AUBURN HILLS, Mich.,
Feb. 13, 2014 /PRNewswire/ --
BorgWarner Inc. (NYSE: BWA) today reported fourth quarter 2013 U.S.
GAAP earnings of $0.62 per diluted
share. Excluding non-comparable items, net earnings were
$0.79 per diluted share. Net sales
were $1,885 million in the
quarter.
Fourth Quarter Highlights:
- Net sales of $1,885 million.
- Excluding the impact of foreign currencies and 2012
dispositions, net sales were up 9% compared with fourth quarter
2012.
- U.S. GAAP earnings of $0.62 per
diluted share.
- Excluding the $(0.20) per diluted
share impact of restructuring activities, and $0.02 per diluted share related to net tax
adjustments, net earnings were $0.79
per diluted share, up 36% from fourth quarter 2012.
- Operating income of $188 million,
or 10.0% of net sales.
- Excluding the $52 million pretax
impact of restructuring activities, operating income was
$240 million, or 12.7% of net
sales.
- Signed an agreement to acquire all shares in Gustav Wahler GmbH
u. Co. KG and its general partner ("Wahler"), a producer of exhaust
gas recirculation (EGR) valves, EGR tubes and thermostats.
- Implemented a two-for-one stock split.
- Contributed $138 million to the
company's German pension plans.
Full Year Highlights:
- Record net sales of $7,437
million.
- Excluding the impact of foreign currencies and 2012
dispositions, net sales were up 4% from 2012.
- U.S. GAAP earnings of $2.70 per
diluted share.
- Excluding net non-comparable items, 2013 earnings were
$2.89 per diluted share, a record for
the company, up 17% from 2012 comparable results.
- Operating income of $855 million,
or 11.5% of net sales.
- Excluding non-comparable items, operating income was 12.4% of
net sales, a full year record.
- Repurchased approximately 5.2 million shares of common stock in
2013. The number of shares repurchased has been adjusted for the
two-for-one stock split.
Comment and Outlook: "2013 was a remarkable year for our
company," said James R. Verrier,
President and Chief Executive Officer, BorgWarner. "Faced with cost
pressures and a challenging environment for growth, we maintained
our focus on operational efficiency and cost management and
achieved record profitability. Additionally, we signed an agreement
to purchase Wahler, a leading producer of EGR valves, EGR tubes and
thermostats. This strategic acquisition will strengthen our
competitive position in EGR systems, a technology automakers and
commercial vehicle makers are rapidly adopting to help improve fuel
economy and meet tightening emissions standards around the
world."
"As we look ahead to 2014, we expect organic net sales growth of
7% to 11% compared with 2013, earnings of $3.10 to $3.25 per diluted share and an operating
income margin of 12.5% or better. This excludes the impact of the
pending Wahler acquisition. A return to historical growth rates,
combined with improved operational proficiency, should result in
another great year for BorgWarner in 2014," said Verrier.
Financial Results: Net sales were $1,885 million in fourth quarter 2013, up 10%
from $1,719 million in fourth quarter
2012. Net earnings in the quarter were $141
million, or $0.62 per diluted
share, compared with $121 million, or
$0.51 per diluted share, in fourth
quarter 2012. Fourth quarter 2013 net earnings included net
non-comparable items of $(0.18) per
diluted share. Fourth quarter 2012 net earnings included
non-comparable items of $(0.07) per
diluted share. These items are listed in a table below as
reconciliations of non-U.S. GAAP measures, which are provided by
the company for comparison with other results, and the most
directly comparable U.S. GAAP measures. The impact of foreign
currencies increased net sales by approximately $28 million, and decreased net earnings by
approximately $0.01 per diluted
share, in fourth quarter 2013 compared with fourth quarter
2012.
Full year 2013 net sales were $7,437
million, up 4% compared with $7,183
million in 2012. Full year 2013 net earnings were
$624 million, or $2.70 per diluted share, compared with
$501 million, or $2.09 per diluted share, in 2012. Full year 2013
net earnings included net non-comparable items of $(0.20) per diluted share. Full year 2012 net
earnings included non-comparable items of $(0.40) per diluted share. These items are listed
in a table below as reconciliations of non-U.S. GAAP measures,
which are provided by the company for comparison with other
results, and the most directly comparable U.S. GAAP measures. The
impact of foreign currencies increased net sales by approximately
$71 million, and decreased net
earnings by approximately $0.05 per
diluted share, in 2013 compared with 2012.
