- Annual Report of Employee Stock Plans (11-K)
01 Juin 2009 - 10:37PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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þ
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Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended December 31, 2008
Or
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o
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Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
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For the transition period from
to
Commission File Number 333-136605, 333-118202 and 313-150570
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A.
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Full title of the plan and the address of the plan, if different from that of the issuer named below:
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BorgWarner Inc. Retirement Savings Plan
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B.
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Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
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BorgWarner Inc.
3850 Hamlin Road
Auburn Hills, MI 48326
Required Information
Item 4.
Financial Statements as of December 31, 2008 and 2007, and for the Year Ended December 31, 2008,
Supplemental Schedule as of December 31, 2008, and Report of Independent Registered Public
Accounting Firm
BorgWarner Inc.
Retirement
Savings Plan
Financial Statements as of December 31, 2008 and
2007, and for the Year Ended December 31, 2008,
Supplemental Schedule as of December 31, 2008,
and Report of Independent Registered Public Accounting Firm
BORGWARNER INC. RETIREMENT SAVINGS PLAN
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Page
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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1
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FINANCIAL STATEMENTS:
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Statements of Assets Available for Benefits as of
December 31, 2008 and 2007
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2
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Statement of Changes in Assets Available for Benefits for the
Year Ended December 31, 2008
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3
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Notes to Financial Statements as of December 31, 2008 and 2007,
and for the Year Ended December 31, 2008
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411
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SUPPLEMENTAL SCHEDULE:
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12
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Form 5500 Schedule H, Part IV, Line 4i Schedule of Assets (Held at End of Year)
as of December 31, 2008
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13
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NOTE:
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All other schedules required by section 2520.103-10 of the Department of Labors
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted due to the absence of conditions
under which they are required.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Employee Benefits Committee and
the BorgWarner Inc. Retirement Savings Plan
Auburn Hills, Michigan
We have audited the accompanying statements of assets available for benefits of the BorgWarner Inc.
Retirement Savings Plan (the Plan) as of December 31, 2008 and 2007, and the related statement of
changes in assets available for benefits for the year ended December 31, 2008. These financial
statements are the responsibility of the Plans management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit includes consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plans
internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the assets
available for benefits of the Plan as of December 31, 2008 and 2007, and the changes in assets
available for benefits for the year ended December 31, 2008 in conformity with accounting
principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31,
2008, is presented for the purpose of additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by the Department of Labors Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This schedule is the responsibility of the Plans management. Such schedule has been
subjected to the auditing procedures applied in our audit of the basic 2008 financial statements
and, in our opinion, is fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Detroit, Michigan
June 1, 2009
BORGWARNER INC. RETIREMENT SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2008 AND 2007
(In thousands)
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2008
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2007
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ASSETS:
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Participant-directed investments in BorgWarner Inc. Retirement
Savings Master Trust (Master Trust)
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$
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496,019
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$
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641,694
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Participant loans
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8,710
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6,559
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Investments
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504,729
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648,253
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Participant contributions receivable
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152
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141
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Company contributions receivable
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185
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160
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ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE
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505,066
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648,554
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Adjustments from fair value to contract value for fully benefit-responsive investments
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1,167
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(616
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ASSETS AVAILABLE FOR BENEFITS
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$
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506,233
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$
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647,938
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See notes to financial statements.
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BORGWARNER INC. RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2008
(In thousands)
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ADDITIONS TO ASSETS:
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Net transfers from other BorgWarner Inc. plans
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$
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64,958
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Loan interest payments
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509
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Contributions from participants
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17,782
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Contributions from the Company
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16,133
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Total additions
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99,382
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DEDUCTIONS FROM ASSETS:
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Investment loss from the Master Trust
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$
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179,012
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Participants withdrawals
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61,799
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Administrative expenses
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276
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Total deductions
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241,087
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NET DECREASE
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(141,705
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ASSETS AVAILABLE FOR BENEFITS Beginning of year
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647,938
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ASSETS AVAILABLE FOR BENEFITS End of year
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$
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506,233
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See notes to financial statements.
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BORGWARNER INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007, AND FOR THE YEAR ENDED DECEMBER 31, 2008
1.
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DESCRIPTION OF PLAN
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The following description of the BorgWarner Inc. Retirement Savings Plan (the Plan) provides
only general information. Participants should refer to the Plan document for a more complete
description of the Plans provisions.
