##### Table of Contents









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549-1004





FORM 10-Q


|   |  |                                                                                            
|-- |  | -------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|   |  | For the quarterly period ended March 31, 2005                                              
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OF THE
    SECURITIES EXCHANGE ACT OF 1934        
|  
|   |  | For the transition period
    from           to          .                                 

Commission file No. 1-14787


DELPHI CORPORATION




|                                                                                                                                                    |  |                                                              
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------
|Delaware(State or other jurisdiction of
    incorporation or organization)5725 Delphi Drive, Troy, Michigan(Address of principal executive offices) |  | 38-3430473(IRS employer Identification Number)48098(Zip code)

(248) 813-2000


(Registrants telephone number, including area code)


o þ


þ o












---










DELPHI CORPORATION


INDEX


|                                                 |  |                                                                                               |    |      |    | 
|------------------------------------------------ |  | --------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                                 |  |                                                                                               |    | Page |   
|                                                 |  |                                                                                               |    |      |   
|Part I  Financial
    Information              
|Item 1.                                          |  | Financial Statements (Unaudited)                                                              |    |      |    | 
|                                                 |  | Consolidated Statements of Operations for
    the Three Months Ended March 31, 2005 and 2004  |    |      | 3  | 
|                                                 |  | Consolidated Balance Sheets at
    March 31, 2005 and December 31, 2004                       |    |      | 4  | 
|                                                 |  | Consolidated Statements of Cash Flows for
    the Three Months Ended March 31, 2005 and 2004  |    |      | 5  | 
|                                                 |  | Notes to Consolidated Financial
    Statements                                                |    |      | 6  | 
|Item 2.                                          |  | Managements Discussion and Analysis
    of Financial Condition and Results of
    Operations |    |      | 17 | 
|Item 3.                                          |  | Quantitative and Qualitative Disclosures
    About Market Risk                                |    |      | 32 | 
|Item 4.                                          |  | Controls and Procedures                                                                       |    |      | 32 | 
|                                                
|Part II  Other
    Information                 
|Item 1.                                          |  | Legal Proceedings                                                                             |    |      | 34 | 
|Item 2.                                          |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                               |    |      | 34 | 
|Item 6.                                          |  | Exhibits                                                                                      |    |      | 35 | 
|Signature                                        |  |                                                                                               | 36 |     
|Certification Pursuant to Section 302           
|Certification Pursuant to Section 302           
|Certification Pursuant to 18 U.S.C. Section 1350
|Certification Pursuant to 18 U.S.C. Section 1350



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##### Table of Contents






PART I. FINANCIAL INFORMATION





ITEM 1. FINANCIAL STATEMENTS


DELPHI CORPORATION





CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


|                                                                            |                                             |                          |      |       |       |   |     |       |       | 
|--------------------------------------------------------------------------- | ------------------------------------------- | ------------------------ | ---- | ----- | ----- | - | --- | ----- | ----- | 
|                                                                            |                                             | Three Months             |     
|                                                                            |                                             | Ended March 31,          |     
|                                                                            |                                             |                          |     
|                                                                            |                                             | 2005                     |      |       | 2004  |  
|                                                                            |                                             |                          |      |       |       |  
|                                                                            |                                             | (in millions, except     |     
|                                                                            |                                             | per share amounts)       |     
|Net sales:                                                                  |                                             |                          |      |       |       |   |     |      
|                                                                            | General Motors and affiliates               |                          | $    | 3,399 |       |   | $   | 4,189 |      
|                                                                            | Other customers                             |                          |      | 3,463 |       |   |     | 3,216 |      
|                                                                            |                                             |                          |      |       |       |  
|                                                                            |                                             | Total net sales          |      |       | 6,862 |   |     |       | 7,405 | 
|                                                                            |                                             |                          |      |       |       |  
|Operating expenses:                                                         |                                             |                          |      |       |       |   |     |      
|                                                                            | Cost of sales, excluding items listed below |                          |      | 6,500 |       |   |     | 6,564 |      
|                                                                            | Selling, general and administrative         |                          |      | 394   |       |   |     | 378   |      
|                                                                            | Depreciation and amortization               |                          |      | 292   |       |   |     | 282   |      
|                                                                            | Employee and product line charges           |                          |      |      |       |   |     | 38    |      
|                                                                            |                                             |                          |      |       |       |  
|                                                                            |                                             | Total operating expenses |      |       | 7,186 |   |     |       | 7,262 | 
|                                                                            |                                             |                          |      |       |       |  
|Operating (loss) income                                                     |                                             |                          | (324 | )     |       |   | 143 |      
|                                                                            | Interest expense                            |                          |      | (54   | )     |   |     | (62   | )    
|                                                                            | Other income (expense), net                 |                          |      | 5     |       |   |     | (6    | )    
|                                                                            |                                             |                          |      |       |       |  
|(Loss) income before income taxes, minority interest, and equity
    income |                                             |                          | (373 | )     |       |   | 75  |      
|                                                                            | Income tax expense                          |                          |      | (37   | )     |   |     | (23   | )    
|                                                                            | Minority interest, net of tax               |                          |      | (8    | )     |   |     | (11   | )    
|                                                                            | Equity income                               |                          |      | 15    |       |   |     | 22    |      
|                                                                            |                                             |                          |      |       |       |  
|Net (loss) income                                                           |                                             | $                        | (403 | )     |       | $ | 63  |      
|                                                                            |                                             |                          |      |       |       |  
|(Loss) earnings per share                                                   |                                             |                          |      |       |       |   |     |      
|                                                                            | Basic and diluted                           |                          | $    | (0.73 | )     |   | $   | 0.11  |      
|                                                                            |                                             |                          |      |       |       |  



