##### Table of Contents



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

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2007ORo

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

38-3430473(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)5725 Delphi Drive, Troy,
    Michigan

48098(Address of principal executive
    offices)

(Zip Code)    (248) 813-2000 (Registrants
    telephone number, including area code)
  þ o
  non-accelerated Rule 12b-2
 þ o o
  Rule 12b-2 o þ
    WEBSITE
    ACCESS TO COMPANYS REPORTS
  www.delphi.com. Form 10-K, Form 10-Q, Form 8-K,




---



##### 



DELPHI
    CORPORATION
  INDEX
  
  PagePart I 
    Financial InformationItem 1.


Financial
    StatementsConsolidated
    Statements of Operations for the Three and Six Months Ended
    June 30, 2007 and 2006 (Unaudited)

3Consolidated
    Balance Sheets as of June 30, 2007 (Unaudited) and
    December 31, 2006

4Consolidated
    Statements of Cash Flows for the Six Months Ended June 30,
    2007 and 2006 (Unaudited)

5Consolidated
    Statements of Comprehensive Loss for the Three and Six Months
    Ended June 30, 2007 and 2006 (Unaudited)

6Notes to
    Consolidated Financial Statements (Unaudited)

7Item 2.


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

40Executive Summary
    of Business

40Overview of
    Performance

49Results of
    Operations

51Liquidity and
    Capital Resources

62Shareholder
    Lawsuits

68Bankruptcy Related
    Litigation

70Environmental
    Matters

70Other

71Inflation

71Recently Issued
    Accounting Pronouncements

71Significant
    Accounting Policies and Critical Accounting Estimates

71Forward-Looking
    Statements

72Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk

73Item 4.


Controls and
    Procedures

73Part II 
    Other InformationItem 1.


Legal
    Proceedings

74Item 1A.


Risk
    Factors

74Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds

75Item 3.


Defaults Upon
    Senior Securities

75Item 5.


Other
    Information

75Item 6.


Exhibits

76Signatures

77Rights AgreementAgreement between Delphi Corporation and Appalossa Management L.P.Section 302 CertificationSection 302 CertificationSection 906 CertificationSection 906 Certification   2




---



##### Table of Contents



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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(in millions, except per share amounts)Net sales:General Motors and affiliates

$
2,890


$
3,069


$
5,676


$
6,286Other customers


4,131



3,926



8,020



7,682Total net sales


7,021



6,995



13,696



13,968Operating expenses:Cost of sales, excluding items
    listed below


6,635



6,543



12,857



13,102U.S. employee special attrition
    program charges






1,905







1,905Depreciation and amortization


247



272



504



542Long-lived asset impairment charges


39







199



Selling, general and administrative


419



387



810



763Securities & ERISA
    litigation charge


332







332



Total operating expenses


7,672



9,107



14,702



16,312Operating loss


(651
)


(2,112
)


(1,006
)


(2,344
)Interest expense (contractual
    interest expense for the three and six months ended
    June 30, 2007 was $118 million and $242 million,
    respectively, and for the three and six months ended
    June 30, 2006 was $144 million and $284 million,
    respectively)


(85
)


(104
)


(176
)


(203
)Loss on extinguishment of debt










(23
)


Other income, net


17



12



38



23Loss before reorganization items,
    income taxes, minority interest, equity income, and cumulative
    effect of accounting change


(719
)


(2,204
)


(1,167
)


(2,524
)Reorganization items


(42
)


(20
)


(81
)


(33
)Loss before income taxes, minority
    interest, equity income, and cumulative effect of accounting
    change


(761
)


(2,224
)


(1,248
)


(2,557
)Income tax expense


(57
)


(51
)


(106
)


(91
)Loss before minority interest,
    equity income, and cumulative effect of accounting change


(818
)


(2,275
)


(1,354
)


(2,648
)Minority interest, net of tax


(14
)


(14
)


(26
)


(24
)Equity income, net of tax


11



14



26



31Loss before cumulative effect of
    accounting change


(821
)


(2,275
)


(1,354
)


(2,641
)Cumulative effect of accounting
    change, net of tax














3Net loss

$
(821
)

$
(2,275
)

$
(1,354
)

$
(2,638
)Basic and diluted loss per share:Before cumulative effect of
    accounting change

$
(1.46
)

$
(4.05
)

$
(2.41
)

$
(4.71
)Cumulative effect of accounting
    change














0.01Basic and diluted loss per share

$
(1.46
)

$
(4.05
)

$
(2.41
)

$
(4.70
)    3




---



##### Table of Contents



DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)CONSOLIDATED BALANCE SHEETS
  June 30,2007


December 31,(Unaudited)


2006(in millions)ASSETSCurrent assets:Cash and cash equivalents

$
1,489


$
1,667Restricted cash


159



146Accounts receivable, net:General Motors and affiliates


2,110



2,078Other


3,245



2,691Inventories, net:Productive material,
    work-in-process
    and supplies


1,532



1,598Finished goods


604



577Other current assets


497



458Total current assets


9,636



9,215Long-term assets:Property, net


4,340



4,695Investments in affiliates


436



417Goodwill


383



378Other intangible assets, net


45



51Other


618



636Total long-term assets


5,822



6,177Total assets

$
15,458


$
15,392LIABILITIES AND
    STOCKHOLDERS DEFICITCurrent liabilities:Short-term debt

$
3,877


$
3,339Accounts payable


3,142



2,820Accrued liabilities


1,944



2,211Total current liabilities


8,963



8,370Long-Term liabilities:Other long-term debt


24



49Employee benefit plan obligations


598



550Other


836



859Total long-term liabilities


1,458



1,458Liabilities subject to compromise


18,054



17,416Total liabilities


28,475



27,244Minority interest


209



203Stockholders deficit:Common stock, $0.01 par
    value, 1,350 million shares authorized, 565 million
    shares issued in 2007 and 2006


6



6Additional paid-in capital


2,776



2,769Accumulated deficit


(13,265
)


(11,893
)Accumulated other comprehensive
    loss:Employee benefit plans


(3,046
)


(3,041
)Other


355



156Total accumulated other
    comprehensive loss


(2,691
)


(2,885
)Treasury stock, at cost
    (3.2 million shares in 2007 and 2006)


(52
)


(52
)Total stockholders deficit


(13,226
)


(12,055
)Total liabilities and
    stockholders deficit

$
15,458


$
15,392    4




---



##### Table of Contents



DELPHI
    CORPORATION(DEBTOR-IN-POSSESSION)CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
  Six Months EndedJune 30,2007


2006(in millions)Cash flows from operating
    activities:Net loss

$
(1,354
)

$
(2,638
)Adjustments to reconcile net loss
    to net cash (used in) provided by operating activities:Depreciation and amortization


504



542Long-lived asset impairment charges


199



Deferred income taxes


19



(16
)Pension and other postretirement
    benefit expenses


548



804Equity income


(26
)


(31
)Reorganization items


81



33U.S. employee special attrition
    program charges






1,905Loss on extinguishment of debt


23



Securities & ERISA
    litigation charge


332



Loss on
    liquidation/deconsolidation of investment


79



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


(1,029
)


(573
)Inventories, net


18



(209
)Other assets


(17
)


(173
)Accounts payable


435



549Accrued and other long-term
    liabilities


336



229Other, net


(14
)


43U.S. employee special attrition
    program payments


(526
)


U.S. employee special attrition
    program reimbursement by GM


265



Pension contributions


(156
)


(141
)Other postretirement benefit
    payments


(87
)


(116
)Net payments for reorganization
    items


(61
)


(21
)Net cash (used in) provided by
    operating activities


(431
)


187Cash flows from investing
    activities:Capital expenditures


(334
)


(416
)Proceeds from sale of property


24



34Proceeds from sale of
    non-U.S.
    trade bank notes


95



84Increase in restricted cash


(10
)


(81
)Proceeds from divestitures






12Other, net


(13
)


(36
)Net cash used in investing
    activities


(238
)


(403
)Cash flows from financing
    activities:Proceeds from refinanced
    debtor-in-possession
    facility, net of issuance cost


2,739



Repayments of borrowings under
    debtor-in-possession
    facility


(250
)


Repayments of borrowings under
    prepetition term loan facility


(988
)


Repayments of borrowings under
    prepetition revolving credit facility


(1,508
)


Net borrowings under refinanced
    debtor-in-possession
    facility


410



Net borrowings under other debt
    agreements


80



5Repayments under cash
    overdraft.






