Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Statements contained in this Annual Report on Form 10-K (“Form 10-K”) (including Management’s Discussion and Analysis of Financial Condition and Results of Operations) may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act (the “Act”) that are based on management’s current outlook, expectations, estimates and projections. Words such as “anticipates,” “believes,” “continues,” “could,” “designed,” “effect,” “estimates,” “evaluates,” “expects,” “forecasts,” “goal,” “initiative,” “intends,” “may,” “outlook,” “plans,” “potential,” “predicts,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact contained or incorporated by reference in this Form 10-K, that we expect or anticipate will or may occur in the future regarding our financial position, business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading “Critical Accounting Policies and Estimates” in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. All forward looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. Forward-looking statements are not guarantees of performance and the Company’s actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include supply disruptions impacting us or our customers, such as the current shortage of semiconductor chips that has impacted original equipment manufacturer (“OEM”) customers and their suppliers, including us; commoditiescommodity availability and pricing;pricing, and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; competitive challenges from existing and new competitors including OEM customers; the challenges associated with rapidly-changing technologies, particularly as relates to electric vehicles, and our ability to innovate in response; uncertainties regarding the extent and duration of impacts of matters associated with the COVID-19/coronavirus pandemic (“COVID-19”), including additional production disruptions; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential disruptions in the global economy caused by Russia’s invasion of Ukraine; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis includingbasis; our recent acquisition of AKASOL AG (“AKASOL”) and our 2020 acquisition of Delphi Technologies PLC (“Delphi Technologies”); the ability to identify appropriate combustion portfolio businesses for dispositioneffect the intended tax-free spin-off of our Fuel Systems and consummate planned dispositionsAftermarket segments into a separate, publicly traded company on acceptable terms;a timely basis or at all; the potential that uncertainty during the pendency of the spin-off transaction could affect our financial performance; the possibility that the spin-off transaction will not achieve its intended benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; our dependence on automotive and truck production, both of which are highly cyclical and subject to disruptions; our reliance on major OEM customers; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the outcome of existing or any future legal proceedings, including litigation with respect to various claims; future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; impacts from any potential future acquisition or disposition transactions; and the other risks noted under Item 1A, “Risk Factors,” and in other reports that we file with the Securities and Exchange Commission. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this Form 10-K to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.

This section and the discussions contained in Item 1A, “Risk Factors,” and in Item 7, subheading “Critical Accounting Policies and Estimates” in this report, are intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Act. This should not be construed as a

In addition to results presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this report includes non-GAAP financial measures. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in understanding the underlying performance and trends of the Company. Readers should be aware that non-GAAP financial measures have inherent limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, we use non-GAAP measures as comparative tools, together with GAAP measures, to assist in the evaluation of our operating performance or financial condition. We calculate these measures using the appropriate GAAP components in their entirety and compute them in a manner intended to facilitate consistent period-to-period comparisons. The Company’s method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP. Where non-GAAP financial measures are used, the most directly comparable GAAP financial measure, as well as the reconciliation to the most directly comparable GAAP financial measure, can be found in this report.

BorgWarner Inc. (together with its Consolidated Subsidiaries, the “Company” or “BorgWarner”) is a Delaware corporation incorporated in 1987.The1987. The Company is a global product leader in clean and efficient technology solutions for combustion, hybrid and electric vehicles. Its products help improve vehicle performance, propulsion efficiency, stability and air quality. The Company manufactures and sells these products worldwide, primarily to original equipment manufacturers (“OEMs”) of light vehicles (passenger cars, sport-utility vehicles (“SUVs”), vans and light trucks). The Company’s products are also sold to OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications). The Company also manufactures and sells its products to certain Tier Onetier one vehicle systems suppliers and into the aftermarket for light, commercial and off-highway vehicles. The Company operates manufacturing facilities serving customers in Europe, the Americas and Asia and is an original equipment supplier to nearly every major automotive OEM in the world.

Acquisitions are an integral component of the Company’s growth and value creation strategy. Below are summaries of recent acquisitions. Refer to Note 2, “Acquisitions and Dispositions,” to the Consolidated Financial Statements in Item 8 of this report for more information.

On October 1, 2020, the Company completed its acquisition of 100% of the outstanding ordinary shares of Delphi Technologies PLC (“Delphi Technologies”) from the shareholders of Delphi Technologies pursuant to the terms of the Transaction Agreement, dated January 28, 2020, as amended on May 6, 2020, by and between the Company and Delphi Technologies (the “Transaction Agreement”). Pursuant to the terms of the Transaction Agreement, the Company issued, in exchange for each Delphi Technologies share, 0.4307 of a share of common stock of the Company and cash in lieu of any fractional share.shares. In the aggregate, the Company delivered consideration of approximately $2.4 billion, including approximately 37 million shares of common stock of the Company, valued at $1.5 billion, repayment of approximately $900 million of Delphi Technologies’ debt and stock-based compensation of approximately $15 million. Upon closing, the Company also assumed approximately $800 million in senior notes as discussed in Item 7 of this report under the caption “Acquisition of Delphi Technologies PLC.”billion. The acquisition has strengthened the Company’s electronics and power electronics products, strengthened its capabilities and scale, enhanced key combustion, commercial vehicle and aftermarket product offerings, and positioned the Company for greater growth as electrified propulsion systems gain momentum.

The Company reports its results under four reporting segments: Air Management, e-Propulsion & Drivetrain, Fuel InjectionSystems and Aftermarket.

Net sales by reporting segment were as follows:

The sales information presented above does not include the sales by the Company’s unconsolidated joint ventures (see sub-heading “Joint Ventures” below). Such unconsolidated sales totaled approximately $969 million, $1,053 million, $721 million, and $827$721 million for the years ended December 31, 2022, 2021 2020 and 2019,2020, respectively.

The Air Management segment develops and manufactures products to improve fuel economy, reduce emissions and enhance performance. The Air Management segment’s technologies include turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, canisters, cabin heaters, battery modulesheaters, battery charging and systems, battery packs, battery heaters and battery charging. The Company’s Air Management segment includes AKASOL.

The Air Management segment’s emissions, thermal and turbocharger systems provide several benefits including increased power for a given engine size, improved fuel economy, reduced emissions and optimized temperatures in propulsion systems and vehicle cabins. Sales of turbochargers for light vehicles represented approximately 19%20%, 24%19% and 28%24% of the Company’s net sales for the years ended December 31, 2022, 2021 and 2020, and 2019, respectively. No other single product line accounted for more than 10% of consolidated net sales in any of the years presented.

