Document_and_Entity_Informatio
Document and Entity Information Document | 9 Months Ended | |
Sep. 30, 2013 | Oct. 25, 2013 | |
Entity Information [Line Items] | ||
Entity Registrant Name | BORGWARNER INC. | |
Entity Central Index Key | 908255 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 113,778,270 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
ASSETS | ||
Cash | $920.40 | $715.70 |
Receivables, net | 1,347.50 | 1,147.30 |
Inventories, net | 454.7 | 447.6 |
Deferred income taxes | 85.3 | 94.7 |
Prepayments and other current assets | 98.3 | 67.5 |
Total current assets | 2,906.20 | 2,472.80 |
Property, plant and equipment, net | 1,875.40 | 1,788 |
Investments and advances | 402.3 | 382.7 |
Goodwill | 1,190.30 | 1,181.40 |
Other non-current assets | 590.1 | 575.9 |
Total assets | 6,964.30 | 6,400.80 |
LIABILITIES AND EQUITY | ||
Notes payable and other short-term debt | 253.7 | 243.4 |
Accounts payable and accrued expenses | 1,377.70 | 1,287.20 |
Income taxes payable | 43.3 | 72.5 |
Total current liabilities | 1,674.70 | 1,603.10 |
Long-term debt | 1,018.60 | 823.8 |
Other non-current liabilities: | ||
Retirement-related liabilities | 507.7 | 509.7 |
Other | 328.6 | 318.1 |
Total other non-current liabilities | 836.3 | 827.8 |
Common stock | 1.2 | 1.2 |
Capital in excess of par value | 1,132 | 1,160.70 |
Retained earnings | 3,065.60 | 2,611.20 |
Accumulated other comprehensive loss | -91 | -121.3 |
Common stock held in treasury | -740.5 | -569.2 |
Total BorgWarner Inc. stockholders’ equity | 3,367.30 | 3,082.60 |
Noncontrolling interest | 67.4 | 63.5 |
Total equity | 3,434.70 | 3,146.10 |
Total liabilities and equity | $6,964.30 | $6,400.80 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ||||
Net sales | $1,806.20 | $1,695.20 | $5,551.20 | $5,464.10 |
Cost of sales | 1,426.60 | 1,351.50 | 4,400.30 | 4,341.40 |
Gross profit | 379.6 | 343.7 | 1,150.90 | 1,122.70 |
Selling, general and administrative expenses | 157.7 | 151 | 472.6 | 473.1 |
Other (income) expense | -3.7 | 29.7 | 10.8 | 67.4 |
Operating income | 225.6 | 163 | 667.5 | 582.2 |
Equity in affiliates’ earnings, net of tax | -10.4 | -11.1 | -31.2 | -32.8 |
Interest income | -1.3 | -1 | -3.3 | -3.7 |
Interest expense and finance charges | 8.1 | 5 | 26.6 | 32.7 |
Earnings before income taxes and noncontrolling interest | 229.2 | 170.1 | 675.4 | 586 |
Provision for income taxes | 56.3 | 64.2 | 173.8 | 190.2 |
Net earnings | 172.9 | 105.9 | 501.6 | 395.8 |
Net earnings attributable to the noncontrolling interest, net of tax | 6.1 | 4.8 | 18.7 | 16.1 |
Net earnings attributable to the noncontrolling interest, net of tax | $166.80 | $101.10 | $482.90 | $379.70 |
Earnings per share — basic | $1.47 | $0.88 | $4.21 | $3.40 |
Earnings per share — diluted | $1.45 | $0.85 | $4.16 | $3.15 |
Weighted average shares outstanding: | ||||
Basic | 113,819 | 114,299 | 114,584 | 111,619 |
Diluted | 115,238 | 118,499 | 115,968 | 122,571 |
Dividends declared per share | $0.25 | $0 | $0.25 | $0 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings attributable to BorgWarner Inc. | $166.80 | $101.10 | $482.90 | $379.70 |
Foreign currency translation adjustments | ||||
Foreign currency translation adjustments | 94.5 | 64.2 | 4.7 | 18.3 |
Hedge instrument adjustments | ||||
Market value change of hedge instruments | 12.1 | |||
Income taxes associated with the market value change of hedge instruments | 8.5 | |||
Loss (gain) reclassified into net earnings | 8.7 | |||
Income taxes reclassified into net earnings | -1.7 | |||
Hedge instruments | 0.4 | -3.7 | 14 | 7.3 |
Defined benefit postretirement plans | ||||
Defined benefit postretirement plans | 1.9 | 1.5 | 11.1 | 4.1 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent | 0.5 | 0.5 | ||
Total other comprehensive income attributable to BorgWarner Inc. | 96.8 | 62 | 30.3 | 30.2 |
Comprehensive income attributable to BorgWarner Inc. | 266.3 | 164.4 | 513.6 | 411.3 |
Comprehensive income attributable to the noncontrolling interest | 2.7 | 1.3 | 0.4 | 1.4 |
Comprehensive income | $263.60 | $163.10 | $513.20 | $409.90 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
OPERATING | ||
Net earnings | $501.60 | $395.80 |
Adjustments to reconcile net earnings to net cash flows from operations: | ||
Depreciation and tooling amortization | 202.4 | 189.8 |
Amortization of intangible assets and other | 20.1 | 21.5 |
Loss from disposal activities, net of cash paid | 0 | 31.7 |
Restructuring Costs | 25.5 | |
Bond amortization | 0 | 5.3 |
Stock-based compensation expense | 29.3 | 41 |
Deferred income tax benefit | -9 | -0.4 |
Equity in affiliates’ earnings, net of dividends received, and other | -28.2 | -15.9 |
Net earnings adjusted for non-cash charges to operations | 716.2 | 694.3 |
Changes in assets and liabilities: | ||
Receivables | -195.3 | -81.5 |
Inventories | -13 | -38.5 |
Prepayments and other current assets | -39.7 | -18.9 |
Accounts payable and accrued expenses | 85.5 | -2.1 |
Income taxes payable | -25.9 | 25.7 |
Other non-current assets and liabilities | -13 | -36.4 |
Net cash provided by operating activities | 514.8 | 542.6 |
INVESTING | ||
Capital expenditures, including tooling outlays | -297.9 | -283 |
Net proceeds from asset disposals | 22.8 | 3.9 |
Net proceeds from sale of business | 0 | 56.8 |
Net cash used in investing activities | -275.1 | -222.3 |
FINANCING | ||
Net increase in notes payable | 14.3 | 34.7 |
Additions to long-term debt, net of debt issuance costs | 272 | 313.9 |
Repayments of long-term debt, including current portion | -76.9 | -203.6 |
Payments for purchase of treasury stock | -225.5 | -200.3 |
Proceeds from stock options exercised, including the tax benefit | 25.3 | 49.9 |
Taxes paid on employees' restricted stock award vestings | -29.2 | -17.8 |
Payments to Acquire Interest in Subsidiaries and Affiliates | 0 | -7.4 |
Payments of Dividends | -28.5 | 0 |
Dividends paid to noncontrolling stockholders | -10.7 | -20.5 |
Net cash used in financing activities | -59.2 | -51.1 |
Effect of exchange rate changes on cash | 24.2 | -7.3 |
Net increase in cash | 204.7 | 261.9 |
Cash at beginning of year | 715.7 | 359.6 |
Cash at end of period | 920.4 | 621.5 |
Net cash paid during the period for: | ||
Interest | 37.6 | 44.7 |
Income taxes | $197.60 | $122 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited Condensed Consolidated Financial Statements of BorgWarner Inc. and Consolidated Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations and cash flow activity required by GAAP for complete financial statements. In the opinion of management, all normal recurring adjustments necessary for a fair presentation of results have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The balance sheet as of December 31, 2012 was derived from the audited financial statements as of that date. For further information, refer to the Consolidated Financial Statements and Footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | |
Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, as well as, the amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. Actual results could differ from these estimates. |
Research_and_Development
Research and Development | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Research and Development [Abstract] | ||||||||||||||||
Research and Development | Research and Development Expenditures | |||||||||||||||
The Company's net Research & Development ("R&D") expenditures are included in selling, general and administrative expenses of the Condensed Consolidated Statements of Operations. Customer reimbursements are netted against gross R&D expenditures as they are considered a recovery of cost. Customer reimbursements for prototypes are recorded net of prototype costs based on customer contracts, typically either when the prototype is shipped or when it is accepted by the customer. Customer reimbursements for engineering services are recorded when performance obligations are satisfied in accordance with the contract and accepted by the customer. Financial risks and rewards transfer upon shipment, acceptance of a prototype component by the customer or upon completion of the performance obligation as stated in the respective customer agreement. | ||||||||||||||||
The following table presents the Company’s gross and net expenditures on R&D activities: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Gross R&D expenditures | $ | 84.7 | $ | 75.6 | $ | 250.9 | $ | 228.5 | ||||||||
Customer reimbursements | (12.9 | ) | (11.2 | ) | (34.7 | ) | (29.8 | ) | ||||||||
Net R&D expenditures | $ | 71.8 | $ | 64.4 | $ | 216.2 | $ | 198.7 | ||||||||
The Company has contracts with several customers at the Company's various R&D locations. No such contract exceeded 5% of annual net R&D expenditures in any of the periods presented. |
Other_income_expense
Other income expense | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Other Income and Expenses [Abstract] | ||||||||||||||||
Other Income and Other Expense Disclosure [Text Block] | (3) Other (Income) Expense | |||||||||||||||
Items included in other (income) expense consist of: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Program termination agreement | $ | — | $ | — | $ | 11.3 | $ | — | ||||||||
Retirement related obligations | — | — | 5.9 | — | ||||||||||||
Loss from disposal activities | — | 1.8 | — | 39.7 | ||||||||||||
Restructuring expense | — | 27.4 | — | 27.4 | ||||||||||||
Other | (3.7 | ) | 0.5 | (6.4 | ) | 0.3 | ||||||||||
Other (income) expense | $ | (3.7 | ) | $ | 29.7 | $ | 10.8 | $ | 67.4 | |||||||
During the first quarter of 2013, the Company recorded an $11.3 million expense related to a program termination agreement, which was paid in the second and third quarters of 2013. | ||||||||||||||||
During the fourth quarter of 2012, the Company waived the forfeiture provision associated with future restricted stock grants made to certain retiring Named Executive Officers. The Company recorded a $5.9 million retirement related obligation primarily related to a first quarter 2013 grant of restricted stock awards to these Named Executive Officers. | ||||||||||||||||
During the second quarter of 2012, the Company signed a Master Purchase Agreement to sell its spark plug business to Federal-Mogul Corporation. As a result, the Company recorded expense of $39.7 million primarily to write-down prior purchase price accounting adjustments included within the disposal group. These purchase price accounting adjustments were originally recorded in the Engine segment and related to the BERU acquisition.The Company also recorded restructuring expense of $27.4 million in the third quarter of 2012 primarily associated with the disposal and future requirements of BERU's on-going business, which included $16.9 million of employee termination benefits and $10.5 million of other charges, primarily related to the write-down of certain assets. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
The Company's provision for income taxes is based upon an estimated annual tax rate for the year applied to federal, state and foreign income. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter. | |
At September 30, 2013, the Company estimates its U.S. GAAP effective tax rate to be approximately 26% for the year ending December 31, 2013, which includes tax benefits of $3.8 million and $2.1 million related to the program termination agreement and retirement related obligations discussed in the Other (Income) Expense footnote. This rate also includes a net tax benefit of $7.3 million, which is comprised of tax benefits of $6.6 million related to the extension of the federal research and development credit and other international tax provisions resulting from the retroactive impact of U.S. legislation enacted in January 2013, $3.1 million related to 2012 provision to return adjustments and $2.5 million related to the reversal of certain deferred tax asset valuation allowances, partially offset by a $4.9 million tax expense related to a comprehensive income adjustment. | |
At September 30, 2012, the Company estimated its U.S. GAAP effective tax rate to be approximately 31% for the year ending December 31, 2012. This rate included net tax expense of $3.5 million associated with the loss from disposal activities and restructuring expense recorded during the third quarter of 2012. The $3.5 million net expense was comprised of $11.2 million tax expense resulting from the completion of the disposal, partially offset by a tax benefit of $7.7 million associated with the restructuring expense. For the nine months ended September 30, 2012, the net tax benefit associated with the loss from disposal activities and restructuring expense was $2.0 million. The 31% U.S. GAAP effective tax rate also included additional tax expense of $15.9 million resulting from other tax adjustments. These other tax adjustments included $8.2 million of tax expense primarily resulting from the settlement of certain tax audits and $7.7 million of tax expense associated with the Company's second quarter 2012 decision to change its cash repatriation assertion for some of its foreign subsidiaries. | |
