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, 2001 Commission file number: 1-12162
---------------------
BorgWarner 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, 2002 was approximately $1.69 billion.
As of June 1, 2002, the registrant had 26,656,688 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. 2001 Annual Report to Stockholders Parts II and IV
BorgWarner Inc. Proxy Statement for the
2002 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 31 through 50
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, 2001 and 2000
is set forth on page 49 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 14.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Financial Statements
March 31, 2002, 2001 and 2000
(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, 2002 and 2001,
and the related consolidated statements of earnings, stockholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended March 31, 2002. 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, 2002 and 2001, and the results of their
operations and their cash flows for each of the years in the three-year period
ended March 31, 2002 in conformity with accounting 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.
Tokyo, Japan
April 24, 2002
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Balance Sheets
March 31, 2002 and 2001
130:
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)
2002 2001 2002
------ -------- -------
Assets
Current assets:
Cash and cash
equivalents (note 13)Y Y 539,401 1,418,216 $4,056
Short-term investments
(notes 3 and 13) 5,717,422 2,905,386 42,988
Receivables (notes
11 and 13):
Trade accounts 9,874,016 10,021,804 74,241
Other 1,074,554 720,852 8,079
--------- ------- ---------
Total receivables 10,948,570 10,742,656 82,320
---------- --------- ---------
Inventories (note 4) 1,728,205 2,197,911 12,994
Prepaid expenses
and other current
assets (note 6) 608,365 856,307 4,573
-------- --------- --------
Total current assets 19,541,963 18,120,476 146,931
---------- ----------- ----------
Marketable investment
securities (notes
5 and 13) 420,353 585,870 3,161
Investment in an
affiliated company(note 6) 529,895 759,417 3,984
Property, plant and equipment, at cost:
Land 4,552,595 4,552,879 34,230
Buildings 11,736,102 11,717,494 88,241
Machinery and equipment 21,284,140 21,029,784 160,031
Vehicles 101,009 99,526 759
Tools, furniture
and fixtures 5,721,616 5,477,757 43,020
Construction in
progress 214,394 56,843 1,612
--------- -------- --------
43,609,856 42,934,283 327,893
Less accumulated
depreciation 27,674,688 26,189,406 208,080
----------- ---------- ---------
Net property,
plant and equipment 15,935,168 16,744,877 119,813
----------- ---------- ---------
Other assets: 872,259 540,525 6,558
--------- -------- ----------
Total other assets 872,259 540,525 6,558
--------- -------- --------
Y 37,299,638 36,751,165 $280,447
========== ========== =========
Liabilities & Stockholders' Equity
Current Liabilities:
Trade payables (notes 11 and 13):
Notes Y 2,754,345 2,969,565 $20,709
Accounts 4,260,317 4,187,145 32,032
----------- --------- ---------
Total trade payables 7,014,662 7,156,710 52,741
----------- --------- ----------
Other payables (notes 11 and 13):
Notes 236,520 638,459 1,778
Accounts 301,851 518,812 2,270
------------ --------- ------------
Total other payables 538,371 1,157,271 4,048
------------ --------- -----------
Income taxes payable 1,602,173 1,474,781 12,046
Accrued expenses (note 13) 1,839,041 1,746,490 13,827
Other current liabilities 41,959 40,625 316
--------- ----------- --------
Total current liabilities 11,036,206 11,575,877 82,978
---------- --------- ----------
Noncurrent liabilities:
Accrued pension and severance
cost (note 8) 465,806 492,711 3,502
Deferred income taxes (note 7) 113,561 186,252 854
------- ------- --------
Total noncurrent liabilities 579,367 678,963 4,356
------- ----------- --------
Total liabilities 11,615,573 12,254,840 87,334
--------- ---------- ---------
Stockholders' equity:
Common stock (note 11)
Authorized 220,000 shares; issued
55,000 shares 550,000 550,000 4,135
Legal reserve (note 9) 137,500 137,500 1,034
Retained earnings 25,055,594 23,999,208 188,388
Accumulated other compre-
hensive income (loss)
(notes 7 and 10) (59,029) (190,383) (444)
----------- --------- --------
Total stockholders' equity 25,684,065 24,496,325 193,113
Commitments and contingent
liability (note 12)
Y 37,299,638 36,751,165 $280,447
========== ========= =========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Earnings
Years ended March 31, 2002, 2001 and 2000
Japanese yen(thousands) U.S. dollars(thousands)(note 2)
2002 2001 2000 2002
----- ----- ---- ------
Sales (note 11)Yen 36,932,969 37,367,662 34,597,079 $277,691
Cost of sales (note 11)28,687,784 28,704,155 26,766,381 215,698
------------- ----------- --------- -------
Gross profit 8,245,185 8,663,507 7,830,698 61,993
------------- ---------- --------- -------
Selling, general and administrative
expenses (note 11)3,121,961 3,193,397 2,953,437 23,473
--------- ---------- --------- -------
Operating profit 5,123,224 5,470,110 4,877,261 38,520
---------- --------- --------- -------
Other income:
Interest income 38,341 50,508 57,272 288
Exchange gains, net 34,521 29,378 4,077 260
Equity in income of an affiliated
company 535,217 238,348 97,210 4,024
