Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 07, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 1-12162 | ||
Entity Registrant Name | BorgWarner Inc. | ||
Entity Central Index Key | 0000908255 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-3404508 | ||
Entity Address, Address Line One | 3850 Hamlin Road | ||
Entity Address, City or Town | Auburn Hills | ||
Entity Address, State or Province | MI | ||
Entity Address, Postal Zip Code | 48326 | ||
City Area Code | 248 | ||
Local Phone Number | 754-9200 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8.6 | ||
Entity Common Stock, Shares Outstanding | 206,409,586 | ||
Documents Incorporated by Reference | 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 Portions of the BorgWarner Inc. Proxy Statement for the 2019 Annual Meeting of Stockholders Part III | ||
Entity Emerging Growth Company | false | ||
Issued common stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | BWA | ||
Security Exchange Name | NYSE | ||
Senior Notes [Member] | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 1.80% Senior Notes due 2022 | ||
Trading Symbol | BWA22 | ||
Security Exchange Name | NYSE |
BorgWarner Inc. and Consolidate
BorgWarner Inc. and Consolidated Subsidiaries Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 832 | $ 739 |
Receivables, net | 1,921 | 1,988 |
Inventories, net | 807 | 781 |
Prepayments and other current assets | 276 | 250 |
Assets held for sale | 0 | 47 |
Total current assets | 3,836 | 3,805 |
Property, plant and equipment, net | 2,925 | 2,904 |
Investments and other long-term receivables | 318 | 592 |
Goodwill | 1,842 | 1,853 |
Other intangible assets, net | 402 | 439 |
Other non-current assets | 379 | 502 |
Total assets | 9,702 | 10,095 |
LIABILITIES AND EQUITY | ||
Notes payable and other short-term debt | 286 | 173 |
Accounts payable and accrued expenses | 1,977 | 2,144 |
Income taxes payable | 66 | 59 |
Liabilities held for sale | 0 | 23 |
Total current liabilities | 2,329 | 2,399 |
Long-term debt | 1,674 | 1,941 |
Other non-current liabilities: | ||
Asbestos-related liabilities | 0 | 755 |
Retirement-related liabilities | 306 | 298 |
Other | 549 | 357 |
Total other non-current liabilities | 855 | 1,410 |
Capital stock: | ||
Common stock | 3 | 3 |
Capital in excess of par value | 1,145 | 1,146 |
Retained earnings | 5,942 | 5,336 |
Accumulated other comprehensive loss | (727) | (674) |
Common stock held in treasury | (1,657) | (1,585) |
Total BorgWarner Inc. stockholders’ equity | 4,706 | 4,226 |
Noncontrolling interest | 138 | 119 |
Total equity | 4,844 | 4,345 |
Total liabilities and equity | $ 9,702 | $ 10,095 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 390,000,000 | 390,000,000 |
Common Stock, Shares, Issued | 246,387,057 | 246,387,057 |
Common Stock, Shares, Outstanding | 206,407,543 | 208,214,934 |
Treasury Stock, Shares | 39,979,514 | 38,172,123 |
Nonvoting Common Stock [Member] | ||
Capital stock: | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Common Stock, Shares, Issued | 0 | 0 |
Common Stock, Shares, Outstanding | 0 | 0 |
BorgWarner Inc. and Consolida_2
BorgWarner Inc. and Consolidated Subsidiaries Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||||||||||
Net sales | $ 2,559 | $ 2,492 | $ 2,551 | $ 2,566 | $ 2,574 | $ 2,478 | $ 2,694 | $ 2,784 | $ 10,168 | $ 10,530 | $ 9,799 |
Cost of sales | 2,014 | 1,968 | 2,038 | 2,047 | 2,030 | 1,963 | 2,114 | 2,193 | 8,067 | 8,300 | 7,684 |
Gross profit | 545 | 524 | 513 | 519 | 544 | 515 | 580 | 591 | 2,101 | 2,230 | 2,115 |
Selling, general and administrative expenses | 205 | 230 | 212 | 226 | 226 | 230 | 237 | 253 | 873 | 946 | 899 |
Other (income) expense, net | (138) | 18 | 16 | 29 | 52 | 7 | 30 | 5 | (75) | 94 | 144 |
Operating income | 478 | 276 | 285 | 264 | 266 | 278 | 313 | 333 | 1,303 | 1,190 | 1,072 |
Equity in affiliates’ earnings, net of tax | (7) | (7) | (9) | (9) | (11) | (15) | (13) | (10) | (32) | (49) | (51) |
Interest income | (3) | (4) | (2) | (3) | (2) | (1) | (1) | (2) | (12) | (6) | (6) |
Interest expense | 12 | 15 | 14 | 14 | 14 | 14 | 15 | 16 | 55 | 59 | 71 |
Other postretirement income | 1 | (1) | 27 | 0 | (2) | (3) | (2) | (3) | 27 | (10) | (5) |
Earnings before income taxes and noncontrolling interest | 475 | 273 | 255 | 262 | 267 | 283 | 314 | 332 | 1,265 | 1,196 | 1,063 |
Provision for income taxes | 238 | 66 | 73 | 91 | 19 | 67 | 30 | 95 | 468 | 211 | 580 |
Net earnings | 237 | 207 | 182 | 171 | 248 | 216 | 284 | 237 | 797 | 985 | 483 |
Net earnings attributable to the noncontrolling interest, net of tax | 17 | 13 | 10 | 11 | 18 | 12 | 12 | 12 | 51 | 54 | 43 |
Net earnings attributable to BorgWarner Inc. | $ 220 | $ 194 | $ 172 | $ 160 | $ 230 | $ 204 | $ 272 | $ 225 | $ 746 | $ 931 | $ 440 |
Earnings per share — basic | $ 1.07 | $ 0.94 | $ 0.84 | $ 0.77 | $ 1.11 | $ 0.98 | $ 1.30 | $ 1.07 | $ 3.63 | $ 4.47 | $ 2.09 |
Earnings per share — diluted | $ 1.06 | $ 0.94 | $ 0.83 | $ 0.77 | $ 1.10 | $ 0.98 | $ 1.30 | $ 1.07 | $ 3.61 | $ 4.44 | $ 2.08 |
Weighted average shares outstanding: | |||||||||||
Basic | 205.7 | 208.2 | 210.4 | ||||||||
Diluted | 206.8 | 209.5 | 211.5 |
BorgWarner Inc. and Consolida_3
BorgWarner Inc. and Consolidated Subsidiaries Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net earnings attributable to BorgWarner Inc. | $ 746 | $ 931 | $ 440 | |
Foreign currency translation adjustments | (55) | (148) | 237 | |
Hedge instruments | [1] | 0 | 2 | (6) |
Defined benefit postretirement plans | [1] | 4 | (23) | 0 |
Other | [1] | (2) | (1) | 1 |
Total other comprehensive (loss) income attributable to BorgWarner Inc. | (53) | (170) | 232 | |
Comprehensive income attributable to BorgWarner Inc. | [1] | 693 | 761 | 672 |
Net earnings attributable to the noncontrolling interest, net of tax | 51 | 54 | 43 | |
Other comprehensive (loss) income attributable to the noncontrolling interest | [1] | (2) | (8) | 11 |
Comprehensive income | $ 742 | $ 807 | $ 726 | |
[1] | * Net of income taxes. |
BorgWarner Inc. and Consolida_4
BorgWarner Inc. and Consolidated Subsidiaries Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING | |||
Net earnings | $ 797 | $ 985 | $ 483 |
Adjustments to reconcile net earnings to net cash flows from operations: | |||
Depreciation and amortization | 439 | 431 | 408 |
Deferred income tax (benefit) provision | 186 | (57) | 42 |
Stock-based compensation expense | 42 | 53 | 52 |
Restructuring expense, net of cash paid | 30 | 33 | 27 |
Pension settlement loss | 27 | 0 | 0 |
Tax reform adjustments to provision for income taxes | 16 | (13) | 274 |
Asset impairment and loss on divestiture | 7 | 26 | 71 |
Gain on derecognition of subsidiary | (177) | 0 | 0 |
Equity in affiliates’ earnings, net of dividends received, and other | (12) | (32) | |
Net earnings adjusted for non-cash charges to operations | 1,367 | 1,446 | 1,325 |
Derecognition of subsidiary | (172) | 0 | 0 |
Changes in assets and liabilities: | |||
Receivables | 19 | (43) | (168) |
Inventories | (36) | (53) | (85) |
Prepayments and other current assets | (18) | (19) | 1 |
Accounts payable and accrued expenses | (123) | (76) | 233 |
Prepaid taxes and income taxes payable | (8) | (85) | (43) |
Other assets and liabilities | (21) | (44) | (83) |
Net cash provided by operating activities | 1,008 | 1,126 | 1,180 |
INVESTING | |||
Capital expenditures, including tooling outlays | (481) | (546) | (560) |
Payments for investments in equity securities | (53) | (6) | (3) |
Payments for businesses acquired, including restricted cash, net of cash acquired | (10) | 0 | (186) |
Proceeds from sale of businesses, net of cash divested | 24 | 0 | 0 |
Proceeds from (payments for) settlement of net investment hedges | 22 | 2 | (8) |
Proceeds from asset disposals and other | 9 | 36 | 5 |
Net cash used in investing activities | (489) | (514) | (752) |
FINANCING | |||
Net decrease in notes payable | 0 | (34) | (88) |
Additions to debt, net of debt issuance costs | 63 | 59 | 3 |
Repayments of long term debt, including current portion | (204) | (66) | (20) |
Payments for debt issuance cost | 0 | 0 | (2) |
Payments for purchase of treasury stock | (100) | (150) | (100) |
Payments for stock-based compensation items | (15) | (15) | (2) |
Capital contribution from noncontrolling interest | 4 | 0 | 0 |
Dividends paid to BorgWarner stockholders | (140) | (142) | (124) |
Dividends paid to noncontrolling stockholders | (28) | (35) | (30) |
Net cash used in financing activities | (420) | (383) | (363) |
Effect of exchange rate changes on cash | (6) | (35) | 36 |
Net increase in cash and cash equivalents | 93 | 194 | 101 |
Cash and restricted cash at beginning of period | 739 | 545 | 444 |
Cash and restricted cash at end of period | 832 | 739 | 545 |
Net Cash Paid During Period For [Abstract] | |||
Interest | 72 | 84 | 92 |
Income taxes, net of refunds | 243 | 316 | 280 |
Non Cash Investing Transactions [Abstract] | |||
Liabilities assumed from business acquired | $ 0 | $ 0 | $ 18 |
BorgWarner Inc. and Consolida_5
BorgWarner Inc. and Consolidated Subsidiaries Consolidated Statements of Equity - USD ($) $ in Millions | Total | Issued common stock | Capital in excess of par value | Common stock held in treasury | Retained earnings | Accumulated other comprehensive income (loss) | Noncontrolling interests | Share-based Payment Arrangement, Option [Member]Common stock held in treasury | Performance Shares [Member]Common stock held in treasury | Restricted Stock [Member]Common stock held in treasury | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Treasury Stock, Common, Shares | (34,124,092) | |||||||||||
Beginning Balance at Dec. 31, 2016 | $ 3 | $ 1,104 | $ (1,382) | $ 4,215 | $ (722) | $ 84 | ||||||
Beginning Balance, shares at Dec. 31, 2016 | 246,387,057 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Dividends declared | (124) | (29) | ||||||||||
Stock incentive plans | (11) | $ 19 | ||||||||||
Net issuance for executive stock plan | 21 | $ 3 | ||||||||||
Net issuance of restricted stock | 4 | $ 15 | ||||||||||
Treasury stock reissued, shares | 473,419 | 73,935 | 402,184 | |||||||||
Purchase of treasury stock | $ (100) | |||||||||||
Business divestiture | 0 | |||||||||||
Purchases of treasury stock, shares | (2,399,710) | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ 440 | 440 | ||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 43 | 43 | ||||||||||
Other comprehensive income (loss) | 232 | 232 | ||||||||||
Other comprehensive (loss) income attributable to the noncontrolling interest | $ 11 | [1] | 11 | |||||||||
Ending Balance at Dec. 31, 2017 | $ 3 | 1,118 | $ (1,445) | 4,531 | (490) | 109 | ||||||
Ending Balance, shares at Dec. 31, 2017 | 246,387,057 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.59 | |||||||||||
Treasury Stock, Common, Shares | (35,574,264) | |||||||||||
Dividends declared | (142) | (36) | ||||||||||
Net issuance for executive stock plan | 18 | $ 4 | ||||||||||
Net issuance of restricted stock | 10 | $ 6 | ||||||||||
Treasury stock reissued, shares | 154,642 | 284,946 | ||||||||||
Purchase of treasury stock | $ (150) | |||||||||||
Business divestiture | $ 0 | |||||||||||
Purchases of treasury stock, shares | (3,037,447) | |||||||||||
Net earnings attributable to BorgWarner Inc. | 931 | 931 | ||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 54 | 54 | ||||||||||
Other comprehensive income (loss) | (170) | (170) | ||||||||||
Other comprehensive (loss) income attributable to the noncontrolling interest | (8) | [1] | (8) | |||||||||
Ending Balance at Dec. 31, 2018 | $ 4,345 | $ 3 | 1,146 | $ (1,585) | 5,336 | (674) | 119 | |||||
Ending Balance, shares at Dec. 31, 2018 | 246,387,057 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.68 | |||||||||||
Treasury Stock, Common, Shares | (38,172,123) | |||||||||||
Dividends declared | (140) | (34) | ||||||||||
Noncontrolling interest contributions | $ 4 | |||||||||||
Net issuance for executive stock plan | 0 | $ 7 | ||||||||||
Net issuance of restricted stock | (1) | $ 21 | ||||||||||
Treasury stock reissued, shares | 199,135 | 571,996 | ||||||||||
Purchase of treasury stock | $ (100) | |||||||||||
Purchases of treasury stock, shares | (2,578,522) | |||||||||||
Net earnings attributable to BorgWarner Inc. | 746 | |||||||||||
Net earnings attributable to the noncontrolling interest, net of tax | 51 | 51 | ||||||||||
Other comprehensive income (loss) | (53) | (53) | ||||||||||
Other comprehensive (loss) income attributable to the noncontrolling interest | [1] | (2) | ||||||||||
Ending Balance at Dec. 31, 2019 | $ 4,844 | $ 3 | $ 1,145 | $ (1,657) | $ 5,942 | $ (727) | $ 138 | |||||
Ending Balance, shares at Dec. 31, 2019 | 246,387,057 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0 | |||||||||||
Treasury Stock, Common, Shares | (39,979,514) | |||||||||||
[1] | * Net of income taxes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following paragraphs briefly describe the Company's significant accounting policies. Basis of presentation Certain prior period amounts have been reclassified to conform to current period presentation. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the accompanying notes, as well as the amounts of revenues and expenses reported during the periods covered by these financial statements and accompanying notes. Actual results could differ from those estimates. Principles of consolidation The Consolidated Financial Statements include all majority-owned subsidiaries with a controlling financial interest. All inter-company accounts and transactions have been eliminated in consolidation. The Company has investments in two joint ventures of which it owns 32.6% and 50% , that are accounted for under the equity method as the Company does not have a controlling financial interest. Interests in privately-held companies that do not have readily determinable fair values are measured at cost less impairments, adjusted for observable price changes in orderly transactions for the identical or similar investment of the same issuer. There were no impairments or upward adjustments recorded during the years ended December 31, 2019, 2018 or 2017. Revenue recognition The Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of our products. Although the Company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the life of the arrangements, and a contract does not exist for purposes of applying Accounting Standards Codification ("ASC") Topic 606 until volumes are contractually known. For most of our products, transfer of control occurs upon shipment or delivery, however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer. Revenue is measured at the amount of consideration we expect to receive in exchange for transferring the good. The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. Customer incentive payments are capitalized when the payments are incremental and incurred only if the new business is obtained and these amounts are expected to be recovered from the customer over the term of the new business arrangement. The Company recognizes a reduction to revenue as products that the upfront payments are related to are transferred to the customer, based on the total amount of products expected to be sold over the term of the arrangement (generally 3 to 7 years). The Company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement. Cost of sales The Company includes materials, direct labor and manufacturing overhead within cost of sales. Manufacturing overhead is comprised of indirect materials, indirect labor, factory operating costs and other such costs associated with manufacturing products for sale. Cash and cash equivalents Cash and cash equivalents are valued at fair market value. It is the Company's policy to classify all highly liquid investments with original maturities of three months or less as cash and cash equivalents. Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal risk. Receivables, net Accounts receivable are stated at cost less an allowance for bad debts. An allowance for doubtful accounts is recorded when it is probable amounts will not be collected based on specific identification of customer circumstances or age of the receivable. Refer to Note 6, "Balance Sheet Information," to the Consolidated Financial Statements for more information. Inventories, net Cost of certain U.S. inventories is determined using the last-in, first-out (“LIFO”) method at the lower of cost or market, while other U.S. and foreign operations use the first-in, first-out (“FIFO”) or average-cost methods at the lower of cost or net realizable value. Inventory held by U.S. operations using the LIFO method was $193 million and $138 million at December 31, 2019 and 2018, respectively. Such inventories, if valued at current cost instead of LIFO, would have been greater by $15 million and $17 million at December 31, 2019 and 2018, respectively. Refer to Note 6, "Balance Sheet Information," to the Consolidated Financial Statements for more information. Pre-production costs related to long-term supply arrangements Engineering, research and development and other design and development costs for products sold on long-term supply arrangements are expensed as incurred unless the Company has a contractual guarantee for reimbursement from the customer. Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company has title to the assets are capitalized in property, plant and equipment and amortized to cost of sales over the shorter of the term of the arrangement or over the estimated useful lives of the assets, typically three to five years . Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company has a contractual guarantee for lump sum reimbursement from the customer are capitalized in prepayments and other current assets. Property, plant and equipment, net Property, plant and equipment is valued at cost less accumulated depreciation. Expenditures for maintenance, repairs and renewals of relatively minor items are generally charged to expense as incurred. Renewals of significant items are capitalized. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. Useful lives for buildings range from 15 to 40 years and useful lives for machinery and equipment range from three to 12 years. For income tax purposes, accelerated methods of depreciation are generally used. Refer to Note 6, "Balance Sheet Information," to the Consolidated Financial Statements for more information. Impairment of long-lived assets, including definite-lived intangible assets The Company reviews the carrying value of its long-lived assets, whether held for use or disposal, including other amortizing intangible assets, when events and circumstances warrant such a review under ASC Topic 360. In assessing long-lived assets for an impairment loss, assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In assessing long-lived assets for impairment, management generally considers individual facilities the lowest level for which identifiable cash flows are largely independent. A recoverability review is performed using the undiscounted cash flows if there is a triggering event. If the undiscounted cash flow test for recoverability identifies a possible impairment, management will perform a fair value analysis. Management determines fair value under ASC Topic 820 using the appropriate valuation technique of market, income or cost approach. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Management believes that the estimates of future cash flows and fair value assumptions are reasonable; however, changes in assumptions underlying these estimates could affect the valuations. Significant judgments and estimates used by management when evaluating long-lived assets for impairment include: (i) an assessment as to whether an adverse event or circumstance has triggered the need for an impairment review; (ii) undiscounted future cash flows generated by the asset; and (iii) fair valuation of the asset. Assets and liabilities held for sale The Company classifies assets and liabilities (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal group; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond the Company's control extend the period of time required to sell the disposal group beyond one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group, if material, in the line items assets held for sale and liabilities held for sale in the Consolidated Balance Sheets. Additionally, depreciation is not recorded during the period in which the long-lived assets, included in the disposal group, are classified as held for sale. Goodwill and other indefinite-lived intangible assets During the fourth quarter of each year, the Company qualitatively assesses its goodwill assigned to each of its reporting units. This qualitative assessment evaluates various events and circumstances, such as macro economic conditions, industry and market conditions, cost factors, relevant events and financial trends, that may impact a reporting unit's fair value. Using this qualitative assessment, the Company determines whether it is more-likely-than-not the reporting unit's fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not the reporting unit's fair value exceeds the carrying value, or upon consideration of other factors, including recent acquisition, restructuring or divestiture activity or to refresh the fair values, the Company performs a quantitative, "step one," goodwill impairment analysis. In addition, the Company may test goodwill in between annual test dates if an event occurs or circumstances change that could more-likely-than-not reduce the fair value of a reporting unit below its carrying value. Similar to goodwill, the Company can elect to perform the impairment test for indefinite-lived intangibles other than goodwill (primarily trade names) using a qualitative analysis, considering similar factors as outlined in the goodwill discussion in order to determine if it is more-likely-than-not that the fair value of the trade names is less than the respective carrying values. If the Company elects to perform or is required to perform a quantitative analysis, the test consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset as of the impairment testing date. The Company estimates the fair value of indefinite-lived intangibles using the relief-from-royalty method, which it believes is an appropriate and widely used valuation technique for such assets. The fair value derived from the relief-from-royalty method is measured as the discounted cash flow savings realized from owning such trade names and not being required to pay a royalty for their use. Refer to Note 7, "Goodwill and Other Intangibles," to the Consolidated Financial Statements for more information. Product warranties The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one to three years . Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and industry developments and recoveries from third parties. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty claims. Management believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual. The product warranty accrual is allocated to current and non-current liabilities in the Consolidated Balance Sheets. Refer to Note 8, "Product Warranty," to the Consolidated Financial Statements for more information. Other loss accruals and valuation allowances The Company has numerous other loss exposures, such as customer claims, workers' compensation claims, litigation and recoverability of assets. Establishing loss accruals or valuation allowances for these matters requires the use of estimates and judgment in regard to the risk exposure and ultimate realization. The Company estimates losses under the programs using consistent and appropriate methods; however, changes to its assumptions could materially affect the recorded accrued liabilities for loss or asset valuation allowances. Asbestos Like many other industrial companies that have historically operated in the United States, the Company, or parties that the Company is obligated to indemnify, has been named as one of many defendants in asbestos-related personal injury actions. BorgWarner Morse TEC LLC ("Morse TEC"), a former wholly-owned subsidiary of the Company, was the obligor for the Company's recorded asbestos-related liabilities and the policyholder of the related insurance assets. On October 30, 2019, the Company transferred 100% of its equity interests to Enstar Holdings (US) LLC (“Enstar”). In the fourth quarter of 2019, the Company derecognized Morse TEC and removed asbestos obligations, related insurance assets and associated deferred tax assets from the Consolidated Balance Sheet. With the assistance of a third-party actuary, the Company estimated the liability and corresponding insurance recovery for pending and future claims not yet asserted to extend through December 31, 2064 with a runoff through 2074 and defense costs. This estimate was based on the Company's historical claim experience and estimates of the number and resolution cost of potential future claims that may be filed based on anticipated levels of unique plaintiff asbestos-related claims in the U.S. tort system against all defendants. As with any estimates, actual experience may differ. This estimate was not discounted to present value. The Company believed that December 31, 2074 was a reasonable assumption as to the last date on which it was likely to have resolved all asbestos-related claims, based on the nature and useful life of the Company’s products and the likelihood of incidence of asbestos-related disease in the U.S. population generally. The Company assessed the sufficiency of its estimated liability for pending and future claims not yet asserted and defense costs by evaluating actual experience regarding claims filed, settled and dismissed, and amounts paid in claim resolution costs. In addition to claims experience, the Company considered additional quantitative and qualitative factors such as changes in legislation, the legal environment, and the Company's defense strategy. The Company continued to have additional excess insurance coverage available for potential future asbestos-related claims. In connection with the Company’s review of its asbestos-related claims, the Company also reviewed the amount of its potential insurance coverage for such claims, taking into account the remaining limits of such coverage, the number and amount of claims on the Company's insurance from co-insured parties, ongoing litigation against the Company’s insurance carriers, potential remaining recoveries from insolvent insurance carriers, the impact of previous insurance settlements, and coverage available from solvent insurance carriers not party to the coverage litigation. Refer to Note 15, "Contingencies," to the Consolidated Financial Statements for more information. Environmental contingencies The Company accounts for environmental costs in accordance with ASC Topic 450. Costs related to environmental assessments and remediation efforts at operating facilities are accrued when it is probable that a liability has been incurred and the amount of that liability can be reasonably estimated. Estimated costs are recorded at undiscounted amounts, based on experience and assessments and are regularly evaluated. The liabilities are recorded in accounts payable and accrued expenses and other non-current liabilities in the Company's Consolidated Balance Sheets. Refer to Note 15, "Contingencies," to the Consolidated Financial Statements for more information. Derivative financial instruments The Company recognizes that certain normal business transactions generate risk. Examples of risks include exposure to exchange rate risk related to transactions denominated in currencies other than the functional currency, changes in commodity costs and interest rates. It is the objective of the Company to assess the impact of these transaction risks and offer protection from selected risks through various methods, including financial derivatives. Virtually all derivative instruments held by the Company are designated as hedges, have high correlation with the underlying exposure and are highly effective in offsetting underlying price movements. Accordingly, gains and losses from changes in qualifying hedge fair values are matched with the underlying transactions. Hedge instruments are generally reported gross, with no right to offset, on the Consolidated Balance Sheets at their fair value based on quoted market prices for contracts with similar maturities. The Company does not engage in any derivative transactions for purposes other than hedging specific risks. Refer to Note 11, "Financial Instruments," to the Consolidated Financial Statements for more information. Foreign currency 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 the functional currency for substantially all of the Company's foreign subsidiaries. Translation adjustments for foreign subsidiaries are recorded as a component of accumulated other comprehensive income (loss) in equity. The Company recognizes transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency in earnings as incurred. Refer to Note 14, "Accumulated Other Comprehensive Loss," to the Consolidated Financial Statements for more information. Pensions and other postretirement employee defined benefits The Company's defined benefit pension and other postretirement employee benefit plans are accounted for in accordance with ASC Topic 715. Disability, early retirement and other postretirement employee benefits are accounted for in accordance with ASC Topic 712. Pensions and other postretirement employee benefit costs and related liabilities and assets are dependent upon assumptions used in calculating such amounts. These assumptions include discount rates, expected returns on plan assets, health care cost trends, compensation and other factors. In accordance with GAAP, actual results that differ from the assumptions used are accumulated and amortized over future periods, and accordingly, generally affect recognized expense in future periods. Refer to Note 12, "Retirement Benefit Plans," to the Consolidated Financial Statements for more information. Restructuring Restructuring costs may occur when the Company takes action to exit or significantly curtail a part of its operations or implements a reorganization that affects the nature and focus of operations. A restructuring charge can consist of severance costs associated with reductions to the workforce, costs to terminate an operating lease or contract, professional fees and other costs incurred related to the implementation of restructuring activities. The Company generally records costs associated with voluntary separations at the time of employee acceptance. Costs for involuntary separation programs are recorded when management has approved the plan for separation, the employees are identified and aware of the benefits they are entitled to and it is unlikely that the plan will change significantly. When a plan of separation requires approval by or consultation with the relevant labor organization or government, the costs are recorded upon agreement. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period. Refer to Note 16, "Restructuring," to the Consolidated Financial Statements for more information. Income taxes In accordance with ASC Topic 740, the Company's income tax expense is calculated based on expected income and statutory tax rates in the various jurisdictions in which the Company operates and requires the use of management's estimates and judgments. Accounting for income taxes is complex, in part because the Company conducts business globally and therefore files income tax returns in numerous tax jurisdictions. Management judgment is required in determining the Company’s worldwide provision for income taxes and recording the related assets and liabilities, including accruals for unrecognized tax benefits. The determination of accruals for unrecognized tax benefits includes the application of complex tax laws in a multitude of jurisdictions across the Company's global operations. Management judgment is required in determining the gross unrecognized tax benefits related liabilities. In the ordinary course of the Company's business, there are many transactions and calculations where the ultimate tax determination is less than certain. Accruals for unrecognized tax benefits are established when, despite the belief that tax positions are supportable, there remain certain positions that do not meet the minimum probability threshold, which is a tax position that is more-likely-than-not to be sustained upon examination by the applicable taxing authority. Refer to Note 5, "Income Taxes," to the Consolidated Financial Statements for more information. New Accounting Pronouncements Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)." Under this guidance, a lease is a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lessees are required to recognize a right-of-use asset and a lease liability for leases with a term of more than 12 months, including operating leases defined under previous GAAP. This guidance was effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted ASC Topic 842 as of January 1, 2019, using the optional transition method provided in ASU No. 2018-11, "Leases (Topic 842): Targeted Improvements." Under this method, the Company recorded an adjustment as of the effective date and did not include any retrospective adjustments to comparative periods to reflect the adoption of ASC Topic 842. In addition, the Company elected the package of practical expedients permitted under the transition guidance within ASC Topic 842, which among other things, does not require the Company to reassess whether existing contracts contain leases, classification of leases identified, nor classification and treatment of initial direct costs capitalized under ASC Topic 840. The Company also elected the practical expedients to combine the lease and non-lease components. The Company did not elect the practical expedient to apply hindsight as part of the leases evaluation. Additionally, the Company elected the practical expedient under ASU No. 2018-01, "Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842", which allows an entity to not reassess whether any existing land easements are or contain leases. The Company's lease agreements primarily consist of real estate property, such as manufacturing facilities, warehouses, and office buildings, in addition to personal property, such as vehicles, manufacturing and information technology equipment. The Company determines whether a contract is or contains a lease at contract inception. The majority of the Company's lease arrangements are comprised of fixed payments and a limited number of these arrangements include a variable payment component based on certain index fluctuations. Adoption of ASC Topic 842 resulted in the recording of lease right-of-use assets ("lease assets") and lease liabilities of approximately $104 million and $103 million , respectively, as of January 1, 2019. The adoption did not impact consolidated net earnings and had no impact on cash flows. Refer to Note 17, "Leases and Commitments," to the Consolidated Financial Statements for more information. Accounting Standards Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.” The amendments in the standard remove certain exceptions to the general principles in Topic 740 and improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for interim and annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)." It requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance (Subtopic 350-40). This guidance is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)." The new standard (i) requires the removal of disclosures that are no longer considered cost beneficial; (ii) clarifies specific requirements of certain disclosures; (iii) adds new disclosure requirements, including the weighted average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and reasons for significant gains and losses related to changes in the benefit obligation. This guidance is effective for annual periods beginning after December 15, 2020 and early adoption is permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements and will include enhanced disclosures in the consolidated financial statements upon adoption. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820) ." It removes disclosure requirements on fair value measurements including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. It also amends and clarifies certain disclosures and adds new disclosure requirements including the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. The Company does not expect this guidance to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)." It replaces the current incurred loss impairment method with a new method that reflects expected credit losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | REVENUE FROM CONTRACTS WITH CUSTOMERS The Company manufactures and sells products, primarily to OEMs of light vehicles, and to a lesser extent, to other OEMs of commercial vehicles and off-highway vehicles, to certain Tier One vehicle systems suppliers and into the aftermarket. Although the Company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the life of the arrangements, and a contract does not exist for purposes of applying ASC Topic 606, "Revenue from Contracts with Customers" , until volumes are contractually known. Revenue is recognized when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of our products. For most of our products, transfer of control occurs upon shipment or delivery; however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer using the input cost-to-cost method. The Company recorded a contract asset of $10 million and $11 million at December 31, 2019 and December 31, 2018, respectively, for these arrangements. These amounts are reflected in Prepayments and other current assets in the Company's Consolidated Balance Sheets. Revenue is measured at the amount of consideration we expect to receive in exchange for transferring the goods. The Company has a limited number of arrangements with customers where the price paid by the customer is dependent on the volume of product purchased over the term of the arrangement. In other limited arrangements, the Company will provide a rebate to customers based on the volume of products purchased during the course of the arrangement. The Company estimates the volumes to be sold over the term of the arrangement and recognizes revenue based on the estimated amount of consideration to be received from these arrangements. As a result of these arrangements, the Company recognized a liability of $2 million and $6 million at December 31, 2019 and December 31, 2018. These amounts are reflected in Accounts payable and accrued expenses in the Company's Consolidated Balance Sheets. The Company’s payment terms with customers are customary and vary by customer and geography but typically range from 30 to 90 days . We have evaluated the terms of our arrangements and determined that they do not contain significant financing components. The Company provides warranties on some of its products. Provisions for estimated expenses related to product warranty are made at the time products are sold. Refer to Note 8, "Product Warranty," to the Consolidated Financial Statements for more information. Shipping and handling fees billed to customers are included in sales, while costs of shipping and handling are included in cost of sales. The Company has elected to apply the accounting policy election available under ASC Topic 606 and accounts for shipping and handling activities as a fulfillment cost. In limited instances, certain customers have provided payments in advance of receiving related products, typically at the onset of an arrangement prior to the beginning of production. These contract liabilities are reflected in Accounts payable and accrued expenses and Other non-current liabilities in the Company's Consolidated Balance Sheets and were $10 million and $12 million at December 31, 2019 and $13 million and $17 million at December 31, 2018, respectively. These amounts are reflected as revenue over the term of the arrangement (typically 3 to 7 years) as the underlying products are shipped. The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. The Company evaluates the underlying economics of each amount of consideration payable to a customer to determine the proper accounting by understanding the reasons for the payment, the rights and obligations resulting from the payment, the nature of the promise in the contract, and other relevant facts and circumstances. When the Company determines that the payments are incremental and incurred only if the new business is obtained and expects to recover these amounts from the customer over the term of the new business arrangement, the Company capitalizes these amounts. The Company recognizes a reduction to revenue as products that the upfront payments are related to are transferred to the customer, based on the total amount of products expected to be sold over the term of the arrangement (generally 3 to 7 years). The Company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement. The Company had $37 million and $29 million recorded in Prepayments and other current assets, and $180 million and $187 million recorded in Other non-current assets in the Consolidated Balance Sheets at December 31, 2019 and December 31, 2018. The following table represents a disaggregation of revenue from contracts with customers by segment and region: Year Ended December 31, 2019 ( In millions ) Engine Drivetrain Total North America $ 1,584 $ 1,791 $ 3,375 Europe 2,980 830 3,810 Asia 1,468 1,365 2,833 Other 121 29 150 Total $ 6,153 $ 4,015 $ 10,168 Year Ended December 31, 2018 ( In millions ) Engine Drivetrain Total North America $ 1,573 $ 1,799 $ 3,372 Europe 3,074 948 4,022 Asia 1,621 1,362 2,983 Other 122 31 153 Total $ 6,390 $ 4,140 $ 10,530 Year Ended December 31, 2017 ( In millions ) Engine Drivetrain Total North America $ 1,509 $ 1,691 $ 3,200 Europe 2,783 952 3,735 Asia 1,615 1,116 2,731 Other 102 31 133 Total $ 6,009 $ 3,790 $ 9,799 |
