Delphi Delphi Thermal AUDI MLBevo HVAC Vincent Fagard Neal Sweeney

Delphi

Delphi Thermal AUDI MLBevo HVAC

Vincent FagardNeal Sweeney

DELPHI CONFIDENTIAL 2

Vehicles: A4, A5, A6, A7, A8, Touareg III, Cayenne III Products: Multi Zone Modular HVAC SOP: - October 2015:Single and Tri- zones - October 2016: 3+2 zones

- July 2017: 4+2 zones Volume: 3.1 Millions Life Time as 2nd Tranche Volume

10 year program life – Europe only New programs comprise 69% of the awarded volume

while the Touareq and Cayenne vehicles are replacement business

$21.8M gross investment; $12.5M net investmentTri-zone HVAC module(9 actuators per HVAC)

Tri- +2 zone HVAC module(15 actuators per HVAC)

ThermalAUDI MLBevo HVAC

DELPHI CONFIDENTIAL

2015 2017


2016

Audi A4 Sedan

Audi A4 Avant

Audi A5 Sportsback

Audi A6 AvantAudi A7 Sportsback

Porsche Cayenne

VW TouaregAudi A5 Coupé

SZ / TZ

Audi A8

3+2 4+2

3


Project Description (Project #SEN007)• Multi zone modular HVAC for Audi MLBevo, the premium

vehicle lineup for VW

• HVAC unit is based on Behr design. Thermal was awarded 40% of the global volume. Behr will provide the remaining 60%.

• The A4, A5, A6, A7 and A8 vehicles are conquest business from Denso and represents 69% of awarded volume. The Touareg III and Cayenne III are replacement programs for Thermal.

• Product Line: HVAC

• Customer location: Ingolstadt and Neckarsulm, Germany, Bratislava, Slovakia

• Manufacturing Locations: Final Assembly: Senica, Slovakia; Heat exchangers and pipes will be supplied by Thermal’s facility in Ostrow, Poland

Project Description (Continued)

• Investment includes injection molding equipment, tube mill, stacker, center machine, stamping press, HVAC assembly equipment and tooling.

• Business case volumes are based on November 2013 IHS

• BBP Status: Sales and Capital included in BBP

• Program Life: 10 year program life implemented with staggered vehicle SOPs.

• Government Incentives: None available at this time

• Financials consistent with DPRG approval

• Staffing: Total of 241 new hires: Senica: 184; Ostrow: 52; Luxembourg: 5 (11 Salary, 230 Hourly)

• Source of Project Funding: Delphi Senica and Delphi Ostrow

• Source of Project Funding: Delphi Automotive

AR Investment Summary Financial Summary


$ M 2014 2015 2016 2017+ TotalBuilding 0.3 0.3 0.0 0.0 0.7Facilities 1.8 3.9 1.6 1.5 8.8Tools 8.2 2.5 0.2 0.0 10.9Operations 0.6 0.7 0.1 0.2 1.5Total Investment 10.9 7.4 1.8 1.7 21.8Customer Rebillable 0.0 (9.2) (0.2) 0.0 (9.4)Government/Other 0.0 0.0 0.0 0.0 0.0Net Investment 10.9 (1.8) 1.7 1.7 12.5Net Capital Spending 10.3 (2.5) 1.6 1.5 10.9

AR DGM PRGDate: Jan 2014 Nov 2013Gross Investment $21.8 $21.2Factory Margin (%) 23.0% 22.8%Operating Margin (%) 8.3% 8.3%EBITDA Margin (%) 11.9% 11.7%NPV $13.6 $13.6Payback (discounted) 5.3 Yrs 5.6 YrsPayback (%) 52.6% 56.0%IRR (%) 31.4% 33.0%Total Program Revenue $715 $715Average Annual Revenue $72 $72Average Annual Volume 314 319


* Price Change – Mix $2.07 plus Sequencing $0.86 * 50mm tube and center evaporator is a Thermal design FAI

ThermalAUDI MLBevo HVAC – Financials Metrics Summary

Financial Metrics DGM F/(U)AR PRG Var

Avg. Unit Price * 227.30 224.37 2.93Avg. Annual Revenue 71.2 71.5 (0.3)Factory Margin 23.0% 22.8% 20 bpsOperating Income 8.3% 8.3% 0 bpsEBITDA 11.9% 11.7% 20 bpsIRR 31.2% 33.0% (180) bpsNPV 13.6 13.6 0.0Payback Yrs (discounted) 5.3 5.6 0.3Net Investment 12.5 10.3 (2.2)