Other (note 11) 213,388 210,508 193,195 1,604
------- ------- -------- -----
821,467 528,742 351,754 6,176
------- ------- -------- ------
Other deductions:
Other 337,763 128,946 14,210 2,540
------ -------- ------- ------
337,763 128,946 14,210 2,540
Income before
income taxes 5,606,928 5,869,906 5,214,805 42,156
---------- -------- --------- -------
Income taxes (note 7):
Current 2,551,224 2,600,000 2,250,000 19,182
Deferred (200,682) (158,689) (183,644) (1,509)
--------- --------- -------- --------
2,350,542 2,441,311 2,066,356 17,673
--------- --------- --------- --------
Net Income Yen 3,256,386 3,428,595 3,148,449 $24,483
========= ========== ======== ========
YEN U.S. dollars
(note 2)
Basic Net income per
share (note 1 (l))Y59,207 62,338 57,245 $445
======== ======= ======= ======
Dividends per share Y40,000 100,000 20,000 $301
========== ======== ======== ========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Stockholders' Equity
and Comprehensive Income
Years ended March 31, 2002, 2001 and 2000
Japanese yen (thousands) U.S. dollars(thousands)(note 2)
2002 2001 2000 2002
Common stock: ----- ---- ------- ------
Balance at beginning
of year Yen 550,000 550,000 550,000 $4,135
-------- ------- ------- ------
Balance at end of year 550,000 550,000 550,000 4,135
-------- -------- -------- ------
Legal reserve:
Balance at beginning
of year 137,500 137,500 137,500 1,034
-------- -------- ------- -----
Balance at end of year 137,500 137,500 137,500 1,034
-------- -------- -------- -----
Retained earnings:
Balance at beginn-
ing of year 23,999,208 26,070,613 24,022,164 180,445
Net income 3,256,386 3,428,595 3,148,449 24,483
Cash dividends (2,200,000)(5,500,000)(1,100,000)(16,540)
----------- ---------- ---------- --------
Balance at end of year 25,055,594 23,999,208 26,070,613 188,388
----------- ---------- ---------- ---------
Accumulated other comprehensive income
(loss) (notes 7 and 10):
Balance at beginning
of year (190,383) (136,632) (133,073)(1,431)
Adjustments for the year 131,354 (53,751) (3,559) 987
-------- ----------- -------- -------
Balance at end of year (59,029) (190,383) (136,632) (444)
--------- ---------- -------- --------
Total stockholders' equity Yen 25,684,065 24,496,325 26,621,481 $193,113
========== ========== ========== ========
Disclosure of comprehensive income:
Net income Yen 3,256,386 3,428,595 3,148,449 $24,483
Other comprehensive income (loss),
net of tax (note 10) 131,354 (53,751) (3,559) 987
------- ----------- ---------- --------
Comprehensive income Yen 3,387,740 3,374,844 3,144,890 $25,740
======== ========= ========== =========
See accompanying notes to consolidated financial statements.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Cash Flows
Years ended March 31, 2002, 2001 and 2000
Japanese yen (thousands) U.S. dollars(thousands)(note 2)
2002 2001 2000 2002
Cash flows from
operating activities:
Net income Yen 3,256,386 3,428,595 3,148,449 $24,483
Adjustments to reconcile
net earnings to net cash
provided by operating activities:
Depreciation
and amortization 2,071,312 2,422,927 2,373,900 15,574
Accrual for pension
and severance costs,
less payments (26,905) (135,692) 142,968 (202)
Losses on retirement
of property, plant
and equipment, net 121,072 136,842 69,010 910
Loses on investment 126,230 - - 949
Equity in income
of an affiliated
company (535,217) (238,348) (97,210) (4,024)
Dividend received 263,597 238,348 28,729 1982
Deferred income
taxes (200,682)(158,689)(183,644)(1,509)
Decrease (increase)
in receivables 393,042 (1,493,860) (1,821,253)2,955
Decrease (increase)in
inventories 469,706 (295,671) (143,450) 3,532
Decrease (increase)
in prepaid expenses
and other current assets 351,312 (347,597) (8,595) 2,641
Increase (decrease)
in trade payables (174,237) 1,048,848 1,185,340 (1,310)
Increase (decrease)
in other payables (618,900) (113,786) 577,371 (4,653)
Increase
in accrued expenses 92,391 105,795 6,289 695
Increase in income
taxes payable 126,472 221,437 113,456 951
Increase in other current
liabilities 1,210 7,219 12,598 9
Other, net - (29,337) 0 -
-------- --------- -------- ---------
Total adjustments 2,460,403 1,368,436 2,255,509 18,500
--------- --------- --------- -------
Net cash provided
by operating
activities 5,716,789 4,797,031 5,403,958 42,983
--------- --------- --------- -------
Cash flows from investing activities:
Decrease (increase)
in short-term
investments (2,812,036) 6,199,061 (1,594,431) (21,143)
Dividend received - 67,253 - -
Proceeds from sale
of property, plant
and equipment 5,062 10,064 1,962 38
Payments for pur-
chase of property,
plant and equipment (1,387,737)(4,313,555)(2,474,451)(10,434)
Proceeds from redemption
of investment securities100,000 - - 752
Other, net (331,734) (165,392) (189,443) (2,494)
-------- ------- -------- --------
Net cash provided by (used in)
investing
activities (4,426,445)1,797,431(4,256,363) (33,281)
--------- --------- --------- --------
Cash flows from financing activities:
Dividends paid (2,200,000)(5,500,000) (1,100,000) (16,540)
----------- ---------- --------- ---------
Net cash used in
financing activities (2,200,000) (5,500,000)(1,100,000)(16,540)
------------ ---------- ----------- -------
Effect of exchange rate
changes on cash and
cash equivalents 30,841 14,790 (15,962) 230
--------- ------- ------ -----
