SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999 Commission file number: 1-12162
---------------------
BorgWarner Inc.
(formerly known as Borg-Warner Automotive, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 13-3404508
(State of Incorporation) (IRS Employer Identification No.)
200 South Michigan Avenue
Chicago, Illinois 60604
(312) 322-8500
(Address and telephone number of principal executive offices)
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Common Stock, par value $.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
-----------------------------
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ NO---
The aggregate market value of the voting stock of the registrant held by
stockholders (not including voting stock held by directors and executive
officers of the registrant) on June 1, 2000 was approximately $1.06 billion.
As of June 1, 2000, the registrant had 26,381,833 shares of Common Stock
outstanding.
Indicate by check-mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /x/
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated herein by reference
into the Part of the Form 10-K indicated.
DOCUMENT PART OF FORM 10-K INTO WHICH INCORPORATED
BorgWarner Inc. 1999 Annual Report to Stockholders Parts II and IV
BorgWarner Inc. Proxy Statement for the
2000 Annual Meeting of Stockholders Part III
PART II
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements (including the notes thereto) of the
Company and the Independent Auditors' Report as set forth on pages 25 through 43
in the Company's Annual Report are incorporated herein by reference and made a
part of this report. Supplementary financial information regarding quarterly
results of operations (unaudited) for the years ended December 31, 1999 and 1998
is set forth in Note 11 of the Notes to Consolidated Financial Statements on
page 42 of the Company's Annual Report. For a list of financial statements
filed as part of this report, see Item 14, "Exhibits, Financial Statement
Schedules, and Reports on Form 8-K" on page 13.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Financial Statements
March 31, 2000, 1999 and 1998
(With Independent Auditors' Report Thereon)
Independent Auditors' Report
The Board of Directors and Stockholders
NSK-Warner Kabushiki Kaisha:
We have audited the accompanying consolidated balance sheets (expressed in yen)
of NSK-Warner Kabushiki Kaisha and a subsidiary as of March 31, 2000 and 1999,
and the related consolidated statements of earnings, stockholders equity, and
cash flows for each of the years in the three-year period ended March 31, 2000.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of NSK-Warner Kabushiki
Kaisha and a subsidiary as of March 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the three-year period
ended March 31, 2000 in conformity with auditing standards generally accepted in
the United States of America.
The accompanying consolidated financial statements have been translated into
United States dollars solely for the convenience of the reader. We have
recomputed the translation and, in our opinion, the consolidated financial
statements expressed in yen have been translated into United States dollars on
the basis set forth in note 2 of the notes to consolidated financial statements.
KPMG
Tokyo, Japan
April 28, 2000
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Balance Sheets
March 31, 2000 and 1999
Japanese yen U.S. dollars Japanese yen U.S. dollars
(thousands)(thousands)(note 2) (thousands) (thousands)(note 2)
Japanese yen U.S. dollars
-------------- --------------
(thousands) (thousands)(note 2)
2000 1999 2000
------ -------- -------
Assets
Current assets:
Cash and cash
equivalents (note 12)Y Y308,964 277,331 $2,909
Short-term investments
(notes 3 and 12) 9,104,448 7,510,017 85,729
Receivables (notes
10 and 12):
Trade accounts 8,290,782 6,941,942 78,068
Other 943,121 480,927 8,880
--------- ------- ---------
Total receivables 9,233,903 7,422,869 86,948
---------- --------- ---------
Inventories (note 4) 1,901,917 1,759,243 17,909
Prepaid expenses
and other current
assets (note 6) 403,615 322,379 3,801
-------- --------- --------
Total current assets 20,952,847 17,291,839 197,296
---------- ----------- ----------
Marketable investment
securities (notes
5 and 12) 674,949 564,899 6,355
Investment in an
affiliated company 833,077 829,293 7,844
Property, plant and equipment, at cost:
Land 1,538,771 1,474,665 14,489
Buildings 11,581,814 11,534,526 109,057
Machinery and equipment 20,397,820 19,060,269 192,070
Vehicles 102,660 102,387 967
Tools, furniture
and fixtures 5,072,950 4,791,107 47,768
Construction in
progress 884,833 746,066 8,331
--------- -------- --------
39,578,848 37,709,020 372,682
Less accumulated
depreciation 24,716,843 22,968,089 232,738
----------- ---------- ---------
Net property,
plant and equipment 14,862,005 14,740,931 139,944
----------- ---------- ---------
Other assets:
Patent, less accumu-
lated amortization 5,120 3,125 48
Other 488,576 384,154 4,601
--------- -------- ----------
Total other assets 493,696 387,154 4,649
--------- -------- --------
Y 37,816,576 33,814,116 $356,088
========== ========== =========
Current Liabilities:
Trade payables (notes 10 and 12):
