##### Table of Contents



UNITED
    STATES 
    SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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 September 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
  non-accelerated Rule 12b-2
  þ o o 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 Nine Months Ended September 30, 2008 and
    2007 (Unaudited)

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

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

5Consolidated Statements of Comprehensive Income
    (Loss) for the Three and Nine Months Ended September 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

64Executive Summary of Business

64Overview of Performance

78Overview of Net Sales and Net Loss

79Results of Operations

81Liquidity and Capital Resources

95Liquidity Outlook

100Litigation Commitments and Contingencies

101Environmental Matters

101Other

102Inflation

102Recently Issued Accounting Pronouncements

102Significant Accounting Policies and Critical
    Accounting Estimates

102Forward-Looking Statements

102Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk

103Item 4.

Controls and Procedures

103Part II  Other
    InformationItem 1.

Legal Proceedings

105Item 1A.

Risk Factors

105Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds

110Item 3.

Defaults Upon Senior Securities

110Item 4.

Submission of Matters to a Vote of Security
    Holders

110Item 5.

Other Information

110Item 6.

Exhibits

111Signatures

112EX-10(D)EX-10(E)EX-10(F)EX-31(A)EX-31(B)EX-32(A)EX-32(B)   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)
  Nine MonthsThree Months Ended


EndedSeptember 30,


September 30,2008


2007


2008


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

$
1,366


$
2,031


$
4,490


$
6,441Other customers


3,011



3,248



10,373



10,520Total net sales


4,377



5,279



14,863



16,961Operating expenses:Cost of sales, excluding items listed below


4,117



5,111



13,835



16,071U.S. employee workforce transition program charges


22



197



76



191GM settlement (Note 2  MRA)


(254
)






(254
)


Depreciation and amortization


206



215



635



672Long-lived asset impairment charges


5



14



13



54Goodwill impairment charges










168



Selling, general and administrative


377



384



1,118



1,142Securities & ERISA litigation charge






21







353Total operating expenses


4,473



5,942



15,591



18,483Operating loss


(96
)


(663
)


(728
)


(1,522
)Interest expense (contractual interest expense for the three and
    nine months ended September 30, 2008 was
    $128 million and $407 million, respectively, and for
    the three and nine months ended September 30, 2007 was
    $118 million and $360 million, respectively)


(93
)


(454
)


(312
)


(628
)Loss on extinguishment of debt










(49
)


(23
)Other income, net


50



23



73



62Reorganization items, net:GM settlement (Notes 2 and 3  GSA)


5,332







5,332



Professional fees and other, net (Note 3)


(24
)


(39
)


(162
)


(120
)Income (loss) from continuing operations before income taxes,
    minority interest and equity income


5,169



(1,133
)


4,154



(2,231
)Income tax expense


(5
)


(15
)


(78
)


(116
)Income (loss) from continuing operations before minority
    interest and equity income


5,164



(1,148
)


4,076



(2,347
)Minority interest, net of tax


(5
)


(11
)


(28
)


(35
)Equity (loss) income, net of tax


(16
)


10



6



34Income (loss) from continuing operations


5,143



(1,149
)


4,054



(2,348
)Income (loss) from discontinued operations, net of tax
    (Note 2 and 4)


75



(20
)


24



(175
)Net income (loss)

$
5,218


$
(1,169
)

$
4,078


$
(2,523
)Basic and diluted income (loss) per share:Continuing operations

$
9.11


$
(2.04
)

$
7.19


$
(4.18
)Discontinued operations


0.13



(0.04
)


0.04



(0.31
)Basic and diluted income (loss) per share

$
9.24


$
(2.08
)

$
7.23


$
(4.49
)    3




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


December 31,(Unaudited)


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

$
1,866


$
1,036Restricted cash


111



173Accounts receivable, net:General Motors and affiliates


1,105



1,257Other


2,378



2,637Inventories, net (Note 11)


1,646



1,808Other current assets


575



588Assets held for sale (Note 4)


617



720Total current assets


8,298



8,219Long-term assets:Property, net


3,655



3,863Investments in affiliates


342



387Goodwill


239



397Other


535



801Total long-term assets


4,771



5,448Total assets

$
13,069


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

$
4,314


$
3,495Accounts payable


2,478



2,904Accrued liabilities (Note 12)


2,350



2,281Liabilities held for sale (Note 4)


406



412Total current liabilities


9,548



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


57



59Employee benefit plan obligations (Note 17)


442



443Other (Note 12)


1,055



1,185Total long-term liabilities


1,554



1,687Liabilities subject to compromise (Note 14)


11,123



16,197Total liabilities


22,225



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


139



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


(11,023
)


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


(1,319
)


(1,679
)Other


300



446Total accumulated other comprehensive loss


(1,019
)


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


(6
)


(25
)Total stockholders deficit


(9,295
)


(13,472
)Total liabilities and stockholders deficit

$
13,069


$
13,667    4




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


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

$
4,078


$
(2,523
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Depreciation and amortization


635



672Long-lived asset and goodwill impairment charges and loss on
    assets held for sale


213



54Deferred income taxes


(36
)


Pension and other postretirement benefit expenses


561



699Equity income


(6
)


(34
)Reorganization items (Notes 2 and 3  GSA)


(5,170
)


120GM settlement (Note 2  MRA)


(254
)


GM warranty settlement


(107
)


U.S. employee workforce transition program charges


76



191Loss on extinguishment of debt


49



23Securities & ERISA litigation charge






353Loss on liquidation/deconsolidation of investment






79Gain on sale of investment


(32
)


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


330



(684
)Inventories, net


127



(122
)Other assets


76



(40
)Accounts payable


(324
)


337Accrued and other long-term liabilities


(130
)


743Other, net


(151
)


1U.S. employee workforce transition program payments, net of
    reimbursement by GM


(122
)


(306
)Pension contributions


(344
)


(230
)Other postretirement benefit payments


(201
)


(149
)Net cash received from reorganization items


1,156



(91
)Dividends from equity investments


10



32Discontinued operations (Note 4)


55



326Net cash provided by (used in) operating activities


489



(549
)Cash flows from investing activities:Capital expenditures


(624
)


(435
)Proceeds from sale of property


69



32Proceeds from sale of investment


8



Cost of acquisitions


(15
)


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


177



150Proceeds from divestitures, net


122



71Decrease (increase) in restricted cash


62



(30
)Other, net


10



(6
)Discontinued operations


(126
)


(41
)Net cash used in investing activities


(317
)


(259
)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


465



Net borrowings under refinanced
    debtor-in-possession
    facility






480Net (payments) borrowings under other debt agreements


(197
)


69Dividend payments of consolidated affiliates to minority
    shareholders


(44
)


(45
)Discontinued operations


8



8Net cash provided by financing activities


644



505Effect of exchange rate fluctuations on cash and cash equivalents


14



76Increase (decrease) in cash and cash equivalents


830



(227
)Cash and cash equivalents at beginning of period


1,036



1,608Cash and cash equivalents at end of period

$
1,866


$
1,381    5




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


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(in millions)Net income (loss)

$
5,218


$
(1,169
)

$
4,078


$
(2,523
)Other comprehensive income:Currency translation adjustments, net of tax


(210
)


71



(120
)


217Net change in unrecognized gain on derivative instruments, net
    of tax


(106
)


9



(26
)


62Employee benefit plans adjustment, net of tax


383



1,191



372



1,186Other comprehensive income


67



1,271



226



1,465Comprehensive income (loss)

$
5,285


$
102


$
4,304


$
(1,058
)    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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##### Table of Contents



Going Concern debtor-in-possession 180-day debtors-in-possession
 8




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##### Table of Contents



Contractual Interest Expense and Interest Expense on
    Unsecured Claims SOP 90-7.
  Use of Estimates
  Valuation of Long-Lived Assets
  Discontinued Operations Accounting for the Impairment or Disposal of Long-Lived
    Assets
 9




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##### Table of Contents



non-U.S. operations non-U.S. operations non-U.S. pension
    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
 10




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Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
  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
   11




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GM
    Global Settlement Agreement
   12




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##### Table of Contents



Reorganization


Cash ReceivedGain (Loss)


From GM(in millions)Hourly Pension Plan Settlement:Hourly Plan First Pension Transfer to GM

$
2,083


$
Recognition of Hourly Plan related OCI amounts


(494
)


Hourly OPEB Settlement:GM assumption of OPEB obligation


6,821



Recognition of OPEB related OCI amounts


266



Allowed Claims and Other:Allowed GM administrative claim


(1,628
)


Allowed GM general unsecured claim


(2,500
)


Allowed IUE-CWA and USW claims


(129
)


OPEB reimbursement from GM


353



350Special attrition programs


491



230Other, net


69



61Total, net

$
5,332


$
641   Hourly Pension Plan Settlement  First Pension
    Transfer to GM  Employers Accounting
    for Settlements and Curtailments of Defined Benefit Pension
    Plans and for Termination Benefit
  Hourly Pension Plan Settlement  Second Pension
    Transfer to GM  Employers Accounting for Pensions,
 13




