EX-99.(A) 2 k06479exv99wxay.htm MONTHLY OPERATING REPORT FOR THE MONTH ENDED MAY 31, 2006 exv99wxay
 

Exhibit 99(a)
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
Debtors: Delphi Corporation, et al. (1)
Case Number: Jointly Administered 05-44481 (RDD)
Monthly Operating Report for the Month Ended:
May 31, 2006
Debtors’ Address:
5725 Delphi Drive
Troy, Michigan 48098
Monthly Operating Loss: $277 million
Debtors’ Attorneys:
John Wm. Butler Jr. (JB 4711)
John K. Lyons (JL 4951)
Ron E. Meisler (RM 3026)
Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Suite 2100
Chicago, IL 60606
Telephone: (312) 407-0700
Facsimile: (312) 407-0411
And
Kayalyn A. Marafioti (KM 9632)
Thomas J. Matz (TM 5986)
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Report Preparer:
The undersigned, having reviewed the attached report and being familiar with the Debtors’ financial affairs, verifies under the penalty of perjury that the information contained therein is complete, accurate and truthful to the best of my knowledge. (2)
     
Date: June 30, 2006
  /s/ JOHN D. SHEEHAN
 
   
 
  John D. Sheehan
 
  Vice President and Chief Restructuring Officer, and Chief Accounting Officer
 
(1) See next page for a listing of Debtors by case number.
 
(2) All amounts herein are unaudited and subject to revision. The Debtors reserve all rights to revise this report.

 

 

DELPHI CORPORATION, et al.
MONTHLY OPERATING REPORT
(1) The Debtors in these jointly administered cases are as follows:
         
    Case  
Debtor Name   Number  
 
Delphi NY Holdings Corporation
     05-44480  
Delphi Corporation
     05-44481  
ASEC Manufacturing General Partnership
     05-44482  
ASEC Sales General Partnership
     05-44484  
Environmental Catalysts, LLC
     05-44503  
Delphi Medical Systems Colorado Corporation
     05-44507  
Delphi Medical Systems Texas Corporation
     05-44511  
Delphi Medical Systems Corporation
     05-44529  
Specialty Electronics International Ltd.
     05-44536  
Specialty Electronics, Inc.
     05-44539  
Delphi Liquidation Holding Company
     05-44542  
Delphi Electronics (Holding) LLC
     05-44547  
Delphi Technologies, Inc.
     05-44554  
Delphi Automotive Systems Tennessee, Inc.
     05-44558  
Delphi Mechatronic Systems, Inc.
     05-44567  
Delphi Automotive Systems Risk Management Corporation
     05-44570  
Exhaust Systems Corporation
     05-44573  
Delphi China LLC
     05-44577  
Delphi Automotive Systems Korea, Inc.
     05-44580  
Delphi International Services, Inc.
     05-44583  
Delphi Automotive Systems Thailand, Inc.
     05-44586  
Delphi Automotive Systems International, Inc.
     05-44589  
Delphi International Holdings Corporation
     05-44591  
Delphi Automotive Systems Overseas Corporation
     05-44593  
Delphi Automotive Systems (Holding), Inc.
     05-44596  
Delco Electronics Overseas Corporation
     05-44610  
Delphi Diesel Systems Corporation
     05-44612  
Delphi LLC
     05-44615  
Aspire, Inc.
     05-44618  
Delphi Integrated Service Solutions, Inc.
     05-44623  
Delphi Connection Systems
     05-44624  
Packard Hughes Interconnect Company
     05-44626  
DREAL, Inc.
     05-44627  
Delphi Automotive Systems Services LLC
     05-44632  
Delphi Services Holding Corporation
     05-44633  
Delphi Automotive Systems Global (Holding), Inc.
     05-44636  
Delphi Foreign Sales Corporation
     05-44638  
Delphi Automotive Systems Human Resources LLC
     05-44639  
Delphi Automotive Systems LLC
     05-44640  
Delphi Furukawa Wiring Systems LLC
     05-47452  
Delphi Receivables LLC
     05-47459  
MobileAria, Inc.
     05-47474  
Case Number: 05-44481 (RDD) (Jointly Administrated)

2

 

DELPHI CORPORATION, et al.
MONTHLY OPERATING REPORT
INDEX
         
Description   Page
Condensed Combined Debtors-in-Possession Statement of Operations for the month ended May 31, 2006 and Year to Date January 1 to May 31, 2006
     4  
Condensed Combined Debtors-in-Possession Balance Sheet as of May 31, 2006
     5  
Condensed Combined Debtors-in-Possession Statement of Cash Flows for the month ended May 31, 2006
     6  
Notes to Monthly Operating Report
     7  
Schedule of Payroll and Payroll Taxes Withheld and Incurred
     12  
Schedule of Payroll Taxes Paid
     13  
Schedule of Other Taxes Collected, Incurred and Paid
     15  
Schedule of Disbursements
     17  
Case Number: 05-44481 (RDD) (Jointly Administered)

