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Share Name | Share Symbol | Market | Type |
---|---|---|---|
BorgWarner Inc | NYSE:BWA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 33.18 | 0 | 09:00:10 |
☑
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
|
13-3404508
|
||
State or other jurisdiction of
|
|
(I.R.S. Employer
|
||
Incorporation or organization
|
|
Identification No.)
|
||
|
|
|
|
|
3850 Hamlin Road,
|
Auburn Hills,
|
Michigan
|
|
48326
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
|
BWA
|
|
New York Stock Exchange
|
Large accelerated filer
|
☑
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
Page No.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
June 30,
2019
|
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Cash
|
$
|
710
|
|
|
$
|
739
|
|
Receivables, net
|
2,063
|
|
|
1,988
|
|
||
Inventories, net
|
817
|
|
|
781
|
|
||
Prepayments and other current assets
|
259
|
|
|
250
|
|
||
Assets held for sale
|
—
|
|
|
47
|
|
||
Total current assets
|
3,849
|
|
|
3,805
|
|
||
|
|
|
|
|
|
||
Property, plant and equipment, net
|
2,891
|
|
|
2,904
|
|
||
Investments and other long-term receivables
|
690
|
|
|
592
|
|
||
Goodwill
|
1,845
|
|
|
1,853
|
|
||
Other intangible assets, net
|
421
|
|
|
439
|
|
||
Other non-current assets
|
535
|
|
|
502
|
|
||
Total assets
|
$
|
10,231
|
|
|
$
|
10,095
|
|
|
|
|
|
|
|
||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Notes payable and other short-term debt
|
$
|
171
|
|
|
$
|
173
|
|
Accounts payable and accrued expenses
|
2,089
|
|
|
2,144
|
|
||
Income taxes payable
|
53
|
|
|
59
|
|
||
Liabilities held for sale
|
—
|
|
|
23
|
|
||
Total current liabilities
|
2,313
|
|
|
2,399
|
|
||
|
|
|
|
|
|
||
Long-term debt
|
1,929
|
|
|
1,941
|
|
||
|
|
|
|
||||
Other non-current liabilities:
|
|
|
|
||||
Asbestos-related liabilities
|
734
|
|
|
755
|
|
||
Retirement-related liabilities
|
283
|
|
|
298
|
|
||
Other
|
470
|
|
|
357
|
|
||
Total other non-current liabilities
|
1,487
|
|
|
1,410
|
|
||
|
|
|
|
|
|
||
Common stock
|
3
|
|
|
3
|
|
||
Capital in excess of par value
|
1,116
|
|
|
1,146
|
|
||
Retained earnings
|
5,598
|
|
|
5,336
|
|
||
Accumulated other comprehensive loss
|
(670
|
)
|
|
(674
|
)
|
||
Common stock held in treasury
|
(1,653
|
)
|
|
(1,585
|
)
|
||
Total BorgWarner Inc. stockholders’ equity
|
4,394
|
|
|
4,226
|
|
||
Noncontrolling interest
|
108
|
|
|
119
|
|
||
Total equity
|
4,502
|
|
|
4,345
|
|
||
Total liabilities and equity
|
$
|
10,231
|
|
|
$
|
10,095
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
(in millions, except per share amounts)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
2,551
|
|
|
$
|
2,694
|
|
|
$
|
5,117
|
|
|
$
|
5,478
|
|
Cost of sales
|
2,038
|
|
|
2,114
|
|
|
4,085
|
|
|
4,307
|
|
||||
Gross profit
|
513
|
|
|
580
|
|
|
1,032
|
|
|
1,171
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
212
|
|
|
237
|
|
|
438
|
|
|
490
|
|
||||
Other expense, net
|
16
|
|
|
30
|
|
|
45
|
|
|
35
|
|
||||
Operating income
|
285
|
|
|
313
|
|
|
549
|
|
|
646
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Equity in affiliates’ earnings, net of tax
|
(9
|
)
|
|
(13
|
)
|
|
(18
|
)
|
|
(23
|
)
|
||||
Interest income
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(3
|
)
|
||||
Interest expense
|
14
|
|
|
15
|
|
|
28
|
|
|
31
|
|
||||
Other postretirement expense (income)
|
27
|
|
|
(2
|
)
|
|
27
|
|
|
(5
|
)
|
||||
Earnings before income taxes and noncontrolling interest
|
255
|
|
|
314
|
|
|
517
|
|
|
646
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Provision for income taxes
|
73
|
|
|
30
|
|
|
164
|
|
|
125
|
|
||||
Net earnings
|
182
|
|
|
284
|
|
|
353
|
|
|
521
|
|
||||
Net earnings attributable to the noncontrolling interest, net of tax
|
10
|
|
|
12
|
|
|
21
|
|
|
24
|
|
||||
Net earnings attributable to BorgWarner Inc.
|
$
|
172
|
|
|
$
|
272
|
|
|
$
|
332
|
|
|
$
|
497
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share — basic
|
$
|
0.84
|
|
|
$
|
1.30
|
|
|
$
|
1.61
|
|
|
$
|
2.38
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share — diluted
|
$
|
0.83
|
|
|
$
|
1.30
|
|
|
$
|
1.60
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (millions):
|
|
|
|
|
|
|
|
||||||||
Basic
|
205.7
|
|
|
208.6
|
|
|
206.1
|
|
|
209.0
|
|
||||
Diluted
|
206.8
|
|
|
209.9
|
|
|
207.0
|
|
|
210.3
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net earnings attributable to BorgWarner Inc.
|
$
|
172
|
|
|
$
|
272
|
|
|
$
|
332
|
|
|
$
|
497
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments*
|
(13
|
)
|
|
(146
|
)
|
|
(22
|
)
|
|
(81
|
)
|
||||
Hedge instruments*
|
(1
|
)
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Defined benefit retirement plans*
|
19
|
|
|
7
|
|
|
27
|
|
|
5
|
|
||||
Total other comprehensive income (loss) attributable to BorgWarner Inc.