(24
)Other, net


(30
)


(11
)Net cash provided by (used in)
    financing activities


453



(30
)Effect of exchange rate
    fluctuations on cash and cash equivalents


38



13Decrease in cash and cash
    equivalents


(178
)


(233
)Cash and cash equivalents at
    beginning of period


1,667



2,221Cash and cash equivalents at end
    of period

$
1,489


$
1,988    5




---



##### Table of Contents



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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(in millions)Net loss

$
(821
)

$
(2,275
)

$
(1,354
)

$
(2,638
)Other comprehensive income:Currency translation adjustments,
    net of tax


120



37



146



86Net change in unrecognized gain on
    derivative instruments, net of tax


50



8



53



2Employee benefit plans adjustment,
    net of tax


(5
)


859



(5
)


859Other comprehensive income


165



904



194



947Comprehensive loss

$
(656
)

$
(1,371
)

$
(1,160
)

$
(1,691
)    6




---



##### Table of Contents



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




---



##### Table of Contents



SOP 90-7
  Going Concern debtor-in-possession
  Contractual Interest Expense SOP 90-7.
  Use of Estimates
  Valuation of Long-Lived Assets
  Postemployment Benefits
 8




---



##### Table of Contents



Employee Termination Benefits and Other Exit
    Costs
  Share-Based Compensation Share-Based
    Payments
  Recently Issued Accounting
    Pronouncements Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement No. 109. Accounting
    for Income Taxes.
  Fair Value Measurements.
  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans-an amendment of FASB Statements
    No. 87, 88, 106, and 132(R).
 9




---



##### Table of Contents



The Fair Value Option for Financial Assets and
    Financial Liabilities  Including an amendment of FASB
    Statement No. 115.
  2.
    TRANSFORMATION
    PLAN AND CHAPTER 11 BANKRUPTCY  Accounting for the
    Impairment or Disposal of Long-Lived Assets,
  1113/1114 1113/1114
 10




---



##### Table of Contents



1113/1114 1113/1114 1113/1114
  Form 8-K
  
    The UAW Settlement Agreement extends the UAW CBAs until
    September 14, 2011;
    A site plan is implemented with respect to each of 21 UAW-Delphi
    plants which includes, at certain sites, specific revenue,
    production, and job commitments from Delphi
    and/or GM
    and pursuant to which Delphi will retain ownership and
    operations in four facilities, seven facilities will be sold or
    transferred to a third party so that Delphi will have no further
    operational or employment responsibilities after certain
    specified sunset dates, and ten facilities will be closed;
    A workforce transition program is implemented for traditional
    UAW-represented employees that provides eligible employees with
    transformation plan options including (1) attrition options
    similar to the previously-approved UAW attrition programs,
    (2) flowback rights to eligible Delphi employees as of the
    date of the filing of Delphis bankruptcy petition who do
    not elect the attrition options, including relocation allowances
    of up to $67,000 in certain circumstances when plants cease
    production, (3) provision of lump sum buy-down
    payments totaling $105,000 for traditional production employees
    who do not elect the attrition option or flowback and continue
    to work for Delphi under the terms of the 2004 UAW-Delphi
    Supplemental Agreement applicable to employees hired after 2004,
    transferring those employees to Supplemental Employee
    Status as of October 1, 2007, (4) conversion of
    temporary employees in UAW-Delphi plants to permanent employee
    status, and (5) severance payments up to $40,000 to
    eligible employees who are permanently laid off prior to
    September 14, 2011;
    Certain terms of the 2004 UAW-Delphi Supplemental Agreement with
    respect to wages, individual retirement and savings plans, and
    post-retirement health care accounts are modified;
    Certain terms of the UAW CBAs are modified with respect to
    provisions covering hiring requirements, existing Center for
    Human Resources (CHR)/Legal Services, holiday
    schedule, temporary employees, Appendix L, Guaranteed
    Income Stream, America Online, and other matters described in
    Attachment E to the UAW Settlement Agreement;
    Local negotiations subject to mutual agreement regarding work
    rules and other local agreement issues will be conducted on an
    expedited basis;
    Delphis commitment in the 2004 UAW-Delphi Supplemental
    Agreement to the principle of equivalence of
    sacrifice when establishing compensation and benefit
    levels for salaried employees and management is reaffirmed; 11




---



##### Table of Contents




    All employee, retiree, and union asserted and unasserted claims
    are settled (except for waiver of rights to vested pension
    benefits, workers compensation benefits, unemployment
    compensation benefits, and pending ordinary course grievances of
    employees remaining in the workforce); and
    The UAW will receive an allowed prepetition claim, to be paid
    pursuant to the plan of reorganization in the amount of
    $140 million on account of the CHR and Legal Services
    claims as of April 1, 2007 (to be adjusted for accruals
    through October 1, 2007 and adjusted for expenditures by
    Delphi until the effective date of a plan of reorganization) of
    which $30 million will be paid to the UAW-GM Center for
    Human Resources and the balance will be paid directly to the DC
    VEBA established pursuant to a settlement agreement approved by
    the court in the case of International Union, UAW, et
    al. v. General Motors Corp., Civil Action No.
    05-73991.    
    Delphis obligation to provide certain retiree welfare
    benefits is eliminated and GM is obligated to provide certain
    retiree welfare benefits for certain UAW-represented employees
    covered as provided in the Benefit Guarantee Term Sheet;
    A transfer of certain pension assets and liabilities from
    Delphis pension plans to GMs pension plans is
    effectuated pursuant to Internal Revenue Code
    Section 414(1) in exchange for certain consideration to be
    paid by Delphi to GM;
    Delphis existing pension plan is frozen in certain
    respects effective upon emergence from chapter 11 and GM
    will be obligated to pay certain benefits for certain
    UAW-represented employees covered as provided in the Benefit
    Guarantee Term Sheet;
    The amount of $450 million is funded by GM, which the UAW
    has directed to be paid directly to the DC VEBA established
    pursuant to a settlement agreement approved by the court in the
    case of International Union, UAW, et al. v. General Motors
    Corp., Civil Action
    No. 05-73991;
    The UAW Settlement Agreement (including the UAW CBAs) is assumed
    pursuant to 11 U.S.C. § 365;
    The UAW released parties are exculpated and released in
    connection with the UAW Settlement Agreement and Delphis
    chapter 11 cases; and
    Delphi and GM receive releases from the UAW, all employees and
    former employees of Delphi represented or formerly represented
    by the UAW, and all persons or entities with claims derived from
    or related to any relationship with such employees of Delphi
    arising directly or indirectly from or in any way related to any
    obligations under the collective bargaining agreements or the
    UAW Settlement Agreement (except for claims for benefits
    provided for or explicitly not waived under the UAW Settlement
    Agreement).  1113/1114 1113/1114 1113/1114
   12




