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 February 11, 2016 |
BorgWarner Inc. | ||
Date: February 11, 2016 | 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 11, 2016 |
Immediate Release |
Contact: Ken Lamb |
248.754.0884 |
• | U.S. GAAP net sales of $2,123 million. |
◦ | Excluding the impact of foreign currencies and the Remy acquisition, net sales were up 7.1% compared with fourth quarter 2014. |
• | U.S. GAAP net earnings of $0.56 per diluted share. |
◦ | Excluding $(0.21) per diluted share related to net non-comparable items (detailed in the table below) and $0.02 per diluted share of net earnings related to the Remy acquisition, net earnings were $0.75 per diluted share. |
• | U.S. GAAP operating income of $201 million. |
◦ | Excluding $68 million of pretax expenses related to non-comparable items and $8 million of operating income net of purchase accounting adjustments related to the Remy acquisition, operating income was $261 million, or 13.2% of net sales. |
• | U.S. GAAP net sales of $8,023 million. |
◦ | Excluding the impact of foreign currencies and the Remy and Wahler acquisitions, net sales were up 4.3% compared with 2014. |
• | U.S. GAAP net earnings of $2.70 per diluted share. |
◦ | Excluding $(0.34) per diluted share related to net non-comparable items (detailed in the table below) and $0.02 per diluted share of net earnings related to the Remy acquisition, net earnings were $3.02 per diluted share. |
• | U.S. GAAP operating income of $940 million. |
◦ | Excluding $102 million of pretax expenses related to net non-comparable items and $8 million of operating income net of purchase accounting adjustments related to the Remy acquisition, operating income was $1,034 million, or 13.2% of net sales. |
Net earnings per diluted share | Fourth Quarter | Full Year | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Non – U.S. GAAP excluding Remy | $ | 0.75 | $ | 0.75 | $ | 3.02 | $ | 3.25 | ||||||||
Remy | 0.02 | 0.02 | ||||||||||||||
Non – U.S. GAAP including Remy | $ | 0.77 | $ | 3.04 | ||||||||||||
Reconciliations: | ||||||||||||||||
Restructuring expense | (0.11 | ) | (0.09 | ) | (0.27 | ) | (0.33 | ) | ||||||||
Merger and acquisition expense | (0.06 | ) | (0.08 | ) | ||||||||||||
Pension settlement | (0.07 | ) | (0.07 | ) | (0.01 | ) | ||||||||||
Gain on previously held equity interest | 0.05 | |||||||||||||||
Intangible asset impairment | (0.04 | ) | (0.04 | ) | ||||||||||||
Tax adjustments | 0.03 | 0.04 | ||||||||||||||
U.S. GAAP | $ | 0.56 | $ | 0.61 | * | $ | 2.70 | * | $ | 2.86 | * | |||||
*Column does not add due to rounding |
• | On November 6, 2015, BorgWarner issued a public offering of €500 million aggregate principal amount of its 1.80% senior notes due 2022. The company used the net proceeds for general corporate purposes, including but not limited to the acquisition of Remy. |
• | On November 10, 2015, the company completed its acquisition of Remy International, Inc., a leading manufacturer of rotating electrical components such as alternators, starter motors and electric traction motors for the automotive and commercial vehicle industry. |
• | BorgWarner provides its innovative GenV electro-hydraulically actuated all-wheel drive (AWD) coupling for the all-new XC90 luxury SUV from Volvo Cars. |
• | BorgWarner is expanding its engine timing business in Korea, by supplying its advanced cam-torque actuated variable cam timing with mid-position lock technology for Hyundai and Kia vehicles powered by 3.0- to 3.8-liter V-6 gasoline engines. |