Research and Development Costs
Research and Development Costs | 12 Months Ended |
Dec. 31, 2019 | |
Research and Development [Abstract] | |
Research and development costs | RESEARCH AND DEVELOPMENT COSTS The Company's net Research & Development ("R&D") expenditures are 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. The following table presents the Company’s gross and net expenditures on R&D activities: Year Ended December 31, (in millions) 2019 2018 2017 Gross R&D expenditures $ 498 $ 512 $ 473 Customer reimbursements (85 ) (72 ) (65 ) Net R&D expenditures $ 413 $ 440 $ 408 Net R&D expenditures as a percentage of net sales were 4.1% , 4.2% and 4.2% for the years ended December 31, 2019, 2018 and 2017, respectively. The Company has contracts with several customers at the Company's various R&D locations. None of the Company's R&D-related customer reimbursements under these contracts exceeded 5% of net R&D expenditures in any of the periods presented. |
Other (Income) Expense, Net
Other (Income) Expense, Net | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Other expense, net | OTHER (INCOME) EXPENSE, NET Items included in Other (income) expense, net consist of: Year Ended December 31, (in millions) 2019 2018 2017 Gain on derecognition of subsidiary $ (177 ) $ — $ — Restructuring expense 72 67 58 Unfavorable arbitration loss 14 — — Merger, acquisition and divestiture expense 11 6 10 Asset impairment and loss on divestiture 7 25 71 Asbestos-related adjustments — 23 — Gain on sale of building — (19 ) — Gain on commercial settlement — (4 ) — Lease termination settlement — — 5 Other income (2 ) (4 ) — Other (income) expense, net $ (75 ) $ 94 $ 144 On October 30, 2019, the Company entered into a definitive agreement with Enstar, a subsidiary of Enstar Group Limited, pursuant to which Enstar acquired 100% of the equity interests of Morse TEC, a consolidated wholly-owned subsidiary of the Company that holds asbestos and certain other liabilities. In connection with the closing, the Company recorded a pre-tax gain of $177 million . Refer to Note 19 “Recent Transactions,” to the Consolidated Financial Statements for more information. During the year ended December 31, 2019 the Company recorded $72 million of restructuring expense, primarily related to actions to reduce structural costs. During the years ended December 31, 2018 and 2017, the Company recorded restructuring expense of $67 million and $58 million , respectively, primarily related to Drivetrain and Engine segment actions designed to improve future profitability and competitiveness. Refer to Note 16, "Restructuring," to the Consolidated Financial Statements for more information. During the year ended December 31, 2019, the Company recorded $14 million of expense related to the receipt of a final unfavorable arbitration decision associated with the resolution of a matter related to a previous acquisition. During the years ended December 31, 2019, 2018 and 2017, the Company recorded $11 million , $6 million and $10 million of merger, acquisition and divestiture expenses. The merger, acquisition and divestiture expense in the year ended December 31, 2019 was primarily professional fees, related to the Company's review of strategic acquisition and divestiture targets, including the transfer of Morse TEC, the anticipated acquisition of Delphi Technologies PLC, and the 20% equity interest in Romeo Systems, Inc. and the divestiture activities for the non-core pipes and thermostat product lines. The merger, acquisition and divestiture expense in the year ended December 31, 2018 primarily related to professional fees associated with divestiture activities for the non-core pipes and thermostat product lines. Refer to Note 20, "Assets and Liabilities Held For Sale," to the Consolidated Financial Statements for more information. The merger and acquisition expense in the year ended December 31, 2017 primarily related to the acquisition of Sevcon. Refer to Note 19, "Recent Transactions," to the Consolidated Financial Statements for more information. In the third quarter of 2017, the Company started exploring strategic options for non-core emission product lines. In the fourth quarter of 2017, the Company launched an active program to locate a buyer for these non-core pipes and thermostat product lines and initiated all other actions required to complete the plan to sell these non-core product lines. The Company determined that the assets and liabilities of the pipes and thermostat product lines met the held for sale criteria as of December 31, 2017. As a result, the Company recorded an asset impairment expense of $71 million in the fourth quarter of 2017 to adjust the net book value of this business to its fair value less cost to sell. In December 2018, the Company reached an agreement to sell its thermostat product lines for approximately $28 million . As a result, the Company recorded an additional asset impairment expense of $25 million in the year ended December 31, 2018 to adjust the net book value of this business to fair value less costs to sell. All closing conditions were satisfied, and the sale was closed on April 1, 2019. Based on the agreement reached in the fourth quarter of 2019 regarding the finalization of the purchase price adjustments related to the sale of the thermostat product lines, the Company determined that $7 million of additional loss on sale was required during the year ended December 31, 2019. During the year ended December 31, 2018, the Company recorded asbestos-related adjustments resulting in an increase to Other (income) expense, net, of $23 million . This increase was the result of actuarial valuation changes of $23 million associated with the Company's estimate of liabilities for asbestos-related claims asserted but not yet resolved and potential claims not yet asserted. Refer to Note 15, "Contingencies," to the Consolidated Financial Statements for more information. During the fourth quarter of 2018, the Company recorded a gain of $19 million related to the sale of a building at a manufacturing facility located in Europe. During the year ended December 31, 2018, the Company recorded a gain of approximately $4 million related to the settlement of a commercial contract for an entity acquired in the 2015 Remy acquisition. During the first quarter of 2017, the Company recorded a loss of $5 million related to the termination of a long-term property lease for a manufacturing facility located in Europe. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | INCOME TAXES Earnings before income taxes and the provision for income taxes are presented in the following table. Year Ended December 31, (in millions) 2019 2018 2017 Earnings before income taxes: U.S. $ 310 $ 220 $ 203 Non-U.S. 955 976 860 Total $ 1,265 $ 1,196 $ 1,063 Provision for income taxes: Current: Federal $ 32 $ 17 $ 36 State 4 5 5 Foreign 245 259 247 Total current 281 281 288 Deferred: Federal 150 (40 ) 324 State 23 (8 ) 2 Foreign 14 (22 ) (34 ) Total deferred 187 (70 ) 292 Total provision for income taxes $ 468 $ 211 $ 580 The provision for income taxes resulted in an effective tax rate of 37% , 17.7% and 54.7% for the years ended December 31, 2019, 2018 and 2017, respectively. An analysis of the differences between the effective tax rate and the U.S. statutory rate for the years ended December 31, 2019, 2018 and 2017 is presented below. On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act"), was enacted into law, which significantly changed existing U.S. tax law and included many provisions applicable to the Company, such as reducing the U.S. federal statutory tax rate, imposing a one-time transition tax on deemed repatriation of deferred foreign income, and adopting a territorial tax system. The Tax Act reduced the U.S. federal statutory tax rate from 35% to 21% effective January 1, 2018. The Tax Act also includes a provision to tax Global Intangible Low-Taxed Income (“GILTI”) of foreign subsidiaries, a special tax deduction for Foreign-Derived Intangible Income (“FDII”), and a Base Erosion Anti-Abuse (“BEAT”) tax measure that may tax certain payments between a U.S. corporation and its subsidiaries. These additional provisions of the Tax Act were effective beginning January 1, 2018. In accordance with guidance provided by Staff Accounting Bulletin No 118 (SAB 118), as of December 31, 2017, the Company had not completed its accounting for the tax effects of the Tax Act and had recorded provisional estimates for significant items including the following: (i) the effects on existing deferred balances, including executive compensation, (ii) the one-time transition tax, and (iii) its indefinite reinvestment assertion. In light of the treatment of foreign earnings under the Tax Act, the Company reconsidered its indefinite reinvestment position and concluded it would no longer assert indefinite reinvestment with respect to the Company's foreign unremitted earnings as of December 31, 2017. The Company recognized income tax expense of $274 million for the year ended December 31, 2017 for the significant items it could reasonably estimate associated with the Tax Act. This amount was comprised of (i) a revaluation of U.S. deferred tax assets and liabilities at December 31, 2017, resulting in a tax charge of $75 million , including $11 million for executive compensation (ii) a one-time transition tax resulting in a tax charge of $105 million and (iii) a tax charge of $94 million for additional provisional deferred tax liabilities with respect to the expected future remittance of foreign earnings. For the year ended December 31, 2018, the Company completed its accounting for the tax effects of the Tax Act. The final SAB 118 adjustments resulted in: (i) an increase in the Company's existing deferred tax asset balances of $13 million , including $9 million for executive compensation (ii) a tax charge of $8 million for the one-time transition tax, and (iii) a decrease in the deferred tax liability associated with its indefinite reinvestment assertion of $7 million . The total impact to tax expense from these adjustments was a net tax benefit of $13 million . Compared to the year ended December 31, 2017, this additional tax benefit from the final adjustments was a result of further analysis performed by the Company and the issuance of additional regulatory guidance. In 2018, the Company made an accounting policy election to treat the future tax impacts of the GILTI provisions of the Tax Act as a period cost to the extent applicable. As discussed above, in light of the treatment of foreign earnings under the Tax Act, the Company reconsidered its indefinite reinvestment position with respect to its foreign unremitted earnings in 2017, and the Company is no longer asserting indefinite reinvestment with respect to its foreign unremitted earnings. The Company recorded a deferred tax liability of $56 million with respect to its foreign unremitted earnings at December 31, 2019. With respect to certain book versus tax basis differences not represented by undistributed earnings of approximately $400 million as of December 31, 2019, the Company continues to assert indefinite reinvestment of these basis differences. These basis differences would become taxable upon the sale or liquidation of the foreign subsidiaries. The Company's best estimate of the unrecognized deferred tax liability on these basis differences is approximately $20 million as of December 31, 2019. The following table provides a reconciliation of tax expense based on the U.S. statutory tax rate to final tax expense. Year Ended December 31, (in millions) 2019 2018 2017 Income taxes at U.S. statutory rate of 21% for 2019 and 2018 (35% for 2017) $ 266 $ 251 $ 372 Increases (decreases) resulting from: Impact of transactions 124 (1 ) 4 Reserve adjustments, settlements and claims 46 32 8 Foreign rate differentials 35 28 (100 ) Net tax on remittance of foreign earnings 22 (22 ) 80 U.S. tax on non-U.S. earnings 15 37 171 Other foreign taxes 10 8 8 State taxes, net of federal benefit 3 6 2 Non-deductible transaction costs 3 3 11 Impact of foreign derived intangible income (1 ) (15 ) — Valuation allowance adjustments (2 ) (11 ) 12 Affiliates' earnings (7 ) (10 ) (18 ) Changes in accounting methods and filing positions (7 ) (30 ) (2 ) Tax credits (17 ) (26 ) (24 ) Tax holidays (26 ) (28 ) (31 ) Revaluation of U.S. deferred taxes — (4 ) 64 Other 4 (7 ) 23 Provision for income taxes, as reported $ 468 $ 211 $ 580 The change in the effective tax rate for 2019, as compared to 2018, was primarily due to the derecognition of Morse TEC and items related to the Tax Act. The derecognition of Morse TEC resulted in an increase in income tax expense of $173 million for the reversal of the asbestos-related deferred tax assets. This amount is offset in the rate reconciliation above by a benefit of $37 million representing the impact of the nontaxable pre-tax gain of $177 million .The items related to the Tax Act include an increase in tax expense of $22 million due to the U.S. Department of the Treasury’s issuance of the final regulations in the first quarter of 2019 related to the calculation of the one-time transition tax. Additionally, the Company recorded a tax expense of $22 million on net remittance of foreign earnings in 2019 compared to a tax benefit recorded in 2018. The tax benefit in 2018 is related to the refinement in the Company’s change in the indefinite reinvestment assertion. The Company's provision for income taxes for the year ended December 31, 2019 includes an increase in income tax expense for the items mentioned above. In addition, the provision for income taxes also includes reductions of income tax expense of $19 million related to restructuring and merger, acquisition and divestiture expense, $11 million for a global realignment plan, $8 million related to other one-time adjustments and $6 million related to pension settlement loss. The change in the effective tax rate for 2018, as compared to 2017, was primarily due to items related to the Tax Act. The Tax Act includes a reduction in the US income tax rate from 35% to 21% , as of January 1, 2018. Tax expense includes a provision for GILTI of $29 million , net of foreign tax credits and a tax benefit for FDII of $15 million that was not applicable in 2017. The one-time transition tax that resulted in a tax charge of $105 million in 2017 was not applicable in 2018. There was also a tax charge of $75 million related to a revaluation of U.S. deferred tax assets and liabilities, including $11 million for executive compensation in 2017 and the initial tax charge of $94 million related to the Company’s change in indefinite reinvestment assertion with respect to the expected future remittance of undistributed foreign earnings in 2017. The Company's provision for income taxes for the year ended December 31, 2018 includes reductions of income tax expense of $15 million related to restructuring expense, $6 million related to the asbestos-related adjustments, and $8 million related to asset impairment expense, offset by increases to tax expense of $1 million and $6 million related to a gain on commercial settlement and a gain on the sale of a building, respectively, discussed in Note 4, "Other (Income) Expense, Net," to the Consolidated Financial Statements. The provision for income taxes also includes reductions of income tax expense of $13 million related to final adjustments made to measurement period provisional estimates associated with the Tax Act, $22 million related to a decrease in the Company's deferred tax liability due to a tax benefit for certain foreign tax credits now available due to actions the Company took during the year, $9 million related to valuation allowance releases, $3 million related to tax reserve adjustments, and $30 million related to changes in accounting methods and tax filing positions for prior years primarily related to the Tax Act. The Company's provision for income taxes for the year ended December 31, 2017 includes reductions of income tax expense of $10 million , $1 million , $18 million and $4 million related to the restructuring expense, merger and acquisition expense, asset impairment expense and other one-time adjustments, respectively, discussed in Note 4, "Other (Income) Expense, Net," to the Consolidated Financial Statements. A roll forward of the Company's total gross unrecognized tax benefits for the years ended December 31, 2019 and 2018, respectively, is presented below: (in millions) 2019 2018 2017 Balance, January 1 $ 120 $ 92 $ 91 Additions based on tax positions related to current year 7 24 17 Additions/(reductions) for tax positions of prior years 26 18 (2 ) Reductions for closure of tax audits and settlements — (8 ) (20 ) Reductions for lapse in statute of limitations (6 ) — (1 ) Translation adjustment (1 ) (6 ) 7 Balance, December 31 $ 146 $ 120 $ 92 The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The amounts recognized in income tax expense for 2019 and 2018 are $15 million and $10 million , respectively. The Company has an accrual of approximately $46 million and $32 million for the payment of interest and penalties at December 31, 2019 and 2018, respectively. As of December 31, 2019, approximately $144 million represents the amount that, if recognized, would affect the Company's effective income tax rate in future periods. This amount includes a decrease in U.S. federal income taxes that would occur upon recognition of the state tax benefits and U.S. foreign tax credits included therein. The Company estimates that approximately $5 million will be released in the next 12 months for the closure of an audit and the lapse in statute of limitations subsequent to the reporting period from certain taxing jurisdictions. The Company and/or one of its subsidiaries files income tax returns in the U.S. federal, various state jurisdictions and various foreign jurisdictions. In certain tax jurisdictions, the Company may have more than one taxpayer. The Company is no longer subject to income tax examinations by tax authorities in its major tax jurisdictions as follows: Tax jurisdiction Years no longer subject to audit Tax jurisdiction Years no longer subject to audit U.S. Federal 2014 and prior Japan 2018 and prior China 2012 and prior Mexico 2013 and prior France 2015 and prior Poland 2013 and prior Germany 2011 and prior South Korea 2013 and prior Hungary 2013 and prior In the U.S. , certain tax attributes created in years prior to 2015 were subsequently utilized. Even though the U.S. federal statute of limitations has expired for years prior to 2015, the years in which these tax attributes were created could still be subject to examination, limited to only the examination of the creation of the tax attribute . The components of deferred tax assets and liabilities as of December 31, 2019 and 2018 consist of the following: December 31, (in millions) 2019 2018 Deferred tax assets: Research and development capitalization $ 74 $ 92 Net operating loss and capital loss carryforwards 70 84 Other comprehensive loss 53 64 Unrecognized tax benefits 49 41 Employee compensation 32 24 Pension and other postretirement benefits 25 19 State tax credits 21 20 Warranty 15 14 Foreign tax credits 13 — Asbestos-related — 172 Other 67 80 Total deferred tax assets $ 419 $ 610 Valuation allowance (71 ) (86 ) Net deferred tax asset $ 348 $ 524 Deferred tax liabilities: Goodwill and intangible assets (174 ) (183 ) Fixed assets (144 ) (118 ) Unremitted foreign earnings (56 ) (57 ) Other (20 ) (19 ) Total deferred tax liabilities $ (394 ) $ (377 ) Net deferred taxes $ (46 ) $ 147 At December 31, 2019, certain non-U.S. subsidiaries have net operating loss carryforwards totaling $212 million available to offset future taxable income. Of the total $212 million , $147 million expire at various dates from 2020 through 2039 and the remaining $65 million have no expiration date. The Company has a valuation allowance recorded against $134 million of the $212 million of non-U.S. net operating loss carryforwards. The Company has a U.S. foreign tax credit carryover of $13 million , which is partially offset by a valuation allowance of $2 million . Certain U.S. subsidiaries have state net operating loss carryforwards totaling $571 million , which are largely offset by a valuation allowance of $504 million . The state net operating loss carryforwards expire at various dates from 2020 to 2039. Certain U.S. subsidiaries also have state tax credit carryforwards of $21 million which are partially offset by a valuation allowance of $19 million . Certain non-U.S. subsidiaries located in China had tax exemptions or tax holidays, which reduced local tax expense approximately $26 million and $28 million in 2019 and 2018, respectively. The tax holidays for these subsidiaries are issued in three -year terms with expirations for certain subsidiaries ranging from 2019 to 2021. |
Balance Sheet Information
Balance Sheet Information | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet information | BALANCE SHEET INFORMATION Detailed balance sheet data is as follows: December 31, (in millions) 2019 2018 Receivables, net: Customers $ 1,713 $ 1,728 Indirect taxes 106 114 Other 108 153 Gross receivables 1,927 1,995 Bad debt allowance (a) (6 ) (7 ) Total receivables, net $ 1,921 $ 1,988 Inventories, net: Raw material and supplies $ 502 $ 485 Work in progress 113 114 Finished goods 207 199 FIFO inventories 822 798 LIFO reserve (15 ) (17 ) Total inventories, net $ 807 $ 781 Prepayments and other current assets: Prepaid taxes $ 95 $ 84 Prepaid tooling 83 83 Other 98 83 Total prepayments and other current assets $ 276 $ 250 Property, plant and equipment, net: Land and land use rights $ 105 $ 108 Buildings 755 763 Machinery and equipment 2,971 2,851 Capital leases 1 3 Construction in progress 360 426 Property, plant and equipment, gross 4,192 4,151 Accumulated depreciation (1,513 ) (1,474 ) Property, plant and equipment, net, excluding tooling 2,679 2,677 Tooling, net of amortization 246 227 Property, plant and equipment, net $ 2,925 $ 2,904 Investments and other long-term receivables: Investment in equity affiliates $ 256 $ 244 Cost method investments 60 8 Other long-term asbestos-related insurance receivables* — 303 Other long-term receivables* 2 37 Total investments and other long-term receivables $ 318 $ 592 Other non-current assets: Operating leases $ 85 $ — Deferred income taxes* 79 198 Deferred asbestos-related insurance asset* — 83 Other 215 221 Total other non-current assets $ 379 $ 502 December 31, (in millions) 2019 2018 Accounts payable and accrued expenses: Trade payables $ 1,325 $ 1,485 Payroll and employee related 233 233 Customer related 71 49 Product warranties 63 56 Indirect taxes 61 73 Severance 34 25 Operating leases 18 — Interest 18 19 Insurance 17 12 Retirement related 15 16 Dividends payable to noncontrolling shareholders 14 17 Asbestos-related* — 50 Other 108 109 Total accounts payable and accrued expenses $ 1,977 $ 2,144 Other non-current liabilities: Deferred income taxes $ 125 $ 51 Operating leases 67 — Product warranties 53 47 Deferred revenue 49 51 Other 255 208 Total other non-current liabilities $ 549 $ 357 ________________ * Relates to the derecognition of Morse TEC, refer to Note 19, “Recent Transactions” to the Consolidated Financial Statements for more information. (a) Bad debt allowance: 2019 2018 2017 Beginning balance, January 1 $ (7 ) $ (6 ) $ (3 ) Provision (1 ) (5 ) (3 ) Write-offs 2 4 — Ending balance, December 31 $ (6 ) $ (7 ) $ (6 ) As of December 31, 2019 and December 31, 2018, accounts payable of $102 million and $104 million , respectively, were related to property, plant and equipment purchases. Interest costs capitalized for the years ended December 31, 2019, 2018 and 2017 were $16 million , $22 million and $20 million , respectively. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangibles | GOODWILL AND OTHER INTANGIBLES During the fourth quarter of each year, the Company qualitatively assesses its goodwill assigned to each of its reporting units. This qualitative assessment evaluates various events and circumstances, such as macro economic conditions, industry and market conditions, cost factors, relevant events and financial trends, that may impact a reporting unit's fair value. Using this qualitative assessment, the Company determines whether it is more-likely-than-not the reporting unit's fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not the reporting unit's fair value exceeds the carrying value, or upon consideration of other factors, including recent acquisition, restructuring or divestiture activity or to refresh the fair values, the Company performs a quantitative, "step one," goodwill impairment analysis. In addition, the Company may test goodwill in between annual test dates if an event occurs or circumstances change that could more-likely-than-not reduce the fair value of a reporting unit below its carrying value. During the fourth quarter of 2019, the Company performed an analysis on each reporting unit. Based on the factors above, the Company elected to perform quantitative, "step one," goodwill impairment analyses, on three reporting units. This requires the Company to make significant assumptions and estimates about the extent and timing of future cash flows, discount rates and growth rates. The basis of this goodwill impairment analysis is the Company's annual budget and long-range plan (“LRP”). The annual budget and LRP includes a five-year projection of future cash flows based on actual new products and customer commitments and assumes the last year of the LRP data is a fair indication of the future performance. Because the LRP is estimated over a significant future period of time, those estimates and assumptions are subject to a high degree of uncertainty. Further, the market valuation models and other financial ratios used by the Company require certain assumptions and estimates regarding the applicability of those models to the Company's facts and circumstances. The Company believes the assumptions and estimates used to determine the estimated fair value are reasonable. Different assumptions could materially affect the estimated fair value. The primary assumptions affecting the Company's December 31, 2019 goodwill quantitative, "step one," impairment review are as follows: • Discount rate: the Company used a 10.7% weighted average cost of capital (“WACC”) as the discount rate for future cash flows. The WACC is intended to represent a rate of return that would be expected by a market participant. • Operating income margin: the Company used historical and expected operating income margins, which may vary based on the projections of the reporting unit being evaluated. • Revenue growth rate: the Company used a global automotive market industry growth rate forecast adjusted to estimate its own market participation for product lines. I n addition to the above primary assumptions, the Company notes the following risks to volume and operating income assumptions that could have an impact on the discounted cash flow models: • The automotive industry is cyclical, and the Company's results of operations would be adversely affected by industry downturns. • The Company is dependent on market segments that use our key products and would be affected by decreasing demand in those segments. • The Company is subject to risks related to international operations. Based on the assumptions outlined above, the impairment testing conducted in the fourth quarter of 2019 indicated the Company's goodwill assigned to the reporting units that were quantitatively assessed were not impaired and contained fair values substantially higher than the reporting units' carrying values. Additionally, for the reporting units quantitatively assessed, sensitivity analyses were completed indicating that a one percentage point increase in the discount rate, a one percentage point decrease in the operating margin, or a one percentage point decrease in the revenue growth rate assumptions would not result in the carrying value exceeding the fair value. The changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2018 are as follows: 2019 2018 (in millions) Engine Drivetrain Engine Drivetrain Gross goodwill balance, January 1 $ 1,343 $ 1,012 $ 1,360 $ 1,024 Accumulated impairment losses, January 1 (502 ) — (502 ) — Net goodwill balance, January 1 $ 841 $ 1,012 $ 858 $ 1,024 Goodwill during the year: Acquisitions* — 7 — 2 Translation adjustment and other (6 ) (12 ) (17 ) (14 ) Ending balance, December 31 $ 835 $ 1,007 $ 841 $ 1,012 ________________ * Acquisitions relate to the Company's 2019 purchase of Rinehart Motion Systems LLC and AM Racing LLC and the 2017 purchase of Sevcon. The Company’s other intangible assets, primarily from acquisitions, consist of the following: December 31, 2019 December 31, 2018 (in millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Amortized intangible assets: Patented and unpatented technology $ 154 $ 70 $ 84 $ 152 $ 61 $ 91 Customer relationships 481 224 257 490 201 289 Miscellaneous 10 4 6 8 4 4 Total amortized intangible assets 645 298 347 650 266 384 Unamortized trade names 55 — 55 55 — 55 Total other intangible assets $ 700 $ 298 $ 402 $ 705 $ 266 $ 439 Amortization of other intangible assets was $39 million , $40 million and $40 million for the years ended December 31, 2019, 2018 and 2017, respectively. The estimated useful lives of the Company's amortized intangible assets range from 3 to 20 years. The Company utilizes the straight line method of amortization recognized over the estimated useful lives of the assets. The estimated future annual amortization expense, primarily for acquired intangible assets, is as follows: $39 million in 2020, $38 million in 2021, $37 million in 2022, $31 million in 2023, and $31 million in 2024. A roll forward of the gross carrying amounts of the Company's other intangible assets is presented below: (in millions) 2019 2018 Beginning balance, January 1 $ 705 $ 730 Acquisitions* 5 — Translation adjustment (10 ) (25 ) Ending balance, December 31 $ 700 $ 705 ________________ * Acquisitions relate to the Company's 2019 purchase of Rinehart Motion Systems LLC and AM Racing LLC and the 2017 purchase of Sevcon. A roll forward of the accumulated amortization associated with the Company's other intangible assets is presented below: (in millions) 2019 2018 Beginning balance, January 1 $ 266 $ 237 Amortization 39 40 Translation adjustment (7 ) (11 ) Ending balance, December 31 $ 298 $ 266 |
Product Warranty