Cost Element Analysis DGM PRG 2016AR Approval BBP

Sales 100% 100% 100%

Material 66.4% 66.6% 66.7%Manufacturing 10.7% 10.7% 12.6%Engineering * 5.0% 5.1% 4.8%OCOGS 1.5% 1.5% 1.5%SG&A 4.5% 4.5% 3.9%D&A 3.6% 3.4% 3.7%Total Operating Expense 91.7% 91.7% 93.2%

Operating Income 8.3% 8.3% 6.8%

Factory OperatingMargin Income EBITDA IRR NPV Comment

DPRG Approval 22.8% 8.3% 11.7% 33.0% 13.6Volume 0 bps 0 bps 0 bps 0 bps 0.0

Economics 0 bps 0 bps 0 bps 0 bps 0.0FX 0 bps 0 bps 0 bps 0 bps 0.0

Price 0 bps 0 bps 0 bps 0 bps 0.0

Performance 0 bps 0 bps 0 bps 0 bps 0.0

Other 30 bps 0 bps 20 bps (180) bps 0.0

AR 23.1% 8.3% 11.9% 31.2% 13.6

Fav/(

Unfa

v)

Margins are up slightly due to just in time sequencing, IRR dow n due to grant removal


• Multi Zone HVAC unit is a build-to-function for Thermal based on Behr design. Thermal was awarded 40% of the global volume. Behr will provide the remainder supplied by Behr

• The A4, A5, A6, A7 and A8 vehicles is conquest business from Denso and represents 69% of awarded volume. The Touareg III and Cayenne III are replacement programs for Thermal.

Open Issue/Risk Risk Risk Mitigation

Volumes Volumes may fluctuate up or down depending on changes in economic conditions.

Business case volumes are based on 40% target of the MLB platform. A variation in volumes of +/- 15% has been acknowledged by both parties. However if volumes drop by more than 15% on a long term basis, a strategy for recovery will be defined with the customer.

FX Material 100% Euro Sales and material contracts are 100% Euro based. Euro is also the functional currency for the Ostrow and Senica manufacturing sites. No FX transaction risk is present.

Commodity Primarily aluminum and copper Customer contract includes an escalation clause for aluminum and copper

Project Timing Type I and Type II HVAC modules: Customer PPAP: March 2015; SOP: October 2015. Type IV SOP October 2016 and Type III HVAC modules SOP July 2017

Type I and Type II modules under development. AUDI quality system requires the PPV testing to be performed with Off tool/Off process components (October 2014). Timing for full assembly line readiness requirement in discussion.

Engineering / Equipment Readiness

Build-to-function design with integration of Thermal heat exchangers. Considered a significant project due to size of program and customer. 50mm tube and center evaporator is FAI.

Sufficient Engineering resources in place to implement program.

Cost Increases Ability to recover cost increase from Audi - evaluated on a case-by-case

Close monitor design changes – use tool kick off design as the reference for future negotiations

Commercial Agreement with Customer

Model specific penetration may fluctuate depending on Audi's volume distribution between Delphi and Behr

40% of the volume has been granted to Delphi per contract. A quarterly monitoring process will be put in place to verify that Delphi receives its share.

ThermalAUDI MLBevo HVAC – Background / Issues

Delphi

DGM Backup

DELPHI CONFIDENTIAL

PML Vs Customer Plants for MLB HVAC

Neckarsulm

Ostrow

BratislavaIngolstadt

621 KmsSenica to Ingolstadt

826 KmsOstrow to Neckarsulm

89 KmsSenica to Bratislava

Senica

Heat Exchangers

BehrMnichovo

A4, A5, A6, A7, A8

Touareg, CayenneA4, A5

737 KmsSenica to Neckarsulm

510 KmsOstrow to Bratislava

746 KmsOstrow to Ingolstadt


Plastics + Assembly

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DELPHI CONFIDENTIAL9

ThermalAUDI MLBevo HVAC - Volumes

AR (IHS Nov. 2013)

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ThermalAUDI MLBevo HVAC – Volumes walk - from Global to AR volumes

10

40% of Global volumes is 3.1M units which translates into 49% of the European volumes


ThermalAUDI MLBevo HVAC – Cash Flow (‘000s of USD)

Capital Investment 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 TOTAL

Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Buildings ($651) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($651)

Machinery & Equipment ($5,723) $0 ($1,552) ($1,113) ($432) $0 $0 $0 $0 $0 $0 ($8,820)

Information Technology $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Capacity Tools ($1,859) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($1,859)

Tools ($8,807) $0 ($186) $0 $0 $0 $0 $0 $0 $0 $0 ($8,994)