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DELPHI CORPORATION





CONSOLIDATED BALANCE SHEETS


|                                                     |                                       |                                                                                                                |                             |       |              |        |        |     |        |        |  
|---------------------------------------------------- | ------------------------------------- | -------------------------------------------------------------------------------------------------------------- | --------------------------- | ----- | ------------ | ------ | ------ | --- | ------ | ------ | -
|                                                     |                                       | March 31,                                                                                                      |                             |       |             
|                                                     |                                       | 2005                                                                                                           |                             |       | December 31, |       
|                                                     |                                       | (Unaudited)                                                                                                    |                             |       | 2004         |       
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                     |                                       | (in millions)                                                                                                  |                            
|ASSETS                                              
|Current assets:                                      |                                       |                                                                                                                |                             |       |              |        |        |    
|                                                     | Cash and cash equivalents             |                                                                                                                | $                           | 1,164 |              |        | $      | 964 |       
|                                                     | Accounts receivable, net:             |                                                                                                                |                             |       |              |        |        |     |       
|                                                     |                                       | General Motors and affiliates                                                                                  |                             |       | 2,394        |        |        |     | 2,182  |       
|                                                     |                                       | Other customers                                                                                                |                             |       | 2,414        |        |        |     | 1,476  |       
|                                                     | Retained interest in receivables, net |                                                                                                                |                             |      |              |        |        | 726 |       
|                                                     | Inventories, net:                     |                                                                                                                |                             |       |              |        |        |     |       
|                                                     |                                       | Productive material, work-in-process and supplies                                                              |                             |       | 1,419        |        |        |     | 1,413  |       
|                                                     |                                       | Finished goods                                                                                                 |                             |       | 563          |        |        |     | 545    |       
|                                                     | Deferred income taxes                 |                                                                                                                |                             | 37    |              |        |        | 39  |       
|                                                     | Prepaid expenses and other            |                                                                                                                |                             | 325   |              |        |        | 354 |       
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                     |                                       |                                                                                                                | Total current assets        |       |              | 8,316  |        |     |        | 7,699  |  
|Long-term assets:                                    |                                       |                                                                                                                |                             |       |              |        |        |    
|                                                     |                                       | Property, net                                                                                                  |                             |       | 5,778        |        |        |     | 5,946  |       
|                                                     |                                       | Deferred income taxes                                                                                          |                             |       | 143          |        |        |     | 130    |       
|                                                     |                                       | Goodwill                                                                                                       |                             |       | 780          |        |        |     | 798    |       
|                                                     |                                       | Other intangible asset                                                                                         |                             |       | 72           |        |        |     | 80     |       
|                                                     |                                       | Pension intangible assets                                                                                      |                             |       | 1,044        |        |        |     | 1,044  |       
|                                                     |                                       | Other                                                                                                          |                             |       | 865          |        |        |     | 896    |       
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                     |                                       |                                                                                                                | Total assets                |       | $            | 16,998 |        |     | $      | 16,593 |  
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                    
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)      
|Current liabilities:                                 |                                       |                                                                                                                |                             |       |              |        |        |    
|                                                     |                                       | Notes payable and current portion of long-term debt                                                            |                             | $     | 965          |        |        | $   | 507    |       
|                                                     |                                       | Accounts payable                                                                                               |                             |       | 3,673        |        |        |     | 3,504  |       
|                                                     |                                       | Accrued liabilities                                                                                            |                             |       | 3,090        |        |        |     | 2,694  |       
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                     |                                       |                                                                                                                | Total current liabilities   |       |              | 7,728  |        |     |        | 6,705  |  
|Long-term liabilities:                               |                                       |                                                                                                                |                             |       |              |        |        |    
|                                                     |                                       | Long-term debt                                                                                                 |                             |       | 2,058        |        |        |     | 2,061  |       
|                                                     |                                       | Junior subordinated notes due to Delphi Trust I and II                                                         |                             |       | 412          |        |        |     | 412    |       
|                                                     |                                       | Pension benefits                                                                                               |                             |       | 3,207        |        |        |     | 3,523  |       
|                                                     |                                       | Postretirement benefits other than pensions                                                                    |                             |       | 6,526        |        |        |     | 6,297  |       
|                                                     |                                       | Other                                                                                                          |                             |       | 947          |        |        |     | 936    |       
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                     |                                       |                                                                                                                | Total liabilities           |       |              | 20,878 |        |     |        | 19,934 |  
|                                                     |                                       |                                                                                                                |                             |       |              |       
|Commitments and contingencies (Note 9)               |                                       |                                                                                                                |                             |       |              |        |        |    
|Minority interest                                    |                                       |                                                                                                                | 211                         |       |              |        | 198    |    
|Stockholders equity (deficit):                      |                                       |                                                                                                                |                             |       |              |        |        |    
|                                                     |                                       | Common stock, $0.01 par value, 1,350 million shares
    authorized, 565 million shares issued in 2005 and 2004 |                             |       | 6            |        |        |     | 6      |       
|                                                     |                                       | Additional paid-in capital                                                                                     |                             |       | 2,661        |        |        |     | 2,661  |       
|                                                     |                                       | Accumulated deficit                                                                                            |                             |       | (4,333       | )      |        |     | (3,913 | )     
|                                                     |                                       | Minimum pension liability                                                                                      |                             |       | (2,466       | )      |        |     | (2,469 | )     
|                                                     |                                       | Accumulated other comprehensive income, excluding minimum
    pension liability                                |                             |       | 99           |        |        |     | 237    |       
|                                                     |                                       | Treasury stock, at cost (3.6 million and 3.8 million
    shares in 2005
    and 2004, respectively)            |                             |       | (58          | )      |        |     | (61    | )     
|                                                     |                                       |                                                                                                                |                             |       |              |       
|                                                     |                                       |                                                                                                                | Total stockholders deficit |       |              | (4,091 | )      |     |        | (3,539 | )
|                                                     |                                       |                                                                                                                |                             |       |              |       
|Total liabilities and stockholders equity (deficit) |                                       | $                                                                                                              | 16,998                      |       |              | $      | 16,593 |    
|                                                     |                                       |                                                                                                                |                             |       |              |       