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##### Table of Contents



Hourly Plan Freeze and Triggering of Benefit
    Guarantees 
  Hourly OPEB Settlement and OPEB Reimbursement from
    GM  Employers Accounting for Postretirement Benefits Other
    Than Pensions.
  Allowed GM Administrative and General Unsecured
    Claims 
       14




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Allowed IUE-CWA and USW Claims 
  Special Attrition Programs 
  Other, Net 
  Master Restructuring Agreement
 15




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##### Table of Contents



GM Settlement Gain


Cash Receivedin Pre-Tax Earnings


From GM(in millions)Reimbursement of hourly labor costs

$
272


$
273Production cash burn breakeven reimbursement


81



74Working capital backstop  Steering Business






210Other


2



2Total, net

$
355


$
559Continuing operations

$
254Discontinued operations

$
101   Existing and Future Business Awards and Related
    Matters 
  Reimbursement of Hourly Labor Costs  UAW-represented
  Production Cash Burn Breakeven Reimbursement  site-specified
 16




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##### Table of Contents



Working Capital Backstop  Steering
    Business 
  Reimbursement of Hourly Workers Compensation and Other
    Benefits 
  Accelerated GM North American Payment Terms 
  Pensions
     17




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Labor
   18




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##### Table of Contents



Portfolio
          Cost Structure
   19




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##### Table of Contents



Equity Purchase and Commitment Agreement
             20




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##### Table of Contents



out-of-pocket
  The Plan of Reorganization
  180-day
        
    All senior secured debt will be refinanced and paid in full and
    all allowed administrative and priority claims will be paid in
    full.
    Trade and Other Unsecured Claims, including senior notes but not
    including the subordinated notes which are contractually
    subordinated to the senior notes, will be satisfied with
    $1.238 billion in a combination of rights and common stock
    of reorganized Delphi, at a midpoint per share total enterprise
    value of $20.00. 21




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##### Table of Contents




    GM will receive $2.1 billion of Series D Convertible
    Preferred Stock in satisfaction of its allowed administrative
    claim of $2.1 billion and its allowed general unsecured
    claim of $2.5 billion.
    Holders of Delphis existing equity securities will receive
    Post-Emergence Rights exercisable to purchase up to
    26,187,745 shares of common stock of reorganized Delphi at
    an exercise price of $17.00 per share. To the extent that any
    Post-Emergence Rights are exercised, the gross proceeds
    generated from the exercise thereof will be used to repurchase
    up to 25% of the shares of Series D Convertible
    Preferred Stock held by GM.      Form 10-K Form 10-Q Form 10-Q.
 22




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##### Table of Contents



3.
    REORGANIZATION
    ITEMS  SOP 90-7
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(in millions)GM Amended GSA settlement (Note 2)

$
5,332


$



$
5,332


$
Professional fees directly related to reorganization


(24
)


(41
)


(83
)


(128
)Interest income


1



2



5



8Write off of previously capitalized fees and expenses related to
    the EPCA










(79
)


Other


(1
)






(5
)


Total reorganization items

$
5,308


$
(39
)

$
5,170


$
(120
)     4.
    DISCONTINUED
    OPERATIONS    Steering
    and Halfshaft Business
    held-for-use
 23




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##### Table of Contents



Interiors
    and Closures Business
      Results
    of Discontinued Operations
    Nine MonthsThree Months Ended


EndedSeptember 30,


September 30,2008


2007


2008


2007(in millions)Sales:Steering Business

$
500


$
633


$
1,639


$
2,013Interiors and Closures Business






309



241



943Total sales

$
500


$
942


$
1,880


$
2,956Income (loss) before income taxes (including minority interest
    and equity income, net of tax)

$
75


$
(18
)

$
33


$
(168
)Provision for income taxes






(2
)


(9
)


(7
)Income (loss) from discontinued operations

$
75


$
(20
)

$
24


$
(175
)Steering Business


78



(15
)


9



(192
)Interiors and Closures Business(a)


(3
)


(5
)


15



17     (a)
    
    The Interiors and Closures Business loss from discontinued
    operations for the three months ended
    September 30, 2008 reflects the impact of the
    retroactive labor subsidy and PCBB reimbursement. 24




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##### Table of Contents



September 30,


December 31,2008


2007(in millions)Current assets:Cash

$
38


$
49Accounts receivable


372



411Inventory


184



188Other current assets


21



8Long-term assets:Property, net






48Other long-term assets


2



16Assets held for sale

$
617


$
720Steering Business


617



594Interiors and Closures Business






126Current liabilities:Short-term debt

$
55


$
49Accounts payable


235



271Accrued liabilities


73



53Other long-term liabilities


23



14Minority interest


20



25Liabilities held for sale

$
406


$
412Steering Business


406



392Interiors and Closures Business






20     Nine Months EndedSeptember 30,2008


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

$
12


$
Long-lived asset impairment charges






168Pension and other postretirement benefit expenses


29



57GM warranty settlement


(5
)


U.S. employee workforce transition program charges


4



47GM Amended MRA settlement (Note 2)


(101
)


Changes in net operating assets


116



54Total

$
55


$
326Steering Business


25



296Interiors and Closures Business


30



30  25




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5.
    ACQUISITIONS
    AND DIVESTITURES    Automotive
    Holdings Group Segment
  Power Products Business Sale
  U.S. Suspensions Asset Sale
  Bearings Business Product Sale
  Brake Hose Business Sale
  North American Brake Product Asset
    Sale
 26




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##### Table of Contents



Powertrain
    Systems Segment
  Global Exhaust Business Sale
  Catalyst Product Line Sale
  Battery Product Line Sale
  Electronics &
    Safety Segment
  Acquisition of Joint Venture
  6.
    INCOME
    TAXES  Accounting for Income Taxes
     27




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##### Table of Contents



Three Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2008


2008(in millions)Tax at U.S. federal statutory income tax rate

$
1,863


$
1,478U.S. income taxed at other rates


(7
)


(22
)Non-U.S.
    income taxed at other rates


8



104Change in valuation allowance


(1,857
)


(1,466
)Tax allocation from OCI deferred taxes


12



(9
)Other adjustments


(14
)


(7
)Total income tax provision

$
5


$
78   7.
    LONG-LIVED
    ASSET IMPAIRMENT   28




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##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,Segment

2008


2007


2008


2007(in millions)Electronics & Safety

$



$



$
5


$
1Powertrain Systems






1







10Electrical/Electronic Architecture






2



1



3Thermal Systems


4







4



Automotive Holdings Group


1



11



3



40Continuing Operations


5



14



13



54Discontinued Operations






9







168Total

$
5


$
23


$
13


$
222   held-for-use
      8.
    GOODWILL    2008(in millions)Balance at January 1,

$
397
(a)Acquisitions


19Impairment


(168
)Currency translation


(9
)Balance at September 30,

$
239
(b)     (a)
    
    $165 million in Electrical/Electronic Architecture,
    $155 million in Electronics & Safety and
    $77 million in Corporate and Other.(b)
    
    $166 million in Electronics & Safety and
    $73 million in Corporate and Other.   29




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9.
    EMPLOYEE
    TERMINATION BENEFITS AND OTHER EXIT COSTS         30




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Three Months Ended


Nine Months EndedSeptember 30,


September 30,Segment

2008


2007


2008


2007(in millions)Electronics & Safety

$
61


$
13


$
100


$
16Powertrain Systems


30



21



40



40Electrical/Electronic Architecture


21



8



53



73Thermal Systems


9



29



18



39Automotive Holdings Group


18



36



76



225Corporate and Other


7



2



8



24Continuing Operations


146



109



295



417Discontinued Operations


7



3



51



115Total

$
153


$
112


$
346


$
532Cost of sales


128



106



267



390Selling, general and administrative expenses


18



3



28



27Income (loss) from discontinued operations


7



3



51



115     
    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 the 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 in the second quarter of 2009, and
    recognized employee termination benefits of $45 million
    during the nine months ended September 30, 2008.
    Additionally, Electronics & Safety,
    Electrical/Electronic Architecture, Thermal Systems and the
    Automotive Holdings Group segments executed initiatives to
    realign manufacturing operations within North America to lower
    cost markets, and incurred approximately $31 million and
    $72 million of employee termination benefits and other
    related exit costs during the three and nine months ended
    September 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 $43 million related to the closure of a
    manufacturing facility in Athens, Alabama during the three and
    nine months ended September 30, 2008, respectively,
    which related to the Steering Business and was recorded in
    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 nine months ended
    September 30, 2008 for involuntary separation and
    incurred $93 million and $135 million, respectively,
    in related employee termination benefits in the
    Electronics & Safety, Powertrain Systems,
    Electrical/Electronic Architecture, Thermal Systems and the
    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
    Electrical/Electronic Architecture segment transferred
    manufacturing operations in Germany and Portugal to lower cost
    markets in Eastern Europe and Asia Pacific. As a result,
    the Electrical/Electronic Architecture segment significantly
    reduced the number of employees at these locations, and
    announced involuntary employee separation packages for
    approximately $26 million during the nine months ended
    September 30, 2007. Additionally, the 31