Total Gross Capital Spending (Tool Rebills Below) ($17,040) $0 ($1,738) ($1,113) ($432) $0 $0 $0 $0 $0 $0 ($20,324)

Sales Revenue & UnitsSales Units in 000's (vehicles) 5 194 289 407 424 410 395 403 368 249 3,146

Sales Unit JIS fee 5 29 112 251 269 259 248 262 233 188

Sales Revenue ($1,898) ($1,186) $32,669 $59,353 $96,419 $100,295 $97,442 $93,925 $94,255 $86,863 $56,837 $714,973

Cash Flow From Operations

EBITDA ($3,237) ($1,691) $2,761 $4,566 $10,464 $11,582 $11,796 $12,327 $13,579 $13,622 $9,212 $84,980

Depreciation & Amortization $0 $1,612 $2,571 $3,195 $2,940 $3,172 $2,943 $2,604 $2,535 $2,383 $1,854 $25,807

Operating Income Before Taxes ($3,237) ($3,303) $189 $1,371 $7,524 $8,411 $8,853 $9,722 $11,044 $11,239 $7,358 $59,172

Income Taxes - Enter local tax rate: 23.0% $745 $760 ($44) ($315) ($1,731) ($1,934) ($2,036) ($2,236) ($2,540) ($2,585) ($1,692) ($13,610)

Net Income (After Tax) ($2,492) ($2,543) $146 $1,056 $5,793 $6,476 $6,817 $7,486 $8,504 $8,654 $5,666 $45,563

Add Back all "Non-Cash Expense" (D&A) $0 $1,612 $2,571 $3,195 $2,940 $3,172 $2,943 $2,604 $2,535 $2,383 $1,854 $25,807

Cash Flow from Operations ($2,492) ($932) $2,717 $4,250 $8,733 $9,648 $9,760 $10,090 $11,039 $11,037 $7,520 $71,370

Rebills & Working Capital

Subtract Net Working Capital (3) ($9) ($81) ($73) ($102) ($11) $8 $10 ($1) $20 $238 $0

Tooling Rebilled to the Customer $0 $9,200 $186 $0 $0 $0 $0 $0 $0 $0 $0 $9,387

Other - Grants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total $0 $9,191 $106 ($73) ($102) ($11) $8 $10 ($1) $20 $238 $9,387

Total Cash Flow ($19,533) $8,260 $1,085 $3,064 $8,200 $9,637 $9,767 $10,100 $11,038 $11,058 $7,758 $60,433

Present Value Factor 1.00 0.85 0.73 0.62 0.53 0.46 0.39 0.33 0.28 0.24 0.21

Present Value ($19,533) $7,060 $792 $1,913 $4,376 $4,396 $3,808 $3,365 $3,143 $2,691 $1,614 $13,625

Cumulative Payback ($19,533) ($12,473) ($11,681) ($9,768) ($5,392) ($996) $2,812 $6,177 $9,320 $12,011 $13,625

Total Gross Investment $21,849 Weighted Average Over Program LifeNet Present Value $13,625

Return on Investment (ROI) 31.4% Average Operating Margin 8.3%

Payback Years 5.26

Country Hurdle Rate 17%


ThermalAUDI MLB evo HVAC – Income Statement (‘000s of USD)

(1) The JIS is only applicable for the Neckarsulm plant. Per vehicle: $1.46

Revenue2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total

Sales Units in 000's (Memo Only) 5 194 289 407 424 410 395 403 368 249 3,146 Sales Unit JIS 5 29 112 251 269 259 248 262 233 188 1,856

Sales Revenue ($1,898) ($1,193) $32,629 $59,194 $96,054 $99,901 $97,062 $93,561 $93,871 $86,520 $56,562 $712,264

Sales Revenue JIS (1) $7 $40 $159 $365 $394 $380 $363 $384 $342 $275 $2,709

Material & Freight Cost $529 $21,812 $41,249 $65,280 $67,362 $65,113 $61,900 $60,783 $54,969 $35,475 $474,471

Contribution Margin 0.0% 33.2% 30.5% 32.3% 32.8% 33.2% 34.1% 35.5% 36.7% 37.6% 33.6%

Structural Cost

Manufacturing Expense

Total People Cost $32 $1,313 $2,042 $2,958 $3,047 $2,898 $2,756 $2,805 $2,566 $1,736 $22,153

Project / Operations Expense $1,245 $0 $100 $127 $54 $0 $0 $0 $0 $0 $0 $1,525

Lease Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Startup Expense $95 $0 $10 $10 $0 $0 $0 $0 $0 $0 $0 $115 Other $76 $3,058 $4,790 $6,991 $7,203 $6,850 $6,546 $6,656 $6,091 $4,122 $52,381

