<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED 1995 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
COMMISSION FILE NUMBER 33-92432
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Borg-Warner Automotive Automatic Transmission Systems Corporation,
Sterling Heights Plant Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
REQUIRED INFORMATION
ITEM 4.
Financial Statements as of December 31, 1995 and the ten months ended
December 31, 1995 and Supplemental Schedule as of December 31, 1995 and
Independent Auditors' Report
<PAGE> 2
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
STERLING HEIGHTS PLANT
SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995 AND THE TEN MONTHS
ENDED DECEMBER 31, 1995 AND SUPPLEMENTAL SCHEDULE AS OF
DECEMBER 31, 1995 AND INDEPENDENT AUDITORS' REPORT
<PAGE> 3
BORG-WARNER AUTOMOTIVE AUTOMATIC TRANSMISSION SYSTEMS
CORPORATION, STERLING HEIGHTS PLANT SAVINGS PLAN
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits,
December 31, 1995 2
Statement of Changes in Net Assets Available for Benefits,
Ten Months Ended December 31, 1995 3
Notes to Financial Statements,
Ten Months Ended December 31, 1995 4-10
SUPPLEMENTAL SCHEDULE:
Item 27a - Schedule of Assets Held for Investment Purposes, December 31, 1995 11
</TABLE>
(Supplemental schedules not listed are omitted due to the absence of conditions
under which they are required.)
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
Borg-Warner Automotive Automatic Transmission Systems Corporation, Sterling
Heights Plant Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of the Borg-Warner Automotive Automatic Transmission Systems Corporation,
Sterling Heights Plant Savings Plan, as of December 31, 1995, and the related
statement of changes in net assets available for benefits for the ten months
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the Plan's financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan as of December 31, 1995, and the changes in net assets available for
benefits for the ten months then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedule of assets held for
investment purposes as of December 31, 1995 is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic 1995
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Chicago, Illinois
June 26, 1996
<PAGE> 5
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
STERLING HEIGHTS PLANT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSETS 1995
<S> <C>
INVESTMENT IN MASTER TRUST $ 323
---------
NET ASSETS AVAILABLE FOR BENEFITS $ 323
=========
</TABLE>
See notes to financial statements.
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<PAGE> 6
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
STERLING HEIGHTS PLANT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE TEN MONTHS ENDED DECEMBER 31, 1995
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
<S> <C>
Investment income from Master Trust $ 25
Contributions from participants 252
Contributions from the Company 46
--------
Total additions 323
--------
NET INCREASE 323
NET ASSETS AVAILABLE FOR BENEFITS - Beginning of period 0
--------
NET ASSETS AVAILABLE FOR BENEFITS - End of period $ 323
========
</TABLE>
See notes to financial statements.
- 3 -
<PAGE> 7
BORG-WARNER AUTOMOTIVE AUTOMATIC TRANSMISSION SYSTEMS
CORPORATION, STERLING HEIGHTS PLANT SAVINGS
PLAN
NOTES TO FINANCIAL STATEMENTS FOR
TEN MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
Borg-Warner Automotive, Inc. (the "Company") established the Borg-Warner
Automotive, Inc. Retirement Savings Master Trust (the "Master Trust") with
Putnam Fiduciary Trust, Boston, Massachusetts on April 1, 1994, pursuant to
the Benefits Agreement entered into in accordance with the January 27, 1993
distribution of the Company's stock to the stockholders of its then parent
company, Borg-Warner Security Corporation.
The Borg-Warner Automotive Automatic Transmission Systems Corporation,
Sterling Heights Plant Savings Plan (the "Plan") was established on March 1,
1995 as a participant in the Master Trust. The Plan is sponsored by
Borg-Warner Automotive Automatic Transmissions Systems Corporation, Sterling
Heights Plant (the "Sponsor"), a wholly-owned subsidiary of the Company.
The Plan was established as a defined contribution plan under section 401(a)
of the Internal Revenue Code, designed to provide eligible employees of the
Borg-Warner Automotive Automatic Transmissions Systems Corporation,
Sterling Heights Plant (the "Plant") with systematic savings and
tax-advantaged long-term savings for retirement. The Sponsor has assigned
the Retirement Savings Plan Committee (the "Committee") to oversee the Plan.
The Committee has appointed Putnam Investor Services, Inc. and Putnam
Fiduciary Trust to perform the administrative, investment, and trustee
services for the Plan and Master Trust.
A complete description of the Plan procedures and provisions is contained in
the Plan document. Significant Plan features include:
ELIGIBILITY - Hourly employees of the Plant may participate in the Plan
after completing six consecutive months of service with the Company.