---



##### Table of Contents



13




---



##### Table of Contents



14




---



##### Table of Contents



15




---



##### Table of Contents




    All senior secured debt would be refinanced and paid in full and
    all allowed administrative and priority claims would be paid in
    full.
    Trade and other unsecured claims and unsecured funded debt
    claims (exclusive of subordinated debt claims) would be
    satisfied in full with $3.48 million of common stock
    (77.3 million out of a total of 147.6 million shares)
    in the reorganized Company, at a deemed value of $45 per share,
    and with the balance paid in cash. The framework requires that
    the amount of allowed trade and unsecured claims (other than
    funded debt claims and postpetition accrued interest claims) not
    exceed $1.7 billion.
    In exchange for GMs financial contribution to the
    Companys transformation plan, and in satisfaction of
    GMs claims against the Company, GM will receive
    $2.7 billion in cash, and an unconditional release of any
    alleged estate claims against GM. In addition, as with other
    customers, certain GM claims would flow-through the
    Chapter 11 cases and be satisfied by the reorganized
    company in the ordinary course of business. The plan framework
    anticipates that GMs financial contribution to the
    Companys transformation plan would be consistent with the
    items identified in the Companys former framework
    agreement announced on December 18, 2006. While the actual
    value of the potential GM contribution cannot be determined
    until the Delphi-GM global settlement agreement and master
    restructuring agreement are finalized, the Company is aware that
    GM has publicly estimated its potential exposure related to the
    Companys Chapter 11 filing.
    All subordinated debt claims would be allowed and satisfied with
    $478 million of common stock (10.6 million out of a
    total of 147.6 million shares) in the reorganized Company
    at a deemed value of $45 per share.
    The equity securities class in the Companys plan of
    reorganization would receive: 1) $66 million of common
    stock (1.5 million out of a total of 147.6 million
    shares) in the reorganized Company (at a 16




---



##### Table of Contents



deemed value of $45 per share); 2) warrants to purchase an
    additional 5 percent of the common stock of the reorganized
    Company during a five-year period (at an exercise price of $45
    per share); 3) transferable rights to purchase
    approximately 45.6 million shares of common stock in the
    reorganized Company for $1.6 billion at a deemed exercise
    price of approximately $38 per share; and
    4) non-transferable rights to purchase $572 million of
    common stock (at an exercise price of $45 per share), which will
    result in adjustments to the stock and cash distributions to be
    made to the unsecured creditors, Appaloosa, and pursuant to the
    1113/1114 motions.    Basis of
    Presentation
  Condensed Combined
    Debtors-in-Possession
    Financial Statements SOP 90-7. Debtors-in-Possession
  Intercompany Transactions Debtors-in-Possession
 17




---



##### Table of Contents



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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(in millions)Net sales

$
4,092


$
4,597


$
8,181


$
9,353Operating expenses:Cost of sales, excluding items
    listed below


4,186



4,538



8,232



9,257U.S. employee special attrition
    program charges






1,905







1,905Depreciation and amortization


140



166



297



331Long-lived asset impairment charges


38







195



Selling, general and administrative


267



271



521



527Securities & ERISA
    litigation charge


332







332



Total operating expenses


4,963



6,880



9,577



12,020Operating loss


(871
)


(2,283
)


(1,396
)


(2,667
)Interest expense (contractual
    interest expense for the three and six months ended
    June 30, 2007 was $106 million and $219 million,
    respectively, and for the three and six months ended
    June 30, 2006 was $131 million and $260 million,
    respectively)


(73
)


(91
)


(152
)


(178
)Loss on extinguishment of debt










(23
)


Other income (expense), net


22



(4
)


34



(4
)Loss before reorganization items,
    income taxes, equity income, and cumulative effect of accounting
    change


(922
)


(2,378
)


(1,537
)


(2,849
)Reorganization items


(35
)


(16
)


(66
)


(25
)Loss before income tax expense,
    equity income, and cumulative effect of accounting change


(957
)


(2,394
)


(1,603
)


(2,874
)Income tax expense


(20
)


(2
)


(24
)


(6
)Loss before equity income and
    cumulative effect of accounting change


(977
)


(2,396
)


(1,627
)


(2,880
)Equity income from
    non-consolidated affiliates, net of tax


8



12



22



26Equity income from non-Debtor
    affiliates, net of tax


148



109



251



213Loss before cumulative effect of
    accounting change


(821
)


(2,275
)


(1,354
)


(2,641
)Cumulative effect of accounting
    change














3Net loss

$
(821
)

$
(2,275
)

$
(1,354
)

$
(2,638
)  18




---



##### Table of Contents



CONDENSED
    COMBINED
    DEBTORS-IN-POSSESSION
    BALANCE SHEET
    (Non-filed entities, principally
    non-U.S.
    subsidiaries, excluded from consolidated Debtor group)
  June 30,2007


December 31,(Unaudited)


2006(in millions)ASSETSCurrent assets:Cash and cash equivalents

$
26


$
376Restricted cash


110



107Accounts receivable, net:General Motors and affiliates


1,758



1,739Other third parties


1,006



906Non-Debtor affiliates


444



328Notes receivable from non-Debtor
    affiliates


290



346Inventories, net:Productive material,
    work-in-process
    and supplies


824



938Finished goods


255



263Other current assets


280



290Total current assets


4,993



5,293Long-term assets:Property, net


1,869



2,240Investments in affiliates


382



366Investments in non-Debtor
    affiliates


3,869



3,273Goodwill


152



152Other intangible assets, net


30



36Other


315



344Total long-term assets


6,617



6,411Total assets

$
11,610


$
11,704LIABILITIES AND
    STOCKHOLDERS DEFICITCurrent liabilities not subject to
    compromise:Short-term debt

$
3,155


$
2,742Accounts payable


1,289



1,108Accounts payable to non-Debtor
    affiliates


583



434Accrued liabilities


971



1,250Total current liabilities


5,998



5,534Employee benefit plan obligations
    and other


704



737Liabilities subject to compromise


18,134



17,488Total liabilities


24,836



23,759Stockholders deficit:Total stockholders deficit


(13,226
)


(12,055
)Total liabilities and
    stockholders deficit

$
11,610


$
11,704  19




---



##### Table of Contents



CONDENSED
    COMBINED
    DEBTORS-IN-POSSESSION
    STATEMENT OF CASH FLOWS (Unaudited)
    (Non-filed entities, principally
    non-U.S.
    subsidiaries, excluded from consolidated Debtor group)
  Six Months EndedJune 30,2007


2006(in millions)Cash flows from operating
    activities:Net cash used in operating
    activities

$
(648
)

$
(214
)Cash flows from investing
    activities:Capital expenditures


(111
)


(180
)Proceeds from sale of property


11



7Increase in restricted cash






(75
)Other, net


2



(21
)Net cash used in investing
    activities


(98
)


(269
)Cash flows from financing
    activities:Proceeds from refinanced
    debtor-in-possession
    facility


2,739



Repayments of borrowings under
    debtor-in-possession
    facility


(250
)


(Repayments of) proceeds from
    prepetition revolving credit facility, net


(1,508
)


2Repayments of borrowings under
    prepetition term loan facility


(988
)


Net borrowings under refinanced
    debtor-in-possession
    facility


410



Repayments under cash
    overdraft.






