DETROIT -- Delphi Corp. wrongly accounted for $237 million it paid in 2000 to former parent General Motors. The supplier also is reviewing the accounting treatment of another $93 million, it said Tuesday.
The supplier made the disclosures as it noted that its internal investigation is "substantially complete." It expects to file restated earnings reports and its financial report for 2004 by June 30.
Delphi said it erred by spreading out the $237 million payment to GM as post retirement obligations, the supplier said Tuesday. By spreading out the payment, it reduced its impact on earnings over several years. Delphi should have recorded the payment as a warranty claims expense in the year it was made, the company said.
Delphi said it is also reviewing:
Delphi said it would give the results of the reviews to its audit committee and that changes would be reflected in its revised financial statement.
The new disclosures add to earlier findings that cash flow from operations was improperly inflated by $200 million in 2000 by off-balance-sheet transactions and that pre-tax income was inflated by $61 million in 2001 by improper accounting for rebates from information technology suppliers.
The accounting errors were made public in conjunction with the forced resignation of CFO Alan Dawes on March 4 after the audit committee of the supplier's board of directors said it had lost confidence in him.
Ten days before the accounting error disclosures and Dawes' departure, Delphi Chairman and CEO J.T. Battenberg III announced his intention to retire by the end of this year. Battenberg has said there was no connection between his announcement and the accounting disclosures.
The accounting problems became known due to an internal investigation that was started after the Securities and Exchange Commission began asking about rebates Delphi got from information technology suppliers.
Robert Brust, chairman of Delphi's audit committee, said, "Although we continue to review the conduct of certain lower- and mid-level executives, we have concluded our review of officers and believe that no further changes in the company's top management will be required as a result of our investigation."