-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FOeLRD3It2swPHbeOQndSc0wEDcwTAV/zsxayQKfTDxRZF+yjGGJ9oMynUb1Jbme R1RLhnPL09PKnb8EGPL9bw== 0000908255-96-000012.txt : 19960701 0000908255-96-000012.hdr.sgml : 19960701 ACCESSION NUMBER: 0000908255-96-000012 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BORG WARNER AUTOMOTIVE INC CENTRAL INDEX KEY: 0000908255 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 133404508 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 033-64934 FILM NUMBER: 96587971 BUSINESS ADDRESS: STREET 1: 200 S MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60604 BUSINESS PHONE: 3123228500 MAIL ADDRESS: STREET 2: 200 SOUTH MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60604 10-K/A 1 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, 1995 Commission file number: 1-12162 --------------------- 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 much 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 and affiliates of Merrill Lynch & Co., Inc., (the exclusion of such stock shall not be deemed an admission by the registrant that such person is an affiliate of the registrant)) on March 15, 1996 was approximately $456 million. As of March 15, 1996, the registrant had 23,402,987 shares of Common Stock and 122,644 shares of Non-Voting 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. 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 Borg-Warner Automotive, Inc. 1995 Annual Report to Stockholders Parts II and IV Borg-Warner Automotive, Inc. Proxy Statement for the 1996 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 18 through 31 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, 1995 and 1994 is set forth in Note 11 of the Notes to Consolidated Financial Statements on page 29 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. [KPMG PEAT MARWICK LETTERHEAD] Independent Auditors' Report The Board of Directors and Stockholders NSK-Warner Kabushiki Kaisha: We have audited the accompanying balance sheets of NSK-Warner Kabushiki Kaisha as of March 31, 1996 and 1995 and the related statements of earnings, stockholders' equity, and cash flows for each of the years in the three-year period ended March 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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 financial statements referred to above present fairly, in all material respects, the financial position of NSK-Warner Kabushiki Kaisha as of March 31, 1996 and 1995, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 1996 in conformity with United States generally accepted accounting principles. As discussed in notes 1(e) and 5, the Company changed its method of accounting for investments to adopt the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", as of April 1, 1994. The accompanying 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 financial statements expressed in yen have been translated into United States dollars on the basis set forth in note 1(m) of the notes to financial statements. KPMG Peat Marwick Tokyo, Japan April 26, 1996 A-40 NSK-WARNER KABUSHIKI KAISHA Balance Sheets MARCH 31, 1996 and 1995
Japanese Yen U.S. Dollars (Thousands) (Thousands)(Note 1(m)) ----------- ---------------------- Assets 1996 1995 1996 ------ ---- ---- ---- Current assets: Cash and cash equivalents (note 12) Yen 965,613 1,114,496 $ 9,110 Short-term investments (notes 3 and 12) 5,933,083 4,744,138 55,972 Receivables (notes 10 and 12): Trade notes - 8,248 - Trade accounts 8,340,307 7,535,298 78,682 Other 15,029 32,598 142 ----------- ---------- -------- Total receivables 8,355,336 7,576,144 78,824 ----------- ---------- -------- Inventories (note 4) 1,153,064 1,172,561 10,878 Prepaid expenses and other current assets (note 7) 316,596 376,374 2,987 ----------- ---------- -------- Total current assets 16,723,692 14,983,713 157,771 ----------- ---------- -------- Marketable investment securities (notes 5 and 12) 974,223 777,643 9,191 Investment in affiliated company 140,162 34,284 1,322 Property, plant and equipment, at cost (notes 2 and 6): Land 1,502,803 1,502,803 14,177 Buildings 11,398,395 11,377,193 107,532 Machinery and equipment 15,751,813 14,911,063 148,602 Vehicles 91,046 89,970 859 Tools, furniture and fixtures 3,697,670 3,762,259 34,884 Construction in progress - 6,140 - ----------- ---------- -------- 32,441,727 31,649,428 306,054 Less accumulated depreciation 17,658,821 16,067,550 166,593 ----------- ---------- -------- Net property, plant and equipment 14,782,906 15,581,878 139,461 ----------- ---------- -------- Other assets: Goodwill, less accumulated amortization - 27,000 - Patent, less accumulated amortization 21,875 28,125 206 Other 317,285 244,530 2,994 ----------- ---------- -------- Total other assets 339,160 299,655 3,200 ----------- ---------- -------- Yen 32,960,143 31,677,173 $310,945 =========== ========== ========
