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 | ||||||||||||
1.00% Senior Notes due 2031 | BWA31 | New York Stock Exchange |
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | ||||||||||||||||||||
Emerging growth company |
Page No. | |||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
ASSETS | |||||||||||
Cash, cash equivalents and restricted cash | $ | 848 | $ | 1,338 | |||||||
Receivables, net | 3,856 | 3,323 | |||||||||
Inventories, net | 1,860 | 1,687 | |||||||||
Prepayments and other current assets | 312 | 269 | |||||||||
Total current assets | 6,876 | 6,617 | |||||||||
Property, plant and equipment, net | 4,482 | 4,365 | |||||||||
Investments and long-term receivables | 835 | 896 | |||||||||
Goodwill | 3,404 | 3,397 | |||||||||
Other intangible assets, net | 1,002 | 1,051 | |||||||||
Other non-current assets | 718 | 668 | |||||||||
Total assets | $ | 17,317 | $ | 16,994 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Notes payable and other short-term debt | $ | 65 | $ | 62 | |||||||
Accounts payable | 2,725 | 2,684 | |||||||||
Other current liabilities | 1,445 | 1,490 | |||||||||
Total current liabilities | 4,235 | 4,236 | |||||||||
Long-term debt | 4,191 | 4,166 | |||||||||
Retirement-related liabilities | 228 | 223 | |||||||||
Other non-current liabilities | 882 | 861 | |||||||||
Total liabilities | 9,536 | 9,486 | |||||||||
Commitments and contingencies | |||||||||||
Common stock | 3 | 3 | |||||||||
Capital in excess of par value | 2,657 | 2,675 | |||||||||
Retained earnings | 7,796 | 7,454 | |||||||||
Accumulated other comprehensive loss | (898) | (876) | |||||||||
Common stock held in treasury, at cost | (2,007) | (2,032) | |||||||||
Total BorgWarner Inc. stockholders’ equity | 7,551 | 7,224 | |||||||||
Noncontrolling interest | 230 | 284 | |||||||||
Total equity | 7,781 | 7,508 | |||||||||
Total liabilities and equity | $ | 17,317 | $ | 16,994 |
(in millions) | September 30, 2017 | December 31, 2016 | |||||
ASSETS | |||||||
Cash | $ | 414.3 | $ | 443.7 | |||
Receivables, net | 2,046.1 | 1,689.3 | |||||
Inventories, net | 773.4 | 641.2 | |||||
Prepayments and other current assets | 167.3 | 137.4 | |||||
Total current assets | 3,401.1 | 2,911.6 | |||||
Property, plant and equipment, net | 2,753.7 | 2,501.8 | |||||
Investments and other long-term receivables | 559.5 | 502.2 | |||||
Goodwill | 1,882.1 | 1,702.2 | |||||
Other intangible assets, net | 509.4 | 463.5 | |||||
Other non-current assets | 710.4 | 753.4 | |||||
Total assets | $ | 9,816.2 | $ | 8,834.7 | |||
LIABILITIES AND EQUITY | |||||||
Notes payable and other short-term debt | $ | 303.2 | $ | 175.9 | |||
Accounts payable and accrued expenses | 2,015.0 | 1,847.3 | |||||
Income taxes payable | 63.0 | 68.6 | |||||
Total current liabilities | 2,381.2 | 2,091.8 | |||||
Long-term debt | 2,091.9 | 2,043.6 | |||||
Other non-current liabilities: | |||||||
Asbestos-related liabilities | 786.0 | 827.6 | |||||
Retirement-related liabilities | 301.7 | 294.1 | |||||
Other | 339.1 | 275.7 | |||||
Total other non-current liabilities | 1,426.8 | 1,397.4 | |||||
Commitments and contingencies | |||||||
Common stock | 2.5 | 2.5 | |||||
Capital in excess of par value | 1,100.1 | 1,104.3 | |||||
Retained earnings | 4,712.8 | 4,215.2 | |||||
Accumulated other comprehensive loss | (545.7 | ) | (722.1 | ) | |||
Common stock held in treasury | (1,444.0 | ) | (1,381.6 | ) | |||
Total BorgWarner Inc. stockholders’ equity | 3,825.7 | 3,218.3 | |||||
Noncontrolling interest | 90.6 | 83.6 | |||||
Total equity | 3,916.3 | 3,301.9 | |||||
Total liabilities and equity | $ | 9,816.2 | $ | 8,834.7 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net sales | $ | 4,520 | $ | 3,759 | $ | 8,700 | $ | 7,633 | |||||||||||||||
Cost of sales | 3,652 | 3,047 | 7,082 | 6,171 | |||||||||||||||||||
Gross profit | 868 | 712 | 1,618 | 1,462 | |||||||||||||||||||
Selling, general and administrative expenses | 422 | 394 | 806 | 782 | |||||||||||||||||||
Restructuring expense | 12 | 27 | 19 | 42 | |||||||||||||||||||
Other operating expense, net | 51 | 19 | 70 | 14 | |||||||||||||||||||
Operating income | 383 | 272 | 723 | 624 | |||||||||||||||||||
Equity in affiliates’ earnings, net of tax | (14) | (11) | (18) | (19) | |||||||||||||||||||
Unrealized loss (gain) on debt and equity securities | 54 | (11) | 69 | 28 | |||||||||||||||||||
Interest expense, net | 12 | 15 | 22 | 30 | |||||||||||||||||||
Other postretirement expense (income) | 3 | (9) | 5 | (18) | |||||||||||||||||||
Earnings before income taxes and noncontrolling interest | 328 | 288 | 645 | 603 | |||||||||||||||||||
Provision for income taxes | 106 | 57 | 193 | 148 | |||||||||||||||||||
Net earnings | 222 | 231 | 452 | 455 | |||||||||||||||||||
Net earnings attributable to noncontrolling interest, net of tax | 18 | 15 | 31 | 39 | |||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 204 | $ | 216 | $ | 421 | $ | 416 | |||||||||||||||
Earnings per share attributable to BorgWarner Inc. — basic | $ | 0.87 | $ | 0.91 | $ | 1.81 | $ | 1.75 | |||||||||||||||
Earnings per share attributable to BorgWarner Inc. — diluted | $ | 0.87 | $ | 0.91 | $ | 1.80 | $ | 1.74 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 233.4 | 236.9 | 233.1 | 237.6 | |||||||||||||||||||
Diluted | 234.4 | 238.0 | 234.3 | 238.5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net sales | $ | 2,416.2 | $ | 2,214.2 | $ | 7,212.9 | $ | 6,812.0 | |||||||
Cost of sales | 1,893.5 | 1,743.1 | 5,658.7 | 5,379.9 | |||||||||||
Gross profit | 522.7 | 471.1 | 1,554.2 | 1,432.1 | |||||||||||
Selling, general and administrative expenses | 224.8 | 209.7 | 658.6 | 600.4 | |||||||||||
Other expense, net | 22.0 | 111.1 | 27.5 | 147.8 | |||||||||||
Operating income | 275.9 | 150.3 | 868.1 | 683.9 | |||||||||||
Equity in affiliates’ earnings, net of tax | (14.4 | ) | (12.4 | ) | (38.5 | ) | (31.6 | ) | |||||||
Interest income | (1.3 | ) | (1.6 | ) | (4.2 | ) | (4.7 | ) | |||||||
Interest expense and finance charges | 17.6 | 22.4 | 53.6 | 65.1 | |||||||||||
Earnings before income taxes and noncontrolling interest | 274.0 | 141.9 | 857.2 | 655.1 | |||||||||||
Provision for income taxes | 79.4 | 48.8 | 241.9 | 213.4 | |||||||||||
Net earnings | 194.6 | 93.1 | 615.3 | 441.7 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 9.7 | 9.8 | 29.2 | 29.9 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 184.9 | $ | 83.3 | $ | 586.1 | $ | 411.8 | |||||||
Earnings per share — basic | $ | 0.88 | $ | 0.39 | $ | 2.78 | $ | 1.91 | |||||||
Earnings per share — diluted | $ | 0.88 | $ | 0.39 | $ | 2.77 | $ | 1.90 | |||||||
Weighted average shares outstanding (thousands): | |||||||||||||||
Basic | 209,803 | 212,872 | 210,657 | 215,332 | |||||||||||
Diluted | 211,013 | 213,766 | 211,575 | 216,189 | |||||||||||
Dividends declared per share | $ | 0.14 | $ | 0.13 | $ | 0.42 | $ | 0.39 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 184.9 | $ | 83.3 | $ | 586.1 | $ | 411.8 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation adjustments | 64.2 | 27.9 | 186.6 | 41.8 | |||||||||||
Hedge instruments* | (1.7 | ) | (2.3 | ) | (5.2 | ) | 1.1 | ||||||||
Defined benefit postretirement plans* | (1.8 | ) | (2.9 | ) | (6.2 | ) | (2.5 | ) | |||||||
Other* | — | 0.1 | 1.2 | (1.2 | ) | ||||||||||
Total other comprehensive income attributable to BorgWarner Inc. | 60.7 | 22.8 | 176.4 | 39.2 | |||||||||||
Comprehensive income attributable to BorgWarner Inc. | 245.6 | 106.1 | 762.5 | 451.0 | |||||||||||
Comprehensive income attributable to the noncontrolling interest | 1.1 | 2.2 | 4.5 | 2.3 | |||||||||||
Comprehensive income | $ | 246.7 | $ | 108.3 | $ | 767.0 | $ | 453.3 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 204 | $ | 216 | $ | 421 | $ | 416 | |||||||||||||||
Other comprehensive loss | |||||||||||||||||||||||
Foreign currency translation adjustments* | (95) | (262) | (56) | (280) | |||||||||||||||||||
Hedge instruments* | 24 | 5 | 38 | 5 | |||||||||||||||||||
Defined benefit postretirement plans* | (3) | 5 | (4) | 10 | |||||||||||||||||||
Total other comprehensive loss attributable to BorgWarner Inc. | (74) | (252) | (22) | (265) | |||||||||||||||||||
Comprehensive income (loss) attributable to BorgWarner Inc.* | 130 | (36) | 399 | 151 | |||||||||||||||||||
Net income attributable to noncontrolling interest, net of tax | 18 | 15 | 31 | 39 | |||||||||||||||||||
Other comprehensive loss attributable to noncontrolling interest* | (13) | (17) | (14) | (18) | |||||||||||||||||||
Comprehensive income (loss) | $ | 135 | $ | (38) | $ | 416 | $ | 172 |
Nine Months Ended September 30, | |||||||
(in millions) | 2017 | 2016 | |||||
OPERATING | |||||||
Net earnings | $ | 615.3 | $ | 441.7 | |||
Adjustments to reconcile net earnings to net cash flows from operations: | |||||||
Asset impairment expense | — | 106.5 | |||||
Depreciation and amortization | 302.0 | 291.2 | |||||
Restructuring expense, net of cash paid | 3.5 | 12.0 | |||||
Stock-based compensation expense | 35.5 | 27.3 | |||||
Deferred income tax provision | 39.5 | 0.7 | |||||
Equity in affiliates’ earnings, net of dividends received, and other | (23.7 | ) | (22.3 | ) | |||
Net earnings adjusted for non-cash charges to operations | 972.1 | 857.1 | |||||
Changes in assets and liabilities: | |||||||
Receivables | (232.0 | ) | (176.2 | ) | |||
Inventories | (70.8 | ) | (45.5 | ) | |||
Prepayments and other current assets | (9.1 | ) | 3.9 | ||||
Accounts payable and accrued expenses | 49.8 | (14.0 | ) | ||||
Income taxes payable | (18.1 | ) | (33.1 | ) | |||
Other assets and liabilities | (68.0 | ) | 0.9 | ||||
Net cash provided by operating activities | 623.9 | 593.1 | |||||
INVESTING | |||||||
Capital expenditures, including tooling outlays | (389.7 | ) | (354.8 | ) | |||
Payments for business acquired, net of cash acquired | (180.6 | ) | — | ||||
Proceeds from sale of business, net of cash divested | — | 5.4 | |||||
Proceeds from asset disposals and other | 1.6 | 7.0 | |||||
Payments for venture capital investment | (2.0 | ) | — | ||||
Net cash used in investing activities | (570.7 | ) | (342.4 | ) | |||
FINANCING | |||||||
Net increase in notes payable | 124.9 | 51.6 | |||||
Additions to long-term debt, net of debt issuance costs | — | 4.6 | |||||