Product Warranty | 12 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Product warranty | PRODUCT WARRANTY The changes in the carrying amount of the Company’s total product warranty liability for the years ended December 31, 2019 and 2018 were as follows: (in millions) 2019 2018 Beginning balance, January 1 $ 103 $ 112 Provisions for current period sales 63 56 Adjustments of prior estimates 9 12 Payments (57 ) (73 ) Translation adjustment (2 ) (4 ) Ending balance, December 31 $ 116 $ 103 The product warranty liability is classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2019 2018 Accounts payable and accrued expenses $ 63 $ 56 Other non-current liabilities 53 47 Total product warranty liability $ 116 $ 103 |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes payable and long-term debt | NOTES PAYABLE AND LONG-TERM DEBT As of December 31, 2019 and 2018, the Company had short-term and long-term debt outstanding as follows: December 31, (in millions) 2019 2018 Short-term debt Short-term borrowings $ 34 $ 33 Long-term debt 8.00% Senior notes due 10/01/19 ($134 million par value) — 135 4.625% Senior notes due 09/15/20 ($250 million par value) 251 251 1.80% Senior notes due 11/7/22 (€500 million par value) 558 570 3.375% Senior notes due 03/15/25 ($500 million par value) 497 497 7.125% Senior notes due 02/15/29 ($121 million par value) 119 119 4.375% Senior notes due 03/15/45 ($500 million par value) 494 494 Term loan facilities and other 7 15 Total long-term debt $ 1,926 $ 2,081 Less: current portion 252 140 Long-term debt, net of current portion $ 1,674 $ 1,941 In July 2016, the Company terminated interest rate swaps which had the effect of converting $384 million of fixed rate notes to variable rates. The gain on the termination was recorded as an increase to the notes and is being amortized as a reduction to interest expense over the remaining terms of the notes. The unamortized gain related to these swap terminations was $1 million and $2 million as of December 31, 2019 and December 31, 2018, respectively, on the 4.625% notes. The Company may utilize uncommitted lines of credit for short-term working capital requirements. As of December 31, 2019 and 2018, the Company had $34 million and $33 million , respectively, in borrowings under these facilities, which are reported in Notes payable and short-term debt on the Consolidated Balance Sheets. The weighted average interest rate on short-term borrowings outstanding as of December 31, 2019 and 2018 was 2.5% and 4.3% , respectively. The weighted average interest rate on all borrowings outstanding, including the effects of outstanding swaps, as of December 31, 2019 and 2018 was 2.8% and 3.4% , respectively. Annual principal payments required as of December 31, 2019 are as follows: (in millions) 2020 $ 286 2021 3 2022 562 2023 1 2024 — After 2024 1,121 Total payments $ 1,973 Less: unamortized discounts 13 Total $ 1,960 The Company's long-term debt includes various covenants, none of which are expected to restrict future operations. The Company has a $1.2 billion multi-currency revolving credit facility, which includes a feature that allows the Company's facility to be increased to $1.5 billion with bank approval. The facility provides for borrowings through June 29, 2022 . The Company has one key financial covenant as part of the credit agreement which is a debt to EBITDA ("Earnings Before Interest, Taxes, Depreciation and Amortization") ratio. The Company was in compliance with the financial covenant at December 31, 2019. At December 31, 2019 and December 31, 2018, the Company had no outstanding borrowings under this facility. The Company's commercial paper program allows the Company to issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding of $1.2 billion . Under this program, the Company may issue notes from time to time and use the proceeds for general corporate purposes. The Company had no outstanding borrowings under this program as of December 31, 2019 and December 31, 2018. The total current combined borrowing capacity under the multi-currency revolving credit facility and commercial paper program cannot exceed $1.2 billion . As of December 31, 2019 and 2018, the estimated fair values of the Company's senior unsecured notes totaled $2,025 million and $2,058 million , respectively. The estimated fair values were $106 million higher than carrying value at December 31, 2019 and $8 million less than their carrying value at December 31, 2018. Fair market values of the senior unsecured notes are developed using observable values for similar debt instruments, which are considered Level 2 inputs as defined by ASC Topic 820. The carrying values of the Company's multi-currency revolving credit facility and commercial paper program approximate fair value. The fair value estimates do not necessarily reflect the values the Company could realize in the current markets. The Company had outstanding letters of credit of $28 million and $43 million at December 31, 2019 and 2018, respectively. The letters of credit typically act as guarantees of payment to certain third parties in accordance with specified terms and conditions. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | FAIR VALUE MEASUREMENTS ASC Topic 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair values as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC Topic 820: A. Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business. B. Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). C. Income approach: Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models). The following tables classify assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018: Basis of fair value measurements Balance at December 31, 2019 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique (in millions) Assets: Net investment hedge contracts $ 3 $ — $ 3 $ — A Liabilities: Foreign currency contracts $ 1 $ — $ 1 $ — A Net investment hedge contracts $ 8 $ — $ 8 $ — A Basis of fair value measurements (in millions) Balance at December 31, 2018 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets: Foreign currency contracts $ 3 $ — $ 3 $ — A Other long-term receivables (insurance settlement agreement note receivable) $ 34 $ — $ 34 $ — C Net investment hedge contracts $ 12 $ — $ 12 $ — A Liabilities: Foreign currency contracts $ 2 $ — $ 2 $ — A The following tables classify the Company's defined benefit plan assets measured at fair value on a recurring basis as of December 31, 2019 and 2018: Basis of fair value measurements (in millions) Balance at December 31, 2019 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV U.S. Plans: Fixed income securities $ 88 $ — $ — $ — — 88 Equity securities 59 8 — — A 51 Real estate and other 29 15 — — A 14 $ 176 $ 23 $ — $ — $ 153 Non-U.S. Plans: Fixed income securities $ 168 $ — $ — $ — — 168 Equity securities 185 111 — — A 74 Insurance contract and other 152 — — 110 C 42 $ 505 $ 111 $ — $ 110 $ 284 Basis of fair value measurements (in millions) Balance at December 31, 2018 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV (b) U.S. Plans: Fixed income securities $ 122 $ 1 $ — $ — A 121 Equity securities 71 11 — — A 60 Real estate and other 23 18 — — A 5 $ 216 $ 30 $ — $ — $ 186 Non-U.S. Plans: Fixed income securities $ 239 $ — $ — $ — — 239 Equity securities 163 93 — — A 70 Other 36 — — — — 36 $ 438 $ 93 $ — $ — $ 345 ________________ (a) In 2019, the BW Plan, a defined benefit plan in the United Kingdom, purchased an insurance contract that guarantees payment of specified pension liabilities. The Company measures the fair value of the insurance asset by projecting expected future cash flows from the contract and discounting them to present value based on current market rates, including an assessment for non-performance risk of the insurance company. The assumptions used to project expected future cash flows are based on actuarial estimates and are unobservable; therefore, the contract is categorized within Level 3 of the hierarchy. (b) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These amounts represent investments in commingled and managed funds which have underlying assets in fixed income securities, equity securities, and other assets. The reconciliation of Level 3 defined benefit plans assets was as follows: Fair Value Measurements (in millions) Using Significant Unobservable Inputs (Level 3) Balance at December 31, 2018 $ — Purchase of insurance contract 106 Unrealized gains on assets still held at the reporting date 2 Translation adjustment 2 Balance at December 31, 2019 $ 110 Refer to Note 12, "Retirement Benefit Plans," to the Consolidated Financial Statements for more detail surrounding the defined plan’s asset investment policies and strategies, target allocation percentages and expected return on plan asset assumptions. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial instruments | FINANCIAL INSTRUMENTS The Company’s financial instruments include cash and cash equivalents, marketable securities and accounts receivable. Due to the short-term nature of these instruments, their book value approximates their fair value. The Company’s financial instruments may include long-term debt, interest rate and cross-currency swaps, commodity derivative contracts and foreign currency derivative contracts. All derivative contracts are placed with counterparties that have an S&P, or equivalent, investment grade credit rating at the time of the contracts’ placement. At December 31, 2019 and 2018, the Company had no derivative contracts that contained credit-risk-related contingent features. The Company uses certain commodity derivative contracts to protect against commodity price changes related to forecasted raw material and component purchases. The Company primarily utilizes forward and option contracts, which are designated as cash flow hedges. At December 31, 2019 and December 31, 2018, the following commodity derivative contracts were outstanding. Commodity derivative contracts Volume hedged Volume hedged Commodity December 31, 2019 December 31, 2018 Units of measure Duration Copper 203 257 Metric Tons Dec - 20 The Company manages its interest rate risk by balancing its exposure to fixed and variable rates while attempting to optimize its interest costs. The Company selectively uses interest rate swaps to reduce market value risk associated with changes in interest rates (fair value hedges). At December 31, 2019 and December 31, 2018, the Company had no outstanding interest rate swaps. The Company uses foreign currency forward and option contracts to protect against exchange rate movements for forecasted cash flows, including capital expenditures, purchases, operating expenses or sales transactions designated in currencies other than the functional currency of the operating unit. In addition, the Company uses foreign currency forward contracts to hedge exposure associated with our net investment in certain foreign operations (net investment hedges). The Company has also designated its Euro-denominated debt as a net investment hedge of the Company's investment in a European subsidiary. Foreign currency derivative contracts require the Company, at a future date, to either buy or sell foreign currency in exchange for the operating units’ local currency. At December 31, 2019 and December 31, 2018, the following foreign currency derivative contracts were outstanding: Foreign currency derivatives (in millions) Functional currency Traded currency Notional in traded currency Notional in traded currency Ending duration Brazilian real Euro 1 4 Mar - 20 Brazilian real US dollar — 5 Jun - 19 British pound Euro 9 — Mar - 20 British pound US dollar 4 — Mar - 20 Chinese renminbi US dollar 2 — Aug - 20 Euro British pound — 7 Oct - 19 Euro Japanese yen 383 — Dec - 20 Euro Swedish krona — 540 Jun - 19 Euro US dollar 18 19 Dec - 20 Japanese yen Chinese renminbi — 89 Dec - 19 Japanese yen Korean won — 5,785 Dec - 19 Japanese yen US dollar — 3 Dec - 19 Korean won Euro 13 6 Dec - 20 Korean won Japanese yen 409 266 Dec - 20 Korean won US dollar 4 7 Dec - 20 Swedish krona Euro 3 56 Jan - 20 US dollar Euro 14 — Dec - 20 US dollar Mexican peso — 575 Dec - 19 The Company selectively uses cross-currency swaps to hedge the foreign currency exposure associated with our net investment in certain foreign operations (net investment hedges). In December 2019, the Company terminated its $250 million cross-currency swap contract originally maturing in September 2020, and executed a $500 million cross-currency swap contract to mature in March 2025, resulting in cash proceeds of $23 million and a deferred gain of $21 million that is expected to remain in accumulated other comprehensive loss. At December 31, 2019 and December 31, 2018, the following cross-currency swap contracts were outstanding: Cross-currency swaps ( in millions ) December 31, 2019 December 31, 2018 Ending duration US dollar to Euro: Fixed receiving notional $ 500 $ 250 Mar - 25 Fixed paying notional € 450 € 206 Mar - 25 US dollar to Japanese yen: Fixed receiving notional $ 100 $ 100 Feb - 23 Fixed paying notional ¥ 10,978 ¥ 10,978 Feb - 23 At December 31, 2019 and 2018, the following amounts were recorded in the Consolidated Balance Sheets as being payable to or receivable from counterparties under ASC Topic 815: ( in millions ) Assets Liabilities Derivatives designated as hedging instruments Under Topic 815: Location December 31, 2019 December 31, 2018 Location December 31, 2019 December 31, 2018 Foreign currency Prepayments and other current assets $ — $ 2 Accounts payable and accrued expenses $ 1 $ 2 Net investment hedges Other non-current assets $ 3 $ 12 Other non-current liabilities $ 8 $ — Derivatives not designated as hedging instruments Foreign currency Prepayments and other current assets $ — $ 1 Accounts payable and accrued expenses $ — $ — Effectiveness for cash flow hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. Gains and losses arising from these contracts that are included in the assessment of effectiveness are deferred into accumulated other comprehensive income (loss) ("AOCI") and reclassified into income as the underlying operating transactions are recognized. These realized gains or losses offset the hedged transaction and are recorded on the same line in the statement of operations. The initial value of any component excluded from the assessment of effectiveness will be recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in fair value of the excluded component and amounts recognized in income under that systematic and rational method will be recognized in AOCI. Effectiveness for net investment hedges is assessed at the inception of the hedging relationship and quarterly, thereafter. Gains and losses arising from these contracts that are included in the assessment of effectiveness are deferred into foreign currency translation adjustments and only released when the subsidiary being hedged is sold or substantially liquidated. The initial value of any component excluded from the assessment of effectiveness will be recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in fair value of the excluded component and amounts recognized in income under that systematic and rational method will be recognized in AOCI. The table below shows deferred gains (losses) reported in AOCI as well as the amount expected to be reclassified to income in one year or less. The amount expected to be reclassified to income in one year or less assumes no change in the current relationship of the hedged item at December 31, 2019 market rates. (in millions) Deferred gain (loss) in AOCI at Gain (loss) expected to be reclassified to income in one year or less Contract Type December 31, 2019 December 31, 2018 Net investment hedges: Foreign currency 5 4 — Cross-currency swaps 16 12 — Foreign currency denominated debt (17 ) (30 ) — Total $ 4 $ (14 ) $ — Derivative instruments designated as hedging instruments as defined by ASC Topic 815 held during the period resulted in the following gains and losses recorded in income: Year Ended December 31, 2019 (in millions) Net sales Cost of sales Selling, general and administrative expenses Other comprehensive income Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded $ 10,168 $ 8,067 $ 873 $ (53 ) Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) recognized in other comprehensive income $ (1 ) Gain (loss) reclassified from AOCI to income $ (5 ) $ 1 $ 3 $ — Year Ended December 31, 2018 ( in millions ) Net sales Cost of sales Selling, general and administrative expenses Other comprehensive income Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded $ 10,530 $ 8,300 $ 946 $ (170 ) Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) recognized in other comprehensive income $ (1 ) Gain (loss) reclassified from AOCI to income $ (2 ) $ (1 ) $ — $ — Year Ended December 31, 2017 (in millions) Net sales Cost of sales Selling, general and administrative expenses Other comprehensive income Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded $ 9,799 $ 7,684 $ 899 $ 232 Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) recognized in other comprehensive income $ (5 ) Gain (loss) reclassified from AOCI to income $ 3 $ — $ — $ — Commodity Gain (loss) recognized in other comprehensive income $ — $ — $ — $ 1 Gain (loss) reclassified from AOCI to income $ — $ 1 $ — $ — There were no gains and (losses) recorded in income related to components excluded from the assessment of effectiveness for derivative instruments designated as cash flow hedges. Gains and (losses) on derivative instruments designated as net investment hedges were recognized in other comprehensive income during the periods presented below. ( in millions ) Year Ended December 31, Net investment hedges 2019 2018 2017 Foreign currency $ 1 $ 2 $ (8 ) Cross-currency swaps $ 4 $ 12 $ — Foreign currency denominated debt $ 13 $ 27 $ (84 ) Derivatives designated as net investment hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains and (losses) recorded in Interest expense and finance charges on components excluded from the assessment of effectiveness: ( in millions ) Year Ended December 31, Net investment hedges 2019 2018 2017 Foreign currency $ — $ 1 $ 1 Cross-currency swaps $ 11 $ 9 $ — There were no gains and (losses) recorded in income related to components excluded from the assessment of effectiveness for foreign currency denominated debt designated as net investment hedges. There were no gains and losses reclassified from AOCI for net investment hedges during the periods presented. Derivatives not designated as hedging instruments are used to hedge remeasurement exposures of monetary assets and liabilities denominated in currencies other than the operating units' functional currency. These derivatives resulted in the following gains and (losses) recorded to income: (in millions) Year Ended December 31, Contract Type Location 2019 2018 2017 Foreign Currency Selling, general and administrative expenses $ (3 ) $ 1 $ (1 ) |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement benefit plans | RETIREMENT BENEFIT PLANS The Company sponsors various defined contribution savings plans, primarily in the U.S., that allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with plan specified guidelines. Under specified conditions, the Company will make contributions to the plans and/or match a percentage of the employee contributions up to certain limits. Total expense related to the defined contribution plans was $37 million , $35 million and $34 million in the years ended December 31, 2019, 2018 and 2017, respectively. The Company has a number of defined benefit pension plans and other postretirement employee benefit plans covering eligible salaried and hourly employees and their dependents. The defined pension benefits provided are primarily based on (i) years of service and (ii) average compensation or a monthly retirement benefit amount. The Company provides defined benefit pension plans in France, Germany, Ireland, Italy, Japan, Mexico, South Korea, Sweden, U.K. and the U.S. The other postretirement employee benefit plans, which provide medical benefits, are unfunded plans. Our U.S. and U.K. defined benefit plans are frozen and no additional service cost is being accrued. All pension and other postretirement employee benefit plans in the U.S. have been closed to new employees. The measurement date for all plans is December 31. During the year ended December 31, 2019, the Company settled approximately $50 million of its U.S. pension projected benefit obligation by liquidating approximately $50 million in plan assets through a lump-sum disbursement made to an insurance company. Pursuant to this agreement, the insurance company unconditionally and irrevocably guarantees all future payments to certain participants that were receiving payments from the U.S. pension plan. The insurance company assumes all investment risk associated with the assets that were delivered as part of this transaction. Additionally, during the year ended December 31, 2019, the Company discharged certain U.S. pension plan obligations by making lump-sum payments of $15 million to former employees of the Company. As a result, the Company settled $65 million of projected benefit obligation by liquidating pension plan assets and recorded a non-cash settlement loss of $27 million related to the accelerated recognition of unamortized losses. The following table summarizes the expenses for the Company's defined contribution and defined benefit pension plans and the other postretirement defined employee benefit plans: Year Ended December 31, (in millions) 2019 2018 2017 Defined contribution expense $ 37 $ 35 $ 34 Defined benefit pension expense 45 8 12 Other postretirement employee benefit expense — — 1 Total $ 82 $ 43 $ 47 The following provides a roll forward of the plans’ benefit obligations, plan assets, funded status and recognition in the Consolidated Balance Sheets: Pension benefits Other postretirement Year Ended December 31, employee benefits 2019 2018 Year Ended December 31, (in millions) US Non-US US Non-US 2019 2018 Change in projected benefit obligation: Projected benefit obligation, January 1 $ 253 $ 612 $ 283 $ 629 $ 87 $ 107 Service cost — 18 — 18 — — Interest cost 8 12 9 12 3 3 Plan amendments — — — 2 — — Settlement and curtailment (65 ) (5 ) — (4 ) — — Actuarial (gain) loss 17 75 (18 ) 5 3 (6 ) Currency translation — (1 ) — (30 ) — — Benefits paid (15 ) (16 ) (21 ) (20 ) (12 ) (17 ) Projected benefit obligation, December 31 $ 198 $ 695 $ 253 $ 612 $ 81 $ 87 Change in plan assets: Fair value of plan assets, January 1 $ 216 $ 438 $ 240 $ 483 Actual return on plan assets 29 68 (11 ) (18 ) Employer contribution 10 16 7 19 Settlements (65 ) (5 ) — (4 ) Currency translation — 4 — (22 ) Benefits paid (14 ) (16 ) (20 ) (20 ) Fair value of plan assets, December 31 $ 176 $ 505 $ 216 $ 438 Funded status $ (22 ) $ (190 ) $ (37 ) $ (174 ) $ (81 ) $ (87 ) Amounts in the Consolidated Balance Sheets consist of: Non-current assets $ — $ 28 $ — $ 17 $ — $ — Current liabilities (1 ) (4 ) — (5 ) (10 ) (11 ) Non-current liabilities (21 ) (214 ) (37 ) (186 ) (71 ) (76 ) Net amount $ (22 ) $ (190 ) $ (37 ) $ (174 ) $ (81 ) $ (87 ) Amounts in accumulated other comprehensive loss consist of: Net actuarial loss $ 82 $ 211 $ 113 $ 193 $ 16 $ 13 Net prior service (credit) cost (5 ) 2 (6 ) 2 (8 ) (12 ) Net amount $ 77 $ 213 $ 107 $ 195 $ 8 $ 1 Total accumulated benefit obligation for all plans $ 198 $ 660 $ 253 $ 583 The funded status of pension plans with accumulated benefit obligations in excess of plan assets at December 31 is as follows: December 31, (in millions) 2019 2018 Accumulated benefit obligation $ (633 ) $ (650 ) Plan assets 425 450 Deficiency $ (208 ) $ (200 ) Pension deficiency by country: United States $ (22 ) $ (37 ) Germany (107 ) (95 ) Other (79 ) (68 ) Total pension deficiency $ (208 ) $ (200 ) The weighted average asset allocations of the Company’s funded pension plans and target allocations by asset category are as follows: December 31, Target Allocation 2019 2018 U.S. Plans: Real estate and other 16 % 11 % 0% - 15% Fixed income securities 50 % 56 % 45% - 65% Equity securities 34 % 33 % 25% - 45% 100 % 100 % Non-U.S. Plans: Insurance contract, real estate and other 30 % 8 % 0% - 36% Fixed income securities 33 % 55 % 29% - 62% Equity securities 37 % 37 % 30% - 43% 100 % 100 % The Company's investment strategy is to maintain actual asset weightings within a preset range of target allocations. The Company believes these ranges represent an appropriate risk profile for the planned benefit payments of the plans based on the timing of the estimated benefit payments. In each asset category, separate portfolios are maintained for additional diversification. Investment managers are retained in each asset category to manage each portfolio against its benchmark. Each investment manager has appropriate investment guidelines. In addition, the entire portfolio is evaluated against a relevant peer group. The defined benefit pension plans did not hold any Company securities as investments as of December 31, 2019 and 2018. A portion of pension assets is invested in common and commingled trusts. The Company expects to contribute a total of $10 million to $20 million into its defined benefit pension plans during 2020. Of the $10 million to $20 million in projected 2020 contributions, $4 million are contractually obligated, while any remaining payments would be discretionary. Refer to Note 10, "Fair Value Measurements," to the Consolidated Financial Statements for more detail surrounding the fair value of each major category of plan assets, as well as the inputs and valuation techniques used to develop the fair value measurements of the plans' assets at December 31, 2019 and 2018. See the table below for a breakout of net periodic benefit cost between U.S. and non-U.S. pension plans: Pension benefits Other postretirement employee benefits Year Ended December 31, 2019 2018 2017 Year Ended December 31, (in millions) US Non-US US Non-US US Non-US 2019 2018 2017 Service cost $ — $ 18 $ — $ 18 $ — $ 18 $ — $ — $ — Interest cost 8 12 9 12 9 11 3 3 3 Expected return on plan assets (11 ) (22 ) (14 ) (27 ) (13 ) (24 ) — — — Settlements, curtailments and other 27 1 — — — — — — — Amortization of unrecognized prior service (credit) cost (1 ) — (1 ) — (1 ) — (4 ) (4 ) (4 ) Amortization of unrecognized loss 4 9 4 7 4 8 1 1 2 Net periodic cost (income) $ 27 $ 18 $ (2 ) $ 10 $ (1 ) $ 13 $ — $ — $ 1 The components of net periodic benefit cost other than the service cost component are included in Other postretirement income in the Consolidated Statements of Operations. The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $14 million . The estimated net loss and prior service credit for the other postretirement employee benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $1 million and $3 million , respectively. The Company's weighted-average assumptions used to determine the benefit obligations for its defined benefit pension and other postretirement employee benefit plans as of December 31, 2019 and 2018 were as follows: December 31, (percent) 2019 2018 U.S. pension plans: Discount rate 3.17 4.24 Rate of compensation increase N/A N/A U.S. other postretirement employee benefit plans: Discount rate 2.95 4.05 Rate of compensation increase N/A N/A Non-U.S. pension plans: Discount rate 1.61 2.28 Rate of compensation increase 3.05 2.99 The Company's weighted-average assumptions used to determine the net periodic benefit cost/(income) for its defined benefit pension and other postretirement employee benefit plans for the years ended December 31, 2019 and 2018 were as follows: Year Ended December 31, (percent) 2019 2018 U.S. pension plans: Discount rate - service cost 4.24 3.55 Effective interest rate on benefit obligation 3.88 3.13 Expected long-term rate of return on assets 6.00 6.00 Average rate of increase in compensation N/A N/A U.S. other postretirement plans: Discount rate - service cost 3.43 2.65 Effective interest rate on benefit obligation 3.68 2.86 Expected long-term rate of return on assets N/A N/A Average rate of increase in compensation N/A N/A Non-U.S. pension plans: Discount rate - service cost 2.55 2.71 Effective interest rate on benefit obligation 2.06 1.98 Expected long-term rate of return on assets 5.23 5.73 Average rate of increase in compensation 3.03 2.98 The Company's approach to establishing the discount rate is based upon the market yields of high-quality corporate bonds, with appropriate consideration of each plan's defined benefit payment terms and duration of the liabilities. In determining the discount rate, the Company utilizes a full-yield approach in the estimation of service and interest components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company determines its expected return on plan asset assumptions by evaluating estimates of future market returns and the plans' asset allocation. The Company also considers the impact of active management of the plans' invested assets. The estimated future benefit payments for the pension and other postretirement employee benefits are as follows: Pension benefits Other postretirement employee benefits (in millions) Year U.S. Non-U.S. 2020 $ 20 $ 20 $ 10 2021 15 23 9 2022 14 23 9 2023 14 24 8 2024 14 24 7 2025-2029 62 137 25 The weighted-average rate of increase in the per capita cost of covered health care benefits is projected to be 6.25% in 2019 for pre-65 and post-65 participants, decreasing to 5% by the year 2025. A one-percentage point change in the assumed health care cost trend would have the following effects: One Percentage Point (in millions) Increase Decrease Effect on other postretirement employee benefit obligation $ 5 $ (5 ) Effect on total service and interest cost components $ — $ — |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock incentive plans | STOCK-BASED COMPENSATION The Company has granted restricted common stock and restricted stock units (collectively, "restricted stock") and performance share units as long-term incentive awards to employees and non-employee directors under the BorgWarner Inc. 2014 Stock Incentive Plan, as amended ("2014 Plan") and the BorgWarner Inc. 2018 Stock Incentive Plan ("2018 Plan"). The Company's Board of Directors adopted the 2018 Plan as a replacement to the 2014 Plan in February 2018, and the Company's stockholders approved the 2018 Plan at the annual meeting of stockholders on April 25, 2018. After stockholders approved the 2018 Plan, the Company could no longer make grants under the 2014 Plan. The shares that were available for issuance under the 2014 Plan were cancelled upon approval of the 2018 Plan. The 2018 Plan authorizes the issuance of a total of 7 million shares, of which approximately 6 million shares were available for future issuance as of December 31, 2019. Stock Options A summary of the plans’ shares under option at December 31, 2019, 2018 and 2017 is as follows: Shares (thousands) Weighted average exercise price Weighted average remaining contractual life (in years) Aggregate intrinsic value (in millions) Outstanding at January 1, 2017 473 $ 17.47 0.1 $ 10.4 Exercised (473 ) $ 17.47 $ 10.4 Outstanding at December 31, 2017 — $ — 0.0 $ — Exercised — $ — $ — Outstanding at December 31, 2018 — $ — 0.0 $ — Exercised — $ — $ — Outstanding at December 31, 2019 — $ — 0.0 $ — Options exercisable at December 31, 2019 — $ — 0.0 $ — Proceeds from stock option exercises for the years ended December 31, 2019, 2018 and 2017 were as follows: Year Ended December 31, (in millions) 2019 2018 2017 Proceeds from stock options exercised — gross $ — $ — $ 8 Tax benefit — — 8 Proceeds from stock options exercised, net of tax $ — $ — $ 16 Restricted Stock The value of restricted stock is determined by the market value of the Company’s common stock at the date of grant. In 2019, restricted stock in the amount of 1,058,180 shares and 23,880 shares was granted to employees and non-employee directors, respectively. The value of the awards is recognized as compensation expense ratably over the restriction periods. As of December 31, 2019, there was $37 million of unrecognized compensation expense that will be recognized over a weighted average period of approximately 1.8 years. Restricted stock compensation expense recorded in the Consolidated Statements of Operations is as follows: Year Ended December 31, (in millions, except per share data) 2019 2018 2017 Restricted stock compensation expense $ 30 $ 26 $ 27 Restricted stock compensation expense, net of tax $ 23 $ 20 $ 20 A summary of the status of the Company’s nonvested restricted stock for employees and non-employee directors at December 31, 2019, 2018 and 2017 is as follows: Shares subject to restriction Weighted average grant date fair value Nonvested at January 1, 2017 1,429 $ 44.12 Granted 804 $ 40.10 Vested (521 ) $ 56.53 Forfeited (119 ) $ 38.97 Nonvested at December 31, 2017 1,593 $ 38.86 Granted 737 $ 51.70 Vested (556 ) $ 42.25 Forfeited (258 ) $ 44.51 Nonvested at December 31, 2018 1,516 $ 42.97 Granted 1,082 $ 41.66 Vested (724 ) $ 36.81 Forfeited (210 ) $ 44.82 Nonvested at December 31, 2019 1,664 $ 44.26 Total Shareholder Return Performance Share Units The 2014 and 2018 Plans provide for awarding of performance shares to members of senior management at the end of successive three-year periods based on the Company's performance in terms of total shareholder return relative to a peer group of automotive companies. Based on the Company’s relative ranking within the performance peer group, it is possible for none of the awards to vest or for a range up to 200% of the target shares to vest. The Company recognizes compensation expense relating to its performance share plans ratably over the performance period regardless of whether the market conditions are expected to be achieved. Compensation expense associated with the performance share plans is calculated using a lattice model (Monte Carlo simulation). The amounts expensed under the plan and the common stock issuances for the three -year measurement periods ended December 31, 2019, 2018 and 2017 were as follows: Year Ended December 31, (in millions, except share data) 2019 2018 2017 Expense $ 5 $ 9 $ 10 Number of shares — — — A summary of the status of the Company's nonvested total shareholder return performance share units at December 31, 2019, 2018 and 2017 is as follows: Number of shares Weighted average grant date fair value Nonvested at January 1, 2017 410 $ 43.99 Granted 201 $ 45.57 Forfeited (256 ) $ 61.40 Nonvested at December 31, 2017 355 $ 32.35 Granted 287 $ 68.38 Forfeited (345 ) $ 38.26 Nonvested at December 31, 2018 297 $ 60.35 Granted 196 $ 51.52 Vested (160 ) $ 45.78 Forfeited (93 ) $ 55.82 Nonvested at December 31, 2019 240 $ 64.61 As of December 31, 2019, there was $7 million of unrecognized compensation expense that will be recognized over a weighted average period of approximately 1.7 years. Relative Revenue Growth Performance Share Units The 2014 and 2018 Plans provide for awarding of performance shares to reward members of senior management based on the Company's performance in terms of revenue growth relative to the vehicle market over three -year performance periods. The value of this performance share award is determined by the market value of the Company’s common stock at the date of grant. The Company recognizes compensation expense relating to its performance share plans over the performance period based on the number of shares expected to vest at the end of each reporting period. The actual performance of the Company is evaluated quarterly, and the expense is adjusted according to the new projections. The amounts expensed under the plan and common stock issuance for the years ended December 31, 2019, 2018 and 2017 were as follows: Year Ended December 31, (in millions, except share data) 2019 2018 2017 Expense $ 7 $ 18 $ 16 Number of shares 315,000 249,000 126,000 A summary of the status of the Company’s nonvested relative revenue growth performance shares at December 31, 2019, 2018 and 2017 is as follows: Number of shares Weighted average grant date fair value Nonvested at January 1, 2017 320 $ 38.62 Granted 198 $ 40.08 Vested (156 ) $ 38.62 Forfeited (7 ) $ 39.20 Nonvested at December 31, 2017 355 $ 39.42 Granted 287 $ 50.82 Vested (166 ) $ 38.62 Forfeited (179 ) $ 45.82 Nonvested at December 31, 2018 297 $ 47.03 Granted 196 $ 41.90 Vested (160 ) $ 40.10 Forfeited (93 ) $ 44.30 Nonvested at December 31, 2019 240 $ 48.52 Based on the Company’s relative revenue growth in excess of the industry vehicle production, it is possible for none of the awards to vest or for a range up to 200% of the target shares to vest. As of December 31, 2019, there was $8 million of unrecognized compensation expense that will be recognized over a weighted average period of approximately 1.7 years. The unrecognized amount of compensation expense is based on projected performance as of December 31, 2019. In 2018, the Company modified the vesting provisions of restricted stock and performance share unit grants made to retiring executive officers to allow certain of the outstanding awards, that otherwise would have been forfeited, to vest upon retirement. This resulted in net restricted stock and performance share unit compensation expense of $2 million and $8 million for the years ended December 31, 2019 and 2018, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive Income (Loss) Note | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table summarizes the activity within accumulated other comprehensive loss during the years ended December 31, 2019, 2018 and 2017: (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Other Total Beginning Balance, January 1, 2017 $ (530 ) $ 5 $ (198 ) $ 1 $ (722 ) Comprehensive (loss) income before reclassifications 236 (4 ) (5 ) 2 229 Income taxes associated with comprehensive (loss) income before reclassifications — 1 (1 ) — — Reclassification from accumulated other comprehensive (loss) income — (4 ) 9 — 5 Income taxes reclassified into net earnings — 1 (3 ) — (2 ) Ending Balance December 31, 2017 $ (294 ) $ (1 ) $ (198 ) $ 3 $ (490 ) Adoption of accounting standard — — (14 ) — (14 ) Comprehensive (loss) income before reclassifications (153 ) (2 ) (42 ) (1 ) (198 ) Income taxes associated with comprehensive (loss) income before reclassifications 5 — 14 — 19 Reclassification from accumulated other comprehensive (loss) income — 4 8 — 12 Income taxes reclassified into net earnings — (1 ) (2 ) — (3 ) Ending Balance December 31, 2018 $ (442 ) $ — $ (234 ) $ 2 $ (674 ) Comprehensive (loss) income before reclassifications (51 ) (1 ) (29 ) (2 ) (83 ) Income taxes associated with comprehensive (loss) income before reclassifications (4 ) — 4 — — Reclassification from accumulated other comprehensive (loss) income — 1 37 — 38 Income taxes reclassified into net earnings — — (8 ) — (8 ) Ending Balance December 31, 2019 $ (497 ) $ — $ (230 ) $ — $ (727 ) |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES The Company's environmental and product liability contingencies are discussed separately below. In the normal course of business, the Company is also party to various other commercial and legal claims, actions and complaints, including matters involving warranty claims, intellectual property claims, general liability and various other risks. It is not possible to predict with certainty whether or not the Company will ultimately be successful in any of these other commercial and legal matters or, if not, what the impact might be. The Company's management does not expect that an adverse outcome in any of these other commercial and legal claims, actions and complaints will have a material adverse effect on the Company's results of operations, financial position or cash flows, although it could be material to the results of operations in a particular quarter. Environmental The Company and certain of its 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 (“PRPs”) at various hazardous waste disposal sites under the Comprehensive Environmental Response, Compensation and Liability Act (“Superfund”) and equivalent state laws. The PRPs may currently be liable for the cost of clean-up and other remedial activities at 14 and 28 such sites as of December 31, 2019 and 2018, respectively. Responsibility for clean-up and other remedial activities at a Superfund site is typically shared among PRPs based on an allocation formula. The Company believes that none of these matters, individually or in the aggregate, will have a material adverse effect on its results of operations, financial position or cash flows. Generally, this is because either the estimates of the maximum potential liability at a site are not material or the liability will be shared with other PRPs, although no assurance can be given with respect to the ultimate outcome of any such matter. The Company has an accrual for environmental liabilities of $3 million and $9 million as of December 31, 2019 and December 31, 2018, respectively. This accrual is based on information available to the Company (which in most cases includes: an estimate of allocation of