The Air Management segment’s timing systems enable precise control of air and exhaust flow through the engine, improving fuel economy and emissions. The Air Management segment is a leading manufacturer of timing systems for OEMs around the world.

The Air Management segment’s powertrain products include an array of highly engineered products that complement and enhance the efficiency improvements delivered by many other air management and fuel injection technologies.

The Company’s e-Propulsion & Drivetrain segment’s technologies include rotating electrical components, power electronics, electric drive motors, control modules, software, battery products, friction and mechanical products for automatic transmissions and torque-management products.

The e-Propulsion & Drivetrain segment’s rotating electrical componentselectronics portfolio meets the demandsconsists of increasing vehicle electrification, improved efficiency, reduced weight, and lowered electrical and mechanical noise. Rotating electrical components include starter motors, alternators and electric motors for hybrid and electric vehicles.

The e-Propulsion & Drivetrain segment’s friction and mechanical products for automatic transmissions include dual clutch modules, friction clutch modules, friction and separator plates, transmission bands, torque converter clutches, one-way clutches and torsional vibration dampers. Controls products for automatic transmissions feature electro-hydraulic solenoids for standard and high pressure hydraulic systems, transmission solenoid modules and dual clutch control modules.

The e-Propulsion & Drivetrain segment’s torque management products include rear-wheel drive (“RWD”)-all-wheel drive (“AWD”) transfer case systems, front-wheel drive (“FWD”)-AWD coupling systems and cross-axle coupling systems. The segment is developing electronically controlled torque management devices and systems that will benefit vehicle energy efficiency and vehicle dynamics.

The Fuel InjectionSystems segment develops and manufactures gasoline and diesel fuel injection components and systems. Its gasolinehighly-engineered fuel injection systems portfolio includes a full suite ofpumps, injectors, evaporative canisters, fuel injection technologies – including pumps, injectors,delivery modules, fuel rails and fuel rail assemblies, engine control units, and complete systems, –including associated software and calibration services, that deliver greater efficiency and improve fuel economy for

The Aftermarket segment sells products and services to independent aftermarket customers and original equipment service customers.customers with both new and remanufactured products. Its product portfolio includes a wide range of solutions covering the fuel injection, electronics and engine management, starters and alternators, maintenance, and test equipment and vehicle diagnostics categories. The aftermarket segment’s business provides a recurring and stable revenue base, as replacement of many of these products is non-discretionary in nature.

As of December 31, 2021,2022, the Company had 13ten joint ventures in which it had a less-than-100% ownership interest. Results from the tenseven joint ventures in which the Company is the majority owner and has a controlling financial interest are consolidated as part of the Company’s results. Results from the three joint ventures in which the Company exercises significant influence but does not have a controlling financial interest, were reported by the Company using the equity method of accounting pursuant to which the Company records its proportionate share of each joint venture’s income or loss each period.

The Company has a global presence. During the year ended December 31, 2021,2022, approximately 17%19% of the Company’s net sales were generated in the United States, and 83%81% were generated outside the United States. Refer to Note 24, “Reporting Segments and Related Information,” to the Consolidated Financial Statements in Item 8 of this report for additional financial information about geographic areas. 

During the year ended December 31, 2021,2022, approximately 76% of the Company’s net sales were for light-vehicle applications; approximately 11%12% were for commercial-vehicle applications; approximately 4% were for off-highway vehicle applications; and approximately 9%8% were to distributors of aftermarket replacement parts.

No other single customer accounted for more than 10% of the Company’s consolidated net sales in any of the years presented. Sales to the Company’s top ten customers represented 57%62% of sales for the year ended December 31, 2021.2022.

The Company’s automotive products are generally sold directly to OEMs, substantially pursuant to negotiated annual contracts, long-term supply agreements or terms and conditions as may be modified by the parties. Deliveries are subject to periodic authorizations based upon OEM production schedules. The Company typically ships its products directly from its plants to the OEMs.

Each of the Company’s businesses within its reporting segments has its own sales function. Account executives for each of the Company’s businesses are assigned to serve specific customers for one or more businesses’ products. Account executives spend the majority of their time in direct contact with customers’ purchasing and engineering employees and are responsible for servicing existing business and for identifying and obtaining new business. Because of their close relationship with customers, account executives are able to identify and meet customers’ needs based upon their knowledge of the Company’s product design and manufacturing capabilities. Upon securing a new order, account executives participate in product launch team activities and serve as a key interface with customers. In addition, sales and marketing employees of the Company’s reporting segments often work together to explore cross-development opportunities where appropriate.

The Company’s operations are directly related to the automotive and commercial-vehicle industry. Consequently, the Company’s segments may experience seasonal fluctuations to the extent vehicle production slows, such as in the summer months when many customer plants typically close for model year changeovers or vacations. Historically, model changeovers or vacations have generally resulted in lower sales volume in the Company’s third quarter.

The Company conducts advanced propulsion research. This advanced engineering function seeks to leverage know-how and expertise across product lines to create new electrified propulsion systems and modules that can be commercialized. This function oversees the Company's investments in certain venture capital funds that provide seed money for start-up businesses developing new technologies pertinent to the automotive industry and the Company's propulsion strategies.

In addition, each of the Company's businesses within its Air Management, e-Propulsion & Drivetrain and Fuel InjectionSystems reporting segments has its own research and development (“R&D”) organization, including engineers and technicians, engaged in R&D activities at facilities worldwide. The Company also operates testing facilities such as prototype, measurement and calibration, life-cycle testing and dynamometer laboratories.

By working closely with OEMs and anticipating their future product needs, the Company’s R&D personnel conceive, design, develop and manufacture new proprietary components and systems. R&D personnel

The Company’s net R&D expenditures are primarily included in selling, general and administrative expenses of the Consolidated Statements of Operations. Customer reimbursements are netted against gross R&D expenditures as they are considered a recovery of cost. Customer reimbursements for prototypes are recorded net of prototype costs based on customer contracts, typically either when the prototype is shipped or when it is accepted by the customer. Customer reimbursements for engineering services are recorded when performance obligations are satisfied in accordance with the contract. Financial risks and rewards transfer upon shipment, acceptance of a prototype component by the customer or upon completion of the performance obligation as stated in the respective customer agreement.

Net R&D expenditures as a percentage of net sales were 4.8%5.0%, 4.7%4.8% and 4.1%4.7% for the years ended December 31, 2022, 2021 2020 and 2019,2020, respectively.

