Earnings Per Share

9 Months Ended

Sep. 30, 2015

The Company presents both basic and diluted earnings per share of common stock (“EPS”) amounts. Basic EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock outstanding during the reporting period. Diluted EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock and common equivalent stock outstanding during the reporting period.

The dilutive impact of stock-based compensation is calculated using the treasury stock method. The treasury stock method assumes that the Company uses the assumed proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any windfall/(shortfall) tax benefits that would be credited/(debited) to capital in excess of par value when the award generates a tax deduction. Options are only dilutive when the average market price of the underlying common stock exceeds the exercise price of the options.

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share amounts)	2015		2014		2015		2014
Basic earnings per share:
Net earnings attributable to BorgWarner Inc.	$	157.4	$	166.6	$	484.4	$	515.9
Weighted average shares of common stock outstanding	224.837		227.077		225.329		227.395
Basic earnings per share of common stock	$	0.70	$	0.73	$	2.15	$	2.27

Diluted earnings per share:
Net earnings attributable to BorgWarner Inc.	$	157.4	$	166.6	$	484.4	$	515.9

Weighted average shares of common stock outstanding	224.837		227.077		225.329		227.395

Effect of stock-based compensation	1.154		1.591		1.236		1.827

Weighted average shares of common stock outstanding including dilutive shares	225.991		228.668		226.565		229.222
Diluted earnings per share of common stock	$	0.70	$	0.73	$	2.14	$	2.25