Net change in cash and
cash equivalents (878,815) 1,109,252 31,633 (6,608)
-------- ------ --------- -----
Cash and cash equi-
valents at beginning
of year 1,418,216 308,964 277,331 10,664
-------- -------- ------- -------
Cash and cash
equivalents at end
of year Yen 539,401 1,418,216 308,964 $4,056
======= ======= ======= ======
Supplemental information of cash flows:
Cash paid during the year for:
Income taxes 2,424,752 2,378,591 2,136,543 18,231
========= ========= ========= =======
See accompanying notes to consolidated financial statements.
(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 clutches and
related parts, and friction plates and related parts. These products mainly
relate to the automatic mission system of passenger cars.
The Company sells most of its products to NSK Ltd., a parent company of 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, 2002 were distributed as
follows: one-way clutches and related parts - 56%, friction plates and related
parts - 44%.
(b) Principles of Consolidation
NSK-Warner USA Inc., a wholly-owned subsidiary of the Company, was established
in the United Stated of America 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 accounting standards generally
accepted in the United States of America. Such adjustments are summarized in
note 14 of the notes to consolidated 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.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(f) Marketable Investment Securities
Marketable investment securities at March 31, 2002 and 2001 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, and are 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. The
depreciation period ranges from 2 years to 60 years for building, 4 years to 12
years for machinery and equipment, and 2 years to 20 years for vehicles, tools,
furniture and fixtures.
(i) Research and Development
Research and development costs are expensed as incurred. Research and
development costs charged to earnings for the years ended March 31, 2002, 2001
and 2000 amounted to \1,139,130 thousand ($8,565 thousand), \1,150,866 thousand
and \1,094,118 thousand, respectively.
(j) 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.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(k) 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".
(l) Basic Net Income per Share
Basic net income per share has been computed by dividing net income available to
common stockholders by the weighted-average number of common shares outstanding
during each year.
(m) 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 accounting standards generally accepted in the
United States of America. Actual results could differ from those estimates.
(n) 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 (undiscounted and without interest charges)
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.
(o) Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement
including, delivery has occurred, the sales price is fixed or determinable, and
collectibility is probable. These criteria are met due to the
mass-merchandising
products in nature at the time when the product is received by the
customer.
(p) Shipping and Handling Costs
Shipping and handling costs totaled \620,393 thousand ($4,665 thousand),
\592,251 thousand and \591,967 thousand for the years ended March 31, 2002, 2001
and 2000, respectively, and are included in selling, general and administrative
expenses in the consolidated statements of earnings.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(q) New Accounting Standards
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001 as well as all
purchase method business combinations completed after June 30, 2001. SFAS No.
141 also specifies the types of acquired intangible assets that are required to
be recognized and reported separately from goodwill and those acquired
intangible assets that are recognized to be included in goodwill. SFAS No. 142
will require that goodwill no longer be amortized, but instead tested for
impairment at least annually. SFAS No. 142 will also require recognized
intangible assets be amortized over their respective estimated useful lives and
reviewed for impairment in accordance with SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". Any recognized intangible assets
determined to have an indefinite useful life will not be amortized, but instead
tested for impairment in accordance with the Standard until its life is
determined to no longer be indefinite.
The provisions of SFAS No. 141 and 142 shall be applied for fiscal years
beginning after December 15, 2001, to all goodwill and other tangible assets
recognized in an entity's statement of financial position at the beginning of
that fiscal year, regardless of when those previously recognized assets were
initially recognized, with the exception of immediate requirement to use the
purchase method of accounting for all business combinations initiated after June
30, 2001. However, any goodwill and any intangible assets determined to have an
indefinite useful life that is acquired in a business combination completed
after June 30, 2001 will not be amortized and instead reviewed for impairment in
accordance with APB No. 17 or SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", until the date
SFAS No. 142 is applied in its entirety.