liability among PRPs; the probability that other PRPs, many of whom are large, solvent public companies, will fully pay the cost apportioned to them; currently available information from PRPs and/or federal or state environmental agencies concerning the scope of contamination and estimated remediation and consulting costs; and remediation alternatives). The decrease in both the number of sites and accrual was primarily the result of divestitures completed during 2019 including Morse TEC and non-core pipes and thermostat product lines. Refer to Note 19, "Recent Transactions," to the Consolidated Financial Statements for more information. Asbestos-related Liability Like many other industrial companies that have historically operated in the United States, the Company, or parties that the Company is obligated to indemnify, has been named as one of many defendants in asbestos-related personal injury actions. Morse TEC, a former wholly-owned subsidiary of the Company, was the obligor for the Company's recorded asbestos-related liabilities and the policyholder of the related insurance assets. On October 30, 2019, the Company transferred 100% of its equity interests to Enstar. As a result of the transaction, the Company removed Morse TEC's asbestos-related liabilities, related insurance assets and associated deferred tax assets from the Consolidated Balance Sheet. Refer to Note 19 "Recent Transactions," to the Consolidated Financial Statements for more information. The Company’s asbestos-related claims activity during the years ended December 31, 2019 and 2018 is as follows: 2019 2018 Beginning claims January 1 8,598 9,225 New claims received 1,667 1,932 Dismissed claims (967 ) (2,189 ) Settled claims (237 ) (370 ) Derecognized claims (9,061 ) — Ending claims December 31 — 8,598 During the years ended December 31, 2019 and 2018, the Company paid $38 million and $46 million , respectively, in asbestos-related claim resolution costs and associated defense costs. Asbestos-related claim resolution costs and associated defense costs are reflected in the Company's operating cash flows. Prior to the derecognition of Morse TEC, the Company reviewed its own experience in handling asbestos-related claims and trends affecting asbestos-related claims in the U.S. tort system generally for the purposes of assessing the value of pending asbestos-related claims and the number and value of those that may be asserted in the future, as well as potential recoveries from the Company’s insurance carriers with respect to such claims and defense costs. As part of its review and assessment of asbestos-related claims, the Company utilized a third-party actuary to further assist in the analysis of potential future asbestos-related claim resolution costs and associated defense costs. The actuary’s work utilized data and analysis resulting from the Company’s claim review process, including input from national coordinating counsel and local counsel, and included the development of an estimate of the potential value of asbestos-related claims asserted but not yet resolved as well as the number and potential value of asbestos-related claims not yet asserted. In developing the estimate of liability for potential future claims, the actuary projected a potential number of future claims based on the Company’s historical claim filings and patterns and compared that to anticipated levels of unique plaintiff asbestos-related claims asserted in the U.S. tort system against all defendants. The actuary also utilized assumptions based on the Company’s historical proportion of claims resolved without payment, historical claim resolution costs for those claims that result in a payment, and historical defense costs. The liabilities were estimated by multiplying the pending and projected future claim filings by projected payments rates and average claim resolution amounts and then adding an estimate for defense costs. The Company determined based on the factors described above, including the analysis and input of the actuary, its best estimate of the aggregate liability both for asbestos-related claims asserted but not yet resolved and potential asbestos-related claims not yet asserted, including estimated defense costs. This liability reflected the actuarial central estimate, which was intended to represent an expected value of the most probable outcome. As of December 31, 2019 and 2018, the Company estimates that its aggregate liability for such claims, including defense costs, is as follows: (in millions) 2019 2018 Beginning asbestos liability as of January 1 $ 805 $ 828 Actuarial revaluation — 23 Claim resolution costs and defense related costs (37 ) (46 ) Derecognized liability (768 ) — Ending asbestos liability as of December 31 $ — $ 805 The Company's estimate of asbestos-related claim resolution costs and associated defense costs was not discounted to present value and included an estimate of liability for potential future claims not yet asserted through December 31, 2064 with a runoff through 2074. The Company believed that December 31, 2074 was a reasonable assumption as to the last date on which it was likely to have resolved all asbestos-related claims, based on the nature and useful life of the Company’s products and the likelihood of incidence of asbestos-related disease in the U.S. population generally. During the year ended December 31, 2018, the Company recorded an increase to its asbestos-related liabilities of $23 million as a result of actuarial valuation changes. This increase was the result of higher future defense costs resulting from recent trends in the ratio of defense costs to claim resolution costs. During the year ended December 31, 2017, the Company , with the assistance of counsel and its third party actuary, reviewed the Company's claims experience against external data sources and concluded no actuarial valuation adjustment to the liability in 2017 was necessary. The Company’s estimate of the claim resolution costs and associated defense costs for asbestos-related claims asserted but not yet resolved and potential claims not yet asserted was its reasonable best estimate of such costs. Such estimate was subject to numerous uncertainties. The balances recorded for asbestos-related claims were based on the best available information and assumptions that the Company believed to be reasonable, but those assumptions may change over time. The Company concluded that it was reasonably possible that it may incur additional losses through 2074 for asbestos-related claims, in addition to amounts recorded, of up to approximately $100 million as of December 31, 2018. The Company had certain insurance coverage applicable to asbestos-related claims. The rights to this insurance were transferred with Morse TEC upon the sale of its membership interests. Prior to the derecognition, the coverage was the subject of litigation that remained pending at the time of the derecognition. As of December 31, 2018, the Company estimated that it had $386 million in aggregate insurance coverage available with respect to asbestos-related claims, and their associated defense costs. The Company had recorded this insurance coverage as a long-term receivable for asbestos-related claim resolution costs and associated defense costs that have been incurred, less cash and notes received, and remaining limits as a deferred insurance asset with respect to liabilities recorded for potential future costs for asbestos-related claims. The Company had determined the amount of that estimate by taking into account the remaining limits of the insurance coverage, the number and amounts of potential claims from co-insured parties, potential remaining recoveries from insolvent insurance carriers, the impact of previous insurance settlements, and coverage available from solvent insurance carriers not party to the coverage litigation. The Company’s estimated remaining insurance coverage relating to asbestos-related claims and their associated defense costs was the subject of disputes with its insurance carriers. The Company believed that its insurance receivable was probable of collection when recorded notwithstanding those disputes based on, among other things, the arguments made by the insurance carriers in litigation proceedings and evaluation of those arguments by the Company and its counsel, the case law applicable to the issues in dispute, the rulings to date by the court, the absence of any credible evidence alleged by the insurance carriers that they were not liable to indemnify the Company, and the fact that the Company had recovered a substantial portion of its insurance coverage, $271 million through December 31, 2018, from its insurance carriers under similar policies. However, the resolution of the insurance coverage disputes, and the number and amounts of claims on our insurance from co-insured parties, could have increased or decreased the amount of such insurance coverage available to the Company as compared to the Company’s estimate. The amounts recorded in the Consolidated Balance Sheets respecting asbestos-related claims are as follows: December 31, (in millions) 2019 2018 Assets: Other long-term asbestos-related insurance receivables $ — $ 303 Deferred asbestos-related insurance asset — 83 Total insurance assets $ — $ 386 Liabilities: Accounts payable and accrued expenses $ — $ 50 Other non-current liabilities — 755 Total accrued liabilities $ — $ 805 |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure | RESTRUCTURING The Company has initiated several actions to reduce existing structural costs. The Company recorded $5 million in the Engine segment and $6 million in the Drivetrain segment in the year ended December 31, 2019 related to these actions. Additionally, the Company initiated a voluntary termination program in the Engine segment where approximately 350 employees accepted termination packages and recorded restructuring expense of $37 million in the year ended December 31, 2019. In 2017, the Company initiated actions within its Engine segment designed to improve future profitability and competitiveness and started exploring strategic options for the non-core product lines. As a continuation of these actions, the Company recorded restructuring expense of $18 million and $54 million in the years ended December 31, 2019 and 2018, respectively, primarily related to professional fees, employee termination benefits and relocation costs. The largest portion of this was a voluntary termination program in the European emissions business where approximately 140 employees accepted the termination packages. As a result, the Company recorded approximately $28 million of employee severance expense during the year ended December 31, 2018. In addition, the Company recorded $6 million in employee termination benefits in other locations in the Engine segment in the year ended December 31, 2018. The Company recorded restructuring expense of $48 million within its emissions business in the year ended December 31, 2017, primarily related to professional fees and negotiated commercial costs associated with business divestiture and manufacturing footprint rationalization activities. The Company also recorded restructuring expense of $6 million in the year ended December 31, 2019, related to Corporate restructuring activities. Additionally, the Company recorded restructuring expense of $10 million in the year ended December 31, 2018 in the Drivetrain segment primarily related to manufacturing footprint rationalization activities. On September 27, 2017, the Company acquired 100% of the equity interests of Sevcon Inc ("Sevcon"). In connection with this transaction, the Company recorded restructuring expense of $7 million during the year ended December 31, 2017, primarily related to contractually required severance associated with Sevcon executive officers and other employee termination benefits. Estimates of restructuring expense are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established accruals. The Company is evaluating numerous options across its operations and plans to take additional restructuring actions to reduce existing structural costs over the next few years. These actions are expected to result in significant restructuring expense. The following table displays a rollforward of the severance accruals recorded within the Company's Consolidated Balance Sheets and the related cash flow activity for the years ended December 31, 2019 and 2018: Severance Accruals (in millions) Drivetrain Engine Total Balance at January 1, 2018 $ 4 $ 1 $ 5 Provision 7 35 42 Cash payments (7 ) (15 ) (22 ) Balance at December 31, 2018 4 21 25 Provision 1 43 44 Cash payments (1 ) (34 ) (35 ) Balance at December 31, 2019 $ 4 $ 30 $ 34 |
Leases and Commitments
Leases and Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases and commitments | LEASES AND COMMITMENTS The Company's lease agreements primarily consist of real estate property, such as manufacturing facilities, warehouses, and office buildings, in addition to personal property, such as vehicles, manufacturing and information technology equipment. A significant portion of leases are classified as operating leases, and as of December 31, 2019, finance leases were immaterial. Generally, the Company’s operating leases have renewal options that extend lease terms an additional 1 to 5 years , and some include options to terminate the agreement or purchase the leased asset. The amortizable life of these assets is the lesser of its useful life or the lease term, including renewal periods reasonably assured of being exercised at lease inception. The Company’s lease arrangements with renewal periods reasonably assured of being exercised at lease inception are immaterial. For the year ended December 31, 2019, leased assets obtained in exchange for lease obligations were $4 million . All leases with an initial term of 12 months or less without an option to extend or purchase the underlying asset that the Company is reasonably certain to exercise ("short-term leases") are not recorded on the Consolidated Balance Sheet, and lease expense is recognized on a straight-line basis over the lease term. The following table presents the operating lease assets and lease liabilities: (in millions) December 31, 2019 Assets Location Operating leases Other non-current assets $ 85 Total operating leases $ 85 Liabilities Operating leases Accounts payable and accrued expenses $ 18 Operating leases Other non-current liabilities 67 Total operating lease liabilities $ 85 The following table presents the maturity of lease liabilities as of December 31, 2019: (in millions) Operating leases 2020 $ 20 2021 15 2022 13 2023 9 2024 7 After 2024 33 Total (undiscounted) lease payments $ 97 Less: Imputed interest 12 Present value of lease liabilities $ 85 In the year ended December 31, 2019, the Company recorded operating lease costs of $24 million and short-term lease costs of $18 million , primarily in Cost of sales in the Consolidated Statement of Operations. Under the previous lease accounting standard, total rent expense was $42 million and $40 million in the years ended December 31, 2018 and 2017, respectively. The operating cash flows for operating leases were $24 million for the year ended December 31, 2019. ASC Topic 842 requires that the rate implicit in the lease be used if readily determinable. Generally, implicit rates are not readily determinable in the Company's agreements and the incremental borrowing rate is used for each lease arrangement. The incremental borrowing rates are determined using rates specific to the term of the lease, economic environments where lease activity is concentrated, value of lease portfolio, and assuming full collateralization of the loans. The following table presents the terms and discount rates: Operating leases As of December 31, 2019 Weighted-average remaining lease term (years) 8 Weighted-average discount rate 2.8 % |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per share | EARNINGS PER SHARE The Company presents both basic and diluted earnings per share of common stock (“EPS”) amounts. Basic EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock outstanding during the reporting period. Diluted EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock and common equivalent stock outstanding during the reporting period. The dilutive impact of stock-based compensation is calculated using the treasury stock method. The treasury stock method assumes that the Company uses the assumed proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, and compensation cost for future service that the Company has not yet recognized. Options are only dilutive when the average market price of the underlying common stock exceeds the exercise price of the options. The dilutive effects of performance-based stock awards described in Note 13, "Stock-Based Compensation," to the Consolidated Financial Statements are included in the computation of diluted earnings per share at the level the related performance criteria are met through the respective balance sheet date. The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock: Year Ended December 31, (in millions except share and per share amounts) 2019 2018 2017 Basic earnings per share: Net earnings attributable to BorgWarner Inc. $ 746 $ 931 $ 440 Weighted average shares of common stock outstanding 205.7 208.2 210.4 Basic earnings per share of common stock $ 3.63 $ 4.47 $ 2.09 Diluted earnings per share: Net earnings attributable to BorgWarner Inc. $ 746 $ 931 $ 440 Weighted average shares of common stock outstanding 205.7 208.2 210.4 Effect of stock-based compensation 1.1 1.3 1.1 Weighted average shares of common stock outstanding including dilutive shares 206.8 209.5 211.5 Diluted earnings per share of common stock $ 3.61 $ 4.44 $ 2.08 Antidilutive stock-based awards excluded from the calculation of diluted earnings per share 0.1 0.1 — |
Recent Transactions
Recent Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Recent transactions | RECENT TRANSACTIONS BorgWarner Morse TEC LLC On October 30, 2019, the Company entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Enstar. Pursuant to the Purchase Agreement, the Company transferred 100% of the equity interests of Morse TEC to Enstar. In connection with this transfer, the Company contributed approximately $172 million in cash to Morse TEC. As Morse TEC was the obligor for the Company's asbestos-related liabilities and policyholder of the related insurance assets, the rights and obligations related to these items transferred upon the sale, and pursuant to the Purchase Agreement, Morse TEC indemnifies the Company and its affiliates for asbestos-related liabilities as more specifically described in the Purchase Agreement. This indemnification obligation with respect to Asbestos-Related Liabilities (as such terms are defined in the Purchase Agreement) are not subject to any cap or time limitation. Following the completion of this transfer, the Company has no obligation with respect to previously recorded asbestos-related liabilities. In accordance with ASC Topic 810 this subsidiary was derecognized as the Company ceased to control the entity, and the Company removed the associated assets and liabilities from the Consolidated Balance Sheet, resulting in a pre-tax gain of $177 million . In addition, the Company recorded tax expense as a result of the reversal of the previously recorded deferred tax assets related to the asbestos liabilities of $173 million , resulting in an after-tax gain of $4 million . The following is a summary of the impacts to the Consolidated Balance Sheet: (in millions) Cash and cash equivalents $ (172 ) Receivables, net (9 ) Investments and other long-term receivables (371 ) Other non-current assets (223 ) Accounts payable and accrued expenses 7 Asbestos-related and environmental liabilities 772 Gain on derecognition of subsidiary, net $ 4 Romeo Systems, Inc. In May 2019, the Company invested $50 million in exchange for a 20% equity interest in Romeo Systems, Inc. ("Romeo"), a technology-leading battery module and pack supplier. The Company accounts for this investment in Series A-1 Preferred Stock of Romeo under the measurement alternative in ASC Topic 321, "Investments - Equity Securities" for equity investments without a readily determinable fair value. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. In September 2019, the Company and Romeo contributed total equity of $10 million and formed a new joint venture, BorgWarner Romeo Power LLC (the "Romeo JV"), in which the Company owns 60% interest. The Romeo JV is a variable interest entity focusing on producing battery module and pack technology. The Company is the primary beneficiary of the Romeo JV and consolidates the Romeo JV in its consolidated financial statements. Rinehart Motion Systems LLC and AM Racing LLC On January 2, 2019, the Company acquired Rinehart Motion Systems LLC and AM Racing LLC, two established companies in the specialty electric and hybrid propulsion market, for approximately $15 million , of which $10 million was paid in the first quarter of 2019, and the remaining $5 million will be paid upon satisfaction of certain conditions. The Company created Cascadia Motion LLC ("Cascadia Motion") to combine assets and operations of these two acquired companies. Based in Oregon, Cascadia Motion specializes in design, development and production of hybrid and electric propulsion solutions for prototype and low-volume production applications. It allows the Company to offer design, development and production of full electric and hybrid propulsion systems for niche and low-volume manufacturing applications. In connection with the acquisition, the Company recognized intangible assets of $5 million , goodwill of $7 million within the Drivetrain reporting segment, and other assets and liabilities of $2 million to reflect the preliminary fair value of the assets acquired and liabilities assumed. The intangible assets will be amortized over a period of 2 to 15 years . Various valuation techniques were used to determine the fair value of the intangible assets, with the primary techniques being forms of the income approach, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, the Company is required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Due to the nature of the transaction, goodwill is not deductible for tax purposes. Sevcon, Inc. On September 27, 2017 , the Company acquired 100% of the equity interests in Sevcon for cash of $186 million . This amount includes $27 million paid to settle outstanding debt and $5 million paid for Sevcon stock-based awards attributable to pre-combination services. Sevcon is a global provider of electrification technologies, serving customers in the U.S., U.K., France, Germany, Italy, China and the Asia-Pacific region. Sevcon products complement BorgWarner’s power electronics capabilities utilized to provide electrified propulsion solutions. Sevcon's operating results and assets are reported within the Company's Drivetrain reporting segment. The following table summarizes the aggregated fair value of the assets acquired and liabilities assumed on September 27, 2017, the date of acquisition: (in millions) Receivables, net $ 16 Inventories, net 17 Other current assets 3 Property, plant and equipment, net 7 Goodwill 128 Other intangible assets 71 Deferred tax liabilities (9 ) Income taxes payable (1 ) Other assets and liabilities (3 ) Accounts payable and accrued expenses (25 ) Total consideration, net of cash acquired 204 Less: Assumed retirement-related liabilities 18 Cash paid, net of cash acquired $ 186 In connection with the acquisition, the Company capitalized $18 million for customer relationships, $49 million for developed technology and $4 million for the Sevcon trade name. These intangible assets, excluding the indefinite-lived trade name, will be amortized over a period of 7 to 20 years. Various valuation techniques were used to determine the fair value of the intangible assets, with the primary techniques being forms of the income approach, specifically, the relief-from-royalty and excess earnings valuation methods, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, the Company is required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Due to the nature of the transaction, goodwill is not deductible for tax purposes. In the third quarter of 2018, the Company finalized all purchase accounting adjustments related to the acquisition and recorded fair value adjustments based on new information obtained during the measurement period primarily related to intangible assets. These adjustments have resulted in a decrease in goodwill of $6 million from the Company's initial estimate. Due to its insignificant size relative to the Company, supplemental pro forma financial information of the combined entity for the current and prior reporting period is not provided. |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ASSETS AND LIABILITIES HELD FOR SALE In 2017, the Company started exploring strategic options for non-core emission product lines. In the fourth quarter of 2017, the Company launched an active program to locate a buyer for these non-core pipes and thermostat product lines and initiated all other actions required to complete the plan to sell these non-core product lines. The Company determined that the assets and liabilities of the pipes and thermostat product lines met the held for sale criteria as of December 31, 2017. As a result, the Company recorded an asset impairment expense of $71 million in the fourth quarter of 2017 to adjust the net book value of this business to its fair value less cost to sell. In December 2018, the Company reached an agreement to sell its thermostat product lines for approximately $28 million . As a result, the Company recorded an additional asset impairment expense of $25 million in the year ended December 31, 2018 to adjust the net book value of this business to fair value less costs to sell. All closing conditions were satisfied, and the sale was closed on April 1, 2019. Based on the agreement reached in the fourth quarter of 2019 regarding the finalization of the purchase price adjustments related to the sale of the thermostat product lines, the Company determined that $7 million of additional loss on sale was required during the year ended December 31, 2019. During the year ended December 31, 2019, the assets and liabilities were removed from the Consolidated Balance Sheet. The business did not meet the criteria to be classified as a discontinued operation. The assets and liabilities classified as held for sale at December 31, 2018 were as follows: December 31, ( in millions ) 2018 Receivables, net $ 15 Inventories, net 42 Prepayments and other current assets 12 Property, plant and equipment, net 45 Goodwill 7 Other intangible assets, net 20 Other assets — Impairment of carrying value (94 ) Total assets held for sale $ 47 Accounts payable and accrued expenses $ 18 Other liabilities 5 Total liabilities held for sale $ 23 |
Reporting Segments and Related
Reporting Segments and Related Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Reporting segments and related information | REPORTING SEGMENTS AND RELATED INFORMATION The Company's business is comprised of two reporting segments: Engine and Drivetrain. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems. The Company allocates resources to each segment based upon the projected after-tax return on invested capital ("ROIC") of its business initiatives. ROIC is comprised of Adjusted EBIT after deducting notional taxes compared to the projected average capital investment required. Adjusted EBIT is comprised of earnings before interest, income taxes and noncontrolling interest (“EBIT") adjusted for restructuring, goodwill impairment charges, affiliates' earnings and other items not reflective of on-going operating income or loss. Adjusted EBIT is the measure of segment income or loss used by the Company. The Company believes Adjusted EBIT is most reflective of the operational profitability or loss of our reporting segments. The following tables show segment information and Adjusted EBIT for the Company's reporting segments: 2019 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures (a) (in millions) Customers Inter-segment Net Engine $ 6,153 $ 61 $ 6,214 $ 4,536 $ 227 $ 219 Drivetrain 4,015 — 4,015 4,075 183 254 Inter-segment eliminations — (61 ) (61 ) — — — Total 10,168 — 10,168 8,611 410 473 Corporate (b) — — — 1,091 29 8 Consolidated $ 10,168 $ — $ 10,168 $ 9,702 $ 439 $ 481 2018 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures (a) (in millions) Customers Inter-segment Net Engine $ 6,390 $ 57 $ 6,447 $ 4,731 $ 226 $ 278 Drivetrain 4,140 — 4,140 3,920 175 254 Inter-segment eliminations — (57 ) (57 ) — — — Total 10,530 — 10,530 8,651 401 532 Corporate (b) — — — 1,444 30 14 Consolidated $ 10,530 $ — $ 10,530 $ 10,095 $ 431 $ 546 2017 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset (in millions) Customers Inter-segment Net Engine $ 6,009 $ 53 $ 6,062 $ 4,733 $ 219 $ 305 Drivetrain 3,790 — 3,790 3,904 161 242 Inter-segment eliminations — (53 ) (53 ) — — — Total 9,799 — 9,799 8,637 380 547 Corporate (b) — — — 1,151 28 13 Consolidated $ 9,799 $ — $ 9,799 $ 9,788 $ 408 $ 560 _______________ (a) Long-lived asset expenditures include capital expenditures and tooling outlays. (b) Corporate assets include investments and other long-term receivables and deferred income taxes. Adjusted earnings before interest, income taxes and noncontrolling interest ("Adjusted EBIT") Year Ended December 31, (in millions) 2019 2018 2017 Engine $ 995 $ 1,040 $ 992 Drivetrain 443 475 448 Adjusted EBIT 1,438 1,515 1,440 Gain on derecognition of subsidiary (177 ) — — Restructuring expense 72 67 58 Unfavorable arbitration loss 14 — — Merger, acquisition and divestiture expense 11 6 10 Asset impairment and loss on divestiture 7 25 71 Officer stock awards modification 2 8 — Asbestos-related adjustments — 23 — Gain on sale of building — (19 ) — Lease termination settlement — — 5 Other (income) expense — (4 ) 2 Corporate, including stock-based compensation 206 219 222 Equity in affiliates' earnings, net of tax (32 ) (49 ) (51 ) Interest income (12 ) (6 ) (6 ) Interest expense 55 59 71 Other postretirement expense (income) 27 (10 ) (5 ) Earnings before income taxes and noncontrolling interest 1,265 1,196 1,063 Provision for income taxes 468 211 580 Net earnings 797 985 483 Net earnings attributable to the noncontrolling interest, net of tax 51 54 43 Net earnings attributable to BorgWarner Inc. $ 746 $ 931 $ 440 Geographic Information During the year ended December 31, 2019, approximately 77% of the Company's consolidated net sales were outside the United States ("U.S."), attributing sales to the location of production rather than the location of the customer. Outside the U.S., only Germany, China, South Korea, Mexico, Poland and Hungary exceeded 5% of consolidated net sales during the year ended December 31, 2019. Also, the Company's equity investments are excluded from the definition of long-lived assets, as are goodwill and certain other non-current assets. Net sales Long-lived assets (in millions) 2019 2018 2017 2019 2018 2017 United States $ 2,335 $ 2,394 $ 2,280 $ 752 $ 729 $ 719 Europe: Germany 1,507 1,665 1,653 328 371 413 Poland 627 519 522 180 171 152 Hungary 589 687 656 164 153 148 Other Europe 1,087 1,151 904 285 282 274 Total Europe 3,810 4,022 3,735 957 977 987 China 1,711 1,801 1,560 605 589 555 Mexico 1,040 978 920 247 223 201 South Korea 786 859 877 221 235 244 Other foreign 486 476 427 152 151 158 Total $ 10,168 $ 10,530 $ 9,799 $ 2,934 $ 2,904 $ 2,864 Sales to Major Customers Consolidated net sales to Ford (including its subsidiaries) were approximately 15% , 14% , and 15% for the years ended December 31, 2019, 2018 and 2017, respectively, and to Volkswagen (including its subsidiaries) were approximately 11% , 12% and 13% for the years ended December 31, 2019, 2018 and 2017, respectively. Both of the Company's reporting segments had significant sales to Ford and Volkswagen in 2019, 2018 and 2017. Such sales consisted of a variety of products to a variety of customer locations and regions. No other single customer accounted for more than 10% of consolidated net sales in any of the years presented. Sales by Product Line Sales of turbochargers for light vehicles represented approximately 28% , 27% and 28% of total net sales for the years ended December 31, 2019, 2018 and 2017, respectively. The Company currently supplies light vehicle turbochargers to many OEMs including BMW, Daimler, Fiat Chrysler Automobiles, Ford, General Motors, Great Wall, Hyundai, Renault, Volkswagen and Volvo. No other single product line accounted for more than 10% of consolidated net sales in any of the years presented. |
Interim Financial Information (
