Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 03, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-12162 | ||
Entity Registrant Name | BorgWarner Inc. | ||
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 Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7.8 | ||
Entity Common Stock, Shares Outstanding | 234,130,802 | ||
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 2023 Annual Meeting of Stockholders Part III | ||
Entity Central Index Key | 0000908255 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Common Stock, par value $0.01 per share | |||
Document Information [Line Items] | |||
Title of each class | Common Stock, par value $0.01 per share | ||
Trading Symbol(s) | BWA | ||
Name of each exchange on which registered | NYSE | ||
1.00% Senior Notes due 2031 | |||
Document Information [Line Items] | |||
Title of each class | 1.00% Senior Notes due 2031 | ||
Trading Symbol(s) | BWA31 | ||
Name of each exchange on which registered | NYSE |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Detroit, Michigan |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash, cash equivalents and restricted cash | $ 1,338 | $ 1,844 |
Receivables, net | 3,323 | 2,898 |
Inventories, net | 1,687 | 1,534 |
Prepayments and other current assets | 269 | 321 |
Total current assets | 6,617 | 6,597 |
Property, plant and equipment, net | 4,365 | 4,395 |
Investments and long-term receivables | 896 | 530 |
Goodwill | 3,397 | 3,279 |
Other intangible assets, net | 1,051 | 1,091 |
Other non-current assets | 668 | 683 |
Total assets | 16,994 | 16,575 |
LIABILITIES AND EQUITY | ||
Notes payable and other short-term debt | 62 | 66 |
Accounts payable | 2,684 | 2,276 |
Other current liabilities | 1,490 | 1,456 |
Total current liabilities | 4,236 | 3,798 |
Long-term debt | 4,166 | 4,261 |
Retirement-related liabilities | 223 | 290 |
Other non-current liabilities | 861 | 964 |
Total liabilities | 9,486 | 9,313 |
Commitments and contingencies | ||
Capital stock: | ||
Preferred stock, $0.01 par value; authorized shares: 5,000,000; none issued and outstanding | $ 0 | $ 0 |
Common stock outstanding (in shares) | 234,122,211 | 239,776,892 |
Common stock issued (in shares) | 283,575,876 | 283,575,876 |
Common stock, par value (in dollar per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 390,000,000 | 390,000,000 |
Capital in excess of par value | $ 2,675 | $ 2,637 |
Retained earnings | 7,454 | 6,671 |
Accumulated other comprehensive loss | (876) | (551) |
Common stock held in treasury, at cost: (2022 - 49,453,665 shares; 2021 - 43,798,984 shares) | (2,032) | (1,812) |
Total BorgWarner Inc. stockholders’ equity | 7,224 | 6,948 |
Noncontrolling interest | 284 | 314 |
Total equity | 7,508 | 7,262 |
Total liabilities and equity | 16,994 | 16,575 |
Issued common stock | ||
Capital stock: | ||
Common stock | $ 3 | $ 3 |
Nonvoting Common Stock | ||
Capital stock: | ||
Common stock outstanding (in shares) | 0 | 0 |
Common stock issued (in shares) | 0 | 0 |
Common stock, par value (in dollar per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par values (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized ( in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued ( in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollar per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 390,000,000 | 390,000,000 |
Common stock issued (in shares) | 283,575,876 | 283,575,876 |
Common stock outstanding (in shares) | 234,122,211 | 239,776,892 |
Treasury stock (in shares) | 49,453,665 | 43,798,984 |
Nonvoting Common Stock | ||
Common stock, par value (in dollar per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock issued (in shares) | 0 | 0 |
Common stock outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 15,801 | $ 14,838 | $ 10,165 |
Cost of sales | 12,700 | 11,983 | 8,255 |
Gross profit | 3,101 | 2,855 | 1,910 |
Selling, general and administrative expenses | 1,610 | 1,460 | 951 |
Restructuring expense | 59 | 163 | 203 |
Other operating expense, net | 58 | 81 | 138 |
Operating income | 1,374 | 1,151 | 618 |
Equity in affiliates’ earnings, net of tax | (38) | (48) | (18) |
Unrealized loss (gain) on debt and equity securities | (73) | (362) | 382 |
Interest expense, net | 52 | 93 | 61 |
Other postretirement income | (31) | (45) | (7) |
Earnings before income taxes and noncontrolling interest | 1,318 | 789 | 964 |
Provision for income taxes | 292 | 150 | 397 |
Net earnings | 1,026 | 639 | 567 |
Net earnings attributable to the noncontrolling interest, net of tax | 82 | 102 | 67 |
Net earnings attributable to BorgWarner Inc. | $ 944 | $ 537 | $ 500 |
Earnings per share attributable to BorgWarner Inc. — basic (in dollar per share) | $ 4.01 | $ 2.25 | $ 2.35 |
Earnings per share attributable to BorgWarner Inc. — diluted (in dollar per share) | $ 3.99 | $ 2.24 | $ 2.34 |
Weighted average shares outstanding: | |||
Basic (in shares) | 235.5 | 238.1 | 213 |
Diluted (in shares) | 236.8 | 239.5 | 214 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 944 | $ 537 | $ 500 | |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustments | [1] | (327) | (102) | 176 |
Hedge instruments | [1] | 4 | 0 | 0 |
Defined benefit postretirement plans | [1] | (2) | 202 | (100) |
Total other comprehensive (loss) income attributable to BorgWarner Inc. | (325) | 100 | 76 | |
Comprehensive income attributable to BorgWarner Inc | [1] | 619 | 637 | 576 |
Net earnings attributable to noncontrolling interest, net of tax | 82 | 102 | 67 | |
Other comprehensive (loss) income attributable to the noncontrolling interest | [1] | (24) | (6) | 20 |
Comprehensive income | $ 677 | $ 733 | $ 663 | |
[1]Net of income taxes. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING | |||
Net cash provided by operating activities | $ 1,569 | $ 1,306 | $ 1,184 |
INVESTING | |||
Capital expenditures, including tooling outlays | (723) | (666) | (441) |
Capital expenditures for damage to property, plant and equipment | 0 | (2) | (20) |
Insurance proceeds received for damage to property, plant and equipment | 0 | 5 | 20 |
Payments for businesses acquired, net of cash and restricted cash acquired | (312) | (759) | (449) |
Proceeds from sale of businesses, net of cash divested | 27 | 22 | 0 |
Proceeds from settlement of net investment hedges, net | 40 | 11 | 10 |
Payments for investments in debt and equity securities, net | (473) | (20) | (2) |
Proceeds from asset disposals and other, net | 23 | 14 | 16 |
Net cash used in investing activities | (1,418) | (1,395) | (866) |
FINANCING | |||
Net (decrease) increase in notes payable | 0 | (8) | 8 |
Additions to debt | 5 | 1,286 | 1,178 |
Repayments of debt, including current portion | (13) | (699) | (331) |
Payments for debt issuance costs | 0 | (11) | (10) |
Payments for purchase of treasury stock | (240) | 0 | (216) |
Payments for stock-based compensation items | (18) | (15) | (13) |
(Purchase of) capital contribution from noncontrolling interest | (59) | (33) | 4 |
Dividends paid to BorgWarner stockholders | (161) | (162) | (146) |
Dividends paid to noncontrolling stockholders | (81) | (72) | (37) |
Net cash (used in) provided by financing activities | (567) | 286 | 437 |
Effect of exchange rate changes on cash | (90) | (3) | 63 |
Net increase in cash, cash equivalents and restricted cash | (506) | 194 | 818 |
Cash, cash equivalents and restricted cash at beginning of year | 1,844 | 1,650 | 832 |
Cash, cash equivalents and restricted cash at end of year | $ 1,338 | $ 1,844 | $ 1,650 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Issued common stock | Common stock held in treasury | Common stock held in treasury Restricted Stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income (loss) | Noncontrolling interests | |
Beginning balance (in shares) at Dec. 31, 2019 | 246,387,057 | ||||||||
Beginning balance, common stock held in treasury (in shares) at Dec. 31, 2019 | 39,979,514 | ||||||||
Beginning balance at Dec. 31, 2019 | $ 3 | $ (1,657) | $ 1,145 | $ 5,942 | $ (727) | $ 138 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Dividends declared | [1] | (146) | (22) | ||||||
Noncontrolling interest contributions | 4 | ||||||||
Acquisition of delphi technologies (in shares) | 37,188,819 | 197,811 | |||||||
Acquisition of Delphi Technologies | 1,477 | 89 | |||||||
Net issuance for executive stock plan (in shares) | 297,108 | ||||||||
Net issuance for executive stock plan | $ 12 | (8) | |||||||
Net issuance of restricted stock (in shares) | 595,052 | ||||||||
Net issuance of restricted stock | $ 27 | ||||||||
Purchases of treasury stock (shares) | (5,755,630) | ||||||||
Purchase of treasury stock | $ (216) | ||||||||
Net earnings | $ 500 | 500 | 67 | ||||||
Other comprehensive income (loss) | 76 | 76 | |||||||
Comprehensive income | $ 663 | 20 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 283,575,876 | ||||||||
Ending Balance, common stock held in treasury (in shares) at Dec. 31, 2020 | 44,645,173 | ||||||||
Ending balance at Dec. 31, 2020 | $ 3 | $ (1,834) | 2,614 | 6,296 | (651) | 296 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock, dividends, declared (in dollars per share) | $ 0.68 | ||||||||
Dividends declared | [1] | (162) | (84) | ||||||
Net issuance for executive stock plan (in shares) | 89,787 | ||||||||
Net issuance for executive stock plan | $ 2 | 19 | |||||||
Net issuance of restricted stock (in shares) | 756,402 | ||||||||
Net issuance of restricted stock | $ 20 | 5 | |||||||
Acquisition of AKASOL | 96 | ||||||||
Purchase/sale of noncontrolling interest | (1) | (90) | |||||||
Net earnings | $ 537 | 537 | 102 | ||||||
Other comprehensive income (loss) | 100 | 100 | |||||||
Comprehensive income | $ 733 | (6) | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 283,575,876 | 283,575,876 | |||||||
Ending Balance, common stock held in treasury (in shares) at Dec. 31, 2021 | 43,798,984 | 43,798,984 | |||||||
Ending balance at Dec. 31, 2021 | $ 7,262 | $ 3 | $ (1,812) | 2,637 | 6,671 | (551) | 314 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock, dividends, declared (in dollars per share) | $ 0.68 | ||||||||
Dividends declared | [1] | (161) | (85) | ||||||
Net issuance for executive stock plan (in shares) | 181,212 | ||||||||
Net issuance for executive stock plan | $ 4 | 28 | |||||||
Net issuance of restricted stock (in shares) | 583,021 | ||||||||
Net issuance of restricted stock | $ 16 | 9 | |||||||
Purchases of treasury stock (shares) | (6,418,914) | ||||||||
Purchase of treasury stock | $ (240) | ||||||||
Purchase/sale of noncontrolling interest | 1 | (3) | |||||||
Net earnings | $ 944 | 944 | 82 | ||||||
Other comprehensive income (loss) | (325) | (325) | |||||||
Comprehensive income | $ 677 | (24) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 283,575,876 | 283,575,876 | |||||||
Ending Balance, common stock held in treasury (in shares) at Dec. 31, 2022 | 49,453,665 | 49,453,665 | |||||||
Ending balance at Dec. 31, 2022 | $ 7,508 | $ 3 | $ (2,032) | $ 2,675 | $ 7,454 | $ (876) | $ 284 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock, dividends, declared (in dollars per share) | $ 0.68 | ||||||||
[1]Dividends declared relate to BorgWarner common stock. |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, dividends, declared (in dollars per share) | $ 0.68 | $ 0.68 | $ 0.68 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF 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. The Company’s Consolidated Financial Statements reflect the results of acquisitions following the date of the respective acquisition. Refer to Note 2, “Acquisitions and Dispositions,” to the Consolidated Financial Statements for more information. 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 balances and transactions have been eliminated in consolidation. Joint ventures and equity securities The Company has investments in three unconsolidated joint ventures: NSK-Warner K.K., Turbo Energy Private Limited and Delphi-TVS Diesel Systems Ltd of which the Company owns 50%, 32.6% and 52.5%, respectively. These joint ventures are non-controlled affiliates in which the Company exercises significant influence but does not have a controlling financial interest and, therefore, are accounted for under the equity method. With respect to the Company’s 52.5%-owned joint venture, although the Company is the majority owner, it does not have the ability to control significant decisions or management of the entity. Generally, under the equity method, the Company’s original investments in these joint ventures are recorded at cost and subsequently adjusted by the Company’s share of equity in income or losses. The Company monitors its equity method investments for indicators of other-than-temporary declines in fair value on an ongoing basis. If such a decline has occurred, an impairment charge is recorded, which is measured as the difference between the carrying value and the estimated fair value. The Company’s investment in these non-controlled affiliates is included within Investments and long-term receivables in the Consolidated Balance Sheets. The Company’s share of equity in income or losses is included in Equity in affiliates’ earnings, net of tax in the Consolidated Statements of Operations. The Company also has certain investments for which it does not have the ability to exercise significant influence (generally when ownership interest is less than 20%). The Company’s investment in these equity securities is included within Investments and long-term receivables in the Consolidated Balance Sheet. Refer to Note 10, “Other Current and Non-Current Assets,” to the Consolidated Financial Statements for more information. Interests in privately held companies that do not have readily determinable fair values are accounted for using the measurement alternative under ASC Topic 321, “Investments - Equity Securities,” which includes monitoring on an ongoing basis for indicators of impairments or upward adjustments. These equity securities are measured at cost less impairments, adjusted for observable price changes in orderly transactions for the identical or similar investment of the same issuer. If the Company determines that an indicator of impairment or upward adjustment is present, an adjustment is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated fair value is generally determined using an income approach on discounted cash flows or negotiated transaction values. Equity securities that have readily determinable fair values are measured at fair value. Equity securities that do not have a readily determinable fair value and which provide a net asset value (“NAV”) or its equivalent, are valued using NAV as a practical expedient. Changes in fair value and NAV are recorded in Unrealized loss (gain) on debt and equity securities in the Consolidated Statements of Operations. Debt securities On November 16, 2022, the Company entered into a strategic partnership with Wolfspeed, Inc. (“Wolfspeed”) as part of which the Company invested $500 million in convertible debt securities of Wolfspeed. The Company elected to classify the debt security as trading and will remeasure quarterly using fair value in accordance with ASC Topic 320, “Investments.” Refer to Note 16, “Fair Value Measurements,” to the Consolidated Financial Statements for more information regarding the fair value of the convertible debt securities. The Company’s investment in the debt securities is included within Investments and long-term receivables in the Consolidated Balance Sheets. The changes in fair value are recorded in Unrealized loss (gain) on debt and equity securities in the Consolidated Statements of Operations. Business combinations In accordance with ASC Topic 805, “Business Combinations,” acquisitions are recorded using the acquisition method of accounting. The Company includes the operating results of acquired entities from their respective dates of acquisition. The Company recognizes and measures the identifiable assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date fair value. Various valuation techniques are used to determine the fair value of intangible assets, with the primary techniques being forms of the income approach, specifically the relief-from-royalty and multi-period excess earnings valuation methods. Under these valuation approaches, the Company is required to make estimates and assumptions from a market participant perspective that may include revenue growth rates, estimated earnings, royalty rates, obsolescence factors, contributory asset charges, customer attrition and discount rates. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed and any non-controlling interest is recognized as goodwill. Costs incurred as a result of a business combination other than costs related to the issuance of debt or equity securities are recorded in the period the costs are incurred. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to assets acquired and liabilities assumed with the corresponding offset to goodwill. Revenue recognition Revenue is recognized when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of the products. For most products, transfer of control occurs upon shipment or delivery; however, a limited number of customer arrangements for highly customized products with no alternative use provide the Company 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. Revenue is measured at the amount of consideration the Company expects to receive in exchange for transferring the goods. 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. Sales incentives and allowances (including returns) are recognized as a reduction to revenue at the time of the related sale. The Company estimates the allowances based on an analysis of historical experience. Taxes assessed by a governmental authority collected by the Company concurrent with a specific revenue-producing transaction are excluded from net sales. 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. 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 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. 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 three Refer to Note 3, “Revenue from Contracts with Customers,” to the Consolidated Financial Statements for more information. 