Aptiv PLC (APTV) 2016 Q1 法說會逐字稿

Good morning. My name is Kayla and I will be your conference facilitator. At this time, I would like to welcome everyone to Delphi Q1 2016 earnings conference call.

(Operator Instructions)

I would now like to turn the call over to Elena Rosman, Delphi's Vice President of Investor Relations. Elena, you may begin your conference.

Thank you. Good morning, Kayla, and thank you for joining Delphi's first quarter 2016 earnings conference call. To follow along with today's presentation, our slides can be found at delphi.com under the Investors section of the website. Consistent with prior calls, today's review of our actual and forecasted financials excludes restructuring and other special items and will address the continuing operations of Delphi.

The reconciliation between GAAP and non-GAAP measures is included in the back of the presentation and the press release. Please see slide 2 for a disclosure on forward-looking statements, which do reflect Delphi's current view of the future financial performance, which may be materially different from our actual performance.

Joining us today will be Kevin Clark, Delphi's President and CEO; and Joe Massaro, CFO and Senior Vice President. As seen on slide 3, Kevin will provide an operations update, as well as an overview of the quarter, and then Joe will cover the financial results and the 2016 outlook in more detail. With that, I would like to turn the call over to Kevin Clark.

Thanks, Elena. Good morning, everyone. Thank you for joining us. Before Joe gets into our financial results, I would like to provide some color on what was a great quarter for Delphi. So let's begin with the highlights on slide 5.

In summary, we had another very solid quarter, meeting our commitments and delivering strong revenue and earnings growth. Adjusted revenue growth was 6%, driven by market share and content gains across the portfolio. Operating income increased to $509 million. Margins expanded 20 basis points to 12.6%; and earnings per share increased 12% to $1.36. And lastly, we returned approximately $450 million of cash to shareholders.

We remain very confident in our 2016 guidance, as originally communicated back in January. There is nothing we see today that changes our view of the underlying macro environment, with some things stronger, offsetting shortfalls elsewhere.

I'll touch on the macros in greater detail on the next slide. The ramp-up of new program launches will continue to drive accelerated revenue growth and a strong focus on leveraging our robust business model will enable us to flex our cost structure to meet the challenges of virtually any environment.

In addition, we made a number of important announcements during our recent Investor Update Meeting in London. We unveiled a 48-volt vehicle solution, which improves engine performance, while lowering CO2 emissions by more than 10%. I'll cover this in more detail later.

I'll -- we also announced the IRS Section 7874 issue is behind us and that we've prevailed in our appeal, contending that Delphi should be treated as a UK tax entity under the US tax code. We announced a new $1.5 billion share repurchase program. Coupled with the recent dividend increase, this underscores confidence in our medium- and long-term outlook, which is driven by the safe, green, and connected mega trends that are creating new revenue opportunities for Delphi.

Continued material and manufacturing performance, which is funding incremental growth investments and driving margin expansion, which will translate into cash flow generation, providing additional levers to drive shareholder value.

During the quarter, we also acquired Puredepth, Inc., the leading provider of multi-layer 3-D display technology. Our collaboration with Puredepth was on display at the Consumer Electronics Show in a concept Mustang, which has driven significant customer interest.

Slide 6 is an update on our view of the macro environment, which, as I just mentioned, continues to remain balanced relative to the assumptions underlying our 2016 guidance. I'll hit a few of the highlights. Starting with positives on the left, regulatory trends and consumer demands continue to influence fuel economy, emissions, and vehicle safety standards, driving content per vehicle growth. And we continue to expect steady growth in global vehicle production, driven by continued growth in China, North America, and Western Europe.

Moving to the middle of the chart, consistent with our initial planning assumptions, we expect commodities and pricing to remain relatively neutral for the balance of the year. While we're currently seeing a slightly stronger Euro, this is being more than offset by the weakened Chinese RMB, with China being a meaningful part of our business.

Moving to the challenges on the right, we've seen further declines in vehicle production in both South America and Eastern Europe, and increased weakness in the global commercial vehicle market, now expected to be down low single digits, driven by double-digit decline in the North American off-highway market.

Lastly, working closely with our suppliers and OEM customers to mitigate any near-term supply disruptions due to the recent earthquakes in Japan, which will affect the second quarter, but will be made up during the balance of the year. Joe will provide more context on this a little bit later. Given the various puts and takes, our overall outlook remains in line with our prior guidance.

More on China on slide 7. I just returned from the Beijing Auto Show, where I met with several of our top customers. We heard a relatively consistent view of the China market, both global and local OEMs remain very confident China will continue to drive increased global vehicle production, estimating 2016 growth in the 4% to 6% range, resulting from continued strong demand for SUVs and crossovers.

There's also increasing dialogue regarding new energy vehicles and electrification in this market, which given our product portfolio, provides further revenue opportunities. Delphi remains well-positioned in this market and expects to grow 10 to 12 points above vehicle production in 2016, benefiting from market share gains and the trend toward higher content vehicles.

Growth in the China markets reflected in our new business bookings on slide 8, which totaled approximately $7 billion during the first quarter. We had a number of important customer bookings, as well as several conquest wins, including a major electrical architectural win with FCA on the Ram truck in North America; powertrain wins with Chang'An in China; and Ford in North America; and key infotainment wins with Volkswagen in North America, as well as with SGM in China.

The right side of the chart reflects the balanced geographic mix of our bookings, which will drive strong revenue growth over the next few years. The increased geographic and customer diversity ensures that we're not dependent on any one region, segment or customer for growth.

Now, given our portfolio of safe, green and connected technology solutions, and our track record of flawless execution, we're increasingly becoming a strategic partner of choice for a number of our customers, which is reflected in our record bookings over the last few years.

Turning to slide 9, these are just a few examples of launch programs driving revenue growth this past quarter. Our Electrical Architecture segment is benefiting from increased content on the BMW X5 with an onboard charger for plug-in hybrid powertrains.

Also with BMW, our Powertrain division launched several components on the new Active Tourer. And the Electronics and Safety division is launching multiple programs, including short-range radar in the Kia Cadenza; an infotainment content on the Lincoln MKX; Buick Excelle; and Dodge Ram truck.

Moving to slide 10, as we highlighted at our Investor Day and was reinforced in Beijing last week, customer interest in electrification is gaining momentum. Our customers increasingly see the need for electrification of the powertrain to close the regulatory gaps on CO2 emissions and fuel economy. And 48-volt hybrids are an affordable, no compromise solution. An optimized Electrical Architecture Systems is necessary for the electrification of today's vehicles, which is the very foundation for our volt, 48-volt solution.