The following table reconciles the company's non-U.S. GAAP
measures included in the press release, which are provided for
comparison with other results, and the most directly comparable
U.S. GAAP measures:
Net earnings per
diluted share*
|
Fourth
Quarter
|
|
Full Year
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Non – U.S.
GAAP
|
$
|
0.79
|
|
|
$
|
0.58
|
|
|
$
|
2.89
|
|
|
$
|
2.48
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations:
|
|
|
|
|
|
|
|
|
Restructuring
expense
|
(0.20)
|
|
|
|
|
(0.20)
|
|
|
(0.08)
|
|
|
Program termination
agreement
|
|
|
|
|
(0.03)
|
|
|
|
|
Retirement related
obligations
|
|
|
(0.05)
|
|
|
(0.02)
|
|
|
(0.05)
|
|
|
Tax
adjustments
|
0.02
|
|
|
(0.02)
|
|
|
0.05
|
|
|
(0.08)
|
|
|
Loss from disposal
activities
|
|
|
|
|
|
|
(0.19)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
GAAP
|
$
|
0.62
|
|
**
|
$
|
0.51
|
|
|
$
|
2.70
|
|
**
|
$
|
2.09
|
|
**
|
|
|
|
|
|
|
|
|
|
* Reflects a
two-for-one stock split effective December 16, 2013
|
|
|
|
|
|
|
|
|
** Column does not
add due to rounding
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities was $719 million in 2013 compared with $879 million in 2012. Investments in capital
expenditures, including tooling outlays, totaled $418 million in 2013, compared with $407 million in 2012. Balance sheet debt
increased by $155 million and cash
increased by $224 million compared
with the end of 2012. The $68 million
decrease in balance sheet debt (net of cash) was primarily due to
net cash provided by operating activities partially offset by
capital expenditures, share repurchases and dividends paid to
stockholders. The ratio of balance sheet debt (net of cash) to
capital was 7.2% at the end of 2013 compared with 10.0% at the end
of 2012.
Engine Segment Results: Engine segment net sales were
$1,266 million in fourth quarter 2013
compared with $1,167 million in
fourth quarter 2012. Excluding the impact of foreign currencies and
2012 dispositions, net sales were up 8% from the prior year's
quarter, primarily due to higher sales of turbochargers,
engine timing devices and EGR coolers around the world. Adjusted
earnings before interest, income taxes and non-controlling interest
("Adjusted EBIT") were $208 million
in fourth quarter 2013, up 14% from $182
million in fourth quarter 2012.
Drivetrain Segment Results: Drivetrain segment net sales
were $628 million in fourth quarter
2013 compared with $559 million in
fourth quarter 2012. Excluding the impact of foreign currencies,
net sales were up 10% from the prior year's quarter, primarily due
to higher sales of all-wheel drive systems, traditional
transmission components and dual clutch transmission modules around
the world. Adjusted EBIT was $71
million in fourth quarter 2013, up 43% from $49 million in fourth quarter 2012.
Recent Highlights:
- The board of directors approved a two-for-one stock split
effected in the form of a stock dividend on the company's common
stock. To implement the stock split, shares of common stock were
distributed on December 16, 2013 to
all stockholders of record as of the close of business on
December 2, 2013.
- In November, the company reported an expected backlog of
$2.9 billion of net new business for
the period 2014 through 2016. Demand for the company's advanced
powertrain technologies, such as gasoline and diesel turbochargers,
all-wheel drive systems, engine timing systems including variable
cam timing, and emissions products, is expected to continue to
drive strong growth.
- BorgWarner introduced the world's first electronic limited slip
differential designed for the front transaxle of a front-wheel
drive vehicle on the 2013 Volkswagen Golf GTI with Performance
Pack. Known as front cross differential (FXD) technology, the
system greatly enhances vehicle traction, handling and stability
without sacrificing engine power. Under certain driving conditions,
the FXD technology's enhanced vehicle performance approaches that
of an all-wheel drive system but costs less and offers better fuel
economy.