|
5
|
|
|
(138
|
)
|
|
4
|
|
|
(78
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income attributable to BorgWarner Inc.*
|
177
|
|
|
134
|
|
|
336
|
|
|
419
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to noncontrolling interest, net of tax
|
10
|
|
|
12
|
|
|
21
|
|
|
24
|
|
||||
Other comprehensive loss attributable to the noncontrolling interest*
|
(3
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||
Comprehensive income
|
$
|
184
|
|
|
$
|
140
|
|
|
$
|
355
|
|
|
$
|
439
|
|
*
|
Net of income taxes.
|
|
Six Months Ended
June 30, |
||||||
(in millions)
|
2019
|
|
2018
|
||||
OPERATING
|
|
|
|
||||
Net earnings
|
$
|
353
|
|
|
$
|
521
|
|
Adjustments to reconcile net earnings to net cash flows from operations:
|
|
|
|
||||
Depreciation and amortization
|
214
|
|
|
218
|
|
||
Stock-based compensation expense
|
17
|
|
|
22
|
|
||
Restructuring expense, net of cash paid
|
12
|
|
|
31
|
|
||
Pension settlement loss
|
26
|
|
|
—
|
|
||
Deferred income tax provision (benefit)
|
35
|
|
|
(34
|
)
|
||
Tax reform adjustments to provision for income taxes
|
16
|
|
|
—
|
|
||
Equity in affiliates’ earnings, net of dividends received, and other
|
(4
|
)
|
|
(27
|
)
|
||
Net earnings adjusted for non-cash charges to operations
|
669
|
|
|
731
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Receivables
|
(90
|
)
|
|
(159
|
)
|
||
Inventories
|
(40
|
)
|
|
(62
|
)
|
||
Prepayments and other current assets
|
(22
|
)
|
|
(34
|
)
|
||
Accounts payable and accrued expenses
|
(48
|
)
|
|
(106
|
)
|
||
Prepaid taxes and Income taxes payable
|
6
|
|
|
(53
|
)
|
||
Other assets and liabilities
|
(8
|
)
|
|
(12
|
)
|
||
Net cash provided by operating activities
|
467
|
|
|
305
|
|
||
|
|
|
|
|
|
||
INVESTING
|
|
|
|
|
|
||
Capital expenditures, including tooling outlays
|
(244
|
)
|
|
(269
|
)
|
||
Payments for business acquired
|
(10
|
)
|
|
—
|
|
||
Proceeds from sale of business, net of cash divested
|
24
|
|
|
—
|
|
||
Payments for investments in equity securities
|
(48
|
)
|
|
(3
|
)
|
||
Proceeds from asset disposals and other
|
1
|
|
|
5
|
|
||
Net cash used in investing activities
|
(277
|
)
|
|
(267
|
)
|
||
|
|
|
|
|
|
||
FINANCING
|
|
|
|
|
|
||
Net increase in notes payable
|
—
|
|
|
1
|
|
||
Additions to long-term debt, net of debt issuance costs
|
30
|
|
|
19
|
|
||
Repayments of long-term debt, including current portion
|
(39
|
)
|
|
(14
|
)
|
||
Payments for purchase of treasury stock
|
(100
|
)
|
|
(110
|
)
|
||
Payments for stock-based compensation items
|
(15
|
)
|
|
(15
|
)
|
||
Dividends paid to BorgWarner stockholders
|
(70
|
)
|
|
(71
|
)
|
||
Dividends paid to noncontrolling stockholders
|
(24
|
)
|
|
(25
|
)
|
||
Net cash used in financing activities
|
(218
|
)
|
|
(215
|
)
|
||
Effect of exchange rate changes on cash
|
(1
|
)
|
|
(6
|
)
|
||
Net decrease in cash
|
(29
|
)
|
|
(183
|
)
|
||
Cash and restricted cash at beginning of year
|
739
|
|
|
545
|
|
||
Cash and restricted cash at end of period
|
$
|
710
|
|
|
$
|
362
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|||
Cash paid during the period for:
|
|
|
|
|
|||
Interest
|
$
|
33
|
|
|
$
|
39
|
|
Income taxes, net of refunds
|
$
|
89
|
|
|
$
|
186
|
|
(in millions)
|
Balance at December 31, 2018
|
|
Adjustments due to ASC 842
|
|
Balance at January 1, 2019
|
||||||
Other non-current assets
|
$
|
502
|
|
|
$
|
104
|
|
|
$
|
606
|
|
Accounts payable and accrued expenses
|
$
|
2,144
|
|
|
$
|
23
|
|
|
$
|
2,167
|
|
Other non-current liabilities
|
$
|
357
|
|
|
$
|
80
|
|
|
$
|
437
|
|
|
|
Three months ended June 30, 2019
|
|
Three months ended June 30, 2018
|
||||||||||||||||||||
(In millions)
|
|
Engine
|
|
Drivetrain
|
|
Total
|
|
Engine
|
|
Drivetrain
|
|
Total
|
||||||||||||
North America
|
|
$
|
407
|
|
|
$
|
461
|
|
|
$
|
868
|
|
|
$
|
392
|
|
|
$
|
441
|
|
|
$
|
833
|
|
Europe
|
|
760
|
|
|
211
|
|
|
971
|
|
|
807
|
|
|
248
|
|
|
1,055
|
|
||||||
Asia
|
|
356
|
|
|
317
|
|
|
673
|
|
|
430
|
|
|
337
|
|
|
767
|
|
||||||
Other
|
|
30
|
|
|
9
|
|
|
39
|
|
|
31
|
|
|
8
|
|
|
39
|
|
||||||
Total
|
|
$
|
1,553
|
|
|
$
|
998
|
|
|
$
|
2,551
|
|
|
$
|
1,660
|
|
|
$
|
1,034
|
|
|
$
|
2,694
|
|
|
|
Six months ended June 30, 2019