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General
The Plan was established on January 27, 1993, and is a participating plan under the
BorgWarner Inc. Retirement Savings Master Trust (the Master Trust). BorgWarner Inc. (the
Company or the Corporation) is the sponsor of the Plan.
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The Plan was established as a defined contribution plan under Section 401(a) of the Internal
Revenue Code (IRC), designed to provide eligible employees of the Company with systematic
savings and tax-advantaged long-term savings for retirement. The Company has assigned the
Employee Benefit Committee (the Committee) to oversee the Plan and the Master Trust.
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The Committee appointed T. Rowe Price Retirement Plan Services, Inc. and T. Rowe Price Trust
Co. (the Trustee) to perform the administrative, investment, and trustee services for the
Plan and the Master Trust.
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The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
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2008 Plan Merger
On December 31, 2008, the BorgWarner Employee Retirement Savings Plan (the
ERSP Plan) was amended to merge the ERSP Plan into the Plan and provided that the assets
attributable to the ERSP Plan be transferred and merged with those of the Plan effective as of
the start of business on December 31, 2008. Each ERSP Plan participant has an accrued benefit
in the Plan that is no less than his or her accrued benefit under the ERSP Plan immediately
prior to the merger. All ERSP Plan assets were transferred to the Plan on December 31, 2008.
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Eligibility
Employees of the Company, and employees of its divisions, subsidiaries, or
affiliates that have adopted the Plan, subject to the consent of the Committee, are immediately
eligible to start making employee contributions as of their date of hire.
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Participants Accounts
Individual accounts are maintained for each Plan participant. Each
participants account is credited with the participants contributions, the Companys matching
contributions and an allocation of Plan earnings, and charged with withdrawals and an
allocation of Plan losses. Allocations are based on participant earnings or account balances.
The benefit to which a participant is entitled is the benefit that can be provided from the
participants vested account, including:
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Company Retirement Account
The Company makes contributions as a percentage of a
participants compensation, based on years of vested service and age, to this account on behalf
of each eligible participant. No employee contributions are made to this account.
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Savings Account
Participants may voluntarily contribute from 1% to 28% of their compensation
to this account, subject to IRC limitations. Pretax deferrals into this account are limited to
12% for highly compensated employees. New employees are automatically enrolled at 3% upon
completing 60 days of
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service, unless they elect not to participate or they elect a different percentage rate. The
Company makes contributions equal to 100% of the first 3% of participant pre-tax contributions.
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Retiree Health Account
Participants may voluntarily contribute from 1% to 3% of their
compensation to this account, depending on their date of hire and when their location adopted
this provision of the Plan. The Company makes contributions equal to 100% of participants
contributions to this account, limited to $500 per year. No after-tax contributions are
allowed.
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Investment Options
Participants elect to invest their account balances (including current
and accumulated contributions, current and accumulated Company contributions on behalf of
participants and earnings) into various investment options offered by the Plan, including
collective trust funds, mutual funds, stable value fund, money market fund, and the BorgWarner
Inc. Stock Fund.
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Vesting
Fund assets attributable to voluntary participant contributions are fully vested at
all times. Fund assets attributable to Company contributions vest 100% upon: three years of
vested service; or permanent disability, death, or attaining age 65 provided the participant is
employed by the Company on that date.
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Withdrawals
While participants are employed, no hardship withdrawals may be made from the
Company Retirement Account or Retiree Health Account. Hardship withdrawals may be made from the
Savings Account at participants discretion, subject to certain limitations. Distribution of
benefits is made upon retirement, death, or other termination of employment as permitted by the
Plan and by ERISA regulations. Participants may elect to receive distributions in installments
or a lump sum.
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Loans
Participants may borrow from their Savings Account a minimum of $500 and a maximum of
the lesser of (a) 50% of the vested balance or (b) $50,000 reduced by the highest outstanding
loan balance in the last 12 months.
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Loan terms ranged from six months to five years, with interest charged at the rate established
by the Trustee for similar loans on the origination date. Interest rates on loans outstanding
as of December 31, 2008, range from 5.0% to 10.5%. No loans are permitted from the Company
Retirement Account or the Retiree Health Account. Loans are secured by the remaining balance in
the participants Savings Account. Principal and interest are paid ratably through payroll
deductions.
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Priorities upon Termination
Although the Company has expressed no intent to discontinue the
Plan, it has the right to do so at any time, subject to provisions set forth in ERISA. In the
event of termination, the interests of affected participants shall become fully vested. The
Plan assets then remaining shall be used to pay administrative expenses and benefits equal to
the balance in participant accounts.