Customer response has been strong for our total systems solution, which represents approximately four times the content opportunity compared to a traditional internal combustion engine for Delphi. Now, in addition to the two global customer programs we've already been awarded, we received strong interest from several automakers to explore collaborating on this very interesting technology.

Turning to slide 11, Delphi continues to be recognized for its technology leadership by both customers and industry experts. Delphi is proud to receive the first-ever General Motors Innovation Award for our V2X module, which will be introduced on the all new Cadillac CT6. We are the first to market with this breakthrough technology.

We also won our 18th Automotive News Pace Award, after once again, leading the industry with three nominations. The Dual Role Hub is a custom USB application that enables Apple Carplay, allowing the radio and an iPhone to be recognized simultaneously as a host device. It's the only solution on the market with this versatile functionality.

Leading in innovation is the foundation of our strategy for growth. And these industry awards are a strong validation that we're solving our customers' most challenging problems with industry-leading technologies.

Moving to slide 12, before I hand things over to Joe, I want to underscore our commitment to driving consistent, sustainable, and importantly, profitable growth. Since our IPO, we've completed several transactions that enhanced our technology portfolio and better positioned us for the future. Our Advanced Technologies are aligned to the mega trends of safe, green and connected, positioning us for accelerated revenue growth.

Our lean cost structure and global footprint allows us to further leverage both our scale and regional capabilities to drive revenue growth and margin expansion. And lastly, we will continue to execute a very balanced and very disciplined capital accretion -- allocation strategy to drive increased shareholder returns. Our track record conveys our execution capabilities and we are very confident we will deliver continued outperformance for years to come. I now want to turn the call over to Joe.

Great. Thanks, Kevin. Good morning, everyone. I will start by covering our first quarter performance and then discuss our second quarter and full-year 2016 guidance. Let's start on slide 14, with a snapshot of our first quarter financial performance. As Kevin mentioned, we were pleased with our results, which reflected both strong revenue and earnings growth.

Revenue was up 7%, or 6% adjusted for currency, commodity, acquisitions and divestitures. Our operating margins expanded 20 basis points. Earnings per share grew 12%, largely the result of increased net income, and in the quarter, we purchased 5.6 million shares totalling $370 million. The adjusted tax rate was 18% for the quarter.

Slide 15 provides greater detail of revenue for the quarter. Starting on the left, you can see we had strong sales growth, including the impact of M&A, primarily HellermannTyton, which had organic growth of 13% in the first quarter. Foreign exchange and commodities were a slightly bigger headwind, primarily driven by dollar strengthening against the Chinese RMB and the price of copper.

Moving to the right, North America, Europe and Asia saw strong growth in both -- on both a reported, as well as an adjusted basis. As you can see, the South American market remains very weak and we are not planning on a near-term recovery.

Accordingly, we have taken significant steps in the past year to reduce our South American footprint and cost structure, including exiting our business in Argentina and reducing the number of Brazilian manufacturing facilities from nine to four. And while we remain able to serve our global customers in South America, we have significantly reduced the impact of the market downturn on Delphi.

Turning to operating income, slide 16 walks the year-over-year change for the first quarter. Our operating results were consistent with our expectations. Strong flow-through from volume growth contributed to margin expansion in the quarter, helping to offset the impacts of launch and growth-related activities on our net performance.

The impact of the China volume ramp and the added cost to support new program launches in E&S and EEA totaled approximately $35 million in the quarter. The China inefficiencies discussed previously represented approximately $5 million in Q1 and will not have an impact going forward. The remaining launch costs will further moderate over the course of the year and continued to be factored into our full year of 2016 guidance.

Slide 17 takes us through the performance by segment. Electrical Architecture had adjusted growth of 5% and HellermannTyton contributed approximately $200 million of revenue in the quarter. EEA margins expanded 70 basis points year over year.

Powertrain also delivered 5% organic growth, driven by gas systems, partially offset by lower commercial vehicle volumes and powertrain continues to deliver strong margins, despite nearly 40 basis points of FX headwinds, primarily driven by the Chinese RMB.

Electronics & Safety organic growth accelerated to 13% on new program launches, particularly in active safety and infotainment programs in Europe and China; partially offset by lower mechatronic, which represented a 3% negative impact on E&S growth in the quarter. Active safety and infotainment continue to see strong growth of approximately 70% and 10%, respectively.

Our E&S margins of 10.3% were as expected and reflect the launch-related activities I just discussed. As it relates to the remainder of 2016, we expect continued strong growth from new launches and for margins to expand over the course of the year, as we ramp production volumes and improve performance.

Turning now to slide 18, we saw total EPS growth of $0.15, or 12% for the quarter, including $0.11 from increased earnings. Share repurchases contributed $0.07, more than offsetting the impact of a higher tax rate. As you know, the tax rate can vary from quarter to quarter. However, there is no change to our 17% full-year estimate.

Now, turning to the outlook on page 19, as Kevin mentioned, given the puts and takes, there are no changes to the 2016 guidance. Revenue is driven by accelerating organic growth throughout the year and the full-year effect of the HellermannTyton acquisition. We expect to expand margins by roughly 50 basis points and 2016 EPS is expected to be in the range of $5.80 to $6.10, reflecting year-over-year growth of 14%.

Second quarter revenue was forecast in the range of $4.125 billion to $4.225 billion. This includes the impact of the supply disruptions from the Japanese earthquakes, estimated to be $75 million of revenue and $20 million of operating income at the midpoint of our guidance.

While we continue to monitor and assess the potential impact, conversations with our customers indicate that any near-term production disruptions will be made up over the balance of the year. We expect second quarter EPS in the range of $1.50 to $1.60, up 16% at the midpoint, which includes the impact from the earthquake supply disruptions.

Our strong balance sheet and capital allocation strategy, outlined on slide 20, remains an important lever to enhance shareholder value. On the left, we expect cash flow from operations to grow approximately $2 billion, up almost 20% from 2015.

And the deployment priorities on the right are consistent with our strategy, maintaining a strong balance sheet and investment grade rating. We are investing in our business through increased capital expenditures, supporting new program launches, information systems that increase efficiency and productivity, and ongoing footprint rotation to best-cost countries.

