-----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, K6+xK/czJB6mWTBJ/rZ41U1HXHJ/HmWdToeuNU3I9c+MhOOGl80OcVJaxg8otuot fkj9BGJ//Qdsc4/7J9G5Kg== 0000908255-98-000079.txt : 19980629 0000908255-98-000079.hdr.sgml : 19980629 ACCESSION NUMBER: 0000908255-98-000079 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980626 SROS: NYSE 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: 98654457 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, 1997 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: Title of each class Name of each exchange on which registered 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 19, 1998 was approximately $1.04 billion. As of June 19, 1998, the registrant had 23,506,353 shares of Common Stock outstanding and 1,500 shares of Non-Voting 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. 1997 Annual Report to Stockholders Parts II and IV Borg-Warner Automotive, Inc. Proxy Statement for the 1998 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 23 through 37 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, 1997 and 1996 is set forth in Note 11 of the Notes to Consolidated Financial Statements on page 35 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, 1998, 1997 and 1996 (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, 1998 and 1997 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, 1998. 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, 1998 and 1997, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 1998 in conformity with United States generally accepted accounting principles. The accompanying 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. /s/ KPMG PEAT MARWICK - ------------------ KPMG PEAT MARWICK Tokyo, Japan April 24, 1998 NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Balance Sheets March 31, 1998 and 1997
Japanese yen U.S. dollars (thousands) thousands)(note 2) ---------- ------------- Assets 1998 1997 1998 - --------- ------- ------- ----- Current assets: Cash and cash equivalents (note 12) Y 244,107 926,376 $ 1,849 Short-term investments (notes 3 and 12) 8,479,813 7,541,984 64,241 Receivables (notes 10 and 12): Trade accounts 7,216,600 7,683,375 54,671 Other 72,079 16,793 546 --------- ---------- ------ Total receivables 7,288,679 7,700,168 55,217 ---------- ---------- -------- Inventories (note 4) 1,561,172 1,368,131 11,827 Prepaid expenses and other current assets (note 7) 278,322 343,974 2,109 ---------- ---------- ------- Total current assets 17,852,093 17,880,633 135,243 -------- ---------- -------- Marketable investment securities (notes 5 and 12) 546,430 674,431 4,140 Investment in affiliated company 312,000 298,000 2,363 Property, plant and equipment, at cost Land 1,474,665 1,498,734 11,172 Buildings 11,477,837 11,410,826 86,953 Machinery and equipment 17,870,539 16,498,101 135,383 Vehicles 105,045 98,136 796 Tools, furniture and fixtures 4,244,301 3,926,922 32,154 Construction in progress 9,095 - 69 ------------- ---------- ------- 35,181,482 33,432,719 266,527 Less accumulated depreciation 20,985,868 19,351,398 158,984 ------------- ---------- ------ Net property, plant and equipment 14,195,614 14,081,321 107,543 ------------- ----------- ------- Other assets: Patent, less accumulated amortization 9,375 15,625 71 Other 273,955 230,795 2,075 ---------- ---------- ----- Total other assets 283,330 246,420 2,146 ------------ --------- ------- Y 33,189,467 33,180,805 $ 251,435 =========== ======== ======= Japanese yen U.S. dollars (thousands) (thousands)(note 2) --------------- --------------- Liabilities and Stockholders' Equity 1998 1997 1996 - ------------------------------------------- ----- ------ ------ Current Liabilities: Short-term bank loans (notes 6 and 12) Y - 910,000 $ - Trade payables (notes 10 and 12): Notes 2,110,345 2,062,529 15,988 Accounts 3,004,316 3,118,213 22,760 -------- --------- ------ Total trade payables 5,114,706 5,180,742 38,748 Other payables (notes 10 and 12): Notes 237,103 301,152 1,796 Accounts 678,068 180,207 5,137 -------- -------- -------- Total other payables 915,171 481,359 6,933 -------- -------- --------- Income taxes payable (note 7) 1,222,189 1,923,485 9,259 Accrued expenses (notes 10 and 12) 1,472,245 1,481,359 11,153 Other current liabilities 16,683 28,033 127 --------- --------- ---------- Total current liabilities 8,740,994 10,004,978 66,220 ---------- --------- -------- Noncurrent liabilities: Accrued pension and severance cost (note 8) 413,999 367,591 3,136 Deferred income taxes (note 7) 483,882 626,852 3,666 ------ -------- -------- Total noncurrent liabilities 897,881 994,443 6,802 ------- -------- ---------- Total