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##### Table of Contents



Electrical/Electronic Architecture segment announced an
    involuntary employee separation package due to a planned closure
    of a manufacturing facility in France for approximately
    $11 million during the nine months ended
    September 30, 2007. Finally, the
    Electronics & Safety segment announced an involuntary
    separation package due to a planned closure of a manufacturing
    facility in Germany for approximately $10 million during
    the three and nine months ended September 30, 2007.  
    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
    $268 million related to the closure of a manufacturing
    facility in Cadiz, Spain during the nine months ended
    September 30, 2007, of which $161 million related
    to the Automotive Holdings Group segment and $107 million
    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 nine months
    ended September 30, 2007 for involuntary separation,
    and incurred $11 million and $53 million,
    respectively, in related employee termination benefits in the
    Powertrain Systems, Electrical/Electronic Architecture and the
    Automotive Holdings Group segments. During the nine months ended
    September 30, 2007, Delphi incurred $19 million
    related to the financial services and information technology
    outsourcing activities related to the transformation of its
    salaried workforce to reduce general and administrative expenses
    in the Corporate and Other segment. Finally, as part of
    Delphis initiative to modify its labor agreements, Delphi
    signed agreements with the UAW and all of its other principal
    U.S. labor unions during the three and nine months ended
    September 30, 2007. The new agreements offered certain
    eligible Delphi employees severance payments and supplemental
    unemployment benefits, among other options. Delphi incurred
    $48 million of employee termination benefits related to
    these agreements during the three and nine months ended
    September 30, 2007, primarily in the Powertrain
    Systems and the Automotive Holdings Group segments. Refer to
    Note 16. U.S. Employee Workforce Transition Program.  10.
    WEIGHTED
    AVERAGE SHARES      Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(in thousands)Weighted average shares outstanding


564,635



561,782



564,268



561,782Effect of dilutive securities














Diluted shares outstanding


564,635



561,782



564,268



561,782     Three andNine MonthsEndedSeptember 30,2008


2007(in thousands)Anti-dilutive securities


59,090



77,848  32




---



##### Table of Contents



11.
    INVENTORIES,
    NET  first-in,
  September 30,


December 31,2008


2007(in millions)Productive material

$
861


$
926Work-in-process
    and supplies


308



386Finished goods


477



496Total

$
1,646


$
1,808   12.
    LIABILITIES    September 30,


December 31,2008


2007(in millions)Payroll-related obligations

$
290


$
238Employee benefits, including current pension obligations


176



185Accrued income taxes


62



54Taxes other than income


232



195Warranty obligations (Note 13)


124



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


123



234Manufacturing plant rationalization


244



259Interest on prepetition claims (Note 1)


415



411Working capital backstop  Steering Business
    (Note 2)


210



Other


474



461Total

$
2,350


$
2,281     September 30,


December 31,2008


2007(in millions)Workers compensation

$
299


$
328Environmental


93



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


90



148Extended disability benefits


60



72Warranty obligations (Note 13)


272



315Payroll-related obligations


53



55Accrued income taxes


69



55Other


119



100Total

$
1,055


$
1,185   13.
    WARRANTY
    OBLIGATIONS   33




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##### Table of Contents



WarrantyObligations(in millions)Accrual balance at December 31, 2007

$
559Provision for estimated warranties issued during the period


47Provision for changes in estimate for preexisting warranties


20GM warranty forgiveness


(112
)Settlements made during the period (in cash or in kind)


(117
)Foreign currency translation and other


(1
)Accrual balance at September 30, 2008

$
396     debtors-in-possession
  14.
    LIABILITIES
    SUBJECT TO COMPROMISE   34




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##### Table of Contents



and/or
  SOP 90-7
 35




---



##### Table of Contents



September 30,


December 31,2008


2007(in millions)Pension obligations

$
2,085


$
3,329Postretirement obligations other than pensions


946



8,786Allowed GM general unsecured claim (Note 2)


2,500



Allowed GM administrative claim (Note 2)


1,628



Allowed IUE-CWA and USW claims (Note 2)


129



Debt and notes payable


1,984



1,984Accounts payable


732



744Junior subordinated notes due 2033


391



391GM claim for U.S. employee workforce transition programs
    (Note 2)






312Securities & ERISA litigation liability (Note 22)


351



351Other


377



300Total Liabilities Subject to Compromise

$
11,123


$
16,197     15.
    DEBT  Debtor-in-Possession
    Credit Facility
   36




---



##### Table of Contents



ABR plus


LIBOR plusTranche A


3.00
%


4.00
%Tranche B(a)


3.00
%


4.00
%Tranche C(a)


4.25
%


5.25
%     (a)
    
    Facilities include ABR and LIBOR floor of 4.25% and 3.25%,
    respectively        12-month
  Period Ending

Global EBITDAR(in millions)September 30, 2008

$
625October 31, 2008

$
600November 30, 2008

$
675  37




---



##### Table of Contents



Advance
    Agreement and Liquidity Support from General Motors and Related
    Matters
  paid-in-kind
   38




---



##### Table of Contents



Form 10-Q
  16.
    U.S.
    EMPLOYEE WORKFORCE TRANSITION PROGRAMS  Form 10-K EITF 88-23, Lump-Sum Payments under Union Contracts,
 39




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##### Table of Contents



ReorganizationAmended GSA Effectiveness

Gain


Cash(in millions)Amounts reimbursed for buyouts

$
68


$
68Amounts reimbursed for retirement incentives






7Amounts reimbursed for buy-downs


90



155Forgiveness of 2006 special attrition program allowed claim


333



Total

$
491


$
230     U.S. Employee Workforce Transition Program Liability

(in millions)Balance at December 31, 2007

$
382U.S. employee workforce transition program charges


19Buy-down wage liability adjustment


(49
)Payments


(122
)Pension and other postretirement benefits (Note 17)


(23
)Accretion and other


6Balance at September 30, 2008

$
213       U.S. Employee Workforce Transition Program Buy-Down Wage
    Asset

(in millions)Balance at December 31, 2007

$
301Buy-down wage asset adjustment


(49
)Amortization expense


(61
)Amounts reimbursed by GM upon Amended GSA effectiveness


(155
)Reclassified amounts as a receivable from GM under Amended GSA


(126
)Reorganization gain


90Balance at September 30, 2008

$
    40




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##### Table of Contents



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


OtherU.S. Plans


Non-U.S. Plans


Postretirement BenefitsThree Months Ended September 30,2008


2007


2008


2007


2008


2007(in millions)Service cost(a)

$
40


$
42


$
12


$
12


$
8


$
20Interest cost


206



212



23



20



136



135Expected return on plan assets


(219
)


(216
)


(23
)


(20
)






Settlement loss (gain)(b)


494











8



(7,087
)


Curtailment loss (gain)


38



170



16







(36
)


(2
)Amortization of prior service costs


7



13



1



1



(30
)


(24
)Amortization of actuarial losses


5



18



5



8



12



19Net periodic benefit cost

$
571


$
239


$
34


$
29


$
(6,997
)

$
148   41




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##### Table of Contents



Pension Benefits


OtherU.S. Plans


Non-U.S. Plans


Postretirement BenefitsNine Months Ended September 30,2008


2007


2008


2007


2008


2007(in millions)Service cost(a)

$
122


$
137


$
34


$
35


$
23


$
62Interest cost


633



637



70



60



410



406Expected return on plan assets


(655
)


(648
)


(69
)


(60
)






Settlement loss (gain)(b)


494











41



(7,087
)


Curtailment loss (gain)


38



170



40



5



(36
)


(2
)Amortization of prior service costs


18



41



5



3



(83
)


(74
)Amortization of actuarial losses


16



69



13



25



34



57Net periodic benefit cost

$
666


$
406


$
93


$
109


$
(6,739
)

$
449     (a)
    
    Includes $6 million and $23 million for the three and
    nine months ended September 30, 2008, respectively,
    and $11 million and $39 million for the three and nine
    months ended September 30, 2007, respectively, of
    costs previously accrued related to the U.S. employee workforce
    transition programs.(b)
    
    Settlement loss (gain) does not include the impact of allowed
    bankruptcy claims granted to GM under the Amended GSA discussed
    in Note 2. Transformation Plan and Chapter 11 Bankruptcy.    Settlements
    and Curtailments
       42