We are committed to paying a competitive dividend and to the extent we have excess cash, we have a track record of returning it to shareholders via share repurchases, as evidenced by the $370 million of repurchases we did in the first quarter.

As we sit here today, we do not expect repurchases to continue with the first quarter pace. However, we intend to be opportunistic while remaining committed to executing a balanced and disciplined capital allocation framework.

Now, before I hand things back to Kevin, turning to slide 21, we are focused on executing value-enhancing portfolio modifications. As such in the quarter, we completed the final step in the divestiture of the Thermal business with the sale of our stake of a Chinese joint venture.

And we have acquired Puredepth, the leading provider of patented 3-D multi-layer display technology. You can expect us to continue to pursue investments that enhance our existing technology portfolio, strengthen our competitive position, and drive increased value for our shareholders. I'll now turn it over to Kevin for some closing remarks before we open up the call to questions.

Thanks, Joe. Now, summarizing on slide 21, we delivered another strong quarter, executing on the relevant advanced technologies that enable us to outgrow the markets we serve. We believe we're well positioned to deliver on our commitments in 2016. High single-digit organic growth, roughly 50 basis points of margin expansion, solid mid-teens EPS growth, and $1.2 billion of free cash flow.

We continue to optimize our cost structure, increase the flexibility of our workforce, and execute flawlessly. We're investing in profitable growth where we see opportunities. We remain disciplined in our allocation of capital, investing in both organic and inorganic growth, and returning excess cash to shareholders through share repurchases and dividends.

Through all of this, we continue to demonstrate our ability to deliver on our commitments, even against the backdrop of a dynamic environment. So with that, we'll now open up the line for questions.

(Operator Instructions)

Our first question comes from the line of Rod Lache from Deutsche Bank.

Good morning, everybody.

Good morning, Rod.

Had a couple questions. One is on the pricing, it looks like it came in at 2.1% this quarter. I know you've consistently guided to 2%, but it's been running lower, up until recently, and was wondering if this is just growing Electronics & Software and how you are looking at offsetting that.

And then also, noticed that the FX/commodity impact on the EBIT bridge was positive. Looked like it was negative on the top line. Is that somehow related to transactional effects with the Euro appreciating versus the EE currencies, or is that something else?

So why don't I start on the pricing and then you can augment it, Joe, and then talk about FX and commodities. So Rod, with respect to guidance on pricing, we remain -- our guidance in the range is 1.5% to 2% pricing. I think this quarter was slightly higher than that. Given our much faster growth in E&S over the next 12 months, growth is roughly double our overall corporate growth.

And as we've talked about in the past, E&S tends to have price down 2% to 3% versus a balance of our portfolio that is less than 2% and the rapid growth in that segment is what's driving the overall increase in price downs on a year-over-year basis. Other than that, nothing has changed from a business model standpoint. Joe, do you want to --

Sure. Rod, on the FX commodities, we did -- as we mentioned a couple of times during the prepared remarks, the RMB did impact us negatively during the quarter, from both a revenue and OI perspective. Apart from that, everything else was fairly balanced out. We also did see about a $40 million headwind from copper, decreased copper pricing in the quarter.

But as we've talked about before, that has a very low OI flow-through, given the fact that we mostly have pass-throughs to customers and have the rest hedged out. So revenue, slightly bigger impact. OI, with the exception of the CNY, everything else balances out.

Okay, but it did look like commodities and FX, if I'm reading your chart correctly, was like a $6 million positive, even though it was a negative on the top line. So something must have -- is that a timing issue?

No. It's -- you've got a -- I'm sorry. When I say balance, you do have about a $6 million positive, about a $4 million net from FX, everything offsetting the RMB. And then about $2 million flow-through for commodity.

That would all be transactional-related.

Transactional-type stuff. And then lag on the copper.

Okay. That makes sense. And just lastly, can you just comment on how we should be thinking about the effect of launch costs over the course of this year, as obviously, your organic growth starts to accelerate? And there was an uptick in D&A this quarter. Is that something that we should assume as a run rate going forward?

With respect to launch in the general trend, and I'll let Joe talk about the specifics, as we talked about on our fourth quarter earnings call, we certainly saw the effect of China accelerated launch in Q4. China's behind us in Q1. I think Joe referenced in his comments that effectively it was a $5 million headwind in Q1 going to zero.

Launch costs in E&S and EEA, which declined from Q4 to Q1, and then will continue to decrease in Q2 and effectively go away in the back half of the year. Joe, do you want to --

Yes, I mentioned we're about $30 million in launch costs across E&S and EEA in Q1. Another $5 million for China. The $5 million does go away. This is the last quarter we'll have those inefficiencies, Rod. Then I think you start to see -- you will see it come down roughly $20 million in Q3 -- I'm sorry, in Q2. And then below that, in Q3, and basically working our way out of it by the end of the year.

Okay. And the D&A?

D&A, I do think you should think about that as a run rate, as we've put more capital into support launches.

Great. Okay. Thank you.

Our next question is from John Murphy from Bank of America.

Good morning, guys.

Good morning.

Joe, just one follow-up. You said $20 million on the op income line in the second quarter for the Japanese hit; is that correct? And that probably would just equate to about $0.05 in the quarter. Is that about right?

Yes, that's $20 million at the midpoint, about $0.06 of EPS.

Okay, great. Then just a second question. There was relative strength in Europe, up 9%. I'm just curious if you're seeing anything going on with there with mix or take rates on some of your product. Also, in conjunction with that, you highlighted the idea that you had further cost rotation, a low-cost sourcing. I'm just curious what's going on the revenue line or in mix, and then also on the cost side and the potential going forward?

So I'll start it. Listen, in Western Europe, we're seeing the benefits of a stronger market. I would say that's partially offset by weakening in Russia. With respect to the strong growth, I would really tie it to market improvement, as well as just timing of launching new programs, John. I don't think it's anything particular to -- or unique to content gains or anything like that.

With respect to footprint, and Joe should comment on this, we continue to aggressively attack our cost structure. A big piece of the restructuring that we've been doing over the last few years and we'll continue to do is focused on rotating footprint out of Western Europe, into Eastern Europe. Joe?

I think, John, as we've been able to do over the years, you've seen us maybe initially move the EEA or some of the E&S plants to Eastern Europe. We're now at the point where we can move some of the Powertrain facilities, which have much more complicated manufacturing processes, but we've now built a base of Powertrain capabilities in Eastern Europe and we're starting to move those production activities east as well. So that's a continued process, and again, I think in line with our overall best cost country rotation plan, as well as our margin outlook for the coming years.