(24
)Repayments of borrowings under
    other debt agreements


(7
)


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


396



(28
)Decrease in cash and cash
    equivalents


(350
)


(511
)Cash and cash equivalents at
    beginning of period


376



1,361Cash and cash equivalents at end
    of period

$
26


$
850   3.
    REORGANIZATION
    ITEMS  SOP 90-7
  Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(in millions)Professional fees directly related
    to reorganization

$
44


$
36


$
87


$
67Interest income


(2
)


(15
)


(6
)


(31
)Gain on settlement of prepetition
    liabilities






(1
)






(3
)Total Reorganization Items

$
42


$
20


$
81


$
33   debtor-in-possession
 20




---



##### Table of Contents



4.
    INCOME
    TAXES          5.
    LONG-LIVED
    ASSET IMPAIRMENT      U.S. long-lived
 21




---



##### Table of Contents



6.
    WEIGHTED
    AVERAGE SHARES      Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(in thousands)Weighted average shares outstanding


561,782



561,782



561,782



561,782Effect of dilutive securities














Diluted shares outstanding


561,782



561,782



561,782



561,782     Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(in thousands)Anti-dilutive securities


69,624



79,047



69,624



79,047  22




---



##### Table of Contents



7.
    LIABILITIES    June 30,


December 31,2007


2006(in millions)Payroll related obligations

$
265


$
268Employee benefits, including
    current pension obligations


224



216Accrued income taxes


158



142Taxes other than income


186



144Warranty obligations


218



214U.S. Employee Special Attrition
    Program


173



626Manufacturing plant rationalization


356



154Other


364



447Total

$
1,944


$
2,211     June 30,


December 31,2007


2006(in millions)Employee benefits

$
292


$
282Environmental


117



116U.S. Employee Special Attrition
    Program


110



204Extended disability benefits


103



95Other


214



162Total

$
836


$
859   8.
    WARRANTIES      June 30,2007(in millions)Accrual balance at beginning of
    year

$
388Provision for estimated warranties


140Settlements made during the period
    (in cash or in kind)


(53
)Foreign currency translation and
    other


1Accrual balance at end of period

$
476    23




---



##### Table of Contents



9.
    LIABILITIES
    SUBJECT TO COMPROMISE      SOP 90-7
 24




---



##### Table of Contents



:
  June 30,


December 31,2007


2006(in millions)Pension obligations

$
4,330


$
4,257Postretirement obligations other
    than pensions, including amounts payable to GM


9,306



9,109Debt and notes payable


2,049



2,054Accounts payable


751



754Junior subordinated notes due 2033


391



391Prepetition warranty obligation


258



174GM claim for U.S. employee special
    attrition program


312



315Securities & ERISA
    litigation liability (Note 15)


340



8Other


317



354Total Liabilities Subject to
    Compromise

$
18,054


$
17,416   10.
    DEBT     25




---



##### Table of Contents



non-U.S. subsidiaries) debtor-in-possession.
      12-month
    debtor-in-possession
  Form 10-K
 26




---



##### Table of Contents



11.
    U.S.
    EMPLOYEE SPECIAL ATTRITION PROGRAM      Form 10-K
  SpecialTerminationU.S. Employee Special Attrition Program Liability

Benefit(in millions)Balance at December 31, 2006

$
830Payments


(526
)Pension and other postretirement
    benefit service cost (Note 12)


(28
)Other


7Balance at June 30, 2007

$
283  27




---



##### Table of Contents



U.S. Employee Special Attrition Program- GM Accounts
    Receivable(in millions)Balance at December 31, 2006

$
272Receipts from GM


(265
)Other


(7
)Balance at June 30, 2007

$
   12.
    PENSION
    AND OTHER POSTRETIREMENT BENEFITS    non-U.S. salaried
  OtherPension Benefits


PostretirementU.S. Plans


Non-U.S. Plans


BenefitsThree Months Ended June 30,2007


2006


2007


2006


2007


2006(in millions)Service cost(a)

$
47


$
74


$
11


$
10


$
21


$
45Interest cost


213



185



20



15



136



129Expected return on plan assets


(216
)


(205
)


(20
)


(16
)






Settlements










3











Curtailment loss/(gain)






1,520



5











(7
)Amortization of prior service costs


14



32



1



1



(25
)


(24
)Amortization of actuarial losses


26



58



9



7



19



78Net periodic benefit cost

$
84


$
1,664


$
29


$
17


$
151


$
221   28




---



##### Table of Contents



OtherPension Benefits


PostretirementU.S. Plans


Non-U.S. Plans


BenefitsSix Months Ended June 30,2007


2006


2007


2006


2007


2006(in millions)Service cost(a)

$
95


$
147


$
23


$
20


$
42


$
90Interest cost


425



370



40



31



271



259Expected return on plan assets


(432
)


(410
)


(40
)


(32
)






Settlements










33











Curtailment loss/(gain)






1,520



5











(7
)Amortization of prior service costs


28



65



2



2



(50
)


(49
)Amortization of actuarial losses


51



115



17



13



38



156Net periodic benefit cost

$
167


$
1,807


$
80


$
34


$
301


$
449     (a)
    
    Includes $13 million and $28 million for the three and
    six months ended June 30, 2007, respectively, and
    $3 million for the three and six months ended June 30,
    2006, of costs related to pre-retirement participants of the
    U.S. employee special attrition program accrued in 2006.     29




---



##### Table of Contents



non-U.S. subsidiaries non-U.S. plans
  13.
    DERIVATIVES
    AND HEDGING ACTIVITIES  Accounting for Derivative
    Instruments and Hedging Activities
   30




---



##### Table of Contents



June 30,


December 31,2007


2006(in millions)Current assets

$
95


$
73Non-current assets


18



3Total assets

$
113


$
76Current liabilities

$
16


$
61Non-current liabilities






Total liabilities

$
16


$
61       14.
    SEGMENT
    REPORTING    
    Electronics and Safety, which includes audio, entertainment and
    communications, safety systems, body controls and security
    systems, and power electronics, as well as advanced development
    of software and silicon.
    Thermal Systems, which includes Heating, Ventilating and Air
    Conditioning systems, components for multiple transportation and
    other adjacent markets, and powertrain cooling and related
    technologies.
    Powertrain Systems, which includes extensive systems integration
    expertise in gasoline, diesel and fuel handling and full
    end-to-end systems including fuel injection, combustion,
    electronic controls, exhaust handling, and test and validation
    capabilities. 31




---



##### Table of Contents




    Electrical/Electronic Architecture, which includes complete
    electrical architecture and component products.
    Steering, which includes steering, halfshaft and column
    technology.
    Automotive Holdings Group, which includes various non-core
    product lines and plant sites that do not fit Delphis
    future strategic framework.         32




---



##### Table of Contents



Electrical/





AutomotiveElectronics


Thermal


Powertrain


Electronic





Holdings


Corporateand Safety


Systems


Systems


Architecture


Steering


Group


and Other


Total(in millions)For the Three Months
    Ended:June 30, 2007Net sales to GM and affiliates

$
385


$
342


$
434


$
461


$
437


$
717


$
114


$
2,890Net sales to other customers


854



243



986



1,032



262



480



274



4,131Inter-segment net sales


60



27



106



53



15



107



(368
)


Total net sales

$
1,299


$
612


$
1,526


$
1,546


$
714


$
1,304


$
20


$
7,021Depreciation &
    Amortization

$
68


$
17


$
65


$
42


$
9


$
25


$
21


$
247Long-lived asset impairment charges

$



$



$
8


$



$
5


$
26


$



$
39Operating income (loss)

$
76


$
23


$
(2
)

$
44


$
(15
)

$
(249
)

$
(528
)

$
(651
)Equity income

$



$
2


$
3


$
3


$
3


$



$



$
11Minority interest

$
(1
)

$
(2
)

$
(7
)

$
(6
)

$
(1
)

$
(1
)

$
4


$
(14
)June 30, 2006Net sales to GM and affiliates

$
370


$
384


$
448


$
461


$
428


$
827


$
151


$
3,069Net sales to other customers


867



212



857



897



237



568



288



3,926Inter-segment net sales


60



33



86



44



30



110



(363
)


Total net sales

$
1,297


$
629


$
1,391


$
1,402


$
695


$
1,505


$
76


$
6,995Depreciation &
    Amortization

$
69


$
18


$
62


$
43


$
25


$
40


$
15


$
272Long-lived asset impairment charges

$



$



$



$



$



$



$



$
Operating income (loss)