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, warranty 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. Restricted cash Restricted cash includes amounts designated for uses other than current operations and is related to the Company’s commitment to acquire or invest in certain companies. As of December 31, 2022 and 2021, the Company had restricted cash of $5 million and $3 million, respectively. Receivables, net and long-term receivables Accounts receivable and long-term receivables are stated at cost less an allowance for credit losses. An allowance for credit losses is recorded for amounts that may become uncollectible in the future. The allowance for credit losses is an estimate based on expected losses, current economic and market conditions, and a review of the current status of each customer’s accounts receivable. Sales of receivables are accounted for in accordance with the ASC Topic 860, “Transfers and Servicing.” Agreements which result in true sales of the transferred receivables, as defined in ASC Topic 860, which occur when receivables are transferred to a third party without recourse to the Company, are excluded from amounts reported in the consolidated balance sheets. Cash proceeds received from such sales are included in operating cash flows. The expenses associated with receivables factoring are recorded in the consolidated statements of operations within interest expense. Refer to Note 8, “Receivables, Net,” to the Consolidated Financial Statements for more information. Inventories, net The majority of inventory is measured using first-in, first-out (“FIFO”) or average-cost methods at the lower of cost or net realizable value, with the exception of certain U.S. inventories that are determined using the last-in, first-out (“LIFO”) method at the lower of cost or market. Inventory held by U.S. operations using the LIFO method was $184 million and $178 million at December 31, 2022 and 2021, respectively. Such inventories, if valued at current cost instead of LIFO, would have been greater by $25 million as of each of December 31, 2022 and 2021. Refer to Note 9, “Inventories, net,” 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 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 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, “Property, Plant and Equipment.” 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 to be 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, “Fair Value Measurement,” 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. Goodwill and other intangible assets During the fourth quarter of each year, the Company tests goodwill for impairment by either performing a qualitative assessment or a quantitative analysis. The qualitative assessment evaluates various events and circumstances, such as macroeconomic 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 disposal activity or to refresh the fair values, the Company performs a quantitative 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. The Company has definite-lived intangible assets related to patents and developed technology, customer relationships and trade names. The Company amortizes definite-lived intangible assets over their estimated useful lives. The Company also has intangible assets related to acquired trade names that are classified as indefinite-lived when there are no foreseeable limits on the periods of time over which they are expected to contribute cash flows. Costs to renew or extend the term of acquired intangible assets are recognized as expense as incurred. 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 12, “Goodwill and Other Intangibles,” to the Consolidated Financial Statements for more information. 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. 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. 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. Product warranties The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one Refer to Note 13, “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 certain 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 using consistent and appropriate methods; however, changes to its assumptions could materially affect the recorded accrued liabilities for loss or asset valuation allowances. Environmental contingencies The Company accounts for environmental costs in accordance with ASC Topic 450, “Contingencies.” 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 Other current and Other non-current liabilities in the Company’s Consolidated Balance Sheets. Refer to Note 21, “Contingencies,” to the Consolidated Financial Statements for more information. Government grants The Company periodically receives government grants representing assistance provided by a government. These government grants are generally received in cash and typically provide reimbursement related to acquisition of property and equipment, product development or local governmental economic relief. The government grants are generally amortized using a systematic and rational method over the life of the grant. As of December 31, 2022, the Company recorded government grant related liabilities of $3 million in Other current liabilities and $53 million in Other non-current liabilities in the Company’s Consolidated Balance Sheet. During the year ended December 31, 2022, the Company recorded $52 million and $9 million of government grant-related credits in Selling, general and administrative expenses and Cost of sales, respectively, in the Company’s Consolidated Statement of Operations. Derivative financial instruments The Company recognizes that certain normal business transactions and foreign currency operations 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 operational risks. Refer to Note 17, “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 20, “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, “Compensation - Retirement Benefits.” Disability, early retirement and other postretirement employee benefits are accounted for in accordance with ASC Topic 712, “Compensation - Nonretirement Postemployment Benefits.” 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 18, “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 4, “Restructuring,” to the Consolidated Financial Statements for more information. Income taxes In accordance with ASC Topic 740, “Income Taxes,” 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 and assessing the need for valuation allowances. 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. The Company records valuation allowances to reduce the carrying value of deferred tax assets to amounts that it expects are more-likely-than-not to be realized. The Company assesses existing deferred tax assets, net operating losses and tax credit carryforwards by jurisdiction and expectations of its ability to utilize these tax attributes through a review of past, current and estimated future taxable income and tax planning strategies. Refer to Note 7, “Income Taxes,” to the Consolidated Financial Statements for more information. New Accounting Pronouncements Recently Adopted Accounting Standards In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” It is expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require the following annual disclosures about transactions with a government: (i) information about the nature of the transactions and the related accounting policy used to account for the transactions; (ii) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. This guidance was effective for annual reporting periods beginning after December 15, 2021. The Company adopted this guidance prospectively as of January 1, 2022, and there was no impact on the Consolidated Financial Statements; however, the Company has included the required disclosures. Refer to Note 1, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements above for more detail. Accounting Standards Not Yet Adopted In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” It requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. This guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS Acquisitions In accordance with ASC Topic 805, “Business Combinations,” acquisitions are recorded using the acquisition method of accounting. The Company recognizes and measures the acquisition date fair value of the identifiable assets acquired, liabilities assumed, and any non-controlling interest using a range of methodologies as indicated by generally accepted valuation practices. Various valuation techniques are used to determine the fair value of intangible assets, with the primary techniques being forms of the income approach, specifically the relief-from-royalty and multi-period excess earnings valuation methods. Under these valuation approaches, the Company is required to make estimates and assumptions from a market participant perspective and may include revenue growth rates, estimated earnings, royalty rates, obsolescence factors, contributory asset charges, customer attrition and discount rates. For each acquisition disclosed below, management used a third-party valuation firm to assist in the determination of the provisional purchase accounting fair values; however, management ultimately oversees the third-party valuation firm to ensure that the transaction-specific assumptions are appropriate for the Company. Due to the insignificant size of the 2022 and 2021 acquisitions, both individually and in the aggregate, relative to the Company, supplemental pro forma financial information for the current and prior reporting periods is not provided. Hubei Surpass Sun Electric Charging Business On September 20, 2022, the Company announced that it had entered into an Equity Transfer Agreement under which BorgWarner will acquire the electric vehicle solution, smart grid and smart energy businesses of Hubei Surpass Sun Electric. The transaction has an enterprise value up to ¥410 million ($60 million), of which approximately ¥267 million ($39 million) will be delivered at or soon after closing, and up to ¥143 million ($21 million) could be paid in the form of contingent payments over approximately two years following the closing. The acquisition complements the Company’s existing European and North American charging footprint by adding a presence in China. The transaction is subject to satisfaction of customary closing conditions and is expected to close in the first quarter of 2023. Drivetek AG On December 1, 2022, the Company completed its acquisition of 100% of Drivetek AG (“Drivetek”), an engineering and product development company located in Switzerland. This acquisition strengthens the Company’s power electronics capabilities in auxiliary inverters, which it expects to accelerate the growth of the High Voltage eFan business. The Company paid ₣27 million ($29 million) at closing, and up to ₣10 million ($10 million) could be paid in the form of contingent earn-out payments over the three years following closing. The earn-out payments are contingent upon achievement of estimated future sales targets associated with newly awarded business and future turnover rate targets. As of December 31, 2022, the Company’s estimate of the earn-out payments was approximately $10 million, which is recorded in Other non-current liabilities in the Company’s Consolidated Balance Sheet. The purchase price was allocated on a provisional basis as of December 1, 2022. Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable. Certain estimated values for the acquisition, including goodwill, tangible and intangible assets and deferred taxes, are not yet finalized, and the provisional purchase price allocations are subject to change as the Company completes its analysis of the fair value at the date of acquisition. The final valuation of assets acquired and liabilities assumed may be materially different from the estimated values shown below. The estimated fair values of assets acquired and liabilities assumed as of December 1, 2022 were assets of $49 million, including goodwill and intangibles of $40 million, and liabilities of $10 million. Any excess of the purchase price over the estimated fair value of net assets was recognized as goodwill. Goodwill of $22 million was recorded within the Company’s Air Management segment. The goodwill consists of the Company’s expected future economic benefits that will be realized from expanding the Company’s electric vehicle portfolio as electric vehicle production continues to increase. The goodwill is not expected to be deductible for tax purposes. In connection with the acquisition, the Company preliminarily recorded $18 million for intangible assets, primarily for developed technology and customer relationships. As described above, the provisional fair value of intangible assets was valued using the income approach. The impact of the Drivetek acquisition on net sales and net earnings was immaterial for the year ended December 31, 2022. Rhombus Energy Solutions On July 29, 2022, the Company completed its acquisition of 100% of Rhombus Energy Solutions (“Rhombus”), a provider of charging solutions in the North American market, pursuant to the terms of an Agreement and Plan of Merger (the “Agreement”). The acquisition complements the Company’s existing European charging footprint to accelerate organic growth and adds North American regional presence to its charging business. The Company paid $131 million at closing. Pursuant to the Agreement, the Company is obligated to remit up to $30 million of earn-out payments, payable in 2025, contingent upon achievement of certain sales dollars, sales volume, and gross margin targets. The Company’s current estimates indicate that the minimum thresholds for these earn-out targets will not be achieved, thus no amount for the earn-out payments has been included in the purchase consideration or in the Company’s Consolidated Balance Sheet. Additionally, pursuant to the Agreement, the Company is obligated to remit up to $25 million over the three years following closing in key employee retention related payments, which include certain performance targets. The amounts will be accounted for as post-combination expense. The purchase price was allocated on a preliminary basis as of July 29, 2022. Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable. Certain estimated values for the acquisition, including goodwill and deferred taxes, are not yet finalized, and the preliminary purchase price allocations are subject to change as the Company completes its analysis of the fair value at the date of acquisition. The final valuation of assets acquired and liabilities assumed may be materially different from the estimated values shown below. The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of July 29, 2022, the acquisition date: (in millions) Initial Allocation Measurement Period Adjustments Revised Allocation ASSETS Current assets $ 7 $ — $ 7 Goodwill 104 — 104 Other intangible assets, net 27 — 27 Other non-current assets 4 — 4 Total assets acquired 142 — 142 LIABILITIES Current liabilities 3 — 3 Other non-current liabilities 8 — 8 Total liabilities assumed 11 — 11 Net assets acquired $ 131 $ — $ 131 Any excess of the purchase price over the estimated fair value of net assets was recognized as goodwill. Goodwill of $104 million was recorded within the Company’s Air Management segment. The goodwill consists of the Company’s expected future economic benefits that will be realized from expanding the Company’s electric vehicle portfolio as electric vehicle production continues to increase. The goodwill is not expected to be deductible for tax purposes. The following table summarizes the other intangible assets acquired: (in millions) Estimated Life Estimated Fair Value Developed technology 13 years $ 22 Customer relationships 8 years 5 Total other intangible assets $ 27 Goodwill and identifiable intangible assets were valued using the income approach. The impact of the Rhombus acquisition on net sales and net earnings was immaterial for the year ended December 31, 2022. Santroll Automotive Components On March 31, 2022, the Company completed its acquisition of 100% of Santroll Automotive Components (“Santroll”), a carve-out of Santroll Electric Auto’s eMotor business, pursuant to the terms of an Equity Transfer Agreement (“ETA”). The acquisition strengthens the Company’s vertical integration, scale and portfolio breadth in light vehicle eMotors while allowing for increased speed to market. The total final consideration was $192 million, which reflects a reduction of approximately $20 million in the base purchase price since the acquisition closing date resulting from an amendment to the ETA and finalization of post-closing adjustments. The consideration includes approximately ¥1.0 billion ($152 million) of base purchase price and ¥0.25 billion ($40 million) of originally estimated earn-out payments. The Company paid approximately $157 million of base purchase price in the year ended December 31, 2022 and expects to recapture approximately $5 million of post-closing adjustments through a reduction of the payment of the second earn-out. Pursuant to the ETA, the obligation of the Company to remit up to ¥0.3 billion (approximately $47 million) of earn-out payments is contingent upon achievement of certain sales volume targets and certain estimated future volume targets associated with newly awarded business. As of December 31, 2022, the Company’s estimate of the earn-out payments was approximately $21 million. The net amount of the earn-out payment and post-closing adjustments is recorded in Other current liabilities in the Company’s Consolidated Balance Sheet. The purchase price was allocated on a preliminary basis as of March 31, 2022. Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable. Certain estimated values for the acquisition, including goodwill and deferred taxes, are not yet finalized, and the preliminary purchase price allocations are subject to change as the Company completes its analysis of the fair value at the date of acquisition. The final valuation of assets acquired and liabilities assumed may be materially different from the estimated values shown below. The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of March 31, 2022, the acquisition date: (in millions) Initial Allocation Measurement Period Adjustments Revised Allocation ASSETS Current assets $ 8 $ (2) $ 6 Property, plant and equipment, net 9 2 11 Goodwill 132 (20) 112 Other intangible assets, net 87 — 87 Total assets acquired 236 (20) 216 LIABILITIES Current liabilities 2 — 2 Other non-current liabilities 22 — 22 Total liabilities assumed 24 — 24 Net assets acquired $ 212 $ (20) $ 192 Any excess of the purchase price over the estimated fair value of net assets was recognized as goodwill. Goodwill of $112 million was recorded within the Company’s e-Propulsion & Drivetrain segment. The goodwill consists of the Company’s expected future economic benefits that will arise from future product sales and the added capabilities from vertical integration of eMotors. The goodwill is not expected to be deductible for tax purposes in China. The following table summarizes the other intangible assets acquired: (in millions) Estimated Life Estimated Fair Value Customer relationships 12 years $ 62 Manufacturing processes (know-how) 10 years 25 Total other intangible assets $ 87 Goodwill and identifiable intangible assets were valued using the income approach. The impact of the Santroll acquisition on net sales and net earnings was immaterial for the year ended December 31, 2022. AKASOL AG On June 4, 2021, the Company completed its voluntary public takeover offer for shares of AKASOL AG (“AKASOL”), resulting in ownership of 89% of AKASOL’s outstanding shares. The Company paid approximately €648 million ($788 million) to settle the offer from current cash balances, which included proceeds received from its public offering of 1.00% Senior Notes due 2031 completed on May 19, 2021. Refer to Note 14, “Notes Payable and Debt,” to the Consolidated Financial Statements for more information. Following the settlement of the offer, AKASOL became a consolidated majority-owned subsidiary of the Company. The Company also consolidated approximately €64 million ($77 million) of gross debt of AKASOL. Subsequent to the completion of the voluntary public takeover offer, the Company purchased additional shares of AKASOL for €28 million ($33 million) increasing its ownership to 93% as of December 31, 2021. On August 2, 2021, the Company initiated a merger squeeze-out process under German law for the purpose of acquiring 100% of AKASOL. On December 17, 2021, the shareholders of AKASOL voted to mandatorily transfer to ABBA BidCo. AG, a wholly owned indirect subsidiary of the Company, each issued and outstanding share of AKASOL held by shareholders that did not tender their shares in the Company’s previously completed exchange offer for AKASOL shares (the “Squeeze Out”). In exchange for the AKASOL shares transferred in the Squeeze Out, the Company paid appropriate cash compensation, in the amount of €119.16 per share, which was determined after an assessment by a third-party valuation firm, the adequacy of which was examined by an independent, court-appointed auditor. At December 31, 2021, the noncontrolling interest in AKASOL of approximately €51 million ($58 million) to be acquired through the Squeeze Out was reclassified to Other current liabilities in the Company’s Consolidated Balance Sheet as it was deemed mandatorily redeemable. No shareholder objections were filed during the statutory contestation period, and on February 10, 2022, the Company completed the registration of the Squeeze Out resulting in 100% ownership. The Company settled the Squeeze Out with AKASOL minority shareholders in the first quarter of 2022. The acquisition further strengthens BorgWarner’s commercial vehicle and industrial electrification capabilities, which positions the Company to capitalize on what it believes to be a fast-growing battery module and pack market. Following the June 4, 2021 acquisition date, AKASOL’s operations had net sales of $67 million for the year ended December 31, 2021. The impact on net earnings was immaterial for the year ended December 31, 2021.The Company finalized its valuation of the assets and liabilities of the AKASOL acquisition during the second quarter of 2022. The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the acquisition date and subsequent measurement period adjustments: (in millions) Initial Allocation Measurement Period Adjustments Final Allocation ASSETS Cash and cash equivalents (including restricted cash of $16 million) $ 29 $ — $ 29 Receivables, net 16 — 16 Inventories, net 42 (2) 40 Prepayments and other current assets 5 — 5 Property, plant and equipment, net 106 (3) 103 Goodwill 707 (3) 704 Other intangible assets, net 130 — 130 Other non-current assets — 7 7 Total assets acquired 1,035 (1) 1,034 LIABILITIES Notes payable and other short-term debt 8 — 8 Accounts payable 22 — 22 Other current liabilities 13 6 19 Long-term debt 69 — 69 Other non-current liabilities 39 (7) 32 Total liabilities assumed 151 (1) 150 Noncontrolling interests 96 — 96 Net assets and noncontrolling interest acquired $ 788 $ — $ 788 Any excess of the purchase price over the estimated fair value of net assets was recognized as goodwill. Goodwill of $704 million, including the impact of measurement period adjustments, was initially recorded within the Company’s Air Management segment. In 2022, the goodwill was moved to the e-Propulsion & Drivetrain segment following the inter-segment transition of this business. Both before and after this transition, this business was evaluated for impairment as a standalone goodwill reporting unit. The goodwill consists of the Company’s expected future economic benefits that will arise from acquiring this business, which is established in making next-generation products for electric vehicles and the potential development and deployment of future technologies, across a global customer base, in this market and across adjacent industries. The goodwill is not deductible for tax purposes. The following table summarizes the other intangible assets acquired: (in millions) Estimated Life Estimated Fair Value Amortized intangible assets: Developed technology 5 years $ 70 Customer relationships 11 years 25 Total amortized intangible assets 95 Unamortized trade names Indefinite 35 Total other intangible assets $ 130 The property, plant and equipment acquired were valued using a combination of cost and market approaches. Goodwill and identifiable intangible assets were valued using the income approach. Noncontrolling interests were valued using a market approach. Delphi Technologies PLC On October 1, 2020, the Company completed its acquisition of 100% of the outstanding ordinary shares of Delphi Technologies PLC (“Delphi Technologies”) from the shareholders of Delphi Technologies pursuant to the terms of the Transaction Agreement, dated January 28, 2020, as amended on May 6, 2020, by and between the Company and Delphi Technologies (the “Transaction Agreement”). Pursuant to the terms of the Transaction Agreement, the Company issued, in exchange for each Delphi Technologies share, 0.4307 of a share of common stock of the Company, par value $0.01 per share and cash in lieu of any fractional share. In the aggregate, the Company delivered consideration of approximately $2.4 billion. The acquisition has strengthened the Company’s electronics and power electronics products, strengthened its capabilities and scale, enhanced key combustion, commercial vehicle and aftermarket product offerings, and positioned the Company for greater growth as electrified propulsion systems gain momentum. Upon closing, the Company also assumed approximately $800 million (par value) in aggregate principal amount of Delphi Technologies’ outstanding 5.0% Senior Notes due October 2025. The following table summarizes the purchase price for Delphi Technologies: (in millions, except for share data) BorgWarner common stock issued for purchase of Delphi Technologies 37,188,819 BorgWarner share price at October 1, 2020 $ 39.54 Fair value of stock consideration $ 1,470 Stock compensation consideration 7 Total stock consideration $ 1,477 Cash consideration 18 Repayment of Delphi Technologies’ debt 896 Total consideration $ 2,391 During the three months ended December 31, 2020, the Company incurred $27 million of expense related to the amortization of the inventory fair value adjustment. The following table summarizes the net sales and earnings related to Delphi Technologies’ operations that have been included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2020, following the October 1, 2020 acquisition date: (in millions) Net sales $ 1,120 Net earnings attributable to BorgWarner Inc. $ 30 Pro forma financial information (unaudited): The following table summarizes, on a pro forma basis, the combined results of operations of the Company and Delphi Technologies business as though the acquisition and the related financing had occurred as of January 1, 2019. The pro forma results are not necessarily indicative of either the actual consolidated results had the acquisition of Delphi Technologies occurred on January 1, 2019 or of future consolidated operating results. Actual operating results for the year ended December 31, 2022 and 2021 have been included in the table below for comparative purposes. Actual Pro forma (unaudited) Year Ended December 31, (in millions) 2022 2021 2020 Net sales $ 15,801 $ 14,838 $ 12,792 Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 616 These pro forma amounts have been calculated after applying the Company’s accounting policies and the results presented above primarily reflect (i) depreciation adjustments relating to fair value adjustments to property, plant and equipment; (ii) amortization adjustments relating to fair value estimates of intangible assets; (iii) incremental interest expense, net on debt related transactions; (iv) cost of goods sold adjustments relating to fair value adjustments to inventory; and (v) stock-based compensation that was accelerated and settled on the date of acquisition. In 2020, the Company incurred $89 million of acquisition-related costs. These expenses are included in Other operating expense, net in the Company’s Consolidated Statement of Operations for the year ended December 31, 2020. Romeo Power, Inc. In May 2019, the Company invested $50 million in exchange for a 20% equity interest in Romeo Systems, Inc., now known as Romeo Power, Inc., (“Romeo”), a technology-leading battery module and pack supplier that was then privately held. On December 29, 2020, through the business combination of Romeo Systems, Inc. and special purpose acquisition company RMG Acquisition Corporation, a new entity, Romeo Power, Inc., became a publicly listed company. The Company’s ownership in Romeo was reduced to 14%, and the investment was recorded at fair value on an ongoing basis with changes in fair value being recognized in Unrealized loss (gain) on debt and equity securities in the Consolidated Statements of Operations. During the years ended December 31, 2021 and 2020, the Company recorded a loss of $362 million and a gain of $382 million, respectively, to adjust the carrying value of the Company’s investment to fair value. As of December 31, 2021, the investment’s fair value was $70 million, which was reflected in Investments and long-term receivables in the Company’s Consolidated Balance Sheets. During the year ended December 31, 2022, the Company recorded a loss of $39 million and liquidated its investment in Romeo shares at a fair value of $31 million. As of March 17, 2022, the Company no longer held any investment in Romeo. In September 2019, the Company and Romeo contributed total equity of $10 million and formed a new joint venture, BorgWarner Romeo Power LLC (“Romeo JV”), in which the Company owned a 60% interest. Romeo JV was a variable interest entity focusing on producing battery module and pack technology. The Company was the primary beneficiary of Romeo JV and had consolidated Romeo JV in its consolidated financial statements. On October 25, 2021, the Company delivered written notice to Romeo that the Company was electing to exercise its right to put its ownership stake in Romeo JV to Romeo. Based on an independent appraisal, the Company’s interest in Romeo JV was valued at $30 million. As the estimated fair value, less costs to sell, of the Company’s investment exceeded its carrying value, no adjustment to the carrying value was required at December 31, 2021. In February 2022, the Company completed the sale of its 60% interest in the Romeo JV for $29 million, the fair value of $30 million reduced by a 5% discount pursuant to the joint venture agreement. During the year ended December 31, 2022, the Company recorded a gain of $22 million in Other operating expense, net, which represented the difference between the Company’s book value of its interest in Romeo JV compared to the fair value of consideration received. As a result of the sale, the Company has no further rights in or involvement with Romeo JV. Water Valley Divestiture In 2021, the Company announced its strategy to aggressively grow its electrification product portfolio over time through organic investments and technology-focused acquisitions. Additionally, the Company announced a plan to dispose of certain internal combustion assets in support of that strategy. In December 2021, the Company entered into a definitive agreement to sell its Water Valley, Mississippi manufacturing facility (“Water Valley”) and the associated solenoid, transmission control module and stop/start accumulator system business for an estimated $57 million. The consideration consisted of $39 million in cash and notes and up to $30 million in potential earn-out payments. The Company included $18 million as contingent consideration in the proceeds, which reflected its original estimate of the payout pursuant to the earn-out. During the year ended December 31, 2022, the Company changed its estimate of the expected earn-out and recorded a pre-tax loss of $9 million in Other operating expense, net. The contingent consideration and promissory note were included in Receivables, net and Investments and long-term receivables on the Consolidated Balance Sheet. Water Valley had net sales of $177 million during the year ended December 31, 2021 and was included in the Company’s e-Propulsion & Drivetrain segment. On December 31, 2021, upon the closing of the transaction, based upon the final transaction price agreed to in the fourth quarter of 2021, the Company recorded a loss on divestiture of $22 million. As a result of this transaction, assets of $99 million, including allocated goodwill of $12 million, and liabilities of $20 million were removed from the Company’s Consolidated Balance Sheet as of December 31, 2021. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 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. The Company’s payment terms are based on customary business practices and vary by customer type and products offered. The Company has evaluated the terms of its arrangements and determined that they do not contain significant financing components. Generally, revenue is recognized upon shipment or delivery; however, a limited number of the Company’s customer arrangements for its highly customized products with no alternative use provide the Company 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 $16 million and $17 million at December 31, 2022 and 2021, respectively, for these arrangements. These amounts are reflected in Prepayments and other current assets in the Company’s Consolidated Balance Sheets. 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 as Other current liabilities in the Consolidated Balance Sheets and were $16 million at December 31, 2022 and $21 million at December 31, 2021, respectively. These amounts are reflected as revenue over the term of the arrangement (typically three The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. 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. As of December 31, 2022 and 2021, the Company recorded customer incentive payments of $34 million and $36 million, respectively, in Prepayments and other current assets, and $99 million and $137 million, respectively, in Other non-current assets in the Consolidated Balance Sheets. The following table represents a disaggregation of revenue from contracts with customers by reporting segment and region for the years ended December 31, 2022, 2021, and 2020. The balances for the years ended December 31, 2021 and 2020 have been recast for inter-segment transitions of certain businesses that were completed during 2022. Refer to Note 24, Reporting Segments and Related Information to the Consolidated Financial Statements for more information. Year ended December 31, 2022 ( in millions ) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Total North America $ 1,989 $ 1,868 $ 473 $ 711 $ 5,041 Europe 2,845 1,195 913 401 5,354 Asia 2,018 2,377 599 64 5,058 Other 182 — 67 99 348 Total $ 7,034 $ 5,440 $ 2,052 $ 1,275 $ 15,801 Year ended December 31, 2021 ( in millions ) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Total North America $ 1,664 $ 1,616 $ 302 $ 643 $ 4,225 Europe 2,805 973 1,004 423 5,205 Asia 2,103 2,329 627 61 5,120 Other 148 — 63 77 288 Total $ 6,720 $ 4,918 $ 1,996 $ 1,204 $ 14,838 Year ended December 31, 2020 ( in millions ) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Total North America $ 1,358 $ 1,284 $ 67 $ 348 $ 3,057 Europe 2,458 733 277 91 3,559 Asia 1,585 1,631 180 15 3,411 Other 95 — 13 30 138 Total $ 5,496 $ 3,648 $ 537 $ 484 $ 10,165 |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURINGThe Company’s restructuring activities are undertaken as necessary to execute management’s strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize the Company’s business and to relocate operations to best-cost locations. The Company’s restructuring expenses consist primarily of employee termination benefits (principally severance and/or other termination benefits) and other costs, which are primarily professional fees and costs related to facility closures and exits. (in millions) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Corporate Total Year ended December 31, 2022 Employee termination benefits $ 24 $ 13 $ 3 $ — $ — $ 40 Other 2 9 8 — — 19 Total restructuring expense $ 26 $ 22 $ 11 $ — $ — $ 59 Year ended December 31, 2021 Employee termination benefits $ 34 $ 12 $ 53 $ — $ — $ 99 Other 18 43 1 — 2 64 Total restructuring expense $ 52 $ 55 $ 54 $ — $ 2 $ 163 Year ended December 31, 2020 Employee termination benefits $ 50 $ 54 $ 8 $ 1 $ 44 $ 157 Other 29 16 — — 1 46 Total restructuring expense $ 79 $ 70 $ 8 $ 1 $ 45 $ 203 The following table displays a rollforward of the restructuring liability recorded within the Company’s Consolidated Balance Sheets and the related cash flow activity: (in millions) Employee termination benefits Other Total Balance at January 1, 2021 $ 160 $ 13 $ 173 Restructuring expense, net 99 64 163 Cash payments (128) (61) (189) Foreign currency translation adjustment and other (5) (3) (8) Balance at December 31, 2021 126 13 139 Restructuring expense, net 40 19 59 Cash payments (99) (28) (127) Foreign currency translation adjustment and other (8) 5 (3) Balance at December 31, 2022 $ 59 $ 9 $ 68 Less: Non-current restructuring liability 22 — 22 Current restructuring liability at December 31, 2022 $ 37 $ 9 $ 46 During the year ended December 31, 2022, the Company recorded $18 million of restructuring costs for individually approved restructuring actions that primarily related to reductions in headcount. 2020 Structural Costs Plan In February 2020, the Company announced a $300 million restructuring plan to address existing structural costs. During the years ended December 31, 2022 and 2021, the Company recorded $36 million and $103 million of restructuring charges related to this plan, respectively. Cumulatively, the Company has incurred $287 million of restructuring charges related to this plan. As of December 31, 2022, the plan was substantially complete. 