Repayments of long-term debt, including current portion | (14.5 | ) | (16.6 | ) | |||
Proceeds from interest rate swap termination | — | 8.9 | |||||
Payments for debt issuance cost | (2.4 | ) | — | ||||
Payments for purchase of treasury stock | (100.0 | ) | (250.0 | ) | |||
Payments for (proceeds from) stock-based compensation items | (2.1 | ) | 0.9 | ||||
Dividends paid to BorgWarner stockholders | (88.5 | ) | (83.8 | ) | |||
Dividends paid to noncontrolling stockholders | (23.6 | ) | (25.7 | ) | |||
Net cash used in financing activities | (106.2 | ) | (310.1 | ) | |||
Effect of exchange rate changes on cash | 23.6 | 0.4 | |||||
Net decrease in cash | (29.4 | ) | (59.0 | ) | |||
Cash at beginning of year | 443.7 | 577.7 | |||||
Cash at end of period | $ | 414.3 | $ | 518.7 | |||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 72.1 | $ | 73.5 | |||
Income taxes, net of refunds | $ | 219.9 | $ | 246.1 | |||
Non-cash investing transactions | |||||||
Liabilities assumed from business acquired | $ | 19.1 | $ | — |
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
OPERATING | |||||||||||
Net cash provided by operating activities (see Note 23) | $ | 268 | $ | 332 | |||||||
INVESTING | |||||||||||
Capital expenditures, including tooling outlays | (520) | (331) | |||||||||
Payments for businesses acquired, net of cash acquired | (30) | (157) | |||||||||
Proceeds from settlement of net investment hedges, net | 13 | 28 | |||||||||
(Payments) proceeds from investments in debt and equity securities, net | (1) | 30 | |||||||||
Proceeds from the sale of business, net | — | 25 | |||||||||
Proceeds from asset disposals and other, net | 16 | 17 | |||||||||
Net cash used in investing activities | (522) | (388) | |||||||||
FINANCING | |||||||||||
Net increase in notes payable | 3 | — | |||||||||
Additions to debt | 2 | 2 | |||||||||
Repayments of debt, including current portion | (6) | (6) | |||||||||
Payments for purchase of treasury stock | — | (140) | |||||||||
Payments for stock-based compensation items | (25) | (17) | |||||||||
Payments for contingent consideration | (23) | — | |||||||||
Purchase of noncontrolling interest | (15) | (59) | |||||||||
Dividends paid to BorgWarner stockholders | (79) | (82) | |||||||||
Dividends paid to noncontrolling stockholders | (64) | (46) | |||||||||
Net cash used in financing activities | (207) | (348) | |||||||||
Effect of exchange rate changes on cash | (29) | (50) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (490) | (454) | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | 1,338 | 1,844 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 848 | $ | 1,390 |
(in millions) | Estimated Life | Estimated Fair Value | |||||||||
Developed technology | 8 years | $ | 11 | ||||||||
Customer relationships | 12 years | 7 | |||||||||
Total other intangible assets | $ | 18 |
(in millions) | Estimated Life | Estimated Fair Value | |||||||||
Developed technology | 13 years | $ | 22 | ||||||||
Customer relationships | 8 years | 5 | |||||||||
Total other intangible assets | $ | 27 |
(in millions) | Estimated Life | Estimated Fair Value | |||||||||
Customer relationships | 12 years | $ | 62 | ||||||||
Manufacturing processes (know-how) | 10 years | 25 | |||||||||
Total other intangible assets | $ | 87 |
Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Total | |||||||||||||||||||||||||||||
North America | $ | 558 | $ | 414 | $ | 152 | $ | 142 | $ | 172 | $ | 1,438 | |||||||||||||||||||||||
Europe | 861 | 351 | 258 | 68 | 116 | 1,654 | |||||||||||||||||||||||||||||
Asia | 528 | 350 | 120 | 309 | 20 | 1,327 | |||||||||||||||||||||||||||||
Other | 56 | 2 | 15 | — | 28 | 101 | |||||||||||||||||||||||||||||
Total | $ | 2,003 | $ | 1,117 | $ | 545 | $ | 519 | $ | 336 | $ | 4,520 | |||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Total | |||||||||||||||||||||||||||||
North America | $ | 506 | $ | 338 | $ | 107 | $ | 136 | $ | 184 | $ | 1,271 | |||||||||||||||||||||||
Europe | 689 | 264 | 231 | 44 | 102 | 1,330 | |||||||||||||||||||||||||||||
Asia | 451 | 294 | 118 | 194 | 17 | 1,074 | |||||||||||||||||||||||||||||
Other | 46 | — | 18 | — | 20 | 84 | |||||||||||||||||||||||||||||
Total | $ | 1,692 | $ | 896 | $ | 474 | $ | 374 | $ | 323 | $ | 3,759 | |||||||||||||||||||||||
Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Total | |||||||||||||||||||||||||||||
North America | $ | 1,078 | $ | 785 | $ | 304 | $ | 270 | $ | 343 | $ | 2,780 | |||||||||||||||||||||||
Europe | 1,751 | 651 | 485 | 128 | 228 | 3,243 | |||||||||||||||||||||||||||||
Asia | 1,019 | 633 | 237 | 560 | 36 | 2,485 | |||||||||||||||||||||||||||||
Other | 108 | 3 | 26 | — | 55 | 192 | |||||||||||||||||||||||||||||
Total | $ | 3,956 | $ | 2,072 | $ | 1,052 | $ | 958 | $ | 662 | $ | 8,700 | |||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Total | |||||||||||||||||||||||||||||
North America | $ | 965 | $ | 644 | $ | 223 | $ | 259 | $ | 352 | $ | 2,443 | |||||||||||||||||||||||
Europe | 1,422 | 498 | 472 | 94 | 201 | 2,687 | |||||||||||||||||||||||||||||
Asia | 967 | 649 | 272 | 415 | 30 | 2,333 | |||||||||||||||||||||||||||||
Other | 90 | — | 36 | — | 44 | 170 | |||||||||||||||||||||||||||||
Total | $ | 3,444 | $ | 1,791 | $ | 1,003 | $ | 768 | $ | 627 | $ | 7,633 |
Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Corporate | Total | ||||||||||||||||||||||||||||||||||
Employee termination benefits | $ | 7 | $ | — | $ | 1 | $ | — | $ | 1 | $ | — | $ | 9 | |||||||||||||||||||||||||||
Other | 2 | — | 1 | — | — | — | 3 | ||||||||||||||||||||||||||||||||||
Total restructuring expense | $ | 9 | $ | — | $ | 2 | $ | — | $ | 1 | $ | — | $ | 12 | |||||||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Corporate | Total | ||||||||||||||||||||||||||||||||||
Employee termination benefits | $ | 7 | $ | 14 | $ | 2 | $ | — | $ | — | $ | (1) | $ | 22 | |||||||||||||||||||||||||||
Other | — | 2 | 2 | 1 | — | — | 5 | ||||||||||||||||||||||||||||||||||
Total restructuring expense | $ | 7 | $ | 16 | $ | 4 | $ | 1 | $ | — | $ | (1) | $ | 27 | |||||||||||||||||||||||||||
Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Corporate | Total | ||||||||||||||||||||||||||||||||||
Employee termination benefits | $ | 9 | $ | — | $ | 5 | $ | — | $ | 1 | $ | — | $ | 15 | |||||||||||||||||||||||||||
Other | 3 | — | 1 | — | — | — | 4 | ||||||||||||||||||||||||||||||||||
Total restructuring expense | $ | 12 | $ | — | $ | 6 | $ | — | $ | 1 | $ | — | $ | 19 | |||||||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Air Management | Drivetrain & Battery Systems | Fuel Systems | ePropulsion | Aftermarket | Corporate | Total | ||||||||||||||||||||||||||||||||||
Employee termination benefits | $ | 14 | $ | 14 | $ | 3 | $ | — | $ | — | $ | (1) | $ | 30 | |||||||||||||||||||||||||||
Other | — | 9 | 2 | 1 | — | — | 12 | ||||||||||||||||||||||||||||||||||
Total restructuring expense | $ | 14 | $ | 23 | $ | 5 | $ | 1 | $ | — | $ | (1) | $ | 42 |
(in millions) | Employee Termination Benefits | Other | Total | ||||||||||||||
Balance at January 1, 2023 | $ | 59 | $ | 9 | $ | 68 | |||||||||||
Restructuring expense, net | 15 | 4 | 19 | ||||||||||||||
Cash payments | (38) | (6) | (44) | ||||||||||||||
Foreign currency translation adjustment and other | — | 1 | 1 | ||||||||||||||
Balance at June 30, 2023 | 36 | 8 | 44 | ||||||||||||||
Less: Non-current restructuring liability | 9 | — | 9 | ||||||||||||||
Current restructuring liability at June 30, 2023 | $ | 27 | $ | 8 | $ | 35 | |||||||||||
(in millions) | Employee Termination Benefits | Other | Total | ||||||||||||||
Balance at January 1, 2022 | $ | 126 | $ | 13 | $ | 139 | |||||||||||
Restructuring expense, net | 30 | 12 | 42 | ||||||||||||||
Cash payments | (64) | (17) | (81) | ||||||||||||||
Foreign currency translation adjustment and other | (5) | 2 | (3) | ||||||||||||||
Balance at June 30, 2022 | 87 | 10 | 97 | ||||||||||||||
Less: Non-current restructuring liability | 21 | 1 | 22 | ||||||||||||||
Current restructuring liability at June 30, 2022 | $ | 66 | $ | 9 | $ | 75 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Gross R&D expenditures | $ | 259 | $ | 234 | $ | 503 | $ | 466 | |||||||||||||||
Customer reimbursements | (51) | (27) | (102) | (68) | |||||||||||||||||||
Net R&D expenditures | $ | 208 | $ | 207 | $ | 401 | $ | 398 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Gross R&D expenditures | $ | 115.2 | $ | 106.1 | $ | 346.9 | $ | 311.1 | |||||||
Customer reimbursements | (13.7 | ) | (17.5 | ) | (44.1 | ) | (52.2 | ) | |||||||
Net R&D expenditures | $ | 101.5 | $ | 88.6 | $ | 302.8 | $ | 258.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Restructuring expense | $ | 13.3 | $ | 1.3 | $ | 13.3 | $ | 26.9 | |||||||
Merger and acquisition expense | 6.4 | 5.9 | 6.4 | 18.9 | |||||||||||
Lease termination settlement | — | — | 5.3 | — | |||||||||||
Asset impairment expense | — | 106.5 | — | 106.5 | |||||||||||
Other expense (income) | 2.3 | (2.6 | ) | 2.5 | (4.5 | ) | |||||||||
Other expense, net | $ | 22.0 | $ | 111.1 | $ | 27.5 | $ | 147.8 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Merger, acquisition and divestiture expense, net | $ | 56 | $ | 9 | $ | 83 | $ | 32 | |||||||||||||||
Service and lease agreement termination | 9 | — | 9 | — | |||||||||||||||||||
Gain on sale of asset | (6) | — | (6) | — | |||||||||||||||||||
Gain on sale of business | (5) | — | (5) | (24) | |||||||||||||||||||
Other (income) expense, net | (3) | 10 | (11) | 6 | |||||||||||||||||||
Other operating expense, net | $ | 51 | $ | 19 | $ | 70 | $ | 14 |
June 30, | December 31, | ||||||||||
(in millions) | 2023 | 2022 | |||||||||
Raw material and supplies | $ | 1,332 | $ | 1,203 | |||||||
Work in progress | 185 | 176 | |||||||||
Finished goods | 372 | 333 | |||||||||
FIFO inventories | 1,889 | 1,712 | |||||||||
LIFO reserve | (29) | (25) | |||||||||
Inventories, net | $ | 1,860 | $ | 1,687 |
June 30, | December 31, | ||||||||||
(in millions) | 2023 | 2022 | |||||||||
Prepayments and other current assets: | |||||||||||
Prepaid tooling | $ | 93 | $ | 82 | |||||||
Derivative instruments | 44 | 18 | |||||||||
Prepaid taxes | 35 | 40 | |||||||||
Customer incentive payments (Note 4) | 28 | 34 | |||||||||
Contract assets (Note 4) | 15 | 16 | |||||||||
Other | 97 | 79 | |||||||||