3

 

DELPHI CORPORATION, et al.
MONTHLY OPERATING REPORT
CONDENSED COMBINED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS
(Non-filed entities, principally non-U.S. subsidiaries, excluded from Debtor group)
                 
            Year to Date  
    Month Ended     January 1 to  
    May 31, 2006     May 31, 2006  
    (in millions)  
Net sales:
                
General Motors and affiliates
   $ 910     $ 4,462  
Other customers
     641       3004  
Intercompany non-Debtor subsidiaries
     51       253  
 
            
Total net sales
     1,602       7,719  
 
            
 
                
Operating expenses:
                
Cost of sales, excluding items listed below
     1,720       7,798  
Selling, general and administrative
     111       455  
Depreciation and amortization
     48       260  
 
            
Total operating expenses
     1,879       8,513  
 
            
 
                
Operating loss
     (277 )     (794 )
Interest expense (contractual interest expense was $44 million and $217 million, respectively)
     (31 )     (148 )
Other income (expense), net
     (2 )     (8 )
 
            
Loss before reorganization items, income taxes and equity income
     (310 )     (950 )
Reorganization items
     (7 )     (21 )
Income tax expense
     (1 )     (2 )
Equity income from non-consolidated subsidiaries, net of tax
     4       21  
Equity income from non-Debtor subsidiaries, net of tax
     65       198  
 
            
 
                
Net loss
   $ (249 )   $ (754 )
 
            
The accompanying notes are an integral part of the financial statements.
Case Number: 05-44481 (RDD) (Jointly Administered)

4

 

DELPHI CORPORATION, et al.
MONTHLY OPERATING REPORT
CONDENSED COMBINED DEBTORS-IN-POSSESSION BALANCE SHEET
(Non-filed entities, principally non-U.S. subsidiaries, excluded from Debtor group)
         
    May 31, 2006  
    (in millions)  
ASSETS
        
Current assets:
        
Cash and cash equivalents
   $ 1,018  
Restricted cash
     75  
Accounts receivable, net:
        
General Motors and affiliates
     1,695  
Other third parties
     1,567  
Non-Debtor subsidiaries
     304  
Notes receivable from non-Debtor subsidiaries
     384  
Inventories, net:
        
Productive material, work-in-process and supplies
     924  
Finished goods
     291  
Prepaid expenses and other
     289  
 
      
Total current assets
     6,547  
 
        
Long-term assets:
        
Property, net
     2,636  
Goodwill
     152  
Other intangible assets, net
     37  
Pension intangible assets
     871  
Investments in non-Debtor subsidiaries
     3,444  
Other
     703  
 
      
Total assets
   $ 14,390  
 
      
 
        
LIABILITIES AND STOCKHOLDERS’ DEFICIT
        
Current liabilities not subject to compromise:
        
Secured debt in default
   $ 2,492  
Accounts payable
     1,187  
Accounts payable to non-Debtor subsidiaries
     440  
Accrued liabilities
     895  
 
      
Total current liabilities
     5,014  
 
        
Long-term liabilities not subject to compromise:
        
Debtor-in-possession financing
     250  
Employee benefit plan obligations and other
     686  
 
      
Total long-term liabilities
     936  
 
        
Liabilities subject to compromise
     15,267  
 
      
 
        
Total liabilities
     21,217  
 
      
 
        
Stockholders’ deficit:
        
Common stock, $0.01 par value, 1,350 million shares authorized, 565 million shares issued
     6  
Additional paid-in capital
     2,758  
Accumulated deficit
     (7,184 )
Minimum pension liability
     (2,311 )
Accumulated other comprehensive loss, excluding minimum pension liability
     (44 )
Treasury stock, at cost (3.2 million shares)
     (52 )
 
      
Total stockholders’ deficit
     (6,827 )
 
      
Total liabilities and stockholders’ deficit
   $ 14,390  
 
      
The accompanying notes are an integral part of the financial statements.
Case Number: 05-44481 (RDD) (Jointly Administered)

5

 

DELPHI CORPORATION, et al.
MONTHLY OPERATING REPORT
CONDENSED COMBINED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS
(Non-filed entities, principally non-U.S. subsidiaries, excluded from Debtor group)
         
    Month Ended  
    May 31, 2006  
    (in millions)  
Cash flows from operating activities:
        
Net loss
   $ (249 )
Adjustments to reconcile net loss to net cash provided by operating activities:
        
Depreciation and amortization
     48  
Pension and other postretirement benefit expenses
     129  
Equity income from unconsolidated subsidiaries, net of tax
     (4 )
Equity income from non-Debtor subsidiaries, net of tax
     (65 )
Reorganization items
     7  
Changes in operating assets and liabilities:
        
Accounts receivable, net
     170  
Inventories, net
     (9 )
Prepaid expenses and other
     (60 )
Accounts payable, accrued and other long-term liabilities
     162  
Pension contributions
     —  
Other postretirement benefit payments
     (18 )
Receipts (payments) for reorganization items, net
     1  
Other
     19  
 