Notes Y 1,952,572 1,617,758 $18,386
Accounts 4,134,675 3,301,976 38,933
----------- --------- ---------
Total trade payables 6,087,247 4,919,734 57,319
----------- --------- ----------
Other payables (notes 10 and 12):
Notes 632,085 405,880 5,952
Accounts 638,972 278,806 6,017
------------ --------- ------------
Total other payables 1,271,057 693,686 11,969
------------ --------- -----------
Income taxes payable 1,253,344 1,139,888 11,801
Accrued expenses (note 12) 1,640,462 1,634,434 15,447
Other current liabilities 33,406 20,821 314
--------- ----------- --------
Total current liabilities 10,285,516 8,408,563 96,850
---------- --------- ----------
Noncurrent liabilities:
Accrued pension and severance
cost (note 7) 628,403 485,435 5,917
Deferred income taxes (note 6) 281,174 343,527 2,648
------- ------- --------
Total noncurrent liabilities 909,577 828,962 8,565
------- ----------- --------
Total liabilities 11,195,093 9,237,525 105,415
--------- ---------- ---------
Stockholders' equity:
Common stock of Y10,000 par value (note 10)
Authorized 220,000 shares; issued
55,000 shares 550,000 550,000 5,179
Legal reserve (note 8) 137,500 137,500 1,295
Retained earnings 26,070,613 24,022,164 245,486
Accumulated other compre-
hensive income (loss)
(notes 6 and 9) (136,632) (133,073) (1,287)
----------- --------- --------
Total stockholders' equity 26,621,481 24,022,164 245,486
Commitments and contingent
liability (note 11)
Y 37,816,574 33,814,116 $356,088
========== ========= =========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Earnings
Years ended March 31, 2000, 1999 and 1998
Japanese yen(thousands) U.S. dollars(thousands)(note 2)
2000 1999 1998 2000
----- ----- ---- ------
Sales (note 10)Yen 34,597,079 30,028,699 32,332,267 $325,773
Cost of sales (note 10)26,766,381 23,334,312 24,415,185 252,038
------------- ----------- --------- -------
Gross profit 7,830,698 6,694,387 7,917,082 73,735
------------- ---------- --------- -------
Selling, general and administrative
expenses (note 10)2,884,427 2,813,665 2,875,594 27,160
--------- ---------- --------- -------
Operating profit 4,946,271 3,880,722 5,041,488 46,575
---------- --------- --------- -------
Other income:
Interest income 57,272 82,924 59,277 539
Exchange gains, net 4,077 25,765 3,777 38
Equity in income of an affiliated
company 97,210 18,184 157,486 915
Other 193,195 87,510 161,574 1,820
------- ------- -------- -----
351,754 214,383 382,114 3,312
------- ------- -------- ------
Other deductions:
Interest expenses - 371 6,543 -
Losses on retirement of property,
plant and equip-
ment, net 69,010 47,605 46,534 650
Other 14,210 191,150 16,377 134
------ -------- ------- ------
83,220 238,792 79,454 784
------- -------- ------ ----
Earnings before
income taxes 5,214,805 3,856,313 5,344,148 49,103
---------- -------- --------- -------
Income taxes (note 6):
Current 2,250,000 1,994,700 2,605,400 21,186
Deferred (183,644) (287,287) 107,443 (1,729)
--------- --------- -------- --------
2,066,356 1,707,413 2,712,843 19,457
--------- --------- --------- --------
Net earnings Yen 3,148,449 2,148,900 2,631,305 $29,646
========= ========== ======== ========
U.S. dollars Yen (note 2)
Net income per
share (note 1 (m))\57,245 39,071 47,842 $539
======== ======= ======= ======
Dividends per share \60,000 20,000 20,000 $565
========== ======== ======== ========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Stockholders' Equity
Years ended March 31, 2000, 1999 and 1998
Japanese yen (thousands) U.S. dollars(thousands)(note 2)
2000 1999 1998 2000
Common stock: ----- ---- ------- ------
Balance at beginning
of year Yen 550,000 550,000 550,000 $5,179
-------- ------- ------- ------
Balance at end of year 550,000 550,000 550,000 5,179
-------- -------- -------- ------
Legal reserve:
Balance at beginning
of year 137,500 137,500 137,500 1,295
-------- -------- ------- -----
Balance at end of year 137,500 137,500 137,500 1,295
-------- -------- -------- -----
Retained earnings:
Balance at beginn-
ing of year 24,022,164 22,973,264 21,441,959 226,198
Net earnings 3,148,449 2,148,900 2,631,305 29,646
Cash dividends (1,100,000)(1,100,000)(1,100,000)(10,358)
----------- ---------- ---------- --------
Balance at end of year 26,070,613 24,022,164 22,973,264 245,486
----------- ---------- ---------- ---------
Accumulated other comprehensive income
(loss) (notes 6 and 9):
Balance at beginning
of year (133,073) (110,172) 51,925 (1,254)
Adjustments for the year (3,559) (22,901) (162,097) (33)
-------- ----------- ---------- --------
Balance at end of year (136,632) (133,073) (110,172) (1,287)
--------- ---------- -------- ---------
Total stockholders' equity Yen 26,621,481 24,576,591 23,550,592 $250,673
=========== ========== ========== ========
Disclosure of comprehensive income:
Net earnings Yen 3,148,449 2,148,900 2,631,305 $29,646
Other comprehensive income (loss),
net of tax (note 9) (3,559) (22,901) (162,097) (33)
-------- ----------- ---------- --------
Comprehensive income Yen 3,144,890 2,125,999 2,469,208 $29,613
========= =========== ========== =========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Cash Flows
Years ended March 31, 2000, 1999 and 1998
Japanese yen (thousands) U.S.