The Company has approximately 8,2007,800 active domestic and foreign patents and patent applications pending or under preparation and receives royalties from licensing patent rights to others. While it considers its patents on the whole to be important, the Company does not consider any single patent, any group of related patents or any single license essential to its operations in the aggregate or to the operations of any of the Company’s business groups individually. The expiration of the patents individually and in the aggregate is not expected to have a material effect on the Company’s financial position or future operating results. The Company owns numerous trademarks, some of which are valuable, but none of which are essential to its business in the aggregate.

The Company owns the “BorgWarner” trade name and numerous BORGWARNER trademarks including without limitation “BORGWARNER” and “BORGWARNER and Bug Design”, which are material to the Company's business. 

The Company’s reporting segments compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. Many of these competitors are larger and have greater resources than the Company. Technological innovation, application engineering development, quality, price, delivery and program launch support are the primary methods of competition.

The Company’s major non-OEM competitors are Robert Bosch GmbH, Denso Corporation, Hitachi, Ltd., Magna Powertrain (an operating unit of Magna International Inc.), Valeo, Schaeffler Group and Vitesco Technologies. The Company also competes with certain start-ups in electrification.

In addition, a number of the Company’s major OEM customers manufacture, for their own use and for others, products that compete with the Company's products. Other current OEM customers could elect to manufacture products to meet their own requirements or to compete with the Company. There is no assurance that the Company’s business will not be adversely affected by increased competition in the markets in which it operates.

For many of its products, the Company’s competitors include suppliers in parts of the world that enjoy economic advantages such as lower labor costs, lower health care costs, lower tax rates and, in some cases, export subsidies and/or raw materials subsidies. Also, see Item 1A, “Risk Factors.”

The Company’s Compensation Committee oversees human capital management including diversity, equity, and inclusion, and assesses whether environmental, social and governance (“ESG”) goals and milestones, ifas appropriate, are effectively reflected in executive compensation. The full Board of Directors oversees talent reviews and succession planning for the Company.

As of December 31, 2021,2022, the Company had a worldwide salaried and hourly workforce as follows:

The Company uses an array of practices to attract, develop and retain highly qualified talent, including the following:

The Company uses a variety of raw materials in the production of its products including aluminum, copper, nickel, plastic resins, steel, certain alloy elements and semiconductor chips. Manufacturing operations for each of the Company’s operating segments are dependent upon natural gas, fuel oil and electricity.

The Company uses a variety of tactics in an attempt to limit the impact of supply shortages and inflationary pressures. The Company’s global procurement organization works to accelerate cost reductions, purchase from lower cost regions, optimize the supply base, mitigate risk and collaborate on its buying activities. In addition, the Company uses long-term contracts, cost sharing arrangements, design changes, customer buy programs and limited financial instruments to help control costs. The Company intends to use similar measures in 20222023 and beyond. Refer to Note 17, “Financial Instruments,” to the Consolidated Financial Statements in Item 8 of this report for information related to the Company’s hedging activities. 

The Company operates in a constantly evolving global regulatory environment and is subject to numerous and varying regulatory requirements for its product performance and material content. The Company’s practice is to identify potential regulatory and quality risks early in the design and development process and proactively manage them throughout the product lifecycle through the use of routine assessments, protocols, standards, performance measures and audits. New regulations and changes to existing regulations are managed in collaboration with the Company’s OEM customers and implemented through its global systems and procedures designed to ensure compliance with existing laws and regulations. The Company demonstrates material content compliance through the International Material Data System (“IMDS”), which is the automotive industry material data system. In the IMDS, all materials used for automobile manufacturing are archived and maintained to meet the obligations placed on the automobile manufacturers, and thus on their suppliers, by national and international standards, laws and regulations.

The Company works collaboratively with a number of stakeholder groups including government agencies, such as the National Highway Traffic Safety Administration, its customers and its suppliers to proactively engage in federal, state and international public policy processes.

Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a discussion of the impact of environmental regulations on the Company’s business. Also, see Item 1A, “Risk Factors.”

Set forth below are the names, ages, positions and certain other information concerning the executive officers of the Company as of February 15, 2022.9, 2023.

The following risk factors and other information included in this Annual Report on Form 10-K should be considered. The risks and uncertainties described below are not the only ones the Company faces.we face. Additional risks and uncertainties not presently known to the Companyus or that itwe currently deemsdeem immaterial also may impact itsour business operations. If any of the following risks occur, the Company’sour business including itsour financial performance, financial condition, operating results and cash flows could be adversely affected.

The Company expectsWe expect to continue to pursue business ventures, acquisitions, and strategic alliances that leverage itsour technology capabilities and enhance itsour customer base, geographic representation, and scale to complement itsour current businesses. The CompanyWe regularly evaluatesevaluate potential growth opportunities, some of which could be material. While it believeswe believe that such transactions are an integral part of itsour long-term strategy, there are risks and uncertainties related to these activities. Assessing a potential growth opportunity involves extensive due diligence. However, the amount of information the Companywe can obtain about a potential growth opportunity can be limited, and itwe can give no assurance that past or future business ventures, acquisitions, and strategic alliances will positively affect itsour financial performance or will perform as planned. Assessing a price for potential transactions is inexact, particularly in a market that generally favors sellers and attaches a high multiple or premium on technology. The CompanyWe may not be able to successfully assimilate or integrate companies that it haswe have acquired or will acquire in the future, including their personnel, financial systems, distribution, operations and general operating procedures. Failure to execute the Company’sour growth strategy could adversely affect itsour business.

The success of the Company’sour acquisitions is dependent, in part, on itsour ability to realize the expected benefits from combining theour businesses of the Company and businesses that it acquires.we acquire. To realize these anticipated benefits, both companies must be successfully combined, which is subject to the Company’sour ability to consolidate operations, corporate cultures and systems and to eliminate redundancies and costs. If the Company iswe are unsuccessful in combining companies, the anticipated benefits of the acquisitions may not be realized fully or at all or may take longer to realize than expected. Further, there is potential for unknown or inestimable liabilities relating to the acquired businesses. In addition, the actual integration may result in additional and unforeseen expenses, which could reduce the anticipated benefits of the acquisitions.