2019 Legacy Delphi Technologies Plan In 2019, legacy Delphi Technologies announced a restructuring plan to reshape and realign its global technical center footprint and reduce salaried and contract staff. The Company continued actions under this program post-acquisition and has recorded cumulative charges of $67 million since October 1, 2020, including approximately $5 million and $60 million in restructuring charges during the years ended December 31, 2022 and 2021, respectively. The actions under this plan are substantially complete. Additionally, the Company recorded approximately $54 million in restructuring charges during the three months ended December 31, 2020, for acquisition-related restructuring charges. In conjunction with the acquisition, there were contractually required severance and post-combination stock-based compensation cash payments to legacy Delphi Technologies executive officers and other employee termination benefits. The following provides details of restructuring expense incurred by the Company’s reporting segments during the years ended December 31, 2022, 2021 and 2020, related to the plans discussed above: Air Management 2020 Structural Costs Plan • During the year ended December 31, 2022, the segment recorded $26 million of restructuring costs under this plan. This primarily related to $18 million for two voluntary termination programs pursuant to which approximately 74 employees accepted termination packages in 2022. • During the year ended December 31, 2021, the segment recorded $52 million of restructuring costs, of which $23 million related to a voluntary termination program where approximately 140 employees accepted termination packages in 2021, and $25 million related to severance costs and professional fees for specific actions to reduce structural costs. • During the year ended December 31, 2020, the segment recorded $79 million of restructuring costs, of which $27 million related to a voluntary termination program where approximately 200 employees accepted termination packages in 2020, $33 million related to severance costs and professional fees for specific actions to reduce structural costs, and $19 million related to employee termination benefits related to the announced closure of a facility in Europe affecting approximately 200 employees. 2019 Legacy Delphi Technologies Plan • During the year ended December 31, 2021, the segment recorded $4 million of restructuring costs, primarily related to severance costs. e-Propulsion & Drivetrain • During the year ended December 31, 2022, the segment recorded $12 million of restructuring costs, primarily related to severance costs associated with the announced closure of a technical center in Europe affecting approximately 80 employees. 2020 Structural Costs Plan • During the year ended December 31, 2022, the segment recorded $10 million of restructuring costs primarily related to contractual settlements and professional fees. • During the year ended December 31, 2021, the segment recorded $55 million of restructuring costs, of which $19 million primarily related to severance costs, equipment relocation and professional fees to reduce existing structural costs, and $35 million related to contractual settlements, professional fees and other costs associated with the announced closure of a facility in Europe. • During the year ended December 31, 2020, the segment recorded $70 million of restructuring costs, of which $55 million related to the announced closure of a facility in Europe affecting approximately 350 employees, primarily for the statutory minimum benefits and incremental one-time termination benefits negotiated with local labor authorities, and $15 million primarily related to severance costs, equipment relocation and professional fees to reduce existing structural costs. Fuel Systems • During the year ended December 31, 2022, the segment recorded $6 million of restructuring costs, primarily related to equipment relocation and professional fees. 2019 Legacy Delphi Technologies Plan • During the year ended December 31, 2022, the segment recorded $5 million of restructuring costs related to this plan, primarily related to employee severance and equipment moves. • During the year ended December 31, 2021, the segment recorded $54 million of restructuring costs related to this plan. These costs were primarily for the statutory minimum benefits and incremental one-time termination benefits negotiated with local labor authorities. • During the year ended December 31, 2020, the segment recorded $8 million of restructuring costs primarily related to contractually required severance and stock-based compensation cash payments associated with Delphi Technologies executive officers and other employee termination benefits. Corporate • During the year ended December 31, 2021, $2 million of net restructuring costs were recorded for various corporate restructuring actions. • During the year ended December 31, 2020, $45 million of restructuring costs were recorded primarily related to contractually required severance and stock-based compensation cash payments associated with Delphi Technologies 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 continues to evaluate different options across its operations to reduce existing structural costs over the next few years. The Company will recognize restructuring expense associated with any future actions at the time they are approved and become probable or are incurred. Any future actions could result in significant restructuring expense. |
RESEARCH AND DEVELOPMENT COSTS
RESEARCH AND DEVELOPMENT COSTS | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
RESEARCH AND DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT COSTSThe Company’s net Research & Development (“R&D”) expenditures are primarily included in Selling, general and administrative expenses of the Consolidated Statements of Operations. Customer reimbursements are netted against gross R&D expenditures as they are considered a recovery of cost. Customer reimbursements for prototypes are recorded net of prototype costs based on customer contracts, typically either when the prototype is shipped or when it is accepted by the customer. Customer reimbursements for engineering services are recorded when performance obligations are satisfied in accordance with the contract. Financial risks and rewards transfer upon shipment, acceptance of a prototype component by the customer or upon completion of the performance obligation as stated in the respective customer agreement. The Company has various customer arrangements relating to R&D activities that it performs at its various R&D locations. The following table presents the Company’s gross and net expenditures on R&D activities: Year Ended December 31, (in millions) 2022 2021 2020 Gross R&D expenditures $ 968 $ 930 $ 533 Customer reimbursements (182) (223) (57) Net R&D expenditures $ 786 $ 707 $ 476 Net R&D expenditures as a percentage of net sales were 5.0%, 4.8% and 4.7% for the years ended December 31, 2022, 2021 and 2020, respectively. |
OTHER OPERATING EXPENSE, NET
OTHER OPERATING EXPENSE, NET | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
OTHER OPERATING EXPENSE, NET | OTHER OPERATING EXPENSE, NET Items included in Other operating expense, net consist of: Year Ended December 31, (in millions) 2022 2021 2020 Merger, acquisition and divestiture expense, net $ 40 $ 50 $ 96 Asset impairments 30 14 17 (Gain) loss on sales of businesses (13) 29 — Intangible asset accelerated amortization (Note 12) — — 38 Other income, net 1 (12) (13) Other operating expense, net $ 58 $ 81 $ 138 Merger, acquisition and divestiture expense, net: During the year ended December 31, 2022, the Company recorded merger, acquisition and divestiture expense of $54 million primarily related to professional fees associated with the intended separation of its Fuel Systems and Aftermarket segments. This merger, acquisition and divestiture expense was partially offset by a $14 million gain related to a change in estimate of the expected earn-out estimate associated with the Santroll acquisition. During the year ended December 31, 2021, the Company recorded merger, acquisition and divestiture expense of $50 million primarily related to professional fees associated with the acquisition of AKASOL, professional fees for integration and other support associated with the Company’s acquisition of Delphi Technologies and other specific acquisition and disposition initiatives. During the year ended December 31, 2020, the Company recorded merger, acquisition and divestiture expense of $96 million primarily for professional fees associated with the Company’s acquisition of Delphi Technologies. (Gain) loss on sales of businesses: During the year ended December 31, 2022, the Company recorded a net gain on sales of businesses of $13 million, which included a $22 million gain related to the sale of its interest in BorgWarner Romeo Power LLC and a $9 million loss related to a change in estimate of the expected earn-out related to the divestiture of the Company’s Water Valley facility. During the year ended December 31, 2021, the Company recorded a pre-tax loss of $29 million, which included a $22 million loss in connection with the divestiture of the Company’s Water Valley facility and a $7 million loss on the sale of an e-Propulsion & Drivetrain technical center in Europe. Refer to Note 2 “Acquisitions and Dispositions,” to the Consolidated Financial Statements for more information. Asset impairments: During the year ended December 31, 2022, the Company recorded an impairment charge of $30 million to remove an indefinite-lived trade name as the Company no longer plans to utilize this trade name in the business. During the year ended December 31, 2021, the Company recorded a $14 million impairment charge on an indefinite-lived trade name in the Aftermarket segment. Refer to Note 12 “Goodwill and Other Intangibles,” to the Consolidated Financial Statement for more information. During the year ended December 31, 2020, the Company recorded asset impairment charges of $17 million. The impairment charges consist of $9 million in the Air Management segment and $8 million in the e-Propulsion & Drivetrain segment, related to the write down of property, plant and equipment associated with the announced closures of two European facilities. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Earnings (loss) before income taxes: U.S. 1 $ 51 $ (423) $ 437 Non-U.S. 1 1,267 1,212 527 Total $ 1,318 $ 789 $ 964 Provision for income taxes: Current: Federal $ 75 $ 43 $ 19 State 7 7 2 Foreign 276 276 252 Total current expense 358 326 273 Deferred: Federal (58) (98) 70 State (9) (13) 11 Foreign 1 (65) 43 Total deferred (benefit) expense (66) (176) 124 Total provision for income taxes $ 292 $ 150 $ 397 __________________________ 1 In 2021, the U.S. loss before income taxes was primarily related to the $362 million unrealized loss related to the Company’s investment in Romeo Power, Inc. In 2020, the Company recognized a $382 million unrealized gain related to its investment in Romeo Power, Inc. The provision for income taxes resulted in an effective tax rate of approximately 22%, 19% and 41% for the years ended December 31, 2022, 2021 and 2020, respectively. 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) 2022 2021 2020 Income taxes at U.S. statutory rate of 21% $ 277 $ 166 $ 203 Increases (decreases) resulting from: Valuation allowance adjustments, net 67 39 53 Net tax on remittance of foreign earnings 36 43 93 Foreign rate differentials 25 36 21 Reserve adjustments, settlements and claims 16 (17) 45 Impact of tax law and rate change 2 (20) — State taxes, net of federal benefit (4) (9) 10 Affiliates' earnings (6) (10) (4) U.S. tax on non-U.S. earnings (11) 4 10 Changes in accounting methods and filing positions (14) (18) (18) Tax credits (16) (5) (12) Enhanced research and development deductions (42) (27) (9) Tax holidays (43) (76) (36) Other, net 5 44 41 Provision for income taxes, as reported $ 292 $ 150 $ 397 The Company’s tax rate is affected by the tax laws and rates of the U.S. and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate was impacted beneficially by tax incentives obtained in various non-U.S. countries, primarily those arising in China related to the High and New Technology Enterprise (“HNTE”) status of various subsidiaries ($43 million, $76 million and $36 million for the years ended December 31, 2022, 2021 and 2020, respectively). HNTE status is granted for three-year periods, and the Company seeks to renew such status on a regular basis. In addition, beneficial impacts were recognized related to tax deductions for qualifying research and development expenditures ($42 million, $27 million and $9 million for the years ended December 31, 2022, 2021 and 2020, respectively). The Company’s effective tax rate is also impacted by net changes to valuation allowances, where the Company has determined that it is more-likely-than-not that certain deferred tax assets would not be realized. For the years ended December 31, 2022, 2021 and 2020,the Company recorded net expense related to valuation allowances of $67 million, $39 million and $53 million, respectively. During 2022, the Company recognized discrete tax benefits of $33 million, primarily related to a reduction in certain unrecognized tax benefits and accrued interest related to a matter for which the statute of limitations had lapsed and favorable provision-to-return adjustments. In 2021, the Company recognized a $55 million tax benefit related to a reduction in certain unrecognized tax benefits and accrued interest related to a matter for which the statute of limitations had lapsed. In addition, the Company recognized a discrete tax benefit of $20 million related to an increase in its deferred tax assets as a result of an increase in the United Kingdom (“UK”) tax rate from 19% to 25%. This rate change was enacted in June 2021 and becomes effective April 2023. Further, a net discrete tax benefit of $36 million was recognized, primarily related to changes to certain withholding rates applied to unremitted earnings. In the fourth quarter of 2021, the Company received approval for tax holiday status reducing the statutory tax rate for two of its legal entities, resulting in a reduction in tax expense of $28 million in 2021. In 2020, the Company recognized $49 million of income tax expense, which primarily related to final U.S. Department of Treasury regulations issued in the third quarter of 2020, which impacted the net tax on remittance of foreign earnings, and certain tax law changes in India effective in the first quarter of 2020. A roll forward of the Company’s total gross unrecognized tax benefits is presented below: (in millions) 2022 2021 2020 Balance, January 1 $ 221 $ 231 $ 146 Additions based on tax positions related to current year 20 23 14 Acquisitions — 8 54 (Reductions) additions for tax positions of prior years (8) — 9 Reductions for lapse in statute of limitations (14) (36) (5) Reductions for closure of tax audits and settlements (21) — — Translation adjustment (14) (5) 13 Balance, December 31 $ 184 $ 221 $ 231 The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense and accrued approximately $57 million and $51 million for the payment of interest and penalties at December 31, 2022 and 2021, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recognized expense related to interest and penalties of $5 million, $16 million and $21 million, respectively. During the year ended December 31, 2021, the Company also recorded a reduction in tax expense of $34 million for previously recorded interest related to matters for which the statute of limitations lapsed. As of December 31, 2022, approximately $218 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 it is reasonably possible there could be a decrease of approximately $26 million in unrecognized tax benefits and interest in the next 12 months related to 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 2015 and prior Japan 2018 and prior Barbados 2016 and prior Luxembourg 2016 and prior China 2015 and prior Mexico 2015 and prior France 2015 and prior Poland 2016 and prior Germany 2011 and prior South Korea 2015 and prior Hungary 2015 and prior United Kingdom 2015 and prior In the U.S. , certain tax attributes created in years prior to 2017 were subsequently utilized. Even though the U.S. federal statute of limitations may have expired for years prior to 2017, 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 consist of the following: December 31, (in millions) 2022 2021 Deferred tax assets: Net operating loss and capital loss carryforwards $ 607 $ 634 Interest limitation carryforwards 156 123 Research and development capitalization 146 91 Pension and other postretirement benefits 45 41 Employee compensation 46 44 Warranty 31 31 State tax credits 29 28 Unrecognized tax benefits 24 32 Unrealized loss on equity securities 8 — Foreign tax credits 7 8 Other comprehensive loss — 39 Other 167 167 Total deferred tax assets $ 1,266 $ 1,238 Valuation allowance (591) (551) Net deferred tax asset $ 675 $ 687 Deferred tax liabilities: Goodwill and intangible assets (267) (274) Unremitted foreign earnings (141) (146) Fixed assets (121) (126) Other comprehensive income (14) — Unrealized gain on equity securities — (5) Other (87) (88) Total deferred tax liabilities $ (630) $ (639) Net deferred taxes $ 45 $ 48 As of December 31, 2022, the Company had gross deferred tax assets for certain non-U.S. net operating loss (“NOL”) carryforwards of $584 million, $374 million of which expire at various dates from 2023 through 2042 and $210 million of which have an indefinite life. The Company has a valuation allowance recorded of $449 million with regards to these deferred tax assets. As of December 31, 2022, certain U.S. subsidiaries had gross deferred tax assets of approximately $23 million for federal and state NOL carryforwards, $21 million of which expire at various dates from 2023 through 2041 and $2 million of which have an indefinite life. The Company has recorded a valuation allowance of $17 million with regards to these deferred tax assets. In addition, certain U.S. subsidiaries also have state tax credit carryforwards of $29 million, which are offset by a valuation allowance of $29 million. The Company reviews the likelihood that the benefit of its deferred tax assets will be realized and, therefore, the need for valuation allowances on a quarterly basis. The Company assesses existing deferred tax assets, net operating loss carryforwards and tax credit carryforwards by jurisdiction and expectations of its ability to utilize these tax attributes through a review of past, current, and estimated future taxable income and tax planning strategies. If, based upon the weight of available evidence, it is more-likely-than-not the deferred tax assets will not be realized, a valuation allowance is recorded. Due to recent restructurings, the Company concluded that the weight of the negative evidence outweighs the positive evidence in certain foreign jurisdictions. As a result, the Company believes it is more-likely-than-not that the net deferred tax assets in certain foreign jurisdictions that include entities in Luxembourg, Hungary, France, Spain, Ireland and the U.K. will not be realized in the future. As of December 31, 2022, the Company recorded deferred tax liabilities of $141 million with respect to foreign unremitted earnings. The Company did not provide deferred tax liabilities with respect to certain book versus tax basis differences not represented by undistributed earnings of approximately $1.1 billion as of December 31, 2022, because 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 $70 million as of December 31, 2022. |