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||
(In millions)
|
|
Engine
|
|
Drivetrain
|
|
Total
|
|
Engine
|
|
Drivetrain
|
|
Total
|
||||||||||||
North America
|
|
$
|
819
|
|
|
$
|
906
|
|
|
$
|
1,725
|
|
|
$
|
794
|
|
|
$
|
889
|
|
|
$
|
1,683
|
|
Europe
|
|
1,561
|
|
|
438
|
|
|
1,999
|
|
|
1,653
|
|
|
539
|
|
|
2,192
|
|
||||||
Asia
|
|
696
|
|
|
620
|
|
|
1,316
|
|
|
852
|
|
|
674
|
|
|
1,526
|
|
||||||
Other
|
|
61
|
|
|
16
|
|
|
77
|
|
|
62
|
|
|
15
|
|
|
77
|
|
||||||
Total
|
|
$
|
3,137
|
|
|
$
|
1,980
|
|
|
$
|
5,117
|
|
|
$
|
3,361
|
|
|
$
|
2,117
|
|
|
$
|
5,478
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gross R&D expenditures
|
$
|
128
|
|
|
$
|
134
|
|
|
$
|
249
|
|
|
$
|
264
|
|
Customer reimbursements
|
(15
|
)
|
|
(22
|
)
|
|
(32
|
)
|
|
(35
|
)
|
||||
Net R&D expenditures
|
$
|
113
|
|
|
$
|
112
|
|
|
$
|
217
|
|
|
$
|
229
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Restructuring expense
|
$
|
13
|
|
|
$
|
31
|
|
|
$
|
27
|
|
|
$
|
39
|
|
Merger, acquisition and divestiture expense
|
5
|
|
|
1
|
|
|
6
|
|
|
3
|
|
||||
Other expense (income)
|
(2
|
)
|
|
(2
|
)
|
|
12
|
|
|
(7
|
)
|
||||
Other expense, net
|
$
|
16
|
|
|
$
|
30
|
|
|
$
|
45
|
|
|
$
|
35
|
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
2019
|
|
2018
|
||||
Raw material and supplies
|
$
|
520
|
|
|
$
|
485
|
|
Work in progress
|
117
|
|
|
114
|
|
||
Finished goods
|
198
|
|
|
199
|
|
||
FIFO inventories
|
835
|
|
|
798
|
|
||
LIFO reserve
|
(18
|
)
|
|
(17
|
)
|
||
Inventories, net
|
$
|
817
|
|
|
$
|
781
|
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
2019
|
|
2018
|
||||
Land, land use rights and buildings
|
$
|
870
|
|
|
$
|
871
|
|
Machinery and equipment
|
2,959
|
|
|
2,851
|
|
||
Finance lease assets
|
2
|
|
|
2
|
|
||
Construction in progress
|
350
|
|
|
426
|
|
||
Total property, plant and equipment, gross
|
4,181
|
|
|
4,150
|
|
||
Less: accumulated depreciation
|
(1,519
|
)
|
|
(1,473
|
)
|
||
Property, plant and equipment, net, excluding tooling
|
2,662
|
|
|
2,677
|
|
||
Tooling, net of amortization
|
229
|
|
|
227
|
|
||
Property, plant and equipment, net
|
$
|
2,891
|
|
|
$
|
2,904
|
|
(in millions)
|
2019
|
|
2018
|
||||
Beginning balance, January 1
|
$
|
103
|
|
|
$
|
112
|
|
Provisions for current period sales
|
27
|
|
|
26
|
|
||
Adjustments of prior estimates
|
7
|
|
|
9
|
|
||
Payments
|
(30
|
)
|
|
(30
|
)
|
||
Translation adjustment and other
|
(1
|
)
|
|
(2
|
)
|
||
Ending balance, June 30
|
$
|
106
|
|
|
$
|
115
|
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
2019
|
|
2018
|
||||
Accounts payable and accrued expenses
|
$
|
59
|
|
|
$
|
56
|
|
Other non-current liabilities
|
47
|
|
|
47
|
|
||
Total product warranty liability
|
$
|
106
|
|
|
$
|
103
|
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
2019
|
|
2018
|
||||
Short-term debt
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
31
|
|
|
$
|
33
|
|
|
|
|
|
|
|
||
Long-term debt
|
|
|
|
|
|
||
8.00% Senior notes due 10/01/19 ($134 million par value)
|
134
|
|
|
135
|
|
||
4.625% Senior notes due 09/15/20 ($250 million par value)
|
251
|
|
|
251
|
|
||
1.80% Senior notes due 11/7/22 (€500 million par value)
|
565
|
|
|
570
|
|
||
3.375% Senior notes due 03/15/25 ($500 million par value)
|
497
|
|
|
497
|
|
||
7.125% Senior notes due 02/15/29 ($121 million par value)
|
119
|
|
|
119
|
|
||
4.375% Senior notes due 03/15/45 ($500 million par value)
|
494
|
|
|
494
|
|
||
Term loan facilities and other
|
9
|
|
|
15
|
|
||
Total long-term debt
|
2,069
|
|
|
2,081
|
|
||
Less: current portion
|
140
|
|
|
140
|
|
||
Long-term debt, net of current portion
|
$
|
1,929
|
|
|
$
|
1,941
|
|
Level 1:
|
Observable inputs such as quoted prices for identical assets or liabilities in active markets;
|
Level 2:
|
Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
Level 3:
|
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
A.
|
Market approach:
Prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business.
|
B.
|
Cost approach:
Amount that would be required to replace the service capacity of an asset (replacement cost).
|
C.
|
Income approach:
Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models).