SFAS No. 141 will require an entity to evaluate its existing intangible assets
and goodwill and to make any necessary reclassifications in order to conform to
the new separation requirements at the date of adoption. Upon adoption SFAS No.
142, an entity will be required to reassess the useful lives and residual values
of all intangible assets and make any necessary amortization period adjustments.
Because the Company currently has no goodwill arising from business combinations
or other intangible assets, the adoption of SFAS No. 141 and 142 will not have a
material impact on its financial position or results of operation under
US GAAP.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS No. 143 requires the Company to record the fair value of an
asset retirement obligation as a liability in the period in which it incurs a
legal obligation associated with the retirement of tangible long-lived assets
that result from the acquisition, construction, development and / or normal use
of assets. The Company also records a corresponding asset which is depreciated
over the life of the asset. Subsequently to the initial measurement of the
assets retirement obligation, the obligation will be adjusted at the end of each
period to reflect the passage of time and changes in the estimated future cash
flows underlying the obligation. The Company is required to adopt SFAS No. 143
on April 1, 2003. The Company does not believe the adoption of SFAS No. 143
will have a significant impact on its consolidated financial position and
results of operations.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment of
Disposal of Long-Lived Assets", which supersedes both SFAS No. 121, and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions" (Opinion 30), for the disposal of a segment of a business (as
previously defined in that Opinion). SFAS No. 144 retains the fundamental
provisions in SFAS No. 121 for recognizing and measuring impairment losses on
long-lived assets held for use and long-lived assets to be disposed of by sales,
while also resolving significant implementation issue associated with SFAS No.
121. For example, SFAS No. 144 provides guidance on the accounting for
a long-lived asset that will be disposed of other than by sale.
SFAS No. 144 retains
the basic provisions of Opinion 30 on how to present discounted operations in
the statement of income but broadens that presentation to include a component of
an entity (rather than a segment of a business). Unlike SFAS No. 121, an
impairment assessment under SFAS No. 141 will never result in a write-down of
goodwill. Rather, goodwill is evaluated for impairment under SFAS No. 142,
"Goodwill and Other Intangible Assets".
The Company is required to adopt SFAS No. 144 no later than the fiscal year
beginning after December 15, 2001. Management does not expect the adoption of
SFAS No. 144 for long-lived assets held for use to have a material impact on the
Company's consolidated financial statements because the impairment assessment
under SFAS No. 144 is largely unchanged from SFAS No. 121. The provisions of
the Statement for assets held for sale or other disposals generally are required
to be applied prospectively after the adoption date to newly initiated disposal
activities. Therefore, management cannot determine the potential effects that
adoption of SFAS No. 144 will have on the Company's consolidated financial
statements.
(q) Reclassifications
Certain reclassifications of previously reported amounts have been made to
conform with current classifications.
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, 2002, 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 \133 to US $1, the approximate rate of exchange
reported by the Tokyo Foreign Exchange Market on March 31, 2002. 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, 2002 and
2001 consisted of the following:
Japanese yen(thousands) U.S. dollars(thousands)
2002 2001 2002
Time deposits with
a maturity of
more than three months
\417,422 255,429 $ 3,138
Certificates of deposits purchased
under resale agreements - 249,957 -
Mortgage backed securities 5,300,000 2,400,000 39,850
---------- ------- --------
\ 5,717,422 2,905,386 $42,988
============ ========== =========
(4) Inventories
Inventories at March 31, 2002 and 2001 are summarized as follows:
Japanese yen(thousands) U.S. dollars(thousands)
2002 2001 2002
Work in process \ 1,154,323 1,490,212 $ 8,679
Raw materials 280,344 378,203 2,108
Supplies 244,490 262,120 1,838
Goods in transit 49,049 67,376 369
-------------- -------- ----------
\ 1,728,205 2,197,911 $12,994
============ =========== ============
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,
2002 and 2001 were as follows:
Japanese yen (thousands)
Cost Gross
unrealized
holding
gains Gross
unrealized
holding
losses
Fair value
At March 31, 2002:
Available-for-sale:
Equity securities \ 418,094 23,044 20,785 420,353
-------- -------- ------- ---------
418,094 23,044 20,785 420,353
======== ======== ========= =========
At March 31, 2001:
Available-for-sale:
Debt security \ 100,000 - - 100,000
Equity securities 544,325 11,535 69,990 485,870
--------- ------- -------- --------
644,325 11,535 69,990 585,870
========= ========= ======== ==========
U.S. dollars (thousands)
Cost Gross
unrealized
holding
gains Gross
unrealized
holding
losses
Fair value
At March 31, 2002:
Available-for-sale:
Equity securities $ 3,144 173 156 3,161
-------- ----- ---- ------
$ 3,144 173 156 3,161
======== ===== ===== ======
Net realized gains or losses during the years ended March 31, 2002, 2001 and
2000 were nil or insignificant.
