SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998 Commission file number: 1-12162
---------------------
Borg-Warner Automotive, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3404508
(State of Incorporation) (IRS Employer
Identification No.)
200 South Michigan Avenue
Chicago, Illinois 60604
(312) 322-8500
(Address and telephone number of principal executive offices)
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
which registered
Title of each class
Common Stock, par value $.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
-----------------------------
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ NO---
The aggregate market value of the voting stock of the registrant held by
stockholders (not including voting stock held by directors and executive
officers of the registrant) on June 18, 1999 was approximately $1.51 billion.
As of June 18, 1999, the registrant had 26,629,514 shares of Common Stock
outstanding.
Indicate by check-mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated herein by reference
into the Part of the Form 10-K indicated.
DOCUMENT PART OF FORM 10-K INTO WHICH INCORPORATED
Borg-Warner Automotive, Inc. 1998 Annual Report to Stockholders Parts II and IV
Borg-Warner Automotive, Inc. Proxy Statement for the 1999
Annual Meeting of Stockholders Part III
<PAGE>
PART II
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements (including the notes thereto) of the
Company and the Independent Auditors' Report as set forth on pages 27 through 44
in the Company's Annual Report are incorporated herein by reference and made a
part of this report. Supplementary financial information regarding quarterly
results of operations (unaudited) for the years ended December 31, 1998 and 1997
is set forth in Note 9 of the Notes to Consolidated Financial Statements on page
40 of the Company's Annual Report. For a list of financial statements filed as
part of this report, see Item 14, "Exhibits, Financial Statement Schedules, and
Reports on Form 8-K" on page 13.
<PAGE>
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Financial Statements
March 31, 1999, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
NSK-Warner Kabushiki Kaisha:
We have audited the accompanying consolidated balance sheets (expressed in yen)
of NSK-Warner Kabushiki Kaisha and a subsidiary as of March 31, 1999 and 1998
and the related consolidated statements of earnings, stockholders' equity, and
cash flows for each of the years in the three-year period ended March 31, 1999.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of NSK-Warner Kabushiki
Kaisha and a subsidiary as of March 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended March 31, 1999 in conformity with United States generally accepted
accounting principles.
The accompanying consolidated financial statements have been translated into
United States dollars solely for the convenience of the reader. We have
recomputed the translation and, in our opinion, the consolidated financial
statements expressed in yen have been translated into United States dollars on
the basis set forth in note 2 of the notes to consolidated financial statements.
Tokyo, Japan
April 28, 1999
<PAGE>
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Balance Sheets
March 31, 1999 and 1998
<TABLE>
<CAPTION>
Japanese yen U.S. dollars
-------------- --------------
(thousands) (thousands)(note 2)
1999 1998 1999
------ -------- -------
<S> <C> <C> <C>
Assets
Current assets:
Current liabilities:
Cash and cash
equivalents (note 12)Y Y277,331 244,107 $2,301
Short-term investments
(notes 3 and 12) 7,510,017 8,479,813 62,298
Receivables (notes
10 and 12):
Trade accounts 6,941,942 7,216,600 57,586
Other 480,927 72,079 3,989
--------- ------- ---------
Total receivables 7,422,869 7,288,679 61,575
---------- --------- ---------
Inventories (note 4) 1,759,243 1,561,172 14,593
Prepaid expenses
and other current
assets (note 6) 322,379 278,322 2,674
-------- --------- --------
Total current assets 17,291,839 17,852,093 143,441
---------- ----------- ----------
Marketable investment
securities (notes
5 and 12) 564,899 546,430 4,686
Investment in an
affiliated company 829,293 312,000 6,879
Property, plant and equipment, at cost:
Land 1,474,665 1,474,665 12,233
Buildings 11,534,526 11,477,837 95,682
Machinery and equipment 19,060,269 17,870,539 158,111
Vehicles 102,387 105,045 849
Tools, furniture
and fixtures 4,791,107 4,244,301 39,744
Construction in
progress 746,066 9,095 6,189
--------- -------- --------
37,709,020 35,181,482 312,808
Less accumulated
depreciation 22,968,089 20,985,868 190,527
----------- ---------- ---------
Net property,
plant and equipment 14,740,931 14,195,614 122,281
----------- ---------- ---------
Other assets:
Patent, less accumu-
lated amortization 3,125 9,375 26
Other 384,029 273,955 3,186
--------- -------- ----------
Total other assets 387,154 283,330 3,212
--------- -------- --------
Y 33,814,116 33,189,467 $280,499
========== ========== =========
Trade payables (notes 10 and 12):
Notes Y 1,617,758 2,110,345 $13,420
Accounts 3,301,976 3,004,361 27,391
----------- --------- ---------
Total trade payables 4,919,734 5,114,706 40,811
----------- --------- ----------
Other payables (notes 10 and 12):
Notes 405,880 237,103 3,367
Accounts 287,806 678,068 2,387
------------ --------- ------------
Total other payables 693,686 915,171 5,754
------------ --------- -----------
Income taxes payable 1,139,888 1,222,189 9,456
Accrued expenses (note 12) 1,634,434 1,472,245 13,558
Other current liabilities 20,821 16,683 173
--------- ----------- --------
Total current liabilities 8,408,563 8,740,994 69,752
---------- --------- ----------
Noncurrent liabilities:
Accrued pension and severance
cost (note 7) 485,435 413,999 4,027
Deferred income taxes (note 6) 343,527 483,882 2,849
------- ------- --------
Total noncurrent liabilities 828,962 897,881 6,876
------- ----------- --------
Total liabilities 9,237,525 9,638,875 76,628
--------- ---------- ---------
Stockholders' equity:
Common stock of Y10,000 par value (note 10)
Authorized 220,000 shares; issued
55,000 shares 550,000 550,000 4,563
Legal reserve (note 8) 137,500 137,500 1,141
Retained earnings 24,022,164 22,973,264 199,271
Accumulated other compre-
hensive income (loss)
(notes 6 and 9) (133,073) (110,172) (1,104)
----------- --------- --------
Total stockholders' equity 24,576,591 23,550,592 203,871
Commitments and contingent
liability (note 11)
Y 33,814,116 33,189,467 $280,499
============ ========= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statement of Earnings
Years ended March 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Japanese yen U.S. dollars
-------------- --------------
(thousands) (thousands)(note 2)
1999 1998 1997 1999
------ ------ ------ -------
<S> <C> <C> <C> <C>
Sales (note 10) Y 30,028,699 32,332,267 33,191,067 $249,097
Cost of Sales