Japanese Yen U.S. Dollars (Thousands) (Thousands)(Note 1(m)) ----------- ---------------------- Liabilities And Stockholders' Equity 1996 1995 1996 ------------------------------------ ---- ---- ---- Current liabilities: Short-term bank loans (notes 6 and 12) Yen 910,000 1,910,000 $ 8,585 Current installments of long-term debt (notes 2, 6 and 12) 1,523,298 334,740 14,371 Trade payables (notes 10 and 12): Notes 2,372,279 1,914,563 22,380 Accounts 2,975,462 2,819,035 28,070 ----------- ---------- -------- Total trade payables 5,347,741 4,733,598 50,450 Other payables (notes 10 and 12): Notes 392,719 389,646 3,705 Accounts 184,378 167,860 1,739 ----------- ---------- -------- Total other payables 577,097 557,506 5,444 ----------- ---------- -------- Income taxes payable (note 7) 1,711,259 2,300,667 16,144 Accrued expenses (notes 10 and 12) 1,493,689 1,234,902 14,091 Other current liabilities 35,787 18,244 338 ----------- ---------- -------- Total current liabilities 11,598,871 11,089,657 109,423 ----------- ---------- -------- Noncurrent liabilities: Long-term debt, excluding current installments (notes 2, 6 and 12) - 1,519,584 - Accrued pension and severance cost (note 8) 443,712 339,163 4,186 Deferred income taxes (note 7) 742,617 644,834 7,006 ----------- ---------- -------- Total noncurrent liabilities 1,186,329 2,503,581 11,192 ----------- ---------- -------- Total liabilities 12,785,200 13,593,238 120,615 ----------- ---------- -------- Stockholders' equity: Common stock of Y10,000 par value (Note 10) Authorized 220,000 shares; issued 55,000 shares 550,000 550,000 5,189 Legal reserve (note 9) 137,500 137,500 1,297 Retained earnings 19,300,304 17,311,984 182,078 Net unrealized gain on debt and marketable equity securities (note 5) 199,029 103,495 1,878 Minimum pension liability adjustment (11,890) (19,044) (112) ----------- ---------- -------- Total stockholders' equity 20,174,943 18,083,935 190,330 ----------- ---------- -------- Commitments and contingent liability (note 11) Yen 32,960,143 31,677,173 $310,945 =========== ========== ========
See accompanying notes to financial statements. A-41 NSK-WARNER KABUSHIKI KAISHA Statements of Earnings Years ended March 31, 1996, 1995 and 1994
U.S. dollars Japanese Yen (thousands) (thousands) (note 1(m)) 1996 1995 1994 1996 ---- ---- ---- ---- Sales (note 10) Yen 31,957,956 32,445,381 30,314,742 $301,490 Cost of sales (note 10) 23,193,526 22,957,205 22,669,176 218,807 ---------- ---------- ---------- -------- Gross profit 8,764,430 9,488,176 7,645,566 82,683 Selling, general and administrative expenses (note 10) 2,577,761 2,416,565 2,264,135 24,318 ---------- ---------- ---------- -------- Operating income 6,186,669 7,071,611 5,381,431 58,365 ---------- ---------- ---------- -------- Other income: Interest income 54,873 93,898 72,053 518 Exchange gain, net - 9,940 9,474 - Equity in income of affiliate 105,879 34,284 - 999 Other 125,933 60,093 92,114 1,186 ---------- ---------- ---------- -------- 286,685 198,215 173,641 2,703 ---------- ---------- ---------- -------- Other deductions: Interest expense 123,203 190,255 294,693 1,162 Loss on retirement of property, plant and equipment, net 87,389 79,934 140,896 824 Exchange loss, net 7,242 - - 68 Other 6,882 12,276 86,304 65 ---------- ---------- ---------- -------- 224,716 282,465 521,893 2,119 ---------- ---------- ---------- -------- Earnings before income taxes 6,248,638 6,987,361 5,033,179 58,949 ---------- ---------- ---------- -------- Income taxes (note 7): Current 3,117,500 3,470,000 2,361,900 29,410 Deferred 42,818 57,384 152,313 404 ---------- ---------- ---------- -------- 3,160,318 3,527,384 2,514,213 29,814 ---------- ---------- ---------- -------- Net earnings Yen 3,088,320 3,459,977 2,518,966 $ 29,135 ========== ========== ========== ========
See accompanying notes to financial statements. A-42 NSK-WARNER KABUSHIKI KAISHA Statements of Stockholders' Equity Years ended March 31, 1996, 1995 and 1994
U.S. dollars Japanese Yen (thousands) (thousands) (note 1(m)) ------------------------------------------ - ------------ 1996 1995 1994 1996 ----------- ----------- ---------- - ------------ Common stock: Balance at beginning of year Yen 550,000 550,000 550,000 $ 5,189 ---------- ---------- ---------- - --------- Balance at end of year 550,000 550,000 550,000 5,189 ---------- ---------- ---------- - --------- Legal reserve: (note 9) Balance at beginning of year 137,500 137,500 137,500 1,297 ---------- ---------- ---------- - --------- Balance at end of year 137,500 137,500 137,500 1,297 ---------- ---------- ---------- - --------- Retained earnings: Balance at beginning of year 17,311,984 14,704,507 12,735,541 163,321 Net earnings 3,088,320 3,459,977 2,518,966 29,135 Cash dividends (1,100,000) (852,500) (550,000) (10,377) ---------- ---------- ---------- - --------- Balance at end of year 19,300,304 17,311,984 14,704,507 182,078 ---------- ---------- ---------- - --------- Net unrealized gain on debt and marketable equity securities (note 5) Balance at beginning of year 103,495 - - 976 Implementation of change in accounting for debt and marketable equity securities, net of tax - 154,662 - - - Change in unrealized gain, net of tax 95,534 (51,167) - 902 ---------- ---------- ---------- - --------- Balance at end of year 199,029 103,495 - 1,878 ---------- ---------- ---------- - --------- Minimum pension liability adjustment (11,890) (19,044) - (112) ---------- ---------- ---------- - --------- Total stockholders' equity Yen 20,174,943 18,083,935 15,392,007 $ 190,330 ========== ========== ========== =========