- BorgWarner has signed an agreement to acquire all shares in
Gustav Wahler GmbH u. Co. KG and its general partner, a producer of
EGR valves, EGR tubes and thermostats, subject to regulatory
approvals. With locations in Germany, Brazil, the U.S., China and Slovakia, Wahler employs approximately 1,250
people and supplies customers such as Daimler, Volkswagen, BMW, GM
and John Deere. Wahler's sales for 2013 are expected to be
approximately $350 million.
At 9:30 a.m. ET today, a brief
conference call concerning fourth quarter and full year results
will be webcast at:
http://www.borgwarner.com/en/Investors/default.aspx.
BorgWarner Inc. (NYSE: BWA) is a product leader in highly
engineered components and systems for powertrains around the world.
Operating manufacturing and technical facilities in 56 locations in
19 countries, the company delivers innovative powertrain solutions
to improve fuel economy, reduce emissions and enhance performance.
For more information, please visit borgwarner.com.
Statements contained in this news release may contain
forward-looking statements as contemplated by the 1995 Private
Securities Litigation Reform Act that are based on management's
current expectations, estimates and projections. Words such as
"outlook," "expects," "anticipates," "intends," "plans,"
"believes," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements are subject to risks and
uncertainties, many of which are difficult to predict and generally
beyond our control, that could cause actual results to differ
materially from those expressed, projected or implied in or by the
forward-looking statements. Such risks and uncertainties include:
fluctuations in domestic or foreign vehicle production, the
continued use of outside suppliers, fluctuations in demand for
vehicles containing our products, changes in general economic
conditions, and other risks detailed in our filings with the
Securities and Exchange Commission, including the Risk Factors,
identified in our most recently filed Annual Report on Form 10-K.
We do not undertake any obligation to update any forward-looking
statements.
BorgWarner
Inc.
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
|
|
(millions, except per
share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Net sales
|
$
|
1,885.4
|
|
|
$
|
1,719.1
|
|
|
$
|
7,436.6
|
|
|
$
|
7,183.2
|
|
Cost of
sales
|
1,478.8
|
|
|
1,374.9
|
|
|
5,879.1
|
|
|
5,716.3
|
|
Gross
profit
|
406.6
|
|
|
344.2
|
|
|
1,557.5
|
|
|
1,466.9
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
167.1
|
|
|
156.2
|
|
|
639.7
|
|
|
629.3
|
|
Other
expense
|
51.8
|
|
|
17.3
|
|
|
62.6
|
|
|
84.7
|
|
Operating
income
|
187.7
|
|
|
170.7
|
|
|
855.2
|
|
|
752.9
|
|
|
|
|
|
|
|
|
|
Equity in affiliates'
earnings, net of tax
|
(12.3)
|
|
|
(10.0)
|
|
|
(43.5)
|
|
|
(42.8)
|
|
Interest
income
|
(1.5)
|
|
|
(1.0)
|
|
|
(4.8)
|
|
|
(4.7)
|
|
Interest expense and
finance charges
|
7.6
|
|
|
6.7
|
|
|
34.2
|
|
|
39.4
|
|
Earnings before
income taxes and noncontrolling interest
|
193.9
|
|
|
175.0
|
|
|
869.3
|
|
|
761.0
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
44.5
|
|
|
48.4
|
|
|
218.3
|
|
|
238.6
|
|
Net
earnings
|
149.4
|
|
|
126.6
|
|
|
651.0
|
|
|
522.4
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
8.0
|
|
|
5.4
|
|
|
26.7
|
|
|
21.5
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
141.4
|
|
|
$
|
121.2
|
|
|
$
|
624.3
|
|
|
$
|
500.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
diluted earnings per share:
|
|
|
|
|
|
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
141.4
|
|
|
$
|
121.2
|
|
|
$
|
624.3
|
|
|
$
|
500.9
|
|
Adjustment for net
interest expense on convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
Diluted net earnings
attributable to BorgWarner Inc.