(note 10) 23,334,312 24,415,185 23,942,752 193,565
---------- ---------- ----------- ---------
Gross profit 6,694,387 7,917,082 9,248,315 55,532
Selling, general
and administrative
expenses (note 10)2,813,665 2,875,594 2,816,980 23,340
--------- ---------- ----------- --------
Operating income 3,880,772 5,041,488 6,431,335 32,192
--------- ---------- ----------- --------
Other income:
Interest income 82,924 59,277 41,680 688
Exchange gain,net 25,765 3,777 - 213
Equity in income
of an affiliated
company 18,184 157,486 152,968 151
Other 87,510 161,574 82,035 726
------- -------- ------ ------
214,383 382,114 276,683 1,778
------- -------- ------- ------
Other deductions:
Interest expense 37 16,543 40,018 0
Loss on retirement
of property, plant
and equipment, net 47,605 46,534 65,725 395
Exchange loss, net - - 12,089 -
Other 191,150 16,377 15,409 1,586
-------- ------- ------- -------
238,792 79,454 133,241 1,981
--------- -------- ------- -------
Earnings before
income taxes 3,856,313 5,344,148 6,574,777 31,989
--------- --------- --------- --------
Income taxes
(note 6): 1,994,700 2,605,400 3,336,800 16,546
Current (287,287) 107,443 (3,678) (2,383)
-------- ---------- --------- -------
Deferred 1,707,413 2,712,843 3,333,122 14,163
--------- ---------- --------- -------
Y 2,148,900 2,631,305 3,241,655 $17,826
========= ========== ========= =======
/TABLE
<PAGE>
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Stockholders' Equity
Years ended March 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Japanese yen U.S. dollars
-------------- --------------
(thousands) (thousands)(note 2)
1999 1998 1997 1999
------ ----- ------ ------
<S> <C> <C> <C> <C>
Common stock:
Balance at begin-
ning of year Y550,000 550,000 550,000 $4,563
--------- -------- --------- --------
Balance at end of year 550,000 550,000 550,000 4,563
--------- -------- --------- --------
Legal reserve (note 8)
Balance at begin-
ning of year 137,500 137,500 137,500 1,141
--------- --------- -------- --------
Balance at end of year 137,500 137,500 137,500 1,141
-------- --------- ---------- --------
Retained earnings:
Balance at begin-
ning of year 22,973,264 21,441,959 19,300,304 190,570
Net earnings 2,148,900 2,631,305 3,241,655 17,826
Cash dividends (1,100,000) (1,100,000)(1,100,000) (9,125)
----------- ----------- ---------- --------
Balance at end
of year 24,022,164 22,973,264 21,441,959 199,271
----------- ---------- ---------- ---------
Accumulated other
comprehensive income
(loss)(notes 6 and 9)
Balance at begin-
ning of year (110,172) 51,925 187,139 (914)
Adjustments for
the year (22,901) (162,097) (135,214) (190)
------------ -------- --------- ---------
Balance at
end of year (133,073) (110,172) 51,925 (1,104)
Total Stockholders' ------------- ----------- --------- --------
equity Y 24,576,591 23,550,592 22,181,384 $203,871
============= =========== ========== =========
Disclosure of compre-
hensive income:
Net earnings 2,148,900 2,631,305 3,241,655 $17,826
Other comprehensive
income(loss),
net of tax
(note 9) (22,901) (162,097) (135,214) (190)
---------- ---------- --------- --------
Comprehensive incomeY 2,125,999 2,469,208 3,106,441 $17,636
=========== =========== ========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Consolidated Statements of Cash Flows
Years ended March 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Japanese yen U.S. dollars
-------------- --------------
(thousands) (thousands)(note 2)
1999 1998 1997 1999
------ ----- ------ ------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net earnings Y 2,148,900 2,631,305 3,241,655 $17,826
Adjustments to reconcile
net earnings to net
cash provided by operating
activities:
Depreciation and
amortization 2,340,937 2,053,227 1,997,587 19,419
Loss on retirement of
property,plant and
equipment, net 47,605 46,534 65,725 395
Equity in income of an
affiliated company (18,184) (90,408) (157,838) (151)
Deferred income taxes (287,287) 40,365 (3,678) (2,383)
Decrease (increase)
in receivables (147,581) 397,114 655,168 (1,224)
Increase in inventories (199,404) (192,585) (215,067) (1,654)
Decrease (increase) in
prepaid expenses and other
current assets 35,415 (32,115) 1,269 294
Decrease in trade payables (181,063) (50,286) (166,999) (1,502)
Increase (decrease) in other
payables (221,485) 433,812 (95,738) (1,838)
Increase (decrease) in
accrued expenses 162,383 (9,139) (12,330) 1,347
Increase (decrease) in
income taxes payable (82,301) (701,296) 212,226 (683)
Increase (decrease) in other
current liabilities 4,245 (11,571) (7,754) 35
Other, net 60,990 46,408 56,677 506
-------- -------- --------- -------
Total adjustments 1,514,270 1,930,060 2,329,248 12,561
---------- --------- --------- -------
Net cash provided
by operating activities 3,663,170 4,561,365 5,570,903 30,387
---------- --------- --------- --------
Cash flows from
investing activities:
Increase in short-
term investments 965,296 (933,329) (1,608,901) 8,007
Proceeds from sale
of property,
plant and equipment 43,745 22,336 6,996 363
Payments from purchase of
property, plant
and equipment (2,923,493) (2,217,810) (1,355,848) (24,251)
Payment for purchase of investment
in an affiliated company (463,899) - - (3,848)
Increase in all other assets (126,308) (55,235) (28,668) (1,048)
Other, net (20,872) (48,571) (5,290) (173)
----------- --------- --------- ----------
Net cash used in
investment activities (2,525,531) (3,232,609)(2,991,711) (20,950)
----------- --------- ----------- ---------
Cash flows from financing activities:
Decrease in short-term
bank loans - (910,000) (1,523,298) -
Dividends paid (1,100,000) (1,100,000)(1,100,000) (9,125)
------------ ---------- ----------- --------
Net cash used in finan-
cing activities (1,100,000) (2,010,000) (2,623,298) (9,125)
------------ --------- ----------- ---------
Effect of exchange rate
changes on cash and cash
equivalents (4,415) (1,025) 4,869 (36)
------------ ------------ -------- --------
Net decrease in cash
and cash equivalents 33,224 (682,269) (39,237) 276
------------ ------------ --------- ----------
Cash and cash equivalents
at beginning of year 244,107 926,376 965,613 2,025
-------- ----------- -------- ---------
Cash and cash equivalents
at end of year Y 277,331 244,107 926,376 $2,301
========== =========== ======== =========
Supplemental information of cash flows:
Cash paid during the year for:
Interest Y 37 15,340 24,340 $ 0
Income taxes 2,077,001 3,306,696 3,124,508 17,229
========== ========== ========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
March 31, 1999, 1998 and 1997
(1) Summary of Significant Accounting Policies
(a) Description of Business
NSK-Warner Kabushiki Kaisha (the "Company") operates a plant in Fukuroi
City in Shizuoka Prefecture in Japan engaged in the production of one-way clutch
and related parts, and friction plates and related parts. These products relate
to the automatic transmission system of passenger cars.
