Earnings Per Share

6 Months Ended

Jun. 30, 2015

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 June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2015		2014		2015		2014
Basic earnings per share:
Net earnings attributable to BorgWarner Inc.	$	148.1	$	190.2	$	327.0	$	349.3
Weighted average shares of common stock outstanding	225.353		227.678		225.575		227.554
Basic earnings per share of common stock	$	0.66	$	0.84	$	1.45	$	1.54

Diluted earnings per share:
Net earnings attributable to BorgWarner Inc.	$	148.1	$	190.2	$	327.0	$	349.3

Weighted average shares of common stock outstanding	225.353		227.678		225.575		227.554

Effect of stock-based compensation	1.262		1.992		1.277		1.945

Weighted average shares of common stock outstanding including dilutive shares	226.615		229.670		226.852		229.499
Diluted earnings per share of common stock	$	0.65	$	0.83	$	1.44	$	1.52