Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The Company presents both basic and diluted earnings per share of common stock (“EPS”) amounts. Basic EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock outstanding during the reporting period. Diluted EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock and common equivalent stock outstanding during the reporting period.

The dilutive impact of stock-based compensation is calculated using the treasury stock method. The treasury stock method assumes that the Company uses the assumed proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any windfall/(shortfall) tax benefits that would be credited/(debited) to capital in excess of par value when the award generates a tax deduction. Options are only dilutive when the average market price of the underlying common stock exceeds the exercise price of the options.

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share amounts)	2014		2013		2014		2013
Basic earnings per share:
Net earnings attributable to BorgWarner Inc.	$	166.6	$	166.8	$	515.9	$	482.9
Weighted average shares of common stock outstanding	227.077		227.638		227.395		229.168
Basic earnings per share of common stock	$	0.73	$	0.73	$	2.27	$	2.11
Diluted earnings per share:
Net earnings attributable to BorgWarner Inc.	$	166.6	$	166.8	$	515.9	$	482.9
Weighted average shares of common stock outstanding	227.077		227.638		227.395		229.168
Effect of stock-based compensation	1.591		2.838		1.827		2.768
Weighted average shares of common stock outstanding including dilutive shares	228.668		230.476		229.222		231.936
Diluted earnings per share of common stock	$	0.73	$	0.72	$	2.25	$	2.08