(Mark One) | ||
þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the quarterly period ended September 30, 2018 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the transition period from to |
Delaware | 13-3404508 | |
State or other jurisdiction of | (I.R.S. Employer | |
Incorporation or organization | Identification No.) | |
3850 Hamlin Road, Auburn Hills, Michigan | 48326 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | þ | Accelerated filer | o | Non-accelerated filer | o | Smaller reporting company | o |
Emerging growth company | o |
Page No. | |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Cash | $ | 361.8 | $ | 545.3 | |||
Receivables, net | 2,061.1 | 2,018.9 | |||||
Inventories, net | 810.3 | 766.3 | |||||
Prepayments and other current assets | 192.9 | 145.4 | |||||
Assets held for sale | 64.5 | 67.3 | |||||
Total current assets | 3,490.6 | 3,543.2 | |||||
Property, plant and equipment, net | 2,827.8 | 2,863.8 | |||||
Investments and other long-term receivables | 610.3 | 547.4 | |||||
Goodwill | 1,856.5 | 1,881.8 | |||||
Other intangible assets, net | 450.1 | 492.7 | |||||
Other non-current assets | 481.1 | 458.7 | |||||
Total assets | $ | 9,716.4 | $ | 9,787.6 | |||
LIABILITIES AND EQUITY | |||||||
Notes payable and other short-term debt | $ | 50.7 | $ | 84.6 | |||
Accounts payable and accrued expenses | 2,009.2 | 2,270.3 | |||||
Income taxes payable | 9.8 | 40.8 | |||||
Liabilities held for sale | 29.9 | 29.5 | |||||
Total current liabilities | 2,099.6 | 2,425.2 | |||||
Long-term debt | 2,085.6 | 2,103.7 | |||||
Other non-current liabilities: | |||||||
Asbestos-related liabilities | 739.7 | 775.7 | |||||
Retirement-related liabilities | 269.4 | 301.6 | |||||
Other | 351.9 | 355.5 | |||||
Total other non-current liabilities | 1,361.0 | 1,432.8 | |||||
Common stock | 2.5 | 2.5 | |||||
Capital in excess of par value | 1,127.1 | 1,118.7 | |||||
Retained earnings | 5,127.3 | 4,531.0 | |||||
Accumulated other comprehensive loss | (609.2 | ) | (490.0 | ) | |||
Common stock held in treasury | (1,581.3 | ) | (1,445.4 | ) | |||
Total BorgWarner Inc. stockholders’ equity | 4,066.4 | 3,716.8 | |||||
Noncontrolling interest | 103.8 | 109.1 | |||||
Total equity | 4,170.2 | 3,825.9 | |||||
Total liabilities and equity | $ | 9,716.4 | $ | 9,787.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions, except share and per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | $ | 2,478.5 | $ | 2,416.2 | $ | 7,956.8 | $ | 7,212.9 | |||||||
Cost of sales | 1,962.9 | 1,894.6 | 6,270.2 | 5,662.1 | |||||||||||
Gross profit | 515.6 | 521.6 | 1,686.6 | 1,550.8 | |||||||||||
Selling, general and administrative expenses | 230.5 | 225.0 | 719.9 | 659.1 | |||||||||||
Other expense, net | 7.1 | 22.0 | 42.4 | 27.5 | |||||||||||
Operating income | 278.0 | 274.6 | 924.3 | 864.2 | |||||||||||
Equity in affiliates’ earnings, net of tax | (15.2 | ) | (14.4 | ) | (38.4 | ) | (38.5 | ) | |||||||
Interest income | (1.5 | ) | (1.3 | ) | (4.4 | ) | (4.2 | ) | |||||||
Interest expense and finance charges | 14.4 | 17.6 | 45.4 | 53.6 | |||||||||||
Other postretirement income | (2.4 | ) | (1.3 | ) | (7.4 | ) | (3.9 | ) | |||||||
Earnings before income taxes and noncontrolling interest | 282.7 | 274.0 | 929.1 | 857.2 | |||||||||||
Provision for income taxes | 66.8 | 79.4 | 192.1 | 241.9 | |||||||||||
Net earnings | 215.9 | 194.6 | 737.0 | 615.3 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 12.1 | 9.7 | 36.3 | 29.2 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 203.8 | $ | 184.9 | $ | 700.7 | $ | 586.1 | |||||||
Earnings per share — basic | $ | 0.98 | $ | 0.88 | $ | 3.36 | $ | 2.78 | |||||||
Earnings per share — diluted | $ | 0.98 | $ | 0.88 | $ | 3.34 | $ | 2.77 | |||||||
Weighted average shares outstanding (thousands): | |||||||||||||||
Basic | 207,471 | 209,803 | 208,505 | 210,657 | |||||||||||
Diluted | 208,738 | 211,013 | 209,787 | 211,575 | |||||||||||
Dividends declared per share | $ | 0.17 | $ | 0.14 | $ | 0.51 | $ | 0.42 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 203.8 | $ | 184.9 | $ | 700.7 | $ | 586.1 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation adjustments* | (43.7 | ) | 64.2 | (124.2 | ) | 186.6 | |||||||||
Hedge instruments* | 1.6 | (1.7 | ) | (0.1 | ) | (5.2 | ) | ||||||||
Defined benefit postretirement plans* | 0.5 | (1.8 | ) | 5.1 | (6.2 | ) | |||||||||
Other* | — | — | — | 1.2 | |||||||||||
Total other comprehensive (loss) income attributable to BorgWarner Inc. | (41.6 | ) | 60.7 | (119.2 | ) | 176.4 | |||||||||
Comprehensive income attributable to BorgWarner Inc.* | 162.2 | 245.6 | 581.5 | 762.5 | |||||||||||
Net earnings attributable to noncontrolling interest, net of tax | 12.1 | 9.7 | 36.3 | 29.2 | |||||||||||
Other comprehensive (loss) income attributable to the noncontrolling interest* | (2.4 | ) | 1.1 | (6.5 | ) | 4.5 | |||||||||
Comprehensive income | $ | 171.9 | $ | 256.4 | $ | 611.3 | $ | 796.2 |
* | Net of income taxes. |
Nine Months Ended September 30, | |||||||
(in millions) | 2018 | 2017 | |||||
OPERATING | |||||||
Net earnings | $ | 737.0 | $ | 615.3 | |||
Adjustments to reconcile net earnings to net cash flows from operations: | |||||||
Depreciation and amortization | 325.8 | 302.0 | |||||
Stock-based compensation expense | 37.6 | 35.5 | |||||
Deferred income tax (benefit) provision | (36.6 | ) | 39.5 | ||||
Restructuring expense, net of cash paid | 34.7 | 3.5 | |||||
Equity in affiliates’ earnings, net of dividends received, and other | (21.6 | ) | (23.7 | ) | |||
Net earnings adjusted for non-cash charges to operations | 1,076.9 | 972.1 | |||||
Changes in assets and liabilities: | |||||||
Receivables | (110.8 | ) | (232.0 | ) | |||
Inventories | (80.4 | ) | (70.8 | ) | |||
Prepayments and other current assets | (43.2 | ) | (9.1 | ) | |||
Accounts payable and accrued expenses | (201.4 | ) | 49.8 | ||||
Income taxes payable | (53.4 | ) | (18.1 | ) | |||
Other assets and liabilities | (31.4 | ) | (68.0 | ) | |||
Net cash provided by operating activities | 556.3 | 623.9 | |||||
INVESTING | |||||||
Capital expenditures, including tooling outlays | (394.3 | ) | (389.7 | ) | |||
Payments for business acquired, net of cash acquired | — | (180.6 | ) | ||||
Payments for venture capital investment | (4.2 | ) | (2.0 | ) | |||
Proceeds from asset disposals and other | 5.5 | 1.6 | |||||
Net cash used in investing activities | (393.0 | ) | (570.7 | ) | |||
FINANCING | |||||||
Net (decrease) increase in notes payable | (29.8 | ) | 124.9 | ||||
Additions to long-term debt, net of debt issuance costs | 20.3 | — | |||||
Repayments of long-term debt, including current portion | (15.0 | ) | (14.5 | ) | |||
Payments for debt issuance cost | — | (2.4 | ) | ||||
Payments for purchase of treasury stock | (150.0 | ) | (100.0 | ) | |||
Payments for stock-based compensation items | (15.1 | ) | (2.1 | ) | |||
Dividends paid to BorgWarner stockholders | (106.3 | ) | (88.5 | ) | |||
Dividends paid to noncontrolling stockholders | (27.5 | ) | (23.6 | ) | |||
Net cash used in financing activities | (323.4 | ) | (106.2 | ) | |||
Effect of exchange rate changes on cash | (23.4 | ) | 23.6 | ||||
Net decrease in cash | (183.5 | ) | (29.4 | ) | |||
Cash at beginning of year | 545.3 | 443.7 | |||||
Cash at end of period | $ | 361.8 | $ | 414.3 | |||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 67.0 | $ | 72.1 | |||
Income taxes, net of refunds | $ | 266.7 | $ | 219.9 | |||
Non-cash investing transactions | |||||||
Liabilities assumed from business acquired | $ | — | $ | 19.1 |
(In millions) | Balance at December 31, 2017 | Adjustments due to ASC 606 | Balance at January 1, 2018 | |||||||||
Inventories, net | $ | 766.3 | $ | (7.4 | ) | $ | 758.9 | |||||
Prepayments and other current assets (including contract assets) | $ | 145.4 | $ | 9.4 | $ | 154.8 | ||||||
Accounts payable and other accrued expenses (including contract liabilities) | $ | 2,270.3 | $ | 0.1 | $ | 2,270.4 | ||||||
Retained earnings | $ | 4,531.0 | $ | 1.9 | $ | 4,532.9 |
Three months ended September 30, 2018 | Three months ended September 30, 2017 | |||||||||||||||||||||||
(In millions) | Engine | Drivetrain | Total | Engine | Drivetrain | Total | ||||||||||||||||||
North America | $ | 393.0 | $ | 451.7 | $ | 844.7 | $ | 362.5 | $ | 398.9 | $ | 761.4 | ||||||||||||
Europe | 690.3 | 208.7 | 899.0 | 693.3 | 238.2 | 931.5 | ||||||||||||||||||
Asia | 386.3 | 307.8 | 694.1 | 410.2 | 276.2 | 686.4 | ||||||||||||||||||
Other | 32.1 | 8.6 | 40.7 | 28.5 | 8.4 | 36.9 | ||||||||||||||||||
Total | $ | 1,501.7 | $ | 976.8 | $ | 2,478.5 | $ | 1,494.5 | $ | 921.7 | $ | 2,416.2 |
Nine months ended September 30, 2018 | Nine months ended September 30, 2017 | |||||||||||||||||||||||
(In millions) | Engine | Drivetrain | Total | Engine | Drivetrain | Total | ||||||||||||||||||
North America | $ | 1,186.5 | $ | 1,341.1 | $ | 2,527.6 | $ | 1,145.1 | $ | 1,260.0 | $ | 2,405.1 | ||||||||||||
Europe | 2,343.1 | 747.8 | 3,090.9 | 2,057.6 | 704.0 | 2,761.6 | ||||||||||||||||||
Asia | 1,238.4 | 981.6 | 2,220.0 | 1,167.2 | 781.2 | 1,948.4 | ||||||||||||||||||
Other | 94.8 | 23.5 | 118.3 | 75.3 | 22.5 | 97.8 | ||||||||||||||||||
Total | $ | 4,862.8 | $ | 3,094.0 | $ | 7,956.8 | $ | 4,445.2 | $ | 2,767.7 | $ | 7,212.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Gross R&D expenditures | $ | 121.8 | $ | 115.2 | $ | 385.9 | $ | 346.9 | |||||||
Customer reimbursements | (13.8 | ) | (13.7 | ) | (48.8 | ) | (44.1 | ) | |||||||
Net R&D expenditures | $ | 108.0 | $ | 101.5 | $ | 337.1 | $ | 302.8 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Restructuring expense | $ | 5.7 | $ | 13.3 | $ | 44.4 | $ | 13.3 | |||||||
Merger, acquisition and divestiture expense | 1.6 | 6.4 | 4.8 | 6.4 | |||||||||||
Lease termination settlement | — | — | — | 5.3 | |||||||||||
Other (income) expense | (0.2 | ) | 2.3 | (6.8 | ) | 2.5 | |||||||||
Other expense, net | $ | 7.1 | $ | 22.0 | $ | 42.4 | $ | 27.5 |
September 30, | December 31, | ||||||
(in millions) | 2018 | 2017 | |||||
Raw material and supplies | $ | 512.1 | $ | 469.7 | |||
Work in progress | 122.6 | 126.7 | |||||
Finished goods | 190.7 | 183.0 | |||||
FIFO inventories | 825.4 | 779.4 | |||||
LIFO reserve | (15.1 | ) | (13.1 | ) | |||
Inventories, net | $ | 810.3 | $ | 766.3 |
September 30, | December 31, | ||||||
(in millions) | 2018 | 2017 | |||||
Land, land use rights and buildings | $ | 880.5 | $ | 899.2 | |||
Machinery and equipment | 2,796.9 | 2,734.4 | |||||
Capital leases | — | 1.5 | |||||
Construction in progress | 371.7 | 410.5 | |||||
Total property, plant and equipment, gross | 4,049.1 | 4,045.6 | |||||
Less: accumulated depreciation | (1,433.6 | ) | (1,391.7 | ) | |||
Property, plant and equipment, net, excluding tooling | 2,615.5 | 2,653.9 | |||||
Tooling, net of amortization | 212.3 | 209.9 | |||||
Property, plant and equipment, net | $ | 2,827.8 | $ | 2,863.8 |
(in millions) | 2018 | 2017 | |||||
Beginning balance, January 1 | $ | 111.5 | $ | 95.3 | |||
Provisions | 47.5 | 51.3 | |||||
Acquisition | 0.2 | 0.4 | |||||
Payments | (45.2 | ) | (45.7 | ) | |||
Translation adjustment | (3.7 | ) | 5.4 | ||||
Ending balance, September 30 | $ | 110.3 | $ | 106.7 |
September 30, | December 31, | ||||||
(in millions) | 2018 | 2017 | |||||
Accounts payable and accrued expenses | $ | 64.7 | $ | 69.0 | |||
Other non-current liabilities | 45.6 | 42.5 | |||||
Total product warranty liability | $ | 110.3 | $ | 111.5 |
September 30, | December 31, | ||||||
(in millions) | 2018 | 2017 | |||||
Short-term debt | |||||||
Short-term borrowings | $ | 35.9 | $ | 68.8 | |||
Long-term debt | |||||||
8.00% Senior notes due 10/01/19 ($134 million par value) | 135.9 | 137.4 | |||||
4.625% Senior notes due 09/15/20 ($250 million par value) | 251.1 | 251.4 | |||||
1.80% Senior notes due 11/7/22 (€500 million par value) | 576.4 | 595.7 | |||||
3.375% Senior notes due 03/15/25 ($500 million par value) | 496.5 | 496.1 | |||||
7.125% Senior notes due 02/15/29 ($121 million par value) | 119.0 | 118.9 | |||||
4.375% Senior notes due 03/15/45 ($500 million par value) | 493.7 | 493.5 | |||||
Term loan facilities and other | 27.8 | 26.5 | |||||
Total long-term debt | 2,100.4 | 2,119.5 | |||||
Less: current portion | 14.8 | 15.8 | |||||
Long-term debt, net of current portion | $ | 2,085.6 | $ | 2,103.7 |
Level 1: | Observable inputs such as quoted prices for identical assets or liabilities 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. |
A. | Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business. |
B. | Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). |
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). |
Basis of fair value measurements | |||||||||||||||||
(in millions) | Balance at September 30, 2018 | Quoted prices in active markets for identical items (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Valuation technique | ||||||||||||
Assets: | |||||||||||||||||
Foreign currency contracts | $ | 1.3 | $ | — | $ | 1.3 | $ | — | A | ||||||||
Net investment hedge contracts | $ | 10.7 | $ | — | $ | 10.7 | $ | — | A | ||||||||
Other long-term receivables (insurance settlement agreement note receivable) | $ | 43.7 | $ | — | $ | 43.7 | $ | — | C | ||||||||
Liabilities: | |||||||||||||||||
Foreign currency contracts | $ | 3.3 | $ | — | $ | 3.3 | $ | — | A | ||||||||
Net investment hedge contracts | $ | 0.3 | $ | — | $ | 0.3 | $ | — | A | ||||||||
Commodity contracts | $ | 0.2 | $ | — | $ | 0.2 | $ | — | A |
Basis of fair value measurements | |||||||||||||||||
(in millions) | Balance at December 31, 2017 | Quoted prices in active markets for identical items (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Valuation technique | ||||||||||||
Assets: | |||||||||||||||||
Foreign currency contracts | $ | 1.7 | $ | — | $ | 1.7 | $ | — | A | ||||||||
Other long-term receivables (insurance settlement agreement note receivable) | $ | 42.9 | $ | — | $ | 42.9 | $ | — | C | ||||||||
Liabilities: | |||||||||||||||||
Foreign currency contracts | $ | 5.0 | $ | — | $ | 5.0 | $ | — | A |
Commodity derivative contracts | |||||||
Volume hedged | |||||||
Commodity | September 30, 2018 | Units of measure | Duration | ||||
Copper | 327.9 | Metric Tons | Dec - 19 |
Foreign currency derivatives (in millions) | ||||||||||
Functional currency | Traded currency | Notional in traded currency September 30, 2018 | Notional in traded currency December 31, 2017 | Ending Duration | ||||||
Brazilian real | Euro | 0.9 | 1.1 | Dec - 18 | ||||||
British pound | Euro | 8.8 | — | Dec - 18 | ||||||
British pound | US dollar | 2.9 | — | Dec - 18 | ||||||
Chinese renminbi | US dollar | — | 36.0 | Sep - 18 | ||||||
Chinese renminbi | Euro | — | 18.6 | Jun - 18 | ||||||
Euro | Chinese renminbi | 18.3 | 85.0 | Dec - 18 | ||||||
Euro | British pound | 1.0 | 3.9 | Dec - 18 | ||||||
Euro | Japanese yen | 281.3 | 1,311.3 | Dec - 18 | ||||||
Euro | Swedish krona | 467.6 | 267.4 | Jun -19 | ||||||
Euro | US dollar | 13.3 | 56.5 | Mar - 19 | ||||||
Japanese yen | Chinese renminbi | 24.7 | — | Dec - 18 | ||||||
Japanese yen | US dollar | 0.8 | — | Dec - 18 | ||||||
Korean won | Euro | 0.3 | 3.1 | Dec - 18 | ||||||
Korean won | Japanese yen | 202.1 | 619.0 | Dec - 18 | ||||||
Korean won | US dollar | 16.3 | 11.2 | Dec - 18 | ||||||
Swedish krona | Euro | 70.2 | 109.7 | Jan - 20 | ||||||
US dollar | Euro | 50.0 | 42.0 | Dec - 18 | ||||||
US dollar | Korean won | 44,902.3 | — | Dec - 18 | ||||||
US dollar | Mexican peso | 139.2 | — | Dec - 18 |
Cross-Currency Swaps | |||||||||
(in millions) | Notional in USD | Notional in Local Currency | Duration | ||||||
Fixed $ to fixed € | $ | 250.0 | € | 206.2 | Sep - 20 | ||||
Fixed $ to fixed ¥ | $ | 100.0 | ¥ | 10,977.5 | Feb - 23 |
(in millions) | Assets | Liabilities | ||||||||||||||||||
Derivatives designated as hedging instruments Under Topic 815: | Location | September 30, 2018 | December 31, 2017 | Location | September 30, 2018 | December 31, 2017 | ||||||||||||||
Foreign currency | Prepayments and other current assets | $ | 1.2 | $ | 0.9 | Accounts payable and accrued expenses | $ | 2.4 | $ | 3.9 | ||||||||||
Other non-current assets | $ | — | $ | 0.8 | Other non-current liabilities | $ | 0.7 | $ | — | |||||||||||
Commodity | Prepayments and other current assets | $ | — | $ | — | Accounts payable and accrued expenses | $ | 0.2 | $ | — | ||||||||||
Net investment hedges | Prepayments and other current assets | $ | 0.7 | $ | — | Accounts payable and accrued expenses | $ | 0.3 | $ | — | ||||||||||
Other non-current assets | $ | 10.0 | $ | — | Other non-current liabilities | $ | — | $ | — | |||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Foreign currency | Prepayments and other current assets | $ | 0.1 | $ | — | Accounts payable and accrued expenses | $ | 0.2 | $ | 1.1 |
(in millions) | Deferred gain (loss) in AOCI at | Gain (loss) expected to be reclassified to income in one year or less | ||||||||||
Contract Type | September 30, 2018 | December 31, 2017 | ||||||||||
Foreign currency | $ | (2.0 | ) | $ | (2.3 | ) | $ | (1.3 | ) | |||
Commodity | (0.2 | ) | — | (0.2 | ) | |||||||
Net investment hedges: | ||||||||||||
Foreign currency | 3.1 | 2.9 | — | |||||||||
Cross-currency swaps | 10.0 | — | — | |||||||||
Foreign currency denominated debt | (37.1 | ) | (57.1 | ) | — | |||||||
Total | $ | (26.2 | ) | $ | (56.5 | ) | $ | (1.5 | ) |
Three Months Ended September 30, 2018 | ||||||||||||||||
(in millions) | Net sales | Cost of sales | Selling, general and administrative expenses | Other comprehensive income | ||||||||||||
Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded | $ | 2,478.5 | $ | 1,962.9 | $ | 230.5 | $ | (41.6 | ) | |||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||
Foreign currency | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | 1.7 | ||||||||
Gain (loss) reclassified from AOCI to income | $ | (0.9 | ) | $ | 0.1 | $ | 0.1 | $ | — | |||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | — | $ | — | ||||||||
Commodity | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | (0.2 | ) | |||||||
Gain (loss) reclassified from AOCI to income | $ | — | $ | (0.1 | ) | $ | — | $ | — | |||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | — | $ | — |
Nine Months Ended September 30, 2018 | ||||||||||||||||
(in millions) | Net sales | Cost of sales | Selling, general and administrative expenses | Other comprehensive income | ||||||||||||
Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded | $ | 7,956.8 | $ | 6,270.2 | $ | 719.9 | $ | (119.2 | ) | |||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||
Foreign currency | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | (4.1 | ) | |||||||
Gain (loss) reclassified from AOCI to income | $ | (1.7 | ) | $ | (2.5 | ) | $ | (0.2 | ) | $ | — | |||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | — | $ | — | ||||||||
Commodity | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | (0.3 | ) | |||||||
Gain (loss) reclassified from AOCI to income | $ | — | $ | (0.1 | ) | $ | — | $ | — | |||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | — | $ | — |
Three Months Ended September 30, 2017 | ||||||||||||||||
(in millions) | Net sales | Cost of sales | Selling, general and administrative expenses | Other comprehensive income | ||||||||||||
Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded | $ | 2,416.2 | $ | 1,894.6 | $ | 225.0 | $ | 60.7 | ||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||
Foreign currency | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | (1.5 | ) | |||||||
Gain (loss) reclassified from AOCI to income | $ | 1.3 | $ | (0.4 | ) | $ | — | $ | — | |||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | (0.1 | ) | $ | — | |||||||
Commodity | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | 0.1 | ||||||||
Gain (loss) reclassified from AOCI to income | $ | — | $ | 0.1 | $ | — | $ | — | ||||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | — | $ | — |
Nine Months Ended September 30, 2017 | ||||||||||||||||
(in millions) | Net sales | Cost of sales | Selling, general and administrative expenses | Other comprehensive income | ||||||||||||
Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded | $ | 7,212.9 | $ | 5,662.1 | $ | 659.1 | $ | 176.4 | ||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||
Foreign currency | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | (2.4 | ) | |||||||
Gain (loss) reclassified from AOCI to income | $ | 3.3 | $ | 0.9 | $ | — | $ | — | ||||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | (0.1 | ) | $ | — | |||||||
Commodity | ||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | — | $ | — | $ | — | $ | 0.1 | ||||||||
Gain (loss) reclassified from AOCI to income | $ | — | $ | 0.4 | $ | — | $ | — | ||||||||
Gain (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring | $ | — | $ | — | $ | — | $ | — |
(in millions) | Three months ended | Nine months ended | ||||||||||||||
Net investment hedges | September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
Foreign currency | $ | 0.2 | $ | (3.8 | ) | $ | 0.2 | $ | (10.3 | ) | ||||||
Cross-currency swaps | $ | 3.4 | $ | — | $ | 10.0 | $ | — | ||||||||
Foreign currency denominated debt | $ | 4.0 | $ | (19.3 | ) | $ | 20.0 | $ | (64.5 | ) |
(in millions) | Three months ended | Nine months ended | ||||||||||||||
Net investment hedges | September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
Cross-currency swaps | $ | 2.7 | $ | — | $ | 6.2 | $ | — |
Pension benefits | Other postretirement employee benefits | |||||||||||||||||||||||
(in millions) | 2018 | 2017 | ||||||||||||||||||||||
Three Months Ended September 30, | US | Non-US | US | Non-US | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | — | $ | 4.4 | $ | — | $ | 4.5 | $ | 0.1 | $ | — | ||||||||||||
Interest cost | 2.1 | 3.0 | 2.2 | 2.8 | 0.7 | 0.8 | ||||||||||||||||||
Expected return on plan assets | (3.4 | ) | (6.7 | ) | (3.3 | ) | (6.0 | ) | — | — | ||||||||||||||
Amortization of unrecognized prior service credit | (0.2 | ) | — | (0.2 | ) | — | (1.1 | ) | (1.1 | ) | ||||||||||||||
Amortization of unrecognized loss | 1.0 | 1.7 | 1.1 | 2.0 | 0.3 | 0.4 | ||||||||||||||||||
Net periodic benefit (income) cost | $ | (0.5 | ) | $ | 2.4 | $ | (0.2 | ) | $ | 3.3 | $ | — | $ | 0.1 |
Pension benefits | Other postretirement employee benefits | |||||||||||||||||||||||
(in millions) | 2018 | 2017 | ||||||||||||||||||||||
Nine Months Ended September 30, | US | Non-US | US | Non-US | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | — | $ | 13.5 | $ | — | $ | 13.3 | $ | 0.1 | $ | 0.1 | ||||||||||||
Interest cost | 6.4 | 9.1 | 6.6 | 8.0 | 2.1 | 2.4 | ||||||||||||||||||
Expected return on plan assets | (10.3 | ) | (20.6 | ) | (9.8 | ) | (17.4 | ) | — | — | ||||||||||||||
Amortization of unrecognized prior service credit | (0.6 | ) | — | (0.6 | ) | — | (3.1 | ) | (3.1 | ) | ||||||||||||||
Amortization of unrecognized loss | 3.1 | 5.3 | 3.2 | 5.8 | 0.9 | 1.0 | ||||||||||||||||||
Net periodic benefit (income) cost | $ | (1.4 | ) | $ | 7.3 | $ | (0.6 | ) | $ | 9.7 | $ | — | $ | 0.4 |
Shares subject to restriction (thousands) | Weighted average grant date fair value | |||||
Nonvested at December 31, 2017 | 1,593 | $ | 38.86 | |||
Granted | 625 | $ | 52.64 | |||
Vested | (486 | ) | $ | 41.05 | ||
Forfeited | (7 | ) | $ | 49.48 | ||
Nonvested at March 31, 2018 | 1,725 | $ | 43.26 | |||
Granted | 68 | $ | 50.86 | |||
Vested | (68 | ) | $ | 51.11 | ||
Forfeited | (142 | ) | $ | 45.68 | ||
Nonvested at June 30, 2018 | 1,583 | $ | 43.03 | |||
Forfeited | (27 | ) | $ | 43.09 | ||
Nonvested at September 30, 2018 | 1,556 | $ | 43.03 |
Number of shares (thousands) | Weighted average grant date fair value | |||||
Nonvested at December 31, 2017 | 355 | $ | 39.42 | |||
Granted | 175 | $ | 52.64 | |||
Nonvested at March 31, 2018 | 530 | $ | 43.79 | |||
Granted | 95 | $ | 50.20 | |||
Forfeited | (144 | ) | $ | 45.82 | ||
Nonvested at June 30, 2018 | 481 | $ | 44.45 | |||
Forfeited | (2 | ) | $ | 47.43 | ||
Nonvested at September 30, 2018 | 479 | $ | 44.43 |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, June 30, 2018 | $ | (374.3 | ) | $ | (3.0 | ) | $ | (193.0 | ) | $ | 2.7 | $ | (567.6 | ) | ||||||
Comprehensive (loss) income before reclassifications | (45.3 | ) | 1.5 | (0.9 | ) | — | (44.7 | ) | ||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | 1.6 | (0.6 | ) | 0.2 | — | 1.2 | ||||||||||||||
Reclassification from accumulated other comprehensive loss | — | 0.8 | 1.7 | — | 2.5 | |||||||||||||||
Income taxes reclassified into net earnings | — | (0.1 | ) | (0.5 | ) | — | (0.6 | ) | ||||||||||||
Ending balance, September 30, 2018 | $ | (418.0 | ) | $ | (1.4 | ) | $ | (192.5 | ) | $ | 2.7 | $ | (609.2 | ) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, June 30, 2017 | $ | (407.9 | ) | $ | 1.5 | $ | (202.5 | ) | $ | 2.5 | $ | (606.4 | ) | |||||||