      
Net cash provided by operating activities
     131  
 
      
 
Cash flows from investing activities:
        
Capital expenditures
     (24 )
Increase in restricted cash
     (75 )
Other
     (6 )
 
      
Net cash used in investing activities
     (105 )
 
      
 
Cash flows from financing activities:
        
Repayments of borrowings under other debt
     (1 )
 
      
Net cash used in financing activities
     (1 )
 
      
 
Increase in cash and cash equivalents
     25  
Cash and cash equivalents at beginning of period
     993  
 
      
Cash and cash equivalents at end of period
   $ 1,018  
 
      
The accompanying notes are an integral part of the financial statements.
Case Number: 05-44481 (RDD) (Jointly Administered)

6

 

DELPHI CORPORATION, et al.
NOTES TO MONTHLY OPERATING REPORT
1. Background and Organization
     General — Delphi Corporation (“Delphi” or the “Company”) is a world-leading supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology.
     Chapter 11 Reorganization Cases — On October 8, 2005, Delphi and certain of its United States (“U.S.”) subsidiaries (the “Initial Filers”) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Court”), and on October 14, 2005, three additional U.S. subsidiaries of Delphi (collectively with the Initial Filers, the “Debtors”) filed voluntary petitions for relief under the Bankruptcy Code (the Debtors’ October 8, 2005 and October 14, 2005 filings are referred to herein collectively as the “Chapter 11 Filings”). See the second page of this report for a listing of the Debtors and case number information. The Debtors will continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. Delphi’s non-U.S. subsidiaries were not included in the filings and will continue their business operations without supervision from U.S. courts. On October 17, 2005 the Office of the United States Trustee for the Southern District of New York appointed a statutory committee of unsecured creditors. The composition of the creditors’ committee was subsequently changed. On March 22, 2006, the Court granted a motion to create an equity committee to represent the interests of Delphi’s stock owners and on April 28, 2006, the U.S. Trustee appointed a committee of equity security holders in these chapter 11 cases. The equity committee’s composition was also later changed.
     On January 20, 2006, the Debtors filed with the Court the Schedules of Assets and Liabilities and Statements of Financial Affairs (the “Schedules and Statements”), as required by the Bankruptcy Code. In addition, on February 1, 2006 and April 18, 2006, the Debtors filed certain amendments to the Schedules and Statements.
     On February 3, 2006, the United States Trustee convened a meeting of creditors of Delphi pursuant to section 341 of the Bankruptcy Code. A section 341 meeting is a statutorily mandated meeting of creditors, presided over by the United States Trustee, at which a debtor’s representatives appear. All creditors of the debtor are entitled to attend a section 341 meeting. At the conclusion of the section 341 meeting, the United States Trustee closed the meeting.
     On April 12, 2006, the Court established a bar date of July 31, 2006 for filing proofs of claim against the Debtors’ estates.
2. Basis of Presentation
     Periods Presented — The periods presented in the statement of operations in prior monthly operating reports contained monthly amounts as well as filing to date amounts. Effective with this monthly operating report, filing to date amounts have been omitted and replaced with year to date amounts.
     Condensed Combined Debtor-in-Possession Financial Statements — The financial statements and supplemental information contained herein are unaudited, preliminary and may not comply with generally accepted accounting principles in the United States of America (“U.S. GAAP”), in all material respects. In addition, the financial statements and supplemental information contained herein represent the condensed combined financial information for the Debtors only. Delphi’s non-Debtor subsidiaries are treated as non-consolidated subsidiaries in the attached financial statements and as such, their net income (loss) is included as “Equity income (loss) from non-Debtor subsidiaries, net of tax” in the statement of operations and their net assets are included as “Investments in non-Debtor subsidiaries” in the balance sheet.
     American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”), which is applicable to companies in chapter 11, generally does not change the manner in which financial statements are prepared. It does require, however, that the financial statements for periods subsequent to the filing of the chapter 11 petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. The Debtors’ financial statements contained herein have been prepared in accordance with the guidance in SOP 90-7.
     The unaudited combined financial statements have been derived from the books and records of the Debtors. This information, however, has not been subject to procedures that would typically be applied to financial
Case Number: 05-44481 (RDD) (Jointly Administered)

7

 