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Forfeited Accounts
At December 31, 2008 and 2007, there were approximately $662,000 and
$1,037,000, respectively, in forfeited nonvested accounts. During the year ended December 31,
2008, employer contributions were reduced by approximately $728,000 from forfeited nonvested
accounts.
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Basis of Presentation
The financial statements of the Plan are prepared under the accrual
method of accounting and in accordance with accounting principles generally accepted in the
United States of America (GAAP).
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Adoption of New Accounting Guidance
On January 1, 2008, the Plan adopted as required,
Statement of Financial Accounting Standards No. 157
Fair Value Measurements
(SFAS 157)
which expands the disclosure of fair value measurements and its impact on the Plans financial
statements.
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Refer to Note 8, Fair Value Measurements, for further information related to SFAS 157.
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Investment Valuation
The Master Trusts investments are recorded at fair value, based upon
the last traded or current bid prices in active markets. Where there are no readily available
last traded or current bid prices, fair value estimation procedures used in determining asset
values might cause differences from the values that would exist in a ready market due to the
potential subjectivity in the estimates. Equities and mutual funds are valued based on quoted
market prices on national exchanges.
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Collective Trust Funds
The Collective Trust Funds are valued on a unit value basis
either on a monthly or quarterly basis by the fund manager or general partner, and are
reviewed by the Master Trusts fiduciaries for reasonableness. The fair values of these
investments are determined by reference to the respective funds underlying assets, which
are primarily marketable equity and fixed income securities. In the event that a fund
managers or general partners valuation is not deemed reasonable, fair value is
determined by the fair valuation policies prescribed by the Master Trust agreement.
Stable Value Fund
The contract value of the T. Rowe Price Stable Value Common Trust
Fund (SVF) of the Master Trust was approximately $150,797,000 and $144,248,000 at
December 31, 2008 and 2007, respectively. The fair value of the SVF was approximately $149,397,000 and
$145,106,000 at December 31, 2008 and 2007, respectively. The crediting interest rate was 4.1% and
4.7% at December 31, 2008 and 2007, respectively. Crediting interest rates are influenced
by the yield and any gain or loss on investment contracts underlying the SVF. The yield
on the SVF is an average of the crediting rates of interest for the underlying investment
contracts of the SVF. SVF yields change daily. The fair value of the SVF is determined
based on the fair value of the underlying assets in the funds on the close of business on
the valuation date. There are no reserves against contract value for credit risk of the
contract issuer or otherwise.
BorgWarner Inc. Common Stock Fund
BorgWarner Inc. common stock is valued at the
closing price reported on the New York Stock Exchange Composite Listing.
Mutual Funds
Mutual Funds are investment vehicles stated at fair value based on quoted
market prices as reported by the Trustee.
Money Market Fund
The Money Market Fund invests in high-quality short-term securities
with maturities of 13 months or less. The fund is an investment vehicle valued using $1
for the net asset value. The fund is stated at fair value, based on the funds underlying
assets, as reported by the Trustee.
Participant Loans
Loans to plan participants are valued at cost plus accrued interest,
which approximates fair value.
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Estimates
The preparation of financial statements in conformity with GAAP requires Plan
management to make estimates and assumptions that affect the reported amounts of assets
available for benefits as of the date of the financial statements, and the reported amounts of
changes in assets available for benefits during the reporting period. Actual results could
differ from those estimates.
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Risks and Uncertainties
The Plan utilizes various investment instruments, including a stable
value fund, mutual funds, collective trusts, equities and a money market fund. Investment
securities, in general, are exposed to various risks, such as interest rate, credit, and
overall market volatility. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect the amounts reported in
the financial statements.
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Administrative Expenses
Transfer taxes and brokerage expenses attributable to the Master
Trust assets are charged to the applicable fund as a reduction of the return on that fund. Any
other expenses incurred with respect to Master Trust administration are charged to participant
accounts, where applicable, or are paid in such manner as the Company determines, and is in
accordance with the plan documents.
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Payment of Benefits
Benefits are recorded when paid. There were no amounts allocated to
accounts of persons who had elected to withdraw from the Plan but had not yet been paid at
December 31, 2008 and 2007.
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Transfers
Other entities of the Corporation sponsor defined contribution plans, besides the
Plan. When an employee transfers to any other BorgWarner entity covered by a different
BorgWarner-sponsored plan, that participants account balance is transferred to the
corresponding plan.