|
|
|
|
Basis of fair value measurements
|
|
|
||||||||||||
(in millions)
|
Balance at
June 30, 2019 |
|
Quoted prices in active markets for identical items
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
|
Valuation technique
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
A
|
Other long-term receivables (insurance settlement agreement note receivable)
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
C
|
Net investment hedge contracts
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
A
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
A
|
|
|
|
Basis of fair value measurements
|
|
|
||||||||||||
(in millions)
|
Balance at
December 31, 2018
|
|
Quoted prices in active markets for identical items
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
|
Valuation
technique
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
A
|
Other long-term receivables (insurance settlement agreement note receivable)
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
C
|
Net investment hedge contracts
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
A
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
A
|
|
|
Commodity derivative contracts
|
|||||||
Commodity
|
|
Volume hedged June 30, 2019
|
Volume hedged December 31, 2018
|
|
Units of measure
|
|
Duration
|
||
Copper
|
|
120
|
|
257
|
|
|
Metric Tons
|
|
Dec - 19
|
|
Cross-Currency Swaps
|
||||||||
(in millions)
|
Notional
in USD
|
|
Notional
in Local Currency
|
|
Duration
|
||||
Fixed $ to fixed €
|
$
|
250
|
|
|
€
|
206
|
|
|
Sep - 20
|
Fixed $ to fixed ¥
|
$
|
100
|
|
|
¥
|
10,978
|
|
|
Feb - 23
|
(in millions)
|
|
Assets
|
|
Liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments Under 815:
|
|
Location
|
|
June 30, 2019
|
|
December 31, 2018
|
|
Location
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
Foreign currency
|
|
Prepayments and other current assets
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Accounts payable and accrued expenses
|
|
$
|
4
|
|
|
$
|
2
|
|
Net investment hedges
|
|
Other non-current assets
|
|
$
|
17
|
|
|
$
|
12
|
|
|
Other non-current liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
|
Prepayments and other current assets
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Accounts payable and accrued expenses
|
|
$
|
—
|
|
|
$
|
—
|
|
(in millions)
|
|
Deferred gain (loss) in AOCI at
|
|
Gain (loss) expected to be reclassified to income in one year or less
|
||||||||
Contract Type
|
|
June 30, 2019
|
|
December 31, 2018
|
|
|||||||
Foreign currency
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Net investment hedges:
|
|
|
|
|
|
|
||||||
Foreign currency
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Cross-currency swaps
|
|
17
|
|
|
12
|
|
|
—
|
|
|||
Foreign currency denominated debt
|
|
(25
|
)
|
|
(30
|
)
|
|
—
|
|
|||
Total
|
|
$
|
(5
|
)
|
|
$
|
(14
|
)
|
|
$
|
(1
|
)
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
(in millions)
|
|
Net sales
|
|
Cost of sales
|
|
Selling, general and administrative expenses
|
|
Other comprehensive income(loss)
|
||||||||
Total amounts of earnings and other comprehensive income(loss) line items in which the effects of cash flow hedges are recorded
|
|
$
|
2,551
|
|
|
$
|
2,038
|
|
|
$
|
212
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in other comprehensive income
|
|
|
|
|
|
|
|
$
|
(1
|
)
|
||||||
Gain (loss) reclassified from AOCI to income
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
(in millions)
|
|
Net sales
|
|
Cost of sales
|
|
Selling, general and administrative expenses
|
|
Other comprehensive income(loss)
|
||||||||
Total amounts of earnings and other comprehensive income(loss) line items in which the effects of cash flow hedges are recorded
|
|
$
|
5,117
|
|
|
$
|
4,085
|
|
|
$
|
438
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in other comprehensive income
|
|
|
|
|
|
|
|
$
|
(1
|
)
|
||||||
Gain (loss) reclassified from AOCI to income
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
(in millions)
|
|
Net sales
|
|
Cost of sales
|
|
Selling, general and administrative expenses
|
|
Other comprehensive income(loss)
|
||||||||
Total amounts of earnings and other comprehensive income(loss) line items in which the effects of cash flow hedges are recorded
|
|
$
|
2,694
|
|
|
$
|
2,114
|
|
|
$
|
237
|
|
|
$
|
(138
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in other comprehensive income
|
|
|
|
|
|
|
|
$
|
—
|
|
||||||
Gain (loss) reclassified from AOCI to income
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
(in millions)
|
|
Net sales
|
|
Cost of sales
|
|
Selling, general and administrative expenses
|
|
Other comprehensive income(loss)
|
||||||||
Total amounts of earnings and other comprehensive income(loss) line items in which the effects of cash flow hedges are recorded
|
|
$
|
5,478
|
|
|
$
|
4,307
|
|
|
$
|
490
|
|
|
$
|
(78
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in other comprehensive income
|
|
|
|
|
|
|
|
$
|
(6
|
)
|
||||||
Gain (loss) reclassified from AOCI to income
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
|
(in millions)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Net investment hedges
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cross-currency swaps
|
|
$
|
(4
|
)
|
|
$
|
14
|
|
|
$
|
5
|
|
|
$
|
7
|
|
Foreign currency denominated debt
|
|
$
|
(7
|
)
|
|
$
|
32
|
|
|
$
|
5
|
|
|
$
|
16
|
|