The Company sells most of its products to NSK Ltd., a 50% stockholder of
the Company. The products are eventually sold to the automotive industry.
The Company's sales for the year ended March 31, 1999 were distributed as
follows: one-way clutch and related parts - 57%, friction plates and related
parts - 43%.
(b) Principles of Consolidation
NSK-Warner USA Inc., a wholly-owned subsidiary of the Company, was
established in the United Stated in January 1997.
The consolidated financial statements include financial statements of the
Company and the subsidiary. All significant intercompany balances and
transactions have been eliminated in consolidation.
(c) Basis of Presentation of Financial Statements
The Company maintains its books of account in conformity with financial
accounting standards of Japan. However, the accompanying consolidated financial
statements have been prepared in a manner and reflect those adjustments which
management believes are necessary to conform with United States generally
accepted accounting principles. Such adjustments are summarized in note 13 of
the notes to consolidated financial statements.
(d) Cash Equivalents
For purposes of the statements of cash flows, the Company considers all
deposits with a maturity of three months or less to be cash equivalents.
(e) Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method for parts and raw materials and the average
method for work in process and supplies.
<PAGE>
2
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(f) Marketable Investment Securities
Marketable investment securities at March 31, 1999 and 1998 consist of debt
and equity securities that have readily determinable fair values and are
classified as "available-for-sale".
The Company's available-for-sale securities are reported at fair value with
unrealized gain or losses net of differed taxes reported as a separate component
of accumulated other comprehensive income (loss) included in stockholders'
equity.
A decline in the market value of any available-for-sale securities below
cost that is deemed other than temporary results is charged to earnings
resulting in the establishment of a new cost basis for the security.
Realized gains and losses for securities classified as available-for-sale
securities are included in earnings and are derived using the average method for
determining the cost of securities sold.
(g) Investment in an Affiliated Company
Investment in the common stock of an affiliated company is accounted for by
the equity method.
(h) Depreciation
Depreciation of property, plant and equipment is computed by the declin-
ing-balance method over the estimated useful lives of assets.
(i) Amortization
Patent purchased from Borg-Warner Automotive K.K. is amortized on a
straight-line basis over a period of eight years.<PAGE>
3
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(j) Research and Development
Research and development costs are expensed as incurred. Research and
development costs charged to earnings for the years ended March 31, 1999, 1998
and 1997 amounted to Y1,218,158 thousand ($10,105 thousand), Y1,236,354 thousand
and Y1,280,682 thousand, respectively.
(k) Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".
Under the asset and liability method of SFAS No. 109, deferred tax assets and
liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the
enactment date.
(l) Retirement and Severance Benefits
The Company accounts for its defined benefit pension plans and retirement
plans in accordance with Statement of Financial Accounting Standards (SFAS) No.
87, "Employers' Accounting for Pensions".
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
132, "Employers' Disclosures about Pensions and Other Postretirement Benefits"
in the year ended March 31, 1999. SFAS No. 132 amends SFAS No. 87 and revises
employers' disclosures about pension and other postretirement benefit plans.
SFAS No. 132 does not change the recognition or measurement of those plans and
will not affect the Company's consolidated financial position and results of
operations. All prior years disclosures have been restated to conform with the
provisions of SFAS No. 132.
(m) Use of Estimates
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these consolidated financial
statements in conformity with United Sates generally accepted accounting
principles. Actual results could differ from those estimates.
<PAGE>
4
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(n) Long-Lived Assets and Long-Lived Assets to Be Disposed Of
The Company's long-lived assets and certain identifiable intangibles are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future net cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceed the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.
(o) Comprehensive Income
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
130, "Reporting Comprehensive Income" from the year beginning April 1, 1998.
Comprehensive income consists of net earnings, change in foreign currency
translation adjustments, change in net unrealized gains (losses) on marketable
investment securities and change in minimum pension liability adjustment, and is
included in the consolidated statements of stockholders' equity. SFAS No. 130
requires only additional disclosures in the consolidated financial statements
and does not affect the Company's consolidated financial position and results of
operations. All prior years consolidated financial statements have been
reclassified to conform with the provisions of SFAS No. 130.
(2) U.S. Dollar Amounts
The accompanying consolidated financial statements are expressed in
Japanese yen as of and for the year ended March 31, 1999, the currency of the
country in which the Company operates. The translation of Japanese yen amounts
into U.S. dollar amounts is included solely for the convenience of readers and
has been made at the rate of Y120.55 to US $1, the approximate rate of exchange
reported by the Tokyo Foreign Exchange Market on March 31, 1999. Such
translation should not be construed as a representation that the amounts shown
could be converted into U.S. dollars at the above rate.
