<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 1996 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
COMMISSION FILE NUMBER 333-12941
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
Gallipolis Plant Retirement 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 for the Years Ended December 31, 1996 and 1995 and
Supplemental Schedule as of December 31, 1996 and Independent Auditors' Report
<PAGE> 2
BORG-WARNER AUTOMOTIVE
AUTOMATIC TRANSMISSION
SYSTEMS CORPORATION,
GALLIPOLIS PLANT
RETIREMENT SAVINGS PLAN
Financial Statements as of
December 31, 1996 and for the
Period from June 22, 1996 to December 31, 1996
and Supplemental Schedule as of
December 31, 1996 and
Independent Auditors' Report
<PAGE> 3
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
GALLIPOLIS PLANT RETIREMENT 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, 1996 2
Statement of Changes in Net Assets Available for Benefits,
for the Period from June 22, 1996 to December 31, 1996 3
Notes to Financial Statements,
for the Period from June 22, 1996 to December 31, 1996 4-10
SUPPLEMENTAL SCHEDULE:
Item 27a - Schedule of Assets Held for Investment Purposes, December 31, 1996 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,
Gallipolis Plant Retirement Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of the Borg-Warner Automotive Automatic Transmission Systems Corporation,
Gallipolis Plant Retirement Savings Plan (the "Plan") as of December 31, 1996,
and the related statement of changes in net assets available for benefits for
the period from June 22, 1996 to December 31, 1996. 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, 1996, and the changes in net assets available for
benefits for the period from June 22, 1996 to December 31, 1996 in conformity
with generally accepted accounting principles.
Our audit was performed 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, 1996 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
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
June 16, 1997
<PAGE> 5
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
GALLIPOLIS PLANT RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(IN THOUSANDS)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in Master Trust $ 373
Contributions receivable 37
-----
Total 410
LIABILITIES:
Other payable (104)
-----
NET ASSETS AVAILABLE FOR BENEFITS $ 306
=====
See notes to financial statements.
</TABLE>
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<PAGE> 6
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
GALLIPOLIS PLANT RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
PERIOD FROM JUNE 22, 1996 TO DECEMBER 31, 1996
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ADDITIONS TO NET ASSETS:
Investment income from Master Trust (Note 4):
Net depreciation in carrying value of investments $ (1)
Interest income 1
Dividend income 7
-------
Total investment income 7
Contributions from participants (Note 1) 88
Contributions from the Company (Note 1) 213
-------
Total additions 308
DEDUCTIONS FROM NET ASSETS:
Participants' withdrawals 2
-------
Total deductions 2
-------
NET INCREASE 306
NET ASSETS AVAILABLE FOR BENEFITS - Beginning of period
-------
NET ASSETS AVAILABLE FOR BENEFITS - End of period $306
=======
</TABLE>
See notes to financial statements.
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<PAGE> 7
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
GALLIPOLIS PLANT RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM JUNE 22, 1996 TO DECEMBER 31, 1996
1. DESCRIPTION OF PLAN
The following description of the Borg-Warner Automotive Automatic
Transmission Systems Corporation, Gallipolis Plant Retirement Savings Plan
(the "Plan") provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan's
provisions.
GENERAL - The Plan was established on June 22, 1996 as a participant in the
Borg-Warner Automotive, Inc. Retirement Savings Master Trust (the "Master
Trust"). The Plan is sponsored by the Gallipolis Plant of Borg-Warner
Automotive Automatic Transmissions Systems Corporation, (the "Company"), a
wholly owned subsidiary of the Borg-Warner Automotive, Inc. (the
"Corporation").
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
Company with systematic savings and tax-advantaged long-term savings for
retirement. The Company has assigned the Retirement Savings Plan Committee
(the "Committee") to oversee the Plan and the Master Trust. 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. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
ELIGIBILITY - Hourly employees of the Company, who are covered by a
collective bargaining agreement between the Company and UAW Local 1685,
become participants in the Plan after they have been employed for at least
six months by the Company. However, employees who were employed by the
Company on the date the Plan was established, and previously participated in
the predecessor employer's defined contribution plans, became participants at
the inception of the plan.