dollars(thousands)(note 2)
2000 1999 1998 2000
Cash flows from
operating activities:
Net earnings Yen 3,148,449 2,148,900 2,631,305 $29,646
Adjustments to reconcile
net earnings to net cash
provided by operating activities:
Depreciation
and amortization 2,373,900 2,340,937 2,053,227 22,353
Losses on retirement
of property, plant
and equipment, net 69,010 47,605 46,534 650
Equity in income
of an affiliated
company (97,210) (18,184) (90,408) (915)
Deferred income
taxes (183,644) (287,287) 40,365 (1,729)
Decrease (increase)
in receivables (1,821,253)(147,581)397,114 (17,149)
Increase in
inventories (143,450) (199,404) (192,585) (1,351)
Decrease (increase)
in prepaid expenses
and other current
assets (8,595) 35,415 (32,115) (81)
Increase (decrease)
in trade payables 1,185,340 (181,063) (50,286) 11,161
Increase (decrease)
in other payables 577,371 (221,485) 433,812 5,437
Increase (decrease)
in accrued expenses 6,289 162,383 (9,139) 59
Increase (decrease)
in income taxes
payable 113,456 (82,301) (701,296) 1,068
Increase (decrease)
in other current
liabilities 12,598 4,245 (11,571) 119
Other, net 142,968 60,990 46,408 1,346
-------- --------- -------- ---------
Total adjustments 2,226,780 1,514,270 1,930,060 20,968
--------- --------- --------- -------
Net cash provided
by operating
activities 5,375,229 3,663,170 4,561,365 50,614
--------- --------- --------- -------
Cash flows from investing activities:
Decrease (increase)
in short-term
investments (1,594,431) 965,296 (933,329) (15,013)
Proceeds from sale
of property, plant
and equipment 1,962 43,745 22,336 18
Payments for pur-
chase of property,
plant and equipment(2,474,451)(2,923,493)(2,217,810)(23,300)
Payment for purchase of
investment in an
affiliated company - (463,899) - -
Increase in all
other assets (191,745) (126,308) (55,235) (1,806)
Other, net 31,031 (20,872) (48,571) 293
-------- ----------- ---------- ---------
Net cash used in
investing
activities (4,227,634)(2,525,531)(3,232,609)(39,808)
----------- ---------- --------- --------
Cash flows from financing activities:
Decrease in short-term
bank loans - - (910,000) -
Dividends paid (1,100,000)(1,100,000)(1,100,000)(10,358)
----------- ---------- --------- ---------
Net cash used in
financing activities(1,100,000)(1,100,000)(2,010,000) (10,358)
------------ ---------- ----------- -------
Effect of exchange rate
changes on cash and
cash equivalents (15,962) (4,415) (1,025) (150)
--------- ------- ------ -------
Net change in cash and
cash equivalents 31,633 33,224 (682,269) 298
-------- ------ --------- -----
Cash and cash equi-
valents at beginning
of year 277,331 244,107 926,376 2,611
-------- -------- ------- -------
Cash and cash
equivalents at end
of year Yen 308,964 277,331 244,107 $2,909
======= ======= ======= ======
Supplemental information of cash flows:
Cash paid during the year for:
Interest Yen - 37 15,340 $ -
Income taxes 2,136,543 2,077,001 3,306,696 20,118
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
March 31, 2000, 1999 and 1998
(1) Summary of Significant Accounting Policies
(a) Description of Business
NSK-Warner Kabushiki Kaisha (the "Company") operates a plant in
Fukuroi City in Shizuoka Prefecture in Japan engaged in the production of
one-way clutch and related parts, and friction plates and related parts.
These products relate to the automatic mission system of passenger cars.
The Company sells most of its products to NSK Ltd., a 50% stockholder
of the Company. The products are eventually sold to the automotive
industry.
The Company's sales for the year ended March 31, 2000 were distributed
as follows: one-way clutch and related parts - 55%, friction plates and
related parts - 45%.
(b) Principles of Consolidation
NSK-Warner USA Inc., a wholly-owned subsidiary of the Company, was
established in the United Stated in January 1997.
The consolidated financial statements include financial statements of
the Company and the subsidiary. All significant intercompany balances and
transactions have been eliminated in consolidation.
(c) Basis of Presentation of Financial Statements
The Company maintains its books of account in conformity with
financial accounting standards of Japan. However, the accompanying
consolidated financial statements have been prepared in a manner and
reflect the adjustments which management believes are necessary to conform
with auditing standards generally accepted in the United States of
America. Such adjustments are summarized in note 13 of the notes to con-
solidated financial statements.
(d) Cash Equivalents
For purposes of the consolidated statements of cash flows, the Company
considers all deposits with an original maturity of three months or less to
be cash equivalents.
(e) Inventories
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method for raw materials and the
average method for work in process and supplies.
2
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(f) Marketable Investment Securities
Marketable investment securities at March 31, 2000 and 1999 consist of
debt and equity securities that have readily determinable fair values and
are classified as "available-for-sale".
The Company's available-for-sale securities are reported at fair value
with unrealized gains or losses net of deferred income taxes reported as a
separate component of accumulated other comprehensive income (loss)
included in stockholders' equity.
A decline in the market value of any available-for-sale securities
below cost that is deemed other than temporary results is charged to
earnings resulting in the establishment of a new cost basis for the
security.
Realized gains and losses for securities classified as available-for-
sale securities are included in earnings and are derived using the average
method for determining the cost of securities sold.
(g) Investment in an Affiliated Company
Investment in the common stock of an affiliated company is accounted
for by the equity method.
(h) Depreciation
Depreciation of property, plant and equipment is computed principally
by the declining-balance method over the estimated useful lives of assets.
(i) Amortization
Patent purchased from Borg-Warner Automotive K.K. is amortized on a
straight-line basis over a period of eight years.
(j) Research and Development
Research and development costs are expensed as incurred. Research and
development costs charged to earnings for the years ended March 31, 2000,
1999 and 1998 amounted to Yen 1,094,118 thousand ($10,302 thousand), Yen
1,218,158 thousand and Yen 1,236,354 thousand, respectively.
(k) Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes". Under the asset and liability method of SFAS No. 109, deferred
income tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards.
Deferred income tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under SFAS
No. 109, the effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in earnings in the period that includes
the enactment date.
3
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(l) Retirement and Severance Benefits
The Company accounts for its defined benefit pension plans and
retirement plans in accordance with Statement of Financial Accounting
Standards No. 87, "Employers' Accounting for Pensions".
(m) Net Earnings per Share
Net earnings per share has been computed by dividing net earnings
available to common stockholders by the weighted-average number of common
shares outstanding during each year.
(n) Use of Estimates
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these
consolidated financial statements in conformity with auditing standards
generally accepted in the United States of America. Actual results could
differ from those estimates.