So as we think about that, though, what's the opportunity? Because I mean, it seemed like a lot of that had been executed already, but just sounds like a good piece of news. Are you halfway done or three-quarters of the way done? And then as we think about the $7 per hour labor costs, I mean, is this -- could this potentially have a positive impact on that going forward?

I think it will certainly help us maintain our current labor dollars. As you think about just globally, there's obviously ups and downs in labor economics and in part, we're doing this to sort of maintain our position. I would say as you think about Powertrain, they are really in the first third of this rotation is the way I would think about it.

Okay.

I mean, John, if I can -- so listen. Everything we do has a -- like this has a very positive return. So it's two things. It's one, to Joe's point, it's about strategically positioning our footprint over the long-term so that we maintain the industry's most competitive cost structure.

And it's all about driving increased return. So net-net, yes, there's an incremental profit improvement impact, you know, that will flow through our numbers in the out years. So there certainly is a benefit on top of maintaining our cost structure and actually improving it.

Okay, that's helpful. And then lastly, it just seems like there's some incremental wins going on here in infotainment. I'm just curious, are you gaining market share there? And curious if you are. Is that just purely because of content, or is that also your ability to backward integrate -- or to integrate, not backward, but integrate into the electrical architecture of the vehicle?

Yes, listen. I -- we don't really sell that as a package. I think, underpinning everything we do from a vehicle electrification, system integration standpoint, I think we would tell you we're at a competitive advantage given our electrical architecture capabilities, because for all the happen flawlessly, the electrical architecture is an important component on there.

So internally,, we certainly partner and work together, but in terms of how we go to the customer, customers tend to buy specific products. Our bookings in E&S have been close to $2 billion per year each year over the last four years; we would expect to -- actually over $2 billion. We would expect to book roughly $2 billion again this year, which is roughly two times our current run rate from a revenue standpoint.

Infotainment's going to be our fastest growing, or one of our fastest growing segments, growing roughly 20% over the next few years. That's faster than the overall market. I think we're benefiting from where we sit in medium- and high-end systems, where you see content growth. And then we're probably also gaining some share in certain markets.

That's incredibly helpful. Thank you.

Our next question is from Brian Johnson from Barclays.

Yes, good morning. I want to talk a little bit on PureDepth, especially in the context of cockpit electronics and infotainment. Maybe a couple of things. Where are you right now in terms of cockpit electronics or what we would call dashboards?

Second, how do you see that playing out in the next three to five years along a couple dimensions, first, the transition from gauges and dials to flat screens, or I guess for you, 3-D flat screens? And then kind of when do you expect that inflection?

And second, to what extent will this be purchased by OEMs as a module along with the center stack infotainment or is it still a separate purchase? And then finally, any details on PureDepth in terms of transaction amounts, if you could disclose it?

Yes. Joe, can talk about the transaction amount. Why don't I start with where we are. Clearly, I think, Brian, as you know, the cockpit's moving to digital and what PureDepth gives us is effectively enhanced graphics and 3-D capabilities. I can tell you at the Consumer Electronics Show, and I know you visited our booth, the 3-D graphics on the cluster we had got more attention from our customers than any other technology we showed at CES, including our automated drive capabilities.

So it is a very interesting technology that we're integrating into our cluster business. Where we sit today, we sell clusters, we sells center stacks, as you know, with infotainment systems. You're going to see more display; you're going to see more glass in cars. We're convinced of that. You're going to see that happen over the next two, three, four, five years.

From our perspective, it's important that we're well situated and we believe we are and we think that's reflected in our strong infotainment wins. The cluster business is a business that is, for us, not real large today, but is growing rapidly and we think PureDepth technology is something that will help us advance our growth. Joe, do you want to --

Sure, Brian. From a transaction perspective, just a couple of things. Relatively small from a value perspective, about $50 million we paid for the acquisition of PureDepth. We've worked closely with PureDepth, at CES Show over the last couple of years, so we know them well.

Integration was fairly easy. We've basically completed it. This isn't a deal that will have a long-run on integration. So it's now tucked in and the development efforts are underway, as they are now fully-owned company versus just a development partner. So it was pretty much taken care of in the quarter.

Okay. And just following up a couple of things, you mentioned it's not real large for you. Can you give us a sense of either your share of the global instrument cluster market or what share of E&S instrument clusters is?

It's small. It's small.

And I guess second, the one question, because I know I had a lot of them, is kind of who are the buyers at your OEMs for instrument clusters versus infotainment, and as they -- as instrument clusters go digital, how is that shifting?

I think you're -- today it varies a bit by customer. Some customers, they are separate buying groups and engineering groups, but they are increasingly becoming more integrated with the infotainment function.

Okay.

So that is the trend and it will continue. Okay?

Thank you.

Our next question is from Itay Michaeli from Citi.

Great, thanks. Good morning, everyone. Maybe just a question on the organic growth in the second half of the year, given some of the moving parts around Japan and the backlog. Can you maybe help us think about Q3 and Q4 and also maybe what the rough backlog split is between the first half and second half this year?

Sure, Itay. It's Joe. Obviously, first quarter, we saw 6% organic growth. Second quarter, we're right around 8%, just a little under 8%. Japan's worth about 2 points of that, so we basically, that's -- that negative's already included in the 8%. So we see that moving to the back half of the year.

Right now, we see Q3 and Q4 between 12% and 10%, respectively. That -- those numbers get a little cloudy obviously though just on a year-over-year comp basis, just given some of the activities on China last year. But right now, we're looking at 12% growth and 10% growth, Q3, Q4.

And on a relative basis, if you remember, China, very weak Q3, very strong Q4. And obviously, those revenue growth numbers include some snapback related to Japan.

We're currently assuming, for lack of a better barometer at this point, just we pick up half in Q3, half in Q4. So it's about 1 point in each of the two quarters, Itay.

That's very helpful. And then maybe just on the share buybacks, and I know, Joe, you mentioned that the first quarter rate does -- shouldn't be modeled continuously throughout the year. But maybe additional help in terms of how to model that the rest of the year? Should we assume maybe that same ratio, free cash flow in the next few quarters, or is there some other guideline to think about?

Yes, I would -- it's certainly not the Q3 activity. We -- I think -- I'm sorry, the Q1 activity. We were obviously fairly aggressive in Q1. Saw the dislocation in the marketplace. As we said, we will be opportunistic, as those things happen. I think for modeling perspective, Itay, to be honest, that would be around $50 million to $75 million per quarter.