See accompanying notes to financial statements. A-43 NSK-WARNER KABUSHIKI KAISHA Statements of Cash Flows Years ended March 31, 1996, 1995 and 1994
U.S. dollars Japanese Yen (thousands) (thousands) (note 1(m)) - ----------------------------------------- ------------ 1996 1995 1994 1996 ---- ---- ---- ---- Cash flows from operating activities: Net earnings Yen 3,088,320 3,459,977 2,518,966 $ 29,135 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 2,138,726 2,347,074 2,445,905 20,177 Loss on retirement of property, plant and equipment, net 88,035 79,934 140,896 831 Equity in income of affiliate (105,878) (34,284) - - (999) Deferred income taxes 42,818 57,384 152,313 404 Decrease (increase) in receivables (779,192) (3,005,229) 74,971 (7,351) Decrease in inventories 19,497 143,049 212,005 184 Decrease in prepaid expenses and other current assets 7,863 2,160 14,484 74 Increase (decrease) in trade payables 614,143 575,323 (223,454) 5,793 Increase (decrease) in other payables 19,591 (261,641) 204,537 185 Increase (decrease) in accrued expenses 258,787 (254,361) (160,486) 2,441 Increase (decrease) in income taxes (589,408) 885,156 (284,933) (5,560) Increase (decrease) in other current liabilities 17,543 2,355 (1,833) 166 Other, net 61,839 (34,466) (148,403) 583 ---------- ---------- - ---------- --------- Total adjustments 1,794,364 502,454 2,426,002 16,928 ---------- ---------- - ---------- --------- Net cash provided by operating activities 4,882,684 3,962,431 4,944,968 46,063 ---------- ---------- - ---------- --------- Cash flows from investing activities: Increase in short-term investments (1,188,945) (1,973,793) (1,390,450) (11,216) Proceeds from sale of property, plant and equipment 1,232 2,887 720 12 Payments for purchase of property, plant and equipment (1,386,084) (1,372,298) (1,917,087) (13,076) Increase in all other investments (21,623) (16,295) (16,557) (204) Other, net (1,407) -- - -- (14) ---------- ---------- - ---------- --------- Net cash used in investing activities (2,596,827) (3,359,499) (3,323,374) (24,498) ---------- ---------- - ---------- --------- Cash flows from financing activities: Increase (decrease) in short-term bank loans (1,000,000) 900,000 (968,000) (9,434) Decrease in long-term debt (334,740) (752,970) (433,999) (3,158) Dividends paid (1,100,000) (852,500) (550,000) (10,377) ---------- ---------- - ---------- --------- Net cash used in financing activities (2,434,740) (705,470) (1,951,999) (22,969) ---------- ---------- - ---------- --------- Net decrease in cash and cash equivalents (148,883) (102,538) (330,405) (1,404) ---------- ---------- - ---------- --------- Cash and cash equivalents at beginning of year 1,114,496 1,217,034 1,547,439 10,514 ---------- ---------- - ---------- --------- Cash and cash equivalents at end of year Yen 965,613 1,114,496 1,217,034 $ 9,110 ========== ========== ========== ========= Supplemental information of cash flows: Cash paid during the year for: Interest Yen 118,498 195,172 284,863 $ 1,118 Income taxes 3,706,909 2,584,844 2,646,833 34,971 ========== ========== ========== =========
See accompanying notes to financial statements. A-44 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements March 31, 1996, 1995 and 1994 (1) Summary of Significant Accounting Policies (a) Description of Business 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 Nihon Seiko Kabusiki Kaisha, 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, 1996 were distributed as follows: one-way clutch and related parts - 58%, friction plates and related parts - 42%. (b) Basis of Presentation of Financial Statements The Company maintains its books of account in conformity with financial accounting standards of Japan. However, the accompanying financial statements have been prepared in a manner and reflect those adjustments which management believes are necessary to conform with generally accepted accounting principles in the United States. Such adjustments are summarized in note 13. (c) Cash Equivalents For purposes of the Statements of Cash Flows, the Company considers all time deposits with a maturity of three months or less to be cash equivalents. (d) Inventories Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method for parts and raw materials and the average method for work in process and supplies. (Continued) A-45 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements March 31, 1996, 1995 and 1994 (e) Marketable Investment