(o) Long-Lived Assets and Long-Lived Assets to Be Disposed Of
The Company's long-lived assets and certain identifiable intangibles
are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value
less costs to sell.
(p) New Accounting Standards
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and for
hedging activities, and requires that an entity recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
instruments at fair value. SFAS No. 133, as amended, is effective for
fiscal years beginning after June 15, 2000. The Company will adopt SFAS
No. 133 for the year beginning April 1, 2001 and is currently assessing the
impact of adopting SFAS No. 133. However, based on its quite limited use
of derivative financial instruments, management does not anticipate that
the adoption of SFAS No. 133 will have a material effect on the Company's
consolidated financial position or results of operations.
4
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(2) Financial Statement Translation
The accompanying consolidated financial statements are expressed in
Japanese yen as of and for the year ended March 31, 2000, the currency of
the country in which the Company operates. The translation of Japanese yen
amounts into United States dollar amounts is included solely for the
convenience of the reader and has been made at the rate of Yen 106.2 to US
$1, the approximate rate of exchange reported by the Tokyo Foreign Exchange
Market on March 31, 2000. Such translation should not be construed as a
representation that the amounts shown could be converted into United States
dollars at the above rate.
(3) Short-term Investments
Short-term investments, at cost, which approximate market, at March 31,
2000 and 1999 consisted of the following:
Japanese yen(thousands)U.S. dollars(thousands)
2000 1999 2000
Time deposits with a
maturity of more than
three months Yen 106,768 - $1,005
Certificates of deposit purchased
under resale agreements 8,997,680 7,510,017 84,724
---------- --------- ------
Yen 9,104,448 7,510,017 $85,729
(4) Inventories ========== ======== =======
Inventories at March 31, 2000 and 1999 are summarized as follows:
Japanese yen(thousands) U.S. dollars(thousands)
2000 1999 2000
Work in process 1,296,839 1,166,246 $12,211
Raw materials 270,914 325,995 2,551
Supplies 237,387 188,322 2,236
Goods in transit 96,777 78,680 911
-------- --------- ------
Yen 1,901,917 1,759,243 $17,909
========= ========= =======
5
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(5) Marketable Investment Securities
The cost, gross unrealized holding gains, gross unrealized holding losses
and fair value for available-for-sale securities by major security type at March
31, 2000 and 1999 were as follows:
Japanese yen (thousands)
Gross Gross
unrealized unrealized
holding holding
Cost gains losses Fair value
At March 31, 2000:
Available-for-sale:
Debt security yen 100,000 - - 100,000
Equity securities 521,352 96,832 43,235 574,949
-------- -------- --------- --------
621,352 96,832 43,235 674,949
======= ======== ========= =======
At March 31, 1999:
Available-for-sale:
Debt security yen 100,000 - - 100,000
Equity securities 521,352 26,433 82,886 464,899
--------- ------- ------ --------
621,352 26,433 82,886 564,899
========= ======= ======= ========
U.S. dollars (thousands)
Gross Gross
unrealized unrealized
holding holding
Cost gains losses Fair value
At March 31, 2000:
Available-for-sale:
Debt security $ 942 - - 942
Equity securities 4,909 911 407 5,413
-------- ---- ------ -------
$5,851 911 407 6,355
======== ===== ===== ========
The debt security at March 31, 2000 is due in 2001.
Net realized gains or losses during the years ended March 31, 2000, 1999 and
1998 were insignificant.
6
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(6) Income Taxes
The Company is subject to a number of taxes based on income, which in the
aggregate result in a normal income tax rate of approximately 41%, 47% and 51%
for the years ended March 31, 2000, 1999 and 1998. The Company's subsidiary in
the United States was not liable to pay income taxes in the years ended December
31, 1999 and 1998.
Amendments to Japanese tax regulations were enacted into law on March 31,
1998. As a result of these amendments, the normal income tax rate was reduced
from approximately 51% to 47% effective from April 1, 1998. Current income
taxes were calculated at the tax rate of 51% in effect for the year ended March
31, 1998. Deferred income taxes at March 31, 1998 were measured at the rate of
47%. The effect of the income tax rate reduction on deferred income tax
balances at March 31, 1998 was insignificant.
Amendments to Japanese tax regulations were also enacted into law on March
24, 1999. As a result of these amendments, the normal income tax rate was also
reduced from approximately 47% to 41% effective from April 1, 1999. Current
income taxes were calculated at the tax rate of 47% in effect for the year ended
March 31, 1999. Deferred income taxes at March 31, 1999 were measured at the
rate of 41%. The effect of the income tax rate reduction on deferred income tax
balances at March 31, 1999 was insignificant.
