Central Index Key 0001707092  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.20.2
Consolidated Statements Of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Net sales $ 628 $ 1,121 $ 1,573 $ 2,272
Operating expenses:        
Cost of sales 602 955 1,426 1,938
Selling, general and administrative 74 103 169 207
Amortization 3 2 6 8
Restructuring (Note 7) 9 5 52 8
Total operating expenses 688 1,065 1,653 2,161
Operating (loss) income (60) 56 (80) 111
Interest expense (22) (18) (38) (36)
Other income (expense), net (Note 17) 9 8 11 (4)
(Loss) income before income taxes and equity income (73) 46 (107) 71
Income tax expense (27) (14) (47) (22)
(Loss) income before equity income (100) 32 (154) 49
Equity (loss) income, net of tax (2) (1) (2) 1
Net (loss) income (102) 31 (156) 50
Net income attributable to noncontrolling interest 4 4 7 7
Net (loss) income attributable to Delphi Technologies $ (106) $ 27 $ (163) $ 43
Net (loss) income attributable to Delphi Technologies        
Basic (in dollars per share) $ (1.23) $ 0.31 $ (1.89) $ 0.49
Diluted (in dollars per share) $ (1.23) $ 0.31 $ (1.89) $ 0.49
Weighted average ordinary shares outstanding:        
Basic (in shares) 86,330 87,770 86,250 88,110
Diluted (in shares) 86,330 88,110 86,250 88,330
v3.20.2
Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net (loss) income $ (102) $ 31 $ (156) $ 50
Other comprehensive income (loss):        
Currency translation adjustments (3) (15) (49) (6)
Net change in unrecognized gain (loss) on derivative instruments, net of tax (Note 15) 0 (9) 4 7
Employee benefit plans adjustment, net of tax 5 9 18 43
Other comprehensive income (loss) 2 (15) (27) 44
Comprehensive (loss) income (100) 16 (183) 94
Comprehensive income attributable to noncontrolling interests 5 2 6 6
Comprehensive (loss) income attributable to Delphi Technologies $ (105) $ 14 $ (189) $ 88
v3.20.2
Consolidated Balance Sheets - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 550 $ 191
Accounts receivable, net 703 821
Inventories, net (Note 3) 373 447
Other current assets (Note 4) 128 189
Total current assets 1,754 1,648
Long-term assets:    
Property, net 1,435 1,509
Investments in affiliates 40 42
Intangible assets, net 44 53
Goodwill 6 7
Deferred income taxes 260 269
Other long-term assets (Note 4) 230 219
Total long-term assets 2,015 2,099
Total assets 3,769 3,747
Current liabilities:    
Short-term debt (Note 8) 58 40
Accounts payable 480 717
Accrued liabilities (Note 5) 486 466
Total current liabilities 1,024 1,223
Long-term liabilities:    
Long-term debt (Note 8) 1,914 1,455
Pension and other postretirement benefit obligations (Note 9) 367 404
Other long-term liabilities (Note 5) 200 210
Total long-term liabilities 2,481 2,069
Total liabilities 3,505 3,292
Commitments and contingencies (Note 10)
Shareholders’ equity:    
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, none issued and outstanding 0 0
Ordinary shares, $0.01 par value per share, 1,200,000,000 shares authorized, 86,349,731 and 86,071,640 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively 1 1
Additional paid-in-capital 415 409
Retained earnings 118 281
Accumulated other comprehensive loss (Note 14) (402) (376)
Total Delphi Technologies shareholders’ equity 132 315
Noncontrolling interest 132 140
Total shareholders’ equity 264 455
Total liabilities and shareholders’ equity $ 3,769 $ 3,747
v3.20.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Preferred shares, par value (in USD per share) $ 0.01 $ 0.01
Preferred shares, authorized (in shares) 50,000,000 50,000,000
Preferred shares, outstanding (in shares) 0 0
Preferred shares, issued (in shares) 0 0
Ordinary shares, par value (in USD per share) $ 0.01 $ 0.01
Ordinary shares, authorized (in shares) 1,200,000,000 1,200,000,000
Ordinary shares, issued (in shares) 86,349,731 86,071,640
Ordinary shares, outstanding (in shares) 86,349,731 86,071,640
v3.20.2
Consolidated Statements Of Cash Flows (Unaudited) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash flows from operating activities:    
Net (loss) income $ (156) $ 50
Adjustments to reconcile net (loss) income to net cash provided by operating activities:    
Depreciation 103 97
Amortization 6 5
Amortization of deferred debt issuance costs 3 2
Impairment of assets 5 8
Restructuring expense, net of cash paid 0 (11)
Deferred income taxes 4 (2)
Pension and other postretirement benefit expenses 0 18
Income from equity method investments 2 (1)
Gain on sale of assets (4) (1)
Share-based compensation 8 9
Changes in operating assets and liabilities:    
Accounts receivable, net 157 (6)
Inventories, net 74 (32)
Other assets 65 7
Accounts payable (188) (13)
Accrued and other long-term liabilities 0 (10)
Other, net (27) (3)
Pension contributions (11) (26)
Net cash provided by operating activities 41 91
Cash flows from investing activities:    
Capital expenditures (145) (234)
Proceeds from sale of property 9 5
Dividends from equity method investment 1 0
Cost of technology investments (1) 0
Settlement of undesignated derivatives (1) (1)
Net cash used in investing activities (137) (230)
Cash flows from financing activities:    
Net repayments under short-term debt agreements (1) 0
Repayments under long-term debt agreements (19) (19)
Net borrowings under revolving credit facility 500 0
Dividend payments of consolidated affiliates to minority shareholders (8) (8)
Taxes withheld and paid on employees’ restricted share awards (2) (2)
Repurchase of ordinary shares 0 (29)
Fees associated with amendments to long-term debt agreements (9) 0
Net cash provided by (used in) financing activities 461 (58)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash (6) 0
