##### Table of Contents



UNITED
    STATES
    SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C.
    20549
  FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to
    .   Commission file number:
    1-14787
   DELPHI CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

38-3430473(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)5725 Delphi Drive, Troy, Michigan

48098(Address of principal executive
    offices)

(Zip Code)    (248) 813-2000 (
    Registrants telephone number, including area code)
   þ o
  Rule 12b-2
  Large
    accelerated
    filer þ.
    Accelerated
    filer o.
    Non-accelerated
    filer o.
    Smaller
    reporting
    company o.  (Do not
    check if a smaller reporting company)
  Rule 12b-2 o þ
    WEBSITE
    ACCESS TO COMPANYS REPORTS
  www.delphi.com Form 10-K, Form 10-Q, Form 8-K,




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##### 



DELPHI
    CORPORATION
  INDEX
   
 PagePart I  Financial
    InformationItem 1.

Financial StatementsConsolidated Statements of Operations for the
    Three and Six Months Ended June 30, 2008 and 2007
    (Unaudited)

3Consolidated Balance Sheets as of June 30,
    2008 (Unaudited) and December 31, 2007

4Consolidated Statements of Cash Flows for the Six
    Months Ended June 30, 2008 and 2007 (Unaudited)

5Consolidated Statements of Comprehensive Loss for
    the Three and Six Months Ended June 30, 2008 and 2007
    (Unaudited)

6Notes to Consolidated Financial Statements
    (Unaudited)

7Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations

50Executive Summary of Business

50Overview of Performance

59Overview of Net Sales and Net Loss

61Results of Operations

62Liquidity and Capital Resources

74Liquidity Outlook for 2008

80Litigation Commitments and Contingencies

81Environmental Matters

81Other

81Inflation

81Recently Issued Accounting Pronouncements

81Significant Accounting Policies and Critical
    Accounting Estimates

82Forward-Looking Statements

82Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk

83Item 4.

Controls and Procedures

83Part II  Other
    InformationItem 1.

Legal Proceedings

84Item 1A.

Risk Factors

84Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds

86Item 3.

Defaults Upon Senior Securities

86Item 4.

Submission of Matters to a Vote of Security
    Holders

86Item 5.

Other Information

86Item 6.

Exhibits

86Signatures

87EX-31(A)EX-31(B)EX-32(A)EX-32(B)Agreement between Delphi Corporation and General Motors Corporation   2




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION ITEM 1.
    FINANCIAL STATEMENTS  DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
  Three Months


Six MonthsEnded


EndedJune 30,


June 30,2008


2007


2008


2007(in millions, except per share amounts)Net sales:General Motors and affiliates

$
1,483


$
2,247


$
3,124


$
4,410Other customers


3,751



3,753



7,362



7,272Total net sales


5,234



6,000



10,486



11,682Operating expenses:Cost of sales, excluding items listed below


4,821



5,654



9,718



10,960U.S. employee workforce transition program charges (credit)


18







54



(6
)Depreciation and amortization


210



230



429



457Long-lived asset impairment charges


5



34



8



40Goodwill impairment charges


168







168



Selling, general and administrative


377



394



741



758Securities & ERISA litigation charge






332







332Total operating expenses


5,599



6,644



11,118



12,541Operating loss


(365
)


(644
)


(632
)


(859
)Interest expense (contractual interest expense for the three and
    six months ended June 30, 2008 was $150 million and
    $279 million, respectively, and for the three and six
    months ended June 30, 2007 was $118 million and
    $242 million, respectively)


(109
)


(84
)


(219
)


(174
)Loss on extinguishment of debt


(49
)






(49
)


(23
)Other income, net


4



19



23



39Reorganization items


(29
)


(42
)


(138
)


(81
)Loss from continuing operations before income taxes, minority
    interest and equity income


(548
)


(751
)


(1,015
)


(1,098
)Income tax expense


(10
)


(55
)


(73
)


(101
)Loss from continuing operations before minority interest and
    equity income


(558
)


(806
)


(1,088
)


(1,199
)Minority interest, net of tax


(12
)


(12
)


(23
)


(24
)Equity income, net of tax


11



10



22



24Loss from continuing operations


(559
)


(808
)


(1,089
)


(1,199
)Income (loss) from discontinued operations, net of tax


8



(13
)


(51
)


(155
)Net loss

$
(551
)

$
(821
)

$
(1,140
)

$
(1,354
)Basic and diluted loss per share:Continuing operations

$
(0.99
)

$
(1.44
)

$
(1.93
)

$
(2.14
)Discontinued operations


0.01



(0.02
)


(0.09
)


(0.27
)Basic and diluted loss per share

$
(0.98
)

$
(1.46
)

$
(2.02
)

$
(2.41
)    3




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##### Table of Contents



DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)CONSOLIDATED BALANCE SHEETS
  June 30,2008


December 31,(Unaudited)


2007(in millions)ASSETSCurrent assets:Cash and cash equivalents

$
1,054


$
1,036Restricted cash


121



173Accounts receivable, net:General Motors and affiliates


1,108



1,257Other


3,024



2,637Inventories, net (Note 11)


1,737



1,808Other current assets


677



588Assets held for sale (Note 4)


711



720Total current assets


8,432



8,219Long-term assets:Property, net


3,811



3,863Investments in affiliates


386



387Goodwill


256



397Other


784



801Total long-term assets


5,237



5,448Total assets

$
13,669


$
13,667LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Short-term debt (Note 15)

$
4,421


$
3,495Accounts payable


2,951



2,904Accrued liabilities (Note 12)


2,343



2,281Liabilities held for sale (Note 4)


451



412Total current liabilities


10,166



9,092Long-Term liabilities:Other long-term debt (Note 15)


59



59Employee benefit plan obligations (Note 17)


475



443Other (Note 12)


1,160



1,185Total long-term liabilities


1,694



1,687Liabilities subject to compromise (Note 14)


16,244



16,197Total liabilities


28,104



26,976Commitments and contingencies (Note 22)Minority interest


145



163Stockholders deficit:Common stock, $0.01 par value, 1,350 million shares
    authorized, 565 million shares issued in 2008 and 2007


6



6Additional paid-in capital


2,747



2,756Accumulated deficit


(16,241
)


(14,976
)Accumulated other comprehensive loss:Employee benefit plans (Note 17)


(1,702
)


(1,679
)Other


616



446Total accumulated other comprehensive loss


(1,086
)


(1,233
)Treasury stock, at cost (391 thousand and 1.5 million
    shares in 2008 and 2007, respectively)


(6
)


(25
)Total stockholders deficit


(14,580
)


(13,472
)Total liabilities and stockholders deficit

$
13,669


$
13,667    4




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##### Table of Contents



DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
  Six Months EndedJune 30,2008


2007(in millions)Cash flows from operating activities:Net loss

$
(1,140
)

$
(1,354
)Adjustments to reconcile net loss to net cash used in operating
    activities:Depreciation and amortization


429



457Long-lived asset impairment charges


8



40Goodwill impairment charges


168



Deferred income taxes


(10
)


19Pension and other postretirement benefit expenses


375



482Equity income


(22
)


(24
)Reorganization items


138



81U.S. employee workforce transition program charges (credit)


54



(6
)Loss on extinguishment of debt


49



23Loss on assets held for sale


32



Securities & ERISA litigation charge






332Loss on liquidation/deconsolidation of investment






79Changes in operating assets and liabilities:Accounts receivable, net


(376
)


(922
)Inventories, net


36



4Other assets


36



(42
)Accounts payable


151



399Accrued and other long-term liabilities


53



389Other, net


(42
)


(33
)U.S. employee workforce transition program payments


(100
)


(526
)U.S. employee workforce transition program reimbursement by GM






265Pension contributions


(310
)


(156
)Other postretirement benefit payments


(131
)


(87
)Net payments for reorganization items


(55
)


(61
)Dividends from equity investments


10



12Discontinued operations (Note 4)


48



193Net cash used in operating activities


(599
)


(436
)Cash flows from investing activities:Capital expenditures


(414
)


(308
)Proceeds from sale of property


47



20Cost of acquisitions


(15
)


Proceeds from sale of
    non-U.S.
    trade bank notes


117



95Proceeds from divestitures, net


121



Decrease (increase) in restricted cash


52



(10
)Other, net


(6
)


(16
)Discontinued operations


(99
)


(19
)Net cash used in investing activities


(197
)


(238
)Cash flows from financing activities:Proceeds from amended and restated
    debtor-in-possession
    facility, net of issuance cost of $92 million


3,158



Proceeds from refinanced
    debtor-in-possession
    facility, net of issuance cost of $7 million






2,739Repayments of borrowings from refinanced
    debtor-in-possession
    facility