DELPHI CORPORATION, et al.
NOTES TO MONTHLY OPERATING REPORT
information presented in accordance with U.S. GAAP, and upon the application of such procedures (such as tests for asset impairment), the Debtors believe that the financial information could be subject to changes, and these changes could be material. The information furnished in this report includes primarily normal recurring adjustments but does not include all of the adjustments that would typically be made for quarterly financial statements in accordance with U.S. GAAP. As of May 31, 2006, certain prepaid balances and pre- and postpetition trade accounts payable balances are subject to further review and reclassification. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, this report should be read in conjunction with our consolidated financial statements and notes thereto included in our 2004 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the period ended September 30, 2005 that were filed with the United States Securities and Exchange Commission.
     The results of operations contained herein are not necessarily indicative of results which may be expected from any other period or for the full year and may not necessarily reflect the consolidated results of operations, financial position and cash flows of the Debtors in the future.
     Intercompany Transactions — Intercompany transactions between Debtors have been eliminated in the financial statements contained herein. Intercompany transactions with the Debtors’ non-Debtor subsidiaries have not been eliminated in the financial statements and are reflected as intercompany receivables, loans, and payables.
     General Motors and Affiliates — Includes activity with General Motors Corporation (“GM”) and its consolidated subsidiaries. Activity with GM’s non-consolidated subsidiaries (such as GM Shanghai) and activity with other Tier 1 suppliers who sell directly to GM is classified as other (non-GM) customer activity.
     Property — Includes property, plant, and equipment and is recorded at cost net of accumulated depreciation.
     Special Attrition Program — On March 22, 2006, Delphi, GM and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (“UAW”) agreed on a special attrition program, and on May 5, 2006, the Court entered the order approving the motion with certain modifications. The order was subsequently amended on May 12, 2006. The special attrition program offers, among other things, certain eligible Delphi U.S. hourly employees represented by the UAW normal and early voluntary retirements with a lump sum incentive payment of $35,000, which will be paid by GM. The program also provides a pre-retirement program and transfer to and retirement from GM. Approximately 14,500 U.S. hourly employees represented by the UAW are eligible to participate in the program and as of May 31, 2006, approximately 7,800 employees had elected to participate. The Debtors have recorded in “Cost of Sales” approximately $138 million during May 2006 and $212 million year to date for the preretirement portion of the cost of the special attrition program. The Debtors will also incur significant pension and postemployment benefit curtailment charges due to reductions in anticipated future service as a result of the retirements. Due to the complex nature of the calculation of these charges, however, they will only be recorded at quarter-end. As a result of the special attrition program, the Debtors determined that previously recorded accruals for postemployment benefits, representing the future cash expenditures expected during the period between the idling of affecting employees and the time when such employees are redeployed, retire, or otherwise terminate their employment, were no longer necessary and accordingly were released. The Debtors have recorded credits in “Cost of Sales” of approximately $85 million filing to date as a result of the release of previously recorded postemployment benefit accruals.
     Contractual Interest Expense — Contractual interest expense represents amounts due under the contractual terms of outstanding debt during the month, including unsecured debt subject to compromise for which interest expense is not recognized in the income statement in accordance with the provisions of SOP 90-7.
     Taxes — Delphi accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” and recognizes current and deferred income tax assets and liabilities based upon all events that have been recognized in the consolidated financial statements as measured by the enacted tax laws. Due to the Company’s history of U.S. losses over the past years, combined with the deterioration in its current U.S. operating outlook, during the fourth quarter of 2004, Delphi established a 100% valuation allowance against its U.S. deferred tax assets. As a result, Delphi discontinued recognizing income tax benefits for net operating losses incurred in periods subsequent to December 31, 2004 and continues to record a 100% valuation allowance against all U.S. deferred tax assets.
Case Number: 05-44481 (RDD) (Jointly Administered)

8

 