Increase (decrease) in cash, cash equivalents and restricted cash 359 (197)
Cash, Cash Equivalents and Restricted Cash, beginning 191 360
Cash, Cash Equivalents and Restricted Cash, end $ 550 $ 163
v3.20.2
Consolidated Statement Of Shareholders' Equity (Unaudited) - USD ($)
$ in Millions
Total
Ordinary Shares
Additional Paid in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Total Delphi Technologies Shareholders’ Equity
Noncontrolling Interest
Shares outstanding, beginning of period (shares) at Dec. 31, 2018   89,000,000          
Balance at beginning of year at Dec. 31, 2018 $ 438 $ 1 $ 407 $ 296 $ (412) $ 292 $ 146
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income 19     16   16 3
Other comprehensive loss 59       58 58 1
Dividend payments of consolidated affiliates to minority shareholders (8)           (8)
Repurchase of ordinary shares (shares)   (1,000,000)          
Repurchase of ordinary shares, value (15)   (4) (11)   (15)  
Share-based compensation 4   4     4  
Taxes withheld on employees’ restricted share award vestings (1)   (1)     (1)  
Balance at end of year at Mar. 31, 2019 496 $ 1 406 301 (354) 354 142
Shares outstanding, end of period (shares) at Mar. 31, 2019   88,000,000          
Shares outstanding, beginning of period (shares) at Dec. 31, 2018   89,000,000          
Balance at beginning of year at Dec. 31, 2018 438 $ 1 407 296 (412) 292 146
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income 50            
Other comprehensive loss $ 44            
Repurchase of ordinary shares (shares) (1,583,876)            
Repurchase of ordinary shares, value $ (30)            
Balance at end of year at Jun. 30, 2019 500 $ 1 406 317 (367) 357 143
Shares outstanding, end of period (shares) at Jun. 30, 2019   87,000,000          
Shares outstanding, beginning of period (shares) at Mar. 31, 2019   88,000,000          
Balance at beginning of year at Mar. 31, 2019 496 $ 1 406 301 (354) 354 142
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income 31     27   27 4
Other comprehensive loss (15)       (13) (13) (2)
Dividend payments of consolidated affiliates to minority shareholders $ (1)           (1)
Repurchase of ordinary shares (shares) (845,959) (1,000,000)          
Repurchase of ordinary shares, value $ (15)   (4) (11)   (15)  
Share-based compensation 5   5     5  
Taxes withheld on employees’ restricted share award vestings (1)   (1)     (1)  
Balance at end of year at Jun. 30, 2019 500 $ 1 406 317 (367) 357 143
Shares outstanding, end of period (shares) at Jun. 30, 2019   87,000,000          
Shares outstanding, beginning of period (shares) at Dec. 31, 2019   86,000,000          
Balance at beginning of year at Dec. 31, 2019 455 $ 1 409 281 (376) 315 140
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income (54)     (57)   (57) 3
Other comprehensive loss (29)       (27) (27) (2)
Dividend payments of consolidated affiliates to minority shareholders (8)           (8)
Share-based compensation 4   4     4  
Taxes withheld on employees’ restricted share award vestings (2)   (2)     (2)  
Balance at end of year at Mar. 31, 2020 366 $ 1 411 224 (403) 233 133
Shares outstanding, end of period (shares) at Mar. 31, 2020   86,000,000          
Shares outstanding, beginning of period (shares) at Dec. 31, 2019   86,000,000          
Balance at beginning of year at Dec. 31, 2019 455 $ 1 409 281 (376) 315 140
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income (156)            
Other comprehensive loss (27)            
Balance at end of year at Jun. 30, 2020 264 $ 1 415 118 (402) 132 132
Shares outstanding, end of period (shares) at Jun. 30, 2020   86,000,000          
Shares outstanding, beginning of period (shares) at Mar. 31, 2020   86,000,000          
Balance at beginning of year at Mar. 31, 2020 366 $ 1 411 224 (403) 233 133
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income (102)     (106)   (106) 4
Other comprehensive loss 2       1 1 1
Dividend payments of consolidated affiliates to minority shareholders (6)           (6)
Share-based compensation 4   4     4  
Balance at end of year at Jun. 30, 2020 $ 264 $ 1 $ 415 $ 118 $ (402) $ 132 $ 132
Shares outstanding, end of period (shares) at Jun. 30, 2020   86,000,000          
v3.20.2
General
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
General GENERAL
On December 4, 2017, Delphi Technologies PLC (“Delphi Technologies,” “we,” “us,” “our” or the “Company”) became an independent publicly-traded company, formed under the laws of Jersey, as a result of the separation of the Powertrain Systems segment, which included the aftermarket operations, from Delphi Automotive PLC (the “Former Parent”). The separation was completed in the form of a pro-rata distribution to the Former Parent shareholders of record on November 22, 2017 of 100% of the outstanding ordinary shares of Delphi Technologies PLC (the “Separation”). Following the Separation, Delphi Automotive PLC changed its name to Aptiv PLC (“Aptiv”). Delphi Technologies’ ordinary shares began trading on the New York Stock Exchange under the ticker symbol “DLPH” on December 5, 2017.
BorgWarner Inc. Transaction
On January 28, 2020, we announced that we had entered into a definitive transaction agreement (the “Original Transaction Agreement”) under which BorgWarner Inc. (“BorgWarner”), a global product leader in clean and efficient technology solutions for combustion, hybrid and electric vehicles, would acquire Delphi Technologies in an all-stock transaction pursuant to a scheme of arrangement (the “Scheme of Arrangement”) under Part 18A of the Companies (Jersey) Law 1991, as amended from time to time (the “Transaction”).