Interim Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | INTERIM FINANCIAL INFORMATION (Unaudited) The following table presents summary quarterly financial data: (in millions, except per share amounts) 2019 2018 Quarter ended Mar-31 Jun-30 Sep-30 Dec-31 Year Mar-31 Jun-30 Sep-30 Dec-31 Year Net sales $ 2,566 $ 2,551 $ 2,492 $ 2,559 $ 10,168 $ 2,784 $ 2,694 $ 2,478 $ 2,574 $ 10,530 Cost of sales 2,047 2,038 1,968 2,014 8,067 2,193 2,114 1,963 2,030 8,300 Gross profit 519 513 524 545 2,101 591 580 515 544 2,230 Selling, general and administrative expenses 226 212 230 205 873 253 237 230 226 946 Other expense (income), net 29 16 18 (138 ) (75 ) 5 30 7 52 94 Operating income 264 285 276 478 1,303 333 313 278 266 1,190 Equity in affiliates’ earnings, net of tax (9 ) (9 ) (7 ) (7 ) (32 ) (10 ) (13 ) (15 ) (11 ) (49 ) Interest income (3 ) (2 ) (4 ) (3 ) (12 ) (2 ) (1 ) (1 ) (2 ) (6 ) Interest expense 14 14 15 12 55 16 15 14 14 59 Other postretirement expense (income) — 27 (1 ) 1 27 (3 ) (2 ) (3 ) (2 ) (10 ) Earnings before income taxes and noncontrolling interest 262 255 273 475 1,265 332 314 283 267 1,196 Provision for income taxes 91 73 66 238 468 95 30 67 19 211 Net earnings 171 182 207 237 797 237 284 216 248 985 Net earnings attributable to the noncontrolling interest, net of tax 11 10 13 17 51 12 12 12 18 54 Net earnings attributable to BorgWarner Inc. (a) $ 160 $ 172 $ 194 $ 220 $ 746 $ 225 $ 272 $ 204 $ 230 $ 931 Earnings per share — basic $ 0.77 $ 0.84 $ 0.94 $ 1.07 $ 3.63 $ 1.07 $ 1.30 $ 0.98 $ 1.11 $ 4.47 Earnings per share — diluted $ 0.77 $ 0.83 $ 0.94 $ 1.06 $ 3.61 $ 1.07 $ 1.30 $ 0.98 $ 1.10 $ 4.44 _______________ (a) The Company's results were impacted by the following: • Quarter ended December 31, 2019: The Company recorded a pre-tax gain on the derecognition of Morse TEC of $177 million . In addition, the Company recorded tax expense as a result of the reversal of the previously recorded deferred tax assets related to the asbestos liabilities of $173 million , resulting in an after-tax gain of $4 million . The Company recorded restructuring expense of $31 million primarily related to actions to reduce structural costs. The Company recorded $7 million of additional loss on sale related to the finalization of the purchase price adjustments related to the sale of the non-core pipes and thermostat product lines. The Company recorded reductions of income tax expense of $11 million related to a global realignment plan and $8 million related to restructuring expense, partially offset by an increase in income tax of $5 million related to other one-time adjustments. • Quarter ended September 30, 2019: The Company recorded restructuring expense of $14 million primarily related to Drivetrain and Engine segment actions designed to improve future profitability and competitiveness. The Company recorded expenses, primarily professional fees, related to the Company's review of strategic acquisition and divestiture targets, including the 20% equity interest in Romeo, and the divestiture activities for the non-core pipes and thermostat product lines of $4 million . The Company recorded reductions of income tax expense of $4 million related to restructuring expense and $9 million related to other one-time adjustments. • Quarter ended June 30, 2019: The Company recorded restructuring expense of $13 million primarily related to Drivetrain and Engine segment actions designed to improve future profitability and competitiveness. The Company recorded expenses, primarily professional fees, related to the Company's review of strategic acquisition and divestiture targets, including the 20% equity interest in Romeo, and the divestiture activities for the non-core pipes and thermostat product lines of $5 million . The Company recorded reductions of income tax expense of $4 million related to restructuring expense, $6 million related to pension settlement loss, partially offset by an increase in income tax of $1 million related to other one-time adjustments. • Quarter ended March 31, 2019: The Company recorded restructuring expense of $14 million primarily related to Drivetrain and Engine segment actions designed to improve future profitability and competitiveness. The Company recorded expenses, primarily professional fees, associated with divestiture activities for the non-core pipes and thermostat product lines of $1 million . The Company recorded $14 million of expense related to the receipt of a final unfavorable arbitration decision associated with the resolution of a matter related to a previous acquisition. The Company recorded reductions of income tax expense of $3 million related to restructuring expense and $5 million related to other one-time adjustments. The Company recorded an increase in income tax expense of $22 million due to the U.S. Department of the Treasury's issuance of the final regulations in the first quarter of 2019 related to the calculation of the one-time transition tax. • Quarter ended December 31, 2018: The Company recorded an asset impairment expense of $26 million to adjust the net book value of the pipes and thermostat product lines to fair value. The Company recorded asbestos-related adjustments resulting in a net increase to Other Expense of $23 million . The Company recorded restructuring expense of $23 million primarily related to the Engine and Drivetrain segment actions designed to improve future profitability and competitiveness. The Company recorded a gain of $19 million related to the sale of a building at a manufacturing facility located in Europe. The Company also recorded merger and acquisition expense of $1 million primarily related to professional fees associated with divestiture activities for the non-core pipes and thermostat product line. The Company recorded reductions of income tax expense of $6 million related to restructuring expense, $6 million related to asbestos-related adjustments, $8 million related to asset impairment expense, $9 million related to valuation allowance releases, $3 million related to tax reserve adjustments, and $19 million related to changes in accounting methods and tax filing positions for prior years primarily related to the Tax Act. Additionally, the Company recorded income tax expense of $6 million related to a gain on the sale of a building, and $7 million related to adjustments to measurement period provisional estimates associated with the Tax Act. • Quarter ended September 30, 2018: The Company recorded restructuring expense of $6 million primarily related to the actions within its Engine segment designed to improve future profitability and competitiveness. The Company also recorded merger and acquisition expense of $2 million primarily related to professional fees associated with divestiture activities for the non-core pipes and thermostat product line. The Company recorded reductions of income tax expense of $1 million related to restructuring expense, $7 million related to adjustments to measurement period provisional estimates associated with the Tax Act, $1 million related to a decrease in our deferred tax liability due to the Company's ability to record a tax benefit for certain foreign tax credits available due to actions the Company took during the year, and $2 million related to other one-time tax adjustments, primarily due to changes in tax filing positions. • Quarter ended June 30, 2018: The Company recorded restructuring expense of $31 million primarily related to the initiation of actions within its emissions business in the Engine segment designed to improve future profitability and competitiveness. The Company also recorded merger and acquisition expense of $1 million primarily related to professional fees associated with divestiture activities for the non-core pipes and thermostat product line. The Company recorded reductions of income tax expenses of $8 million associated with restructuring expense, $13 million related to adjustments to measurement period provisional estimates associated with the Tax Act, $21 million related to a decrease in our deferred tax liability due to the Company's ability to record a tax benefit for certain foreign tax credits available due to actions the Company took in the second quarter, and $10 million related to other one-time tax adjustments. • Quarter ended March 31, 2018: The Company recorded restructuring expense of $8 million primarily related to Engine and Drivetrain segment actions designed to improve future profitability and competitiveness. The Company recorded a gain of approximately $4 million related to the settlement of a commercial contract for an entity acquired in the 2015 Remy acquisition. The Company also recorded merger and acquisition expense of $2 million primarily related to professional fees associated with divestiture activities for the non-core pipes product line. The Company recorded income tax expenses of $1 million , and reductions of income tax expense of $1 million which is associated with restructuring expense. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event On January 28, 2020, the Company entered into a definitive agreement to acquire Delphi Technologies PLC (“Delphi Technologies”) in an all-stock transaction valued at approximately $3.3 billion , based on the closing price of BorgWarner stock on January 27, 2020. The transaction, which is expected to close in the second half of 2020, is subject to approval by Delphi Technologies' stockholders, the satisfaction of customary closing conditions and receipt of regulatory approvals. Under the terms of the agreement, Delphi Technologies stockholders would receive a fixed exchange ratio of 0.4534 shares of BorgWarner common stock for each share of Delphi Technologies stock. Upon closing of the transaction, current BorgWarner stockholders are expected to own approximately 84% of the combined company, while current Delphi Technologies stockholders are expected to own approximately 16% . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the accompanying notes, as well as the amounts of revenues and expenses reported during the periods covered by these financial statements and accompanying notes. Actual results could differ from those estimates. |
Consolidations | Principles of consolidation The Consolidated Financial Statements include all majority-owned subsidiaries with a controlling financial interest. All inter-company accounts and transactions have been eliminated in consolidation. The Company has investments in two joint ventures of which it owns 32.6% and 50% |
Revenue recognition | Revenue recognition The Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of our products. Although the Company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the life of the arrangements, and a contract does not exist for purposes of applying Accounting Standards Codification ("ASC") Topic 606 until volumes are contractually known. For most of our products, transfer of control occurs upon shipment or delivery, however, a limited number of our customer arrangements for our highly customized products with no alternative use provide us with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer. Revenue is measured at the amount of consideration we expect to receive in exchange for transferring the good. The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. Customer incentive payments are capitalized when the payments are incremental and incurred only if the new business is obtained and these amounts are expected to be recovered from the customer over the term of the new business arrangement. The Company recognizes a reduction to revenue as products that the upfront payments are related to are transferred to the customer, based on the total amount of products expected to be sold over the term of the arrangement (generally 3 to 7 years). The Company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement. |
Cost of sales | Cost of sales The Company includes materials, direct labor and manufacturing overhead within cost of sales. Manufacturing overhead is comprised of indirect materials, indirect labor, factory operating costs and other such costs associated with manufacturing products for sale. |
Cash | Cash and cash equivalents Cash and cash equivalents are valued at fair market value. It is the Company's policy to classify all highly liquid investments with original maturities of three months or less as cash and cash equivalents. Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal risk. |
Receivables, net | Receivables, net Accounts receivable are stated at cost less an allowance for bad debts. An allowance for doubtful accounts is recorded when it is probable amounts will not be collected based on specific identification of customer circumstances or age of the receivable. Refer to Note 6, "Balance Sheet Information," to the Consolidated Financial Statements for more information. |
Inventories, net | Inventories, net Cost of certain U.S. inventories is determined using the last-in, first-out (“LIFO”) method at the lower of cost or market, while other U.S. and foreign operations use the first-in, first-out (“FIFO”) or average-cost methods at the lower of cost or net realizable value. Inventory held by U.S. operations using the LIFO method was $193 million and $138 million at December 31, 2019 and 2018, respectively. Such inventories, if valued at current cost instead of LIFO, would have been greater by $15 million and $17 million at December 31, 2019 and 2018, respectively. Refer to Note 6, "Balance Sheet Information," to the Consolidated Financial Statements for more information. |
Pre-production costs related to long-term supply arrangements | Pre-production costs related to long-term supply arrangements Engineering, research and development and other design and development costs for products sold on long-term supply arrangements are expensed as incurred unless the Company has a contractual guarantee for reimbursement from the customer. Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company has title to the assets are capitalized in property, plant and equipment and amortized to cost of sales over the shorter of the term of the arrangement or over the estimated useful lives of the assets, typically three to five years . Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company has a contractual guarantee for lump sum reimbursement from the customer are capitalized in prepayments and other current assets. |
Property, plant and equipment and depreciation, net | Property, plant and equipment, net Property, plant and equipment is valued at cost less accumulated depreciation. Expenditures for maintenance, repairs and renewals of relatively minor items are generally charged to expense as incurred. Renewals of significant items are capitalized. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. Useful lives for buildings range from 15 to 40 years and useful lives for machinery and equipment range from three to 12 years. For income tax purposes, accelerated methods of depreciation are generally used. Refer to Note 6, "Balance Sheet Information," to the Consolidated Financial Statements for more information. |
Impairment or disposal of long-lived assets, including intangible assets, policy | Impairment of long-lived assets, including definite-lived intangible assets The Company reviews the carrying value of its long-lived assets, whether held for use or disposal, including other amortizing intangible assets, when events and circumstances warrant such a review under ASC Topic 360. In assessing long-lived assets for an impairment loss, assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In assessing long-lived assets for impairment, management generally considers individual facilities the lowest level for which identifiable cash flows are largely independent. A recoverability review is performed using the undiscounted cash flows if there is a triggering event. If the undiscounted cash flow test for recoverability identifies a possible impairment, management will perform a fair value analysis. Management determines fair value under ASC Topic 820 using the appropriate valuation technique of market, income or cost approach. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Management believes that the estimates of future cash flows and fair value assumptions are reasonable; however, changes in assumptions underlying these estimates could affect the valuations. Significant judgments and estimates used by management when evaluating long-lived assets for impairment include: (i) an assessment as to whether an adverse event or circumstance has triggered the need for an impairment review; (ii) undiscounted future cash flows generated by the asset; and (iii) fair valuation of the asset. Assets and liabilities held for sale The Company classifies assets and liabilities (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal group; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond the Company's control extend the period of time required to sell the disposal group beyond one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group, if material, in the line items assets held for sale and liabilities held for sale in the Consolidated Balance Sheets. Additionally, depreciation is not recorded during the period in which the long-lived assets, included in the disposal group, are classified as held for sale. |
Goodwill and other indefinite-lived intangible assets | Goodwill and other indefinite-lived intangible assets During the fourth quarter of each year, the Company qualitatively assesses its goodwill assigned to each of its reporting units. This qualitative assessment evaluates various events and circumstances, such as macro economic conditions, industry and market conditions, cost factors, relevant events and financial trends, that may impact a reporting unit's fair value. Using this qualitative assessment, the Company determines whether it is more-likely-than-not the reporting unit's fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not the reporting unit's fair value exceeds the carrying value, or upon consideration of other factors, including recent acquisition, restructuring or divestiture activity or to refresh the fair values, the Company performs a quantitative, "step one," goodwill impairment analysis. In addition, the Company may test goodwill in between annual test dates if an event occurs or circumstances change that could more-likely-than-not reduce the fair value of a reporting unit below its carrying value. Similar to goodwill, the Company can elect to perform the impairment test for indefinite-lived intangibles other than goodwill (primarily trade names) using a qualitative analysis, considering similar factors as outlined in the goodwill discussion in order to determine if it is more-likely-than-not that the fair value of the trade names is less than the respective carrying values. If the Company elects to perform or is required to perform a quantitative analysis, the test consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset as of the impairment testing date. The Company estimates the fair value of indefinite-lived intangibles using the relief-from-royalty method, which it believes is an appropriate and widely used valuation technique for such assets. The fair value derived from the relief-from-royalty method is measured as the discounted cash flow savings realized from owning such trade names and not being required to pay a royalty for their use. Refer to Note 7, "Goodwill and Other Intangibles," to the Consolidated Financial Statements for more information. |
Product warranties | Product warranties The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one to three years . Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and industry developments and recoveries from third parties. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty claims. Management believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual. The product warranty accrual is allocated to current and non-current liabilities in the Consolidated Balance Sheets. Refer to Note 8, "Product Warranty," to the Consolidated Financial Statements for more information. |
Other loss accruals and valuation allowances | Other loss accruals and valuation allowances The Company has numerous other loss exposures, such as customer claims, workers' compensation claims, litigation and recoverability of assets. Establishing loss accruals or valuation allowances for these matters requires the use of estimates and judgment in regard to the risk exposure and ultimate realization. The Company estimates losses under the programs using consistent and appropriate methods; however, changes to its assumptions could materially affect the recorded accrued liabilities for loss or asset valuation allowances. |
Asbestos | Asbestos Like many other industrial companies that have historically operated in the United States, the Company, or parties that the Company is obligated to indemnify, has been named as one of many defendants in asbestos-related personal injury actions. BorgWarner Morse TEC LLC ("Morse TEC"), a former wholly-owned subsidiary of the Company, was the obligor for the Company's recorded asbestos-related liabilities and the policyholder of the related insurance assets. On October 30, 2019, the Company transferred 100% of its equity interests to Enstar Holdings (US) LLC (“Enstar”). In the fourth quarter of 2019, the Company derecognized Morse TEC and removed asbestos obligations, related insurance assets and associated deferred tax assets from the Consolidated Balance Sheet. With the assistance of a third-party actuary, the Company estimated the liability and corresponding insurance recovery for pending and future claims not yet asserted to extend through December 31, 2064 with a runoff through 2074 and defense costs. This estimate was based on the Company's historical claim experience and estimates of the number and resolution cost of potential future claims that may be filed based on anticipated levels of unique plaintiff asbestos-related claims in the U.S. tort system against all defendants. As with any estimates, actual experience may differ. This estimate was not discounted to present value. The Company believed that December 31, 2074 was a reasonable assumption as to the last date on which it was likely to have resolved all asbestos-related claims, based on the nature and useful life of the Company’s products and the likelihood of incidence of asbestos-related disease in the U.S. population generally. The Company assessed the sufficiency of its estimated liability for pending and future claims not yet asserted and defense costs by evaluating actual experience regarding claims filed, settled and dismissed, and amounts paid in claim resolution costs. In addition to claims experience, the Company considered additional quantitative and qualitative factors such as changes in legislation, the legal environment, and the Company's defense strategy. The Company continued to have additional excess insurance coverage available for potential future asbestos-related claims. In connection with the Company’s review of its asbestos-related claims, the Company also reviewed the amount of its potential insurance coverage for such claims, taking into account the remaining limits of such coverage, the number and amount of claims on the Company's insurance from co-insured parties, ongoing litigation against the Company’s insurance carriers, potential remaining recoveries from insolvent insurance carriers, the impact of previous insurance settlements, and coverage available from solvent insurance carriers not party to the coverage litigation. |
Environmental cost, expense policy | Environmental contingencies The Company accounts for environmental costs in accordance with ASC Topic 450. Costs related to environmental assessments and remediation efforts at operating facilities are accrued when it is probable that a liability has been incurred and the amount of that liability can be reasonably estimated. Estimated costs are recorded at undiscounted amounts, based on experience and assessments and are regularly evaluated. The liabilities are recorded in accounts payable and accrued expenses and other non-current liabilities in the Company's Consolidated Balance Sheets. Refer to Note 15, "Contingencies," to the Consolidated Financial Statements for more information. |
Derivatives, reporting of derivative activity | Derivative financial instruments The Company recognizes that certain normal business transactions generate risk. Examples of risks include exposure to exchange rate risk related to transactions denominated in currencies other than the functional currency, changes in commodity costs and interest rates. It is the objective of the Company to assess the impact of these transaction risks and offer protection from selected risks through various methods, including financial derivatives. Virtually all derivative instruments held by the Company are designated as hedges, have high correlation with the underlying exposure and are highly effective in offsetting underlying price movements. Accordingly, gains and losses from changes in qualifying hedge fair values are matched with the underlying transactions. Hedge instruments are generally reported gross, with no right to offset, on the Consolidated Balance Sheets at their fair value based on quoted market prices for contracts with similar maturities. The Company does not engage in any derivative transactions for purposes other than hedging specific risks. |
Foreign currency | Foreign currency 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 the functional currency for substantially all of the Company's foreign subsidiaries. Translation adjustments for foreign subsidiaries are recorded as a component of accumulated other comprehensive income (loss) in equity. The Company recognizes transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency in earnings as incurred. Refer to Note 14, "Accumulated Other Comprehensive Loss," to the Consolidated Financial Statements for more information. |
Pension and other postretirement plans | Pensions and other postretirement employee defined benefits The Company's defined benefit pension and other postretirement employee benefit plans are accounted for in accordance with ASC Topic 715. Disability, early retirement and other postretirement employee benefits are accounted for in accordance with ASC Topic 712. Pensions and other postretirement employee benefit costs and related liabilities and assets are dependent upon assumptions used in calculating such amounts. These assumptions include discount rates, expected returns on plan assets, health care cost trends, compensation and other factors. In accordance with GAAP, actual results that differ from the assumptions used are accumulated and amortized over future periods, and accordingly, generally affect recognized expense in future periods. Refer to Note 12, "Retirement Benefit Plans," to the Consolidated Financial Statements for more information. |
Restructuring | Restructuring Restructuring costs may occur when the Company takes action to exit or significantly curtail a part of its operations or implements a reorganization that affects the nature and focus of operations. A restructuring charge can consist of severance costs associated with reductions to the workforce, costs to terminate an operating lease or contract, professional fees and other costs incurred related to the implementation of restructuring activities. |
Income taxes | Income taxes In accordance with ASC Topic 740, the Company's income tax expense is calculated based on expected income and statutory tax rates in the various jurisdictions in which the Company operates and requires the use of management's estimates and judgments. Accounting for income taxes is complex, in part because the Company conducts business globally and therefore files income tax returns in numerous tax jurisdictions. Management judgment is required in determining the Company’s worldwide provision for income taxes and recording the related assets and liabilities, including accruals for unrecognized tax benefits. The determination of accruals for unrecognized tax benefits includes the application of complex tax laws in a multitude of jurisdictions across the Company's global operations. Management judgment is required in determining the gross unrecognized tax benefits related liabilities. In the ordinary course of the Company's business, there are many transactions and calculations where the ultimate tax determination is less than certain. Accruals for unrecognized tax benefits are established when, despite the belief that tax positions are supportable, there remain certain positions that do not meet the minimum probability threshold, which is a tax position that is more-likely-than-not to be sustained upon examination by the applicable taxing authority. Refer to Note 5, "Income Taxes," to the Consolidated Financial Statements for more information. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)." Under this guidance, a lease is a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lessees are required to recognize a right-of-use asset and a lease liability for leases with a term of more than 12 months, including operating leases defined under previous GAAP. This guidance was effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted ASC Topic 842 as of January 1, 2019, using the optional transition method provided in ASU No. 2018-11, "Leases (Topic 842): Targeted Improvements." Under this method, the Company recorded an adjustment as of the effective date and did not include any retrospective adjustments to comparative periods to reflect the adoption of ASC Topic 842. In addition, the Company elected the package of practical expedients permitted under the transition guidance within ASC Topic 842, which among other things, does not require the Company to reassess whether existing contracts contain leases, classification of leases identified, nor classification and treatment of initial direct costs capitalized under ASC Topic 840. The Company also elected the practical expedients to combine the lease and non-lease components. The Company did not elect the practical expedient to apply hindsight as part of the leases evaluation. Additionally, the Company elected the practical expedient under ASU No. 2018-01, "Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842", which allows an entity to not reassess whether any existing land easements are or contain leases. The Company's lease agreements primarily consist of real estate property, such as manufacturing facilities, warehouses, and office buildings, in addition to personal property, such as vehicles, manufacturing and information technology equipment. The Company determines whether a contract is or contains a lease at contract inception. The majority of the Company's lease arrangements are comprised of fixed payments and a limited number of these arrangements include a variable payment component based on certain index fluctuations. Adoption of ASC Topic 842 resulted in the recording of lease right-of-use assets ("lease assets") and lease liabilities of approximately $104 million and $103 million , respectively, as of January 1, 2019. The adoption did not impact consolidated net earnings and had no impact on cash flows. Refer to Note 17, "Leases and Commitments," to the Consolidated Financial Statements for more information. Accounting Standards Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.” The amendments in the standard remove certain exceptions to the general principles in Topic 740 and improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for interim and annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)." It requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance (Subtopic 350-40). This guidance is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)." The new standard (i) requires the removal of disclosures that are no longer considered cost beneficial; (ii) clarifies specific requirements of certain disclosures; (iii) adds new disclosure requirements, including the weighted average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and reasons for significant gains and losses related to changes in the benefit obligation. This guidance is effective for annual periods beginning after December 15, 2020 and early adoption is permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements and will include enhanced disclosures in the consolidated financial statements upon adoption. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820) ." It removes disclosure requirements on fair value measurements including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. It also amends and clarifies certain disclosures and adds new disclosure requirements including the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. The Company does not expect this guidance to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)." It replaces the current incurred loss impairment method with a new method that reflects expected credit losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Year Ended December 31, 2019 ( In millions ) Engine Drivetrain Total North America $ 1,584 $ 1,791 $ 3,375 Europe 2,980 830 3,810 Asia 1,468 1,365 2,833 Other 121 29 150 Total $ 6,153 $ 4,015 $ 10,168 Year Ended December 31, 2018 ( In millions ) Engine Drivetrain Total North America $ 1,573 $ 1,799 $ 3,372 Europe 3,074 948 4,022 Asia 1,621 1,362 2,983 Other 122 31 153 Total $ 6,390 $ 4,140 $ 10,530 Year Ended December 31, 2017 ( In millions ) Engine Drivetrain Total North America $ 1,509 $ 1,691 $ 3,200 Europe 2,783 952 3,735 Asia 1,615 1,116 2,731 Other 102 31 133 Total $ 6,009 $ 3,790 $ 9,799 |
Research and Development Costs
Research and Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Research and Development [Abstract] | |
Schedule of Research and Development Costs | Year Ended December 31, (in millions) 2019 2018 2017 Gross R&D expenditures $ 498 $ 512 $ 473 Customer reimbursements (85 ) (72 ) (65 ) Net R&D expenditures $ 413 $ 440 $ 408 |
Other (Income) Expense, Net (Ta
Other (Income) Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Year Ended December 31, (in millions) 2019 2018 2017 Gain on derecognition of subsidiary $ (177 ) $ — $ — Restructuring expense 72 67 58 Unfavorable arbitration loss 14 — — Merger, acquisition and divestiture expense 11 6 10 Asset impairment and loss on divestiture 7 25 71 Asbestos-related adjustments — 23 — Gain on sale of building — (19 ) — Gain on commercial settlement — (4 ) — Lease termination settlement — — 5 Other income (2 ) (4 ) — Other (income) expense, net $ (75 ) $ 94 $ 144 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) | Year Ended December 31, (in millions) 2019 2018 2017 Earnings before income taxes: U.S. $ 310 $ 220 $ 203 Non-U.S. 955 976 860 Total $ 1,265 $ 1,196 $ 1,063 Provision for income taxes: Current: Federal $ 32 $ 17 $ 36 State 4 5 5 Foreign 245 259 247 Total current 281 281 288 Deferred: Federal 150 (40 ) 324 State 23 (8 ) 2 Foreign 14 (22 ) (34 ) Total deferred 187 (70 ) 292 Total provision for income taxes $ 468 $ 211 $ 580 |
Effective Income Tax Rate Reconciliation | Year Ended December 31, (in millions) 2019 2018 2017 Income taxes at U.S. statutory rate of 21% for 2019 and 2018 (35% for 2017) $ 266 $ 251 $ 372 Increases (decreases) resulting from: Impact of transactions 124 (1 ) 4 Reserve adjustments, settlements and claims 46 32 8 Foreign rate differentials 35 28 (100 ) Net tax on remittance of foreign earnings 22 (22 ) 80 U.S. tax on non-U.S. earnings 15 37 171 Other foreign taxes 10 8 8 State taxes, net of federal benefit 3 6 2 Non-deductible transaction costs 3 3 11 Impact of foreign derived intangible income (1 ) (15 ) — Valuation allowance adjustments (2 ) (11 ) 12 Affiliates' earnings (7 ) (10 ) (18 ) Changes in accounting methods and filing positions (7 ) (30 ) (2 ) Tax credits (17 ) (26 ) (24 ) Tax holidays (26 ) (28 ) (31 ) Revaluation of U.S. deferred taxes — (4 ) 64 Other 4 (7 ) 23 Provision for income taxes, as reported $ 468 $ 211 $ 580 |
Reconciliation of the total gross unrecognized tax benefits | (in millions) 2019 2018 2017 Balance, January 1 $ 120 $ 92 $ 91 Additions based on tax positions related to current year 7 24 17 Additions/(reductions) for tax positions of prior years 26 18 (2 ) Reductions for closure of tax audits and settlements — (8 ) (20 ) Reductions for lapse in statute of limitations (6 ) — (1 ) Translation adjustment (1 ) (6 ) 7 Balance, December 31 $ 146 $ 120 $ 92 |
Tax jurisdiction | Tax jurisdiction Years no longer subject to audit Tax jurisdiction Years no longer subject to audit U.S. Federal 2014 and prior Japan 2018 and prior China 2012 and prior Mexico 2013 and prior France 2015 and prior Poland 2013 and prior Germany 2011 and prior South Korea 2013 and prior Hungary 2013 and prior |
Deferred Tax Assets (Liabilities) | December 31, (in millions) 2019 2018 Deferred tax assets: Research and development capitalization $ 74 $ 92 Net operating loss and capital loss carryforwards 70 84 Other comprehensive loss 53 64 Unrecognized tax benefits 49 41 Employee compensation 32 24 Pension and other postretirement benefits 25 19 State tax credits 21 20 Warranty 15 14 Foreign tax credits 13 — Asbestos-related — 172 Other 67 80 Total deferred tax assets $ 419 $ 610 Valuation allowance (71 ) (86 ) Net deferred tax asset $ 348 $ 524 Deferred tax liabilities: Goodwill and intangible assets (174 ) (183 ) Fixed assets (144 ) (118 ) Unremitted foreign earnings (56 ) (57 ) Other (20 ) (19 ) Total deferred tax liabilities $ (394 ) $ (377 ) Net deferred taxes $ (46 ) $ 147 |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance sheet information | December 31, (in millions) 2019 2018 Receivables, net: Customers $ 1,713 $ 1,728 Indirect taxes 106 114 Other 108 153 Gross receivables 1,927 1,995 Bad debt allowance (a) (6 ) (7 ) Total receivables, net $ 1,921 $ 1,988 Inventories, net: Raw material and supplies $ 502 $ 485 Work in progress 113 114 Finished goods 207 199 FIFO inventories 822 798 LIFO reserve (15 ) (17 ) Total inventories, net $ 807 $ 781 Prepayments and other current assets: Prepaid taxes $ 95 $ 84 Prepaid tooling 83 83 Other 98 83 Total prepayments and other current assets $ 276 $ 250 Property, plant and equipment, net: Land and land use rights $ 105 $ 108 Buildings 755 763 Machinery and equipment 2,971 2,851 Capital leases 1 3 Construction in progress 360 426 Property, plant and equipment, gross 4,192 4,151 Accumulated depreciation (1,513 ) (1,474 ) Property, plant and equipment, net, excluding tooling 2,679 2,677 Tooling, net of amortization 246 227 Property, plant and equipment, net $ 2,925 $ 2,904 Investments and other long-term receivables: Investment in equity affiliates $ 256 $ 244 Cost method investments 60 8 Other long-term asbestos-related insurance receivables* — 303 Other long-term receivables* 2 37 Total investments and other long-term receivables $ 318 $ 592 Other non-current assets: Operating leases $ 85 $ — Deferred income taxes* 79 198 Deferred asbestos-related insurance asset* — 83 Other 215 221 Total other non-current assets $ 379 $ 502 December 31, (in millions) 2019 2018 Accounts payable and accrued expenses: Trade payables $ 1,325 $ 1,485 Payroll and employee related 233 233 Customer related 71 49 Product warranties 63 56 Indirect taxes 61 73 Severance 34 25 Operating leases 18 — Interest 18 19 Insurance 17 12 Retirement related 15 16 Dividends payable to noncontrolling shareholders 14 17 Asbestos-related* — 50 Other 108 109 Total accounts payable and accrued expenses $ 1,977 $ 2,144 Other non-current liabilities: Deferred income taxes $ 125 $ 51 Operating leases 67 — Product warranties 53 47 Deferred revenue 49 51 Other 255 208 Total other non-current liabilities $ 549 $ 357 ________________ * Relates to the derecognition of Morse TEC, refer to Note 19, “Recent Transactions” to the Consolidated Financial Statements for more information. (a) Bad debt allowance: 2019 2018 2017 Beginning balance, January 1 $ (7 ) $ (6 ) $ (3 ) Provision (1 ) (5 ) (3 ) Write-offs 2 4 — Ending balance, December 31 $ (6 ) $ (7 ) $ (6 ) |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill [Text Block] | The changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2018 are as follows: 2019 2018 (in millions) Engine Drivetrain Engine Drivetrain Gross goodwill balance, January 1 $ 1,343 $ 1,012 $ 1,360 $ 1,024 Accumulated impairment losses, January 1 (502 ) — (502 ) — Net goodwill balance, January 1 $ 841 $ 1,012 $ 858 $ 1,024 Goodwill during the year: Acquisitions* — 7 — 2 Translation adjustment and other (6 ) (12 ) (17 ) (14 ) Ending balance, December 31 $ 835 $ 1,007 $ 841 $ 1,012 ________________ * Acquisitions relate to the Company's 2019 purchase of Rinehart Motion Systems LLC and AM Racing LLC and the 2017 purchase of Sevcon. |
Intangible assets disclosure [Text Block] | The Company’s other intangible assets, primarily from acquisitions, consist of the following: December 31, 2019 December 31, 2018 (in millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Amortized intangible assets: Patented and unpatented technology $ 154 $ 70 $ 84 $ 152 $ 61 $ 91 Customer relationships 481 224 257 490 201 289 Miscellaneous 10 4 6 8 4 4 Total amortized intangible assets 645 298 347 650 266 384 Unamortized trade names 55 — 55 55 — 55 Total other intangible assets $ 700 $ 298 $ 402 $ 705 $ 266 $ 439 |
Intangible assets gross roll forward [Text Block] | A roll forward of the gross carrying amounts of the Company's other intangible assets is presented below: (in millions) 2019 2018 Beginning balance, January 1 $ 705 $ 730 Acquisitions* 5 — Translation adjustment (10 ) (25 ) Ending balance, December 31 $ 700 $ 705 ________________ * Acquisitions relate to the Company's 2019 purchase of Rinehart Motion Systems LLC and AM Racing LLC and the 2017 purchase of Sevcon. |
Accumulated amortization net [Text Block] | (in millions) 2019 2018 Beginning balance, January 1 $ 266 $ 237 Amortization 39 40 Translation adjustment (7 ) (11 ) Ending balance, December 31 $ 298 $ 266 |
Product Warranty (Tables)
Product Warranty (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Product warranty liability [Text Block] | (in millions) 2019 2018 Beginning balance, January 1 $ 103 $ 112 Provisions for current period sales 63 56 Adjustments of prior estimates 9 12 Payments (57 ) (73 ) Translation adjustment (2 ) (4 ) Ending balance, December 31 $ 116 $ 103 The product warranty liability is classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2019 2018 Accounts payable and accrued expenses $ 63 $ 56 Other non-current liabilities 53 47 Total product warranty liability $ 116 $ 103 |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Outstanding Notes Payable And Long Term Debt [Text Block] | December 31, (in millions) 2019 2018 Short-term debt Short-term borrowings $ 34 $ 33 Long-term debt 8.00% Senior notes due 10/01/19 ($134 million par value) — 135 4.625% Senior notes due 09/15/20 ($250 million par value) 251 251 1.80% Senior notes due 11/7/22 (€500 million par value) 558 570 3.375% Senior notes due 03/15/25 ($500 million par value) 497 497 7.125% Senior notes due 02/15/29 ($121 million par value) 119 119 4.375% Senior notes due 03/15/45 ($500 million par value) 494 494 Term loan facilities and other 7 15 Total long-term debt $ 1,926 $ 2,081 Less: current portion 252 140 Long-term debt, net of current portion $ 1,674 $ 1,941 |