The effective income tax rates of the Company for the years ended March 31,
2000, 1999 and 1998 differ from the normal income tax rate for the following
reasons:
2000 1999 1998
Computed normal income tax rate 41.0% 47.0% 51.0%
Other (1.4) (2.7) (0.2)
------ --------- ------
Effective income tax rate 39.6% 44.3% 50.8%
====== ========= =======
Net deferred income tax assets and liabilities are reflected on the accompanying
consolidated balance sheets under the following captions:
Japanese yen(thousands) U.S. dollars(thousands)
2000 1999 2000
Prepaid expenses and
other current assets yen394,688 321,867 $3,717
Noncurrent liabilities (281,174) (343,527)(2,648)
--------- --------- -----
113,514 (21,660) $1,069
======== ========= =======
7
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
Change in net deferred income tax assets and liabilities is allocated as
follows:
Japanese yen(thousands) U.S. dollars(thousands)
2000 1999 1998 2000
Earnings (183,644)(287,287)107,443 $(1,729)
Stockholders' equity - accumulated other
comprehensive income (loss):
Foreign currency
translation adjustments 3,293 56,596 (67,078) 31
Net unrealized gains (losses) on
marketable investment
securities 45,177 11,968 (86,731) 425
--------- ------ -------- ----------
(135,174) (218,723)(46,366) $(1,273)
========= ======== ========= ======
The tax effects of temporary differences that give rise to significant portions
of the deferred income tax assets and liabilities at March 31, 2000 and 1999 are
presented below:
Japanese yen(thousands) U.S. dollars(thousands)
2000 1999 2000
Deferred income tax assets:
Business tax Yen 116,670 101,981 $ 1,099
Employee bonus 76,661 41,693 722
Accrued expenses 203,781 204,496 1,919
Accrued pension and
severance cost 142,285 105,396 1,340
Marketable invest-
ment securities - 23,203 -
Other 32,337 - 304
------- -------- --------
Total deferred
income tax assets 571,734 476,769 5,384
-------- ------- --------
Deferred income tax liabilities:
Allowance for doubt-
ful receivables 28,113 26,304 265
Capital gain deferred in connection
with the acquisition of new
property (see note 10)307,266 327,346 2,893
Special depreciation 19,709 23,861 186
Losses for investment 57,458 41,918 541
Investment in an
affiliated company 23,699 79,000 223
Marketable investment
securities 21,975 - 207
------- -------- ---------
Total deferred income
tax liabilities 458,220 498,429 4,315
------- -------- --------
Net deferred income tax
assets (liabilities)Yen 113,514(21,660) $1,069
========== ======= ======
8
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
There was no valuation allowance on deferred income tax assets at March 31,
2000 and 1999. In assessing the realizability of deferred income tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred income tax assets will not be realized. The ultimate
realization of deferred income tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred
income tax liabilities and projected future taxable income in making this
assessment. Based upon the level of historical taxable income and projections
for future taxable income over the periods which the deferred income tax assets
are deductible, management believes it is more likely than not the Company will
realize the benefits of these deductible differences at March 31, 2000.
The Company's income tax returns through March 31, 1999 have been examined
by the Japanese tax authorities.
(7) Retirement and Severance Benefits
Employees of the Company are covered by the following defined pension and
severance benefit plans.
The Company has an unfunded lump-sum payment retirement plan covering
substantially all employees. Under the plan, employees are entitled to lump-sum
payments based on current rate of pay, length of service and certain other
factors upon retirement or termination of employment for reasons other than
dismissal for cause. The Company also has a funded pension plan covering
substantially all employees who meet age and service plan requirements. Net
periodic benefit costs of the plans were calculated using the unit credit
actuarial cost method.
Directors and statutory auditors are covered by a separate plan. It was
not the policy of the Company to fund the retirement and severance benefits
described above.
Net periodic benefit costs for the Company's retirement and severance
defined benefits plans for the years ended March 31, 2000, 1999 and 1998 are Yen
220,268 thousand ($2,074 thousand), Yen 177,227 thousand and Yen 173,433
thousand, respectively.
9
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
Benefit obligations, fair value of plan assets, funded status of the plans
as of March 31, 2000 and 1999 and related information are as follows:
Japanese yen(thousands) U.S. dollars(thousands)
2000 1999 2000
Benefit obligations
at end of year 2,584,659 1,893,040 $24,337
Fair value of plan
assets at end of
year 904,555 758,224 8,517
--------- -------- --------
Funded status 1,680,104 1,134,816 $15,820
========= ========= =========
Accrued pension and
severance cost recognized
in the consolidated
balance sheets 628,403 485,435 $5,917
Actuarial present ========= ========== =========
value of accumulated
benefit obligations
at end of year yen 1,532,958 1,243,659 $14,435
========= ========= =========
Employer contributionyen 116,684 111,817 $1,099
========== ========= ==========
Benefits paid yen 43,433 71,149 $ 409
======== ========= =========
Actuarial assumptions:
Discount rate 3.50% 4.00%
Assumed rate of salary
increase 4.69% 4.16%
Expected long-term rate
of return on plan assets 4.00% 4.50%
(8)Legal Reserve and Cash Dividends
The Japanese Commercial Code provides that at least 10% of any cash
payments out of retained earnings be appropriated as a legal reserve until such
reserve equals 25% of stated capital. This reserve is not available for
dividends, but may be used to reduce a deficit or be transferred to stated
capital. Presently, the legal reserve is equal to the maximum requirement of
25% of stated capital.
Cash dividends charged to retained earnings during the three years ended
March 31, 2000, 1999 and 1998 represent dividends paid out during those years.
The accompanying consolidated financial statements do not include any provision
for a dividend to be proposed by the Board of Directors of Yen60,000 ($565) per
share aggregating yen 3,300,000 thousand ($31,073 thousand) in respect of the
year ended March 31, 2000.