(3) Short-term Investments
Short-term investments, at cost, which approximate market, at March 31,
1999 and 1998 consisted of the following:
Japanese yen(thousands) U.S. dollars(thousands)
1999 1998 1999
-------- ------- -----------
Time deposits with
a maturity of more
than three months Y - 335,550 $-
Certificates of deposit
purchased under
resale agreements 7,510,017 8,144,263 62,298
--------- -------- --------
Y7,510,017 8,479,813 $62,298
========== ========= ========<PAGE>
5
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(4) Inventories
Inventories at March 31, 1999 and 1998 are summarized as follows:
Japanese yen(thousands) U.S. dollars(thousands)
1999 1998 1999
------- ------- --------------
Work in process Y1,166,246 1,205,766 $ 9,674
Raw materials 325,995 201,060 2,704
Supplies 188,322 132,685 1,562
Goods in transit 78,680 21,661 653
----------- --------- ---------
Y 1,759,243 1,561,172 $ 14,593
============= =========== ============
(5) Marketable Investment Securities
The cost, gross unrealized holding gains, gross unrealized holding
losses and fair value for available-for-sale securities by major security type
at March 31, 1999 and 1998 were as follows:
Japanese yen (thousands)
Gross Gross
Unrealized Unrealized
------------ ---------------
Cost Holding Holding Fair
Gains Losses Value
----- -------- ---------- --------
At March 31, 1999:
Available-for-sale:
Debt security \Y 100,000 - - 100,000
Equity securities 521,352 26,433 82,886 464,899
------- ------- -------- ---------
Y 621,352 26,433 82,886 564,899
========= ======= ======== =========
Japanese yen (thousands)
Gross Gross
Unrealized Unrealized
----------- ------------
Cost Holding Holding Fair
Gains Losses Value
------ --------- -------- --------
At March 31, 1998:
Available-for-sale:
Debt security \Y 100,000 - - 100,000
Equity securities 521,903 27,915 103,388 446,430
-------- -------- ------- --------
Y 621,903 27,915 103,388 546,430
======== ======== ======== =========
<PAGE>
6
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
U.S. dollars (thousands)
-------------------------
Gross Gross
Unrealized Unrealized
---------- ------------
Cost Holding Holding Fair
Gains Losses Value
------- ------- ------ ----------
Fair Value
At March 31, 1999:
Available-for-sale:
Debt security $830 - - 830
Equity securities 4,324 219 687 3,856
------ ------ ------- -----------
$ 5,154 219 687 4,686
====== ====== ======== ==========
The debt security at March 31, 1999 is due in 2001.
Net realized gains during the years ended March 31, 1999, 1998 and
1997 were insignificant.
(6) Income Taxes
The Company is subject to a number of taxes based on income, which in t
the aggregate result in a normal income tax rate of approximately 47%, 51% and
51% for the years ended March 31, 1999, 1998 and 1997. The Company's
subsidiary in the United States was not liable to pay income taxes in 1999 and
1998.
Amendments to Japanese tax regulations were enacted into law on March
31, 1998. As a result of these amendments, the normal income tax rate was
reduced from approximately 51% to 47% effective from April 1, 1998. Current
income taxes were calculated at the tax rate of 51% in effect for the year
ended March 31, 1998. Deferred income taxes at March 31, 1998 were measured at
the rate of 47%. The effect of the income tax rate reduction on deferred
income tax balances at March 31, 1998 was insignificant.
Amendments to Japanese tax regulations were also enacted into law on March
24, 1999. As a result of these amendments, the normal income tax rate is to be
reduced from approximately 47% to 41% effective from April 1, 1999. Current
income taxes were calculated at the tax rate of 47% in effect for the year ended
March 31, 1999. Deferred income taxes at March 31, 1999 were measured at the
rate of 41%. The effect of the income tax rate reduction on deferred income tax
balances at March 31, 1999 was insignificant.
The effective income tax rates of the Company for the years ended March 31,
1999, 1998 and 1997 differ from the normal income tax rate for the following
reasons:
1999 1998 1997
------ -------- ---------
Computed normal income tax rate 47.0% 51.0% 51.0%
Other (2.7) (0.2) (0.3)
Effective income tax rate 44.3% 50.8% 50.7%<PAGE>
7
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
Net deferred income tax assets and liabilities are reflected on the
accompanying consolidated balance sheets under the following captions:
Japanese yen(thousands) U.S. dollars(thousands)
1999 1998 1999
------ --------- ----------
Prepaid expenses and
other current assets Y 321,867 243,499 $ 2,669
Noncurrent liabilities (343,527)(483,882) (2,849)
--------- ------- ----------
\ Y (21,660) (240,383) $ (180)
========= ========= ===========
Change in net deferred income tax assets and liabilities is allocated as
follows.
Japanese yen(thousands) U.S. dollars(thousands)
----------------------- -----------------------
1999 1998 1997 1999
------ ------ ------- -------
Earnings \ Y (287,287)107,443(3,678) $ (2,383)
Stockholders' equity -
accumulated other
comprehensive income
(loss): Foreign
currency translation
adjustments 56,596 (67,078) 2,483 469
Net unrealized gains
(losses) on marketable
investment
securities 11,968 (86,731)(155,592) 100
Minimum pension
liability
adjustment - - 12,375 -
---------- ------ -------- -----------
Y (218,723)(46,366)(144,412) $(1,814)
=========== ======= ======== ============
<PAGE>
8
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at March 31,
1999 and 1998 are presented below:
Japanese yen(thousands) U.S. dollars(thousands)
----------------------- ------------------------
1999 1998 1999
------ ------ -------
Deferred tax assets:
Business tax Y 101,981 124,557 $ 846
Employee bonus 41,693 - 346
Accrued expenses 204,496 169,270 1,697
Accrued pension
and severance
cost 105,396 102,521 874
Marketable
investment
securities 23,203 35,171 192
------- -------- ----------
Total deferred
tax assets 476,769 431,519 3,955
------- -------- -------
Deferred tax liabilities:
Allowance for doubtful
receivables 26,304 50,328 218
Capital gain deferred in
connection with the
acquisition of new
property
(see note 10) 327,346 394,509 2,715
Special depre-
ciation 23,861 34,271 198
Loss for invest-
ment 41,918 47,402 348
Investment in an
affiliated
company 79,000 145,392 656
------- -------- ---------
Total deferred
tax liabi-
lities 498,429 671,902 4,135
------- ------- ---------
Net deferred
tax liabilities Y(21,660)(240,383) $ (180)
=========== ========= ===========
There was no valuation allowance on deferred tax assets at March 31, 1999 and
1998. In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities and projected
future taxable income in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over the
periods which the deferred tax assets are deductible, management believes it is
more likely than not the Company will realize the benefits of these deductible
differences at March 31, 1999.