Total Manufacturing Expense $1,339 $108 $4,481 $6,968 $10,003 $10,249 $9,747 $9,302 $9,460 $8,657 $5,858 $76,175

Factory Margin 0.0% 19.5% 18.8% 21.9% 22.6% 23.2% 24.2% 25.5% 26.8% 27.3% 23.0%

Engineering 5.0% ($60) $1,644 $2,986 $4,851 $5,046 $4,902 $4,726 $4,742 $4,370 $2,860 $36,067

SG&A 4.5% ($54) $1,479 $2,688 $4,366 $4,541 $4,412 $4,253 $4,268 $3,933 $2,574 $32,460

OCOGS 1.5% ($18) $493 $896 $1,455 $1,514 $1,471 $1,418 $1,423 $1,311 $858 $10,820

Depreciation (Existing Equipment) $20 $825 $1,290 $1,879 $1,935 $1,841 $1,759 $1,789 $1,637 $1,108 $14,083

Amortization (Existing Tools) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation (New Equipment) $791 $1,067 $1,201 $1,227 $1,236 $1,102 $845 $746 $746 $746 $9,707Amortization (3 Year Useful Life) $800 $680 $704 ($166) $0 $0 $0 $0 $0 $0 $2,018

Total Structural Cost $1,339 $1,589 $10,668 $16,732 $23,615 $24,522 $23,475 $22,303 $22,428 $20,655 $14,003 $181,330

Operating Income ($3,237) ($3,303) $189 $1,371 $7,524 $8,411 $8,853 $9,722 $11,044 $11,239 $7,358 $59,172

Operating Margin 0.0% 0.6% 2.3% 7.8% 8.4% 9.1% 10.4% 11.7% 12.9% 12.9% 8.3%

EBITDA - $ ($3,237) ($1,691) $2,761 $4,566 $10,464 $11,582 $11,796 $12,327 $13,579 $13,622 $9,212 $84,980

EBITDA - % 0.0% 8.5% 7.7% 10.9% 11.6% 12.2% 13.2% 14.5% 15.7% 16.3% 11.9%


ThermalAUDI MLBevo HVAC– Sensitivity Analysis Summary

FX – No FX. All sales, material and operating expenses are in EuroCommodity – Thermal has escalation agreement with Audi

AR

Operating Margin (%) 8.3%EBITDA Margin (%) 11.9%NPV $13,625Payback (discounted) 5.26 YrsPayback (%) 52.6%IRR (%) 31.4%

Increase Decrease

8.7% 7.9%12.2% 11.7%

$16,753 $10,5814.89 Yrs 5.73 Yrs48.9% 57.2%34.1% 28.7%

10%

Volume

Increase Decrease

8.8% 7.6%12.3% 11.6%

$18,349 $9,0894.74 Yrs 6.00 Yrs47.4% 60.0%35.3% 27.3%

Volume

15%

DELPHI CONFIDENTIAL

ThermalAUDI MLBevo HVAC – Operations Summary Sheet

Maximize return & capture growth

Minimize risk (to return and growth)

Lean Enterprise Objectives

High capacity utilizationHigh resource utilization Best in class cost structure

Best in class quality Best in class lead time

Best in class process flexibility

Best in class re-use

Best in class inventory

Note: Cash items are underlined

Operations Data for AR

Machine utilization: 94% (Assembly)Resource utilization:- 3 Shift operations assembly – 3 lines

- Mfg % to sales 10.8%- Logistics cost: 1.28% to sales- Total people cost: 3.1% to sales- Quality – FTQ 20,000ppm Assembly- Lead time: 2.5 (days)

- 15% flexibility absorbed with extra shifts

- Re-use: $8,350K – 28% reuse

- Inventory: 11 days

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DELPHI CONFIDENTIAL

Senica Floor Space Utilization – Shared Site with Packard

2015 floor space availability will be jointly monitored between Delphi Packard and Delphi

Thermal

ThermalSenica Floor Space

15

DELPHI CONFIDENTIAL

16

16

Delphi

DGM Supplemental

DELPHI CONFIDENTIAL

Volume History

18

2013 2014 EDIActual Fcst. 2013 2014 2013 2014

Touareg 153.8 142.8 138.0 138.0 15.8 4.8 - -

Cayenne 30.1 47.2 34.5 34.5 (4.4) 12.7

Total 183.9 190.0 172.5 172.5 11.4 17.5

2010 Capacity Increase Requests Fav / (Unfav)

Audi has delivered on their volume projections

DELPHI CONFIDENTIAL

Run Rate Improvement – 2013 Exit to 2016

19

Description $ Revenue Contribution

Margin Factory Margin

Operating Income

Probability Assessment

(High/Medium/Low)