On March 30, 2020, we drew the full available amount under our Revolving Credit Facility (the “Revolver Draw”), resulting in a total of $500 million outstanding under the Revolving Credit Facility. We determined it was prudent and in the best interests of the Company and its shareholders to draw the full $500 million under the facility to protect the business and best position the Company to weather current market conditions and uncertainties caused by the novel coronavirus (“COVID-19”) pandemic.
Following the Revolver Draw, on March 30, 2020, BorgWarner notified the Company of its assertion that the Company materially breached the Original Transaction Agreement as a result of effecting the Revolver Draw without BorgWarner’s prior written consent and also asserted that, if such alleged breach was not cured within 30 days of the Revolver Draw (or April 29, 2020), BorgWarner would have the right to terminate the Original Transaction Agreement. We disputed BorgWarner’s breach assertion on the basis that, among other things, BorgWarner unreasonably withheld and conditioned its consent in material breach of the Original Transaction Agreement.
On May 6, 2020, we resolved our breach dispute with BorgWarner regarding our Revolver Draw by entering into an Amendment and Consent Agreement (the “Amendment” and, together with the Original Transaction Agreement, the “Transaction Agreement”), pursuant to which, among other things, BorgWarner consented to the Revolver Draw and certain other matters, subject to the terms and conditions contained in the Amendment. The Amendment also amends the Original Transaction Agreement to (a) reduce the exchange ratio at which each Delphi Technologies ordinary share will be exchanged from 0.4534 shares of BorgWarner common stock to 0.4307 shares of BorgWarner common stock, and (b) include the following additional conditions to BorgWarner’s obligations to close the Transaction: (i) Delphi Technologies’ net-debt-to-adjusted EBITDA ratio does not exceed (x) 6.5 to 1.0 if closing of the Transaction occurs on or before September 30, 2020, and (y) 7.5 to 1.0 if the closing of the Transaction occurs on or after October 1, 2020, and (ii) as of 11:59 p.m. (New York time) on the date immediately prior to the closing of the Transaction, Delphi Technologies’ outstanding revolver borrowings do not exceed $225 million and, net of cash balances, the revolver borrowings do not exceed $115 million.
On June 25, 2020, shareholders of the Company voted to approve the Transaction, which is currently expected to close in the second half of 2020. However, there can be no assurance the conditions to closing will be satisfied or waived or that the Transaction will be completed within the expected time frame or at all. Refer to Item 1A. Risk Factors, set forth in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, for risks associated with this Transaction.
Nature of Operations
Delphi Technologies is a leader in the development, design and manufacture of integrated propulsion technologies that enable vehicles to drive cleaner, better and further, by optimizing engine performance, increasing vehicle efficiency, reducing emissions, improving driving performance, and supporting their electrification. The Company is a global supplier to original equipment manufacturers (“OEMs”) seeking to manufacture vehicles that meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. We provide advanced fuel injection systems, actuators, valvetrain products, sensors, electronic control modules and power electronics technologies. Additionally, the Company offers a full spectrum of aftermarket products serving a global customer base.
Our comprehensive portfolio of advanced technologies and solutions for all propulsion systems are sold to global OEMs of both light vehicles (passenger cars, trucks, vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). We also remanufacture and sell our products to leading aftermarket companies, including independent retailers and wholesale distributors. We supply a wide range of aftermarket products and services covering the fuel injection, electronics and engine management, maintenance, and test equipment and
vehicle diagnostics categories. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions throughout vehicles’ lifecycle.
Basis of Presentation
The unaudited consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements. These financial statements include all adjustments, which consist of normal recurring items, necessary for a fair presentation. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These financial statements should be read in conjunction with the Delphi Technologies’ Annual Report on Form 10-K for the year ended December 31, 2019.
v3.20.2
Significant Accounting Policies
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Significant Accounting Policies SIGNIFICANT ACCOUNTING POLICIES
There have been no material changes on the Company’s significant accounting policies since the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, except those described below.
Principles of consolidation—The consolidated financial statements as of and for the three and six months ended June 30, 2020 include the accounts of Delphi Technologies’ subsidiaries in which the Company holds a controlling financial or management interest and variable interest entities of which Delphi Technologies has determined that it is the primary beneficiary. All significant intercompany transactions and balances between consolidated Delphi Technologies businesses have been eliminated.
Delphi Technologies held a $6 million investment in PolyCharge America Inc. (“PolyCharge”) as of December 31, 2019. PolyCharge is a privately-held company that does not have a readily determinable fair value and is measured at cost less impairments, adjusted for observable price changes in orderly transactions for the identical or similar investment of the same issuer. During the six months ended June 30, 2020, Delphi Technologies recorded a $3 million impairment related to its investment in PolyCharge after assessing its ability to recover the carrying amount of the investment.
During the six months ended June 30, 2020, Delphi Technologies made a $1 million investment in Mobilion Ventures L.P. (“Mobilion”), a venture capital fund investing in smart mobility aftermarket companies, over which Delphi Technologies does not exert significant influence.
Use of estimates—Preparation of consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect amounts reported therein. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets, deferred tax asset valuation allowances, income taxes, pension benefit plan assumptions, accruals related to litigation, warranty costs, restructuring, environmental remediation costs, worker’s compensation accruals and healthcare accruals. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates. Events or changes in circumstances after June 30, 2020, including those resulting from the impacts of the COVID-19 pandemic, generally will be included in future periods.