(in millions)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Net investment hedges
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cross-currency swaps
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
3
|
|
(in millions)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Contract Type
|
|
Location
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign Currency
|
|
Selling, general and administrative expenses
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
|
Pension benefits
|
|
Other postretirement
employee benefits
|
||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|||||||||||||||||||
Three Months Ended June 30,
|
|
US
|
|
Non-US
|
|
US
|
|
Non-US
|
|
2019
|
|
2018
|
||||||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
3
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||||
Expected return on plan assets
|
|
(3
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||||
Settlement
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of unrecognized prior service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Amortization of unrecognized loss
|
|
1
|
|
|
3
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
1
|
|
||||||
Net periodic benefit cost (income)
|
|
$
|
27
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Pension benefits
|
|
Other postretirement
employee benefits
|
||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|||||||||||||||||||
Six Months Ended June 30,
|
|
US
|
|
Non-US
|
|
US
|
|
Non-US
|
|
2019
|
|
2018
|
||||||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
5
|
|
|
6
|
|
|
4
|
|
|
6
|
|
|
2
|
|
|
1
|
|
||||||
Expected return on plan assets
|
|
(6
|
)
|
|
(11
|
)
|
|
(7
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
||||||
Settlement
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of unrecognized prior service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Amortization of unrecognized loss
|
|
2
|
|
|
5
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
1
|
|
||||||
Net periodic benefit cost (income)
|
|
$
|
27
|
|
|
$
|
9
|
|
|
$
|
(1
|
)
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Shares subject to restriction
(thousands)
|
|
Weighted average grant date fair value
|
|||
Nonvested at December 31, 2018
|
1,516
|
|
|
$
|
42.97
|
|
Granted
|
930
|
|
|
$
|
41.92
|
|
Vested
|
(665
|
)
|
|
$
|
35.94
|
|
Forfeited
|
(6
|
)
|
|
$
|
45.41
|
|
Nonvested at March 31, 2019
|
1,775
|
|
|
$
|
44.77
|
|
Granted
|
125
|
|
|
$
|
40.78
|
|
Vested
|
(28
|
)
|
|
$
|
50.43
|
|
Forfeited
|
(37
|
)
|
|
$
|
45.13
|
|
Nonvested at June 30, 2019
|
1,835
|
|
|
$
|
44.40
|
|
|
Number of shares
(thousands)
|
|
Weighted average grant date fair value
|
|||
Nonvested at December 31, 2018
|
297
|
|
|
$
|
60.35
|
|
Granted
|
190
|
|
|
$
|
51.52
|
|
Forfeited
|
(9
|
)
|
|
$
|
55.30
|
|
Nonvested at March 31, 2019
|
478
|
|
|
$
|
56.93
|
|
Granted
|
5
|
|
|
$
|
51.59
|
|
Forfeited
|
(56
|
)
|
|
$
|
55.67
|
|
Nonvested at June 30, 2019
|
427
|
|
|
$
|
57.03
|
|
|
Number of shares (thousands)
|
|
Weighted average grant date fair value
|
|||
Nonvested at December 31, 2018
|
297
|
|
|
$
|
47.03
|
|
Granted
|
190
|
|
|
$
|
41.90
|
|
Forfeited
|
(9
|
)
|
|
$
|
44.12
|
|
Nonvested at March 31, 2019
|
478
|
|
|
$
|
45.04
|
|
Granted
|
5
|
|
|
$
|
41.92
|
|
Forfeited
|
(56
|
)
|
|
$
|
44.24
|
|
Nonvested at June 30, 2019
|
427
|
|
|
$
|
45.11
|
|
|
BorgWarner Inc. stockholder's equity
|
|
|
||||||||||||||||||||
(in millions)
|
Issued common stock
|
|
Capital in excess of par value
|
|
Treasury stock
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Noncontrolling interests
|
||||||||||||
Balance, March 31, 2019
|
$
|
3
|
|
|
$
|
1,111
|
|
|
$
|
(1,626
|
)
|
|
$
|
5,461
|
|
|
$
|
(675
|
)
|
|
$
|
111
|
|
Dividends declared ($0.17 per share) *
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(10
|
)
|
||||||
Net issuance for executive stock plan
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net issuance of restricted stock
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|
—
|
|
|
10
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(3
|
)
|
||||||
Balance, June 30, 2019
|
$
|
3
|
|
|
$
|
1,116
|
|
|
$
|
(1,653
|
)
|
|
$
|
5,598
|
|
|
$
|
(670
|
)
|
|
$
|
108
|
|
|
BorgWarner Inc. stockholder's equity
|
|
|
||||||||||||||||||||
(in millions)
|
Issued common stock
|
|
Capital in excess of par value
|
|
Treasury stock
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Noncontrolling interests
|
||||||||||||
Balance, March 31, 2018
|
$
|
3
|
|
|
$
|
1,102
|
|
|
$
|
(1,486
|
)
|
|
$
|
4,736
|
|
|
$
|
(444
|
)
|
|
$
|
105
|
|
Dividends declared ($0.17 per share) *
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(17
|
)
|
||||||
Net issuance for executive stock plan
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net issuance of restricted stock
|
—
|
|
|
6
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
|
12
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
(6
|
)
|
||||||
Balance, June 30, 2018
|
$
|
3
|
|
|
$
|
1,110
|
|
|
$
|
(1,544
|
)
|
|
$
|
4,973
|
|
|
$
|
(582
|
)
|
|
$
|
94
|
|
|
BorgWarner Inc. stockholder's equity
|
|
|
||||||||||||||||||||
(in millions)
|
Issued common stock
|
|
Capital in excess of par value
|
|
Treasury stock
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Noncontrolling interests
|
||||||||||||
Balance, December 31, 2018
|
$
|
3
|
|
|
$
|
1,146
|
|
|
$
|
(1,585
|
)
|
|
$
|
5,336
|
|
|
$
|
(674
|
)
