Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 20, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | BORGWARNER INC. | |
Entity Central Index Key | 908,255 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
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 | 210,101,808 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash | $ 409.7 | $ 545.3 |
Receivables, net | 2,247.1 | 2,018.9 |
Inventories, net | 800.4 | 758.9 |
Prepayments and other current assets | 171 | 154.8 |
Assets held for sale | 69.6 | 67.3 |
Total current assets | 3,697.8 | 3,545.2 |
Property, plant and equipment, net | 2,923.8 | 2,863.8 |
Investments and other long-term receivables | 581.8 | 547.4 |
Goodwill | 1,890.6 | 1,881.8 |
Other intangible assets, net | 485.2 | 492.7 |
Other non-current assets | 455.6 | 458.7 |
Total assets | 10,034.8 | 9,789.6 |
LIABILITIES AND EQUITY | ||
Notes payable and other short-term debt | 194 | 84.6 |
Accounts payable and accrued expenses | 2,160.4 | 2,270.4 |
Income taxes payable | 44.4 | 40.8 |
Liabilities held for sale | 37.8 | 29.5 |
Total current liabilities | 2,436.6 | 2,425.3 |
Long-term debt | 2,131.5 | 2,103.7 |
Other non-current liabilities: | ||
Asbestos-related liability | 761.3 | 775.7 |
Retirement-related liabilities | 300.2 | 301.6 |
Other | 389.4 | 355.5 |
Total other non-current liabilities | 1,450.9 | 1,432.8 |
Commitments and Contingencies | ||
Common stock | 2.5 | 2.5 |
Capital in excess of par value | 1,102.3 | 1,118.7 |
Retained earnings | 4,722.4 | 4,532.9 |
Accumulated other comprehensive loss | (430.3) | (490) |
Common stock held in treasury | (1,486.2) | (1,445.4) |
Total BorgWarner Inc. stockholders’ equity | 3,910.7 | 3,718.7 |
Noncontrolling interest | 105.1 | 109.1 |
Total equity | 4,015.8 | 3,827.8 |
Total liabilities and equity | $ 10,034.8 | $ 9,789.6 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 2,784.3 | $ 2,407 |
Cost of sales | 2,192.5 | 1,890.7 |
Gross profit | 591.8 | 516.3 |
Selling, general and administrative expenses | 253.4 | 219 |
Other expense, net | 4.9 | 5.8 |
Operating income | 333.5 | 291.5 |
Equity in affiliates’ earnings, net of tax | (10.2) | (9.7) |
Interest income | (1.5) | (1.5) |
Interest expense and finance charges | 16.1 | 18 |
Other postretirement income | (2.6) | (1.2) |
Earnings before income taxes and noncontrolling interest | 331.7 | 285.9 |
Provision for income taxes | 94.9 | 86.3 |
Net earnings | 236.8 | 199.6 |
Net earnings attributable to the noncontrolling interest, net of tax | 11.7 | 10.4 |
Net earnings attributable to BorgWarner Inc. | $ 225.1 | $ 189.2 |
Earnings per share — basic | $ 1.07 | $ 0.89 |
Earnings per share — diluted | $ 1.07 | $ 0.89 |
Weighted average shares outstanding (thousands): | ||
Basic | 209,475 | 211,596 |
Diluted | 210,766 | 212,236 |
Dividends declared per share | $ 0.17 | $ 0.14 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||
Net earnings attributable to BorgWarner Inc. | $ 225.1 | $ 189.2 | |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | 65 | 49 | |
Hedge instruments | [1] | (3.3) | (1.2) |
Defined benefit postretirement plans | [1] | (2) | 0.1 |
Total other comprehensive income attributable to BorgWarner Inc. | 59.7 | 47.9 | |
Comprehensive income attributable to BorgWarner Inc. | 284.8 | 237.1 | |
Net earnings attributable to the noncontrolling interest, net of tax | 11.7 | 10.4 | |
Other comprehensive income attributable to the noncontrolling interest | 2.4 | 4 | |
Comprehensive income | $ 298.9 | $ 251.5 | |
[1] | Net of income taxes. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING | ||
Net earnings | $ 236.8 | $ 199.6 |
Adjustments to reconcile net earnings to net cash flows from operations: | ||
Depreciation and amortization | 109.2 | 97.3 |
Stock-based compensation expense | 14.7 | 13.1 |
Deferred income tax provision | 8.2 | 20.6 |
Restructuring expense, net of cash paid | 6.9 | 0 |
Equity in affiliates’ earnings, net of dividends received, and other | (11) | (9.5) |
Net earnings adjusted for non-cash charges to operations | 364.8 | 321.1 |
Changes in assets and liabilities: | ||
Receivables | (187.1) | (215.4) |
Inventories | (27.5) | (5.5) |
Prepayments and other current assets | (13.6) | (8.7) |
Accounts payable and accrued expenses | (109.1) | (16.3) |
Income taxes payable | 3.1 | (16.5) |
Other assets and liabilities | 4.1 | 1.6 |
Net cash provided by operating activities | 34.7 | 60.3 |
INVESTING | ||
Capital expenditures, including tooling outlays | (160.4) | (130.9) |
Payments for venture capital investment | (0.6) | (1.5) |
Proceeds from asset disposals and other | 0.1 | (0.3) |
Net cash used in investing activities | (160.9) | (132.7) |
FINANCING | ||
Net increase in notes payable | 117.4 | 74.4 |
Additions to long-term debt, net of debt issuance costs | 12.1 | 0 |
Repayments of long-term debt, including current portion | (10) | (6.4) |
Payments for purchase of treasury stock | (55.2) | (31) |
Payments for stock-based compensation items | (14.4) | (1.3) |
Dividends paid to BorgWarner stockholders | (35.6) | (29.7) |
Dividends paid to noncontrolling stockholders | (17.8) | (21.8) |
Net cash used in financing activities | (3.5) | (15.8) |
Effect of exchange rate changes on cash | (5.9) | 2.9 |
Net decrease in cash | (135.6) | (85.3) |
Cash at beginning of year | 545.3 | 443.7 |
Cash at end of period | 409.7 | 358.4 |
Cash paid during the period for: | ||
Interest | 30.6 | 31.9 |
Income taxes, net of refunds | $ 80.2 | $ 78.5 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
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 statement of results have been included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The balance sheet as of December 31, 2017 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, 2017. Certain prior period amounts have been reclassified to conform to current period presentation. During the fourth quarter of 2017, the Company identified a prior period error related to the exclusion of the net earnings attributable to the non-controlling interest in the first three months of 2017 Consolidated Statement of Comprehensive Income. The inclusion of this amount increased total Comprehensive Income by $10.4 million for the three months ended March 31, 2017. The Company concluded that the error was not material to the financial statements of any prior annual or interim period and therefore, amendments of previously filed reports are not required. In accordance with ASC Topic 250, "Accounting Changes and Error Corrections," we have corrected the error for all prior periods presented by revising the consolidated financial statements appearing herein. Quarterly periods not presented herein will be revised, as applicable, in future filings. The revision had no impact on the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Cash Flows. 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. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, "Derivatives and Hedging (Topic 815)." It expands and refines hedge accounting for both nonfinancial and financial risk components and reduces complexity in fair value hedges of interest rate risk. It eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. It also eases certain documentation and assessment requirements and modifies the accounting for components excluded from assessment of hedge effectiveness. In addition, the new guidance requires expanded disclosures as it pertains to the effect of hedging on individual income statement lines, including the effects of components excluded from the assessment of effectiveness. The guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company adopted this guidance during the first quarter of 2018 and the impact on the consolidated financial statements was not material. Refer to the Financial Instruments footnote for expanded disclosures. In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." It requires disaggregating the service cost component from the other components of net benefit cost, provides explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization when applicable. This guidance is effective for interim and annual periods beginning after December 15, 2017. In the first quarter of 2018, the Company retrospectively adopted the presentation of service cost separate from the other components of net benefit costs. As a result, Cost of sales of $1.0 million and Selling, general and administrative expenses of $0.2 million for the three months ended March 31, 2017 have been reclassified to Other postretirement income as a separate line item in the Condensed Consolidated Statements of Operations. In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business." It revises the definition of a business and provides a framework to evaluate when an input and a substantive process are present in an acquisition to be considered a business. This guidance is effective for annual periods beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 and there is no impact to the consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, "Restricted Cash." It requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 and there is no impact to the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments." It provides guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how they are classified in the statement of cash flows. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 and there is no impact to the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." Under this guidance, lessees will be required to recognize a right-of-use asset and a lease liability for all operating leases defined under previous GAAP. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company is currently developing policies and processes to meet the requirements of this new guidance. The Company is in the process of analyzing its global lease obligations in order to evaluate the impact this guidance will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." It requires equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This guidance is effective for interim and fiscal years beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 with no impact to the consolidated financial statements and elected the measurement alternative for equity investments without readily determinable fair values. In May 2014, the FASB amended the Accounting Standards Codification to add Topic 606 and issued ASU 2014-09, "Revenue from Contracts with Customers," outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseding the then applicable revenue recognition guidance. The new guidance requires new disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted this new standard and all the related amendments (“new revenue standard”) effective January 1, 2018 and applied it to all contracts using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of adoption of the new standard to be immaterial to our sales and net income on an ongoing basis. Revenue is recognized when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of our products. For most of our products, transfer of control occurs upon shipment or delivery, however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, under the new revenue standard, revenue is recognized as goods are produced and control transfers to the customer. The Company recorded a transition adjustment as of January 1, 2018, which increased retained earnings by $2.0 million related to these arrangements. The Company also has a limited number of arrangements with customers where the price paid by the customer is dependent on the volume of product purchased over the term of the arrangement. Under the new revenue standard, the Company estimates the volumes to be sold over the term of the arrangement and recognizes revenue based on the estimated amount of consideration to be received from these arrangements. The Company recorded a transition adjustment, which decreased the opening balance of retained earnings by $0.1 million related to these arrangements. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of new revenue standard was as follows: (In millions) Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Inventories, net $ 766.3 $ (7.4 ) $ 758.9 Prepayments and other current assets (including contract assets) $ 145.4 $ 9.4 $ 154.8 Accounts payable and other accrued expenses (including contract liabilities) $ 2,270.3 $ 0.1 $ 2,270.4 Retained earnings $ 4,531.0 $ 1.9 $ 4,532.9 The impact from adopting the new revenue standard as compared to the previous revenue guidance is immaterial to our Consolidated Statements of Operations for the three months ended March 31, 2018 and Consolidated Balance Sheets as of March 31, 2018. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenue from Contracts with Customers The Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments to all contracts using the modified retrospective method effective January 1, 2018. The Company manufactures and sells products, primarily to OEMs of light vehicles, and, to a lesser extent, to other OEMs of commercial vehicles, off-highway vehicles, certain Tier One vehicle systems suppliers and into the aftermarket. Although the Company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the life of the arrangements, and a contract does not exist for purposes of applying ASC 606 until volumes are contractually known. Revenue is recognized when performance obligations under the terms of a contract are satisfied which generally occurs with the transfer of control of our products. For most of our products, transfer of control occurs upon shipment or delivery, however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer. The Company has recorded a contract asset of $9.7 million and $9.4 million at March 31, 2018 and December 31, 2017 for these arrangements. These amounts are reflected in Prepayments and other current assets in our consolidated balance sheet. Revenue is measured at the amount of consideration we expect to receive in exchange for transferring the goods. The Company has a limited number of arrangements with customers where the price paid by the customer is dependent on the volume of product purchased over the term of the arrangement. In other limited arrangements, the Company will provide a rebate to customers based on the volume of products purchased during the course of the arrangement. The Company estimates the volumes to be sold over the term of the arrangement and recognizes revenue based on the estimated amount of consideration to be received from these arrangements. As a result of these arrangements, the Company has recognized a liability of $22.0 million and $18.5 million at March 31, 2018 and December 31, 2017. These amounts are reflected in Accounts payable and accrued expenses in our consolidated balance sheet. The Company’s payment terms with customers are customary and vary by customer and geography but typically range from 30 to 90 days. We have evaluated the terms of our arrangements and determined that they do not contain significant financing components. The Company provides warranties on some of its products. Provisions for estimated expenses related to product warranty are made at the time products are sold. See the Product Warranty footnote to the Consolidated Financial Statements for more information on product warranties. Shipping and handling fees billed to customers are included in sales, while costs of shipping and handling are included in cost of sales. The Company has elected to apply the accounting policy election available under ASC 606 and accounts for shipping and handling activities as a fulfillment cost. In limited instances, certain customers have provided payments in advance of receiving related products, typically at the onset of an arrangement prior to the beginning of production. These contract liabilities are reflected as Accounts payable and accrued expenses and Other non-current liabilities in our consolidated balance sheet and were $12.1 million and $21.1 million at March 31, 2018 and $12.1 million and $21.9 million at December 31, 2017, respectively. These amounts are reflected as a revenue over the term of the arrangement (typically 3 to 7 years) as the underlying products are shipped. The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. The Company evaluates the underlying economics of each amount of consideration payable to a customer to determine the proper accounting by understanding the reasons for the payment, the rights and obligations resulting from the payment, the nature of the promise in the contract, and other relevant facts and circumstances. When the Company determines that the payments are incremental and incurred only if the new business is obtained and expects to recover these costs from the customer over the term of the new business arrangement, the Company capitalizes these costs. The Company recognizes a reduction to revenue as products that the upfront payments are related to are transferred to the customer based on the total amount of products expected to be sold over the term of the arrangement (generally 3 to 7 years). The Company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement. The Company had $21.2 million and $18.2 million recorded in Prepayments and other current assets, and $185.5 million and $180.4 million recorded in Other non-current assets in the consolidated balance sheet at March 31, 2018 and December 31, 2017. The following table represents a disaggregation of revenue from contracts with customers by segment and region: For the period ended March 31, 2018 For the period ended March 31, 2017 (In millions) Engine Drivetrain Total Engine Drivetrain Total North America 401.7 448.0 849.7 389.6 429.3 818.9 Europe 846.2 291.2 1,137.4 679.1 236.9 916.0 Asia 421.7 336.7 758.4 391.9 252.0 643.9 Other 31.6 7.2 38.8 21.5 6.7 28.2 Total 1,701.2 1,083.1 2,784.3 1,482.1 924.9 2,407.0 |
Research and Development Expend
Research and Development Expenditures | 3 Months Ended |
Mar. 31, 2018 | |
Research and Development [Abstract] | |
Research and Development Expenditures | 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 March 31, (in millions) 2018 2017 Gross R&D expenditures $ 129.7 $ 112.0 Customer reimbursements (13.0 ) (15.6 ) Net R&D expenditures $ 116.7 $ 96.4 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 Expense, Net
Other Expense, Net | 3 Months Ended |
Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Expense, net | Other Expense, net Items included in other expense, net consist of: Three Months Ended March 31, (in millions) 2018 2017 Restructuring expense $ 7.5 $ — Merger and acquisition expense 2.2 — Lease termination settlement — 5.3 Other (income) expense (4.8 ) 0.5 Other expense, net $ 4.9 $ 5.8 During the three months ended March 31, 2018, the Company recorded restructuring expense of $7.5 million . This restructuring expense primarily relates to Drivetrain and Engine segment actions designed to improve future profitability and competitiveness. See the Restructuring footnote to the Condensed Consolidated Financial Statements for further discussion of these expenses. During the three months ended March 31, 2018, the Company recorded $2.2 million of merger and acquisition expense primarily related to professional fees associated with divestiture activities for the non-core pipe and thermostat product lines. See the Assets and Liabilities Held for Sale footnote to the Condensed Consolidated Financial Statements for further discussion. During the first three months of 2018, the Company recorded a gain of approximately $4 million related to the settlement of a commercial contract for an entity acquired in the 2015 Remy acquisition. During the first three months of 2017, the Company recorded a loss of $5.3 million related to the termination of a long term property lease for a manufacturing facility located in Europe. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018, the Company's effective tax rate for the first quarter was 28.6% . This rate includes income tax expenses of $0.9 million and $0.4 million related to a commercial settlement gain and other one-time tax adjustments, and reductions of income tax expense of $0.6 million and $0.3 million million which are associated with restructuring expense, and merger and acquisition expense. At March 31, 2017, the Company's effective tax rate for the first quarter was 30.2% . This rate includes tax expense of $3.4 million related to one-time adjustments. 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., U.S. taxes on foreign earnings, 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. In accordance with guidance provided by Staff Accounting Bulletin No 118 (SAB 118), we have not completed our accounting for the tax effects of the Tax Cuts and Jobs Act of 2017 (the "Act") and have recorded provisional estimates for significant items including the following: (i) the effects on our existing deferred balances, (ii) the one-time transition tax, and (iii) our indefinite reinvestment assertion. The measurement period begins in the reporting period that includes the Act’s enactment date and ends when the additional information is obtained, prepared, or analyzed to complete the accounting requirements under ASC Topic 740. The measurement period should not extend beyond one year from the enactment date. As of March 31, 2018, the Company continues to evaluate the provisional amounts recorded for the year ended December 31, 2017 and have recorded no adjustments. We have made an accounting policy election to treat the future tax impacts of the global intangible low-tax income (GILTI) provisions of the Act as a period cost to the extent applicable. |
Inventories, net
Inventories, net | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net Certain U.S. inventories are measured by the last-in, first-out (“LIFO”) method at the lower of cost or market, while other U.S. and foreign operations use the first-in, first-out (“FIFO”) or average-cost methods at the lower of cost and net realizable value. Inventories consisted of the following: March 31, December 31, (in millions) 2018 2017 Raw material and supplies $ 489.9 $ 469.7 Work in progress 127.1 126.7 Finished goods 197.1 175.6 FIFO inventories 814.1 772.0 LIFO reserve (13.7 ) (13.1 ) Inventories, net $ 800.4 $ 758.9 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net March 31, December 31, (in millions) 2018 2017 Land, land use rights and buildings $ 932.4 $ 899.2 Machinery and equipment 2,816.1 2,734.4 Capital leases 1.4 1.5 Construction in progress 386.2 410.5 Total property, plant and equipment, gross 4,136.1 4,045.6 Less: accumulated depreciation (1,427.2 ) (1,391.7 ) Property, plant and equipment, net, excluding tooling 2,708.9 2,653.9 Tooling, net of amortization 214.9 209.9 Property, plant and equipment, net $ 2,923.8 $ 2,863.8 As of March 31, 2018 and December 31, 2017, accounts payable of $52.5 million and $106.5 million , respectively, were related to property, plant and equipment purchases. Interest costs capitalized for the three months ended March 31, 2018 and 2017 were $5.7 million and $4.3 million , respectively. |
Product Warranty
Product Warranty | 3 Months Ended |
Mar. 31, 2018 | |
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: (in millions) 2018 2017 Beginning balance, January 1 $ 111.5 $ 95.3 Provisions 13.7 27.6 Acquisition 0.2 — Payments (10.0 ) (15.3 ) Translation adjustment 2.1 1.4 Ending balance, March 31 $ 117.5 $ 109.0 In the three months ended March 31, 2018, warranty provisions decreased by $13.9 million from the same period in 2017 as the result of fewer product defect claims from customers in the Company's Engine segment. The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows: March 31, December 31, (in millions) 2018 2017 Accounts payable and accrued expenses $ 67.9 $ 69.0 Other non-current liabilities 49.6 42.5 Total product warranty liability $ 117.5 $ 111.5 |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | Notes Payable and Long-Term Debt As of March 31, 2018 and December 31, 2017, the Company had short-term and long-term debt outstanding as follows: March 31, December 31, (in millions) 2018 2017 Short-term debt Short-term borrowings $ 187.7 $ 68.8 Long-term debt 8.00% Senior notes due 10/01/19 ($134 million par value) 136.9 137.4 4.625% Senior notes due 09/15/20 ($250 million par value) 251.3 251.4 1.80% Senior notes due 11/7/22 (€500 million par value) 611.8 595.7 3.375% Senior notes due 03/15/25 ($500 million par value) 496.2 496.1 7.125% Senior notes due 02/15/29 ($121 million par value) 118.9 118.9 4.375% Senior notes due 03/15/45 ($500 million par value) 493.6 493.5 Term loan facilities and other 29.1 26.5 Total long-term debt 2,137.8 2,119.5 Less: current portion 6.3 15.8 Long-term debt, net of current portion $ 2,131.5 $ 2,103.7 In July 2016, the Company terminated interest rate swaps which had the effect of converting $384.0 million of fixed rate notes to variable rates. The gain on the termination was recorded as an increase to the notes and is being amortized as a reduction to interest expense over the remaining terms of the notes. The unamortized gain related to these swap terminations as of March 31, 2018 was $2.7 million and $0.7 million on the 4.625% and 8.00% notes, respectively. The unamortized gain related to these swap terminations as of December 31, 2017 was $2.9 million and $0.8 million on the 4.625% and 8.00% notes, respectively. The Company terminated fixed to floating interest rate swaps in 2009. The gain on the termination was recorded as an increase to the notes and is being amortized as a reduction to interest expense over the remaining term of the notes. The unamortized gain related to this swap termination at March 31, 2018 and December 31, 2017 was $2.3 million and $2.7 million , respectively, on the 8.00% notes. The weighted average interest rate on short-term borrowings outstanding as of March 31, 2018 and December 31, 2017 was 2.7% and 3.1% , respectively. The weighted average interest rate on all borrowings outstanding, including the effects of outstanding swaps, as of March 31, 2018 and December 31, 2017 was 3.5% and 3.8% , respectively. The Company has a $1.2 billion multi-currency revolving credit facility, which includes a feature that allows the Company's borrowings to be increased to $1.5 billion . The facility provides for borrowings through June 29, 2022 . The Company has one key financial covenant as part of the credit agreement which is a debt to EBITDA ("Earnings Before Interest, Taxes, Depreciation and Amortization") ratio. The Company was in compliance with the financial covenant at March 31, 2018 and expects to remain compliant in future periods. At March 31, 2018 and December 31, 2017, the Company had no outstanding borrowings under this facility. The Company's commercial paper program allows the Company to issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding of $1.2 billion . Under this program, the Company may issue notes from time to time and will use the proceeds for general corporate purposes. As of March 31, 2018, the Company had outstanding borrowings of $80.0 million . As of December 31, 2017, the Company had no outstanding borrowings under this program. The total current combined borrowing capacity under the multi-currency revolving credit facility and commercial paper program cannot exceed $1.2 billion . As of March 31, 2018 and December 31, 2017, the estimated fair values of the Company’s senior unsecured notes totaled $2,185.2 million and $2,209.1 million , respectively. The estimated fair values were $76.5 million and $116.1 million higher than their carrying value at March 31, 2018 and December 31, 2017, 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 values of the Company's multi-currency revolving credit facility and commercial paper program approximates 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 $31.2 million and $31.4 million at March 31, 2018 and December 31, 2017, 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017: Basis of fair value measurements (in millions) Balance at March 31, 2018 Quoted prices in active markets for identical items (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Valuation technique Assets: Foreign currency contracts $ 1.6 $ — $ 1.6 $ — A Other long-term receivables (insurance settlement agreement note receivable) $ 43.1 $ — $ 43.1 $ — C Liabilities: Commodity contracts $ 0.1 $ — $ 0.1 $ — A Foreign currency contracts $ 12.2 $ — $ 12.2 $ — A Net investment hedge contracts $ 7.4 $ — $ 7.4 $ — A Basis of fair value measurements (in millions) Balance at December 31, 2017 Quoted prices in active markets for identical items (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Valuation technique Assets: Foreign currency contracts $ 1.7 $ — $ 1.7 $ — A Other long-term receivables (insurance settlement agreement note receivable) $ 42.9 $ — $ 42.9 $ — C Liabilities: Foreign currency contracts $ 5.0 $ — $ 5.0 $ — A |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