Securities Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities", was issued in May 1993. This Statement addresses the accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. The Company initially applied this Statement as of April 1, 1994. Under SFAS No. 115, debt securities that are classified as "held to maturity securities" are reported at amortized cost. Debt and equity securities classified as "trading securities" are reported at fair value, with unrealized gains and losses included in earnings. Other debt and equity securities are classified as "available-for-sale securities" and are reported at fair value, with unrealized gains or losses net of deferred taxes reported as a separate component of stockholders' equity. All of the Company's marketable investment securities are classified as "available-for-sale." As a result of adopting SFAS No. 115, the carrying values of investments increased by Yen 315,637 thousand, deferred tax liabilities increased by Yen 160,975 thousand and stockholders' equity increased by Yen 154,662 thousand, all at April 1, 1994. Prior to April 1, 1994, marketable equity securities were carried at lower of cost or market, and other investments were carried at cost. 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 are included in earnings and are derived using the average method for determining the cost of securities sold. Marketable investment securities at March 31, 1994 include equity securities and convertible bonds stated at the lower of cost or market value. (f) Investment in Affiliated Company Investment in the common stock of an affiliated company is accounted for by the equity method. (g) Depreciation Depreciation of property, plant and equipment is computed by the declining-balance method over the estimated useful lives of assets. (h) Amortization Goodwill and patent purchased from Borg-Warner Automotive K.K. are amortized on a straight-line basis over a period of five years and eight years, respectively. (i) Research and Development Research and development costs are expensed as incurred. (Continued) A-46 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements Research and development costs charged to earnings for the years ended March 31, 1996, 1995 and 1994 amounted to Yen 1,215,177 thousand ($11,464 thousand), Yen 1,144,668 thousand and Yen 1,093,137 thousand, respectively. (j) Income Taxes Effective April 1, 1993, the Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". Under the asset and liability method of SFAS No. 109, deferred 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 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 tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. (k) Retirement and Severance Benefits The Company accounts for its defined benefit pension plans and retirement plans in accordance with the Statement of Financial Accounting Standards (SFAS) No. 87, "Employers' Accounting for Pensions". (l) 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 financial statements in conformity with United States generally accepted accounting principles. Actual results could differ from those estimates. (m) U.S. Dollar Amounts The accompanying financial statements are expressed in Japanese yen as of and for the year ended March 31, 1996, the currency of the country in which the Company operates. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers and has been made at the rate of Yen 106 to US $1, the approximate rate of exchange reported by the Tokyo Foreign Exchange Market on March 31, 1996. Such translation should not be construed as a representation that the amounts shown could be converted into U.S. dollars at the above rate. (2) Assets Pledged At March 31, 1996, land and buildings amounting to Yen 5,106,333 thousand ($48,173 thousand) at net book value were pledged as security for long-term debt. (Continued) A-47 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements (3) Short-term Investments Short-term investments, at cost, which approximates market, at March 31, 1996 and 1995 consisted of the following:
Japanese yen U.S. dollars (thousands) (thousands) -------------------------- ------------ 1996 1995 1996 ---------- ---------- ------------ Time deposits with a maturity of more than three months Yen 196,500 326,000 $ 1,854 Certificates of deposit purchased under resale agreements 5,701,342 4,382,897 53,786 Government bonds and other 35,241 35,241 332 --------- --------- -------- Yen 5,933,083 4,744,138 $ 55,972 ========= ========= ========
(4) Inventories Inventories at March 31, 1996 and 1995 are summarized as follows:
Japanese yen U.S. dollars (thousands) (thousands) -------------------------- ------------ 1996 1995 1996 ---------- ---------- ------------ Work in process Yen 934,372 917,016 $ 8,815 Raw materials 123,077 131,461 1,161 Parts - 2,999 - Supplies 58,143 76,129 549 Goods in transit 37,472 44,956 353 --------- --------- -------- Yen 1,153,064 1,172,561 $ 10,878 ========= ========= ========