10
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(9) Other Comprehensive Income (Loss)
Change in accumulated other comprehensive income (loss) is as follows:
Japanese yen(thousands) U.S. dollars(thousands)
2000 1999 2000
Foreign currency translation adjustments:
Balance at beginning
of year - (99,823) (69,869) $(941)
Adjustments for
the year (68,432) (29,954) (644)
--------- --------- -------
Balance at end
of year (168,255) (99,823) (1,585)
--------- ------- --------
Net unrealized gains (losses) on marketable
investment securities:
Balance at begin-
ning of year (33,250) (40,303) (313)
Increase in net
unrealized gains on
marketable investment
securities 64,873 7,053 611
-------- ------ ------
Balance at end
of year 31,623 (33,250) 298
--------- -------- ---------
Total accumulated other comprehensive income
(loss):
Balance at beginning
of year (133,073) (110,172) (1,254)
Other comprehensive
income (loss) for the
year, net of tax (3,559) (22,901) (33)
------- --------- ---------
Balance at end of year yen (136,632)(133,073) $(1,287)
======== ========= =========
11
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
Tax effects allocated to each component of other comprehensive income (loss) are
as follows:
Japanese yen (thousands)
Tax
Before-tax (expense) Net-of-tax
amount or benefit amount
2000:
Foreign currency trans-
lation adjustments yen (65,139) (3,293) (68,432)
Net unrealized gains
(losses) on marketable
investment securities 110,050 (45,177) 64,873
--------- ---------- -------
Other comprehensive
income (loss) yen 44,911 (48,470) (3,559)
========= ========= ========
1999:
Foreign currency
translation adjustments yen 26,642 (56,596) (29,954)
Net unrealized gains
(losses) on marketable
investment securities 19,021 (11,968) 7,053
------ -------- --------
Other comprehensive
income (loss) yen 45,663 (68,564) (22,901)
======= ======= ========
1998:
Foreign currency trans-
lation adjustments yen (139,334) 67,078 (72,256)
Net unrealized gains
(losses) on marketable
investment securities (176,572) 86,731 (89,841)
--------- -------- ---------
Other comprehensive
income (loss) yen (315,906) 153,809 (162,097)
========== ======= ==========
U.S. dollars (thousands)
Tax
Before-tax (expense) Net-of-tax
amount or benefit amount
2000:
Foreign currency trans-
lation adjustments $ (613) (31) (644)
Net unrealized gains (losses)
on marketable
investment securities 1,036 (425) 611
------- ---- -----
Other comprehensive
income (loss) $ 423 (456) (33)
====== ======= ======
12
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(10) Balances and Transactions with Affiliated Companies
The Company is a joint-venture corporation and its capital stock is
held in equal amounts by NSK Ltd. and BorgWarner NW Inc., a wholly-owned
subsidiary of BorgWarner Inc.
Balances with the affiliated companies at March 31, 2000 and 1999 were
as follows:
Japanese yen U.S. dollars
(thousands) (thousands)
NSK Ltd. BorgWarner Inc. NSK Ltd. BorgWarner Inc.
At March 31, 2000:
Trade accounts
receivable yen7,813,337 181,752 $ 73,572 1,711
Other receivable - 470,068 - 4,427
--------- -------- -------- ------
Trade accounts
payable 986,112 - 9,286 -
Other accounts
payable 359,112 - 3,381 -
--------- --------- ---------- --------
Net receivable yen6,468,113 651,820 $ 60,905 6,138
========== ======== ========== ========
At March 31, 1999:
Trade accounts
receivable yen6,791,890 18,259
---------- -------
Trade accounts
payable 849,238 -
Other notes payable 26,374 -
-------- ---------
Net receivable yen5,916,278 18,259
============ =======
13
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
During the years ended March 31, 2000, 1999 and 1998, significant
transactions with the affiliated companies were as follows:
Japanese yen(thousands) U.S. dollars(thousands)
NSK Ltd. BorgWarner Inc. NSK Ltd. BorgWarner Inc.
2000:
Sales 32,565,998 366,161 $ 306,648 3,448
Cost of sales:
Purchase 6,720,886 2,448 63,285 23
Pension cost 4,141 - 39 -
Selling, general and
administrative expenses:
Rent 2,573 - 24 -
Pension cost 1,395 - 13 -
Purchase of property,
plant and equipment 83,668 - 788 -
1999:
Sales 29,299,019 76,778
Cost of sales:
Purchase 5,522,641 119,207
Pension cost 4,060 -
Selling, general and
administrative expenses:
Rent 1,612 -
Pension cost 1,375 -
Purchase of property,
plant and equipment 44,778 113,584
Sale of property, plant
and equipment 7,714 -
1998:
Sales - 31,965,228 63,851
Cost of sales:
Purchase 6,136,526 2,977
Pension cost 3,391 -
Selling, general and administrative expenses:
Rent 1,821 -
Pension cost 1,446 -
Purchase of property,
plant and equipment 58,000 -
14
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
On June 30, 1988, the Company sold land and a part of factory build-
ings of the Fujisawa plant to NSK Ltd. in connection with the relocation of its
manufacturing facilities to the new factory in Shizuoka Prefecture. The capital
gain resulting therefrom was recognized as income for the year ended March 31,
1989. However, as permitted under the Special Taxation Measures Law, capital
gain has been deferred for tax purposes as reserve for replacement of property
as an appropriation of retained earnings. The related deferred income tax
liability at March 31, 2000 and 1999 in the amount of Yen 307,266 thousand
($2,893 thousand) and Yen 327,346 thousand, respectively, has been provided in
the accompanying consolidated balance sheets (see note 6).
(11) Commitments and Contingent Liabilities
At March 31, 2000, the Company had commitments for the purchase of
property, plant and equipment of approximately Yen 2,844,503 thousand ($26,784
thousand). This amount includes a commitment for a purchase of land for new
factories of Yen 2,305,909 thousand ($22,700 thousand).
The Company utilizes certain facilities, including warehouses and
employee dormitories, under cancellable lease agreements with third parties.
Rent expenses for the years ended March 31, 2000, 1999 and 1998 under the
foregoing lease agreements amounted to Yen 301,324 thousand ($2,837 thousand),
Yen 281,764 thousand and Yen 254,959 thousand, respectively.
The Company had no noncancellable lease commitments at March 31, 2000.
(12) Disclosure About the Fair Value of Financial Instruments
Cash and cash equivalents, Short-term investments, Receivables, Trade payables,
Other payables and Accrued expenses:
The carrying amounts approximate fair values because of the short maturity of
these instruments.
Marketable investment securities:
The fair values of the Company's investments in securities are based on market
related prices (see note 5).