---



##### Table of Contents



Employers
    Accounting for Postretirement Benefits Other Than Pensions.
    non-U.S. entity.
  non-U.S. pension
 43




---



##### Table of Contents



OtherPostretirementU.S. Pension Plans


Benefits(in millions)Benefit obligation at January 1, 2008

$
13,841


$
8,771Service cost


122



23Interest cost


632



409Plan participants contributions


4



Actuarial gains


(1,257
)


(1,334
)Benefits paid


(822
)


(199
)Impact of transfers / settlements


(2,623
)


(6,821
)Impact of curtailments


38



(54
)Impact of adoption of SFAS 158






132Other transfers


(22
)


Benefit obligation at September 30, 2008

$
9,913


$
927Change in plan assets:Fair value of plan assets at January 1, 2008

$
10,677


$
Actual return on plan assets


(1,702
)


Delphi contributions


262



199Plan participants contributions


4



Benefits paid


(822
)


(199
)Impact of transfers / settlements


(540
)


Other transfers


(22
)


Fair value of plan assets at September 30, 2008

$
7,857


$
Pension liabilities subject to compromise

$
2,056


$
927Amounts recognized in accumulated other comprehensive income
    consist of (pre-tax):Actuarial loss

$
1,903


$
134Prior service cost (credit)


92



(595
)Total

$
1,995


$
(461
)   weighted-average
 44




---



##### Table of Contents



SFAS 158
    Adoption
      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   Pension
    Funding
     45




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##### Table of Contents



18.
    DERIVATIVES
    AND HEDGING ACTIVITIES      September 30,


December 31,2008


2007(in millions)Current assets

$
74


$
40Non-current assets


21



13Total assets

$
95


$
53Current liabilities

$
44


$
24Non-current liabilities


16



Total liabilities

$
60


$
24        46




---



##### Table of Contents



19.
    FAIR
    VALUE MEASUREMENTS    No. 157-2 (FSP 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). 47




---



##### Table of Contents



Fair Value Measurements Using:Quoted Prices


Significant Other


Significantin Active


Observable


UnobservableTotal as of


Markets


Inputs


InputsSeptember 30, 2008


Level 1


Level 2


Level 3(in millions)Available for sale securities

$
74


$
25


$
49


$
Commodity derivatives


1







1



Foreign currency derivatives


94







94



Total

$
169


$
25


$
144


$
     Fair Value Measurements Using:Quoted Prices


Significant Other


Significantin Active


Observable


UnobservableTotal as of


Markets


Inputs


InputsSeptember 30, 2008


Level 1


Level 2


Level 3(in millions)Commodity derivatives

$
56


$



$
56


$
Foreign currency derivatives


4







4



Total

$
60


$



$
60


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


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(in millions)Interest income

$
11


$
19


$
32


$
50Other, net


39



4



41



12Other income, net

$
50


$
23


$
73


$
62    48




---



##### Table of Contents



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.           49




---



##### 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:September 30, 2008Net sales to GM and affiliates

$
293


$
269


$
387


$
278


$
77


$
62


$
1,366Net sales to other customers


637



721



997



248



165



243



3,011Inter-segment net sales


29



88



35



17



8



(177
)


Total net sales

$
959


$
1,078


$
1,419


$
543


$
250


$
128


$
4,377GM settlement (Note 2  MRA)

$
(42
)

$
(94
)

$
(15
)

$
(88
)

$
(62
)

$
47


$
(254
)Depreciation and amortization

$
57


$
62


$
47


$
18


$
9


$
13


$
206Long-lived asset impairment charges

$



$



$



$
4


$
1


$



$
5Goodwill impairment charges

$



$



$



$



$



$



$
Operating (loss) income

$
(91
)

$
33


$
(37
)

$
70


$
86


$
(157
)

$
(96
)Minority interest

$



$
(1
)

$
(3
)

$
(2
)

$
1


$



$
(5
)Equity income (loss)

$



$
3


$
(5
)

$
2


$
(16
)

$



$
(16
)September 30, 2007Net sales to GM and affiliates

$
389


$
405


$
423


$
325


$
377


$
112


$
2,031Net sales to other customers


738



805



955



225



263



262



3,248Inter-segment net sales


65



129



36



26



41



(297
)


Total net sales

$
1,192


$
1,339


$
1,414


$
576


$
681


$
77


$
5,279Depreciation and amortization

$
60


$
64


$
41


$
14


$
16


$
20


$
215Long-lived asset impairment charges

$



$
1


$
2


$



$
11


$



$
14Operating income (loss)

$
35


$
(203
)

$
(23
)

$
(19
)

$
(74
)

$
(379
)

$
(663
)Minority interest

$
(1
)

$
(5
)

$
(5
)

$
(2
)

$



$
2


$
(11
)Equity income (loss)

$
1


$
4


$
4


$
1


$
(2
)

$
2


$
10   Electrical/





AutomotiveElectronics


Powertrain


Electronic


Thermal


Holdings


Corporateand Safety


Systems


Architecture


Systems


Group


and Other


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

$
938


$
875


$
1,155


$
861


$
428


$
233


$
4,490Net sales to other customers


2,267



2,510



3,350



790



677



779



10,373Inter-segment net sales


114



314



117



64



84



(693
)


Total net sales

$
3,319


$
3,699


$
4,622


$
1,715


$
1,189


$
319


$
14,863GM settlement (Note 2  MRA)

$
(42
)

$
(94
)

$
(15
)

$
(88
)

$
(62
)

$
47


$
(254
)Depreciation and amortization

$
184


$
193


$
138


$
52


$
26


$
42


$
635Long-lived asset impairment charges

$
5


$



$
1


$
4


$
3


$



$
13Goodwill impairment charges

$



$



$
168


$



$



$



$
168Operating (loss) income

$
(246
)

$
27


$
(226
)

$
85


$
(11
)

$
(357
)

$
(728
)Minority interest

$



$
(13
)

$
(12
)

$
(4
)

$
1


$



$
(28
)Equity income (loss)

$



$
9


$
4


$
7


$
(18
)

$
4


$
6September 30, 2007Net sales to GM and affiliates

$
1,231


$
1,260


$
1,326


$
1,056


$
1,234


$
334


$
6,441Net sales to other customers


2,420



2,731



2,956



697



933



783



10,520Inter-segment net sales


192



388



134



92



150



(956
)


Total net sales

$
3,843


$
4,379


$
4,416


$
1,845


$
2,317


$
161


$
16,961Depreciation and amortization

$
196


$
200


$
127


$
44


$
43


$
62


$
672Long-lived asset impairment charges

$
1


$
10


$
3


$



$
40


$



$
54Operating income (loss)

$
91


$
(253
)

$
16


$
(2
)

$
(314
)

$
(1,060
)

$
(1,522
)Minority interest

$
(2
)

$
(21
)

$
(18
)

$
(3
)

$



$
9


$
(35
)Equity income

$
1


$
12


$
11


$
4


$



$
6


$
34  50




---



##### Table of Contents



22.
    COMMITMENTS
    AND CONTINGENCIES  Shareholder
    Lawsuits
         51




---



##### Table of Contents



52




---



##### Table of Contents



third-party
  and/or
      Ordinary
    Business Litigation
       53




---



##### Table of Contents



2005-2007
  Environmental
    Matters
  non-U.S. environmental
 54




---



##### Table of Contents



multi-party
         55




---



##### Table of Contents



Other
    23.
    SUBSEQUENT
    EVENTS       56




---



##### Table of Contents



57




---



##### Table of Contents



Form 10-Q
    24.
    DEBTORS
    CONDENSED COMBINED FINANCIAL STATEMENTS  Basis of
    Presentation
  Condensed Combined
    Debtors-in-Possession
    Financial Statements non-Debtor SOP 90-7.
  Intercompany Transactions Debtors-in-Possession
 58




---



##### Table of Contents



Contractual Interest Expense and Interest Expense on
    Unsecured Claims SOP 90-7.
  U.S. Employee Workforce Transition
    Programs EITF 88-23, Lump-Sum Payments under Union Contracts,
  Goodwill Impairment Charges
  Income Tax Benefit
   59




---



##### Table of Contents



Assets Held for Sale
  Liabilities Subject to
    Compromise
 60




---



##### 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


Nine MonthsEnded


EndedSeptember 30,


September 30,2008


2007


2008


2007(in millions)Net Sales

$
1,934


$
2,903


$
6,388


$
9,441Operating expenses:Cost of sales, excluding items listed below


1,995



3,040



6,686



9,790U.S. employee workforce transition program charges


22



238



76



232GM settlement (Note 2  MRA)


(254
)






(254
)


Depreciation and amortization


99



118



306



379Long-lived asset impairment charges






8



7



45Goodwill impairment charges










99



Selling, general and administrative


193



250



650



734Securities & ERISA litigation charge






21







353Total operating expenses


2,055



3,675



7,570



11,533Operating loss


(121
)