Total prepayments and other current assets | $ | 312 | $ | 269 | |||||||
Investments and long-term receivables: | |||||||||||
Investment in debt securities | $ | 386 | $ | 455 | |||||||
Investment in equity affiliates | 277 | 279 | |||||||||
Long-term receivables | 97 | 87 | |||||||||
Equity securities | 75 | 75 | |||||||||
Total investments and long-term receivables | $ | 835 | $ | 896 | |||||||
Other non-current assets: | |||||||||||
Operating leases | $ | 187 | $ | 199 | |||||||
Deferred income taxes | 335 | 239 | |||||||||
Customer incentive payments (Note 4) | 85 | 99 | |||||||||
Derivative instruments | 48 | 68 | |||||||||
Other | 63 | 63 | |||||||||
Total other non-current assets | $ | 718 | $ | 668 |
(in millions) | Air Management | Drivetrain & Battery Systems | ePropulsion | Aftermarket | Fuel Systems | Total | |||||||||||||||||||||||||||||
Gross goodwill balance, December 31, 2022 | $ | 1,566 | $ | 1,434 | $ | 480 | $ | 374 | $ | 45 | $ | 3,899 | |||||||||||||||||||||||
Accumulated impairment losses, December 31, 2022 | (502) | — | — | — | — | (502) | |||||||||||||||||||||||||||||
Net goodwill balance, December 31, 2022* | $ | 1,064 | $ | 1,434 | $ | 480 | $ | 374 | $ | 45 | $ | 3,397 | |||||||||||||||||||||||
Goodwill during the period: | |||||||||||||||||||||||||||||||||||
Acquisitions | 12 | — | — | — | — | 12 | |||||||||||||||||||||||||||||
Other, primarily translation adjustment | 5 | 12 | (23) | 1 | — | (5) | |||||||||||||||||||||||||||||
Ending balance, June 30, 2023 | $ | 1,081 | $ | 1,446 | $ | 457 | $ | 375 | $ | 45 | $ | 3,404 |
* | The December 31, 2022 balances have been recast for a change in reportable segments that was made during the first quarter of 2023. Refer to Note 22, “Reportable Segments And Related Information” for more information. |
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
(in millions) | Estimated useful lives (years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||||||||||||||||||
Patented and unpatented technology | 5 - 15 | $ | 495 | $ | 163 | $ | 332 | $ | 492 | $ | 141 | $ | 351 | ||||||||||||||||||||||||||||
Customer relationships | 7 - 15 | 900 | 379 | 521 | 901 | 351 | 550 | ||||||||||||||||||||||||||||||||||
Miscellaneous | 2 - 5 | 9 | 6 | 3 | 10 | 6 | 4 | ||||||||||||||||||||||||||||||||||
Total amortized intangible assets | 1,404 | 548 | 856 | 1,403 | 498 | 905 | |||||||||||||||||||||||||||||||||||
Unamortized trade names | 146 | — | 146 | 146 | — | 146 | |||||||||||||||||||||||||||||||||||
Total other intangible assets | $ | 1,550 | $ | 548 | $ | 1,002 | $ | 1,549 | $ | 498 | $ | 1,051 |
September 30, | December 31, | ||||||
(in millions) | 2017 | 2016 | |||||
Raw material and supplies | $ | 454.0 | $ | 378.6 | |||
Work in progress | 126.8 | 102.9 | |||||
Finished goods | 207.4 | 174.9 | |||||
FIFO inventories | 788.2 | 656.4 | |||||
LIFO reserve | (14.8 | ) | (15.2 | ) | |||
Inventories, net | $ | 773.4 | $ | 641.2 |
September 30, | December 31, | ||||||
(in millions) | 2017 | 2016 | |||||
Land, land use rights and buildings | $ | 874.7 | $ | 781.6 | |||
Machinery and equipment | 2,659.9 | 2,371.2 | |||||
Capital leases | 5.9 | 3.9 | |||||
Construction in progress | 381.9 | 338.2 | |||||
Total property, plant and equipment, gross | 3,922.4 | 3,494.9 | |||||
Less: accumulated depreciation | (1,351.3 | ) | (1,137.5 | ) | |||
Property, plant and equipment, net, excluding tooling | 2,571.1 | 2,357.4 | |||||
Tooling, net of amortization | 182.6 | 144.4 | |||||
Property, plant and equipment, net | $ | 2,753.7 | $ | 2,501.8 |
(in millions) | 2023 | 2022 | |||||||||
Beginning balance, January 1 | $ | 245 | $ | 236 | |||||||
Provisions for current period sales | 64 | 47 | |||||||||
Adjustments of prior estimates | (2) | (2) | |||||||||
Payments | (61) | (44) | |||||||||
Other, primarily translation adjustment | (1) | (13) | |||||||||
Ending balance, June 30 | $ | 245 | $ | 224 |
(in millions) | 2017 | 2016 | |||||
Beginning balance, January 1 | $ | 95.3 | $ | 107.9 | |||
Provisions | 51.3 | 47.4 | |||||
Acquisitions | 0.4 | 6.9 | |||||
Liabilities held for sale | — | (9.2 | ) | ||||
Payments | (45.7 | ) | (36.7 | ) | |||
Translation adjustment | 5.4 | 2.1 | |||||
Ending balance, September 30 | $ | 106.7 | $ | 118.4 |
June 30, | December 31, | ||||||||||
(in millions) | 2023 | 2022 | |||||||||
Other current liabilities | $ | 124 | $ | 142 | |||||||
Other non-current liabilities | 121 | 103 | |||||||||
Total product warranty liability | $ | 245 | $ | 245 |
September 30, | December 31, | ||||||
(in millions) | 2017 | 2016 | |||||
Accounts payable and accrued expenses | $ | 64.8 | $ | 63.9 | |||
Other non-current liabilities | 41.9 | 31.4 | |||||
Total product warranty liability | $ | 106.7 | $ | 95.3 |
June 30, | December 31, | ||||||||||
(in millions) | 2023 | 2022 | |||||||||
Short-term borrowings | $ | 62 | $ | 58 | |||||||
Long-term debt | |||||||||||
3.375% Senior notes due 03/15/25 ($500 million par value) | 499 | 499 | |||||||||
5.000% Senior notes due 10/01/25 ($800 million par value)* | 854 | 866 | |||||||||
2.650% Senior notes due 07/01/27 ($1,100 million par value) | 1,093 | 1,092 | |||||||||
7.125% Senior notes due 02/15/29 ($121 million par value) | 120 | 120 | |||||||||
1.000% Senior Notes due 05/19/31 (€1,000 million par value) | 1,073 | 1,051 | |||||||||
4.375% Senior notes due 03/15/45 ($500 million par value) | 495 | 495 | |||||||||
Term loan facilities, finance leases and other | 60 | 47 | |||||||||
Total long-term debt | 4,194 | 4,170 | |||||||||
Less: current portion | 3 | 4 | |||||||||
Long-term debt, net of current portion | $ | 4,191 | $ | 4,166 |
September 30, | December 31, | ||||||
(in millions) | 2017 | 2016 | |||||
Short-term debt | |||||||
Short-term borrowings | $ | 282.4 | $ | 156.5 | |||
Long-term debt | |||||||
8.00% Senior notes due 10/01/19 ($134 million par value) | 137.8 | 139.1 | |||||
4.625% Senior notes due 09/15/20 ($250 million par value) | 251.6 | 251.9 | |||||
1.80% Senior notes due 11/7/22 (€500 million par value) | 585.9 | 520.7 | |||||
3.375% Senior notes due 03/15/25 ($500 million par value) | 495.9 | 495.6 | |||||
7.125% Senior notes due 02/15/29 ($121 million par value) | 118.9 | 118.8 | |||||
4.375% Senior notes due 03/15/45 ($500 million par value) | 493.5 | 493.3 | |||||
Term loan facilities and other | 29.1 | 43.6 | |||||
Total long-term debt | 2,112.7 | 2,063.0 | |||||
Less: current portion | 20.8 | 19.4 | |||||
Long-term debt, net of current portion | $ | 2,091.9 | $ | 2,043.6 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Interest expense | $ | 21 | $ | 21 | $ | 41 | $ | 40 | |||||||||||||||
Interest income | (9) | (6) | (19) | (10) | |||||||||||||||||||
Interest expense, net | $ | 12 | $ | 15 | $ | 22 | $ | 30 |
June 30, | December 31, | ||||||||||
(in millions) | 2023 | 2022 | |||||||||
Other current liabilities: | |||||||||||
Payroll and employee related | $ | 305 | $ | 398 | |||||||
Customer related | 235 | 202 | |||||||||
Indirect taxes | 148 | 125 | |||||||||
Product warranties (Note 12) | 124 | 142 | |||||||||
Income taxes payable | 148 | 142 | |||||||||
Accrued freight | 52 | 44 | |||||||||
Operating leases | 40 | 42 | |||||||||
Interest | 31 | 22 | |||||||||
Employee termination benefits (Note 5) | 27 | 37 | |||||||||
Supplier related | 27 | 23 | |||||||||
Deferred engineering reimbursements | 24 | 39 | |||||||||
Contract liabilities (Note 4) | 22 | 16 | |||||||||
Insurance | 19 | 19 | |||||||||
Other non-income taxes | 18 | 19 | |||||||||
Legal and professional fees | 14 | 15 | |||||||||
Dividends payable | 14 | 21 | |||||||||
Retirement related | 13 | 13 | |||||||||
Derivative instruments | 7 | 10 | |||||||||
Earn-out liability (Note 3) | 2 | 16 | |||||||||
Other | 175 | 145 | |||||||||
Total other current liabilities | $ | 1,445 | $ | 1,490 | |||||||
Other non-current liabilities: | |||||||||||
Other income tax liabilities | $ | 231 | $ | 242 | |||||||
Deferred income taxes | 213 | 194 | |||||||||
Operating leases | 155 | 166 | |||||||||
Product warranties (Note 12) | 121 | 103 | |||||||||
Deferred income | 71 | 66 | |||||||||
Earn-out liability (Note 3) | 13 | 10 | |||||||||
Employee termination benefits (Note 5) | 8 | 22 | |||||||||
Other | 70 | 58 | |||||||||
Total other non-current liabilities | $ | 882 | $ | 861 |
Basis of fair value measurements | |||||||||||||||||||||||||||||||||||
(in millions) | Balance at June 30, 2023 | Quoted prices in active markets for identical items (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Valuation technique | Assets measured at NAV1 | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Investment in debt securities | $ | 386 | $ | — | $ | 386 | $ | — | A | $ | — | ||||||||||||||||||||||||
Investment in equity securities | $ | 28 | $ | — | $ | — | $ | — | — | $ | 28 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 54 | $ | — | $ | 54 | $ | — | A | $ | — | ||||||||||||||||||||||||
Net investment hedge contracts | $ | 38 | $ | — | $ | 38 | $ | — | A | $ | — | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Current earn-out liabilities | $ | 2 | $ | — | $ | — | $ | 2 | C | $ | — | ||||||||||||||||||||||||
Non-current earn-out liabilities | $ | 13 | $ | — | $ | — | $ | 13 | C | $ | — | ||||||||||||||||||||||||
Foreign currency contracts | $ | 8 | $ | — | $ | 8 | $ | — | A | $ | — | ||||||||||||||||||||||||
Basis of fair value measurements | Basis of fair value measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Balance at September 30, 2017 | Quoted prices in active markets for identical items (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Valuation technique | (in millions) | Balance at December 31, 2022 | Quoted prices in active markets for identical items (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Valuation technique | Assets measured at NAV1 | ||||||||||||||||||||||||||||||||||||||||
Assets: | Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commodity contracts | $ | 0.1 | $ | — | $ | 0.1 | $ | — | A | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 2.9 | $ | — | $ | 2.9 | $ | — | A | |||||||||||||||||||||||||||||||||||||||||||
Other long-term receivables (insurance settlement agreement note receivable) | $ | 73.0 | $ | — | $ | 73.0 | $ | — | C | |||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Current earn-out receivable | Current earn-out receivable | $ | 9 | $ | — | $ | — | $ | 9 | C | $ | — | ||||||||||||||||||||||||||||||||||||||||