• | The company announced that it expects net new business to drive a compound annual growth rate of 4% to 6% from 2015 through 2018. |
BorgWarner Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||
(millions, except per share amounts) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net sales | $ | 2,123.1 | $ | 1,991.9 | $ | 8,023.2 | $ | 8,305.1 | |||||||
Cost of sales | 1,676.2 | 1,578.6 | 6,320.1 | 6,548.7 | |||||||||||
Gross profit | 446.9 | 413.3 | 1,703.1 | 1,756.4 | |||||||||||
Selling, general and administrative expenses | 178.4 | 169.4 | 662.0 | 698.9 | |||||||||||
Other expense, net | 68.0 | 31.7 | 101.4 | 93.8 | |||||||||||
Operating income | 200.5 | 212.2 | 939.7 | 963.7 | |||||||||||
Equity in affiliates’ earnings, net of tax | (11.7 | ) | (11.5 | ) | (40.0 | ) | (47.3 | ) | |||||||
Interest income | (2.2 | ) | (1.2 | ) | (7.5 | ) | (5.5 | ) | |||||||
Interest expense and finance charges | 17.8 | 10.2 | 60.4 | 36.4 | |||||||||||
Earnings before income taxes and noncontrolling interest | 196.6 | 214.7 | 926.8 | 980.1 | |||||||||||
Provision for income taxes | 61.2 | 67.3 | 280.4 | 292.6 | |||||||||||
Net earnings | 135.4 | 147.4 | 646.4 | 687.5 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 10.1 | 7.5 | 36.7 | 31.7 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 125.3 | $ | 139.9 | $ | 609.7 | $ | 655.8 | |||||||
Earnings per share — diluted | $ | 0.56 | $ | 0.61 | $ | 2.70 | $ | 2.86 | |||||||
Weighted average shares outstanding — diluted | 222.9 | 228.0 | 225.6 | 228.9 | |||||||||||
Supplemental Information (Unaudited) | |||||||||||||||
(millions of dollars) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Capital expenditures, including tooling outlays | $ | 158.5 | $ | 165.1 | $ | 577.3 | $ | 563.0 | |||||||
Depreciation and amortization | $ | 83.9 | $ | 83.4 | $ | 320.2 | $ | 330.4 |
BorgWarner Inc. | |||||||||||||||
Net Sales by Reporting Segment (Unaudited) | |||||||||||||||
(millions of dollars) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Engine | $ | 1,397.2 | $ | 1,383.9 | $ | 5,500.0 | $ | 5,705.9 | |||||||
Drivetrain | 734.9 | 615.0 | 2,556.7 | 2,631.4 | |||||||||||
Inter-segment eliminations | (9.0 | ) | (7.0 | ) | (33.5 | ) | (32.2 | ) | |||||||
Net sales | $ | 2,123.1 | $ | 1,991.9 | $ | 8,023.2 | $ | 8,305.1 | |||||||
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, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Engine | $ | 230.4 | $ | 228.0 | $ | 900.7 | $ | 924.0 | |||||||
Drivetrain | 81.2 | 65.7 | 294.6 | 303.3 | |||||||||||
Adjusted EBIT | 311.6 | 293.7 | 1,195.3 | 1,227.3 | |||||||||||
Restructuring expense | 24.4 | 23.2 | 65.7 | 90.8 | |||||||||||
Pension settlement | 25.7 | 0.4 | 25.7 | 3.1 | |||||||||||
Merger and acquisition expense | 17.9 | — | 21.8 | — | |||||||||||
Gain on previously held equity interest | — | — | (10.8 | ) | — | ||||||||||
Intangible asset impairment | — | 10.3 | — | 10.3 | |||||||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 31.4 | 36.1 | 113.2 | 112.1 | |||||||||||
Interest income | (2.2 | ) | (1.2 | ) | (7.5 | ) | (5.5 | ) | |||||||
Interest expense and finance charges | 17.8 | 10.2 | 60.4 | 36.4 | |||||||||||
Earnings before income taxes and noncontrolling interest | 196.6 | 214.7 | 926.8 | 980.1 | |||||||||||
Provision for income taxes | 61.2 | 67.3 | 280.4 | 292.6 | |||||||||||