PARTICIPANT'S ACCOUNTS - The participant's accounts consist of the
following:
Company Retirement Account - The Company makes contributions to this account
on behalf of each eligible participant based on the participant's age as
follows:
o For employees under the age of thirty, $0.07 per hour compensated.
o For employees ages thirty, but less than age forty, $0.15 per hour
compensated.
o For employees ages forty, but less than age fifty, $0.33 per hour
compensated.
o For employees ages fifty and older, $0.79 per hour compensated.
Additionally, the Company makes additional contributions for employees who
as of December 31, 1995 were then employed by the Company and were at least
age forty-five as follows:
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<PAGE> 8
o For employees ages forty-five, but less than age fifty-five, $0.05 per
hour compensated.
o For employees ages fifty-five, but less than age sixty, $0.29 per hour
compensated.
o For employees ages sixty and older, $0.46 per hour compensated.
No employee contributions are made to this account.
The Company also made a one-time contribution to this account for eligible
employees employed by the Company as of June 22, 1996.
Employee Retirement Account - Participants may voluntarily contribute from
one to four percent of their compensation to this account. The Company
makes contributions equal to 50 percent of participants' contributions to
this account per year.
Savings Account - Participants may voluntarily contribute one to ten percent
of their compensation to this account. No Company contributions are made to
this account.
Retiree Health Account - Participants may voluntarily contribute from 5 to
20 cents per hour of their compensation to this account. No Company
contributions are made to this account.
MASTER TRUST - Participants may elect to invest their Company Retirement
Account, Employee Retirement Account, 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.
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.
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.
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<PAGE> 9
Pending Account - Represents (1) forfeitures of nonvested account balances
until applied against future Company contributions, and (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, 1996
NUMBER NET ASSET
OF VALUE
UNITS PER UNIT
<S> <C> <C>
Investment Contracts Fund 27,915 $ 1.00
Putnam Voyager Fund 6,008 16.27
Putnam S&P 500 Index Fund 3,187 17.01
The George Putnam Fund of Boston 3,060 16.42
Borg-Warner Automotive, Inc. Stock Fund 284 38.50
Putnam Income Fund 3,975 7.01
</TABLE>
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
contributions vest 100 percent upon five years of vested service with the
participants predecessor employee or the Company, in the aggregate, or upon
permanent disability, death or attaining age 65 provided, however, the
participant is employed by the Company on that date.
WITHDRAWALS - While participants are actively employed, no withdrawals may
be made from the Company Retirement Account, Employee Retirement Account or
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 percent 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
Company Retirement Account, the Employee Retirement Account or the Retiree
Health Account.
PRIORITIES UPON TERMINATION - Although the Company has not expressed any
intent to discontinue the Plan, it has the right to do so at any time,
subject to the provisions set forth in ERISA. 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 Contracts Fund approximates
the fair value. The average yield for the Investment Contracts Fund was 6.2
percent
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<PAGE> 10
for the year ended December 31, 1996. The Investment Contracts Fund
is fully benefit-responsive. The loans to participants are valued at cost
plus accrued interest which approximates fair value. 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.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
3. TAX STATUS
The Plan obtained a determination letter, dated April 3, 1997, in which the
Internal Revenue Service stated that the Plan, as established June 22, 1996,
was in compliance with applicable requirements of the Internal Revenue Code.
The Plan's management believes it is currently designed and being operated
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
Carrying value of Plan investments in the Master Trust as of December 31,
1996, investment income from the Master Trust, contributions from the
participants, contributions from the Company and participants' withdrawals
are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1996
Carrying value of Plan investments in the Master Trust (in thousands):
<S> <C>
Investment Contracts Fund $ 49 *
Putnam Voyager Fund 85 *
Putnam S&P 500 Index Fund 139 *
The George Putnam Fund of Boston 29 *
Borg-Warner Automotive, Inc. Stock Fund 51 *
Putnam Income Fund 20 *
-------
Total $373
=======
*Represents 5% or more of Plan assets.