$
95


$
21


$
11


$
16


$
(19
)

$
(123
)

$
(2,113
)

$
(2,112
)Equity income

$
(1
)

$
1


$
3


$
6


$
1


$
3


$
1


$
14Minority interest

$
(1
)

$
(2
)

$
(10
)

$
(6
)

$
(1
)

$



$
6


$
(14
)   Electrical/





AutomotiveElectronics


Thermal


Powertrain


Electronic





Holdings


Corporateand Safety


Systems


Systems


Architecture


Steering


Group


and Other


Total(in millions)For the Six Months
    Ended:June 30, 2007Net sales to GM and affiliates

$
746


$
676


$
839


$
903


$
862


$
1,428


$
222


$
5,676Net sales to other customers


1,677



468



1,861



2,001



518



974



521



8,020Inter-segment net sales


127



58



210



98



27



198



(718
)


Total net sales

$
2,550


$
1,202


$
2,910


$
3,002


$
1,407


$
2,600


$
25


$
13,696Depreciation &
    Amortization

$
136


$
31


$
134


$
86


$
30


$
45


$
42


$
504Long-lived asset impairment charges

$
1


$



$
9


$
1


$
159


$
29


$



$
199Operating income (loss)

$
121


$
35


$
(25
)

$
39


$
(170
)

$
(315
)

$
(691
)

$
(1,006
)Equity income

$



$
3


$
8


$
7


$
5


$
3


$



$
26Minority interest

$
(1
)

$



$
(16
)

$
(13
)

$
(1
)

$
(1
)

$
6


$
(26
)June 30, 2006Net sales to GM and affiliates

$
731


$
775


$
937


$
944


$
865


$
1,705


$
329


$
6,286Net sales to other customers


1,714



414



1,651



1,753



465



1,132



553



7,682Inter-segment net sales


129



68



169



89



63



221



(739
)


Total net sales

$
2,574


$
1,257


$
2,757


$
2,786


$
1,393


$
3,058


$
143


$
13,968Depreciation &
    Amortization

$
129


$
37


$
129


$
84


$
49


$
70


$
44


$
542Long-lived asset impairment charges

$



$



$



$



$



$



$



$
Operating income (loss)

$
201


$
26


$
38


$
61


$
(47
)

$
(240
)

$
(2,383
)

$
(2,344
)Equity income

$
2


$
2


$
7


$
10


$
2


$
7


$
1


$
31Minority interest

$
(2
)

$
1


$
(17
)

$
(8
)

$
(1
)

$



$
3


$
(24
)  33




---



##### Table of Contents



15.
    COMMITMENTS
    AND CONTINGENCIES  Bankruptcy
    Related Litigation
    follow-up
  Shareholder
    Lawsuits
      Accounting for
    Contingencies,
 34




---



##### Table of Contents



35




---



##### Table of Contents



and/or
  Ordinary
    Business Litigation
        2003-2005
     36




---



##### Table of Contents



Environmental
    Matters
  non-U.S. environmental Form 10-K
      Form 10-K
 37




---



##### Table of Contents



Other
    16.
    SUBSEQUENT
    EVENTS    Equity
    Purchase and Commitment Agreement
     38




---



##### Table of Contents



U.S.
    Labor Agreements
  1113/1114
   39




---



##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K
 Executive
    Summary of Business      No. 05-44481 debtors-in-possession non-U.S. subsidiaries
     40




---



##### Table of Contents



Transformation
    Plan
    
    Labor  Obtain, through negotiations with our
    U.S. labor unions and GM, modifications to our collective
    bargaining agreements to transform to a competitive
    U.S. labor cost structure;
    GM  Conclude negotiations with GM to finalize
    financial support for the legacy and labor costs we currently
    carry and to ascertain its business commitment to Delphi going
    forward; 41




---



##### Table of Contents




    Portfolio  Streamline our product portfolio
    and focus on those core technologies for which we believe we
    have significant competitive and technological advantages and
    make the necessary manufacturing alignment;
    Cost Structure  Transform our salaried
    workforce to ensure that our organizational and cost structure
    is competitive and aligned with our product portfolio and
    manufacturing footprint; and
    Pensions  Devise a workable solution to our
    current pension funding situation, whether by extending
    contributions to the pension trusts or otherwise.  sections 1113/1114 1113/1114 1113/1114 1113/1114 1113/1114 1113/1114
  Form 8-K
  
    The UAW Settlement Agreement extends the UAW CBAs until
    September 14, 2011;
    A site plan is implemented with respect to each of 21 UAW-Delphi
    plants which includes, at certain sites, specific revenue,
    production, and job commitments from Delphi
    and/or GM
    and pursuant to which Delphi will retain ownership and
    operations in four facilities, seven facilities will be sold or
    transferred to a third party so that Delphi will have no further
    operational or employment responsibilities after certain
    specified sunset dates, and ten facilities will be closed;
    A workforce transition program is implemented for traditional
    UAW-represented employees that provides eligible employees with
    transformation plan options including (1) attrition options
    similar to 42




---



##### Table of Contents



the previously-approved UAW attrition programs,
    (2) flowback rights to eligible Delphi employees as of the
    date of the filing of Delphis bankruptcy petition who do
    not elect the attrition options, including relocation allowances
    of up to $67,000 in certain circumstances when plants cease
    production, (3) provision of lump sum buy-down
    payments totaling $105,000 for traditional production employees
    who do not elect the attrition option or flowback and continue
    to work for Delphi under the terms of the 2004 UAW-Delphi
    Supplemental Agreement applicable to employees hired after 2004,
    transferring those employees to Supplemental Employee
    Status as of October 1, 2007, (4) conversion of
    temporary employees in UAW-Delphi plants to permanent employee
    status, and (5) severance payments up to $40,000 to
    eligible employees who are permanently laid off prior to
    September 14, 2011. These program related costs are
    expected to be incurred during the second half of 2007;  
    Certain terms of the 2004 UAW-Delphi Supplemental Agreement with
    respect to wages, individual retirement and savings plans, and
    post-retirement health care accounts are modified;
    Certain terms of the UAW CBAs are modified with respect to
    provisions covering hiring requirements, existing Center for
    Human Resources (CHR)/Legal Services, holiday
    schedule, temporary employees, Appendix L, Guaranteed
    Income Stream, America Online, and other matters described in
    Attachment E to the UAW Settlement Agreement;
    Local negotiations subject to mutual agreement regarding work
    rules and other local agreement issues will be conducted on an
    expedited basis;
    Delphis commitment in the 2004 UAW-Delphi Supplemental
    Agreement to the principle of equivalence of
    sacrifice when establishing compensation and benefit
    levels for salaried employees and management is reaffirmed;
    All employee, retiree, and union asserted and unasserted claims
    are settled (except for waiver of rights to vested pension
    benefits, workers compensation benefits, unemployment
    compensation benefits, and pending ordinary course grievances of
    employees remaining in the workforce); and
    The UAW will receive an allowed prepetition claim, to be paid
    pursuant to the plan of reorganization in the amount of
    $140 million on account of the CHR and Legal Services
    claims as of April 1, 2007 (to be adjusted for accruals
    through October 1, 2007 and adjusted for expenditures by
    Delphi until the effective date of a plan of reorganization) of
    which $30 million will be paid to the UAW-GM Center for
    Human Resources and the balance will be paid directly to the DC
    VEBA established pursuant to a settlement agreement approved by
    the court in the case of International Union, UAW, et
    al. v. General Motors Corp., Civil Action
    No. 05-73991.    
    Delphis obligation to provide certain retiree welfare
    benefits is eliminated and GM is obligated to provide certain
    retiree welfare benefits for certain UAW-represented employees
    covered as provided in the Benefit Guarantee Term Sheet;
    A transfer of certain pension assets and liabilities from
    Delphis pension plans to GMs pension plans is
    effectuated pursuant to Internal Revenue Code
    Section 414(1) in exchange for certain consideration to be
    paid by Delphi to GM;
    Delphis existing pension plan is frozen in certain
    respects effective upon emergence from chapter 11 and GM
    will be obligated to pay certain benefits for certain
    UAW-represented employees covered as provided in the Benefit
    Guarantee Term Sheet; 43