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(6)Investment in an Affiliated Company
Investment in an affiliated company consists of 40% of the common stock of
BorgWarner Transmission Systems Korea Inc. (BorgWaner Korea), an automotive and
industrial components manufacturing company.
Summary financial data for BorgWaner Korea, translated using the ending or
periodic rates as of and for the years ended December 31, 2001 follows:
Japanese yen(thousands) U.S. dollars(thousands)
2001 2001
Current assets \ 3,711,737 $ 27,908
Noncurrent assets 1,114,358 8,378
---------- ---------
Total assets 4,826,095 36,286
---------- --------
Current liabilities 1,793,604 13,486
Noncurrent liabilities 199,014 1,496
---------- -------
Total liabilities 1,992,618 14,982
---------- -------
Stockholders' equity 2,833,477 21,304
---------- -------
Sales 6,942,251 52,197
---------- -------
Net income \ 1,170,266 $8,799
=========== ========
(7) 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% for the years
ended March 31, 2002, 2001 and 2000. The Company's subsidiary in the United
States of America was not liable to pay income taxes in the years ended December
31, 2000 and 1999.
The effective income tax rates of the Company for the years ended March 31,
2002, 2001 and 2000 differ from the normal income tax rate for the following
reasons:
2002 2001 2000
Computed normal income tax rate 41.0% 41.0% 41.0%
Other 0.9 0.6 (1.4)
-------- ------- -------
Effective income tax rate 41.9% 41.6% 39.6%
======= ======== =======
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
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) 2002 2001 2002
Prepaid expenses and
other current assets \ 602,788 499,689 $4,532
Noncurrent liabilities (113,561) (186,252) (854)
--------- ------- --------
489,227 313,437 $3,678
========= ======= ========
Change in net deferred income tax assets and liabilities is allocated as
follows:
Japanese yen(thousands) U.S. dollars(thousands)
2002 2001 2000 2002
Earnings \(200,682) (158,689)(183,644) $(1,509)
Stockholders' equity - accumulated other
comprehensive loss:
Foreign currency
translation adjustments - 4,707 3,293 -
Net unrealized gains (losses) on
marketable invest-
ment securities 24,892 (45,941) 45,177 187
--------- ---------- -------- --------
\(175,790) (199,923) (135,174) $(1,322)
=========== ======== ========== =========
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
The tax effects of temporary differences that give rise to significant
portions of the deferred income tax assets and liabilities at March 31, 2002 and
2001 are presented below:
Japanese yen(thousands) U.S. dollars(thousands)
2002 2001 2002
------- ------- ---------
Deferred Income tax assets:
Business tax Yen 153,979 138,986 $ 1,158
Employee bonus 134,376 117,933 1,010
Accrued expenses 256,602 203,773 1,929
Accrued pension and
severance cost 115,102 124,978 865
Allowance for doubtful
receivables 5,633 - 42
Losses for investment 9,927 - 75
Investment in an
affiliated company 14,749 - 111
Marketable investment
securities - 14,546 -
Other 94,069 75,761 708
-------- ------ ---------
Total deferred income
tax assets 784,437 675,977 5,898
------- -------- ---------
Deferred income tax liabilities:
Capital gain deferred in connection with the
acquisition of new property
(see note 11) 272,180 289,168 2,047
Special depreciation 12,684 15,390 95
Losses for investment - 41,827 -
Investment in an
affiliated company - 16,155 -
Marketable investment
securities 10,346 - 78
--------- -------- --------
Total deferred income
tax liabilities 295,210 362,540 2,220
--------- ------- --------
Net deferred income
tax assets Yen 489,227 313,437 $3,678
======== ========= =========
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, 2002
and 2001. 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, 2002.
The Company's income tax returns through March 31, 2001 have been examined by
the Japanese tax authorities.