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3.
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EXEMPT PARTIES-IN-INTEREST TRANSACTIONS
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The Master Trust invests in BorgWarner Inc. common stock and makes loans to participants, which
are permitted party-in-interest transactions. Certain Master Trust investments are shares of
mutual funds and other investments managed by the Trustee and, therefore, these transactions
qualify as party-in-interest transactions. Fees paid by the Plan to the Trustee for
administrative services amounted to approximately $276,000 for the year ended December 31,
2008, and are included in administrative expenses. Fees paid by the Plan to the Trustee for
investment management services were included as a reduction of return earned on each fund.
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On November 14, 2007, the Corporations Board of Directors approved a two-for-one stock split
effected in the form of a stock dividend on its common stock. To implement this stock split,
shares of common stock were issued on December 17, 2007 to stockholders of record as of the
close of business on December 6, 2007. All prior year share amounts disclosed in this document
have been restated to reflect the two-for-one stock split.
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At December 31, 2008 and 2007, the Master Trust held approximately 2,614,000 and 1,956,000
shares, respectively, of BorgWarner Inc. common stock, the sponsoring employer, on behalf of
the Plan. These shares had a fair value of approximately $56,912,000 and $94,682,000 at
December 31, 2008 and 2007, respectively. During the year ended December 31, 2008, the Master
Trust received dividends of approximately $874,000 on BorgWarner Inc. common stock on behalf of
the Plan.
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The costs and expenses incurred by the Trustee under the Plan and the fee charged by the
Trustee are charged to the Plan. The Company has the right to be reimbursed each year from the
Plan for the cost to the Company of bank fees and auditing fees.
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4.
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TAX STATUS
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The Plan obtained a favorable determination letter, dated March 31, 2009, in which the Internal
Revenue Service (IRS) stated the Plan complied with applicable requirements of the IRC. The
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Company and the Plan administrator believe that the Plan is currently designed and operated in
compliance with the applicable requirements of the IRC and the Plan and related trust continue
to be tax-exempt. Therefore, no provision for income taxes has been included in the Plans
financial statements.
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5.
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RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
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The following is a reconciliation of assets available for benefits per the financial statements
to the Form 5500 as of December 31, 2008 and 2007 (in thousands):
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2008
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2007
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Assets available for benefits per the financial statements
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$
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506,233
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$
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647,938
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Adjustment from contract value to fair value for fully benefit-responsive
investments
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(1,167
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616
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Assets available for benefits per the Form 5500
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$
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505,066
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$
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648,554
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For the year ended December 31, 2008, the following is a reconciliation of net investment loss
per the financial statements to the Form 5500 (in thousands):
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Total
investment loss from the Master Trust per the financial statements
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$
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179,012
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Change in adjustment from contract value to fair value for fully benefit-responsive
investments
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1,783
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Net
investment loss from the Master Trust investment account per the Form 5500
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$
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180,795
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6.
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VOLUNTARY COMPLIANCE RESOLUTION
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For the 2004 through 2007 Plan years, the Company excluded certain forms of compensation from
eligible compensation in applying participants deferral elections and in calculating employer
matching and profit sharing contributions. In order to resolve this issue, the Company filed
with the IRS an application under its Voluntary Correction program in 2007. The Company
corrected the exclusion by contributing $273,550 to the Plan during 2007. This contribution
represents the amount that should have been withheld from affected participants and contributed
to the Plan, the Company match associated with these amounts, the Company retirement account
contribution, and the estimated earnings that could have been realized had such withholdings
and Company contributions occurred (collectively, the Retroactive Contribution). On November
16, 2007, a Voluntary Compliance Resolution was filed with the IRS. On April 18, 2009 the
Voluntary Compliance Resolution was approved by the IRS.
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7.
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MASTER TRUST INFORMATION
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Use of the Master Trust permits commingling of trust assets of a number of defined contribution
plans of the Corporation for investment and administrative purposes. Although assets are
commingled in the Master Trust, the Trustee maintains supporting records for the purpose of
allocating the total investment income of the Master Trust to the various participating plans.
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Purchases and sales of securities in the Master Trust are recorded on a trade-date basis.
Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend
date.
