Delaware (State or other jurisdiction of incorporation) | 1-12162 (Commission File No.) | 13-3404508 (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description |
99.1 | Press release regarding earnings issued by BorgWarner Inc. dated February 14, 2013 |
BorgWarner Inc. | ||
Date: February 14, 2013 | By: | /s/ John J. Gasparovic |
Name: John J. Gasparovic | ||
Title: Secretary |
EXHIBIT INDEX | |
Exhibit Number | Description |
99.1 | Press release regarding earnings issued by BorgWarner Inc. dated February 14, 2013 |
Immediate Release |
Contact: Ken Lamb |
248.754.0884 |
• | Net sales of $1,719 million. |
◦ | Excluding the impact of foreign currencies and 2011 and 2012 dispositions, net sales were flat with fourth quarter 2011. |
• | U.S. GAAP earnings of $1.03 per diluted share. |
◦ | Excluding the $(0.10) per diluted share impact of retirement related obligations, and $(0.03) per diluted share related to net tax adjustments, net earnings were $1.16 per diluted share, down 3% from fourth quarter 2011. |
• | Operating income of $171 million, or 9.9% of net sales. |
◦ | Excluding the $17 million pretax impact of retirement related obligations, operating income was $188 million, or 10.9% of net sales. |
• | Repurchased 1.5 million shares of common stock in the quarter. |
• | Record net sales of $7,183 million. |
◦ | Excluding the impact of foreign currencies and 2011 and 2012 dispositions, net sales were up 6% from 2011. |
• | U.S. GAAP earnings of $4.17 per diluted share. |
◦ | Excluding non-comparable items, 2012 earnings were $4.97 per diluted share, a new record for the company, up 12% from 2011 comparable results. Excluding non-comparable items and the impact of foreign currencies, 2012 earnings were up 17% from 2011 comparable results. |
• | Operating income of $753 million, or 10.5% of net sales. |
◦ | Excluding non-comparable items, operating income was 11.7% of net sales, a new full year record. |
• | Repurchased approximately 4.2 million shares of common stock in 2012. |
Net earnings per diluted share | Fourth Quarter | Full Year | ||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Non – U.S. GAAP | $ | 1.16 | $ | 1.19 | $ | 4.97 | $ | 4.45 | ||||||||
Reconciliations: | ||||||||||||||||
Retirement related obligations | (0.10 | ) | (0.10 | ) | ||||||||||||
Loss from disposal activities | (0.19 | ) | (0.37 | ) | (0.19 | ) | ||||||||||
Restructuring expense | (0.17 | ) | ||||||||||||||
Tax adjustments | (0.03 | ) | (0.16 | ) | 0.05 | |||||||||||
Patent infringement settlement, net of legal costs incurred | 0.14 | |||||||||||||||
U.S. GAAP | $ | 1.03 | $ | 1.00 | $ | 4.17 | $ | 4.45 | ||||||||
* Column does not add due to rounding |
• | The BorgWarner Board of Directors announced the appointment of James R. Verrier, 50, to president and chief executive officer effective January 1, 2013, at which time he also joined the Board of Directors. Former chief executive officer, Timothy M. Manganello, 62, will continue as executive chairman of the company until his planned retirement at the April 24, 2013 annual meeting, at which time he will step down from the Board. Robin J. Adams, Vice Chairman and former chief financial officer, will also step down from the Board at the annual meeting in connection with his planned retirement from the company. The Board also announced that at the time of Manganello’s retirement, the company’s present lead director, Alexis P. Michas, will become non-executive chairman of the Board. |
• | In November, the company reported an expected backlog of $2.3 billion of net new business for the period 2013 through 2015. Demand for the company’s advanced powertrain technologies, such as gasoline and diesel turbochargers, dual-clutch transmission technology, engine timing systems and emissions products, is expected to continue to drive strong growth. |
• | For the first time, BorgWarner supplies its innovative three-stage turbocharging technology for BMW's M Performance diesel engine, the most powerful six-cylinder in-line diesel engine in the world. Exclusively developed for BMW M Performance automobiles, the engine powers the M550d xDrive Sedan and Touring, X5 M50d Touring, and X6 M50d models. |