Investment in debt securities | Investment in debt securities | $ | 455 | $ | — | $ | 455 | $ | — | A | $ | — | ||||||||||||||||||||||||||||||||||||||||
Investment in equity securities | Investment in equity securities | $ | 29 | $ | — | $ | — | $ | — | — | $ | 29 | ||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 2.9 | $ | — | $ | 2.9 | $ | — | A | Foreign currency contracts | $ | 18 | $ | — | $ | 18 | $ | — | A | $ | — | |||||||||||||||||||||||||||||||
Net investment hedge contracts | $ | 9.6 | $ | — | $ | 9.6 | $ | — | A | Net investment hedge contracts | $ | 68 | $ | — | $ | 68 | $ | — | A | $ | — | |||||||||||||||||||||||||||||||
Liabilities: | Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Current earn-out liability | Current earn-out liability | $ | 21 | $ | — | $ | — | $ | 21 | C | $ | — | ||||||||||||||||||||||||||||||||||||||||
Non-current earn-out liability | Non-current earn-out liability | $ | 10 | $ | — | $ | — | $ | 10 | C | $ | — | ||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | Foreign currency contracts | $ | 11 | $ | — | $ | 11 | $ | — | A | $ | — | ||||||||||||||||||||||||||||||||||||||||
Net investment hedge contracts | Net investment hedge contracts | $ | 1 | $ | — | $ | 1 | $ | — | A | $ | — |
Basis of fair value measurements | |||||||||||||||||
(in millions) | Balance at December 31, 2016 | Quoted prices in active markets for identical items (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Valuation technique | ||||||||||||
Assets: | |||||||||||||||||
Commodity contracts | $ | 0.1 | $ | — | $ | 0.1 | $ | — | A | ||||||||
Foreign currency contracts | $ | 7.2 | $ | — | $ | 7.2 | $ | — | A | ||||||||
Other long-term receivables (insurance settlement agreement note receivable) | $ | 71.5 | $ | — | $ | 71.5 | $ | — | C | ||||||||
Liabilities: | |||||||||||||||||
Foreign currency contracts | $ | 1.1 | $ | — | $ | 1.1 | $ | — | A |
Commodity derivative contracts | |||||||||
Commodity | Volume hedged September 30, 2017 | Volume hedged December 31, 2016 | Units of measure | Duration | |||||
Copper | 49.1 | 213.8 | Metric Tons | Dec -17 |
Foreign currency derivatives (in millions)* | ||||||||||||||||||||||||||
Functional Currency | Traded Currency | Notional in traded currency June 30, 2023 | Notional in traded currency December 31, 2022 | Ending Duration | ||||||||||||||||||||||
Brazilian Real | US Dollar | 6 | 14 | Dec - 23 | ||||||||||||||||||||||
British Pound | Euro | 40 | 10 | Dec - 24 | ||||||||||||||||||||||
Chinese Renminbi | British Pound | 13 | 23 | Dec - 23 | ||||||||||||||||||||||
Chinese Renminbi | Euro | 29 | 42 | Dec - 23 | ||||||||||||||||||||||
Chinese Renminbi | US Dollar | 293 | 276 | Dec - 24 | ||||||||||||||||||||||
Euro | British Pound | 52 | 63 | Dec - 23 | ||||||||||||||||||||||
Euro | Hungarian Forint | 7,163 | — | Dec - 24 | ||||||||||||||||||||||
Euro | Korean Won | 20,225 | 9,138 | Mar - 24 | ||||||||||||||||||||||
Euro | Polish Zloty | 428 | 489 | Dec - 24 | ||||||||||||||||||||||
Euro | US Dollar | 172 | 139 | Dec - 24 | ||||||||||||||||||||||
US Dollar | British Pound | 8 | 17 | Dec - 23 | ||||||||||||||||||||||
US Dollar | Chinese Renminbi | 1,956 | 1,402 | Jul - 23 | ||||||||||||||||||||||
US Dollar | Euro | 42 | 45 | Sep - 23 | ||||||||||||||||||||||
US Dollar | Korean Won | 99,611 | 51,786 | Nov - 24 | ||||||||||||||||||||||
US Dollar | Mexican Peso | 2,826 | 3,465 | Dec - 24 | ||||||||||||||||||||||
US Dollar | Thailand Baht | 1,050 | 1,790 | Jun - 24 | ||||||||||||||||||||||
*Table above excludes non-significant traded currency pairings with total notional amounts less than $10 million U.S. dollar equivalent as of June 30, 2023 and December 31, 2022. |
Foreign currency derivatives (in millions) | ||||||||||
Functional currency | Traded currency | Notional in traded currency September 30, 2017 | Notional in traded currency December 31, 2016 | Duration | ||||||
Brazilian real | Euro | 1.1 | — | Jan - 18 | ||||||
Chinese renminbi | US dollar | 49.0 | 33.5 | Nov - 18 | ||||||
Chinese renminbi | Euro | 31.8 | — | Jun - 18 | ||||||
Euro | Chinese renminbi | 30.2 | — | Dec - 17 | ||||||
Euro | British pound | 1.0 | 4.2 | Dec - 17 | ||||||
Euro | Japanese yen | 774.0 | 1,004.8 | Dec - 18 | ||||||
Euro | Polish zloty | 33.6 | 18.8 | Dec - 17 | ||||||
Euro | Swedish krona | 267.4 | — | May -18 | ||||||
Euro | US dollar | 30.3 | 35.3 | Dec - 18 | ||||||
Japanese yen | Chinese renminbi | 18.1 | 68.7 | Dec - 17 | ||||||
Japanese yen | Korean won | 1,441.5 | 5,689.2 | Dec - 17 | ||||||
Japanese yen | US dollar | 0.5 | 2.0 | Dec - 17 | ||||||
Korean won | Euro | 3.2 | — | Dec - 17 | ||||||
Korean won | Japanese yen | 208.5 | 539.9 | Dec - 17 | ||||||
Korean won | US dollar | 5.1 | 14.2 | Dec - 17 | ||||||
Mexican peso | US dollar | 4.9 | 10.5 | Dec - 17 | ||||||
Swedish krona | Euro | 12.5 | 48.2 | Dec - 17 | ||||||
US dollar | Euro | 100.0 | — | Dec - 17 |
Cross-currency swaps | |||||||||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | Ending duration | ||||||||||||||
US dollar to Euro: | |||||||||||||||||
Fixed receiving notional | $ | 1,100 | $ | 1,100 | Jul - 27 | ||||||||||||
Fixed paying notional | € | 976 | € | 976 | Jul - 27 | ||||||||||||
US dollar to Euro: | |||||||||||||||||
Fixed receiving notional | $ | 500 | $ | 500 | Mar - 25 | ||||||||||||
Fixed paying notional | € | 450 | € | 450 | Mar - 25 | ||||||||||||
US dollar to Japanese yen: | |||||||||||||||||
Fixed receiving notional | $ | 100 | $ | 100 | Feb - 29 | ||||||||||||
Fixed paying notional | ¥ | 12,724 | ¥ | 12,724 | Feb - 29 |
(in millions) | Assets | Liabilities | ||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments Under 815: | Location | June 30, 2023 | December 31, 2022 | Location | June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||
Foreign currency | Prepayments and other current assets | $ | 42 | $ | 15 | Other current liabilities | $ | 6 | $ | 9 | ||||||||||||||||||||||||||||
Foreign currency | Other non-current assets | $ | 10 | $ | — | Other non-current liabilities | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||
Net investment hedges | Other non-current assets | $ | 38 | $ | 68 | Other non-current liabilities | $ | — | $ | 1 | ||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Foreign currency | Prepayments and other current assets | $ | 2 | $ | 3 | Other current liabilities | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
(in millions) | Location | September 30, 2017 | December 31, 2016 | Location | September 30, 2017 | December 31, 2016 | ||||||||||||||
Foreign currency | Prepayments and other current assets | $ | 2.9 | $ | 7.2 | Accounts payable and accrued expenses | $ | 2.9 | $ | 1.1 | ||||||||||
Commodity | Prepayments and other current assets | $ | 0.1 | $ | 0.1 | Accounts payable and accrued expenses | $ | — | $ | — | ||||||||||
Net investment hedge | Prepayments and other current assets | $ | — | $ | — | Accounts payable and accrued expenses | $ | 9.6 | $ | — |
(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, 2023 | December 31, 2022 | ||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||
Foreign currency | $ | (7) | $ | (4) | $ | — | ||||||||||||||
Cross-currency swaps | 38 | 67 | — | |||||||||||||||||
Foreign currency-denominated debt | 112 | 133 | — | |||||||||||||||||
Total | $ | 143 | $ | 196 | $ | — |
(in millions) | Deferred gain (loss) in AOCI at | Gain (loss) expected to be reclassified to income in one year or less | ||||||||||
Contract Type | September 30, 2017 | December 31, 2016 | ||||||||||
Foreign currency | $ | (0.9 | ) | $ | 5.6 | $ | (0.9 | ) | ||||
Commodity | 0.1 | (0.1 | ) | 0.1 | ||||||||
Net investment hedges | (45.3 | ) | 29.5 | — | ||||||||
Total | $ | (46.1 | ) | $ | 35.0 | $ | (0.8 | ) |
Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||
(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 | $ | 4,520 | $ | 3,652 | $ | 422 | $ | (74) | ||||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | 25 | ||||||||||||||||||||||||
Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||
(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 | $ | 8,700 | $ | 7,082 | $ | 806 | $ | (22) | ||||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | 39 | ||||||||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||
(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 | $ | 3,759 | $ | 3,047 | $ | 394 | $ | (252) | ||||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | 5 | ||||||||||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||
(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 | $ | 7,633 | $ | 6,171 | $ | 782 | $ | (265) | ||||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | 4 | ||||||||||||||||||||||||
Gain (loss) reclassified from AOCI to income | $ | — | $ | (1) | $ | — | ||||||||||||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | Gain (loss) recognized in income (ineffective portion) | |||||||||||||||||||
(in millions) | Three Months Ended | Three Months Ended | ||||||||||||||||||
Contract Type | Location | September 30, 2017 | September 30, 2016 | Location | September 30, 2017 | September 30, 2016 | ||||||||||||||
Foreign currency | Sales | $ | 1.3 | $ | 0.7 | SG&A expense | $ | — | $ | — | ||||||||||
Foreign currency | Cost of goods sold | $ | (0.4 | ) | $ | (0.4 | ) | SG&A expense | $ | (0.1 | ) | $ | 0.1 | |||||||
Commodity | Cost of goods sold | $ | 0.1 | $ | (0.4 | ) | Cost of goods sold | $ | — | $ | — |
Gain (loss) reclassified from AOCI to income (effective portion) | Gain (loss) recognized in income (ineffective portion) | |||||||||||||||||||
(in millions) | Nine Months Ended | Nine Months Ended | ||||||||||||||||||
Contract Type | Location | September 30, 2017 | September 30, 2016 | Location | September 30, 2017 | September 30, 2016 | ||||||||||||||
Foreign currency | Sales | $ | 3.3 | $ | 0.9 | SG&A expense | $ | — | $ | — | ||||||||||
Foreign currency | Cost of goods sold | $ | 0.9 | $ | (0.6 | ) | SG&A expense | $ | (0.1 | ) | $ | 0.2 | ||||||||
Commodity | Cost of goods sold | $ | 0.4 | $ | (1.5 | ) | Cost of goods sold | $ | — | $ | — |