The annual effective tax rates differ from the U.S. statutory rate primarily due to foreign rates which differ from those in the U.S., the realization of certain business tax credits, including foreign tax credits, and favorable permanent differences between book and tax treatment for certain items, including equity in affiliates' earnings. |
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | Inventories, net | |||||||
Inventories are valued at the lower of cost or market. The cost of U.S. inventories is determined by the last-in, first-out (“LIFO”) method, while the operations outside the U.S. use the first-in, first-out (“FIFO”) or average-cost methods. Inventories consisted of the following: | ||||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Raw material and supplies | $ | 284.2 | $ | 264 | ||||
Work in progress | 79.8 | 82 | ||||||
Finished goods | 106.1 | 117.6 | ||||||
FIFO inventories | 470.1 | 463.6 | ||||||
LIFO reserve | (15.4 | ) | (16.0 | ) | ||||
Inventories, net | $ | 454.7 | $ | 447.6 | ||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment | Property, Plant and Equipment, net | |||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Land, land use rights and buildings | $ | 738.6 | $ | 717.2 | ||||
Machinery and equipment | 1,848.00 | 2,282.40 | ||||||
Capital leases | 2.4 | 2.3 | ||||||
Construction in progress | 265 | 243.7 | ||||||
Total property, plant and equipment, gross | 2,854.00 | 3,245.60 | ||||||
Less: accumulated depreciation | (1,086.5 | ) | (1,567.0 | ) | ||||
Property, plant and equipment, net, excluding tooling | 1,767.50 | 1,678.60 | ||||||
Tooling, net of amortization | 107.9 | 109.4 | ||||||
Property, plant and equipment, net | $ | 1,875.40 | $ | 1,788.00 | ||||
As of September 30, 2013 and December 31, 2012, accounts payable of $35.8 million and $39.8 million, respectively, were related to property, plant and equipment purchases. | ||||||||
Interest costs capitalized for the nine months ended September 30, 2013 and 2012 were $8.5 million and $13.5 million, respectively. |
Product_Warranty
Product Warranty | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Product Warranties Disclosures [Abstract] | ||||||||
Product Warranty | Product Warranty | |||||||
The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one to three years. Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and industry developments and recoveries from third parties. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty claims. Management believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual. | ||||||||
The following table summarizes the activity in the product warranty accrual accounts: | ||||||||
(millions of dollars) | 2013 | 2012 | ||||||
Beginning balance, January 1 | $ | 64.9 | $ | 72.7 | ||||
Provisions | 29.1 | 23.1 | ||||||
Payments | (28.3 | ) | (31.9 | ) | ||||
Translation adjustment | 0.7 | 0.2 | ||||||
Ending balance, September 30 | $ | 66.4 | $ | 64.1 | ||||
The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows: | ||||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Accounts payable and accrued expenses | $ | 33.3 | $ | 33.1 | ||||
Other non-current liabilities | 33.1 | 31.8 | ||||||
Total product warranty liability | $ | 66.4 | $ | 64.9 | ||||
Notes_Payable_and_LongTerm_Deb
Notes Payable and Long-Term Debt | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Notes Payable and Long-Term Debt | Notes Payable and Long-Term Debt | |||||||
As of September 30, 2013 and December 31, 2012, the Company had short-term and long-term debt outstanding as follows: | ||||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Short-term debt | ||||||||
Short-term borrowings | $ | 143.4 | $ | 129.1 | ||||
Receivables securitization | 110 | 110 | ||||||
Total short-term debt | $ | 253.4 | $ | 239.1 | ||||
Long-term debt | ||||||||
5.75% Senior notes due 11/01/16 ($150 million par value) | $ | 149.6 | $ | 149.6 | ||||
8.00% Senior notes due 10/01/19 ($134 million par value) | 133.9 | 133.9 | ||||||
4.625% Senior notes due 09/15/20 ($250 million par value) | 248.1 | 247.9 | ||||||
7.125% Senior notes due 02/15/29 ($121 million par value) | 119.4 | 119.4 | ||||||
Multi-currency revolving credit facility | 320 | 140 | ||||||
Term loan facilities and other | 30.7 | 17.1 | ||||||
Unamortized portion of debt derivatives | 17.2 | 20.2 | ||||||
Total long-term debt | 1,018.90 | 828.1 | ||||||
Less: current portion | 0.3 | 4.3 | ||||||
Long-term debt, net of current portion | $ | 1,018.60 | $ | 823.8 | ||||
The weighted average interest rate on all borrowings outstanding as of September 30, 2013 and December 31, 2012 was 3.6% and 4.0%, respectively. | ||||||||
The Company's multi-currency revolving credit facility includes a feature that allows the Company's borrowings to be increased to $1 billion. Utilizing this feature, on April 12, 2013, the Company increased its multi-currency revolving credit facility from $650 million to $750 million. The credit facility provides for borrowings through June 30, 2016 and is guaranteed by the Company's material domestic subsidiaries. The credit facility has two key financial covenants, a debt compared to EBITDA (“Earnings Before Interest, Taxes, Depreciation and Amortization”) test and an interest coverage test. The Company was in compliance with all covenants at September 30, 2013 and expects to remain compliant in future periods. At September 30, 2013 and December 31, 2012, the Company had outstanding borrowings of $320.0 million and $140.0 million, respectively, under this facility. | ||||||||
As of September 30, 2013 and December 31, 2012, the estimated fair values of the Company’s senior unsecured notes totaled $738.4 million and $770.3 million, respectively. The estimated fair values were $87.4 million and $119.5 million higher than their carrying value at September 30, 2013 and December 31, 2012, respectively. Fair market values of the senior unsecured notes are developed using observable values for similar debt instruments, which are considered Level 2 inputs as defined by ASC Topic 820. The carrying value of the Company's multi-currency revolving credit facility is equal to its fair value. The fair value estimates do not necessarily reflect the values the Company could realize in the current markets. | ||||||||
The Company had outstanding letters of credit of $27.1 million and $59.1 million at September 30, 2013 and December 31, 2012, respectively. The letters of credit typically act as guarantees of payment to certain third parties in accordance with specified terms and conditions. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||||
ASC Topic 820 emphasizes that fair value is a market-based measurement, not an entity specific measurement. Therefore, a fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair values as follows: | ||||||||||||||||||
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. | |||||||||||||||||
Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC Topic 820: | ||||||||||||||||||
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). | |||||||||||||||||
The following tables classify assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||
Basis of fair value measurements | ||||||||||||||||||
(millions of dollars) | Balance at | Quoted prices in active markets for identical items | Significant other observable inputs | Significant unobservable inputs | Valuation technique | |||||||||||||
30-Sep-13 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Assets: | ||||||||||||||||||
Foreign currency contracts | $ | 2.6 | $ | — | $ | 2.6 | $ | — | A | |||||||||
Other non-current assets (insurance settlement agreement note receivable) | $ | 35.5 | $ | — | $ | 35.5 | $ | — | C | |||||||||
Liabilities: | ||||||||||||||||||
Foreign currency contracts | $ | 6.7 | $ | — | $ | 6.7 | $ | — | A | |||||||||
Net investment hedge contracts | $ | 36.2 | $ | — | $ | 36.2 | $ | — | A | |||||||||
Basis of fair value measurements | ||||||||||||||||||
(millions of dollars) | Balance at December 31, 2012 | Quoted prices in active markets for identical items | Significant other observable inputs | Significant unobservable inputs | Valuation | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | technique | |||||||||||||||
Assets: | ||||||||||||||||||
Foreign currency contracts | $ | 5.9 | $ | — | $ | 5.9 | $ | — | A | |||||||||
Other non-current assets (insurance settlement agreement note receivable) | $ | 41 | $ | — | $ | 41 | $ | — | C | |||||||||
Liabilities: | ||||||||||||||||||
Foreign currency contracts | $ | 9.8 | $ | — | $ | 9.8 | $ | — | A | |||||||||
Net investment hedge contracts | $ | 58.1 | $ | — | $ | 58.1 | $ | — | A | |||||||||
Financial_Instruments
Financial Instruments | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||
Financial Instruments | Financial Instruments | ||||||||||||||||||||
The Company’s financial instruments include cash and marketable securities. Due to the short-term nature of these instruments, their book value approximates their fair value. The Company’s financial instruments also include long-term debt, interest rate and cross-currency swaps, commodity derivative contracts and foreign currency derivatives. All derivative contracts are placed with counterparties that have an S&P, or equivalent, investment grade credit rating at the time of the contracts’ placement. At September 30, 2013 and December 31, 2012, the Company had no derivative contracts that contained credit risk related contingent features. | |||||||||||||||||||||
The Company selectively uses cross-currency swaps to hedge the foreign currency exposure associated with our net investment in certain foreign operations (net investment hedges). At September 30, 2013 and December 31, 2012, the following cross-currency swaps were outstanding: | |||||||||||||||||||||
Cross-currency swaps | |||||||||||||||||||||
(in millions) | Notional in | Notional in | Duration | ||||||||||||||||||
USD | local currency | ||||||||||||||||||||
Floating $ to floating € | $ | 75 | € | 58.5 | 19-Oct | ||||||||||||||||
Floating $ to floating ¥ | $ | 150 | ¥ | 17,581.50 | 16-Nov | ||||||||||||||||
The Company uses certain commodity derivative contracts to protect against commodity price changes related to forecasted raw material and supplies purchases. The Company primarily utilizes forward and option contracts, which are designated as cash flow hedges. The Company did not have any commodity derivative contracts outstanding at September 30, 2013 and December 31, 2012. | |||||||||||||||||||||
The Company uses foreign currency forward and option contracts to protect against exchange rate movements for forecasted cash flows, including capital expenditures, purchases, operating expenses or sales transactions designated in currencies other than the functional currency of the operating unit. Foreign currency derivative contracts require the Company, at a future date, to either buy or sell foreign currency in exchange for the operating units’ local currency. | |||||||||||||||||||||
At September 30, 2013 and December 31, 2012, the following foreign currency derivative contracts were outstanding: | |||||||||||||||||||||
Foreign currency derivatives (in millions) | |||||||||||||||||||||
Functional currency | Traded currency | Notional in traded currency | Notional in traded currency | Duration | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||
Brazilian real | US dollar | 21.9 | — | 14-Dec | |||||||||||||||||
British pound | Euro | 14.4 | 28.8 | 13-Dec | |||||||||||||||||
Chinese yuan | Japanese yen | 737 | — | 14-Feb | |||||||||||||||||
Chinese yuan | US dollar | 17.5 | — | 14-Dec | |||||||||||||||||
Euro | British pound | 4.2 | 4.7 | 14-Dec | |||||||||||||||||
Euro | Hungarian forint | 2,325.00 | 9,300.00 | 13-Nov | |||||||||||||||||
Euro | Japanese yen | 5,762.50 | 6,760.00 | 14-Dec | |||||||||||||||||
Euro | Polish zloty | 16.3 | 87.4 | 13-Dec | |||||||||||||||||
Euro | US dollar | 35 | 15.2 | 14-Dec | |||||||||||||||||
Hungarian forint | Euro | 1.7 | — | 13-Dec | |||||||||||||||||
Japanese yen | Chinese yuan | 84 | — | 14-Dec | |||||||||||||||||
Japanese yen | US dollar | 2.5 | 9.5 | 13-Dec | |||||||||||||||||
Korean won | Euro | 25.3 | 32.4 | 14-Dec | |||||||||||||||||
Korean won | Japanese yen | 162.9 | — | 14-Jun | |||||||||||||||||