I think we're going to - we've got -- we're going to be, obviously, continuing down the path of our capital allocation strategy, but we'll be mindful of M&A opportunities and the stock's obviously come up off the lows that we saw in the February timeframe. So we would be thinking $50 million to $75 million is probably the right -- from a modeling perspective, realizing we will obviously reserve the right to be opportunistic as well going forward.

Great. Lastly, quickly, maybe for Kevin, just with the conquest wins you've been able to have and $7 billion of Q1 bookings, any -- I know it's still early in the year, but any initial thoughts of where maybe bookings can track this year relative to prior years?

Yes, I would, Itay, I would expect bookings to be roughly at the levels that we did last year, $26 billion, or a bit more. That can be affected by timing of awards, so I warn you on that. But given our current line of sight and given the number of opportunities and the estimated timing of those opportunities, we should be at roughly $26 billion or more.

That's very helpful. Thanks, everyone.

Thank you.

Our next question is from Patrick Archambault from Goldman Sachs.

Good morning, Patrick.

Good morning, guys.

Hi, Patrick.

Just one quick follow-up on the Japan issue. Can you just dimension that a little bit for us? I know there was another company that -- also, an infotainment, that had an impact as well. And what's the visibility? How broad-based has this impact been on your supply chain?

Are some of these facilities now beginning to turn around and start produce -- like, is there any visibility as to when they might come back online? What's your confidence on when that comes back?

Listen, I think there's a reasonable amount of visibility, but I would say the situation's evolving. Patrick, I think as an industry, from a supply chain standpoint, we do a very good job of -- and this is across the board. This is a supply base as well as the OEs, working together to identify where issues are and identify either alternative sources to manufacture or substitute products that the OEs approve, to mitigate the overall impact of these types of situations.

So we all have a vested interest in ensuring there's as much visibility as possible and that we're working together to resolve the problem to ensure that our OEs have the product to build the car. Joe, maybe you could comment more on the numbers?

Sure. I think from, again, as we look at the numbers, that's a lot of dialogue with the suppliers. We have two suppliers, one's a little bit more significant than the other that's impacted here. Obviously, we talk to the customers as well. I would say to put it in perspective, if you can think back to the tsunami, there you had physical damage to manufacturing facilities and that tended to be over a longer period of time.

What we've been told so far and what we're seeing, this is more a case of damage to in-process inventory than the facilities themselves. So that gives us some confidence that the delays will be both shorter-term in nature and recovery should be quicker. At the midpoint, we've estimated $75 million of revenue. That includes both direct and it's about 50/50, both direct impact, as well as indirect.

So direct would be where we don't have supply and can't ship to a customer. Indirect and GM is a good example of that, would be a case where a customer has told us they are impacted by another supplier and won't be producing, so therefore, we're not going to ship to them either.

At the high end, it could be $100 million of revenue and close to $30 million of OI. That's reflected in the low end of our guidance. So high end of Japanese risk, low end of our guidance. At the high end of our guidance range, it's about $50 million of revenue and $10 million of OI.

Got it.

Patrick, we have -- so we have a team of supply chain and manufacturing people who have been in Japan now for weeks, working with the supply base there, as well as with our customers, trying to develop and then ultimately, implement solutions to any of these problems. So it's -- very proactive.

Got it. No, appreciate all the details on that. Very helpful. Just one second question, I mean, we've touched on it a little bit in this call so far, but can you just remind us, obviously the CAGR that you've outlined in the infotainment business, back at the analyst day of 20%, it's double your industry forecast of 10%, double -- pretty close to double ours as well.

So can you just remind me, clearly, there's been a lot of content opportunity there and some share gains, but specifically, where are you winning business from others that's allowing you to see so much relative growth, if you will?

Well, when you look at growth in infotainment, it really, for us, it's across the board by region. It's probably fastest growing, as you can imagine in China, off of a smaller number. When you think about the China market, for us that's -- for players like ourselves, I would characterize it as the perfect opportunity.

It's solid vehicle production growth, as well as when you look at mix of vehicles, they tend to be higher-end SUVs, crossovers or sedans with significant content. And given the fact that they are significant content and we're winning business in regions, in areas like that, we're benefiting from that stronger, much stronger mix. But we're also, we've won and we're launching big wins with some of the European OEs, both what I would call the mass market as well as luxury, as well as here in the US.

Terrific. Appreciate the color, guys. Thanks a lot.

Our next question is from Ryan Brinkman from JPMorgan.

Hi. Thanks for taking my question.

Hi, Ryan.

Hi. Maybe one more on PureDepth. Just from my quick Googling here this morning, it seems like there was a strong non-autos market focus prior to the acquisition, primarily in the sort of gaming and mobile industry. So I'm sure the motivation obviously is to enhance your technology capabilities and drive information systems.

But like with HellermannTyton, are you happy to continue with the non-automotive business as well? Then what is your general philosophy toward non-auto businesses that may sort of peripherally come along as you make, I guess, increasingly technology-type acquisitions?

No, I -- and listen, that's a great question. The original technology started in the gaming industry, and in fact, we're not here to announce we're heading into gaming. The reality is that has been a technology that they de-focused and is running off and the sole focus is in the automotive space. But that is where their roots actually began, Ryan. So it's a very good question.

Okay, got it. Thanks. And then just last one, I thought to check in with another quarter past Volkswagen emissions issue, if you're seeing any corollary uptick and interest in 48-volt products, because there have been some articles recently discussing how whereas Europe was maybe behind Japan and the US in terms of electrification that maybe now there's going to be a big inflection.

So perhaps remind, what is embedded in the long-term guidance from the Analyst Day relative to electrification in Europe? I'm curious if it already incorporates a big increase or whether there might be more upside based upon your latest conversations?

Well, listen. Our outlook for electrification is it's kind of high. It's -- what is it, roughly 25% in 2025, a couple points of EP -- 20% -- sorry. 20% in 2025. About 2 points of that mix is pure EVs. The balance is hybrid and 48-volt. And our estimate is 48-volt is roughly half, so call it 9 or 10 points. I think that reflects fairly rapid growth on the hybrid and 48-volt side.