DELPHI CORPORATION, et al.
NOTES TO MONTHLY OPERATING REPORT
     The Debtors’ have received authorization, but not direction, to pay sales, use, trust fund, and certain other taxes in the normal course. Accordingly, the Debtors have paid the applicable taxes when due. See the schedules of payroll and other taxes paid for additional information regarding taxes paid.
3. Debtor-in-Possession (“DIP”) Financing
     On October 14, 2005, Delphi entered into a Revolving Credit, Term Loan and Guaranty Agreement (the “DIP Credit Facility”) to borrow up to $2.0 billion from a syndicate of lenders. The DIP Credit Facility consists of a $1,750 million revolving facility and a $250 million term loan facility (collectively, the “DIP Loans”). The DIP Credit Facility contains various representations, warranties and covenants by the Debtors that are customary for transactions of this nature, including (without limitation) reporting requirements and maintenance of financial covenants.
     On October 27, 2005, Delphi entered into the First Amendment to the DIP Credit Facility (the “First Amendment”). Under the terms of the First Amendment the Company has agreed, among other things, to mandatory prepayments from Asset Sales and Recovery Events (each as defined in the First Amendment). The First Amendment also modified the terms of the Borrowing Base (as defined in the DIP Credit Facility) computation, which limits the amount outstanding under the DIP Loans at any one time.
     On October 28, 2005, the Court granted, on a final basis, the Debtors’ motion for approval of the DIP financing order. The DIP financing order granted final approval of the DIP Credit Facility, as amended, and final approval of an adequate protection package for certain prepetition facilities. Following approval of the final DIP financing order, the Debtors have access to $2 billion in DIP financing subject to the terms and conditions set forth in the DIP financing documents, as amended, and $2.5 billion under certain prepetition facilities, for a total financing of $4.5 billion.
     On November 21, 2005, Delphi entered into an Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement (the “Amended DIP Credit Facility”) which, among other things, adds new lenders to the DIP Credit Facility, increases the interest rate that was provided under the DIP Credit Facility, and alters the provisions regarding future amendments. The Amended DIP Credit Facility carries an interest rate at the option of Delphi of either (i) the Administrative Agent’s Alternate Base Rate (as defined in the Amended DIP Credit Facility) plus 1.75% or (ii) 2.75% above the Eurodollar base rate, which is the London Interbank Borrowing Rate (“LIBOR”). The LIBOR interest rate period can be set at a one, three, or six-month period as selected by Delphi in accordance with the terms of the Amended DIP Credit Facility. Accordingly, the interest rate will fluctuate based on the movement of the Alternate Base Rate or LIBOR through the term of the DIP Loans. The Amended DIP Credit Facility will expire on the earlier of October 8, 2007 and the date of substantial consummation of a Reorganization Plan that is confirmed pursuant to an order of the Court. Borrowings under the Amended DIP Credit Facility are prepayable at Delphi’s option without premium or penalty.
     Also on November 21, 2005, the $250 million term loan was funded and the Company elected to pay interest at LIBOR plus 2.75% for a six month period. On May 22, 2006 the Company elected to pay interest at LIBOR plus 2.75% for a one month period. As of May 31, 2006, there were no amounts outstanding under the DIP revolving facility, but the Company had approximately $44 million in letters of credit outstanding under the DIP revolving facility as of that date.
4. Reorganization Items
     SOP 90-7 requires reorganization items such as realized gains and losses from the settlement of prepetition liabilities, provisions for losses resulting from the reorganization and restructuring of the business, as well as professional fees directly related to the process of reorganizing the Debtors under chapter 11, to be separately disclosed.
Case Number: 05-44481 (RDD) (Jointly Administered)

9

 

DELPHI CORPORATION, et al.
NOTES TO MONTHLY OPERATING REPORT
     The Debtors’ reorganization items consist of the following:
                 
            Year to Date  
    Month Ended     January 1 to  
    May 31, 2006     May 31, 2006  
    (in millions)  
Professional fees directly related to reorganization
   $ (14 )   $ (56 )
Interest income
     7       33  
Gain on settlement of prepetition liabilities
     —       2  
 
            
Total Reorganization Items
   $ (7 )   $ (21 )
 
            
     Professional fees directly related to the reorganization (“Professional Fees”) include fees and reimbursable expenses associated with advisors to the Debtors, unsecured creditors, secured creditors, and unions. Professional Fees for the month ended May 31, 2006 were estimated by the Debtors and will be reconciled to actual invoices when received.
5. Liabilities Subject to Compromise
     As a result of the Chapter 11 Filings, the payment of prepetition indebtedness is subject to compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-chapter 11 liabilities are stayed. Although prepetition claims are generally stayed, at hearings held in mid October 2005 and November 2005, the Court granted final approval of the Debtors’ “first day” motions generally designed to stabilize the Debtors’ operations and covering, among other things, human capital obligations, supplier relations, customer relations, business operations, tax matters, cash management, utilities, case management, and retention of professionals.
     The Debtors have been paying and intend to continue to pay undisputed postpetition claims in the ordinary course of business. In addition, the Debtors may reject prepetition executory contracts and unexpired leases with respect to the Debtors’ operations, with the approval of the Court. Damages resulting from rejection of executory contracts and unexpired leases are treated as general unsecured claims and will be classified as liabilities subject to compromise. On April 12, 2006, the Court entered an order establishing July 31, 2006 as the bar date. The bar date is the date by which claims against the Debtors arising prior to the Debtors’ Chapter 11 Filings must be filed if the claimants wish to receive any distribution in the chapter 11 cases. On April 17, 2006, the Debtors commenced notification, including publication, to all known actual and potential creditors informing them of the bar date and the required procedures with respect to the filing of proofs of claim with the Court. Any differences between claim amounts listed by the Debtors in their Schedules of Assets and Liabilities (as amended) and claims filed by creditors will be investigated and, if necessary, the Court will make the final determination as to the amount, nature and validity of claims. The determination of how liabilities will ultimately be settled and treated cannot be made until the Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. Classification for purposes of these financial statements of any prepetition liabilities on any basis other than liabilities subject to compromise is not an admission against interest or legal conclusion by the Debtors as to the manner of classification, treatment, allowance or payment in the Debtors’ chapter 11 cases, including in connection with any plan of reorganization that may be confirmed by the Court and that may become effective pursuant to the Court’s order.
     SOP 90-7 requires prepetition liabilities that are subject to compromise to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, or other events.
Case Number: 05-44481 (RDD) (Jointly Administered)

10

 

DELPHI CORPORATION, et al.
NOTES TO MONTHLY OPERATING REPORT
     Liabilities subject to compromise consist of the following:
         