liabilities 9,638,875 10,999,421 73,022 ----------- ------- ----- Stockholders' Equity: Common stock of Y10,000 par value (note 10) Authorized 220,000 shares; issued 55,000 share 550,000 550,000 4,146 Legal reserve (note 9) 137,500 137,500 1,041 Retained earnings 22,973,264 21,441,959 174,040 Foreign currency translation adjustment (note 7) (69,869) 2,387 (529) Net unrealized gain on debt and marketable equity securities (notes 5 and 7) (40,303) 49,538 (305) ----------- ---------- -------- Total stockholders' equity 23,550,592 22,181,384 178,413 ----------- ------- ------ Commitments and contingent liability Y 33,189,467 33,180,805 $ 251,435 (Note 11) =========== =========== ========
See accompanying notes to consolidated financial statements. NSK-WARNER KABUSKIKI KAISHA AND A SUBSIDIARY Consolidated Statements of Earnings Years ended March 31, 1998, 1997 and 1996 U.S. Dollars
Japanese Yen (thousands) (thousands) (note 2) ------------- -------------- 1998 1997 1996 1998 ------ ------- ----- ----- Sales (note 10) Y 32,332,267 33,191,067 31,957,956 $ 244,941 Cost of sales (note 10) 24,415,185 23,942,752 23,193,526 184,963 ----------- ----------- ----------- ------- Gross profit 7,917,082 9,248,315 8,764,430 59,978 Selling, general and administrative expenses (note 10) 2,875,594 2,816,980 2,577,761 21,785 ----------- ----------- ------------ --------- Operating income 5,041,488 6,431,335 6,186,669 38,193 ---------- ----------- ----------- ----- Other income: Interest income 59,277 41,680 54,873 449 Exchange gain, net 3,777 - - 29 Equity in income of affiliated company 157,486 152,968 105,879 1,193 Other 161,574 82,035 125,933 1,224 ------- ------ ------- ------ 382,114 276,683 286,685 2,895 -------- --------- ------- -------- Other deductions: Interest expense 16,543 40,018 123,203 125 Loss on retirement of property, plant and equipment, net 46,534 65,725 87,389 353 Exchange loss, net - 12,089 7,242 - Other 16,377 15,409 6,882 124 -------- --------- -------- ------ 79,454 133,241 224,716 602 -------- ------------ ----- ---------- Earnings before income taxes 5,344,148 6,574,777 6,248,638 40,486 ------------ ----------- --------- -------- Income taxes (note 7): Current 2,605,400 3,336,800 3,117,500 19,738 Deferred 107,443 (3,678) 42,818 814 ----------- ------------- --------- ------- 2,712,843 3,333,122 3,160,318 20,552 -------- -------------- ----------- ------- Net earnings Y 2,631,305 3,241,655 3,088,320 $19,934 ============= ============ ====== =======
see accompanying notes to consolidated financial statements. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Statements of Stockholders' Equity Years ended March 31, 1998, 1997 and 1996
U.S. Dollars Japanese Yen (thousands) (thousands) (note 2) ---------------- --------------- 1998 1997 1996 1998 -------- ---------- ------- ------ Common stock: Balance at beginning of year Y 550,000 550,000 550,000 $ 4,166 --------- ---------- -------- ------- Balance at end of year 550,000 550,000 550,000 4,166 --------- ---------- -------- ------- Legal reserve (note 9): Balance at beginning of year 137,500 137,500 137,500 1,041 --------- ---------- --------- -------- Balance at end of year 137,500 137,500 137,500 1,041 --------- ---------- --------- -------- Retained earnings: Balance at beginning of year 21,441,959 19,300,304 17,311,984 162,439 Net earnings 2,631,305 3,241,655 3,088,320 19,934 Cash dividends (1,100,000)(1,100,000) (1,100,000)(8,333) ----------- ---------- ---------- -------- Balance at end of year 22,973,264 21,441,959 19,300,304 174,040 --------- ----------- ----------- ------ Foreign currency translation adjustments (note 7): Balance at beginning of year 2,387 - - 18 Adjustment for the year (72,256) 2,387 - (547) ------ ----------- ---------- ------- Balance at end of year (69,869) 2,387 - (529) ---------- ----------- --------- ------- Net unrealized gain on debt and marketable equity securities (notes 5 and 7): Balance at beginning of year 49,538 199,029 103,495 375 Change in unrealized gain, net of tax(89,841)(149,491) 95,534 (680) --------- ---------- -------- --------- Balance at end of year (40,303) 49,538 199,029 (305) --------- ----------- ------ -------- Minimum pension liability adjustment - - (11,890) - (note 7) --------- ---------- ------------------ Total stockholders' equity Y 23,550,592 22,181,384 20,174,943 $178,413 ========= ========== ========= ========
see accompanying notes to consolidated financial statements. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Consolidated Statements of Cash Flows Years ended March 31, 1998, 1997 and 1996