If you look at IHS and based on conversations with customers, that mix of EV and hybrids out in 2025 has actually increased over the last six months. And, listen, I'd just say there is maybe an opportunity that accelerates further. Clearly, there's more dialogue and more interest from our customers as they focus on solutions to reducing CO2 emissions and increasing fuel economy.

And things like 48-volt where you can get a significant benefit at a fraction of the cost, it's a great value proposition. It's a terrific value proposition. So we're having increasing dialogue. And it's really across the globe. It's not just in Europe and in North America.

There's actually a couple customers in China that we're working with now on 48-volt system solutions. And what positions us really, really well is you think about it being in the Powertrain business, in the Electronics & Safety, and then importantly, in that Electrical Architecture business, we actually have solutions to every single aspect you need to provide a complete system solution to the OE.

(Multiple speakers) Okay, great. Thanks a lot.

Our next question is from David Leiker from Baird.

Hi, David.

Good morning.

Good morning, David.

As kind of follow-up a little bit on the discussion that Ryan was just going through. In China, around the Auto Show and you walk the floor there, it seems like much more interest in electrification than here in the US. I was just wondering if we could talk about the new energy vehicles, as they are calling them and bringing them to market and maybe you answered part of this. But a little bit more focus specifically in terms of the opportunity in China where Delphi is positioned relative to competition there and the products and technologies capabilities that you have that you can bring to market there?

Sure. So when you think about it, let me start with, as you know, David, you were just there. We've been in the China market for close to 25 years serving the China market. When you look at our capabilities, everywhere from engineering, design development to manufacturing, I would say there isn't a supplier out there that has the same capabilities. And we're localized in virtually all of our product lines.

I think of our 33 product lines, we're 30 or 31 are localized. So we have a full portfolio that we can provide to our customer base in region. And we can meet their needs from a design standpoint, as well as a cost standpoint. I think that starts with electrical architecture. I think it's augmented with inverters -- converters, battery packs, things like that, that we can bring to bear.

And those products that we don't manufacture today, like electric motors, there are partners that we're using strategically to sell the whole system solution. When you look at the market, if there is a market that is right for electrification, where it should be easier to implement, it's the China market.

Based on discussions with both the globals, as well as the local OEs, everyone is convinced that the government is focused on enforcing regulations and reducing CO2 emissions and addressing the pollution problem. So enforcement is there. The infrastructure investment is easy to make. And from a growth standpoint, it's probably -- it probably is one of the biggest opportunities. We'll see how quickly it comes to fruition though at this point in time.

Okay, great. That's perfect. Thanks. Then just another item here on the ADAS self-driving cars, autonomous vehicles, just want to get a perspective of where you stand today on your capabilities to essentially provide a turnkey solution to an automaker who might be found lacking a bit in the investment or behind the pack of some of the leaders in this space? Are you at the point that you can offer a turnkey solution to an automaker who wants to play catch-up?

Yes, we can certainly offer a turnkey solution from a technology standpoint. And we are having dialogues with various parties with respect to that. I think the challenge for both customers, as well as folks like ourselves, are kind of twofold. Near term, it's cost, and it's how you sell commercially, you know, commercially effective solution.

And then second, it's the regulatory/legal environment and how you cross those various bridges. I mean, as we said in the past, the biggest challenge to get to fully automated is not going to be the technology or the costs. It's really going to be regulation and legal liability.

I think the important thing, from our perspective, is we sit -- we look at automated driving as, quite frankly, the far end of the spectrum on active safety. What excites us most is getting to Level 2 automated driving, which is fully commercializable today. You can get to 80% of the active safety benefits. So really at a fraction of the cost, and that is really why we're seeing the tremendous demand for active safety solutions.

As Joe mentioned in his comments, our active safety revenues grew 70% in the quarter. We expect, from a compounded growth rate standpoint, over the next few years to grow at roughly 50%. It's that sort of cost benefit analysis that's driving that growth.

Great. Thank you very much.

Thank you.

Our next question is from Colin Langan from UBS.

Great. Thanks for taking my question.

Hi, Colin.

Any color on the cadence of Powertrain margins as we look out? You mentioned in the commentary there's a 40 basis point hit from FX. Should that continue through the year, or should we see these margins start to recover?

Colin, it's Joe. I think the -- just to touch on that, one of the things we are seeing in Powertrain, and it ties in with the RMB discussion. That -- Powertrain does have some transactional FX disclosure as it relates to RMB. And that's basically driven by the fact that our Chinese Powertrain business does import for the heavy duty diesel business, some of its products from our European and UK plants.

So there is some transactional FX that impacts that business. That's really what's driving that 40 basis points. That's going to be very RMB-dependent. I would say apart from that, we are seeing the margin progression in Powertrain that we would expect to just given the volume increases and our typical levels of expected performance. So it's going to be RMB-dependent and it's very specific to that heavy duty business in China.

And current outlook for the year is roughly 25 basis points of margin expansion.

In Powertrain.

Okay. And can you remind us your commercial truck exposure overall and how much of it is in Powertrain? I imagine they are more of an outside exposure to commercial.

Yes, our total commercial vehicle is about 10% of our full-year volume and about two-thirds of that roughly is in Powertrain.

Got it. And just on E&S, I mean, you mentioned in the commentary there's $30 million in launch costs between E&S and EEA. Even if it's just half E&S, that's a pretty big margin hit for that segment. So does that give -- should we be modeling in pretty significant margin upside in the second half of the year as that $30 million shrinks down in the E&S segment? Because that could be almost 200 basis points of -- if you look at half of it this quarter.

No, it is a significant piece of the quarter. I agree with that. I think our overall guidance for E&S remains unchanged, is 25 basis points growth on a full-year basis. And our guidance from the beginning of the year has incorporated these launch costs, as I've talked about.

We knew these launches were happening. They're -- they don't -- they are not a surprise, if you will. So we factored that into our full-year margin guidance. So that -- using that 25 basis points expansion on a full-year basis is what I would suggest.

Got it. And just one last question. On the impact from Japan, is there any particular segment that's more impacted, or is it across all three or (multiple speakers) --

You know, all three see it. I would say the -- if you think about the $75 million of revenue, roughly $40 million, $45 million of it is in EEA. That's not -- it's not necessarily specific to EEA products, but EEA being such a large business picks up what I'll call some of the impact from our other Delphi businesses, particularly E&S, losing direct supply.

But it was also impacted by some of the indirect and particularly, the GM pull-ahead of the plant, before plant shutdown from July to June is impactful to EEA. So EEA is the largest, although it tends to suffer more from indirect than direct, is the way I would think about it.