Korean won | US dollar | 4.2 | 17.5 | 13-Dec | |||||||||||||||||
Mexican peso | US dollar | 7.4 | 20.9 | 13-Dec | |||||||||||||||||
Swedish krona | Euro | 13 | — | 13-Dec | |||||||||||||||||
US dollar | Indian rupee | 9.4 | 111.1 | 13-Oct | |||||||||||||||||
US dollar | Japanese yen | 3,311.20 | 3,000.00 | 13-Dec | |||||||||||||||||
At September 30, 2013 and December 31, 2012, the following amounts were recorded in the Condensed Consolidated Balance Sheets as being payable to or receivable from counterparties under ASC Topic 815: | |||||||||||||||||||||
(millions of dollars) | Assets | Liabilities | |||||||||||||||||||
Contract Type | Location | September 30, 2013 | December 31, 2012 | Location | September 30, 2013 | December 31, 2012 | |||||||||||||||
Foreign currency contracts | Prepayments and other current assets | $ | 2.4 | $ | 5.7 | Accounts payable and accrued expenses | $ | 6.5 | $ | 9.8 | |||||||||||
Other non-current assets | $ | 0.2 | $ | 0.2 | Other non-current liabilities | $ | 0.2 | $ | — | ||||||||||||
Net investment hedge contracts | Other non-current assets | $ | — | $ | — | Other non-current liabilities | $ | 36.2 | $ | 58.1 | |||||||||||
Effectiveness for cash flow and net investment hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. To the extent that derivative instruments are deemed to be effective, gains and losses arising from these contracts are deferred into accumulated other comprehensive income (loss) ("AOCI") and reclassified into income as the underlying operating transactions are recognized. These realized gains or losses offset the hedged transaction and are recorded on the same line in the statement of operations. To the extent that derivative instruments are deemed to be ineffective, gains or losses are recognized into income. | |||||||||||||||||||||
The table below shows deferred gains (losses) reported in AOCI as well as the amount expected to be reclassified to income in one year or less. The amount expected to be reclassified to income in one year or less assumes no change in the current relationship of the hedged item at September 30, 2013 market rates. | |||||||||||||||||||||
(millions of dollars) | Deferred gain (loss) in AOCI at | Gain (loss) expected to be reclassified to income in one year or less | |||||||||||||||||||
Contract Type | September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Foreign currency | $ | (4.6 | ) | $ | (3.5 | ) | $ | (4.6 | ) | ||||||||||||
Net investment hedges | (32.6 | ) | (54.5 | ) | — | ||||||||||||||||
Total | $ | (37.2 | ) | $ | (58.0 | ) | $ | (4.6 | ) | ||||||||||||
Derivative instruments designated as hedging instruments as defined by ASC Topic 815 held during the period resulted in the following gains and losses recorded in income: | |||||||||||||||||||||
Gain (loss) reclassified | Gain (loss) | ||||||||||||||||||||
from AOCI to income | recognized in income | ||||||||||||||||||||
(effective portion) | (ineffective portion) | ||||||||||||||||||||
(millions of dollars) | Three Months Ended | Three Months Ended | |||||||||||||||||||
Contract Type | Location | September 30, 2013 | September 30, 2012 | Location | September 30, 2013 | September 30, 2012 | |||||||||||||||
Foreign currency | Sales | $ | 0.7 | $ | 2.4 | SG&A expense | $ | — | $ | — | |||||||||||
Foreign currency | Cost of goods sold | $ | (4.1 | ) | $ | 1.4 | SG&A expense | $ | (0.1 | ) | $ | — | |||||||||
Foreign currency | SG&A expense | $ | (0.1 | ) | $ | — | SG&A expense | $ | — | $ | — | ||||||||||
Cross-currency swap | N/A | Interest expense | $ | 0.4 | $ | 3.9 | |||||||||||||||
Gain (loss) reclassified | Gain (loss) | ||||||||||||||||||||
from AOCI to income | recognized in income | ||||||||||||||||||||
(effective portion) | (ineffective portion) | ||||||||||||||||||||
(millions of dollars) | Nine Months Ended | Nine Months Ended | |||||||||||||||||||
Contract Type | Location | September 30, 2013 | September 30, 2012 | Location | September 30, 2013 | September 30, 2012 | |||||||||||||||
Foreign currency | Sales | $ | 1.6 | $ | 3.9 | SG&A expense | $ | 0.2 | $ | — | |||||||||||
Foreign currency | Cost of goods sold | $ | (10.1 | ) | $ | 2.5 | SG&A expense | $ | (0.8 | ) | $ | — | |||||||||
Foreign currency | SG&A expense | $ | (0.2 | ) | $ | — | SG&A expense | $ | — | $ | — | ||||||||||
Cross-currency swap | N/A | Interest expense | $ | 0.1 | $ | 1.7 | |||||||||||||||
At September 30, 2013, derivative instruments that were not designated as hedging instruments as defined by ASC Topic 815 were immaterial. |
Retirement_Benefit_Plans
Retirement Benefit Plans | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||
Retirement Benefit Plans | Retirement Benefit Plans | ||||||||||||||||||||||||
The Company has a number of defined benefit pension plans and other postretirement benefit plans covering eligible salaried and hourly employees and their dependents. The estimated contributions to the Company's defined benefit pension plans for 2013 range from $15 million to $25 million, of which $15.1 million has been contributed through the first nine months of the year. The other postretirement benefit plans, which provide medical and life insurance benefits, are unfunded plans. | |||||||||||||||||||||||||
The components of net periodic benefit cost recorded in the Condensed Consolidated Statements of Operations are as follows: | |||||||||||||||||||||||||
Pension benefits | Other post- | ||||||||||||||||||||||||
retirement benefits | |||||||||||||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Three Months Ended September 30, | US | Non-US | US | Non-US | |||||||||||||||||||||
Service cost | $ | — | $ | 3.1 | $ | — | $ | 2.2 | $ | 0.1 | $ | 0.1 | |||||||||||||
Interest cost | 2.9 | 4.2 | 3.6 | 4.2 | 1.7 | 2.5 | |||||||||||||||||||
Expected return on plan assets | (4.6 | ) | (2.8 | ) | (4.7 | ) | (2.3 | ) | — | — | |||||||||||||||
Amortization of unrecognized prior service benefit | (0.2 | ) | — | (0.2 | ) | — | (1.6 | ) | (1.6 | ) | |||||||||||||||
Amortization of unrecognized loss | 2.1 | 1.3 | 2 | 0.4 | 1.2 | 1.8 | |||||||||||||||||||
Net periodic benefit cost | $ | 0.2 | $ | 5.8 | $ | 0.7 | $ | 4.5 | $ | 1.4 | $ | 2.8 | |||||||||||||
Pension benefits | Other post- | ||||||||||||||||||||||||
retirement benefits | |||||||||||||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Nine Months Ended September 30, | US | Non-US | US | Non-US | |||||||||||||||||||||
Service cost | $ | — | $ | 9.3 | $ | — | $ | 6.8 | $ | 0.3 | $ | 0.4 | |||||||||||||
Interest cost | 8.7 | 12.4 | 10.8 | 12.9 | 5.1 | 7.6 | |||||||||||||||||||
Expected return on plan assets | (13.7 | ) | (8.2 | ) | (14.1 | ) | (6.9 | ) | — | — | |||||||||||||||
Amortization of unrecognized prior service benefit | (0.6 | ) | — | (0.6 | ) | — | (4.8 | ) | (4.8 | ) | |||||||||||||||
Amortization of unrecognized loss | 6.2 | 3.9 | 6.1 | 0.9 | 3.7 | 5.2 | |||||||||||||||||||
Net periodic benefit cost | $ | 0.6 | $ | 17.4 | $ | 2.2 | $ | 13.7 | $ | 4.3 | $ | 8.4 | |||||||||||||
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||
Under the Company's 1993 Stock Incentive Plan (“1993 Plan”), the Company granted options to purchase shares of the Company's common stock at the fair market value on the date of grant. The options vested over periods up to three years and have a term of 10 years from date of grant. As of December 31, 2003, there were no options available for future grants under the 1993 Plan. The 1993 Plan expired at the end of 2003 and was replaced by the Company's 2004 Stock Incentive Plan. Under this Plan, 12.5 million shares are authorized for grant, of which approximately 1.6 million shares are available for future issuance. | |||||||||||||
Stock options A summary of the Company’s stock option activity for the nine months ended September 30, 2013 is as follows: | |||||||||||||
Shares under option | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | ||||||||||
(thousands) | (in years) | (in millions) | |||||||||||
Outstanding and exercisable at December 31, 2012 | 1,436 | $ | 30.65 | 3.4 | $ | 58.8 | |||||||
Exercised | (81 | ) | $ | 28.43 | |||||||||
Outstanding and exercisable at March 31, 2013 | 1,355 | $ | 30.78 | 3.2 | $ | 63.1 | |||||||
Exercised | (201 | ) | $ | 27.56 | |||||||||
Outstanding and exercisable at June 30, 2013 | 1,154 | $ | 31.34 | 3.1 | $ | 63.2 | |||||||
Exercised | (103 | ) | $ | 30.12 | |||||||||
Outstanding and exercisable at September 30, 2013 | 1,051 | $ | 31.46 | 2.8 | $ | 73.5 | |||||||
Restricted stock At its November 2007 meeting, the Company's Compensation Committee decided that restricted common stock awards and stock units ("restricted stock") would be awarded in place of stock options for long-term incentive award grants to employees. Restricted stock granted to employees vests 50% after two years and the remainder after three years from the date of grant. Restricted stock granted to non-employee directors generally vests on the anniversary date of the grant. | |||||||||||||
The value of restricted stock is determined by the market value of the Company’s common stock at the date of grant. In 2013, restricted stock in the amount of 373,197 and 14,140 shares was granted to employees and non-employee directors, respectively, under the 2004 Stock Incentive Plan. The value of the awards is recorded as unearned compensation within capital in excess of par value in equity and is amortized as compensation expense over the restriction periods. | |||||||||||||
The Company recorded restricted stock compensation expense of $4.9 million and $20.8 million for the three and nine months ended September 30, 2013, respectively, and $5.0 million and $14.9 million for the three and nine months ended September 30, 2012, respectively. | |||||||||||||
During the fourth quarter of 2012, the Company waived the forfeiture provision associated with future restricted stock grants made to certain retiring Named Executive Officers. The expense of $20.8 million for the nine months ended September 30, 2013 includes $5.5 million of expense related to the grant of restricted stock awards to these Named Executive Officers. | |||||||||||||
A summary of the Company’s restricted stock activity for the nine months ended September 30, 2013 is as follows: | |||||||||||||
Shares subject to restriction | Weighted average price | ||||||||||||
(thousands) | |||||||||||||
Outstanding at December 31, 2012 | 1,032 | $ | 58.77 | ||||||||||
Granted | 372 | $ | 75.41 | ||||||||||
Vested | (331 | ) | $ | 47.69 | |||||||||
Forfeited | (19 | ) | $ | 68.14 | |||||||||
Outstanding at March 31, 2013 | 1,054 | $ | 67.71 | ||||||||||
Granted | 15 | $ | 75.32 | ||||||||||
Vested | (65 | ) | $ | 72.93 | |||||||||
Forfeited | (12 | ) | $ | 75.68 | |||||||||
Outstanding at June 30, 2013 | 992 | $ | 67.37 | ||||||||||
Granted | — | $ | — | ||||||||||
Vested | (6 | ) | $ | 42.23 | |||||||||
Forfeited | (21 | ) | $ | 75.56 | |||||||||
Outstanding at September 30, 2013 | 965 | $ | 67.36 | ||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Notes) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | (13) Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||||||
The following table summarizes the activity within accumulated other comprehensive (loss) income during the nine months ended September 30, 2013: | |||||||||||||||||||||
(millions of dollars) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | ||||||||||||||||
Beginning Balance, December 31, 2012 | $ | 140.8 | $ | (37.2 | ) | $ | (225.8 | ) | $ | 0.9 | $ | (121.3 | ) | ||||||||
Comprehensive (loss) income before reclassifications | 4.7 | 12.1 | 1.4 | 0.5 | 18.7 | ||||||||||||||||
Income taxes associated with comprehensive (loss) income before reclassifications | — | (8.5 | ) | — | — | (8.5 | ) | ||||||||||||||
Reclassification from accumulated other comprehensive (loss) income | — | 8.7 | 8.4 | — | 17.1 | ||||||||||||||||
Income taxes reclassified into net earnings | — | 1.7 | 1.3 | — | 3 | ||||||||||||||||
Ending Balance September 30, 2013 | $ | 145.5 | $ | (23.2 | ) | $ | (214.7 | ) | $ | 1.4 | $ | (91.0 | ) | ||||||||
Contingencies
Contingencies | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Contingencies | Contingencies | |||||||
In the normal course of business, the Company is party to various commercial and legal claims, actions and complaints, including matters involving warranty claims, intellectual property claims, general liability and various other risks. It is not possible to predict with certainty whether or not the Company will ultimately be successful in any of these commercial and legal matters or, if not, what the impact might be. The Company's environmental and product liability contingencies are discussed separately below. The Company's management does not expect that an adverse outcome in any of these commercial and legal claims, actions and complaints would have a material adverse effect on the Company's overall results of operations, financial position or cash flows, although it could be material to results of operations in a particular quarter. | ||||||||