PARTICIPANT'S ACCOUNT - A Retirement Savings Plan account is established for
each participant in the Plan. The participant's account consists of the
following:
Savings Account - Participants may voluntarily contribute one to fifteen
percent of their compensation to this account. For participants with
twenty or more years of seniority, the Company will match dollar for
dollar the first three percent contributed to this account. No other
Company contributions are made to this account.
Retiree Health Account - Participants may voluntarily contribute from 5
to 20 cents for each hour of service. The Company makes contributions
equal to 100 percent of participant contributions to this account up to
$400 per year.
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<PAGE> 8
MASTER TRUST - Participants may elect to invest their Savings Account and
Retiree Health Account in one or more of the funds of the Master Trust
maintained by Putnam Fiduciary Trust, other than the pending account and
loan fund which are not fund elections available to participants. The funds
of the Master Trust are as follows:
Investment Contracts Fund - Invests in investment contracts with either
highly rated insurance companies or major banks and also in short-term
investments which provide liquidity.
Putnam Voyager Fund - Invests a significant portion of its assets in
securities of smaller and newer issuers. The fund may borrow money to
purchase additional portfolio securities. The fund also trades
securities for short-term profits.
Putnam S&P 500 Index Fund - Invests primarily in publicly traded
common stocks either directly or through collective investment trusts
having a similar investment objective. A small portion of the fund's
assets are invested in high-quality money market instruments and
financial futures contracts.
Putnam U.S. Government Bond Fund - Invests exclusively in securities
backed by the full faith and credit of the United States Government,
repurchase agreements, and forward committments with respect to such
securities. Effective December 29, 1995, the Master Trust discontinued
this fund as an investment option and participants' investments in this
fund were transfered to other participant elected investment options.
No balance existed in this fund at December 31, 1995.
The George Putnam Fund of Boston - Invests in a well-diversified
portfolio of stocks and bonds.
Borg-Warner Automotive, Inc. Stock Fund - Invests in the common stock of
Borg-Warner Automotive, Inc.
Putnam Income Fund - Invests primarily in quality corporate and government
bonds that pay a rate of interest in regularly scheduled payments. The
fund became an eligible investment option in the Master Trust effective
October 1, 1995.
Loan Fund - Invests in plan participant loans. Participant borrowings
increase the Fund balance and principal repayments decrease the Fund
balance with proceeds reinvested in participant directed fund investment
elections. The Loan Fund does not share in the dividends, earnings, and
gains of the Master Trust.
Pending Account - Represents (1) forfeitures of nonvested account
balances until applied against future Company contributions; (2) proceeds
from the sale of assets prior to distribution to the newly elected
investment fund.
Participant interests in each of the funds are accounted for in units of
value. The following is a summary by fund of the number of units and net
asset value per unit:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
NUMBER NET ASSET
OF VALUE
UNITS PER UNIT
<S> <C> <C>
Investment Contracts Fund 58,902 $ 1.00
Putnam Voyager Fund 4,916 15.34
Putnam S&P 500 Index Fund 2,567 13.88
The George Putnam Fund of Boston 6,077 15.52
Borg-Warner Automotive, Inc. Stock Fund 1,844 32.00
</TABLE>
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<PAGE> 9
Contributions to, and earnings of, each fund are invested in appropriate
holdings on a timely basis. All purchases of Borg-Warner Automotive, Inc.
stock are made on the open market.
VESTING - Fund assets attributable to voluntary participant
contributions are fully vested at all times. Fund assets attributable to
Company matched contributions are fully vested after five years of seniority
or upon permanent disability, death, or attaining age 65 provided, however,
the participant is employed by the Company on that date.
WITHDRAWALS - While a participant is actively employed, no withdrawals
may be made from the Retiree Health Account. Withdrawals may be made from
the Savings Account at the participants' option subject to certain
limitations. Upon termination of employment, participants may elect an
immediate or future distribution of the participants' vested account
balances as permitted by the Plan subject to ERISA regulations.
LOANS - Participants may borrow up to 50% of their Savings Account balance
with a minimum of $500 and a maximum of $50,000 limited to a single loan
outstanding at any time. Loan terms range from six months to five years,
with interest charged at the rate established by the trustee for similar
loans on the origination date. No loans are permitted from the Retiree
Health Account.
PRIORITIES UPON TERMINATION - Although the Company has not expressed any
intent to discontinue the Plan, it may do so at any time. In the event of
termination, the interests of the affected participants shall become fully
vested. The Plan assets then remaining shall be used to pay administrative
expenses and benefits equal to the balance in the participants' accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS - The Investment Contracts Fund of the Master Trust is
stated at cost plus interest earned to date (i.e., contract value) as
reported by the Trustee. The contract value of the Investment Contract Fund
approximates the fair value. The average yield for the Investment Contracts
Fund was 6.9% for the years ended December 31, 1995 and 1994. The
Investment Contracts Fund is fully benefit responsive. Investments in all
other funds are stated at market value as reported by the Trustee.
