AUBURN HILLS, Mich.,
Feb. 11, 2016 /PRNewswire/
-- BorgWarner Inc. (NYSE: BWA) today reported fourth quarter
and full year 2015 results.
Fourth Quarter Highlights:
- 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.
Full Year Highlights:
- 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.
First Quarter 2016 Guidance: The company has reaffirmed
its 2016 first quarter guidance. Net sales growth is expected to be
within a range of 8.3% to 13.3% compared with first quarter 2015.
Excluding the impact of foreign currencies and the Remy
acquisition, net sales growth is expected to be within a range of
-0.3% to 2.7%. Net earnings are expected to be within a range of
$0.75 to $0.79 per diluted share.
Excluding the Remy acquisition, net earnings are expected to be
within a range of $0.72 to $0.76 per
diluted share. Operating income, as a percentage of net sales, is
expected to be above 12%. Excluding the Remy acquisition, operating
income, as a percentage of net sales, is expected to be above
13%.
Full Year 2016 Guidance: The company has reaffirmed its
2016 full year guidance. Net sales growth is expected to be within
a range of 13.2% to 18.3% compared with 2015. Excluding the impact
of foreign currencies and the Remy acquisition, net sales growth is
expected to be within a range of 2.5% to 5.5%. Net earnings are
expected to be within a range of $3.11 to
$3.32 per diluted share. Excluding the Remy acquisition, net
earnings are expected to be within a range of $2.98 to $3.18 per diluted share. Operating
income, as a percentage of net sales, is expected to be above 12%.
Excluding the Remy acquisition, operating income, as a percentage
of net sales, is expected to be above 13%.
Financial Results: Net sales were $2,123 million in fourth quarter 2015, up 6.6%
from $1,992 million in fourth quarter
2014. Net earnings in the quarter were $125
million, or $0.56 per diluted
share, compared with $140 million, or
$0.61 per diluted share, in fourth
quarter 2014. Fourth quarter 2015 net earnings included net
non-comparable items of $(0.21) per
diluted share. Fourth quarter 2014 net earnings included
non-comparable items of $(0.14) 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 decreased net sales by approximately $157 million and decreased net earnings by
approximately $0.06 per diluted share
in fourth quarter 2015 compared with fourth quarter 2014.
Full year 2015 net sales were $8,023
million, down 3.4% from $8,305
million in 2014. Full year 2015 net earnings were
$610 million, or $2.70 per diluted share, compared with
$656 million, or $2.86 per diluted share, in 2014. Full year 2015
net earnings included net non-comparable items of $(0.34) per diluted share. Full year 2014
included net non-comparable items of $(0.39) 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 decreased net sales by approximately
$841 million and decreased net
earnings by approximately $0.32 per
diluted share in 2015 compared with 2014.
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
|
|
|
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
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities was $868 million in 2015 compared with $802 million in 2014. Investments in capital
expenditures, including tooling outlays, totaled $577 million in 2015, compared with $563 million 2014. Balance sheet debt increased
by $1,226 million and cash decreased
by $220 million at the end of 2015
compared with the end of 2014. The company's net debt to net
capital ratio was 35.4% at the end of 2015 compared with 12.8% at
the end of 2014.
Engine Segment Results: Engine segment net sales were
$1,397 million in fourth quarter 2015
compared with $1,384 million in
fourth quarter 2014. Excluding the impact of foreign currencies,
primarily the Euro, net sales were up 9.8% from the prior year's
quarter. Adjusted earnings before interest, income taxes and
non-controlling interest ("Adjusted EBIT") were $230 million in fourth quarter 2015. Excluding
the impact of foreign currencies, Adjusted EBIT was $247 million, up 8.1% from fourth quarter
2014.
Drivetrain Segment Results: Drivetrain segment net sales
were $735 million in fourth quarter
2015 compared with $615 million in
fourth quarter 2014. Excluding the impact of foreign currencies,
primarily the Euro, and the Remy acquisition, net sales were up
1.3% from the prior year's quarter. Adjusted EBIT was $81 million in fourth quarter 2015. Excluding the
impact of foreign currencies and the Remy acquisition, Adjusted
EBIT was $78 million, up 18.3% from
fourth quarter 2014.
Recent Developments:
- 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.
At 9:30 a.m. ET today, a brief
conference call concerning 2015 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 74 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,
|
|
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
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/borgwarner-reports-fourth-quarter-2015-us-gaap-net-earnings-of-056-per-diluted-share-or-075-per-diluted-share-excluding-non-comparable-items-and-the-remy-acquisition-300218762.html
SOURCE BorgWarner Inc.