(in millions) | Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||
Contract Type | Location | Gain (loss) on swaps | Gain (loss) on borrowings | Gain (loss) on swaps | Gain (loss) on borrowings | |||||||||||||
Interest rate swap | Interest expense and finance charges | $ | — | $ | — | $ | (2.8 | ) | $ | 2.8 |
(in millions) | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||
Contract Type | Location | Gain (loss) on swaps | Gain (loss) on borrowings | Gain (loss) on swaps | Gain (loss) on borrowings | |||||||||||||
Interest rate swap | Interest expense and finance charges | $ | — | $ | — | $ | 8.5 | $ | (8.5 | ) |
(in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
Net investment hedges | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Foreign currency | $ | (3) | $ | 3 | $ | (3) | $ | 3 | ||||||||||||||||||
Cross-currency swaps | $ | (24) | $ | 104 | $ | (29) | $ | 135 | ||||||||||||||||||
Foreign currency-denominated debt | $ | (7) | $ | 58 | $ | (21) | $ | 89 |
(in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
Net investment hedges | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Cross-currency swaps | $ | 6 | $ | 7 | $ | 12 | $ | 13 |
(in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
Contract Type | Location | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||
Foreign Currency | Selling, general and administrative expenses | $ | (4) | $ | 5 | $ | (4) | $ | 6 |
Pension benefits | Other postemployment benefits | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | US | Non-US | US | Non-US | 2023 | 2022 | ||||||||||||||||||||||||||||||||
Service cost | $ | — | $ | 4 | $ | — | $ | 5 | $ | — | $ | — | ||||||||||||||||||||||||||
Interest cost | 1 | 16 | 1 | 9 | 1 | — | ||||||||||||||||||||||||||||||||
Expected return on plan assets | (1) | (14) | (1) | (20) | — | — | ||||||||||||||||||||||||||||||||
Amortization of unrecognized prior service credit | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||
Amortization of unrecognized loss | — | 1 | 1 | 2 | — | — | ||||||||||||||||||||||||||||||||
Net periodic benefit expense (income) | $ | — | $ | 7 | $ | 1 | $ | (4) | $ | — | $ | (1) | ||||||||||||||||||||||||||
Pension benefits | Other postemployment benefits | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | US | Non-US | US | Non-US | 2023 | 2022 | ||||||||||||||||||||||||||||||||
Service cost | $ | — | $ | 8 | $ | — | $ | 10 | $ | — | $ | — | ||||||||||||||||||||||||||
Interest cost | 3 | 32 | 2 | 19 | 1 | — | ||||||||||||||||||||||||||||||||
Expected return on plan assets | (3) | (29) | (3) | (40) | — | — | ||||||||||||||||||||||||||||||||
Amortization of unrecognized prior service credit | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||
Amortization of unrecognized loss | 1 | 1 | 1 | 4 | — | — | ||||||||||||||||||||||||||||||||
Net periodic benefit income | $ | 1 | $ | 12 | $ | — | $ | (7) | $ | — | $ | (1) |
Pension benefits | Other postretirement employee benefits | |||||||||||||||||||||||
(in millions) | 2017 | 2016 | ||||||||||||||||||||||
Three Months Ended September 30, | US | Non-US | US | Non-US | 2017 | 2016 | ||||||||||||||||||
Service cost | $ | — | $ | 4.5 | $ | — | $ | 4.1 | $ | — | $ | — | ||||||||||||
Interest cost | 2.2 | 2.8 | 2.4 | 3.1 | 0.8 | 1.0 | ||||||||||||||||||
Expected return on plan assets | (3.3 | ) | (6.0 | ) | (3.7 | ) | (6.1 | ) | — | — | ||||||||||||||
Amortization of unrecognized prior service credit | (0.2 | ) | — | (0.2 | ) | — | (1.1 | ) | (1.2 | ) | ||||||||||||||
Amortization of unrecognized loss | 1.1 | 2.0 | 1.3 | 1.6 | 0.4 | 0.5 | ||||||||||||||||||
Net periodic benefit (income) cost | $ | (0.2 | ) | $ | 3.3 | $ | (0.2 | ) | $ | 2.7 | $ | 0.1 | $ | 0.3 |
BorgWarner Inc. stockholders' 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, 2023 | $ | 3 | $ | 2,661 | $ | (2,031) | $ | 7,632 | $ | (824) | $ | 238 | |||||||||||||||||||||||
Dividends declared ($0.17 per share*) | — | — | — | (40) | — | — | |||||||||||||||||||||||||||||
Net issuance for executive stock plan | — | 10 | — | — | — | — | |||||||||||||||||||||||||||||
Net issuance of restricted stock | — | (12) | 24 | — | — | — | |||||||||||||||||||||||||||||
Purchase of noncontrolling interest | — | (2) | — | — | — | (13) | |||||||||||||||||||||||||||||
Net earnings | — | — | — | 204 | — | 18 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (74) | (13) | |||||||||||||||||||||||||||||
Balance, June 30, 2023 | $ | 3 | $ | 2,657 | $ | (2,007) | $ | 7,796 | $ | (898) | $ | 230 |
Pension benefits | Other postretirement employee benefits | |||||||||||||||||||||||
(in millions) | 2017 | 2016 | ||||||||||||||||||||||
Nine Months Ended September 30, | US | Non-US | US | Non-US | 2017 | 2016 | ||||||||||||||||||
Service cost | $ | — | $ | 13.3 | $ | — | $ | 12.3 | $ | 0.1 | $ | 0.1 | ||||||||||||
Interest cost | 6.6 | 8.0 | 7.2 | 9.6 | 2.4 | 2.9 | ||||||||||||||||||
Expected return on plan assets | (9.8 | ) | (17.4 | ) | (11.2 | ) | (18.7 | ) | — | — | ||||||||||||||
Amortization of unrecognized prior service credit | (0.6 | ) | — | (0.6 | ) | — | (3.1 | ) | (3.6 | ) | ||||||||||||||
Amortization of unrecognized loss | 3.2 | 5.8 | 3.8 | 4.7 | 1.0 | 1.6 | ||||||||||||||||||
Net periodic benefit (income) cost | $ | (0.6 | ) | $ | 9.7 | $ | (0.8 | ) | $ | 7.9 | $ | 0.4 | $ | 1.0 |
BorgWarner Inc. stockholders' 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, 2022 | $ | 3 | $ | 2,617 | $ | (1,836) | $ | 6,830 | $ | (564) | $ | 288 | |||||||||||||||||||||||
Dividends declared ($0.17 per share*) | — | — | — | (41) | — | (4) | |||||||||||||||||||||||||||||
Net issuance for executive stock plan | — | 6 | 1 | — | — | — | |||||||||||||||||||||||||||||
Net issuance of restricted stock | — | 10 | (1) | — | — | — | |||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | (100) | — | — | — | |||||||||||||||||||||||||||||
Net earnings | — | — | — | 216 | — | 15 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (252) | (17) | |||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | 3 | $ | 2,633 | $ | (1,936) | $ | 7,005 | $ | (816) | $ | 282 |
BorgWarner Inc. stockholders' 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, 2022 | $ | 3 | $ | 2,675 | $ | (2,032) | $ | 7,454 | $ | (876) | $ | 284 | |||||||||||||||||||||||
Dividends declared ($0.34 per share*) | — | — | — | (79) | — | (58) | |||||||||||||||||||||||||||||
Net issuance for executive stock plan | — | — | 5 | — | — | — | |||||||||||||||||||||||||||||
Net issuance of restricted stock | — | (16) | 20 | — | — | — | |||||||||||||||||||||||||||||
Purchase of noncontrolling interest | — | (2) | — | — | — | (13) | |||||||||||||||||||||||||||||
Net earnings | — | — | — | 421 | — | 31 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (22) | (14) | |||||||||||||||||||||||||||||
Balance, June 30, 2023 | $ | 3 | $ | 2,657 | $ | (2,007) | $ | 7,796 | $ | (898) | $ | 230 |
BorgWarner Inc. stockholders' 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, 2021 | $ | 3 | $ | 2,637 | $ | (1,812) | $ | 6,671 | $ | (551) | $ | 314 | |||||||||||||||||||||||
Dividends declared ($0.34 per share*) | — | — | — | (82) | — | (49) | |||||||||||||||||||||||||||||
Net issuance for executive stock plan | — | — | 5 | — | — | — | |||||||||||||||||||||||||||||
Net issuance of restricted stock | — | (5) | 11 | — | — | — | |||||||||||||||||||||||||||||
Purchase/sale of noncontrolling interest | — | 1 | — | — | — | (4) | |||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | (140) | — | — | — | |||||||||||||||||||||||||||||
Net earnings | — | — | — | 416 | — | 39 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (265) | (18) | |||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | 3 | $ | 2,633 | $ | (1,936) | $ | 7,005 | $ | (816) | $ | 282 |
Shares under option (thousands) | Weighted average exercise price | Weighted average remaining contractual life (in years) | Aggregate intrinsic value (in millions) | |||||||||
Outstanding and exercisable at December 31, 2016 | 473 | $ | 17.47 | 0.1 | $ | 10.4 | ||||||
Exercised | (473 | ) | $ | 17.47 | ||||||||
Outstanding and exercisable at September 30, 2017 | — |
Shares subject to restriction (thousands) | Weighted average price | |||||
Nonvested at December 31, 2016 | 1,429 | $ | 44.12 | |||
Granted | 777 | $ | 40.07 | |||
Vested | (453 | ) | $ | 57.35 | ||
Forfeited | (28 | ) | $ | 41.87 | ||
Nonvested at March 31, 2017 | 1,725 | $ | 39.27 | |||
Granted | 27 | $ | 41.13 | |||
Vested | (61 | ) | $ | 51.71 | ||
Forfeited | (28 | ) | $ | 38.06 | ||
Nonvested at June 30, 2017 | 1,663 | $ | 38.86 | |||
Vested | (7 | ) | $ | 45.09 | ||
Forfeited | (19 | ) | $ | 38.22 | ||
Nonvested at September 30, 2017 | 1,637 | $ | 38.85 |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit retirement plans | Total | |||||||||||||||||||||||||
Beginning balance, March 31, 2023 | $ | (711) | $ | 18 | $ | (131) | $ | (824) | |||||||||||||||||||||
Comprehensive (loss) income before reclassifications | (102) | 24 | (2) | (80) | |||||||||||||||||||||||||
Income taxes associated with comprehensive (loss) income before reclassifications | 7 | — | (1) | 6 | |||||||||||||||||||||||||
Reclassification from accumulated other comprehensive loss | — | — | — | — | |||||||||||||||||||||||||
Income taxes reclassified into net earnings | — | — | — | — | |||||||||||||||||||||||||
Ending balance, June 30, 2023 | $ | (806) | $ | 42 | $ | (134) | $ | (898) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit retirement plans | Total | |||||||||||||||||||||||||
Beginning balance, March 31, 2022 | $ | (441) | $ | — | $ | (123) | $ | (564) | |||||||||||||||||||||
Comprehensive (loss) income before reclassifications | (216) | 5 | 3 | (208) | |||||||||||||||||||||||||
Income taxes associated with comprehensive (loss) income before reclassifications | (46) | — | 1 | (45) | |||||||||||||||||||||||||
Reclassification from accumulated other comprehensive loss | — | — | 2 | 2 | |||||||||||||||||||||||||
Income taxes reclassified into net earnings | — | — | (1) | (1) | |||||||||||||||||||||||||
Ending balance, June 30, 2022 | $ | (703) | $ | 5 | $ | (118) | $ | (816) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit retirement plans | Total | |||||||||||||||||||||||||
Beginning balance, December 31, 2022 | $ | (750) | $ | 4 | $ | (130) | $ | (876) | |||||||||||||||||||||