RECEIVABLES, NET
RECEIVABLES, NET | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
RECEIVABLES, NET | RECEIVABLES, NET The table below provides details of receivables as of December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Receivables, net: Customers $ 2,823 $ 2,522 Indirect taxes 319 240 Other 199 149 Gross receivables 3,341 2,911 Allowance for credit losses (18) (13) Total receivables, net $ 3,323 $ 2,898 The table below summarizes the activity in the allowance for credit losses for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (in millions) 2022 2021 2020 Beginning balance, January 1 $ (13) $ (11) $ (6) Provision (6) (3) (11) Write-offs — — 7 Translation adjustment and other 1 1 (1) Ending balance, December 31 $ (18) $ (13) $ (11) Factoring |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET A summary of Inventories, net is presented below: December 31, ( in millions ) 2022 2021 Raw material and supplies $ 1,203 $ 1,057 Work-in-progress 176 175 Finished goods 333 327 FIFO inventories 1,712 1,559 LIFO reserve (25) (25) Inventories, net $ 1,687 $ 1,534 |
OTHER CURRENT AND NON-CURRENT A
OTHER CURRENT AND NON-CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT AND NON-CURRENT ASSETS | OTHER CURRENT AND NON-CURRENT ASSETS Additional detail related to assets is presented below: December 31, ( in millions) 2022 2021 Prepayments and other current assets: Prepaid tooling $ 82 $ 81 Prepaid taxes 40 64 Customer incentive payments (Note 3) 34 36 Derivative instruments 18 13 Contract assets (Note 3) 16 17 Prepaid insurance 11 9 Prepaid engineering 9 27 Other 59 74 Total prepayments and other current assets $ 269 $ 321 Investments and long-term receivables: Investment in debt securities $ 455 $ — Investment in equity affiliates 279 298 Long-term receivables 87 102 Investment in equity securities 75 130 Total investments and long-term receivables $ 896 $ 530 Other non-current assets: Deferred income taxes (Note 7) $ 239 $ 254 Operating leases (Note 22) 199 185 Customer incentive payments (Note 3) 99 137 Derivative instruments 68 8 Other 63 99 Total other non-current assets $ 668 $ 683 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net is stated at cost less accumulated depreciation and amortization, and consisted of: December 31, ( in millions) 2022 2021 Land, land use rights and buildings $ 1,440 $ 1,504 Machinery and equipment 5,917 5,807 Finance lease assets 15 13 Construction in progress 610 471 Total property, plant and equipment, gross 7,982 7,795 Less: accumulated depreciation 3,904 3,713 Property, plant and equipment, net, excluding tooling 4,078 4,082 Tooling, net of amortization 287 313 Property, plant and equipment, net $ 4,365 $ 4,395 Interest costs capitalized for the years ended December 31, 2022, 2021 and 2020 were $18 million, $12 million and $8 million, respectively. In 2022, the Company revised its prior year presentation of fully depreciated assets still in use to include these assets on their respective line items at their gross values with a corresponding increase in accumulated depreciation. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES During the fourth quarter of 2022, the Company performed a quantitative analysis on each reporting unit to refresh its respective fair value. Prior to 2022, the estimated fair value was determined based on the income approach. The income approach is based on discounted future cash flows and requires significant assumptions, including estimates regarding future revenue, profitability, capital requirements and discount rates. The basis of the income approach 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. Because the projections are estimated over a significant future period of time, those estimates and assumptions are subject to uncertainty. For 2022, the estimated fair value was determined using a combined income and market approach. The market approach is based on market multiples (revenue and “EBITDA”, defined as earnings before interest, taxes, depreciation and amortization) and requires an estimate of appropriate multiples based on market data for comparable companies. 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 2022 goodwill quantitative impairment review are as follows: • Discount rates: the Company used a range of 11.0% to 14.5% weighted average cost of capital (“WACC”) as the discount rates 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 rates: the Company used a global automotive market industry growth rate forecast adjusted to estimate its own market participation for product lines. In 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 could be adversely affected by industry downturns. • The automotive industry is evolving, and if the Company does not respond appropriately, its results of operations could be adversely affected. • The Company is dependent on market segments that use its key products and could 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 2022 indicated the Company’s goodwill assigned to the respective reporting units was not impaired. Future changes in the judgments, assumptions and estimates from those used in acquisition-related valuations and goodwill impairment testing, including discount rates or future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future. Due to the Company’s recent acquisitions, there is less headroom (the difference between the carrying value and the fair value) associated with certain of the Company’s reporting units. Based on the impairment testing conducted in 2022, the amounts by which the estimated fair values of the Company’s goodwill reporting units exceeded their carrying values ranged from 25% to 153%. An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect the Company’s financial statements in any given year. A summary of the changes in the carrying amount of goodwill is presented in the following tables. The prior period balances have been recast for inter-segment transitions of certain businesses that were completed during 2022. Refer to Note 24, “Reporting Segments and Related Information” for more information. 2022 (in millions) Air Management e-Propulsion & Drivetrain Aftermarket Fuel Systems Total Gross goodwill balance, January 1 $ 1,466 $ 1,890 $ 380 $ 45 $ 3,781 Accumulated impairment losses, January 1 (502) — — — (502) Net goodwill balance, January 1 $ 964 $ 1,890 $ 380 $ 45 $ 3,279 Goodwill during the year: Acquisitions 1 (Note 2) 126 132 — — 258 Measurement period adjustments (Note 2) — (20) — — (20) Other, primarily translation adjustment (26) (88) (6) — (120) Net goodwill balance, December 31 $ 1,064 $ 1,914 $ 374 $ 45 $ 3,397 2021 (in millions) Air Management e-Propulsion & Drivetrain Aftermarket Fuel Systems Total Gross goodwill balance, January 1 $ 1,472 $ 1,244 $ 368 $ 45 $ 3,129 Accumulated impairment losses, January 1 (502) — — — (502) Net goodwill balance, January 1 $ 970 $ 1,244 $ 368 $ 45 $ 2,627 Goodwill during the year: Acquisitions 1 (Note 2) — 707 — — 707 Measurement period adjustments 2 (1) 26 16 — 41 Disposition 3 (Note 2) — (12) — — (12) Other, primarily translation adjustment (5) (75) (4) — (84) Net goodwill balance, December 31 $ 964 $ 1,890 $ 380 $ 45 $ 3,279 _____________________________ 1 Acquisitions relate to the Company’s 2022 purchases of Drivetek, Rhombus and Santroll, and the 2021 purchase of AKASOL. 2 Measurement period adjustments primarily relate to the 2020 acquisition of Delphi Technologies. 3 Disposition relates to the Company’s 2021 sale of Water Valley. The Company’s other intangible assets, primarily from acquisitions, consist of the following: December 31, 2022 December 31, 2021 (in millions) Estimated useful lives (years) Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Patented and unpatented technology 5 - 15 $ 492 $ 141 $ 351 $ 443 $ 105 $ 338 Customer relationships 7 - 15 901 351 550 877 310 567 Miscellaneous 2 - 5 10 6 4 14 7 7 Total amortized intangible assets 1,403 498 905 1,334 422 912 Unamortized trade names 146 — 146 179 — 179 Total other intangible assets $ 1,549 $ 498 $ 1,051 $ 1,513 $ 422 $ 1,091 Amortization of other intangible assets was $97 million, $88 million and $89 million for the years ended December 31, 2022, 2021 and 2020, respectively. 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: $95 million in 2023, $95 million in 2024, $94 million in 2025, $86 million in 2026, $80 million in 2027 and $455 million thereafter. During the fourth quarter of 2020, as a result of an evaluation of the underlying technologies and management of the business subsequent to the acquisition of Delphi Technologies, the Company reduced the useful life of certain intangible assets as they no longer provided future economic benefit. This resulted in accelerated amortization expense of $38 million and the removal of the related gross carrying amount and accumulated amortization of these assets. A roll forward of the gross carrying amounts and related accumulated amortization of the Company’s other intangible assets is presented below: Gross carrying amounts Accumulated amortization (in millions) 2022 2021 2022 2021 Beginning balance, January 1 $ 1,513 $ 1,452 $ 422 $ 356 Acquisitions 1 (Note 2) 132 130 — — Impairment 2 (41) (14) (3) — Amortization — — 97 88 Translation adjustment (55) (55) (18) (22) Ending balance, December 31 $ 1,549 $ 1,513 $ 498 $ 422 _____________________________ 1 Acquisitions relate to the Company’s 2022 purchases of Drivetek, Rhombus and Santroll, and the 2021 purchase of AKASOL. 2 During the fourth quarter of 2022, the Company recorded an impairment charge of $30 million to remove an indefinite-lived trade name as the Company no longer plans to utilize this trade name in the business. In 2021, the Company performed a quantitative impairment test over its indefinite-lived trade names, which indicated that for one trade name the fair value was less than the carrying value. Therefore, the Company recorded an impairment charge to reduce the carrying value to the fair value. |
PRODUCT WARRANTY
PRODUCT WARRANTY | 12 Months Ended |
Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY | PRODUCT WARRANTY The following table summarizes the activity in the product warranty accrual accounts: (in millions) 2022 2021 Beginning balance, January 1 $ 236 $ 253 Acquisitions/dispositions — 4 Provisions for current period sales 103 83 Adjustments of prior estimates 1 14 142 Payments 1 (96) (240) Other, primarily translation adjustment (12) (6) Ending balance, December 31 $ 245 $ 236 _____________________________ 1 In December 2021, the Company settled and paid a warranty claim for $130 million. The Company had been working with an OEM customer through the warranty process during 2021, and in December 2021, as a result of discussions that occurred in the fourth quarter, the Company (without admission of liability) and the customer reached an agreement to fully resolve the claim for $130 million. This resulted in an adjustment to prior estimates of $124 million during the year ended December 31, 2021. The Company is pursuing a partial recovery of this claim through its insurance coverage. No amounts have been recorded to date and there can be no assurance that there will be any recovery. The product warranty liability is classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2022 2021 Other current liabilities $ 142 $ 128 Other non-current liabilities 103 108 Total product warranty liability $ 245 $ 236 |
NOTES PAYABLE AND DEBT
NOTES PAYABLE AND DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND DEBT | NOTES PAYABLE AND DEBT The Company had short-term and long-term debt outstanding as follows: December 31, (in millions) 2022 2021 Short-term debt Short-term borrowings $ 58 $ 62 Long-term debt 3.375% Senior notes due 03/15/25 ($500 million par value) 499 498 5.000% Senior notes due 10/01/25 ($800 million par value) 1 866 889 2.650% Senior notes due 07/01/27 ($1,100 million par value) 1,092 1,092 7.125% Senior notes due 02/15/29 ($121 million par value) 120 119 1.000% Senior notes due 05/19/31 (€1,000 million par value) 1,051 1,117 4.375% Senior notes due 03/15/45 ($500 million par value) 495 494 Term loan facilities, finance leases and other 47 56 Total long-term debt 4,170 4,265 Less: current portion 4 4 Long-term debt, net of current portion $ 4,166 $ 4,261 _____________________________ 1 These notes include the fair value step-up from the Delphi Technologies acquisition. The fair value step-up was calculated based on observable market data and is amortized as a reduction to interest expense over the remaining life of the instrument using the effective interest method. The Company may utilize uncommitted lines of credit for short-term working capital requirements. As of December 31, 2022 and 2021, the Company had $58 million and $62 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, 2022 and 2021 was 0.9% and 1.0%, respectively. The weighted average interest rate on all borrowings outstanding, including the effects of outstanding swaps, as of December 31, 2022 and 2021 was 2.5%. The following table provides details on Interest expense, net included in the Consolidated Statements of Operations: Year Ended December 31, (in millions) 2022 2021 2020 Interest expense $ 78 $ 105 $ 73 Interest income (26) (12) (12) Interest expense, net $ 52 $ 93 $ 61 On May 19, 2021, in anticipation of the acquisition of AKASOL and to refinance the Company’s €500 million 1.80% senior notes due in November 2022, the Company issued €1.0 billion in 1.00% senior notes due May 2031. Interest is payable annually in arrears on May 19 of each year. These senior notes are not guaranteed by any of the Company’s subsidiaries. On June 18, 2021, the Company repaid its €500 million 1.80% senior notes due November 2022 and incurred a loss on debt extinguishment of $20 million, which is reflected in Interest expense, net in the Consolidated Statement of Operations. Annual principal payments required as of December 31, 2022 are as follows: (in millions) 2023 $ 62 2024 7 2025 1,307 2026 7 2027 1,106 After 2027 1,707 Total payments $ 4,196 Add: unamortized premiums, net of discount 32 Total $ 4,228 The Company’s long-term debt includes various covenants, none of which are expected to restrict future operations. The Company has a $2 billion multi-currency revolving credit facility that allows the Company the ability to increase the facility by $1 billion with bank group approval. This facility matures in March 2025. The credit agreement contains customary events of default and one key financial covenant, 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, 2022. At December 31, 2022 and 2021, the Company had no outstanding borrowings under this facility. The Company’s commercial paper program allows the Company to issue $2 billion of short-term, unsecured commercial paper notes under the limits of its multi-currency revolving credit facility. 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, 2022 and 2021. The total current combined borrowing capacity under the multi-currency revolving credit facility and commercial paper program cannot exceed $2 billion. As of December 31, 2022 and 2021, the estimated fair values of the Company’s senior unsecured notes totaled $3,553 million and $4,421 million, respectively. The estimated fair values were $570 million lower than carrying value at December 31, 2022 and $212 million higher than their carrying value at December 31, 2021. 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, commercial paper program and other debt facilities 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 $38 million and $35 million at December 31, 2022 and 2021, respectively. The letters of credit typically act as guarantees of payment to certain third parties in accordance with specified terms and conditions. |
OTHER CURRENT AND NON-CURRENT L