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 may include long-term debt, interest rate and cross-currency swaps, commodity derivative contracts and foreign currency derivative contracts. 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 March 31, 2018 and December 31, 2017, the Company had no derivative contracts that contained credit risk related contingent features. 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. At March 31, 2018, the following commodity derivative contracts were outstanding. At December 31, 2017, there were no commodity derivative contracts outstanding. Commodity derivative contracts Volume hedged Commodity March 31, 2018 Units of measure Duration Copper 227.0 Metric Tons Dec - 18 The Company manages its interest rate risk by balancing its exposure to fixed and variable rates while attempting to optimize its interest costs. The Company selectively uses interest rate swaps to reduce market value risk associated with changes in interest rates (fair value hedges). At March 31, 2018 and December 31, 2017, the Company had no outstanding interest rate swaps. The Company uses foreign currency forward and option contracts to protect against exchange rate movements for forecasted cash flows (cash flow hedges), remeasurement exposures that affect earnings (non-designated hedges), and exposures associated with the Company’s net investments in certain foreign operations (net investment hedges). Forecasted cash flows may include capital expenditures, inventory purchases, operating expenses or sales transactions designated in currencies other than the functional currency of the operating unit. The Company has also designated its Euro - denominated debt as a net investment hedge of the Company's investment in a European subsidiary. 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 March 31, 2018 and December 31, 2017, the following foreign currency derivative contracts were outstanding: Foreign currency derivatives (in millions) Functional currency Traded currency Notional in traded currency March 31, 2018 Notional in traded currency December 31, 2017 Ending Duration Brazilian real Euro 2.7 1.1 Dec - 18 British pound Euro 30.1 — Dec - 18 British pound US dollar 8.6 — Dec - 18 Chinese renminbi US dollar 24.4 36.0 Sep - 18 Chinese renminbi Euro 8.2 18.6 Jun - 18 Euro Chinese renminbi 59.7 85.0 Dec - 18 Euro British pound 3.0 3.9 Dec - 18 Euro Japanese yen 857.8 1,311.3 Dec - 18 Euro Swedish krona 267.4 267.4 May -18 Euro US dollar 37.5 56.5 Mar - 19 Japanese yen Chinese renminbi 62.2 — Dec - 18 Japanese yen US dollar 2.0 — Dec - 18 Korean won Euro 2.8 3.1 Dec - 18 Korean won Japanese yen 518.5 619.0 Dec - 18 Korean won US dollar 8.1 11.2 Dec - 18 Swedish krona Euro 97.3 109.7 Jan - 20 US dollar Euro 42.0 42.0 Dec - 18 US dollar Mexican peso 404.3 — Dec - 18 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 March 31, 2018, the following cross-currency swap contract was outstanding. At December 31, 2017, there were no cross-currency swap derivative contracts outstanding. Cross-Currency Swaps (millions of dollars) Notional in USD Notional in Local Currency Duration Fixed $ to fixed € $ 250.0 € 206.2 Sep - 20 At March 31, 2018 and December 31, 2017, the following amounts were recorded in the Condensed Consolidated Balance Sheets as being payable to or receivable from counterparties: (in millions) Assets Liabilities Derivatives designated as hedging instruments Under Topic 815: Location March 31, 2018 December 31, 2017 Location March 31, 2018 December 31, 2017 Foreign currency Prepayments and other current assets $ 1.6 $ 0.9 Accounts payable and accrued expenses $ 6.6 $ 3.9 Other non-current assets $ — $ 0.8 Other non-current liabilities $ 1.8 $ — Commodity Prepayments and other current assets $ — $ — Accounts payable and accrued expenses $ 0.1 $ — Net investment hedges Other non-current assets $ — $ — Other non-current liabilities $ 7.4 $ — Derivatives not designated as hedging instruments Foreign currency Prepayments and other current assets — — Accounts payable and accrued expenses 3.8 1.1 Effectiveness for cash flow hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. Gains and losses arising from these contracts that are included in the assessment of effectiveness 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. The initial value of any component excluded from the assessment of effectiveness will be recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in fair value of the excluded component and amounts recognized in income under that systematic and rational method will be recognized in AOCI. Effectiveness for net investment hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. Gains and losses arising from these contracts that are included in the assessment of effectiveness are deferred into foreign currency translation adjustments and only released when the subsidiary being hedged is sold or substantially liquidated. The initial value of any component excluded from the assessment of effectiveness will be recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in fair value of the excluded component and amounts recognized in income under that systematic and rational method will be recognized in AOCI. 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 March 31, 2018 market rates. (in millions) Deferred gain (loss) in AOCI at Gain (loss) expected to be reclassified to income in one year or less Contract Type March 31, 2018 December 31, 2017 Foreign currency $ (6.5 ) $ (2.3 ) $ (4.7 ) Commodity (0.1 ) — (0.1 ) Net investment hedges: Foreign currency 2.9 2.9 — Cross-currency swap (7.4 ) — — Foreign currency denominated debt (73.0 ) (57.1 ) — Total $ (84.1 ) $ (56.5 ) $ (4.8 ) Derivative instruments designated as cash flow hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains and (losses) recorded in income: Three Months Ended March 31, 2018 (in millions) Net sales Cost of sales Selling, general and administrative expenses Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 2,784.3 $ 2,192.5 $ 253.4 Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) reclassified from AOCI to income $ (0.1 ) $ (1.1 ) $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — Commodity Gain (loss) reclassified from AOCI to income $ — $ — $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — Three Months Ended March 31, 2017 (in millions) Net sales Cost of sales Selling, general and administrative expenses Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 2,407.0 $ 1,890.7 $ 219.0 Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) reclassified from AOCI to income $ 1.1 $ 0.8 $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ 0.1 Commodity Gain (loss) reclassified from AOCI to income $ — $ 0.2 $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — There were no gains and (losses) recorded in income related to components excluded from the assessment of effectiveness for derivative instruments designated as cash flow hedges. Derivatives designated as net investment hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains and (losses) recorded in income on components excluded from the assessment of effectiveness: (in millions) Three months ended Contract Type Location March 31, 2018 March 31, 2017 Cross-currency swap Interest expense and finance charges $ 1.3 $ — There were no gains and (losses) recorded in income related to components excluded from the assessment of effectiveness for foreign currency denominated debt designated as net investment hedges. There were no gains and losses reclassified from AOCI for net investment hedges during the periods presented. Derivatives not designated as hedging instruments are used to hedge remeasurement exposures of monetary assets and liabilities denominated in currencies other than the operating units’ functional currency. These derivatives resulted in the following gains and (losses) recorded in income: (in millions) Three months ended Contract Type Location March 31, 2018 March 31, 2017 Foreign currency Selling, general and administrative expenses $ (3.7 ) $ (0.9 ) |
Retirement Benefit Plans
Retirement Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [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 2018 range from $15.0 million to $25.0 million , of which $4.1 million has been contributed through the first three 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 postretirement employee benefits (in millions) 2018 2017 Three Months Ended March 31, US Non-US US Non-US 2018 2017 Service cost $ — $ 4.6 $ — $ 4.3 $ — $ — Interest cost 2.1 3.1 2.2 2.6 0.7 0.8 Expected return on plan assets (3.4 ) (7.0 ) (3.3 ) (5.6 ) — — Amortization of unrecognized prior service credit (0.2 ) — (0.2 ) — (1.0 ) (1.0 ) Amortization of unrecognized loss 1.0 1.8 1.1 1.9 0.3 0.3 Net periodic benefit (income) cost $ (0.5 ) $ 2.5 $ (0.2 ) $ 3.2 $ — $ 0.1 The components of net periodic benefit cost other than the service cost component are included in Other postretirement income in the Condensed Consolidated Statements of Operations. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Under the Company's 2014 Stock Incentive Plan ("2014 Plan"), the Company granted restricted common stock awards and stock units ("restricted stock") and performance share units as long-term incentive award grants to employees and non-employee directors. Restricted stock granted to employees primarily 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 first anniversary date of the grant. Under the 2014 Plan, 8 million shares are authorized for grant, of which approximately 4.4 million shares are available for future issuance as of March 31, 2018. Restricted stock The value of restricted stock is determined by the market value of the Company’s common stock at the date of grant. In the first three months of 2018, restricted stock in the amount of 625,416 shares was granted to employees. The value of the awards is recognized as compensation expense ratably over the restriction periods. As of March 31, 2018, there was $50.6 million of unrecognized compensation expense that will be recognized over a weighted average period of 2.3 years . The Company recorded restricted stock compensation expense of $6.5 million and $6.8 million for the three months ended March 31, 2018 and 2017, respectively. A summary of the Company’s nonvested restricted stock for the three months ended March 31, 2018 is as follows: Shares subject to restriction (thousands) Weighted average grant date fair value Nonvested at December 31, 2017 1,593 $ 38.86 Granted 625 $ 52.64 Vested (486 ) $ 41.05 Forfeited (7 ) $ 49.48 Nonvested at March 31, 2018 1,725 $ 43.26 Total Shareholder Return Performance Share Plans The 2014 Plan provides for awarding of performance shares to members of senior management at the end of successive three-year periods based on the Company's performance in terms of total shareholder return relative to a peer group of automotive companies. The Company recorded compensation expense of $1.7 million and $3.1 million for the three months ended March 31, 2018 and 2017, respectively. Relative Revenue Growth Performance Share Plans The 2014 Plan also provides for awarding of performance shares to members of senior management based on the Company's performance in terms of revenue growth relative to the vehicle market over three-year performance periods. The compensation expense was $6.5 million and $3.2 million for the three months ended March 31, 2018 and 2017, respectively. A summary of the status of the Company’s nonvested relative revenue growth performance shares for the three months ended March 31, 2018 is as follows: Number of shares (thousands) Weighted average grant date fair value Nonvested at December 31, 2017 355 $ 39.42 Granted 175 $ 52.64 Nonvested at March 31, 2018 530 $ 43.79 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following tables summarize the activity within accumulated other comprehensive loss during the three months ended March 31, 2018 and 2017: (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Other Total Beginning balance, December 31, 2017 $ (293.8 ) $ (1.3 ) $ (197.6 ) $ 2.7 $ (490.0 ) Comprehensive income (loss) before reclassifications 61.7 (5.5 ) (4.3 ) — 51.9 Income taxes associated with comprehensive income (loss) before reclassifications 3.3 1.3 1.1 — 5.7 Reclassification from accumulated other comprehensive loss — 1.2 1.9 — 3.1 Income taxes reclassified into net earnings — (0.3 ) (0.7 ) — (1.0 ) Ending balance, March 31, 2018 $ (228.8 ) $ (4.6 ) $ (199.6 ) $ 2.7 $ (430.3 ) (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Other Total Beginning balance, December 31, 2016 $ (530.3 ) $ 5.0 $ (198.1 ) $ 1.3 $ (722.1 ) Comprehensive income (loss) before reclassifications 49.0 0.5 (2.3 ) — 47.2 Income taxes associated with comprehensive income (loss) before reclassifications — (0.2 ) 1.0 — 0.8 Reclassification from accumulated other comprehensive loss — (2.1 ) 2.1 — — Income taxes reclassified into net earnings — 0.6 (0.7 ) — (0.1 ) Ending balance, March 31, 2017 $ (481.3 ) $ 3.8 $ (198.0 ) $ 1.3 $ (674.2 ) |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