(2,746
)


Repayments of borrowings under
    debtor-in-possession
    facility






(250
)Repayments of borrowings under prepetition term loan facility






(988
)Repayments of borrowings under prepetition revolving credit
    facility






(1,508
)Net borrowings under amended and restated
    debtor-in-possession
    facility


311



Net borrowings under refinanced
    debtor-in-possession
    facility






410Net borrowings under other debt agreements


29



83Dividend payments of consolidated affiliates to minority
    shareholders


(23
)


(30
)Discontinued operations


17



(3
)Net cash provided by financing activities


746



453Effect of exchange rate fluctuations on cash and cash equivalents


68



38Increase (decrease) in cash and cash equivalents


18



(183
)Cash and cash equivalents at beginning of period


1,036



1,608Cash and cash equivalents at end of period

$
1,054


$
1,425    5




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DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
    (Unaudited)
  Three Months


Six MonthsEnded


EndedJune 30,


June 30,2008


2007


2008


2007(in millions)Net loss

$
(551
)

$
(821
)

$
(1,140
)

$
(1,354
)Other comprehensive income:Currency translation adjustments, net of tax


21



120



90



146Net change in unrecognized gain on derivative instruments, net
    of tax


(16
)


50



80



53Employee benefit plans adjustment, net of tax


19



(5
)


(11
)


(5
)Other comprehensive income


24



165



159



194Comprehensive loss

$
(527
)

$
(656
)

$
(981
)

$
(1,160
)    6




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##### Table of Contents



DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)
  1.
    BASIS OF
    PRESENTATION  General Form 10-K
  Consolidation non-U.S. subsidiaries
  Bankruptcy Filing No. 05-44481 debtors-in-possession non-U.S. subsidiaries
  90-7 (SOP 90-7), Financial Reporting by Entities in Reorganization under the
    Bankruptcy Code
 7




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Going Concern debtor-in-possession 180-day debtors-in-possession
  Contractual Interest Expense and Interest Expense on
    Unsecured Claims SOP 90-7.
 8




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Use of Estimates
  Valuation of Long-Lived Assets
  Discontinued Operations Accounting for the Impairment or Disposal of Long-Lived
    Assets
  non-U.S. operations non-U.S. operations non-U.S. pension
   9




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Recently Issued Accounting
    Pronouncements Fair Value Measurements
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans-an amendment of FASB Statements
    No. 87, 88, 106, and 132(R)
  The Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
 10




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Disclosures about Derivative Instruments and Hedging
    Activities  an Amendment of FASB Statement 133 Accounting for Derivative Instruments and Hedging Activities;
  SOP 90-7-1 SOP 90-7-1), An Amendment of AICPA Statement of Position
    90-7 SOP 90-7-1 SOP 90-7, SOP 90-7-1
  2.
    TRANSFORMATION
    PLAN AND CHAPTER 11 BANKRUPTCY  Plan of Reorganization and Transformation Plan
  Elements of Transformation Plan
    Labor
   11




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##### Table of Contents



GM
    
    Most obligations set forth in the GSA are to be performed upon
    the occurrence of the effective date of the Plan or as soon as
    reasonably possible thereafter. By contrast, the MRA addresses
    matters that will require a significantly longer period that
    will extend for a number of years after consummation of the Plan
    to complete.
    GMs obligations under the GSA and MRA are conditioned
    upon, among other things, Delphis consummation of the
    Plan, including payment of amounts to settle GM claims as
    outlined below.      
    GM will assume approximately $7 billion of certain
    postretirement benefits for certain of the Companys active
    and retired hourly employees, including health care and life
    insurance; 12




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##### Table of Contents




    Delphi will freeze its Delphi Hourly-Rate Employees Pension Plan
    as soon as practicable following the effective date of the Plan,
    as provided in the union settlement agreements, and GMs
    Hourly-Rate Employees Pension Plan will become responsible for
    certain future costs related to the Delphi Hourly-Rate Employees
    Pension Plan;
    Delphi will transfer certain assets and liabilities of its
    Delphi Hourly-Rate Employees Pension Plan to the GM Hourly-Rate
    Employees Pension Plan, as set forth in the U.S. labor
    union settlement agreements;
    Shortly after the effectiveness of the Plan, GM will receive an
    interest bearing note from Delphi in the amount of
    $1.5 billion which is expected to be paid promptly
    following effectiveness;
    GM will make significant contributions to Delphi to fund various
    special attrition programs, consistent with the provisions of
    the U.S. labor union settlement agreements; and
    GM and certain related parties and Delphi and certain related
    parties will exchange broad, global releases (which will not
    apply to certain surviving claims as set forth in the GSA).    
    The scope of existing business awards, related pricing
    agreements, and extensions of certain existing supply
    agreements, including GMs ability to move production to
    alternative suppliers, and reorganized Delphis rights to
    bid and qualify for new business awards;
    GM will make significant, ongoing contributions to Delphi and
    reorganized Delphi to reimburse the Company for labor costs in
    excess of $26 per hour, excluding certain costs, including
    hourly pension and other postretirement benefit contributions
    provided under the Supplemental Wage Agreement, at specified UAW
    manufacturing facilities retained by Delphi;
    GM and Delphi have agreed to certain terms and conditions
    concerning the sale of certain of Delphis non-core
    businesses;
    GM and Delphi have agreed to certain additional terms and
    conditions if certain of Delphis businesses and facilities
    are not sold or wound down by certain future dates (as defined
    in the MRA); and
    GM and Delphi have agreed to the treatment of certain contracts
    between Delphi and GM arising from Delphis separation from
    GM and other contracts between Delphi and GM.    Portfolio
   13




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Cost Structure
    Pensions
     14




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15




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Equity Purchase and Commitment Agreement
           16




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##### Table of Contents



The Plan of Reorganization
  180-day
   17




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##### Table of Contents



Form 10-K Form 10-Q Form 10-Q.
    Basis of
    Presentation
  Condensed Combined
    Debtors-in-Possession
    Financial Statements  SOP 90-7.
  Intercompany Transactions  Debtors-in-Possession
  Contractual Interest Expense and Interest Expense on
    Unsecured Claims SOP 90-7.
 18




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##### Table of Contents



U.S. Employee Workforce Transition
    Programs
  Goodwill Impairment Charges
  Income Tax Benefit 
      Assets Held for Sale 
 19




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##### Table of Contents



CONDENSED
    COMBINED
    DEBTORS-IN-POSSESSION
    STATEMENTS OF OPERATIONS (Unaudited)
    (Non-filed entities, principally
    non-U.S.
    subsidiaries, excluded from consolidated Debtor group)
  Three Months


Six MonthsEnded


EndedJune 30,


June 30,2008


2007


2008


2007(in millions)Net Sales

$
2,126


$
3,251


$
4,454


$
6,538Operating expenses:Cost of sales, excluding items listed below


2,238



3,428



4,691



6,750U.S. employee workforce transition program charges (credit)


18







54



(6
)Depreciation and amortization


95



128



207



261Long-lived asset impairment charges


4



33



7



37Goodwill impairment charges


99







99



Selling, general and administrative


232



248



457



484Securities & ERISA litigation charge






332







332Total operating expenses


2,686



4,169



5,515



7,858Operating loss


(560
)


(918
)


(1,061
)


(1,320
)Interest expense (contractual interest expense for the three and
    six months ended June 30, 2008 was $127 million and
    $241 million, respectively, and for the three and six
    months ended June 30, 2007 was $106 million and
    $219 million, respectively)


(86
)


(73
)


(181
)


(152
)Loss on extinguishment of debt


(49
)






(49
)


(23
)Other (expense) income, net


(5
)


(7
)


(5
)


5Reorganization items


(13
)


(35
)


(113
)


(66
)Loss from continuing operations before income taxes, minority
    interest and equity income


(713
)


(1,033
)


(1,409
)


(1,556
)Income tax benefit (expense)


18



(20
)


15



(24
)Loss from continuing operations before minority interest and
    equity income


(695
)


(1,053
)


(1,394
)


(1,580
)Equity income from non-consolidated affiliates, net of tax


12



8



19



22Loss from continuing operations


(683
)


(1,045
)


(1,375
)


(1,558
)(Loss) income from discontinued operations, net of tax


(10
)


47



(92
)


(76
)Equity income from non-Debtor affiliates, net of tax


142



177



327



280Net loss

$
(551
)

$
(821
)

$
(1,140
)

$
(1,354
)  20




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##### Table of Contents



CONDENSED
    COMBINED
    DEBTORS-IN-POSSESSION
    BALANCE SHEET
    (Non-filed entities, principally
    non-U.S.
    subsidiaries, excluded from consolidated Debtor group)
  June 30,2008