Recently adopted accounting pronouncements—In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The Company adopted this ASU on January 1, 2020. This guidance is applicable to the Company’s accounts receivable allowance for doubtful accounts, reimbursable engineering costs, notes receivable and cash equivalents. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The Company adopted this ASU on January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This guidance amends ASC 820 to add, remove and clarify certain disclosure requirements related to fair value measures. The Company adopted this ASU on January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
Recently issued accounting pronouncements not yet adopted—In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. This guidance amends ASC 715 to add, remove and clarify certain disclosure requirements related to defined benefit pension and other postretirement plans. The new guidance is effective for fiscal years ending after December 31, 2020. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides temporary optional expedients and exceptions for applying US GAAP on contract modifications and hedge accounting affected by reference rate reform if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. The new guidance is effective March 12, 2020 and can be applied through December 31, 2022. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.
v3.20.2
Inventories
6 Months Ended
Jun. 30, 2020
Inventory Disclosure [Abstract]  
Inventories INVENTORIES
A summary of inventories is shown below:
June 30,
2020
December 31,
2019
 (in millions)
Productive material$179  $210  
Work-in-process34  40  
Finished goods160  197  
Total$373  $447  
v3.20.2
Other Assets
6 Months Ended
Jun. 30, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Assets OTHER ASSETS
Other current assets consisted of the following:
June 30,
2020
December 31,
2019
 (in millions)
Value added tax receivable$58  $107  
Prepaid insurance and other expenses25  21  
Reimbursable engineering costs15  19  
Return assets (Note 11)10   
Notes receivable 12  
Income and other taxes receivable 13  
Derivative financial instruments (Note 15)  
Other  
Total$128  $189  
Other long-term assets consisted of the following:
June 30,
2020
December 31,
2019
 (in millions)
Operating lease assets$109  $107  
Income and other taxes receivable35  28  
Investment in Tula Technology, Inc.21  21  
Derivative financial instruments (Note 15)12  13  
Debt issuance costs  
Value added tax receivable  
Reimbursable engineering costs  
Investment in PolyCharge  
Other36  34  
Total$230  $219  
v3.20.2
Liabilities
6 Months Ended
Jun. 30, 2020
Other Liabilities Disclosure [Abstract]  
Liabilities LIABILITIES
Accrued liabilities consisted of the following:
June 30,
2020
December 31,
2019
 (in millions)
Restructuring (Note 7)$83  $73  
Income and other taxes payable68  71  
Warranty obligations (Note 6)56  63  
Deferred reimbursable engineering44  45  
Payroll-related obligations40  48  
Operating lease liabilities25  22  
Accrued rebates22  26  
Accrued customer returns16   
Accrued interest14  10  
Freight13  13  
Outside services11  11  
Employee benefits10   
Customer deposits  
Dividends to minority shareholders  
Other72  61  
Total$486  $466  
Other long-term liabilities consisted of the following:
June 30,
2020
December 31,
2019
 (in millions)
Operating lease liabilities$91  $93  
Accrued income taxes44  45  
Warranty obligations (Note 6)24  23  
Deferred income taxes16  15  
Restructuring (Note 7)11  23  
Environmental  
Derivative financial instruments (Note 15) —  
Other 10  
Total$200  $210  
v3.20.2
Warranty Obligations
6 Months Ended
Jun. 30, 2020
Product Warranties Disclosures [Abstract]  
Warranty Obligations WARRANTY OBLIGATIONS
Delphi Technologies has recognized its best estimate for its total aggregate warranty reserves, including product recall costs, across its operating segments as of June 30, 2020. The Company estimates the reasonably possible amount to ultimately resolve all matters in excess of the recorded reserves as of June 30, 2020 to be up to approximately $20 million.
The table below summarizes the activity in the product warranty liability for the six months ended June 30, 2020:
 Warranty Obligations
 (in millions)
Accrual balance at December 31, 2019$86  
Provision for estimated warranties incurred during the period14  
Changes in estimate for pre-existing warranties 
Settlements made during the period (in cash or in kind)(22) 
Foreign currency translation and other(2) 
Accrual balance at June 30, 2020$80  
v3.20.2
Restructuring
6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Restructuring RESTRUCTURING
The Company’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing Delphi Technologies’ strategy, either in the normal course of business or pursuant to significant restructuring programs.
On October 31, 2019, the Company announced a restructuring plan to reshape and realign the Company’s global technical center footprint and reduce salaried and contract staff, with expected charges of up to $175 million. Certain of these actions are subject to consultation with employee works councils and other employee representatives and are expected to be substantially completed by the end of 2021. The Company recorded pre-tax restructuring charges of approximately $40 million during the six months ended June 30, 2020 related to this plan (approximately $100 million of charges recorded to date). The Company expects to record additional pre-tax restructuring charges of approximately $25 million up to $75 million across the organization. Nearly all of the restructuring charges will be cash expenditures.
As part of the Company’s continued efforts to optimize its cost structure, in recent years it has undertaken several restructuring programs which include workforce reductions as well as plant closures. These programs are primarily focused on the continued rotation of our manufacturing footprint to best-cost locations in Europe and on reducing global overhead costs. The Company recorded employee-related and other restructuring charges related to these programs totaling approximately $9 million and $12 million during the three and six months ended June 30, 2020, respectively, as well as $5 million and $8 million during the three and six months ended June 30, 2019, respectively.
Restructuring charges for employee separation and termination benefits are paid either over the severance period or in a lump sum in accordance with either statutory requirements or individual agreements. Delphi Technologies incurred cash expenditures related to its restructuring programs of approximately $52 million and $19 million in the six months ended June 30, 2020 and 2019, respectively.