Litigation | ||||||||
In January 2006, BorgWarner Diversified Transmission Products Inc. ("DTP"), a subsidiary of the Company, filed a declaratory judgment action in United States District Court, Southern District of Indiana (Indianapolis Division) against the United Automobile, Aerospace, and Agricultural Implements Workers of America (“UAW”) Local No. 287 and Gerald Poor, individually and as the representative of a defendant class. DTP sought the Court's affirmation that DTP did not violate the Labor-Management Relations Act or the Employee Retirement Income Security Act (ERISA) by unilaterally amending certain medical plans effective April 1, 2006 and October 1, 2006, prior to the expiration of the then-current collective bargaining agreements. On September 10, 2008, the Court found that DTP's reservation of the right to make such amendments reducing the level of benefits provided to retirees was limited by its collectively bargained health insurance agreement with the UAW, which did not expire until April 24, 2009. Thus, the amendments were untimely. In 2008, the Company recorded a charge of $4.0 million as a result of the Court's decision. | ||||||||
DTP filed a declaratory judgment action in the United States District Court, Southern District of Indiana (Indianapolis Division) against the UAW Local No. 287 and Jim Barrett and others, individually and as representatives of a defendant class, on February 26, 2009 again seeking the Court's affirmation that DTP did not violate the Labor-Management Relations Act or ERISA by modifying the level of benefits provided retirees to make them comparable to other Company retiree benefit plans after April 24, 2009. Certain retirees, on behalf of themselves and others, filed a mirror-image action in the United States District Court, Eastern District of Michigan (Southern Division) on March 11, 2009, for which a class has been certified. During the last quarter of 2009, the action pending in Indiana was dismissed, while the action in Michigan is continuing. The Company is vigorously defending against the suit. This contingency is subject to many uncertainties, therefore based on the information available to date, the Company cannot reasonably estimate the amount or the range of potential loss, if any. A decision on the merits of the suit could be rendered sometime in 2013. | ||||||||
Environmental | ||||||||
The Company and certain of its current and former direct and indirect corporate predecessors, subsidiaries and divisions have been identified by the United States Environmental Protection Agency and certain state environmental agencies and private parties as potentially responsible parties (“PRPs”) at various hazardous waste disposal sites under the Comprehensive Environmental Response, Compensation and Liability Act (“Superfund”) and equivalent state laws and, as such, may presently be liable for the cost of clean-up and other remedial activities at 32 such sites. Responsibility for clean-up and other remedial activities at a Superfund site is typically shared among PRPs based on an allocation formula. | ||||||||
The Company believes that none of these matters, individually or in the aggregate, will have a material adverse effect on its results of operations, financial position or cash flows. Generally, this is because either the estimates of the maximum potential liability at a site are not material or the liability will be shared with other PRPs, although no assurance can be given with respect to the ultimate outcome of any such matter. | ||||||||
Based on information available to the Company (which in most cases includes: an estimate of allocation of liability among PRPs; the probability that other PRPs, many of whom are large, solvent public companies, will fully pay the cost apportioned to them; currently available information from PRPs and/or federal or state environmental agencies concerning the scope of contamination and estimated remediation and consulting costs; and remediation alternatives), the Company has an accrual for indicated environmental liabilities of $4.7 million and $3.9 million at September 30, 2013 and at December 31, 2012, respectively. The Company expects to pay out substantially all of the amounts accrued for environmental liability over the next five years. | ||||||||
In connection with the sale of Kuhlman Electric Corporation (“Kuhlman Electric”), the Company agreed to indemnify the buyer and Kuhlman Electric for certain environmental liabilities, then unknown to the Company, relating to certain operations of Kuhlman Electric that pre-date the Company's 1999 acquisition of Kuhlman Electric. The Company previously settled or obtained dismissals of various lawsuits that were filed against Kuhlman Electric and others, including the Company, on behalf of plaintiffs alleging personal injury relating to alleged environmental contamination at its Crystal Springs, Mississippi plant. The Company filed a lawsuit against Kuhlman Electric and a related entity challenging the validity of the indemnity and the defendants filed counterclaims and a related lawsuit. In addition, two lawsuits by plaintiffs alleging environmental contamination relating to Kuhlman Electric's Crystal Springs plant are still pending and the Company may in the future become subject to further legal proceedings. | ||||||||
Product Liability | ||||||||
Like many other industrial companies who have historically operated in the U.S., the Company (or parties the Company is obligated to indemnify) continues to be named as one of many defendants in asbestos-related personal injury actions. We believe that the Company's involvement is limited because, in general, these claims relate to a few types of automotive friction products that were manufactured many years ago and contained encapsulated asbestos. The nature of the fibers, the encapsulation and the manner of use lead the Company to believe that these products are highly unlikely to cause harm. As of both September 30, 2013 and December 31, 2012, the Company had approximately 16,000 pending asbestos-related product liability claims, respectively. Of the approximately 16,000 outstanding claims at September 30, 2013, approximately half were pending in jurisdictions that have undergone significant tort and judicial reform activities subsequent to the filing of these claims. | ||||||||
The Company's policy is to vigorously defend against these lawsuits and the Company has been successful in obtaining dismissal of many claims without any payment. The Company expects that the vast majority of the pending asbestos-related product liability claims where it is a defendant (or has an obligation to indemnify a defendant) will result in no payment being made by the Company or its insurers. In 2013, of the approximately 1,200 claims resolved, 217 (18%) resulted in payment being made to a claimant by or on behalf of the Company. In the full year of 2012, of the approximately 2,400 claims resolved, 308 (13%) resulted in any payment being made to a claimant by or on behalf of the Company. | ||||||||
Prior to June 2004, the settlement and defense costs associated with all claims were paid by the Company's primary layer insurance carriers under a series of funding arrangements. In addition to the primary insurance available for asbestos-related claims, the Company has substantial excess insurance coverage available for potential future asbestos-related product claims. In June 2004, primary layer insurance carriers notified the Company of the alleged exhaustion of their policy limits. | ||||||||
A declaratory judgment action was filed in January 2004 in the Circuit Court of Cook County, Illinois by Continental Casualty Company and related companies against the Company and certain of its historical general liability insurers. The court has issued a number of interim rulings and discovery is continuing. The Company has entered into settlement agreements with some of its insurance carriers, resolving their coverage disputes by agreeing to pay specified amounts to the Company. The Company is vigorously pursuing the litigation against the remaining insurers. | ||||||||
In August 2013, the Los Angeles Superior Court entered a jury verdict against the Company in an asbestos-related personal injury action with damages of $35.0 million, $32.5 million of which was non-compensatory and will not be recoverable through insurance if the verdict is upheld. The Company intends to vigorously defend against this action and to appeal the verdict. The Company cannot predict the outcome of this pending litigation and therefore cannot reasonably estimate the amount of possible loss, if any, that could result from this action. | ||||||||
Although it is impossible to predict the outcome of pending or future claims or the impact of tort reform legislation that may be enacted at the state or federal levels, due to the encapsulated nature of the products, the Company's experience in vigorously defending and resolving claims in the past, and the Company's significant insurance coverage with solvent carriers as of the date of this filing, management does not believe that asbestos-related product liability claims are likely to have a material adverse effect on the Company's results of operations, financial position or cash flows. | ||||||||
To date, the Company has paid and accrued $264.6 million in defense and indemnity in advance of insurers' reimbursement and has received $124.8 million in cash and notes from insurers. The net balance of $139.8 million, is expected to be fully recovered, of which approximately $20.0 million is expected to be recovered within one year. Timing of recovery is dependent on final resolution of the declaratory judgment action referred to above or additional negotiated settlements. At December 31, 2012, insurers owed $111.0 million in association with these claims. | ||||||||
In addition to the $139.8 million net balance relating to past settlements and defense costs, the Company has estimated a liability of $109.0 million for claims asserted, but not yet resolved and their related defense costs at September 30, 2013. The Company also has a related asset of $109.0 million to recognize proceeds from the insurance carriers, which is expected to be fully recovered. Receipt of these proceeds is not expected prior to the resolution of the declaratory judgment action referred to above, which, more-likely-than-not, will occur subsequent to September 30, 2014. At December 31, 2012, the comparable value of the accrued liability and associated insurance asset was $85.6 million. | ||||||||
The amounts recorded in the Condensed Consolidated Balance Sheets related to the estimated future settlement of existing claims are as follows: | ||||||||
(millions of dollars) | September 30, 2013 | December 31, 2012 | ||||||
Assets: | ||||||||
Prepayments and other current assets | $ | — | $ | — | ||||
Other non-current assets | 109 | 85.6 | ||||||
Total insurance assets | $ | 109 | $ | 85.6 | ||||
Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 44.1 | $ | 36.5 | ||||
Other non-current liabilities | 64.9 | 49.1 | ||||||
Total accrued liabilities | $ | 109 | $ | 85.6 | ||||
The 2013 increase in the accrued liability and associated insurance asset is primarily due to an expected higher rate of claim settlement based on recent litigation claim activity. | ||||||||
The Company cannot reasonably estimate possible losses, if any, in excess of those for which it has accrued, because it cannot predict how many additional claims may be brought against the Company (or parties the Company has an obligation to indemnify) in the future, the allegations in such claims, the possible outcomes, or the impact of tort reform legislation that may be enacted at the state or federal levels. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Earnings Per Share | Earnings Per Share | |||||||||||||||
The Company presents both basic and diluted earnings per share of common stock (“EPS”) amounts. Basic EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock outstanding during the reporting period. Diluted EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock and common equivalent stock outstanding during the reporting period. | ||||||||||||||||