The combination of independent businesses is a complex, costly and time-consuming process that requires significant management attention and resources. It is possible that the integration process could result in the loss of key employees, the disruption of the Company’sour operations, the inability to maintain or increase itsour competitive presence, inconsistencies in standards, controls, procedures and policies, difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition, the diversion of management’s attention to integration matters and/or difficulties in the assimilation of employees and corporate cultures. Any or all of these factors could adversely affect the Company’sour ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the acquisition and could have an adverse effect on the combined company. In addition, many of these factors are outside of the Company’sour control, and any one of these factors could result in increased costs, decreases in the amount of expected revenues and additional diversion of management’s time and energy, which could materially adversely impact itsour business, financial condition and results of operations.

When the Company decideswe decide to dispose of assets or a business, itwe may have difficulty finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay theour ability of the Company to achieve itsour strategic objectives. ItWe may also dispose of a business at a price or on terms that are less desirable than itwe had anticipated. Buyers of the assets or business may from time to time agree to indemnify the Companyus for operations of such businesses after the closing. The CompanyWe cannot be assured that any of these indemnification provisions will fully protect it,us, and as a result may face unexpected liabilities that adversely affect itsour business, financial condition and results of operations. In addition, the Companywe may experience fewer synergies than expected, and the impact of the disposition on itsour financial results may be larger than projected.

After reaching an agreement for the disposition of a business, the Company iswe are subject to satisfaction of pre-closing conditions as well as necessary regulatory and governmental approvals on acceptable terms, which, if not satisfied or obtained, may prevent itus from completing the transaction. Such regulatory and governmental approvals may be required in jurisdictions around the world, and any delays in the timing of such approvals could materially delay or prevent the transaction.

The Company hasWe have recorded goodwill and indefinite-lived intangible assets related to acquisitions. ItWe periodically assessesassess these assets to determine if they are impaired. Significant negative industry or macro-economicmacroeconomic trends, disruptions to itsour business, inability to effectively integrate acquired businesses,

The Company reviewsWe review goodwill and indefinite-lived intangible assets for impairment either annually or whenever changes in circumstances indicate that the carrying value may not be recoverable. The risk of impairment to goodwill and indefinite-lived intangible assets is higher during the early years following an acquisition. This is because the fair values of these assets align very closely with what was paid to acquire the reporting units to which these assets are assigned. As a result, the difference between the carrying value of the reporting unit and its fair value (typically referred to as “headroom”) is smaller at the time of acquisition. Until this headroom grows over time, due to business growth or lower carrying value of the reporting unit, a relatively small decrease in reporting unit fair value can trigger impairment charges. When impairment charges are triggered, they tend to be material due to the size of the assets involved. Future acquisitions could present similar risks. Any charges relating to such impairments could adversely affect the Company’sour results of operations in the periods recognized.

We may not realize the anticipated strategic, financial, operational or other benefits of the spin-off. We cannot predict with certainty when the benefits expected from the spin-off will occur or the extent to which they will be achieved. There is no assurance that following the spin-off each separate company will be successful. Whether or not the spin-off is completed, we may face material challenges in connection with the intended separation, including but not limited to, the diversion of management time on matters relating to the spin-off; the impact of having to operate under the terms of any transition service agreements; the impact on our ability to retain talent; and potential impacts on our relationships with customers, suppliers, employees and other counterparties. In addition, we will incur one-time costs and ongoing costs in connection with, or as a result of, the spin-off, including costs of operating as independent, publicly-traded companies that the separate businesses will no longer be able to share. Those costs may exceed our estimates or could negate some of the benefits we expect to realize. Further, while it is intended that the transaction will be tax-free to the Company’s stockholders for U.S.

The Company’sOur financial performance depends on conditions in the global automotive industry. Automotive and truck production and sales are cyclical and sensitive to general economic conditions and other factors including interest rates, consumer credit, and consumer spending and preferences. Economic declines that result in significant reduction in automotive or truck production would have an adverse effect on the Company’sour sales to OEMs.

The Company competes worldwideWe compete globally with a number of other manufacturers and distributors that produce and sell similar products. Price, quality, delivery, technological innovation, engineering development and program launch support are the primary elements of competition. The Company’sOur competitors include vertically integrated units of itsour major OEM customers, as well as a large number of independent domestic and international suppliers. Additionally, itsour competitors include start-ups that may be well funded, with the result that they could have more operational and financial flexibility than it has.we have. A number of the Company’sour competitors are larger than it is,we are, and some competitors have greater financial and other resources than it does.we do. Although OEMs have indicated that they will continue to rely on outside suppliers, a number of major OEM customers manufacture products for their own uses that directly compete with the Company’sour products. These OEMs could elect to manufacture such products for their own uses in place of the products the Companywe currently supplies. The Company’ssupply. Our traditional OEM customers, faced with intense international competition, have continued to expand their worldwideglobal sourcing of components. As a result, the Company haswe have experienced competition from suppliers in other parts of the world that enjoy economic advantages, such as lower labor costs, lower health care costs, lower tax rates and, in some cases, export or raw materials subsidies. Increased competition could adversely affect the Company’sour business. In addition, any of itsour competitors may foresee the course of market development more accurately than it does,we do, develop products that are superior to itsour products, produce similar products at a cost that is lower than itsour cost, or adapt more quickly than it doeswe do to new technologies or evolving customer requirements. As a result, the Company’sour products may not be able to compete successfully with itsour competitors' products, and itwe may not be able to meet the growing demands of customers. These trends may adversely affect the Company’sour sales as well as the profit margins on itsour products.

The automotive industry is increasingly focused on the development of hybrid and electric vehicles and of advanced driver assistance technologies, with the goal of developing and introducing a commercially viable, fully automated driving experience. There has also been an increase in consumer preferences for mobility on demand services, such as car and ride sharing, as opposed to automobile ownership, which may result in a long-term reduction in the number of vehicles per capita. In addition, some industry participants are exploring transportation through alternatives to automobiles. These evolving areas have also attracted increased competition from entrants outside the traditional automotive industry. While we are focused on driving growth through our ability to capitalize on certain potential trends, such as the move toward hybrid and electric vehicles, some of the focuses and trends are not part of our product line or strategy, which could have an adverse impact on our results of operations. If the Company doeswe do not continue to innovate and develop, or acquire, new and compelling products that capitalize upon new technologies in response to OEM and consumer preferences, this could have an adverse impact on itsour results of operations.