December 31,(Unaudited)


2007(in millions)ASSETSCurrent assets:Cash and cash equivalents

$
148


$
113Restricted cash


58



125Accounts receivable, net:General Motors and affiliates


768



972Other third parties


654



623Non-Debtor affiliates


313



250Notes receivable from non-Debtor affiliates


41



278Inventories, net


708



823Other current assets


365



385Assets held for sale


450



475Total current assets


3,505



4,044Long-term assets:Property, net


1,317



1,446Investments in affiliates


327



331Investments in non-Debtor affiliates


2,075



3,267Goodwill


53



152Notes receivable from non-Debtor affiliates


1,429



Other


456



512Total long-term assets


5,657



5,708Total assets

$
9,162


$
9,752LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities not subject to compromise:Short-term debt

$
3,594


$
2,782Accounts payable


821



1,007Accounts payable to non-Debtor affiliates


654



689Accrued liabilities


1,266



1,328Liabilities held for sale


190



167Total current liabilities


6,525



5,973Long-term liabilities not subject to compromise:Debtor-in-possession
    financing


22



24Employee benefit plan obligations and other


870



951Total long-term liabilities


892



975Liabilities subject to compromise


16,325



16,276Total liabilities


23,742



23,224Stockholders deficit:Total stockholders deficit


(14,580
)


(13,472
)Total liabilities and stockholders deficit

$
9,162


$
9,752  21




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##### Table of Contents



CONDENSED
    COMBINED
    DEBTORS-IN-POSSESSION
    STATEMENT OF CASH FLOWS (Unaudited)
    (Non-filed entities, principally
    non-U.S.
    subsidiaries, excluded from consolidated Debtor group)
  Six MonthsEndedJune 30,2008


2007(in millions)Cash flows from operating activities:Net cash used in operating activities

$
(960
)

$
(648
)Cash flows from investing activities:Capital expenditures


(161
)


(104
)Proceeds from sale of property


32



10Proceeds from divestitures


119



Decrease in restricted cash


67



Proceeds from notes receivable from non-Debtor affiliates


265



Other, net


5



2Discontinued operations


(50
)


(6
)Net cash provided by (used in) investing activities


277



(98
)Cash flows from financing activities:Net borrowings under amended and restated
    debtor-in-possession
    facility


3,469



(Repayments of borrowings) net proceeds from refinanced
    debtor-in-possession
    facility


(2,746
)


3,149Repayments of borrowings from
    debtor-in-possession
    facility






(250
)Repayments of borrowings under prepetition term loan facility






(988
)Repayments of borrowings from prepetition revolving credit
    facility






(1,508
)Repayments of borrowings under other debt agreements


(5
)


(7
)Net cash provided by financing activities


718



396Increase (decrease) in cash and cash equivalents


35



(350
)Cash and cash equivalents at beginning of period


113



376Cash and cash equivalents at end of period

$
148


$
26   3.
    REORGANIZATION
    ITEMS  SOP 90-7
  Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(in millions)Professional fees directly related to reorganization

$
30


$
44


$
59


$
87Interest income


(2
)


(2
)


(4
)


(6
)Write off of previously capitalized fees and expenses related to
    the EPCA










79



Other


1







4



Total Reorganization Items

$
29


$
42


$
138


$
81  22




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4.
    DISCONTINUED
    OPERATIONS    Steering
    and Halfshaft Business
      Interiors
    and Closures Business
     23




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##### Table of Contents



Three Months


Six MonthsEnded


EndedJune 30,


June 30,2008


2007


2008


2007(in millions)Sales:Steering Business

$
570


$
699


$
1,139


$
1,380Interiors and Closures Business






322



241



634Total sales

$
570


$
1,021


$
1,380


$
2,014Income (loss) before income taxes (including minority interest
    and equity income, net of tax)

$
13


$
(11
)

$
(42
)

$
(150
)Provision for income taxes


(5
)


(2
)


(9
)


(5
)Income (loss) from discontinued operations

$
8


$
(13
)

$
(51
)

$
(155
)Steering Business


8



(23
)


(69
)


(177
)Interiors and Closures Business






10



18



22     June 30,


December 31,2008


2007(in millions)Current assets:Cash

$
79


$
49Accounts receivable


425



411Inventory


188



188Other current assets


17



8Long-term assets:Property, net






48Other long-term assets


2



16Assets held for sale

$
711


$
720Steering Business(a)


711



594Interiors and Closures Business






126Current liabilities:Accounts payable

$
268


$
271Accrued liabilities


74



53Short-term debt


66



49Other long-term liabilities


23



14Minority interest


20



25Liabilities held for sale

$
451


$
412Steering Business(b)


451



392Interiors and Closures Business






20
     (a)
    
    The increase in the Steering Business assets held for sale as of
    June 30, 2008 is due to increased cash at certain
    non-U.S.
    operations of the Steering Business that will be stock sales, as
    well as increased accounts receivable due to operational
    seasonality.(b)
    
    The increase in the Steering Business liabilities held for sale
    as of June 30, 2008 is due to increased borrowings at
    certain
    non-U.S.
    operations of the Steering Business that will be stock sales, as
    well as an increase in employee termination benefit and other
    exit cost accruals related to the closure of a plant in
    accordance with the U.S. labor settlement agreements. 24




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##### Table of Contents



Six MonthsEndedJune 30,2008


2007(in millions)Charge related to assets held for sale

$
7


$
Long-lived asset impairment charges






159Pension and other postretirement benefit expenses


20



38U.S. employee workforce transition program charges


3



Changes in net operating assets


18



(4
)Total

$
48


$
193Steering Business


18



170Interiors and Closures Business


30



23
   5.
    ACQUISITIONS
    AND DIVESTITURES    North
    American Brake Product Asset Sale (Automotive Holdings Group
    Segment)
    Bearings
    Business Product Sale (Automotive Holdings Group
    Segment)
    U.S.
    Suspensions Asset Sale (Automotive Holdings Group
    Segment)
   25




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##### Table of Contents



Catalyst
    Product Line Sale (Powertrain Systems Segment)
    Power
    Products Business Sale (Automotive Holdings Group
    Segment)
    Global
    Exhaust Business Sale (Powertrain Systems Segment)
    Acquisition
    of Joint Venture (Electronics & Safety
    Segment)
    6.
    INCOME
    TAXES       26




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##### Table of Contents



7.
    LONG-LIVED
    ASSET IMPAIRMENT      Three Months


Six MonthsEnded


EndedJune 30,


June 30,Segment

2008


2007


2008


2007(in millions)Electronics & Safety

$
4


$



$
5


$
1Powertrain Systems






8







9Electrical/Electronic Architecture


1







1



1Automotive Holdings Group






26



2



29Continuing Operations


5



34



8



40Discontinued Operations






5







159Total

$
5


$
39


$
8


$
199       8.
    GOODWILL
    IMPAIRMENT    2008(in millions)Balance at January 1,

$
397
(a)Acquisitions


19Impairment


(168
)Currency translation


8Balance at June 30,

$
256
(b)     (a)
    
    $165 million in Electrical/Electronic Architecture,
    $155 million in Electronics & Safety and
    $77 million in Corporate and Other.(b)
    
    $177 million in Electronics & Safety and
    $79 million in Corporate and Other. 27




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##### Table of Contents



9.
    EMPLOYEE
    TERMINATION BENEFITS AND OTHER EXIT COSTS      (1)
    Realignment of existing manufacturing capacity and closure of
    facilities and other exit or disposal activities, as it relates
    to executing the Companys strategy in the normal course of
    business.(2)
    Transformation plan activities, which support the Companys
    overall transformation initiatives announced in 2006, including
    selling or winding down non-core product lines, transforming its
    salaried workforce to reduce general and administrative
    expenses, and modifying labor agreements with its principal
    unions in the U.S. 28