The dilutive impact of stock-based compensation is calculated using the treasury stock method. The treasury stock method assumes that the Company uses the assumed proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any windfall/(shortfall) tax benefits that would be credited/(debited) to capital in excess of par value when the award generates a tax deduction. Options are only dilutive when the average market price of the underlying common stock exceeds the exercise price of the options. | ||||||||||||||||
Prior to the April 2012 settlement of the Company's 3.50% convertible senior notes, the potential common shares associated with these notes were reflected in diluted EPS using the “if-converted” method. Under this method, if dilutive, the common shares were assumed issued as of the beginning of the reporting period and included in calculating diluted EPS. In addition, if dilutive, interest expense, net of tax, related to the convertible senior notes was added back to the numerator in calculating diluted EPS. | ||||||||||||||||
In conjunction with the convertible senior note offering, the Company entered into a bond hedge overlay, including both call options and warrants. Prior to the April 2012 settlement of the call option portion of the bond hedge overlay, the call options were anti-dilutive if the Company's weighted average share price exceeded $32.82 per share. Prior to third and fourth quarter 2012 settlements of the warrant portion of the bond hedge overlay, the warrants were dilutive to the Company's earnings if the Company's weighted-average share price exceeded $38.61 per share. | ||||||||||||||||
The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in millions, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Basic earnings per share: | ||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 379.7 | ||||||||
Weighted average shares of common stock outstanding | 113.819 | 114.299 | 114.584 | 111.619 | ||||||||||||
Basic earnings per share of common stock | $ | 1.47 | $ | 0.88 | $ | 4.21 | $ | 3.4 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 379.7 | ||||||||
Adjustment for net interest expense on convertible notes | — | — | — | 5.8 | ||||||||||||
Diluted net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 385.5 | ||||||||
Weighted average shares of common stock outstanding | 113.819 | 114.299 | 114.584 | 111.619 | ||||||||||||
Effect of 3.50% convertible senior notes | — | — | — | 4.429 | ||||||||||||
Effect of warrant | — | 2.208 | — | 4.507 | ||||||||||||
Effect of stock-based compensation | 1.419 | 1.992 | 1.384 | 2.016 | ||||||||||||
Total dilutive effect on weighted average shares of common stock outstanding | 1.419 | 4.2 | 1.384 | 10.952 | ||||||||||||
Weighted average shares of common stock outstanding including dilutive shares | 115.238 | 118.499 | 115.968 | 122.571 | ||||||||||||
Diluted earnings per share of common stock | $ | 1.45 | $ | 0.85 | $ | 4.16 | $ | 3.15 | ||||||||
Total anti-dilutive shares: | ||||||||||||||||
Call options | — | — | — | 2.586 | ||||||||||||
Reporting_Segments
Reporting Segments | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Reporting Disclosure | Reporting Segments | |||||||||||||||
The Company's business is comprised of two reporting segments: Engine and Drivetrain. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems. | ||||||||||||||||
The Company allocates resources to each segment based upon the projected after-tax return on invested capital ("ROIC") of its business initiatives. ROIC is comprised of Adjusted EBIT after deducting notional taxes compared to the projected average capital investment required. Adjusted EBIT is comprised of earnings before interest, income taxes and noncontrolling interest (“EBIT") adjusted for restructuring, goodwill impairment charges, affiliates' earnings and other items not reflective of on-going operating income or loss. | ||||||||||||||||
Adjusted EBIT is the measure of segment income or loss used by the Company. The Company believes Adjusted EBIT is most reflective of the operational profitability or loss of our reporting segments. The following tables show segment information and Adjusted EBIT for the Company's reporting segments. | ||||||||||||||||
Net Sales by Reporting Segment | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Engine | $ | 1,210.30 | $ | 1,168.00 | $ | 3,756.10 | $ | 3,745.80 | ||||||||
Drivetrain | 604 | 534.4 | 1,818.90 | 1,739.70 | ||||||||||||
Inter-segment eliminations | (8.1 | ) | (7.2 | ) | (23.8 | ) | (21.4 | ) | ||||||||
Net sales | $ | 1,806.20 | $ | 1,695.20 | $ | 5,551.20 | $ | 5,464.10 | ||||||||
Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest (“Adjusted EBIT”) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Engine | $ | 195.5 | $ | 184.1 | $ | 618.1 | $ | 604.4 | ||||||||
Drivetrain | 65.9 | 44.1 | 181.7 | 159.9 | ||||||||||||
Adjusted EBIT | 261.4 | 228.2 | 799.8 | 764.3 | ||||||||||||
Program termination agreement | — | — | 11.3 | — | ||||||||||||
Retirement related obligations | — | — | 5.9 | — | ||||||||||||
Loss from disposal activities | — | 1.8 | — | 39.7 | ||||||||||||
Restructuring expense | — | 27.4 | — | 27.4 | ||||||||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 25.4 | 24.9 | 83.9 | 82.2 | ||||||||||||
Interest income | (1.3 | ) | (1.0 | ) | (3.3 | ) | (3.7 | ) | ||||||||
Interest expense and finance charges | 8.1 | 5 | 26.6 | 32.7 | ||||||||||||
Earnings before income taxes and noncontrolling interest | 229.2 | 170.1 | 675.4 | 586 | ||||||||||||
Provision for income taxes | 56.3 | 64.2 | 173.8 | 190.2 | ||||||||||||
Net earnings | 172.9 | 105.9 | 501.6 | 395.8 | ||||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 6.1 | 4.8 | 18.7 | 16.1 | ||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 379.7 | ||||||||
Total Assets | ||||||||||||||||
(millions of dollars) | September 30, 2013 | December 31, 2012 | ||||||||||||||
Engine | $ | 3,514.00 | $ | 3,299.20 | ||||||||||||
Drivetrain | 1,826.70 | 1,652.20 | ||||||||||||||
Total | 5,340.70 | 4,951.40 | ||||||||||||||
Corporate (a) | 1,623.60 | 1,449.40 | ||||||||||||||
Total assets | $ | 6,964.30 | $ | 6,400.80 | ||||||||||||
____________________________________ | ||||||||||||||||
(a) | Corporate assets include investments and advances and deferred income taxes. |
New_Accounting_Pronouncments_N
New Accounting Pronouncments (Notes) | 9 Months Ended |
Sep. 30, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | (17) New Accounting Pronouncements |
In July 2013, the Financial Accounting Standards Board amended ASC Topic 740, "Income Taxes," requiring an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2013. The Company anticipates the adoption of this guidance will not have a material impact to its Consolidated Financial Statements. |
Research_and_Development_Table
Research and Development (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Research and Development [Abstract] | ||||||||||||||||
Gross and net expenditures on research and development ("R&D") activities | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Gross R&D expenditures | $ | 84.7 | $ | 75.6 | $ | 250.9 | $ | 228.5 | ||||||||
Customer reimbursements | (12.9 | ) | (11.2 | ) | (34.7 | ) | (29.8 | ) | ||||||||
Net R&D expenditures | $ | 71.8 | $ | 64.4 | $ | 216.2 | $ | 198.7 | ||||||||
Other_income_expense_Other_inc
Other income expense Other income expense (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Other Income and Expenses [Abstract] | ||||||||||||||||
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Items included in other (income) expense consist of: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Program termination agreement | $ | — | $ | — | $ | 11.3 | $ | — | ||||||||
Retirement related obligations | — | — | 5.9 | — | ||||||||||||
Loss from disposal activities | — | 1.8 | — | 39.7 | ||||||||||||
Restructuring expense | — | 27.4 | — | 27.4 | ||||||||||||
Other | (3.7 | ) | 0.5 | (6.4 | ) | 0.3 | ||||||||||
Other (income) expense | $ | (3.7 | ) | $ | 29.7 | $ | 10.8 | $ | 67.4 | |||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of Inventory | Inventories consisted of the following: | |||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Raw material and supplies | $ | 284.2 | $ | 264 | ||||
Work in progress | 79.8 | 82 | ||||||
Finished goods | 106.1 | 117.6 | ||||||
FIFO inventories | 470.1 | 463.6 | ||||||
LIFO reserve | (15.4 | ) | (16.0 | ) | ||||
Inventories, net | $ | 454.7 | $ | 447.6 | ||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Disclosure of Property, Plant and Equipment | ||||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Land, land use rights and buildings | $ | 738.6 | $ | 717.2 | ||||
Machinery and equipment | 1,848.00 | 2,282.40 | ||||||
Capital leases | 2.4 | 2.3 | ||||||
Construction in progress | 265 | 243.7 | ||||||
Total property, plant and equipment, gross | 2,854.00 | 3,245.60 | ||||||
Less: accumulated depreciation | (1,086.5 | ) | (1,567.0 | ) | ||||
Property, plant and equipment, net, excluding tooling | 1,767.50 | 1,678.60 | ||||||
Tooling, net of amortization | 107.9 | 109.4 | ||||||
Property, plant and equipment, net | $ | 1,875.40 | $ | 1,788.00 | ||||
Product_Warranty_Tables
Product Warranty (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Product Warranties Disclosures [Abstract] | ||||||||
Schedule of Product Warranty Liability | The following table summarizes the activity in the product warranty accrual accounts: | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Beginning balance, January 1 | $ | 64.9 | $ | 72.7 | ||||
Provisions | 29.1 | 23.1 | ||||||
Payments | (28.3 | ) | (31.9 | ) | ||||
Translation adjustment | 0.7 | 0.2 | ||||||
Ending balance, September 30 | $ | 66.4 | $ | 64.1 | ||||
The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows: | ||||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Accounts payable and accrued expenses | $ | 33.3 | $ | 33.1 | ||||
Other non-current liabilities | 33.1 | 31.8 | ||||||
Total product warranty liability | $ | 66.4 | $ | 64.9 | ||||
Notes_Payable_and_LongTerm_Deb1
Notes Payable and Long-Term Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of Long-term Debt Instruments | As of September 30, 2013 and December 31, 2012, the Company had short-term and long-term debt outstanding as follows: | |||||||
September 30, | December 31, | |||||||
(millions of dollars) | 2013 | 2012 | ||||||
Short-term debt | ||||||||
Short-term borrowings | $ | 143.4 | $ | 129.1 | ||||
Receivables securitization | 110 | 110 | ||||||
Total short-term debt | $ | 253.4 | $ | 239.1 | ||||
Long-term debt | ||||||||
5.75% Senior notes due 11/01/16 ($150 million par value) | $ | 149.6 | $ | 149.6 | ||||
8.00% Senior notes due 10/01/19 ($134 million par value) | 133.9 | 133.9 | ||||||
4.625% Senior notes due 09/15/20 ($250 million par value) | 248.1 | 247.9 | ||||||
7.125% Senior notes due 02/15/29 ($121 million par value) | 119.4 | 119.4 | ||||||
Multi-currency revolving credit facility | 320 | 140 | ||||||
Term loan facilities and other | 30.7 | 17.1 | ||||||
Unamortized portion of debt derivatives | 17.2 | 20.2 | ||||||
Total long-term debt | 1,018.90 | 828.1 | ||||||
Less: current portion | 0.3 | 4.3 | ||||||
Long-term debt, net of current portion | $ | 1,018.60 | $ | 823.8 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||
Assets and liabilities measured at fair value | ||||||||||||||||||
Basis of fair value measurements | ||||||||||||||||||
(millions of dollars) | Balance at | Quoted prices in active markets for identical items | Significant other observable inputs | Significant unobservable inputs | Valuation technique | |||||||||||||
30-Sep-13 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Assets: | ||||||||||||||||||
Foreign currency contracts | $ | 2.6 | $ | — | $ | 2.6 | $ | — | A | |||||||||
Other non-current assets (insurance settlement agreement note receivable) | $ | 35.5 | $ | — | $ | 35.5 | $ | — | C | |||||||||
Liabilities: | ||||||||||||||||||
Foreign currency contracts | $ | 6.7 | $ | — | $ | 6.7 | $ | — | A | |||||||||
Net investment hedge contracts | $ | 36.2 | $ | — | $ | 36.2 | $ | — | A | |||||||||
Basis of fair value measurements | ||||||||||||||||||
(millions of dollars) | Balance at December 31, 2012 | Quoted prices in active markets for identical items | Significant other observable inputs | Significant unobservable inputs | Valuation | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | technique | |||||||||||||||
Assets: | ||||||||||||||||||
Foreign currency contracts | $ | 5.9 | $ | — | $ | 5.9 | $ | — | A | |||||||||
Other non-current assets (insurance settlement agreement note receivable) | $ | 41 | $ | — | $ | 41 | $ | — | C | |||||||||
Liabilities: | ||||||||||||||||||
Foreign currency contracts | $ | 9.8 | $ | — | $ | 9.8 | $ | — | A | |||||||||
Net investment hedge contracts | $ | 58.1 | $ | — | $ | 58.1 | $ | — | A | |||||||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||