There is substantial and continuing pressure on OEMs to reduce costs, including costs of products the Company supplies.we supply. OEM customers expect annual price reductions in itsour business. To maintain itsour profit margins, the Company seekswe seek price reductions from itsour suppliers, improved production processes to increase manufacturing efficiency, and streamlined product designs to reduce costs, and it attemptswe attempt to develop new products, the benefits of which support stable or increased prices. The Company’sOur ability to pass through increased raw material costs to itsour OEM customers is limited, with cost recovery often less than 100% and often on a delayed basis. Inability to reduce costs in an amount equal to annual price reductions, increases in raw material costs, and increases in employee wages and benefits could have an adverse effect on its business.us.

From time to time, commodity prices may also fall rapidly. If this happens, suppliers may withdraw capacity from the market until prices improve which may cause periodic supply interruptions. The same may be true of transportation carriers and energy providers. If these supply interruptions occur, it could adversely affect our business.

The United States has maintained tariffs on certain imported steel, aluminum and items originating from China. These tariffs have increased the cost of raw materials and components the Company purchases.we purchase. The imposition of tariffs by the United States has resulted in retaliatory tariffs from a number of countries, including China, which increase the cost of products the Company sells.we sell. If the U.S. or other countries impose additional tariffs, that will have a further adverse impact on its business.us.

The Company ownsWe own important intellectual property, including patents, trademarks, copyrights, and trade secrets and isare involved in numerous licensing arrangements. ItsOur intellectual property plays an important role in maintaining itsour competitive position in a number of the markets that it serves. The Company’swe serve. Our competitors may develop technologies that are similar or superior to itsour proprietary technologies or design around the patents it ownswe own or licenses.license. Further, as it expands itswe expand our operations in jurisdictions where the enforcement of intellectual property rights is less robust, the risk of others duplicating the Company’sour proprietary technologies increases, despite efforts it undertakeswe undertake to protect them. The Company’sOur inability to protect or enforce itsour intellectual property rights or claims that it iswe are infringing intellectual property rights of others could adversely affect itsour business and itsour competitive position.

To improve efficiency and reduce costs, the Company haswe have regionally centralized the information systems that support itsour business processes such as invoicing, payroll, and general management operations. If the centralized systems are disrupted or disabled, key business processes could be interrupted, which could adversely affect itsour business.

The Company reliesWe rely on the capacity, reliability and security of itsour IT systems and infrastructure. IT systems are vulnerable to disruptions, including those resulting from natural disasters, cyber-attacks or failures in third-party provided services. Disruptions and attacks on the Company’sour IT systems pose a risk to the security of itsour systems and itsour ability to protect itsour networks and the confidentiality, availability and integrity of information and data and that of third parties, including itsour employees. Some cyber-attacks depend on human error or manipulation, including phishing attacks or schemes that use social engineering to gain access to systems or carry out disbursement of funds or other frauds, which raise the risks from such

events and the costs associated with protecting against such attacks. Although it haswe have implemented security policies, processes, and layers of defense designed to help identify and protect against intentional and unintentional misappropriation or corruption of itsour systems and information, and disruptions of itsour operations, the Company haswe have been, and likely will continue to be, subjected to such attacks or disruptions. Future attacks or disruptions could potentially lead to the inappropriate disclosure of confidential information, including the Company’sour intellectual property, improper use of itsour systems and networks, access to and manipulation and destruction of Companyour or third-party data, production downtimes, lost revenues, inappropriate disbursement of funds and both internal and external supply shortages. In addition, the Companywe may be required to incur significant costs to protect against damage caused by such attacks or disruptions in the future. These consequences could cause significant damage to the Company’sour reputation, affect itsour relationships with itsour customers and suppliers, lead to claims against the Companyus and ultimately adversely affect itsour business.

The Company’sOur ability to sustain and grow itsour business requires itus to hire, retain and develop a highly skilled and diverse management team and workforce worldwide. In particular, any unplanned turnover or inability to attract and retain key employees and employees with engineering, technical and software capabilities in numbers sufficient for itsour needs could adversely affect itsour business.

The launch of new business is a complex process, the success of which depends on a wide range of factors, including the production readiness of the Company’sour manufacturing facilities and manufacturing processes and those of itsour suppliers, as well as factors related to tooling, equipment, employees, initial product quality and other factors. The Company’sOur failure to successfully launch new business, or itsour inability to accurately estimate the cost to design, develop and launch new business, could have an adverse effect on itsour profitability and results of operations.

To the extent the Company iswe are not able to successfully launch new business, vehicle production at itsour customers could be significantly delayed or shut down. Such situations could result in significant financial penalties to the Companyus or a diversion of personnel and financial resources to improving launches rather than investment in continuous process improvement or other growth initiatives and could result in itsour customers shifting work away from itus to a competitor, all of which could result in loss of revenue or loss of market share and could have an adverse effect on itsour profitability and cash flows.

As of December 31, 2021,2022, approximately 13% of the Company’sour U.S. workforce was unionized. The Company hasWe have a domestic collective bargaining agreement for one facility in New York, which expires in September 2024. The workforce at certain of itsour international facilities is also unionized. A prolonged dispute with itsour employees could have an adverse effect on the Company’sour business.

Because the automotive industry relies heavily on just-in-time delivery of components during the assembly and manufacture of vehicles, a work stoppage or production shutdown at one or more of the Company’sour manufacturing and assembly facilities could have adverse effects on itsour business. Similarly, if one or more of itsour customers were to experience a work stoppage or production shutdown, that customer would likely halt or limit purchases of the Company’sour products, which could result in the shutdown of the related manufacturing facilities. A significant disruption in the supply of a key component due to supply

constraints, such as the constraints experienced in 2021 and 2022 related to semiconductor chips, or due to a work stoppage or production shutdown at one of the Company’sour suppliers or any other supplier could have the same consequences and, accordingly, have an adverse effect on itsour financial results.

    

The Company hasWe have unfunded obligations under certain of itsour defined benefit pension and other postretirement benefit plans. The valuation of itsour future payment obligations under the plans and the related plan assets is subject to significant adverse changes if the credit and capital markets cause interest rates and projected rates of return to decline. Such declines could also require the Companyus to make significant additional contributions to itsour pension plans in the future. Additionally, a material deterioration in the funded status of the plans could significantly increase the Company’sour pension expenses and reduce profitability in the future.

The CompanyWe also sponsorssponsor post-employment medical benefit plans in the U.S. that are unfunded. If medical costs continue to increase or actuarial assumptions are modified, this could have an adverse effect on itsour business. 