(8) 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, 2002, 2001 and 2000 consisted of
the following components:
Japanese yen(thousands) U.S. dollars(thousands)
2002 2001 2000 2002
------ ------- --------- ----------
Service cost benefits earned
during the year \182,055 197,864 151,032 $1,369
Interest cost on pro-
jected benefit obligation69,569 89,515 74,617 523
Expected return on plan
assets (45,722) (37,206) (32,988) (344)
Net amortization 26,662 45,384 27,607 201
---------- -------- --------- ------
\ 232,564 295,557 220,268 $1,749
========= ======== ========= ======
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, 2002 and 2001 and related information are as follows:
Japanese yen(thousands) U.S. dollars(thousands)
2002 2001 2002
------ ------ --------
Change in benefit obligations:
Benefit obligations at beginning of year
\ 2,360,662 2,584,659 $17,749
Service cost 182,055 197,864 1,369
Interest cost 69,569 89,515 523
Actuarial loss (gain) 309,881 (459,662) 2,330
Benefits paid (38,201) (51,714) (287)
--------- ---------- ----------
Benefit obligations at
end of year 2,883,966 2,360,662 21,684
Change in plan assets:
Fair value of plan assets at beginning of year
1,119,615 904,555 8,418
Actual return on plan
assets (39,369) (76,550) (296)
Employer contribution 235,926 325,013 1,774
Benefits paid (14,598) (33,403) (110)
---------- --------- --------
Fair value of plan
assets at end of year 1,301,574 1,119,615 9,786
----------- ---------- ---------
Funded status 1,582,392 1,241,047 11,898
Unrecognized actuarial loss(1,014,924) (634,112) (7,631)
Unrecognized prior service cost(97,842) (109,070) (736)
Unrecognized net transition
obligation (3,820) (5,094) (29)
----------- ---------- --------
Net amount recognized as accrued pension and
severance cost recognized in the consolidated
balance sheets \ 465,806 492,771 $ 3,502
========== ========= ========
Actuarial present value of accumulated benefit
obligations at end of year\1,688,559 1,396,217 $12,696
=========== ========== =========
Actuarial assumptions: 2002 2001 2000
Discount rate 2.50% 3.00% 3.50%
Assumed rate of salary increase 4.69% 4.69% 4.69%
Expected long-term rate of
return on plan assets 3.50% 3.50% 4.00%
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(9) Legal Reserve and Cash Dividends
The Japanese Commercial Code provided that at least 10% of any cash payments out
of retained earnings be appropriated as a legal reserve until such reserve
equals 25% of common stock. This reserve was not available for dividends, but
might be used to reduce a deficit or be transferred to stated capital. The
Japanese Commercial Code, amended effective on October 1, 2001, provides that an
amount equal to at least 10% of appropriates paid in cash be appropriated as a
legal reserve until an aggregated amount of additional paid-in capital and the
legal reserve equals 25% of common stock. The amount of total additional
paid-in capital and the legal reserve which exceeds 25% of common stock can be
transferred retained earnings by the resolution of the stockholders, which may
be available for dividends. Presently, the additional paid-in capital is nil,
and the legal reserve is equal to the maximum requirement of 25% of common
stock.
Cash dividends charged to retained earnings during the three years ended March
31, 2002, 2001 and 2000 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 \12,000 ($90) per share
aggregating \660,000 thousand ($4,962 thousand) in respect of the year ended
March 31, 2002.
(10) Other Comprehensive Income (Loss)
Change in accumulated other comprehensive income (loss) is as follows:
Japanese yen
(thousands) U.S. dollars
(thousands)
2002 2001 2002
------- ------- -------
Foreign currency translation adjustments:
Balance at beginning of year Yen(155,895)(168,255) $(1,172)
Adjustments for the year 95,533 12,360 718
Balance at end of year (60,362) (155,895) (454)
Net unrealized gains (losses) on marketable
investment securities:
Balance at beginning of year (34,488) 31,623 (259)
Net change during the year 35,821 (66,111) 269
Balance at end of year 1,333 (34,488) 10
Total accumulated other comprehensive income
(loss):
Balance at beginning of year (190,383) (136,632) (1,431)
Other comprehensive income (loss) for the
year, net of tax 131,354 (53,751) 987
Balance at end of year \ (59,029) (190,383) $(444)
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)
Before-tax
amount Tax (expense)
or benefit
Net-of-tax
amount
2002:
Foreign currency translation adjustments \ 95,533 - 95,533
Net unrealized gains (losses) on marketable
investment securities 60,713 (24,892) 35,821
Other comprehensive income (loss) \156,246 (24,892) 131,354
2001:
Foreign currency translation adjustments \ 17,067 (4,707) 12,360
Net unrealized gains (losses) on marketable
investment securities (112,052) 45,941 (66,111)
Other comprehensive income (loss) \ (94,985) 41,234 (53,751)
2000:
Foreign currency translation adjustments\(65,139) (3,293) (68,432)
Net unrealized gains (losses) on marketable
investment securities 110,050 (45,177) 64,873
Other comprehensive income (loss) \ 44,911 (48,470) (3,559)
U.S. dollars (thousands)
Before-tax
amount Tax (expense)
or benefit
Net-of-tax
amount
2002:
Foreign currency translation adjustments $ 718 - 718
Net unrealized gains (losses) on marketable
investment securities 456 (187) 269
Other comprehensive income (loss) $1,174 (187) 987
1183:
1192:
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(11) Balances and Transactions with Affiliated Companies
The Company is a joint-venture corporation and its capital stock is held in
equal amounts by NSK Overseas Holdings Co., Ltd., a wholly-owned subsidiary of
NSK Ltd., and BorgWarner NW Inc., a wholly-owned subsidiary of BorgWarner Inc.
Balances with the affiliated companies at March 31, 2002 and 2001 were
as follows:
Japanese yen
(thousands) U.S. dollars
(thousands)
NSK Ltd. BorgWarner Inc. NSK Ltd. BorgWarner Inc.