Derivatives Instruments in Statements of Financial Position | |||||||||||||||||||||
(millions of dollars) | Assets | Liabilities | |||||||||||||||||||
Contract Type | Location | September 30, 2013 | December 31, 2012 | Location | September 30, 2013 | December 31, 2012 | |||||||||||||||
Foreign currency contracts | Prepayments and other current assets | $ | 2.4 | $ | 5.7 | Accounts payable and accrued expenses | $ | 6.5 | $ | 9.8 | |||||||||||
Other non-current assets | $ | 0.2 | $ | 0.2 | Other non-current liabilities | $ | 0.2 | $ | — | ||||||||||||
Net investment hedge contracts | Other non-current assets | $ | — | $ | — | Other non-current liabilities | $ | 36.2 | $ | 58.1 | |||||||||||
Deferred Losses Reported In Accumulated Other Comprehensive Income Loss | |||||||||||||||||||||
(millions of dollars) | Deferred gain (loss) in AOCI at | Gain (loss) expected to be reclassified to income in one year or less | |||||||||||||||||||
Contract Type | September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Foreign currency | $ | (4.6 | ) | $ | (3.5 | ) | $ | (4.6 | ) | ||||||||||||
Net investment hedges | (32.6 | ) | (54.5 | ) | — | ||||||||||||||||
Total | $ | (37.2 | ) | $ | (58.0 | ) | $ | (4.6 | ) | ||||||||||||
Derivatives Designated As Cash Flow Hedging Instruments | |||||||||||||||||||||
Gain (loss) reclassified | Gain (loss) | ||||||||||||||||||||
from AOCI to income | recognized in income | ||||||||||||||||||||
(effective portion) | (ineffective portion) | ||||||||||||||||||||
(millions of dollars) | Nine Months Ended | Nine Months Ended | |||||||||||||||||||
Contract Type | Location | September 30, 2013 | September 30, 2012 | Location | September 30, 2013 | September 30, 2012 | |||||||||||||||
Foreign currency | Sales | $ | 1.6 | $ | 3.9 | SG&A expense | $ | 0.2 | $ | — | |||||||||||
Foreign currency | Cost of goods sold | $ | (10.1 | ) | $ | 2.5 | SG&A expense | $ | (0.8 | ) | $ | — | |||||||||
Foreign currency | SG&A expense | $ | (0.2 | ) | $ | — | SG&A expense | $ | — | $ | — | ||||||||||
Cross-currency swap | N/A | Interest expense | $ | 0.1 | $ | 1.7 | |||||||||||||||
Net Investment Hedge [Member] | |||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||
Notional Amounts of Outstanding Derivative Positions | |||||||||||||||||||||
Cross-currency swaps | |||||||||||||||||||||
(in millions) | Notional in | Notional in | Duration | ||||||||||||||||||
USD | local currency | ||||||||||||||||||||
Floating $ to floating € | $ | 75 | € | 58.5 | 19-Oct | ||||||||||||||||
Floating $ to floating ¥ | $ | 150 | ¥ | 17,581.50 | 16-Nov | ||||||||||||||||
Foreign currency contracts | |||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||
Notional Amounts of Outstanding Derivative Positions | |||||||||||||||||||||
Foreign currency derivatives (in millions) | |||||||||||||||||||||
Functional currency | Traded currency | Notional in traded currency | Notional in traded currency | Duration | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||
Brazilian real | US dollar | 21.9 | — | 14-Dec | |||||||||||||||||
British pound | Euro | 14.4 | 28.8 | 13-Dec | |||||||||||||||||
Chinese yuan | Japanese yen | 737 | — | 14-Feb | |||||||||||||||||
Chinese yuan | US dollar | 17.5 | — | 14-Dec | |||||||||||||||||
Euro | British pound | 4.2 | 4.7 | 14-Dec | |||||||||||||||||
Euro | Hungarian forint | 2,325.00 | 9,300.00 | 13-Nov | |||||||||||||||||
Euro | Japanese yen | 5,762.50 | 6,760.00 | 14-Dec | |||||||||||||||||
Euro | Polish zloty | 16.3 | 87.4 | 13-Dec | |||||||||||||||||
Euro | US dollar | 35 | 15.2 | 14-Dec | |||||||||||||||||
Hungarian forint | Euro | 1.7 | — | 13-Dec | |||||||||||||||||
Japanese yen | Chinese yuan | 84 | — | 14-Dec | |||||||||||||||||
Japanese yen | US dollar | 2.5 | 9.5 | 13-Dec | |||||||||||||||||
Korean won | Euro | 25.3 | 32.4 | 14-Dec | |||||||||||||||||
Korean won | Japanese yen | 162.9 | — | 14-Jun | |||||||||||||||||
Korean won | US dollar | 4.2 | 17.5 | 13-Dec | |||||||||||||||||
Mexican peso | US dollar | 7.4 | 20.9 | 13-Dec | |||||||||||||||||
Swedish krona | Euro | 13 | — | 13-Dec | |||||||||||||||||
US dollar | Indian rupee | 9.4 | 111.1 | 13-Oct | |||||||||||||||||
US dollar | Japanese yen | 3,311.20 | 3,000.00 | 13-Dec | |||||||||||||||||
Retirement_Benefit_Plans_Table
Retirement Benefit Plans (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic benefit cost recorded in the Condensed Consolidated Statements of Operations are as follows: | ||||||||||||||||||||||||
Pension benefits | Other post- | ||||||||||||||||||||||||
retirement benefits | |||||||||||||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Three Months Ended September 30, | US | Non-US | US | Non-US | |||||||||||||||||||||
Service cost | $ | — | $ | 3.1 | $ | — | $ | 2.2 | $ | 0.1 | $ | 0.1 | |||||||||||||
Interest cost | 2.9 | 4.2 | 3.6 | 4.2 | 1.7 | 2.5 | |||||||||||||||||||
Expected return on plan assets | (4.6 | ) | (2.8 | ) | (4.7 | ) | (2.3 | ) | — | — | |||||||||||||||
Amortization of unrecognized prior service benefit | (0.2 | ) | — | (0.2 | ) | — | (1.6 | ) | (1.6 | ) | |||||||||||||||
Amortization of unrecognized loss | 2.1 | 1.3 | 2 | 0.4 | 1.2 | 1.8 | |||||||||||||||||||
Net periodic benefit cost | $ | 0.2 | $ | 5.8 | $ | 0.7 | $ | 4.5 | $ | 1.4 | $ | 2.8 | |||||||||||||
Pension benefits | Other post- | ||||||||||||||||||||||||
retirement benefits | |||||||||||||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Nine Months Ended September 30, | US | Non-US | US | Non-US | |||||||||||||||||||||
Service cost | $ | — | $ | 9.3 | $ | — | $ | 6.8 | $ | 0.3 | $ | 0.4 | |||||||||||||
Interest cost | 8.7 | 12.4 | 10.8 | 12.9 | 5.1 | 7.6 | |||||||||||||||||||
Expected return on plan assets | (13.7 | ) | (8.2 | ) | (14.1 | ) | (6.9 | ) | — | — | |||||||||||||||
Amortization of unrecognized prior service benefit | (0.6 | ) | — | (0.6 | ) | — | (4.8 | ) | (4.8 | ) | |||||||||||||||
Amortization of unrecognized loss | 6.2 | 3.9 | 6.1 | 0.9 | 3.7 | 5.2 | |||||||||||||||||||
Net periodic benefit cost | $ | 0.6 | $ | 17.4 | $ | 2.2 | $ | 13.7 | $ | 4.3 | $ | 8.4 | |||||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock Options Activity | Stock options A summary of the Company’s stock option activity for the nine months ended September 30, 2013 is as follows: | ||||||||||||
Shares under option | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | ||||||||||
(thousands) | (in years) | (in millions) | |||||||||||
Outstanding and exercisable at December 31, 2012 | 1,436 | $ | 30.65 | 3.4 | $ | 58.8 | |||||||
Exercised | (81 | ) | $ | 28.43 | |||||||||
Outstanding and exercisable at March 31, 2013 | 1,355 | $ | 30.78 | 3.2 | $ | 63.1 | |||||||
Exercised | (201 | ) | $ | 27.56 | |||||||||
Outstanding and exercisable at June 30, 2013 | 1,154 | $ | 31.34 | 3.1 | $ | 63.2 | |||||||
Exercised | (103 | ) | $ | 30.12 | |||||||||
Outstanding and exercisable at September 30, 2013 | 1,051 | $ | 31.46 | 2.8 | $ | 73.5 | |||||||
Nonvested Restricted Stock Activity | A summary of the Company’s restricted stock activity for the nine months ended September 30, 2013 is as follows: | ||||||||||||
Shares subject to restriction | Weighted average price | ||||||||||||
(thousands) | |||||||||||||
Outstanding at December 31, 2012 | 1,032 | $ | 58.77 | ||||||||||
Granted | 372 | $ | 75.41 | ||||||||||
Vested | (331 | ) | $ | 47.69 | |||||||||
Forfeited | (19 | ) | $ | 68.14 | |||||||||
Outstanding at March 31, 2013 | 1,054 | $ | 67.71 | ||||||||||
Granted | 15 | $ | 75.32 | ||||||||||
Vested | (65 | ) | $ | 72.93 | |||||||||
Forfeited | (12 | ) | $ | 75.68 | |||||||||
Outstanding at June 30, 2013 | 992 | $ | 67.37 | ||||||||||
Granted | — | $ | — | ||||||||||
Vested | (6 | ) | $ | 42.23 | |||||||||
Forfeited | (21 | ) | $ | 75.56 | |||||||||
Outstanding at September 30, 2013 | 965 | $ | 67.36 | ||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table summarizes the activity within accumulated other comprehensive (loss) income during the nine months ended September 30, 2013: | ||||||||||||||||||||
(millions of dollars) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | ||||||||||||||||
Beginning Balance, December 31, 2012 | $ | 140.8 | $ | (37.2 | ) | $ | (225.8 | ) | $ | 0.9 | $ | (121.3 | ) | ||||||||
Comprehensive (loss) income before reclassifications | 4.7 | 12.1 | 1.4 | 0.5 | 18.7 | ||||||||||||||||
Income taxes associated with comprehensive (loss) income before reclassifications | — | (8.5 | ) | — | — | (8.5 | ) | ||||||||||||||
Reclassification from accumulated other comprehensive (loss) income | — | 8.7 | 8.4 | — | 17.1 | ||||||||||||||||
Income taxes reclassified into net earnings | — | 1.7 | 1.3 | — | 3 | ||||||||||||||||
Ending Balance September 30, 2013 | $ | 145.5 | $ | (23.2 | ) | $ | (214.7 | ) | $ | 1.4 | $ | (91.0 | ) | ||||||||
Contingencies_Tables
Contingencies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Estimated future settlement of existing claims | The amounts recorded in the Condensed Consolidated Balance Sheets related to the estimated future settlement of existing claims are as follows: | |||||||
(millions of dollars) | September 30, 2013 | December 31, 2012 | ||||||
Assets: | ||||||||
Prepayments and other current assets | $ | — | $ | — | ||||
Other non-current assets | 109 | 85.6 | ||||||
Total insurance assets | $ | 109 | $ | 85.6 | ||||
Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 44.1 | $ | 36.5 | ||||
Other non-current liabilities | 64.9 | 49.1 | ||||||
Total accrued liabilities | $ | 109 | $ | 85.6 | ||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Schedule of Earnings Per Share Reconciliation | The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in millions, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Basic earnings per share: | ||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 379.7 | ||||||||
Weighted average shares of common stock outstanding | 113.819 | 114.299 | 114.584 | 111.619 | ||||||||||||
Basic earnings per share of common stock | $ | 1.47 | $ | 0.88 | $ | 4.21 | $ | 3.4 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 379.7 | ||||||||
Adjustment for net interest expense on convertible notes | — | — | — | 5.8 | ||||||||||||
Diluted net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 385.5 | ||||||||
Weighted average shares of common stock outstanding | 113.819 | 114.299 | 114.584 | 111.619 | ||||||||||||
Effect of 3.50% convertible senior notes | — | — | — | 4.429 | ||||||||||||
Effect of warrant | — | 2.208 | — | 4.507 | ||||||||||||
Effect of stock-based compensation | 1.419 | 1.992 | 1.384 | 2.016 | ||||||||||||
Total dilutive effect on weighted average shares of common stock outstanding | 1.419 | 4.2 | 1.384 | 10.952 | ||||||||||||
Weighted average shares of common stock outstanding including dilutive shares | 115.238 | 118.499 | 115.968 | 122.571 | ||||||||||||
Diluted earnings per share of common stock | $ | 1.45 | $ | 0.85 | $ | 4.16 | $ | 3.15 | ||||||||
Total anti-dilutive shares: | ||||||||||||||||
Call options | — | — | — | 2.586 | ||||||||||||
Reporting_Segments_Tables
Reporting Segments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Net Sales by Reporting Segment | Net Sales by Reporting Segment | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Engine | $ | 1,210.30 | $ | 1,168.00 | $ | 3,756.10 | $ | 3,745.80 | ||||||||
Drivetrain | 604 | 534.4 | 1,818.90 | 1,739.70 | ||||||||||||
Inter-segment eliminations | (8.1 | ) | (7.2 | ) | (23.8 | ) | (21.4 | ) | ||||||||
Net sales | $ | 1,806.20 | $ | 1,695.20 | $ | 5,551.20 | $ | 5,464.10 | ||||||||
Segment Earnings Before Interest and Income Taxes | Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest (“Adjusted EBIT”) | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(millions of dollars) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Engine | $ | 195.5 | $ | 184.1 | $ | 618.1 | $ | 604.4 | ||||||||
Drivetrain | 65.9 | 44.1 | 181.7 | 159.9 | ||||||||||||
Adjusted EBIT | 261.4 | 228.2 | 799.8 | 764.3 | ||||||||||||
Program termination agreement | — | — | 11.3 | — | ||||||||||||
Retirement related obligations | — | — | 5.9 | — | ||||||||||||
Loss from disposal activities | — | 1.8 | — | 39.7 | ||||||||||||
Restructuring expense | — | 27.4 | — | 27.4 | ||||||||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 25.4 | 24.9 | 83.9 | 82.2 | ||||||||||||
Interest income | (1.3 | ) | (1.0 | ) | (3.3 | ) | (3.7 | ) | ||||||||
Interest expense and finance charges | 8.1 | 5 | 26.6 | 32.7 | ||||||||||||
Earnings before income taxes and noncontrolling interest | 229.2 | 170.1 | 675.4 | 586 | ||||||||||||
Provision for income taxes | 56.3 | 64.2 | 173.8 | 190.2 | ||||||||||||