The following table summarizes the restructuring charges recorded for the three and six months ended June 30, 2020 and 2019 by operating segment:
 Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
 (in millions)
Fuel Injection Systems$ $ $40  $ 
Powertrain Products  10   
Electrification & Electronics(3)  (2)  
Aftermarket —   —  
Corporate    
Total$ $ $52  $ 
The table below summarizes the activity in the restructuring liability for the six months ended June 30, 2020:
Employee Termination Benefits LiabilityOther Exit Costs LiabilityTotal
 (in millions)
Accrual balance at December 31, 2019$95  $ $96  
Provision for estimated expenses during the period51   52  
Payments made during the period(52) —  (52) 
Foreign currency and other(2) —  (2) 
Accrual balance at June 30, 2020$92  $ $94  
v3.20.2
Debt
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Debt DEBT
The following is a summary of debt outstanding, net of unamortized issuance costs and discounts, as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
(in millions)
Term Loan A Facility (net of $6 and $3 unamortized issuance costs)
$669  $691  
Senior Notes at 5.00% (net of $10 and $10 unamortized issuance costs and $2 and $2 discount, respectively)
788  788  
Revolving Credit Facility500  —  
Finance lease liabilities and other15  16  
Total debt1,972  1,495  
Less: current portion(58) (40) 
Long-term debt$1,914  $1,455  
Credit Agreement
On September 7, 2017, Delphi Technologies and its wholly-owned subsidiary Delphi Powertrain Corporation entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), with respect to $1.25 billion in senior secured credit facilities, which became effective in conjunction with the Separation. The Credit Agreement consists of a senior secured five-year $750 million term loan facility due December 2022 (the “Term Loan A Facility”) and a $500 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders party thereto and JPMorgan Chase Bank, N.A. We incurred $9
million of issuance costs in connection with the Credit Agreement. As of June 30, 2020, there was $500 million drawn on the Revolving Credit Facility.
The Credit Facilities are subject to an interest rate, at our option, of either (a) the Administrative Agent’s Alternate Base Rate (“ABR” as defined in the Credit Agreement) or (b) the London Interbank Offered Rate (the “Adjusted LIBOR Rate” as defined in the Credit Agreement) (“LIBOR”), in each case, plus an applicable margin that is based on our corporate credit ratings, as more particularly described below (the “Applicable Rate”). In addition, the Credit Agreement requires payment of additional interest on certain overdue obligations on terms and conditions customary for financings of this type. The interest rate period with respect to LIBOR interest rate options can be set at one-, two-, three-, or six-months as selected by us in accordance with the terms of the Credit Agreement (or other period as may be agreed by the applicable lenders). We may elect to change the selected interest rate over the term of the Credit Facilities in accordance with the provisions of the Credit Agreement. The Applicable Rates charged to the Company on the specified date are set forth below:
June 30, 2020December 31, 2019
LIBOR plusABR plusLIBOR PlusABR plus
Revolving Credit Facility2.025 %1.025 %1.450 %0.450 %
Term Loan A Facility2.375 %1.375 %1.750 %0.750 %
The Credit Agreement was amended on February 10, 2020. Pursuant to the amendment, the applicable interest rate margins for the Term Loan A Facility will increase or decrease from time to time between 1.50% and 2.25% per annum (for LIBOR loans) and between 0.50% and 1.25% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Pursuant to the amendment, the applicable interest rate margins for the Revolving Credit Facility will increase or decrease from time to time between 1.30% and 1.75% per annum (for LIBOR loans) and between 0.30% and 0.75% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings.
In light of current economic conditions and uncertainties arising in connection with the COVID-19 pandemic, the Credit Agreement was further amended on May 4, 2020. Pursuant to the second amendment, the applicable interest rate margins for the Term Loan A Facility will increase or decrease from time to time between 2.00% and 2.75% per annum (for LIBOR loans) and between 1.00% and 1.75% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Pursuant to the second amendment, the applicable interest rate margins for the Revolving Credit Facility will increase or decrease from time to time between 1.80% and 2.25% per annum (for LIBOR loans) and between 0.80% and 1.25% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings.
Accordingly, the Applicable Rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR or future changes in our corporate credit ratings.
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, with respect to our and our subsidiaries’ equity interests. In addition, the Credit Agreement requires that we maintain a consolidated net leverage ratio of Consolidated Total Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement (the “Original Ratio”). The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events. Pursuant to the Credit Agreement amendment on February 10, 2020, for any fiscal quarter ending on or prior to September 30, 2019 or after December 31, 2020, the Company must maintain a consolidated net leverage ratio of not greater than 3.5 to 1.0 and for any fiscal quarter ending on or after December 31, 2019 and on or prior to December 31, 2020 a consolidated net leverage ratio of not greater than 4.0 to 1.0.
Pursuant to the second Credit Agreement amendment on May 4, 2020, the net leverage ratio definition was amended to be Consolidated Secured Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement (the “Revised Ratio”). For any fiscal quarter ending on or prior to March 31, 2020, the Company must maintain the Revised Ratio of not greater than 4.25 to 1.0 stepping down by 0.5x every quarter starting the quarter ended June 30, 2021, and reverting back to the Original Ratio starting the quarter ended March 31, 2022 to be maintained at a level no greater than 4.0 to 1.0.
The Company was in compliance with the Credit Agreement covenants as of June 30, 2020.
Senior Notes
On September 28, 2017, Delphi Technologies PLC issued $800 million in aggregate principal amount of 5.00% senior unsecured notes due 2025 in a transaction exempt from registration under the Securities Act (the “Senior Notes”).
The Senior Notes indenture contains certain restrictive covenants, including with respect to Delphi Technologies’ (and subsidiaries) ability to incur liens, enter into sale and leaseback transactions and merge with or into other entities. The Company was in compliance with the Senior Notes covenants as of June 30, 2020.
Other Financing
Receivable factoring—The Company is party to a €225 million accounts receivable factoring facility for certain subsidiaries in Europe. This facility is currently suspended. The facility would be accounted for as short-term debt and borrowings would be subject to the availability of eligible accounts receivable. Collateral is not required related to these trade accounts receivable. This facility matures on November 28, 2022 and will automatically renew on a non-committed, indefinite basis unless terminated by either party. Borrowings bear interest at LIBOR plus a margin for borrowings denominated in British pounds and Euro Interbank Offered Rate ("EURIBOR") plus a margin for borrowings denominated in Euros. The current applicable margin will increase or decrease from time to time between 0.45% and 0.85% based on changes to our corporate credit ratings. There were no amounts outstanding on the European accounts receivable factoring facility as of June 30, 2020 and December 31, 2019.