|
|
$
|
119
|
|
Dividends declared ($0.34 per share) *
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
(30
|
)
|
||||||
Net issuance for executive stock plan
|
—
|
|
|
(9
|
)
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net issuance of restricted stock
|
—
|
|
|
(21
|
)
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|
—
|
|
|
21
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(2
|
)
|
||||||
Balance, June 30, 2019
|
$
|
3
|
|
|
$
|
1,116
|
|
|
$
|
(1,653
|
)
|
|
$
|
5,598
|
|
|
$
|
(670
|
)
|
|
$
|
108
|
|
|
BorgWarner Inc. stockholder's equity
|
|
|
||||||||||||||||||||
(in millions)
|
Issued common stock
|
|
Capital in excess of par value
|
|
Treasury stock
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Noncontrolling interests
|
||||||||||||
Balance, December 31, 2017
|
$
|
3
|
|
|
$
|
1,118
|
|
|
$
|
(1,445
|
)
|
|
$
|
4,531
|
|
|
$
|
(490
|
)
|
|
$
|
109
|
|
Dividends declared ($0.34 per share) *
|
—
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
(35
|
)
|
||||||
Net issuance for executive stock plan
|
—
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net issuance of restricted stock
|
—
|
|
|
(9
|
)
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
(14
|
)
|
|
—
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
497
|
|
|
—
|
|
|
24
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
(4
|
)
|
||||||
Balance, June 30, 2018
|
$
|
3
|
|
|
$
|
1,110
|
|
|
$
|
(1,544
|
)
|
|
$
|
4,973
|
|
|
$
|
(582
|
)
|
|
$
|
94
|
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Hedge instruments
|
|
Defined benefit retirement plans
|
|
Other
|
|
Total
|
||||||||||
Beginning balance, March 31, 2019
|
|
$
|
(450
|
)
|
|
$
|
—
|
|
|
$
|
(227
|
)
|
|
$
|
2
|
|
|
$
|
(675
|
)
|
Comprehensive (loss) income before reclassifications
|
|
(15
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(15
|
)
|
|||||
Income taxes associated with comprehensive (loss) income before reclassifications
|
|
2
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Reclassification from accumulated other comprehensive loss
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|||||
Income taxes reclassified into net earnings
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Ending balance, June 30, 2019
|
|
$
|
(463
|
)
|
|
$
|
(1
|
)
|
|
$
|
(208
|
)
|
|
$
|
2
|
|
|
$
|
(670
|
)
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Hedge instruments
|
|
Defined benefit retirement plans
|
|
Other
|
|
Total
|
||||||||||
Beginning balance, March 31, 2018
|
|
$
|
(229
|
)
|
|
$
|
(4
|
)
|
|
$
|
(214
|
)
|
|
$
|
3
|
|
|
$
|
(444
|
)
|
Comprehensive (loss) income before reclassifications
|
|
(149
|
)
|
|
(1
|
)
|
|
6
|
|
|
—
|
|
|
(144
|
)
|
|||||
Income taxes associated with comprehensive (loss) income before reclassifications
|
|
3
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
|||||
Reclassification from accumulated other comprehensive loss
|
|
—
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
5
|
|
|||||
Income taxes reclassified into net earnings
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Ending balance, June 30, 2018
|
|
$
|
(375
|
)
|
|
$
|
(3
|
)
|
|
$
|
(207
|
)
|
|
$
|
3
|
|
|
$
|
(582
|
)
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Hedge instruments
|
|
Defined benefit retirement plans
|
|
Other
|
|
Total
|
||||||||||
Beginning balance, December 31, 2018
|
|
$
|
(441
|
)
|
|
$
|
—
|
|
|
$
|
(235
|
)
|
|
$
|
2
|
|
|
$
|
(674
|
)
|
Comprehensive (loss) income before reclassifications
|
|
(20
|
)
|
|
(1
|
)
|
|
4
|
|
|
—
|
|
|
(17
|
)
|
|||||
Income taxes associated with comprehensive (loss) income before reclassifications
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Reclassification from accumulated other comprehensive loss
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
|||||
Income taxes reclassified into net earnings
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Ending balance, June 30, 2019
|
|
$
|
(463
|
)
|
|
$
|
(1
|
)
|
|
$
|
(208
|
)
|
|
$
|
2
|
|
|
$
|
(670
|
)
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Hedge instruments
|
|
Defined benefit retirement plans
|
|
Other
|
|
Total
|
||||||||||
Beginning balance, December 31, 2017
|
|
$
|
(294
|
)
|
|
$
|
(1
|
)
|
|
$
|
(198
|
)
|
|
$
|
3
|
|
|
$
|
(490
|
)
|
Adoption of Accounting Standards
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Comprehensive (loss) income before reclassifications
|
|
(87
|
)
|
|
(6
|
)
|
|
2
|
|
|
—
|
|
|
(91
|
)
|
|||||
Income taxes associated with comprehensive (loss) income before reclassifications
|
|
6
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Reclassification from accumulated other comprehensive loss
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
8
|
|
|||||
Income taxes reclassified into net earnings
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Ending balance, June 30, 2018
|
|
$
|
(375
|
)
|
|
$
|
(3
|
)
|
|
$
|
(207
|
)
|
|
$
|
3
|
|
|
$
|
(582
|
)
|
(in millions)
|
|
|
|
June 30, 2019
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Other non-current assets
|
|
$
|
95
|
|
Total operating lease assets
|
|
|
|
$
|
95
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating lease liabilities
|
|
Accounts payable and accrued expenses
|
|
$
|
22
|
|
Noncurrent
|
|
|
|
|
||
Operating lease liabilities
|
|
Other non-current liabilities
|
|
71
|
|
|
Total operating lease liabilities
|
|
|
|
$
|
93
|
|