The Company’sOur operations are subject to laws governing, among other things, emissions to air, discharges to waters, and the generation, management, transportation and disposal of waste and other materials. The operation of automotive parts manufacturing plants entails risks in these areas, and the Companywe cannot assure that itwe will not incur material costs or liabilities as a result. Through various acquisitions over the years, the Company haswe have acquired a number of manufacturing facilities, and itwe cannot assure that itwe will not incur material costs and liabilities relating to activities that predate itsour ownership. In addition, potentially significant expenditures could be required to comply with evolving interpretations of existing environmental, health and safety laws and regulations or any new such laws and regulations (including concerns about global climate change and its impact) that may be adopted in the future. Costs associated with failure to comply with such laws and regulations could have an adverse effect on the Company’sour business.

Climate change is receiving increasing attention worldwide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. Our manufacturing plants use energy, including electricity and natural gas, and certain of our plants emit amounts of greenhouse gas that may be affected by these legislative and regulatory efforts. Greenhouse gas regulation could increase the price of the electricity we purchase, increase costs for use of natural gas, potentially restrict access to or the use of natural gas, require us to purchase allowances to offset our own emissions or result in an overall increase in costs of raw materials, any one of which could increase our costs, reduce competitiveness in a global economy or otherwise negatively affect our financial condition, results of operations and reputation. Many of our suppliers face similar circumstances. Supply disruptions would raise market rates and jeopardize the continuity of production and could have an adverse effect on our financial results.

The CompanyWe and certain of itsour current and former direct and indirect corporate predecessors, subsidiaries and divisions have been identified by the United States Environmental Protection Agency and certain state environmental agencies and private parties as potentially responsible parties at various hazardous waste disposal sites under the Comprehensive Environmental Response, Compensation and Liability Act and equivalent state laws, and, as such, may be liable for the cost of clean-up and other remedial activities at such sites. While responsibility for clean-up and other remedial activities at such sites is typically shared among potentially responsible parties based on an allocation formula, the Companywe could have greater liability under applicable statutes. Refer to Note 21, “Contingencies,” to the Consolidated Financial Statements in item 8 of this report for further discussion.

The Company providesWe provide product warranties to itsour customers for some of itsour products. Under these product warranties, the Companywe may be required to bear costs and expenses for the repair or replacement of these products. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, auto manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product warranty claims. A recall claim brought against the Company,us, or a product warranty claim brought against it,us, could adversely impact itsour results of operations. In addition, a recall claim could require itus to review itsour entire product portfolio to assess whether similar issues are present in other product lines, which could result in significant disruption to itsour business and could have an adverse impact on itsour results of operations. The CompanyWe cannot assure that costs and expenses associated with these product warranties will not be material or that those costs will not exceed any amounts accrued for such product warranties in itsour financial statements.

The Company isWe are currently, and may in the future become, subject to legal proceedings and commercial or contractual disputes. These claims typically arise in the normal course of business and may include, but not be limited to, commercial or contractual disputes with the Company’sour customers and suppliers, intellectual property matters, personal injury, product liability, environmental and employment claims. There is a possibility that such claims may have an adverse impact on the Company’sour business that is greater than it anticipates.we anticipate. While the Company maintainswe maintain insurance for certain risks, the amount of insurance may not be adequate to cover all insured claims and liabilities. The incurringincurrence of significant liabilities for which there is no, or insufficient, insurance coverage could adversely affect the Company’sour business.

The Company hasWe have operations in multiple countries that can be impacted by expected and unexpected changes in the legal and business environments in which it operates.we operate. Compliance-related issues in certain countries associated with laws such as the Foreign Corrupt Practices Act and other anti-corruption laws could adversely affect itsour business. The Company hasWe have internal policies and procedures relating to compliance with such laws; however, there is a risk that such policies and procedures will not always protect itus from the improper acts of employees, agents, business partners, joint venture partners, or representatives, particularly in the case of recently acquired operations that may not have significant training in applicable compliance policies and procedures. Violations of these laws, which are complex, may result in criminal penalties, sanctions and/or fines that could have an adverse effect on the Company’sour business, financial condition, and results of operations and reputation.

Changes that could impact the legal environment include new legislation, new regulations, new policies, investigations and legal proceedings, and new interpretations of existing legal rules and regulations, in particular, changes in import and export control laws or exchange control laws, additional restrictions on doing business in countries subject to sanctions, additional limitations on greenhouse gas emissions or other matters related to climate change and other changes in laws in countries where the Company operateswe operate or intendsintend to operate.

Changes in tax laws or tax rates, the resolution of tax assessments or audits by various tax authorities, and the inability to fully utilize itsour tax loss carryforwards and tax credits could adversely affect the Company’sour operating results. In addition, the Companywe may periodically restructure itsour legal entity organization.

If taxing authorities were to disagree with the Company’sour tax positions in connection with any such restructurings, itsour effective tax rate could be materially affected. The Company’sOur tax filings for various periods are subject to audit by the tax authorities in most jurisdictions where it conductswe conduct business. The Company hasWe have received tax assessments from various taxing authorities and isare currently at varying stages of appeals and/or litigation regarding these matters. These audits may result in assessment of additional taxes that are resolved with the authorities or through the courts. The Company believesWe believe these assessments may occasionally be based on erroneous and even arbitrary interpretations of local tax law. Resolution of any tax matters involves uncertainties, and there are no assurances that the outcomes will be favorable.

The Company hasWe have manufacturing and technical facilities in many regions including Europe, Asia, and the Americas. For 2021,2022, approximately 83%81% of itsour consolidated net sales were outside the U.S. Consequently, the Company’sour results could be affected by changes in trade, monetary and fiscal policies, trade restrictions or prohibitions, import or other charges or taxes, fluctuations in foreign currency exchange rates, limitations on the repatriation of funds, changing economic conditions, unreliable intellectual property protection and legal systems, insufficient infrastructures, social unrest, political instability and disputes, international terrorism and other factors that may be discrete to a particular country or geography. Compliance with multiple and potentially conflicting laws and regulations of various countries is challenging, burdensome and expensive.

The financial statements of foreign subsidiaries are translated to U.S. Dollars using the period-end exchange rate for assets and liabilities and an average exchange rate for each period for revenues, expenses and capital expenditures. The local currency is typically the functional currency for the Company'sour foreign subsidiaries. Significant foreign currency fluctuations and the associated translation of those foreign currencies to U.S. Dollars could adversely affect the Company’sour business. Additionally, significant changes in currency exchange rates, particularly the Euro, Korean Won and Chinese Renminbi, could cause fluctuations in the reported results of the Company’sour businesses’ operations that could negatively affect itsour results of operations.