H2 2013 Sencia Actual Results 15.1$ 2.9$ 1.8$ (0.2)$ 19% 12% -1%

2013 FY Exit Run Rate 30.2$ 5.80$ 3.6$ (0.4)$ 19% 12% -1.3%

Volume Changes Transfer of Cayenne/Touareg Program from Ostrow (Colorado 2 & Ext) 22.7 4.4 3.5 2.0 HighNew Business - Audit MLB - Program Win, High Confidence Volume/Margin Assumptions 32.7 8.0 6.3 0.6 HighNew Business - BWM Booster 1.9 0.5 0.4 0.0 HighWind down of Lower Margin Programs in 2014 (A3300 & X81) (4.6) (0.6) (0.1) (0.1) HighE1XX Reduction in Volume/Improvement in Margin (2.0) 2.1 2.6 2.6 MediumGazelle HVM Volume Increase 5.4 1.5 1.5 1.7 HighAtego & Axor Volume Increase 0.4 0.4 0.6 0.2 HighOther Volume Changes (1.3) (0.4) (0.7) (0.4) MediumTotal Volume Changes 55.2 15.9 14.0 6.5

29% 25% 12%Cost Structure Changes

Negotiated Reduction in Rent - - 0.4 0.4 HighImpact of Labor Renegotiation - 0.2 0.3 0.4 MediumReduction in Freight Costs and Supplier Mark Up from Insourcing of Injection Molding - 0.9 0.8 0.7 HighAssumption of Full Plant Capacity Assuming Packard Exits Shared Facility in 2015

Internal & External Services (Security, Canteen, O/S Services, Audits, ….) - (0.7) (0.7) (1.0) HighNo more share of resources from Mgmt. Staff with Packard - - (0.7) (0.7) HighFull responsibility for plant maintenance - - (0.1) (0.1) High

Total Cost Structure Changes - 0.5 0.1 (0.3)

FY 2016 Senica Operating Results 85.4 22.1 17.7 5.8

26% 21% 7%

2016 Senica BBP 103.0 24.9 19.8 8.9 % 24% 19% 9%

Variances (17.5) (2.8) (2.1) (3.1) % 2% 2% -2%

Major assumption differences between BBP and 2016 Senica Operating Results caused by:BBP assumed VW T6 HVAC to be produced in Senica while we now plan for Ostrow as PML.The FY 2016 Senica Operating Results are using the latest BC for MLBevo, BMW Boosterwhich is different from the BBP assumptions.

DELPHI CONFIDENTIAL

Audi MLB Comparison

20

USD

Per Unit Extended % Per Unit Extended % Per Unit Extended % Per Unit Extended % Per Unit Extended %

Volume (000) 154 98 3,146 60 64 Avg. Price 177.74 27.3 153.47 15.1 227.26 715.0 175.62 10.6 163.76 10.5

Material 123.21 18.9 69.3% 113.27 11.1 73.8% 150.82 474.5 66.4% 131.93 7.9 75.1% 119.59 7.7 73.0%

Contribution Margin 54.53 8.4 30.7% 40.20 3.9 26.2% 76.45 240.5 33.6% 43.69 2.6 24.9% 44.17 2.8 27.0%

Variable Mfg. Cost 0.0% 10.38 1.0 6.8% 0.0% 0.4 3.4% 8.93 0.6 5.5%

Fixed Mfg. 16.90 2.6 9.5% 11.55 1.1 7.5% 24.21 76.2 10.7% 5.98 0.4 3.4% 5.95 0.4 3.6%

Factory Margin 37.63 5.8 21.2% 18.26 1.8 11.9% 52.23 164.3 23.0% 31.72 1.9 18.1% 29.29 1.9 17.9%

Engineering 6.80 1.0 3.8% 5.86 0.6 3.8% 11.46 36.1 5.0% 9.97 0.6 5.7% 3.22 0.2 2.0%