15
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidates Financial Statements
(13) Adjustments to Conform with United States Generally Accepted Accounting
Principles
Japanese yen (thousands)
2000 1999 1998
Net Retained Net Retained Net Retained
earnings earnings at earnings earnings at earnings earnings at
for year end of year for year end of year for year end of year
Per
legal
books -3,095,898 25,637,552 2,046,306 23,101,202 2,802,555 22,172,536
Adjustments:
Bonus to
officers (18,944)(18,944)(18,008) (18,008) (17,640) (17,640)
Allowance for doubtful
receivables 5,000 69,000 (44,000) 64,000 (3,000) 108,000
Special
depreciation(9,985) 48,071 (15,402) 58,056 (16,363) 73,458
Accrued pension
and severance
cost (90,429) 45,829 (72,703) 136,258 (72,812) 208,961
Deferred
income
taxes 165,320 (31,702) 222,587 361,438 (132,843) 138,851
Losses for
investment 28 102,018 269 101,990 77,058 101,721
Investment in an
affiliated
company 44,994 513,794 18,184 468,800 157,486 450,616
Accrued
expenses (43,433)(295,005) 11,667 (251,572) (163,136) (263,239)
-------- -------- ------- --------- ---------- ----------
52,551 433,061 102,594 920,962 (171,250) 800,728
---------- -------- ------- ---------- --------- ----------
Per accompanying consolidated financial statements
Yen 3,148,449 26,070,613 2,148,900 24,022,164 2,631,305 22,973,264
========= ========== ========== =========== ========== ==========
U.S. dollars (thousands)
-----------------------
2000
Net Retained
earnings earnings at
for year end of year
Per legal books $ 29,152 241,408
Adjustments:
Bonus to officers (178) (178)
Allowance for doubt-
ful receivables 47 650
Special depreciation (94) 453
Accrued pension and
severance cost (851) 432
Deferred income taxes 1,556 (299)
Losses for investment 0 961
Investment in an
affiliated company 424 4,838
Accrued expenses (410) (2,779)
------ -------
494 4,078
------- -------
Per accompanying
consolidated financial
statements $ 29,646 245,486
========= =========
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. The following consolidated financial statements of the Company on
pages 25 through 43 of the Company's Annual Report are incorporated herein by
reference:
Independent Auditors' Report
Consolidated Statements of Operations - three years ended December 31,
1999, 1998 and 1997
Consolidated Balance Sheets - December 31, 1999 and 1998
Consolidated Statements of Cash Flows - years ended December 31, 1999,
1998 and 1997
Consolidated Statements of Stockholders' Equity - years ended December
31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
Financial Statements of NSK-Warner Kabushiki Kaisha (including the
notes thereto)
2. Certain schedules for which provisions are made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.
3. The exhibits filed in response to Item 601 of Regulation S-K are
listed in the Exhibit Index on page A-1.
(b) Reports on Form 8-K.
(1) On October 6, 1999, the Company filed a report on Form 8-K announ-
cing that it had completed the public offering of $150,000,000 aggregate
principal amount of its 8% Senior Notes due 2019.
(2) On October 15, 1999, the Company filed a report on Form 8-K
announcing that it had completed the previously announced acquisition of the
Fluid Power Division of Eaton Corporation.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BORGWARNER INC.
By: /s/ Lawrence B. Skatoff
-------------------------------------------
LAWRENCE B.SKATOFF
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
Date: June 28, 2000
EXHIBIT INDEX
Exhibit
Number Document Description
- --------- -----------------------
*3.1 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1 of the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1993).
*3.2 By-laws of the Company (incorporated by reference to Exhibit No. 3.2
of the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1993).
*3.3 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.3
of the Company's Annual Report on Form 10-K for the year ended December 31,
1999.)
*4.1 Indenture, dated as of November 1, 1996, between Borg-Warner
Automotive, Inc. and The First National Bank of Chicago (incorporated
by reference to Exhibit No. 4.1 to Registration Statement
No. 333-14717).
*4.2 Indenture, dated as of February 15, 1999, between Borg-Warner
Automotive, Inc. and The First National Bank of Chicago (incorporated by
reference to Exhibit No. 4.1 to Registration Statement No. 333-66879).
*4.3 Rights Agreement, dated as of July 22, 1998, between Borg-Warner
Automotive, Inc. And ChaseMellon Shareholder Services, L.L.C. (incorporated by
reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed on July
24, 1998).
*10.1 Credit Agreement dated as of December 7, 1994 among Borg-Warner
Automotive, Inc., as Borrower, the Lenders listed therein, as Lenders,
Chemical Bank and the Bank of Nova Scotia, as Co-Arrangers, Chemical
Bank, as Administrative Agent and The Bank of Nova Scotia as
Documentation Agent (incorporated by reference to Exhibit No. 10.1 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1994).
*10.2 First Amendment of Credit Agreement dated as of December 15, 1995
(incorporated by reference to Exhibit 10.2 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1995).
*10.3 Second Amendment of Credit Agreement dated as of January 16, 1996
(incorporated by reference to Exhibit 10.3 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1996).
*10.4 Replacement and Restatement Agreement dated as of October 10, 1996 to
the Credit Agreement dated as of December 7, 1994 (incorporated by reference to
Exhibit 10.1 on Form 10-Q for the quarter ended September 30, 1996).
*10.5 Amendment to Credit Agreement dated as of February 2, 1999 to the
Credit Agreement dated as of December 7, 1994 (incorporated by reference to
Exhibit 10.5 of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998.)
*10.6 Distribution and Indemnity Agreement dated January 27, 1993 between
Borg-Warner Automotive, Inc. and Borg-Warner Security Corporation (incorporated
by reference to Exhibit No. 10.2 to Registration Statement No. 33-64934).