Comprehensive income (loss) before reclassifications | 64.2 | (1.4 | ) | (4.7 | ) | — | 58.1 | |||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | — | 0.9 | 1.5 | — | 2.4 | |||||||||||||||
Reclassification from accumulated other comprehensive loss | — | (1.0 | ) | 2.2 | — | 1.2 | ||||||||||||||
Income taxes reclassified into net earnings | — | (0.2 | ) | (0.8 | ) | — | (1.0 | ) | ||||||||||||
Ending balance, September 30, 2017 | $ | (343.7 | ) | $ | (0.2 | ) | $ | (204.3 | ) | $ | 2.5 | $ | (545.7 | ) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, December 31, 2017 | $ | (293.8 | ) | $ | (1.3 | ) | $ | (197.6 | ) | $ | 2.7 | $ | (490.0 | ) | ||||||
Comprehensive income (loss) before reclassifications | (132.0 | ) | (4.4 | ) | 1.2 | — | (135.2 | ) | ||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | 7.8 | 0.7 | (0.1 | ) | — | 8.4 | ||||||||||||||
Reclassification from accumulated other comprehensive loss | — | 4.5 | 5.6 | — | 10.1 | |||||||||||||||
Income taxes reclassified into net earnings | — | (0.9 | ) | (1.6 | ) | — | (2.5 | ) | ||||||||||||
Ending balance, September 30, 2018 | $ | (418.0 | ) | $ | (1.4 | ) | $ | (192.5 | ) | $ | 2.7 | $ | (609.2 | ) |
(in millions) | Foreign currency translation adjustments | Hedge instruments | Defined benefit postretirement plans | Other | Total | |||||||||||||||
Beginning balance, December 31, 2016 | $ | (530.3 | ) | $ | 5.0 | $ | (198.1 | ) | $ | 1.3 | $ | (722.1 | ) | |||||||
Comprehensive income (loss) before reclassifications | 186.6 | (2.3 | ) | (15.7 | ) | 1.2 | 169.8 | |||||||||||||
Income taxes associated with comprehensive income (loss) before reclassifications | — | 0.4 | 5.2 | — | 5.6 | |||||||||||||||
Reclassification from accumulated other comprehensive loss | — | (4.6 | ) | 6.3 | — | 1.7 | ||||||||||||||
Income taxes reclassified into net earnings | — | 1.3 | (2.0 | ) | — | (0.7 | ) | |||||||||||||
Ending balance, September 30, 2017 | $ | (343.7 | ) | $ | (0.2 | ) | $ | (204.3 | ) | $ | 2.5 | $ | (545.7 | ) |
2018 | 2017 | ||||
Beginning Claims January 1 | 9,225 | 9,385 | |||
New Claims Received | 1,460 | 1,597 | |||
Dismissed Claims | (1,430 | ) | (1,273 | ) | |
Settled Claims | (268 | ) | (326 | ) | |
Ending Claims September 30 | 8,987 | 9,383 |
(in millions) | 2018 | 2017 | |||||
Asbestos Liability beginning balance, January 1 | $ | 828.2 | $ | 879.3 | |||
Indemnity and Defense Related Costs | (36.7 | ) | (41.0 | ) | |||
Asbestos Liability ending balance, September 30 | $ | 791.5 | $ | 838.3 |
September 30, | December 31, | ||||||
(in millions) | 2018 | 2017 | |||||
Assets: | |||||||
Non-current assets | $ | 386.4 | $ | 386.4 | |||
Total insurance assets | $ | 386.4 | $ | 386.4 | |||
Liabilities: | |||||||
Accounts payable and accrued expenses | $ | 51.8 | $ | 52.5 | |||
Other non-current liabilities | 739.7 | 775.7 | |||||
Total accrued liabilities | $ | 791.5 | $ | 828.2 |
Severance Accruals | ||||||||||||
(in millions) | Drivetrain | Engine | Total | |||||||||
Balance at December 31, 2017 | $ | 4.1 | $ | 1.3 | $ | 5.4 | ||||||
Provision | 1.1 | 0.7 | 1.8 | |||||||||
Cash payments | (0.6 | ) | (1.1 | ) | (1.7 | ) | ||||||
Translation adjustment | 0.1 | — | 0.1 | |||||||||
Balance at March 31, 2018 | $ | 4.7 | $ | 0.9 | $ | 5.6 | ||||||
Provision | 1.7 | 25.4 | 27.1 | |||||||||
Cash payments | (1.3 | ) | (4.8 | ) | (6.1 | ) | ||||||
Translation adjustment | (0.1 | ) | — | (0.1 | ) | |||||||
Balance at June 30, 2018 | $ | 5.0 | $ | 21.5 | $ | 26.5 | ||||||
Provision | (0.5 | ) | 1.9 | 1.4 | ||||||||
Cash payments | (3.5 | ) | (5.8 | ) | (9.3 | ) | ||||||
Translation adjustment | — | (0.1 | ) | (0.1 | ) | |||||||
Balance at September 30, 2018 | $ | 1.0 | $ | 17.5 | $ | 18.5 |
Severance Accruals | ||||||||||||
(in millions) | Drivetrain | Engine | Total | |||||||||
Balance at December 31, 2016 | $ | 3.7 | $ | 2.7 | $ | 6.4 | ||||||
Cash payments | (1.6 | ) | (2.1 | ) | (3.7 | ) | ||||||
Translation adjustment | — | 0.1 | 0.1 | |||||||||
Balance at March 31, 2017 | $ | 2.1 | $ | 0.7 | $ | 2.8 | ||||||
Cash payments | (0.2 | ) | (0.4 | ) | (0.6 | ) | ||||||
Translation adjustment | 0.1 | — | 0.1 | |||||||||
Balance at June 30, 2017 | $ | 2.0 | $ | 0.3 | $ | 2.3 | ||||||
Provision | 0.7 | 0.7 | 1.4 | |||||||||
Cash payments | (0.2 | ) | — | (0.2 | ) | |||||||
Translation adjustment | 0.1 | — | 0.1 | |||||||||
Balance at September 30, 2017 | $ | 2.6 | $ | 1.0 | $ | 3.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions, except per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Basic earnings per share: | |||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 203.8 | $ | 184.9 | $ | 700.7 | $ | 586.1 | |||||||
Weighted average shares of common stock outstanding | 207.471 | 209.803 | 208.505 | 210.657 | |||||||||||
Basic earnings per share of common stock | $ | 0.98 | $ | 0.88 | $ | 3.36 | $ | 2.78 | |||||||
Diluted earnings per share: | |||||||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 203.8 | $ | 184.9 | $ | 700.7 | $ | 586.1 | |||||||
Weighted average shares of common stock outstanding | 207.471 | 209.803 | 208.505 | 210.657 | |||||||||||
Effect of stock-based compensation | 1.267 | 1.210 | 1.282 | 0.918 | |||||||||||
Weighted average shares of common stock outstanding including dilutive shares | 208.738 | 211.013 | 209.787 | 211.575 | |||||||||||
Diluted earnings per share of common stock | $ | 0.98 | $ | 0.88 | $ | 3.34 | $ | 2.77 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Engine | $ | 1,515.8 | $ | 1,506.4 | $ | 4,906.2 | $ | 4,483.6 | |||||||
Drivetrain | 976.7 | 921.8 | 3,093.7 | 2,767.7 | |||||||||||
Inter-segment eliminations | (14.0 | ) | (12.0 | ) | (43.1 | ) | (38.4 | ) | |||||||
Net sales | $ | 2,478.5 | $ | 2,416.2 | $ | 7,956.8 | $ | 7,212.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Engine | $ | 238.2 | $ | 237.6 | $ | 797.2 | $ | 727.1 | |||||||
Drivetrain | 107.6 | 111.1 | 344.9 | 324.7 | |||||||||||
Adjusted EBIT | 345.8 | 348.7 | 1,142.1 | 1,051.8 | |||||||||||
Restructuring expense | 5.7 | 13.3 | 44.4 | 13.3 | |||||||||||
Merger, acquisition and divestiture expense | 1.6 | 6.4 | 4.8 | 6.4 | |||||||||||
Lease termination settlement | — | — | — | 5.3 | |||||||||||
Other expense (income), net | 1.5 | 2.7 | (3.3 | ) | 2.7 | ||||||||||
Other postretirement income | (2.4 | ) | (1.3 | ) | (7.4 | ) | (3.9 | ) | |||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 43.8 | 37.3 | 133.5 | 121.4 | |||||||||||
Interest income | (1.5 | ) | (1.3 | ) | (4.4 | ) | (4.2 | ) | |||||||
Interest expense and finance charges | 14.4 | 17.6 | 45.4 | 53.6 | |||||||||||
Earnings before income taxes and noncontrolling interest | 282.7 | 274.0 | 929.1 | 857.2 | |||||||||||
Provision for income taxes | 66.8 | 79.4 | 192.1 | 241.9 | |||||||||||
Net earnings | 215.9 | 194.6 | 737.0 | 615.3 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 12.1 | 9.7 | 36.3 | 29.2 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 203.8 | $ | 184.9 | $ | 700.7 | $ | 586.1 |
September 30, | December 31, | ||||||
(in millions) | 2018 | 2017 | |||||
Engine | $ | 4,757.7 | $ | 4,732.9 | |||
Drivetrain | 3,821.9 | 3,903.8 | |||||
Total | 8,579.6 | 8,636.7 | |||||
Corporate * | 1,136.8 | 1,150.9 | |||||
Total assets | $ | 9,716.4 | $ | 9,787.6 |
(millions of dollars) | ||||
Receivables, net | $ | 15.9 | ||
Inventories, net | 16.7 | |||
Other current assets | 2.8 | |||
Property, plant and equipment, net | 7.3 | |||
Goodwill | 127.6 | |||
Other intangible assets | 70.7 | |||
Deferred tax liabilities | (9.2 | ) | ||
Income taxes payable | (0.7 | ) | ||
Other assets and liabilities | (2.9 | ) | ||
Accounts payable and accrued expenses | (24.5 | ) | ||
Total consideration, net of cash acquired | 203.7 | |||
Less: Assumed retirement-related liabilities | 18.0 | |||
Cash paid, net of cash acquired | $ | 185.7 |
September 30, | December 31, | ||||||
(millions of dollars) | 2018 | 2017 | |||||
Receivables, net | $ | 23.6 | $ | 21.0 | |||
Inventories, net | 24.4 | 30.4 | |||||
Prepayments and other current assets | 12.8 | 10.3 | |||||
Property, plant and equipment, net | 44.7 | 47.7 | |||||
Goodwill | 7.1 | 7.3 | |||||
Other intangible assets, net | 20.4 | 21.1 | |||||
Other assets | 0.1 | 0.5 | |||||
Impairment of carrying value | (68.6 | ) | (71.0 | ) | |||
Total assets held for sale | $ | 64.5 | $ | 67.3 | |||
Accounts payable and accrued expenses | $ | 24.9 | $ | 24.6 | |||
Other liabilities | 5.0 | 4.9 | |||||
Total liabilities held for sale | $ | 29.9 | $ | 29.5 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Non-comparable items: | |||||||
Restructuring and other expense | $ | (0.03 | ) | $ | (0.07 | ) | |
Merger, acquisition and divestiture expense | — | (0.03 | ) | ||||
CEO stock awards modification | (0.03 | ) | — | ||||
Tax adjustments | 0.04 | 0.02 | |||||
Total impact of non-comparable items per share — diluted | $ | (0.02 | ) | $ | (0.08 | ) |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Non-comparable items: | |||||||
Restructuring and other expense | $ | (0.17 | ) | $ | (0.07 | ) | |
Merger, acquisition and divestiture expense | (0.02 | ) | (0.03 | ) | |||
CEO stock awards modification | (0.01 | ) | — | ||||
Gain on commercial settlement | 0.01 | — | |||||
Tax adjustments | 0.25 | 0.06 | |||||
Total impact of non-comparable items per share — diluted | $ | 0.06 | $ | (0.04 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Engine | $ | 1,515.8 | $ | 1,506.4 | $ | 4,906.2 | $ | 4,483.6 | |||||||
Drivetrain | 976.7 | 921.8 | 3,093.7 | 2,767.7 | |||||||||||
Inter-segment eliminations | (14.0 | ) | (12.0 | ) | (43.1 | ) | (38.4 | ) | |||||||
Net sales | $ | 2,478.5 | $ | 2,416.2 | $ | 7,956.8 | $ | 7,212.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Engine | $ | 238.2 | $ | 237.6 | $ | 797.2 | $ | 727.1 | |||||||
Drivetrain | 107.6 | 111.1 | 344.9 | 324.7 | |||||||||||
Adjusted EBIT | 345.8 | 348.7 | 1,142.1 | 1,051.8 | |||||||||||
Restructuring expense | 5.7 | 13.3 | 44.4 | 13.3 | |||||||||||
Merger, acquisition and divestiture expense | 1.6 | 6.4 | 4.8 | 6.4 | |||||||||||
Lease termination settlement | — | — | — | 5.3 | |||||||||||
Other expense (income), net | 1.5 | 2.7 | (3.3 | ) | 2.7 | ||||||||||
Other postretirement income | (2.4 | ) | (1.3 | ) | (7.4 | ) | (3.9 | ) | |||||||
Corporate, including equity in affiliates' earnings and stock-based compensation | 43.8 | 37.3 | 133.5 | 121.4 | |||||||||||
Interest income | (1.5 | ) | (1.3 | ) | (4.4 | ) | (4.2 | ) | |||||||
Interest expense and finance charges | 14.4 | 17.6 | 45.4 | 53.6 | |||||||||||
Earnings before income taxes and noncontrolling interest | 282.7 | 274.0 | 929.1 | 857.2 | |||||||||||
Provision for income taxes | 66.8 | 79.4 | 192.1 | 241.9 | |||||||||||
Net earnings | 215.9 | 194.6 | 737.0 | 615.3 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 12.1 | 9.7 | 36.3 | 29.2 | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ | 203.8 | $ | 184.9 | $ | 700.7 | $ | 586.1 |
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Issuer Purchases of Equity Securities | |||||||||||||
Period | Total number of shares purchased | Average price per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | |||||||||
Month Ended July 31, 2018 | |||||||||||||
Common Stock Repurchase Program | 685,052 | $ | 44.88 | 685,052 | 6,947,725 | ||||||||
Employee transactions | — | $ | — | — | |||||||||
Month Ended August 31, 2018 | |||||||||||||
Common Stock Repurchase Program | 127,892 | $ | 44.82 | 127,892 | 6,819,833 | ||||||||
Employee transactions | — | $ | — | — | |||||||||
Month Ended September 30, 2018 | |||||||||||||
Common Stock Repurchase Program | — | $ | — | — | 6,819,833 | ||||||||
Employee transactions | — | $ | — | — |
Item 6. | Exhibits |
Exhibit 31.1 | |||
Exhibit 31.2 | |||
Exhibit 32.1 | |||
Exhibit 101.INS | XBRL Instance Document.* | ||
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document.* | ||
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.* | ||
Exhibit 101.LAB | XBRL Taxonomy Extension Label Linkbase Document.* | ||
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.* | ||
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document.* |
BorgWarner Inc. | ||||
(Registrant) | ||||
By | /s/ Anthony D. Hensel | |||
(Signature) | ||||
Anthony D. Hensel | ||||
Vice President and Controller | ||||
(Principal Accounting Officer) | ||||
1. | I have reviewed this quarterly report on Form 10-Q of BorgWarner Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. |
Date: October 25, 2018 | |
/s/ Frederic B. Lissalde | |