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On December 31, 2008, the ERSP Plan was amended to merge into the Plan and provided that the
assets attributable to the ERSP Plan be transferred and merged with the Plan effective as of
the start of business on December 31, 2008. Therefore, at December 31, 2008 the Master Trust
consisted of the investments of four defined contribution plans sponsored by the Corporation
and certain of its entities. At December 31, 2007, the Master Trust consisted of the
investments of five defined contribution plans sponsored by the Corporation and certain of its
entities. The investments held by the Master Trust are valued at fair value at the end of each
business day, with the exception of the investments held in the SVF, which are valued at
contract value. The total investment loss in the Master Trust is allocated by the Trustee to
each participating plan based on the relationship of the interest of each plan to the total of
the interests of all participating plans.
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At December 31, 2008 and 2007, the Plans interest in the assets of the Master Trust was 83.33%
and 71.79%, respectively.
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The following tables present the carrying value of investments of the Master Trust as of
December 31, 2008 and 2007, and the components of investment loss for the Master Trust for the
year ended December 31, 2008 (in thousands):
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2008
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2007
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Fair value of investments:
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Barclays LifePath Funds
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$
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140,885
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$
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195,217
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T. Rowe Price Stable Value Common Trust Fund
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149,397
|
|
|
|
145,106
|
|
Barclays Equity Index
|
|
|
112,344
|
|
|
|
201,659
|
|
BorgWarner Inc. Stock Fund
|
|
|
69,618
|
|
|
|
152,733
|
|
Harbor International Fund
|
|
|
38,834
|
|
|
|
75,250
|
|
Barclays US Debt Index
|
|
|
30,495
|
|
|
|
28,446
|
|
Vanguard Mid-Cap Index
|
|
|
27,135
|
|
|
|
51,681
|
|
Buffalo Small Cap
|
|
|
26,487
|
|
|
|
43,267
|
|
T. Rowe Price Prime Reserve Fund
|
|
|
60
|
|
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets reflecting all investments at fair value
|
|
|
595,255
|
|
|
|
893,844
|
|
|
|
|
|
|
|
|
|
|
Adjustments from fair value to contract value
|
|
|
1,400
|
|
|
|
(858
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
596,655
|
|
|
$
|
892,986
|
|
|
|
|
|
|
|
|
-9-
|
|
|
|
|
Investment income/(loss):
|
|
|
|
|
Net appreciation (depreciation) in fair
value of investments:
|
|
|
|
|
Barclays Equity Index
|
|
$
|
(69,478
|
)
|
BorgWarner Inc. Stock Fund
|
|
|
(84,205
|
)
|
Barclays LifePath Funds
|
|
|
(50,347
|
)
|
Harbor International Fund
|
|
|
(31,690
|
)
|
Vanguard Mid-Cap Index
|
|
|
(20,889
|
)
|
Buffalo Small Cap
|
|
|
(13,452
|
)
|
Barclays US Debt Index
|
|
|
1,513
|
|
T. Rowe Price Stable Value Common Trust Fund
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Net depreciation in fair value of investments
|
|
|
(268,541
|
)
|
|
|
|
|
|
|
|
|
|
Dividend and interest income:
|
|
|
|
|
T. Rowe Price Stable Value Common Trust Fund
|
|
|
6,739
|
|
BorgWarner Inc. Stock Fund
|
|
|
1,403
|
|
Buffalo Small Cap
|
|
|
1,241
|
|
Harbor International Fund
|
|
|
734
|
|
Vanguard Mid-Cap Index
|
|
|
574
|
|
|
|
|
|
|
|
|
|
|
Total dividend and interest income
|
|
|
10,691
|
|
|
|
|
|
|
|
|
|
|
Total investment loss
|
|
$
|
(257,850
|
)
|
|
|
|
|
8.
|
|
FAIR VALUE MEASURMENTS
|
|
|
|
SFAS 157 emphasizes that fair value is a market-based measurement, not an entity specific
measurement. Therefore, a fair value measurement should be determined based on assumptions
that market participants would use in pricing an asset or liability. As a basis for
considering market participant assumptions in fair value measurements, SFAS 157 establishes a
fair value hierarchy, which prioritizes the inputs used in measuring fair values. The
hierarchy gives the highest priority to Level 1 measurements and the lowest priority to Level 3
measurements. The three levels of the fair value hierarchy under SFAS 157 are described as
follows:
|
|
Level 1:
|
|
Observable inputs such as quoted prices in active markets;
|
|
|
Level 2:
|
|
Inputs, other than quoted prices in active markets, that are observable
either directly or indirectly; and
|
|
|
Level 3:
|
|
Unobservable inputs in which there is little or no market data, which
require the reporting entity to develop its own assumptions.