Okay. All right. Thank you very much.

Our next question is from Adam Jonas from Morgan Stanley.

Hi, everybody.

Hi, Adam.

Hi. Good, how are you guys doing?

Good, good.

Kevin, a question here, kind of high level. We're hearing a lot of auto executives, and I think yourself included, saying things like the automobile should change more in the next five years than in the last 50 years. I think you -- kind of like from a high level agree with that sentiment, right?

Yes, I don't know if it's exactly five, but --

Right.

Plus, I think in general we're going to see a lot of change.

If we just take that ostensibly at face value, could -- one could argue that could mean that in five or seven or whatever that number of years, certainly within engineering cycle, that cars on the road, all cars on the road are going to feel like they are 50 years old. Now, do you see -- just curious where you -- I know you don't have a crystal ball, but curious if your team at a high level, from a production capacity and demand planning standpoint, think about the possibility of this supercycle of accelerator placement demand as kind of buying a new car is seen as a life-saving decision.

And as more data comes out about the dangers of human driving unassisted relative to the -- to what's available on the market and the great products you provide, whether there could be a movement and even kind of an effort in Washington even to say, listen, we've got to get these death traps off the road and accelerate. Just curious at a high level -- I know it's not quasi-lobbying-type question, but does that get any air play with you?

Listen, I understand your point. I think you're going to see a tremendous amount of change, more digitization, more electrification, and quite frankly, safer vehicles. And I would argue first, Adam, we don't need to get all the way to fully automated to make that happen, right?

Of course. Right.

We can get to Level 2. Unfortunately, governments don't move as quickly as markets do and oftentimes, as citizens and consumers want them to. But it's certainly something internally, we're making sure that we have the capabilities.

It's why we bought companies like Ottomatika; it's why we invested in companies like PureDepth. It's why we have the 40 engineers in Silicon Valley. It's why I'm headed to Israel next week to meet with technology partners there. So it's certainly something that we need to be ready for.

And I think the challenge for players like us who have commitments to folks like you and investors is how do we strike the balance about making sure we're perfectly positioned for the future? And at the same time, ensuring that we're delivering several financial returns between now and then?

And those are the trade-offs that we constantly think about, but obviously, there's more and more focus on software, on systems integration, on electrification, and there's far more investment in that area. When you look at advanced engineering for us as a percent of our total engineering, I think we're up 10% or 20% and a big piece of that is investment software.

Well, and then maybe as a follow-up then, invest -- not just investment in software, but maybe investment in human beings. Can you kind of give a real-time update of kind of where you're short? We obviously know that the competition for talent is brutal and it goes -- you overlap way, way beyond traditional auto industry in terms of trying to get the best people in the organization.

You're competing with all sorts of other tech firms and software firms. But where are you kind of -- where is that talent battle? Is it getting worse? Kind of where do you need people most, either by discipline or geography? (multiple speakers) Thanks.

Listen, when you think about it from the most rapid growth from an engineering standpoint is clearly on software and systems. They are 25% -- those engineers are 25% of our engineering workforce to date. I think we expected -- Joe talked about it in our Investor Day, close to doubling that number over the next five years.

That doesn't mean you need to do it in Silicon Valley. You can do it in places like Bangalore, where we're located; in places like Shanghai. We're looking at other locations to actually recruit and put those people. And quite frankly, where it makes sense, we partner with outside service providers and leverage their capabilities.

But that's been our biggest focus. To be honest, we haven't had a challenge in getting those people. It's not been a constraint. It's not getting our way -- gotten in the way of our product development or revenue growth.

I think part of that is because of the real interesting things we're doing from an automated drive standpoint, from an infotainment standpoint, from a systems integration standpoint. I think we've benefited from that. And it's clearly something we're very, very focused on.

Great. Thanks, Kevin. Thanks team.

Our next question is from Joe Spak from RBC Capital.

Hi, Joe. How are you?

Hi. This is Jacob Hughes on for Joe. How are you doing?

Hi, Jacob.

Hi. Just had a couple of quick follow-ups. On commodities, when you guys are saying nothing neutral year over year. Was there some sort of tight winter tailwind last year? Just trying -- how to think about that?

No, I think -- well, it's just that, Jacob, commodities for us is really a discussion around copper, particularly now that we've divested of thermal. So we've -- copper pricing continues to move down. We have for about 80% of our pass-throughs agreements with our customers, so we're neutral to price, but it does impact the revenue line. We pass-throughs the exact price.

So you see it come down on revenue, but there's really no OI impact. So that's all we're talking about here. So as copper prices come down, we do have less revenue, but it's really no -- there's no impact on OI, very minimal impact on OI. What there is on OI, it's really just more of a timing than anything else.

Okay. And secondly, obviously, got some good news on tax that you gave at the Analyst Day. Did you guys evaluate any of this earnings stripping component with the IRS ruling? Does that impact your tax situation at all, or does that not matter?

No, that does not matter. None of the rules that came out over the last couple of weeks, which were fairly targeted, I think, at acquisitions that were either in process or being contemplated, none of that impacts us at this point.

Okay. All right. Thank you.

Our next question is from David Lim from Wells Fargo Securities.

Hi, good morning, Kevin, Joe and team.

Hi, David.

Hi. Thanks for all the great color. Just two questions. On the reconfigurable cluster, are you seeing OEMs trying to do, like, a package deal, if you will, with infotainment?

Joe, I think you mentioned one-third of the rotation to best-cost countries with Powertrain has been completed. Is there a particular timeline on when that will be fully completed?

Sure. Want me go first and then you can --? Sure. So we've kicked off -- when I say completed, it's in process. Over the next two years, we'll see a rotation of a couple significant Western European Powertrain plants east and some more consolidation. So it's really for us, a 2016, 2017, maybe a little bit into 2018 event, so it's relatively short, as it goes from a -- European restructuring perspective, a relatively short timeline as we get those plants moved.

And then David, I'll talk about -- I think today, there are customers that are talking about the integration of between cluster and infotainment. There are not any that we're working with that are buying the two together as a package. It's headed in that direction. Ultimately, I think we'll get there, but we're not there at this point in time.

Great. Thank you so much.

Our next question is from Emmanuel Rosner from CLSA.

Hi, Emmanuel.

Hi, good morning. Just a couple of remaining quick ones for me. On active safety, you were talking about revenues up 70% and obviously, since it's a small base, I understand there's some lumpiness there.