-------- -------------- ------- ---------------
At March 31, 2002:
Trade accounts receivable \9,344,272 132,144 $70,258 994
Other receivable 4,816 252 36 2
Trade accounts payable 925,791 - 6,961 -
Other accounts payable 145,081 - 1,091 -
\8,278,216 132,396 $62,242 996
At March 31, 2001:
Trade accounts receivable \ 9,471,089 289,528
Other receivable 2,116 220,088
Trade accounts payable 1,068,205 -
Other accounts payable 222,285 -
Net receivable \ 8,182,715 509,616
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
During the years ended March 31, 2002, 2001 and 2000, significant transactions
with the affiliated companies were as follows:
Japanese yen
(thousands) U.S. dollars
(thousands)
NSK Ltd.BorgWarner Inc. NSK Ltd. BorgWarner Inc.
2002:
Sales Yen 34,270,950 393,807 $ 257,676 2,961
Cost of sales:
Purchase 6,013,758 45,543 45,216 342
Pension cost 1,606 - 12 -
Selling, general and
administrative expenses:
Rent 3,040 - 23 -
Pension cost 3,467 - 26 -
Purchase of property,
plant and equipment 320,870 41,634 2,413 313
Commission - 19,080 - 143
2001:
Sales Yen 35,027,976 506,056
Cost of sales:
Purchase 6,940,665 4,581
Pension cost 3,130
Selling, general and
administrative expenses:
Rent 2,387 -
Pension cost 4,461 -
Purchase of property,
plant and equipment 235,640
Commission - 62,347
2000:
Sales Yen32,565,998 366,161
Cost of sales:
Purchase 6,720,886 2,448
Pension cost 4,141 -
Selling, general and
administrative expenses:
Rent 2,573 -
Pension cost 1,395 -
Purchase of property,
plant and equipment 83,668 -
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 buildings 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, 2002 and 2001 in the amount of \272,180 thousand ($2,047
thousand) and \289,168thousand, respectively, has been provided in the
accompanying consolidated balance sheets (see note 7).
(12)Commitments and Contingent Liabilities
At March 31, 2002, the Company had commitments for the purchase of property,
plant and equipment of approximately \537,619 thousand ($4,042 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, 2002, 2001 and 2000 under the foregoing
lease agreements amounted to \306,258 thousand ($2,303 thousand), \319,041
thousand and \301,324 thousand, respectively.
The Company had no noncancellable lease commitments at March 31, 2002.
(13) 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).
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidates Financial Statements
(14) Adjustments to Conform with United States Generally Accepted Accounting
Principles
Japanese yen (thousands) 2002 2001 2000
Japanese yen (thousands)
2002 2001 2000
Net Retained Net Retained Net Retained
income earnings at income earnings at income earnings at
for year end of year for year end of year for year end of year
Per legal books Y3,533,069 24,712,949 3,280,913 23,399,520 3,095,898 25,637,552
Adjustments:
Bonus to
officers (11,465) (11,465) (19,640) (19,640) (18,944) (18,944)
Allowance for
doubtful recei-
vables - - (69,000) - 5,000 9,000
Special depre-
ciation (6,599) 30,937 (10,535) 37,536 (9,985) 48,071
Accrued pension
and severance
cost 124,081 524,503 354,592 400,422 (90,429) 45,829
Deferred income
taxes 30,566 (116,467) (115,331) (147,033) 165,320 (31,702)
Losses for
investment (76,901) 25,117 - 102,018 28 102,018
Investment in an
affiliated company(308,072)139,074 (66,648) 447,146 44,994 513,794
Marketable invest-
ment securities - 22,975 22,975 22,975 - -
Accrued expenses(28,293) (272,029) 51,269 (243,736)(43,433) (295,005)
------ --------- ------ ------- ---- ----
(276,683) 342,645 147,683 599,688 52,551 433,061
------- -------- ------ ------- ----- ------
Per accompanying consolidated financial statements
Y3,256,386 25,055,594 3,428,595 23,999,208 3,148,449 26,070,613
========== ========== ========= ========== ========= ===========
U.S. dollars (thousands)
2002
Net Retained
Income earnings at
for year end of year
---------- ------------
Per legal books $26,564 185,812
Adjustments:
Bonus to officers (86) (86)
Special depreciation (50) 233
Accrued pension and 933 3,944
severance cost
Deferred income taxes 230 (876)
Losses for investment (578) 189
Investment in an
affiliated company
Marketable investment (2316) 1045
securities - 173
Accrued expenses (214) (2,046)
----- ------
(2081) 2,576
------ ------
Per accompanying
consolidated
financial statements $24,483 188,388
======== ========
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 31 through 50 of the Company's Annual Report are incorporated herein by
reference:
Independent Auditors' Report
Consolidated Statements of Operations - three years ended December 31,
2001, 2000 and 1999
Consolidated Balance Sheets - December 31, 2001 and 2000
Consolidated Statements of Cash Flows - years ended December 31, 2001,
2000 and 1999
Consolidated Statements of Stockholders' Equity - years ended December
31, 2001, 2000 and 1999
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) None.
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:
-------------------------------------------
George E. Strickler
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: June __, 2002
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.
