BWA BorgWarner Inc

AUBURN HILLS, Mich., Jan. 12 /PRNewswire-FirstCall/ -- BorgWarner Inc. (NYSE:BWA) today provided 2006 earnings guidance of $4.22 to $4.57 per diluted share on a U.S. GAAP basis, which includes ($0.16) to ($0.18) per diluted share negative impact of the implementation of FAS 123(R) and ($0.12) to ($0.25) per diluted share negative impact of weaker foreign currencies. Excluding the implementation of FAS 123(R) and the impact of currency, earnings growth is expected to be in line with BorgWarner historical growth rates of approximately 10%. "Our robust pipeline of new business and proven ability to participate in the fastest growing segments of the auto market are expected to generate healthy growth for BorgWarner in 2006," said Timothy M. Manganello, Chairman and CEO. "We expect that our technologies, developed to enhance fuel economy, performance, vehicle stability and emissions, will continue to drive long term growth." BorgWarner expects to achieve 2006 sales growth in a range of 5% to 7%, or 9% to 11% excluding the impact of currency. The outlook for global vehicle production is moderate as North American and European vehicle production is expected to be flat, although solid growth is anticipated in Asia. Despite an expectation of modest industry growth, the company expects sales growth in every major product family, in both the Engine Group and the Drivetrain Group, in 2006. Mr. Manganello noted that currency fluctuations have impacted results over the past few years and are expected to do so again in 2006. BorgWarner expects the Euro, on average, to trade in a range of $1.15 to $1.20, compared with $1.25 in 2005 and a current spot rate of approximately $1.21. The company also expects the Japanese Yen, on average, to be weaker in 2006 with the dollar trading in a range of 115 yen to 110 yen, versus 110 yen in 2005 and a current spot rate of approximately 114 yen. "The unfavorable impact of weaker foreign currencies in 2006 is a reversal of the tailwind those currencies provided in 2004. Despite currency fluctuations, our business fundamentals remain strong." The company expects to maintain operating margins in 2006 despite continued raw material and energy cost increases, rising healthcare costs and the costs related to global expansion. The company will discuss its guidance in conjunction with the North American International Auto Show in Detroit today. Further details can be found by accessing the presentation webcast at http://www.borgwarner.com/investor_webcasts.html . Auburn Hills, Michigan-based BorgWarner Inc. (NYSE:BWA) is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. The company operates manufacturing and technical facilities in 61 locations in 17 countries. Customers include Ford, DaimlerChrysler, General Motors, VW/Audi, Toyota, Hyundai/Kia, Renault/Nissan, Honda, Caterpillar, Navistar International, Peugeot, and BMW. The Internet address for BorgWarner is: http://www.borgwarner.com/ . The following table reconciles Non-U.S. GAAP earnings per diluted share amounts included in the press release to the most directly comparable U.S. GAAP amounts and is provided for comparisons with other results: 2006 Guidance -- Earnings Per Diluted Share U.S. GAAP: $4.22 - $4.57 Implementation of FAS 123(R) 0.18 - 0.16 Non-U.S. GAAP $4.40 - $4.73 Impact of currency 0.25 - 0.12 Non-U.S. GAAP excluding impact of currency $4.65 - $4.85 The company's management believes that the Non-U.S. GAAP financial metrics provided are useful as they enable investors to make comparisons with historical results. 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 "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 the control of the Company, 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 automotive production, the continued use of outside suppliers by original equipment manufacturers, fluctuations in demand for vehicles containing the Company's products, general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission, including the Cautionary Statements filed as Exhibit 99.1 to the Form 10-K for the fiscal year ended December 31, 2004. The Company does not undertake any obligation to update any forward-looking statement. http://www.borgwarner.com/investor_webcasts.html DATASOURCE: BorgWarner Inc. CONTACT: Mary Brevard, +1-248-754-0881, or Ken Lamb +1-248-754-0884, both of BorgWarner Inc. Web site: http://www.borgwarner.com/

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