OTHER CURRENT AND NON-CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT AND NON-CURRENT LIABILITIES | OTHER CURRENT AND NON-CURRENT LIABILITIES Additional detail related to liabilities is presented in the table below: December 31, (in millions) 2022 2021 Other current liabilities: Payroll and employee related $ 398 $ 330 Customer related 202 220 Product warranties (Note 13) 142 128 Income taxes payable 142 105 Indirect taxes 125 106 Accrued freight 44 46 Operating leases (Note 22) 42 43 Deferred engineering 39 44 Employee termination benefits (Note 4) 37 85 Supplier related 23 18 Interest 22 23 Dividends payable 21 18 Other non-income taxes 19 22 Insurance 19 19 Earn-out liability 16 — Contract liabilities (Note 3) 16 21 Legal and professional fees 15 8 Retirement related (Note 18) 13 16 Mandatorily redeemable noncontrolling interest liability (Note 2) — 58 Other 155 146 Total other current liabilities $ 1,490 $ 1,456 Other non-current liabilities: Other income tax liabilities $ 242 $ 274 Deferred income taxes (Note 7) 194 206 Operating leases (Note 22) 166 152 Product warranties (Note 13) 103 108 Deferred income 66 68 Employee termination benefits (Note 4) 22 41 Other 68 115 Total other non-current liabilities $ 861 $ 964 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021: Basis of fair value measurements Balance at December 31, 2022 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 1 (in millions) Assets: Receivables $ 11 $ — $ 2 $ 9 C $ — Long-term receivables $ 13 $ — $ 13 $ — C $ — Investment in debt securities $ 455 $ — $ 455 $ — A $ — Investment in equity securities $ 29 $ — $ — $ — — $ 29 Foreign currency contracts $ 18 $ — $ 18 $ — A $ — Net investment hedge contracts $ 68 $ — $ 68 $ — A $ — Liabilities: Current earn-out liability $ 21 $ — $ — $ 21 C $ — Non-current earn-out liability $ 10 $ — $ — $ 10 C $ — Foreign currency contracts $ 11 $ — $ 11 $ — A $ — Net investment hedge contracts $ 1 $ — $ 1 $ — A $ — Basis of fair value measurements (in millions) Balance at December 31, 2021 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 1 Assets: Investment in equity securities $ 87 $ 70 $ — $ — A $ 17 Long-term receivables $ 35 $ — $ 17 $ 18 C $ — Foreign currency contracts $ 13 $ — $ 13 $ — A $ — Net investment hedge contracts $ 8 $ — $ 8 $ — A $ — Liabilities: Foreign currency contracts $ 8 $ — $ 8 $ — A $ — Net investment hedge contracts $ 54 $ — $ 54 $ — A $ — _____________________________ 1 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 that have underlying assets in fixed income securities, equity securities, and other assets and the fair values have been estimated using the net asset value of the Company's ownership interest in partners' capital. The Company’s redemption of its investments with the funds is governed by the partnership agreements and subject to approval from the general partners. With the exception of annual distributions in connection with the Company’s deemed tax liability, distributions from each fund will be received as the underlying investments of the funds are liquidated, the timing of which is unknown. The following tables classify the Company’s defined benefit plan assets measured at fair value on a recurring basis: Basis of fair value measurements (in millions) Balance at December 31, 2022 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 3 U.S. Plans: Fixed income securities $ 89 $ — $ — $ — — $ 89 Equity securities 17 — — — — 17 Alternative credit fund 20 — — — — 20 Cash 3 3 — — A — $ 129 $ 3 $ — $ — $ 126 Non-U.S. Plans: Fixed income securities $ 525 $ 54 $ — $ — A $ 471 Equity securities 142 113 — — A 29 Cash 147 147 — — A — Insurance contract 2 69 — — 69 C — Real estate and other 273 — 20 46 A,C 207 $ 1,156 $ 314 $ 20 $ 115 $ 707 Basis of fair value measurements (in millions) Balance at December 31, 2021 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 3 U.S. Plans: Fixed income securities $ 129 $ — $ — $ — — $ 129 Equity securities 28 — — — — 28 Alternative credit fund 19 — — — — 19 Cash 1 1 — — A — $ 177 $ 1 $ — $ — $ 176 Non-U.S. Plans: Fixed income securities $ 710 $ 116 $ — $ — A $ 594 Equity securities 412 363 — — A 49 Cash 1 338 338 — — A — Insurance contract 2 108 — — 108 C — Real estate and other 481 124 18 127 A,C 212 $ 2,049 $ 941 $ 18 $ 235 $ 855 _____________________________ 1 As of December 31, 2021, £122 million in the Company’s non-U.S. plans was deemed cash in-transit and classified as a Level 1 investment. 2 A BorgWarner defined benefit plan in the United Kingdom owns 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. 3 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 that 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 Using Significant Unobservable Inputs (Level 3) (in millions) Insurance contract Real estate trust fund Balance at January 1, 2021 $ 113 $ 86 Purchases, sales and settlements — 36 Benefits paid (4) — Unrealized gains on assets still held at the reporting date 1 7 Translation adjustment (2) (2) Balance at December 31, 2021 $ 108 $ 127 Purchases, sales and settlements — (93) Realized gains — 3 Benefits paid (5) — Unrealized (losses) gains on assets still held at the reporting date (20) 25 Translation adjustment (14) (16) Balance at December 31, 2022 $ 69 $ 46 Refer to Note 18, “Retirement Benefit Plans,” to the Consolidated Financial Statements for more detail surrounding the defined benefit 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, 2022 | |
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, investments in equity securities, 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. An adjustment for non-performance risk is considered in the estimate of fair value in derivative assets based on the counterparty credit default swap (“CDS”) rate. When the Company is in a net derivative liability position, the non-performance risk adjustment is based on its CDS rate. At December 31, 2022 and 2021, the Company had no derivative contracts that contained credit-risk-related contingent features. The Company, at times, uses certain commodity derivative contracts to protect against commodity price changes related to forecasted raw material and component purchases. The Company had no outstanding commodity contracts at December 31, 2022 and 2021 . 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, at times, selectively uses interest rate swaps to reduce market value risk associated with changes in interest rates (fair value hedges and cash flow hedges). At December 31, 2022 and 2021, the Company had no outstanding interest rate swaps or options. 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 its net investment in certain foreign operations (net investment hedges). 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. The following foreign currency derivative contracts were outstanding and mature through the ending duration noted below: Foreign currency derivatives (in millions) 1 Functional currency Traded currency Notional in traded currency Notional in traded currency Ending duration Brazilian Real U.S. Dollar 14 23 Dec-23 British Pound Euro 10 42 Feb-23 Chinese Renminbi British Pound 23 26 Dec-23 Chinese Renminbi Euro 42 26 Dec-23 Chinese Renminbi U.S. Dollar 276 185 Dec-24 Euro British Pound 63 6 Dec-24 Euro Polish Zloty 489 394 Dec-24 Euro U.S. Dollar 139 86 Dec-24 U.S. Dollar British Pound 17 13 Dec-23 U.S. Dollar Chinese Renminbi 1,402 — Jun-23 U.S. Dollar Euro 45 28 Mar-23 U.S. Dollar Korean Won 51,786 49,919 Nov-23 U.S. Dollar Mexico Peso 3,465 2,619 Dec-24 U.S. Dollar Singapore Dollar — 27 N/A U.S. Dollar Thailand Baht 1,790 1,720 May-23 _____________________________ 1 Table above excludes non-significant traded currency pairings with total notional amounts less than $10 million U.S. Dollar equivalent as of December 31, 2022 or 2021. The Company selectively uses cross-currency swaps to hedge the foreign currency exposure associated with its net investment in certain foreign operations (net investment hedges). In May 2022, the Company terminated its $100 million cross-currency swap contract originally maturing in February 2023 and executed a $100 million cross-currency swap contract to mature in February 2029, resulting in cash proceeds of $16 million that are expected to remain in accumulated other comprehensive loss until the net investment is sold, completely liquidated or substantially liquidated. At December 31, 2022 and 2021, the following cross-currency swap contracts were outstanding: Cross-currency swaps ( in millions ) December 31, 2022 December 31, 2021 Ending duration U.S. Dollar to Euro: Fixed receiving notional $ 1,100 $ 1,100 Jul-27 Fixed paying notional € 976 € 976 Jul-27 U.S. Dollar to Euro: Fixed receiving notional $ 500 $ 500 Mar-25 Fixed paying notional € 450 € 450 Mar-25 U.S. Dollar to Japanese Yen: Fixed receiving notional $ — $ 100 Feb-23 Fixed paying notional ¥ — ¥ 10,978 Feb-23 Fixed receiving notional $ 100 $ — Feb-29 Fixed paying notional ¥ 12,724 ¥ — Feb-29 At December 31, 2022 and 2021, the following amounts were recorded in the Consolidated Balance Sheets as being payable to or receivable from counterparties under ASC Topic 815, “Derivatives and Hedging”: ( in millions ) Assets Liabilities Derivatives designated as hedging instruments Under Topic 815: Balance Sheet Location December 31, 2022 December 31, 2021 Balance Sheet Location December 31, 2022 December 31, 2021 Foreign currency Prepayments and other current assets $ 15 $ 7 Other current liabilities $ 9 $ 8 Foreign currency Other non-current assets $ — $ — Other non-current liabilities $ 1 $ — Net investment hedges Other non-current assets $ 68 $ 8 Other non-current liabilities $ 1 $ 54 Derivatives not designated as hedging instruments: Foreign currency Prepayments and other current assets $ 3 $ 6 Other current liabilities $ 1 $ — 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. During the year ended December 31, 2021, the Company repaid its €500 million 1.80% senior notes due November 2022, which were designated as a net investment hedge, resulting in a deferred loss 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 for designated net investment hedges. 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, 2022 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, 2022 December 31, 2021 Net investment hedges: Foreign currency $ (4) $ (10) $ — Cross-currency swaps 67 (46) — Foreign currency-denominated debt 133 66 — Total $ 196 $ 10 $ — 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, 2022 (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 $ 15,801 $ 12,700 $ 1,610 $ (325) Gain (loss) on cash flow hedging relationships: Foreign currency Gain recognized in other comprehensive income $ 4 Year ended December 31, 2021 ( 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 $ 14,838 $ 11,983 $ 1,460 $ 100 Gain (loss) on cash flow hedging relationships: Foreign currency Loss recognized in other comprehensive income $ (4) Gain (loss) reclassified from AOCI to income $ 1 $ (4) $ (1) $ — Year ended December 31, 2020 (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 $ 10,165 $ 8,255 $ 951 $ 76 Gain (loss) on cash flow hedging relationships: Foreign currency Loss recognized in other comprehensive income $ (1) Gain (loss) reclassified from AOCI to income $ — $ 1 $ (2) $ — The gains or losses recorded in income related to components excluded from the assessment of effectiveness for derivative instruments designated as cash flow hedges were immaterial for the periods presented. Gains and losses on derivative instruments designated as net investment hedges were recognized in other comprehensive income (loss) during the periods presented below. ( in millions ) Year Ended December 31, Net investment hedges 2022 2021 2020 Foreign currency $ 6 $ (9) $ (2) Cross-currency swaps $ 129 $ 115 $ (155) Foreign currency-denominated debt $ 67 $ 84 $ (51) Derivatives designated as net investment hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains recorded in Interest expense on components excluded from the assessment of effectiveness: ( in millions ) Year Ended December 31, Net investment hedges 2022 2021 2020 Cross-currency swaps $ 26 $ 22 $ 18 There were no gains or 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 recorded in income: (in millions) Year Ended December 31, Contract Type Location 2022 2021 2020 Foreign Currency Selling, general and administrative expenses $ 22 $ 13 $ 3 |
RETIREMENT BENEFIT PLANS
RETIREMENT BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
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 $59 million, $58 million and $38 million in the years ended December 31, 2022, 2021 and 2020, 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, India, Ireland, Italy, Japan, Mexico, South Korea, Sweden, Switzerland, Turkey, U.K. and the U.S. The other postretirement employee benefit plans, which provide medical benefits, are unfunded plans. The Company’s 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. On October 1, 2020, as a result of the acquisition of Delphi Technologies, the Company assumed all of the retirement-related liabilities of Delphi Technologies, the most significant of which was the Delphi Technologies Pension Scheme (the “Scheme”) in the United Kingdom. On December 12, 2020, the Company entered into a Heads of Terms Agreement (the “Agreement”) with the Trustees of the Scheme related to the future funding of the Scheme. Under the Agreement, the Company eliminated the prior schedule of contributions between Delphi Technologies and the Scheme in exchange for a $137 million (£100 million) one-time contribution into the Scheme Plan by December 31, 2020, which was paid on December 15, 2020. The Agreement also contained other provisions regarding the implementation of a revised asset investment strategy as well as a funding progress test that will be performed every three years to determine if additional contributions need to be made into the Scheme by the Company. 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) 2022 2021 2020 Defined contribution expense $ 59 $ 58 $ 38 Defined benefit pension (income) expense (10) (19) 15 Other postretirement employee benefit income (1) (1) (1) Total $ 48 $ 38 $ 52 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 2022 2021 Year Ended December 31, (in millions) U.S. Non-U.S. U.S. Non-U.S. 2022 2021 Change in projected benefit obligation: Projected benefit obligation, January 1 $ 183 $ 2,227 $ 202 $ 2,527 $ 54 $ 65 Service cost — 20 — 25 — — Interest cost 4 37 3 30 1 1 Plan amendments — (11) — 1 — — Settlement and curtailment (6) (3) (4) (13) — — Actuarial gain (33) (685) (7) (208) (13) (6) Currency translation — (200) — (59) — — Acquisition — 8 — — — — Benefits paid (12) (71) (11) (76) (5) (6) Projected benefit obligation, December 31 1 $ 136 $ 1,322 $ 183 $ 2,227 $ 37 $ 54 Change in plan assets: Fair value of plan assets, January 1 $ 177 $ 2,049 $ 187 $ 2,041 Actual return on plan assets (33) (655) 5 110 Employer contribution 2 20 — 24 Settlements (5) (4) (4) (11) Currency translation — (189) — (39) Acquisition — 6 — — Benefits paid (12) (71) (11) (76) Fair value of plan assets, December 31 $ 129 $ 1,156 $ 177 $ 2,049 Funded status $ (7) $ (166) $ (6) $ (178) $ (37) $ (54) Amounts in the Consolidated Balance Sheets consist of: Non-current assets $ — $ 26 $ — $ 68 $ — $ — Current liabilities (1) (6) (2) (7) (6) (7) Non-current liabilities (6) (186) (4) (239) (31) (47) Net amount $ (7) $ (166) $ (6) $ (178) $ (37) $ (54) Amounts in accumulated other comprehensive loss consist of: Net actuarial loss $ 80 $ 104 $ 84 $ 74 $ (3) $ 10 Net prior service (credit) cost (3) (9) (3) 2 (11) (13) Net amount $ 77 $ 95 $ 81 $ 76 $ (14) $ (3) Total accumulated benefit obligation for all plans $ 136 $ 1,279 $ 183 $ 2,183 _____________________________ 1 The decrease in the projected benefit obligation was primarily due to actuarial gains during the period. The main driver of these gains was the increase of 2.97% in the weighted average discount rate for Non-U.S. plans. The funded status of pension plans with accumulated benefit obligations in excess of plan assets is as follows: December 31, (in millions) 2022 2021 Accumulated benefit obligation $ (1,185) $ (658) Plan assets 1,022 442 Deficiency $ (163) $ (216) Pension deficiency by country: United States $ (6) $ (6) United Kingdom (38) (11) Germany (34) (89) Other (85) (110) Total pension deficiency $ (163) $ (216) The funded status of pension plans with projected benefit obligations in excess of plan assets is as follows: December 31, (in millions) 2022 2021 Projected benefit obligation $ (1,223) $ (731) Plan assets 1,026 478 Deficiency $ (197) $ (253) Pension deficiency by country: United States $ (6) $ (6) United Kingdom (38) (11) Germany (35) (95) Other (118) (141) Total pension deficiency $ (197) $ (253) 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 2022 2021 U.S. Plans: Alternative credit, real estate, cash and other 18 % 12 % 7% - 17% Fixed income securities 69 % 72 % 70% - 80% Equity securities 13 % 16 % 9% - 19% 100 % 100 % Non-U.S. Plans: Insurance contract, real estate, cash and other 1 42 % 45 % 22% - 32% Fixed income securities 1 46 % 35 % 54% - 64% Equity securities 12 % 20 % 9% - 19% 100 % 100 % _____________________________ 1 As of December 31, 2021, £122 million in the Company’s non-U.S. plans was deemed cash in-transit, driving the variances between actual allocation and target allocation. 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, 2022 and 2021. A portion of pension assets is invested in common and commingled trusts. The Company expects to contribute a total of $20 million to $30 million into its defined benefit pension plans during 2023. Of the $20 million to $30 million in projected 2023 contributions, $7 million are contractually obligated, while any remaining payments would be discretionary. Refer to Note 16, “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, 2022 and 2021. 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, 2022 2021 2020 Year Ended December 31, (in millions) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. 2022 2021 2020 Service cost $ — $ 20 $ — $ 25 $ — $ 21 $ — $ — $ — Interest cost 4 37 3 30 5 16 1 1 2 Expected return on plan assets (8) (75) (10) (83) (10) (36) — — — Settlements, curtailments and other 3 — 2 (2) — 5 — — — Amortization of unrecognized prior service (credit) cost (1) — (1) — — — (2) (3) (4) Amortization of unrecognized loss 3 7 4 13 3 11 — 1 1 Net periodic cost (income) $ 1 $ (11) $ (2) $ (17) $ (2) $ 17 $ (1) $ (1) $ (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 Company’s weighted average assumptions used to determine the benefit obligations for its defined benefit pension and other postretirement employee benefit plans were as follows: December 31, (percent) 2022 2021 U.S. pension plans: Discount rate 5.46 2.73 Rate of compensation increase N/A N/A U.S. other postretirement employee benefit plans: Discount rate 5.41 2.46 Rate of compensation increase N/A N/A Non-U.S. pension plans: Discount rate 1 4.94 1.97 Rate of compensation increase 3.76 3.21 ________________ 1 Includes 4.94% and 1.91% for the U.K. pension plans for December 31, 2022 and 2021, respectively. 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 were as follows: Year Ended December 31, (percent) 2022 2021 2020 U.S. pension plans: Discount rate 2.73 2.31 3.17 Effective interest rate on benefit obligation 2.18 1.62 2.73 Expected long-term rate of return on assets 4.75 5.75 6.00 Average rate of increase in compensation N/A N/A N/A U.S. other postretirement plans: Discount rate 2.46 1.93 2.95 Effective interest rate on benefit obligation 1.84 1.21 2.50 Expected long-term rate of return on assets N/A N/A N/A Average rate of increase in compensation N/A N/A N/A Non-U.S. pension plans: Discount rate 1 1.97 1.44 1.69 Effective interest rate on benefit obligation 1.83 1.24 2.19 Expected long-term rate of return on assets 2 4.10 4.10 4.75 Average rate of increase in compensation 3.21 3.23 3.10 ________________ 1 Includes 1.91%, 1.39% and 1.82% for the U.K. pension plans for December 31, 2022, 2021 and 2020, respectively. 2 Includes 4.12%, 4.00% and 3.97% for the U.K. pension plans for December 31, 2022, 2021 and 2020, respectively. 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. 2023 $ 14 $ 73 $ 6 2024 14 71 5 2025 13 71 5 2026 13 74 4 2027 13 78 4 2028-2032 52 441 13 The weighted average rate of increase in the per capita cost of covered health care benefits is projected to range from 6.50% in 2023 down to an ultimate trend rate of 4.75%. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 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. 2018 Stock Incentive Plan (“2018 Plan”). The Company’s Board of Directors adopted the 2018 Plan in February 2018, and the Company’s stockholders approved the 2018 Plan at the annual meeting of stockholders on April 25, 2018. The 2018 Plan authorizes the issuance of a total of 7.0 million shares. As part of the Delphi Technologies acquisition, 2.2 million shares were registered for future issuance for former Delphi Technologies employees. In aggregate, approximately 2.2 million shares were available for future issuance as of December 31, 2022. 