Delaware | 1-12162 | 13-3404508 | ||
State or other jurisdiction of | Commission File No. | (I.R.S. Employer | ||
Incorporation or organization | Identification No.) |
3850 Hamlin Road, Auburn Hills, Michigan | 48326 | |
(Address of principal executive offices) | (Zip Code) |
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 April 30, 2015 |
BorgWarner Inc. | ||
Date: April 30, 2015 | 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 April 30, 2015 |
Immediate Release |
Contact: Ken Lamb |
248.754.0884 |
• | U.S. GAAP net sales of $1,984 million, down 5% compared with first quarter 2014. |
◦ | The impact of foreign currencies decreased first quarter 2015 net sales growth by approximately 11% compared with first quarter 2014. |
◦ | Excluding the impact of foreign currencies, the Wahler acquisition, and the first quarter 2015 acquisition of the remaining 51% of BERU Diesel Start Systems Pvt. Ltd. ("BERU Diesel"), net sales were up 3% compared with first quarter 2014. |
• | U.S. GAAP net earnings of $0.79 per diluted share. |
◦ | The impact of foreign currencies decreased net earnings by approximately $0.09 per diluted share in first quarter 2015 compared with first quarter 2014. |
◦ | Excluding the $0.01 per diluted share net impact of restructuring, gain on a previously held equity interest and tax adjustments, net earnings were $0.78 per diluted share. |
• | U.S. GAAP operating income of $260 million. |
◦ | Excluding the $12 million pretax impact of restructuring and the $11 million pretax gain on a previously held equity interest in BERU Diesel, operating income was $261 million, or 13.1% of net sales, in line with first quarter 2014. |
Net earnings per diluted share | First Quarter | |||||||
2015 | 2014 | |||||||
Non – U.S. GAAP | $ | 0.78 | $ | 0.83 | ||||
Reconciliations: | ||||||||
Restructuring expense | (0.05 | ) | (0.13 | ) | ||||
Gain on previously held equity interest | 0.05 | |||||||
Tax adjustments | 0.01 | |||||||
U.S. GAAP | $ | 0.79 | $ | 0.69 | * | |||
*Column does not add due to rounding |
• | BorgWarner received a 2015 Automotive News PACE Award for its first-to-market front cross differential (FXD) technology. The electronic limited slip differential provides automakers with a cost-effective and fuel-efficient alternative to all-wheel drive (AWD) systems. BorgWarner’s FXD technology debuted on the Volkswagen Golf GTI with Performance Pack and SEAT Leon CUPRA. Programs are also under development with several other global automakers. |
• | BorgWarner Morse TEC recently received a Best Powertrain EMEA (Europe, Middle East and Africa) Supplier Award 2014 from Fiat Chrysler Automobiles (FCA). BorgWarner was honored for its strong engineering contributions throughout the development of FCA’s Global Small Engine (GSE) platform and its excellent service level, especially in part quality. |
• | The company received a 2014 Regional Contribution Award from Toyota Motor Corporation during the Toyota Global Suppliers Convention held recently in Nagoya, Japan. The award recognizes BorgWarner’s outstanding contribution to Toyota’s localization success as its sole North American supplier of part-time four-wheel drive transfer cases for the 2014 Tundra pick-up truck. |
• | BorgWarner’s manufacturing plants in Nabari and Aoyama, Japan, were presented with a Supplier Excellence Award from Honda Japan, recognizing best-in-class quality in 2014. This is the second consecutive year BorgWarner has received the award. |
• | The company supplies its advanced variable turbine geometry (VTG) turbochargers for two newly developed 1.4-liter three-cylinder diesel engines from the Volkswagen Group. Both engines comply with Euro 6 emissions standards and set new benchmarks by improving fuel economy up to 21 percent compared with the predecessor vehicles. |
• | BorgWarner supplies its GenV all-wheel drive (AWD) coupling for the BMW Group’s all-new 2 Series Active Tourer. The electro-hydraulically actuated AWD coupling automatically distributes power between the front and rear wheels of BMW brand’s first-ever front-wheel drive vehicle. |
• | The company has expanded manufacturing capacity for emissions technologies in China, Mexico and South Korea. Products produced at the newly expanded facilities include ignition products, exhaust gas recirculation (EGR) modules, valves and coolers, variable force solenoids, diesel cold-start technologies and coolant control valves. |
• | On March 16, 2015, BorgWarner issued $1.0 billion aggregate principal amount of fixed rate senior notes, consisting of $500 million of 3.375% senior notes due March 2025 and $500 million of 4.375% senior notes due March 2045. |
• | In January 2015, the Company completed the purchase of the remaining 51% of BERU Diesel by acquiring the shares of its former joint venture partner. The former joint venture was formed in 1996 to develop and manufacture glow plugs in India. |
BorgWarner Inc. | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
(millions, except per share amounts) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net sales | $ | 1,984.2 | $ | 2,084.1 | |||
Cost of sales | 1,555.2 | 1,638.3 | |||||
Gross profit | 429.0 | 445.8 | |||||
Selling, general and administrative expenses | 168.2 | 173.8 | |||||
Other expense, net | 1.2 | 38.8 | |||||
Operating income | 259.6 | 233.2 | |||||