The Company entered into arrangements with various financial institutions to sell eligible trade receivables from certain Aftermarket customers in North America and Europe. These arrangements can be terminated at any time subject to prior written notice. The receivables under these arrangements are sold to a third party without recourse to the Company and are therefore accounted for as true sales. During the three and six months ended June 30, 2020, $31 million and $62 million of receivables were sold under these arrangements, and expenses of less than $1 million and $1 million were recognized within interest expense, respectively. During the three and six months ended June 30, 2019, $43 million and $74 million of receivables were sold under these arrangements, and expenses of $1 million and $2 million were recognized within interest expense, respectively.
In addition, during the six months ended June 30, 2019, one of the Company’s European subsidiaries factored, without recourse, $21 million of receivables related to certain foreign research credits to a financial institution. This transaction was accounted for as a true sale of the receivables, and the Company therefore derecognized this amount from other long-term assets in the consolidated balance sheet. During the six months ended June 30, 2019, less than $1 million of expenses were recognized within interest expense related to these transactions.
Finance leases—There were approximately $14 million and $14 million of finance lease obligations outstanding as of June 30, 2020 and December 31, 2019, respectively.
Interest—Cash paid for interest related to debt outstanding, including the effect of interest rate and cross currency swaps, totaled $31 million and $35 million, for the six months ended June 30, 2020 and 2019, respectively.
v3.20.2
Pension Benefits
6 Months Ended
Jun. 30, 2020
Retirement Benefits [Abstract]  
Pension Benefits PENSION BENEFITS
The Company sponsors defined benefit pension plans for certain employees and retirees outside of the U.S. Using appropriate actuarial methods and assumptions, the Company’s defined benefit pension plans are accounted for in accordance with FASB ASC Topic 715, Compensation—Retirement Benefits. The Company’s primary non-U.S. plans are located in the United Kingdom (“U.K.”), France and Mexico. The U.K. and certain Mexican plans are funded. In addition, the Company has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period. Delphi Technologies does not have any U.S. pension assets or liabilities.
Effective March 31, 2019, the Company froze future accruals for nearly all U.K. based employees under the related defined benefit plans, replacing them with contributions under defined contribution plans effective April 1, 2019, including additional contributions and other payments to impacted employees over a two-year transition period. As a result of this change, the Company realized a one-time reduction to its pension obligation of $33 million, along with a one-time charge of $15 million in the six months ended June 30, 2019, related to curtailing the defined benefit pension plans in the U.K. For the three and six months ended June 30, 2020, the Company also recognized a charge of $1 million and $3 million, respectively, related to transitional payments to impacted employees. For the three and six months ended June 30, 2019, the Company also recognized a charge of $2 million and $9 million, respectively, related to transitional payments to impacted employees. The Company excluded these charges, and expects to exclude related future charges, from our calculation of Adjusted Operating Income.
The amounts shown below reflect the non-U.S. plans’ defined benefit pension (income) expense for the three and six months ended June 30, 2020 and 2019:
 Three Months Ended June 30,
 20202019
 (in millions)
Service cost$ $ 
Interest cost  
Expected return on plan assets(10) (15) 
Amortization of actuarial losses  
Net periodic benefit cost (income)$—  $(3) 
 Six Months Ended June 30,
 20202019
 (in millions)
Service cost$ $ 
Interest cost13  18  
Expected return on plan assets(21) (29) 
Curtailment loss—  15  
Amortization of actuarial losses  
Net periodic benefit cost$—  $18  
Other postretirement benefit obligations were $1 million and $1 million at June 30, 2020 and December 31, 2019, respectively.
v3.20.2
Commitments And Contingencies
6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments And Contingencies COMMITMENTS AND CONTINGENCIES
Ordinary Business Claims
In the normal course of our business, we are named from time to time as a defendant in various legal actions, including arbitrations, class actions, and other litigation. We also from time to time receive subpoenas and other inquiries or requests for information from U.S. and foreign federal, state and local governments on a variety of matters. We accrue for matters when we believe that losses are probable and can be reasonably estimated. Considering, among other things, the legal defenses available and existing accruals, it is inherently difficult in many matters to determine whether loss is probable or reasonably possible or to estimate the size or range of the possible loss. Accordingly adverse outcomes from such proceedings could exceed the
amounts accrued by an amount that could be material to our results of operations or cash flows in any particular reporting period.
We estimate our reasonably possible loss in excess of the amounts accrued for ordinary business claims to be up to $10 million. We estimate our reasonably possible loss in excess of the amounts accrued for environmental matters, including investigation and remediation, to be up to $5 million.
Transaction with BorgWarner
Shareholder Litigation
Since the January 28, 2020 announcement that the Company had entered into a definitive transaction agreement with BorgWarner Inc., six complaints were filed by alleged Company shareholders, in actions captioned Sherman v. Delphi Technologies PLC, et al., No. 1:20-cv-00385 (D. Del.), Costa v. Delphi Technologies PLC, et al., No. 1:20-cv-02363 (S.D.N.Y.), Catalano v. Delphi Technologies, PLC, et al., No. 1:20-cv-02520 (S.D.N.Y.), Schlageter v. Delphi Technologies PLC, et al., No. 1:20-cv-02527 (S.D.N.Y.); Heinowski v. Delphi Technologies PLC, et al., No. 2:20-cv-10834 (E.D. Mich.), and Reyes v. Delphi Technologies PLC, et al., No. 2:20-cv-11562 (E.D. Mich.). The complaint in each case named as defendants the Company and the members of the board of directors of the Company and alleged, among other things, that the defendants violated federal securities laws by omitting supposedly material information from the Company’s proxy statement filed in connection with the proposed transaction with BorgWarner Inc. As of July 6, 2020, each of the six actions were voluntarily dismissed. Certain plaintiffs in these dismissed actions have indicated that they may pursue an award of attorney’s fees from the Company. While we do not have enough information to estimate the amount of such fees, they are not expected to be material.
v3.20.2
Revenue
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue REVENUE
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring promised goods or services. The Company generally recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. From time to time, we enter into pricing agreements with our customers that provide for price reductions, some of which are conditional upon achieving certain criteria. In these instances, revenue is recognized based on the agreed-upon price at the time of shipment.