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 will have a material adverse effect on the Company's results of operations, financial position or cash flows, although it could be material to the results of operations in a particular quarter. 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 27 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 $8.3 million as of March 31, 2018 and December 31, 2017, 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”), a former indirect subsidiary, the Company agreed to indemnify the buyer and Kuhlman Electric against certain environmental liabilities relating to certain operations of Kuhlman Electric that pre-date the Company’s 1999 acquisition of Kuhlman Electric. Kuhlman Electric was sued by plaintiffs alleging personal injuries purportedly arising from contamination at Kuhlman Electric’s Crystal Springs, Mississippi facility. The Company understands that Kuhlman Electric was required by regulatory officials to remediate such contamination. Kuhlman Electric and its new owner tendered the personal injury lawsuits and regulatory demands to the Company. After the Company made certain payments to the plaintiffs and undertook certain remediation on Kuhlman Electric’s behalf, litigation regarding the validity of the indemnity ensued. The underlying personal injury lawsuits and indemnity litigation now have been fully resolved. The Company continues to pursue litigation against Kuhlman Electric’s historical insurers for reimbursement of amounts it paid on behalf of Kuhlman Electric under the indemnity. The Company may in the future become subject to further legal proceedings relating to these matters. Asbestos-related Liability Like many other industrial companies that have historically operated in the United States, the Company, or parties that 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 these claims generally relate to a few types of automotive products that were manufactured over thirty years ago and contained encapsulated asbestos. The nature of the fibers, the encapsulation of the asbestos, and the manner of the products’ use all lead the Company to believe that these products were and are highly unlikely to cause harm. Furthermore, the useful life of nearly all of these products expired many years ago. The Company’s asbestos-related claims activity during the three months ended March 31, 2018 and 2017 is as follows: 2018 2017 Beginning Claims January 1 9,225 9,385 New Claims Received 503 611 Dismissed Claims (462 ) (392 ) Settled Claims (106 ) (120 ) Ending Claims March 31 9,160 9,484 The Company vigorously defends against these claims, and has obtained the dismissal of the majority of the claims asserted against it without any payment. The Company likewise expects that no payment will be made by the Company or its insurers in the vast majority of current and future asbestos-related claims in which it has been or will be named (or has an obligation to indemnify a party which has been or will be named). Through March 31, 2018 and December 31, 2017, the Company incurred $543.3 million and $528.7 million , respectively, in indemnity (including settlement payments) and defense costs in connection with asbestos-related claims. During the three months ended March 31, 2018 and 2017, the Company paid $14.6 million and $13.6 million , respectively, in indemnity and related defense costs in connection with asbestos-related claims. These gross payments are before tax benefits and any insurance receipts. Indemnity and defense costs are incorporated into the Company's operating cash flows and will continue to be in the future. The Company reviews, on an ongoing basis, its own experience in handling asbestos-related claims and trends affecting asbestos-related claims in the U.S. tort system generally, for the purposes of assessing the value of pending asbestos-related claims and the number and value of those that may be asserted in the future, as well as potential recoveries from the Company’s insurers with respect to such claims and defense costs. During the fourth quarter of 2016, the Company determined that a reasonable estimate of its liability for asbestos claims not yet asserted could be made, and the Company increased its aggregate estimated liability for asbestos-related claims asserted but not yet resolved and potential asbestos-related claims not yet asserted to $879.3 million as of December 31, 2016. This estimate was not discounted to present value and included an estimate of liability for potential future claims not yet asserted through December 31, 2059 with a runoff through 2067. The Company currently believes that December 31, 2067 is a reasonable assumption as to the last date on which it is likely to have resolved all asbestos-related claims, based on the nature and useful life of the Company’s products and the likelihood of incidence of asbestos-related disease in the U.S. population generally. As of March 31, 2018, the Company’s reasonable best estimate of the aggregate liability for both asbestos-related claims asserted but not yet resolved and potential asbestos-related claims not yet asserted, including estimated defense costs, is as follows: (in millions) 2018 2017 Asbestos Liability beginning balance, January 1 $ 828.2 $ 879.3 Indemnity and Defense Related Costs (14.6 ) (13.6 ) Asbestos Liability ending balance, March 31 $ 813.6 $ 865.7 The Company’s estimate of the indemnity and defense costs for asbestos-related claims asserted but not yet resolved and potential claims not yet asserted is its reasonable best estimate of such costs. Such estimate is subject to numerous uncertainties. These include future legislative or judicial changes affecting the U.S. tort system, bankruptcy proceedings involving one or more co-defendants, the impact and timing of payments from bankruptcy trusts that presently exist and those that may exist in the future, disease emergence and associated claim filings, the impact of future settlements or significant judgments, changes in the medical condition of claimants, changes in the treatment of asbestos-related disease, and any changes in settlement or defense strategies. The balances recorded for asbestos-related claims are based on the best available information and assumptions that the Company believes are reasonable, including as to the number of future claims that may be asserted, the percentage of claims that may result in a payment, the average cost to resolve such claims, and potential defense costs. The Company concluded that it is reasonably possible that it may incur additional losses through 2067 for asbestos-related claims, in addition to amounts recorded, of up to approximately $100.0 million as of March 31, 2018. The various assumptions utilized in arriving at the Company’s estimate may also change over time, and the Company’s actual liability for asbestos-related claims asserted but not yet resolved and those not yet asserted may be higher or lower than the Company’s estimate as a result of such changes. The Company has certain insurance coverage applicable to asbestos-related claims. Prior to June 2004, the settlement and defense costs associated with all asbestos-related claims were paid by the Company's primary layer insurance carriers under a series of interim funding arrangements. 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 Cook County court has issued a number of interim rulings and discovery is continuing in this proceeding. The Company is vigorously pursuing the litigation against all carriers that are parties to it, as well as pursuing settlement discussions with its carriers where appropriate. The Company has entered into settlement agreements with certain of its insurance carriers, resolving such insurance carriers’ coverage disputes through the carriers’ agreement to pay specified amounts to the Company, either immediately or over a specified period. Through March 31, 2018 and December 31, 2017, the Company received $270.5 million and $270.0 million , respectively, in cash and notes from insurers on account of indemnity and defense costs respecting asbestos-related claims. The Company continues to have additional excess insurance coverage available for potential future asbestos-related claims. As of March 31, 2018 and December 31, 2017, the Company estimates that it has $386.4 million in aggregate insurance coverage available with respect to asbestos-related claims, and their associated defense costs, which the Company has recorded as a receivable. The Company has determined the amount of that estimate by taking into account the remaining limits of the insurance coverage, the number and amount of potential claims from co-insured parties, potential remaining recoveries from insolvent insurers, the impact of previous insurance settlements, and coverage available from solvent insurers not party to the coverage litigation. The Company’s remaining estimated insurance coverage relating to asbestos-related claims and their associated defense costs is the subject of disputes with its insurers, substantially all of which are being adjudicated in the Cook County insurance litigation. The Company believes that its insurance receivable is probable of collection notwithstanding those disputes based on, among other things, the arguments made by the insurers in the Cook County litigation and evaluation of those arguments by the Company and its counsel, the case law applicable to the issues in dispute, the rulings to date by the Cook County court, the absence of any credible evidence alleged by the insurers that they are not liable to indemnify the Company, and the fact that the Company has recovered a substantial portion of its insurance coverage, $270.5 million , to date from its insurers under similar policies. However, the resolution of the insurance coverage disputes, and the number and amount of claims on our insurance from co-insured parties, may increase or decrease the amount of such insurance coverage available to the Company as compared to the Company’s estimate. The amounts recorded in the Condensed Consolidated Balance Sheets respecting asbestos-related claims are as follows: March 31, December 31, (in millions) 2018 2017 Assets: Non-current assets $ 386.4 $ 386.4 Total insurance assets $ 386.4 $ 386.4 Liabilities: Accounts payable and accrued expenses $ 52.3 $ 52.5 Other non-current liabilities 761.3 775.7 Total accrued liabilities $ 813.6 $ 828.2 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the third quarter of 2017, the Company initiated actions within its emissions business in the Engine segment designed to improve future profitability and competitiveness and started exploring strategic options for the non-core emission product lines. As a continuation of these actions, the Company recorded restructuring expense of $4.8 million during the first quarter of 2018, primarily related to professional fees and employee termination benefits. The Company will continue its plan to improve the future profitability and competitiveness of its remaining European emissions business in the Engine segment. These actions may result in the recognition of additional restructuring charges that could be material. Additionally, in the first quarter of 2018, the Company recorded restructuring expense of $2.3 million in the Drivetrain segment primarily related to manufacturing footprint rationalization activities. Estimates of restructuring expense are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established accruals. The following tables display a rollforward of the severance accruals recorded within the Company's Condensed Consolidated Balance Sheet and the related cash flow activity for the three months ended March 31, 2018 and 2017: Severance Accruals (in millions) Drivetrain Engine Total Balance at December 31, 2017 $ 4.1 $ 1.3 $ 5.4 Provision 1.1 0.7 1.8 Cash payments (0.6 ) (1.1 ) (1.7 ) Translation adjustment 0.1 — 0.1 Balance at March 31, 2018 $ 4.7 $ 0.9 $ 5.6 Severance Accruals (in millions) Drivetrain Engine Total Balance at December 31, 2016 $ 3.7 $ 2.7 $ 6.4 Cash payments (1.6 ) (2.1 ) (3.7 ) Translation adjustment — 0.1 0.1 Balance at March 31, 2017 $ 2.1 $ 0.7 $ 2.8 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company presents both basic and diluted earnings per share of common stock (“EPS”). 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 and compensation cost for future service that the Company has not yet recognized. The dilutive effects of performance-based stock awards described in the Stock-Based Compensation footnote are included in the computation of diluted earnings per share at the level the related performance criteria are met through the respective balance sheet date. The total shareholder return performance shares of 174,400 shares granted in 2016 were excluded from the computation of the diluted earnings per share for the three months ended March 31, 2018 because the shares are not expected to be paid out at the end of the performance period as currently estimated. The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock: Three Months Ended March 31, (in millions, except per share amounts) 2018 2017 Basic earnings per share: Net earnings attributable to BorgWarner Inc. $ 225.1 $ 189.2 Weighted average shares of common stock outstanding 209.475 211.596 Basic earnings per share of common stock $ 1.07 $ 0.89 Diluted earnings per share: Net earnings attributable to BorgWarner Inc. $ 225.1 $ 189.2 Weighted average shares of common stock outstanding 209.475 211.596 Effect of stock-based compensation 1.291 0.640 Weighted average shares of common stock outstanding including dilutive shares 210.766 212.236 Diluted earnings per share of common stock $ 1.07 $ 0.89 |
Reporting Segments