(772
)


(1,182
)


(2,092
)Interest expense (contractual interest expense for the three and
    nine months ended September 30, 2008 was
    $127 million and $367 million, respectively, and for
    the three and nine months ended September 30, 2007 was
    $108 million and $326 million, respectively)


(94
)


(444
)


(275
)


(596
)Loss on extinguishment of debt










(49
)


(23
)Other income, net


30



79



25



84Reorganization items:GM settlement (Notes 2 and 3  GSA)


5,332







5,332



Professional fees and other, net (Note 3)


(8
)


(32
)


(121
)


(98
)Income (loss) from continuing operations before income taxes,
    minority interest and equity income


5,139



(1,169
)


3,730



(2,725
)Income tax expense


(18
)


(4
)


(3
)


(28
)Income (loss) from continuing operations before minority
    interest and equity income


5,121



(1,173
)


3,727



(2,753
)Equity (loss) income from non-consolidated affiliates, net of tax


(17
)


8



2



30Income (loss) from continuing operations


5,104



(1,165
)


3,729



(2,723
)Income (loss) from discontinued operations, net of tax
    (Notes 2 and 4)


72



(33
)


(20
)


(109
)Equity income from non-Debtor affiliates, net of tax


42



29



369



309Net income (loss)

$
5,218


$
(1,169
)

$
4,078


$
(2,523
)  61




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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)
  September 30,2008


December 31,(Unaudited)


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

$
1,136


$
113Restricted cash


50



125Accounts receivable, net:General Motors and affiliates


850



972Other third parties


583



623Non-Debtor affiliates


273



250Notes receivable from non-Debtor affiliates


65



278Inventories, net


667



823Other current assets


257



385Assets held for sale


397



475Total current assets


4,278



4,044Long-term assets:Property, net


1,302



1,446Investments in affiliates


281



331Investments in non-Debtor affiliates


1,831



3,267Goodwill


53



152Notes receivable from non-Debtor affiliates


1,429



Other


203



512Total long-term assets


5,099



5,708Total assets

$
9,377


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

$
3,728


$
2,782Accounts payable


747



1,007Accounts payable to non-Debtor affiliates


621



689Accrued liabilities


1,278



1,328Liabilities held for sale


186



167Total current liabilities


6,560



5,973Long-term liabilities not subject to compromise:Other long-term debt


20



24Employee benefit plan obligations and other


888



951Total long-term liabilities


908



975Liabilities subject to compromise


11,204



16,276Total liabilities


18,672



23,224Stockholders deficit:Total stockholders deficit


(9,295
)


(13,472
)Total liabilities and stockholders deficit

$
9,377


$
9,752  62




---



##### 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)
  Nine MonthsEndedSeptember 30,2008


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

$
(84
)

$
(682
)Cash flows from investing activities:Capital expenditures


(228
)


(151
)Proceeds from sale of property


42



12Proceeds from sale of investment


8



Proceeds from divestitures


120



62Decrease (increase) in restricted cash


75



(12
)Proceeds from notes receivable from non-Debtor affiliates


265



Return of investments from non-Debtor affiliates


20



Other, net


16



(10
)Discontinued operations


(61
)


(19
)Net cash provided by (used in) investing activities


257



(118
)Cash flows from financing activities:Net borrowings under amended and restated
    debtor-in-possession
    facility


3,623



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


(2,746
)


3,219Repayments 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


(27
)


(7
)Net proceeds from borrowings from non-debtor affiliates






65Net cash provided by financing activities


850



531Increase (decrease) in cash and cash equivalents


1,023



(269
)Cash and cash equivalents at beginning of period


113



376Cash and cash equivalents at end of period

$
1,136


$
107  63




---



##### 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
     64




---



##### Table of Contents



Form 10-Q Form 10-Q Form 10-K debtors-in-possession
    debtor-in-possession
 65




---



##### Table of Contents



Form 10-Q
 66




---



##### Table of Contents



Plan of
    Reorganization and Transformation Plan
  Elements of Transformation Plan
    GM
    Global Settlement Agreement 
   67




---



##### Table of Contents



Reorganization


Cash ReceivedGain (Loss)


From GM(in millions)Hourly Pension Plan Settlement:Hourly Plan First Pension Transfer to GM

$
2,083


$
Recognition of Hourly Plan related OCI amounts


(494
)


Hourly OPEB Settlement:GM assumption of OPEB obligation


6,821



Recognition of OPEB related OCI amounts


266



Allowed Claims and Other:Allowed GM administrative claim


(1,628
)


Allowed GM general unsecured claim


(2,500
)


Allowed IUE-CWA and USW claims


(129
)


OPEB reimbursement from GM


353



350Special attrition programs


491



230Other, net


69



61Total, net

$
5,332


$
641   Hourly Pension Plan Settlement  First Pension
    Transfer to GM  Employers Accounting
    for Settlements and Curtailments of Defined Benefit Pension
    Plans and for Termination Benefit
  Hourly Pension Plan Settlement  Second Pension
    Transfer to GM  Employers Accounting for Pensions,
 68




---



##### Table of Contents



Hourly Plan Freeze and Triggering of Benefit
    Guarantees 
  Hourly OPEB Settlement and OPEB Reimbursement from
    GM  Employers Accounting for Postretirement Benefits Other
    Than Pensions.
  Allowed GM Administrative and General Unsecured
    Claims 
       69




---



##### Table of Contents



Allowed IUE-CWA and USW Claims 
  Special Attrition Programs 
  Other, Net 
  Master Restructuring Agreement 
 70




---



##### Table of Contents



GM Settlement Gain


Cash Receivedin Pre-Tax Earnings


From GM(in millions)Reimbursement of hourly labor costs

$
272


$
273Production cash burn breakeven reimbursement


81



74Working capital backstop  Steering Business






210Other


2



2Total, net

$
355


$
559Continuing operations

$
254Discontinued operations

$
101   Existing and Future Business Awards and Related
    Matters 
  Reimbursement of Hourly Labor Costs  UAW-represented
  Production Cash Burn Breakeven Reimbursement  site-specified
 71




---



##### Table of Contents



Working Capital Backstop  Steering
    Business 
  Reimbursement of Hourly Workers Compensation and Other
    Benefits 
  Accelerated GM North American Payment Terms 
  Pensions
     72




---



##### Table of Contents



Labor
   73




---



##### Table of Contents



Portfolio
        Long-Lived
  74




---



##### Table of Contents



For the Three Months Ended


For the Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(in millions)Long-lived asset impairment charges

$
5


$
23


$
13


$
222Goodwill impairment charges










168



Employee termination benefits and other exit costs


153



112



346



532U.S. employee workforce transition program charges


23



244



80



238Total

$
181


$
379


$
607


$
992Core product lines


154



273



473



390Non-core product lines


19



47



79



272Discontinued operations


8



59



55



330   Cost Structure
    Equity Purchase and Commitment Agreement
      Form 10-Q Form 8-K/A
   75




---



##### Table of Contents



The Plan of Reorganization
  180-day
 76




---



##### Table of Contents




    All senior secured debt will be refinanced and paid in full and
    all allowed administrative and priority claims will be paid in
    full.
    Trade and Other Unsecured Claims, including senior notes, but
    not including the subordinated notes which are contractually
    subordinated to the senior notes, will be satisfied with
    $1.238 billion in a combination of rights and common stock
    of reorganized Delphi, at a midpoint per share total enterprise
    value of $20.00.
    GM will receive $2.1 billion of Series D Convertible
    Preferred Stock in satisfaction of its allowed administrative
    claim of $2.1 billion and its allowed general unsecured
    claim of $2.5 billion.
    Holders of our existing equity securities will receive
    Post-Emergence Rights exercisable to purchase up to
    26,187,745 shares of common stock of reorganized Delphi at
    an exercise price of $17.00 per share. To the extent that any
    Post-Emergence Rights are exercised, the gross proceeds
    generated from the exercise thereof will be used to repurchase
    up to 25% of the shares of Series D Convertible Preferred
    Stock held by GM.     77




---



##### Table of Contents



Form 10-K Form 10-Q Form 10-Q.
 Overview
    of Performance During the Third Quarter of 2008     78




---



##### Table of Contents



pick-up
  and/or
 Overview
    of Net Sales and Net Income (Loss) During the Three and Nine
    Months Ended September 30, 2008 and 2007  Three Months Ended September 30,


Nine Months Ended September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
1,366



31
%

$
2,031



38
%

$
(665
)

$
4,490



30
%

$
6,441



38
%

$
(1,951
)Other customers


3,011



69
%


3,248



62
%


(237
)


10,373



70
%


10,520



62
%


(147
)Total net sales

$
4,377






$
5,279






$
(902
)

$
14,863






$
16,961






$
(2,098
)Income (loss) from continuing operations

$
5,143






$
(1,149
)