The Company's corporate tax returns through March 31, 1995 have been examined
by the Japanese tax authorities.
9
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(7) Retirement and Severance Benefits
Employees of the Company are covered by the following defined pension and
severance benefit plans.
The Company has an unfunded lump-sum payment retirement plan covering
substantially all employees. Under the plan, employees are entitled to lump-sum
payments based on current rate of pay, length of service and certain other
factors upon retirement or termination of employment for reasons other than
dismissal for cause. The Company also has a funded pension plan covering
substantially all employees who meet age and service plan requirements. Net
periodic benefit costs of the plans were calculated using the unit credit
actuarial cost method.
Directors and statutory auditors are covered by a separate plan. It was not
the policy of the Company to fund the retirement and severance benefits
described above.
Net periodic benefit costs for the Company's retirement and severance defined
benefits plans for the years ended March 31, 1999, 1998 and 1997 are Y177,227
thousand ($1,470 thousand), Y173,433 thousand and Y176,329 thousand,
respectively.
Benefit obligations, fair value of plan assets, funded status of the plans as
of March 31, 1999 and 1998 and related information are as follows:
Japanese yen (thousands) U.S. dollars(thousands)
------------------------ -------------------------
1998 1997 1998
----- ------ ------
Benefit obliga-
tions at end of year Y 1,893,040 1,515,871 $ 15,703
Fair value of plan
assets at end of year 758,224 684,396 6,289
----------- -------- ---------
Funded status Y 1,134,816 831,475 $ 9,414
============ ======= ==========
Accrued pension and severance cost recognized
in the consolidated balance sheets
Y 485,435 413,999 $ 4,027
=========== ========== ========
Actuarial present value of accumulated benefit
obligations at end of year
Y 1,243,659 1,016,626 $ 10,317
=========== ========== =========
Employer contribution Y 111,817 108,053 $ 928
=========== ========= =========
Benefits paid Y 71,149 58,801 $ 590
============== ========== ==========
Actuarial assumptions:
Discount rate 4.00% 4.50%
Assumed rate of salary increase 4.16% 4.16%
Expected long-term rate of return
on plan assets 4.50% 4.50%
10
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(8) Legal Reserve and Cash Dividends
The Japanese Commercial Code provides that at least 10% of any cash payments
out of retained earnings be appropriated as a legal reserve until such reserve
equals 25% of stated capital. This reserve is not available for dividends, but
may be used to reduce a deficit or be transferred to stated capital. Presently,
the legal reserve is equal to the maximum requirement of 25% of stated capital.
Cash dividends charged to retained earnings during the three years ended
March 31, 1999, 1998 and 1997 represent dividends paid out during those years.
The accompanying consolidated financial statements do not include any provision
for a dividend to be proposed by the Board of Directors of Y20,000 ($166) per
share aggregating Y1,100,000 thousand ($9,125 thousand) and reversal of reserve
for replacement of property amounting to Y50,122 thousand ($416 thousand) in
respect of the year ended March 31, 1999 (see note 10).
(9) Other Comprehensive Income (Loss)
Change in accumulated other comprehensive income (loss) is as follows:
Japanese yen (thousands) U.S. dollars(thousands)
------------------------ -----------------------
1999 1998 1999
------- -------- ----------
Foreign currency translation adjustments:
Balance at beginning of year Y(69,869) 2,387 $(580)
Adjustments for the year (29,954) (72,256) (248)
--------- -------- --------
Balance at end of year (99,823) (69,869) (828)
-------- -------- ------
Net unrealized gains (losses) on marketable
investment securities:
Balance at beginning of year (40,303) 49,538 (334)
Increase (decrease) in net
unrealized gains
(losses) on marketable investment
securities 7,053 (89,841) 58
-------- --------- --------
Balance at end of year (33,250) (40,303) (276)
------- --------- --------
Total accumulated other comprehensive income
(loss):
Balance at beginning of year (110,172) 51,925(914)
Other comprehensive income
(loss) for the year, net of tax (22,901) (162,097)(190)
-------- -------- -------
Balance at end of year Y (133,073) (110,172) $(1,104)
========== ========== =========== <PAGE>
11
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
Tax effects allocated to each component of other comprehensive income (loss)
are as follows:
Japanese yen (thousands)
--------------------------
Tax
Before-(expense) Net-of-
tax or tax
amount benefit amount
-------- --------- --------
1999:
Foreign currency translation
adjustments Y 26,642 (56,596) (29,954)
Net unrealized gains (losses)
on marketable
investment securities 19,021 (11,968) 7,053
------ --------- --------
Other comprehensive income (loss) Y 45,663 (68,564) (22,901)
======== ======= =========
1998:
Foreign currency translation
adjustments Y (139,334)67,078 (72,256)
Net unrealized gains (losses)
on marketable
investment securities (176,572) 86,731 (89,841)
--------- -------- ----------
Other comprehensive income(loss)Y(315,906)153,809 (162,097)
========== =========== =========
1997:
Foreign currency translation
adjustments Y 4,870 (2,483) 2,387
Net unrealized gains (losses)
on marketable investment
securities (305,083) 155,592 (149,491)
Minimum pension liability
adjustment 24,265 (12,375) 11,890
------- ------- ---------
Other comprehensive income (loss)Y(275,948)140,734 (135,214)
======== ========= =========
U.S. dollars (thousands)
---------------------------
Before-tax Tax (expense) Net-of-tax
amount or benefit amount
--------- ----------- ----------
1999:
Foreign currency translation
adjustments $ 221 (469) (248)
Net unrealized gains (losses)
on marketable
investment securities 158 (100) 58
--------- ---------- ---------
Other comprehensive income
(loss) $ 379 (569) (190)
======= ========== ============
12
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
(10) Balances and Transactions with Affiliated Companies
The Company is a joint-venture corporation and its capital stock is held in
equal amounts by NSK Ltd. and Borg-Warner Automotive NW Corporation, a wholly-
owned subsidiary of Borg-Warner Automotive, Inc.