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DELPHI CORPORATION





CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


|                                      |                                                                                              |                                                               |                                                     |       |      |      |   |      |      |      |  
|------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | --------------------------------------------------- | ----- | ---- | ---- | - | ---- | ---- | ---- | -
|                                      |                                                                                              | Three Months                                                  |                                                    
|                                      |                                                                                              | Ended March 31,                                               |                                                    
|                                      |                                                                                              |                                                               |                                                    
|                                      |                                                                                              | 2005                                                          |                                                     |       | 2004 |     
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      |                                                                                              | (in millions)                                                 |                                                    
|Cash flows from operating activities: |                                                                                              |                                                               |                                                     |       |      |      |   |     
|                                      | Net (loss) income                                                                            |                                                               | $                                                   | (403  | )    |      | $ | 63   |     
|                                      | Adjustments to reconcile net (loss) income to net cash provided
    by operating activities: |                                                               |                                                     |       |      |      |   |      |     
|                                      |                                                                                              | Depreciation and amortization                                 |                                                     |       | 292  |      |   |      | 282  |     
|                                      |                                                                                              | Deferred income taxes                                         |                                                     |       | (2   | )    |   |      | (84  | )   
|                                      |                                                                                              | Employee and product line charges                             |                                                     |       |     |      |   |      | 38   |     
|                                      |                                                                                              | Equity income                                                 |                                                     |       | (15  | )    |   |      | (22  | )   
|                                      | Changes in operating assets and liabilities:                                                 |                                                               |                                                     |       |      |      |   |      |     
|                                      |                                                                                              | Accounts receivable and retained interest in receivables, net |                                                     |       | 137  |      |   |      | (686 | )   
|                                      |                                                                                              | Inventories, net                                              |                                                     |       | (24  | )    |   |      | (67  | )   
|                                      |                                                                                              | Prepaid expenses and other                                    |                                                     |       | 42   |      |   |      | 7    |     
|                                      |                                                                                              | Accounts payable                                              |                                                     |       | 171  |      |   |      | 175  |     
|                                      |                                                                                              | Employee and product line charge obligations                  |                                                     |       | (26  | )    |   |      | (141 | )   
|                                      |                                                                                              | Accrued and other long-term liabilities                       |                                                     |       | 381  |      |   |      | 424  |     
|                                      |                                                                                              | Other                                                         |                                                     |       | (24  | )    |   |      | 51   |     
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      |                                                                                              |                                                               | Net cash provided by operating activities           |       |      | 529  |   |      |      | 40   |  
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|Cash flows from investing activities: |                                                                                              |                                                               |                                                     |       |      |      |   |     
|                                      | Capital expenditures                                                                         |                                                               |                                                     | (199  | )    |      |   | (229 | )   
|                                      | Proceeds from sale of property                                                               |                                                               |                                                     | 6     |      |      |   | 15   |     
|                                      | Other                                                                                        |                                                               |                                                     | 12    |      |      |   |     |     
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      |                                                                                              |                                                               | Net cash used in investing activities               |       |      | (181 | ) |      |      | (214 | )
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|Cash flows from financing activities: |                                                                                              |                                                               |                                                     |       |      |      |   |     
|                                      | Net proceeds from (repayments of) borrowings under credit
    facilities and other debt      |                                                               |                                                     | (79   | )    |      |   | 153  |     
|                                      | Dividend payments                                                                            |                                                               |                                                     | (39   | )    |      |   | (39  | )   
|                                      | Other                                                                                        |                                                               |                                                     | (5    | )    |      |   | (2   | )   
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      |                                                                                              |                                                               | Net cash (used in) provided by financing activities |       |      | (123 | ) |      |      | 112  |  
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      | Effect of exchange rate fluctuations on cash and cash equivalents                            |                                                               |                                                     | (25   | )    |      |   | (2   | )   
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      | Increase (decrease) in cash and cash equivalents                                             |                                                               |                                                     | 200   |      |      |   | (64  | )   
|                                      | Cash and cash equivalents at beginning of period                                             |                                                               |                                                     | 964   |      |      |   | 893  |     
|                                      |                                                                                              |                                                               |                                                     |       |      |     
|                                      | Cash and cash equivalents at end of period                                                   |                                                               | $                                                   | 1,164 |      |      | $ | 829  |     
|                                      |                                                                                              |                                                               |                                                     |       |      |     



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DELPHI CORPORATION





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)




|   |                      
|-- | ---------------------
|1. | BASIS OF PRESENTATION

General




Earnings (loss) Per Share




|                                    |  |                    |         |  |      |  |         | 
|----------------------------------- |  | ------------------ | ------- |  | ---- |  | ------- | 
|                                    |  | Three Months Ended |        
|                                    |  | March 31,          |        
|                                    |  |                    |        
|                                    |  | 2005               |         |  | 2004 | 
|                                    |  |                    |         |  |      | 
|                                    |  | (in thousands)     |        
|Weighted average shares outstanding |  |                    | 555,242 |  |      |  | 560,340 | 
|Effect of dilutive securities       |  |                    |        |  |      |  | 3,282   | 
|                                    |  |                    |         |  |      | 
|Diluted shares outstanding          |  |                    | 555,242 |  |      |  | 563,622 | 
|                                    |  |                    |         |  |      | 



|                         |  |                 |        |  |      |  |        | 
|------------------------ |  | --------------- | ------ |  | ---- |  | ------ | 
|                         |  | Three Months    |       
|                         |  | Ended March 31, |       
|                         |  |                 |       
|                         |  | 2005            |        |  | 2004 | 
|                         |  |                 |        |  |      | 
|                         |  | (in thousands)  |       
|Anti-dilutive securities |  |                 | 89,885 |  |      |  | 73,052 | 
|                         |  |                 |        |  |      | 



Stock-Based Compensation


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|                                                                                                                                            |                                 |                      |      |       |      |   |    |      | 
|------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -------------------- | ---- | ----- | ---- | - | -- | ---- | 
|                                                                                                                                            |                                 | Three Months         |     
|                                                                                                                                            |                                 | Ended March 31,      |     
|                                                                                                                                            |                                 |                      |     
|                                                                                                                                            |                                 | 2005                 |      |       | 2004 |  
|                                                                                                                                            |                                 |                      |      |       |      |  
|                                                                                                                                            |                                 | (in millions, except |     
|                                                                                                                                            |                                 | per share amounts)   |     
|Net (loss) income, as reported                                                                                                              |                                 | $                    | (403 | )     |      | $ | 63 |     
|Add: Stock-based compensation expense recognized, net of related
    tax effects                                                            |                                 |                      | 3    |       |      |   | 2  |     
|Less: Total stock-based employee compensation expense determined
    under fair value method for all awards, net of related tax
    effects |                                 |                      | (5   | )     |      |   | (4 | )   
|                                                                                                                                            |                                 |                      |      |       |      |  
|Pro forma net (loss) income                                                                                                                 |                                 | $                    | (405 | )     |      | $ | 61 |     
|                                                                                                                                            |                                 |                      |      |       |      |  
|Loss (earnings) per share:                                                                                                                  |                                 |                      |      |       |      |   |    |     
|                                                                                                                                            | Basic and diluted  as reported |                      | $    | (0.73 | )    |   | $  | 0.11 | 
|                                                                                                                                            |                                 |                      |      |       |      |  
|                                                                                                                                            | Basic and diluted  pro forma   |                      | $    | (0.73 | )    |   | $  | 0.11 | 
|                                                                                                                                            |                                 |                      |      |       |      |  



Retention Payments




|   |                                  
|-- | ---------------------------------
|2. | EMPLOYEE AND PRODUCT LINE CHARGES



7



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|                                  |                                 |                |     |     |            |   |    |       |   |   |     |     |     
|--------------------------------- | ------------------------------- | -------------- | --- | --- | ---------- | - | -- | ----- | - | - | --- | --- | ----
|Employee and Product Line Charges |                                 | Employee Costs |     |     | Exit Costs |   |    | Total |  
|                                  |                                 |                |     |     |            |   |    |       |  
|Balance at January 1, 2005        |                                 | $              | 124 |     |            | $ | 16 |       |   | $ | 140 |    
|                                  | First quarter 2005 charges      |                |     |    |            |   |    |      |   |   |     |    |     
|                                  | Usage in the first quarter 2005 |                |     | (24 | )          |   |    | (2    | ) |   |     | (26 | )(a)
|                                  |                                 |                |     |     |            |   |    |       |  
|Balance at March 31, 2005         |                                 | $              | 100 |     |            | $ | 14 |       |   | $ | 114 | (b)
|                                  |                                 |                |     |     |            |   |    |       |  






|    |  |                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The total cash paid in the first quarter of 2005 was
    $26 million, as shown on our consolidated Statement of Cash
    Flows.
|   
|(b) |  | This amount is included in accrued liabilities in the
    accompanying consolidated balance sheet.                             