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##### Table of Contents



Three Months


Six MonthsEnded


EndedJune 30,


June 30,Segment

2008


2007


2008


2007(in millions)Electronics & Safety

$
11


$
1


$
39


$
3Powertrain Systems


6



18



10



19Electrical/Electronic Architecture


19



34



32



65Thermal Systems


6



7



9



10Automotive Holdings Group


15



145



58



189Corporate and Other


1



18



1



22Continuing Operations


58



223



149



308Discontinued Operations


9



78



44



112Total

$
67


$
301


$
193


$
420Cost of sales


53



202



139



284Selling, general and administrative expenses


5



21



10



24Loss from discontinued operations


9



78



44



112     
    Realignment of existing manufacturing capacity and closure of
    facilities.  As part of Delphis ongoing
    efforts to lower costs and operate efficiently, Delphis
    Electronics & Safety and Automotive Holdings Group
    segments plan to transfer core products manufactured at a shared
    location in Portugal to a lower cost market and exit non-core
    products from that facility and recognized employee termination
    benefits of $44 million during the six months ended
    June 30, 2008. Additionally, Electronics &
    Safety, Electrical / Electronic Architecture
    (E/EA), Thermal Systems and the Automotive Holdings
    Group segments executed initiatives to realign manufacturing
    operations within North America to lower cost markets, and
    incurred approximately $18 million and $41 million of
    employee termination benefits and other related exit costs
    during the three and six months ended June 30, 2008,
    respectively.
    Transformation plan activities.  As part of an
    initiative to sell or wind down non-core product lines, Delphi
    incurred employee termination benefits and other exit costs of
    $6 million and $37 million related to the closure of a
    manufacturing facility in Athens, Alabama during the three and
    six months ended June 30, 2008, respectively, which
    related to the Steering Business and was recorded in loss from
    discontinued operations. As part of an effort to transform its
    salaried workforce and reduce general and administrative
    expenses, Delphi identified certain salaried employees in North
    America during the three and six months ended
    June 30, 2008 for involuntary separation and incurred
    $24 million and $42 million, respectively, in related
    employee termination benefits in the Electronics &
    Safety, Powertrain Systems, E/EA and Automotive Holdings Group
    segments.    
    Realignment of existing manufacturing capacity and closure of
    facilities.As part of Delphis ongoing
    efforts to lower costs and operate efficiently, the E/EA segment
    transferred manufacturing operations in Germany and Portugal to
    lower cost markets in Eastern Europe and Asia Pacific. As a
    result, E/EA significantly reduced the number of employees at
    these locations, and announced involuntary employee separation
    packages for approximately $26 million during the three and
    six months ended June 30, 2007. Additionally, E/EA
    announced an involuntary employee separation package due to a
    planned closure of a manufacturing facility in France for
    approximately $11 million during the six months ended
    June 30, 2007. 29




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##### Table of Contents




    Transformation plan activities.  As part of an
    initiative to sell or wind down non-core product lines, Delphi
    incurred employee termination benefits and other exit costs of
    $207 million and $268 million related to the closure
    of a manufacturing facility in Cadiz, Spain during the three and
    six months ended June 30, 2007, respectively, of which
    $130 million and $161 million, respectively, related
    to the Automotive Holdings Group segment and $77 million
    and $107 million, respectively, related to the Steering
    Business, which is recorded in loss from discontinued
    operations. As a part of an effort to transform its salaried
    workforce and reduce general and administrative expenses, Delphi
    identified certain salaried employees, primarily in North
    America, during the three and six months ended
    June 30, 2007 for involuntary separation, and incurred
    $19 million and $42 million, respectively, in related
    employee termination benefits in the Powertrain Systems, E/EA,
    and Automotive Holdings Group segments. During the three and six
    months ended June 30, 2007, Delphi incurred
    $19 million related to the financial services and
    information technology outsourcing activities related to the
    transformation of our salaried workforce to reduce general and
    administrative expenses in the Corporate and Other segment.  10.
    WEIGHTED
    AVERAGE SHARES      Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(in thousands)Weighted average shares outstanding


564,519



561,782



564,083



561,782Effect of dilutive securities














Diluted shares outstanding


564,519



561,782



564,083



561,782     Three and Six MonthsEndedJune 30,2008

2007(in thousands)Anti-dilutive securities


60,922



78,652   11.
    INVENTORIES,
    NET  first-in,
  June 30,


December 31,2008


2007(in millions)Productive material

$
916


$
926Work-in-process
    and supplies


331



386Finished goods


490



496Total

$
1,737


$
1,808  30




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##### Table of Contents



12.
    LIABILITIES    June 30,


December 31,2008


2007(in millions)Payroll-related obligations

$
303


$
238Employee benefits, including current pension obligations


156



185Accrued income taxes


132



54Taxes other than income


245



195Warranty obligations (Note 13)


242



244U.S. employee workforce transition program (Note 16)


167



234Manufacturing plant rationalization


207



259Interest on prepetition claims


418



411Other


473



461Total

$
2,343


$
2,281     June 30,


December 31,2008


2007(in millions)Workers compensation

$
325


$
328Environmental


87



112U.S. employee workforce transition program (Note 16)


122



148Extended disability benefits


74



72Warranty obligations (Note 13)


302



315Other


250



210Total

$
1,160


$
1,185   13.
    WARRANTY
    OBLIGATIONS      June 30,2008(in millions)Accrual balance at beginning of year

$
559Provision for estimated warranties issued during the period


31Provision for changes in estimate for preexisting warranties


19Settlements made during the period (in cash or in kind)


(79
)Foreign currency translation and other


14Accrual balance at end of period

$
544  31




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##### Table of Contents



14.
    LIABILITIES
    SUBJECT TO COMPROMISE     32




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##### Table of Contents



and/or
  SOP 90-7
  :
  June 30,


December 31,2008


2007(in millions)Pension obligations

$
3,132


$
3,329Postretirement obligations other than pensions, including
    amounts payable to GM


9,073



8,786Debt and notes payable


1,984



1,984Accounts payable


737



744Junior subordinated notes due 2033


391



391GM claim for U.S. employee workforce transition programs


312



312Securities & ERISA litigation liability (Note 22)


351



351Other


264



300Total Liabilities Subject to Compromise

$
16,244


$
16,197   15.
    DEBT   33




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##### Table of Contents




    Increases the interest rate on the facilities at the option of
    Delphi of either the Administrative Agents Alternate Base
    Rate (ABR) plus a specified percent or LIBOR plus a
    specified percent as follows:  ABR plus


LIBOR plusAmended





Amendedand Restated


Refinanced


and Restated


RefinancedDIP Credit


DIP Credit


DIP Credit


DIP CreditFacility


Facility


Facility


FacilityTranche A


3.00%



2.50%



4.00%



3.50%Tranche B


3.00%



2.50%



4.00%



3.50%Tranche C


4.25%



3.00%



5.25%



4.00%     
    Increases the undrawn revolver fees from 50 basis points to
    100 basis points,
    Adds a LIBOR and ABR floor to the Tranche B and
    Tranche C Term Loans of 3.25% and 4.25%, respectively,
    Sets rolling
    12-month
    cumulative Global EBITDAR covenant levels for the extension
    period as follows:  Period Ending

Global EBITDAR(in millions)June 30, 2008

$
600July 31, 2008

$
575August 31, 2008

$
550September 30, 2008

$
625October 31, 2008

$
600November 30, 2008

$
675   
    Modifies the borrowing base definition and limits availability
    to draw additional amounts under the Revolving Facility, under
    certain conditions as defined, and modifies the allowable junior
    liens, and
    Allows Delphi to enter into an agreement with GM as described
    below.     34




---



##### Table of Contents



paid-in-kind
    12-month debtor-in-possession
 35




---



##### Table of Contents



16.
    U.S.
    EMPLOYEE WORKFORCE TRANSITION PROGRAMS  Form 10-K EITF 88-23, Lump-Sum Payments under Union Contracts,
    U.S. Employee Workforce Transition Program Liability

(in millions)Balance at December 31, 2007

$
382U.S. employee workforce transition program charges


16Buy-down wage liability adjustment


3Payments


(100
)Pension and other postretirement benefits (Note 17)


(17
)Accretion and other


5Balance at June 30, 2008

$
289       U.S. Employee Workforce Transition Program Buydown Wage
    Asset

(in millions)Balance at December 31, 2007

$
301Buy-down wage asset adjustment


3Amortization expense


(41
)Balance at June 30, 2008

$
263    36




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##### Table of Contents



17.
    PENSION
    AND OTHER POSTRETIREMENT BENEFITS  non-U.S. subsidiaries non-U.S. plans
  non-U.S. subsidiaries non-U.S. other
  non-U.S. salaried non-U.S. salaried
  OtherPostretirementPension Benefits


BenefitsU.S. Plans


Non-U.S. PlansThree Months Ended June 30,2008


2007


2008


2007


2008


2007(in millions)Service cost (a)

$
41


$
47


$
11


$
11


$
8


$
21Interest cost


214



213



24



20



137



136Expected return on plan assets


(218
)


(216
)


(23
)


(20
)






Settlements










13



3







Curtailment loss














5







Amortization of prior service costs


4



14



3



1



(26
)


(25
)Amortization of actuarial losses


6



26



2



9



11



19Net periodic benefit cost

$
47


$
84


$
30


$
29


$
130


$
151   37




---



##### Table of Contents



OtherPostretirementPension Benefits


BenefitsU.S. Plans


Non-U.S. PlansSix Months Ended June 30,2008


2007


2008


2007


2008


2007(in millions)Service cost (a)