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits as of the date of the financial statements and the
reported amounts of changes in net assets available for benefits during the
reporting period. Actual results could differ from those estimates.
MISCELLANEOUS EXPENSES - Transfer taxes and brokerage expenses attributable
to the Master Trust assets are charged to the applicable fund. Any other
expenses incurred in respect of Master Trust income or property are charged
to the accounts of the participants, where applicable, or are paid in such
manner as the Company determines.
BENEFITS PAYABLE - In accordance with the AICPA Audit and Accounting
Guide, Audits of Employee Benefit Plans, the Plan does not record benefits
payable to participants who have withdrawn from the plan. As of December
31, 1995, no benefits were due to participants withdrawn from the Plan.
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<PAGE> 10
3. TAX STATUS
The Plan is in the process of obtaining a determination letter from the
Internal Revenue Service to determine the Plan's compliance with
applicable requirements of the Internal Revenue Code. The Plan's
management believes it is designed and operates in accordance with the
applicable rules and regulations of the Internal Revenue Code; therefore,
no provision for income taxes has been made in the Plan's financial
statements.
4. FUND INFORMATION
Fair value of Plan investments in the Master Trust as of December 31,
1995, investment income from the Master Trust, contributions from
participants, and contributions from the Company are as follows:
<TABLE>
DECEMBER 31,
1995
<S> <C>
Fair value of Plan investments in Master Trust (in thousands):
Investment Contracts Fund $ 59*
Putnam Voyager Fund 75*
Putnam S&P 500 Index Fund 36*
The George Putnam Fund of Boston 94*
Borg-Warner Automotive, Inc. Stock Fund 59*
--------
Total $ 323
========
</TABLE>
* Represents 5% or more of Plan assets.
- 7 -
<PAGE> 11
Investment income from Master Trust, for the Ten Months Ended December 31, 1995
(in thousands):
<TABLE>
<S> <C>
Investment Contracts Fund $ 1
Putnam Voyager Fund 8
Putnam S&P 500 Index Fund 3
The George Putnam Fund of Boston 8
Borg-Warner Automotive, Inc. Stock Fund 5
---------
Total $ 25
=========
</TABLE>
Contributions from participants, for the Ten Months Ended December 31, 1995
(in thousands):
<TABLE>
<S> <C>
Investment Contracts Fund $ 54
Putnam Voyager Fund 57
Putnam S&P 500 Index Fund 29
The George Putnam Fund of Boston 70
Borg-Warner Automotive, Inc. Stock Fund 42
---------
Total $ 252
=========
</TABLE>
Contributions from the Company, for the Ten Months Ended December 31, 1995
(in thousands):
<TABLE>
<S> <C>
Investment Contracts Fund $ 11
Putnam Voyager Fund 7
Putnam S&P 500 Index Fund 3
The George Putnam Fund of Boston 16
Borg-Warner Automotive, Inc. Stock Fund 9
---------
Total $ 46
=========
</TABLE>
5. MASTER TRUST
The plans participating in the Master Trust are the Borg-Warner
Automotive, Inc. Retirement Savings Plan ("BWARSP"), the Ithaca
Retirement Savings Plan ("IRSP"), the Borg-Warner Retirement Savings Plan,
Dixon Plant ("DRSP"), the Borg-Warner Retirement Savings Plan, Blytheville
Plant ("BRSP"), the Borg-Warner Automotive Diversified Transmission
Products Corporation, Muncie Plant Retirement Savings Plan ("MRSP"), the
Borg-Warner Automotive Diversified Transmission Products Corporation,
Muncie Plant, Local 287 Retirement Investment Plan ("MRIP"), Borg-Warner
Automotive Automatic Transmission Systems Corporation, Coldwater Plant
Retirement Savings Plan ("CRSP"), the Borg-Warner Automotive Automatic
Transmission Systems Corporation, Sterling Heights Plant Savings Plan
("SHSP"), the Borg-Warner Automotive Automatic Transmission Systems
Corporation, Plymouth Plant Retirement Savings Plan ("PRSP"), and the
Borg-Warner Automotive Automatic Transmission Systems Corporation, Romulus
Plant Retirement Savings Plan ("RRSP").
