Accounting & Tax

Delphi Files Promised Restatements

Company also agrees to waive the one-year statute of limitations for the SEC's investigation until next April.
Stephen TaubJuly 1, 2005

Delphi Corp. filed its previously announced restatement for 2001, 2002, and 2003 and announced that it is current in its periodic filings with the Securities and Exchange Commission.

The auto-parts giant also announced that its audit committee has concluded its internal investigation of certain accounting transactions over the past five years. Delphi is “poised to integrate the lessons learned into the company’s internal controls and channel all efforts and resources toward Delphi’s transformation,” said Robert H. Brust, chairman of the audit committee, as well as executive vice president and chief financial officer of Eastman Kodak Co., in a statement.

Delphi’s restatement reduced 2001 retained earnings by $265 million, to slightly more than $1 billion; lowered 2002 earnings by $24 million, to 318 million; and increased its 2003 net loss by $46 million, to $10 million.

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The restatements resulted from incorrect accounting for a number of transactions, including rebates, credits, and other lump sum payments from suppliers; disposition of indirect material and other inventories; warranty settlements with General Motors, Delphi’s former parent, and other unspecified transactions.

As a result of these accounting errors, Delphi is being investigated by the SEC and the Department of Justice. The company reiterated in a regulatory filing that it is cooperating fully; Delphi also agreed to waive the one-year statute of limitations for the SEC investigation until April 6, 2006.

In March, vice chairman and chief financial officer Alan S. Dawes as well as chief accountant and controller Paul Free left the company. Last month, Delphi announced that it accepted the resignations of treasurer Pam Geller and former vice president of treasury, mergers and acquisitions John Blahnik.