Reporting Segments | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Reporting Segments | 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 March 31, (in millions) 2018 2017 Engine $ 1,716.1 $ 1,495.4 Drivetrain 1,082.9 924.9 Inter-segment eliminations (14.7 ) (13.3 ) Net sales $ 2,784.3 $ 2,407.0 Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest (“Adjusted EBIT”) Three Months Ended March 31, (in millions) 2018 2017 Engine $ 280.2 $ 246.2 Drivetrain 121.0 104.4 Adjusted EBIT 401.2 350.6 Restructuring expense 7.5 — Merger and acquisition expense 2.2 — Lease termination settlement — 5.3 Other income, net (4.8 ) — Other postretirement income (2.6 ) (1.2 ) Corporate, including equity in affiliates' earnings and stock-based compensation 52.6 44.1 Interest income (1.5 ) (1.5 ) Interest expense and finance charges 16.1 18.0 Earnings before income taxes and noncontrolling interest 331.7 285.9 Provision for income taxes 94.9 86.3 Net earnings 236.8 199.6 Net earnings attributable to the noncontrolling interest, net of tax 11.7 10.4 Net earnings attributable to BorgWarner Inc. $ 225.1 $ 189.2 Total Assets March 31, December 31, (in millions) 2018 2017 Engine $ 4,919.1 $ 4,733.4 Drivetrain 4,025.1 3,905.3 Total 8,944.2 8,638.7 Corporate * 1,090.6 1,150.9 Total assets $ 10,034.8 $ 9,789.6 ____________________________________ * Corporate assets include investments and other long-term receivables and certain deferred income taxes. |
Recent Transactions
Recent Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | Recent Transactions On September 27, 2017, the Company acquired 100% of the equity interests in Sevcon for cash of $185.7 million . This amount included $26.6 million paid to settle outstanding debt and $5.1 million paid for Sevcon stock-based awards attributable to precombination services. Sevcon is a global player in electrification technologies, serving customers in the U.S., U.K., France, Germany, Italy, China and the Asia Pacific region. Sevcon complements BorgWarner’s power electronics capabilities utilized to provide electrified propulsion solutions. Sevcon's operating results and assets are reported within the Company's Drivetrain reporting segment. The following table summarizes the aggregated preliminary fair value of the assets acquired and liabilities assumed on September 27, 2017, the date of acquisition: (millions of dollars) Receivables, net $ 15.9 Inventories, net 18.6 Other current assets 2.8 Property, plant and equipment, net 7.3 Goodwill 126.0 Other intangible assets 70.7 Deferred tax liabilities (9.5 ) Income taxes payable (0.7 ) Other assets and liabilities (2.9 ) Accounts payable and accrued expenses (24.5 ) Total consideration, net of cash acquired 203.7 Less: Assumed retirement-related liabilities 18.0 Cash paid, net of cash acquired $ 185.7 In connection with the acquisition, the Company capitalized $17.7 million for customer relationships, $48.8 million for developed technology and $4.2 million for the Sevcon trade name. These intangible assets, excluding the indefinite-lived trade name, will be amortized over a period of 7 to 20 years. Various valuation techniques were used to determine the fair value of the intangible assets, with the primary techniques being forms of the income approach, specifically, the relief-from-royalty and excess earnings valuation methods, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, the Company is required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Due to the nature of the transaction, goodwill is not deductible for tax purposes. The Company is in the process of finalizing all purchase accounting adjustments related to the acquisition. The Company has recorded fair value adjustments based on new information obtained during the measurement period primarily related to intangible assets. As of March 31, 2018, these adjustments have resulted in a decrease in goodwill of $7.6 million from the Company's initial estimate. In addition, certain other estimated values for the acquisition, including goodwill, contingencies and deferred taxes are not yet finalized, and the preliminary purchase price allocations are subject to change as the Company completes its analysis of the fair value at the date of acquisition. Due to its insignificant size relative to the Company, supplemental pro forma financial information of the combined entity for the current and prior reporting period is not provided. |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 3 Months Ended |
Mar. 31, 2018 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | In 2017, the Company started exploring strategic options for non-core emission product lines in the Engine segment and launched an active program to locate a buyer and initiated all other actions required to complete the plan to sell the non-core pipes and thermostat product lines. The Company determined that the assets and liabilities of the pipes and thermostat product lines met the held for sale criteria as of December, 2017. In the first quarter of 2018, the Company continued its efforts to locate a buyer for this business. As of March 31, 2018 and December 31, 2017, assets of $69.6 million and $67.3 million , including allocated goodwill of $7.5 million and $7.3 million , and liabilities of $37.8 million and $29.5 million , respectively, were reclassified as held for sale on the Consolidated Balance Sheets. The fair value of the assets and liabilities, less costs to sell, was determined to be less than the carrying value, therefore, the Company recorded an asset impairment expense of $71.0 million in the year ended December 31, 2017 in Other expense, net to adjust the net book value of this business to its fair value less cost to sell. There was no asset impairment expense recorded in the three months ended March 31, 2018. The business did not meet the criteria to be classified as a discontinued operation. The assets and liabilities classified as held for sale are as follows: March 31, December 31, (millions of dollars) 2018 2017 Receivables, net $ 25.6 $ 21.0 Inventories, net 28.5 30.4 Prepayments and other current assets 12.0 10.3 Property, plant and equipment, net 46.8 47.7 Goodwill 7.5 7.3 Other intangible assets, net 21.7 21.1 Other assets 0.4 0.5 Impairment of carrying value (72.9 ) (71.0 ) Total assets held for sale $ 69.6 $ 67.3 Accounts payable and accrued expenses $ 30.5 $ 24.6 Other liabilities 7.3 4.9 Total liabilities held for sale $ 37.8 $ 29.5 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | 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 statement of results have been included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The balance sheet as of December 31, 2017 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, 2017. |
Use of Estimates, Policy [Policy Text Block] | 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. |
New Accounting Pronouncements R
New Accounting Pronouncements Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | (In millions) Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Inventories, net $ 766.3 $ (7.4 ) $ 758.9 Prepayments and other current assets (including contract assets) $ 145.4 $ 9.4 $ 154.8 Accounts payable and other accrued expenses (including contract liabilities) $ 2,270.3 $ 0.1 $ 2,270.4 Retained earnings $ 4,531.0 $ 1.9 $ 4,532.9 |
Revenue from Contracts with C29
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | For the period ended March 31, 2018 For the period ended March 31, 2017 (In millions) Engine Drivetrain Total Engine Drivetrain Total North America 401.7 448.0 849.7 389.6 429.3 818.9 Europe 846.2 291.2 1,137.4 679.1 236.9 916.0 Asia 421.7 336.7 758.4 391.9 252.0 643.9 Other 31.6 7.2 38.8 21.5 6.7 28.2 Total 1,701.2 1,083.1 2,784.3 1,482.1 924.9 2,407.0 |
Research and Development Expe30
Research and Development Expenditures (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Research and Development [Abstract] | |
Gross and net expenditures on research and development ("R&D") activities | Three Months Ended March 31, (in millions) 2018 2017 Gross R&D expenditures $ 129.7 $ 112.0 Customer reimbursements (13.0 ) (15.6 ) Net R&D expenditures $ 116.7 $ 96.4 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of other expense | Three Months Ended March 31, (in millions) 2018 2017 Restructuring expense $ 7.5 $ — Merger and acquisition expense 2.2 — Lease termination settlement — 5.3 Other (income) expense (4.8 ) 0.5 Other expense, net $ 4.9 $ 5.8 |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | March 31, December 31, (in millions) 2018 2017 Raw material and supplies $ 489.9 $ 469.7 Work in progress 127.1 126.7 Finished goods 197.1 175.6 FIFO inventories 814.1 772.0 LIFO reserve (13.7 ) (13.1 ) Inventories, net $ 800.4 $ 758.9 |
Property, Plant and Equipment33
Property, Plant and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Disclosure of Property, Plant and Equipment | March 31, December 31, (in millions) 2018 2017 Land, land use rights and buildings $ 932.4 $ 899.2 Machinery and equipment 2,816.1 2,734.4 Capital leases 1.4 1.5 Construction in progress 386.2 410.5 Total property, plant and equipment, gross 4,136.1 4,045.6 Less: accumulated depreciation (1,427.2 ) (1,391.7 ) Property, plant and equipment, net, excluding tooling 2,708.9 2,653.9 Tooling, net of amortization 214.9 209.9 Property, plant and equipment, net $ 2,923.8 $ 2,863.8 |
Product Warranty (Tables)
Product Warranty (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | (in millions) 2018 2017 Beginning balance, January 1 $ 111.5 $ 95.3 Provisions 13.7 27.6 Acquisition 0.2 — Payments (10.0 ) (15.3 ) Translation adjustment 2.1 1.4 Ending balance, March 31 $ 117.5 $ 109.0 March 31, December 31, (in millions) 2018 2017 Accounts payable and accrued expenses $ 67.9 $ 69.0 Other non-current liabilities 49.6 42.5 Total product warranty liability $ 117.5 $ 111.5 |
Notes Payable and Long-Term D35
Notes Payable and Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | March 31, December 31, (in millions) 2018 2017 Short-term debt Short-term borrowings $ 187.7 $ 68.8 Long-term debt 8.00% Senior notes due 10/01/19 ($134 million par value) 136.9 137.4 4.625% Senior notes due 09/15/20 ($250 million par value) 251.3 251.4 1.80% Senior notes due 11/7/22 (€500 million par value) 611.8 595.7 3.375% Senior notes due 03/15/25 ($500 million par value) 496.2 496.1 7.125% Senior notes due 02/15/29 ($121 million par value) 118.9 118.9 4.375% Senior notes due 03/15/45 ($500 million par value) 493.6 493.5 Term loan facilities and other 29.1 26.5 Total long-term debt 2,137.8 2,119.5 Less: current portion 6.3 15.8 Long-term debt, net of current portion $ 2,131.5 $ 2,103.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value | Basis of fair value measurements (in millions) Balance at March 31, 2018 Quoted prices in active markets for identical items (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Valuation technique Assets: Foreign currency contracts $ 1.6 $ — $ 1.6 $ — A Other long-term receivables (insurance settlement agreement note receivable) $ 43.1 $ — $ 43.1 $ — C Liabilities: Commodity contracts $ 0.1 $ — $ 0.1 $ — A Foreign currency contracts $ 12.2 $ — $ 12.2 $ — A Net investment hedge contracts $ 7.4 $ — $ 7.4 $ — A Basis of fair value measurements (in millions) Balance at December 31, 2017 Quoted prices in active markets for identical items (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Valuation technique Assets: Foreign currency contracts $ 1.7 $ — $ 1.7 $ — A Other long-term receivables (insurance settlement agreement note receivable) $ 42.9 $ — $ 42.9 $ — C Liabilities: Foreign currency contracts $ 5.0 $ — $ 5.0 $ — A |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Price Risk Derivatives | Commodity derivative contracts Volume hedged Commodity March 31, 2018 Units of measure Duration Copper 227.0 Metric Tons Dec - 18 |
Notional Amounts of Outstanding Derivative Positions | Foreign currency derivatives (in millions) Functional currency Traded currency Notional in traded currency March 31, 2018 Notional in traded currency December 31, 2017 Ending Duration Brazilian real Euro 2.7 1.1 Dec - 18 British pound Euro 30.1 — Dec - 18 British pound US dollar 8.6 — Dec - 18 Chinese renminbi US dollar 24.4 36.0 Sep - 18 Chinese renminbi Euro 8.2 18.6 Jun - 18 Euro Chinese renminbi 59.7 85.0 Dec - 18 Euro British pound 3.0 3.9 Dec - 18 Euro Japanese yen 857.8 1,311.3 Dec - 18 Euro Swedish krona 267.4 267.4 May -18 Euro US dollar 37.5 56.5 Mar - 19 Japanese yen Chinese renminbi 62.2 — Dec - 18 Japanese yen US dollar 2.0 — Dec - 18 Korean won Euro 2.8 3.1 Dec - 18 Korean won Japanese yen 518.5 619.0 Dec - 18 Korean won US dollar 8.1 11.2 Dec - 18 Swedish krona Euro 97.3 109.7 Jan - 20 US dollar Euro 42.0 42.0 Dec - 18 US dollar Mexican peso 404.3 — Dec - 18 |
Schedule of Foreign Exchange Contracts, Statement of Financial Position | Cross-Currency Swaps (millions of dollars) Notional in USD Notional in Local Currency Duration Fixed $ to fixed € $ 250.0 € 206.2 Sep - 20 |
Derivatives Instruments in Statements of Financial Position | (in millions) Assets Liabilities Derivatives designated as hedging instruments Under Topic 815: Location March 31, 2018 December 31, 2017 Location March 31, 2018 December 31, 2017 Foreign currency Prepayments and other current assets $ 1.6 $ 0.9 Accounts payable and accrued expenses $ 6.6 $ 3.9 Other non-current assets $ — $ 0.8 Other non-current liabilities $ 1.8 $ — Commodity Prepayments and other current assets $ — $ — Accounts payable and accrued expenses $ 0.1 $ — Net investment hedges Other non-current assets $ — $ — Other non-current liabilities $ 7.4 $ — Derivatives not designated as hedging instruments Foreign currency Prepayments and other current assets — — Accounts payable and accrued expenses 3.8 1.1 |