|
$
|
141.4
|
|
|
$
|
121.2
|
|
|
$
|
624.3
|
|
|
$
|
506.7
|
|
|
|
|
|
|
|
|
|
Earnings per share —
diluted
|
$
|
0.62
|
|
|
$
|
0.51
|
|
|
$
|
2.70
|
|
|
$
|
2.09
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding — diluted
|
229.5
|
|
|
235.6
|
|
|
231.3
|
|
|
242.8
|
|
|
|
|
|
|
|
|
|
Supplemental
Information (Unaudited)
|
|
|
|
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Capital expenditures,
including tooling outlays
|
$
|
119.9
|
|
|
$
|
124.4
|
|
|
$
|
417.8
|
|
|
$
|
407.4
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
Fixed assets and
tooling
|
$
|
70.3
|
|
|
$
|
70.4
|
|
|
$
|
272.7
|
|
|
$
|
260.2
|
|
Intangible assets and
other
|
6.6
|
|
|
6.9
|
|
|
26.7
|
|
|
28.4
|
|
|
$
|
76.9
|
|
|
$
|
77.3
|
|
|
$
|
299.4
|
|
|
$
|
288.6
|
|
BorgWarner
Inc.
|
|
|
|
|
|
|
|
Net Sales by
Reporting Segment (Unaudited)
|
|
|
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Engine
|
$
|
1,266.0
|
|
|
$
|
1,167.2
|
|
|
$
|
5,022.1
|
|
|
$
|
4,913.0
|
|
Drivetrain
|
627.6
|
|
|
559.0
|
|
|
2,446.5
|
|
|
2,298.7
|
|
Inter-segment
eliminations
|
(8.2)
|
|
|
(7.1)
|
|
|
(32.0)
|
|
|
(28.5)
|
|
Net sales
|
$
|
1,885.4
|
|
|
$
|
1,719.1
|
|
|
$
|
7,436.6
|
|
|
$
|
7,183.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Engine
|
$
|
207.9
|
|
|
$
|
182.0
|
|
|
$
|
826.0
|
|
|
$
|
786.4
|
|
Drivetrain
|
70.5
|
|
|
49.2
|
|
|
252.2
|
|
|
209.1
|
|
Adjusted
EBIT
|
278.4
|
|
|
231.2
|
|
|
1,078.2
|
|
|
995.5
|
|
Restructuring
expense
|
52.3
|
|
|
—
|
|
|
52.3
|
|
|
27.4
|
|
Program termination
agreement
|
—
|
|
|
—
|
|
|
11.3
|
|
|
—
|
|
Retirement related
obligations
|
—
|
|
|
17.3
|
|
|
5.9
|
|
|
17.3
|
|
Loss from disposal
activities
|
—
|
|
|
—
|
|
|
—
|
|
|
39.7
|
|
Corporate, including
equity in affiliates' earnings and stock-based
compensation
|
26.1
|
|
|
33.2
|
|
|
110.0
|
|
|
115.4
|
|
Interest
income
|
(1.5)
|
|
|
(1.0)
|
|
|
(4.8)
|
|
|
(4.7)
|
|
Interest expense and
finance charges
|
7.6
|
|
|
6.7
|
|
|
34.2
|
|
|
39.4
|
|
Earnings before
income taxes and noncontrolling interest
|
193.9
|
|
|
175.0
|
|
|
869.3
|
|
|
761.0
|
|
Provision for income
taxes
|
44.5
|
|
|
48.4
|
|
|
218.3
|
|
|
238.6
|
|
Net
earnings
|
149.4
|
|
|
126.6
|
|
|
651.0
|
|
|
522.4
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
8.0
|
|
|
5.4
|
|
|
26.7
|
|
|
21.5
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
141.4
|
|
|
$
|
121.2
|
|
|
$
|
624.3
|
|
|
$
|
500.9
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
December
31,
2013
|
|
December
31,
2012
|
Assets
|
|
|
|
|
|
|
|
Cash
|
$
|
939.5
|
|
|
$
|
715.7
|
|
Receivables,
net
|
1,248.5
|
|
|
1,147.3
|
|
Inventories,
net
|
458.1
|
|
|
447.6
|
|
Other current
assets
|
152.4
|
|
|
162.2
|
|
Total current
assets
|
2,798.5
|
|
|
2,472.8
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,939.4
|
|
|
1,788.0
|
|
Other non-current
assets
|
2,179.1
|
|
|
2,140.0
|
|
Total
assets
|
$
|
6,917.0
|
|
|
$
|
6,400.8
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Notes payable and
other short-term debt
|
$
|
201.6
|
|
|
$
|
243.4
|
|
Accounts payable and
accrued expenses
|
1,383.8
|
|
|
1,287.2
|
|
Income taxes
payable
|
38.5
|
|
|
72.5
|
|
Total current
liabilities
|
1,623.9
|
|
|
1,603.1
|
|
|
|
|
|
Long-term
debt
|
1,021.0
|
|
|
823.8
|
|
Other non-current
liabilities
|
639.7
|
|
|
827.8
|
|
|
|
|
|
Total BorgWarner Inc.