    May 31, 2006  
    (in millions)  
Pension obligations (3)
   $ 3,702  
Postretirement obligations other than pensions (3)
     6,618  
Debt and notes payable
     2,461  
Accounts payable
     888  
Other
     1,598  
 
      
Total Liabilities Subject to Compromise
   $ 15,267  
 
      
 
(3)   Due to the complex nature of the calculation of these liabilities, a small portion of the balances represent amounts potentially considered to be administrative claims.
6. Postpetition Accounts Payable
     To the best of the Debtors’ knowledge, all undisputed postpetition accounts payable have been and are being paid under agreed-upon payment terms.
Case Number: 05-44481 (RDD) (Jointly Administered)

11

 

DELPHI CORPORATION, et al.
SCHEDULE OF PAYROLL AND PAYROLL TAXES WITHHELD AND INCURRED
MONTH ENDED MAY 31, 2006
                 
    Employee Payroll Taxes   Employer Payroll
Gross Wages Paid   Withheld   Taxes Owed
 
$249,664,632
   $ 69,266,269     $ 20,389,671  
 
Case Number: 05-44481 (RDD) (Jointly Administered)

12

 

DELPHI CORPORATION, et al.
SCHEDULE OF PAYROLL TAXES PAID
MONTH ENDED MAY 31, 2006
         
Payee   Payroll Taxes Paid  
 
Internal Revenue Service
   $ 80,857,442  
State of Ohio
     3,406,247  
City of Dayton, OH
     282,695  
City of Kettering, OH
     136,818  
City of Moraine, OH
     123,393  
City of Warren, OH
     103,863  
City of Vandalia, OH
     62,220  
City of Columbus, OH
     61,816  
City of Rita, OH
     58,500  
City of Hubbard, OH
     5,462  
City of Elyria, OH
     4,685  
City of Huron, OH
     3,914  
City of Trotwood, OH
     3,498  
City of Dublin, OH
     2,055  
City of Toledo, OH
     1,568  
City of Lordstown, OH
     962  
City of Springfield, OH
     762  
City of Cincinnati, OH
     364  
City of Xenia, OH
     276  
City of Akron, OH
     164  
City of Fairfield, OH
     143  
City of Canton, OH
     109  
City of Mansfield, OH
     84  
City of W Carrollton, OH
     32  
Ohio School District
     28,909  
State of Michigan
     3,000,092  
City of Flint, MI
     117,685  
City of Saginaw, MI
     97,168  
City of Grand Rapids, MI
     9,517  
City of Detroit, MI
     3,610  
City of Walker, MI
     2,526  
City of Pontiac, MI
     667  
City of Lansing, MI
     199  
State of New York
     1,811,944  
State of Indiana
     1,601,422  
State of Wisconsin
     1,065,094  
State of Alabama
     583,066  
City of Gadsden, AL
     13,114  
State of Mississippi
     245,037  
State of California
     154,743  
State of Georgia
     140,531  
State of Texas
     139,588  
State of Oklahoma
     68,657  
State of New Jersey
     42,426  
State of Pennsylvania
     40,104  
State of Illinois
     22,966  
State of Colorado
     22,714  
State of Kansas
     13,935  
State of South Carolina
     10,807  
State of Missouri
     6,682  
State of Oregon
     3,159  
State of Kentucky
     2,741  
State of Virginia
     2,390  
State of North Carolina
     2,374  
State of Minnesota
     1,733  
State of Louisiana
     1,321  
State of Arkansas
     1,214  
State of Arizona
     894  
Case Number: 05-44481 (RDD) (Jointly Administered)

13

 

DELPHI CORPORATION, et al.
SCHEDULE OF PAYROLL TAXES PAID
MONTH ENDED MAY 31, 2006
         
Payee   Payroll Taxes Paid  
 
State of Maryland
     772  
State of Connecticut
     752  
City of Philadelphia, PA
     269  
City of Denver, CO
     238  
State of Delaware
     247  
City of Towamencin, PA
     36  
State of Utah
     27  
State of Florida
     22  
Inland Revenue Service (UK)
     595,357  
Country of Switzerland
     6,077  
 
      
Total
   $ 94,979,898  
 
      
Case Number: 05-44481 (RDD) (Jointly Administered)

14

 