Balances with the affiliated companies at March 31, 1999 and 1998 were
as follows:
Japanese yen U.S. dollars
(thousands) (thousands)
----------------- --------------------
NSK Ltd. Borg-Warner NSK Ltd. Borg-Warner
Automotive, Inc. Automotive, Inc.
-------- ---------------- ---------- ----------------
At March 31, 1999:
Trade accounts receivable Y 6,791,890 18,259 $ 56,341 151
Trade accounts payable 849,238 - 7,045 -
Other notes payable 26,374 - 219 -
------- ------- ------ ------
Net receivable Y 5,916,278 18,259 $ 49,077 151
============ ======= ======= ======
At March 31, 1998:
Trade accounts
receivable Y 7,114,854 14,707
------------- -------------
Trade accounts payable 877,990 -
Other notes payable 4,473 -
------------ --------------
Net receivable Y 6,232,391 14,707
=============== =========== <PAGE>
13
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
During the years ended March 31, 1999, 1998 and 1997, significant trans-
actions with the affiliated companies were as follows:
<TABLE>
<CAPTION>
Japanese yen(thousands) U.S. dollars (thousands)
----------------------- ---------------------------
NSK Ltd. Borg-Warner NSK Ltd. Borg-Warner
Automotive, Inc. Automotive, Inc.
---------- -------------- --------- ------------
<S> <C> <C> <C> <C>
1999:
Sales Y 29,299,019 76,778 $ 243,045 637
Cost of sales:
Purchase 5,522,641 119,207 45,812 989
Pension cost 4,060 - 34 -
Selling, general and
administrative expenses:
Rent 1,612 - 13 -
Pension cost 1,375 - 11 -
Purchase of property,
plant and equipment 44,778 113,584 371 942
Sale of property, plant
and equipment 7,714 - 64 -
1998:
Sales Y 31,965,228 63,851
Cost of sales:
Purchase 6,136,526 2,977
Pension cost 3,391 -
Selling, general and
administrative expenses:
Rent 1,821 -
Pension cost 1,446 -
Purchase of property,
plant and equipment 58,000 -
1997:
Sales Y 32,372,975 63,847
Cost of sales:
Purchase 6,626,242 3,172
Pension cost 4,562 -
Selling, general and
administrative expenses:
Rent 1,672 -
Pension cost 1,687 -
Purchase of property,
plant and equipment
245,230 -
Sale of property, plant
and equipment 35,507 -
</TABLE>
<PAGE>
14
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidated Financial Statements
On June 30, 1988, the Company sold land and a part of factory buildings of
the Fujisawa plant to NSK Ltd. in connection with the relocation of its
manufacturing facilities to the new factory in Shizuoka Prefecture. The capital
gain resulting therefrom was recognized as income for the year ended March 31,
1989. However, as permitted under the Special Taxation Measures Law, capital
gain has been deferred for tax purposes as reserve for replacement of property
as an appropriation of retained earnings. The related deferred income tax
liability at March 31, 1999 and 1998 in the amount of Y327,346 thousand ($2,715
thousand) and Y394,509 thousand, respectively, has been provided in the
accompanying balance sheets (see notes 6 and 8).
(11) Commitments and Contingent Liability
At March 31, 1998, the Company had commitments for the purchase of
property, plant and equipment of approximately Y2,597,198 thousand ($21,545
thousand). This amount includes a commitment for a purchase of land for new
factories of Y2,410,711 thousand ($19,998 thousand).
The Company utilizes certain facilities, including warehouses and employee
dormitories, under cancellable lease agreements with third parties. Rent
expense for the years ended March 31, 1999, 1998 and 1997 under the foregoing
lease agreements amounted to Y281,764 thousand ($2,337 thousand), Y254,959
thousand and Y231,193 thousand, respectively.
The Company had no noncancellable lease commitments at March 31, 1999.
(12) Disclosure About the Fair Value of Financial Instruments
Cash and cash equivalents, Short-term investments, Receivables, Trade and
Other payables and Accrued expenses:
The carrying amounts approximate fair values because of the short maturity
of these instruments.
Marketable investment securities:
The fair values of the Company's investments in securities are based on
market related prices (see note 5).