$
6,292


$
4,054






$
(2,348
)





$
6,402Income (loss) from discontinued operations, net of tax


75







(20
)






95



24







(175
)






199Net income (loss)

$
5,218






$
(1,169
)





$
6,387


$
4,078






$
(2,523
)





$
6,601    79




---



##### Table of Contents



non-GM
    
    $369 million of interest expense recorded in the third
    quarter of 2007 related to certain prepetition claims that were
    determined to be probable of becoming an allowed claim in
    accordance with the Plan;
    $217 million and $347 million, respectively, of
    reduced warranty expenses, primarily due to the forgiveness of
    $112 million in warranty amounts;
    $69 million and $28 million, respectively, of
    favorable foreign currency fluctuations and transactions;
    $21 million and $353 million, respectively, of the
    absence of Securities and ERISA litigation charges recorded
    during the three and nine months ended
    September 30, 2007;
    $186 million of lower employee termination benefits and
    other exit costs during the nine months ended
    September 30, 2008, primarily related to the exit of
    the manufacturing facility in Cadiz, Spain during the nine
    months ended September 30, 2007; and
    $209 million of decreased long-lived asset impairment
    charges, primarily included within loss from discontinued
    operations during the nine months ended
    September 30, 2007.   80




---



##### Table of Contents



Consolidated
    Results of Operations
  Three
    and Nine Months Ended September 30, 2008 versus Three
    and Nine Months Ended September 30, 2007
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
1,366



31
%

$
2,031



38
%

$
(665
)

$
4,490



30
%

$
6,441



38
%

$
(1,951
)Other customers


3,011



69
%


3,248



62
%


(237
)


10,373



70
%


10,520



62
%


(147
)Total net sales

$
4,377






$
5,279






$
(902
)

$
14,863






$
16,961






$
(2,098
)Cost of sales


4,117







5,111







994



13,835







16,071







2,236Gross margin(a)

$
260



5.9
%

$
168



3.2
%

$
92


$
1,028



6.9
%

$
890



5.2
%

$
138U.S employee workforce transition program charges


22







197







175



76







191







115GM settlement  MRA


(254
)














254



(254
)














254Depreciation and amortization


206







215







9



635







672







37Long-lived asset impairment charges


5







14







9



13







54







41Goodwill impairment charges






















168















(168
)Selling, general and administrative


377







384







7



1,118







1,142







24Securities & ERISA litigation charge










21







21











353







353Operating income (loss)

$
(96
)





$
(663
)





$
567


$
(728
)





$
(1,522
)





$
794Interest expense


(93
)






(454
)






361



(312
)






(628
)






316Loss on extinguishment of debt






















(49
)






(23
)






(26
)Other income, net


50







23







27



73







62







11Reorganization items:GM settlement  GSA


5,332















5,332



5,332















5,332Professional fees and other, net


(24
)






(39
)






15



(162
)






(120
)






(42
)Income (loss) from continuing operations before income taxes,
    minority interest and equity income

$
5,169






$
(1,133
)





$
6,302


$
4,154






$
(2,231
)





$
6,385Income tax expense


(5
)






(15
)






10



(78
)






(116
)






38Income (loss) from continuing operations before minority
    interest and equity income

$
5,164






$
(1,148
)





$
6,312


$
4,076






$
(2,347
)





$
6,423Minority interest, net of tax


(5
)






(11
)






6



(28
)






(35
)






7Equity (loss) income, net of tax


(16
)






10







(26
)


6







34







(28
)Income (loss) from continuing operations

$
5,143






$
(1,149
)





$
6,292


$
4,054






$
(2,348
)





$
6,402Income (loss) from discontinued operations, net of tax


75







(20
)






95



24







(175
)






199Net income (loss)

$
5,218






$
(1,169
)





$
6,387


$
4,078






$
(2,523
)





$
6,601     (a)
    
    Gross margin is defined as net sales less cost of sales
    (excluding U.S. employee workforce transition program charges,
    GM settlement, Depreciation and amortization, Long-lived asset
    impairment charges and Goodwill impairment charges).   81




---



##### Table of Contents



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

$
1,366



31
%

$
2,031



38
%

$
(665
)


$
(713
)

$
38


$
10


$
(665
)Other customers


3,011



69
%


3,248



62
%


(237
)



(381
)


138



6



(237
)Total net sales

$
4,377






$
5,279






$
(902
)


$
(1,094
)

$
176


$
16


$
(902
)       Net Sales for the Nine Months Ended
    September 30, 2008 versus September 30,
    2007.
  Nine Months EndedSeptember 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

$
4,490



30
%

$
6,441



38
%

$
(1,951
)


$
(2,136
)

$
154


$
31


$
(1,951
)Other customers


10,373



70
%


10,520



62
%


(147
)



(819
)


636



36



(147
)Total net sales

$
14,863






$
16,961






$
(2,098
)


$
(2,955
)

$
790


$
67


$
(2,098
)  82




---



##### Table of Contents



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

Variance Due To:Favorable/

Price Reductions

Operational2008

2007

(Unfavorable)

and Volume

Performance

Other

Total(dollars in millions)



(dollars in millions)Gross Margin

$
260


$
168


$
92


$
(423
)

$
238


$
277


$
92Percentage of Sales


5.9
%


3.2
%     
    $217 million decrease in warranty costs, primarily due to
    the forgiveness of $107 million due under the warranty
    settlement agreement with GM during the three months ended
    September 30, 2008 and a $93 million increase to
    warranty reserves recorded in the three months ended
    September 30, 2007 in the Powertrain Systems segment
    related to higher than normal warranty claims on engine
    electronic control units; and
    $86 million due to the impact of foreign currency exchange
    rate fluctuations and transactions.    Gross Margin for the Nine Months Ended
    September 30, 2008 versus September 30,
    2007.
  83




---



##### Table of Contents



Nine Months EndedSeptember 30,

Variance Due To:Favorable/

Price Reductions

Operational2008

2007

(Unfavorable)

and Volume

Performance

Other

Total(dollars in millions)



(dollars in millions)Gross Margin

$
1,028


$
890


$
138


$
(1,215
)

$
729


$
624


$
138Percentage of Sales


6.9
%


5.2
%     
    $347 million decrease in warranty costs, primarily due to
    the forgiveness of $107 million due under the warranty
    settlement agreement with GM during the three months ended
    September 30, 2008 and a $28 million recovery
    from an affiliated supplier related to previously established
    warranty reserves in the Thermal Systems segment during the nine
    months ended September 30, 2008. Additionally, during
    the nine months ended September 30, 2007, Delphi
    recorded a $91 million increase to warranty reserves in the
    Powertrain Systems and Electronics and Safety segments related
    to the warranty settlement agreement with GM and a
    $93 million increase to warranty reserves in the Powertrain
    Systems segment related to higher than normal warranty claims on
    engine electronic control units;
    $123 million decrease 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;
    $97 million increase due to the impact of foreign currency
    exchange rate fluctuations and transactions;
    $42 million decrease in incentive compensation plans for
    executives and U.S. salaried employees; and
    $32 million of employee benefit plan settlements in Mexico
    which occurred during the three months ended
    September 30, 2007.  fuel-efficient
  U.S. Employee Workforce Transition Program Charges for
    the Three and Nine Months Ended September 30, 2008
    versus September 30, 2007.
 84




---



##### Table of Contents



GM Settlement for the Three and Nine Months Ended
    September 30, 2008 versus
    September 30, 2007.
  Depreciation and Amortization for the Three and Nine Months
    Ended September 30, 2008 versus
    September 30, 2007.
  Long-Lived Asset Impairment Charges for the Three and Nine
    Months Ended September 30, 2008 versus
    September 30, 2007.
  Goodwill Impairment Charges for the Three and Nine Months
    Ended September 30, 2008 versus
    September 30, 2007.
  Selling, General and Administrative Expenses for the Three
    and Nine Months Ended September 30, 2008 versus
    September 30, 2007.
  Securities & ERISA Litigation Charge for the Three
    and Nine Months Ended September 30, 2008 versus
    September 30, 2007.
 85




---



##### Table of Contents



Interest Expense for the Three and Nine Months Ended
    September 30, 2008 versus
    September 30, 2007. 90-7 (SOP 90-7), Financial Reporting by Entities in Reorganization under the
    Bankruptcy Code
  Loss on Extinguishment of Debt for the Three and Nine Months
    Ended September 30, 2008 versus
    September 30, 2007.
  Other Income and Expense for the Three Months Ended
    September 30, 2008 versus
    September 30, 2007.
  Reorganization Items for the Three and Nine Months Ended
    September 30, 2008 versus
    September 30, 2007.
 86