• | Propelled by the rapidly growing Chinese automotive market, BorgWarner opened another production plant at its campus in Ningbo, China, on November 28, 2012. The all-new high-tech manufacturing facility will produce and test Morse TEC variable cam timing (VCT) technologies and engine timing systems to support the production and launch of over 50 programs with more than 20 different customers. The opening ceremony also celebrated the inauguration of BorgWarner's world-class Ningbo Engineering Center which provides research and development, applications engineering and management support. |
BorgWarner Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||
(millions, except per share amounts) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 1,719.1 | $ | 1,773.7 | $ | 7,183.2 | $ | 7,114.7 | |||||||
Cost of sales | 1,374.9 | 1,414.0 | 5,716.3 | 5,704.3 | |||||||||||
Gross profit | 344.2 | 359.7 | 1,466.9 | 1,410.4 | |||||||||||
Selling, general and administrative expenses | 156.2 | 146.8 | 629.3 | 621.0 | |||||||||||
Other (income) expense | 17.3 | 21.8 | 84.7 | (8.1 | ) | ||||||||||
Operating income | 170.7 | 191.1 | 752.9 | 797.5 | |||||||||||
Equity in affiliates’ earnings, net of tax | (10.0 | ) | (10.2 | ) | (42.8 | ) | (38.2 | ) | |||||||
Interest income | (1.0 | ) | (1.3 | ) | (4.7 | ) | (4.8 | ) | |||||||
Interest expense and finance charges | 6.7 | 17.2 | 39.4 | 74.6 | |||||||||||
Earnings before income taxes and noncontrolling interest | 175.0 | 185.4 | 761.0 | 765.9 | |||||||||||
Provision for income taxes | 48.4 | 58.2 | 238.6 | 195.3 | |||||||||||
Net earnings | 126.6 | 127.2 | 522.4 | 570.6 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 5.4 | 5.2 | 21.5 | 20.5 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 121.2 | $ | 122.0 | $ | 500.9 | $ | 550.1 | |||||||
Reconciliation to diluted earnings per share: | |||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 121.2 | $ | 122.0 | $ | 500.9 | $ | 550.1 | |||||||
Adjustment for net interest expense on convertible notes | — | 5.5 | 5.8 | 21.5 | |||||||||||
Diluted net earnings attributable to BorgWarner Inc. | $ | 121.2 | $ | 127.5 | $ | 506.7 | $ | 571.6 | |||||||
Earnings per share — diluted | $ | 1.03 | $ | 1.00 | $ | 4.17 | $ | 4.45 | |||||||
Weighted average shares outstanding — diluted | 117.8 | 127.6 | 121.4 | 128.5 | |||||||||||
Supplemental Information (Unaudited) | |||||||||||||||
(millions of dollars) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Capital expenditures, including tooling outlays | $ | 124.4 | $ | 119.6 | $ | 407.4 | $ | 393.7 | |||||||
Depreciation and amortization: | |||||||||||||||
Fixed assets and tooling | $ | 70.4 | $ | 65.2 | $ | 260.2 | $ | 252.2 | |||||||
Intangible assets and other | 6.9 | 7.7 | 28.4 | 30.8 | |||||||||||
$ | 77.3 | $ | 72.9 | $ | 288.6 | $ | 283.0 |
BorgWarner Inc. | |||||||||||||||
Net Sales by Reporting Segment (Unaudited) | |||||||||||||||
(millions of dollars) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Engine | $ | 1,167.2 | $ | 1,245.1 | $ | 4,913.0 | $ | 5,050.6 | |||||||
Drivetrain | 559.0 | 533.7 | 2,298.7 | 2,084.5 | |||||||||||
Inter-segment eliminations | (7.1 | ) | (5.1 | ) | (28.5 | ) | (20.4 | ) | |||||||
Net sales | $ | 1,719.1 | $ | 1,773.7 | $ | 7,183.2 | $ | 7,114.7 | |||||||
Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest ("Adjusted EBIT") (Unaudited) | |||||||||||||||
(millions of dollars) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Engine | $ | 182.0 | $ | 202.8 | $ | 786.4 | $ | 774.3 | |||||||
Drivetrain | 49.2 | 46.8 | 209.1 | 161.2 | |||||||||||
Adjusted EBIT | 231.2 | 249.6 | 995.5 | 935.5 | |||||||||||
Loss from disposal activities | — | 21.5 | 39.7 | 21.5 | |||||||||||
Restructuring expense | — | — | 27.4 | — | |||||||||||
Retirement related obligations | 17.3 | — | 17.3 | — | |||||||||||