|   |                     
|-- | --------------------
|3. | ASSET SECURITIZATION

U.S. Program






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European Program









|   |           
|-- | ----------
|4. | WARRANTIES



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|                                     |                                                                           |               |     |     |      |   |     |     |  
|------------------------------------ | ------------------------------------------------------------------------- | ------------- | --- | --- | ---- | - | --- | --- | -
|                                     |                                                                           | March 31,     |    
|                                     |                                                                           |               |    
|                                     |                                                                           | 2005          |     |     | 2004 |  
|                                     |                                                                           |               |     |     |      |  
|                                     |                                                                           | (in millions) |    
|Accrual balance at beginning of year |                                                                           | $             | 274 |     |      | $ | 258 |    
|                                     | Provision for estimated warranties accrued during the period              |               |     | 28  |      |   |     | 28  |  
|                                     | Accruals for pre-existing warranties (including changes in
    estimates) |               |     | (1  | )    |   |     | 8   |  
|                                     | Settlements made during the period (in cash or in kind)                   |               |     | (42 | )    |   |     | (33 | )
|                                     | Foreign currency translation                                              |               |     | (4  | )    |   |     | (2  | )
|                                     |                                                                           |               |     |     |      |  
|Accrual balance at end of period     |                                                                           | $             | 255 |     |      | $ | 259 |    
|                                     |                                                                           |               |     |     |      |  





|   |                                          
|-- | -----------------------------------------
|5. | PENSION AND OTHER POSTRETIREMENT BENEFITS





|                                   |                           |                  |      |                |               |       |      |      |  |   |      |     |  |   |     |     | 
|---------------------------------- | ------------------------- | ---------------- | ---- | -------------- | ------------- | ----- | ---- | ---- |  | - | ---- | --- |  | - | --- | --- | 
|                                   |                           |                  |      |                |               | Other |     
|                                   |                           |                  |      | Postretirement |              
|                                   |                           | Pension Benefits |      |                | Benefits      |      
|                                   |                           |                  |      |                |               |      
|                                   |                           | 2005             |      |                | 2004          |       |      | 2005 |  |   | 2004 |    
|                                   |                           |                  |      |                |               |       |      |      |  |   |      |    
|                                   |                           | (in millions)    |      |                | (in millions) |      
|Service cost                       |                           | $                | 73   |                |               | $     | 71   |      |  | $ | 47   |     |  | $ | 45  |    
|Interest cost                      |                           |                  | 181  |                |               |       | 175  |      |  |   | 141  |     |  |   | 128 |    
|Expected return on plan assets     |                           |                  | (197 | )              |               |       | (181 | )    |  |   |     |     |  |   |    |    
|Amortization of prior service cost |                           |                  | 35   |                |               |       | 35   |      |  |   | (1   | )   |  |   | (1  | )  
|Amortization of net loss           |                           |                  | 53   |                |               |       | 35   |      |  |   | 49   |     |  |   | 35  |    
|Special termination benefits       |                           |                  |     |                |               |       | 3    |      |  |   | 2    |     |  |   | 1   |    
|                                   |                           |                  |      |                |               |       |      |      |  |   |      |    
|                                   | Net periodic benefit cost |                  | $    | 145            |               |       | $    | 138  |  |   | $    | 238 |  |   | $   | 208 | 
|                                   |                           |                  |      |                |               |       |      |      |  |   |      |    



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|   |                                   
|-- | ----------------------------------
|6. | DERIVATIVES AND HEDGING ACTIVITIES





11



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|   |                     
|-- | --------------------
|7. | STOCKHOLDERS EQUITY



|                           |                                                           |                            |     |   |            |   |   |             |  |                    |         |   |  |           |        |          |       |   |               |       |  |   |         |      |   |   |     |   |  |   |        |      |      |  
|-------------------------- | --------------------------------------------------------- | -------------------------- | --- | - | ---------- | - | - | ----------- |  | ------------------ | ------- | - |  | --------- | ------ | -------- | ----- | - | ------------- | ----- |  | - | ------- | ---- | - | - | --- | - |  | - | ------ | ---- | ---- | -
|                           |                                                           |                            |     |   |            |   |   |             |  | Accumulated Other  |         |   |  |           |       
|                           |                                                           |                            |     |   |            |   |   |             |  | Comprehensive Loss |         |   |  |           |       
|                           |                                                           |                            |     |   |            |   |   |             |  |                    |         |   | 
|                           |                                                           | Common Stock               |     |   | Additional |   |   |             |  | Minimum            |         |   |  |           |        |          | Total |  
|                           |                                                           |                            |     |   | Paid-In    |   |   | Accumulated |  |                    | Pension |   |  |           |        | Treasury |       |   | Stockholders |      
|                           |                                                           | Shares                     |     |   | Amount     |   |   | Capital     |  |                    | Deficit |   |  | Liability |        |          | Other |   |               | Stock |  |   | Deficit |     
|                           |                                                           |                            |     |   |            |   |   |             |  |                    |         |   |  |           |        |          |       |   |               |       |  |   |         |     
|                           |                                                           | (in millions)              |    
|Balance at January 1, 2005 |                                                           |                            | 565 |   |            | $ | 6 |             |  | $                  | 2,661   |   |  | $         | (3,913 | )        |       | $ | (2,469        | )     |  | $ | 237     |      |   | $ | (61 | ) |  | $ | (3,539 | )   
|                           | Net loss                                                  |                            |     |  |            |   |   |            |  |                    |         |  |  |           |        | (403     | )     |   |               |      |  |   |         |     |   |   |     |  |  |   |        | (403 | )   
|                           | Currency translation adjustments and other                |                            |     |  |            |   |   |            |  |                    |         |  |  |           |        |         |       |   |               | 3     |  |   |         | (122 | ) |   |     |  |  |   |        | (119 | )   
|                           | Net change in unrecognized gain on derivative instruments |                            |     |  |            |   |   |            |  |                    |         |  |  |           |        |         |       |   |               |      |  |   |         | (16  | ) |   |     |  |  |   |        | (16  | )   
|                           | Minimum pension liability adjustment                      |                            |     |  |            |   |   |            |  |                    |         |  |  |           |        |         |       |   |               |      |  |   |         |     |   |   |     |  |  |   |        |     |     
|                           |                                                           |                            |     |   |            |   |   |             |  |                    |         |   |  |           |        |          |       |   |               |       |  |   |         |     
|                           |                                                           | Total comprehensive income |     |   |            |   |   |             |  |                    |         |   |  |           |        |          |       |   |               |       |  |   |         |      |   |   |     |   |  |   |        |      | (538 | )
|                           | Shares issued for employee benefit plans, net             |                            |     |  |            |   |   |            |  |                    |         |  |  |           |        |         |       |   |               |      |  |   |         |     |   |   |     | 3 |  |   |        | 3    |     
|                           | Dividends                                                 |                            |     |  |            |   |   |            |  |                    |         |  |  |           |        | (17      | )     |   |               |      |  |   |         |     |   |   |     |  |  |   |        | (17  | )   
|                           |                                                           |                            |     |   |            |   |   |             |  |                    |         |   |  |           |        |          |       |   |               |       |  |   |         |     
|Balance at March 31, 2005  |                                                           |                            | 565 |   |            | $ | 6 |             |  | $                  | 2,661   |   |  | $         | (4,333 | )        |       | $ | (2,466        | )     |  | $ | 99      |      |   | $ | (58 | ) |  | $ | (4,091 | )   
|                           |                                                           |                            |     |   |            |   |   |             |  |                    |         |   |  |           |        |          |       |   |               |       |  |   |         |     