DELPHI CORPORATION, et al.
SCHEDULE OF OTHER TAXES COLLECTED, INCURRED AND PAID
MONTH ENDED MAY 31, 2006
                     
Taxing Jurisdiction   Tax Type   Tax Due     Tax Paid  
 
Ohio Department of Treasury
   Use   $ 587,855     $ 587,855  
Michigan Department of Treasury
   Use     345,109       345,109  
Indiana Department of Revenue
   Use     200,501       200,501  
New York Department of Taxation & Finance
   Use     120,902       120,902  
Mississippi Tax Commission
   Use     84,509       84,509  
Limestone County, AL (Payee ALATAX - Tax Trust Account)
   Use     33,859       33,859  
Texas Comptroller of Public Accounts
   Use     31,921       31,921  
New Jersey Sales Tax Division
   Use     31,599       31,599  
Wisconsin Department of Revenue
   Use     30,667       30,667  
Georgia Sales Tax Division
   Use     7,406       7,406  
Gadsden City, Alabama (Payee ALATAX - Tax Trust Account)
   Use     3,677       3,677  
Tuscaloosa County, Alabama
   Use     2,227       2,227  
Etowah County, Alabama (Payee LGREC Inc.)
   Use     784       784  
Tuscaloosa, Alabama
   Use     37       37  
Colorado Department of Revenue
   Use     192       192  
Texas Comptroller of Public Accounts
   Franchise     550,500       550,500  
Delaware Secretary of State
   Franchise     66,000       66,000  
Texas Comptroller of Public Accounts
   Income     270,000       270,000  
Ohio Treasurer of State
   Commercial Activity     264,339       264,339  
Ohio Department of Treasury
   Kilowatt Hour     66,446       66,446  
Johnson County, Kansas
   Personal Property     42,936       42,936  
Marion County, Indiana
   Personal Property     9,794       9,794  
Allen County, Indiana
   Personal Property     2,756       2,756  
Tipton County, Indiana
   Personal Property     1,185       1,185  
San Diego County, California
   Personal Property     774       774  
Johnson County, Indiana
   Personal Property     744       744  
Nemaha County, Kansas
   Personal Property     687       687  
Wayne County, Indiana
   Personal Property     522       522  
Hidalgo County, Texas
   Personal Property     441       441  
Noble County, Indiana
   Personal Property     347       347  
Elkhart County, Indiana
   Personal Property     297       297  
Clinton County, Indiana
   Personal Property     296       296  
Dekalb County, Indiana
   Personal Property     290       290  
Ripley County, Indiana
   Personal Property     210       210  
Delaware County, Indiana
   Personal Property     186       186  
Shelby County, Indiana
   Personal Property     173       173  
Kosciusko County, Indiana
   Personal Property     169       169  
Adams County, Indiana
   Personal Property     158       158  
Huntington County, Indiana
   Personal Property     152       152  
Pharr, Texas
   Personal Property     134       134  
Blackford County, Indiana
   Personal Property     120       120  
Lagrange County, Indiana
   Personal Property     90       90  
Cass County, Indiana
   Personal Property     90       90  
Tippecanoe County, Indiana
   Personal Property     87       87  
Scott County, Indiana
   Personal Property     64       64  
Dearborn County, Indiana
   Personal Property     58       58  
Wells County, Indiana
   Personal Property     56       56  
Marshall County, Indiana
   Personal Property     54       54  
Switzerland County, Indiana
   Personal Property     45       45  
Jay County, Indiana
   Personal Property     44       44  
Case Number: 05-44481 (RDD) (Jointly Administered)

15

 

DELPHI CORPORATION, et al.
SCHEDULE OF OTHER TAXES COLLECTED, INCURRED AND PAID
MONTH ENDED MAY 31, 2006
                     
Taxing Jurisdiction   Tax Type   Tax Due     Tax Paid  
 
Dubois County, Indiana
   Personal Property   $ 42     $ 42  
Washington County, Indiana
   Personal Property     23       23  
Whitley County, Indiana
   Personal Property     23       23  
Tippecanoe County, Indiana
   Personal Property     23       23  
Bartholomew County, Indiana
   Personal Property     20       20  
Laporte County, Indiana
   Personal Property     18       18  
Steuben County, Indiana
   Personal Property     17       17  
Hamiliton County, Indiana
   Personal Property     16       16  
Fulton County, Indiana
   Personal Property     15       15  
Vanderberg County, Indiana
   Personal Property     14       14  
Jennings County, Indiana
   Personal Property     10       10  
Monroe County, Indiana
   Personal Property     9       9  
Lawrence County, Indiana
   Personal Property     5       5  
Jasper County, Indiana
   Personal Property     4       4  
Gibson County, Indiana
   Personal Property     4       4  
Fayette County, Indiana
   Personal Property     3       3  
Wabash County, Indiana
   Personal Property     3       3  
Vigo County, Indiana
   Personal Property     1       1  
Oak Creek, Wisconsin
   Real Property     38,459       38,459  
Johnson County, Kansas
   Real Property     14,793       14,793  
Alabama Department of Revenue
   Seller’s Use     37,598       37,598  
Alabama Department of Revenue
   Consumer Use     34,449       34,449  
State of California Board of Equalization
   Sales & Use     937       937  
South Carolina Department of revenue
   Sales & Use     16       16  
Colorado Department of Revenue
   Sales     254       254  
Colorado Department of Revenue
   Utility     229       229  
         
Total
       $ 2,888,474     $ 2,888,474  
         
 
Note 1:   The amounts listed above for tax due and tax paid include postpetition taxes and only those prepetition taxes for which the Debtors have received Court authorization to pay. Accordingly, certain prepetition taxes (primarily on real and personal property) that the Debtors do not have authority to pay, are not included in the schedule above. Such prepetition taxes are included in the balance sheet as part of “Liabilities Subject to Compromise.”
 