<PAGE>
15
NSK-WARNER KABUSHIKI KAISHA
AND A SUBSIDIARY
Notes to Consolidates Financial Statements
(13) Adjustments to Conform with United States Generally Accepted Accoun-
ting Principles
<TABLE>
<CAPTION>
Japanese yen (thousands)
1999 1998 1997
-------- --------- ----------
Net Retained Net Retained Net Retained
earnings earnings at earnings earnings at earnings earnings at
for year end of year for yearend of year for year end of year
-------- --------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Per legal books Y2,046,306 23,101,202 2,802,555 22,172,536 3,322,318 20,486,381
Adjustments:
Bonus to officers (18,008) (18,008)(17,640)(17,640)(16,400)(16,400)
Allowance for doubtful
receivables (44,000) 64,000 (3,000)108,000 8,000 111,000
Special depre-
ciation (15,402) 58,056 (16,363)73,458 (20,263)89,821
Accrued pension
and severance cost(72,703) 136,258 (72,812) 208,961 3,033 281,773
Deferred income
taxes 222,587 361,438(132,843)138,851(23,122)271,694
Loss for investment 269 101,990 77,058 101,721 15,570 24,663
Investment in an
affiliated company 18,184 468,800 157,486 450,616 152,968 293,130
Accrued expenses 11,667 (251,572)(163,136)(263,239)(200,449)(100,103)
------- ---------- --------- -------- ------ -------
102,594 920,962 (171,250) 800,728 (80,663) 955,578
------- -------- ---------- ------- -------- --------
Per accompanying consolidated
financial
statements Y 2,148,900 24,022,164 2,631,305 22,973,264 3,241,655 21,441,959
========= ========== ========= ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
U.S. dollars (thousands)
-------------------------
1999
-------
Net Retained
earnings earnings at
for year end of year
---------- -----------------
<S> <C> <C>
Per legal books $ 16,975 191,632
Adjustments:
Bonus to officers (149) (149)
Allowance for doubtful
receivables (365) 531
Special depreciation (128) 481
Accrued pension and
severance cost (603) 1,130
Deferred income taxes 1,847 2,998
Loss for investment 2 846
Investment in an
affiliated company 151 3,889
Accrued expenses 96 (2,087)
------ -------
851 7,639
------ ------
Per accompanying consolidated
financial statements $ 17,826 199,271
========= ===========
</TABLE>
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. The following consolidated financial statements of the Company on
pages 27 through 44 of the Company's Annual Report are incorporated herein by
reference:
Independent Auditors' Report
Consolidated Statements of Operations - three years ended December 31, 1998,
1997 and 1996
Consolidated Balance Sheets - December 31, 1998 and 1997
Consolidated Statements of Cash Flows - years ended December 31, 1998, 1997
and 1996
Consolidated Statements of Stockholders' Equity - years ended December
31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements
Financial Statements of NSK-Warner Kabushiki Kaisha (including the notes
thereto)
2. Certain schedules for which provisions are made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and
therefore have been omitted.
3. The exhibits filed in response to Item 601 of Regulation S-K are listed
in the Exhibit Index on page A-1.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the three-month period
ended December 31, 1998.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BORG-WARNER AUTOMOTIVE, INC.
By: /s/ WILLIAM C. CLINE
-------------------------------------------
William C. Cline
Vice President and Controller
(Principal Accounting Officer)
Date: June 22, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Description
- --------- -----------------------
*3.1 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1 of the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993).
*3.2 By-laws of the Company (incorporated by reference to Exhibit No. 3.2
of the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993).
3.3 Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock.
*4.1 Indenture, dated as of November 1, 1996, between Borg-Warner Auto-
motive, Inc. and The First National Bank of Chicago (incorporated
by reference to Exhibit No. 4.1 to Registration Statement
No. 333-14717).
*4.2 Indenture, dated as of February 15, 1999, between Borg-Warner Auto-
motive, Inc. and The First National Bank of Chicago (incorporated
by reference to Exhibit No. 4.1 to Amendment No. 1 to Registration
Statement No. 333-66879).
*4.3 Rights Agreement, dated as of July 22, 1998, between Borg-Warner Auto-
motive, Inc. and ChaseMellon Shareholder Services, L.L.C.(incorporated
by reference to Exhibit 4.1 to the Registration Statement
on Form 8-A filed on July 24, 1998).
*10.1 Credit Agreement dated as of December 7, 1994 among Borg-Warner
Automotive, Inc., as Borrower, the Lenders listed therein, as
Lenders, Chemical Bank and the Bank of Nova Scotia, as Co-Arrangers,
Chemical Bank, as Administrative Agent and The Bank of Nova Scotia as
Documentation Agent (incorporated by reference to Exhibit No. 10.1 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1994).
*10.2 First Amendment of Credit Agreement dated as of December 15, 1995
(incorporated by reference to Exhibit 10.2 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1995).
*10.3 Second Amendment of Credit Agreement dated as of January 16, 1996
(incorporated by reference to Exhibit 10.3 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1996).
*10.4 Replacement and Restatement Agreement dated as of October 10, 1996 to
the Credit Agreement dated as of December 7, 1994 (incorporated by
reference to Exhibit 10.1 on Form 10-Q for the quarter ended
September 30, 1996).
10.5 Amendment to Credit Agreement dated as of February 2, 1999 to the
Credit Agreement dated as of December 7, 1994.
*10.6 Distribution and Indemnity Agreement dated January 27, 1993 between
Borg-Warner Automotive, Inc. and Borg-Warner Security Corporation
(incorporated by reference to Exhibit No. 10.2 to Registration
Statement No. 33-64934).
*10.7 Tax Sharing Agreement dated January 27, 1993 between Borg-Warner
Automotive, Inc. and Borg-Warner Security Corporation (incorporated by
reference to Exhibit No. 10.3 to Registration Statement No. 33-64934).
+*10.8 Borg-Warner Automotive, Inc. Management Stock Option Plan, as amended
(incorporated by reference to Exhibit No. 10.6 to Registration Statement
No. 33-64934).
+*10.9 Borg-Warner Automotive, Inc. 1993 Stock Incentive Plan as amended
effective November 8, 1995 and further amended April 29, 1997
(incorporated by reference to Appendix A of the Company's Proxy
Statement dated March 21, 1997).
*10.10 Receivables Transfer Agreement dated as of January 28, 1994 among BWA
Receivables Corporation, ABN AMRO Bank N.V. as Agent and the Program
LOC Provider and Windmill Funding Corporation (incorporated by
reference to Exhibit No. 10.12 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993).
10.11 Amended and Restated Receivables Loan Agreement dated as of December
23, 1998 among BWA Receivables Corporation, as Borrower, Borg-Warner
Automotive, Inc., as Collection Agent, ABN AMRO Bank N.V., as
Agent, the Banks from time to time party hereto, ABN AMRO Bank N.V.,
as the Program LOC Provider and the Program LOC Provider and Windmill
Funding Corporation.
*10.12 Service Agreement, dated as of December 31, 1992, by and between Borg-
Warner Security Corporation and Borg-Warner Automotive, Inc.
(incorporated by reference to Exhibit No. 10.10 to Registration State-
ment No. 33-64934).