Net earnings | 135.4 | 147.4 | 646.4 | 687.5 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 10.1 | 7.5 | 36.7 | 31.7 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 125.3 | $ | 139.9 | $ | 609.7 | $ | 655.8 |
BorgWarner Inc. | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(millions of dollars) | |||||||
December 31, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Cash | $ | 577.7 | $ | 797.8 | |||
Receivables, net | 1,665.0 | 1,443.5 | |||||
Inventories, net | 723.6 | 505.7 | |||||
Other current assets | 169.0 | 223.8 | |||||
Total current assets | 3,135.3 | 2,970.8 | |||||
Property, plant and equipment, net | 2,448.1 | 2,093.9 | |||||
Other non-current assets | 3,258.1 | 2,163.3 | |||||
Total assets | $ | 8,841.5 | $ | 7,228.0 | |||
Liabilities and Equity | |||||||
Notes payable and other short-term debt | $ | 441.5 | $ | 623.7 | |||
Accounts payable and accrued expenses | 1,866.4 | 1,530.3 | |||||
Income taxes payable | 49.4 | 14.2 | |||||
Total current liabilities | 2,357.3 | 2,168.2 | |||||
Long-term debt | 2,124.6 | 716.3 | |||||
Other non-current liabilities | 728.1 | 652.6 | |||||
Total BorgWarner Inc. stockholders’ equity | 3,553.7 | 3,616.2 | |||||
Noncontrolling interest | 77.8 | 74.7 | |||||
Total equity | 3,631.5 | 3,690.9 | |||||
Total liabilities and equity | $ | 8,841.5 | $ | 7,228.0 |
BorgWarner Inc. | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
(millions of dollars) | |||||||
Twelve Months Ended December 31, | |||||||
2015 | 2014 | ||||||
Operating | |||||||
Net earnings | $ | 646.4 | $ | 687.5 | |||
Non-cash charges (credits) to operations: | |||||||
Depreciation and amortization | 320.2 | 330.4 | |||||
Restructuring expense, net of cash paid | 36.3 | 45.8 | |||||
Gain on previously held equity interest | (10.8 | ) | — | ||||
Pension settlement loss | 25.7 | 3.1 | |||||
Deferred income tax provision | 13.3 | 42.3 | |||||
Other non-cash items | 18.3 | 26.9 | |||||
Net earnings adjusted for non-cash charges to operations | 1,049.4 | 1,136.0 | |||||
Changes in assets and liabilities | (181.5 | ) | (334.2 | ) | |||
Net cash provided by operating activities | 867.9 | 801.8 | |||||
Investing | |||||||
Payments for businesses acquired, including restricted cash, net of cash acquired | (1,199.6 | ) | (110.5 | ) | |||
Capital expenditures, including tooling outlays | (577.3 | ) | (563.0 | ) | |||
Proceeds from settlement of net investment hedges | 13.1 | — | |||||
Proceeds from asset disposals and other | 4.7 | 8.4 | |||||
Net cash used in investing activities | (1,759.1 | ) | (665.1 | ) | |||
Financing | |||||||
Net (decrease) increase in notes payable | (316.7 | ) | 493.2 | ||||
Additions to long-term debt, net of debt issuance costs | 1,569.2 | 130.5 | |||||
Repayments of long-term debt, including current portion | (29.8 | ) | (431.6 | ) | |||
Repayments of accounts receivable securitization facility | — | (110.0 | ) | ||||
Payments for purchase of treasury stock | (349.8 | ) | (139.9 | ) | |||
Proceeds from (payments for) stock-based compensation items | 3.7 | (6.7 | ) | ||||
Dividends paid to BorgWarner stockholders | (116.7 | ) | (116.1 | ) | |||
Dividends paid to noncontrolling stockholders | (23.3 | ) | (21.1 | ) | |||
Net cash provided by (used in) financing activities | 736.6 | (201.7 | ) | ||||
Effect of exchange rate changes on cash | (65.5 | ) | (76.7 | ) | |||
Net decrease in cash | (220.1 | ) | (141.7 | ) | |||
Cash at beginning of year | 797.8 | 939.5 | |||||
Cash at end of year | $ | 577.7 | $ | 797.8 |