$
82


$
95


$
22


$
23


$
15


$
42Interest cost


427



425



47



40



274



271Expected return on plan assets


(436
)


(432
)


(46
)


(40
)






Settlements










24



33







Curtailment loss














5







Amortization of prior service costs


11



28



4



2



(53
)


(50
)Amortization of actuarial losses


11



51



8



17



22



38Net periodic benefit cost

$
95


$
167


$
59


$
80


$
258


$
301     (a)
    
    Includes $8 million and $17 million for the three and
    six months ended June 30, 2008, respectively, and
    $13 million and $28 million for the three and six
    months ended June 30, 2007, respectively, of costs
    previously accrued related to the U.S. employee workforce
    transition programs.      U.S. Retiree


Non-U.S.Medical Plans


Pension Plans


TotalIncrease/(Decrease)(in millions)Pension and other postretirement benefit liabilities

$
132


$
7


$
139Accumulated deficit as of January 1, 2008

$
117


$
12


$
129Accumulated other comprehensive loss as of
    January 1, 2008

$
15


$
(5
)

$
10    38




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##### Table of Contents



18.
    DERIVATIVES
    AND HEDGING ACTIVITIES      June 30,


December 31,2008


2007(in millions)Current assets

$
113


$
40Non-current assets


17



13Total assets

$
130


$
53Current liabilities

$
12


$
24Non-current liabilities


1



Total liabilities

$
13


$
24      39




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##### Table of Contents



19.
    FAIR
    VALUE MEASUREMENTS    No. 157-2 Effective Date of FASB Statement
    No. 157,
    
    Level 1:  Observable inputs such as quoted
    prices in active markets;
    Level 2:  Inputs, other than quoted prices
    in active markets, that are observable either directly or
    indirectly; and
    Level 3:  Unobservable inputs in which
    there is little or no market data, which require the reporting
    entity to develop its own assumptions.    a.
    Market approach:Prices and other relevant information
    generated by market transactions involving identical or
    comparable assets or liabilities.b.
    Cost approach:Amount that would be required to replace
    the service capacity of an asset (replacement cost).c.
    Income approach:Techniques to convert future amounts to
    a single present amount based upon market expectations
    (including present value techniques, option-pricing and excess
    earnings models).    Fair Value Measurements Using:Quoted Prices


Significant Other


Significantin Active


Observable


UnobservableTotal as of


Markets


Inputs


InputsJune 30, 2008


Level 1


Level 2


Level 3(in millions)Available-for-sale securities

$
2


$
2


$



$
Commodity derivatives


80







80



Foreign currency derivatives


50







50



Total

$
132


$
2


$
130


$
  40




---



##### Table of Contents



Fair Value Measurements Using:Quoted Prices


Significant Other


Significantin Active


Observable


UnobservableTotal as of


Markets


Inputs


InputsJune 30, 2008


Level 1


Level 2


Level 3(in millions)Commodity derivatives

$
3


$



$
3


$
Foreign currency derivatives


10







10



Total

$
13


$



$
13


$
     20.
    OTHER
    INCOME (EXPENSE), NET    Three Months


Six MonthsEnded


EndedJune 30,


June 30,2008


2007


2008


2007(in millions)Interest income

$
8


$
16


$
21


$
31Other, net


(4
)


3



2



8Other income, net

$
4


$
19


$
23


$
39   21.
    SEGMENT
    REPORTING    
    Electronics and Safety, which includes audio, entertainment and
    communications, safety systems, body controls and security
    systems, displays, mechatronics and power electronics, as well
    as advanced development of software and silicon.
    Powertrain Systems, which includes extensive systems integration
    expertise in gasoline, diesel and fuel handling and full
    end-to-end systems including fuel injection, combustion,
    electronic controls, exhaust handling, and test and validation
    capabilities.
    Electrical/Electronic Architecture, which includes complete
    electrical architecture and component products.
    Thermal Systems, which includes Heating, Ventilating and Air
    Conditioning (HVAC) systems, components for multiple
    transportation and other adjacent markets, and powertrain
    cooling and related technologies.
    Automotive Holdings Group, which includes various non-core
    product lines and plant sites that do not fit Delphis
    future strategic framework. 41




---



##### Table of Contents



42




---



##### Table of Contents



Electrical/





AutomotiveElectronics


Powertrain


Electronic


Thermal


Holdings


Corporateand Safety


Systems


Architecture


Systems


Group


and Other


Total(in millions)For the Three Months Ended:June 30, 2008Net sales to GM and affiliates

$
296


$
298


$
365


$
287


$
156


$
81


$
1,483Net sales to other customers


812



923



1,216



291



232



277



3,751Inter-segment net sales


37



117



38



20



34



(246
)


Total net sales

$
1,145


$
1,338


$
1,619


$
598


$
422


$
112


$
5,234Depreciation and amortization

$
64


$
63


$
46


$
19


$
5


$
13


$
210Long-lived asset impairment charges

$
4


$



$
1


$



$



$



$
5Goodwill impairment charges

$



$



$
168


$



$



$



$
168Operating (loss) income

$
(75
)

$
7


$
(183
)

$
(11
)

$
(27
)

$
(76
)

$
(365
)Equity income

$



$
2


$
6


$
3


$
(1
)

$
1


$
11Minority interest

$



$
(6
)

$
(5
)

$
(1
)

$



$



$
(12
)June 30, 2007Net sales to GM and affiliates

$
435


$
441


$
461


$
362


$
434


$
114


$
2,247Net sales to other customers


857



1,021



1,032



245



325



273



3,753Inter-segment net sales


60



132



53



30



58



(333
)


Total net sales

$
1,352


$
1,594


$
1,546


$
637


$
817


$
54


$
6,000Depreciation and amortization

$
67


$
65


$
42


$
17


$
17


$
22


$
230Long-lived asset impairment charges

$



$
8


$



$



$
26


$



$
34Operating income (loss)

$
9


$
(16
)

$
44


$
16


$
(177
)

$
(520
)

$
(644
)Equity income

$



$
4


$
3


$
2


$



$
1


$
10Minority interest

$
(1
)

$
(7
)

$
(6
)

$
(3
)

$



$
5


$
(12
)   43




---



##### Table of Contents



Electrical/





AutomotiveElectronics


Powertrain


Electronic


Thermal


Holdings


Corporateand Safety


Systems


Architecture


Systems


Group


and Other


Total(in millions)For the Six Months Ended:June 30, 2008Net sales to GM and affiliates

$
645


$
606


$
768


$
583


$
351


$
171


$
3,124Net sales to other customers


1,630



1,789



2,353



542



512



536



7,362Inter-segment net sales


85



226



82



47



76



(516
)


Total net sales

$
2,360


$
2,621


$
3,203


$
1,172


$
939


$
191


$
10,486Depreciation and amortization

$
127


$
131


$
91


$
34


$
17


$
29


$
429Long-lived asset impairment charges

$
5


$



$
1


$



$
2


$



$
8Goodwill impairment charges

$



$



$
168


$



$



$



$
168Operating (loss) income

$
(155
)

$
(6
)

$
(189
)

$
15


$
(97
)

$
(200
)

$
(632
)Equity income

$



$
6


$
9


$
5


$
(2
)

$
4


$
22Minority interest

$



$
(12
)

$
(9
)

$
(2
)

$



$



$
(23
)June 30, 2007Net sales to GM and affiliates

$
842


$
855


$
903


$
731


$
857


$
222


$
4,410Net sales to other customers


1,682



1,926



2,001



472



670



521



7,272Inter-segment net sales


127



259



98



66



109



(659
)


Total net sales

$
2,651


$
3,040


$
3,002


$
1,269


$
1,636


$
84


$
11,682Depreciation and amortization

$
136


$
136


$
86


$
30


$
27


$
42


$
457Long-lived asset impairment charges

$
1


$
9


$
1


$



$
29


$



$
40Operating income (loss)

$
56


$
(50
)

$
39


$
17


$
(240
)

$
(681
)

$
(859
)Equity income

$



$
8


$
7


$
3


$
2


$
4


$
24Minority interest

$
(1
)

$
(16
)

$
(13
)

$
(1
)

$



$
7


$
(24
)   22.
    COMMITMENTS
    AND CONTINGENCIES  Shareholder
    Lawsuits
     44