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|   |                  
|-- | -----------------
|8. | SEGMENT REPORTING







|                            |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |   |      |      |   |   |       |       | 
|--------------------------- | ------------------------------ | --------------- | - | ----- | ------------- |  | - | ---------- | ----- |  | -------- | ---- | ---- | ----- | - | ---- | ---- | - | - | ----- | ----- | 
|                            |                                | Dynamics,       |   |       |               |  |   |            |       |  |         
|                            |                                | Propulsion,     |   |       | Electrical,   |  |   | Automotive |       |  |          |      |     
|                            |                                | Thermal &       |   |       | Electronics & |  |   | Holdings   |       |  |          |      |     
|                            |                                | Interior        |   |       | Safety        |  |   | Group      |       |  | Other(a) |      |      | Total |  
|                            |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |  
|                            |                                | (in millions)   |  
|For the Three Months Ended: |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |   |      |      |   |   |      
|March 31, 2005              |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |   |      |      |   |   |      
|                            | Net sales to GM and affiliates |                 | $ | 1,677 |               |  | $ | 1,368      |       |  | $        | 378  |      |       | $ | (24  | )    |   | $ | 3,399 |      
|                            | Net sales to other customers   |                 |   | 1,325 |               |  |   | 2,008      |       |  |          | 111  |      |       |   | 19   |      |   |   | 3,463 |      
|                            | Inter-sector net sales         |                 |   | 210   |               |  |   | 93         |       |  |          | 166  |      |       |   | (469 | )    |   |   |      |      
|                            |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |  
|                            |                                | Total net sales |   | $     | 3,212         |  |   | $          | 3,469 |  |          | $    | 655  |       |   | $    | (474 | ) |   | $     | 6,862 | 
|                            |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |  
|                            | Sector operating (loss) income |                 | $ | (183  | )             |  | $ | 169        |       |  | $        | (259 | )    |       | $ | (51  | )    |   | $ | (324  | )    
|For the Three Months Ended: |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |   |      |      |   |   |      
|March 31, 2004              |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |   |      |      |   |   |      
|                            | Net sales to GM and affiliates |                 | $ | 2,058 |               |  | $ | 1,627      |       |  | $        | 504  |      |       | $ |     |      |   | $ | 4,189 |      
|                            | Net sales to other customers   |                 |   | 1,296 |               |  |   | 1,800      |       |  |          | 120  |      |       |   |     |      |   |   | 3,216 |      
|                            | Inter-sector net sales         |                 |   | 199   |               |  |   | 122        |       |  |          | 226  |      |       |   | (547 | )    |   |   |      |      
|                            |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |  
|                            |                                | Total net sales |   | $     | 3,553         |  |   | $          | 3,549 |  |          | $    | 850  |       |   | $    | (547 | ) |   | $     | 7,405 | 
|                            |                                |                 |   |       |               |  |   |            |       |  |          |      |      |       |  
|                            | Sector operating income (loss) |                 | $ | 110   | (b)           |  | $ | 287        | (b)   |  | $        | (145 | )(b) |       | $ | (19  | )(b) |   | $ | 233   | (b)  






|    |  |                                                                                                                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Other includes activity not allocated to the product sectors and
    elimination of inter-sector transactions.                                                                                                       
|   
|(b) |  | Excludes 2004 Charges of $31 million for Dynamics,
    Propulsion, Thermal & Interior, $20 million for
    Electrical, Electronics & Safety, $35 million for
    Automotive Holdings Group, and $4 million for Other.



|   |                              
|-- | -----------------------------
|9. | COMMITMENTS AND CONTINGENCIES

Ongoing SEC Investigation




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Shareholder Lawsuits










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Ordinary Business Litigation














Non-binding Letter of Intent




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|    |                  
|--- | -----------------
|10. | SUBSEQUENT EVENTS



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS

Executive Summary of business










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Results of Operations






| |                                                                               
| | ------------------------------------------------------------------------------
| | Three Months Ended March 31, 2005 versus Three Months
    Ended March 31, 2004

Net Sales.


|                                         |           |                 |       |       |         |   |       |       | 
|---------------------------------------- | --------- | --------------- | ----- | ----- | ------- | - | ----- | ----- | 
|                                         |           | Three Months    |      
|                                         |           | Ended March 31, |      
|                                         |           |                 |      
|Product Sector                           |           | 2005            |       |       | 2004(a) |  
|                                         |           |                 |       |       |         |  
|                                         |           | (in millions)   |      
|Dynamics, Propulsion, Thermal & Interior |           | $               | 3,212 |       |         | $ | 3,553 |      
|Electrical, Electronics & Safety         |           |                 | 3,469 |       |         |   | 3,549 |      
|Automotive Holdings Group                |           |                 | 655   |       |         |   | 850   |      
|Other                                    |           |                 | (474  | )     |         |   | (547  | )    
|                                         |           |                 |       |       |         |  
|                                         | Net sales |                 | $     | 6,862 |         |   | $     | 7,405 | 
|                                         |           |                 |       |       |         |  






|    |  |                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The 2004 data has been reclassified to conform to the
    realignment of our business sectors by moving three additional
    manufacturing operations in the companys Automotive
    Holdings Group (AHG) to accelerate efforts to bring
    these sites back to profitability or resolve issues at these
    operations through other actions.