(in millions)
|
|
Operating Leases
|
||
2019 (excluding the six months ended June 30, 2019)
|
|
$
|
11
|
|
2020
|
|
20
|
|
|
2021
|
|
15
|
|
|
2022
|
|
12
|
|
|
2023
|
|
9
|
|
|
After 2023
|
|
39
|
|
|
Total (undiscounted) lease payments
|
|
$
|
106
|
|
Less: Imputed interest
|
|
13
|
|
|
Present value of lease liabilities
|
|
$
|
93
|
|
(in millions)
|
|
||
2019
|
$
|
24
|
|
2020
|
21
|
|
|
2021
|
15
|
|
|
2022
|
13
|
|
|
2023
|
10
|
|
|
After 2023
|
38
|
|
|
Total minimum lease payments
|
$
|
121
|
|
Weighted-average remaining lease term (years)
|
|
|
|
Operating leases
|
|
8
|
|
Finance leases
|
|
3
|
|
Weighted-average discount rate
|
|
|
|
Operating leases
|
|
2.8
|
%
|
Finance leases
|
|
3.3
|
%
|
|
2019
|
|
2018
|
||
Beginning Claims January 1
|
8,598
|
|
|
9,225
|
|
New Claims Received
|
1,111
|
|
|
1,020
|
|
Dismissed Claims
|
(793
|
)
|
|
(786
|
)
|
Settled Claims
|
(154
|
)
|
|
(189
|
)
|
Ending Claims June 30
|
8,762
|
|
|
9,270
|
|
(in millions)
|
2019
|
|
2018
|
||||
Beginning asbestos liability as of January 1
|
$
|
805
|
|
|
$
|
828
|
|
Claim resolution costs and associated defense costs
|
(22
|
)
|
|
(28
|
)
|
||
Ending asbestos liability as of June 30
|
$
|
783
|
|
|
$
|
800
|
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
||||
Other long-term asbestos-related insurance receivables
|
$
|
324
|
|
|
$
|
303
|
|
Deferred asbestos-related insurance asset
|
$
|
62
|
|
|
$
|
83
|
|
Total insurance assets
|
$
|
386
|
|
|
$
|
386
|
|
Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
49
|
|
|
$
|
50
|
|
Other non-current liabilities
|
734
|
|
|
755
|
|
||
Total accrued liabilities
|
$
|
783
|
|
|
$
|
805
|
|
|
|
Severance Accruals
|
||||||||||
(in millions)
|
|
Drivetrain
|
|
Engine
|
|
Total
|
||||||
Balance at December 31, 2018
|
|
$
|
4
|
|
|
$
|
21
|
|
|
$
|
25
|
|
Provision
|
|
—
|
|
|
7
|
|
|
7
|
|
|||
Cash payments
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|||
Balance at March 31, 2019
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
12
|
|
Provision
|
|
—
|
|
|
8
|
|
|
8
|
|
|||
Cash payments
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Balance at June 30, 2019
|
|
$
|
4
|
|
|
$
|
14
|
|
|
$
|
18
|
|
|
|
Severance Accruals
|
||||||||||
(in millions)
|
|
Drivetrain
|
|
Engine
|
|
Total
|
||||||
Balance at December 31, 2017
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
5
|
|
Provision
|
|
1
|
|
|
1
|
|
|
2
|
|
|||
Cash payments
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Translation adjustment
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Balance at March 31, 2018
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
6
|
|
Provision
|
|
1
|
|
|
26
|
|
|
27
|
|
|||
Cash payments
|
|
(1
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
Balance at June 30, 2018
|
|
$
|
5
|
|
|
$
|
22
|
|
|
$
|
27
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(in millions, except per share amounts)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to BorgWarner Inc.
|
$
|
172
|
|
|
$
|
272
|
|
|
$
|
332
|
|
|
$
|
497
|
|
Weighted average shares of common stock outstanding
|
205.7
|
|
|
208.6
|
|
|
206.1
|
|
|
209.0
|
|
||||
Basic earnings per share of common stock
|
$
|
0.84
|
|
|
$
|
1.30
|
|
|
$
|
1.61
|
|
|
$
|
2.38
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to BorgWarner Inc.
|
$
|
172
|
|
|
$
|
272
|
|
|
$
|
332
|
|
|
$
|
497
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding
|
205.7
|
|
|
208.6
|
|
|
206.1
|
|
|
209.0
|
|
||||
Effect of stock-based compensation
|
1.1
|
|
|
1.3
|
|
|
0.9
|
|
|
1.3
|
|
||||
Weighted average shares of common stock outstanding including dilutive shares
|
206.8
|
|
|
209.9
|
|
|
207.0
|
|
|
210.3
|
|
||||
Diluted earnings per share of common stock
|
$
|
0.83
|
|
|
$
|
1.30
|
|
|
$
|
1.60
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share:
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Engine
|
$
|
1,569
|
|
|
$
|
1,674
|
|
|
$
|
3,167
|
|
|
$
|
3,390
|
|
Drivetrain
|
998
|
|
|
1,034
|
|
|
1,980
|
|
|
2,117
|
|
||||
Inter-segment eliminations
|
(16
|
)
|
|
(14
|
)
|
|
(30
|
)
|
|
(29
|
)
|
||||
Net sales
|
$
|
2,551
|
|
|
$
|
2,694
|
|
|
$
|
5,117
|
|
|
$
|
5,478
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Engine
|
$
|
249
|
|
|
$
|
279
|
|
|
$
|
490
|
|
|
$
|
559
|
|
Drivetrain
|
102
|
|
|
116
|
|
|
207
|
|
|
237
|
|
||||
Adjusted EBIT
|
351
|
|
|
395
|
|
|
697
|
|
|
796
|
|
||||
Restructuring expense
|
13
|
|
|
31
|
|
|
27
|
|
|
39
|
|
||||
Merger, acquisition and divestiture expense
|
5
|
|
|
1
|
|
|
6
|
|
|
3
|
|
||||
Other expense (income)
|
—
|
|
|
—
|
|
|
14
|
|
|
(5
|
)
|
||||
Officer stock awards modification
|
—
|
|
|
(4
|
)
|
|
2
|
|
|
(4
|
)
|
||||
Corporate, including equity in affiliates' earnings and stock-based compensation
|
39
|
|
|
41
|
|
|
81
|
|
|
94
|
|
||||
Interest income
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(3
|
)
|
||||
Interest expense
|
14
|
|
|
15
|
|
|
28
|
|
|
31
|
|
||||
Other postretirement expense (income)
|
27
|
|
|
(2
|
)
|
|
27
|
|
|
(5
|
)
|
||||
Earnings before income taxes and noncontrolling interest
|
255
|
|
|
314
|
|
|
517
|
|
|
646
|
|
||||
Provision for income taxes
|
73
|
|
|
30
|
|
|
164
|
|
|
125
|
|
||||
Net earnings
|
182
|
|
|
284
|
|
|
353
|
|
|
521
|
|
||||
Net earnings attributable to the noncontrolling interest, net of tax
|
10
|
|
|
12
|
|
|
21
|
|
|
24
|
|
||||
Net earnings attributable to BorgWarner Inc.