---



##### Table of Contents



45




---



##### Table of Contents



Form 8-K
          and/or
   46




---



##### Table of Contents



Ordinary
    Business Litigation
           47




---



##### Table of Contents



Environmental
    Matters
  non-U.S. environmental
  multi-party
       48




---



##### Table of Contents



Other
    23.
    SUBSEQUENT
    EVENTS       49




---



##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K
 Executive
    Summary of Business      No. 05-44481 debtors-in-possession non-U.S. subsidiaries
     50




---



##### Table of Contents



180-day
  Form 10-Q Form 10-Q Form 10-K debtors-in-possession
      wind-down Form 10-Q, Form 10-Q
 51




---



##### Table of Contents



Form 10-K
        Plan of
    Reorganization and Transformation Plan
  Elements of Transformation Plan
    Labor
   52




---



##### Table of Contents



GM
    
    Most obligations set forth in the GSA are to be performed upon
    the occurrence of the effective date of the Plan or as soon as
    reasonably possible thereafter. By contrast, the MRA addresses
    matters that will require a significantly longer period that
    will extend for a number of years after consummation of the Plan
    to complete.
    GMs obligations under the GSA and MRA are conditioned
    upon, among other things, Delphis consummation of the
    Plan, including payment of amounts to settle GM claims as
    outlined below.   53




---



##### Table of Contents




    GM will assume approximately $7 billion of certain
    postretirement benefits for certain of the Companys active
    and retired hourly employees, including health care and life
    insurance;
    Delphi will freeze its Delphi Hourly-Rate Employees Pension Plan
    as soon as practicable following the effective date of the Plan,
    as provided in the union settlement agreements, and GMs
    Hourly-Rate Employees Pension Plan will become responsible for
    certain future costs related to the Delphi Hourly-Rate Employees
    Pension Plan;
    Delphi will transfer certain assets and liabilities of its
    Delphi Hourly-Rate Employees Pension Plan to the GM Hourly-Rate
    Employees Pension Plan, as set forth in the U.S. labor
    union settlement agreements;
    Shortly after the effectiveness of the Plan, GM will receive an
    interest bearing note from Delphi in the amount of
    $1.5 billion which is expected to be paid promptly
    following effectiveness;
    GM will make significant contributions to Delphi to fund various
    special attrition programs, consistent with the provisions of
    the U.S. labor union settlement agreements; and
    GM and certain related parties and Delphi and certain related
    parties will exchange broad, global releases (which will not
    apply to certain surviving claims as set forth in the GSA).    
    The scope of existing business awards, related pricing
    agreements, and extensions of certain existing supply
    agreements, including GMs ability to move production to
    alternative suppliers, and reorganized Delphis rights to
    bid and qualify for new business awards;
    GM will make significant, ongoing contributions to Delphi and
    reorganized Delphi to reimburse the Company for labor costs in
    excess of $26 per hour, excluding certain costs, including
    hourly pension and other postretirement benefit contributions
    provided under the Supplemental Wage Agreement, at specified UAW
    manufacturing facilities retained by Delphi;
    GM and Delphi have agreed to certain terms and conditions
    concerning the sale of certain of Delphis non-core
    businesses;
    GM and Delphi have agreed to certain additional terms and
    conditions if certain of Delphis businesses and facilities
    are not sold or wound down by certain future dates (as defined
    in the MRA); and
    GM and Delphi have agreed to the treatment of certain contracts
    between Delphi and GM arising from Delphis separation from
    GM and other contracts between Delphi and GM.   54




---



##### Table of Contents



Portfolio
          For the


For theThree Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(in millions)Long-lived asset impairment charges

$
5


$
39


$
8


$
199Employee termination benefits and other exit costs


67



301



193



420U.S. employee workforce transition program charges


20







57



(6
)Total

$
92


$
340


$
258


$
613Core product lines


66



79



151



117Non-core product lines


15



178



60



225Discontinued operations


11



83



47



271   Cost Structure
   55




---



##### Table of Contents



Pensions
         56




---



##### Table of Contents



Equity Purchase and Commitment Agreement
     57




---



##### Table of Contents



Form 10-Q Form 8-K/A
        out-of-pocket
  The Plan of Reorganization
   58




---



##### Table of Contents



180-day
    Form 10-K Form 10-Q Form 10-Q.
 Overview
    of Performance During the Second Quarter of 2008   59




---



##### Table of Contents



pick-up
  and/or
 60




---



##### Table of Contents



Overview
    of Net Sales and Net Loss During the Three and Six Months Ended
    June 30, 2008 and 2007  Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)Net sales:General Motors and affiliates

$
1,483



28
%

$
2,247



37
%

$
(764
)

$
3,124



30
%

$
4,410



38
%

$
(1,286
)Other customers


3,751



72
%


3,753



63
%


(2
)


7,362



70
%


7,272



62
%


90Total net sales

$
5,234






$
6,000






$
(766
)

$
10,486






$
11,682






$
(1,196
)Loss from continuing operations

$
(559
)





$
(808
)





$
249


$
(1,089
)





$
(1,199
)





$
110Income (loss) from discontinued operations, net of tax


8







(13
)






21



(51
)






(155
)






104Net loss

$
(551
)





$
(821
)





$
270


$
(1,140
)





$
(1,354
)





$
214   sub-assembly
 61




---



##### Table of Contents



Consolidated
    Results of Operations
  Three
    and Six Months Ended June 30, 2008 versus Three and Six
    Months Ended June 30, 2007
    Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)


(dollars in millions)Net sales:General Motors and affiliates

$
1,483



28
%

$
2,247



37
%

$
(764
)

$
3,124



30
%

$
4,410



38
%

$
(1,286
)Other customers


3,751



72
%


3,753



63
%


(2
)


7,362



70
%


7,272



62
%


90Total net sales

$
5,234






$
6,000






$
(766
)

$
10,486






$
11,682






$
(1,196
)Cost of sales


4,821







5,654







833



9,718







10,960







1,242Gross margin(a)

$
413



7.9
%

$
346



5.8
%

$
67


$
768



7.3
%

$
722



6.2
%

$
46U.S. employee workforce transition program charges (credit)


18















(18
)


54







(6
)






(60
)Depreciation and amortization


210







230







20



429







457







28Long-lived asset impairment charges


5







34







29



8







40







32Goodwill impairment charges


168















(168
)


168















(168
)Selling, general and administrative


377







394







17



741







758







17Securities & ERISA litigation charge










332







332











332







332Operating loss

$
(365
)





$
(644
)





$
279


$
(632
)





$
(859
)





$
227Interest expense


(109
)






(84
)






(25
)


(219
)






(174
)






(45
)Loss on extinguishment of debt


(49
)














(49
)


(49
)






(23
)






(26
)Other income, net


4







19







(15
)


23







39







(16
)Reorganization items


(29
)






(42
)






13



(138
)






(81
)






(57
)Loss from continuing operations before income taxes, minority
    interest and equity income

$
(548
)





$
(751
)





$
203


$
(1,015
)





$
(1,098
)





$
83Income tax expense


(10
)






(55
)






45



(73
)






(101
)






28Loss from continuing operations before minority interest and
    equity income

$
(558
)





$
(806
)





$
248


$
(1,088
)





$
(1,199
)





$
111Minority interest, net of tax


(12
)






(12
)










(23
)






(24
)






1Equity income, net of tax


11







10







1



22







24







(2
)Loss from continuing operations

$
(559
)





$
(808
)





$
249


$
(1,089
)





$
(1,199
)





$
110Income (loss) from discontinued operations, net of tax


8







(13
)






21



(51
)






(155
)






104Net loss

$
(551
)





$
(821
)





$
270


$
(1,140
)





$
(1,354
)





$
214     (a)
    
    Gross margin is defined as net sales less cost of sales
    (excluding U.S. employee workforce transition program charges
    (credit), Depreciation and amortization, Long-lived asset
    impairment charges and Goodwill impairment charges).   62




---



##### Table of Contents



Net
    Sales
 Net Sales for the Three Months Ended June 30, 2008
    versus June 30, 2007.
  Three Months Ended June 30,



Variance Due To:PriceFavorable/



Reductions2008


2007


(Unfavorable)



and Volume


FX


Other


Total(dollars in millions)



(dollars in millions)Net sales:General Motors and affiliates

$
1,483



28
%

$
2,247



37
%

$
(764
)


$
(844
)

$
63


$
17


$
(764
)Other customers


3,751



72
%


3,753



63
%


(2
)



(282
)


253



27



(2
)Total net sales

$
5,234






$
6,000






$
(766
)


$
(1,126
)

$
316


$
44


$
(766
)       Net Sales for the Six Months Ended June 30, 2008 versus
    June 30, 2007.
  Six Months Ended June 30,


Variance Due To:Favorable/


Price Reductions2008


2007


(Unfavorable)


and Volume


FX


Other


Total(dollars in millions)