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 2022, restricted stock in the amount of 1.0 million shares and less than 0.1 million shares were granted to employees and non-employee directors, respectively. The value of the awards is recognized as compensation expense ratably over the restriction periods, generally two Restricted stock compensation expense recorded in the Consolidated Statements of Operations is as follows: Year Ended December 31, (in millions, except per share data) 2022 2021 2020 Restricted stock compensation expense $ 37 $ 37 $ 31 Restricted stock compensation expense, net of tax $ 28 $ 28 $ 23 A summary of the status of the Company’s nonvested restricted stock for employees and non-employee directors is as follows: Shares subject to restriction Weighted average grant date fair value Nonvested at January 1, 2020 1,664 $ 44.26 Granted 810 $ 33.94 Vested (600) $ 44.85 Forfeited (80) $ 40.20 Converted 1 346 $ 39.54 Nonvested at December 31, 2020 2,140 $ 39.58 Granted 1,175 $ 43.66 Vested (845) $ 43.34 Forfeited (107) $ 39.86 Nonvested at December 31, 2021 2,363 $ 40.24 Granted 1,060 $ 44.32 Vested (862) $ 38.68 Forfeited (188) $ 42.09 Nonvested at December 31, 2022 2,373 $ 42.47 ________________ 1 Represents outstanding Delphi Technologies restricted stock converted to BorgWarner restricted stock. The Delphi Technologies awards were converted using an exchange ratio of 0.4307 at the close of the acquisition. Performance share units: The Company grants performance share units to members of senior management that vest at the end of three-year periods based the following metrics: • Total Stockholder Return Units: This performance metric is based on the Company’s market 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 of up to 200% of the target shares to vest. The Company recognizes compensation expense relating to this performance share plan 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). As of December 31, 2022, there was $10 million of unrecognized compensation expense related to total stockholder return units that will be recognized over a weighted average period of approximately 1.7 years. • Relative Revenue Growth Units: This performance metric is based on the Company’s performance in terms of revenue growth relative to the vehicle market over three-year performance periods. 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 of up to 200% of the target shares to vest. 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 this performance share plan 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. As of December 31, 2022, these awards were fully expensed. • Adjusted Earnings Per Share Units: Introduced in the first quarter of 2020, this performance metric is based on the Company’s earnings per share adjusted for certain one-time items and non-operating gains and losses against a pre-defined target measured in the third year of the performance period. The value of this performance share award is determined by the adjusted earnings per share performance. The Company recognizes compensation expense relating to this performance share plan 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. As of December 31, 2022, these awards were fully expensed. • eProducts Revenue Mix : Introduced in the first quarter of 2021, this performance metric is based on the Company’s total revenue derived from eProducts in relation to its total proforma revenue in the third year of the performance period. Based on the Company’s eProducts revenue mix, it is possible for none of the awards to vest or for a range of up to 200% of the target shares to vest. 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 this performance share plan 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. As of December 31, 2022, there was $17 million of unrecognized compensation expense related to the eProducts revenue mix units that will be recognized over a weighted average period of approximately 1.5 years. The unrecognized amount of compensation expense is based on projected performance as of December 31, 2022. • Cumulative Free Cash Flow : Introduced in the first quarter of 2021, this performance metric is based on the Company’s performance in terms of its operating cash flow, less capital expenditures, over the three-year performance periods. Based on the Company’s cumulative free cash flow, it is possible for none of the awards to vest or for a range of up to 200% of the target shares to vest. 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 this performance share plan 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. As of December 31, 2022, there was $13 million of unrecognized compensation expense related to the cumulative free cash flow units 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, 2022. • eProducts Revenue : Introduced in the first quarter of 2022, this performance metric is based on the amount of the Company’s total revenue derived from eProducts in the third year of the performance period. Based on the Company’s eProducts revenue, it is possible for none of the awards to vest or for a range of up to 200% of the target shares to vest. 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 this performance share plan 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. As of December 31, 2022, there was $8 million of unrecognized compensation expense related to the eProducts revenue units that will be recognized over a weighted average period of approximately 2.0 years. The unrecognized amount of compensation expense is based on projected performance as of December 31, 2022. The amounts expensed and common stock issued for performance share units for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, 2022 2021 2020 Expense (in millions) Number of shares issued (in thousands) Expense (in millions) Number of shares issued (in thousands) Expense (in millions) Number of shares issued (in thousands) Total Stockholder Return $ 7 — $ 6 — $ 5 165 Other Performance-Based 31 305 18 148 5 340 Total $ 38 305 $ 24 148 $ 10 505 A summary of the status of the Company’s nonvested performance share units for the years ended December 31, 2022, 2021 and 2020 were as follows: Total Stockholder Return Other Performance-Based Number of shares (in thousands) Weighted average grant date fair value Number of shares (in thousands) Weighted average grant date fair value Nonvested at January 1, 2020 240 $ 64.61 240 $ 48.52 Granted 137 $ 28.55 253 $ 34.15 Vested (89) $ 69.75 (89) $ 51.29 Forfeited (17) $ 57.36 (19) $ 44.19 Nonvested at December 31, 2020 271 $ 45.20 385 $ 38.66 Granted 135 $ 70.39 404 $ 45.30 Vested (143) $ 47.93 (143) $ 41.92 Forfeited (4) $ 37.28 (6) $ 36.79 Nonvested at December 31, 2021 259 $ 56.90 640 $ 42.14 Granted 138 $ 66.96 415 $ 44.33 Vested (127) $ 28.55 (234) $ 34.73 Forfeited (20) $ 59.87 (56) $ 43.35 Nonvested at December 31, 2022 250 $ 76.68 765 $ 45.51 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table summarizes the activity within accumulated other comprehensive loss: (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Total Beginning Balance, January 1, 2020 $ (497) $ — $ (230) $ (727) Comprehensive (loss) income before reclassifications 133 (1) (131) 1 Income taxes associated with comprehensive (loss) income before reclassifications 43 — 18 61 Reclassification from accumulated other comprehensive (loss) income — 1 16 17 Income taxes reclassified into net earnings — — (3) (3) Ending Balance December 31, 2020 $ (321) $ — $ (330) $ (651) Comprehensive (loss) income before reclassifications 1 (59) (4) 255 192 Income taxes associated with comprehensive (loss) income before reclassifications (43) — (64) (107) Reclassification from accumulated other comprehensive (loss) income — 4 14 18 Income taxes reclassified into net earnings — — (3) (3) Ending Balance December 31, 2021 $ (423) $ — $ (128) $ (551) Comprehensive (loss) income before reclassifications (287) 4 (14) (297) Income taxes associated with comprehensive (loss) income before reclassifications (40) — 7 (33) Reclassification from accumulated other comprehensive (loss) income — — 7 7 Income taxes reclassified into net earnings — — (2) (2) Ending Balance December 31, 2022 $ (750) $ 4 $ (130) $ (876) _____________________________ 1 The increase in the defined benefit postretirement plans comprehensive income before reclassifications is primarily due to actuarial gains during the period. Refer to Note 18 “Retirement Benefit Plans,” for more information. The change in other comprehensive income for the Company’s noncontrolling interest entities is related to foreign currency translation. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES In the normal course of business, the Company is party to various 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 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 commercial and legal claims, actions and complaints that are currently pending will have a material adverse effect on the Company’s results of operations, financial position or cash flows. An adverse outcome could, nonetheless, be material to the results of operations or cash flows. 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 and, as such, may be presently liable for the cost of clean-up and other remedial activities at 26 such sites as of December 31, 2022 and 2021. 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 $7 million as of each of December 31, 2022 and 2021, included in Other current and Other non-current liabilities in the Consolidated Balance Sheets. This accrual, which relates to eight of the sites, 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 which 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). Clean-up and other remedial activities are complete or nearing completion at the other 18 sites, for which there was no accrual as of December 31, 2022 and 2021. |
LEASES AND COMMITMENTS
LEASES AND COMMITMENTS | 12 Months Ended |
Dec. 31, 2022 | |
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. 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. As of December 31, 2022, a significant portion of the Company’s leases were classified as operating leases. Generally, the Company’s operating leases have renewal options that extend the lease terms, 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. 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 lease assets and lease liabilities as of December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Assets Balance Sheet Location Operating leases Other non-current assets $ 199 $ 185 Finance leases Property, plant and equipment, net 10 11 Total lease assets $ 209 $ 196 Liabilities Current Operating leases Other current liabilities $ 42 $ 43 Finance leases Notes payable and other short-term debt 3 2 Non-current Operating leases Other non-current liabilities 166 152 Finance leases Long-term debt 9 11 Total lease liabilities $ 220 $ 208 The following table presents lease obligations arising from obtaining leased assets for the years ended December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Operating leases $ 39 $ 27 Finance leases 2 1 Total lease obligations $ 41 $ 28 The following table presents the maturity of lease liabilities as of December 31, 2022: (in millions) Operating leases Finance leases 2023 $ 47 $ 2 2024 40 2 2025 37 2 2026 32 2 2027 26 2 After 2027 44 3 Total (undiscounted) lease payments $ 226 $ 13 Less: Imputed interest 18 1 Present value of lease liabilities $ 208 $ 12 In the years ended December 31, 2022, 2021 and 2020, the Company recorded operating lease expense of $50 million, $57 million and $29 million, respectively. In the years ended December 31, 2022, 2021 and 2020, the operating cash flows for operating leases were $50 million, $54 million and $29 million, respectively. In the years ended December 31, 2022, 2021 and 2020, the Company recorded short-term lease costs of $25 million, $21 million and $21 million, respectively. Finance lease costs and related cash flows were immaterial for the periods presented. ASC Topic 842, “Leases”, 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, so the incremental borrowing rate is used instead for such lease arrangements. 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: December 31, 2022 2021 Weighted average remaining lease term (years) Operating leases 6 7 Finance leases 6 7 Weighted average discount rate Operating leases 2.2 % 2.0 % Finance leases 3.2 % 3.0 % |
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. 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. As of December 31, 2022, a significant portion of the Company’s leases were classified as operating leases. Generally, the Company’s operating leases have renewal options that extend the lease terms, 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. 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 lease assets and lease liabilities as of December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Assets Balance Sheet Location Operating leases Other non-current assets $ 199 $ 185 Finance leases Property, plant and equipment, net 10 11 Total lease assets $ 209 $ 196 Liabilities Current Operating leases Other current liabilities $ 42 $ 43 Finance leases Notes payable and other short-term debt 3 2 Non-current Operating leases Other non-current liabilities 166 152 Finance leases Long-term debt 9 11 Total lease liabilities $ 220 $ 208 The following table presents lease obligations arising from obtaining leased assets for the years ended December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Operating leases $ 39 $ 27 Finance leases 2 1 Total lease obligations $ 41 $ 28 The following table presents the maturity of lease liabilities as of December 31, 2022: (in millions) Operating leases Finance leases 2023 $ 47 $ 2 2024 40 2 2025 37 2 2026 32 2 2027 26 2 After 2027 44 3 Total (undiscounted) lease payments $ 226 $ 13 Less: Imputed interest 18 1 Present value of lease liabilities $ 208 $ 12 In the years ended December 31, 2022, 2021 and 2020, the Company recorded operating lease expense of $50 million, $57 million and $29 million, respectively. In the years ended December 31, 2022, 2021 and 2020, the operating cash flows for operating leases were $50 million, $54 million and $29 million, respectively. In the years ended December 31, 2022, 2021 and 2020, the Company recorded short-term lease costs of $25 million, $21 million and $21 million, respectively. Finance lease costs and related cash flows were immaterial for the periods presented. ASC Topic 842, “Leases”, 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, so the incremental borrowing rate is used instead for such lease arrangements. 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: December 31, 2022 2021 Weighted average remaining lease term (years) Operating leases 6 7 Finance leases 6 7 Weighted average discount rate Operating leases 2.2 % 2.0 % Finance leases 3.2 % 3.0 % |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
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 stock equivalents 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. The dilutive effects of performance-based stock awards described in Note 19, “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. There were 0.8 million, 0.8 million and 0.2 million of performance share units excluded from the computation of the diluted earnings per share for the years ended December 31, 2022, 2021 and 2020, respectively, because the related performance criteria had not been met as of the balance sheet dates. As a result of the acquisition of Delphi Technologies, approximately 37 million shares were issued on October 1, 2020, which resulted in dilution of approximately 9 million shares on a year-to-date basis. 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) 2022 2021 2020 Basic earnings per share: Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 500 Weighted average shares of common stock outstanding 235.5 238.1 213.0 Basic earnings per share of common stock $ 4.01 $ 2.25 $ 2.35 Diluted earnings per share: Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 500 Weighted average shares of common stock outstanding 235.5 238.1 213.0 Effect of stock-based compensation 1.3 1.4 1.0 Weighted average shares of common stock outstanding including dilutive shares 236.8 239.5 214.0 Diluted earnings per share of common stock $ 3.99 $ 2.24 $ 2.34 Antidilutive stock-based awards excluded from the calculation of diluted earnings per share — — — |
REPORTING SEGMENTS AND RELATED