Frederic B. Lissalde | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of BorgWarner Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. |
Date: October 25, 2018 | |
/s/ Ronald T. Hundzinski | |
Ronald T. Hundzinski | |
Executive Vice President and Chief Financial Officer | |
Dated: October 25, 2018 | |
/s/ Frederic B. Lissalde | |
Frederic B. Lissalde | |
President and Chief Executive Officer | |
/s/ Ronald T. Hundzinski | |
Ronald T. Hundzinski | |
Executive Vice President and Chief Financial Officer |
Document and Entity Information Document - shares |
9 Months Ended | |
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Sep. 30, 2018 |
Oct. 19, 2018 |
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Entity Information [Line Items] | ||
Entity Registrant Name | BORGWARNER INC. | |
Entity Central Index Key | 0000908255 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 208,272,716 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Income Statement [Abstract] | ||||
Net sales | $ 2,478.5 | $ 2,416.2 | $ 7,956.8 | $ 7,212.9 |
Cost of sales | 1,962.9 | 1,894.6 | 6,270.2 | 5,662.1 |
Gross profit | 515.6 | 521.6 | 1,686.6 | 1,550.8 |
Selling, general and administrative expenses | 230.5 | 225.0 | 719.9 | 659.1 |
Other expense, net | 7.1 | 22.0 | 42.4 | 27.5 |
Operating income | 278.0 | 274.6 | 924.3 | 864.2 |
Equity in affiliates’ earnings, net of tax | (15.2) | (14.4) | (38.4) | (38.5) |
Interest income | (1.5) | (1.3) | (4.4) | (4.2) |
Interest expense and finance charges | 14.4 | 17.6 | 45.4 | 53.6 |
Other postretirement income | (2.4) | (1.3) | (7.4) | (3.9) |
Earnings before income taxes and noncontrolling interest | 282.7 | 274.0 | 929.1 | 857.2 |
Provision for income taxes | 66.8 | 79.4 | 192.1 | 241.9 |
Net earnings | 215.9 | 194.6 | 737.0 | 615.3 |
Net earnings attributable to the noncontrolling interest, net of tax | 12.1 | 9.7 | 36.3 | 29.2 |
Net earnings attributable to BorgWarner Inc. | $ 203.8 | $ 184.9 | $ 700.7 | $ 586.1 |
Earnings per share — basic | $ 0.98 | $ 0.88 | $ 3.36 | $ 2.78 |
Earnings per share — diluted | $ 0.98 | $ 0.88 | $ 3.34 | $ 2.77 |
Weighted average shares outstanding (thousands): | ||||
Basic | 207,471 | 209,803 | 208,505 | 210,657 |
Diluted | 208,738 | 211,013 | 209,787 | 211,575 |
Dividends declared per share | $ 0.17 | $ 0.14 | $ 0.51 | $ 0.42 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Statement of Comprehensive Income [Abstract] | |||||||
Net earnings attributable to BorgWarner Inc. | $ 203.8 | $ 184.9 | $ 700.7 | $ 586.1 | |||
Other comprehensive income (loss) | |||||||
Foreign currency translation adjustments | (43.7) | 64.2 | (124.2) | 186.6 | |||
Hedge instruments | [1] | 1.6 | (1.7) | (0.1) | (5.2) | ||
Defined benefit postretirement plans | [1] | 0.5 | (1.8) | 5.1 | (6.2) | ||
Other | [1] | 0.0 | 0.0 | 0.0 | 1.2 | ||
Total other comprehensive (loss) income attributable to BorgWarner Inc. | (41.6) | 60.7 | (119.2) | 176.4 | |||
Comprehensive income attributable to BorgWarner Inc. | 162.2 | 245.6 | 581.5 | 762.5 | |||
Net earnings attributable to the noncontrolling interest, net of tax | 12.1 | 9.7 | 36.3 | 29.2 | |||
Other comprehensive (loss) income attributable to the noncontrolling interest | (2.4) | 1.1 | (6.5) | 4.5 | |||
Comprehensive income | $ 171.9 | $ 256.4 | $ 611.3 | $ 796.2 | |||
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Basis of Presentation |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of BorgWarner Inc. and Consolidated Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations and cash flow activity required by GAAP for complete financial statements. In the opinion of management, all normal recurring adjustments necessary for a fair statement of results have been included. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The balance sheet as of December 31, 2017 was derived from the audited financial statements as of that date. For further information, refer to the Consolidated Financial Statements and Footnotes thereto included in the Company's Amended Annual Report on Form 10-K/A for the year ended December 31, 2017 that was filed with the Securities and Exchange Commission (the "SEC") on September 28, 2018. Certain prior period amounts have been reclassified to conform to current period presentation. During the fourth quarter of 2017, the Company identified a prior period error related to the exclusion of the net earnings attributable to the noncontrolling interest in the first three and nine months of the 2017 Consolidated Statement of Comprehensive Income. The inclusion of this amount increased total Comprehensive Income by $9.7 million and $29.2 million for the three and nine months ended September 30, 2017, respectively. The Company concluded that the error was not material to the financial statements of any prior annual or interim period and therefore, amendments of previously filed reports are not required. In accordance with ASC Topic 250, "Accounting Changes and Error Corrections," we have corrected the error for all prior periods presented by revising the consolidated financial statements appearing herein. The revision had no impact on the Consolidated Balance Sheets, Consolidated Statements of Operations or Consolidated Statements of Cash Flows. Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, as well as the amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. Actual results could differ from these estimates. |
New Accounting Pronouncements |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements | New Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)." It requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance (Subtopic 350-40). This guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)." The new standard (i) requires the removal of disclosures that are no longer considered cost beneficial; (ii) clarifies specific requirements of certain disclosures; (iii) adds new disclosure requirements, including the weighted average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and reasons for significant gains and losses related to changes in the benefit obligation. This guidance is effective for annual periods beginning after December 15, 2020 and early adoption is permitted. The Company is currently assessing the guidance and will include enhanced disclosures in the consolidated financial statements upon adoption. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820)." It removes disclosure requirements on fair value measurements including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. It also amends and clarifies certain disclosures and adds new disclosure requirements including the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. The Company is currently assessing the guidance and does not expect this guidance to have a material impact on its consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718)." It expands the scope of the employee share-based payments guidance, which currently only includes share-based payments issued to employees, to also include share-based payments issued to nonemployees for goods and services. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220)." It allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 ("the Tax Act"). In addition, the new guidance requires expanded disclosures including a description of the accounting policy releasing disproportionate income tax effects from accumulated other comprehensive income. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815)." It expands and refines hedge accounting for both nonfinancial and financial risk components and reduces complexity in fair value hedges of interest rate risk. It eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. It also eases certain documentation and assessment requirements and modifies the accounting for components excluded from assessment of hedge effectiveness. In addition, the new guidance requires expanded disclosures as it pertains to the effect of hedging on individual income statement lines, including the effects of components excluded from the assessment of effectiveness. The guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company adopted this guidance during the first quarter of 2018 and the impact on the consolidated financial statements was not material. Refer to the Financial Instruments footnote to the Condensed Consolidated Financial Statements for expanded disclosures. In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." It requires disaggregating the service cost component from the other components of net benefit cost, provides explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization when applicable. This guidance is effective for interim and annual periods beginning after December 15, 2017. During the first quarter of 2018, the Company retrospectively adopted the presentation of service cost separate from the other components of net benefit costs. As a result, Cost of sales of $1.1 million and $3.4 million and Selling, general and administrative expenses of $0.2 million and $0.5 million for the three and nine months ended September 30, 2017, respectively, have been reclassified to Other postretirement income as a separate line item in the Condensed Consolidated Statements of Operations. In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business." It revises the definition of a business and provides a framework to evaluate when an input and a substantive process are present in an acquisition to be considered a business. This guidance is effective for annual periods beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 and there was no impact to the consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, "Restricted Cash." It requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 and there was no impact to the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments." It provides guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how they are classified in the statement of cash flows. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 and there was no impact to the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)." It replaces the current incurred loss impairment method with a new method that reflects expected credit losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." Under this guidance, lessees will be required to recognize a right-of-use asset and a lease liability for leases with a term more than 12 months, including operating leases defined under previous GAAP. The recognition and presentation of expenses will depend on classification as a finance or operating lease. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company has elected not to restate comparative periods upon adoption, but record a cumulative-effect adjustment to the opening balance of retained earnings at January 1, 2019. The Company intends to adopt certain additional practical expedients and will carry forward historical conclusions related to (1) contracts that contain leases, (2) existing lease classification, and (3) initial direct costs. The Company is currently evaluating all forms of leasing arrangements and determining potential system requirements that will be necessary to implement the new standard. The Company continues to evaluate the impact this guidance will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." It requires equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This guidance is effective for interim and fiscal years beginning after December 15, 2017. The Company adopted this guidance in the first quarter of 2018 with no impact to the consolidated financial statements and elected the measurement alternative for equity investments without readily determinable fair values. In May 2014, the FASB amended the Accounting Standards Codification to add Topic 606 and issued ASU 2014-09, "Revenue from Contracts with Customers," outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseding the then applicable revenue recognition guidance. The new guidance requires new disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted this new standard and all the related amendments (“new revenue standard”) effective January 1, 2018 and applied it to all contracts using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of adoption of the new standard to be immaterial to our sales and net income on an ongoing basis. Revenue is recognized when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of our products. For most of our products, transfer of control occurs upon shipment or delivery, however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, under the new revenue standard, revenue is recognized as goods are produced and control transfers to the customer. The Company recorded a transition adjustment as of January 1, 2018, which increased retained earnings by $2.0 million related to these arrangements. The Company also has a limited number of arrangements with customers where the price paid by the customer is dependent on the volume of product purchased over the term of the arrangement. Under the new revenue standard, the Company estimates the volumes to be sold over the term of the arrangement and recognizes revenue based on the estimated amount of consideration to be received from these arrangements. The Company recorded a transition adjustment, which decreased the opening balance of retained earnings by $0.1 million related to these arrangements. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of new revenue standard was as follows:
The impact from adopting the new revenue standard as compared to the previous revenue guidance is immaterial to our Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and Consolidated Balance Sheets as of September 30, 2018. |
Revenue from Contracts with Customers |
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Revenue from Contract with Customer | Revenue from Contracts with Customers The Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments to all contracts using the modified retrospective method effective January 1, 2018. The Company manufactures and sells products, primarily to OEMs of light vehicles, and to a lesser extent, to other OEMs of commercial vehicles, off-highway vehicles, certain Tier One vehicle systems suppliers and into the aftermarket. Although the Company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the life of the arrangements, and a contract does not exist for purposes of applying ASC 606 until volumes are contractually known. Revenue is recognized when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of our products. For most of our products, transfer of control occurs upon shipment or delivery, however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer. The Company recorded a contract asset of $10.5 million and $9.4 million at September 30, 2018 and January 1, 2018 for these arrangements. These amounts are reflected in Prepayments and other current assets in our consolidated balance sheet. Revenue is measured at the amount of consideration we expect to receive in exchange for transferring the goods. The Company has a limited number of arrangements with customers where the price paid by the customer is dependent on the volume of product purchased over the term of the arrangement. In other limited arrangements, the Company will provide a rebate to customers based on the volume of products purchased during the course of the arrangement. The Company estimates the volumes to be sold over the term of the arrangement and recognizes revenue based on the estimated amount of consideration to be received from these arrangements. As a result of these arrangements, the Company recognized a liability of $5.0 million and $18.4 million at September 30, 2018 and December 31, 2017. These amounts are reflected in Accounts payable and accrued expenses in our consolidated balance sheet. The Company’s payment terms with customers are customary and vary by customer and geography but typically range from 30 to 90 days. We have evaluated the terms of our arrangements and determined that they do not contain significant financing components. The Company provides warranties on some of its products. Provisions for estimated expenses related to product warranty are made at the time products are sold. See the Product Warranty footnote to the Consolidated Financial Statements for more information on product warranties. Shipping and handling fees billed to customers are included in sales, while costs of shipping and handling are included in cost of sales. The Company has elected to apply the accounting policy election available under ASC 606 and accounts for shipping and handling activities as a fulfillment cost. In limited instances, certain customers have provided payments in advance of receiving related products, typically at the onset of an arrangement prior to the beginning of production. These contract liabilities are reflected as Accounts payable and accrued expenses and Other non-current liabilities in our consolidated balance sheet and were $12.6 million and $17.6 million at September 30, 2018 and $12.1 million and $21.9 million at December 31, 2017, respectively. These amounts are reflected as revenue over the term of the arrangement (typically 3 to 7 years) as the underlying products are shipped. The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. The Company evaluates the underlying economics of each amount of consideration payable to a customer to determine the proper accounting by understanding the reasons for the payment, the rights and obligations resulting from the payment, the nature of the promise in the contract, and other relevant facts and circumstances. When the Company determines that the payments are incremental and incurred only if the new business is obtained and expects to recover these costs from the customer over the term of the new business arrangement, the Company capitalizes these costs. The Company recognizes a reduction to revenue as products that the upfront payments are related to are transferred to the customer based on the total amount of products expected to be sold over the term of the arrangement (generally 3 to 7 years). The Company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement. The Company had $26.8 million and $18.2 million recorded in Prepayments and other current assets, and $180.7 million and $180.4 million recorded in Other non-current assets in the consolidated balance sheet at September 30, 2018 and December 31, 2017. The following table represents a disaggregation of revenue from contracts with customers by segment and region:
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Research and Development Expenditures |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development Expenditures | Research and Development Expenditures The Company's net Research & Development ("R&D") expenditures are included in selling, general and administrative expenses of the Condensed Consolidated Statements of Operations. Customer reimbursements are netted against gross R&D expenditures as they are considered a recovery of cost. Customer reimbursements for prototypes are recorded net of prototype costs based on customer contracts, typically either when the prototype is shipped or when it is accepted by the customer. Customer reimbursements for engineering services are recorded when performance obligations are satisfied in accordance with the contract and accepted by the customer. Financial risks and rewards transfer upon shipment, acceptance of a prototype component by the customer or upon completion of the performance obligation, as stated in the respective customer agreement. The following table presents the Company’s gross and net expenditures on R&D activities:
The Company has contracts with several customers at the Company's various R&D locations. No such contract exceeded 5% of annual net R&D expenditures in any of the periods presented. |
Other Expense, Net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense, net | Other Expense, net Items included in other expense, net consist of:
During the three and nine months ended September 30, 2018, the Company recorded restructuring expense of $5.7 million and $44.4 million, respectively. During the three and nine months ended September 30, 2017, the Company recorded restructuring expense of $13.3 million. These restructuring expenses primarily relate to Drivetrain and Engine segment actions designed to improve future profitability and competitiveness. See the Restructuring footnote to the Condensed Consolidated Financial Statements for further discussion of these expenses. During the three and nine months ended September 30, 2018, the Company recorded $1.6 million and $4.8 million of merger, acquisition and divestiture expense primarily related to professional fees associated with divestiture activities for the non-core pipe and thermostat product lines, respectively. See the Assets and Liabilities Held for Sale footnote to the Condensed Consolidated Financial Statements for further discussion. On September 27, 2017, the Company acquired 100% of the equity interests of Sevcon, Inc. ("Sevcon"), a global player in electrification technologies, serving customers in the U.S., U.K., France, Germany, Italy, China and the Asia Pacific region. As a result, the Company recorded $6.4 million of transaction related professional fees during the three months ended September 30, 2017. See the Recent Transactions footnote to the Condensed Consolidated Financial Statements for further discussion. During the first three months of 2017, the Company recorded a loss of $5.3 million related to the termination of a long-term property lease for a manufacturing facility located in Europe. During the first three months of 2018, the Company recorded a gain of approximately $4.0 million related to the settlement of a commercial contract for an entity acquired in the 2015 Remy acquisition. |
Income Taxes |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's provision for income taxes is based upon an estimated annual tax rate for the year applied to federal, state and foreign income. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter. At September 30, 2018, the Company's effective tax rate for the first nine months was 20.7%. This rate includes income tax expenses of $0.9 million related to a commercial settlement gain, and reductions of income tax expense of $9.5 million related to restructuring expense, $0.2 million related to merger, acquisition and divestiture expense, $0.4 million related to other expense, $20.0 million related to adjustments to measurement period provisional estimates associated with the Tax Act, $21.6 million primarily related to an increase to our deferred tax asset due to the Company's ability to record a tax benefit for certain foreign tax credits now available due to actions the Company took during the year, and $11.3 million for other one-time tax adjustments, primarily due to changes in tax filing positions. At September 30, 2017, the Company's effective tax rate for the first nine months was 28.2%. This rate includes reductions of income tax expense of $1.2 million, $0.3 million, and $11.7 million which are associated with restructuring expense, merger and acquisition expense, and one-time tax adjustments, primarily resulting from tax audit settlements. The annual effective tax rates differ from the U.S. statutory rate primarily due to foreign rates which differ from those in the U.S., U.S. taxes on foreign earnings, the realization of certain business tax credits, including foreign tax credits, and favorable permanent differences between book and tax treatment for certain items, including equity in affiliates' earnings. In accordance with guidance provided by Staff Accounting Bulletin No 118 (SAB 118), as of December 31, 2017, we had not completed our accounting for the tax effects of the Tax Act and had recorded provisional estimates for significant items including the following: (i) the effects on our existing deferred balances, (ii) the one-time transition tax, and (iii) our indefinite reinvestment assertion. The measurement period begins in the reporting period that includes the Tax Act’s enactment date and ends when the additional information is obtained, prepared, or analyzed to complete the accounting requirements under ASC Topic 740. The measurement period should not extend beyond one year from the enactment date. As of September 30, 2018, the Company evaluated the provisional amounts initially recorded for the year ended December 31, 2017 and recorded adjustments based on updates to the Company's assumptions and the application of additional interpretative guidance issued in the second and third quarter of 2018. For the three months ended September 30, 2018, these adjustments resulted in (i) an increase in our existing deferred tax asset balances (ii) a net increase to the one-time transition tax, and (iii) a decrease in the deferred tax liability associated with our indefinite reinvestment assertion totaling a net tax benefit of $6.6 million in the third quarter of 2018. For the nine months ended September 30, 2018, these adjustments resulted in (i) an increase in our existing deferred tax asset balances (ii) no change to the one-time transition tax, and (iii) a decrease in the deferred tax liability associated with our indefinite reinvestment assertion totaling a net tax benefit of $20.0 million. As of September 30, 2018, the Company has completed its accounting for the effects of tax reform as they relate to the one-time transition tax. The Company will continue to evaluate the remaining provisional amounts recorded for the year ended December 31, 2017 throughout the remainder of the measurement period. Deferred tax assets, which are reflected in Other non-current assets in our consolidated balance sheet, increased from $121.2 million at December 31, 2017 to $170.9 million at September 30, 2018, primarily due to the Company’s ability to record a tax benefit for certain foreign tax credits now available in the third quarter of 2018. We have made an accounting policy election to treat the future tax impacts of the global intangible low tax income (GILTI) provisions of the Tax Act as a period cost to the extent applicable. |