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Gross Margin.


Selling, General and Administrative.


Depreciation and Amortization.


Employee and Product Line Charges.






|                                  |                                 |                |     |     |            |   |    |       |   |   |     |     |     
|--------------------------------- | ------------------------------- | -------------- | --- | --- | ---------- | - | -- | ----- | - | - | --- | --- | ----
|Employee and Product Line Charges |                                 | Employee Costs |     |     | Exit Costs |   |    | Total |  
|                                  |                                 |                |     |     |            |   |    |       |  
|Balance at January 1, 2005        |                                 | $              | 124 |     |            | $ | 16 |       |   | $ | 140 |    
|                                  | First quarter 2005 charges      |                |     |    |            |   |    |      |   |   |     |    |     
|                                  | Usage in the first quarter 2005 |                |     | (24 | )          |   |    | (2    | ) |   |     | (26 | )(a)
|                                  |                                 |                |     |     |            |   |    |       |  
|Balance at March 31, 2005         |                                 | $              | 100 |     |            | $ | 14 |       |   | $ | 114 | (b)
|                                  |                                 |                |     |     |            |   |    |       |  






|    |  |                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The total cash paid in the first quarter of 2005 was
    $26 million, as shown on our consolidated Statement of Cash
    Flows.
|   
|(b) |  | This amount is included in accrued liabilities in the
    accompanying consolidated balance sheet.                             

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Operating Results.


|                                         |                               |                 |      |      |      |   |      |     | 
|---------------------------------------- | ----------------------------- | --------------- | ---- | ---- | ---- | - | ---- | --- | 
|                                         |                               | Three Months    |     
|                                         |                               | Ended March 31, |     
|                                         |                               |                 |     
|Product Sector                           |                               | 2005            |      |      | 2004 |  
|                                         |                               |                 |      |      |      |  
|                                         |                               | (in millions)   |     
|Dynamics, Propulsion, Thermal & Interior |                               | $               | (183 | )    |      | $ | 110  |    
|Electrical, Electronics & Safety         |                               |                 | 169  |      |      |   | 287  |    
|Automotive Holdings Group                |                               |                 | (259 | )    |      |   | (145 | )  
|Other                                    |                               |                 | (51  | )    |      |   | (19  | )  
|                                         |                               |                 |      |      |      |  
|                                         | Subtotal                      |                 |      | (324 | )    |   |      | 233 | 
|2004 Charges(a)                          |                               |                 |     |      |      |   | (90  | )  
|                                         |                               |                 |      |      |      |  
|                                         | Total operating (loss) income |                 | $    | (324 | )    |   | $    | 143 | 
|                                         |                               |                 |      |      |      |  






|    |  |                                                                                                                                                                                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Represents the 2004 Charges of $31 million for Dynamics,
    Propulsion, and Thermal & Interior, $20 million
    for Electrical, Electronics & Safety, $35 million
    for Automotive Holdings Group and $4 million for Other.



Taxes.


2004 and 2003 Segment Reporting




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|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |      |      |   |   |       |       | 
|--------------------------------------------- | --------------- | ------------- | ----- | ----- | ------------- | - | ----- | ---------- |  | - | -------- | ---- |  | ----- | ---- | ---- | - | - | ----- | ----- | 
|                                              |                 | Dynamics,     |       |       |               |   |       |            |  |   |         
|                                              |                 | Propulsion,   |       |       | Electrical,   |   |       | Automotive |  |   |          |      | 
|                                              |                 | Thermal &     |       |       | Electronics & |   |       | Holdings   |  |   |          |      | 
|                                              |                 | Interior      |       |       | Safety        |   |       | Group      |  |   | Other(a) |      |  | Total |     
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|                                              |                 | (in millions) |      
|For the Three Months Ended March 31, 2004     |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |      |      |   |   |       |      
|Net sales to GM and affiliates                |                 | $             | 2,058 |       |               | $ | 1,627 |            |  | $ | 504      |      |  | $     |     |      |   | $ | 4,189 |      
|Net sales to other customers                  |                 |               | 1,296 |       |               |   | 1,800 |            |  |   | 120      |      |  |       |     |      |   |   | 3,216 |      
|Inter-sector net sales                        |                 |               | 199   |       |               |   | 122   |            |  |   | 226      |      |  |       | (547 | )    |   |   |      |      
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|                                              | Total net sales |               | $     | 3,553 |               |   | $     | 3,549      |  |   | $        | 850  |  |       | $    | (547 | ) |   | $     | 7,405 | 
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|Sector operating income (loss)                |                 | $             | 110   | (b)   |               | $ | 287   | (b)        |  | $ | (145     | )(b) |  | $     | (19  | )(b) |   | $ | 233   | (b)  
|For the Three Months Ended June 30, 2004      |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |      |      |   |   |       |      
|Net sales to GM and affiliates                |                 | $             | 2,035 |       |               | $ | 1,611 |            |  | $ | 487      |      |  | $     |     |      |   | $ | 4,133 |      
|Net sales to other customers                  |                 |               | 1,359 |       |               |   | 1,931 |            |  |   | 119      |      |  |       |     |      |   |   | 3,409 |      
|Inter-sector net sales                        |                 |               | 212   |       |               |   | 96    |            |  |   | 213      |      |  |       | (521 | )    |   |   |      |      
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|                                              | Total net sales |               | $     | 3,606 |               |   | $     | 3,638      |  |   | $        | 819  |  |       | $    | (521 | ) |   | $     | 7,542 | 
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|Sector operating income (loss)                |                 | $             | 105   | (c)   |               | $ | 324   | (c)        |  | $ | (151     | )(c) |  | $     | (22  | )(c) |   | $ | 256   | (c)  
|For the Three Months Ended September 30, 2004 |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |      |      |   |   |       |      
|Net sales to GM and affiliates                |                 | $             | 1,696 |       |               | $ | 1,414 |            |  | $ | 386      |      |  | $     |     |      |   | $ | 3,496 |      
|Net sales to other customers                  |                 |               | 1,219 |       |               |   | 1,807 |            |  |   | 120      |      |  |       |     |      |   |   | 3,146 |      
|Inter-sector net sales                        |                 |               | 191   |       |               |   | 80    |            |  |   | 179      |      |  |       | (450 | )    |   |   |      |      
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|                                              | Total net sales |               | $     | 3,106 |               |   | $     | 3,301      |  |   | $        | 685  |  |       | $    | (450 | ) |   | $     | 6,642 | 
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|Sector operating (loss) income                |                 | $             | (69   | )(d)  |               | $ | 189   | (d)        |  | $ | (188     | )(d) |  | $     | (14  | )(d) |   | $ | (82   | )(d) 
|For the Three Months Ended December 31, 2004  |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |      |      |   |   |       |      
|Net sales to GM and affiliates                |                 | $             | 1,770 |       |               | $ | 1,443 |            |  | $ | 386      |      |  | $     |     |      |   | $ | 3,599 |      
|Net sales to other customers                  |                 |               | 1,350 |       |               |   | 1,962 |            |  |   | 117      |      |  |       | 5    |      |   |   | 3,434 |      
|Inter-sector net sales                        |                 |               | 182   |       |               |   | 87    |            |  |   | 166      |      |  |       | (435 | )    |   |   |      |      
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|                                              | Total net sales |               | $     | 3,302 |               |   | $     | 3,492      |  |   | $        | 669  |  |       | $    | (430 | ) |   | $     | 7,033 | 
|                                              |                 |               |       |       |               |   |       |            |  |   |          |      |  |       |     
|Sector operating (loss) income                |                 | $             | (125  | )(e)  |               | $ | 159   | (e)        |  | $ | (196     | )(e) |  | $     | (40  | )(e) |   | $ | (202  | )(e) 