Annual principal payments [Text Block] | (in millions) 2020 $ 286 2021 3 2022 562 2023 1 2024 — After 2024 1,121 Total payments $ 1,973 Less: unamortized discounts 13 Total $ 1,960 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value | Basis of fair value measurements Balance at December 31, 2019 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique (in millions) Assets: Net investment hedge contracts $ 3 $ — $ 3 $ — A Liabilities: Foreign currency contracts $ 1 $ — $ 1 $ — A Net investment hedge contracts $ 8 $ — $ 8 $ — A Basis of fair value measurements (in millions) Balance at December 31, 2018 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets: Foreign currency contracts $ 3 $ — $ 3 $ — A Other long-term receivables (insurance settlement agreement note receivable) $ 34 $ — $ 34 $ — C Net investment hedge contracts $ 12 $ — $ 12 $ — A Liabilities: Foreign currency contracts $ 2 $ — $ 2 $ — A |
Fair value defined benefit plan assets measured at recurring and non-recurring basis | Basis of fair value measurements (in millions) Balance at December 31, 2019 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV U.S. Plans: Fixed income securities $ 88 $ — $ — $ — — 88 Equity securities 59 8 — — A 51 Real estate and other 29 15 — — A 14 $ 176 $ 23 $ — $ — $ 153 Non-U.S. Plans: Fixed income securities $ 168 $ — $ — $ — — 168 Equity securities 185 111 — — A 74 Insurance contract and other 152 — — 110 C 42 $ 505 $ 111 $ — $ 110 $ 284 Basis of fair value measurements (in millions) Balance at December 31, 2018 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV (b) U.S. Plans: Fixed income securities $ 122 $ 1 $ — $ — A 121 Equity securities 71 11 — — A 60 Real estate and other 23 18 — — A 5 $ 216 $ 30 $ — $ — $ 186 Non-U.S. Plans: Fixed income securities $ 239 $ — $ — $ — — 239 Equity securities 163 93 — — A 70 Other 36 — — — — 36 $ 438 $ 93 $ — $ — $ 345 ________________ (a) In 2019, the BW Plan, a defined benefit plan in the United Kingdom, purchased an insurance contract that guarantees payment of specified pension liabilities. The Company measures the fair value of the insurance asset by projecting expected future cash flows from the contract and discounting them to present value based on current market rates, including an assessment for non-performance risk of the insurance company. The assumptions used to project expected future cash flows are based on actuarial estimates and are unobservable; therefore, the contract is categorized within Level 3 of the hierarchy. (b) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These amounts represent investments in commingled and managed funds which have underlying assets in fixed income securities, equity securities, and other assets. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The reconciliation of Level 3 defined benefit plans assets was as follows: Fair Value Measurements (in millions) Using Significant Unobservable Inputs (Level 3) Balance at December 31, 2018 $ — Purchase of insurance contract 106 Unrealized gains on assets still held at the reporting date 2 Translation adjustment 2 Balance at December 31, 2019 $ 110 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Price Risk Derivatives [Table Text Block] | Commodity derivative contracts Volume hedged Volume hedged Commodity December 31, 2019 December 31, 2018 Units of measure Duration Copper 203 257 Metric Tons Dec - 20 |
Foreign Exchange Derivative Contracts Outstanding [Text Block] | Foreign currency derivatives (in millions) Functional currency Traded currency Notional in traded currency Notional in traded currency Ending duration Brazilian real Euro 1 4 Mar - 20 Brazilian real US dollar — 5 Jun - 19 British pound Euro 9 — Mar - 20 British pound US dollar 4 — Mar - 20 Chinese renminbi US dollar 2 — Aug - 20 Euro British pound — 7 Oct - 19 Euro Japanese yen 383 — Dec - 20 Euro Swedish krona — 540 Jun - 19 Euro US dollar 18 19 Dec - 20 Japanese yen Chinese renminbi — 89 Dec - 19 Japanese yen Korean won — 5,785 Dec - 19 Japanese yen US dollar — 3 Dec - 19 Korean won Euro 13 6 Dec - 20 Korean won Japanese yen 409 266 Dec - 20 Korean won US dollar 4 7 Dec - 20 Swedish krona Euro 3 56 Jan - 20 US dollar Euro 14 — Dec - 20 US dollar Mexican peso — 575 Dec - 19 |
Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block] | Cross-currency swaps ( in millions ) December 31, 2019 December 31, 2018 Ending duration US dollar to Euro: Fixed receiving notional $ 500 $ 250 Mar - 25 Fixed paying notional € 450 € 206 Mar - 25 US dollar to Japanese yen: Fixed receiving notional $ 100 $ 100 Feb - 23 Fixed paying notional ¥ 10,978 ¥ 10,978 Feb - 23 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Text Block] | ( in millions ) Assets Liabilities Derivatives designated as hedging instruments Under Topic 815: Location December 31, 2019 December 31, 2018 Location December 31, 2019 December 31, 2018 Foreign currency Prepayments and other current assets $ — $ 2 Accounts payable and accrued expenses $ 1 $ 2 Net investment hedges Other non-current assets $ 3 $ 12 Other non-current liabilities $ 8 $ — Derivatives not designated as hedging instruments Foreign currency Prepayments and other current assets $ — $ 1 Accounts payable and accrued expenses $ — $ — |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | (in millions) Deferred gain (loss) in AOCI at Gain (loss) expected to be reclassified to income in one year or less Contract Type December 31, 2019 December 31, 2018 Net investment hedges: Foreign currency 5 4 — Cross-currency swaps 16 12 — Foreign currency denominated debt (17 ) (30 ) — Total $ 4 $ (14 ) $ — |
Derivative Instruments, Gain (Loss) [Table Text Block] | Year Ended December 31, 2019 (in millions) Net sales Cost of sales Selling, general and administrative expenses Other comprehensive income Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded $ 10,168 $ 8,067 $ 873 $ (53 ) Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) recognized in other comprehensive income $ (1 ) Gain (loss) reclassified from AOCI to income $ (5 ) $ 1 $ 3 $ — Year Ended December 31, 2018 ( in millions ) Net sales Cost of sales Selling, general and administrative expenses Other comprehensive income Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded $ 10,530 $ 8,300 $ 946 $ (170 ) Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) recognized in other comprehensive income $ (1 ) Gain (loss) reclassified from AOCI to income $ (2 ) $ (1 ) $ — $ — Year Ended December 31, 2017 (in millions) Net sales Cost of sales Selling, general and administrative expenses Other comprehensive income Total amounts of earnings and other comprehensive income line items in which the effects of cash flow hedges are recorded $ 9,799 $ 7,684 $ 899 $ 232 Gain (loss) on cash flow hedging relationships: Foreign currency Gain (loss) recognized in other comprehensive income $ (5 ) Gain (loss) reclassified from AOCI to income $ 3 $ — $ — $ — Commodity Gain (loss) recognized in other comprehensive income $ — $ — $ — $ 1 Gain (loss) reclassified from AOCI to income $ — $ 1 $ — $ — |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | ( in millions ) Year Ended December 31, Net investment hedges 2019 2018 2017 Foreign currency $ 1 $ 2 $ (8 ) Cross-currency swaps $ 4 $ 12 $ — Foreign currency denominated debt $ 13 $ 27 $ (84 ) |
Schedule of Net Investment Hedges, Statements of Financial Performance and Financial Position, Location [Table Text Block] | ( in millions ) Year Ended December 31, Net investment hedges 2019 2018 2017 Foreign currency $ — $ 1 $ 1 Cross-currency swaps $ 11 $ 9 $ — |
Schedule of Interest Rate Derivatives [Table Text Block] | Derivatives not designated as hedging instruments are used to hedge remeasurement exposures of monetary assets and liabilities denominated in currencies other than the operating units' functional currency. These derivatives resulted in the following gains and (losses) recorded to income: (in millions) Year Ended December 31, Contract Type Location 2019 2018 2017 Foreign Currency Selling, general and administrative expenses $ (3 ) $ 1 $ (1 ) |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Expense for defined contribution and defined benefit pension plans and other post employment defined benefit plans [Text Block] | Year Ended December 31, (in millions) 2019 2018 2017 Defined contribution expense $ 37 $ 35 $ 34 Defined benefit pension expense 45 8 12 Other postretirement employee benefit expense — — 1 Total $ 82 $ 43 $ 47 |
Reconciliation of the plans' benefit obligations, plan assets, funded status and recognition [Text Block] | Pension benefits Other postretirement Year Ended December 31, employee benefits 2019 2018 Year Ended December 31, (in millions) US Non-US US Non-US 2019 2018 Change in projected benefit obligation: Projected benefit obligation, January 1 $ 253 $ 612 $ 283 $ 629 $ 87 $ 107 Service cost — 18 — 18 — — Interest cost 8 12 9 12 3 3 Plan amendments — — — 2 — — Settlement and curtailment (65 ) (5 ) — (4 ) — — Actuarial (gain) loss 17 75 (18 ) 5 3 (6 ) Currency translation — (1 ) — (30 ) — — Benefits paid (15 ) (16 ) (21 ) (20 ) (12 ) (17 ) Projected benefit obligation, December 31 $ 198 $ 695 $ 253 $ 612 $ 81 $ 87 Change in plan assets: Fair value of plan assets, January 1 $ 216 $ 438 $ 240 $ 483 Actual return on plan assets 29 68 (11 ) (18 ) Employer contribution 10 16 7 19 Settlements (65 ) (5 ) — (4 ) Currency translation — 4 — (22 ) Benefits paid (14 ) (16 ) (20 ) (20 ) Fair value of plan assets, December 31 $ 176 $ 505 $ 216 $ 438 Funded status $ (22 ) $ (190 ) $ (37 ) $ (174 ) $ (81 ) $ (87 ) Amounts in the Consolidated Balance Sheets consist of: Non-current assets $ — $ 28 $ — $ 17 $ — $ — Current liabilities (1 ) (4 ) — (5 ) (10 ) (11 ) Non-current liabilities (21 ) (214 ) (37 ) (186 ) (71 ) (76 ) Net amount $ (22 ) $ (190 ) $ (37 ) $ (174 ) $ (81 ) $ (87 ) Amounts in accumulated other comprehensive loss consist of: Net actuarial loss $ 82 $ 211 $ 113 $ 193 $ 16 $ 13 Net prior service (credit) cost (5 ) 2 (6 ) 2 (8 ) (12 ) Net amount $ 77 $ 213 $ 107 $ 195 $ 8 $ 1 Total accumulated benefit obligation for all plans $ 198 $ 660 $ 253 $ 583 |
Funded status of pension plans with accumulated benefit obligations in excess of plan assets [Text Block] | December 31, (in millions) 2019 2018 Accumulated benefit obligation $ (633 ) $ (650 ) Plan assets 425 450 Deficiency $ (208 ) $ (200 ) Pension deficiency by country: United States $ (22 ) $ (37 ) Germany (107 ) (95 ) Other (79 ) (68 ) Total pension deficiency $ (208 ) $ (200 ) |
Weighted average asset allocations of funded pensions plans and target allocations [Text Block] | December 31, Target Allocation 2019 2018 U.S. Plans: Real estate and other 16 % 11 % 0% - 15% Fixed income securities 50 % 56 % 45% - 65% Equity securities 34 % 33 % 25% - 45% 100 % 100 % Non-U.S. Plans: Insurance contract, real estate and other 30 % 8 % 0% - 36% Fixed income securities 33 % 55 % 29% - 62% Equity securities 37 % 37 % 30% - 43% 100 % 100 % |
Components of net periodic benefit cost [Text Block] | Pension benefits Other postretirement employee benefits Year Ended December 31, 2019 2018 2017 Year Ended December 31, (in millions) US Non-US US Non-US US Non-US 2019 2018 2017 Service cost $ — $ 18 $ — $ 18 $ — $ 18 $ — $ — $ — Interest cost 8 12 9 12 9 11 3 3 3 Expected return on plan assets (11 ) (22 ) (14 ) (27 ) (13 ) (24 ) — — — Settlements, curtailments and other 27 1 — — — — — — — Amortization of unrecognized prior service (credit) cost (1 ) — (1 ) — (1 ) — (4 ) (4 ) (4 ) Amortization of unrecognized loss 4 9 4 7 4 8 1 1 2 Net periodic cost (income) $ 27 $ 18 $ (2 ) $ 10 $ (1 ) $ 13 $ — $ — $ 1 |
Defined benefit plan weighted average assumptions used in calculating benefit obligations [Text Block] | December 31, (percent) 2019 2018 U.S. pension plans: Discount rate 3.17 4.24 Rate of compensation increase N/A N/A U.S. other postretirement employee benefit plans: Discount rate 2.95 4.05 Rate of compensation increase N/A N/A Non-U.S. pension plans: Discount rate 1.61 2.28 Rate of compensation increase 3.05 2.99 The Company's weighted-average assumptions used to determine the net periodic benefit cost/(income) for its defined benefit pension and other postretirement employee benefit plans for the years ended December 31, 2019 and 2018 were as follows: Year Ended December 31, (percent) 2019 2018 U.S. pension plans: Discount rate - service cost 4.24 3.55 Effective interest rate on benefit obligation 3.88 3.13 Expected long-term rate of return on assets 6.00 6.00 Average rate of increase in compensation N/A N/A U.S. other postretirement plans: Discount rate - service cost 3.43 2.65 Effective interest rate on benefit obligation 3.68 2.86 Expected long-term rate of return on assets N/A N/A Average rate of increase in compensation N/A N/A Non-U.S. pension plans: Discount rate - service cost 2.55 2.71 Effective interest rate on benefit obligation 2.06 1.98 Expected long-term rate of return on assets 5.23 5.73 Average rate of increase in compensation 3.03 2.98 |
Defined benefit plan estimated future benefit payments [Text Block] | Pension benefits Other postretirement employee benefits (in millions) Year U.S. Non-U.S. 2020 $ 20 $ 20 $ 10 2021 15 23 9 2022 14 23 9 2023 14 24 8 2024 14 24 7 2025-2029 62 137 25 |
Defined benefit plan effect of one percentage point change in assumed health care cost trend rates [Text Block] | One Percentage Point (in millions) Increase Decrease Effect on other postretirement employee benefit obligation $ 5 $ (5 ) Effect on total service and interest cost components $ — $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity [Text Block] | Shares (thousands) Weighted average exercise price Weighted average remaining contractual life (in years) Aggregate intrinsic value (in millions) Outstanding at January 1, 2017 473 $ 17.47 0.1 $ 10.4 Exercised (473 ) $ 17.47 $ 10.4 Outstanding at December 31, 2017 — $ — 0.0 $ — Exercised — $ — $ — Outstanding at December 31, 2018 — $ — 0.0 $ — Exercised — $ — $ — Outstanding at December 31, 2019 — $ — 0.0 $ — Options exercisable at December 31, 2019 — $ — 0.0 $ — |
Cash Proceeds Received and Tax Benefit from Share-based Payment Awards [Table Text Block] | Year Ended December 31, (in millions) 2019 2018 2017 Proceeds from stock options exercised — gross $ — $ — $ 8 Tax benefit — — 8 Proceeds from stock options exercised, net of tax $ — $ — $ 16 |
Restricted stock compensation expense [Text Block] | Year Ended December 31, (in millions, except per share data) 2019 2018 2017 Restricted stock compensation expense $ 30 $ 26 $ 27 Restricted stock compensation expense, net of tax $ 23 $ 20 $ 20 |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block] | Shares subject to restriction Weighted average grant date fair value Nonvested at January 1, 2017 1,429 $ 44.12 Granted 804 $ 40.10 Vested (521 ) $ 56.53 Forfeited (119 ) $ 38.97 Nonvested at December 31, 2017 1,593 $ 38.86 Granted 737 $ 51.70 Vested (556 ) $ 42.25 Forfeited (258 ) $ 44.51 Nonvested at December 31, 2018 1,516 $ 42.97 Granted 1,082 $ 41.66 Vested (724 ) $ 36.81 Forfeited (210 ) $ 44.82 Nonvested at December 31, 2019 1,664 $ 44.26 |
Share-based Payment Arrangement, Performance Shares, Activity [Table Text Block] | Year Ended December 31, (in millions, except share data) 2019 2018 2017 Expense $ 7 $ 18 $ 16 Number of shares 315,000 249,000 126,000 A summary of the status of the Company’s nonvested relative revenue growth performance shares at December 31, 2019, 2018 and 2017 is as follows: Number of shares Weighted average grant date fair value Nonvested at January 1, 2017 320 $ 38.62 Granted 198 $ 40.08 Vested (156 ) $ 38.62 Forfeited (7 ) $ 39.20 Nonvested at December 31, 2017 355 $ 39.42 Granted 287 $ 50.82 Vested (166 ) $ 38.62 Forfeited (179 ) $ 45.82 Nonvested at December 31, 2018 297 $ 47.03 Granted 196 $ 41.90 Vested (160 ) $ 40.10 Forfeited (93 ) $ 44.30 Nonvested at December 31, 2019 240 $ 48.52 Number of shares Weighted average grant date fair value Nonvested at January 1, 2017 410 $ 43.99 Granted 201 $ 45.57 Forfeited (256 ) $ 61.40 Nonvested at December 31, 2017 355 $ 32.35 Granted 287 $ 68.38 Forfeited (345 ) $ 38.26 Nonvested at December 31, 2018 297 $ 60.35 Granted 196 $ 51.52 Vested (160 ) $ 45.78 Forfeited (93 ) $ 55.82 Nonvested at December 31, 2019 240 $ 64.61 Year Ended December 31, (in millions, except share data) 2019 2018 2017 Expense $ 5 $ 9 $ 10 Number of shares — — — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Other Total Beginning Balance, January 1, 2017 $ (530 ) $ 5 $ (198 ) $ 1 $ (722 ) Comprehensive (loss) income before reclassifications 236 (4 ) (5 ) 2 229 Income taxes associated with comprehensive (loss) income before reclassifications — 1 (1 ) — — Reclassification from accumulated other comprehensive (loss) income — (4 ) 9 — 5 Income taxes reclassified into net earnings — 1 (3 ) — (2 ) Ending Balance December 31, 2017 $ (294 ) $ (1 ) $ (198 ) $ 3 $ (490 ) Adoption of accounting standard — — (14 ) — (14 ) Comprehensive (loss) income before reclassifications (153 ) (2 ) (42 ) (1 ) (198 ) Income taxes associated with comprehensive (loss) income before reclassifications 5 — 14 — 19 Reclassification from accumulated other comprehensive (loss) income — 4 8 — 12 Income taxes reclassified into net earnings — (1 ) (2 ) — (3 ) Ending Balance December 31, 2018 $ (442 ) $ — $ (234 ) $ 2 $ (674 ) Comprehensive (loss) income before reclassifications (51 ) (1 ) (29 ) (2 ) (83 ) Income taxes associated with comprehensive (loss) income before reclassifications (4 ) — 4 — — Reclassification from accumulated other comprehensive (loss) income — 1 37 — 38 Income taxes reclassified into net earnings — — (8 ) — (8 ) Ending Balance December 31, 2019 $ (497 ) $ — $ (230 ) $ — $ (727 ) |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Change of Outstanding Asbestos-related Claims [Table Text Block] | 2019 2018 Beginning claims January 1 8,598 9,225 New claims received 1,667 1,932 Dismissed claims (967 ) (2,189 ) Settled claims (237 ) (370 ) Derecognized claims (9,061 ) — Ending claims December 31 — 8,598 |
Schedule of Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | (in millions) 2019 2018 Beginning asbestos liability as of January 1 $ 805 $ 828 Actuarial revaluation — 23 Claim resolution costs and defense related costs (37 ) (46 ) Derecognized liability (768 ) — Ending asbestos liability as of December 31 $ — $ 805 |
Schedule Of Liability For Unpaid Claims And Claims Adjustment Expenses [Table Text Block] | December 31, (in millions) 2019 2018 Assets: Other long-term asbestos-related insurance receivables $ — $ 303 Deferred asbestos-related insurance asset — 83 Total insurance assets $ — $ 386 Liabilities: Accounts payable and accrued expenses $ — $ 50 Other non-current liabilities — 755 Total accrued liabilities $ — $ 805 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | Severance Accruals (in millions) Drivetrain Engine Total Balance at January 1, 2018 $ 4 $ 1 $ 5 Provision 7 35 42 Cash payments (7 ) (15 ) (22 ) Balance at December 31, 2018 4 21 25 Provision 1 43 44 Cash payments (1 ) (34 ) (35 ) Balance at December 31, 2019 $ 4 $ 30 $ 34 |
Leases and Commitments (Tables)
Leases and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Operating lease assets and lease liabilities | The following table presents the operating lease assets and lease liabilities: (in millions) December 31, 2019 Assets Location Operating leases Other non-current assets $ 85 Total operating leases $ 85 Liabilities Operating leases Accounts payable and accrued expenses $ 18 Operating leases Other non-current liabilities 67 Total operating lease liabilities $ 85 |
Maturity of lease liabilities | The following table presents the maturity of lease liabilities as of December 31, 2019: (in millions) Operating leases 2020 $ 20 2021 15 2022 13 2023 9 2024 7 After 2024 33 Total (undiscounted) lease payments $ 97 Less: Imputed interest 12 Present value of lease liabilities $ 85 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Share reconciliation [Text Block] | Year Ended December 31, (in millions except share and per share amounts) 2019 2018 2017 Basic earnings per share: Net earnings attributable to BorgWarner Inc. $ 746 $ 931 $ 440 Weighted average shares of common stock outstanding 205.7 208.2 210.4 Basic earnings per share of common stock $ 3.63 $ 4.47 $ 2.09 Diluted earnings per share: Net earnings attributable to BorgWarner Inc. $ 746 $ 931 $ 440 Weighted average shares of common stock outstanding 205.7 208.2 210.4 Effect of stock-based compensation 1.1 1.3 1.1 Weighted average shares of common stock outstanding including dilutive shares 206.8 209.5 211.5 Diluted earnings per share of common stock $ 3.61 $ 4.44 $ 2.08 Antidilutive stock-based awards excluded from the calculation of diluted earnings per share 0.1 0.1 — |
Recent Transactions (Tables)
Recent Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | (in millions) Receivables, net $ 16 Inventories, net 17 Other current assets 3 Property, plant and equipment, net 7 Goodwill 128 Other intangible assets 71 Deferred tax liabilities (9 ) Income taxes payable (1 ) Other assets and liabilities (3 ) Accounts payable and accrued expenses (25 ) Total consideration, net of cash acquired 204 Less: Assumed retirement-related liabilities 18 Cash paid, net of cash acquired $ 186 |
Assets and Liabilities Held f_2
Assets and Liabilities Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | December 31, ( in millions ) 2018 Receivables, net $ 15 Inventories, net 42 Prepayments and other current assets 12 Property, plant and equipment, net 45 Goodwill 7 Other intangible assets, net 20 Other assets — Impairment of carrying value (94 ) Total assets held for sale $ 47 Accounts payable and accrued expenses $ 18 Other liabilities 5 Total liabilities held for sale $ 23 |
Reporting Segments and Relate_2
Reporting Segments and Related Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | 2019 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures (a) (in millions) Customers Inter-segment Net Engine $ 6,153 $ 61 $ 6,214 $ 4,536 $ 227 $ 219 Drivetrain 4,015 — 4,015 4,075 183 254 Inter-segment eliminations — (61 ) (61 ) — — — Total 10,168 — 10,168 8,611 410 473 Corporate (b) — — — 1,091 29 8 Consolidated $ 10,168 $ — $ 10,168 $ 9,702 $ 439 $ 481 2018 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures (a) (in millions) Customers Inter-segment Net Engine $ 6,390 $ 57 $ 6,447 $ 4,731 $ 226 $ 278 Drivetrain 4,140 — 4,140 3,920 175 254 Inter-segment eliminations — (57 ) (57 ) — — — Total 10,530 — 10,530 8,651 401 532 Corporate (b) — — — 1,444 30 14 Consolidated $ 10,530 $ — $ 10,530 $ 10,095 $ 431 $ 546 2017 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset (in millions) Customers Inter-segment Net Engine $ 6,009 $ 53 $ 6,062 $ 4,733 $ 219 $ 305 Drivetrain 3,790 — 3,790 3,904 161 242 Inter-segment eliminations — (53 ) (53 ) — — — Total 9,799 — 9,799 8,637 380 547 Corporate (b) — — — 1,151 28 13 Consolidated $ 9,799 $ — $ 9,799 $ 9,788 $ 408 $ 560 _______________ (a) Long-lived asset expenditures include capital expenditures and tooling outlays. (b) Corporate assets include investments and other long-term receivables and deferred income taxes. Adjusted earnings before interest, income taxes and noncontrolling interest ("Adjusted EBIT") Year Ended December 31, (in millions) 2019 2018 2017 Engine $ 995 $ 1,040 $ 992 Drivetrain 443 475 448 Adjusted EBIT 1,438 1,515 1,440 Gain on derecognition of subsidiary (177 ) — — Restructuring expense 72 67 58 Unfavorable arbitration loss 14 — — Merger, acquisition and divestiture expense 11 6 10 Asset impairment and loss on divestiture 7 25 71 Officer stock awards modification 2 8 — Asbestos-related adjustments — 23 — Gain on sale of building — (19 ) — Lease termination settlement — — 5 Other (income) expense — (4 ) 2 Corporate, including stock-based compensation 206 219 222 Equity in affiliates' earnings, net of tax (32 ) (49 ) (51 ) Interest income (12 ) (6 ) (6 ) Interest expense 55 59 71 Other postretirement expense (income) 27 (10 ) (5 ) Earnings before income taxes and noncontrolling interest 1,265 1,196 1,063 Provision for income taxes 468 211 580 Net earnings 797 985 483 Net earnings attributable to the noncontrolling interest, net of tax 51 54 43 Net earnings attributable to BorgWarner Inc. $ 746 $ 931 $ 440 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Net sales Long-lived assets (in millions) 2019 2018 2017 2019 2018 2017 United States $ 2,335 $ 2,394 $ 2,280 $ 752 $ 729 $ 719 Europe: Germany 1,507 1,665 1,653 328 371 413 Poland 627 519 522 180 171 152 Hungary 589 687 656 164 153 148 Other Europe 1,087 1,151 904 285 282 274 Total Europe 3,810 4,022 3,735 957 977 987 China 1,711 1,801 1,560 605 589 555 Mexico 1,040 978 920 247 223 201 South Korea 786 859 877 221 235 244 Other foreign 486 476 427 152 151 158 Total $ 10,168 $ 10,530 $ 9,799 $ 2,934 $ 2,904 $ 2,864 |
Interim Financial Information_2
Interim Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Table Text Block] | The following table presents summary quarterly financial data: (in millions, except per share amounts) 2019 2018 Quarter ended Mar-31 Jun-30 Sep-30 Dec-31 Year Mar-31 Jun-30 Sep-30 Dec-31 Year Net sales $ 2,566 $ 2,551 $ 2,492 $ 2,559 $ 10,168 $ 2,784 $ 2,694 $ 2,478 $ 2,574 $ 10,530 Cost of sales 2,047 2,038 1,968 2,014 8,067 2,193 2,114 1,963 2,030 8,300 Gross profit 519 513 524 545 2,101 591 580 515 544 2,230 Selling, general and administrative expenses 226 212 230 205 873 253 237 230 226 946 Other expense (income), net 29 16 18 (138 ) (75 ) 5 30 7 52 94 Operating income 264 285 276 478 1,303 333 313 278 266 1,190 Equity in affiliates’ earnings, net of tax (9 ) (9 ) (7 ) (7 ) (32 ) (10 ) (13 ) (15 ) (11 ) (49 ) Interest income (3 ) (2 ) (4 ) (3 ) (12 ) (2 ) (1 ) (1 ) (2 ) (6 ) Interest expense 14 14 15 12 55 16 15 14 14 59 Other postretirement expense (income) — 27 (1 ) 1 27 (3 ) (2 ) (3 ) (2 ) (10 ) Earnings before income taxes and noncontrolling interest 262 255 273 475 1,265 332 314 283 267 1,196 Provision for income taxes 91 73 66 238 468 95 30 67 19 211 Net earnings 171 182 207 237 797 237 284 216 248 985 Net earnings attributable to the noncontrolling interest, net of tax 11 10 13 17 51 12 12 12 18 54 Net earnings attributable to BorgWarner Inc. (a) $ 160 $ 172 $ 194 $ 220 $ 746 $ 225 $ 272 $ 204 $ 230 $ 931 Earnings per share — basic $ 0.77 $ 0.84 $ 0.94 $ 1.07 $ 3.63 $ 1.07 $ 1.30 $ 0.98 $ 1.11 $ 4.47 Earnings per share — diluted $ 0.77 $ 0.83 $ 0.94 $ 1.06 $ 3.61 $ 1.07 $ 1.30 $ 0.98 $ 1.10 $ 4.44 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Cost of sales | $ 2,014 | $ 1,968 | $ 2,038 | $ 2,047 | $ 2,030 | $ 1,963 | $ 2,114 | $ 2,193 | $ 8,067 | $ 8,300 | $ 7,684 | |
Selling, general and administrative expenses | 205 | $ 230 | $ 212 | $ 226 | 226 | $ 230 | $ 237 | $ 253 | 873 | 946 | $ 899 | |
Total operating leases | 85 | 0 | 85 | 0 | ||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Inventories, net | 807 | 781 | 807 | 781 | ||||||||
Inventory, LIFO Reserve | 15 | 17 | 15 | 17 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Present value of lease liabilities | 85 | 85 | ||||||||||
United States | ||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Inventories, net | $ 193 | $ 138 | $ 193 | $ 138 | ||||||||
Minimum [Member] | ||||||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 years | 3 years | ||||||||||
Standard product warranty term | 1 year | |||||||||||
Minimum [Member] | Long-term Supply Arrangements [Member] | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||||||||
Minimum [Member] | Building [Member] | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Useful Life | 15 years | |||||||||||
Minimum [Member] | Machinery and equipments | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||||||||
Maximum [Member] | ||||||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 7 years | 7 years | ||||||||||
Standard product warranty term | 3 years | |||||||||||
Maximum [Member] | Long-term Supply Arrangements [Member] | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||||||||
Maximum [Member] | Building [Member] | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Useful Life | 40 years | |||||||||||
Maximum [Member] | Machinery and equipments | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Useful Life | 12 years | |||||||||||
Accounting Standards Update 2018-11 [Member] | ||||||||||||
Total operating leases | $ 104 | |||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Present value of lease liabilities | $ 103 | |||||||||||
Joint Venture, One [Member] | ||||||||||||
Ownership interest (percent) | 32.60% | 32.60% | ||||||||||
Joint Venture, Two [Member] | ||||||||||||
Ownership interest (percent) | 50.00% | 50.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Contract with Customer, Asset, after Allowance for Credit Loss | $ 10 | $ 11 | $ 10 | $ 11 | |||||||
Contract with Customer, Refund Liability, Current | 2 | 6 | $ 2 | 6 | |||||||
Revenue, Performance Obligation, Description of Payment Terms | from 30 to 90 days | ||||||||||
Contract with Customer, Liability, Noncurrent | 49 | 51 | $ 49 | 51 | |||||||
Net sales | $ 2,559 | $ 2,492 | $ 2,551 | $ 2,566 | 2,574 | $ 2,478 | $ 2,694 | $ 2,784 | $ 10,168 | 10,530 | $ 9,799 |
Maximum [Member] | |||||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 7 years | 7 years | |||||||||
Capitalized contract costs, amortization period | 7 years | ||||||||||
Minimum [Member] | |||||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 years | 3 years | |||||||||
Capitalized contract costs, amortization period | 3 years | ||||||||||
Accounts payable and accrued expenses | |||||||||||
Contract with Customer, Liability, Current | $ 10 | 13 | $ 10 | 13 | |||||||
Other non-current liabilities | |||||||||||
Contract with Customer, Liability, Noncurrent | 12 | 17 | 12 | 17 | |||||||
Prepaid Expenses and Other Current Assets [Member] | |||||||||||
Contract with Customer, Asset, after Allowance for Credit Loss | 37 | 29 | 37 | 29 | |||||||
Other non-current assets | |||||||||||
Contract with Customer, Asset, after Allowance for Credit Loss | $ 180 | $ 187 | 180 | 187 | |||||||
Europe | |||||||||||
Net sales | 3,810 | 4,022 | 3,735 | ||||||||
Other | |||||||||||
Net sales | 486 | 476 | 427 | ||||||||
Consolidated Entities [Member] | |||||||||||
Net sales | 10,168 | 10,530 | 9,799 | ||||||||
Consolidated Entities [Member] | Europe | |||||||||||
Net sales | 3,810 | 4,022 | 3,735 | ||||||||
Consolidated Entities [Member] | North America [Member] | |||||||||||
Net sales | 3,375 | 3,372 | 3,200 | ||||||||
Consolidated Entities [Member] | Asia [Member] | |||||||||||
Net sales | 2,833 | 2,983 | 2,731 | ||||||||
Consolidated Entities [Member] | Other | |||||||||||
Net sales | 150 | 153 | 133 | ||||||||
Drivetrain [Member] | |||||||||||
Net sales | 4,015 | 4,140 | 3,790 | ||||||||
Drivetrain [Member] | Europe | |||||||||||
Net sales | 830 | 948 | 952 | ||||||||
Drivetrain [Member] | North America [Member] | |||||||||||
Net sales | 1,791 | 1,799 | 1,691 | ||||||||
Drivetrain [Member] | Asia [Member] | |||||||||||
Net sales | 1,365 | 1,362 | 1,116 | ||||||||
Drivetrain [Member] | Other | |||||||||||
Net sales | 29 | 31 | 31 | ||||||||
Engine [Member] | |||||||||||
Net sales | 6,214 | 6,447 | 6,062 | ||||||||
Engine [Member] | Europe | |||||||||||
Net sales | 2,980 | 3,074 | 2,783 | ||||||||
Engine [Member] | North America [Member] | |||||||||||
Net sales | 1,584 | 1,573 | 1,509 | ||||||||
Engine [Member] | Asia [Member] | |||||||||||
Net sales | 1,468 | 1,621 | 1,615 | ||||||||
Engine [Member] | Other | |||||||||||
Net sales | 121 | 122 | 102 | ||||||||
Reportable Geographical Components [Member] | Drivetrain [Member] | |||||||||||
Net sales | 4,015 | 4,140 | 3,790 | ||||||||
Reportable Geographical Components [Member] | Engine [Member] | |||||||||||
Net sales | $ 6,153 | $ 6,390 | $ 6,009 |
Research and Development Cost_2
Research and Development Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Research and Development [Abstract] | |||
Gross R&D expenditures | $ 498 | $ 512 | $ 473 |
Customer reimbursements | (85) | (72) | (65) |
Net R&D expenditures | $ 413 | $ 440 | $ 408 |
Net R&D expenditures as a percentage of net sales | 4.10% | 4.20% | 4.20% |
Research and Development Contract, Percent of Net Research and Development, Maximum | 5.00% | 5.00% | 5.00% |
Other (Income) Expense, Net (De
Other (Income) Expense, Net (Details) - USD ($) $ in Millions | Oct. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Gain on derecognition of subsidiary | $ 177 | $ 177 | $ 0 | $ 0 | ||||||||||
Restructuring expense | $ 31 | $ 14 | $ 13 | $ 14 | $ 23 | $ 6 | $ 31 | $ 8 | 72 | 67 | 58 | |||
Unfavorable arbitration loss | 14 | 0 | 0 | |||||||||||
Merger, acquisition and divestiture expense | 1 | 2 | 1 | 2 | 11 | 6 | 10 | |||||||
Asset impairment and loss on divestiture | 26 | 7 | 25 | 71 | ||||||||||
Asbestos-related adjustments | 23 | 0 | 23 | 0 | ||||||||||
Gain on sale of building | (19) | 0 | (19) | 0 | ||||||||||
Lease termination settlement | 0 | 0 | 5 | |||||||||||
Gain on commercial settlement | (4) | 0 | (4) | 0 | ||||||||||
Other income | (2) | (4) | ||||||||||||
Other (income) expense, net | $ (138) | $ 18 | $ 16 | $ 29 | $ 52 | $ 7 | $ 30 | $ 5 | $ (75) | $ 94 | $ 144 | |||
Proceeds from Divestiture of Businesses | $ 28 | |||||||||||||
Morse TEC [Member] | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Equity interest acquired by Enstar (percent) | 100.00% | |||||||||||||
Romeo Systems Inc. [Member] | ||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||
Ownership interest (percent) | 20.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Oct. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Information [Line Items] | ||||||||||||
Tax benefit on nontaxable gain from derecognition of subsidiary | $ 37 | |||||||||||
Gain on derecognition of subsidiary | 177 | $ 177 | $ 0 | $ 0 | ||||||||
Earnings before income taxes and the provision for income taxes | ||||||||||||
Earnings before income taxes - U.S. | 310 | 220 | 203 | |||||||||
Earnings before income taxes - Non-U.S. | 955 | 976 | 860 | |||||||||
Earnings before income taxes and noncontrolling interest | $ 475 | $ 273 | $ 255 | $ 262 | $ 267 | $ 283 | $ 314 | $ 332 | 1,265 | 1,196 | 1,063 | |
Current: | ||||||||||||
Federal | 32 | 17 | 36 | |||||||||
State | 4 | 5 | 5 | |||||||||
Foreign | 245 | 259 | 247 | |||||||||
Total current | 281 | 281 | 288 | |||||||||
Deferred: | ||||||||||||
Federal | 150 | (40) | 324 | |||||||||
State | 23 | (8) | 2 | |||||||||
Foreign | 14 | (22) | (34) | |||||||||
Total deferred | 187 | (70) | 292 | |||||||||
Provision for income taxes | 238 | $ 66 | $ 73 | $ 91 | 19 | 67 | 30 | $ 95 | $ 468 | $ 211 | $ 580 | |
Effective tax rate | 37.00% | 17.70% | 54.70% | |||||||||
U.S. Federal Corporate Tax Rate prior to the Tax Cuts and Jobs Act | 35.00% | |||||||||||
U.S. Federal Corporate Tax Rate After the Tax Cuts and Jobs Act | 21.00% | |||||||||||
Tax reform adjustments to provision for income taxes | $ 16 | $ (13) | $ 274 | |||||||||
Income tax expense, revaluation of deferred tax assets and liabilities due to change of tax law | 75 | |||||||||||
Income tax expense related to executive compensation due to change of tax law | 11 | |||||||||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | 105 | |||||||||||
Increase of deferred tax liabilities, future remittance of foreign earnings, due to the Act | $ 94 | |||||||||||
Increase (decrease) in deferred tax assets due to final SAB 118 adjustments | 13 | |||||||||||
Increase (decrease) in deferred tax assets, executive compensation, final SAB 118 adjustments | 9 | |||||||||||
Income tax expense, one-time transition tax measurement period adjustment due to change of tax law | 8 | |||||||||||
Decrease in deferred tax liability, indefinite reinvestment assertion, measurement period adjustments due to change of law | 7 | |||||||||||
Effective rate reconciliation measurement period adjustments due to the Tax Act | $ (7) | $ 7 | $ 13 | $ 13 | ||||||||
Tax expense on net remittance of foreign earnings | 22 | |||||||||||
Undistributed Earnings of Foreign Subsidiaries | 400 | 400 | ||||||||||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | $ 20 | $ 20 | ||||||||||
BorgWarner Morse TEC LLC [Member] | ||||||||||||
Income Tax Information [Line Items] | ||||||||||||
Tax expense on derecognition of subsidiary | $ 173 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||||||||||
Income taxes at U.S. statutory rate of 21% for 2019 and 2018 (35% for 2017) | $ 266 | $ 251 | $ 372 | ||||||||
Impact of transactions | 124 | (1) | 4 | ||||||||
Reserve adjustments, settlements and claims | 46 | 32 | 8 | ||||||||
Foreign rate differentials | 35 | 28 | (100) | ||||||||
Net tax on remittance of foreign earnings | 22 | (22) | 80 | ||||||||
U.S. tax on non-U.S. earnings | 15 | 37 | 171 | ||||||||
Other foreign taxes | 10 | 8 | 8 | ||||||||
State taxes, net of federal benefit | 3 | 6 | 2 | ||||||||
Non-deductible transaction costs | 3 | 3 | 11 | ||||||||
Impact of foreign derived intangible income | 1 | 15 | 0 | ||||||||
Valuation allowance adjustments | $ (9) | (2) | (11) | 12 | |||||||
Affiliates' earnings | (7) | (10) | (18) | ||||||||
Changes in accounting methods and filing positions | (7) | (30) | (2) | ||||||||
Tax credits | (17) | (26) | (24) | ||||||||
Changes in accounting methods and filing positions | (26) | (28) | (31) | ||||||||
Revaluation of U.S. deferred taxes | 0 | (4) | 64 | ||||||||
Other | 4 | (7) | 23 | ||||||||