U.S. Dollars Japanese Yen (thousands) (thousands) (note 2) ---------------- ------------ 1998 1997 1996 1998 ------- -------- ------- ------ Cash flows from operating activities: Net earnings Y 2,631,305 3,241,655 3,088,320 $19,934 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 2,053,227 1,997,587 2,138,726 15,555 Loss on retirement of property, plant and equipment, net 46,534 65,725 88,035 353 Equity in income of an affiliated Company (90,408) (157,838) (105,878) (685) Deferred income taxes 40,365 (3,678) 42,818 306 Decrease (increase) in receivables 397,114 655,168 (779,192) 3,008 Decrease (increase) in inventories (192,585)(215,067) 19,497 (1,459) Decrease (increase) in prepaid expenses and other current assets (32,115) 1,269 7,863 (243) Increase (decrease) in trade payables (50,286) (166,999) 614,143 (381) Increase (decrease) in other payables 433,812 (95,738) 19,591 3,286 Increase (decrease) in accrued expenses (9,139) (12,330) 258,787 (69) Increase (decrease) in income taxes payable (701,296) 212,226 (589,408) (5,313) Increase (decrease) in other current liabilities (11,571) (7,754) 17,543 (88) Other, net 46,408 56,677 61,839 351 ------- --------- --------- ------- Total adjustments 1,930,060 2,329,248 1,794,364 14,621 --- --------- --------- ----- Net cash provided by operating activities 4,561,365 5,570,903 4,882,684 34,555 --------- --------- --------- -------- Cash flows from investing activities: Increase in short-term investments (933,329)(1,608,901) (1,188,945) (7,071) Proceeds from sale of property, plant and equipment 22,336 6,996 1,232 169 Payments from purchase of property, plant and equipment (2,217,810) (1,355,848) (1,386,084)(16,801) Increase in all other assets (55,235) (28,668) (21,623) (418) Other, net (48,571) (5,290) (1,407) (368) ------ ----------- ---------- ------ Net cash used in investing activities (3,232,609) (2,991,711) (2,596,827) (24,489) -------- ----------- ----------- -------- Cash flows from financing activities: Decrease in short-term bank loans(910,000) (1,523,298) (1,000,000) (6,894) Decrease in long-term debt - - (334,740) - Dividends paid (1,100,000) (1,100,000)(1,100,000) (8,333) ---------- -------- --------- -------- Net cash used in financing activities (2,010,000) (2,623,298) (2,434,740) (15,227) ---------- ------------ ---------- ------- Effect of exchange rate changes on cash and cash equivalents (1,025) 4,869 - (8) ---------- ------------ ---------- ------ Net decrease in cash and cash equivalents (682,269) (39,237) (148,883) (5,169) Cash and cash equivalents at beginning of year 926,376 965,613 1,114,496 7,018 ---------- ------------- ------------- ------- Cash and cash equivalents at end of year Y 244,107 926,376 965,613 $1,849 ======== ======== ========= ===== Supplemental information of cash flows: Cash paid during the year for: Interest Y 15,340 24,340 118,498 $ 116 Income taxes 3,306,696 3,124,508 3,706,909 25,051 ========= ========= ========= =======
See accompanying notes to consolidated financial statements. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements March 31, 1998, 1997 and 1996 (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 mission 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, 1998 were distributed as follows: one-way clutch and related parts - 56%, friction plates and related parts - 44%. (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 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 time 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. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements (f) MARKETABLE INVESTMENT SECURITIES Marketable investment securities at March 31, 1998 and 1997 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 stockholder's 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 are included in earnings and are derived using the average method for determining the cost of securities sold. (g) INVESTMENT IN 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 declining-balance method over the estimated useful lives of assets. (i) AMORTIZATION Patents purchased from Borg-Warner Automotive K.K. are amortized on a straight-line basis over a period of eight years. (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, 1998, 1997 and 1996 amounted to Y 1,236,354 thousand ($9,366 thousand), Y1,280,682 and Y 1,215,177 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. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements (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." (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 financial statements in conformity with United States generally accepted accounting principles. Actual results could differ from those estimates. (n) LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF The Company's long-lived assets and certain identfiable 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. (2) U.S. DOLLAR AMOUNTS The accompanying consolidated financial statements are expressed in Japanese yen as of and for the year ended March 31, 1998, 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 Y 132 to US $1, the approximate rate of exchange reported by the Tokyo Foreign Exchange Market on March 31, 1998. 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 approximates market, at March 31, 1998 and 1997 consisted of the following: NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements
Japanese yen U.S. dollars (thousands) (thousands) ------------- ------------- 1998 1997 1998 ----- ------ ----- Time deposits with a maturity of more than three months Y 335,550 191,000 $ 2,542 Certificates of deposit purchased under resale agreements 8,144,263 7,315,743 61,699 Government bonds and other - 35,241 - --------- ---------- --------- Y 8,479,813 7,541,984 $ 64,241 ========= =========== ========
(4) INVENTORIES Inventories at March 31, 1998 and 1997 are summarized as follows:
Japanese yen U.S. dollars (thousands) (thousands) ------------- ------------- 1998 1997 1998 ----- ------ ----- Work in process Y 1,205,766 1,053,416 $ 9,135 Raw materials 201,060 215,525 1,523 Supplies 132,685 78,858 1,005 Goods in transit 21,661 20,332 164 --------- -------- ------ Y 1,561,172 1,368,131 $ 11,827 ========= ========= ======== /TABLE NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements (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, 1998 and 1997, were as follows:
Japanese yen (thousands) ------------------------- Gross Gross Unrealized Unrealized Holding Holding Cost Gains Losses Fair 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 ======== ======== ========= =========
Japanese yen (thousands) ------------------------ Gross Gross Unrealized Unrealized Holding Holding Cost Gains Losses Fair Value ------ ------- ------- ----------- At March 31, 1997 Available for-sale: Debt security Y 100,000 - - 100,000 Equity securities 473,332 126,197 25,098 574,431 --------- --------- --------- -------- Y 573,332 126,197 25,098 674,431 ========= ========= ========= ========
U.S. dollars (thousands) ------------------------- Gross Gross Unrealized Unrealized Holding Holding Cost Gains Losses Fair Value ------ ------- -------- ----------- At March 31, 1998 Available-for-sale: Debt security $ 758 - - 758 Equity securities 3,954 211 783 3,382 ------- ------ ------- -------- $ 4,712 211 783 4,140 ======= ======= ====== =======
The debt security at March 31, 1998 is due in 2001. Net realized gains during the years 1998, 1997 and 1996 were insignificant. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements (6) SHORT-TERM BANK LOAN AND LONG-TERM DEBT The weighted average interest rate on short-term bank loans outstanding at March 31, 1997 was 1.63%. As is customary in Japan, security may have to be given if requested by a lending bank and such bank has the right to offset cash deposited with it against any debt or obligation that becomes due and, in the case of default or certain other specified events, against all debts payable to the bank. (7) INCOME TAXES The Company is subject to a number of taxes based on income, which in the aggregate result in a normal tax rate of approximately 51% for the years ended March 31, 1998, 1997 and 1996. The Company's subsidiary in the United States was not liable to pay income taxes in 1998 and 1997. 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 were calculated at the rate of 47%. The effect of the income tax rate reduction on year-end deferred income tax balances at march 31, 1998 was insignificant. The effective tax rates of the Company for the years ended March 31, 1998, 1997 and 1996 differ from the normal income tax rate for the following reasons:
1998 1997 1996 ----- ----- ----- Computed normal income tax rate 51.0% 51.0% 51.0% Other (0.2) (0.3) (0.4) ----- ----- ----- Effective income tax rate 50.8% 50.7% 50.6% ===== ===== =====
Net deferred income tax assets and liabilities are reflected on the accompanying balance sheets under the following captions:
Japanese yen U.S. dollars (thousands) (thousands) ------------- ------------- 1998 1997 1998 ----- ----- ----- Prepaid expenses and other current assets Y 243,499 340,103 $1,845 Noncurrent liabilities (483,882) (626,852) (3,666) -------- --------- -------- Y (240,383) (286,749)$(1,821) ========= ========= ========
Change in net deferred income tax assets is allocated as follows.