Comprehensive (loss) income before reclassifications | (68) | 38 | (4) | (34) | |||||||||||||||||||||||||
Income taxes associated with comprehensive (loss) income before reclassifications | 12 | — | (1) | 11 | |||||||||||||||||||||||||
Reclassification from accumulated other comprehensive loss | — | — | 1 | 1 | |||||||||||||||||||||||||
Income taxes reclassified into net earnings | — | — | — | — | |||||||||||||||||||||||||
Ending balance, June 30, 2023 | $ | (806) | $ | 42 | $ | (134) | $ | (898) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit retirement plans | Total | |||||||||||||||||||||||||
Beginning balance, December 31, 2021 | $ | (423) | $ | — | $ | (128) | $ | (551) | |||||||||||||||||||||
Comprehensive (loss) income before reclassifications | (234) | 4 | 6 | (224) | |||||||||||||||||||||||||
Income taxes associated with comprehensive (loss) income before reclassifications | (46) | — | 1 | (45) | |||||||||||||||||||||||||
Reclassification from accumulated other comprehensive loss | — | 1 | 4 | 5 | |||||||||||||||||||||||||
Income taxes reclassified into net earnings | — | — | (1) | (1) | |||||||||||||||||||||||||
Ending balance, June 30, 2022 | $ | (703) | $ | 5 | $ | (118) | $ | (816) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, June 30, 2017 | $ | (407.9 | ) | $ | 1.5 | $ | (202.5 | ) | $ | 2.5 | $ | (606.4 | ) | |||||||
Comprehensive income (loss) before reclassifications | 64.2 | (1.4 | ) | (4.7 | ) | — | 58.1 | |||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | — | 0.9 | 1.5 | — | 2.4 | |||||||||||||||
Reclassification from accumulated other comprehensive loss | — | (1.0 | ) | 2.2 | — | 1.2 | ||||||||||||||
Income taxes reclassified into net earnings | — | (0.2 | ) | (0.8 | ) | — | (1.0 | ) | ||||||||||||
Ending balance, September 30, 2017 | $ | (343.7 | ) | $ | (0.2 | ) | $ | (204.3 | ) | $ | 2.5 | $ | (545.7 | ) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, June 30, 2016 | $ | (407.3 | ) | $ | 1.4 | $ | (189.5 | ) | $ | 1.6 | $ | (593.8 | ) | |||||||
Comprehensive income (loss) before reclassifications | 27.9 | (1.2 | ) | (4.1 | ) | 0.1 | 22.7 | |||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | — | (1.4 | ) | (0.4 | ) | — | (1.8 | ) | ||||||||||||
Reclassification from accumulated other comprehensive loss | — | 0.1 | 2.0 | — | 2.1 | |||||||||||||||
Income taxes reclassified into net earnings | — | 0.2 | (0.4 | ) | — | (0.2 | ) | |||||||||||||
Ending balance, September 30, 2016 | $ | (379.4 | ) | $ | (0.9 | ) | $ | (192.4 | ) | $ | 1.7 | $ | (571.0 | ) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, December 31, 2016 | $ | (530.3 | ) | $ | 5.0 | $ | (198.1 | ) | $ | 1.3 | $ | (722.1 | ) | |||||||
Comprehensive income (loss) before reclassifications | 186.6 | (2.3 | ) | (15.7 | ) | 1.2 | 169.8 | |||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | — | 0.4 | 5.2 | — | 5.6 | |||||||||||||||
Reclassification from accumulated other comprehensive loss | — | (4.6 | ) | 6.3 | — | 1.7 | ||||||||||||||
Income taxes reclassified into net earnings | — | 1.3 | (2.0 | ) | — | (0.7 | ) | |||||||||||||
Ending balance, September 30, 2017 | $ | (343.7 | ) | $ | (0.2 | ) | $ | (204.3 | ) | $ | 2.5 | $ | (545.7 | ) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, December 31, 2015 | $ | (421.2 | ) | $ | (2.0 | ) | $ | (189.9 | ) | $ | 2.9 | $ | (610.2 | ) | ||||||
Comprehensive income (loss) before reclassifications | 41.8 | 0.7 | (6.1 | ) | (1.2 | ) | 35.2 | |||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | — | (1.0 | ) | (0.6 | ) | — | (1.6 | ) | ||||||||||||
Reclassification from accumulated other comprehensive loss | — | 1.2 | 5.9 | — | 7.1 | |||||||||||||||
Income taxes reclassified into net earnings | — | 0.2 | (1.7 | ) | — | (1.5 | ) | |||||||||||||
Ending balance, September 30, 2016 | $ | (379.4 | ) | $ | (0.9 | ) | $ | (192.4 | ) | $ | 1.7 | $ | (571.0 | ) |
2017 | 2016 | ||||
Beginning Claims January 1 | 9,385 | 10,061 | |||
New Claims Received | 1,597 | 1,626 | |||
Dismissed Claims | (1,273 | ) | (1,942 | ) | |
Settled Claims | (326 | ) | (256 | ) | |
Ending Claims September 30 | 9,383 | 9,489 |
(in millions) | |||
Asbestos Liability as of December 31, 2016 | $ | 879.3 | |
Indemnity and Defense Related Costs | (41.0 | ) | |
Asbestos Liability as of September 30, 2017 | $ | 838.3 |
September 30, | December 31, | ||||||
(in millions) | 2017 | 2016 | |||||
Assets: | |||||||
Non-current assets | $ | 386.4 | $ | 386.4 | |||
Total insurance assets | $ | 386.4 | $ | 386.4 | |||
Liabilities: | |||||||
Accounts payable and accrued expenses | $ | 52.3 | $ | 51.7 | |||
Other non-current liabilities | 786.0 | 827.6 | |||||
Total accrued liabilities | $ | 838.3 | $ | 879.3 |
Severance Accruals | ||||||||||||
(in millions) | Drivetrain | Engine | Total | |||||||||
Balance at December 31, 2016 | $ | 3.7 | $ | 2.7 | $ | 6.4 | ||||||
Cash payments | (1.6 | ) | (2.1 | ) | (3.7 | ) | ||||||
Translation adjustment | — | 0.1 | 0.1 | |||||||||
Balance at March 31, 2017 | $ | 2.1 | $ | 0.7 | $ | 2.8 | ||||||
Cash payments | (0.2 | ) | (0.4 | ) | (0.6 | ) | ||||||
Translation adjustment | 0.1 | — | 0.1 | |||||||||
Balance at June 30, 2017 | $ | 2.0 | $ | 0.3 | $ | 2.3 | ||||||
Provision | 0.7 | 0.7 | 1.4 | |||||||||
Cash payments | (0.2 | ) | — | (0.2 | ) | |||||||
Translation adjustment | 0.1 | — | 0.1 | |||||||||
Balance at September 30, 2017 | $ | 2.6 | $ | 1.0 | $ | 3.6 |
Severance Accruals | ||||||||||||
(in millions) | Drivetrain | Engine | Total | |||||||||
Balance at December 31, 2015 | $ | 25.3 | $ | 4.1 | $ | 29.4 | ||||||
Provision | 2.3 | 1.0 | 3.3 | |||||||||
Cash payments | (17.3 | ) | (2.3 | ) | (19.6 | ) | ||||||
Translation adjustment | 0.7 | 0.2 | 0.9 | |||||||||
Balance at March 31, 2016 | $ | 11.0 | $ | 3.0 | $ | 14.0 | ||||||
Provision | 2.4 | 4.6 | 7.0 | |||||||||
Cash payments | (5.3 | ) | (2.2 | ) | (7.5 | ) | ||||||
Translation adjustment | (0.2 | ) | (0.1 | ) | (0.3 | ) | ||||||
Balance at June 30, 2016 | $ | 7.9 | $ | 5.3 | $ | 13.2 | ||||||
Provision | 0.3 | — | 0.3 | |||||||||
Cash payments | (2.7 | ) | (1.3 | ) | (4.0 | ) | ||||||
Translation adjustment | 0.1 | 0.1 | 0.2 | |||||||||
Balance at September 30, 2016 | $ | 5.6 | $ | 4.1 | $ | 9.7 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Basic earnings per share: | |||||||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 204 | $ | 216 | $ | 421 | $ | 416 | |||||||||||||||
Weighted average shares of common stock outstanding | 233.4 | 236.9 | 233.1 | 237.6 | |||||||||||||||||||
Basic earnings per share of common stock | $ | 0.87 | $ | 0.91 | $ | 1.81 | $ | 1.75 | |||||||||||||||
Diluted earnings per share: | |||||||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 204 | $ | 216 | $ | 421 | $ | 416 | |||||||||||||||
Weighted average shares of common stock outstanding | 233.4 | 236.9 | 233.1 | 237.6 | |||||||||||||||||||
Effect of stock-based compensation | 1.0 | 1.1 | 1.2 | 0.9 | |||||||||||||||||||
Weighted average shares of common stock outstanding including dilutive shares | 234.4 | 238.0 | 234.3 | 238.5 | |||||||||||||||||||
Diluted earnings per share of common stock | $ | 0.87 | $ | 0.91 | $ | 1.80 | $ | 1.74 | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions, except per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Basic earnings per share: | |||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 184.9 | $ | 83.3 | $ | 586.1 | $ | 411.8 | |||||||
Weighted average shares of common stock outstanding | 209.803 | 212.872 | 210.657 | 215.332 | |||||||||||
Basic earnings per share of common stock | $ | 0.88 | $ | 0.39 | $ | 2.78 | $ | 1.91 | |||||||
Diluted earnings per share: | |||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 184.9 | $ | 83.3 | $ | 586.1 | $ | 411.8 | |||||||
Weighted average shares of common stock outstanding | 209.803 | 212.872 | 210.657 | 215.332 | |||||||||||
Effect of stock-based compensation | 1.210 | 0.894 | 0.918 | 0.857 | |||||||||||
Weighted average shares of common stock outstanding including dilutive shares | 211.013 | 213.766 | 211.575 | 216.189 | |||||||||||
Diluted earnings per share of common stock | $ | 0.88 | $ | 0.39 | $ | 2.77 | $ | 1.90 |
Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||
(in millions) | Customers | Inter-segment | Net | Customers | Inter-segment | Net | |||||||||||||||||||||||||||||
Air Management | $ | 2,003 | $ | 24 | $ | 2,027 | $ | 3,956 | $ | 50 | $ | 4,006 | |||||||||||||||||||||||
Drivetrain & Battery Systems | 1,117 | 1 | 1,118 | 2,072 | 1 | 2,073 | |||||||||||||||||||||||||||||
Fuel Systems | 545 | 60 | 605 | 1,052 | 121 | 1,173 | |||||||||||||||||||||||||||||
ePropulsion | 519 | 48 | 567 | 958 | 96 | 1,054 | |||||||||||||||||||||||||||||
Aftermarket | 336 | 3 | 339 | 662 | 7 | 669 | |||||||||||||||||||||||||||||
Inter-segment eliminations | — | (136) | (136) | — | (275) | (275) | |||||||||||||||||||||||||||||
Net sales | $ | 4,520 | $ | — | $ | 4,520 | $ | 8,700 | $ | — | $ | 8,700 |
Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||
(in millions) | Customers | Inter-segment | Net | Customers | Inter-segment | Net | |||||||||||||||||||||||||||||
Air Management | $ | 1,692 | $ | 32 | $ | 1,724 | $ | 3,444 | $ | 48 | $ | 3,492 | |||||||||||||||||||||||
Drivetrain & Battery Systems | 896 | — | 896 | 1,791 | — | 1,791 | |||||||||||||||||||||||||||||
Fuel Systems | 474 | 42 | 516 | 1,003 | 104 | 1,107 | |||||||||||||||||||||||||||||
ePropulsion | 374 | 58 | 432 | 768 | 104 | 872 | |||||||||||||||||||||||||||||
Aftermarket | 323 | 3 | 326 | 627 | 6 | 633 | |||||||||||||||||||||||||||||
Inter-segment eliminations | — | (135) | (135) | — | (262) | (262) | |||||||||||||||||||||||||||||
Net sales | $ | 3,759 | $ | — | $ | 3,759 | $ | 7,633 | $ | — | $ | 7,633 |
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Air Management | $ | 5,568 | $ | 5,376 | |||||||
Drivetrain & Battery Systems | 3,951 | 3,963 | |||||||||
ePropulsion | 2,800 | 2,453 | |||||||||
Fuel Systems | 2,231 | 2,227 | |||||||||
Aftermarket | 1,329 | 1,281 | |||||||||
Total | 15,879 | 15,300 | |||||||||
Corporate | 1,438 | 1,694 | |||||||||
Consolidated | $ | 17,317 | $ | 16,994 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Engine | $ | 1,506.4 | $ | 1,359.3 | $ | 4,483.6 | $ | 4,202.7 | |||||||