Are you seeing, in general, some sort of acceleration in terms of when you discuss with the automakers as a result of their commitment to make automatic emergency braking standard? Is that -- are you seeing maybe a higher pace of adoption than you were seeing six months ago?

Yes. Listen, I'd tell you, I think the adoption of AEB creates some tailwind. I don't think it's the biggest driver. I think, in reality, when you look at it, we've been talking about it for probably the last 12, 24 months. It is a consumer-driven demand item.

And as a result, OEs are making sure that they have that capability in their product. And that's what's really driving the demand and continues to drive demand. I'd tell you, it continues to accelerate but I think it's what our OEs need to sell the cars.

Okay. And then on your guidance slide, you have this interesting commentary that you're monitoring, obviously, a few factors, including global production, FX, commercial vehicle, Japan impact. A lot of these factors seem downside risk, like, and I know you were very clear that you were seeing in general the risk pretty balanced here. What is sort of like the upside risk that you're -- that's resurfacing that give you overall -- the comfort in your full-year view?

I think that's a good way to think about it. Thematically, we see Q1 as being very balanced. We see that continuing through the year. So we're potential strength in China and European markets, Kevin mentioned that.

At this point, being somewhat offset by Brazil and the commercial vehicle space, particularly CV in North America, but again, balance. I think the chart on slide 19, hopefully, is communicating a fairly balanced, a fairly balanced look at this point. And again, where we're comfortable with where we are on full-year outlook.

Emmanuel, I would tell you, if I were to take a step back and look at things, if you look at the first quarter, as an example, and you adjust for FX, we're at the very top end of our revenue range. We're at the top end of our OI range. And we're certainly at the top end of our EPS range.

And I think if you do the same sort of look at our Q2 guidance and adjust it for the Japan earthquake issue, you're in a similar situation. So listen, we feel good about where the market is. The point on Joe's slide, we watch everything, right? And we make sure that we can react to everything.

And fortunately, we have a cost structure that is very flexible, that we can move very quickly on. We control all of our joint ventures in China, so we make the tactical, as well as strategic decisions to ramp up or ramp down. So we're in control. And because we're in control, we monitor and react to everything that's out there and want to be in front of things versus behind them.

That's great to hear. Then just one last housekeeping, if I may. In the -- when you first initiated the guidance at the Detroit Auto Show, I think the underlying share buyback was $400 million for the year. You've done obviously $370 million as of Q1. What's embedded in the current guidance?

Yes, I answered that question earlier for Itay, I believe. So I would, at this point, if you're thinking about outgoing quarters, Q2, Q3, Q4, I would be ranging $50 million to $75 million per quarter.

Perfect. Thank you.

Our next question comes from the line of Matt Stover from SIG.

Hi, Matt, how are you doing?

Hi, thanks. I'm very well. Hope you guys are well. Two questions, if I look at the EEA, the margins continue to be really, really strong there. I know the copper effect kicks in. You probably get some synergy. If you could walk through the walk year to year, that would be helpful.

Sure. So for the full-year EA walk, just to be clear, Matt?

No, just the quarter.

Just the quarter?

Yes.

Sure. Hold on one second here.

And then if you're looking for something, another question, just a bigger picture on backlog. It's always hard for me to make sense of the bookings number. And if I look at -- I tend to look at it on a rolling four-quarter basis and I know this stuff can be lumpy.

But if you look at the rolling four-quarter into the first period, it looks like you've seen a noticeable decline. I'm just wondering if there was activity that would normally have been taking place in the first quarter that perhaps shifted or how we should think about that?

No, that's a great question. Why don't I start with that, instead? Last year in our $10 million booking for the first quarter, we had a $3 billion win with a large global OE, so I would say that would have skewed -- that would have significantly skewed bookings in the first quarter of last year.

Okay.

So Matt, if you walk through the EEA walk, Q1 2015 to Q1 2016, strong material performance, call it about $30 million, strong SG&A, just again, just year-over-year performance of about $10 million, somewhat offset by the launch of the engineering costs that we're talking about.

So think about that as that's about $50 million of upside and about $10 million, $15 million of that's coming out in engineering and launch cost stuff.

Matt, as you look at it, I think our outlook for the year is EEA will -- margin expansion will be roughly 75 basis points, right, on a year-over-year basis, which is solid revenue growth. We'll have very solid margin expansion. And I think it really -- we can go through all the details, but it really comes down to execution.

It's the benefit of volume flow-through. They are an organization that operates very, very well. To the extent you put volume through the machine, that machine tends to convert it into earnings. And we're seeing the benefit from that.

Thank you very much. Appreciate it.

Sure.

Our final question comes from the line of Chris McNally from Evercore.

Hi, Chris.

Thanks, guys. Just a quick follow-on on the organic incremental margin. In Q1, the way you guys reported, it's roughly 30%. It's been tracking in that 30% sort of range for the last couple of quarters. You had some headwinds in China. Can we assume that, that number may have some upside as we get into the second half of the year, particularly as the higher R&D from the new programs in Q1 sort of subsides?

I think Joe can be specific. I think as the year rolls out and the exception, based on our assumption for the Japan earthquake, is really Q2. But if you normalize for that, we would expect to continue to see -- I think on a sequential basis, you actually do, year-over-year margin expansion quarter to quarter. And it's a result of the roll-through or flow-through of the items Joe had talked about earlier. Joe?

You're right. The drop-through on the sales growth is in line with historical trends. That does bounce around a little bit, but it's where we would have expected it to be. Margin progression through the year, heading to our 50 basis points expansion year over year will accelerate as we get to the back half of the year.

So I think and that's effectively the same things we're talking about. The volume picks up. Performance gets better. In part, we perform better in the back half of the year, as our initiatives start to pick up on a full run rate basis. And we also get out of the launch costs that we have been talking about in Q3 and Q4.

Perfect. So the launch costs, basically there is some in Q2 still, but then essentially, they fall off in Q3 and Q4?

Effectively. They fall off. There's some still in Q3 and then they fall off in Q4. But it's -- they are down. They cut themselves in half by Q3 and basically gone in Q4.

So remember, Joe referenced in this presentation roughly $35 million of launch and China costs in Q1, declining to $20 million in Q2, and then falling off from there in Q3 and Q4.

Perfect. Thanks so much, guys.

Thank you.

That concludes the Delphi Q1 2016 earnings conference call. Thank you for joining. You may now disconnect.