Inventories, net |
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Inventories, net | Inventories, net Certain U.S. inventories are measured by the last-in, first-out (“LIFO”) method at the lower of cost or market, while other U.S. and foreign operations use the first-in, first-out (“FIFO”) or average-cost methods at the lower of cost and net realizable value. Inventories consisted of the following:
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Property, Plant and Equipment, net |
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Property, Plant and Equipment, net | Property, Plant and Equipment, net
As of September 30, 2018 and December 31, 2017, accounts payable of $62.7 million and $106.5 million, respectively, were related to property, plant and equipment purchases. Interest costs capitalized for the nine months ended September 30, 2018 and 2017 were $16.6 million and $14.2 million, respectively. |
Product Warranty |
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Product Warranty | Product Warranty The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one to three years. Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and industry developments and recoveries from third parties. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty claims. Management believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual. The following table summarizes the activity in the product warranty accrual accounts:
In the nine months ended September 30, 2018, warranty provisions decreased by $3.8 million from the same period in 2017 as the result of fewer product defect claims from customers in the Company's Engine segment. The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows:
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Notes Payable and Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable and Long-Term Debt | Notes Payable and Long-Term Debt As of September 30, 2018 and December 31, 2017, the Company had short-term and long-term debt outstanding as follows:
In July 2016, the Company terminated interest rate swaps which had the effect of converting $384.0 million of fixed rate notes to variable rates. The gain on the termination was recorded as an increase to the notes and is being amortized as a reduction to interest expense over the remaining terms of the notes. The unamortized gain related to these swap terminations as of September 30, 2018 was $2.2 million and $0.5 million on the 4.625% and 8.00% notes, respectively. The unamortized gain related to these swap terminations as of December 31, 2017 was $2.9 million and $0.8 million on the 4.625% and 8.00% notes, respectively. The Company terminated fixed to floating interest rate swaps in 2009. The gain on the termination was recorded as an increase to the notes and is being amortized as a reduction to interest expense over the remaining term of the notes. The unamortized gain related to this swap termination at September 30, 2018 and December 31, 2017 was $1.6 million and $2.7 million, respectively, on the 8.00% notes. The weighted average interest rate on short-term borrowings outstanding as of September 30, 2018 and December 31, 2017 was 4.2% and 3.1%, respectively. The weighted average interest rate on all borrowings outstanding, including the effects of outstanding swaps, as of September 30, 2018 and December 31, 2017 was 3.4% and 3.8%, respectively. The Company has a $1.2 billion multi-currency revolving credit facility, which includes a feature that allows the Company's borrowings to be increased to $1.5 billion. The facility provides for borrowings through June 29, 2022. The Company has one key financial covenant as part of the credit agreement which is a debt to EBITDA ("Earnings Before Interest, Taxes, Depreciation and Amortization") ratio. The Company was in compliance with the financial covenant at September 30, 2018. At September 30, 2018 and December 31, 2017, the Company had no outstanding borrowings under this facility. The Company's commercial paper program allows the Company to issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding of $1.2 billion. Under this program, the Company may issue notes from time to time and will use the proceeds for general corporate purposes. The Company had no outstanding borrowings under this program as of September 30, 2018 and December 31, 2017. The total current combined borrowing capacity under the multi-currency revolving credit facility and commercial paper program cannot exceed $1.2 billion. As of September 30, 2018 and December 31, 2017, the estimated fair values of the Company’s senior unsecured notes totaled $2,082.2 million and $2,209.1 million, respectively. The estimated fair values were $9.6 million and $116.1 million higher than their carrying value at September 30, 2018 and December 31, 2017, respectively. Fair market values of the senior unsecured notes are developed using observable values for similar debt instruments, which are considered Level 2 inputs as defined by ASC Topic 820. The carrying values of the Company's multi-currency revolving credit facility and commercial paper program approximates fair value. The fair value estimates do not necessarily reflect the values the Company could realize in the current markets. The Company had outstanding letters of credit of $32.9 million and $31.4 million at September 30, 2018 and December 31, 2017, respectively. The letters of credit typically act as guarantees of payment to certain third parties in accordance with specified terms and conditions. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements ASC Topic 820 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, ASC Topic 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair values as follows:
Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC Topic 820:
The following tables classify assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017:
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Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments The Company’s financial instruments include cash and marketable securities. Due to the short-term nature of these instruments, their book value approximates their fair value. The Company’s financial instruments may include long-term debt, interest rate and cross-currency swaps, commodity derivative contracts and foreign currency derivative contracts. All derivative contracts are placed with counterparties that have an S&P, or equivalent, investment grade credit rating at the time of the contracts’ placement. At September 30, 2018 and December 31, 2017, the Company had no derivative contracts that contained credit risk related contingent features. The Company uses certain commodity derivative contracts to protect against commodity price changes related to forecasted raw material and component purchases. The Company primarily utilizes forward and option contracts, which are designated as cash flow hedges. At September 30, 2018, the following commodity derivative contracts were outstanding. At December 31, 2017, there were no commodity derivative contracts outstanding.
The Company manages its interest rate risk by balancing its exposure to fixed and variable rates while attempting to optimize its interest costs. The Company selectively uses interest rate swaps to reduce market value risk associated with changes in interest rates (fair value hedges). At September 30, 2018 and December 31, 2017, the Company had no outstanding interest rate swaps. The Company uses foreign currency forward and option contracts to protect against exchange rate movements for forecasted cash flows (cash flow hedges), remeasurement exposures that affect earnings (non-designated hedges), and exposures associated with the Company’s net investments in certain foreign operations (net investment hedges). Forecasted cash flows may include capital expenditures, inventory purchases, operating expenses or sales transactions designated in currencies other than the functional currency of the operating unit. The Company has also designated its Euro-denominated debt as a net investment hedge of the Company's investment in a European subsidiary. Foreign currency derivative contracts require the Company, at a future date, to either buy or sell foreign currency in exchange for the operating units' local currency. At September 30, 2018 and December 31, 2017, the following foreign currency derivative contracts were outstanding:
The Company selectively uses cross-currency swaps to hedge the foreign currency exposure associated with our net investment in certain foreign operations (net investment hedges). At September 30, 2018, the following cross-currency swap contracts were outstanding. At December 31, 2017, there were no cross-currency swap derivative contracts outstanding.
At September 30, 2018 and December 31, 2017, the following amounts were recorded in the Condensed Consolidated Balance Sheets as being payable to or receivable from counterparties:
Effectiveness for cash flow hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. Gains and losses arising from these contracts that are included in the assessment of effectiveness are deferred into accumulated other comprehensive income (loss) ("AOCI") and reclassified into income as the underlying operating transactions are recognized. These realized gains or losses offset the hedged transaction and are recorded on the same line in the statement of operations. The initial value of any component excluded from the assessment of effectiveness will be recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in fair value of the excluded component and amounts recognized in income under that systematic and rational method will be recognized in AOCI. Effectiveness for net investment hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. Gains and losses arising from these contracts that are included in the assessment of effectiveness are deferred into foreign currency translation adjustments and only released when the subsidiary being hedged is sold or substantially liquidated. The initial value of any component excluded from the assessment of effectiveness will be recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in fair value of the excluded component and amounts recognized in income under that systematic and rational method will be recognized in AOCI. The table below shows deferred gains (losses) reported in AOCI as well as the amount expected to be reclassified to income in one year or less. The amount expected to be reclassified to income in one year or less assumes no change in the current relationship of the hedged item at September 30, 2018 market rates.
Derivative instruments designated as cash flow hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains and (losses) recorded in earnings and other comprehensive income:
There were no gains and (losses) recorded in income related to components excluded from the assessment of effectiveness for derivative instruments designated as cash flow hedges. Gains and (losses) on derivative instruments designated as net investment hedges were recognized in other comprehensive income during the periods presented below.