*10.7 Tax Sharing Agreement dated January 27, 1993 between Borg-Warner
Automotive, Inc. and Borg-Warner Security Corporation (incorporated by
reference to Exhibit No. 10.3 to Registration Statement No. 33-64934).
Exhibit
Number Document Description
- ------ ---------------------
+*10.8 Borg-Warner Automotive, Inc. Management Stock Option Plan, as
amended (incorporated by reference to Exhibit No. 10.6 to Registration State-
ment No. 33-64934).
+*10.9 Borg-Warner Automotive, Inc. 1993 Stock Incentive Plan as amended
effective November 8, 1995 and further amended April 29, 1997(incorporated by
reference to Appendix A of the Company's Proxy Statement dated March 21, 1997).
*10.10 Receivables Transfer Agreement dated as of January 28, 1994 among
BWA Receivables Corporation, ABN AMRO Bank N.V. as Agent and the Program LOC
Provider and Windmill Funding Corporation (incorporated by reference to Exhibit
No. 10.12 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
*10.11 Amended and Restated Receivables Loan Agreement dated as of Decem-
ber 23, 1998 among BWA Receivables Corporation, as Borrower, Borg-Warner Auto-
motive, Inc., as Collection Agent, ABN AMRO Bank N.V., as the Program LOC Pro-
vider and the Program LOC Provider and Windmill Funding Corporation (incorpo-
rated by reference to Exhibit No. 10.11 of the Company's Annual Report on Form
10-K for the year ended December 31, 1998.)
*10.12 First Amendment of Receivables Transfer Agreement dated as of
December 21, 1994 (incorporated by reference to Exhibit No. 10.11 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994).
*10.13 Second Amendment of Receivables Transfer Agreement dated as of January
1, 1995 (incorporated by reference to Exhibit No. 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995).
*10.14 Service Agreement, dated as of December 31, 1992, by and between
org-Warner Security Corporation and Borg-Warner Automotive, Inc.(incorporated by
reference to Exhibit No. 10.10 to Registration Statement No. 33-64934).
+*10.15 Borg-Warner Automotive, Inc. Transitional Income Guidelines for
Executive Officers amended as of May 1, 1989 (incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
+*10.16 Borg-Warner Automotive, Inc. Management Incentive Bonus Plan dated
January 1, 1994 (incorporated by reference to Exhibit No. 10.18 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993).
+*10.17 Borg-Warner Automotive, Inc. Retirement Savings Excess Benefit Plan
dated January 27, 1993 (incorporated by reference to Exhibit No. 10.20 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1993).
+*10.18 Borg-Warner Automotive, Inc. Retirement Savings Plan dated January 27,
1993 as further amended and restated effective as of April 1, 1994 (incorporated
by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995).
+*10.19 Borg-Warner Automotive, Inc. Deferred Compensation Plan dated January
1, 1994 (incorporated by reference to Exhibit No. 10.24 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1993).
+*10.20 Form of Employment Agreement for John F. Fiedler (incorporated by
reference to Exhibit No. 10.0 of the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1994.)
Exhibit
Number Document Description
- ------ ---------------------
*10.21 Amended Form of Employment Agreement for John F. Fiedler dated January
27, 1998 (incorporated by reference to Exhibit 10.21 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1997).
+*10.22 Form of Change of Control Employment Agreement for Executive Officers
(incorporated by reference to Exhibit No. 10.1 to the Company's Quarterly Report
on Form 10-Q for the Quarter ended September 30, 1997).
+10.23 Amendment to the Change of Control Employment Agreement between the
Company and John F. Fiedler effective January 30, 1998 (incorporated by
reference to Exhibit 10.23 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1997).
*10.24 Assignment of Trademarks and License Agreement (incorporated by
reference to Exhibit No. 10.0 of the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994).
*10.25 Amendment to Assignment of Trademarks and License Agreement
(incorporated by reference to Exhibit No. 10.23 of the Company's Form 10-K for
the year ended December 31, 1995).
+*10.26 Borg-Warner Automotive, Inc. Executive Stock Performance Plan
(incorporated by reference to Exhibit No. 10.23 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1995).
*10.27 Agreement of Purchase and Sale dated as of May 31, 1996 by and among
Coltec Industries Inc., Holley Automotive Group, Ltd., Holley Automotive Inc.,
Coltec Automotive Inc., and Holley Automotive Systems GmbH and Borg-Warner
Automotive, Inc., Borg-Warner Automotive Air/Fluid Systems Corporation and
Borg-Warner Automotive Air/Fluid Systems Corporation of Michigan (incorporated
by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated
as of June 17, 1996).
*10.28 Agreement and Plan of Merger dated as of December 17, 1998 by and
between Borg-Warner Automotive, Inc., BWA Merger Corp. and Kuhlman Corporation
(incorporated by reference to Exhibit 2 of the Company's Current Report on Form
8-K dated as of December 21, 1998).
*10.29 Asset Purchase Agreement dated as of August 2,1999 among Eaton
Corporation, the Seller Subsidiaries,Borg-Warner Automotive, Inc. and the Buyer
Subsidiaries (incorporated by reference to Exhibit 10.29 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1999).
+*10.30 Employment Agreement for Lawrence B. Skatoff (incorporated by
reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000.)
*13.1 Annual Report to Stockholders for the year ended December 31,
1997 with manually signed Independent Auditors' Report. (The Annual Report,
except for those portions which are expressly incorporated by reference in the
Form 10-K, is furnished for the information of the Commission and is not
deemed filed as part of the Form 10-K).
21.1 Subsidiaries of the Company.
23.1 Independent Auditors' Consent.
23.2 Independent Auditors' Consent.
27.1 Financial Data Schedule.
99.1 Cautionary Statements.
* Incorporated by reference.
+ Indicates a management contract or compensatory plan or arrangement required
to be filed pursuant to Item 14(c).