Deferred Losses Reported In Accumulated Other Comprehensive Income Loss | (in millions) Deferred gain (loss) in AOCI at Gain (loss) expected to be reclassified to income in one year or less Contract Type March 31, 2018 December 31, 2017 Foreign currency $ (6.5 ) $ (2.3 ) $ (4.7 ) Commodity (0.1 ) — (0.1 ) Net investment hedges: Foreign currency 2.9 2.9 — Cross-currency swap (7.4 ) — — Foreign currency denominated debt (73.0 ) (57.1 ) — Total $ (84.1 ) $ (56.5 ) $ (4.8 ) |
Derivative Instruments, Gain (Loss) | (in millions) Three months ended Contract Type Location March 31, 2018 March 31, 2017 Cross-currency swap Interest expense and finance charges $ 1.3 $ — (in millions) Three months ended Contract Type Location March 31, 2018 March 31, 2017 Foreign currency Selling, general and administrative expenses $ (3.7 ) $ (0.9 ) Three Months Ended March 31, 2018 (in millions) Net sales Cost of sales Selling, general and administrative expenses Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 2,784.3 $ 2,192.5 $ 253.4 Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) reclassified from AOCI to income $ (0.1 ) $ (1.1 ) $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — Commodity Gain (loss) reclassified from AOCI to income $ — $ — $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — Three Months Ended March 31, 2017 (in millions) Net sales Cost of sales Selling, general and administrative expenses Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 2,407.0 $ 1,890.7 $ 219.0 Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) reclassified from AOCI to income $ 1.1 $ 0.8 $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ 0.1 Commodity Gain (loss) reclassified from AOCI to income $ — $ 0.2 $ — Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | Pension benefits Other postretirement employee benefits (in millions) 2018 2017 Three Months Ended March 31, US Non-US US Non-US 2018 2017 Service cost $ — $ 4.6 $ — $ 4.3 $ — $ — Interest cost 2.1 3.1 2.2 2.6 0.7 0.8 Expected return on plan assets (3.4 ) (7.0 ) (3.3 ) (5.6 ) — — Amortization of unrecognized prior service credit (0.2 ) — (0.2 ) — (1.0 ) (1.0 ) Amortization of unrecognized loss 1.0 1.8 1.1 1.9 0.3 0.3 Net periodic benefit (income) cost $ (0.5 ) $ 2.5 $ (0.2 ) $ 3.2 $ — $ 0.1 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Restricted Stock Units Activity | Shares subject to restriction (thousands) Weighted average grant date fair value Nonvested at December 31, 2017 1,593 $ 38.86 Granted 625 $ 52.64 Vested (486 ) $ 41.05 Forfeited (7 ) $ 49.48 Nonvested at March 31, 2018 1,725 $ 43.26 |
Schedule of Share-based Compensation, Performance Shares Award Unvested Activity | Number of shares (thousands) Weighted average grant date fair value Nonvested at December 31, 2017 355 $ 39.42 Granted 175 $ 52.64 Nonvested at March 31, 2018 530 $ 43.79 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Other Total Beginning balance, December 31, 2017 $ (293.8 ) $ (1.3 ) $ (197.6 ) $ 2.7 $ (490.0 ) Comprehensive income (loss) before reclassifications 61.7 (5.5 ) (4.3 ) — 51.9 Income taxes associated with comprehensive income (loss) before reclassifications 3.3 1.3 1.1 — 5.7 Reclassification from accumulated other comprehensive loss — 1.2 1.9 — 3.1 Income taxes reclassified into net earnings — (0.3 ) (0.7 ) — (1.0 ) Ending balance, March 31, 2018 $ (228.8 ) $ (4.6 ) $ (199.6 ) $ 2.7 $ (430.3 ) (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Other Total Beginning balance, December 31, 2016 $ (530.3 ) $ 5.0 $ (198.1 ) $ 1.3 $ (722.1 ) Comprehensive income (loss) before reclassifications 49.0 0.5 (2.3 ) — 47.2 Income taxes associated with comprehensive income (loss) before reclassifications — (0.2 ) 1.0 — 0.8 Reclassification from accumulated other comprehensive loss — (2.1 ) 2.1 — — Income taxes reclassified into net earnings — 0.6 (0.7 ) — (0.1 ) Ending balance, March 31, 2017 $ (481.3 ) $ 3.8 $ (198.0 ) $ 1.3 $ (674.2 ) |
Contingencies (Tables)
Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Loss Contingencies [Line Items] | |
Change of Outstanding Asbestos-related Claims | 2018 2017 Beginning Claims January 1 9,225 9,385 New Claims Received 503 611 Dismissed Claims (462 ) (392 ) Settled Claims (106 ) (120 ) Ending Claims March 31 9,160 9,484 |
Liability for Asbestos and Environmental Claims, Gross, Payment for Claims | (in millions) 2018 2017 Asbestos Liability beginning balance, January 1 $ 828.2 $ 879.3 Indemnity and Defense Related Costs (14.6 ) (13.6 ) Asbestos Liability ending balance, March 31 $ 813.6 $ 865.7 |
Schedule of Loss Contingencies by Contingency | March 31, December 31, (in millions) 2018 2017 Assets: Non-current assets $ 386.4 $ 386.4 Total insurance assets $ 386.4 $ 386.4 Liabilities: Accounts payable and accrued expenses $ 52.3 $ 52.5 Other non-current liabilities 761.3 775.7 Total accrued liabilities $ 813.6 $ 828.2 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of employee related and other restructuring accruals | Severance Accruals (in millions) Drivetrain Engine Total Balance at December 31, 2017 $ 4.1 $ 1.3 $ 5.4 Provision 1.1 0.7 1.8 Cash payments (0.6 ) (1.1 ) (1.7 ) Translation adjustment 0.1 — 0.1 Balance at March 31, 2018 $ 4.7 $ 0.9 $ 5.6 Severance Accruals (in millions) Drivetrain Engine Total Balance at December 31, 2016 $ 3.7 $ 2.7 $ 6.4 Cash payments (1.6 ) (2.1 ) (3.7 ) Translation adjustment — 0.1 0.1 Balance at March 31, 2017 $ 2.1 $ 0.7 $ 2.8 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | Three Months Ended March 31, (in millions, except per share amounts) 2018 2017 Basic earnings per share: Net earnings attributable to BorgWarner Inc. $ 225.1 $ 189.2 Weighted average shares of common stock outstanding 209.475 211.596 Basic earnings per share of common stock $ 1.07 $ 0.89 Diluted earnings per share: Net earnings attributable to BorgWarner Inc. $ 225.1 $ 189.2 Weighted average shares of common stock outstanding 209.475 211.596 Effect of stock-based compensation 1.291 0.640 Weighted average shares of common stock outstanding including dilutive shares 210.766 212.236 Diluted earnings per share of common stock $ 1.07 $ 0.89 |
Reporting Segments (Tables)
Reporting Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Net Sales by Reporting Segment | Three Months Ended March 31, (in millions) 2018 2017 Engine $ 1,716.1 $ 1,495.4 Drivetrain 1,082.9 924.9 Inter-segment eliminations (14.7 ) (13.3 ) Net sales $ 2,784.3 $ 2,407.0 |
Segment Earnings Before Interest and Income Taxes | Three Months Ended March 31, (in millions) 2018 2017 Engine $ 280.2 $ 246.2 Drivetrain 121.0 104.4 Adjusted EBIT 401.2 350.6 Restructuring expense 7.5 — Merger and acquisition expense 2.2 — Lease termination settlement — 5.3 Other income, net (4.8 ) — Other postretirement income (2.6 ) (1.2 ) Corporate, including equity in affiliates' earnings and stock-based compensation 52.6 44.1 Interest income (1.5 ) (1.5 ) Interest expense and finance charges 16.1 18.0 Earnings before income taxes and noncontrolling interest 331.7 285.9 Provision for income taxes 94.9 86.3 Net earnings 236.8 199.6 Net earnings attributable to the noncontrolling interest, net of tax 11.7 10.4 Net earnings attributable to BorgWarner Inc. $ 225.1 $ 189.2 |
Segment assets | March 31, December 31, (in millions) 2018 2017 Engine $ 4,919.1 $ 4,733.4 Drivetrain 4,025.1 3,905.3 Total 8,944.2 8,638.7 Corporate * 1,090.6 1,150.9 Total assets $ 10,034.8 $ 9,789.6 ____________________________________ * Corporate assets include investments and other long-term receivables and certain deferred income taxes. |
Recent Transactions (Tables)
Recent Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | (millions of dollars) Receivables, net $ 15.9 Inventories, net 18.6 Other current assets 2.8 Property, plant and equipment, net 7.3 Goodwill 126.0 Other intangible assets 70.7 Deferred tax liabilities (9.5 ) Income taxes payable (0.7 ) Other assets and liabilities (2.9 ) Accounts payable and accrued expenses (24.5 ) Total consideration, net of cash acquired 203.7 Less: Assumed retirement-related liabilities 18.0 Cash paid, net of cash acquired $ 185.7 |
Asset and Liabilities Held for
Asset and Liabilities Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | March 31, December 31, (millions of dollars) 2018 2017 Receivables, net $ 25.6 $ 21.0 Inventories, net 28.5 30.4 Prepayments and other current assets 12.0 10.3 Property, plant and equipment, net 46.8 47.7 Goodwill 7.5 7.3 Other intangible assets, net 21.7 21.1 Other assets 0.4 0.5 Impairment of carrying value (72.9 ) (71.0 ) Total assets held for sale $ 69.6 $ 67.3 Accounts payable and accrued expenses $ 30.5 $ 24.6 Other liabilities 7.3 4.9 Total liabilities held for sale $ 37.8 $ 29.5 |
Basis of Presentation Basis o47
Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basis of Presentation [Abstract] | ||
Net earnings attributable to the noncontrolling interest, net of tax | $ 11.7 | $ 10.4 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cost of sales | $ 2,192.5 | $ 1,890.7 |
Selling, general and administrative expenses | $ 253.4 | 219 |
Accounting Standards Update 2017-07 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cost of sales | 1 | |
Selling, general and administrative expenses | $ 0.2 |
New Accounting Pronouncements49
New Accounting Pronouncements Revenue Recognition (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories, net | $ 800.4 | $ 758.9 |
Prepayments and other current assets (including contract assets) | 171 | 154.8 |
Accounts payable and other accrued expenses (including contract liabilities) | 2,270.4 | |
Retained Earnings | $ 4,722.4 | 4,532.9 |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||
Inventories, net | (7.4) | |
Prepayments and other current assets (including contract assets) | 9.4 | |
Accounts payable and other accrued expenses (including contract liabilities) | 0.1 | |
Retained earnings | 1.9 | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Transferred over Time [Member] | ||
Retained earnings | 2 | |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||
Inventories, net | 766.3 | |
Prepayments and other current assets (including contract assets) | 145.4 | |
Accounts payable and other accrued expenses (including contract liabilities) | 2,270.3 | |
Retained Earnings | 4,531 | |
Contract with Customer, Variable Consideration [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||
Retained Earnings | $ 0.1 |
Revenue from Contracts with C50
Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Sales Revenue, Goods, Net | $ 2,784.3 | $ 2,407 | |
Contract with Customer, Liability, Current | 12.1 | $ 12.1 | |
Contract with Customer, Liability, Noncurrent | 21.1 | 21.9 | |
Contract with Customer, Refund Liability, Current | 22 | 18.5 | |
Contract with Customer, Asset, Net | 9.7 | 9.4 | |
Engine [Member] | |||
Sales Revenue, Goods, Net | 1,716.1 | 1,495.4 | |
Drivetrain [Member] | |||
Sales Revenue, Goods, Net | 1,082.9 | 924.9 | |
Europe [Member] | Consolidated Entities [Member] | |||
Sales Revenue, Goods, Net | 1,137.4 | 916 | |
Europe [Member] | Engine [Member] | |||
Sales Revenue, Goods, Net | 846.2 | 679.1 | |
Europe [Member] | Drivetrain [Member] | |||
Sales Revenue, Goods, Net | 291.2 | 236.9 | |
Asia [Member] | Consolidated Entities [Member] | |||
Sales Revenue, Goods, Net | 758.4 | 643.9 | |
Asia [Member] | Engine [Member] | |||
Sales Revenue, Goods, Net | 421.7 | 391.9 | |
Asia [Member] | Drivetrain [Member] | |||
Sales Revenue, Goods, Net | 336.7 | 252 | |
Other Foreign [Member] | Consolidated Entities [Member] | |||
Sales Revenue, Goods, Net | 38.8 | 28.2 | |
Other Foreign [Member] | Engine [Member] | |||
Sales Revenue, Goods, Net | 31.6 | 21.5 | |
Other Foreign [Member] | Drivetrain [Member] | |||
Sales Revenue, Goods, Net | 7.2 | 6.7 | |
All Countries [Domain] | Consolidated Entities [Member] | |||
Sales Revenue, Goods, Net | 2,784.3 | 2,407 | |
All Countries [Domain] | Engine [Member] | |||
Sales Revenue, Goods, Net | 1,701.2 | 1,482.1 | |
All Countries [Domain] | Drivetrain [Member] | |||
Sales Revenue, Goods, Net | 1,083.1 | 924.9 | |
North America [Member] | Consolidated Entities [Member] | |||
Sales Revenue, Goods, Net | 849.7 | 818.9 | |
North America [Member] | Engine [Member] | |||
Sales Revenue, Goods, Net | 401.7 | 389.6 | |
North America [Member] | Drivetrain [Member] | |||
Sales Revenue, Goods, Net | 448 | $ 429.3 | |
Prepaid Expenses and Other Current Assets [Member] | |||
Contract with Customer, Asset, Net | 21.2 | 18.2 | |
Other Noncurrent Assets [Member] | |||
Contract with Customer, Asset, Net | $ 185.5 | $ 180.4 | |
Minimum [Member] | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 years | ||
Capitalized contract costs, amortization period | 3 years | ||
Revenue, Performance Obligation, Description of Payment Terms | 30 | ||
Maximum [Member] | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 7 years | ||
Capitalized contract costs, amortization period | 7 years | ||
Revenue, Performance Obligation, Description of Payment Terms | 90 |
Research and Development Expe51
Research and Development Expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Research and Development | ||
Gross R&D expenditures | $ 129.7 | $ 112 |
Customer reimbursements | (13) | (15.6) |
Net R&D expenditures | $ 116.7 | $ 96.4 |
Maximum value of R&D contract | 5.00% | 5.00% |
Other Expense, Net (Details)
Other Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring expense | $ 7.5 | $ 0 |
Merger and acquisition expense | 2.2 | 0 |
Lease termination settlement | 0 | 5.3 |
Other operating income | (4.8) | |
Other operating expense | 0.5 | |
Other expense, net | 4.9 | $ 5.8 |
Remy International Inc. [Member] | ||
Other operating income | $ (4) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, continuing operations | 28.60% | 30.20% |
Tax expense on gain from commercial settlement | $ 0.9 | |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 0.4 | $ 3.4 |
Tax benefits related to restructuring expense | 0.6 | |
Tax Benefit Associated with Merger and Acquisition Expense | $ 0.3 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $ 489.9 | $ 469.7 |
Work in progress | 127.1 | 126.7 |
Finished goods | 197.1 | 175.6 |