---



##### Table of Contents




    The amount of $450 million is funded by GM, which the UAW
    has directed to be paid directly to the DC VEBA established
    pursuant to a settlement agreement approved by the court in the
    case of International Union, UAW, et al. v. General Motors
    Corp., Civil Action
    No. 05-73991;
    The UAW Settlement Agreement (including the UAW CBAs) is assumed
    pursuant to 11 U.S.C. § 365;
    The UAW released parties are exculpated and released in
    connection with the UAW Settlement Agreement and Delphis
    chapter 11 cases; and
    Delphi and GM receive releases from the UAW, all employees and
    former employees of Delphi represented or formerly represented
    by the UAW, and all persons or entities with claims derived from
    or related to any relationship with such employees of Delphi
    arising directly or indirectly from or in any way related to any
    obligations under the collective bargaining agreements or the
    UAW Settlement Agreement (except for claims for benefits
    provided for or explicitly not waived under the UAW Settlement
    Agreement).  1113/1114 1113/1114 1113/1114
    wind-down Accounting for the Impairment or Disposal of
    Long-Lived
    Assets,
 44




---



##### Table of Contents



Form 10-K
     45




---



##### Table of Contents



46




---



##### Table of Contents




    All senior secured debt would be refinanced and paid in full and
    all allowed administrative and priority claims would be paid in
    full.
    Trade and other unsecured claims and unsecured funded debt
    claims (exclusive of subordinated debt claims) would be
    satisfied in full with $3.48 billion of common stock
    (77.3 million out of a total of 147.6 million shares)
    in the reorganized Company, at a deemed value of $45 per share,
    and with the balance paid in cash. The framework requires that
    the amount of allowed trade and unsecured claims (other than
    funded debt claims and postpetition accrued interest claims) not
    exceed $1.7 billion.
    In exchange for GMs financial contribution to the
    Companys transformation plan, and in satisfaction of
    GMs claims against the Company, GM will receive
    $2.7 billion in cash and an unconditional release of any
    alleged estate claims against GM. In addition, as with other
    customers, certain GM claims would flow through the
    Chapter 11 cases and be satisfied by the reorganized
    company in the ordinary course of business. The plan framework
    anticipates that GMs financial contribution to the
    Companys transformation plan would be consistent with the
    items identified in the Companys former framework
    agreement announced on December 18, 2006. While the actual
    value of the potential GM contribution cannot be determined
    until the Delphi-GM global settlement agreement and master
    restructuring agreement are finalized, the Company is aware that
    GM has publicly estimated its potential exposure related to the
    Companys Chapter 11 filing.
    All subordinated debt claims would be allowed and satisfied with
    $478 million of common stock (10.6 million out of a
    total of 147.6 million shares) in the reorganized Company
    at a deemed value of $45 per share.
    The equity securities class in the Companys plan of
    reorganization would receive: 1) $66 million of common
    stock (1.5 million out of a total of 147.6 million
    shares) in the reorganized Company (at a deemed value of $45 per
    share); 2) warrants to purchase an additional
    5 percent of the common stock of the reorganized Company
    during a five-year period (at an exercise price of $45 per
    share); 3) transferable rights to purchase approximately
    45.6 million shares of common stock in the reorganized
    Company for $1.6 billion at a deemed exercise price of
    approximately $38 per share; and 4)
    non-transferable
    rights to purchase $572 million of common stock (at an
    exercise price of $45 per share), which will result in
    adjustments to the stock and cash distributions to be made to
    the unsecured creditors, Appaloosa, and pursuant to
    1113/1114
    motions.   47




---



##### Table of Contents



Form 10-K
   48




---



##### Table of Contents



Overview
    of Performance During the Second Quarter and First Six Months of
    2007  Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
2,890



41
%

$
3,069



44
%

$
(179
)

$
5,676



41
%

$
6,286



45
%

$
(610
)Other customers


4,131



59
%


3,926



56
%


205



8,020



59
%


7,682



55
%


338Total net sales

$
7,021






$
6,995






$
26


$
13,696






$
13,968






$
(272
)Net loss

$
(821
)





$
(2,275
)





$
(1,454
)

$
(1,354
)





$
(2,638
)





$
(1,284
)      49




---



##### Table of Contents



and/or
 50




---



##### Table of Contents



Consolidated
    Results of Operations
  Three
    and Six Months Ended June 30, 2007 versus Three and Six
    Months Ended June 30, 2006
    Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
2,890



41
%

$
3,069



44
%

$
(179
)

$
5,676



41
%

$
6,286



45
%

$
(610
)Other customers


4,131



59
%


3,926



56
%


205



8,020



59
%


7,682



55
%


338Total net sales

$
7,021






$
6,995






$
26


$
13,696






$
13,968






$
(272
)Cost of sales


6,635







6,543







92



12,857







13,102







(245
)Gross margin(a)

$
386



5.5
%

$
452



6.5
%

$
(66
)

$
839



6.1
%

$
866



6.2
%

$
(27
)U.S employee special attrition
    program charges










1,905







(1,905
)










1,905







(1,905
)Depreciation and amortization


247







272







(25
)


504







542







(38
)Long-lived asset impairment charges


39















39



199















199Selling, general and administrative


419







387







32



810







763







47Securities and ERISA litigation
    charge


332















332



332















332Operating loss

$
(651
)





$
(2,112
)





$
(1,461
)

$
(1,006
)





$
(2,344
)





$
(1,338
)Interest expense


(85
)






(104
)






(19
)


(176
)






(203
)






(27
)Loss on extinguishment of debt






















(23
)














23Other income, net


17







12







5



38







23







15Reorganization items


(42
)






(20
)






22



(81
)






(33
)






48Income tax expense


(57
)






(51
)






6



(106
)






(91
)






15Minority interest, net of tax


(14
)






(14
)










(26
)






(24
)






2Equity income, net of tax


11







14







(3
)


26







31







(5
)Cumulative effect of accounting
    change, net of tax






























3







(3
)Net loss

$
(821
)





$
(2,275
)





$
(1,454
)

$
(1,354
)





$
(2,638
)





$
(1,284
)     (a)
    
    Gross margin is defined as net sales less cost of sales
    (excluding U.S. employee special attrition program charges,
    Depreciation and amortization, and Long-lived asset impairment
    charges).  Net Sales
 Net Sales for the Three Months Ended June 30, 2007
    versus June 30, 2006.
 51




---



##### Table of Contents



Net Sales for the Six Months Ended June 30, 2007 versus
    June 30, 2006.
      Gross Margin
 Gross Margin for the Three Months Ended June 30, 2007
    versus June 30, 2006.
  Gross Margin for the Six Months Ended June 30, 2007
    versus June 30, 2006.
 52