|
|
|
Assets and liabilities measured at fair value are based on one or more of the following three
valuation techniques noted in SFAS 157:
|
|
A.
|
|
Market approach: Prices and other relevant information generated
by market transactions involving identical or comparable assets or liabilities.
|
|
|
B.
|
|
Cost approach: Amount that would be required to replace the
service capacity of an asset (replacement cost).
|
-10-
|
C.
|
|
Income approach: Techniques to convert future amounts to a
single present amount based upon market expectations (including present value
techniques, option-pricing and excess earnings models).
|
The following table classifies the Master Trust and other investment assets measured at fair
value by level within the fair value hierarchy as of December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis of Fair Value Measurements
|
|
|
|
|
|
|
|
|
|
|
Quoted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prices in
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
Other
|
|
|
Significant
|
|
|
|
|
|
|
Balance at
|
|
|
Markets for
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
December 31,
|
|
|
Identical Items
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
|
(in thousands)
|
|
2008
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Technique
|
|
Master Trust Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collective Trust Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barclays LifePath Funds
|
|
$
|
140,885
|
|
|
$
|
|
|
|
$
|
140,885
|
|
|
$
|
|
|
|
|
A
|
|
Barclays US Debt Index
|
|
|
30,495
|
|
|
|
|
|
|
|
30,495
|
|
|
|
|
|
|
|
A
|
|
Barclays Equity Index
|
|
|
112,344
|
|
|
|
|
|
|
|
112,344
|
|
|
|
|
|
|
|
A
|
|
T. Rowe Price Stable Value Common Trust Fund
|
|
|
149,397
|
|
|
|
|
|
|
|
149,397
|
|
|
|
|
|
|
|
A
|
|
BorgWarner Inc. Stock Fund
|
|
|
69,618
|
|
|
|
69,618
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harbor International Fund
|
|
|
38,834
|
|
|
|
38,834
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
Vanguard Mid-Cap Index
|
|
|
27,135
|
|
|
|
27,135
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
Buffalo Small Cap
|
|
|
26,487
|
|
|
|
26,487
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
Money Market Fund
|
|
|
60
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Master Trust Assets
|
|
$
|
595,255
|
|
|
$
|
162,074
|
|
|
$
|
433,181
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant Loans
|
|
$
|
8,710
|
|
|
$
|
|
|
|
$
|
8,710
|
|
|
$
|
|
|
|
|
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
******
-11-
SUPPLEMENTAL SCHEDULE
-12-
BORGWARNER INC. RETIREMENT SAVINGS PLAN
FORM 5500 SCHEDULE H, PART IV, LINE 4i SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
AS OF DECEMBER 31, 2008
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Identity of Issues,
|
|
Description of Investment Including
|
|
|
|
|
Borrower, Lessor, or
|
|
Maturity Date, Rate of Interest,
|
|
Current
|
|
|
Similar Party
|
|
Collateral, Par, or Maturity Value
|
|
Value
|
|
|
|
|
|
|
|
|
|
*
|
|
Participant Loans
|
|
Loans to participants, interest rates
ranging from 5.00% to 10.50%;
loan terms ranging from 6 months to 5 years
|
|
|
$8,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Denotes party-in-interest.
|
|
|
|
|
|
|
-13-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the committee has duly
caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
Plan Name: BorgWarner Inc. Retirement Savings Plan
|
|
|
|
|
|
|
By:
|
/s/ Timothy M. Manganello
|
|
|
Name:
|
Timothy M. Manganello
|
|
|
Title:
|
Member Retirement Savings Plan Committee
|
|
|
|
|
By:
|
/s/ Robin J. Adams
|
|
|
Name:
|
Robin J. Adams
|
|
|
Title:
|
Member Retirement Savings Plan Committee
|
|
|
|
|
By:
|
/s/ Jeffrey L. Obermayer
|
|
|
Name:
|
Jeffrey L. Obermayer
|
|
|
Title:
|
Member Retirement Savings Plan Committee
|
|
|
|
|
By:
|
/s/ Angela J. DAversa
|
|
|
Name:
|
Angela J. DAversa
|
|
|
Title:
|
Member Retirement Savings Plan Committee
|
|
|
Date: June 1, 2009
EXHIBIT INDEX
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
-14-
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