|
$
|
172
|
|
|
$
|
272
|
|
|
$
|
332
|
|
|
$
|
497
|
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
2019
|
|
2018
|
||||
Engine
|
$
|
4,780
|
|
|
$
|
4,731
|
|
Drivetrain
|
3,906
|
|
|
3,920
|
|
||
Total
|
8,686
|
|
|
8,651
|
|
||
Corporate *
|
1,545
|
|
|
1,444
|
|
||
Total assets
|
$
|
10,231
|
|
|
$
|
10,095
|
|
|
|
December 31,
|
||
(millions of dollars)
|
|
2018
|
||
Receivables, net
|
|
$
|
15
|
|
Inventories, net
|
|
42
|
|
|
Prepayments and other current assets
|
|
12
|
|
|
Property, plant and equipment, net
|
|
45
|
|
|
Goodwill
|
|
7
|
|
|
Other intangible assets, net
|
|
20
|
|
|
Impairment of carrying value
|
|
(94
|
)
|
|
Total assets held for sale
|
|
$
|
47
|
|
|
|
|
||
Accounts payable and accrued expenses
|
|
$
|
18
|
|
Other liabilities
|
|
5
|
|
|
Total liabilities held for sale
|
|
$
|
23
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Non-comparable items:
|
|
|
|
||||
Pension settlement loss
|
$
|
(0.10
|
)
|
|
$
|
—
|
|
Restructuring expense
|
(0.05
|
)
|
|
(0.11
|
)
|
||
Merger, acquisition and divestiture expense
|
(0.02
|
)
|
|
(0.01
|
)
|
||
Officer stock awards modification
|
—
|
|
|
0.02
|
|
||
Tax adjustments
|
—
|
|
|
0.21
|
|
||
Total impact of non-comparable items per share — diluted
|
$
|
(0.17
|
)
|
|
$
|
0.11
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Non-comparable items:
|
|
|
|
||||
Restructuring expense
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
Pension settlement loss
|
(0.10
|
)
|
|
—
|
|
||
Loss on arbitration
|
(0.07
|
)
|
|
—
|
|
||
Merger, acquisition and divestiture expense
|
(0.02
|
)
|
|
(0.02
|
)
|
||
Officer stock awards modification
|
(0.01
|
)
|
|
0.02
|
|
||
Gain on commercial settlement
|
—
|
|
|
0.01
|
|
||
Tax adjustments
|
(0.09
|
)
|
|
0.21
|
|
||
Total impact of non-comparable items per share — diluted
|
$
|
(0.40
|
)
|
|
$
|
0.08
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Engine
|
$
|
1,569
|
|
|
$
|
1,674
|
|
|
$
|
3,167
|
|
|
$
|
3,390
|
|
Drivetrain
|
998
|
|
|
1,034
|
|
|
1,980
|
|
|
2,117
|
|
||||
Inter-segment eliminations
|
(16
|
)
|
|
(14
|
)
|
|
(30
|
)
|
|
(29
|
)
|
||||
Net sales
|
$
|
2,551
|
|
|
$
|
2,694
|
|
|
$
|
5,117
|
|
|
$
|
5,478
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Engine
|
$
|
249
|
|
|
$
|
279
|
|
|
$
|
490
|
|
|
$
|
559
|
|
Drivetrain
|
102
|
|
|
116
|
|
|
207
|
|
|
237
|
|
||||
Adjusted EBIT
|
351
|
|
|
395
|
|
|
697
|
|
|
796
|
|
||||
Restructuring expense
|
13
|
|
|
31
|
|
|
27
|
|
|
39
|
|
||||
Merger, acquisition and divestiture expense
|
5
|
|
|
1
|
|
|
6
|
|
|
3
|
|
||||
Other expense (income)
|
—
|
|
|
—
|
|
|
14
|
|
|
(5
|
)
|
||||
Officer stock awards modification
|
—
|
|
|
(4
|
)
|
|
2
|
|
|
(4
|
)
|
||||
Corporate, including equity in affiliates' earnings and stock-based compensation
|
39
|
|
|
41
|
|
|
81
|
|
|
94
|
|
||||
Interest income
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(3
|
)
|
||||
Interest expense
|
14
|
|
|
15
|
|
|
28
|
|
|
31
|
|
||||
Other postretirement expense (income)
|
27
|
|
|
(2
|
)
|
|
27
|
|
|
(5
|
)
|
||||
Earnings before income taxes and noncontrolling interest
|
255
|
|
|
314
|
|
|
517
|
|
|
646
|
|
||||
Provision for income taxes
|
73
|
|
|
30
|
|
|
164
|
|
|
125
|
|
||||
Net earnings
|
182
|
|
|
284
|
|
|
353
|
|
|
521
|
|
||||
Net earnings attributable to the noncontrolling interest, net of tax
|
10
|
|
|
12
|
|
|
21
|
|
|
24
|
|
||||
Net earnings attributable to BorgWarner Inc.
|
$
|
172
|
|
|
$
|
272
|
|
|
$
|
332
|
|
|
$
|
497
|
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6.
|
Exhibits
|
|
|
|
|
|
|
|
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Exhibit 10.1
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Exhibit 10.2
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Exhibit 10.3
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Exhibit 10.4
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Exhibit 10.5
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32.1
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Exhibit 101.SCH
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XBRL Taxonomy Extension Schema Document.*
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Exhibit 101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.*
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Exhibit 101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.*
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Exhibit 101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.*
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Exhibit 101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.*
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BorgWarner Inc.
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(Registrant)
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By
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/s/ Thomas J. McGill
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(Signature)
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Thomas J. McGill
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Vice President and Controller
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(Principal Accounting Officer)
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1 Year BorgWarner Chart |
1 Month BorgWarner Chart |
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