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|                                     |                 |               |       |        |               |   |       |            |  |   |          |       |  |       |        |        |   |   |        |        | 
|------------------------------------ | --------------- | ------------- | ----- | ------ | ------------- | - | ----- | ---------- |  | - | -------- | ----- |  | ----- | ------ | ------ | - | - | ------ | ------ | 
|                                     |                 | Dynamics,     |       |        |               |   |       |            |  |   |         
|                                     |                 | Propulsion,   |       |        | Electrical,   |   |       | Automotive |  |   |          |       | 
|                                     |                 | Thermal &     |       |        | Electronics & |   |       | Holdings   |  |   |          |       | 
|                                     |                 | Interior      |       |        | Safety        |   |       | Group      |  |   | Other(a) |       |  | Total |       
|                                     |                 |               |       |        |               |   |       |            |  |   |          |       |  |       |       
|                                     |                 | (in millions) |      
|For the Year Ended December 31, 2004 |                 |               |       |        |               |   |       |            |  |   |          |       |  |       |        |        |   |   |        |       
|Net sales to GM and affiliates       |                 | $             | 7,559 |        |               | $ | 6,095 |            |  | $ | 1,763    |       |  | $     |       |        |   | $ | 15,417 |       
|Net sales to other customers         |                 |               | 5,224 |        |               |   | 7,500 |            |  |   | 476      |       |  |       | 5      |        |   |   | 13,205 |       
|Inter-sector net sales               |                 |               | 784   |        |               |   | 385   |            |  |   | 784      |       |  |       | (1,953 | )      |   |   |       |       
|                                     |                 |               |       |        |               |   |       |            |  |   |          |       |  |       |       
|                                     | Total net sales |               | $     | 13,567 |               |   | $     | 13,980     |  |   | $        | 3,023 |  |       | $      | (1,948 | ) |   | $      | 28,622 | 
|                                     |                 |               |       |        |               |   |       |            |  |   |          |       |  |       |       
|Depreciation and amortization        |                 | $             | 557   | (f)    |               | $ | 443   | (f)        |  | $ | 99       | (f)   |  | $     | 45     |        |   | $ | 1,144  | (f)   
|Sector operating income (loss)       |                 | $             | 21    | (g)    |               | $ | 959   | (g)        |  | $ | (680     | )(g)  |  | $     | (95    | )(g)   |   | $ | 205    | (g)   
|Sector assets                        |                 | $             | 8,632 |        |               | $ | 8,306 |            |  | $ | 942      |       |  | $     | (1,287 | )      |   | $ | 16,593 |       
|Capital expenditures                 |                 | $             | 429   |        |               | $ | 388   |            |  | $ | 64       |       |  | $     | 33     |        |   | $ | 914    |       

|                                     |                 |   |        |        |  |   |       |        |  |   |       |       |  |   |        |        |   |   |        |        | 
|------------------------------------ | --------------- | - | ------ | ------ |  | - | ----- | ------ |  | - | ----- | ----- |  | - | ------ | ------ | - | - | ------ | ------ | 
|2003                                 |                 |   |        |        |  |   |       |        |  |   |       |       |  |   |        |        |   |   |        |       
|                                     |                 |   |        |        |  |   |       |        |  |   |       |       |  |   |       
|For the Year Ended December 31, 2003 |                 |   |        |        |  |   |       |        |  |   |       |       |  |   |        |        |   |   |        |       
|Net sales to GM and affiliates       |                 | $ | 8,232  |        |  | $ | 6,631 |        |  | $ | 2,166 |       |  | $ |       |        |   | $ | 17,029 |       
|Net sales to other customers         |                 |   | 4,580  |        |  |   | 5,980 |        |  |   | 487   |       |  |   | 1      |        |   |   | 11,048 |       
|Inter-sector net sales               |                 |   | 734    |        |  |   | 417   |        |  |   | 867   |       |  |   | (2,018 | )      |   |   |       |       
|                                     |                 |   |        |        |  |   |       |        |  |   |       |       |  |   |       
|                                     | Total net sales |   | $      | 13,546 |  |   | $     | 13,028 |  |   | $     | 3,520 |  |   | $      | (2,017 | ) |   | $      | 28,077 | 
|                                     |                 |   |        |        |  |   |       |        |  |   |       |       |  |   |       
|Depreciation and amortization        |                 | $ | 514    | (h)    |  | $ | 418   | (h)    |  | $ | 89    | (h)   |  | $ | 41     |        |   | $ | 1,062  | (h)   
|Sector operating income (loss)       |                 | $ | 485    | (i)    |  | $ | 971   | (i)    |  | $ | (675  | )(i)  |  | $ | (131   | )(i)   |   | $ | 650    | (i)   
|Sector assets                        |                 | $ | 10,275 |        |  | $ | 8,715 |        |  | $ | 2,510 |       |  | $ | (434   | )      |   | $ | 21,066 |       
|Capital expenditures                 |                 | $ | 540    |        |  | $ | 394   |        |  | $ | 96    |       |  | $ | 16     |        |   | $ | 1,046  |       