Because the Company iswe are a U.S. holding company, one significant source of itsour funds is distributions from itsour non-U.S. subsidiaries. Certain countries in which the Company operateswe operate have adopted or could institute currency exchange controls that limit or prohibit the Company’s localour non-U.S. subsidiaries' ability to convert local currency into U.S. Dollars or to make payments outside the country. This could subject the Companyus to the risks of local currency devaluation and business disruption.

Maintaining a strong position in the Chinese market is a key component of the Company’sour global growth strategy. The automotive supply market in China is highly competitive, with competition from many of the largest global manufacturers and numerous smaller domestic manufacturers. As the Chinese market evolves, the Company anticipateswe anticipate that market participants will act aggressively to increase or maintain their market share. Increased competition may result in price reductions, reduced margins and itsour inability to gain or hold market share. In addition, the Company’sour business in China is sensitive to economic, political, social and market conditions that drive sales volumes in China. If we are unable to maintain our position in the Chinese

political, social and market conditions that drive sales volumes in China. Economic growth has slowed in China. If it is unable to maintain its position in the Chinese market or if vehicle sales in China decrease, the Company’sour business and financial results could be adversely affected.

Changes in the ratings that rating agencies assign to the Company’sour debt may ultimately impact itsour access to the debt capital markets and the costs it incurswe incur to borrow funds. If ratings for itsour debt fall below investment grade, the Company’sour access to the debt capital markets could become restricted and itsour cost of borrowing or the interest rate for any subsequently issued debt would likely increase.

The Company’sOur revolving credit agreement includes an increase in interest rates if the ratings for itsour debt are downgraded. The interest costscost on itsour revolving credit agreement areis based on a rating grid agreed to in its credit agreement.grid. Further, an increase in the level of itsour indebtedness and related interest costs may increase the Company’sour vulnerability to adverse general economic and industry conditions and may affect itsour ability to obtain additional financing.

The Company hasWe have initiated and may continue to initiate restructuring actions designed to improve the competitiveness of itsour business and sustain itsour margin profile, optimize itsour product portfolio or create an optimal legal entity structure. The CompanyWe may not realize anticipated savings or benefits from past or future actions in full or in part or within the time periods it expects. It iswe expect. We are also subject to the risks of labor unrest, negative publicity and business disruption in connection with itsour actions. Failure to realize anticipated savings or benefits from itsour actions could have an adverse effect on the Company’sour business.

The Company reliesWe rely on sales to OEMs around the world of varying credit quality and manufacturing demands. Supply to several of these customers requires significant investment by the Company. The Company bases itsus. We base our growth projections, in part, on commitments made by itsour customers. These commitments generally renew yearly during a program life cycle. Among other things, the level of production orders the Company receiveswe receive is dependent on the ability of itsour OEM customers to design and sell products that consumers desire to purchase. If actual production orders from itsour customers do not approximate such commitments due to a variety of factors including non-renewal of purchase orders, a customer's financial hardship or other unforeseen reasons, it could adversely affect the Company’sour business.

Some of the Company’sour sales are concentrated. The Company’sOur worldwide sales in 20212022 to Ford and Volkswagen constituted approximately 10%13% and 9%8% of its 2021our 2022 consolidated net sales, respectively. Sales to the Company’s top ten customers represented 62% of sales for the year ended December 31, 2022.  

All three of the Company’sour primary North American customers, Ford, Stellantis, and General Motors, have major union contracts with the United Automobile, Aerospace and Agricultural Implement Workers of America. Because of domestic OEMs’ dependence on a single union, the Company iswe are affected by labor difficulties and work stoppages at OEMs’ facilities. Similarly, a majority of the Company’sour global customers' operations outside of North America are also represented by various unions. Any extended work stoppage at one or more of itsour customers could have an adverse effect on the Company’sour business.

In an effort to manage and reduce the cost of purchased goods and services, the Company haswe have been rationalizing itsour supply base. As a result, it remainswe remain dependent on fewer sources of supply for certain components used in the manufacture of itsour products. The Company selectsWe select suppliers based on total value (including total landed price, quality, delivery, and technology), taking into consideration their production capacities and financial condition. The Company expectsWe expect that they will deliver to the Company’sour stated written expectations.

However, there can be no assurance that capacity limitations, industry shortages, labor or social unrest, weather emergencies, commercial disputes, government actions, riots, wars, such as Russia’s invasion of Ukraine in 2022, sabotage, cyber-attacks, non-conforming parts, acts of terrorism, “Acts of God,” or other problems that the Company’sour suppliers experience will not result in occasional shortages or delays in their supply of components to it.us. During 2021, and to a lesser extent in 2022, trailing impacts of the shutdowns and production declines related, in part, to COVID-19, created supply constraints of certain components, particularly semiconductor chips. These supply constraints have had, and are expected to continue to have, significant impacts on global industry production levels. If the Company is towe experience a prolonged shortage of critical components from any of itsour suppliers and cannot procure the components from other sources, itwe may be unable to meet the production schedules for some of itsour key products and could miss customer delivery expectations. In addition, with fewer sources of supply for certain components, each supplier may perceive that it has greater leverage and, therefore, some ability to seek higher prices from the Companyus at a time that it faceswe face substantial pressure from OEMs to reduce the prices of its products. Thisour products, which could adversely affect the Company’sour customer relations and business.

Rapidly changing industry conditions such as volatile production volumes; the Company’sour need to seek price reductions from itsour suppliers as a result of the substantial pressure it faceswe face from OEMs to reduce the prices of itsour products; credit tightness; changes in foreign currencies;currency exchange rates; raw material, commodity, tariffs, transportation, and energy price escalation; drastic changes in consumer preferences; and other factors could adversely affect the Company’sour supply chain, and sometimes with little advance notice. These conditions could also result in increased commercial disputes and supply interruption risks. In certain instances, it would be difficult and expensive for the Companyus to change suppliers that are critical to itsour business. On occasion, the Companywe must provide financial support to distressed suppliers or take other measures to protect itsour supply lines. The CompanyWe cannot predict with certainty the potential adverse effects these costs might have on itsour business.

The Company engagesWe engage in numerous financial transactions and contracts including insurance policies, letters of credit, credit line agreements, financial derivatives, and investment management agreements involving various counterparties. The Company isWe are subject to the risk that one or more of these counterparties may become insolvent and, therefore, be unable to meet its obligations under such contracts.