Net earnings | 172.9 | 105.9 | 501.6 | 395.8 | ||||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 6.1 | 4.8 | 18.7 | 16.1 | ||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 166.8 | $ | 101.1 | $ | 482.9 | $ | 379.7 | ||||||||
Segment assets | Total Assets | |||||||||||||||
(millions of dollars) | September 30, 2013 | December 31, 2012 | ||||||||||||||
Engine | $ | 3,514.00 | $ | 3,299.20 | ||||||||||||
Drivetrain | 1,826.70 | 1,652.20 | ||||||||||||||
Total | 5,340.70 | 4,951.40 | ||||||||||||||
Corporate (a) | 1,623.60 | 1,449.40 | ||||||||||||||
Total assets | $ | 6,964.30 | $ | 6,400.80 | ||||||||||||
____________________________________ | ||||||||||||||||
(a) | Corporate assets include investments and advances and deferred income taxes |
Research_and_Development_Detai
Research and Development (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Research and Development | ||||
Gross R&D expenditures | $84.70 | $75.60 | $250.90 | $228.50 |
Customer reimbursements | -12.9 | -11.2 | -34.7 | -29.8 |
Net R&D expenditures | $71.80 | $64.40 | $216.20 | $198.70 |
Maximum value of R&D contract | 5.00% | 5.00% | 5.00% | 5.00% |
Other_income_expense_Other_inc1
Other income expense Other income expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Other Income and Expenses [Abstract] | ||||
Program termination agreement | $0 | $0 | $11.30 | $0 |
Retirement related obligations | 0 | 0 | 5.9 | 0 |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 0 | 1.8 | 0 | 39.7 |
Restructuring Charges | 0 | 27.4 | 0 | 27.4 |
Other expense | 0.5 | 0.3 | ||
Other Income | -3.7 | -6.4 | ||
Other income expense | ($3.70) | $29.70 | $10.80 | $67.40 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate, continuing operations | 26.00% | 31.00% | |
Tax Benefit Associated With Disposal Activities And Restructuring | $3.50 | $2 | |
Tax benefit associated with loss on disposal | 11.2 | ||
Tax Benefit Associated With Restructuring | 7.7 | ||
Tax benefit of project termination settlement | 3.8 | ||
Tax benefit associated with retirement obligations | 2.1 | ||
Other Tax Adjustments | 7.3 | ||
Tax benefit of research and development and international tax credit extensions | 6.6 | ||
Other Tax Expense (Benefit) | 3.1 | ||
Valuation Allowance, Deferred Tax Asset, Change in Amount | 2.5 | ||
Tax impact of other tax adjustments | 4.9 | 15.9 | |
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount | 8.2 | ||
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | $7.70 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $284.20 | $264 |
Work in progress | 79.8 | 82 |
Finished goods | 106.1 | 117.6 |
FIFO inventories | 470.1 | 463.6 |
LIFO reserve | -15.4 | -16 |
Inventories, net | $454.70 | $447.60 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Property Plant and Equipment | |||
Total property, plant and equipment, gross | $2,854 | $3,245.60 | |
Less: accumulated depreciation | -1,086.50 | -1,567 | |
Property, plant and equipment, net, excluding tooling | 1,767.50 | 1,678.60 | |
Tooling, net of amortization | 107.9 | 109.4 | |
Property, plant and equipment, net | 1,875.40 | 1,788 | |
Capital Expenditures Incurred but Not yet Paid | 35.8 | 39.8 | |
Capitalized interest costs | 8.5 | 13.5 | |
Land and Building [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 738.6 | 717.2 | |
Machinery and Equipment [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 1,848 | 2,282.40 | |
Assets Held under Capital Leases [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 2.4 | 2.3 | |
Construction in Progress [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | $265 | $243.70 |
Product_Warranty_Details
Product Warranty (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
years | |||
Product warranty rollforward | |||
Beginning balance, January 1 | $64.90 | $72.70 | |
Provisions | 29.1 | 23.1 | |
Payments | -28.3 | -31.9 | |
Translation adjustment | 0.7 | 0.2 | |
Ending balance, September 30 | 66.4 | 64.1 | |
Product warranty liability | |||
Accounts payable and accrued expenses | 33.3 | 33.1 | |
Other non-current liabilities | 33.1 | 31.8 | |
Total product warranty liability | $66.40 | $64.10 | |
Minimum warranty term (in years) | 1 | ||
Maximum warranty term (in years) | 3 |
Notes_Payable_and_LongTerm_Deb2
Notes Payable and Long-Term Debt (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Apr. 12, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
Senior Notes One [Member] | Short Term Borrowings [Member] | Short Term Borrowings [Member] | Receivables Securitization [Member] | Receivables Securitization [Member] | Total Short Term Debt [Member] | Total Short Term Debt [Member] | 5.75% Senior Notes [Member] | 5.75% Senior Notes [Member] | 8.00% Senior Notes [Member] | 8.00% Senior Notes [Member] | 4.625% Senior Notes [Member] | 4.625% Senior Notes [Member] | 7.125% Senior Notes [Member] | 7.125% Senior Notes [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Term Loan Facilities And Other [Member] | Term Loan Facilities And Other [Member] | Unamortized portion of debt derivative [Member] | Unamortized portion of debt derivative [Member] | |||
Short-term debt | ||||||||||||||||||||||||
Short-term borrowings | $143,400,000 | $129,100,000 | $110,000,000 | $110,000,000 | $253,400,000 | $239,100,000 | ||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Long-term debt | 1,018,900,000 | 828,100,000 | 149,600,000 | 149,600,000 | 133,900,000 | 133,900,000 | 248,100,000 | 247,900,000 | 119,400,000 | 119,400,000 | 320,000,000 | 140,000,000 | 30,700,000 | 17,100,000 | 17,200,000 | 20,200,000 | ||||||||
Current portion of long-term debt | 300,000 | 4,300,000 | ||||||||||||||||||||||
Long-term debt, net of current portion | 1,018,600,000 | 823,800,000 | ||||||||||||||||||||||
Debt instrument par value | 150,000,000 | 134,000,000 | 250,000,000 | 121,000,000 | ||||||||||||||||||||
Debt instrument stated interest rate | 3.50% | 5.75% | 8.00% | 4.63% | 7.13% | |||||||||||||||||||
Debt instrument maturity date | 1-Nov-16 | 1-Oct-19 | 15-Sep-20 | 15-Feb-29 | ||||||||||||||||||||
Debt weighted average interest rate | 3.60% | 4.00% | ||||||||||||||||||||||
Multi-currency revolving credit facility, current borrowing capacity | 650,000,000 | 750,000,000 | ||||||||||||||||||||||
Multi-currency revolving credit facility, maximum borrowing capacity | 1,000,000,000 | |||||||||||||||||||||||
Estimated fair value of senior unsecured notes | 738,400,000 | 770,300,000 | ||||||||||||||||||||||
Fair value higher than carrying value for senior unsecured notes | 87,400,000 | 119,500,000 | ||||||||||||||||||||||
Outstanding letter of credit | $27,100,000 | $59,100,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Foreign currency contracts | $0 | $0 |
Other non-current assets (insurance settlement agreement note receivable) | 0 | 0 |
Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Net investment hedge contracts | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Foreign currency contracts | 2.6 | 5.9 |
Other non-current assets (insurance settlement agreement note receivable) | 35.5 | 41 |
Liabilities: | ||
Foreign currency contracts | 6.7 | 9.8 |
Net investment hedge contracts | 36.2 | 58.1 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Foreign currency contracts | 0 | 0 |
Other non-current assets (insurance settlement agreement note receivable) | 0 | 0 |
Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Net investment hedge contracts | 0 | 0 |
Estimate of Fair Value Measurement [Member] | ||
Assets: | ||
Foreign currency contracts | 2.6 | 5.9 |
Other non-current assets (insurance settlement agreement note receivable) | 35.5 | 41 |
Liabilities: | ||
Foreign currency contracts | 6.7 | 9.8 |
Net investment hedge contracts | $36.20 | $58.10 |
Financial_Instruments_Details
Financial Instruments (Details) | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
In Millions, unless otherwise specified | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Japanese yen | Japanese yen | Japanese yen | Korean won | Korean won | Korean won | Korean won | Cost of goods sold | Cost of goods sold | Cost of goods sold | Cost of goods sold | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | Interest expense | Interest expense | Interest expense | Interest expense | Sales | Sales | Sales | Sales |
Maturity October 2019 | Maturity October 2019 | Maturity October 2019 | Maturity October 2019 | Maturity November 2016 | Maturity November 2016 | Maturity November 2016 | Maturity November 2016 | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | |
USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | JPY (¥) | USD ($) | JPY (¥) | Maturity December 2013 | Maturity December 2013 | Maturity October 2013 | Maturity December 2013 | Maturity December 2013 | Maturity Of Derivatives Period Eight [Member] [Domain] | Maturity Of Derivatives Period Eight [Member] [Domain] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | JPY (¥) | JPY (¥) | |||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | ($4.10) | $1.40 | ($10.10) | $2.50 | ($0.10) | $0 | ($0.20) | $0 | $0.70 | $2.40 | $1.60 | $3.90 | |||||||||||||||||||||||||||
Gain (loss) recognized in net income, ineffective portion and amount excluded from effectiveness testing, net | -0.1 | 0 | -0.8 | 0 | 0 | 0 | 0.2 | 0 | 0 | 0 | 0 | 0 | 0.4 | 3.9 | 0.1 | 1.7 | |||||||||||||||||||||||
Notional amount of cross currency swaps | $75 | € 58.50 | $75 | € 58.50 | $150 | ¥ 17,581.5 | $150 | ¥ 17,581.5 | $2.50 | $9.50 | $84 | $4.20 | $17.50 | ¥ 162.9 | ¥ 0 |
Financial_Instruments_Foreign_
Financial Instruments - Foreign Currency Derivatives (Details) (Foreign currency contracts) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | Brazil real | Brazil real | British pound | British pound | China, Yuan Renminbi | China, Yuan Renminbi | China, Yuan Renminbi | China, Yuan Renminbi | Euro | Euro | Euro | Euro | Euro | Euro | Euro | Euro | Euro | Euro | Hungary, Forint | Hungary, Forint | Japanese yen | Japanese yen | Japanese yen | Korean won | Korean won | Korean won | Korean won | Korean won | Korean won | Mexican peso | Mexican peso | Sweden, Kronor | Sweden, Kronor | US dollar | US dollar | US dollar | US dollar |
Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity February 2014 | Maturity February 2014 | Maturity December 2014 | Maturity December 2014 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity November 2013 | Maturity November 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity October 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2014 | Maturity December 2014 | Maturity Of Derivatives Period Eight [Member] [Domain] | Maturity Of Derivatives Period Eight [Member] [Domain] | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity December 2013 | Maturity October 2013 | Maturity October 2013 | |
USD ($) | USD ($) | EUR (€) | EUR (€) | JPY (¥) | JPY (¥) | USD ($) | USD ($) | USD ($) | GBP (£) | JPY (¥) | PLN | USD ($) | GBP (£) | JPY (¥) | PLN | HUF | HUF | EUR (€) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | JPY (¥) | JPY (¥) | USD ($) | USD ($) | EUR (€) | EUR (€) | JPY (¥) | JPY (¥) | INR | INR | |
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||
Notional amount of cross currency swaps | $21.90 | $0 | € 14.40 | € 28.80 | ¥ 737 | ¥ 0 | $17.50 | $0 | $35 | £ 4.2 | ¥ 5,762.5 | 16.3 | $15.20 | £ 4.7 | ¥ 6,760 | 87.4 | 2,325 | 9,300 | € 1.70 | € 0 | $2.50 | $9.50 | $84 | $4.20 | $17.50 | € 25.30 | € 32.40 | ¥ 162.9 | ¥ 0 | $7.40 | $20.90 | € 13 | € 0 | ¥ 3,311.2 | ¥ 3,000 | 9.4 | 111.1 |
Financial_Instruments_Balance_
Financial Instruments - Balance Sheet (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Foreign currency contracts | Prepayments and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $2.40 | $5.70 |
Foreign currency contracts | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0.2 | 0.2 |
Foreign currency contracts | Accounts payable and accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 6.5 | 9.8 |
Foreign currency contracts | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0.2 | 0 |
Net investment hedge contracts | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Net investment hedge contracts | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $36.20 | $58.10 |
Financial_Instruments_Income_S
Financial Instruments - Income Statement (Details) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | Net investment hedge contracts | |||
Sales | Sales | Sales | Sales | Cost of goods sold | Cost of goods sold | Cost of goods sold | Cost of goods sold | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | SG&A expense | Interest expense | Interest expense | Interest expense | Interest expense | |||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income, Effective Portion, Net [Abstract] | ||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from cash flow hedges, before tax | ($37.20) | ($58) | ($4.60) | ($3.50) | ($32.60) | ($54.50) | ||||||||||||||||||||||||