(dollars in millions)Net sales:General Motors and affiliates

$
3,124



30
%

$
4,410



38
%

$
(1,286
)

$
(1,412
)

$
116


$
10


$
(1,286
)Other customers


7,362



70
%


7,272



62
%


90



(439
)


501



28



90Total net sales

$
10,486






$
11,682






$
(1,196
)

$
(1,851
)

$
617


$
38


$
(1,196
)    63




---



##### Table of Contents



Operating Results
   Gross Margin for the Three Months Ended June 30, 2008
    versus June 30, 2007.
  Three Months Ended June 30,

Variance Due To:Favorable/

Price Reductions

Operational2008

2007

(Unfavorable)

and Volume

Performance

Other

Total(dollars in millions)

(dollars in millions)Gross Margin

$
413


$
346


$
67


$
(445
)

$
226


$
286


$
67Percentage of Sales


7.9
%


5.8
%     
    $149 million decrease in costs in employee termination
    benefits and other exit costs, primarily due to costs recorded
    during 2007 related to the exit of a manufacturing facility in
    Cadiz, Spain;
    $101 million decrease in warranty costs, primarily due to a
    $91 million increase to warranty reserves recorded in the
    six months ended June 30, 2007 in the Powertrain Systems
    and Electronics and Safety segments related to the warranty
    settlement agreement with GM; and
    $25 million decrease in costs related to incentive
    compensation plans for executives and U.S. salaried
    employees.   64




---



##### Table of Contents



Gross Margin the Six Months Ended June 30, 2008
    versus June 30, 2007.
  Six Months Ended June 30,

Variance Due To:PriceFavorable/

Reductions and

Operational2008

2007

(Unfavorable)

Volume

Performance

Other

Total(dollars in millions)

(dollars in millions)Gross Margin

$
768


$
722


$
46


$
(761
)

$
474


$
333


$
46Percentage of Sales


7.3
%


6.2
%     
    $129 million decrease in warranty costs, primarily due to a
    $91 million increase to warranty reserves recorded in the
    six months ended June 30, 2007 in the Powertrain
    Systems and Electronics and Safety segments related to the
    warranty settlement agreement with GM, and a $28 million
    recovery from an affiliated supplier related to previously
    established warranty reserves in the Thermal Systems segment
    during the six months ended June 30, 2008;
    $145 million decrease in costs in employee termination
    benefits and other exit costs, primarily due to costs recorded
    during 2007 related to the exit of a manufacturing facility in
    Cadiz, Spain;
    $46 million decrease in incentive compensation plans for
    executives and U.S. salaried employees;
    $32 million of employee benefit plan settlements in Mexico
    which occurred in the six months ended June 30, 2007
    in the Electronics & Safety segment; and
    $30 million due to the impact of foreign currency exchange
    rate fluctuations.    
    $30 million charge related to the loss on sale of
    Delphis global bearings business in the AHG segment
    recorded during the first quarter of 2008; and
    $24 million loss on foreign currency exchange contracts
    related to purchase transactions primarily within the Powertrain
    Systems segment.  U.S. Employee Workforce Transition Program Charges
    (Credit) for the Three and Six Months Ended
    June 30, 2008 versus
    June 30, 2007.
  Depreciation and Amortization for the Three Months Ended
    June 30, 2008 versus
    June 30, 2007.
 65




---



##### Table of Contents



Depreciation and Amortization for the Six Months Ended
    June 30, 2008 versus
    June 30, 2007.
  Long-Lived Asset Impairment Charges for the Three Months
    Ended June 30, 2008 versus June 30,
    2007. Accounting for the Impairment or Disposal of Long-Lived
    Assets
  Long-Lived Asset Impairment Charges for the Six Months Ended
    June 30, 2008 versus June 30,
    2007.
  Goodwill Impairment Charges for the Three and Six Months
    Ended June 30, 2008 versus June 30,
    2007.
    Selling, General and Administrative Expenses for the Three
    Months Ended June 30, 2008 versus
    June 30, 2007.
  Selling, General and Administrative Expenses for the Six
    Months Ended June 30, 2008 versus
    June 30, 2007.
 66




---



##### Table of Contents



Securities & ERISA Litigation Charge for the Three
    and Six Months Ended June 30, 2008 versus
    June 30, 2007.
  Interest Expense for the Three Months Ended June 30,
    2008 versus June 30, 2007. Financial
    Reporting by Entities in Reorganization under the Bankruptcy
    Code
  Interest Expense for the Six Months Ended June 30, 2008
    versus June 30, 2007. SOP 90-7
  Loss on Extinguishment of Debt for the Three and Six Months
    Ended June 30, 2008 versus
    June 30, 2007.
  Other Income and Expense for the Three Months Ended
    June 30, 2008 versus June 30,
    2007.
  Other Income and Expense for the Six and Months Ended
    June 30, 2008 versus June 30,
    2007.
 67




---



##### Table of Contents



Reorganization Items for the Three Months Ended June 30,
    2008 versus June 30,
    2007.
  Reorganization Items for the Six Months Ended June 30,
    2008 versus June 30,
    2007.
  Income Taxes for the Three and Six Months Ended June 30,
    2008 versus June 30, 2007. non-U.S. operations. non-U.S. operations
  Minority Interest, net of tax, for the Three and Six Months
    Ended June 30, 2008 versus June 30,
    2007.
  Equity Income, net of tax, for the Three and Six Months Ended
    June 30, 2008 versus June 30,
    2007.
  Income (loss) from Discontinued Operations for the Three
    Months Ended June 30, 2008 versus
    June 30, 2007.
 68




---



##### Table of Contents



Loss from Discontinued Operations for the Six Months Ended
    June 30, 2008 versus June 30,
    2007.
 Results
    of Operations by Segment  Three
    and Six Months Ended June 30, 2008 versus Three and Six
    Months Ended June 30, 2007
  Electronics and Safety
   Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)Net sales:General Motors and affiliates

$
296



26
%

$
435



32
%

$
(139
)

$
645



27
%

$
842



32
%

$
(197
)Other customers


812



71
%


857



64
%


(45
)


1,630



69
%


1,682



63
%


(52
)Inter-segment


37



3
%


60



4
%


(23
)


85



4
%


127



5
%


(42
)Total other and inter-segment


849



74
%


917



68
%


(68
)


1,715



73
%


1,809



68
%


(94
)Total net sales

$
1,145






$
1,352






$
(207
)

$
2,360






$
2,651






$
(291
)Operating (loss) income

$
(75
)





$
9






$
(84
)

$
(155
)





$
56






$
(211
)Gross margin

$
75






$
152






$
(77
)

$
142






$
340






$
(198
)Gross margin %


6.6
%






11.2
%










6.0
%






12.8
%   Net Sales
   69




---



##### Table of Contents



Operating Income/Loss
  Powertrain Systems
 end-to-end
  Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)Net sales:General Motors and affiliates

$
298



22
%

$
441



28
%

$
(143
)

$
606



23
%

$
855



28
%

$
(249
)Other customers


923



69
%


1,021



64
%


(98
)


1,789



68
%


1,926



63
%


(137
)Inter-segment


117



9
%


132



8
%


(15
)


226



9
%


259



9
%


(33
)Total other and inter-segment


1,040



78
%


1,153



72
%


(113
)


2,015



77
%


2,185



72
%


(170
)Total net sales

$
1,338






$
1,594






$
(256
)

$
2,621






$
3,040






$
(419
)Operating income (loss)

$
7






$
(16
)





$
23


$
(6
)





$
(50
)





$
44Gross margin

$
144






$
142






$
2


$
273






$
262






$
11Gross margin %


10.8
%






8.9
%










10.4
%






8.6
%   Net Sales
   70




---



##### Table of Contents



Operating Income/Loss
  Electrical/Electronic Architecture
    Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)Net sales:General Motors and affiliates

$
365



23
%

$
461



30
%

$
(96
)

$
768



24
%

$
903



30
%

$
(135
)Other customers


1,216



75
%


1,032



67
%


184



2,353



73
%


2,001



67
%


352Inter-segment


38



2
%


53



3
%


(15
)


82



3
%


98



3
%


(16
)Total other and inter-segment


1,254



77
%


1,085



70
%


169



2,435



76
%


2,099



70
%


336Total net sales

$
1,619






$
1,546






$
73


$
3,203






$
3,002






$
201Operating (loss) income

$
(183
)





$
44






$
(227
)

$
(189
)





$
39






$
(228
)Gross margin

$
142






$
193






$
(51
)

$
283






$
336






$
(53
)Gross margin %


8.8
%






12.5
%










8.8
%






11.2
%   Net Sales
   71




---



##### Table of Contents



Operating Income/Loss
  Thermal Systems
   Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)Net sales:General Motors and affiliates