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C>
Net appreciation (depreciation) in the carrying value of investments of the
Master Trust for the period from June 22, 1996 to December 31, 1996
(in thousands):
Putnam Voyager Fund $ (3)
The George Putnam Fund of Boston 1
Putnam Income Fund 1
------
Total $ (1)
======
Interest income from the Master Trust for the period from
June 22, 1996 to December 31, 1996 (in thousands):
Investment Contracts Fund $ 1
Total $ 1
======
Dividends income from the Master Trust for the period from
June 22, 1996 to December 31, 1996 (in thousands):
Putnam Voyager Fund $ 7
------
Total $ 7
======
Contributions from participants for the period from
June 22, 1996 to December 31, 1996 (in thousands):
Investment Contracts Fund $ 3
Putnam Voyager Fund 46
Putnam S&P 500 Index Fund 24
The George Putnam Fund of Boston 9
Borg-Warner Automotive, Inc. Stock Fund 3
Putnam Income Fund 3
------
Total $ 88
======
Contributions from the Company for the period from
June 22, 1996 to December 31, 1996 (in thousands):
Investment Contracts Fund $ 30
Putnam Voyager Fund 61
Putnam S&P 500 Index Fund 38
The George Putnam Fund of Boston 47
Borg-Warner Automotive, Inc. Stock Fund 9
Putnam Income Fund 28
------
Total $ 213
======
Participants' withdrawals for the period from
June 22, 1996 to December 31, 1996 (in thousands):
Investment Contracts Fund $ 2
------
Total $ 2
======
</TABLE>
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<PAGE> 12
5. MASTER TRUST
The plans participating in the Master Trust as of December 31, 1996 are the
Borg-Warner Automotive, Inc. Retirement Savings Plan ("BWARSP"), the Ithaca
Retirement Savings Plan ("IRSP"), 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"), the
Borg-Warner Automotive Automatic Transmission Systems Corporation, Sterling
Heights Plant Savings Plan ("SHSP"), the Borg-Warner Automotive Automatic
Transmission Systems Corporation, Coldwater Plant Retirement Savings Plan
("CRSP"), the Borg-Warner Automotive Automatic Transmission Systems
Corporation, Romulus Plant Retirement Savings Plan ("RRSP"), the Borg-Warner
Automotive Automatic Transmission Systems Corporation, Plymouth Plant
Retirement Savings Plan ("PRSP"), the Borg-Warner Automotive Powertrain
Systems Corporation, Seneca Plant Retirement Savings Plan ("SRSP"), the
Borg-Warner Automotive Transmission Systems Corporation, Gallipolis Plant
Retirement Savings Plan ("GRSP"), and the Borg-Warner Automotive Air/Fluid
Systems Corporation of Michigan, Warren Savings Plan ("WSP"). During 1996,
the Borg-Warner Retirement Savings Plan, Dixon Plant ("DRSP") was renamed as
the Borg-Warner Automotive Air/Fluid Systems Corporation Retirement Savings
Plan ("AFSRSP") and the Borg-Warner Retirement Savings Plan, Blytheville
Plant was merged into the AFSRSP.