---



##### Table of Contents



U.S. Employee Special Attrition Program Charges
 U.S. Employee Special Attrition Program Charges for the
    Three and Six Months Ended June 30, 2007 versus
    June 30, 2006.
  Depreciation and Amortization
 Depreciation and Amortization Expenses for the Three Months
    Ended June 30, 2007 versus June 30,
    2006.
  Depreciation and Amortization Expenses for the Six Months
    Ended June 30, 2007 versus June 30, 2006.
  Long-Lived Asset Impairment Charges
 Long-Lived Asset Impairment Charges for the Three Months
    Ended June 30, 2007 versus June 30,
    2006.
  Long-Lived Asset Impairment Charges for the Six Months Ended
    June 30, 2007 versus June 30,
    2006.
  Selling, General and Administrative
 Selling, General and Administrative Expenses for the Three
    Months Ended June 30, 2007 versus
    June 30, 2006.
  Selling, General and Administrative Expenses for the Six
    Months Ended June 30, 2007 versus
    June 30, 2006.
 53




---



##### Table of Contents



Securities and ERISA Litigation Charge
 Securities and ERISA Litigation Charge for the Three and Six
    Months Ended June 30, 2007 versus June 30,
    2006.
  Interest Expense
 Interest Expense for the Three Months Ended June 30,
    2007 versus June 30, 2006. 90-7, (SOP 90-7).
  Interest Expense for the Six Months Ended June 30, 2007
    versus June 30, 2006. SOP 90-7.
  Loss on Extinguishment of Debt
 Loss on Extinguishment of Debt for the Three and Six Months
    Ended June 30, 2007 versus June 30,
    2006.
  Other Income and Expense
 Other Income and Expense for the Three Months Ended
    June 30, 2007 versus June 30,
    2006.
 54




---



##### Table of Contents



non-Debtor
  Other Income and Expense for the Six Months Ended
    June 30, 2007 versus June 30,
    2006.
  Reorganization Items
 Reorganization Items for the Three Months Ended June 30,
    2007 versus June 30, 2006.
  Reorganization Items for the Six Months Ended June 30,
    2007 versus June 30, 2006.
  Minority Interest, net of tax
 Minority Interest for the Three and Six Months Ended
    June 30, 2007 versus June 30,
    2006.
  Equity Income, net of tax
 Equity Income for the Three and Six Months Ended
    June 30, 2007 versus June 30,
    2006.
  Cumulative Effect of Accounting Change, net of tax
 Cumulative Effect of Accounting Change for the six months
    ended June 30, 2007 versus June 30,
    2006. Share Based
    Payments,
  Taxes
 Taxes for the Three and Six Months Ended June 30, 2007
    versus June 30, 2006. non-U.S. operations.
 55




---



##### Table of Contents



non-U.S. operations
 Results
    of Operations by Segment  Three
    and Six Months Ended June 30, 2007 versus Three and Six
    Months Ended June 30, 2006
  Electronics and Safety
   Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
385



30
%

$
370



29
%

$
15


$
746



29
%

$
731



28
%

$
15Other customers


854



66
%


867



67
%


(13
)


1,677



66
%


1,714



67
%


(37
)Inter-segment


60



4
%


60



4
%






127



5
%


129



5
%


(2
)Total Other and Inter-segment


914



70
%


927



71
%


(13
)


1,804



71
%


1,843



72
%


(39
)Total net sales

$
1,299






$
1,297






$
2


$
2,550






$
2,574






$
(24
)Operating income

$
76






$
95






$
(19
)

$
121






$
201






$
(80
)Gross margin


16.6
%






17.8
%










15.6
%






18.1
%   Net Sales
      Operating Income/Loss
 56




---



##### Table of Contents



Powertrain Systems
   Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
434



28
%

$
448



32
%

$
(14
)

$
839



29
%

$
937



34
%

$
(98
)Other customers


986



65
%


857



62
%


129



1,861



64
%


1,651



60
%


210Inter-segment


106



7
%


86



6
%


20



210



7
%


169



6
%


41Total Other and Inter-segment


1,092



72
%


943



68
%


149



2,071



71
%


1,820



66
%


251Total net sales

$
1,526






$
1,391






$
135


$
2,910






$
2,757






$
153Operating (loss) income

$
(2
)





$
11






$
(13
)

$
(25
)





$
38






$
(63
)Gross margin


9.8
%






10.5
%










9.5
%






11.0
%   Net Sales
      Operating Income/Loss
 57




---



##### Table of Contents



Electrical/Electronic Architecture
   Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
461



30
%

$
461



33
%

$



$
903



30
%

$
944



34
%

$
(41
)Other customers


1,032



67
%


897



64
%


135



2,001



67
%


1,753



63
%


248Inter-segment


53



3
%


44



3
%


9



98



3
%


89



3
%


9Total Other and Inter-segment


1,085



70
%


941



67
%


144



2,099



70
%


1,842



66
%


257Total net sales

$
1,546






$
1,402






$
144


$
3,002






$
2,786






$
216Operating income

$
44






$
16






$
28


$
39






$
61






$
(22
)Gross margin


12.5
%






10.6
%










11.2
%






11.7
%   Net Sales
     58




---



##### Table of Contents



Operating Income/Loss
  Thermal Systems
  Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
342



56
%

$
384



61
%

$
(42
)

$
676



56
%

$
775



62
%

$
(99
)Other customers


243



40
%


212



34
%


31



468



39
%


414



33
%


54Inter-segment


27



4
%


33



5
%


(6
)


58



5
%


68



5
%


(10
)Total Other and Inter-segment


270



44
%


245



39
%


25



526



44
%


482



38
%


44Total net sales

$
612






$
629






$
(17
)

$
1,202






$
1,257






$
(55
)Operating income

$
23






$
21






$
2


$
35






$
26






$
9Gross margin


11.8
%






11.3
%










10.9
%






9.9
%   Net Sales
      Operating Income/Loss
 59




---



##### Table of Contents



Steering
   Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
437



61
%

$
428



62
%

$
9


$
862



61
%

$
865



62
%

$
(3
)Other customers


262



37
%


237



34
%


25



518



37
%


465



33
%


53Inter-segment


15



2
%


30



4
%


(15
)


27



2
%


63



5
%


(36
)Total Other and Inter-segment


277



39
%


267



38
%


10



545



39
%


528



38
%


17Total net sales

$
714






$
695






$
19


$
1,407






$
1,393






$
14Operating loss

$
(15
)





$
(19
)





$
(4
)

$
(170
)





$
(47
)





$
123Gross margin


4.8
%






5.8
%










6.3
%






5.0
%   Net Sales
  period-over-period
    Operating Income/Loss
 60




---



##### Table of Contents



Automotive Holdings Group
   Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


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

$
717



55
%

$
827



55
%

$
(110
)

$
1,428



55
%

$
1,705



56
%

$
(277
)Other customers


480



37
%


568



38
%


(88
)


974



37
%


1,132



37
%


(158
)Inter-segment


107



8
%


110



7
%


(3
)


198



8
%


221



7
%


(23
)Total Other and Inter-segment


587



45
%


678



45
%


(91
)


1,172



45
%


1,353



44
%


(181
)Total net sales

$
1,304






$
1,505






$
(201
)

$
2,600






$
3,058






$
(458
)Operating loss

$
(249
)





$
(123
)





$
126


$
(315
)





$
(240
)





$
75Gross margin


(10.5
)%






(0.4
)%










(4.4
)%






(0.4
%)   Net Sales
      Operating Income/Loss
 61




---



##### Table of Contents



Corporate and Other
     Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


Change


2007


2006


Change(dollars in millions)


(dollars in millions)Net Sales

$
20


$
76


$
(56
)

$
25


$
143


$
(118
)Operating loss

$
(528
)

$
(2,113
)

$
(1,585
)

$
(691
)

$
(2,383
)

$
(1,692
)   Net Sales
  Operating Income/Loss
 Liquidity
    and Capital Resources  Overview
    of Capital Structure
     62




---



##### Table of Contents



non-U.S. subsidiaries) debtor-in-possession.
      12-month
    debtor-in-possession
   63