Note 2:   Certain Debtors also pay transaction taxes such as value added tax (“VAT”) to certain foreign countries based upon the purchase or supply of goods or services within the country and the importation of goods into the country from outside the country. For the purchase of goods or services in certain foreign countries, VAT may either be collected by the supplier from the Debtors or paid directly by the Debtors through self-assessment. For the supply of goods or services in certain foreign countries, the Debtors may collect VAT from the customers and remit the tax to the foreign governments. Upon importation in certain countries, VAT may be paid by the Debtors. In most cases, VAT is recoverable either as an input VAT credit or as a refund. The process of calculating VAT owed or refundable is a complex process of netting VAT paid, collected and remitted. To the best of the Company’s knowledge, all VAT has been paid and is being paid when due. In addition, certain Debtors incur foreign withholding taxes on certain payments from various foreign non-Debtor subsidiaries. These foreign withholding taxes generally apply to interest, royalties, dividends, and service payments received from certain foreign non-Debtor subsidiaries. The foreign withholding taxes are required to be withheld by the foreign non-Debtor subsidiaries and paid over to the foreign tax authorities on behalf of the Debtors. To the best of the Company’s knowledge, all foreign withholding taxes have been withheld by the foreign non-Debtor subsidiaries when required to be withheld and paid over to the appropriate foreign tax authorities when due. These foreign tax payments have not been included in the schedule above.
Case Number: 05-44481 (RDD) (Jointly Administered)

16

 

DELPHI CORPORATION, et al.
SCHEDULE OF DISBURSEMENTS
MONTH ENDED MAY 31, 2006
                 
    Case    
Debtor Name   Number   Amount (4)
 
Delphi NY Holdings Corporation
     05-44480     $ —  
Delphi Corporation
     05-44481       —  
ASEC Manufacturing General Partnership
     05-44482       —  
ASEC Sales General Partnership
     05-44484       —  
Environmental Catalysts, LLC
     05-44503       —  
Delphi Medical Systems Colorado Corporation
     05-44507       5,185,413  
Delphi Medical Systems Texas Corporation
     05-44511       1,205,767  
Delphi Medical Systems Corporation
     05-44529       1,441,252  
Specialty Electronics International Ltd.
     05-44536       —  
Specialty Electronics, Inc.
     05-44539       531,975  
Delphi Liquidation Holding Company
     05-44542       —  
Delphi Electronics (Holding) LLC
     05-44547       —  
Delphi Technologies, Inc.
     05-44554       3,020,468  
Delphi Automotive Systems Tennessee, Inc.
     05-44558       —  
Delphi Mechatronic Systems, Inc.
     05-44567       11,413,812  
Delphi Automotive Systems Risk Management Corporation
     05-44570       —  
Exhaust Systems Corporation
     05-44573       6,399,768  
Delphi China LLC
     05-44577       —  
Delphi Automotive Systems Korea, Inc.
     05-44580       82,912  
Delphi International Services, Inc.
     05-44583       7,445,006  
Delphi Automotive Systems Thailand, Inc.
     05-44586       —  
Delphi Automotive Systems International, Inc.
     05-44589       —  
Delphi International Holdings Corporation
     05-44591       —  
Delphi Automotive Systems Overseas Corporation
     05-44593       5,086  
Delphi Automotive Systems (Holding), Inc.
     05-44596       —  
Delco Electronics Overseas Corporation
     05-44610       8,281,149  
Delphi Diesel Systems Corporation
     05-44612       31,523,153  
Delphi LLC
     05-44615       —  
Aspire, Inc.
     05-44618       367,277  
Delphi Integrated Service Solutions, Inc.
     05-44623       304,903  
Delphi Connection Systems
     05-44624       4,325,615  
Packard Hughes Interconnect Company
     05-44626       —  
DREAL, Inc.
     05-44627       —  
Delphi Automotive Systems Services LLC
     05-44632       226,115,505  
Delphi Services Holding Corporation
     05-44633       —  
Delphi Automotive Systems Global (Holding), Inc.
     05-44636       —  
Delphi Foreign Sales Corporation
     05-44638       —  
Delphi Automotive Systems Human Resources LLC
     05-44639       160,961,243  
Delphi Automotive Systems LLC
     05-44640       1,872,366,485  
Delphi Furukawa Wiring Systems LLC
     05-47452       170,431  
Delphi Receivables LLC
     05-47459       —  
MobileAria, Inc.
     05-47474       945,112  
 
(4)   Operating expenses for the month ended May 31, 2006 were used as a proxy for disbursements.
Case Number: 05-44481 (RDD) (Jointly Administered)

17