Nature of Goods
The majority of our revenue is recorded at a point in time as defined by ASC Topic 606, Revenue from Contacts with Customers (“ASC 606”) as the customers obtain control of the product upon title transfer and not as the product is manufactured or developed. For certain customers, based on specific terms and conditions pertaining to termination for convenience, Delphi Technologies concluded that it had an enforceable right to payment for performance completed to date and the products have no alternative use to the Company, which requires the recognition of revenue over time as defined by ASC 606. The impact on both revenue and operating income from recognizing revenue over time instead of point in time is not significant.
The amount of revenue recognized for these products is based on the purchase order price and adjusted for revenue allocated to variable consideration (i.e. estimated rebates and price discounts), as applicable. Our payment terms are based on customary business practices and vary by customer type and products offered. The term between invoicing and when payment is due is not significant.
Disaggregation of Revenue
In the following table, net sales to outside customers, based on the manufacturing location, is disaggregated by primary geographical market:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
(in millions)
North America$124  $314  $384  $652  
Europe213  520  631  1,062  
Asia Pacific278  254  520  490  
South America13  33  38  68  
Total$628  $1,121  $1,573  $2,272  
The Fuel Injection Systems, Powertrain Products and Electrification & Electronics segments primarily serve OEMs along with certain Tier 1 suppliers (one that supplies vehicle components directly to manufacturers) and the Aftermarket segment serves sales channels to independent aftermarket customers and original equipment service customers.
In the following table, net sales is disaggregated by customer and sales channels:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
(in millions)
Sales to OEMs and Tier 1 customers:
Fuel Injection Systems$216  $415  $574  $834  
Powertrain Products133  290  374  592  
Electronics & Electrification products151  202  323  439  
Total sales to OEMs and Tier 1 customers500  907  1,271  1,865  
Sales to independent aftermarket customers92  159  213  300  
Sales to original equipment service customers36  55  89  107  
Total sales to aftermarket customers128  214  $302  $407  
Total$628  $1,121  $1,573  $2,272  
Contract Balances
As discussed above, certain customers have contracts with specific terms and conditions which require recognition of revenue over time as defined by ASC 606. As of June 30, 2020 and December 31, 2019 the recognition of revenue over time resulted in approximately $1 million and $2 million of unbilled accounts receivable, respectively, which are included in accounts receivable, net. There were no other contract assets or liabilities as of June 30, 2020 and December 31, 2019 as defined by ASC 606.
Return Assets
The Aftermarket segment provides certain customers with a right of return. The Company recognizes an estimated return asset (and adjusts for cost of sales) for the right to recover the products returned by the customer. ASC 606 requires that return assets be presented separately from inventory. As of June 30, 2020 and December 31, 2019, the Company had return assets of $10 million and $7 million, respectively, included in other current assets.
Practical Expedients and Exemptions
For our Fuel Injection Systems, Powertrain Products and Electrification & Electronics segments, we define the contract with the customer as the combination of a current purchase order and a current production schedule issued by the customer. For our Aftermarket segment, we define the contract with the customer as the combination of a current purchase order and a master agreement with the customer. Although there are instances where the master agreements may extend beyond one year, there are generally no purchase orders with an expected duration beyond a year.
There are generally no performance obligations outstanding beyond a year. The Company generally does not enter into fixed long-term supply agreements. The Company applies the exemption in ASC 606 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
In addition, the Company applies the practical expedient in ASC 340 and immediately expenses contract acquisition costs when incurred, including sales commissions, because the amortization period would be one year or less.
v3.20.2
Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
At the end of each interim period, the Company makes its best estimate of the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to unusual or infrequent items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or income tax contingencies is recognized in the interim period in which the change occurs.
The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. Jurisdictions with a projected loss for the year or a year-to-date loss for which no tax benefit or expense can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the composition and timing of actual earnings compared to annual projections. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as our tax environment changes. To the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs.
The Company’s income tax expense and effective tax rate for the six months ended June 30, 2020 and 2019 were as follows:
 Six Months Ended June 30,
 20202019
 (dollars in millions)
Income tax expense$47  $22  
Effective tax rate(44)%31 %
The Company’s tax rate is affected by the fact that Delphi Technologies PLC, its parent entity, is a U.K. resident taxpayer, the tax rates in the other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.
The Company’s effective tax rate for the six months ended June 30, 2020 was impacted by unfavorable changes in geographic income mix in 2020 as compared to 2019 which increased the amount of losses in jurisdictions in which no tax benefit for those losses could be recognized. The COVID-19 pandemic has also affected the 2020 effective tax rate in comparison to 2019 due to its significant impact on the Company’s operating results in the first six months of 2020 and full-year projections. The Company’s effective tax rate for the six months ended June 30, 2020 includes net discrete tax expense of $2 million. The effective tax rate for the six months ended June 30, 2019 was impacted by unfavorable changes in geographic income mix in 2019 as compared to 2018. The Company’s effective tax rate for the six months ended June 30, 2019 includes net discrete tax benefit of less than $1 million.