|    |  |                                                                                                                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Other includes activity not allocated to the product sectors and
    elimination of inter-sector transactions.                                                                                                                                             
|   
|(b) |  | Excludes the First Quarter 2004 Charges of $90 million with
    $31 million for Dynamics, Propulsion, Thermal &
    Interior, $20 million for Electrical,
    Electronics & Safety, $35 million for Automotive
    Holdings Group and $4 million for Other.
|   
|(c) |  | Excludes the Second Quarter 2004 Charges of $46 million
    with $11 million for Dynamics, Propulsion,
    Thermal & Interior, $24 million for Electrical,
    Electronics & Safety, $8 million for Automotive
    Holdings Group and $3 million for Other.
|   
|(d) |  | Excludes the Third Quarter 2004 Charges of $26 million with
    $8 million for Dynamics, Propulsion, Thermal &
    Interior, $13 million for Electrical,
    Electronics & Safety and $5 million for Automotive
    Holdings Group.                        
|   
|(e) |  | Excludes the Fourth Quarter 2004 Charges of $525 million
    with $82 million for Dynamics, Propulsion,
    Thermal & Interior, $34 million for Electrical,
    Electronics & Safety and $409 million for
    Automotive Holdings Group.                   
|   
|(f) |  | Excludes asset impairment charges recorded in 2004 of
    $372 million with $74 million for Dynamics,
    Propulsion, Thermal & Interior, $13 million for
    Electrical, Electronics & Safety and $285 million
    for Automotive Holdings Group.         
|   
|(g) |  | Excludes the 2004 Charges of $637 million with
    $132 million for Dynamics, Propulsion, Thermal &
    Interior, $91 million for Electrical,
    Electronics & Safety, $457 million for Automotive
    Holdings Group and $7 million for Other.           

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|    |  |                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(h) |  | Excludes asset impairment charges recorded 2003 of
    $58 million with $1 million for Dynamics, Propulsion,
    Thermal & Interior, $6 million for Electrical,
    Electronics & Safety, and $51 million for
    Automotive Holdings Group.
|   
|(i) |  | Excludes the 2003 Charges of $561 with $86 million for
    Dynamics, Propulsion, Thermal & Interior,
    $114 million for Electrical, Electronics & Safety,
    $319 million for Automotive Holdings Group and
    $42 million for Other.   

Liquidity and Capital Resources




| |                              
| | -----------------------------
| | Overview of Capital Structure






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| |                                     
| | ------------------------------------
| | Bonds and Trust Preferred Securities



1 4 1 4






| |                            
| | ---------------------------
| | Available Credit Facilities





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| |                             
| | ----------------------------
| | Other Financial Transactions












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| |                            
| | ---------------------------
| | Customer Financing Programs





| |               
| | --------------
| | Credit Ratings





| |           
| | ----------
| | Cash Flows

Operating Activities.


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Investing Activities.


Financing Activities.


Dividends.


Outlook


General.




28



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Ongoing SEC Investigation








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Shareholder Lawsuits










Inflation




Environmental Matters




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Forward-Looking Statements









|        |                                                           
|------- | ----------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK








|        |                        
|------- | -----------------------
|ITEM 4. | CONTROLS AND PROCEDURES



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PART II. OTHER INFORMATION







|        |                  
|------- | -----------------
|ITEM 1. | LEGAL PROCEEDINGS










|        |                                                                
|------- | ---------------------------------------------------------------
|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS



| |                                                                          
| | -------------------------------------------------------------------------
| | Purchase of Equity Securities by the Issuer and Affiliated
    Purchasers



|                                           |  |                  |           |         |            |                        |                      |                      |                    |                  |                    |  |  |  |            | 
|------------------------------------------ |  | ---------------- | --------- | ------- | ---------- | ---------------------- | -------------------- | -------------------- | ------------------ | ---------------- | ------------------ |  |  |  | ---------- | 
|                                           |  |                  |           |         |            |                        |                      | Maximum Number       |                   
|                                           |  |                  |           |         |            | Total Number of Shares |                      |                      | of Shares that May |                 
|                                           |  |                  |           | Average |            |                        | Purchased as Part of |                      |                    | Yet Be Purchased |                   
|                                           |  | Total Number of  |           |         | Price Paid |                        |                      | Publicly Announced   |                    |                  | Under the Plans or | 
|Period                                     |  | Shares Purchased |           |         | Per Share  |                        |                      | Plans or Programs(a) |                    |                  | Programs(a)        | 
|                                           |  |                  |           |         |            |                        |                      |                      |                    |                  |                    | 
|January 1, 2005 through January 31, 2005   |  |                  | 589,082   | (b)(c)  |            | $                      | 8.17                 |                      |                    |                  |                   |  |  |  | 19,000,000 | 
|February 1, 2005 through February 28, 2005 |  |                  |          |         |            | $                      |                     |                      |                    |                  |                   |  |  |  | 19,000,000 | 
|March 1, 2005 through March 31, 2005       |  |                  | 435,000   | (b)     |            | $                      | 5.25                 |                      |                    |                  |                    |  |  |  | 19,000,000 | 
|                                           |  |                  |           |         |            |                        |                      |                      |                    |                  |                    | 
|Total                                      |  |                  | 1,024,082 |         |            | $                      | 6.93                 |                      |                    |                  |                    |  |  |  | 19,000,000 | 
|                                           |  |                  |           |         |            |                        |                      |                      |                    |                  |                    | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | As part of Delphis stock repurchase program in January of
    2004, the Board of Directors authorized the repurchase of up to
    an aggregate of 19 million shares of our common stock
    through the first quarter of 2005 to fund obligations for our
    stock options and other awards issued under its equity based
    compensation plan. To date no repurchases have been made
    pursuant to that plan.
|   
|(b) |  | Primarily includes open-market purchases by the trustee of
    Delphis 401(k) plans to fund investments by employees in
    our common stock, one of the investment options available under
    such plans.                                                                                                                                                                                                       
|   
|(c) |  | Amount also includes 114,082 shares of common stock that
    were withheld to satisfy our tax withholding obligations arising
    upon vesting of restricted stock units pursuant to our equity
    based compensation plan.                                                                                                                                                                                       

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|        |         
|------- | --------
|ITEM 6. | EXHIBITS

|        |    |              |  |                                                                                                                                                                                                                                                                           
|------- | -- | ------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             
|Number  |    | Exhibit Name
|        |    |             
|        | 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)          |  | By-laws of Delphi Automotive Systems Corporation, incorporated
    by reference to Exhibit 3.2 to Delphis Registration
    Statement on Form S-1 (Registration No. 333-67333).                                                                                           
|       
|        | 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.                                                                                                                                              

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SIGNATURE






| |                                         
| | ----------------------------------------
| | Delphi Corporation                      
| | ________________________________________
| | (Registrant)                            

|              |  |                                                                                                
|------------- |  | -----------------------------------------------------------------------------------------------
|June 30, 2005 |  | /s/ John D. Sheehan                                                                            
|              |  |                                                                                                
|              |  | John D. Sheehan
    Acting Chief Financial Officer,
    Chief Accounting Officer and Controller

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EXHIBIT INDEX


|        |    |             |  |                                                                                                                                             
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 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, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002              
|       
|        | 32 | (b)         |  | Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002