FIFO inventories | 814.1 | 772 |
LIFO reserve | (13.7) | (13.1) |
Inventories, net | $ 800.4 | $ 758.9 |
Property, Plant and Equipment55
Property, Plant and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Capital Expenditures Incurred but Not yet Paid | $ 52.5 | $ 106.5 | |
Capitalized interest costs | 5.7 | $ 4.3 | |
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 4,136.1 | 4,045.6 | |
Less: accumulated depreciation | (1,427.2) | (1,391.7) | |
Property, plant and equipment, net, excluding tooling | 2,708.9 | 2,653.9 | |
Tooling, net of amortization | 214.9 | 209.9 | |
Property, plant and equipment, net | 2,923.8 | 2,863.8 | |
Land, land use rights and buildings [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 932.4 | 899.2 | |
Machinery and equipment [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 2,816.1 | 2,734.4 | |
Capital leases [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | 1.4 | 1.5 | |
Construction in progress [Member] | |||
Property Plant and Equipment | |||
Total property, plant and equipment, gross | $ 386.2 | $ 410.5 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Product warranty rollforward | ||||
Beginning balance, January 1 | $ 111.5 | $ 95.3 | ||
Provisions | 13.7 | 27.6 | ||
Acquisitions | 0.2 | 0 | ||
Payments | (10) | (15.3) | ||
Translation adjustment | 2.1 | 1.4 | ||
Ending balance, March 31 | 117.5 | 109 | ||
Change in year-over-year warranty provision | 13.9 | |||
Accounts payable and accrued expenses | $ 67.9 | $ 69 | ||
Other non-current liabilities | 49.6 | 42.5 | ||
Total product warranty liability | $ 111.5 | $ 95.3 | $ 117.5 | $ 111.5 |
Notes Payable and Long-Term D57
Notes Payable and Long-Term Debt (Details) | 3 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Jul. 20, 2016USD ($) | |
Long-term debt | ||||
Long-term Debt | $ 2,137,800,000 | $ 2,119,500,000 | ||
Current portion of long-term debt | 6,300,000 | 15,800,000 | ||
Long-term debt, net of current portion | $ 2,131,500,000 | $ 2,103,700,000 | ||
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.70% | 2.70% | 3.10% | |
Debt weighted average interest rate | 3.50% | 3.50% | 3.80% | |
Maximum borrowing capacity | $ 1,500,000,000 | |||
Estimated fair value of senior unsecured notes | 2,185,200,000 | $ 2,209,100,000 | ||
Fair value higher than carrying value for senior unsecured notes | 76,500,000 | 116,100,000 | ||
Letters of Credit Outstanding, Amount | 31,200,000 | 31,400,000 | ||
Short Term Borrowings [Member] | ||||
Short-term debt | ||||
Short-term borrowings | 187,700,000 | 68,800,000 | ||
8.00% Senior Notes [Member] | ||||
Long-term debt | ||||
Long-term Debt | 136,900,000 | 137,400,000 | ||
Debt instrument par value | $ 134,000,000 | |||
Debt instrument stated interest rate | 8.00% | 8.00% | ||
Debt instrument maturity date | Oct. 1, 2019 | |||
4.625% Senior Notes [Member] | ||||
Long-term debt | ||||
Long-term Debt | $ 251,300,000 | 251,400,000 | ||
Debt instrument par value | $ 250,000,000 | |||
Debt instrument stated interest rate | 4.625% | 4.625% | ||
Debt instrument maturity date | Sep. 15, 2020 | |||
1.80% Senior Notes [Member] | ||||
Long-term debt | ||||
Long-term Debt | $ 611,800,000 | 595,700,000 | ||
Debt instrument par value | € | € 500,000,000 | |||
Debt instrument stated interest rate | 1.80% | 1.80% | ||
Debt instrument maturity date | Nov. 7, 2022 | |||
3.375% Senior Notes [Member] | ||||
Long-term debt | ||||
Long-term Debt | $ 496,200,000 | 496,100,000 | ||
Debt instrument par value | $ 500,000,000 | |||
Debt instrument stated interest rate | 3.375% | 3.375% | ||
Debt instrument maturity date | Mar. 15, 2025 | |||
7.125% Senior Notes [Member] | ||||
Long-term debt | ||||
Long-term Debt | $ 118,900,000 | 118,900,000 | ||
Debt instrument par value | $ 121,000,000 | |||
Debt instrument stated interest rate | 7.125% | 7.125% | ||
Debt instrument maturity date | Feb. 15, 2029 | |||
4.375% Senior Notes [Member] | ||||
Long-term debt | ||||
Long-term Debt | $ 493,600,000 | 493,500,000 | ||
Debt instrument par value | $ 500,000,000 | |||
Debt instrument stated interest rate | 4.375% | 4.375% | ||
Debt instrument maturity date | Mar. 15, 2045 | |||
Revolving Credit Facility [Member] | ||||
Long-term debt | ||||
Current borrowing capacity | $ 1,200,000,000 | |||
Term Loan Facilities And Other [Member] | ||||
Long-term debt | ||||
Long-term Debt | 29,100,000 | 26,500,000 | ||
Interest rate swaps | ||||
Long-term debt | ||||
Derivative, Notional Amount | $ 384,000,000 | |||
Commercial Paper [Member] | ||||
Short-term debt | ||||
Short-term borrowings | 80,000,000 | |||
Long-term debt | ||||
Current borrowing capacity | 1,200,000,000 | |||
2016 swap termination event [Member] | Unamortized portion of interest rate swap | 8.00% Senior Notes [Member] | ||||
Long-term debt | ||||
Derivative assets | 700,000 | 800,000 | ||
2016 swap termination event [Member] | Unamortized portion of interest rate swap | 4.625% Senior Notes [Member] | ||||
Long-term debt | ||||
Derivative assets | 2,700,000 | 2,900,000 | ||
2009 swap termination event [Member] | Unamortized portion of interest rate swap | 8.00% Senior Notes [Member] | ||||
Long-term debt | ||||
Derivative assets | $ 2,300,000 | $ 2,700,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Market Approach Valuation Technique [Member] | ||
Assets: | ||
Foreign currency contracts | $ 1.6 | $ 1.7 |
Liabilities: | ||
Commodity contracts | 0.1 | |
Foreign currency contracts | 12.2 | 5 |
Net investment hedge contracts | 7.4 | |
Market Approach Valuation Technique [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Foreign currency contracts | 0 | 0 |
Liabilities: | ||
Commodity contracts | 0 | |
Foreign currency contracts | 0 | 0 |
Net investment hedge contracts | 0 | |
Market Approach Valuation Technique [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Foreign currency contracts | 1.6 | 1.7 |
Liabilities: | ||
Commodity contracts | 0.1 | |
Foreign currency contracts | 12.2 | 5 |
Net investment hedge contracts | 7.4 | |
Market Approach Valuation Technique [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Foreign currency contracts | 0 | 0 |
Liabilities: | ||
Commodity contracts | 0 | |
Foreign currency contracts | 0 | 0 |
Net investment hedge contracts | 0 | |
Income Approach Valuation Technique [Member] | ||
Assets: | ||
Other long-term receivables (insurance settlement agreement note receivable) | 43.1 | 42.9 |
Income Approach Valuation Technique [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Other long-term receivables (insurance settlement agreement note receivable) | 0 | 0 |
Income Approach Valuation Technique [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Other long-term receivables (insurance settlement agreement note receivable) | 43.1 | 42.9 |
Income Approach Valuation Technique [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Other long-term receivables (insurance settlement agreement note receivable) | $ 0 | $ 0 |
Financial Instruments - Derivat
Financial Instruments - Derivatives (Details) € in Millions, ¥ in Millions, ¥ in Millions, £ in Millions, kr in Millions, $ in Millions, $ in Millions | 3 Months Ended | ||||||||||||||
Mar. 31, 2018USD ($)t | Mar. 31, 2018JPY (¥) | Mar. 31, 2018CNY (¥) | Mar. 31, 2018SEK (kr) | Mar. 31, 2018EUR (€) | Mar. 31, 2018MXN ($) | Mar. 31, 2018GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017JPY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2017SEK (kr) | Dec. 31, 2017EUR (€) | Dec. 31, 2017MXN ($) | Dec. 31, 2017GBP (£) | Jul. 20, 2016USD ($) | |
Commodity contracts | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative, Nonmonetary Notional Amount, Mass | t | 227 | ||||||||||||||
Interest rate swaps | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | $ | $ 384 | ||||||||||||||
Brazil, Brazil Real | Foreign currency | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | € | € 2.7 | € 1.1 | |||||||||||||
United Kingdom, Pounds | Foreign currency | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | $ 8.6 | 30.1 | $ 0 | 0 | |||||||||||
China, Yuan Renminbi | Foreign currency | Maturity September 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | $ | 24.4 | 36 | |||||||||||||
China, Yuan Renminbi | Foreign currency | Maturity June 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | € | 8.2 | 18.6 | |||||||||||||
Euro Member Countries, Euro | Cross Currency Interest Rate Contract [Member] | Maturity September 2020 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | € | 206.2 | ||||||||||||||
Euro Member Countries, Euro | Foreign currency | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | ¥ 857.8 | ¥ 59.7 | £ 3 | ¥ 1,311.3 | ¥ 85 | £ 3.9 | |||||||||
Euro Member Countries, Euro | Foreign currency | Maturity May 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | kr | kr 267.4 | kr 267.4 | |||||||||||||
Euro Member Countries, Euro | Foreign currency | Maturity March 2019 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | $ | 37.5 | 56.5 | |||||||||||||
Japan, Yen | Foreign currency | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | 2 | ¥ 62.2 | 0 | ¥ 0 | |||||||||||
Korea (South), Won | Foreign currency | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | 8.1 | ¥ 518.5 | 2.8 | $ 11.2 | ¥ 619 | 3.1 | |||||||||
Sweden, Kronor | Foreign currency | Maturity January 2020 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | € | 97.3 | 109.7 | |||||||||||||
United States of America, Dollars | Cross Currency Interest Rate Contract [Member] | Maturity September 2020 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | $ | $ 250 | ||||||||||||||
United States of America, Dollars | Foreign currency | Maturity December 2018 | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Notional amount of currency derivatives | € 42 | $ 404.3 | € 42 | $ 0 |
Financial Instruments - Balance
Financial Instruments - Balance Sheet (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | $ (84.1) | $ (56.5) |
Gain (loss) expected to be reclassified in one year or less | (4.8) | |
Foreign currency | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | (6.5) | (2.3) |
Gain (loss) expected to be reclassified in one year or less | (4.7) | |
Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | (0.1) | 0 |
Gain (loss) expected to be reclassified in one year or less | (0.1) | |
Designated as Hedging Instrument [Member] | Foreign currency | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1.6 | 0.9 |
Designated as Hedging Instrument [Member] | Foreign currency | Accounts Payable and Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 6.6 | 3.9 |
Designated as Hedging Instrument [Member] | Foreign currency | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0.8 |
Designated as Hedging Instrument [Member] | Foreign currency | Other Noncurrent Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 1.8 | 0 |
Designated as Hedging Instrument [Member] | Commodity contracts | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Designated as Hedging Instrument [Member] | Commodity contracts | Accounts Payable and Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0.1 | 0 |
Designated as Hedging Instrument [Member] | Cross Currency Interest Rate Contract [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Designated as Hedging Instrument [Member] | Cross Currency Interest Rate Contract [Member] | Accounts payable and accrued expenses [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 7.4 | 0 |
Not Designated as Hedging Instrument [Member] | Foreign currency | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Foreign currency | Accounts Payable and Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 3.8 | 1.1 |
Net investment hedge | Foreign currency | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | 2.9 | 2.9 |
Net investment hedge | Cross Currency Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | (7.4) | 0 |
Net investment hedge | Foreign currency denominated debt designated as a net investment hedge [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | $ (73) | $ (57.1) |
Financial Instruments - Income
Financial Instruments - Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives, Fair Value [Line Items] | ||
Sales Revenue, Goods, Net | $ 2,784.3 | $ 2,407 |
Cost of sales | 2,192.5 | 1,890.7 |
Selling, general and administrative expenses | 253.4 | 219 |
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income, Effective Portion, Net [Abstract] | ||
Gain (loss) expected to be reclassified in one year or less | (4.8) | |
Commodity contracts | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income, Effective Portion, Net [Abstract] | ||
Gain (loss) expected to be reclassified in one year or less | (0.1) | |
Foreign currency | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income, Effective Portion, Net [Abstract] | ||
Gain (loss) expected to be reclassified in one year or less | (4.7) | |
Cross Currency Interest Rate Contract [Member] | Interest expense and finance charges | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | 1.3 | 0 |
Foreign currency denominated debt designated as a net investment hedge [Member] | SG&A expense | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | (3.7) | (0.9) |
Cash Flow Hedging [Member] | Commodity contracts | Sales Revenue, Net [Member] | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | 0 | 0 |
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net | 0 | 0 |
Cash Flow Hedging [Member] | Commodity contracts | Cost of goods sold | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | 0 | 0.2 |
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net | 0 | 0 |
Cash Flow Hedging [Member] | Commodity contracts | SG&A expense | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | 0 | 0 |
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net | 0 | 0 |
Cash Flow Hedging [Member] | Foreign currency | Sales Revenue, Net [Member] | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | (0.1) | 1.1 |