Provision for income taxes | $ 238 | $ 66 | $ 73 | $ 91 | 19 | $ 67 | $ 30 | $ 95 | 468 | $ 211 | $ 580 |
Tax expense resulting from finalization of one-time transition tax | 22 | ||||||||||
Tax expense on net remittance of foreign earnings | 22 | ||||||||||
Effective Income Tax Rate Reconciliation, Deduction, Other Postretirement Expense, Amount | 6 | 6 | |||||||||
U.S. Federal Corporate Tax Rate prior to the Tax Cuts and Jobs Act | 35.00% | ||||||||||
U.S. Federal Corporate Tax Rate After the Tax Cuts and Jobs Act | 21.00% | ||||||||||
Effective tax rate reconciliation, GILTI | $ 29 | ||||||||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 105 | ||||||||||
Income tax expense, revaluation of deferred tax assets and liabilities due to change of tax law | 75 | ||||||||||
Income tax expense related to executive compensation due to change of tax law | 11 | ||||||||||
Increase of deferred tax liabilities, future remittance of foreign earnings, due to the Act | 94 | ||||||||||
Tax benefit associated with restructuring | 8 | 4 | 4 | 3 | 6 | 1 | 8 | 1 | 19 | 15 | 10 |
Tax benefit associated with merger and acquisition expense | (1) | ||||||||||
Tax expenses (benefits) associated with asbestos-related adjustments | (6) | (6) | |||||||||
Tax benefit associated with asset impairment expense | (8) | (8) | (18) | ||||||||
Tax expense on gain from customer contract expiration | $ 1 | 1 | |||||||||
Effective Income Tax Rate Reconciliation, Disposition of Asset, Amount | 6 | 6 | |||||||||
Effective rate reconciliation measurement period adjustments due to the Tax Act | 7 | (7) | (13) | (13) | |||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | (1) | (21) | (22) | ||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (9) | ||||||||||
Effective income tax rate reconciliation, tax reserve adjustments | (3) | (3) | |||||||||
Tax impact of other tax adjustments | (5) | $ (9) | $ (1) | $ (5) | $ (19) | $ (2) | $ (10) | $ (30) | $ (4) | ||
Effective Income Tax Rate Reconciliation, Global Realignment Plan | $ 11 | ||||||||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ 8 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the total gross unrecognized tax benefits | |||
Balance, January 1 | $ 120 | $ 92 | $ 91 |
Additions based on tax positions related to current year | 7 | 24 | 17 |
Unrecognized tax benefits, decrease resulting from prior period tax positions | (2) | ||
Unrecognized tax benefits, increase resulting from prior period tax positions | 26 | 18 | |
Reductions for closure of tax audits and settlements | 0 | (8) | (20) |
Reductions for lapse in statute of limitations | (6) | 0 | (1) |
Unrecognized tax benefits, increase resulting from foreign currency translation | 7 | ||
Unrecognized tax benefits, decrease resulting from foreign currency translation | (1) | (6) | |
Balance, December 31 | 146 | 120 | $ 92 |
Income tax penalties and interest expense | 15 | 10 | |
Unrecognized tax benefits that would impact effective tax rate | 144 | ||
Income tax penalties and interest accrued on unrecognized tax benefits | 46 | $ 32 | |
Other Current Liabilities [Member] | |||
Reconciliation of the total gross unrecognized tax benefits | |||
Balance, December 31 | $ 5 |
Income Taxes - Income Tax Exami
Income Taxes - Income Tax Examinations (Details) | 12 Months Ended |
Dec. 31, 2019 | |
U.S. Federal | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2014 and prior |
Japan | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2018 and prior |
China | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2012 and prior |
Mexico | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2013 and prior |
France | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2015 and prior |
Poland | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2013 and prior |
Germany | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2011 and prior |
South Korea | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2013 and prior |
Hungary | |
Major tax payer in tax Jurisdiction | |
Years no longer subject to examination | 2013 and prior |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Foreign tax credits | $ 13 | $ 0 |
Deferred Tax Assets, Tax Credit Carryforward, State | 21 | 20 |
Employee compensation | 32 | 24 |
Other comprehensive loss | 53 | 64 |
Research and development capitalization | 74 | 92 |
Net operating loss and capital loss carryforwards | 70 | 84 |
Foreign tax credits | 25 | 19 |
Asbestos-related | 0 | 172 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Warranty Reserves | 15 | 14 |
Deferred Tax Assets, Unrecognized Tax Benefits | 49 | 41 |
Other | 67 | 80 |
Total deferred tax assets | 419 | 610 |
Valuation allowance | (71) | (86) |
Net deferred tax asset | 348 | 524 |
Deferred tax liabilities: | ||
Goodwill and intangible assets | (174) | (183) |
Fixed assets | (144) | (118) |
Unremitted foreign earnings | (56) | (57) |
Other | (20) | (19) |
Total deferred tax liabilities | (394) | (377) |
Deferred tax liabilities, net | $ 46 | |
Deferred tax assets, net | $ 147 |
Income Taxes Income Taxes - Ope
Income Taxes Income Taxes - Operating Loss Carryforwards (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss and capital loss carryforwards | $ 70 | $ 84 |
State Operating Loss Carryforwards | 571 | |
Non-U.S. Tax Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 212 | |
Operating Loss Carryforwards subject to expiration | 147 | |
Operating Loss Carryforwards not subject to expiration | 65 | |
Operating Loss Carryforwards valuation allowance | 134 | |
Net operating loss and capital loss carryforwards | 212 | |
Tax Credit Carryforward, Amount | 13 | |
Tax Credit Carryforward, Valuation Allowance | 2 | |
Non-U.S. income tax holidays | 26 | $ 28 |
State and Local Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards valuation allowance | 504 | |
Deferred Tax Assets, Tax Credit Carryforwards, Other | 21 | |
Tax Credit Carryforward, Valuation Allowance | $ 19 |
Balance Sheet Information (Deta
Balance Sheet Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables, net: | |||
Customers | $ 1,713 | $ 1,728 | |
Indirect taxes | 106 | 114 | |
Other | 108 | 153 | |
Gross receivables | 1,927 | 1,995 | |
Bad debt allowance (a) | (6) | (7) | |
Total receivables, net | 1,921 | 1,988 | |
Inventories, net: | |||
Raw material and supplies | 502 | 485 | |
Work in progress | 113 | 114 | |
Finished goods | 207 | 199 | |
FIFO inventories | 822 | 798 | |
LIFO reserve | (15) | (17) | |
Total inventories, net | 807 | 781 | |
Prepayments and other current assets: | |||
Prepaid tooling | 83 | 83 | |
Prepaid taxes | 95 | 84 | |
Other | 98 | 83 | |
Total prepayments and other current assets | 276 | 250 | |
Property, plant and equipment, net: | |||
Property, plant and equipment, gross | 4,192 | 4,151 | |
Accumulated depreciation | (1,513) | (1,474) | |
Property, plant and equipment, net, excluding tooling | 2,679 | 2,677 | |
Tooling, net of amortization | 246 | 227 | |
Property, plant and equipment, net | 2,925 | 2,904 | |
Investments and other long-term receivables: | |||
Investment in equity affiliates | 256 | 244 | |
Cost Method Investments | 60 | 8 | |
Other long-term asbestos-related insurance receivables | 0 | 303 | |
Other long-term receivables | 2 | 37 | |
Long-term Investments and Receivables, Net | 318 | 592 | |
Total operating leases | 85 | 0 | |
Other non-current assets: | |||
Deferred income taxes | 79 | 198 | |
Deferred asbestos-related insurance asset | 0 | 83 | |
Other | 215 | 221 | |
Total other non-current assets | 379 | 502 | |
Accounts payable and accrued expenses: | |||
Trade payables | 1,325 | 1,485 | |
Payroll and employee related | 233 | 233 | |
Customer related | 71 | 49 | |
Product warranties | 63 | 56 | |
Indirect taxes | 61 | 73 | |
Severance | 34 | 25 | |
Operating leases, current | 18 | 0 | |
Asbestos-related | 0 | 50 | |
Interest | 18 | 19 | |
Dividends payable to noncontrolling shareholders | 14 | 17 | |
Retirement related | 15 | 16 | |
Insurance | 17 | 12 | |
Other | 108 | 109 | |
Total accounts payable and accrued expenses | 1,977 | 2,144 | |
Other non-current liabilities: | |||
Deferred income taxes | 125 | 51 | |
Operating leases, noncurrent | 67 | ||
Product warranties | 53 | 47 | |
Deferred revenue | 49 | 51 | |
Other | 255 | 208 | |
Total other non-current liabilities | 549 | 357 | |
Bad debt allowance | |||
Beginning balance, January 1 | (7) | (6) | $ (3) |
Provision | (1) | (5) | (3) |
Write-offs | 2 | 4 | 0 |
Ending balance, December 31 | (6) | (7) | (6) |
Trade payables for capital expenditures | 102 | 104 | |
Interest costs capitalized | 16 | 22 | $ 20 |
Land [Member] | |||
Property, plant and equipment, net: | |||
Property, plant and equipment, gross | 105 | 108 | |
Building [Member] | |||
Property, plant and equipment, net: | |||
Property, plant and equipment, gross | 755 | 763 | |
Machinery and equipments | |||
Property, plant and equipment, net: | |||
Property, plant and equipment, gross | 2,971 | 2,851 | |
Capital leases | |||
Property, plant and equipment, net: | |||
Property, plant and equipment, gross | 1 | 3 | |
Construction in progress | |||
Property, plant and equipment, net: | |||
Property, plant and equipment, gross | $ 360 | $ 426 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Changes in the carrying amount of goodwill | ||||
Net goodwill balance, January 1 | $ 1,853 | |||
Ending balance, December 31 | $ 1,842 | $ 1,853 | ||
Goodwill impairment test, weighted average cost of capital discount rate for future cash flow | 10.70% | |||
Sensitivity analysis Increase in discount rate | 1.00% | |||
Sensitivity analysis decrease in operating margin assumption | 1.00% | |||
Sensitivity analysis decrease in revenue growth rate | 1.00% | |||
Engine [Member] | ||||
Changes in the carrying amount of goodwill | ||||
Gross goodwill balance, January 1 | $ 1,343 | 1,360 | ||
Accumulated impairment losses, January 1 | (502) | $ (502) | ||
Net goodwill balance, January 1 | 841 | 858 | ||
Acquisitions | 0 | 0 | ||
Translation adjustment and other | (6) | (17) | ||
Ending balance, December 31 | 835 | 841 | ||
Drivetrain [Member] | ||||
Changes in the carrying amount of goodwill | ||||
Gross goodwill balance, January 1 | 1,012 | 1,024 | ||
Net goodwill balance, January 1 | 1,012 | 1,024 | ||
Acquisitions | 7 | [1] | 2 | |
Translation adjustment and other | (12) | (14) | ||
Ending balance, December 31 | $ 1,007 | $ 1,012 | ||
[1] | * Acquisitions relate to the Company's 2019 purchase of Rinehart Motion Systems LLC and AM Racing LLC and the 2017 purchase of Sevcon. |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Amortized intangible assets, gross | $ 645 | $ 650 | |||
Amortized intangible assets, accumulated amortization | $ 266 | $ 266 | $ 237 | 298 | 266 |
Amortized intangible assets, net | 347 | 384 | |||
Other intangible assets, net | 402 | 439 | |||
Amortized intangible assets, future amortization expense [Abstract] | |||||
Future Amortization Expense - 2020 | 39 | ||||
Future Amortization Expense - 2021 | 38 | ||||
Future Amortization Expense - 2022 | 37 | ||||
Future Amortization Expense - 2023 | 31 | ||||
Future Amortization Expense - 2024 | 31 | ||||
Intangible assets (excluding goodwill), gross [Roll Forward] | |||||
Beginning balance, January 1 | 705 | 730 | |||
Acquisitions | 5 | 0 | |||
Translation adjustment | (10) | (25) | |||
Ending balance, December 31 | 700 | 705 | 730 | ||
Intangible assets, accumulated amortization [Roll Forward] | |||||
Beginning balance, January 1 | 266 | 237 | |||
Amortization | 39 | 40 | 40 | ||
Translation adjustment | (7) | (11) | |||
Ending balance, December 31 | 298 | 266 | $ 237 | ||
Patented and unpatented technology [Member] | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Amortized intangible assets, gross | 154 | 152 | |||
Amortized intangible assets, accumulated amortization | 61 | 61 | 70 | 61 | |
Amortized intangible assets, net | 84 | 91 | |||
Intangible assets, accumulated amortization [Roll Forward] | |||||
Beginning balance, January 1 | 61 | ||||
Ending balance, December 31 | 70 | 61 | |||
Customer relationships | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Amortized intangible assets, gross | 481 | 490 | |||
Amortized intangible assets, accumulated amortization | 201 | 201 | 224 | 201 | |
Amortized intangible assets, net | 257 | 289 | |||
Intangible assets, accumulated amortization [Roll Forward] | |||||
Beginning balance, January 1 | 201 | ||||
Ending balance, December 31 | 224 | 201 | |||
Miscellaneous amortizable assets | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Amortized intangible assets, gross | 10 | 8 | |||
Amortized intangible assets, accumulated amortization | 4 | 4 | 4 | 4 | |
Amortized intangible assets, net | 6 | 4 | |||
Intangible assets, accumulated amortization [Roll Forward] | |||||
Beginning balance, January 1 | 4 | ||||
Ending balance, December 31 | $ 4 | $ 4 | |||
Unamortized trade names | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Unamortized trade names | $ 55 | $ 55 | |||
Minimum [Member] | |||||
Amortized intangible assets, future amortization expense [Abstract] | |||||
Amortized intangible assets, useful life | 3 years | ||||
Maximum [Member] | |||||
Amortized intangible assets, future amortization expense [Abstract] | |||||
Amortized intangible assets, useful life | 20 years |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||||
Beginning balance, January 1 | $ 103 | $ 112 | ||
Provisions for current period sales | 63 | 56 | ||
Adjustments of prior estimates | 9 | 12 | ||
Payments | (57) | (73) | ||
Translation adjustment | (2) | (4) | ||
Ending balance, December 31 | 116 | 103 | ||
Product Warranty Accrual, Balance Sheet Classification [Abstract] | ||||
Accounts payable and accrued expenses | $ 63 | $ 56 | ||
Other non-current liabilities | 53 | 47 | ||
Total product warranty liability | $ 103 | $ 103 | $ 116 | $ 103 |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Jul. 20, 2016USD ($) | |
Debt Instrument [Line Items] | ||||
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.50% | 2.50% | 4.30% | |
Debt, Weighted Average Interest Rate | 2.80% | 2.80% | 3.40% | |
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | $ 1,926,000,000 | $ 2,081,000,000 | ||
Current portion of long-term debt | 252,000,000 | 140,000,000 | ||
Long-term debt, net of current portion | 1,674,000,000 | 1,941,000,000 | ||
Long-term Debt, by Maturity [Abstract] | ||||
2020 | 286,000,000 | |||
2021 | 3,000,000 | |||
2022 | 562,000,000 | |||
2023 | 1,000,000 | |||
2024 | 0 | |||
After 2024 | 1,121,000,000 | |||
Total payments | 1,973,000,000 | |||
Less: unamortized discounts | 13,000,000 | |||
Total | 1,960,000,000 | |||
Multi-currency revolving credit agreement, maximum borrowing capacity | 1,500,000,000 | |||
Estimated fair value of senior unsecured notes | 2,025,000,000 | 2,058,000,000 | ||
Debt, difference between fair value and carrying value | 106,000,000 | 8,000,000 | ||
Outstanding letters of credit | 28,000,000 | 43,000,000 | ||
Short Term Borrowings [Member] | ||||
Short-term debt | ||||
Total short-term debt | 34,000,000 | 33,000,000 | ||
Senior Notes Due October 2019 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | 135,000,000 | |||
Senior Notes Due September 2020 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | 251,000,000 | 251,000,000 | ||
Debt instrument par value | $ 250,000,000 | |||
Debt instrument stated interest rate | 4.625% | 4.625% | ||
Debt instrument maturity period | Sep. 15, 2020 | |||
Senior Notes Due November 2022 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | $ 558,000,000 | 570,000,000 | ||
Debt instrument par value | € | € 500,000,000 | |||
Debt instrument stated interest rate | 1.80% | 1.80% | ||
Debt instrument maturity period | Nov. 7, 2022 | |||
Senior Notes Due March 2025 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | $ 497,000,000 | 497,000,000 | ||
Debt instrument par value | $ 500,000,000 | |||
Debt instrument stated interest rate | 3.375% | 3.375% | ||
Debt instrument maturity period | Mar. 15, 2025 | |||
Senior Notes Due February 2029 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | $ 119,000,000 | 119,000,000 | ||
Debt instrument par value | $ 121,000,000 | |||
Debt instrument stated interest rate | 7.125% | 7.125% | ||
Debt instrument maturity period | Feb. 15, 2029 | |||
Senior Notes Due March 2045 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | $ 494,000,000 | 494,000,000 | ||
Debt instrument par value | $ 500,000,000 | |||
Debt instrument stated interest rate | 4.375% | 4.375% | ||
Debt instrument maturity period | Mar. 15, 2045 | |||
Term Loan Facilities And Other [Member] | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Long-term Debt | $ 7,000,000 | 15,000,000 | ||
Revolving Credit Facility [Member] | ||||
Long-term Debt, by Maturity [Abstract] | ||||
Multi-currency revolving credit agreement, current borrowing capacity | 1,200,000,000 | |||
Commercial Paper [Member] | ||||
Long-term Debt, by Maturity [Abstract] | ||||
Multi-currency revolving credit agreement, current borrowing capacity | 1,200,000,000 | |||
Interest Rate Swap [Member] | ||||
Debt Instrument [Line Items] | ||||
Derivative, Notional Amount | $ 384,000,000 | |||
2016 swap termination event [Member] | Unamortized portion of debt derivative [Member] | Senior Notes Due September 2020 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | ||||
Derivative assets | $ 1,000,000 | $ 2,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Recurring [Member] - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Valuation, Market Approach [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Foreign currency contracts | $ 3 | |
Net investment hedge contracts | $ 3 | 12 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Foreign currency contracts | 1 | 2 |
Net investment hedge contracts | 8 | |
Valuation, Market Approach [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Net investment hedge contracts | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Net investment hedge contracts | 0 | |
Valuation, Market Approach [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Foreign currency contracts | 3 | |
Net investment hedge contracts | 3 | 12 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Foreign currency contracts | 1 | 2 |
Net investment hedge contracts | 8 | |
Valuation, Market Approach [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Net investment hedge contracts | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Net investment hedge contracts | $ 0 | |
Valuation, Income Approach [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Other long-term receivables (insurance settlement agreement note receivable) | 34 | |
Valuation, Income Approach [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Other long-term receivables (insurance settlement agreement note receivable) | $ 34 |
Fair Value Measurements - Defin
Fair Value Measurements - Defined Benefit Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | $ 110 | $ 0 |
United States | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 176 | 216 |
United States | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 23 | 30 |
United States | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 153 | 186 |
United States | Fixed Income Securities [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 88 | 122 |
United States | Fixed Income Securities [Member] | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 88 | 121 |
United States | Equity securities | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 59 | 71 |
United States | Equity securities | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 51 | 60 |
United States | Real estate and other | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 29 | 23 |
United States | Real estate and other | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 14 | 5 |
United States | Valuation, Market Approach [Member] | Fixed Income Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 1 | |
United States | Valuation, Market Approach [Member] | Equity securities | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 8 | 11 |
United States | Valuation, Market Approach [Member] | Real estate and other | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 15 | 18 |
Non-US [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 505 | 438 |
Non-US [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 111 | 93 |
Non-US [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 110 | |
Non-US [Member] | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 284 | 345 |
Non-US [Member] | Fixed Income Securities [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 168 | 239 |
Non-US [Member] | Fixed Income Securities [Member] | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 168 | 239 |
Non-US [Member] | Equity securities | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 185 | 163 |
Non-US [Member] | Equity securities | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 74 | 70 |
Non-US [Member] | Other | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 36 | |
Non-US [Member] | Other | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 36 | |
Non-US [Member] | Insurance contract, real estate and other [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 152 | |
Non-US [Member] | Insurance contract, real estate and other [Member] | Fair Value, Recurring [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 42 | |
Non-US [Member] | Valuation, Market Approach [Member] | Fixed Income Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 |
Non-US [Member] | Valuation, Market Approach [Member] | Equity securities | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | 111 | $ 93 |
Non-US [Member] | Valuation, Market Approach [Member] | Insurance contract, real estate and other [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Amount | $ 110 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 3 defined benefit plan assets (Details) - Fair Value, Inputs, Level 3 [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value of plan assets, January 1 | $ 0 |
Purchase of insurance contract | 106 |
Unrealized gains on assets still held at the reporting date | 2 |
Level 3 reconciliation, translation adjustment | 2 |
Fair value of plan assets, December 31 | $ 110 |
Financial Instruments (Details)
Financial Instruments (Details) € in Millions, ₩ in Millions, ¥ in Millions, ¥ in Millions, £ in Millions, kr in Millions, $ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($)t | Dec. 31, 2018USD ($)t | Dec. 31, 2019JPY (¥) | Dec. 31, 2019EUR (€) | Dec. 31, 2018JPY (¥) | Dec. 31, 2018KRW (₩) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018SEK (kr) | Dec. 31, 2018EUR (€) | Dec. 31, 2018MXN ($) | Dec. 31, 2018GBP (£) | Jul. 20, 2016USD ($) | |
Commodity Contract [Member] | Dec - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Nonmonetary Notional Amount, Mass | t | 203 | 257 | |||||||||||
Interest Rate Swap [Member] | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | $ 384 | ||||||||||||
Brazil, Brazil Real | Foreign currency contracts [Member] | Jun - 19 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | $ 5 | ||||||||||||
Brazil, Brazil Real | Foreign currency contracts [Member] | Mar - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | € | € 1 | € 4 | |||||||||||
British pound | Foreign currency contracts [Member] | Mar - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | $ 4 | $ 4 | 9 | ||||||||||
Chinese yuan | Foreign currency contracts [Member] | Aug - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | 2 | 2 | |||||||||||
Euro | Foreign currency contracts [Member] | Jun - 19 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | kr | kr 540 | ||||||||||||
Euro | Foreign currency contracts [Member] | Oct - 19 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | £ | £ 7 | ||||||||||||
Euro | Foreign currency contracts [Member] | Dec - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | 18 | 18 | 19 | ¥ 383 | |||||||||
Japanese yen | Foreign currency contracts [Member] | Dec - 19 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | 3 | ₩ 5,785 | ¥ 89 | ||||||||||
Korean won | Foreign currency contracts [Member] | Dec - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | 4 | 4 | 7 | 409 | 13 | ¥ 266 | 6 | ||||||
Sweden, Kronor | Foreign currency contracts [Member] | Jan - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | € | 3 | 56 | |||||||||||
US dollar | Foreign currency contracts [Member] | Dec - 20 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | € | 14 | 0 | |||||||||||
US dollar | Foreign currency contracts [Member] | Dec - 19 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | $ 575 | ||||||||||||
Euro | Cross Currency Interest Rate Contract [Member] | Mar - 25 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | € | € 450 | € 206 | |||||||||||
US dollar | Cross Currency Interest Rate Contract [Member] | Mar - 25 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | 500 | 500 | 250 | ||||||||||
Proceeds from Hedge, Investing Activities | 23 | ||||||||||||
Deferred gain in accumulated other comprehensive income, before tax | 21 | ||||||||||||
US dollar | Cross Currency Interest Rate Contract [Member] | Feb - 23 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | $ 100 | $ 100 | $ 100 | ||||||||||
Japanese yen | Cross Currency Interest Rate Contract [Member] | Feb - 23 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivative, Notional Amount | ¥ | ¥ 10,978 | ¥ 10,978 |
Financial Instruments - Balance
Financial Instruments - Balance Sheet (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | $ 4 | $ (14) |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 0 | |
Net investment hedge contracts [Member] | Foreign currency contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | 5 | 4 |
Net investment hedge contracts [Member] | Cross Currency Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | 16 | 12 |
Net investment hedge contracts [Member] | Foreign currency denominated debt designated as a net investment hedge [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | (17) | (30) |
Designated as Hedging Instrument [Member] | Foreign currency contracts [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 2 |
Designated as Hedging Instrument [Member] | Foreign currency contracts [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 1 | 2 |
Designated as Hedging Instrument [Member] | Cross Currency Interest Rate Contract [Member] | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 3 | 12 |
Designated as Hedging Instrument [Member] | Cross Currency Interest Rate Contract [Member] | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 8 | 0 |
Not Designated as Hedging Instrument [Member] | Foreign currency contracts [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 1 |
Not Designated as Hedging Instrument [Member] | Foreign currency contracts [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 0 |
Financial Instruments - Income
Financial Instruments - Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (3) | $ 1 | $ (1) | ||||||||
Net sales | $ 2,559 | $ 2,492 | $ 2,551 | $ 2,566 | $ 2,574 | $ 2,478 | $ 2,694 | $ 2,784 | 10,168 | 10,530 | 9,799 |
Deferred gain (loss) in AOCI | 4 | (14) | 4 | (14) | |||||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 0 | ||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Cost of Goods and Services Sold | 2,014 | 1,968 | 2,038 | 2,047 | 2,030 | 1,963 | 2,114 | 2,193 | 8,067 | 8,300 | 7,684 |
Selling, general and administrative expenses | 205 | $ 230 | $ 212 | $ 226 | 226 | $ 230 | $ 237 | $ 253 | 873 | 946 | 899 |
Other comprehensive income (loss) | (53) | (170) | 232 | ||||||||
Net investment hedge contracts [Member] | Foreign currency contracts [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Deferred gain (loss) in AOCI | 5 | 4 | 5 | 4 | |||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | 1 | 2 | (8) | ||||||||
Net investment hedge contracts [Member] | Foreign currency contracts [Member] | Interest expense [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) recognized in income (ineffective portion) | 0 | 1 | 1 | ||||||||
Net investment hedge contracts [Member] | Cross Currency Interest Rate Contract [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Deferred gain (loss) in AOCI | 16 | 12 | 16 | 12 | |||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | 4 | 12 | 0 | ||||||||
Net investment hedge contracts [Member] | Cross Currency Interest Rate Contract [Member] | Interest expense [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) recognized in income (ineffective portion) | 11 | 9 | 0 | ||||||||
Net investment hedge contracts [Member] | Foreign currency denominated debt designated as a net investment hedge [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Deferred gain (loss) in AOCI | $ (17) | $ (30) | (17) | (30) | |||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | 13 | 27 | (84) | ||||||||
Cash Flow Hedging [Member] | Foreign currency contracts [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | (1) | (1) | (5) | ||||||||
Cash Flow Hedging [Member] | Foreign currency contracts [Member] | Revenue Benchmark [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | (5) | (2) | 3 | ||||||||
Cash Flow Hedging [Member] | Foreign currency contracts [Member] | Selling general and administrative expenses [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | 3 | 0 | 0 | ||||||||
Cash Flow Hedging [Member] | Foreign currency contracts [Member] | Cost of goods sold [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | $ 1 | $ (1) | 0 | ||||||||
Cash Flow Hedging [Member] | Commodity Contract [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | 1 | ||||||||||
Cash Flow Hedging [Member] | Commodity Contract [Member] | Revenue Benchmark [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | 0 | ||||||||||
Cash Flow Hedging [Member] | Commodity Contract [Member] | Selling general and administrative expenses [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | 0 | ||||||||||
Cash Flow Hedging [Member] | Commodity Contract [Member] | Cost of goods sold [Member] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | |||||||||||
Gain (loss) reclassified from AOCI to income (effective portion) | $ 1 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Funded status of plan | $ (208) | $ (200) | |
Defined contribution expense | 37 | 35 | $ 34 |
Defined benefit pension expense | 45 | 8 | 12 |
Other postretirement employee benefit expense | 1 | ||
Total | 82 | 43 | 47 |
Pension settlement loss | 27 | 0 | $ 0 |
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Funded status of plan | (22) | (37) | |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Funded status of plan | (79) | (68) | |
Germany | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Funded status of plan | $ (107) | $ (95) | |
Pension Plan [Member] | United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% | |
Funded status of plan | $ (22) | $ (37) | |
Defined Benefit Plan, Benefit Obligation, Payment for Settlement | 50 | ||
Defined Benefit Plan, Plan Assets Level 3 Reconciliation, Decrease for Settlement | 50 | ||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | $ 15 | $ 21 | |
Pension Plan [Member] | Non-US [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% | |
Funded status of plan | $ (190) | $ (174) | |
Defined Benefit Plan, Benefit Obligation, Benefits Paid | 16 | 20 | |
Other Postretirement Benefits Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Funded status of plan | (81) | (87) | |
Defined Benefit Plan, Benefit Obligation, Benefits Paid | 12 | $ 17 | |
Former Employees [Member] | Pension Plan [Member] | United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Benefit Obligation, Payment for Settlement | 65 | ||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | 15 | ||
Pension settlement loss | $ 27 |
Retirement Benefit Plans - Bene
Retirement Benefit Plans - Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Change in plan assets: | ||||
Funded status of plan | $ (208) | $ (200) | ||
Amounts recognized in Balance Sheet [Abstract] | ||||
Non-current liabilities | (306) | (298) | ||
Other Postretirement Benefits Plan [Member] | ||||
Change in benefit obligation [Roll Forward] | ||||
Projected benefit obligation, January 1 | 87 | 107 | ||
Interest cost | 3 | 3 | $ 3 | |
Plan amendments | 0 | 0 | ||
Actuarial (gain) loss | 3 | (6) | ||
Benefits paid | (12) | (17) | ||
Projected benefit obligation, December 31 | 81 | 87 | 107 | |
Change in plan assets: | ||||
Funded status of plan | (81) | (87) | ||
Amounts recognized in Balance Sheet [Abstract] | ||||
Non-current assets | 0 | 0 | ||
Current liabilities | (10) | (11) | ||
Non-current liabilities | (71) | (76) | ||
Net amount | (81) | (87) | ||
Amounts recognized in accumulated other comprehensive Income Loss) [Abstract] | ||||
Net actuarial loss | 16 | 13 | ||
Net prior service (credit) cost | (8) | (12) | ||
Net amount | [1] | 8 | 1 | |
United States | ||||
Change in plan assets: | ||||
Funded status of plan | (22) | (37) | ||
United States | Pension Plan [Member] | ||||
Change in benefit obligation [Roll Forward] | ||||
Projected benefit obligation, January 1 | 253 | 283 | ||
Interest cost | 8 | 9 | 9 | |
Settlement and curtailment | (65) | |||
Actuarial (gain) loss | 17 | (18) | ||
Benefits paid | (15) | (21) | ||
Projected benefit obligation, December 31 | 198 | 253 | 283 | |
Change in plan assets: | ||||
Fair value of plan assets, January 1 | 216 | 240 | ||
Actual return on plan assets | 29 | (11) | ||
Employer contribution | 10 | 7 | ||
Settlements | (65) | |||
Benefits paid | (14) | (20) | ||
Fair value of plan assets, December 31 | 176 | 216 | 240 | |
Funded status of plan | (22) | (37) | ||
Amounts recognized in Balance Sheet [Abstract] | ||||
Non-current assets | 0 | 0 | ||
Current liabilities | (1) | |||
Non-current liabilities | (21) | (37) | ||
Net amount | (22) | (37) | ||
Amounts recognized in accumulated other comprehensive Income Loss) [Abstract] | ||||
Net actuarial loss | 82 | 113 | ||
Net prior service (credit) cost | (5) | (6) | ||
Net amount | [1] | 77 | 107 | |
Defined Benefit Plan, Accumulated Benefit Obligation | 198 | 253 | ||
Non-US [Member] | Pension Plan [Member] | ||||
Change in benefit obligation [Roll Forward] | ||||
Projected benefit obligation, January 1 | 612 | 629 | ||
Service cost | 18 | 18 | 18 | |
Interest cost | 12 | 12 | 11 | |
Plan amendments | 2 | |||
Settlement and curtailment | (5) | (4) | ||
Actuarial (gain) loss | 75 | 5 | ||
Currency translation | (1) | (30) | ||
Benefits paid | (16) | (20) | ||
Projected benefit obligation, December 31 | 695 | 612 | 629 | |
Change in plan assets: | ||||
Fair value of plan assets, January 1 | 438 | 483 | ||
Actual return on plan assets | 68 | (18) | ||
Employer contribution | 16 | 19 | ||
Settlements | (5) | (4) | ||
Currency translation | 4 | (22) | ||
Benefits paid | (16) | (20) | ||
Fair value of plan assets, December 31 | 505 | 438 | $ 483 | |
Funded status of plan | (190) | (174) | ||
Amounts recognized in Balance Sheet [Abstract] | ||||
Non-current assets | 28 | 17 | ||
Current liabilities | (4) | (5) | ||
Non-current liabilities | (214) | (186) | ||
Net amount | (190) | (174) | ||
Amounts recognized in accumulated other comprehensive Income Loss) [Abstract] | ||||
Net actuarial loss | 211 | 193 | ||
Net prior service (credit) cost | 2 | 2 | ||
Net amount | [1] | 213 | 195 | |
Defined Benefit Plan, Accumulated Benefit Obligation | $ 660 | $ 583 | ||
[1] |
Retirement Benefit Plans - Fund
Retirement Benefit Plans - Funded status of plans with ABO in excess of plan assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated benefit obligation | $ (633) | $ (650) |
Plan assets | 425 | 450 |
Funded status of plan | (208) | (200) |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of plan | (22) | (37) |
Germany | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of plan | (107) | (95) |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of plan | $ (79) | $ (68) |
Retirement Benefit Plans - Asse
Retirement Benefit Plans - Asset Allocations (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year, Under Contractual Obligation | $ 4 | |
United States | Pension Plan [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% |
United States | Pension Plan [Member] | Real estate and other | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 16.00% | 11.00% |
United States | Pension Plan [Member] | Fixed income securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 50.00% | 56.00% |
United States | Pension Plan [Member] | Equity securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 34.00% | 33.00% |
Non-US [Member] | Pension Plan [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% |
Non-US [Member] | Pension Plan [Member] | Fixed income securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 33.00% | 55.00% |
Non-US [Member] | Pension Plan [Member] | Equity securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 37.00% | 37.00% |
Non-US [Member] | Pension Plan [Member] | Insurance contract, real estate and other [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 30.00% | 8.00% |
Minimum [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 10 | |
Minimum [Member] | United States | Pension Plan [Member] | Real estate and other | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 0.00% | |
Minimum [Member] | United States | Pension Plan [Member] | Fixed income securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 45.00% | |
Minimum [Member] | United States | Pension Plan [Member] | Equity securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 25.00% | |
Minimum [Member] | Non-US [Member] | Pension Plan [Member] | Fixed income securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 29.00% | |
Minimum [Member] | Non-US [Member] | Pension Plan [Member] | Equity securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 30.00% | |