Japanese yen U.S. dollars (thousands) (thousands) ------------ ------------ 1998 1997 1996 1998 ----- ----- ----- ----- Earnings Y 107,443 (3,678) 42,818 $ 814 Stockholders' equity: Foreign currency translation adjustment (67,078) 2,483 - (508) Net unrealized gains on marketable debt and equity securities (86,731) (155,592) 99,433 (657) Minimum pension liability adjustment - 12,375 7,447 - --------- ------- -------- ----- Y (46,366) (144,412) 149,698 $ (351) ======== ======= ======== ======
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 1998 and 1997 are presented below:
Japanese yen U.S. dollars (thousands) (thousands) ------------- ------------- 1998 1997 1998 ----- ----- ----- Deferred tax assets: Business tax 124,557 215,399 944 Employee bonus - 2,761 - Accrued expenses 169,270 178,553 1,282 Accrued pension and severance cost 102,521 89,709 777 Marketable investment securities 35,171 - 266 ------- -------- ------- Total deferred tax assets 431,519 486,422 3,269 ------- --------- ------- Deferred tax liabilities: Allowance for doubtful receivables 50,328 56,610 381 Capital gain deferred in connection with the acquisition of new property (see note 10) 394,509 454,634 2,989 Special depreciation 34,271 45,809 260 Loss for investment 47,402 12,578 359 Equity in income of an affiliated company 145,392 151,980 1,101 Marketable investment securities - 51,560 - -------- -------- ------- Total deferred tax liabilities 671,902 773,171 5,090 -------- -------- ------- Net deferred tax liabilities (240,383)(286,749) (1,821) ========= ========= ========
There was no valuation allowance on deferred tax assets at March 31, 1998 and 1997. 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, 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, 1998. The Company's corporate tax returns through March 31, 1995 have been examined by the Japanese tax authorities. (8)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. 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. The Company also has a funded pension plan covering substantially all employees who meet age and service plan requirements. Net periodic pension cost of the plans was calculated using the unit credit actuarial cost method. The funded status of the plans as of March 31, 1998 and 1997 is as follows:
Japanese yen U.S. dollars (thousands) (thousands) ------------- ------------- 1998 1997 1998 ----- ----- ----- Actuarial present value of benefit obligations: Vested benefits Y 1,014,640 948,949 $7,687 Nonvested benefits 1,986 1,086 15 -------- -------- -------- Accumulated benefit obligation 1,016,626 950,035 7,702 ======== ======== ======== Projected benefit obligation 1,515,871 1,406,725 11,484 Plan assets at fair value 684,396 586,317 5,185 -------- -------- -------- Projected benefit obligation in excess of plan assets 831,475 820,408 6,299 Unrecognized net loss (314,382) (339,333) (2,382) Unrecognized net obligation from initial application of SFAS No.87 (8,916) (10,190) (68) Unrecognized prior service cost (94,178) (103,294) (713) --------- --------- ------- Accrued pension and severance cost Y 413,999 367,591 $ 3,136 ========= ========= ======== Significant actuarial assumptions: Discount rate 4.5% 4.5% Rate of salary increase 4.16% 4.16% Expected long-term rate of return on plan assets 4.5% 4.5%
NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements For the above plans, the components of pension costs for the years ended March 31, 1998, 1997 and 1996 are as follows:
Japanese yen U.S. dollars (thousands) (thousands) ------------- ------------- 1998 1997 1996 1998 ----- ----- ----- ----- Components of pension costs: Service cost for benefits earned during the year Y 121,536 117,809 111,907 $ 921 Interest cost on projected benefit obligation 61,280 56,944 50,529 464 Actual return on plan assets (29,855) (10,512) (38,775) (226) Net amortization and deferral 20,472 12,088 45,312 155 ------- ------- ------- ------ Y 173,433 176,329 168,973 $1,314 ======== ======== ======= ======
(9) LEGAL RESERVE AND CASH DIVIDENDS The Japanese Commercial Code provides that at least ten percent 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, 1998, 1997 and 1996 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 Y 20,000 ($152) per share aggregating Y 1,100,000 thousand ($8,333 thousand) and reversal of reserve for replacement of property amounting to Y 44,854 thousand ($340 thousand)in respect of the year ended March 31, 1998 (see note 10). (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, 1998 and 1997 were as follows:
Japanese Yen U.S. Dollars (Thousands) (Thousands) --------------------- ----------------------- Borg-Warner Borg-Warner NSK Ltd. Automotive, Inc. NSK Ltd. Automotive, Inc. ------ ------------- -------- -------------- At March 31, 1998: Trade accounts receivableY 7,114,854 14,707 $ 53,900 111 -------- ------ ------- ----- Trade accounts payable 877,990 - 6,651 - Other notes payable 4,473 - 34 - --------- ------- ------- ----- Net receivable Y 6,232,391 14,707 $47,215 111 ========= ======== ======= ===== At March 31, 1997: Trade accounts receivableY 7,638,400 14,207 -------- -------- Trade accounts payable 931,040 - Other notes payable 83,842 - Accrued expenses 166,381 - ---------- --------- Net receivable Y 6,457,137 14,207 =========== ========
NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidated Financial Statements During the years ended March 31, 1998, 1997 and 1996, significant transactions with the affiliated companies were as follows:
Japanese yen U.S. dollars (thousands) (thousands) ----------------------- ------------------------ Borg-Warner Borg-Warner NSK Ltd. Automotive, Inc. NSK Ltd. Automotive, Inc. ------- ---------------- -------- ---------------- 1998: Sales Y 31,965,228 63,851 $ 242,161 484 Cost of sales: Purchase 6,136,526 2,977 46,489 23 Pension cost 3,391 - 26 - Selling, general and administrative expenses: Rent 1,821 - 14 - Pension cost 1,446 - 11 - Purchase of property, plant and equipment 58,000 - 439 - 1997: Sales Y 32,372,975 63,847 Cost of sales: Purchases 6,626,242 3,172 Pension cost 4,562 - Selling, general and administrative expenses: Rent 1,672 - Pension cost 1,687 - Purchases of property, plant and equipment 245,230 - Sale of property plant and equipment 35,507 - 1996: Sales Y 31,159,709 69,000 Cost of sales: Purchases 6,604,190 14,337 Pension cost 4,440 - Selling, general and administrative expenses: Rent 1,637 - Pension cost 1,480 - Purchases of property, plant and equipment 490,202 - /TABLE 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, 1998 and 1997 in the amount of Y 394,509 thousand ($2,989 thousand) and Y 454,634 thousand, respectively, has been provided in the accompanying balance sheets (see notes 7 and 9). (11) COMMITMENTS AND CONTINGENT LIABILITY At March 31, 1998, the Company had commitments for the purchase of property, plant and equipment of approximately Y 212,989 thousand ($1,614 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, 1998, 1997 and 1996 under the foregoing lease agreements amounted to Y 254,959 thousand ($1,932 thousand), Y 231,193 thousand and Y 215,395 thousand, respectively. The Company had no noncancellable lease commitments at March 31, 1998. (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 value 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). Short-term bank loans: The carrying amount of the Company's borrowings under its short-term revolving credit agreements approximates their fair value because of the short maturity of these instruments. NSK-WARNER KABUSHIKI KAISHA AND A SUBSIDIARY Notes to Consolidates Financial Statements (13)ADJUSTMENTS TO CONFORM WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Japanese yen (thousands) ------------------------ 1998 1997 1996 ----- ------ ----- Net Retained Net Retained Net Retained earnings earnings at earnings earnings at earnings earnings at for year end of year for year end of yearfor year end of year ------- ----------- ------- --------- -------- ------- Per legal books Y 2,802,555 22,172,536 3,322,318 20,486,381 3,295,765 18,278,913 Adjustments: Bonus to officers (17,640) (17,640) (16,400) (16,400) (14,850) (14,850) Allowance for doubtful receivables(3,000) 108,000 8,000 111,000 16,000 103,000 Special depr- eciation (16,363) 73,458 (20,263) 89,821 (25,257) 110,084 Accrued pension and severance cost (72,812) 208,961 3,033 281,773 14,521 278,740 Goodwill - - - - (27,000) - Deferred income taxes (132,843) 138,851 (23,122) 271,694 (80,318) 294,816 Loss for investment 77,058 101,721 15,570 24,663 - 9,093 Investments in an affiliated company 157,486 450,616 152,968 293,130 105,879 140,162 Accrued expenses (163,136) (263,239) (200,449) (100,103) (196,420) 100,346 (171,250) 800,728 (80,663) 955,578 (207,445) 1,021,391 -------- --------- -------- ------- ------- ------- Per accompanying consolidated financial statementsY 2,631,305 22,973,264 3,241,655 21,441,959 3,088,320 19,300,304 ========= ========= ========= ========== ========= ========
U.S. dollars (thousands) ------------------------ 1998 ----- Net Retained earnings earnings at for year end of year ------------- -------------- Per legal books $ 21,231 167,974 Adjustments: Bonus to officers (134) (134) Allowance for doubtful receivables(23) 818 Special depreciation (124) 557 Accrued pension and severance cost(552) 1,583 Deferred income taxes (1,006) 1,052 Loss for investment 584 771 Investments in affiliated company 1,193 3,414 Accrued expenses (1,235) (1,995) -------- -------- (1,297) 6,066 --------- --------- Per accompanying consolidated financial statements $ 19,934 174,040 ========= =========