Drivetrain | 921.8 | 865.9 | 2,767.7 | 2,640.5 | |||||||||||
Inter-segment eliminations | (12.0 | ) | (11.0 | ) | (38.4 | ) | (31.2 | ) | |||||||
Net sales | $ | 2,416.2 | $ | 2,214.2 | $ | 7,212.9 | $ | 6,812.0 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Air Management | $ | 307 | $ | 244 | $ | 592 | $ | 495 | |||||||||||||||
Drivetrain & Battery Systems | 140 | 113 | 250 | 226 | |||||||||||||||||||
Fuel Systems | 57 | 44 | 105 | 110 | |||||||||||||||||||
Aftermarket | 52 | 51 | 97 | 90 | |||||||||||||||||||
ePropulsion | (19) | (42) | (53) | (59) | |||||||||||||||||||
Segment Adjusted Operating Income | 537 | 410 | 991 | 862 | |||||||||||||||||||
Corporate, including stock-based compensation | 63 | 62 | 121 | 125 | |||||||||||||||||||
Merger, acquisition and divestiture expense, net | 56 | 9 | 86 | 32 | |||||||||||||||||||
Intangible asset amortization expense | 24 | 27 | 48 | 50 | |||||||||||||||||||
Restructuring expense (Note 5) | 12 | 27 | 19 | 42 | |||||||||||||||||||
Service and lease agreement termination | 9 | — | 9 | — | |||||||||||||||||||
Gain on sale of business | (5) | — | (5) | (24) | |||||||||||||||||||
Gain on sale of asset | (6) | — | (6) | — | |||||||||||||||||||
Other non-comparable items | 1 | 13 | (4) | 13 | |||||||||||||||||||
Equity in affiliates’ earnings, net of tax | (14) | (11) | (18) | (19) | |||||||||||||||||||
Unrealized loss (gain) on debt and equity securities | 54 | (11) | 69 | 28 | |||||||||||||||||||
Interest expense, net | 12 | 15 | 22 | 30 | |||||||||||||||||||
Other postretirement expense (income) | 3 | (9) | 5 | (18) | |||||||||||||||||||
Earnings before income taxes and noncontrolling interest | 328 | 288 | 645 | 603 | |||||||||||||||||||
Provision for income taxes | 106 | 57 | 193 | 148 | |||||||||||||||||||
Net earnings | 222 | 231 | $ | 452 | $ | 455 | |||||||||||||||||
Net earnings attributable to noncontrolling interest, net of tax | 18 | 15 | 31 | 39 | |||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 204 | $ | 216 | $ | 421 | $ | 416 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Engine | $ | 238.5 | $ | 221.5 | $ | 729.8 | $ | 696.3 | |||||||
Drivetrain | 111.5 | 89.4 | 325.9 | 271.0 | |||||||||||
Adjusted EBIT | 350.0 | 310.9 | 1,055.7 | 967.3 | |||||||||||
Restructuring expense | 13.3 | 1.3 | 13.3 | 26.9 | |||||||||||
Merger and acquisition expense | 6.4 | 5.9 | 6.4 | 18.9 | |||||||||||
Lease termination settlement | — | — | 5.3 | — | |||||||||||
Other expense, net | 2.7 | — | 2.7 | — | |||||||||||
Asset impairment expense | — | 106.5 | — | 106.5 | |||||||||||
Contract expiration loss (gain) | — | 1.3 | — | (6.2 | ) | ||||||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 37.3 | 33.2 | 121.4 | 105.7 | |||||||||||
Interest income | (1.3 | ) | (1.6 | ) | (4.2 | ) | (4.7 | ) | |||||||
Interest expense and finance charges | 17.6 | 22.4 | 53.6 | 65.1 | |||||||||||
Earnings before income taxes and noncontrolling interest | 274.0 | 141.9 | 857.2 | 655.1 | |||||||||||
Provision for income taxes | 79.4 | 48.8 | 241.9 | 213.4 | |||||||||||
Net earnings | 194.6 | 93.1 | 615.3 | 441.7 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 9.7 | 9.8 | 29.2 | 29.9 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 184.9 | $ | 83.3 | $ | 586.1 | $ | 411.8 |
September 30, | December 31, | ||||||
(in millions) | 2017 | 2016 | |||||
Engine | $ | 4,607.0 | $ | 4,134.6 | |||
Drivetrain | 3,748.8 | 3,212.4 | |||||
Total | 8,355.8 | 7,347.0 | |||||
Corporate * | 1,460.4 | 1,487.7 | |||||
Total assets | $ | 9,816.2 | $ | 8,834.7 |
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
OPERATING | |||||||||||
Net earnings | $ | 452 | $ | 455 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and tooling amortization | 321 | 315 | |||||||||
Intangible asset amortization | 48 | 50 | |||||||||
Restructuring expense, net of cash paid | 12 | 36 | |||||||||
Stock-based compensation expense | 34 | 28 | |||||||||
Gain on sale of business | (5) | (26) | |||||||||
Deferred income tax benefit | (60) | (26) | |||||||||
Unrealized loss on debt and equity securities | 69 | 28 | |||||||||
Other non-cash adjustments | — | (15) | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities | 871 | 845 | |||||||||
Retirement plan contributions | (11) | (14) | |||||||||
Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments: | |||||||||||
Receivables | (548) | (353) | |||||||||
Inventories | (162) | (194) | |||||||||
Prepayments and other current assets | (21) | 5 | |||||||||
Accounts payable and accrued expenses | 78 | 50 | |||||||||
Prepaid taxes and income taxes payable | 19 | (10) | |||||||||
Other assets and liabilities | 42 | 3 | |||||||||
Net cash provided by operating activities | $ | 268 | $ | 332 | |||||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 62 | $ | 59 | |||||||
Income taxes, net of refunds | $ | 256 | $ | 171 | |||||||
Balance as of: | |||||||||||
Non-cash investing transactions: | June 30, 2023 | December 31, 2022 | |||||||||
Period end accounts payable related to property, plant and equipment purchases | $ | 149 | $ | 241 |
(millions of dollars) | ||||
Receivables, net | $ | 15.9 | ||
Inventories, net | 19.0 | |||
Other current assets | 3.1 | |||
Property, plant and equipment, net | 7.4 | |||
Goodwill | 133.6 | |||
Other intangible assets | 61.1 | |||
Deferred tax liabilities | (8.6 | ) | ||
Income taxes payable | (0.7 | ) | ||
Other assets and liabilities | (2.7 | ) | ||
Accounts payable and accrued expenses | (23.3 | ) | ||
Total consideration, net of cash acquired | 204.8 | |||
Less: Assumed retirement-related liabilities | 19.1 | |||
Less: Consideration paid in October 2017 | 5.1 | |||
Cash paid in September 2017, net of cash acquired | $ | 180.6 |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Non-comparable items: | |||||||
Restructuring expense | $ | (0.07 | ) | $ | — | ||
Merger and acquisition expense | (0.03 | ) | (0.03 | ) | |||
Asset impairment expense | — | (0.37 | ) | ||||
Tax adjustments | 0.02 | 0.01 | |||||
Total impact of non-comparable items per share — diluted | $ | (0.08 | ) | $ | (0.39 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Non-comparable items: | |||||||
Restructuring expense | $ | (0.07 | ) | $ | (0.10 | ) | |
Merger and acquisition expense | (0.03 | ) | (0.09 | ) | |||
Asset impairment expense | — | (0.36 | ) | ||||
Contract expiration gain | — | 0.02 | |||||
Tax adjustments | 0.06 | 0.02 | |||||
Total impact of non-comparable items per share — diluted | $ | (0.04 | ) | $ | (0.51 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Engine | $ | 1,506.4 | $ | 1,359.3 | $ | 4,483.6 | $ | 4,202.7 | |||||||
Drivetrain | 921.8 | 865.9 | 2,767.7 | 2,640.5 | |||||||||||
Inter-segment eliminations | (12.0 | ) | (11.0 | ) | (38.4 | ) | (31.2 | ) | |||||||
Net sales | $ | 2,416.2 | $ | 2,214.2 | $ | 7,212.9 | $ | 6,812.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Engine | $ | 238.5 | $ | 221.5 | $ | 729.8 | $ | 696.3 | |||||||
Drivetrain | 111.5 | 89.4 | 325.9 | 271.0 | |||||||||||
Adjusted EBIT | 350.0 | 310.9 | 1,055.7 | 967.3 | |||||||||||
Restructuring expense | 13.3 | 1.3 | 13.3 | 26.9 | |||||||||||
Merger and acquisition expense | 6.4 | 5.9 | 6.4 | 18.9 | |||||||||||
Lease termination settlement | — | — | 5.3 | — | |||||||||||
Other expense, net | 2.7 | — | 2.7 | — | |||||||||||
Asset impairment expense | — | 106.5 | — | 106.5 | |||||||||||
Contract expiration loss (gain) | — | 1.3 | — | (6.2 | ) | ||||||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 37.3 | 33.2 | 121.4 | 105.7 | |||||||||||
Interest income | (1.3 | ) | (1.6 | ) | (4.2 | ) | (4.7 | ) | |||||||
Interest expense and finance charges | 17.6 | 22.4 | 53.6 | 65.1 | |||||||||||
Earnings before income taxes and noncontrolling interest | 274.0 | 141.9 | 857.2 | 655.1 | |||||||||||
Provision for income taxes | 79.4 | 48.8 | 241.9 | 213.4 | |||||||||||
Net earnings | 194.6 | 93.1 | 615.3 | 441.7 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 9.7 | 9.8 | 29.2 | 29.9 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 184.9 | $ | 83.3 | $ | 586.1 | $ | 411.8 |
Three Months Ended June 30, | |||||||||||||||||||||||
(in millions, except per share data) | 2023 | 2022 | |||||||||||||||||||||
Net sales | % of net sales | % of net sales | |||||||||||||||||||||
Air Management | $ | 2,027 | 44.8 | % | $ | 1,724 | 45.9 | % | |||||||||||||||
Drivetrain & Battery Systems | 1,118 | 24.7 | 896 | 23.8 | |||||||||||||||||||
Fuel Systems | 605 | 13.4 | 516 | 13.7 | |||||||||||||||||||
ePropulsion | 567 | 12.5 | 432 | 11.5 | |||||||||||||||||||
Aftermarket | 339 | 7.5 | 326 | 8.7 | |||||||||||||||||||
Inter-segment eliminations | (136) | (3.0) | (135) | (3.6) | |||||||||||||||||||
Total net sales | 4,520 | 100.0 | 3,759 | 100.0 | |||||||||||||||||||
Cost of sales | 3,652 | 80.8 | 3,047 | 81.1 | |||||||||||||||||||
Gross profit | 868 | 19.2 | 712 | 18.9 | |||||||||||||||||||
Selling, general and administrative expenses - R&D, net | 208 | 4.6 | 207 | 5.5 | |||||||||||||||||||
Selling, general and administrative expenses - Other | 214 | 4.7 | 187 | 5.0 | |||||||||||||||||||
Restructuring expense | 12 | 0.3 | 27 | 0.7 | |||||||||||||||||||
Other operating expense, net | 51 | 1.1 | 19 | 0.5 | |||||||||||||||||||
Operating income | 383 | 8.5 | 272 | 7.2 | |||||||||||||||||||
Equity in affiliates’ earnings, net of tax | (14) | (0.3) | (11) | (0.3) | |||||||||||||||||||
Unrealized loss (gain) on debt and equity securities | 54 | 1.2 | (11) | (0.3) | |||||||||||||||||||
Interest expense, net | 12 | 0.3 | 15 | 0.4 | |||||||||||||||||||
Other postretirement expense (income) | 3 | 0.1 | (9) | (0.2) | |||||||||||||||||||
Earnings before income taxes and noncontrolling interest | 328 | 7.3 | 288 | 7.7 | |||||||||||||||||||
Provision for income taxes | 106 | 2.3 | 57 | 1.5 | |||||||||||||||||||
Net earnings | 222 | 4.9 | 231 | 6.1 | |||||||||||||||||||
Net earnings attributable to noncontrolling interest, net of tax | 18 | 0.4 | 15 | 0.4 | |||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 204 | 4.5 | % | $ | 216 | 5.7 | % | |||||||||||||||
Earnings per share — diluted | $ | 0.87 | $ | 0.91 |
Six Months Ended June 30, | |||||||||||||||||||||||
(in millions, except per share data) | 2023 | 2022 | |||||||||||||||||||||
