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IP Monetization for a Global Auto Systems Supplier

Delphi Technologies Overview

June 24, 2015

Agenda

• Delphi Automotive Systems, LLC - Overview

• Commercialization and Licensing

• Why We License

• Creating Value through IP – Proven Models

• Summary

Delphi’s global team – at the center of technology innovation – Automotive Systems & Components

126manufacturing

sites

15major global

technical centers

20,000engineers

and scientists

$17.0B2014 revenue

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164,000people in

33 countries

$1.7 Bin

Research &

Development

Delphi has market-driven, strategic product lines that deliver safe, green and connected solutions

Electronics & Safety

• Electronic Controls

• Infotainment & Driver Interface

• Software & Services

Thermal Systems

• Powertrain Cooling

• Climate Control

Powertrain Systems

• Gasoline Engine Management Systems

• Diesel Engine Management Systems

Product & Service Solutions

• Diesel

• Independent Aftermarket

• Original Equipment Service

Electrical/Electronic Architecture

• Electrical/Electronic Distribution Systems

• Connection Systems

Strength in a diversified customer base

No single customer accounts for more than 19% of global sales

• Renault

• Harley Davidson

• Mack

• PEUGEOT

• BUGATTI

• DAIMLER

• Kia Motors

• SHANGHAI GM

• Volkswagen

• AGCO

• TATA

• IVECO

• SKODA

• Sea Ray

• Bentley

• Ford

• SAIC

• Honda

• Paccar

• ABTOBA3

• Lockheed Martin

• Nissan

• FCA

• Toyota

• Calsonic Kansei

• AUDI

• Freightliner

• Maserati

• Suzuki

• Opel

• Car Quest Auto

• GM

• Alfa Romeo

• Ferrari

• Kia Seat

• Johnson Controls

• NAPA

• Benteler

• Caterpillar

• Pioneer

• Air National

• SsangYong

• John Deer

• Hyundai

• Isuzu

• Inteva

• Navistar

• Scania

• Porsche

• CNH

Global scale with regional capabilities

Delphi’s global footprint aligns with the growth plans of leading vehicle makers

Major technical center locations

Supplying 20 of the top 20

vehicle makers in Europe

Supplying 17 of the

top 20 vehicle

makers in China

Supplying 17 of the

top 20 vehicle makers

in the United States

Supplying 10 of the top 10

vehicle makers in South

America

IP Monetization at Delphi

Delphi – Commercialization & Licensing

• Centralized function with staffing in the US and Asia

• Functionally part of the legal staff

• Operate with the regional legal teams for local requirements

Language, country law, etc.

• Responsible for all regions and business units

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DELPHI

GLOBAL COMMERCIALIZATION & LICENSING

January 1, 2015

Project Support &

Administrative

Assistant

Finance Mgr. (Matrix)

John P. Carney

Director

Commercialization &

Licensing

Licensing Executive Licensing Executive Licensing Executive

Senior Business AnalystSenior Business Analyst

Licensing Executive

Delphi – IP CommercializationStaffing and Required Skills

Two basic positions in the group

– Licensing Executive / Manager

– IP Analyst

Licensing Executive – responsible to identify, develop and negotiate

and close deals

– Candidates with commercial backgrounds have been most successful

» “close the deal mentality” vs. R&D

IP Analysts

– Technical experience is very valuable

– Can be a grooming assignment for Licensing Executive position

Licensing as a Business Strategy

• Why License?

Generates Operating Income and cash

Customers sometimes require a second source

It is a relatively fast path to revenue generation

Delphi may elect not to directly invest in our own facilities in some markets

• Licensing – Advantages to Delphi :

Limits competitor’s expansion in key markets

Provides Operating Income without direct investment

Provides for transition path where Delphi elects to exit a product line.

Creates a entry strategy for countries where Delphi has no presence and customers are

active or have plans to establish locations

• Combined IP/Asset Sales

Product technology has a value and a useful life “after Delphi”

Manufacturing assets combined with “know how” is very interesting to certain buyers and

markets

Leveraging IP – Business Models

Licensing Core Products in Regional/Niche Markets: License Delphi’s automotive products in markets Delphi does not elect to pursue directly. Working closely with the business units to co-developing strategy; C&L leads the negotiations.

Asset & IP Sales – Wind Down Products: Sell equipment and the related IP/Know-how for discontinued product lines where no customer contracts exist. Engagement with business units; C&L Leads the activity.

Licensing in Adjacent Markets: License Delphi technology outside automotive markets. C&L Leads the analysis and the pursuit.

Sales of Non-core Patents

IP Monetization – Sharing the Credits Internally @ Delphi

• All proceeds – Cash and P&L benefits go to the business unit

responsible for the technology

• C&L – Leads IP Monetization activities, records the sale for reporting

purposes and collects cash for the operating unit

• Technical Support proceeds are recorded as credits engineering

organizations for all onboarding and tech transfer activities

We work best as an adjunct to the global business teams

– Serve as a resource center for best practices and market economics.

– Single point of contact for drafting and negotiating agreements, obtaining all

internal approvals, signing deals

We are located in several key regions, co-located in key business

centers

We secure legal, business unit, tax and other corporate approvals for all

agreements

We collect the funds owed for all IP monetization and credit the

operating units on a monthly basis

Role within Delphi Organization

• C&L is generating strong cash and income growth with lean budget and staff

• Strong team in place – continue to grow skillsets, capabilities, tools & external networks

• Established strong engagement with the Delphi operating units to identify opportunities and to support business strategies

• Expanded licensing activities significantly into “know-how” and asset deals, in addition to patent licensing and sales

• Expanding Delphi’s position as a recognized active player in the technology transfer market

Summary

Contact information

John P. Carney

Director – Commercialization & Licensing

Delphi Automotive Systems, LLC.

248-813-8065

john.p.carney@delphi.com