Any of the following could materially and adversely affect the Company’sour business: the loss of or changes in supply contracts or sourcing strategies of the Company’sour major customers or suppliers; start-up expenses associated with new vehicle programs or delays or cancellation of such programs; low levels of utilization of the Company’sour manufacturing facilities, which can be dependent on a single product line or customer; inability to recover engineering and tooling costs; market and financial consequences of recalls that may be required on products the Companywe supplied; delays or difficulties in new product development; the possible introduction of similar or superior technologies by others; global excess capacity and vehicle platform proliferation; and the impact of fire, flood, or other natural disasters including pandemics and quarantines.

The Company has received no written comments regarding its periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more preceding the end of its 20212022 fiscal year that remain unresolved.

As of December 31, 2021,2022, the Company had 9392 manufacturing, assembly and technical locations worldwide. The Company’s worldwide headquarters are located in a leased facility in Auburn Hills, Michigan. In general, the Company believes its facilities to be suitable and adequate to meet its current and reasonably anticipated needs.

The following is additional information concerning principal manufacturing, assembly and technical facilities operated by the Company, its subsidiaries, and affiliates.

The table above excludes unconsolidated joint ventures as of December 31, 20212022 and administrative offices. Of the facilities noted above, 3840 have leased land rights or a leased facility.

The Company is subject to a number of claims and judicial and administrative proceedings (some of which involve substantial amounts) arising out of the Company’s business or relating to matters for which the Company may have a contractual indemnity obligation.

The Company’s common stock is listed for trading on the New York Stock Exchange under the symbol BWA. As of February 11, 2022,3, 2023, there were 1,5301,488 holders of record of common stock.

While the Company currently expects that quarterly cash dividends will continue to be paid in the future at levels comparable to recent historical levels, the dividend policy is subject to review and change at the discretion of the Board of Directors.

The line graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of companies on the Standard & Poor’s (S&P’s) 500 Stock Index, and companies within Standard Industrial Code (“SIC”) 3714 - Motor Vehicle Parts.

In January 2020, the Company’s Board of Directors authorized the purchase of up to $1 billion of the Company's common stock, which replaced the previous share repurchase program. This share repurchase authorization does not expire. As of December 31, 2021,2022, the Company hashad repurchased $216$456 million of common stock under this repurchase program. Shares purchased under this authorization may be repurchased in the open market at prevailing prices and at times and in amounts to be determined by management as market conditions and the Company's capital position warrant. The Company may use Rule 10b5-1 and 10b-18 plans to facilitate share repurchases. Repurchased shares will be deemed common stock held in treasury and may subsequently be reissued.

Employee transactions include restricted stock withheld to offset statutory minimum tax withholding that occurs upon vesting of restricted stock. The BorgWarner Inc. 2018 Stock Incentive Plan provides that the withholding obligations be settled by the Company retaining stock that is part of the award. Withheld shares will be deemed common stock held in treasury and may subsequently be reissued for general corporate purposes.

The following table provides information about the Company’s purchases of its equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) during the quarter ended December 31, 2021:2022:

As of December 31, 2021,2022, the number of shares of options, restricted common stock, warrants and rights outstanding under the Company’s equity compensation plans, the weighted average exercise price of outstanding options, restricted common stock, warrants and rights and the number of securities remaining available for issuance were as follows:

 

BorgWarner Inc. and Consolidated Subsidiaries (the “Company” or “BorgWarner”) is a global product leader in clean and efficient technology solutions for combustion, hybrid and electric vehicles. BorgWarner’s products help improve vehicle performance, propulsion efficiency, stability and air quality. These products are manufactured and sold worldwide, primarily to original equipment manufacturers (“OEMs”) of light vehicles (passenger cars, sport-utility vehicles (“SUVs”), vans and light trucks). The Company’s products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications). The Company also manufactures and sells its products to certain tier one vehicle systems suppliers and into the aftermarket for light, commercial and off-highway vehicles. The Company operates manufacturing facilities serving customers in Europe, the Americas and Asia and is an original equipment supplier to nearly every major automotive OEM in the world.

Refer to Note 2, “Acquisitions and Dispositions,” to the Consolidated Financial Statements in Item 8 of this report for more information. Results of operations for AKASOL and Delphi Technologiesthese acquisitions are included in the Company’s financial information following their respective dates of acquisition.

A detailed comparison of the Company’s 20192020 operating results to its 20202021 operating results can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the Company’s 20202021 Annual Report on Form 10-K filed February 22, 2021.15, 2022.

Net sales for the year ended December 31, 20212022 totaled $14,838$15,801 million, an increase of 46%$963 million, or 6%, from the year ended December 31, 2020. During2021. The change in net sales for the year ended December 31, 2021,2022 was primarily driven by the following:

Gross profit and gross margin were $3,101 million and 19.6%, respectively, during the year ended December 202131, 2022 compared to $2,855 million and increases19.2%, respectively, during the year ended December 31, 2021. The increase in commodity and other costs.gross margin was primarily due to the factors discussed above.

the Consolidated Financial Statements in Item 8 of this report for more information.

In February 2020, the Company announced a $300 million restructuring plan to address existing structural costs. During the years ended December 31, 20212022 and 2020,2021, the Company recorded $103$36 million and $148$103 million of restructuring expense related to this plan, respectively. Cumulatively, the Company has incurred $251$287 million of restructuring charges related to this plan. These actions are expected to result in a totalAs of $300 million of restructuring costs through 2022.December 31, 2022, the plan was substantially complete. The resulting annual gross savings are expected to be $90 million toin excess of $100 million and will beare being utilized to sustain overall operating margin profile and cost competitiveness. Nearly all of the restructuring charges are expected to be cash expenditures.

For the years ended December 31, 20212022 and 2020,2021, merger, acquisition and divestiture related expenses, net were $40 million and $50 million, respectively. During the year ended December 31, 2022, the Company recorded merger, acquisition and $96divestiture expense of $54 million respectively. The decrease in 2021 was primarily related to higher professional fees associated with the intended separation of its Fuel Systems and Aftermarket segments. This merger, acquisition and divestiture expense was partially offset by a $14 million gain related to a change in 2020estimate of the expected earn-out estimate associated with the Santroll acquisition. During the year ended December 31, 2021, the Company recorded merger, acquisition and divestiture expense of $50 million primarily related to professional fees associated with the acquisition of AKASOL, professional fees for integration and other support associated with the Company’s acquisition of Delphi Technologies.Technologies and other specific acquisition and disposition initiatives.