-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F3eyj4M79eDIdvrbI6pPf+93azlfifYYG88lGWt1/xHIuCGG7fz/IhtcrYSn7o/4 laY0LQNWbsnJnyO03xNQWA== 0000908255-99-000039.txt : 19990623 0000908255-99-000039.hdr.sgml : 19990623 ACCESSION NUMBER: 0000908255-99-000039 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990622 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BORG WARNER AUTOMOTIVE INC CENTRAL INDEX KEY: 0000908255 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 133404508 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-12162 FILM NUMBER: 99650228 BUSINESS ADDRESS: STREET 1: 200 S MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60604 BUSINESS PHONE: 3123228500 MAIL ADDRESS: STREET 1: 200 SOUTH MICHIGAN AVE STREET 2: 200 SOUTH MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60604 10-K/A 1 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 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. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Financial Statements March 31, 1999, 1998 and 1997 (With Independent Auditors' Report Thereon) 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 NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Balance Sheets March 31, 1999 and 1998
Japanese yen U.S. dollars -------------- -------------- (thousands) (thousands)(note 2) 1999 1998 1999 ------ -------- ------- 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 ============ ========= ===========
See accompanying notes to consolidated financial statements. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Statement of Earnings Years ended March 31, 1999, 1998 and 1997
Japanese yen U.S. dollars -------------- -------------- (thousands) (thousands)(note 2) 1999 1998 1997 1999 ------ ------ ------ ------- 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 NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Statements of Stockholders' Equity Years ended March 31, 1999, 1998 and 1997
Japanese yen U.S. dollars -------------- -------------- (thousands) (thousands)(note 2) 1999 1998 1997 1999 ------ ----- ------ ------ 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 =========== =========== ========== =========
See accompanying notes to consolidated financial statements. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Statements of Cash Flows Years ended March 31, 1999, 1998 and 1997
Japanese yen U.S. dollars -------------- -------------- (thousands) (thousands)(note 2) 1999 1998 1997 1999 ------ ----- ------ ------ 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 ========== ========== ========= ========
See accompanying notes to consolidated financial statements. 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. 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. 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. 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 ========== ========= ======== 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 ======== ======== ======== ========= 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% 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) =========== ======= ======== ============ 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) ========== ========== =========== 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 =============== =========== 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:
Japanese yen(thousands) U.S. dollars (thousands) ----------------------- --------------------------- NSK Ltd. Borg-Warner NSK Ltd. Borg-Warner Automotive, Inc. Automotive, Inc. ---------- -------------- --------- ------------ 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 -
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). 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
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 -------- --------- -------- --------- ---------- ---------- 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 ========= ========== ========= ========== ========= =========
U.S. dollars (thousands) ------------------------- 1999 ------- Net Retained earnings earnings at for year end of year ---------- ----------------- 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 ========= ===========
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 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). EX-23.1 2 [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 EX-23.2 3 [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 -----END PRIVACY-ENHANCED MESSAGE-----