Equity in affiliates’ earnings, net of tax | (8.5 | ) | (8.8 | ) | |||
Interest income | (1.7 | ) | (1.5 | ) | |||
Interest expense and finance charges | 10.0 | 8.2 | |||||
Earnings before income taxes and noncontrolling interest | 259.8 | 235.3 | |||||
Provision for income taxes | 72.1 | 68.1 | |||||
Net earnings | 187.7 | 167.2 | |||||
Net earnings attributable to the noncontrolling interest, net of tax | 8.8 | 8.1 | |||||
Net earnings attributable to BorgWarner Inc. | $ | 178.9 | $ | 159.1 | |||
Earnings per share — diluted | $ | 0.79 | $ | 0.69 | |||
Weighted average shares outstanding — diluted | 227.1 | 229.3 | |||||
Supplemental Information (Unaudited) | |||||||
(millions of dollars) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Capital expenditures, including tooling outlays | $ | 140.0 | $ | 126.2 | |||
Depreciation and amortization: | |||||||
Fixed assets and tooling | $ | 72.7 | $ | 74.1 | |||
Intangible assets and other | 4.4 | 6.0 | |||||
$ | 77.1 | $ | 80.1 |
BorgWarner Inc. | |||||||
Net Sales by Reporting Segment (Unaudited) | |||||||
(millions of dollars) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Engine | $ | 1,380.9 | $ | 1,412.1 | |||
Drivetrain | 611.2 | 680.7 | |||||
Inter-segment eliminations | (7.9 | ) | (8.7 | ) | |||
Net sales | $ | 1,984.2 | $ | 2,084.1 | |||
Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest ("Adjusted EBIT") (Unaudited) | |||||||
(millions of dollars) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Engine | $ | 230.4 | $ | 231.7 | |||
Drivetrain | 71.0 | 80.5 | |||||
Adjusted EBIT | 301.4 | 312.2 | |||||
Restructuring expense | 12.1 | 39.5 | |||||
Gain on previously held equity interest | (10.8 | ) | — | ||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 32.0 | 30.7 | |||||
Interest income | (1.7 | ) | (1.5 | ) | |||
Interest expense and finance charges | 10.0 | 8.2 | |||||
Earnings before income taxes and noncontrolling interest | 259.8 | 235.3 | |||||
Provision for income taxes | 72.1 | 68.1 | |||||
Net earnings | 187.7 | 167.2 | |||||
Net earnings attributable to the noncontrolling interest, net of tax | 8.8 | 8.1 | |||||
Net earnings attributable to BorgWarner Inc. | $ | 178.9 | $ | 159.1 |
BorgWarner Inc. | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(millions of dollars) | |||||||
March 31, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Cash | $ | 1,035.5 | $ | 797.8 | |||
Receivables, net | 1,564.7 | 1,443.5 | |||||
Inventories, net | 506.3 | 505.7 | |||||
Other current assets | 218.9 | 223.8 | |||||
Total current assets | 3,325.4 | 2,970.8 | |||||
Property, plant and equipment, net | 2,049.9 | 2,093.9 | |||||
Other non-current assets | 2,147.3 | 2,163.3 | |||||
Total assets | $ | 7,522.6 | $ | 7,228.0 | |||
Liabilities and Equity | |||||||
Notes payable and other short-term debt | $ | 107.8 | $ | 623.7 | |||
Accounts payable and accrued expenses | 1,484.4 | 1,530.3 | |||||
Income taxes payable | 9.3 | 14.2 | |||||
Total current liabilities | 1,601.5 | 2,168.2 | |||||
Long-term debt | 1,730.6 | 716.3 | |||||
Other non-current liabilities | 628.0 | 652.6 | |||||
Total BorgWarner Inc. stockholders’ equity | 3,504.0 | 3,616.2 | |||||
Noncontrolling interest | 58.5 | 74.7 | |||||
Total equity | 3,562.5 | 3,690.9 | |||||
Total liabilities and equity | $ | 7,522.6 | $ | 7,228.0 |
BorgWarner Inc. | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
(millions of dollars) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Operating | |||||||
Net earnings | $ | 187.7 | $ | 167.2 | |||
Non-cash charges (credits) to operations: | |||||||
Depreciation and amortization | 77.1 | 80.1 | |||||
Restructuring expense, net of cash paid | 8.1 | 34.3 | |||||
Gain on previously held equity interest | (10.8 | ) | — | ||||
Deferred income tax provision | 10.4 | 15.6 | |||||
Other non-cash items | 1.1 | (1.2 | ) | ||||
Net earnings adjusted for non-cash charges to operations | 273.6 | 296.0 | |||||
Changes in assets and liabilities | (240.9 | ) | (249.6 | ) | |||
Net cash provided by operating activities | 32.7 | 46.4 | |||||
Investing | |||||||
Capital expenditures, including tooling outlays | (140.0 | ) | (126.2 | ) | |||
Payments for businesses acquired, net of cash acquired | (12.6 | ) | (106.4 | ) | |||
Proceeds from asset disposals and other | 0.8 | 1.5 | |||||
Net cash used in investing activities | (151.8 | ) | (231.1 | ) | |||
Financing | |||||||
Net (decrease) increase in notes payable | (512.3 | ) | 111.3 | ||||
Additions to long-term debt, net of debt issuance costs | 1,012.8 | 100.0 | |||||
Repayments of long-term debt, including current portion | (3.1 | ) | (100.1 | ) | |||
Payments for purchase of treasury stock | (33.7 | ) | — | ||||
Proceeds from stock options exercised, including the tax benefit | 11.5 | 9.4 | |||||
Taxes paid on employees' restricted stock award vestings | (13.1 | ) | (22.2 | ) | |||
Dividends paid to BorgWarner stockholders | (29.4 | ) | (28.4 | ) | |||
Dividends paid to noncontrolling stockholders | (15.9 | ) | (14.0 | ) | |||
Net cash provided by financing activities | 416.8 | 56.0 | |||||
Effect of exchange rate changes on cash | (60.0 | ) | (2.7 | ) | |||
Net increase (decrease) in cash | 237.7 | (131.4 | ) | ||||
Cash at beginning of year | 797.8 | 939.5 | |||||
Cash at end of period | $ | 1,035.5 | $ | 808.1 |