(Continued) A-48 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements (5) Marketable Investment Securities The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value for available-for-sale securities by major security type at March 31, 1996 and 1995, were as follows:
Japanese yen (thousands) ------------------------------------------ Gross Gross Unrealized Unrealized Holding Holding Cost Gains Losses Fair Value -------- ---------- ---------- ---------- At March 31, 1996 Available-for-sale: Debt security Yen 100,000 37,000 - 137,000 Equity securities 468,000 369,181 - 837,223 ------- ------- -------- ------- Yen 568,042 406,181 - 974,223 ======= ======= ======== ======= U.S. dollars (thousands) ------------------------------------------ Gross Gross Unrealized Unrealized Holding Holding Cost Gains Losses Fair Value -------- ---------- ---------- ---------- At March 31, 1996 Available-for-sale: Debt security $ 943 349 - 1,292 Equity securities 4,416 3,483 - 7,899 ------- ------- -------- ------- $ 5,359 3,832 - 9,191 ======= ======= ======== ======= Japanese yen (thousands) ------------------------------------------ Gross Gross Unrealized Unrealized Holding Holding Cost Gains Losses Fair Value -------- ---------- ---------- ---------- At March 31, 1995 Available-for-sale: Debt securities Yen 104,794 21,706 - 126,500 Equity securities 461,635 198,601 (9,093) 651,143 ------- ------- -------- ------- Yen 566,429 220,307 (9,093) 777,643 ======= ======= ======== =======
The debt security at March 31, 1996 is due in 2001. Net realized gains during the years 1996, 1995 and 1994 were insignificant. (Continued) A-49 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements (6) Short-term bank loan and Long-term Debt The weighted average interest rates on short-term bank loans outstanding at March 31, 1996 and 1995 were 1.63% and 3.01%, respectively. Long-term debt at March 31, 1996 and 1995 is summarized as follows:
Japanese yen U.S. dollars (thousands) (thousands) -------------------------- ------------ 1996 1995 1996 ---------- ---------- ------------ Mortgage debentures: 1st series, due June 1996, interest 5.3% Yen 700,000 700,000 $ 6,604 2nd series, due July 1996, interest 5.3% 600,000 600,000 5,660 --------- --------- -------- 1,300,000 1,300,000 12,264 Less unamortized discount on bond 762 4,476 7 --------- --------- -------- Net mortgage debentures 1,299,238 1,295,524 12,257 --------- --------- -------- Loans from banks and an insurance company, secured by mortgage on land and buildings, due 1996, interest from 2.1% to 3.6% 224,060 558,800 2,114 --------- --------- -------- 1,523,298 1,854,324 14,371 Less current installments 1,523,298 334,740 14,371 --------- --------- -------- Yen - 1,519,584 $ - ========= ========= ========
The long-term debt agreements provide, among other things, that, if requested, the Company submit to the lenders for approval the proposed appropriation of earnings (including dividends) before such appropriation can be submitted to the stockholders. The aggregate annual maturities of principal amounts of long-term debt, including unamortized discount on bond, after March 31, 1996 are as follows:
Japanese yen U.S. dollars Year ending March 31 (thousands) (thousands) -------------------- ------------ ------------ 1997 Yen 1,524,060 $ 14,378 --------- --------- Yen 1,524,060 $ 14,378 ========= =========
As is customary in Japan, security may have to be given if requested by a lending bank and such bank has the right to offset cash deposited with it against any debt or obligation that becomes due and, in the case of default or certain other specified events, against all debts payable to the bank. (Continued) A-50 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements (7) Income Taxes As discussed in note 1(i), effective April 1, 1993, the Company adopted SFAS No. 109. The effect of adopting this new accounting pronouncement was not material. The Company is subject to a number of taxes based on income, which in the aggregate result in a normal tax rate of approximately 51%. The effective tax rates of the Company for the years ended March 31, 1996, 1995 and 1994 differ from the normal income tax rate for the following reasons:
1996 1995 1994 ---- ---- ---- Computed normal income tax rate 51.0% 51.0% 51.0% Special corporate tax - - 0.8 Other (0.4) (0.5) (1.8) ---- ---- ---- Effective income tax rate 50.6% 50.5% 50.0% ==== ==== ====
Net deferred income tax assets and liabilities are reflected on the accompanying balance sheets under the following captions:
Japanese yen U.S. dollars (thousands) (thousands) -------------------------- ------------ 1996 1995 1996 ---------- ---------- ------------ Prepaid expenses and other current assets Yen 311,456 363,371 $ 2,938 Noncurrent liabilities (742,617) (644,834) (7,006) -------- -------- -------- Yen (431,161) (281,463) $ (4,068) ======== ======== ========
Increase in net deferred income tax is allocated as follows.