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 23 through 37 of the Company's Annual Report are incorporated herein by reference: Independent Auditors' Report Consolidated Statements of Operations - three years ended December 31, 1997, 1996 and 1995 Consolidated Balance Sheets - December 31, 1997 and 1996 Consolidated Statements of Cash Flows - years ended December 31, 1997, 1996 and 1995 Consolidated Statements of Stockholders' Equity - years ended December 31, 1997, 1996 and 1995 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, 1997. 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 26, 1998 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). *4.1 Indenture, dated as of November 1, 1996, between Borg-Warner Automotive, Inc. and The First National Bank of Chicago (incorporated by reference to Exhibit No. 4.1 to Registration Statement No. 333-14717). *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 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). *10.6 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). +*10.7 Borg-Warner Automotive, Inc. Management Stock Option Plan, as amended (incorporated by reference to Exhibit No. 10.6 to Registration Statement No. 33-64934). Exhibit Number Document Description - ------ --------------------- +*10.8 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). *10.9 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). *10.10 First Amendment of Receivables Transfer Agreement dated as of December 21, 1994 (incorporated by reference to Exhibit No. 10.11 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994). *10.11 Second Amendment of Receivables Transfer Agreement dated as of January 1, 1995 (incorporated by reference to Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995). *10.12 Third Amendment of Receivables Transfer Agreement dated as of October 23, 1995 (incorporated by reference to Exhibit No. 10.11 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995). *10.13 Fourth Amendment of Receivables Transfer Agreement dated as of June 21, 1996 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996). *10.14 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 Statement No. 33-64934). +*10.15 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). +*10.16 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). +*10.17Borg-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). +*10.18 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). Exhibit Number Document Description - ------- --------------------- +*10.19 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). +*10.20 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.) +10.21 Form of Employment Agreement for John F. Fiedler dated January 27, 1998. +*10.22 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). +10.23 Amendment to the Change of Control Employment Agreement between the Company and John F. Fiedler effective January 30, 1998. *10.24 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). +*10.25 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). *10.26 Agreement of Purchase and Sale dated as of May 31, 1996 by and among Coltec Industries Inc., Holley Automotive Group, Ltd., Holley Automotive 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). 13.1 Annual Report to Stockholders for the year ended December 31, 1997 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 incorporation by reference in Registration Statement Nos. 333- 45491, 333-45493, 333-45507, and 333-45499 dated February 3, 1998; 333-75564, 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 January 30, 1998 (February 13, 1998 as to the third paragraph of Note 4), incorporated by reference in the Annual Report on Form 10-K/A of Borg-Warner Automotive, Inc. for the year ended December 31, 1997. /s/ DELOITTE & TOUCHE LLP - ------------------------ DELOITTE & TOUCHE LLP Chicago, Illinois June 26, 1998 EX-23.2 3 [KPMG PEAT MARWICK LETTERHEAD] Exhibit 23.2 The Board of Directors NSK-Warner Kabushiki Kaisha: INDEPENDENT AUDITORS' CONSENT We consent to incorporation by reference in Registration Statement Nos. 333- 45491, 333-45493, 333-45507, and 333-45499, dated February 3, 1998; 333-75564, 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 24, 1998 with respect to the consolidated balance sheets of NSK-Warner Kabushiki Kaisha as of March 31, 1998 and 1997, 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, 1998 which report appears in the Annual Report on Form 10-K/A of Borg-Warner Automotive, Inc. for the year ended December 31, 1997. /s/ KPMG Peat Marwick - ------------------- KPMG PEAT MARWICK Tokyo, Japan June 26, 1998 -----END PRIVACY-ENHANCED MESSAGE-----