$
287



48
%

$
362



57
%

$
(75
)

$
583



50
%

$
731



58
%

$
(148
)Other customers


291



49
%


245



38
%


46



542



46
%


472



37
%


70Inter-segment


20



3
%


30



5
%


(10
)


47



4
%


66



5
%


(19
)Total other and inter-segment


311



52
%


275



43
%


36



589



50
%


538



42
%


51Total net sales

$
598






$
637






$
(39
)

$
1,172






$
1,269






$
(97
)Operating (loss) income

$
(11
)





$
16






$
(27
)

$
15






$
17






$
(2
)Gross margin

$
41






$
66






$
(25
)

$
118






$
116






$
2Gross margin %


6.9
%






10.4
%










10.1
%






9.1
%   Net Sales
   72




---



##### Table of Contents



Operating Income/Loss
  Automotive Holdings Group
   Three Months Ended June 30,


Six Months Ended June 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


(Unfavorable)(dollars in millions)Net sales:General Motors and affiliates

$
156



37
%

$
434



53
%

$
(278
)

$
351



37
%

$
857



52
%

$
(506
)Other customers


232



55
%


325



40
%


(93
)


512



55
%


670



41
%


(158
)Inter-segment


34



8
%


58



7
%


(24
)


76



8
%


109



7
%


(33
)Total other and inter-segment


266



63
%


383



47
%


(117
)


588



63
%


779



48
%


(191
)Total net sales

$
422






$
817






$
(395
)

$
939






$
1,636






$
(697
)Operating (loss)

$
(27
)





$
(177
)





$
150


$
(97
)





$
(240
)





$
143Gross margin

$
3






$
(87
)





$
90


$
(28
)





$
(89
)





$
61Gross margin %


0.7
%






(10.6
)%










(3.0
)%






(5.4
)%   Net Sales
    Operating Income/Loss
 73




---



##### Table of Contents



Corporate and Other
   Three Months Ended June 30,

Six Months Ended June 30,Favorable/





Favorable/2008

2007

(Unfavorable)

2008

2007

(Unfavorable)(dollars in millions)Net sales

$
112


$
54


$
58


$
191


$
84


$
107Operating (loss)

$
(76
)

$
(520
)

$
444


$
(200
)

$
(681
)

$
481   Net Sales
  Operating Income/Loss
 Liquidity
    and Capital Resources  Overview
    of Capital Structure
     74




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
    Increases the interest rate on the facilities at the option of
    Delphi of either the Administrative Agents Alternate Base
    Rate (ABR) plus a specified percent or LIBOR plus a
    specified percent as follows:  ABR plus


LIBOR plusAmended





Amendedand Restated


Refinanced


and Restated


RefinancedDIP Credit


DIP Credit


DIP Credit


DIP CreditFacility


Facility


Facility


FacilityTranche A


3.00%



2.50%



4.00%



3.50%Tranche B


3.00%



2.50%



4.00%



3.50%Tranche C


4.25%



3.00%



5.25%



4.00%     
    Increases the undrawn revolver fees from 50 basis points to
    100 basis points,
    Adds a LIBOR and ABR floor to the Tranche B and
    Tranche C Term Loans of 3.25% and 4.25%, respectively,
    Sets rolling
    12-month
    cumulative Global EBITDAR covenant levels for the extension
    period as follows:  Period Ending

Global EBITDAR(in millions)June 30, 2008

$
600July 31, 2008

$
575August 31, 2008

$
550September 30, 2008

$
625October 31, 2008

$
600November 30, 2008

$
675   
    Modifies the borrowing base definition and limits availability
    to draw additional amounts under the Revolving Facility, under
    certain conditions as defined, and modifies the allowable junior
    liens, and
    Allows Delphi to enter into an agreement with GM as described
    below.       75




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paid-in-kind
       76




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12-month Form 10-Q.
  debtor-in-possession
  Form 10-K
 77




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##### Table of Contents



June 30,


December 31,2008


2007(in millions)Long-term debt subject to compromise:Senior unsecured debt with maturities ranging from 2006 to 2029

$
1,984


$
1,984Junior subordinated notes due 2033


391



391Total long-term debt subject to compromise


2,375



2,375Short-term, other, and long-term debt not subject to compromise:Amended and Restated DIP term loans


3,250



Amended and Restated DIP revolving credit facility


311



Refinanced DIP term loans






2,746Accounts receivable factoring


442



384European securitization


232



205Other debt


186



160Total short-term and other debt not subject to compromise


4,421



3,495Other long-term debt


59



59Total debt not subject to compromise


4,480



3,554Total outstanding debt

$
6,855


$
5,929   Other
    Financing
    
    Credit
    Ratings, Stock Listing
    Form 10-Q,
 78




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##### Table of Contents



Form 10-Q, 1 2 1 8
  Cash
    Flows
  Operating Activities.
      Investing Activities. non-U.S. trade
 79




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##### Table of Contents



Financing Activities.
  Dividends. debtor-in-possession
 Liquidity
    Outlook for 2008         80




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##### Table of Contents



Litigation
    Commitments and Contingencies   Environmental
    Matters  non-U.S. environmental Form 10-K
   Other   Inflation   Recently
    Issued Accounting Pronouncements   81




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##### Table of Contents



Significant
    Accounting Policies and Critical Accounting Estimates  Form 10-K
 Forward-Looking
    Statements  Form 10-Q, debtor-in-possession and/or Form 10-K and/or and/or
 82




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##### Table of Contents



ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    ITEM 4.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)) Form 10-K Form 10-K
  Form 10-Q Form 10-K
  Changes
    in internal control over financial reporting
  Form 10-K
  Form 10-K
    Form 10-K
 83




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##### Table of Contents



PART II.
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS  Form 10-K
    ITEM 1A.
    RISK
    FACTORS  Form 10-K Form 10-Q Form 10-K Form 10-Q and/or
  Our Delayed Emergence from Chapter 11 Coupled With
    Continued Difficult Economic and Industry Conditions May Further
    Increase Operating Losses, Which May Result in Non-Compliance
    with Certain Covenants and Financial Tests contained in our
    Refinanced DIP Credit Facility.
  12-month debtor-in-possession
   84




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##### Table of Contents



Form 10-K
    We Anticipate the Need to Supplement Borrowings Under Our
    Amended And Restated DIP Credit Facility With Advances Under The
    GM Advance Facility To Maintain Adequate Liquidity Until We Are
    Able To Emerge From Chapter 11. Should The Court Not
    Approve The Amendment To Increase Availability Under The GM
    Advance Facility, Should GM Be Unwilling Or Unable To Continue
    To Provide Such Liquidity Support Or Should Such Facility
    Otherwise Become Unavailable To Us, Then Absent Procurement of
    Alternative Financing, Our Liquidity Would Be Severely
    Restricted Resulting In A Material Adverse Impact On Our
    Business, Financial Condition and Operating Results, Which May,
    Among Other Things, Delay Completion Of Our Transformation
    Plan.
     85




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##### Table of Contents



ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  Purchase
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES  Form 10-K
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 5.
    OTHER
    INFORMATION    ITEM 6.
    EXHIBITS  ExhibitNumber

Exhibit Name2(a)

Confirmed Joint Plan of Reorganization of Delphi Corporation and
    Certain Affiliates, Debtors and
    Debtors-in-Possession,
    incorporated by reference to Exhibit 99(e) to Delphis
    Report on
    Form 8-K
    filed January 30, 2008.3(a)

Amended and Restated Certificate of Incorporation of Delphi
    Automotive Systems Corporation, incorporated by reference to
    Exhibit 3(a) to Delphis Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2002.3(b)

Certificate of Ownership and Merger, dated March 13, 2002,
    Merging Delphi Corporation into Delphi Automotive Systems
    Corporation, incorporated by reference to Exhibit 3(b) to
    Delphis Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2002.3(c)

Amended and Restated Bylaws of Delphi Corporation, incorporated
    by reference to Exhibit 99(c) to Delphis Report on
    Form 8-K
    filed October 14, 2005.31(a)

Certification Pursuant to Exchange Act
    Rules 13a-14(a)/15d-14(a),
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31(b)

Certification Pursuant to Exchange Act
    Rules 13a-14(a)/15d-14(a),
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32(a)

Certification Pursuant to 18 U.S.C. Section 1350,
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.32(b)

Certification Pursuant to 18 U.S.C. Section 1350,
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.99(a)

Agreement between Delphi Corporation and General Motors
    Corporation dated as of August 7, 2008.    86




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##### Table of Contents



SIGNATURE    Delphi Corporation
   August 8, 2008
 Thomas S. Timko
    87