Delphi Technologies PLC is a U.K. resident taxpayer and as such is generally not subject to U.K. tax on remitted foreign earnings.
Cash paid or withheld for income taxes was $21 million and $28 million for the six months ended June 30, 2020 and 2019, respectively.
v3.20.2
Shareholders' Equity And Net Income Per Share
6 Months Ended
Jun. 30, 2020
Shareholders' Equity and Net Income Per Share Note [Abstract]  
Shareholders' Equity And Net Income Per Share SHAREHOLDERS’ EQUITY AND NET INCOME PER SHARE
Net Income Per Share
Basic net income per share is computed by dividing net income attributable to Delphi Technologies by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share reflects the weighted average dilutive impact of all potentially dilutive securities from the date of issuance and is computed using the treasury stock method by dividing net income attributable to Delphi Technologies by the diluted weighted average number of ordinary shares outstanding. For all periods presented the calculation of net income per share contemplates the dilutive impacts, if any, of the Company’s share-based compensation plans. Refer to Note 18. Share-Based Compensation for additional information.
Weighted Average Shares
The following table illustrates net income per share attributable to Delphi Technologies and the weighted average shares outstanding used in calculating basic and diluted income per share:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
 (in millions, except per share data)
Numerator:
Net (loss) income attributable to Delphi Technologies$(106) $27  $(163) $43  
Denominator:
Weighted average ordinary shares outstanding, basic86.33  87.77  86.25  88.11  
Dilutive shares related to restricted stock units (“RSUs”)1
—  0.34  —  0.22  
Weighted average ordinary shares outstanding, including dilutive shares
86.33  88.11  86.25  88.33  
Net income per share attributable to Delphi Technologies:
Basic$(1.23) $0.31  $(1.89) $0.49  
Diluted$(1.23) $0.31  $(1.89) $0.49  
Anti-dilutive securities share impact$—  $—  $—  $—  
1 Due to losses during the three and six months ended June 30, 2020, 0.15 million shares and 0.13 million shares, respectively, are not included because the effect would be anti-dilutive.
Share Repurchases
In January 2019, the Board of Directors elected to suspend the Company’s quarterly dividend and approved a new $200 million share repurchase program, which replaced the previous repurchase authorization from July 2018. Repurchases under this program could be made at management’s discretion from time to time on the open market or through privately negotiated transactions. On October 31, 2019, the Company suspended its share repurchase program.
A summary of the ordinary shares repurchased during the three and six months ended June 30, 2019 is as follows:
Three Months Ended June 30,Six Months Ended June 30,
20192019
Total number of shares repurchased845,959  1,583,876  
Average price paid per share$17.73  $18.94  
Total (in millions)$15  $30  
All repurchased shares were retired and returned to authorized but unissued shares. The repurchased shares are reflected as a reduction of ordinary share capital for the par value of the shares, with the excess applied as reductions to additional paid-in-capital and retained earnings.
v3.20.2
Changes in Accumulated Other Comprehensive Income (Loss)
6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Changes in Accumulated Other Comprehensive Income (Loss) CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) attributable to Delphi Technologies (net of tax) for the three and six months ended June 30, 2020 and 2019 are shown below.
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
(in millions)
Foreign currency translation adjustments:
Balance at beginning of period$(219) $(157) $(175) $(165) 
Aggregate adjustment for the period (1)(4) (13) (48) (5) 
Balance at end of period(223) (170) (223) (170) 
Gains (losses) on derivatives:
Balance at beginning of period24  14  20  (2) 
Other comprehensive income before reclassifications (net tax effect of $0, $0, $0 and $0)
(3) (7)  11  
Reclassification to income (net tax effect of $0, $0, $0 and $0)
 (2)  (4) 
Balance at end of period24   24   
Pension and postretirement plans:
Balance at beginning of period(208) (211) (221) (245) 
Other comprehensive income before reclassifications (net tax effect of $0, $3, $3 and $5)
  14  27  
Reclassification to income (net tax effect $0, $0, $0 and $4)
   16  
Balance at end of period(203) (202) (203) (202) 
Accumulated other comprehensive loss, end of period$(402) $(367) $(402) $(367) 
(1)Includes a loss of $6 million and a loss of $4 million, for the three and six months ended June 30, 2020, respectively, related to the foreign currency impact of intra-entity loans that are of a long-term investment nature. Also includes a gain of $5 million and a gain of $2 million, for the three and six months ended June 30, 2019, respectively, related to the foreign currency impact of intra-entity loans that are of a long-term investment nature. During the three and six months ended June 30, 2020, there was a gain of $2 million and gain of $5 million respectively, related to non-derivative net investment hedges. Also included are a loss of $5 million and a loss of $1 million, for the three and six months ended June 30, 2019, respectively, related to non-derivative net investment hedges. Refer to Note 15. Derivatives and Hedging Activities for further description of these hedges.
Reclassifications from accumulated other comprehensive income (loss) to income for the three and six months ended June 30, 2020 and 2019 were as follows:
Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Details About Accumulated Other Comprehensive Income (Loss) ComponentsThree Months Ended June 30,Six Months Ended June 30,Affected Line Item in the Statement of Operations
2020201920202019
(in millions)
Pension and postretirement plans:
Actuarial losses$ $(1) $ $(5) 
Other income (expense), net1
Curtailment—  —  —  (15) 
Other income (expense), net1
 (1)  (20) Income before income taxes
—  —  —   Income tax expense
 (1)  (16) Net income
—  —  —  —  Net income attributable to noncontrolling interest
$ $(1) $ $(16) Net income attributable to Delphi Technologies
1These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 9. Pension Benefits for additional details).

Refer to Note. 15 Derivatives and Hedging Activities for additional reclassifications from accumulated other comprehensive income (loss) to income.