---



##### Table of Contents



Form 10-K
  Form 10-K
     64




---



##### Table of Contents



June 30,


December 31,2007


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

$
1,984


$
1,984Junior subordinated notes due 2033


391



391Other debt


65



70Total long-term debt subject to
    compromise


2,440



2,445Short-term, other, and long-term
    debt not subject to compromise:Prepetition revolving credit
    facility






1,507Prepetition term loan, due 2011






985Refinanced DIP term loan


2,745



Refinanced DIP revolving credit
    facility


410



Accounts receivable factoring


453



409DIP term loan






250European securitization


148



122Other debt


121



66Total short-term and other debt
    not subject to compromise


3,877



3,339Other long-term debt


24



49Total debt not subject to
    compromise


3,901



3,388Total outstanding debt

$
6,341


$
5,833   Prepetition
    Indebtedness
  Form 10-K
  Senior Unsecured Debt. SOP 90-7,
  Junior Subordinated Notes. 1 4 Form 10-K 1 4
 65




---



##### Table of Contents



five-year
    Prepetition Credit Facilities.
  Other
    Financing
        Credit
    Ratings, Stock Listing
  point-in-time point-in-time
  Form 10-Q,
 66




---



##### Table of Contents



Form 10-Q, 1 2 1 8
  Cash
    Flows
  Operating Activities.
    Investing Activities.
  Financing Activities.
  Dividends. debtor-in-possession
 67




---



##### Table of Contents



Shareholder
    Lawsuits      Accounting for
    Contingencies,
     68




---



##### Table of Contents



and/or
 69




---



##### Table of Contents



Bankruptcy
    Related Litigation    follow-up
 Environmental
    Matters  non-U.S. environmental
     70




---



##### Table of Contents



Form 10-K
   Other   Inflation   Recently
    Issued Accounting Pronouncements   Significant
    Accounting Policies and Critical Accounting Estimates   71




---



##### Table of Contents



Form 10-K
  Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement No. 109, Form 10-Q.
 Forward-Looking
    Statements  Form 10-Q, debtor-in-possession and/or Form 10-K and/or and/or
 72




---



##### Table of Contents



ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    ITEM 4.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)) Form 10-K Form 10-K
  Form 10-Q Form 10-K
  Changes
    in internal control over financial reporting
  Form 10-K
  Form 10-K
  Form 10-K
 73




---



##### Table of Contents



PART II.
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS  Form 10-K
    ITEM 1A.
    RISK
    FACTORS  Form 10-K Form 10-Q Form 10-K Form 10-Q and/or
  Form 10-K
  
    There can be no assurance as to our ability to maintain
    sufficient financing sources to fund our reorganization plan and
    meet future obligations, including costs expected to be incurred
    related to the workforce transition program comprehended in the
    UAW Settlement Agreement. We are currently financing our
    operations during our reorganization cases using funds from
    operations and borrowings under our Refinanced DIP Credit
    Facility, which expires December 31, 2007, and overseas
    factoring and securitization of accounts receivable. We may be
    unable to operate pursuant to the terms of our Refinanced DIP
    Credit Facility, including the financial covenants and
    restrictions contained therein, or to negotiate and obtain
    necessary approvals, amendments, waivers, extensions or other
    types of modifications, and to otherwise fund and execute our
    business plans throughout the duration of the chapter 11
    cases. For more information regarding the terms of our DIP
    facility during 2006 and the Refinanced DIP Credit Facility
    entered into in January 2007, and other uses and sources of
    financing, refer to Item 7. Managements Discussion and
    Analysis of Financial Condition and Results of Operations,
    Liquidity and Capital Resources in this Annual Report.
    GM is one of the largest creditors and a significant stakeholder
    in our chapter 11 cases, and our ability to consummate the
    transactions contemplated by the UAW Settlement Agreement, the
    EPCA and a plan of reorganization depends not only on reaching a
    consensual agreement with GM, but also on GMs ability to
    fulfill certain financial obligations to Delphis
    UAW-represented employees and retirees comprehended in the UAW
    Settlement Agreement. GM has reported a variety of challenges it
    is facing, including with respect to its debt ratings, its
    relationships with its unions and large shareholders and its
    cost and pricing structures. If GM is unable or unwilling to
    fulfill these commitments, we believe that the Companys
    cost structure and ability to operate will be adversely affected.
    The transactions contemplated by the EPCA may not be consummated
    and there can be no assurance that we will be able to
    successfully develop, prosecute, confirm and consummate one or
    more plans of 74




---



##### Table of Contents



reorganization with respect to the chapter 11 cases that
    are acceptable to the Court and the Companys creditors,
    equity holders and other parties in interest. Additionally,
    third parties may seek and obtain Court approval to terminate or
    shorten the exclusivity period for Delphi to propose and confirm
    one or more plans of reorganization, to appoint a
    chapter 11 trustee, or to convert the cases to
    chapter 7 cases.    ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  Purchase
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES  Form 10-K
  ITEM 5.
    OTHER
    INFORMATION  Form 8-K.
  Item 1.01
    Entry into a Material Definitive Agreement
    Item 3.03
    Material Modification to Rights of Security Holders
   75




---



##### Table of Contents



ITEM 6.
    EXHIBITS  ExhibitNumber

Exhibit Name3 (a)

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

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

Amended and Restated Bylaws of
    Delphi Corporation, incorporated by reference to
    Exhibit 99(c) to Delphis Report on
    Form 8-K
    filed October 14, 2005.4 (a)

Rights Agreement relating to
    Delphis Stockholder Rights Plan, incorporated by reference
    to Exhibit(4)(a) to Delphis Annual Report on
    Form 10-K
    for the year ended December 31, 1998, as amended by the
    First Amendment thereto, which is incorporated by reference to
    Exhibit 99(a) to Delphis Report on
    Form 8-K
    dated May 11, 2005, as amended by the Second Amendment
    thereto, which is incorporated by reference to
    Exhibit 99(d) to Delphis Report on
    Form 8-K
    dated January 18, 2007, as amended by the Third Amendment
    thereto, dated August 2, 2007.10 (a)

Final Order entered by the United
    States Bankruptcy Court for the Southern District of New York on
    May 31, 2007 to secure the conditional funding waivers from
    the IRS, incorporated by reference to Exhibit 99(a) to
    Delphis Report on
    Form 8-K
    filed June 4, 2007.10 (b)

Agreement between Delphi
    Corporations indirect wholly owned Spanish Subsidiary,
    Delphi Automotive Systems España, S.L. (DASE)
    and Adalberto Canadas Castillo and Enrique Bujidos (of
    PricewaterhouseCoopers Spain), and, thereafter, Fernando
    Gómez Martín (the DASE Receivers), and the
    workers councils and unions representing the affected
    employees, dated July 4, 2007, incorporated by
    reference to Exhibit 99(a) to Delphis Report on
    Form 8-K
    filed July 19, 2007.10 (c)

Memorandum of Understanding
    between Delphi Corporation and the International Union, United
    Automobile, Aerospace and Agricultural Implement Workers of
    America and General Motors Corporation, dated June 22,
    2007, incorporated by reference to Exhibit 99(a) to
    Delphis Report on
    Form 8-K
    filed July 20, 2007.10 (d)

Agreement between Delphi
    Corporation and Appaloosa Management L.P.; Harbinger Capital
    Partners Master Fund I, Ltd.; and Pardus Capital
    Management, L.P. as well as Merrill Lynch, Pierce,
    Fenner & Smith Inc.; UBS Securities LLC; and Goldman
    Sachs & Co., dated August 3, 2007.31 (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  76




---



##### Table of Contents



SIGNATURE    Delphi
    Corporation(Registrant)August 8, 2007

/s/  Thomas
    S. TimkoThomas S. TimkoChief Accounting Officer and
    Controller  77