Net sales | % of net sales | % of net sales | |||||||||||||||||||||
Air Management | $ | 4,006 | 46.0 | % | $ | 3,492 | 45.7 | % | |||||||||||||||
Drivetrain & Battery Systems | 2,073 | 23.8 | 1,791 | 23.5 | |||||||||||||||||||
Fuel Systems | 1,173 | 13.5 | 1,107 | 14.5 | |||||||||||||||||||
ePropulsion | 1,054 | 12.1 | 872 | 11.4 | |||||||||||||||||||
Aftermarket | 669 | 7.7 | 633 | 8.3 | |||||||||||||||||||
Inter-segment eliminations | (275) | (3.2) | (262) | (3.4) | |||||||||||||||||||
Total net sales | 8,700 | 100.0 | 7,633 | 100.0 | |||||||||||||||||||
Cost of sales | 7,082 | 81.4 | 6,171 | 80.8 | |||||||||||||||||||
Gross profit | 1,618 | 18.6 | 1,462 | 19.2 | |||||||||||||||||||
Selling, general and administrative expenses - R&D, net | 401 | 4.6 | 398 | 5.2 | |||||||||||||||||||
Selling, general and administrative expenses - Other | 405 | 4.7 | 384 | 5.0 | |||||||||||||||||||
Restructuring expense | 19 | 0.2 | 42 | 0.6 | |||||||||||||||||||
Other operating expense, net | 70 | 0.8 | 14 | 0.2 | |||||||||||||||||||
Operating income | 723 | 8.3 | 624 | 8.2 | |||||||||||||||||||
Equity in affiliates’ earnings, net of tax | (18) | (0.2) | (19) | (0.2) | |||||||||||||||||||
Unrealized loss on debt and equity securities | 69 | 0.8 | 28 | 0.4 | |||||||||||||||||||
Interest expense, net | 22 | 0.3 | 30 | 0.4 | |||||||||||||||||||
Other postretirement expense (income) | 5 | 0.1 | (18) | (0.2) | |||||||||||||||||||
Earnings before income taxes and noncontrolling interest | 645 | 7.4 | 603 | 7.9 | |||||||||||||||||||
Provision for income taxes | 193 | 2.2 | 148 | 1.9 | |||||||||||||||||||
Net earnings | 452 | 5.2 | 455 | 6.0 | |||||||||||||||||||
Net earnings attributable to noncontrolling interest, net of tax | 31 | 0.4 | 39 | 0.5 | |||||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 421 | 4.8 | % | $ | 416 | 5.5 | % | |||||||||||||||
Earnings per share — diluted | $ | 1.80 | $ | 1.74 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Non-comparable items: | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Merger, acquisition and divestiture expense, net | $ | (0.24) | $ | (0.04) | $ | (0.35) | $ | (0.13) | |||||||||||||||
Restructuring expense | (0.04) | (0.11) | (0.06) | (0.17) | |||||||||||||||||||
Service and lease agreement termination | (0.03) | — | (0.03) | — | |||||||||||||||||||
Gain on sale of business | 0.02 | — | 0.02 | 0.08 | |||||||||||||||||||
Gain on sale of asset | 0.02 | — | 0.02 | — | |||||||||||||||||||
Other non-comparable items | — | (0.05) | 0.01 | (0.05) | |||||||||||||||||||
Unrealized (loss) gain on debt and equity securities | (0.18) | 0.03 | (0.23) | (0.11) | |||||||||||||||||||
Tax adjustments | (0.03) | 0.03 | (0.02) | 0.03 | |||||||||||||||||||
Total impact of non-comparable items per share - diluted | $ | (0.48) | $ | (0.14) | $ | (0.64) | $ | (0.35) |
Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||
(in millions) | Net sales | Segment Adjusted Operating Income (Loss) | % margin | Net sales | Segment Adjusted Operating Income (Loss) | % margin | |||||||||||||||||||||||||||||
Air Management | $ | 2,027 | $ | 307 | 15.1 | % | $ | 1,724 | $ | 244 | 14.2 | % | |||||||||||||||||||||||
Drivetrain & Battery Systems | 1,118 | 140 | 12.5 | % | 896 | 113 | 12.6 | % | |||||||||||||||||||||||||||
Fuel Systems | 605 | 57 | 9.4 | % | 516 | 44 | 8.5 | % | |||||||||||||||||||||||||||
ePropulsion | 567 | (19) | (3.4) | % | 432 | (42) | (9.7) | % | |||||||||||||||||||||||||||
Aftermarket | 339 | 52 | 15.3 | % | 326 | 51 | 15.6 | % | |||||||||||||||||||||||||||
Inter-segment eliminations | (136) | — | (135) | — | |||||||||||||||||||||||||||||||
Totals | $ | 4,520 | $ | 537 | $ | 3,759 | $ | 410 |
Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||
(in millions) | Net sales | Segment Adjusted Operating Income (Loss) | % margin | Net sales | Segment Adjusted Operating Income (Loss) | % margin | |||||||||||||||||||||||||||||
Air Management | $ | 4,006 | $ | 592 | 14.8 | % | $ | 3,492 | $ | 495 | 14.2 | % | |||||||||||||||||||||||
Drivetrain & Battery Systems | 2,073 | 250 | 12.1 | % | 1,791 | 226 | 12.6 | % | |||||||||||||||||||||||||||
Fuel Systems | 1,173 | 105 | 9.0 | % | 1,107 | 110 | 9.9 | % | |||||||||||||||||||||||||||
ePropulsion | 1,054 | (53) | (5.0) | % | 872 | (59) | (6.8) | % | |||||||||||||||||||||||||||
Aftermarket | 669 | 97 | 14.5 | % | 633 | 90 | 14.2 | % | |||||||||||||||||||||||||||
Inter-segment eliminations | (275) | — | (262) | — | |||||||||||||||||||||||||||||||
Totals | $ | 8,700 | $ | 991 | $ | 7,633 | $ | 862 |
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
OPERATING | |||||||||||
Net earnings | $ | 452 | $ | 455 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and tooling amortization | 321 | 315 | |||||||||
Intangible asset amortization | 48 | 50 | |||||||||
Restructuring expense, net of cash paid | 12 | 36 | |||||||||
Stock-based compensation expense | 34 | 28 | |||||||||
Gain on sale of business | (5) | (26) | |||||||||
Deferred income tax benefit | (60) | (26) | |||||||||
Unrealized loss on debt and equity securities | 69 | 28 | |||||||||
Other non-cash adjustments | — | (15) | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities | 871 | 845 | |||||||||
Retirement plan contributions | (11) | (14) | |||||||||
Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments: | |||||||||||
Receivables | (548) | (353) | |||||||||
Inventories | (162) | (194) | |||||||||
Accounts payable and accrued expenses | 78 | 50 | |||||||||
Other assets and liabilities | 40 | (2) | |||||||||
Net cash provided by operating activities | $ | 268 | $ | 332 |
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
INVESTING | |||||||||||
Capital expenditures, including tooling outlays | $ | (520) | $ | (331) | |||||||
Payments for businesses acquired, net of cash acquired | (30) | (157) | |||||||||
Proceeds from settlement of net investment hedges, net | 13 | 28 | |||||||||
(Payments) proceeds from investments in debt and equity securities, net | (1) | 30 | |||||||||
Proceeds from the sale of business, net | — | 25 | |||||||||
Proceeds from asset disposals and other, net | 16 | 17 | |||||||||
Net cash used in investing activities | $ | (522) | $ | (388) |
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
FINANCING | |||||||||||
Net increase in notes payable | $ | 3 | $ | — | |||||||
Additions to debt | 2 | 2 | |||||||||
Repayments of debt, including current portion | (6) | (6) | |||||||||
Payments for purchase of treasury stock | — | (140) | |||||||||
Payments for stock-based compensation items | (25) | (17) | |||||||||
Payments for contingent consideration | (23) | — | |||||||||
Purchase of noncontrolling interest | (15) | (59) | |||||||||
Dividends paid to BorgWarner stockholders | (79) | (82) | |||||||||
Dividends paid to noncontrolling stockholders | (64) | (46) | |||||||||
Net cash used in financing activities | $ | (207) | $ | (348) |
(in millions, except for percentages) | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |||||||||||||||||||||
Brazilian real | 6 | % | $ | 14 | 10 | % | $ | 24 | |||||||||||||||
Euro | 1 | % | $ | 13 | 2 | % | $ | 35 | |||||||||||||||
British pound | 3 | % | $ | 11 | 5 | % | $ | 17 | |||||||||||||||
Korean won | (1) | % | $ | (7) | (4) | % | $ | (19) | |||||||||||||||
Chinese renminbi | (5) | % | $ | (131) | (5) | % | $ | (122) |
(in millions, except for percentages) | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | |||||||||||||||||||||
Chinese renminbi | (5) | % | $ | (138) | (5) | % | $ | (132) | |||||||||||||||
Euro | (5) | % | $ | (44) | (8) | % | $ | (74) | |||||||||||||||
Korean won | (6) | % | $ | (44) | (8) | % | $ | (54) | |||||||||||||||
British pound | (7) | % | $ | (26) | (10) | % | $ | (37) |
Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
Period | Total number of shares purchased | Average price per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under plans or programs (in millions) | ||||||||||||||||||||||
April 1, 2023 - April 30, 2023 | ||||||||||||||||||||||||||
Common Stock Repurchase Program | — | $ | — | — | $ | 544 | ||||||||||||||||||||
Employee transactions | 237 | $ | 48.13 | — | ||||||||||||||||||||||
May 1, 2023 - May 31, 2023 | ||||||||||||||||||||||||||
Common Stock Repurchase Program | — | $ | — | — | $ | 544 | ||||||||||||||||||||
Employee transactions | 632 | $ | 47.81 | — | ||||||||||||||||||||||
June 1, 2023 - June 30, 2023 | ||||||||||||||||||||||||||
Common Stock Repurchase Program | — | $ | — | — | $ | 544 | ||||||||||||||||||||
Employee transactions | 732 | $ | 46.75 | — |
Issuer Purchases of Equity Securities | |||||||||||||
Period | Total number of shares purchased | Average price per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | |||||||||
Month Ended July 31, 2017 | |||||||||||||
Common Stock Repurchase Program | 264,258 | $ | 45.41 | 264,258 | 9,891,660 | ||||||||
Month Ended August 31, 2017 | |||||||||||||
Common Stock Repurchase Program | 34,380 | $ | 45.90 | 34,380 | 9,857,280 | ||||||||
Employee transactions | 2,808 | $ | 45.74 | — | |||||||||
Month Ended September 30, 2017 | |||||||||||||
Common Stock Repurchase Program | — | $ | — | — | 9,857,280 | ||||||||
Employee transactions | 247 | $ | 46.07 | — |
Exhibit 10.1 | |||||||||||
Exhibit 10.2 | |||||||||||
Exhibit 10.3 | |||||||||||
Exhibit 10.4 | |||||||||||
Exhibit 10.5 | |||||||||||
Exhibit 10.6 | |||||||||||
Exhibit 10.7 | |||||||||||
Exhibit 10.8 | |||||||||||
Exhibit 31.1 | |||||||||||
Exhibit 31.2 | |||||||||||
Exhibit 32.1 | |||||||||||
Exhibit 101.INS | Inline XBRL Instance | ||||||||||
Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | ||||||||||
Exhibit 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | ||||||||||
Exhibit 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | ||||||||||
Exhibit 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | ||||||||||
Exhibit 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | ||||||||||
Exhibit | Cover Page Interactive Data File (formatted as Inline XBRL |
BorgWarner Inc. | ||||||||||||||
(Registrant) | ||||||||||||||
By | /s/ Craig D. Aaron | |||||||||||||
Craig D. Aaron | ||||||||||||||
Vice President and Controller | ||||||||||||||
(Principal Accounting Officer) | ||||||||||||||