SG&A 9.20 1.4 5.2% 7.90 0.8 5.1% 10.32 32.5 4.5% 5.32 0.3 3.0% 9.22 0.6 5.6%

OCOGS 3.65 0.6 2.1% 2.16 0.2 1.4% 3.44 10.8 1.5% 2.66 0.2 1.5% 2.96 0.2 1.8%

D&A 4.08 0.6 2.3% 4.04 0.4 2.6% 8.20 25.8 3.6% 1.66 0.1 0.9% 6.01 0.4 3.7%

OI 13.90 2.1 7.8% (1.70) (0.2) -1.1% 18.81 59.2 8.3% 12.12 0.7 6.9% 7.88 0.5 4.8%

EBITDA 17.98 2.8 10.1% 2.34 0.2 1.5% 27.01 85.0 11.9% 13.78 0.8 7.8% 13.89 0.9 8.5%

2013 Cayenne/TouaregAnnual

2013 Current Senica2nd half

Audi MLBevo(Total Program)Annual Average

2014 Cayenne/TouaregQ4 Fcst

2014 Current SenicaQ4 Fcst

Fully Loaded OST

Cayenne/Touareg

GME E1xx

GME A3300

Renault X81

Daimler Artego Axor

Gazelle Heater

CY13 Act

Mat & Frght % 69.3% 95.4% 76.4% 82.7% 75.8% 59.5%

Mfg & PVS % 9.5% 20.0% 18.4% 17.9% 12.3% 11.9%

Factory Margin % 21.2% -15.5% 5.2% -0.6% 11.9% 28.5%

Q4 13 Act

Senica Improving Margins at Senica The Senica HVAC programs, with the exception of the Gazelle

Heater, were unprofitable programs transferred from Donchery. The E1, A330 and Renault X81 programs will end in 2014 Verticle integration (sealing and injection molding) will help to

improve the Senica factory marginsStartup Risk The Cayenne/Touareg programs will be transferred to Senica in

2014. This will give the Senica team injection molding experience with a premium customer.


Senica, Slovakia Analysis to Support AUDI MLB Appropriation

ThermalSenica HVAC Profitability – 2013 Actual

Senica, Slovakia 2013 Actual (July - December) - Per Unit Margins

Contribution Operating

Program EOP Products Units Price Var. Cost Margin Fixed Cost Factory Margin Engineering SG&A OCOGS D&A Income CM% FM% EBITDA % O.I. %

Delta I Astra (A3300) Aug-14 HVAC 11,933 $110.90 $93.67 $17.22 $15.22 $2.01 $1.42 $5.55 $1.52 $0.15 ($6.64) 15.5% 1.8% (5.9%) (6.0%)

E1xx (Epsilon 2) Oct-14 HVAC 46,648 $103.43 $104.63 ($1.20) $9.73 ($10.93) $1.71 $6.69 $1.83 $0.19 ($21.35) (1.2%) (10.6%) (20.5%) (20.6%)

X81 (Espace) Oct-14 HVAC 3,326 $293.39 $263.82 $29.57 $13.65 $15.92 $4.51 $17.58 $4.81 $0.49 ($11.47) 10.1% 5.4% (3.7%) (3.9%)

Atego & Axor Dec-20 HVAC 25,198 $142.59 $110.95 $31.65 $9.91 $21.74 $1.83 $7.12 $1.95 $0.20 $10.65 22.2% 15.2% 7.6% 7.5%

Gazelle HVM Jul-20 HVAC 11,124 $168.14 $109.69 $58.46 $10.20 $48.26 $28.39 $7.01 $1.92 $33.91 ($22.97) 34.8% 28.7% 6.5% (13.7%)

98,229

Senica, Slovakia 2013 Actual (July - December) - Total Dollars in Millions Margins

Contribution Operating

Program EOP Products Units Revenue Var. Cost Margin Fixed Cost Factory Margin Engineering SG&A OCOGS D&A Income CM% FM% EBITDA % O.I. %

Delta I Astra (A3300) Aug-14 HVAC 11,933 $1.3 $1.1 $0.2 $0.2 $0.02 $0.02 $0.1 $0.0 $0.0 ($0.1) 15.5% 1.8% (5.9%) (6.0%)

E1xx (Epsilon 2) Oct-14 HVAC 46,648 $4.8 $4.9 ($0.1) $0.5 ($0.51) $0.08 $0.3 $0.1 $0.0 ($1.0) (1.2%) (10.6%) (20.5%) (20.6%)

X81 (Espace) Oct-14 HVAC 3,326 $1.0 $0.9 $0.1 $0.0 $0.05 $0.02 $0.1 $0.0 $0.0 ($0.0) 10.1% 5.4% (3.7%) (3.9%)


Gazelle HVM Jul-20 HVAC 11,124 $1.9 $1.2 $0.7 $0.1 $0.54 $0.32 $0.1 $0.0 $0.4 ($0.3) 34.8% 28.7% 6.5% (13.7%)