Minimum [Member] | Non-US [Member] | Pension Plan [Member] | Insurance contract, real estate and other [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 0.00% | |
Maximum [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 20 | |
Maximum [Member] | United States | Pension Plan [Member] | Real estate and other | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 15.00% | |
Maximum [Member] | United States | Pension Plan [Member] | Fixed income securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 65.00% | |
Maximum [Member] | United States | Pension Plan [Member] | Equity securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 45.00% | |
Maximum [Member] | Non-US [Member] | Pension Plan [Member] | Fixed income securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 62.00% | |
Maximum [Member] | Non-US [Member] | Pension Plan [Member] | Equity securities | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 43.00% | |
Maximum [Member] | Non-US [Member] | Pension Plan [Member] | Insurance contract, real estate and other [Member] | ||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 36.00% |
Retirement Benefit Plans - Net
Retirement Benefit Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plan [Member] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Amortization of net losses expected in next year | $ 14 | ||
Other Postretirement Benefits Plan [Member] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Interest cost | 3 | $ 3 | $ 3 |
Amortization of unrecognized prior service (credit) cost | (4) | (4) | (4) |
Amortization of unrecognized loss | 1 | 1 | 2 |
Net periodic benefit cost | 1 | ||
Amortization of net losses expected in next year | 1 | ||
Amortization of net prior service cost expected in the next year | 3 | ||
United States | Pension Plan [Member] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Interest cost | 8 | 9 | 9 |
Expected return on plan assets | (11) | (14) | (13) |
Settlements, curtailments and other | 27 | 0 | |
Amortization of unrecognized prior service (credit) cost | (1) | (1) | (1) |
Amortization of unrecognized loss | 4 | 4 | 4 |
Net periodic benefit cost | 27 | (2) | (1) |
Non-US [Member] | Pension Plan [Member] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 18 | 18 | 18 |
Interest cost | 12 | 12 | 11 |
Expected return on plan assets | (22) | (27) | (24) |
Settlements, curtailments and other | 1 | 0 | |
Amortization of unrecognized prior service (credit) cost | 0 | 0 | |
Amortization of unrecognized loss | 9 | 7 | 8 |
Net periodic benefit cost | $ 18 | $ 10 | $ 13 |
Retirement Benefit Plans - Assu
Retirement Benefit Plans - Assumptions Used (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate | 3.43% | 2.65% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Weighted-Average Interest Crediting Rate | 3.68% | 2.86% |
United States | Pension Plan [Member] | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 3.17% | 4.24% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate | 4.24% | 3.55% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Weighted-Average Interest Crediting Rate | 3.88% | 3.13% |
Assumptions used calculating net periodic benefit cost, expected long-term return on assets | 6.00% | 6.00% |
United States | Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 2.95% | 4.05% |
Non-US [Member] | Pension Plan [Member] | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 1.61% | 2.28% |
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Compensation Increase | 3.05% | 2.99% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate | 2.55% | 2.71% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Weighted-Average Interest Crediting Rate | 2.06% | 1.98% |
Assumptions used calculating net periodic benefit cost, expected long-term return on assets | 5.23% | 5.73% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase | 3.03% | 2.98% |
Retirement Benefit Plans - Esti
Retirement Benefit Plans - Estimated Future Payments (Details) $ in Millions | Dec. 31, 2019USD ($) |
Other Postretirement Benefits Plan [Member] | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2020 | $ 10 |
2021 | 9 |
2022 | 9 |
2023 | 8 |
2024 | 7 |
2025-2029 | 25 |
United States | Pension Plan [Member] | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2020 | 20 |
2021 | 15 |
2022 | 14 |
2023 | 14 |
2024 | 14 |
2025-2029 | 62 |
Non-US [Member] | Pension Plan [Member] | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2020 | 20 |
2021 | 23 |
2022 | 23 |
2023 | 24 |
2024 | 24 |
2025-2029 | $ 137 |
Retirement Benefit Plans - Heal
Retirement Benefit Plans - Health Care Trend Rates (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Assumed health care cost trend rates [Abstract] | |
Health care cost trend rate assumed for next fiscal year | 6.25% |
Ultimate health care cost trend rate | 5.00% |
Effect of one-percentage point change in assumed health care cost trend rates [Abstract] | |
Effect of one percentage point increase on accumulated postretirement benefit obligation | $ 5 |
Effect of one percentage point decrease on accumulated postretirement benefit obligation | $ (5) |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Payment Arrangement [Abstract] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 7,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 6,000 | |||
Options, Outstanding, Weighted Average Exercise Price | $ 0 | $ 0 | $ 17.47 | |
Options, Outstanding, Weighted Average Remaining Contractual Term | 0 days | 0 days | 0 days | 3 days |
Options, Outstanding, Number | 0 | 473 | ||
Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 10.4 | |||
Options, Exercises in Period | 473 | |||
Options, Exercises in Period, Weighted Average Exercise Price | $ 17.47 | |||
Options, Exercises in Period, Intrinsic Value | $ 10.4 | |||
Options, Exercisable, Number | 0 | |||
Options, Exercisable, Weighted Average Remaining Contractual Term | 0 days | |||
Options, Exercisable, Intrinsic Value | $ 0 | |||
Proceeds from stock options exercised - gross | 0 | $ 0 | 8 | |
Tax Benefit from Exercise of Stock Options | 0 | 8 | ||
Proceeds from Stock Options Exercised | $ 0 | $ 16 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock unrecognized compensation, amount | $ 37 | ||
Restricted stock unrecognized compensation, period | 1 year 9 months 18 days | ||
Restricted stock expense | $ 30 | $ 26 | $ 27 |
Restricted stock expense, net of tax | $ 23 | $ 20 | $ 20 |
Status of nonvested restricted stock [Roll Forward] | |||
Nonvested shares, number, beginning balance | 1,516,000 | 1,593,000 | 1,429,000 |
Nonvested shares, weighted average price, beginning balance | $ 42.97 | $ 38.86 | $ 44.12 |
Nonvested shares, granted | 1,082,000 | 737,000 | 804,000 |
Nonvested shares, weighted average price, granted | $ 41.66 | $ 51.70 | $ 40.10 |
Nonvested shares, vested | (724,000) | (556,000) | (521,000) |
Nonvested shares, weighted average price, vested | $ 36.81 | $ 42.25 | $ 56.53 |
Nonvested shares, forfeited | (210,000) | (258,000) | (119,000) |
Nonvested shares, weighted average price, forfeited | $ 44.82 | $ 44.51 | $ 38.97 |
Nonvested shares, number, ending balance | 1,664,000 | 1,516,000 | 1,593,000 |
Nonvested shares, weighted average price, ending balance | $ 44.26 | $ 42.97 | $ 38.86 |
Management [Member] | |||
Status of nonvested restricted stock [Roll Forward] | |||
Nonvested shares, granted | 1,058,180 | ||
Director [Member] | |||
Status of nonvested restricted stock [Roll Forward] | |||
Nonvested shares, granted | 23,880 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Plan Modification, Incremental Compensation Cost | $ 2 | $ 8 | $ 0 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 200.00% | ||
Performance share plan expense | $ 5 | $ 9 | $ 10 |
Performance share plan, shares issued in period | 0 | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Nonvested shares, number, beginning balance | 297,000 | 355,000 | 410,000 |
Nonvested shares, weighted average price, beginning balance | $ 60.35 | $ 32.35 | $ 43.99 |
Nonvested shares, granted | 196,000 | 287,000 | 201,000 |
Nonvested shares, weighted average price, granted | $ 51.52 | $ 68.38 | $ 45.57 |
Nonvested shares, vested | (160,000) | ||
Nonvested shares, weighted average price, vested | $ 45.78 | ||
Nonvested shares, forfeited | (93,000) | (345,000) | (256,000) |
Nonvested shares, weighted average price, forfeited | $ 55.82 | $ 38.26 | $ 61.40 |
Nonvested shares, number, ending balance | 240,000 | 297,000 | 355,000 |
Nonvested shares, weighted average price, ending balance | $ 64.61 | $ 60.35 | $ 32.35 |
Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 7 | ||
Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Nonvested shares, number, beginning balance | 1,516,000 | 1,593,000 | 1,429,000 |
Nonvested shares, weighted average price, beginning balance | $ 42.97 | $ 38.86 | $ 44.12 |
Nonvested shares, granted | 1,082,000 | 737,000 | 804,000 |
Nonvested shares, weighted average price, granted | $ 41.66 | $ 51.70 | $ 40.10 |
Nonvested shares, vested | (724,000) | (556,000) | (521,000) |
Nonvested shares, weighted average price, vested | $ 36.81 | $ 42.25 | $ 56.53 |
Nonvested shares, forfeited | (210,000) | (258,000) | (119,000) |
Nonvested shares, weighted average price, forfeited | $ 44.82 | $ 44.51 | $ 38.97 |
Nonvested shares, number, ending balance | 1,664,000 | 1,516,000 | 1,593,000 |
Nonvested shares, weighted average price, ending balance | $ 44.26 | $ 42.97 | $ 38.86 |
Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 37 | ||
Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 9 months 18 days | ||
Relative Revenue Growth Performance Share Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 200.00% | ||
Performance share plan expense | $ 7 | $ 18 | $ 16 |
Performance share plan, shares issued in period | 315,000 | 249,000 | 126,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Nonvested shares, number, beginning balance | 297,000 | 355,000 | 320,000 |
Nonvested shares, weighted average price, beginning balance | $ 47.03 | $ 39.42 | $ 38.62 |
Nonvested shares, granted | 196,000 | 287,000 | 198,000 |
Nonvested shares, weighted average price, granted | $ 41.90 | $ 50.82 | $ 40.08 |
Nonvested shares, vested | (160,000) | (166,000) | (156,000) |
Nonvested shares, weighted average price, vested | $ 40.10 | $ 38.62 | $ 38.62 |
Nonvested shares, forfeited | (93,000) | (179,000) | (7,000) |
Nonvested shares, weighted average price, forfeited | $ 44.30 | $ 45.82 | $ 39.20 |
Nonvested shares, number, ending balance | 240,000 | 297,000 | 355,000 |
Nonvested shares, weighted average price, ending balance | $ 48.52 | $ 47.03 | $ 39.42 |
Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 8 | ||
Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||
Foreign currency translation adjustments | $ (497) | $ (442) | $ (294) | $ (530) | |
Hedge instruments | (1) | 5 | |||
Defined benefit postretirement plans | (230) | (234) | (198) | (198) | |
Other | 2 | 3 | 1 | ||
Accumulated other comprehensive loss | (727) | (674) | (490) | $ (722) | |
Adoption of accounting standards | $ (14) | ||||
Comprehensive (loss) income before reclassifications, Foreign currency translation adjustments | (51) | (153) | 236 | ||
Comprehensive (loss) income before reclassifications, Hedge instruments | (1) | (2) | (4) | ||
Comprehensive (loss) income before reclassifications, Defined benefit postretirement plans | (29) | (42) | (5) | ||
Comprehensive (loss) income before reclassifications, Other | (2) | (1) | 2 | ||
Comprehensive (loss) income before reclassifications, Total | (83) | (198) | 229 | ||
Other Comprehensive Income (Loss), Foreign Currency Translation Gain (Loss) Arising During Period, Tax | (4) | 5 | |||
Income taxes associated with comprehensive (loss) income before reclassifications, Hedge instruments | 1 | ||||
Income taxes associated with comprehensive (loss) income before reclassifications, Defined benefit postretirement plans | 4 | 14 | (1) | ||
Income taxes associated with comprehensive (loss) income before reclassifications, Total | 19 | ||||
Reclassification from accumulated other comprehensive (loss) income, Hedge instruments | 1 | 4 | (4) | ||
Reclassification from accumulated other comprehensive (loss) income, Defined benefit postretirement plans | 37 | 8 | 9 | ||
Reclassification from accumulated other comprehensive (loss) income, Total | 38 | 12 | 5 | ||
Income taxes reclassified into net earnings, Hedge instruments | (1) | 1 | |||
Income taxes reclassified into net earnings, Defined benefit postretirement plans | (8) | (2) | (3) | ||
Income taxes reclassified into net earnings, Total | $ (8) | $ (3) | $ (2) |
Contingencies (Details)
Contingencies (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($)claim | Dec. 31, 2019USD ($)claim | Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($)claim | |
Loss Contingencies [Line Items] | ||||
Asbestos-related adjustments | $ 23 | $ 0 | $ 23 | $ 0 |
Accrual for Environmental Loss Contingencies Disclosure [Abstract] | ||||
Waste disposal sites with potential liability under the Comprehensive Environmental Response, Compensation and Liability Act | 14 | 28 | ||
Accrual for indicated environmental liabilities | 9 | $ 3 | $ 9 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid | 38 | 46 | ||
Actuarial revaluation | 0 | 23 | ||
Indemnity and defense related costs | (37) | (46) | ||
Derecognized liability | (768) | 0 | ||
Loss Contingency, Range of Possible Loss, Portion Not Accrued | 100 | |||
Cash and notes received from insurers | 271 | 271 | ||
Assets [Abstract] | ||||
Non-current assets | 303 | 0 | 303 | |
Deferred asbestos-related insurance asset | 83 | 0 | 83 | |
Liabilities [Abstract] | ||||
Total accrued liabilities | $ 805 | $ 0 | $ 805 | $ 828 |
Asbestos Issue [Member] | ||||
Accrual for Environmental Loss Contingencies Disclosure [Abstract] | ||||
Beginning claims January 1 | claim | 8,598 | 9,225 | ||
New claims received | claim | 1,667 | 1,932 | ||
Dismissed claims | claim | (967) | (2,189) | ||
Settled claims | claim | (237) | (370) | ||
Derecognized claims | claim | (9,061) | 0 | ||
Ending claims December 31 | claim | 8,598 | 0 | 8,598 | 9,225 |
Assets [Abstract] | ||||
Deferred asbestos-related insurance asset | $ 83 | $ 83 | ||
Total insurance assets | 386 | $ 0 | 386 | |
Liabilities [Abstract] | ||||
Total accrued liabilities | 805 | 0 | 805 | |
Aggregate insurance coverage available | 386 | 386 | ||
Accounts Payable and Accrued Liabilities [Member] | Asbestos Issue [Member] | ||||
Liabilities [Abstract] | ||||
Total accrued liabilities | 50 | 0 | 50 | |
Other non-current liabilities | Asbestos Issue [Member] | ||||
Liabilities [Abstract] | ||||
Total accrued liabilities | $ 755 | $ 0 | $ 755 |
Restructuring (Details)
Restructuring (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 27, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Business acquisition, percentage of voting interests acquired | 20.00% | 20.00% | ||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | $ 31 | $ 14 | $ 13 | $ 14 | $ 23 | $ 6 | $ 31 | $ 8 | $ 72 | $ 67 | $ 58 | |
Employee Severance [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Restructuring reserve, beginning balance | 25 | 5 | 25 | 5 | ||||||||
Provision | 44 | 42 | ||||||||||
Cash payments | (35) | (22) | ||||||||||
Restructuring reserve, ending balance | 34 | 25 | 34 | 25 | 5 | |||||||
Corporate Restructuring Activities [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | 6 | |||||||||||
Sevcon, Inc [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | |||||||||||
Engine [Member] | Reduce structural costs [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | 5 | |||||||||||
Engine [Member] | Employee Severance [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Restructuring reserve, beginning balance | 21 | 1 | 21 | 1 | ||||||||
Provision | 43 | 35 | ||||||||||
Cash payments | (34) | (15) | ||||||||||
Restructuring reserve, ending balance | 30 | 21 | $ 30 | 21 | 1 | |||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 350 | |||||||||||
Engine [Member] | Employee Severance [Member] | Reduce structural costs [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | $ 37 | |||||||||||
Engine [Member] | Professional Fees, Employee Termination and Relocation Costs [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | 18 | 54 | ||||||||||
Emissions [Member] | Professional Fees, Employee Termination and Relocation Costs [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | 48 | |||||||||||
Drivetrain [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | 7 | |||||||||||
Drivetrain [Member] | Reduce structural costs [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | 6 | |||||||||||
Drivetrain [Member] | Employee Severance [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Restructuring reserve, beginning balance | $ 4 | $ 4 | 4 | 4 | ||||||||
Provision | 1 | 7 | ||||||||||
Cash payments | (1) | (7) | ||||||||||
Restructuring reserve, ending balance | $ 4 | $ 4 | 4 | 4 | $ 4 | |||||||
Drivetrain [Member] | Manufacturing Footprint Rationalization Activities [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | $ 10 | |||||||||||
Europe | Engine [Member] | Employee Severance [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | $ 28 | |||||||||||
Europe | Engine [Member] | Professional Fees, Employee Termination and Relocation Costs [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 140 | |||||||||||
Non-Europe [Member] | Engine [Member] | Employee Severance [Member] | ||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||
Provision | $ 6 |
Leases and Commitments Leases a
Leases and Commitments Leases and Commitments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | |||
Right-of-Use asset obtained in exchange for operating lease liability | $ 4 | ||
Operating lease costs | 24 | ||
Short-term lease costs | 18 | ||
Total lease rent expense | $ 42 | $ 40 | |
Operating cash flows for operating leases | $ 24 | ||
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Renewal terms | 1 year | ||
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Renewal terms | 5 years |
Leases and Commitments Leases_2
Leases and Commitments Leases and Commitments - Operating Lease Assets and Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Total operating leases | $ 85 | $ 0 |
Operating leases, current | 18 | $ 0 |
Operating leases, noncurrent | 67 | |
Total operating lease liabilities | $ 85 |
Leases and Commitments - Maturi
Leases and Commitments - Maturity of Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Future minimum operating lease payments | |
2020 | $ 20 |
2021 | 15 |
2022 | 13 |
2023 | 9 |
2024 | 7 |
After 2024 | 33 |
Total (undiscounted) lease payments | 97 |
Less: Imputed interest | 12 |
Present value of lease liabilities | $ 85 |
Leases and Commitments Leases_3
Leases and Commitments Leases and Commitments - Terms and Discounts Under Operating Leases (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) | 8 years |
Weighted-average discount rate (percent) | 2.80% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic earnings per share [Abstract] | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ 220 | $ 194 | $ 172 | $ 160 | $ 230 | $ 204 | $ 272 | $ 225 | $ 746 | $ 931 | $ 440 |
Weighted average shares of common stock outstanding | 205.7 | 208.2 | 210.4 | ||||||||
Earnings per share — basic | $ 1.07 | $ 0.94 | $ 0.84 | $ 0.77 | $ 1.11 | $ 0.98 | $ 1.30 | $ 1.07 | $ 3.63 | $ 4.47 | $ 2.09 |
Diluted earnings per share [Abstract] | |||||||||||
Net earnings attributable to BorgWarner Inc. | $ 220 | $ 194 | $ 172 | $ 160 | $ 230 | $ 204 | $ 272 | $ 225 | $ 746 | $ 931 | $ 440 |
Effect of stock-based compensation | 1.1 | 1.3 | 1.1 | ||||||||
Weighted average shares of common stock outstanding including dilutive shares | 206.8 | 209.5 | 211.5 | ||||||||
Earnings per share — diluted | $ 1.06 | $ 0.94 | $ 0.83 | $ 0.77 | $ 1.10 | $ 0.98 | $ 1.30 | $ 1.07 | $ 3.61 | $ 4.44 | $ 2.08 |
Performance Shares [Member] | |||||||||||
Diluted earnings per share [Abstract] | |||||||||||
Antidilutive stock-based awards excluded from the calculation of diluted earnings per share | 0.1 | 0.1 |
Recent Transactions (Details)
Recent Transactions (Details) - USD ($) $ in Millions | Oct. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Jun. 30, 2019 | May 31, 2019 | Sep. 27, 2017 |
Business Acquisition [Line Items] | |||||||||||||
Gain on derecognition of subsidiary | $ 177 | $ 177 | $ 0 | $ 0 | |||||||||
Business acquisition, percentage of voting interests acquired | 20.00% | 20.00% | |||||||||||
Payments for businesses acquired, net of cash acquired | 10 | 0 | 186 | ||||||||||
Goodwill | $ 1,853 | 1,842 | 1,853 | ||||||||||
Proceeds from sale of businesses, net of cash divested | 24 | 0 | 0 | ||||||||||
Noncontrolling Interest, Decrease from Deconsolidation | 0 | ||||||||||||
Proceeds from Divestiture of Businesses | 28 | ||||||||||||
Asset impairment and loss on divestiture | 7 | 26 | 71 | ||||||||||
Assets | 10,095 | $ 9,788 | 9,702 | 10,095 | $ 9,788 | ||||||||
Inventories, net | 781 | $ 807 | $ 781 | ||||||||||
Romeo Systems Inc. [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity Securities without Readily Determinable Fair Value, Amount | $ 50 | ||||||||||||
Rinehart Motion Systems LLC and AM Racing LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Gross | $ 10 | ||||||||||||
Business Combination, Contingent Consideration, Liability | $ 5 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 2 | ||||||||||||
Business Combination, Consideration Transferred | $ 15 | ||||||||||||
Sevcon, Inc [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Acquisition, Effective Date of Acquisition | Sep. 27, 2017 | ||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||||
Payments for businesses acquired, net of cash acquired | $ 186 | ||||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | 27 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | $ 16 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 17 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 3 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 7 | ||||||||||||
Goodwill | 128 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 71 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | (9) | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | (1) | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Assets and Liabilities | (3) | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (25) | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 204 | ||||||||||||
Liabilities assumed from businesses acquired | 18 | ||||||||||||
Goodwill, Purchase Accounting Adjustments | $ (6) | ||||||||||||
Business Combination, Consideration Transferred | 5 | ||||||||||||
Customer Relationships [Member] | Sevcon, Inc [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 18 | ||||||||||||
Developed Technology Rights [Member] | Sevcon, Inc [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 49 | ||||||||||||
Trade Names [Member] | Sevcon, Inc [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 4 | ||||||||||||
Minimum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Amortized intangible assets, useful life | 3 years | ||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | ||||||||||||
Minimum [Member] | Rinehart Motion Systems LLC and AM Racing LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Amortized intangible assets, useful life | 2 years | ||||||||||||
Maximum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Amortized intangible assets, useful life | 20 years | ||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 20 years | ||||||||||||
Maximum [Member] | Rinehart Motion Systems LLC and AM Racing LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Amortized intangible assets, useful life | 15 years | ||||||||||||
Romeo Systems Inc. [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership interest (percent) | 20.00% | ||||||||||||
BorgWarner Romeo Power LLC [Member] | Corporate Joint Venture [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity Securities without Readily Determinable Fair Value, Amount | $ 10 | ||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 60.00% | ||||||||||||
Drivetrain [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Goodwill | 1,012 | 1,024 | $ 1,007 | $ 1,012 | 1,024 | ||||||||
Assets | $ 3,920 | $ 3,904 | $ 4,075 | $ 3,920 | $ 3,904 | ||||||||
Drivetrain [Member] | Rinehart Motion Systems LLC and AM Racing LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 5 | ||||||||||||
Goodwill | $ 7 | ||||||||||||
BorgWarner Morse TEC LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership Percentage Transferred | 100.00% | ||||||||||||
Cash payments on transfer of subsidiary to third party | $ (172) | ||||||||||||
Receivables, net transferred to third party | (9) | ||||||||||||
Investments and other long-term receivables transferred to third party | (371) | ||||||||||||
Other non-current assets transferred to third party | (223) | ||||||||||||
Accounts payable and accrued expenses transferred to third party | 7 | ||||||||||||
Asbestos-relates and environmental liabilities transferred to third party | 772 | ||||||||||||
Tax expense on derecognition of subsidiary | 173 | ||||||||||||
After-tax gain of derecognition of subsidiary | $ 4 |
Assets and Liabilities Held f_3
Assets and Liabilities Held for Sale (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset impairment expense | $ 26 | $ 7 | $ 25 | $ 71 | |
Proceeds from Divestiture of Businesses | $ 28 | ||||
Receivables, net | 15 | 15 | 15 | ||
Inventories, net | 42 | 42 | 42 | ||
Prepayments and other current assets | 12 | 12 | 12 | ||
Property, plant and equipment, net | 45 | 45 | 45 | ||
Goodwill | 7 | 7 | 7 | ||
Other intangible assets, net | 20 | 20 | 20 | ||
Other assets | 0 | 0 | 0 | ||
Impairment of carrying value | (94) | (94) | (94) | ||
Total assets held for sale | 47 | 47 | 0 | 47 | |
Accounts payable and accrued expenses | 18 | 18 | 18 | ||
Other liabilities | 5 | 5 | 5 | ||
Total liabilities held for sale | $ 23 | $ 23 | $ 0 | $ 23 |
Reporting Segments and Relate_3
Reporting Segments and Related Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | $ 2,559 | $ 2,492 | $ 2,551 | $ 2,566 | $ 2,574 | $ 2,478 | $ 2,694 | $ 2,784 | $ 10,168 | $ 10,530 | $ 9,799 | |
Year-end assets | 9,702 | 10,095 | 9,702 | 10,095 | 9,788 | |||||||
Depreciation and amortization | 439 | 431 | 408 | |||||||||
Long-lived asset expenditures | 481 | 546 | 560 | |||||||||
Operating Segments [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 10,168 | 10,530 | 9,799 | |||||||||
Year-end assets | 8,611 | 8,651 | 8,611 | 8,651 | 8,637 | |||||||
Depreciation and amortization | 410 | 401 | 380 | |||||||||
Long-lived asset expenditures | 473 | 532 | 547 | |||||||||
Engine [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 6,214 | 6,447 | 6,062 | |||||||||
Year-end assets | 4,536 | 4,731 | 4,536 | 4,731 | 4,733 | |||||||
Depreciation and amortization | 227 | 226 | 219 | |||||||||
Long-lived asset expenditures | 219 | 278 | 305 | |||||||||
Drivetrain [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 4,015 | 4,140 | 3,790 | |||||||||
Year-end assets | 4,075 | 3,920 | 4,075 | 3,920 | 3,904 | |||||||
Depreciation and amortization | 183 | 175 | 161 | |||||||||
Long-lived asset expenditures | 254 | 254 | 242 | |||||||||
Corporate, Non-Segment [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Year-end assets | [1] | $ 1,091 | $ 1,444 | 1,091 | 1,444 | 1,151 | ||||||
Depreciation and amortization | [1] | 29 | 30 | 28 | ||||||||
Long-lived asset expenditures | [1] | 8 | 14 | 13 | ||||||||
Reportable Geographical Components [Member] | Engine [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 6,153 | 6,390 | 6,009 | |||||||||
Reportable Geographical Components [Member] | Drivetrain [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 4,015 | 4,140 | 3,790 | |||||||||
Consolidation, Eliminations [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | (61) | (57) | (53) | |||||||||
Intersegment Eliminations [Member] | Engine [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 61 | 57 | 53 | |||||||||
Intersegment Eliminations [Member] | Drivetrain [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | $ 0 | $ 0 | $ 0 | |||||||||
[1] | Corporate assets include investments and other long-term receivables and deferred income taxes. |
Reporting Segments and Relate_4
Reporting Segments and Related Information - Adjusted EBIT (Details) - USD ($) $ in Millions | Oct. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||||||||||||
Adjusted EBIT | $ 1,438 | $ 1,515 | $ 1,440 | |||||||||
Gain on derecognition of subsidiary | $ (177) | (177) | 0 | 0 | ||||||||
Restructuring expense | $ 31 | $ 14 | $ 13 | $ 14 | $ 23 | $ 6 | $ 31 | $ 8 | 72 | 67 | 58 | |
Unfavorable arbitration loss | 14 | 0 | 0 | |||||||||
Asset impairment and loss on divestiture | 26 | 7 | 25 | 71 | ||||||||
Asbestos-related adjustments | 23 | 0 | 23 | 0 | ||||||||
Gain on sale of building | (19) | 0 | (19) | 0 | ||||||||
Other postretirement income | 1 | (1) | 27 | 0 | (2) | (3) | (2) | (3) | 27 | (10) | (5) | |
Income (Loss) from Equity Method Investments | 7 | 7 | 9 | 9 | 11 | 15 | 13 | 10 | 32 | 49 | 51 | |
Officer stock awards modification | 2 | 8 | 0 | |||||||||
Merger, acquisition and divestiture expense | 1 | 2 | 1 | 2 | 11 | 6 | 10 | |||||
Lease termination settlement | 0 | 0 | 5 | |||||||||
Other (income) expense, net | 0 | (4) | 2 | |||||||||
Corporate, including stock-based compensation | 206 | 219 | 222 | |||||||||
Interest income | (3) | (4) | (2) | (3) | (2) | (1) | (1) | (2) | (12) | (6) | (6) | |
Interest expense | 12 | 15 | 14 | 14 | 14 | 14 | 15 | 16 | 55 | 59 | 71 | |
Earnings before income taxes and noncontrolling interest | 1,265 | 1,196 | 1,063 | |||||||||
Provision for income taxes | 238 | 66 | 73 | 91 | 19 | 67 | 30 | 95 | 468 | 211 | 580 | |
Net earnings | 237 | 207 | 182 | 171 | 248 | 216 | 284 | 237 | 797 | 985 | 483 | |
Net earnings attributable to the noncontrolling interest, net of tax | 17 | 13 | 10 | 11 | 18 | 12 | 12 | 12 | 51 | 54 | 43 | |
Net earnings attributable to BorgWarner Inc. | $ 220 | $ 194 | $ 172 | $ 160 | $ 230 | $ 204 | $ 272 | $ 225 | 746 | 931 | 440 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | (27) | 0 | 0 | |||||||||
Engine [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Adjusted EBIT | 995 | 1,040 | 992 | |||||||||
Drivetrain [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Adjusted EBIT | $ 443 | 475 | $ 448 | |||||||||
Restructuring expense | $ 7 |
Reporting Segments and Relate_5
Reporting Segments and Related Information - Geographic Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Minimum percentage in consolidated sales of countries by certain countries | 5.00% | ||||||||||
Investment in NSK-Warner | $ 256 | $ 244 | $ 256 | $ 244 | |||||||
Net sales | 2,559 | $ 2,492 | $ 2,551 | $ 2,566 | 2,574 | $ 2,478 | $ 2,694 | $ 2,784 | 10,168 | 10,530 | $ 9,799 |
Long-lived assets | 2,934 | 2,904 | $ 2,934 | 2,904 | 2,864 | ||||||
outside U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Percentage of net sales | 77.00% | ||||||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 2,335 | 2,394 | 2,280 | ||||||||
Long-lived assets | 752 | 729 | 752 | 729 | 719 | ||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 3,810 | 4,022 | 3,735 | ||||||||
Long-lived assets | 957 | 977 | 957 | 977 | 987 | ||||||
Germany | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,507 | 1,665 | 1,653 | ||||||||
Long-lived assets | 328 | 371 | 328 | 371 | 413 | ||||||
France | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 627 | 519 | 522 | ||||||||
Long-lived assets | 180 | 171 | 180 | 171 | 152 | ||||||
Hungary | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 589 | 687 | 656 | ||||||||
Long-lived assets | 164 | 153 | 164 | 153 | 148 | ||||||
Other Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,087 | 1,151 | 904 | ||||||||
Long-lived assets | 285 | 282 | 285 | 282 | 274 | ||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,711 | 1,801 | 1,560 | ||||||||
Long-lived assets | 605 | 589 | 605 | 589 | 555 | ||||||
Mexico | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,040 | 978 | 920 | ||||||||
Long-lived assets | 247 | 223 | 247 | 223 | 201 | ||||||
South Korea | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 786 | 859 | 877 | ||||||||
Long-lived assets | 221 | 235 | 221 | 235 | 244 | ||||||
Other Foreign [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 486 | 476 | 427 | ||||||||
Long-lived assets | $ 152 | $ 151 | $ 152 | $ 151 | $ 158 |
Reporting Segments and Relate_6
Reporting Segments and Related Information - Major Customers & Products (Details) - Revenue Benchmark [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Turbochargers [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 28.00% | 27.00% | 28.00% |
Volkswagen [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 11.00% | 12.00% | 13.00% |
Ford [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 15.00% | 14.00% | 15.00% |
Maximum [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 10.00% | 10.00% |
Interim Financial Information_3
Interim Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Gain on derecognition of subsidiary | $ 177 | $ 177 | $ 0 | $ 0 | ||||||||
Net sales | $ 2,559 | $ 2,492 | $ 2,551 | $ 2,566 | $ 2,574 | $ 2,478 | $ 2,694 | $ 2,784 | 10,168 | 10,530 | 9,799 | |
Cost of sales | 2,014 | 1,968 | 2,038 | 2,047 | 2,030 | 1,963 | 2,114 | 2,193 | 8,067 | 8,300 | 7,684 | |
Gross profit | 545 | 524 | 513 | 519 | 544 | 515 | 580 | 591 | 2,101 | 2,230 | 2,115 | |
Selling, general and administrative expenses | 205 | 230 | 212 | 226 | 226 | 230 | 237 | 253 | 873 | 946 | 899 | |
Other (income) expense, net | (138) | 18 | 16 | 29 | 52 | 7 | 30 | 5 | (75) | 94 | 144 | |
Operating income | 478 | 276 | 285 | 264 | 266 | 278 | 313 | 333 | 1,303 | 1,190 | 1,072 | |
Equity in affiliates’ earnings, net of tax | (7) | (7) | (9) | (9) | (11) | (15) | (13) | (10) | (32) | (49) | (51) | |
Interest income | (3) | (4) | (2) | (3) | (2) | (1) | (1) | (2) | (12) | (6) | (6) | |
Interest expense | 12 | 15 | 14 | 14 | 14 | 14 | 15 | 16 | 55 | 59 | 71 | |
Other postretirement income | 1 | (1) | 27 | 0 | (2) | (3) | (2) | (3) | 27 | (10) | (5) | |
Earnings before income taxes and noncontrolling interest | 475 | 273 | 255 | 262 | 267 | 283 | 314 | 332 | 1,265 | 1,196 | 1,063 | |
Provision for income taxes | 238 | 66 | 73 | 91 | 19 | 67 | 30 | 95 | 468 | 211 | 580 | |
Net earnings (loss) | 237 | 207 | 182 | 171 | 248 | 216 | 284 | 237 | 797 | 985 | 483 | |
Net earnings attributable to the noncontrolling interest, net of tax | 17 | 13 | 10 | 11 | 18 | 12 | 12 | 12 | 51 | 54 | 43 | |
Net earnings attributable to BorgWarner Inc. | $ 220 | $ 194 | $ 172 | $ 160 | $ 230 | $ 204 | $ 272 | $ 225 | $ 746 | $ 931 | $ 440 | |
Earnings per share — basic | $ 1.07 | $ 0.94 | $ 0.84 | $ 0.77 | $ 1.11 | $ 0.98 | $ 1.30 | $ 1.07 | $ 3.63 | $ 4.47 | $ 2.09 | |
Earnings per share — diluted | $ 1.06 | $ 0.94 | $ 0.83 | $ 0.77 | $ 1.10 | $ 0.98 | $ 1.30 | $ 1.07 | $ 3.61 | $ 4.44 | $ 2.08 | |
Restructuring expense | $ 31 | $ 14 | $ 13 | $ 14 | $ 23 | $ 6 | $ 31 | $ 8 | $ 72 | $ 67 | $ 58 | |
Business acquisition, percentage of voting interests acquired | 20.00% | 20.00% | ||||||||||
Professional Fees | $ 4 | $ 5 | 1 | |||||||||
Litigation Settlement, Expense | 14 | |||||||||||
Effective Income Tax Rate Reconciliation, Deduction, Other Postretirement Expense, Amount | 6 | 6 | ||||||||||
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Transition Tax on Accumulated Foreign Earnings, Amount | 22 | |||||||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 7 | |||||||||||
Effective Income Tax Rate Reconciliation, Global Realignment Plan | 11 | |||||||||||
Gain on sale of building | 19 | 0 | 19 | 0 | ||||||||
Merger, acquisition and divestiture expense | 1 | 2 | 1 | 2 | 11 | 6 | 10 | |||||
Asset impairment expense | 26 | 7 | 25 | 71 | ||||||||
Asbestos-related adjustments | 23 | 0 | 23 | 0 | ||||||||
Lease termination settlement | 0 | 0 | 5 | |||||||||
Tax benefit associated with restructuring | 8 | 4 | 4 | 3 | 6 | 1 | 8 | 1 | 19 | 15 | 10 | |
Effective rate reconciliation measurement period adjustments due to the Tax Act | 7 | (7) | (13) | (13) | ||||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | (1) | (21) | (22) | |||||||||
Valuation allowance adjustments | 9 | 2 | 11 | (12) | ||||||||
Effective income tax rate reconciliation, tax reserve adjustments | (3) | (3) | ||||||||||
Effective Income Tax Rate Reconciliation, Disposition of Asset, Amount | 6 | 6 | ||||||||||
Tax benefit associated with merger and acquisition expense | (1) | |||||||||||
Tax benefit associated with asset impairment expense | 8 | 8 | 18 | |||||||||
Tax impact of other tax adjustments | $ 5 | $ 9 | $ 1 | $ 5 | 19 | $ 2 | $ 10 | 30 | 4 | |||
Tax expenses (benefits) associated with asbestos-related adjustments | $ (6) | (6) | ||||||||||
Tax reform adjustments to provision for income taxes | 16 | (13) | 274 | |||||||||
Tax expense on gain from customer contract expiration | 1 | 1 | ||||||||||
Gain on commercial settlement | $ 4 | $ 0 | $ 4 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Billions | Jan. 28, 2020USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Subsequent Event [Line Items] | |||
Business acquisition, percentage of voting interests expected to be acquired (percent) | 20.00% | 20.00% | |
Delphi Technologies [Member] | Expected [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Value of transaction under definitive agreement | $ 3.3 | ||
Fixed exchange ratio | 0.4534 | ||
Business acquisition, percentage of voting interests expected to be acquired (percent) | 84.00% | ||
Interest expected to be held by current Delphi Technology stockholders (percent) | 16.00% |
Uncategorized Items - a20191231
Label | Element | Value |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (14,000,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 16,000,000 |