*3.4 Certificate of Ownership and Merger Merging BorgWarner Inc. into
Borg-Warner Automotive, Inc. (incorporated by reference to Exhibit 99.1 of
the Company's Quarterly Report on Form 10-Q for the ended March 31,
2000.)
*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 Amendment No. 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 July 21, 2000 among BorgWarner Inc., as
Borrower, the Lenders Party Hereto, The Chase Manhattan Bank, as
Administrative Agent, Bank America, N.A., as Syndication Agent and Bank
One, N.A. as Documentation Agent (incorporated by reference to
Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001).
*10.2 First Amendment, dated as of August 3, 2000 to the Credit Agreement,
dated as of July 21, 2000 among BorgWarner Inc., as Borrower, the
Several Lenders From Time to Time Party Thereto, The Chase Manhattan
Bank, as Administrative Agent for the Lenders, Chase
Securities Inc. And
Bank of America Securities LLC, as Co-Arranger, Bank of America, N.A.,
as Syndication Agent and Bank One, N.A. as Documentation Agent
(incorporated by reference to Exhibit 10.2 of the Company's Annual
Report on Form 10-K for the year ended December 31, 2000).
*10.3 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).
*10.4 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).
+*10.5 Borg-Warner Automotive, Inc. Management Stock Option Plan,
as amended
(incorporated by reference to Exhibit No. 10.6 to
Registration Statement
No. 33-64934).
Exhibit
Number Document Description
+*10.6 Borg-Warner Automotive, Inc. 1993 Stock Incentive Plan as amended
effective November 8, 1995 (incorporated by reference to Appendix A of
the Company's Proxy Statement dated March 21, 1997).
*10.7 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).
*10.8 Amended and Restated Receivables Loan Agreement dated as of
December 23,
1998 among BWA Receivables Corporation, as Borrower, Borg-Warner
Automotive, Inc., as Collection Agent, ABN AMRO Bank N.V., as Agent,
the
Banks from time to time party hereto, ABN AMRO Bank N.V., as the
Program
LOC Provider and the Program LOC Provider and Windmill Funding
Corporation.
*10.9 First Amendment dated as of March 25, 1999 to Amended and Restated
Receivables Loan Agreement dated as of December 23, 1998 (incorporated
by reference to Exhibit No. 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1999).
*10.10 Second Amendment dated as of December 22, 1999 to Amended and Restated
Receivables Loan Agreement dated as of December 23, 1998 (incorporated
by reference to Exhibit No. 10.13 to the Company's Annual Report on
Form
10-K for the year ended December 31, 1999).
*10.11 Third Amendment dated as of December 20, 2000 to Amended and Restated
Receivables Loan Agreement dated as of December 23, 1998 (incorporated
by reference to Exhibit No. 10.11 to the Company's
Annual Report on Form
10-K for the year ended December 31, 2000).
*10.12 Fourth Amendment dated as of April 13, 2001 to Amended and Restated
Receivables Loan Agreement dated as of December 23, 1998 (incorporated
by reference to Exhibit No. 10.12 to the Company's Annual Report on
Form
10-K for the year ended December 31, 2001).
*10.13 Fifth Amendment dated as of July 25, 2001 to Amended and Restated
Receivables Loan Agreement dated as of December 23, 1998 (incorporated
by reference to Exhibit No. 10.13 to the Company's Annual Report
on Form
10-K for the year ended December 31, 2001).
*10.14 Sixth Amendment dated as of December 22, 2001 to Amended and Restated
Receivables Loan Agreement dated as of December 23, 1998 (incorporated
by reference to Exhibit No. 10.14 to the Company's Annual Report
on Form
10-K for the year ended December 31, 2001).
+*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).
Exhibit
Number Document Description
+*10.17 BorgWarner Inc. 1993 Stock Incentive Plan, as amended (incorporated by
reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K
for the year ended December 31, 2001).
+*10.18 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).
+*10.19 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).
+*10.20 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).
+*10.21 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).
+*10.22 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).
+*10.23 Addendum to Employment Agreement between BorgWarner Inc. and John F.
Fiedler dated November 8, 2000 (incorporated by reference to
Exhibit 10.19 of the Company's Annual Report on Form 10-K for the year
ended December 31, 2000).
+*10.24 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).
+*10.25 Amendment to the Change of Control Employment Agreement between the
Company and John F. Fiedler dated 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).
*10.26 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)
*10.27 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, 1998).
+*10.28 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).
Exhibit
Number Document Description
*10.29 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).
*10.30 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).
1681: * 10.31 Asset Purchase Agreement dated as of August 2, 1999 among Eaton
Corporation, the Seller Subsidiaries, Borg-Warner Automotive, Inc. and
the Buyer Subsidiaries.
Annual Report to Stockholders for the year ended December 31, 1999 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).
23.1 Independent Auditors' Consent.
23.2 Independent Auditors' Consent.
* Incorporated by reference.
+ Indicates a management contract or compensatory plan or
arrangement required
to be filed pursuant to Item 14(c).