Japanese yen U.S. dollars (thousands) (thousands) ---------------------------- ------------ 1996 1995 1994 1996 -------- -------- -------- ------------ Earnings Yen 42,818 57,384 152,313 $ 404 Stockholders' equity, for net unrealized gains on marketable debt and equity securities 99,433 107,719 - 938 Stockholders' equity, minimum pension liability adjustment 7,447 (19,822) - 70 ------- ------- ------- ------- Yen 149,698 145,281 152,313 $ 1,412 ======= ======= ======= =======
(Continued) A-51 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 1996 and 1995 are presented below:
Japanese yen U.S. dollars (thousands) (thousands) -------------------------- ------------ 1996 1995 1996 ---------- ---------- ------------ Deferred tax assets: Business tax 193,200 257,207 1,823 Employee bonus 17,961 21,384 169 Accrued expense 152,825 129,150 1,442 Accrued pension and severance cost 63,233 52,347 597 Minimum pension liability adjustment 12,375 19,822 116 -------- -------- ------ Total deferred tax assets 439,594 479,910 4,147 -------- -------- ------ Deferred tax liabilities: Allowance for doubtful receivables 52,530 44,370 496 Capital gain deferred in connection with the acquisition of new property (see note 10) 478,810 504,368 4,517 Goodwill - 13,770 - Special depreciation 56,143 69,024 530 Loss for investment 4,637 4,637 44 Equity pick-up 71,483 17,485 674 Investment in securities 207,152 107,719 1,954 -------- -------- ------ Total deferred tax liabilities 870,755 761,373 8,215 -------- -------- ------ Net deferred tax liabilities (431,161) (281,463) (4,068) ======== ======== ======
There was no valuation allowance on deferred tax assets at March 31, 1996 and 1995. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred 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 tax liabilities, 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 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, 1996. The Company's corporate tax returns through March 31, 1995 have been examined by the Japanese tax authorities. (Continued) A-52 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements (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. 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. The Company also has a funded pension plan covering substantially all employees who meet age and service plan requirements. Net periodic pension cost of the plans was calculated using the unit credit actuarial cost method. The funded status of the plans as of March 31, 1996 and 1995 is a follows:
Japanese yen U.S. dollars (thousands) (thousands) ------------ ----------- 1996 1995 1996 ---- ---- ---- Actuarial present value of benefit obligations: Vested benefits Yen 940,804 704,719 $ 8,876 Nonvested benefits 1,405 7,869 13 --------- ------- --------- Accumulated benefit obligation 942,209 712,588 8,889 ========= ======= ========= Projected benefit obligation 1,308,763 913,636 12,347 Plan assets at fair value 498,497 373,425 4,703 --------- ------- --------- Projected benefit obligation in excess of plan assets 810,266 540,211 7,644 Unrecognized net loss (390,819) (239,914) (3,687) Unrecognized net obligation from initial application of SFAS No. 87 (11,464) (12,738) (108) Unrecognized prior service cost (97,069) (38,690) (916) Adjustment required to recognize minimum liability 132,798 90,294 1,253 --------- ------- --------- Accrued pension and severance cost Yen 443,712 339,163 $ 4,186 ========= ======= =========
(Continued) A-53 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements For the above plans, the components of pension costs and significant actuarial assumptions for the years ended March 31, 1996, 1995 and 1994 are as follows:
Japanese yen U.S. dollars (thousands) (thousands) ----------- ----------- 1996 1995 1994 1996 ---- ---- ---- ---- Components of pension costs: Service cost for benefits earned during the year Yen 111,907 81,998 75,140 $ 1,056 Interest cost on projected benefit obligation 50,529 42,573 39,106 477 Actual return on plan assets (38,775) 5,708 (8,804) (366) Net amortization and deferral 45,312 (14,611) 3,697 427 -------- -------- ------- --------- Yen 168,973 115,668 109,139 $ 1,594 ======== ======== ======= ========= Significant actuarial assumptions: Discount rate 4.5% 5.5% 5.5% Rate of salary increase 4.08% 4.08% 4.08% Expected long-term rate of return on plan assets 4.5% 6.0% 6.0%
(9) Legal Reserve and Cash Dividends The Japanese Commercial Code provides that at least ten percent 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, 1996, 1995 and 1994 represent dividends paid out during those years. The accompanying financial statements do not include any provision for a dividend to be proposed by the Board of Directors of Yen 20,000 ($189) per share aggregating Yen 1,100,000 thousand ($10,377 thousand) and reversal of reserve for replacement of property amounting to Yen 50,112 thousand ($473 thousand)(see note 10) in respect of the year ended March 31, 1996. (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 Borg-Warner Automotive NW Corporation, a wholly-owned subsidiary of Borg-Warner Automotive, Inc. A-54 (Continued) NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements Balances with the affiliated companies at March 31, 1996 and 1995 were as follows:
Japanese yen U.S. dollars (thousands) (thousands) --------- --------- Borg-Warner Borg-Warner NSK Ltd. Automotive, Inc. NSK Ltd. Automotive, Inc. -------- ---------------- -------- ---------------- At March 31, 1996: Trade accounts receivable Yen 8,297,075 29,806 $ 78,274 281 --------- ------ -------- --- Trade accounts payable 884,609 - 8,345 - Other notes payable 93,699 - 884 - Accrued expenses 238,163 - 2,247 - --------- ------ -------- --- Net receivable Yen 1,216,471 - $ 11,476 - ========= ====== ======== === At March 31, 1995: Trade accounts receivable Yen 7,475,841 32,185 Other receivables 3,815 13,618 --------- ------ 7,479,656 45,803 Trade accounts payable 893,185 - Other notes payable 158,675 - Accrued expenses 35,226 - --------- ------ Net receivable Yen 6,392,570 45,803 ========= ======
A-55 (Continued) NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements During the years ended March 31, 1996, 1995 and 1994, significant transactions with the affiliated companies were as follows:
Japanese yen U.S. dollars (thousands) (thousands) ------------ ------------ Borg-Warner Borg-Warner NSK Ltd. Automotive, Inc. NSK Ltd. Automotive, Inc. -------- ---------------- -------- - ---------------- 1996: Sales Yen 31,159,709 69,000 $293,960 651 Cost of sales: Purchases 6,604,190 14,337 62,304 135 Pension cost 4,440 -- 42 -- Selling, general and administrative expenses: Rent 1,637 -- 15 -- Pension cost 1,480 -- 14 -- Purchases of property, plant and equipment 490,202 -- 4,625 -- Sales of property, plant and equipment -- -- -- -- 1995: Sales Yen 32,165,079 95,865 Cost of sales: Purchases 6,424,264 2,109 Pension cost 5,834 -- Selling, general and administrative expenses: Rent 2,632 -- Pension cost 1,743 -- Purchases of property, plant and equipment 273,919 -- Sales of property, plant and equipment 967 -- 1994: Sales Yen 30,119,198 102,499 Cost of sales: Purchases 6,052,878 1,765 Pension cost 4,068 -- Selling, general and administrative expenses: Rent 4,886 -- Pension cost 1,147 -- Purchases of property, plant and equipment 232,471 -- Sales of property, plant and equipment 320 --
A-56 (Continued) NSK-WARNER KABUSHIKI KAISHA Notes to 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, 1996 and 1995 in the amount of Yen 478,810 thousand ($4,517 thousand) and Yen 504,368 thousand, respectively, has been provided in the accompanying balance sheets (see notes 6, 7 and 9). (11) Commitments and Contingent Liability At March 31, 1996, the Company had commitments for the purchase of property, plant and equipment of approximately Yen 37,038 thousand ($349 thousand). The Company utilizes certain facilities, including warehouses and employee dormitories, under cancellable lease agreements with third parties. Rent expense for the years ended March 31, 1996, 1995 and 1994 under the foregoing lease agreements amounted to Yen 215,395 thousand ($2,032 thousand), Yen 213,714 thousand and Yen 209,597 thousand, respectively. The Company had no noncancellable lease commitments at March 31, 1996. (12) Disclosure About the Fair Value of Financial Instruments Cash and cash equivalents, Short-term investments, Receivables, Trade and other payables and Accrued expenses: The carrying amounts approximate fair value because of the short maturity of these instruments. Marketable investments securities: The fair values of the Company's investments in securities are based on market related prices (see note 5). Short-term bank loans and current installment of long-term debt: The carrying amount of the Company's borrowings under its short-term revolving credit agreements and current installment of long-term debt approximate their fair value because of the short maturity of these instruments. (Continued) A-57 NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements Long-term debt: The fair values of each of the Company's long-term debt instruments are based on the present value of future cash flows associated with each instrument discounted using the Company's current borrowing rate for similar debt instruments of comparable maturity. The estimated fair value of the Company's long-term debt at March 31, 1996 and 1995 are as follows:
Japanese yen U.S. dollars (thousands) (thousands) ------------ ------------ 1996 1995 1996 ---- ---- ---- Carrying amount (see note 6) Yen -- 1,858,800 $ -- Estimated fair value Yen -- 1,869,960 $ --
All long-term debt at March 31, 1996 were reported as current installments of long-term debt in the balance sheet due to their maturity dates. A-58 (Continued) NSK-WARNER KABUSHIKI KAISHA Notes to Financial Statements (13) Adjustments to Conform with United States Generally Accepted Accounting Principles
Japanese yen (thousands) ------------------------ 1996 1995 1994 ---- ---- - ---- 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 Yen 3,295,765 18,278,915 3,158,123 16,096,650 2,447,180 13,803,427 Adjustments: Bonus to officers (14,850) (14,850) (13,500) (13,500) (12,400) (12,400) Allowance for doubtful receivables 16,000 103,000 22,000 87,000 9,000 65,000 Special depreciation (25,257) 110,084 (20,185) 135,341 100,302 155,526 Accrued pension and severance cost 14,521 278,740 87,782 264,219 186,097 176,436 Goodwill (27,000) - (27,000) 27,000 (27,000) 54,000 Deferred income taxes (80,318) 294,816 (87,384) 375,134 (184,213) 462,518 Marketable investment securities - 9,093 9,093 9,093 - - - Investments in affiliates 105,879 140,162 34,284 34,284 - - - Accrued expense (196,420) 100,344 296,764 296,764 - - - --------- ---------- --------- ---------- - --------- ---------- (207,445) 1,021,389 301,854 1,215,335 71,786 901,080 --------- ---------- --------- ---------- - --------- ---------- Per accompanying financial statements Yen 3,088,320 19,300,304 3,459,977 17,311,985 2,518,966 14,704,507 ========= ========== ========= ========== ========= ========== U.S. dollars (thousands) ------------------------ 1996 ---- Net Retained earnings earnings at for year end of year -------- ----------- Per legal books $ 31,092 172,443 Adjustments: Bonus to officers (140) (140) Allowance for doubtful receivables 151 972 Special depreciation (238) 1,037 Accrued pension and severance cost 137 2,630 Goodwill (255) - Deferred income taxes (758) 2,781 Marketable investment securities - 86 Investments in affiliates 999 1,322 Accrued expense (1,853) 947 -------- ------- (1,957) 9,635 -------- ------- Per accompanying financial statements $ 29,135 182,078 ======== =======
A-59 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 18 through 31 of the Company's Annual Report are incorporated herein by reference: Independent Auditors' Report Consolidated Statement of Operations - three years ended December 31, 1995, 1994 and 1993 Consolidated Balance Sheets - December 31, 1995 and 1994 Consolidated Statement of Cash Flows - years ended December 31, 1995, 1994 and 1993 Consolidated Statement of Stockholders' Equity - years ended December 31, 1995, 1994 and 1993 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. No reports on Form 8-K were filed by the Company during the three-month period ended December 31, 1995. 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. BORG-WARNER AUTOMOTIVE, INC. By: WILLIAM C. CLINE ------------------------------------------- William C. Cline Vice President and Controller (Principal Accounting Officer) Date: June 28, 1996 EXHIBIT INDEX Sequential Exhibit Page Number Document Description Number *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). *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. *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 Registration Rights Agreement dated January 27, 1993 (incorporated by reference to Exhibit No. 10.5 to Registration Statement No.33-64934). +*10.6 Borg-Warner Automotive, Inc. Management Stock Option Plan, as amended (incorporated by reference to Exhibit No. 10.6 to Registration Statement No. 33-64934). +*10.7 Borg-Warner Automotive, Inc. 1993 Stock Incentive Plan as amended effective November 8, 1995. Sequential Exhibit Page Number Document Description Number *10.8 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). *10.9 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). *10.10 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). 10.11 Third Amendment of Receivables Transfer Agreement dated as of October 23, 1995. *10.12 Service Agreement, dated as of December 31, 1992, by and between Borg-Warner Security Corporation and Borg-Warner Automotive, Inc. (incorporated by reference to Exhibit No.10.10 to Registration Statement No. 33-64934). *10.13 Government Relations Service Agreement, dated as of September 1, 1993, by and between Borg-Warner Security Corporation and Borg- Warner Automotive, Inc. (incorporated by reference to Exhibit No. 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 1993). +*10.14 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). Sequential Exhibit Page Number Document Description Number +*10.15 Form of Employment Agreement for Executive Officers (incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 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. +*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). +*10.21 Form of Change of Control Employment Agreement for executive officers (incorporated by reference to Exhibit No. 10.0 to the Company's Quarterly Report on Form 10-Q for the Quarter ended September 30, 1995). *10.22 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). +10.23 Borg-Warner Automotive, Inc. Executive Stock Performance Plan. Sequential Exhibit Page Number Document Description Number 10.24 Second Amendment to Credit Agreement dated January 16, 1996. *10.25 Shareholders Agreement Concerning the Management of NSK- Warner K.K. dated September 25, 1964 between Borg-Warner Corporation and Nippon Seiko, K.K. (incorporated by reference to Exhibit No. 10.9 to Registration Statement No. 33-64934). 11. Computation of earnings per share. 13. Annual Report to Stockholders for the year ended December 31, 1995 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. Subsidiaries of the Company. 23. Independent Auditors' Consent. 23.2 Independent Auditors' Consent. 24. Power of Attorney. 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). EX-23.2 2 [KPMG PEAT MARWICK LETTERHEAD] The Board of Directors NSK-Warner Kabushiki Kaisha: INDEPENDENT AUDITORS' CONSENT We consent to incorporation by reference in Registration Statement Nos. 33- 75564, 33-75566, 33-75568, 33-75572, 33-75574, 33-67822, 33-67824, 33-92426, 33- 92428, 33-92430, 33-92432, 33-92858, 33-92860 and 33-92862 on Form S-8 of Borg- Warner Automotive, Inc. Of our report dated April 26, 1996 relating to the balance sheets of NSK-Warner Kabushiki Kaisha as of March 31, 1996 and 1995, and the related statements of earnings stockholders' equity, and cash flows for each of the years in the three-year period ended March 31, 1996 which report appears in the December 31, 1995 annual report on Form 10-K/A of Borg-Warner Automotive, Inc. KPMG Peat Marwick Tokyo, Japan June 20, 1996 EX-10.24 3 -----END PRIVACY-ENHANCED MESSAGE-----