BorgWarner(BWA) - 2024 Q2 - Quarterly Report

Financial Performance - Net sales for the three months ended June 30, 2024, were $3,603 million, a decrease of 1.8$3,671 million for the same period in 2023[11]. - Gross profit for the three months ended June 30, 2024, was $685 million, compared to$680 million for the same period in 2023, reflecting a slight increase[11]. - Operating income for the three months ended June 30, 2024, was $297 million, down from$333 million in the same period last year, indicating a decrease of 10.8%[11]. - Net earnings attributable to BorgWarner Inc. for the three months ended June 30, 2024, were $303 million, compared to$204 million for the same period in 2023, representing an increase of 48.5%[11]. - Earnings per share attributable to BorgWarner Inc. for the three months ended June 30, 2024, were $1.34, up from$0.88 in the same period last year, marking a growth of 52.3%[11]. - Comprehensive income attributable to BorgWarner Inc. for the three months ended June 30, 2024, was $259 million, compared to$135 million for the same period in 2023, reflecting a 92.6% increase[13]. - Net earnings from continuing operations for the six months ended June 30, 2024, were $557 million, compared to$427 million for the same period in 2023, representing a 30.5% increase[148]. Assets and Liabilities - Total assets as of June 30, 2024, were $14,108 million, a decrease from$14,453 million as of December 31, 2023[8]. - Total liabilities as of June 30, 2024, were $7,823 million, down from$8,387 million as of December 31, 2023, indicating a reduction of 6.7%[8]. - Cash and cash equivalents as of June 30, 2024, were $1,288 million, compared to$1,534 million as of December 31, 2023, reflecting a decrease of 16.1%[8]. - The net goodwill balance decreased to $2,965 million as of June 30, 2024, from$3,013 million on December 31, 2023, reflecting a reduction of 1.6%[79]. - The total product warranty liability increased to $204 million as of June 30, 2024, compared to$196 million on December 31, 2023, marking a growth of 4.1%[84]. Cash Flow and Operating Activities - Net cash provided by operating activities of continuing operations was $344 million for the six months ended June 30, 2024, up from$289 million in the same period of 2023, indicating an increase of 19.1%[15]. - Cash, cash equivalents, and restricted cash at the end of the period were $1,288 million, compared to$848 million at the end of the same period in 2023, showing a significant increase of 51.8%[15]. Acquisitions and Investments - The company completed the acquisition of Eldor Corporation's electric hybrid systems business for €72 million ($78 million) and may pay up to €175 million ($191 million) in earn-out payments based on future business performance[25]. - The acquisition of Hubei Surpass Sun Electric's electric vehicle solution business was completed for ¥288 million ($42 million), enhancing the company's presence in China[29]. - The total consideration for the acquisition of Drivetek AG was ₣37 million ($39 million), including ₣10 million ($10 million) of estimated earn-out payments[32]. - The company paid$131 million at closing for the acquisition of Rhombus Energy Solutions, with up to $30 million of earn-out payments contingent upon achieving specific sales and gross margin targets[34]. - The total final consideration for the acquisition of Santroll Automotive Components was$192 million, including approximately ¥1.0 billion (152 million) of base purchase price[36]. Research and Development - Gross R&D expenditures for the three months ended June 30, 2024, were 220 million, an increase from 213 million in the same period of 2023[65]. - Net R&D expenditures for the six months ended June 30, 2024, were 376 million, compared to $349 million for the same period in 2023[65]. Taxation - The company recorded a discrete tax benefit of$89 million during the three months ended June 30, 2024, related to unrecognized tax benefits[69]. - The effective tax rate for the six months ended June 30, 2024, was 5%, a decrease from 19% for the same period in 2023[70]. Segment Performance - Net sales for the Air Management segment reached $1,974 million for the three months ended June 30, 2024, compared to$2,027 million in the same period of 2023, indicating a slight decline of 2.6%[145]. - The Drivetrain & Battery Systems segment reported net sales of $1,196 million for the three months ended June 30, 2024, consistent with the previous year[145]. - The ePropulsion segment achieved net sales of$464 million for the three months ended June 30, 2024, compared to $566 million in the same period of 2023, a decrease of 18.0$4,004 million with a Segment Adjusted Operating Income of $612 million and a margin of 15.3$2,355 million, with Segment Adjusted Operating Income of $334 million and a margin of 14.2$900 million, resulting in a Segment Adjusted Operating Loss of $111 million and a margin of (12.3)$25 million for the three months ended June 30, 2024, compared to $9 million in the same period last year[11]. - The company’s restructuring expenses for the six months ended June 30, 2024, totaled$44 million, including $30 million in employee termination benefits[51]. - The Company approved a$75 million restructuring plan in June 2024 for its ePropulsion segment due to increased market volatility[58]. - A restructuring plan announced in 2023 is expected to yield annual savings of $80 million to$90 million by 2027, with $130 million to$150 million allocated for the initiative[178]. Stockholder Information - Total stockholders' equity as of June 30, 2024, was $6,285 million, a decrease from$6,042 million as of March 31, 2024[125]. - Dividends declared for the three months ended June 30, 2024, were $25 million, reflecting a dividend of$0.11 per share[125]. - The balance of retained earnings as of June 30, 2024, was $6,620 million, down from$6,325 million as of March 31, 2024[125].