- 8 -
<PAGE> 12
Each plan's interest in the net assets of the Master Trust as of December
31, 1995 is as follows:
<TABLE>
<CAPTION>
PERCENT OF MASTER TRUST NET ASSETS
DECEMBER 31, 1995
--------------------------------------------------------------------------------------------------------------------
NAME INVESTMENT PUTNAM PUTNAM THE GEORGE BORG-WARNER PUTNAM
OF CONTRACTS VOYAGER S&P 500 PUTNAM FUND AUTOMOTIVE, INC. INCOME LOAN PENDING TOTAL
PLAN FUND FUND INDEX FUND OF BOSTON STOCK FUND FUND FUND ACCOUNT PLAN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BWARSP 26.94% 20.70% 8.10% 19.68% 3.37% 0.77% 0.73% 0.11% 80.40%
IRSP 1.72 1.28 0.48 1.20 0.42 0.01 0.06 0.00 5.17
DRSP 0.50 0.42 0.08 0.37 0.13 0.00 0.01 0.00 1.51
BRSP 0.23 0.21 0.09 0.23 0.08 0.00 0.01 0.00 0.85
MRSP 0.09 0.31 0.13 0.32 0.07 0.00 0.04 0.00 0.96
MRIP 1.41 3.84 1.23 3.99 0.10 0.17 0.04 0.01 10.79
SHSP 0.02 0.02 0.01 0.03 0.02 0.00 0.00 0.00 0.10
CRSP 0.01 0.02 0.02 0.02 0.01 0.00 0.00 0.00 0.08
RRSP 0.01 0.03 0.01 0.02 0.03 0.00 0.00 0.00 0.10
PRSP 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.00 0.04
----- ----- ----- ----- ---- ---- ---- ---- ------
Total by
fund 30.94% 26.84% 10.16% 25.87% 4.23% 0.95% 0.89% 0.12% 100.00%
===== ===== ===== ===== ==== ==== ==== ==== ======
</TABLE>
The net assets of the Master Trust are allocated to each plan based on the
above percentages. Investments in the Master Trust at December 31, 1995
and the components of investment income for the Master Trust for the year
ended December 31, 1995 are summarized in Note 6.
6. MASTER TRUST INFORMATION
The following tables present the fair value of investments of the Master
Trust as of December 31, 1995 and the components of investment income for
the Master Trust for the year ended December 31, 1995.
<TABLE>
<CAPTION>
DECEMBER 31,
1995
<S> <C>
Fair value of investments (in thousands):
Investment Contracts Fund $ 102,880
Putnam Voyager Fund 89,247
Putnam S&P 500 Index Fund 33,768
The George Putnam Fund of Boston 86,070
Borg-Warner Automotive, Inc. Stock Fund 14,053
Putnam Income Fund 3,204
Loan Fund 2,971
Pending Account 422
----------
Total $ 332,615
==========
</TABLE>
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<PAGE> 13
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
NET APPRECIATION
IN FAIR VALUE DIVIDEND INTEREST
OF INVESTMENTS INCOME INCOME
-------------- ------- --------
<S> <C> <C> <C>
Investment Income (in thousands):
Investment Contracts Fund $6,829
Putnam Voyager Fund $ 19,172 4,634
Putnam S&P 500 Index Fund 8,460 1
Putnam U.S. Government Bond Fund 1,236 1,191
The George Putnam Fund of Boston 11,609 5,659
Borg-Warner Automotive, Inc. Stock Fund 2,837 558
Putnam Income Fund 60 28
Loan Fund 0 $186
Pending Account 0 12
------- ------- ----
Total $43,374 $18,912 $186
======= ======= ====
</TABLE>
*****
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<PAGE> 14
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
STERLING HEIGHTS PLANT SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COST
DESCRIPTION (ESTIMATED) MARKET
<S> <C> <C>
INVESTMENT IN MASTER TRUST $ 308 $ 323
------------- ---------
TOTAL $ 308 $ 323
============= =========
</TABLE>
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<PAGE> 15
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
BORG-WARNER AUTOMOTIVE AUTOMATIC TRANSMISSION
SYSTEMS CORPORATION, STERLING HEIGHTS PLANT SAVINGS
PLAN
Date: June 28, 1996 SIGNATURE TITLE
By:/s/ ROBIN J. ADAMS Retirement Savings Plan Committee
Member
Robin J. Adams
/s/ WILLIAM C. CLINE Retirement Savings Plan Committee
Member
William C. Cline
/s/ GERALDINE KINSELLA Retirement Savings Plan Committee
Member
Geraldine Kinsella
/s/ REGIS J. TRENDA Retirement Savings Plan Committee
Member
Regis J. Trenda
<PAGE> 16
EXHIBIT INDEX
Exhibit Number Page
(23.1) Consent of Deloitte & Touche LLP
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-92432 on Form S-8 of Borg-Warner Automotive, Inc. of our report dated June
26, 1996, appearing in this annual report on Form 11-K of the Borg-Warner
Automotive Automatic Transmission Systems Corporation, Sterling Heights Plant
Savings Plan for the year ended December 31, 1995.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Chicago, Illinois
June 26, 1996