Each plan's interest in the net assets of the Master Trust as of December
31, 1996 is as follows:
<TABLE>
<CAPTION>
PERCENT OF MASTER TRUST NET ASSETS
DECEMBER 31, 1996
- ----------------------------------------------------------------------------------------------
INVESTMENT PUTNAM PUTNAM GEORGE BWA INC. PUTNAM
NAME CONTRACTS VOYAGER S&P 500 PUTNAM STOCK INCOME LOAN PENDING TOTAL
OF PLAN FUND FUND INDEX FUND FUND FUND FUND FUND ACCOUNT PLAN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BWARSP 21.51% 22.04% 9.33% 19.67% 4.01% 1.17% .80% .07% 78.6%
IRSP 1.49 1.40 .58 1.26 .45 .02 .07 .00 5.27
AFSRSP .72 .88 .35 .83 .36 .09 .03 .01 3.27
MRSP .07 .36 .15 .40 .08 .00 .04 .00 1.10
MRIP 1.20 4.06 1.32 3.96 .20 .17 .05 .00 10.96
SHSP .02 .06 .03 .07 .04 .00 .01 .00 .23
CRSP .01 .03 .02 .03 .01 .00 .00 .00 .10
RRSP .01 .14 .05 .07 .06 .01 .01 .00 .35
PRSP .01 .01 .01 .01 .00 .00 .00 .00 .04
SRSP .00 .00 .00 .00 .00 .00 .00 .00 .00
GRSP .01 .02 .01 .01 .00 .01 .00 .00 .06
WSP .00 .01 .01 .00 .00 .00 .00 .00 .02
--------- ------ --------- ------ ------- ----- ----- ------ ------
Total 25.05% 29.01% 11.86% 26.31% 5.21% 1.47% 1.01% .08% 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, 1996 and
components of investment income for the Master Trust for the year ended
December 31, 1996 are summarized in Note 6.
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<PAGE> 13
6. MASTER TRUST INFORMATION
The following tables present the fair value of investments of the Master
Trust as of December 31,1996 and the components of investment income for the
Master Trust for the year ended December 31, 1996:
<TABLE>
<CAPTION>
Carrying value of investments (in thousands):
<S> <C>
Investment Contracts Fund $101,350
Putnam Voyager Fund 117,378
Putnam S&P 500 Index Fund 48,014
The George Putnam Fund of Boston 106,454
Borg-Warner Automotive, Inc. Stock Fund 21,087
Putnam Income Fund 5,934
Loan Fund 4,067
Pending Account/Money Market Fund 341
--------
Total $404,625
========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
------------------------------------------------------------
NET APPRECIATION
(DEPRECIATION)
IN CARRYING VALUE DIVIDEND INTEREST
OF INVESTMENTS INCOME INCOME
<S> <C> <C> <C>
Investment income (in thousands):
Investment Contracts Fund $ $ 6,304 $
Putnam Voyager Fund 4,602 7,307
Putnam S&P 500 Index Fund 8,274
The George Putnam Fund of Boston 5,158 9,429
Borg-Warner Automotive, Inc. Stock Fund 299
Putnam Income Fund (106) 296
Loan Fund $ 291
Pending Account 7
-------- ------- --------
Total $ 21,121 $23,642 $ 291
======== ======= ========
</TABLE>
******
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<PAGE> 14
SCHEDULE
BORG-WARNER AUTOMOTIVE AUTOMATIC
TRANSMISSION SYSTEMS CORPORATION,
GALLIPOLIS PLANT RETIREMENT SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FAIR
DESCRIPTION COST VALUE
<S> <C> <C>
INVESTMENT IN MASTER TRUST $374 $373
---- ----
TOTAL $374 $373
==== ====
</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 GALLIPOLIS PLANT RETIREMENT SAVINGS
PLAN
Date: June 28, 1997 SIGNATURE TITLE
By:/s/ ROBIN J. ADAMS Retirement Savings Plan Committee
-------------- Member
Robin J. Adams
WILLIAM C. CLINE Retirement Savings Plan Committee
---------------- Member
William C. Cline
GERALDINE KINSELLA Retirement Savings Plan Committee
------------------ Member
Geraldine Kinsella
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
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-12941 on Form S-8 of Borg-Warner Automotive, Inc. of our report dated June
16, 1997, appearing in this annual report on Form 11-K of the Borg-Warner
Automotive Automatic Transmission Systems Corporation, Gallipolis Plant
Retirement Savings Plan for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Chicago, Illinois
June 25, 1997