Patent infringement settlement, net of legal costs incurred | — | — | — | (29.1 | ) | ||||||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 33.2 | 26.8 | 115.4 | 107.4 | |||||||||||
Interest income | (1.0 | ) | (1.3 | ) | (4.7 | ) | (4.8 | ) | |||||||
Interest expense and finance charges | 6.7 | 17.2 | 39.4 | 74.6 | |||||||||||
Earnings before income taxes and noncontrolling interest | 175.0 | 185.4 | 761.0 | 765.9 | |||||||||||
Provision for income taxes | 48.4 | 58.2 | 238.6 | 195.3 | |||||||||||
Net earnings | 126.6 | 127.2 | 522.4 | 570.6 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 5.4 | 5.2 | 21.5 | 20.5 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 121.2 | $ | 122.0 | $ | 500.9 | $ | 550.1 |
BorgWarner Inc. | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(millions of dollars) | |||||||
December 31, 2012 | December 31, 2011 | ||||||
Assets | |||||||
Cash | $ | 715.7 | $ | 359.6 | |||
Receivables, net | 1,147.3 | 1,183.0 | |||||
Inventories, net | 447.6 | 454.3 | |||||
Other current assets | 162.2 | 140.9 | |||||
Total current assets | 2,472.8 | 2,137.8 | |||||
Property, plant and equipment, net | 1,788.0 | 1,664.3 | |||||
Other non-current assets | 2,140.0 | 2,156.5 | |||||
Total assets | $ | 6,400.8 | $ | 5,958.6 | |||
Liabilities and Equity | |||||||
Notes payable and other short-term debt | $ | 239.1 | $ | 196.3 | |||
Current portion of long-term debt | 4.3 | 381.5 | |||||
Accounts payable and accrued expenses | 1,287.2 | 1,297.8 | |||||
Income taxes payable | 72.5 | 29.8 | |||||
Total current liabilities | 1,603.1 | 1,905.4 | |||||
Long-term debt | 823.8 | 751.3 | |||||
Other non-current liabilities | 827.8 | 848.9 | |||||
Total BorgWarner Inc. stockholders’ equity | 3,082.6 | 2,387.9 | |||||
Noncontrolling interest | 63.5 | 65.1 | |||||
Total equity | 3,146.1 | 2,453.0 | |||||
Total liabilities and equity | $ | 6,400.8 | $ | 5,958.6 |
BorgWarner Inc. | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
(millions of dollars) | |||||||
Twelve Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Operating | |||||||
Net earnings | $ | 522.4 | $ | 570.6 | |||
Non-cash charges (credits) to operations: | |||||||
Depreciation and amortization | 288.6 | 283.0 | |||||
Loss from disposal activities, net of cash paid | 31.7 | 21.5 | |||||
Restructuring expense, net of cash paid | 23.3 | — | |||||
Bond amortization | 5.3 | 20.3 | |||||
Deferred income tax benefit | (10.7 | ) | (1.1 | ) | |||
Other non-cash items | 43.7 | 14.0 | |||||
Net earnings adjusted for non-cash charges to operations | 904.3 | 908.3 | |||||
Changes in assets and liabilities | (25.6 | ) | (200.1 | ) | |||
Net cash provided by operating activities | 878.7 | 708.2 | |||||
Investing | |||||||
Capital expenditures, including tooling outlays | (407.4 | ) | (393.7 | ) | |||
Net proceeds from asset disposals | 5.4 | 7.9 | |||||
Payments for businesses acquired, net of cash acquired | — | (203.7 | ) | ||||
Net proceeds from sale of businesses | 56.8 | 25.0 | |||||
Net cash used in investing activities | (345.2 | ) | (564.5 | ) | |||
Financing | |||||||
Net increase in notes payable | 12.8 | 67.6 | |||||
Additions to long-term debt, net of debt issuance costs | 313.9 | 364.6 | |||||
Repayments of long-term debt, including current portion | (246.4 | ) | (309.1 | ) | |||
Proceeds from accounts receivable securitization facility | 30.0 | — | |||||
Payments for purchase of treasury stock | (295.9 | ) | (357.6 | ) | |||
Proceeds from stock options exercised, including the tax benefit | 52.0 | 53.0 | |||||
Taxes paid on employees' restricted stock award vestings | (18.1 | ) | (14.4 | ) | |||
Purchase of noncontrolling interest | (15.0 | ) | (29.4 | ) | |||
Capital contribution from noncontrolling interest | — | 19.5 | |||||
Dividends paid to noncontrolling stockholders | (21.9 | ) | (13.9 | ) | |||
Net cash used in financing activities | (188.6 | ) | (219.7 | ) | |||
Effect of exchange rate changes on cash | 11.2 | (14.3 | ) | ||||
Net increase (decrease) in cash | 356.1 | (90.3 | ) | ||||
Cash at beginning of year | 359.6 | 449.9 | |||||
Cash at end of year | $ | 715.7 | $ | 359.6 |