---



##### Table of Contents



Income Taxes for the Three and Nine Months Ended
    September 30, 2008 non-U.S. operations.
    non-U.S. operations non-U.S. operations,
  Minority Interest, net of tax, for the Three and Nine Months
    Ended September 30, 2008 versus
    September 30, 2007.
  Equity Income (Loss), net of tax, for the Three and Nine
    Months Ended September 30, 2008 versus
    September 30, 2007.
  Income (loss) from Discontinued Operations for the Three and
    Nine Months Ended September 30, 2008 versus
    September 30, 2007.
   87




---



##### Table of Contents



Results
    of Operations by Segment  Three
    and Nine Months Ended September 30, 2008 versus Three
    and Nine Months Ended September 30, 2007
  Electronics and Safety
   Three Months Ended


Nine Months EndedSeptember 30,


September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
293



31
%

$
389



33
%

$
(96
)

$
938



28
%

$
1,231



32
%

$
(293
)Other customers


637



66
%


738



62
%


(101
)


2,267



68
%


2,420



63
%


(153
)Inter-segment


29



3
%


65



5
%


(36
)


114



4
%


192



5
%


(78
)Total other and inter-segment


666



69
%


803



67
%


(137
)


2,381



72
%


2,612



68
%


(231
)Total net sales

$
959






$
1,192






$
(233
)

$
3,319






$
3,843






$
(524
)Gross margin

$
13






$
171






$
(158
)

$
155






$
511






$
(356
)Gross margin%


1.4
%






14.3
%










4.7
%






13.3
%   Net Sales
    Operating Income/Loss
  Operating (Loss)/Income

Variance Due To:Favorable/



Price

Operational2008

2007

(Unfavorable)

Volume

Reductions

Performance

Other

Total(dollars in millions)

(dollars in millions)Three Months Ended September 30

$
(91
)

$
35


$
(126
)

$
(109
)

$
(33
)

$
24


$
(8
)

$
(126
)Nine Months Ended September 30

$
(246
)

$
91


$
(337
)

$
(320
)

$
(98
)

$
40


$
41


$
(337
)  88




---



##### Table of Contents




    $48 million and $84 million, respectively, of
    increased expense for employee termination benefits and other
    exit costs of primarily related to operations in Portugal, to
    initiatives to realign manufacturing operations within North
    America to lower cost markets, and as a result of involuntary
    separation of certain salaried employees in North America.    
    $42 million of benefits related to the effectiveness of the
    Amended MRA;
    $32 million of employee benefit plan settlements in Mexico
    which occurred during the three months ended
    September 30, 2007; and
    $17 million and $99 million, respectively, of reduced
    warranty expenses primarily due to the impact of GMs
    forgiveness of certain cash amounts due under the Warranty
    Settlement Agreement recorded during the third quarter of 2008
    (the instrument cluster product line was transferred to the
    Electronics and Safety segment effective December 2007) and
    the absence of warranty reserve increases for the instrument
    cluster product line recorded in the nine months ended
    September 30, 2007.  Powertrain Systems
   Three Months Ended


Nine Months EndedSeptember 30,


September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
269



25
%

$
405



30
%

$
(136
)

$
875



24
%

$
1,260



29
%

$
(385
)Other customers


721



67
%


805



60
%


(84
)


2,510



68
%


2,731



62
%


(221
)Inter-segment


88



8
%


129



10
%


(41
)


314



8
%


388



9
%


(74
)Total other and inter-segment


809



75
%


934



70
%


(125
)


2,824



76
%


3,119



71
%


(295
)Total net sales

$
1,078






$
1,339






$
(261
)

$
3,699






$
4,379






$
(680
)Gross margin

$
79






$
(57
)





$
136


$
352






$
205






$
147Gross margin%


7.3
%






(4.3
)%










9.5
%






4.7
%   Net Sales
   89




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##### Table of Contents



Operating Income/Loss
  Operating Income/(Loss)

Variance Due To:Favorable/



Price

Operational2008

2007

(Unfavorable)

Volume

Reductions

Performance

Other

Total(dollars in millions)

(dollars in millions)Three Months Ended September 30

$
33


$
(203
)

$
236


$
(68
)

$
(20
)

$
54


$
270


$
236Nine Months Ended September 30

$
27


$
(253
)

$
280


$
(183
)

$
(76
)

$
228


$
311


$
280     
    $94 million related to the effectiveness of the Amended MRA;
    $136 million and $143 million, respectively, of
    reductions in warranty expense, primarily due to the absence of
    a $93 million increase to warranty reserves related to
    higher than normal warranty claims on engine electronic control
    units in the third quarter of 2007, and the absence of increases
    to warranty reserves related to the warranty settlement
    agreement with GM in the nine months ended
    September 30, 2007, as well as the impact of GMs
    forgiveness of $37 million of certain cash amounts due
    under the Warranty Settlement Agreement recorded in the third
    quarter of 2008;
    $30 million loss as a result of the sale of the Catalyst
    Business recorded in the third quarter of 2007;
    $22 million of reductions in SG&A costs during the
    nine months ended September 30, 2008; and
    $10 million of reductions in long-lived asset impairment
    charges during the nine months ended
    September 30, 2008.    
    $11 million due to the loss on foreign currency exchange
    contracts, primarily related to purchase transactions, during
    the nine months ended September 30, 2008; and
    $9 million of increased employee termination benefits and
    other exit costs during the three months ended
    September 30, 2008. 90




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##### Table of Contents



Electrical/Electronic Architecture
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
387



27
%

$
423



30
%

$
(36
)

$
1,155



25
%

$
1,326



30
%

$
(171
)Other customers


997



70
%


955



68
%


42



3,350



72
%


2,956



67
%


394Inter-segment


35



3
%


36



2
%


(1
)


117



3
%


134



3
%


(17
)Total other and inter-segment


1,032



73
%


991



70
%


41



3,467



75
%


3,090



70
%


377Total net sales

$
1,419






$
1,414






$
5


$
4,622






$
4,416






$
206Gross margin

$
99






$
130






$
(31
)

$
382






$
446






$
(64
)Gross margin%


7.0
%






9.2
%










8.3
%






10.6
%   Net Sales
    Operating Income/Loss
  Operating (Loss)/Income

Variance Due To:Favorable/



Price

Operational2008

2007

(Unfavorable)

Volume

Reductions

Performance

Other

Total(dollars in millions)

(dollars in millions)Three Months Ended September 30

$
(37
)

$
(23
)

$
(14
)

$
(27
)

$
(38
)

$
39


$
12


$
(14
)Nine Months Ended September 30

$
(226
)

$
16


$
(242
)

$
(79
)

$
(97
)

$
93


$
(159
)

$
(242
)     
    $168 million of goodwill impairment charges recorded during
    the nine months ended September 30, 2008;
    $14 million due to the effects of foreign currency exchange
    during the nine months ended
    September 30, 2008; and 91




---



##### Table of Contents




    $13 million of increased employee termination benefits and
    other exit costs during the three months ended
    September 30, 2008.    
    $15 million related to the effectiveness of the Amended MRA;
    $20 million of reduced employee termination benefits and
    other exit costs during the nine months ended
    September 30, 2008; and
    $12 million due to the effects of foreign currency exchange
    during the three months ended September 30, 2008.  Thermal Systems
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
278



51
%

$
325



56
%

$
(47
)

$
861



50
%

$
1,056



57
%

$
(195
)Other customers


248



46
%


225



39
%


23



790



46
%


697



38
%


93Inter-segment


17



3
%


26



5
%


(9
)


64



4
%


92



5
%


(28
)Total other and inter-segment


265



49
%


251



44
%


14



854



50
%


789



43
%


65Total net sales

$
543






$
576






$
(33
)

$
1,715






$
1,845






$
(130
)Gross margin

$
37






$
32






$
5


$
155






$
148






$
7Gross margin%


6.8
%






5.6
%










9.0
%






8.0
%   Net Sales
    Operating Income/Loss
  92




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##### Table of Contents



Operating Income/(Loss)

Variance Due To:Favorable/



Price

Operational2008

2007

(Unfavorable)

Volume

Reductions

Performance

Other

Total(dollars in millions)

(dollars in millions)Three Months Ended September 30

$
70


$
(19
)

$
89


$
(15
)

$
(12
)

$
25


$
91


$
89Nine Months Ended September 30

$
85


$
(2
)

$
87


$
(69
)

$
(27
)

$
80


$
103


$
87     
    $88 million related to the effectiveness of the Amended MRA;
    $28 million recovery from an affiliated supplier during the
    nine months ended September 30, 2008 related to
    previously incurred warranty costs; and
    $5 million related to GMs forgiveness of certain cash
    amounts due under the Warranty Settlement Agreement recorded
    during the third quarter of 2008.    
    $4 million of increased long-lived asset impairment charges.  Automotive Holdings Group
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,Favorable/








Favorable/2008


2007


(Unfavorable)


2008


2007


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

$
77



31
%

$
377



55
%

$
(300
)

$
428



36
%

$
1,234



53
%

$
(806
)Other customers


165



66
%


263



39
%


(98
)