+*10.13 Borg-Warner Automotive, Inc. Transitional Income Guidelines for
Executive Officers amended as of May 1, 1989 (incorporated by
reference to Exhibit 10.16 to the Company's Annual Report on Form
10-K for the year ended December 31, 1993).
+*10.14 Borg-Warner Automotive, Inc. Management Incentive Bonus Plan dated
January 1, 1994 (incorporated by reference to Exhibit No. 10.18 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
+*10.15 Borg-Warner Automotive, Inc. Retirement Savings Excess Benefit Plan
dated January 27, 1993 (incorporated by reference to Exhibit No. 10.20
of the Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
++10.16 Borg-Warner Automotive, Inc. Retirement Savings Plan dated January 27,
1993 as further amended and restated effective as of April 1, 1994
(incorporated by reference to Exhibit 10.18 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1995).
+*10.17 Borg-Warner Automotive, Inc. Deferred Compensation Plan dated January
1, 1994 (incorporated by reference to Exhibit No. 10.24 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
+*10.18 Form of Employment Agreement for John F. Fiedler (incorporated by
reference to Exhibit No. 10.0 of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1994.)
+*10.19 Amended Form of Employment Agreement for John F. Fiedler dated January
27, 1998 (incorporated by reference to Exhibit 10.21 of the Company's
Annual Report on Form 10-K for the year ended December
31, 1997).
+*10.20 Form of Change of Control Employment Agreement for Executive Officers
(incorporated by reference to Exhibit No. 10.1 to the Company's
Quarterly Report on Form 10-Q for the Quarter ended September 30,
1997).
+*10.21 Amendment to the Change of Control Employment Agreement between the
Company and John F. Fiedler effective January 30, 1998 (incorporated
by reference to Exhibit 10.23 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1997).
*10.22 Assignment of Trademarks and License Agreement (incorporated by
reference to Exhibit No. 10.0 of the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1994).
10.23 Amendment to Assignment of Trademarks and License Agreement.
+*10.24 Borg-Warner Automotive, Inc. Executive Stock Performance Plan
(incorporated by reference to Exhibit No. 10.23 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1995).
*10.25 Agreement of Purchase and Sale dated as of May 31, 1996 by and among
Coltec Industries Inc., Holley Automotive Group, Ltd., Holley Auto-
motive Inc., Coltec Automotive Inc., and Holley Automotive
Systems GmbH and Borg-Warner Automotive, Inc., Borg-Warner
Automotive Air/Fluid Systems Corporation and Borg-Warner Automotive
Air/Fluid Systems Corporation of Michigan (incorporated by reference to
Exhibit 10.1 of the Company's Current Report on Form 8-K dated as of
June 17, 1996).
*10.26 Agreement and Plan of Merger dated as of December 17, 1998 by and
between Borg-Warner Automotive, Inc., BWA Merger Corp. and Kuhlman
Corporation (incorporation by reference to Exhibit 2 of the Company's
Current Report on Form 8-K dated as of December 21, 1998).
13.1 Annual Report to Stockholders for the year ended December 31, 1998
with manually signed Independent Auditors' Report. (The Annual Report,
except for those portions which are expressly incorporated by
reference in the Form 10-K, is furnished for the information of the
Commission and is not deemed filed as part of the Form 10-K).
21.1 Subsidiaries of the Company.
23.1 Independent Auditors' Consent.
23.2 Independent Auditors' Consent.
24.1 Power of Attorney
27.1 Financial Data Schedule
99.1 Cautionary Statements.
* Incorporated by reference.
+ Indicates a management contract or compensatory plan or arrangement required
to be filed pursuant to Item 14(c).
[DELOITTE & TOUCHE LLP LETTERHEAD] Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
333-67131, 333-67133 and 333-67135 dated November 12, 1998; 333-51647 dated May
1, 1998; 333-45491, 333-45493, 333-45495, 333-45507, and 333-45499, dated
February 3, 1998; 333-45423 dated February 2, 1998; 33-75564, 33-75566,
33-75572, 33-75574, 33-67822, and 33-67824 dated February 1, 1995; 33-92430,
33-92428, 33-92432, and 33-92426 dated May 17, 1995; 33-92862 and 33-92860 dated
May 30, 1995; 33-92858 dated June 1, 1995; 333-12941, 333-12875, and 333-12939
dated September 27, 1996; and 333-17179 dated December 3, 1996 of Borg-Warner
Automotive, Inc. on Form S-8 of our report, incorporated by reference in the
Annual Report on Form 10-K/A of Borg-Warner Automotive, Inc. for the year ended
December 31, 1998.
/s/ DELOITTE & TOUCHE LLP
- --------------------------
Deloitte & Touche LLP
Chicago, Illinois
June 17, 1999
[KPMG PEAT MARWICK LETTERHEAD] Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in Registration Statement Nos.
333-67131, 333-67133 and 333-67135 dated November 12, 1998; 333-51647 dated
May 1, 1998; 333-45491, 333-45493, 333-45507, and 333-45499 dated February 3,
1998; 333-45423 dated February 2, 1998; 33-75564, 33-75566, 33-75568, 33-75572,
33-75574, 33-67822, and 33-67824 dated February 1, 1995; 33-92430, 33-92428,
33-92432, and 33-92426 dated May 17, 1995; 33-92862 and 33-92860 dated May 30,
1995; 33-92858 dated June 1, 1995; 333-12941, 333-12875, and 333-12939 dated
September 27, 1996; and 333-17179 dated December 3, 1996 of Borg-Warner
Automotive, Inc. on Form S-8 of our report dated April 28, 1999 with respect to
the consolidated balance sheets of NSK-Warner Kabushiki Kaisha as of March 31,
1999 and 1998, and the related consolidated statements of earnings,
stockholders' equity, and cash flows for each of the years in the three-year
period ended March 31, 1999 which report appears in the Annual Report on Form
10-K/A of Borg-Warner Automotive, Inc. for the year ended December 31, 1998.
/s/ KPMG
- ------------------------
KPMG
Tokyo, Japan
June 17, 1999