Other (OES, CH...) HVAC 98,229 $2.49 $1.3 $1.2 $0.1 $1.14 $0.10 $0.1 $0.0 $0.0 $0.9 49.6% 45.9% 37.6% 37.5%

Total $15.1 $12.1 $2.9 $1.1 $1.8 $0.6 $0.8 $0.2 $0.4 ($0.2) 19.4% 11.9% 1.5% (1.1%)

% of Sales 80.6% 19.4% 7.5% 11.9% 3.8% 5.1% 1.4% 2.6% -1.1%

*Financials are based on fully loaded actual basis

*Luxembourg Eng. expenses are allocated mostly in programs "GAZ" (new in 2013) and "Other" (for instance LUX Eng. Exp. for new pursuits - BMW Booster, AUDI MLB)

*E1xx EOP as of Oct 2014 (potential extension of lifetime under negotiation with significant price increase only)

*Intercompany profit for Evaporator and Heater Core deliveries from Ostrow included

*No vertical integration on injection molding (currently outsourced)

21

*11 + 1 Forecast EBITDA was 6.4% prior to year end allocation adjustments


ThermalSenica HVAC Profitability – 2016 Budget

Senica, Slovakia Analysis to Support MLB HVAC Appropriation

Senica, Slovakia 2016 - Per Unit Margins

Contribution OperatingProgram EOP Products Units Price Var. Cost Margin Fixed Cost Factory Margin Engineering SG&A OCOGS D&A Income CM% FM% EBITDA % O.I. %E1xx (Epsilon 2) 2016 HVAC 60,961 $124.9 $93.1 $31.8 $6.2 $25.6 $7.5 $6.2 $1.9 $0.2 $9.86 25.5% 20.5% 8.0% 7.9%Atego & Axor Dec-20 HVAC 59,390 $128.5 $95.1 $33.4 $5.7 $27.8 $6.4 $5.1 $1.9 $0.2 $14.10 26.0% 21.6% 11.1% 11.0%Gazelle HVM Jul-20 HVAC 55,931 $163.9 $111.4 $52.4 $5.9 $46.5 $9.8 $8.2 $2.5 $5.6 $20.49 32.0% 28.4% 15.9% 12.5%Col 2 Jul-16 HVAC 89,580 $173.0 $138.4 $34.6 $7.8 $26.8 $6.9 $4.3 $2.6 $0.0 $12.98 20.0% 15.5% 7.5% 7.5%BMW Booster Nov-21 HVAC 73,200 $25.8 $18.8 $7.0 $1.4 $5.6 $0.8 $1.3 $0.5 $3.4 ($0.38) 27.1% 21.6% 11.8% (1.5%)AUDI MLB Jul-25 HVAC 194,045 $168.4 $126.3 $42.1 $9.2 $32.9 $8.5 $7.6 $2.5 $13.2 $0.99 25.0% 19.5% 8.5% 0.6%Col 2 Extension >2016 HVAC 41,768 $173.1 $138.4 $34.6 $7.8 $26.8 $6.9 $4.3 $2.6 $0.0 $12.98 20.0% 15.5% 7.5% 7.5%

574,875

Senica, Slovakia 2016 - Total Dollars in Millions Margins

Contribution OperatingProgram EOP Products Units Revenue Var. Cost Margin Fixed Cost Factory Margin Engineering SG&A OCOGS D&A Income CM% FM% EBITDA % O.I. %E1xx (Epsilon 2) 2016 HVAC 60,961 $7.6 $5.7 $1.9 $0.4 $1.56 $0.5 $0.4 $0.1 $0.0 $0.6 25.5% 20.5% 8.0% 7.9%Atego & Axor Dec-20 HVAC 59,390 $7.6 $5.65 $2.0 $0.34 $1.65 $0.4 $0.3 $0.1 $0.0 $0.8 26.0% 21.6% 11.1% 11.0%Gazelle HVM Jul-20 HVAC 55,931 $9.2 $6.23 $2.9 $0.33 $2.60 $0.55 $0.46 $0.1 $0.3 $1.1 32.0% 28.4% 15.9% 12.5%Col 2 Jul-16 HVAC 89,580 $15.5 $12.40 $3.1 $0.70 $2.40 $0.62 $0.39 $0.2 $0.0 $1.2 20.0% 15.5% 7.5% 7.5%BMW Booster Nov-21 HVAC 73,200 $1.9 $1.4 $0.5 $0.1 $0.41 $0.1 $0.1 $0.0 $0.3 ($0.0) 27.1% 21.6% 11.8% (1.5%)AUDI MLB Jul-25 HVAC 194,045 $32.7 $24.5 $8.2 $1.8 $6.38 $1.64 $1.48 $0.5 $2.6 $0.2 25.0% 19.5% 8.5% 0.6%Col 2 Extension >2016 HVAC 41,768 $7.2 $5.78 $1.4 $0.33 $1.12 $0.29 $0.18 $0.1 $0.0 $0.5 20.0% 15.5% 7.5% 7.5%Other (OES) >2016 HVAC - - - - - - $3.7 $1.68 $2.0 $0.37 $1.61 $0.11 $0.07 $0.1 $0.0 $1.4 54.0% 44.0% 37.5% 37.5%Total 574,875 $85.4 $63.3 $22.1 $4.3 $17.7 $4.1 $3.4 $1.3 $3.2 $5.8 25.8% 20.8% 10.5% 6.8%