Gain (loss) expected to be reclassified in one year or less | -4.6 | -4.6 | 0 | |||||||||||||||||||||||||||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||||||||||||||||||||||||||||||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | 0.7 | 2.4 | 1.6 | 3.9 | -4.1 | 1.4 | -10.1 | 2.5 | -0.1 | 0 | -0.2 | 0 | ||||||||||||||||||
Gain (loss) recognized in net income, ineffective portion and amount excluded from effectiveness testing, net | $0 | $0 | $0.20 | $0 | ($0.10) | $0 | ($0.80) | $0 | $0 | $0 | $0 | $0 | $0.40 | $3.90 | $0.10 | $1.70 |
Retirement_Benefit_Plans_Detai
Retirement Benefit Plans (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
United States Pension Plan of US Entity, Defined Benefit [Member] | United States Pension Plan of US Entity, Defined Benefit [Member] | United States Pension Plan of US Entity, Defined Benefit [Member] | United States Pension Plan of US Entity, Defined Benefit [Member] | Foreign Pension Plan, Defined Benefit [Member] | Foreign Pension Plan, Defined Benefit [Member] | Foreign Pension Plan, Defined Benefit [Member] | Foreign Pension Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | Minimum [Member] | Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year | $15 | $25 | |||||||||||||
Actual contribution to defined benefit pension plans | 15.1 | ||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||
Service cost | 0 | 0 | 0 | 0 | 3.1 | 2.2 | 9.3 | 6.8 | 0.1 | 0.1 | 0.3 | 0.4 | |||
Interest cost | 2.9 | 3.6 | 8.7 | 10.8 | 4.2 | 4.2 | 12.4 | 12.9 | 1.7 | 2.5 | 5.1 | 7.6 | |||
Expected return on plan assets | -4.6 | -4.7 | -13.7 | -14.1 | -2.8 | -2.3 | -8.2 | -6.9 | 0 | 0 | 0 | 0 | |||
Amortization of unrecognized prior service benefit | -0.2 | -0.2 | -0.6 | -0.6 | 0 | 0 | 0 | 0 | -1.6 | -1.6 | -4.8 | -4.8 | |||
Amortization of unrecognized loss | 2.1 | 2 | 6.2 | 6.1 | 1.3 | 0.4 | 3.9 | 0.9 | 1.2 | 1.8 | 3.7 | 5.2 | |||
Net periodic benefit cost | $0.20 | $0.70 | $0.60 | $2.20 | $5.80 | $4.50 | $17.40 | $13.70 | $1.40 | $2.80 | $4.30 | $8.40 |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Retiring named executive officers [Member] | Director [Member] | |||||
Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized for grant | 12,500,000 | |||||||||
Shares available for future issuance | 1,600,000 | |||||||||
Options Roll Forward | ||||||||||
Shares outstanding under option, Beginning Balance | 1,154,000 | 1,355,000 | 1,436,000 | |||||||
Weighted average exercise price, Beginning Balance | $31.34 | $30.78 | $30.65 | |||||||
Shares outstanding under option, Exercised | -103,000 | -201,000 | -81,000 | |||||||
Shares outstanding under option, Exercised, Weighted average exercise price | $30.12 | $27.56 | $28.43 | |||||||
Shares outstanding under option, Ending Balance | 1,051,000 | 1,154,000 | 1,355,000 | 1,436,000 | ||||||
Weighted average exercise price, Ending Balance | $31.46 | $31.34 | $30.78 | $30.65 | ||||||
Weighted average remaining contractual term | 2 years 10 months | 3 years 1 month | 3 years 2 months | 3 years 5 months | ||||||
Aggregate intrinsic value, outstanding | $73.50 | $63.20 | $63.10 | $58.80 | ||||||
Restricted stock compensation expense | ||||||||||
Restricted stock compensation expense | $4.90 | $5 | $20.80 | $14.90 | $5.50 | |||||
Status of nonvested restricted stock | ||||||||||
Nonvested shares subject to restriction, Beginning Balance | 992,000 | 1,054,000 | 1,032,000 | |||||||
Nonvested shares subject to restriction, weighted average exercise price | $67.37 | $67.71 | $58.77 | |||||||
Restricted shares granted to employees | 15,000 | 372,000 | 373,197 | 14,140 | ||||||
Granted shares subject to restriction, weighted average exercise price | $75.32 | $75.41 | ||||||||
Shares subject to restriction, Vested | -6,000 | -65,000 | -331,000 | |||||||
Vested shares subject to restriction, weighted average exercise price | $42.23 | $72.93 | $47.69 | |||||||
Shares subject to restriction, Forfeited | -21,000 | -12,000 | -19,000 | |||||||
Forfeited shares subject to restriction, weighted average exercise price | $75.56 | $75.68 | $68.14 | |||||||
Nonvested shares subject to restriction, Ending Balance | 965,000 | 992,000 | 1,054,000 | 1,032,000 | ||||||
Nonvested shares subject to restriction, weighted average exercise price | $67.36 | $67.37 | $67.71 | $58.77 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax [Abstract] | ||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $145.50 | $140.80 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss), before Reclassification and Tax | 4.7 | |
Other Comprehensive Income (Loss), Foreign Currency Translation Gain (Loss) Arising During Period, Tax | 0 | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax | 0 | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax | 0 | |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax, Portion Attributable to Parent [Abstract] | ||
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | -23.2 | -37.2 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 12.1 | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | -8.5 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 8.7 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 1.7 | |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax, Portion Attributable to Parent [Abstract] | ||
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax | -214.7 | -225.8 |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Reclassification Adjustments and Tax | 1.4 | |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, before Reclassification Adjustments, Tax | 0 | |
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, before Tax | 8.4 | |
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Tax | 1.3 | |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent [Abstract] | ||
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax | 1.4 | 0.9 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments and Tax | 0.5 | |
Other Comprehensive Income (Loss), Available-for-sale Securities, before Reclassification Adjustments, Tax | 0 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | 0 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | |
Other Comprehensive Income (Loss) Reclassification Adjustment Tax | 3 | |
Other Comprehensive Income (Loss) Reclassification Adjustments Before Tax | 17.1 | |
Other Comprehensive Income (Loss) Before Reclassification Adjustments Tax | -8.5 | |
Other Comprehensive Income (Loss), Adjusments before Reclassification Adjustments and Tax | 18.7 | |
Accumulated other comprehensive loss | ($91) | ($121.30) |
Contingencies_Details
Contingencies (Details) (USD $) | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2008 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Asbestos Issue [Member] | Asbestos Issue [Member] | Asbestos Issue [Member] | Compensatory Damages [Member] | ||||
Accrual for environmental loss contingencies [Abstract] | |||||||
Waste disposal sites with potential liability under the Comprehensive Environmental Response, Compensation and Liability Act | 32 | ||||||
Accrual for indicated environmental liabilities | $4.70 | $3.90 | |||||
Timeframe most environmental liabilities will be paid out | 5 | ||||||
Contingencies [Abstract] | |||||||
Loss as a result of the September 2008 DTP ruling | 4 | ||||||
Number of pending claims | 16,000 | 16,000 | 16,000 | ||||
Payment being made to a claimant by or on behalf of the company | 217 | 308 | |||||
Payment being made to a claimant by or on behalf of the company, percentage | 18.00% | 13.00% | |||||
Loss Contingency, Damages Awarded, Value | 35 | 32.5 | |||||
Loss Contingency, Claims Settled and Dismissed, Number | 1,200 | 2,400 | |||||
Company paid in defense and indemnity in advance of insurers reimbursement | 264.6 | 264.6 | |||||
Cash and notes received from insurers | 124.8 | 124.8 | |||||
Outstanding balance to be fully recovered | 139.8 | 139.8 | 111 | ||||
Outstanding balance expected to be recovered in the next twelve months | 20 | 20 | |||||
Assets: | |||||||
Prepayments and other current assets | 0 | 0 | 0 | ||||
Other non-current assets | 109 | 109 | 85.6 | ||||
Total insurance assets | 109 | 109 | 85.6 | ||||
Liabilities: | |||||||
Accounts payable and accrued expenses | 44.1 | 44.1 | 36.5 | ||||
Other non-current liabilities | 64.9 | 64.9 | 49.1 | ||||
Total accrued liabilities | $109 | $109 | $85.60 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2012 |
Call Option [Member] | Call Option [Member] | Call Option [Member] | Call Option [Member] | Senior Notes One [Member] | |||||
Basic earnings per share: | |||||||||
Net earnings attributable to BorgWarner Inc. | $166.80 | $101.10 | $482.90 | $379.70 | |||||
Weighted average shares of common stock outstanding | 113,819 | 114,299 | 114,584 | 111,619 | |||||
Earnings per share — basic | $1.47 | $0.88 | $4.21 | $3.40 | |||||
Diluted earnings per share: | |||||||||
Net earnings attributable to BorgWarner Inc. | 166.8 | 101.1 | 482.9 | 379.7 | |||||
Adjustment for net interest expense on convertible notes | 0 | 0 | 0 | 5.8 | |||||
Diluted net earnings attributable to BorgWarner Inc. | $166.80 | $101.10 | $482.90 | $385.50 | |||||
Weighted average shares of common stock outstanding | 113,819 | 114,299 | 114,584 | 111,619 | |||||
Effect of 3.50% convertible notes | 0 | 0 | 0 | 4,429 | |||||
Effect of warrant | 0 | 2,208 | 0 | 4,507 | |||||
Effect of stock-based compensation | 1,419 | 1,992 | 1,384 | 2,016 | |||||
Total dilutive effect on weighted average shares of common stock outstanding | 1,419 | 4,200 | 1,384 | 10,952 | |||||
Weighted average shares of common stock outstanding including dilutive shares | 115,238 | 118,499 | 115,968 | 122,571 | |||||
Earnings per share — diluted | $1.45 | $0.85 | $4.16 | $3.15 | |||||
Anti-dilutive securities | 0 | 0 | 0 | 2,586 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | ||||||||
Warrant Exercise Price | $38.61 | ||||||||
Bond Hedge Per Share Price | $32.82 |
Reporting_Segments_Details
Reporting Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |||
Net Sales by Reporting Segment | ||||||||
Segment Reporting, Entity Consolidated Revenue | $1,806.20 | $1,695.20 | $5,551.20 | $5,464.10 | ||||
Adjusted earnings before interest, income taxes and noncontrolling interest | ||||||||
Adjusted EBIT | 261.4 | 228.2 | 799.8 | 764.3 | ||||
Program termination agreement | 0 | 0 | 11.3 | 0 | ||||
Retirement related obligations | 0 | 0 | 5.9 | 0 | ||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 0 | -1.8 | 0 | -39.7 | ||||
Restructuring Charges | 0 | 27.4 | 0 | 27.4 | ||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 25.4 | 24.9 | 83.9 | 82.2 | ||||
Interest income | -1.3 | -1 | -3.3 | -3.7 | ||||
Interest expense and finance charges | 8.1 | 5 | 26.6 | 32.7 | ||||
Earnings before income taxes and noncontrolling interest | 229.2 | 170.1 | 675.4 | 586 | ||||
Provision for income taxes | 56.3 | 64.2 | 173.8 | 190.2 | ||||
Net earnings | 172.9 | 105.9 | 501.6 | 395.8 | ||||
Net earnings attributable to the noncontrolling interest, net of tax | 6.1 | 4.8 | 18.7 | 16.1 | ||||
Net earnings attributable to BorgWarner Inc. | 166.8 | 101.1 | 482.9 | 379.7 | ||||
Segment Reporting Information - Assets | ||||||||
Total assets | 6,964.30 | 6,964.30 | 6,400.80 | |||||
Operating Segments [Member] | ||||||||
Segment Reporting Information - Assets | ||||||||
Total assets | 5,340.70 | 5,340.70 | 4,951.40 | |||||
Engine [Member] | ||||||||
Net Sales by Reporting Segment | ||||||||
Segment Reporting, Entity Consolidated Revenue | 1,210.30 | 1,168 | 3,756.10 | 3,745.80 | ||||
Adjusted earnings before interest, income taxes and noncontrolling interest | ||||||||
Adjusted EBIT | 195.5 | 184.1 | 618.1 | 604.4 | ||||
Segment Reporting Information - Assets | ||||||||
Total assets | 3,514 | 3,514 | 3,299.20 | |||||
Drivetrain [Member] | ||||||||
Net Sales by Reporting Segment | ||||||||
Segment Reporting, Entity Consolidated Revenue | 604 | 534.4 | 1,818.90 | 1,739.70 | ||||
Adjusted earnings before interest, income taxes and noncontrolling interest | ||||||||
Adjusted EBIT | 65.9 | 44.1 | 181.7 | 159.9 | ||||
Segment Reporting Information - Assets | ||||||||
Total assets | 1,826.70 | 1,826.70 | 1,652.20 | |||||
Intersegment Eliminations [Member] | ||||||||
Net Sales by Reporting Segment | ||||||||
Segment Reporting, Entity Consolidated Revenue | -8.1 | -7.2 | -23.8 | -21.4 | ||||
Corporate Segment [Member] | ||||||||
Segment Reporting Information - Assets | ||||||||
Total assets | $1,623.60 | [1] | $1,623.60 | [1] | $1,449.40 | [1] | ||
[1] | Corporate assets include investments and advances and deferred income taxes |