Derivatives designated as net investment hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains and (losses) recorded in Interest expense and finance charges on components excluded from the assessment of effectiveness:
There were no gains and (losses) recorded in income related to components excluded from the assessment of effectiveness for foreign currency denominated debt designated as net investment hedges. There were no gains and losses reclassified from AOCI for net investment hedges during the periods presented. Derivatives not designated as hedging instruments are used to hedge remeasurement exposures of monetary assets and liabilities denominated in currencies other than the operating units' functional currency. The gains and (losses) recorded in income from derivative instruments not designated as hedging instruments were immaterial for the periods presented. |
Retirement Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefit Plans | Retirement Benefit Plans The Company has a number of defined benefit pension plans and other postretirement benefit plans covering eligible salaried and hourly employees and their dependents. The estimated contributions to the Company's defined benefit pension plans for 2018 range from $15.0 million to $25.0 million, of which $12.3 million has been contributed through the first nine months of the year. The other postretirement benefit plans, which provide medical and life insurance benefits, are unfunded plans. The components of net periodic benefit cost recorded in the Condensed Consolidated Statements of Operations are as follows:
The components of net periodic benefit cost other than the service cost component are included in Other postretirement income in the Condensed Consolidated Statements of Operations. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has granted restricted common stock and restricted stock units (collectively, "restricted stock") and performance share units as long-term incentive awards to employees and non-employee directors under the Company's 2014 Stock Incentive Plan ("2014 Plan") and the Company's 2018 Stock Incentive Plan ("2018 Plan"). The Company's Board of Directors adopted the 2018 Plan as a replacement to the 2014 Plan in February 2018, and the Company's stockholders approved the 2018 Plan at the annual meeting of stockholders on April 25, 2018. After stockholders approved the 2018 Plan, the Company could no longer make grants under the 2014 Plan. The shares that were available for issuance under the 2014 Plan were cancelled upon approval of the 2018 Plan. The 2018 Plan authorizes the issuance of a total of 7.0 million shares, of which approximately 6.9 million shares were available for future issuance as of September 30, 2018. Restricted stock In the first nine months of 2018, the Company granted restricted stock relating to 673,961 shares and 19,656 shares to employees and non-employee directors, respectively. Restricted stock granted to employees generally vests 50% after two years and the remainder after three years from the date of grant. Restricted stock granted to non-employee directors generally vests on the first anniversary of the date of grant. The Company recognizes the value of the restricted stock, which is equal to the market value of the Company’s common stock on the date of grant, as compensation expense ratably over the restricted stock's vesting period. As of September 30, 2018, the Company had $36.4 million of unrecognized compensation expense that will be recognized over a weighted average period of 1.8 years. The Company recorded restricted stock compensation expense of $6.8 million and $6.7 million for the three months ended September 30, 2018 and 2017, respectively, and $18.7 million and $20.2 million for the nine months ended September 30, 2018 and 2017, respectively. A summary of the Company’s nonvested restricted stock for the nine months ended September 30, 2018 is as follows:
Total Stockholder Return Performance Share Units The Company grants performance share units to members of senior management that vest at the end of three-year periods based on the Company's total stockholder return relative to a peer group of companies. The Company recorded compensation expense of $3.4 million and $2.2 million for the three months ended September 30, 2018 and 2017, respectively, and $5.6 million and $7.6 million for the nine months ended September 30, 2018 and 2017, respectively. Relative Revenue Growth Performance Share Units The Company also grants performance share units to members of senior management that vest based on the Company's revenue growth relative to the vehicle market over three-year performance periods. The Company's compensation expense was $5.6 million and $2.3 million for the three months ended September 30, 2018 and 2017, respectively, and $13.3 million and $7.7 million for the nine months ended September 30, 2018 and 2017, respectively. A summary of the status of the Company’s nonvested relative revenue growth performance share units for the nine months ended September 30, 2018 is as follows:
In the second quarter of 2018, the Company decided to modify the vesting provisions of restricted stock and performance share unit grants made to a retiring executive officer to allow certain of the outstanding awards, that otherwise would have been forfeited, to vest upon retirement. This resulted in net restricted stock and performance share unit compensation expense of $5.9 million and $1.8 million in the three and nine months ended September 30, 2018, respectively. Additional incremental compensation expense of $9.9 million related to these modified awards will be recognized ratably through February 2019. Stockholder's Equity During the nine months ended September 30, 2018, the Company paid cash dividends of $106.3 million and repurchased 3,037,447 shares of common stock at a total cost of approximately $150 million. In connection with the stock based compensation plans above, the Company issued approximately 858,175 shares from treasury stock during the nine months ended September 30, 2018. During the nine months ended September 30, 2018, the Company declared dividends of $35.2 million to noncontrolling interest stockholders, of which $27.5 million were paid out. |
Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following tables summarize the activity within accumulated other comprehensive loss during the three and nine months ended September 30, 2018 and 2017:
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Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies | Contingencies In the normal course of business, the Company is party to various commercial and legal claims, actions and complaints, including matters involving warranty claims, intellectual property claims, general liability and various other risks. It is not possible to predict with certainty whether or not the Company will ultimately be successful in any of these commercial and legal matters or, if not, what the impact might be. The Company's environmental and product liability contingencies are discussed separately below. The Company's management does not expect that an adverse outcome in any of these commercial and legal claims, actions and complaints will have a material adverse effect on the Company's results of operations, financial position or cash flows, although it could be material to the results of operations in a particular quarter. Environmental The Company and certain of its current and former direct and indirect corporate predecessors, subsidiaries and divisions have been identified by the United States Environmental Protection Agency and certain state environmental agencies and private parties as potentially responsible parties (“PRPs”) at various hazardous waste disposal sites under the Comprehensive Environmental Response, Compensation and Liability Act (“Superfund”) and equivalent state laws. The PRPs may presently be liable for the cost of clean-up and other remedial activities at 28 such sites. Responsibility for clean-up and other remedial activities at a Superfund site is typically shared among PRPs based on an allocation formula. The Company believes that none of these matters, individually or in the aggregate, will have a material adverse effect on its results of operations, financial position or cash flows. Generally, this is because either the estimates of the maximum potential liability at a site are not material or the liability will be shared with other PRPs, although no assurance can be given with respect to the ultimate outcome of any such matter. The Company has an accrual for indicated environmental liabilities of $9.9 million and $8.3 million as of September 30, 2018 and December 31, 2017, respectively. This accrual is based on information available to the Company (which in most cases includes: an estimate of allocation of liability among PRPs; the probability that other PRPs, many of whom are large, solvent public companies, will fully pay the cost apportioned to them; currently available information from PRPs and/or federal or state environmental agencies concerning the scope of contamination and estimated remediation and consulting costs; and remediation alternatives). Asbestos-related Liability Like many other industrial companies that have historically operated in the United States, the Company, or parties that the Company is obligated to indemnify, continues to be named as one of many defendants in asbestos-related personal injury actions. We believe that the Company’s involvement is limited because these claims generally relate to a few types of automotive products that were manufactured over thirty years ago and contained encapsulated asbestos. The nature of the fibers, the encapsulation of the asbestos, and the manner of the products’ use all lead the Company to believe that these products were and are highly unlikely to cause harm. Furthermore, the useful life of nearly all of these products expired many years ago. The Company’s asbestos-related claims activity during the nine months ended September 30, 2018 and 2017 is as follows:
The Company vigorously defends against these claims, and has obtained the dismissal of the majority of the claims asserted against it without any payment. The Company likewise expects that no payment will be made by the Company or its insurers in the vast majority of current and future asbestos-related claims in which it has been or will be named (or has an obligation to indemnify a party which has been or will be named). Through September 30, 2018 and December 31, 2017, the Company incurred $565.4 million and $528.7 million, respectively, in indemnity (including settlement payments) and defense costs in connection with asbestos-related claims. During the nine months ended September 30, 2018 and 2017, the Company paid $36.7 million and $40.9 million, respectively, in indemnity and related defense costs in connection with asbestos-related claims. These gross payments are before tax benefits and any insurance receipts. Indemnity and defense costs are incorporated into the Company's operating cash flows and will continue to be in the future. The Company reviews, on an ongoing basis, its own experience in handling asbestos-related claims and trends affecting asbestos-related claims in the U.S. tort system generally, for the purposes of assessing the value of pending asbestos-related claims and the number and value of those that may be asserted in the future, as well as potential recoveries from the Company’s insurers with respect to such claims and defense costs. The Company has accrued estimated amounts in its consolidated financial statements on account of asbestos-related claims that have been asserted but not yet resolved and for claims that have not yet been asserted. The Company's estimate of asbestos-related claims not yet asserted is not discounted to present value and includes an estimate of liability for potential future claims not yet asserted through December 31, 2059 with a runoff through 2067. The Company currently believes that December 31, 2067 is a reasonable assumption as to the last date on which it is likely to have resolved all asbestos-related claims, based on the nature and useful life of the Company’s products and the likelihood of incidence of asbestos-related disease in the U.S. population generally. As of September 30, 2018, the Company’s reasonable best estimate of the aggregate liability for both asbestos-related claims asserted but not yet resolved and potential asbestos-related claims not yet asserted, including estimated defense costs, is as follows:
The Company’s estimate of the indemnity and defense costs for asbestos-related claims asserted but not yet resolved and potential claims not yet asserted is its reasonable best estimate of such costs. Such estimate is subject to numerous uncertainties. These include future legislative or judicial changes affecting the U.S. tort system, bankruptcy proceedings involving one or more co-defendants, the impact and timing of payments from bankruptcy trusts that presently exist and those that may exist in the future, disease emergence and associated claim filings, the impact of future settlements or significant judgments, changes in the medical condition of claimants, changes in the treatment of asbestos-related disease, and any changes in settlement or defense strategies. The balances recorded for asbestos-related claims are based on the best available information and assumptions that the Company believes are reasonable, including as to the number of future claims that may be asserted, the percentage of claims that may result in a payment, the average cost to resolve such claims, and potential defense costs. The Company has concluded that it is reasonably possible that it may incur additional losses through 2067 for asbestos-related claims, in addition to amounts recorded, of up to approximately $100.0 million as of September 30, 2018. The various assumptions utilized in arriving at the Company’s estimate may also change over time, and the Company’s actual liability for asbestos-related claims asserted but not yet resolved and those not yet asserted may be higher or lower than the Company’s estimate as a result of such changes. The Company has certain insurance coverage applicable to asbestos-related claims. Prior to June 2004, the settlement and defense costs associated with all asbestos-related claims were paid by the Company's primary layer insurance carriers under a series of interim funding arrangements. In June 2004, primary layer insurance carriers notified the Company of the alleged exhaustion of their policy limits. A declaratory judgment action was filed in January 2004 in the Circuit Court of Cook County, Illinois by Continental Casualty Company and related companies against the Company and certain of its historical general liability insurers. The Cook County court has issued a number of interim rulings and discovery is continuing in this proceeding. The Company is vigorously pursuing the litigation against all carriers that are parties to it, as well as pursuing settlement discussions with its carriers where appropriate. The Company has entered into settlement agreements with certain of its insurance carriers, resolving such insurance carriers’ coverage disputes through the carriers’ agreement to pay specified amounts to the Company, either immediately or over a specified period. Through September 30, 2018 and December 31, 2017, the Company received $271.1 million and $270.0 million, respectively, in cash and notes from insurers on account of indemnity and defense costs respecting asbestos-related claims. The Company continues to have additional excess insurance coverage available for potential future asbestos-related claims. As of September 30, 2018 and December 31, 2017, the Company estimates that it has $386.4 million in aggregate insurance coverage available with respect to asbestos-related claims, and their associated defense costs, which the Company has recorded as a receivable. The Company has determined the amount of that estimate by taking into account the remaining limits of the insurance coverage, the number and amount of potential claims from co-insured parties, potential remaining recoveries from insolvent insurers, the impact of previous insurance settlements, and coverage available from solvent insurers not party to the coverage litigation. The Company’s remaining estimated insurance coverage relating to asbestos-related claims and their associated defense costs is the subject of disputes with its insurers, substantially all of which are being adjudicated in the Cook County insurance litigation. The Company believes that its insurance receivable is probable of collection notwithstanding those disputes based on, among other things, the arguments made by the insurers in the Cook County litigation and evaluation of those arguments by the Company and its counsel, the case law applicable to the issues in dispute, the rulings to date by the Cook County court, the absence of any credible evidence alleged by the insurers that they are not liable to indemnify the Company, and the fact that the Company has recovered a substantial portion of its insurance coverage, $271.1 million, to date from its insurers under similar policies. However, the resolution of the insurance coverage disputes, and the number and amount of claims on our insurance from co-insured parties, may increase or decrease the amount of such insurance coverage available to the Company as compared to the Company’s estimate. The amounts recorded in the Condensed Consolidated Balance Sheets respecting asbestos-related claims are as follows:
On July 31, 2018, the Division of Enforcement of the SEC informed the Company that it is conducting an investigation related to the Company's accounting for asbestos-related claims not yet asserted. The Company is fully cooperating with the SEC in connection with its investigation. |
Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring In the third quarter of 2017, the Company initiated actions within its emissions business in the Engine segment designed to improve future profitability and competitiveness and started exploring strategic options for the non-core emission product lines. As a continuation of these actions, the Company recorded restructuring expense of $5.2 million and $38.1 million during the three and nine months ended September 30, 2018, respectively, primarily related to professional fees and employee termination benefits. In the second quarter of 2018, the Company initiated a voluntary termination program in the European emissions business and approximately 140 employees accepted the voluntary termination packages. As a result, the Company recorded approximately $26.9 million of employee severance expense during the nine months ended September 30, 2018. The Company will continue its plan to improve the future profitability and competitiveness of its remaining European emissions business in the Engine segment. These actions may result in the recognition of additional restructuring charges that could be material. Additionally, the Company recorded restructuring expense of $0.5 million and $6.0 million in the three and nine months ended September 30, 2018, respectively, in the Drivetrain segment primarily related to manufacturing footprint rationalization activities. In the third quarter of 2017, the Company recorded restructuring expense of $12.6 million, primarily due to the initiation of actions within its emissions business in the Engine segment designed to improve future profitability and competitiveness. On September 27, 2017, the Company acquired 100% of the equity interests of Sevcon. In connection with this transaction, the Company recorded restructuring expense of $0.7 million in the third quarter of 2017, primarily related to contractually required severance associated with Sevcon executive officers. Estimates of restructuring expense are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established accruals. The following tables display a rollforward of the severance accruals recorded within the Company's Condensed Consolidated Balance Sheet and the related cash flow activity for the three and nine months ended September 30, 2018 and 2017:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Company presents both basic and diluted earnings per share of common stock (“EPS”). 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 and compensation cost for future service that the Company has not yet recognized. The dilutive effects of performance-based stock awards described in the Stock-Based Compensation footnote are included in the computation of diluted earnings per share at the level the related performance criteria are met through the respective balance sheet date. The total shareholder return performance shares of 174,400 shares granted in 2016 and 174,750 shares granted in 2018 were excluded from the computation of the diluted earnings per share for the three and nine months ended September 30, 2018 because the impact of these potential shares would be anti-dilutive to the basic earnings per share. The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock:
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Reporting Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reporting Segments | Reporting Segments The Company's business is comprised of two reporting segments: Engine and Drivetrain. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems. The Company allocates resources to each segment based upon the projected after-tax return on invested capital ("ROIC") of its business initiatives. ROIC is comprised of Adjusted EBIT after deducting notional taxes compared to the projected average capital investment required. Adjusted EBIT is comprised of earnings before interest, income taxes and noncontrolling interest (“EBIT") adjusted for restructuring, goodwill impairment charges, affiliates' earnings and other items not reflective of on-going operating income or loss. Adjusted EBIT is the measure of segment income or loss used by the Company. The Company believes Adjusted EBIT is most reflective of the operational profitability or loss of our reporting segments. The following tables show segment information and Adjusted EBIT for the Company's reporting segments. Net Sales by Reporting Segment
Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest (“Adjusted EBIT”)
Total Assets
____________________________________ * Corporate assets include investments and other long-term receivables and certain deferred income taxes. |
Recent Transactions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Disclosure | Recent Transactions On September 27, 2017, the Company acquired 100% of the equity interests in Sevcon for cash of $185.7 million. This amount included $26.6 million paid to settle outstanding debt and $5.1 million paid for Sevcon stock-based awards attributable to precombination services. Sevcon is a global player in electrification technologies, serving customers in the U.S., U.K., France, Germany, Italy, China and the Asia Pacific region. Sevcon complements BorgWarner’s power electronics capabilities utilized to provide electrified propulsion solutions. Sevcon's operating results and assets are reported within the Company's Drivetrain reporting segment. The following table summarizes the aggregated preliminary fair value of the assets acquired and liabilities assumed on September 27, 2017, the date of acquisition:
In connection with the acquisition, the Company capitalized $17.7 million for customer relationships, $48.8 million for developed technology and $4.2 million for the Sevcon trade name. These intangible assets, excluding the indefinite-lived trade name, will be amortized over a period of 7 to 20 years. Various valuation techniques were used to determine the fair value of the intangible assets, with the primary techniques being forms of the income approach, specifically, the relief-from-royalty and excess earnings valuation methods, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, the Company is required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Due to the nature of the transaction, goodwill is not deductible for tax purposes. The Company has finalized all purchase accounting adjustments related to the acquisition and recorded fair value adjustments based on new information obtained during the measurement period primarily related to intangible assets. As of September 30, 2018, these adjustments have resulted in a decrease in goodwill of $6.0 million from the Company's initial estimate. Due to its insignificant size relative to the Company, supplemental pro forma financial information of the combined entity for the current and prior reporting period is not provided. |
Assets and Liabilities Held for Sale |
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Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure | Assets and Liabilities Held For Sale In 2017, the Company started exploring strategic options for non-core emission product lines in the Engine segment and launched an active program to locate a buyer and initiated all other actions required to complete the plan to sell the non-core pipes and thermostat product lines. The Company determined that the assets and liabilities of the pipes and thermostat product lines met the held for sale criteria as of December 31, 2017. As of September 30, 2018 and December 31, 2017, assets of $64.5 million and $67.3 million, including allocated goodwill of $7.1 million and $7.3 million, and liabilities of $29.9 million and $29.5 million, respectively, were reclassified as held for sale on the Consolidated Balance Sheets. The fair value of the assets and liabilities, less costs to sell, was determined to be less than the carrying value, therefore, the Company recorded an asset impairment expense of $71.0 million in the year ended December 31, 2017 in Other expense, net to adjust the net book value of this business to its fair value less cost to sell. In the first nine months of 2018, the Company continued its efforts to locate a buyer for this business and received bids from interested parties. The Company continues to discuss the form and economics of a potential transaction with interested parties and has not reached an agreement with any party. Based on consideration of all available information, including the status of negotiations with the potential buyers and the preliminary indications of value from interested parties, management determined that no additional adjustment to the carrying value of this business is required as of September 30, 2018. The business did not meet the criteria to be classified as a discontinued operation. The assets and liabilities classified as held for sale are as follows:
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Basis of Presentation Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | The accompanying unaudited Condensed Consolidated Financial Statements of BorgWarner Inc. and Consolidated Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations and cash flow activity required by GAAP for complete financial statements. In the opinion of management, all normal recurring adjustments necessary for a fair statement of results have been included. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The balance sheet as of December 31, 2017 was derived from the audited financial statements as of that date. For further information, refer to the Consolidated Financial Statements and Footnotes thereto included in the Company's Amended Annual Report on Form 10-K/A for the year ended December 31, 2017 that was filed with the Securities and Exchange Commission (the "SEC") on September 28, 2018. |
Use of Estimates, Policy [Policy Text Block] | Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, as well as the amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. Actual results could differ from these estimates. |
New Accounting Pronouncements Revenue Recognition (Tables) |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles |
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Revenue from Contracts with Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue |
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Research and Development Expenditures (Tables) |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross and net expenditures on research and development ("R&D") activities |
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Other Expense, Net (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other expense |
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Schedule of Inventory |
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Property, Plant and Equipment, net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Property, Plant and Equipment |
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Product Warranty (Tables) |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability |
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Notes Payable and Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments |
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value |
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Financial Instruments (Tables) |
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Schedule of Price Risk Derivatives |
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Notional Amounts of Outstanding Derivative Positions |
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Schedule of Foreign Exchange Contracts, Statement of Financial Position |
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Derivatives Instruments in Statements of Financial Position |
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Deferred Losses Reported In Accumulated Other Comprehensive Income Loss |
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Schedule of Derivative Instruments |
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Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) |
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Derivative Instruments, Gain (Loss) |
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Retirement Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs |
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity |
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Schedule of Share-based Compensation, Performance Shares Award Unvested Activity |
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Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income (loss) |
|
Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change of Outstanding Asbestos-related Claims |
|
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Liability for Asbestos and Environmental Claims, Gross, Payment for Claims |
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Schedule of Loss Contingencies by Contingency |
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Restructuring (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of employee related and other restructuring accruals |
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Reconciliation |
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Reporting Segments (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales by Reporting Segment |
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Segment Earnings Before Interest and Income Taxes |
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Segment assets |
____________________________________ * Corporate assets include investments and other long-term receivables and certain deferred income taxes. |
Recent Transactions (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
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Asset and Liabilities Held for Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations |
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Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Basis of Presentation [Abstract] | ||||
Net earnings attributable to the noncontrolling interest, net of tax | $ 12.1 | $ 9.7 | $ 36.3 | $ 29.2 |
New Accounting Pronouncements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of sales | $ 1,962.9 | $ 1,894.6 | $ 6,270.2 | $ 5,662.1 |
Selling, general and administrative expenses | $ 230.5 | 225.0 | $ 719.9 | 659.1 |
Accounting Standards Update 2017-07 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of sales | 1.1 | 3.4 | ||
Selling, general and administrative expenses | $ 0.2 | $ 0.5 |
Research and Development Expenditures (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Research and Development | ||||
Gross R&D expenditures | $ 121.8 | $ 115.2 | $ 385.9 | $ 346.9 |
Customer reimbursements | (13.8) | (13.7) | (48.8) | (44.1) |
Net R&D expenditures | $ 108.0 | $ 101.5 | $ 337.1 | $ 302.8 |
Maximum value of R&D contract | 5.00% | 5.00% | 5.00% | 5.00% |
Other Expense, Net (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2017 |
Mar. 31, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Restructuring expense | $ 5.7 | $ 13.3 | $ 44.4 | $ 13.3 | ||
Merger, acquisition and divestiture expense | 1.6 | 6.4 | 4.8 | 6.4 | ||
Lease termination settlement | 0.0 | 0.0 | $ 5.3 | 0.0 | 5.3 | |
Other operating income | (0.2) | (6.8) | ||||
Other operating expense | 2.3 | 2.5 | ||||
Other expense, net | $ 7.1 | $ 22.0 | $ 42.4 | $ 27.5 | ||
Remy International Inc. [Member] | ||||||
Other operating income | $ (4.0) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
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Income Tax Disclosure [Abstract] | ||||
Effective income tax rate, continuing operations | 20.70% | 28.20% | ||
Tax expense on gain from commercial settlement | $ 0.9 | |||
Tax benefits related to restructuring expense | 9.5 | $ 1.2 | ||
Tax Benefit Associated with Merger and Acquisition Expense | 0.2 | 0.3 | ||
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount | 0.4 | |||
Effective rate reconciliation, measurement period adjustments due to the Tax Act | $ 6.6 | 20.0 | ||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | 21.6 | |||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 11.3 | $ 11.7 | ||
Deferred Tax Assets, Net | $ 170.9 | $ 170.9 | $ 121.2 |
Inventories, net (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw material and supplies | $ 512.1 | $ 469.7 | |
Work in progress | 122.6 | 126.7 | |
Finished goods | 190.7 | 183.0 | |
FIFO inventories | 825.4 | 779.4 | |
LIFO reserve | (15.1) | (13.1) | |
Inventories, net | $ 810.3 | $ 758.9 | $ 766.3 |
Product Warranty (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Product warranty rollforward | ||||
Beginning balance, January 1 | $ 111.5 | $ 95.3 | ||
Provisions | 47.5 | 51.3 | ||
Acquisitions | 0.2 | 0.4 | ||
Payments | (45.2) | (45.7) | ||
Translation adjustment | (3.7) | 5.4 | ||
Ending balance, September 30 | 110.3 | 106.7 | ||
Change in year-over-year warranty provision | (3.8) | |||
Accounts payable and accrued expenses | $ 64.7 | $ 69.0 | ||
Other non-current liabilities | 45.6 | 42.5 | ||
Total product warranty liability | $ 111.5 | $ 95.3 | $ 110.3 | $ 111.5 |
Stock-Based Compensation Stockholder's Equity (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Financial Position [Abstract] | ||
Dividends, Common Stock, Cash | $ 106.3 | $ 88.5 |
Stock Repurchased During Period, Shares | 3,037,447 | |
Stock Repurchased During Period, Value | $ 150.0 | |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 858,175 | |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | $ 35.2 | |
Payments of Ordinary Dividends, Noncontrolling Interest | $ 27.5 | $ 23.6 |
Recent Transactions (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
Sep. 27, 2017 |
|
Business Acquisition [Line Items] | ||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0.0 | $ 180.6 | ||
Goodwill | 1,856.5 | $ 1,881.8 | ||
Sevcon, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
Payments to Acquire Businesses, Net of Cash Acquired | 185.7 | |||
Business Combination, Consideration Transferred, Other | 26.6 | |||
Business Combination, Consideration Transferred | $ 5.1 | |||
Receivables, net | $ 15.9 | |||
Inventories, net | 16.7 | |||
Other current assets | 2.8 | |||
Property, plant and equipment, net | 7.3 | |||
Goodwill | 127.6 | |||
Other intangible assets | 70.7 | |||
Deferred tax liabilities | (9.2) | |||
Income taxes payable | (0.7) | |||
Other assets and liabilities | (2.9) | |||
Accounts payable and accrued expenses | (24.5) | |||
Total consideration, net of cash acquired | 203.7 | |||
Assumed retirement-related liabilities | 18.0 | |||
Goodwill, Purchase Accounting Adjustments | $ (6.0) | |||
Customer Relationships [Member] | Sevcon, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 17.7 | |||
Developed Technology Rights [Member] | Sevcon, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 48.8 | |||
Trade Names [Member] | Sevcon, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | $ 4.2 | |||
Minimum [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | |||
Maximum [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 20 years |
Asset and Liabilities Held for Sale (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Receivables, net | $ 23.6 | $ 21.0 |
Inventories, net | 24.4 | 30.4 |
Prepayments and other current assets | 12.8 | 10.3 |
Property, plant and equipment, net | 44.7 | 47.7 |
Goodwill | 7.1 | 7.3 |
Other intangible assets, net | 20.4 | 21.1 |
Other assets | 0.1 | 0.5 |
Impairment of carrying value | (68.6) | (71.0) |
Assets held for sale | 64.5 | 67.3 |
Accounts payable and accrued expenses | 24.9 | 24.6 |
Other liabilities | 5.0 | 4.9 |
Liabilities held for sale | $ 29.9 | $ 29.5 |
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