stockholders' equity
|
3,560.6
|
|
|
3,082.6
|
|
Noncontrolling
interest
|
71.8
|
|
|
63.5
|
|
Total
equity
|
3,632.4
|
|
|
3,146.1
|
|
Total liabilities and
equity
|
$
|
6,917.0
|
|
|
$
|
6,400.8
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
December
31,
|
|
2013
|
|
2012
|
Operating
|
|
|
|
Net
earnings
|
$
|
651.0
|
|
|
$
|
522.4
|
|
Non-cash charges
(credits) to operations:
|
|
|
|
Depreciation and
amortization
|
299.4
|
|
|
288.6
|
|
Loss from disposal
activities, net of cash paid
|
—
|
|
|
31.7
|
|
Restructuring
expense, net of cash paid
|
48.5
|
|
|
23.3
|
|
Bond
amortization
|
—
|
|
|
5.3
|
|
Deferred income tax
benefit
|
(22.9)
|
|
|
(10.7)
|
|
Other non-cash
items
|
15.3
|
|
|
43.7
|
|
Net earnings adjusted
for non-cash charges to operations
|
991.3
|
|
|
904.3
|
|
Changes in assets and
liabilities
|
(272.5)
|
|
|
(25.6)
|
|
Net cash provided by
operating activities
|
718.8
|
|
|
878.7
|
|
|
|
|
|
Investing
|
|
|
|
Capital expenditures,
including tooling outlays
|
(417.8)
|
|
|
(407.4)
|
|
Net proceeds from
asset disposals
|
23.9
|
|
|
5.4
|
|
Net proceeds from
sale of businesses
|
9.1
|
|
|
56.8
|
|
Net cash used in
investing activities
|
(384.8)
|
|
|
(345.2)
|
|
|
|
|
|
Financing
|
|
|
|
Net (decrease)
increase in notes payable
|
(44.4)
|
|
|
12.8
|
|
Additions to
long-term debt, net of debt issuance costs
|
289.5
|
|
|
313.9
|
|
Repayments of
long-term debt, including current portion
|
(77.0)
|
|
|
(246.4)
|
|
Proceeds from
accounts receivable securitization facility
|
—
|
|
|
30.0
|
|
Payments for purchase
of treasury stock
|
(225.5)
|
|
|
(295.9)
|
|
Proceeds from stock
options exercised, including the tax benefit
|
33.0
|
|
|
52.0
|
|
Taxes paid on
employees' restricted stock award vestings
|
(40.9)
|
|
|
(18.1)
|
|
Purchase of
noncontrolling interest
|
—
|
|
|
(15.0)
|
|
Dividends paid to
BorgWarner stockholders
|
(56.8)
|
|
|
—
|
|
Dividends paid to
noncontrolling stockholders
|
(13.3)
|
|
|
(21.9)
|
|
Net cash used in
financing activities
|
(135.4)
|
|
|
(188.6)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
25.2
|
|
|
11.2
|
|
|
|
|
|
Net increase in
cash
|
223.8
|
|
|
356.1
|
|
|
|
|
|
Cash at beginning of
year
|
715.7
|
|
|
359.6
|
|
Cash at end of
year
|
$
|
939.5
|
|
|
$
|
715.7
|
|
SOURCE BorgWarner Inc.