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net | 0 | 0 |
Cash Flow Hedging [Member] | Foreign currency | Cost of goods sold | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | (1.1) | 0.8 |
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net | 0 | 0 |
Cash Flow Hedging [Member] | Foreign currency | SG&A expense | ||
Derivatives Designated As Net Investment Hedges Under Topic 815 Abstract | ||
Gain (loss) reclassified from accumulated OCI into net income, effective portion, net | 0 | 0 |
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net | $ 0 | $ 0.1 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Actual contribution to defined benefit pension plans | $ 4.1 | ||
Scenario, Forecast [Member] | Minimum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year | $ 15 | ||
Scenario, Forecast [Member] | Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year | $ 25 | ||
Other Postretirement Benefits Plan [Member] | |||
Components of net periodic benefit cost: | |||
Service cost | 0 | $ 0 | |
Interest cost | 0.7 | 0.8 | |
Expected return on plan assets | 0 | 0 | |
Amortization of unrecognized prior service credit | (1) | (1) | |
Amortization of unrecognized loss | 0.3 | 0.3 | |
Net periodic benefit (income) cost | 0 | 0.1 | |
Pension Plan [Member] | UNITED STATES | |||
Components of net periodic benefit cost: | |||
Service cost | 0 | 0 | |
Interest cost | 2.1 | 2.2 | |
Expected return on plan assets | (3.4) | (3.3) | |
Amortization of unrecognized prior service credit | (0.2) | (0.2) | |
Amortization of unrecognized loss | 1 | 1.1 | |
Net periodic benefit (income) cost | (0.5) | (0.2) | |
Pension Plan [Member] | Non-US [Member] | |||
Components of net periodic benefit cost: | |||
Service cost | 4.6 | 4.3 | |
Interest cost | 3.1 | 2.6 | |
Expected return on plan assets | (7) | (5.6) | |
Amortization of unrecognized prior service credit | 0 | 0 | |
Amortization of unrecognized loss | 1.8 | 1.9 | |
Net periodic benefit (income) cost | $ 2.5 | $ 3.2 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Status of nonvested restricted stock | ||
Nonvested shares subject to restriction, Beginning Balance | 1,593,000 | |
Nonvested shares subject to restriction, weighted average exercise price | $ 38.86 | |
Restricted shares granted to employees | 625,000 | |
Granted shares subject to restriction, weighted average exercise price | $ 52.64 | |
Shares subject to restriction, Vested | (486,000) | |
Vested shares subject to restriction, weighted average exercise price | $ 41.05 | |
Shares subject to restriction, Forfeited | (7,000) | |
Forfeited shares subject to restriction, weighted average exercise price | $ 49.48 | |
Nonvested shares subject to restriction, Ending Balance | 1,725,000 | |
Nonvested shares subject to restriction, weighted average exercise price | $ 43.26 | |
Restricted Stock [Member] | ||
Restricted stock compensation expense | ||
Restricted stock compensation expense | $ 6.5 | $ 6.8 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 50.6 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 3 months 18 days | |
Status of nonvested restricted stock | ||
Restricted shares granted to employees | 625,416 | |
Performance Shares [Member] | ||
Status of nonvested restricted stock | ||
Performance share compensation expense | $ 1.7 | 3.1 |
Relative Revenue Growth Performance Share Plans [Member] | ||
Status of nonvested restricted stock | ||
Nonvested shares subject to restriction, Beginning Balance | 355,000 | |
Nonvested shares subject to restriction, weighted average exercise price | $ 39.42 | |
Restricted shares granted to employees | 175,000 | |
Granted shares subject to restriction, weighted average exercise price | $ 52.64 | |
Nonvested shares subject to restriction, Ending Balance | 530,000 | |
Nonvested shares subject to restriction, weighted average exercise price | $ 43.79 | |
Performance share compensation expense | $ 6.5 | $ 3.2 |
2014 Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 8,000,000 | |
Number of shares available for grant | 4,400,000 | |
First Half Vested | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percent of awards vested | 50.00% | |
Vesting period | 2 years | |
Second Half Vested | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Accumulated Other Comprehensi64
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign currency translation adjustments | ||||
Beginning Balance | $ (293.8) | $ (530.3) | ||
Comprehensive income (loss) before reclassifications | 61.7 | 49 | ||
Income taxes associated with comprehensive income (loss) before reclassifications | 3.3 | 0 | ||
Reclassification from accumulated other comprehensive income (loss) | 0 | 0 | ||
Income taxes reclassified into net earnings | 0 | 0 | ||
Ending Balance | (228.8) | (481.3) | ||
Hedge instruments | ||||
Beginning Balance | (1.3) | 5 | ||
Comprehensive income (loss) before reclassifications | (5.5) | 0.5 | ||
Income taxes associated with comprehensive income (loss) before reclassifications | 1.3 | (0.2) | ||
Reclassification from accumulated other comprehensive income (loss) | 1.2 | (2.1) | ||
Income taxes reclassified into net earnings | (0.3) | 0.6 | ||
Ending Balance | (4.6) | 3.8 | ||
Defined benefit postretirement plans | ||||
Beginning Balance | (197.6) | (198.1) | ||
Comprehensive income (loss) before reclassifications | (4.3) | (2.3) | ||
Income taxes associated with comprehensive income (loss) before reclassifications | 1.1 | 1 | ||
Reclassification from accumulated other comprehensive income (loss) | 1.9 | 2.1 | ||
Income taxes reclassified into net earnings | (0.7) | (0.7) | ||
Ending Balance | (199.6) | (198) | ||
Other | ||||
Beginning Balance | 2.7 | 1.3 | ||
Comprehensive income (loss) before reclassifications | 0 | 0 | ||
Income taxes associated with comprehensive income (loss) before reclassifications | 0 | 0 | ||
Reclassification from accumulated other comprehensive income (loss) | 0 | 0 | ||
Income taxes reclassified into net earnings | 0 | 0 | ||
Ending Balance | 2.7 | 1.3 | ||
Total | ||||
Beginning Balance | (490) | (722.1) | ||
Comprehensive income (loss) before reclassifications | 51.9 | 47.2 | ||
Income taxes associated with comprehensive income (loss) before reclassifications | 5.7 | 0.8 | ||
Reclassification from accumulated other comprehensive income (loss) | 3.1 | 0 | ||
Income taxes reclassified into net earnings | (1) | (0.1) | ||
Ending Balance | $ (490) | $ (722.1) | $ (430.3) | $ (674.2) |
Contingencies (Details)
Contingencies (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)claimsite | Mar. 31, 2017USD ($)claim | Dec. 31, 2017USD ($) | |
Accrual for environmental loss contingencies [Abstract] | |||
Waste disposal sites with potential liability under the Comprehensive Environmental Response, Compensation and Liability Act | site | 27 | ||
Accrual for indicated environmental liabilities | $ 8.3 | $ 8.3 | |
Timeframe most environmental liabilities will be paid out | 5 | ||
Loss Contingency Accrual [Roll Forward] | |||
Beginning asbestos liability | $ 828.2 | $ 879.3 | |
Indemnity and defense related costs | (14.6) | (13.6) | |
Ending asbestos liability | $ 813.6 | $ 865.7 | |
Asbestos Issue [Member] | |||
Loss Contingency Claims [Roll Forward] | |||
Beginning Claims | claim | 9,225 | 9,385 | |
New Claims Received | claim | 503 | 611 | |
Dismissed Claims | claim | (462) | (392) | |
Settled Claims | claim | (106) | (120) | |
Ending Claims | claim | 9,160 | 9,484 | |
Company paid in defense and indemnity in advance of insurers reimbursement | $ 543.3 | 528.7 | |
Cash and notes received from insurers | 270.5 | 270 | |
Loss Contingency, Range of Possible Loss, Portion Not Accrued | 100 | ||
Assets: | |||
Non-current assets | 386.4 | 386.4 | |
Total insurance assets | 386.4 | 386.4 | |
Liabilities: | |||
Accounts payable and accrued expenses | 52.3 | 52.5 | |
Other non-current liabilities | 761.3 | 775.7 | |
Total accrued liabilities | 813.6 | $ 828.2 | |
Loss Contingency Accrual [Roll Forward] | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid | $ 14.6 | $ 13.6 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Provision | $ 7.5 | $ 0 |
Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 5.4 | 6.4 |
Provision | 1.8 | |
Cash payments | (1.7) | (3.7) |
Translation adjustment | 0.1 | 0.1 |
Ending Balance | 5.6 | 2.8 |
Employee Severance [Member] | Drivetrain [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 4.1 | 3.7 |
Provision | 1.1 | |
Cash payments | (0.6) | (1.6) |
Translation adjustment | 0.1 | 0 |
Ending Balance | 4.7 | 2.1 |
Employee Severance [Member] | Engine [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 1.3 | 2.7 |
Provision | 0.7 | |
Cash payments | (1.1) | (2.1) |
Translation adjustment | 0 | 0.1 |
Ending Balance | 0.9 | $ 0.7 |
Engine [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Provision | 4.8 | |
Drivetrain [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Provision | $ 2.3 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic earnings per share: | ||
Net earnings attributable to BorgWarner Inc. | $ 225.1 | $ 189.2 |
Weighted average shares of common stock outstanding | 209,475,000 | 211,596,000 |
Basic earnings per share of common stock | $ 1.07 | $ 0.89 |
Diluted earnings per share: | ||
Net earnings attributable to BorgWarner Inc. | $ 225.1 | $ 189.2 |
Weighted average shares of common stock outstanding | 209,475,000 | 211,596,000 |
Effect of stock-based compensation | 1,291,000 | 640,000 |
Weighted average shares of common stock outstanding including dilutive shares | 210,766,000 | 212,236,000 |
Diluted earnings per share of common stock | $ 1.07 | $ 0.89 |
Performance Shares [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount | 174,400 |
Reporting Segments (Details)
Reporting Segments (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | ||
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Net Sales by Reporting Segment | ||||
Sales Revenue, Goods, Net | $ 2,784.3 | $ 2,407 | ||
Adjusted earnings before interest, income taxes and noncontrolling interest | ||||
Adjusted EBIT | 401.2 | 350.6 | ||
Restructuring expense | 7.5 | 0 | ||
Merger and acquisition expense | 2.2 | 0 | ||
Lease termination settlement | 0 | 5.3 | ||
Other expense, net | (4.8) | 0 | ||
Other postretirement income | (2.6) | (1.2) | ||
Corporate, including equity in affiliates' earnings and stock-based compensation | 52.6 | 44.1 | ||
Interest income | (1.5) | (1.5) | ||
Interest expense and finance charges | 16.1 | 18 | ||
Earnings before income taxes and noncontrolling interest | 331.7 | 285.9 | ||
Provision for income taxes | 94.9 | 86.3 | ||
Net earnings | 236.8 | 199.6 | ||
Net earnings attributable to the noncontrolling interest, net of tax | 11.7 | 10.4 | ||
Net earnings attributable to BorgWarner Inc. | 225.1 | 189.2 | ||
Segment Reporting Information - Assets | ||||
Total assets | 10,034.8 | $ 9,789.6 | ||
Operating Segments [Member] | ||||
Segment Reporting Information - Assets | ||||
Total assets | 8,944.2 | 8,638.7 | ||
Engine [Member] | ||||
Net Sales by Reporting Segment | ||||
Sales Revenue, Goods, Net | 1,716.1 | 1,495.4 | ||
Adjusted earnings before interest, income taxes and noncontrolling interest | ||||
Adjusted EBIT | 280.2 | 246.2 | ||
Segment Reporting Information - Assets | ||||
Total assets | 4,919.1 | 4,733.4 | ||
Drivetrain [Member] | ||||
Net Sales by Reporting Segment | ||||
Sales Revenue, Goods, Net | 1,082.9 | 924.9 | ||
Adjusted earnings before interest, income taxes and noncontrolling interest | ||||
Adjusted EBIT | 121 | 104.4 | ||
Segment Reporting Information - Assets | ||||
Total assets | 4,025.1 | 3,905.3 | ||
Intersegment Eliminations [Member] | ||||
Net Sales by Reporting Segment | ||||
Sales Revenue, Goods, Net | (14.7) | $ (13.3) | ||
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information - Assets | ||||
Total assets | [1] | $ 1,090.6 | $ 1,150.9 | |
[1] | Corporate assets include investments and other long-term receivables and certain deferred income taxes. |
Recent Transactions (Details)
Recent Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 27, 2017 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,890.6 | $ 1,881.8 | |
Sevcon, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
Payments to Acquire Businesses, Net of Cash Acquired | 185.7 | ||
Business Combination, Consideration Transferred, Other | 26.6 | ||
Business Combination, Consideration Transferred | $ 5.1 | ||
Receivables, net | $ 15.9 | ||
Inventories, net | 18.6 | ||
Other current assets | 2.8 | ||
Property, plant and equipment, net | 7.3 | ||
Goodwill | 126 | ||
Other intangible assets | 70.7 | ||
Deferred tax liabilities | (9.5) | ||
Income taxes payable | (0.7) | ||
Other assets and liabilities | (2.9) | ||
Accounts payable and accrued expenses | (24.5) | ||
Total consideration, net of cash acquired | 203.7 | ||
Assumed retirement-related liabilities | 18 | ||
Goodwill, Purchase Accounting Adjustments | $ (7.6) | ||
Customer Relationships [Member] | Sevcon, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Other intangible assets | 17.7 | ||
Developed Technology Rights [Member] | Sevcon, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Other intangible assets | 48.8 | ||
Trade Names [Member] | Sevcon, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 4.2 | ||
Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | ||
Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 20 years |
Asset and Liabilities Held fo70
Asset and Liabilities Held for Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Receivables, net | $ 25.6 | $ 21 |
Inventories, net | 28.5 | 30.4 |
Prepayments and other current assets | 12 | 10.3 |
Property, plant and equipment, net | 46.8 | 47.7 |
Goodwill | 7.5 | 7.3 |
Other intangible assets, net | 21.7 | 21.1 |
Other assets | 0.4 | 0.5 |
Impairment of carrying value | (72.9) | (71) |
Assets held for sale | 69.6 | 67.3 |
Accounts payable and accrued expenses | 30.5 | 24.6 |
Other liabilities | 7.3 | 4.9 |
Liabilities held for sale | $ 37.8 | $ 29.5 |