% of Sales 74.2% 25.8% 5.1% 20.8% 4.8% 3.9% 1.5% 3.7% 6.8%

*Full vertical integration on injection molding assumed*AUDI MLB and BMW Booster financials as per latest business case*E1xx considering potential PI for program extension (Oct.14)*Col 2, Atego, Axor and Gazelle volume and price based on SPS (plus GAZ financial supported by latest business case)*OES volume and price based on budget


Senica, Slovakia Analysis to Support AUDI MLB Appropriation

ThermalSenica HVAC Profitability – 2018

*AUDI MLB and BMW Booster financials as per latest business case

*Full vertical integration on injection molding considered

*Intercompany profit for Evaporator and Heater Core deliveries from Ostrow included

Senica, Slovakia 2018 - Per Unit MarginsContributio

n Operating

Program EOP Products Units Price Var. Cost Margin Fixed Cost Factory Margin Engineering SG&A OCOGS D&A Income CM% FM% EBITDA % O.I. %

Gazelle Jul-20 HVAC 62,352 $148.1 $101.0 $47.1 $5.3 $41.8 $8.9 $7.4 $2.2 $7.5 $15.72 31.8% 28.2% 15.7% 10.6%


AUDI MLB Jul-25 HVAC 407,380 $236.7 $174.9 $61.8 $9.9 $51.9 $11.9 $10.7 $3.6 $7.2 $18.48 26.1% 21.9% 10.9% 7.8%

Maserati, Ferrari Dec-19 HVAC 12,000 $500.0 $345.0 $155.0 $30.0 $125.0 $30.0 $27.5 $7.5 $8.3 $51.67 31.0% 25.0% 12.0% 10.3%

BMW Booster Dec-29 HVAC 119,496 $32.4 $23.3 $9.1 $1.7 $7.4 $1.0 $1.6 $0.6 $1.9 $2.36 28.1% 22.9% 13.1% 7.3%

654,146

Senica, Slovakia 2018 - Total Dollars in Millions Margins Contributio

n Operating

Program EOP Products Units Revenue Var. Cost Margin Fixed Cost Factory Margin Engineering SG&A OCOGS D&A Income CM% FM% EBITDA % O.I. %

Gazelle Jul-20 HVAC 62,352 $9.2 $6.3 $2.9 $0.3 $2.60 $0.6 $0.5 $0.1 $0.5 $1.0 31.8% 28.2% 15.8% 10.5%


AUDI MLB Jul-25 HVAC 407,380 $96.4 $71.2 $25.2 $4.0 $21.1 $4.9 $4.4 $1.5 $2.9 $7.5 26.1% 21.9% 10.9% 7.8%

Maserati, Ferrari Dec-19 HVAC 12,000 $6.0 $4.1 $1.9 $0.4 $1.50 $0.4 $0.3 $0.1 $0.1 $0.6 31.0% 25.0% 12.0% 10.3%

BMW Booster Dec-29 HVAC 119,496 $3.9 $2.8 $1.1 $0.2 $0.89 $0.1 $0.2 $0.1 $0.2 $0.3 28.1% 22.9% 13.1% 7.3%

Other (OES) >2018 HVAC - - - - - - $6.0 $2.76 $3.2 $0.60 $2.64 $0.18 $0.09 $0.09 $0.00 $2.3 54.0% 44.0% 38.0% 38.0%

654,146

Total $129.5 $93.1 $36.3 $5.9 $30.4 $6.4 $5.6 $2.0 $3.7 $12.7 28.1% 23.5% 12.7% 9.8%

% of Sales 71.9% 28.1% 4.5% 23.5% 4.9% 4.4% 1.5% 2.9% 9.8%

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Documents

Delphi Delphi Thermal AUDI MLBevo HVAC Vincent Fagard Neal Sweeney