677



57
%


933



40
%


(256
)Inter-segment


8



3
%


41



6
%


(33
)


84



7
%


150



7
%


(66
)Total other and inter-segment


173



69
%


304



45
%


(131
)


761



64
%


1,083



47
%


(322
)Total net sales

$
250






$
681






$
(431
)

$
1,189






$
2,317






$
(1,128
)Gross margin

$
53






$
3






$
50


$
25






$
(86
)





$
111Gross margin%


21.2
%






0.4
%










2.1
%






(3.7
%)   Net Sales
   93




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##### Table of Contents



Operating Income/Loss
  Operating Income/(Loss)

Variance Due To:Favorable/



Price

Operational2008

2007

(Unfavorable)

Volume

Reductions

Performance

Other

Total(dollars in millions)

(dollars in millions)Three Months Ended September 30

$
86


$
(74
)

$
160


$
(98
)

$
(1
)

$
55


$
204


$
160Nine Months Ended September 30

$
(11
)

$
(314
)

$
303


$
(244
)

$
(15
)

$
159


$
403


$
303     
    $62 million related to the effectiveness of the Amended MRA;
    $51 million related to GMs forgiveness of certain
    cash amounts due under the Warranty Settlement Agreement
    recorded during the third quarter of 2008;
    $35 million and $104 million, respectively, due to
    decreased corporate expenses allocated to Automotive Holdings
    Group due to the impact of divestitures and plant closures;
    $18 million and $149 million, respectively, of
    decreased employee termination benefits and other exit costs,
    primarily related to the closure of the Puerto Real site in
    Cadiz, Spain in 2007; and
    $17 million and $49 million, respectively, of lower
    depreciation and amortization charges, primarily due to
    long-lived asset impairment charges taken during the three and
    nine months ended September 30, 2007.    
    $23 million of additional costs related to certain plant
    closures and divestitures; and
    $30 million related to the sale of Delphis global
    bearings business recorded during the nine months ended
    September 30, 2008.  Corporate and Other
    Three Months Ended

Nine Months EndedSeptember 30,

September 30,Favorable/





Favorable/2008

2007

(Unfavorable)

2008

2007

(Unfavorable)(dollars in millions)Net sales

$
128


$
77


$
51


$
319


$
161


$
158Operating income (loss)

$
(157
)

$
(379
)

$
222


$
(357
)

$
(1,060
)

$
703   Net Sales
 94




---



##### Table of Contents



Operating Income/Loss
 Liquidity
    and Capital Resources  Overview
    of Capital Structure
  Refinanced DIP Credit Facility
     ABR plus


LIBOR plusTranche A


3.00
%


4.00
%Tranche B(a)


3.00
%


4.00
%Tranche C(a)


4.25
%


5.25
%     (a)
    
    Facilities include ABR and LIBOR floor of 4.25% and 3.25%,
    respectively     95




---



##### Table of Contents



12-month
  Period Ending

Global EBITDAR(in millions)September 30, 2008

$
625October 31, 2008

$
600November 30, 2008

$
675   Form 10-Q.
  debtor-in-possession
 96




---



##### Table of Contents



Advance Agreement and Liquidity Support from General Motors
    and Related Matters
 paid-in-kind
   97




---



##### Table of Contents



Form 10-Q
  Other Financing
   
  Pre-Petition Indebtedness
 Form 10-K
 98




---



##### Table of Contents



September 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


465



Refinanced DIP term loans






2,746Accounts receivable factoring


232



384European securitization


169



205Other debt


198



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


4,314



3,495Other long-term debt


57



59Total debt not subject to compromise


4,371



3,554Total outstanding debt

$
6,746


$
5,929   Credit
    Ratings, Stock Listing
    Form 10-Q, Form 10-Q, 1 2 1 8
  Cash
    Flows
  Operating Activities.
 99




---



##### Table of Contents



Investing Activities. non-U.S. trade
  Financing Activities.
  Dividends. debtor-in-possession
 Liquidity
    Outlook     100




---



##### Table of Contents



Litigation
    Commitments and Contingencies   Environmental
    Matters  non-U.S. environmental Form 10-K
   101




---



##### Table of Contents



Other   Inflation   Recently
    Issued Accounting Pronouncements   Significant
    Accounting Policies and Critical Accounting Estimates  Form 10-K
 Forward-Looking
    Statements  Form 10-Q, debtor-in-possession
 102




---



##### Table of Contents



and/or Form 10-K and/or and/or
  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
   103




---



##### Table of Contents



Form 10-K
  Form 10-K
    Form 10-K
 104




---



##### 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 Form 10-Q.
  The Subprime Mortgage Crisis, Decline in Residential Real
    Estate Values, Any Changes in Consumer Credit Availability, Or
    Cost of Borrowing Could Adversely Affect Our Business.
    We Depend on General Motors Corporation As a Customer And
    On GMs Support, As Provided In The Amended MRA And Advance
    Agreement, To Continue Executing Our Transformation Plan.
    Accordingly, Our Revenues And Profitability Will Be Adversely
    Impacted If GMs Business Or Market Share Declines, And Our
    Ability To Successfully Complete Our Transformation Plan Will Be
    Delayed Or Impaired If GM Is Unable To Continue Providing
    Support On The Terms Agreed To.
   105




---



##### Table of Contents



Certain Disruptions In Supply Of and Changes In the
    Competitive Environment for Raw Materials Integral to Our
    Products May Adversely Affect Our Profitability.
  petroleum-based
 106




---



##### Table of Contents



We May Not Succeed in Our Attempts to Improve our Cost
    Structure and Absent Significant Improvement, if A Modified Plan
    of Reorganization is not Consummated We May Be Unable to
    Generate Sufficient Excess Cash Flow to Meet Increased U.S.
    Pension and OPEB Funding Obligations Upon Emergence.
      Our Amended And Restated DIP Credit Facility And GM
    Advance Agreement Expire, Absent An Extension, On
    December 31, 2008. Required Lenders Under Our Amended And
    Restated DIP Credit Facility Have Agreed To An Accommodation
    Agreement And GM Has Agreed To Amend And Extend The Term Of
    The GM Advance Agreement Until June 30, 2009 And To Enter
    Into A Temporary Accelerated Payment Agreement Pursuant To Which
    GM Will Accelerate Payment Of Certain Payables To Delphi.
    However, Each Agreement Remains Subject To Certain Conditions,
    Including Court Approval. Should Borrowings Under Our Amended
    And Restated DIP Credit Facility Become Due, Or Should the
    Advances Pursuant To The GM Advance Agreement Become Unavailable
    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 or Prevent
    Completion Of Our Transformation Plan. Additionally, Further
    Disruption In The Capital Markets May Adversely Affect Our
    Ability To Secure Alternative Financing.
   107




---



##### Table of Contents



108




---



##### Table of Contents



12-month debtor-in-possession
   109




---



##### Table of Contents



We Anticipate The Need For Significant Borrowings Even
    After Emergence From Chapter 11 As We Complete Our
    Transformation Plan. The Significant Contraction Of Credit
    Availability As A Result Of The Current Difficult And Turbulent
    Capital Markets May Adversely Impact Our Ability To Obtain Exit
    Financing As Contemplated By A Modified Plan.
    Our Substantial Global Operations Means We Are Exposed to
    Foreign Currency Fluctuations which May Affect our Financial
    Results.
    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   110




---



##### Table of Contents



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, 2005.10(a)

Agreement between Delphi Corporation and General Motors
    Corporation dated as of August 7, 2008, incorporated
    by reference to Exhibit 99(a) to Delphis Current
    Report on
    Form 8-K
    filed September 29, 2008.10(b)

Delphi Corporation Supplemental Executive Retirement Program,
    incorporated by reference to Exhibit 99(b) to Delphis
    Current Report on
    Form 8-K
    filed September 29, 2008.*10(c)

Delphi Corporation Salaried Retirement Equalization Savings
    Program, incorporated by reference to Exhibit 99(c) to
    Delphis Current Report on
    Form 8-K
    filed September 29, 2008.*10(d)

Amended and Restated Global Settlement Agreement between Delphi
    Corporation and General Motors Corporation, dated
    September 12, 2008.10(e)

First Amendment to the Amended and Restated Global Settlement
    Agreement, dated as of September 25, 2008.10 (f)**

Amended and Restated Master Restructuring Agreement between
    Delphi Corporation and General Motors Corporation, dated
    September 12, 2008.31(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.     *
    
    Management contract or compensatory arrangement**
    
    Portions of this exhibit have been omitted under a request for
    confidential treatment and filed separately with the Securities
    and Exchange Commission 111




---



##### Table of Contents



SIGNATURE    Delphi Corporation
   November 10, 2008

/s/ Thomas S. TimkoThomas S. Timko
    Chief Accounting Officer and Controller  112