REPORTING SEGMENTS AND RELATED INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENTS AND RELATED INFORMATION | REPORTING SEGMENTS AND RELATED INFORMATION The Company’s business is aggregated into four reporting segments which are further described below. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems. In the first quarter of 2022, the Company announced that the starter and alternator business, previously reported in its e-Propulsion & Drivetrain segment, would transition to the Aftermarket segment. The Company also announced in 2022 that the canisters and fuel delivery modules business, previously reported in its Air Management segment, would transition to the Fuel Systems segment. Both of these transitions were completed during the second quarter of 2022. Additionally, in the fourth quarter of 2022, the Company moved its battery systems business, previously reported in its Air Management segment, to the e-Propulsion & Drivetrain segment. Related to these transitions, the Company also revised the allocation of Corporate assets to various reporting segments in 2022. The reporting segment disclosures have been updated accordingly which included recasting prior period information for the new reporting structure. • Air Management. This segment develops and manufactures products to improve fuel economy, reduce emissions and enhance performance. The Air Management segment’s technologies include turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery heaters, battery charging and direct current charging stations. • e-Propulsion & Drivetrain. This segment develops and manufactures products to improve fuel economy, reduce emissions and enhance performance in combustion, hybrid and electric vehicles. The e-Propulsion & Drivetrain segment’s technologies include rotating electrical components, power electronics, electric drive motors, battery systems, battery packs, control modules, software, friction and mechanical products for automatic transmissions and torque-management products. • Fuel Systems (formerly known as Fuel Injection). This segment includes gasoline and diesel fuel injection components and systems. The fuel injection systems portfolio includes pumps, injectors, evaporative canisters, fuel delivery modules, fuel rails and fuel rail assemblies, engine control units, and complete systems including associated software and calibration services, that deliver greater efficiency and improve fuel economy for traditional and hybrid vehicles. • Aftermarket. Through this segment, the Company sells products and services to independent aftermarket customers and original equipment service customers with both new and remanufactured products. The aftermarket product portfolio includes a wide range of solutions covering the fuel injection, electronics and engine management, starters and alternators, maintenance, test equipment and vehicle diagnostics categories. During the first quarter of 2022, the Company updated the definition of its measure of segment income or loss to exclude the impact of intangible asset amortization expense. The Company believes this change improves comparability of ongoing operations given the increasing operating margin impact of intangible asset amortization arising from the Company’s merger and acquisition activity. The prior period information disclosed below has been recast to reflect this change. Further, the Company renamed its measure of segment income or loss from Segment Adjusted EBIT to Segment Adjusted Operating Income. Segment Adjusted Operating Income is the measure of segment income or loss used by the Company. Segment Adjusted Operating Income is comprised of operating income adjusted for restructuring, merger, acquisition and divestiture expense, intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment Adjusted Operating Income is most reflective of the operational profitability or loss of its reporting segments. The following tables show segment information and Segment Adjusted Operating Income for the Company’s reporting segments: 2022 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures 1 (in millions) Customers Inter-segment Net Air Management $ 7,034 $ 95 $ 7,129 $ 5,376 $ 245 $ 192 e-Propulsion & Drivetrain 5,440 185 5,625 6,416 278 415 Fuel Systems 2,052 262 2,314 2,227 140 99 Aftermarket 1,275 10 1,285 1,281 23 16 Inter-segment eliminations — (552) (552) — — — Total 15,801 — 15,801 15,300 686 722 Corporate 2 — — — 1,694 35 1 Consolidated $ 15,801 $ — $ 15,801 $ 16,994 $ 721 $ 723 2021 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures 1 (in millions) Customers Inter-segment Net Air Management $ 6,720 $ 100 $ 6,820 $ 5,274 $ 268 $ 239 e-Propulsion & Drivetrain 4,918 168 5,086 6,122 278 262 Fuel Systems 1,996 241 2,237 2,306 166 125 Aftermarket 1,204 8 1,212 1,204 24 6 Inter-segment eliminations — (517) (517) — — — Total 14,838 — 14,838 14,906 736 632 Corporate 2 — — — 1,669 36 34 Consolidated $ 14,838 $ — $ 14,838 $ 16,575 $ 772 $ 666 2020 Segment information Net sales Year-end assets Depreciation/ amortization 3 Long-lived asset expenditures 1 (in millions) Customers Inter-segment Net Air Management $ 5,496 $ 68 $ 5,564 $ 5,385 $ 235 $ 202 e-Propulsion & Drivetrain 3,648 47 3,695 5,017 242 185 Fuel Systems 537 56 593 2,375 38 29 Aftermarket 484 4 488 1,177 21 9 Inter-segment eliminations — (175) (175) — — — Total 10,165 — 10,165 13,954 536 425 Corporate 2 — — — 2,075 32 16 Consolidated $ 10,165 $ — $ 10,165 $ 16,029 $ 568 $ 441 _______________ 1 Long-lived asset expenditures include capital expenditures and tooling outlays. 2 Corporate assets include cash and cash equivalents, investments and long-term receivables, and deferred income taxes. 3 In 2020, e-Propulsion & Drivetrain includes $38 million related to accelerated amortization for certain intangibles, refer to Note 12, “Goodwill and Other Intangibles,” for more information. Segment Adjusted Operating Income Year Ended December 31, (in millions) 2022 2021 2020 Air Management $ 1,068 $ 1,064 $ 762 e-Propulsion & Drivetrain 379 458 368 Fuel Systems 249 235 49 Aftermarket 196 164 54 Segment Adjusted Operating Income 1,892 1,921 1,233 Corporate, including stock-based compensation 289 302 192 Intangible asset amortization expense 97 88 89 Restructuring expense 59 163 203 Merger, acquisition and divestiture expense, net 40 50 96 Asset impairments and lease modifications 30 17 17 (Gain) loss on sales of businesses (13) 29 — Other non-comparable items 16 (3) (9) Customer warranty settlement (Note 21) — 124 — Amortization of inventory fair value adjustment — — 27 Equity in affiliates' earnings, net of tax (38) (48) (18) Unrealized loss (gain) on debt and equity securities 73 362 (382) Interest expense, net 52 93 61 Other postretirement income (31) (45) (7) Earnings before income taxes and noncontrolling interest 1,318 789 964 Provision for income taxes 292 150 397 Net earnings 1,026 639 567 Net earnings attributable to the noncontrolling interest, net of tax 82 102 67 Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 500 Geographic Information During the year ended December 31, 2022, approximately 81% of the Company’s consolidated net sales were outside the U.S., attributing sales to the location of production rather than the location of the customer. Outside the U.S., China, Mexico, Germany, Poland, South Korea and the United Kingdom exceeded 5% of consolidated net sales during the year ended December 31, 2022. The Company’s investments in equity securities 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) 2022 2021 2020 2022 2021 2020 United States $ 3,054 $ 2,490 $ 2,023 $ 635 $ 625 $ 937 Europe: Germany 1,439 1,342 1,175 355 405 338 Poland 1,086 1,121 696 328 324 352 United Kingdom 837 821 276 195 215 229 Other Europe 1,992 1,921 1,412 709 713 804 Total Europe 5,354 5,205 3,559 1,587 1,657 1,723 China 3,383 3,518 2,269 1,045 1,042 1,055 Mexico 1,987 1,736 1,035 653 623 367 South Korea 1,046 1,096 814 220 256 301 Other foreign 977 793 465 225 192 208 Total $ 15,801 $ 14,838 $ 10,165 $ 4,365 $ 4,395 $ 4,591 Sales to Major Customers Consolidated net sales to Ford (including its subsidiaries) were approximately 13%, 10% and 13% for the years ended December 31, 2022, 2021 and 2020, respectively. Consolidated net sales to Volkswagen (including its subsidiaries) were approximately 8%, 9% and 11% for the years ended December 31, 2022, 2021 and 2020. 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 20%, 19% and 24% of consolidated net sales for the years ended December 31, 2022, 2021 and 2020, respectively. No other single product line accounted for more than 10% of consolidated net sales in any of the years presented. |
OPERATING CASH FLOWS AND OTHER
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION | OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION Year Ended December 31, (in millions) 2022 2021 2020 OPERATING Net earnings $ 1,026 $ 639 $ 567 Adjustments to reconcile net earnings to net cash flows from operations: Depreciation and tooling amortization 624 684 479 Intangible asset amortization 97 88 89 Restructuring expense, net of cash paid 45 123 135 Stock-based compensation expense 75 62 41 (Gain) loss on sales of businesses (15) 29 — Loss on debt extinguishment — 20 — Asset impairments 30 14 17 Unrealized loss (gain) on debt and equity securities 73 362 (382) Deferred income tax (benefit) provision (65) (180) 123 Gain on insurance recovery received for property damages — (5) (9) Other non-cash adjustments (31) (31) (13) Net earnings adjustments to reconcile to net cash flows from operations 1,859 1,805 1,047 Retirement plan contributions (26) (30) (182) Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments: Receivables (564) (59) 27 Inventories (215) (268) (28) Prepayments and other current assets 28 11 23 Accounts payable and accrued expenses 438 (134) 186 Prepaid taxes and income taxes payable 63 8 35 Other assets and liabilities (14) (27) 76 Net cash provided by operating activities $ 1,569 $ 1,306 $ 1,184 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the year for: Interest $ 138 $ 130 $ 97 Income taxes, net of refunds $ 319 $ 342 $ 205 Non-cash investing transactions: Period end accounts payable related to property, plant and equipment purchases $ 241 $ 142 $ 182 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation Certain prior period amounts have been reclassified to conform to current period presentation. The Company’s Consolidated Financial Statements reflect the results of acquisitions following the date of the respective acquisition. Refer to Note 2, “Acquisitions and Dispositions,” to the Consolidated Financial Statements for more information. |
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. |
Principles of Consolidation | Principles of consolidation The Consolidated Financial Statements include all majority-owned subsidiaries with a controlling financial interest. All inter-company balances and transactions have been eliminated in consolidation. |
Joint ventures and equity securities | Joint ventures and equity securities The Company has investments in three unconsolidated joint ventures: NSK-Warner K.K., Turbo Energy Private Limited and Delphi-TVS Diesel Systems Ltd of which the Company owns 50%, 32.6% and 52.5%, respectively. These joint ventures are non-controlled affiliates in which the Company exercises significant influence but does not have a controlling financial interest and, therefore, are accounted for under the equity method. With respect to the Company’s 52.5%-owned joint venture, although the Company is the majority owner, it does not have the ability to control significant decisions or management of the entity. Generally, under the equity method, the Company’s original investments in these joint ventures are recorded at cost and subsequently adjusted by the Company’s share of equity in income or losses. The Company monitors its equity method investments for indicators of other-than-temporary declines in fair value on an ongoing basis. If such a decline has occurred, an impairment charge is recorded, which is measured as the difference between the carrying value and the estimated fair value. The Company’s investment in these non-controlled affiliates is included within Investments and long-term receivables in the Consolidated Balance Sheets. The Company’s share of equity in income or losses is included in Equity in affiliates’ earnings, net of tax in the Consolidated Statements of Operations. The Company also has certain investments for which it does not have the ability to exercise significant influence (generally when ownership interest is less than 20%). The Company’s investment in these equity securities is included within Investments and long-term receivables in the Consolidated Balance Sheet. Refer to Note 10, “Other Current and Non-Current Assets,” to the Consolidated Financial Statements for more information. Interests in privately held companies that do not have readily determinable fair values are accounted for using the measurement alternative under ASC Topic 321, “Investments - Equity Securities,” which includes monitoring on an ongoing basis for indicators of impairments or upward adjustments. These equity securities are measured at cost less impairments, adjusted for observable price changes in orderly transactions for the identical or similar investment of the same issuer. If the Company determines that an indicator of impairment or upward adjustment is present, an adjustment is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated fair value is generally determined using an income approach on discounted cash flows or negotiated transaction values. Equity securities that have readily determinable fair values are measured at fair value. Equity securities that do not have a readily determinable fair value and which provide a net asset value (“NAV”) or its equivalent, are valued using NAV as a practical expedient. Changes in fair value and NAV are recorded in Unrealized loss (gain) on debt and equity securities in the Consolidated Statements of Operations. Debt securities On November 16, 2022, the Company entered into a strategic partnership with Wolfspeed, Inc. (“Wolfspeed”) as part of which the Company invested $500 million in convertible debt securities of Wolfspeed. The Company elected to classify the debt security as trading and will remeasure quarterly using fair value in accordance with ASC Topic 320, “Investments.” Refer to Note 16, “Fair Value Measurements,” to the Consolidated Financial Statements for more information regarding the fair value of the convertible debt securities. The Company’s investment in the debt securities is included within Investments and long-term receivables in the Consolidated Balance Sheets. The changes in fair value are recorded in Unrealized loss (gain) on debt and equity securities in the Consolidated Statements of Operations. |
Business Combinations | Business combinations In accordance with ASC Topic 805, “Business Combinations,” acquisitions are recorded using the acquisition method of accounting. The Company includes the operating results of acquired entities from their respective dates of acquisition. The Company recognizes and measures the identifiable assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date fair value. Various valuation techniques are used to determine the fair value of intangible assets, with the primary techniques being forms of the income approach, specifically the relief-from-royalty and multi-period excess earnings valuation methods. Under these valuation approaches, the Company is required to make estimates and assumptions from a market participant perspective that may include revenue growth rates, estimated earnings, royalty rates, obsolescence factors, contributory asset charges, customer attrition and discount rates. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed and any non-controlling interest is recognized as goodwill. Costs incurred as a result of a business combination other than costs related to the issuance of debt or equity securities are recorded in the period the costs are incurred. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to assets acquired and liabilities assumed with the corresponding offset to goodwill. |
Revenue recognition | Revenue recognition Revenue is recognized when performance obligations under the terms of a contract are satisfied, which generally occurs with the transfer of control of the products. For most products, transfer of control occurs upon shipment or delivery; however, a limited number of customer arrangements for highly customized products with no alternative use provide the Company 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. Revenue is measured at the amount of consideration the Company expects to receive in exchange for transferring the goods. 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. Sales incentives and allowances (including returns) are recognized as a reduction to revenue at the time of the related sale. The Company estimates the allowances based on an analysis of historical experience. Taxes assessed by a governmental authority collected by the Company concurrent with a specific revenue-producing transaction are excluded from net sales. 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. 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 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. 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 three |
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, warranty costs and other such costs associated with manufacturing products for sale. |
Cash and cash equivalents and Restricted 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. Restricted cash Restricted cash includes amounts designated for uses other than current operations and is related to the Company’s commitment to acquire or invest in certain companies. As of December 31, 2022 and 2021, the Company had restricted cash of $5 million and $3 million, respectively. |
Receivables, net and long-term receivables | Receivables, net and long-term receivables Accounts receivable and long-term receivables are stated at cost less an allowance for credit losses. An allowance for credit losses is recorded for amounts that may become uncollectible in the future. The allowance for credit losses is an estimate based on expected losses, current economic and market conditions, and a review of the current status of each customer’s accounts receivable. |
Inventories, net | Inventories, net The majority of inventory is measured using first-in, first-out (“FIFO”) or average-cost methods at the lower of cost or net realizable value, with the exception of certain U.S. inventories that are determined using the last-in, first-out (“LIFO”) method at the lower of cost or market. |
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 |
Property, plant and equipment, 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 |
Impairment of long-lived assets, including definite-lived intangible assets | 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, “Property, Plant and Equipment.” 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 to be 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, “Fair Value Measurement,” 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. |
Goodwill and other intangible assets | Goodwill and other intangible assets During the fourth quarter of each year, the Company tests goodwill for impairment by either performing a qualitative assessment or a quantitative analysis. The qualitative assessment evaluates various events and circumstances, such as macroeconomic 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 disposal activity or to refresh the fair values, the Company performs a quantitative 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. The Company has definite-lived intangible assets related to patents and developed technology, customer relationships and trade names. The Company amortizes definite-lived intangible assets over their estimated useful lives. The Company also has intangible assets related to acquired trade names that are classified as indefinite-lived when there are no foreseeable limits on the periods of time over which they are expected to contribute cash flows. Costs to renew or extend the term of acquired intangible assets are recognized as expense as incurred. 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. |
Assets and liabilities held for sale | 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. 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. 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. |
Product warranties | Product warranties The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one |
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 certain 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 using consistent and appropriate methods; however, changes to its assumptions could materially affect the recorded accrued liabilities for loss or asset valuation allowances. |
Environmental contingencies | Environmental contingencies The Company accounts for environmental costs in accordance with ASC Topic 450, “Contingencies.” 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 Other current and Other non-current liabilities in the Company’s Consolidated Balance Sheets. |
Government grants | Government grants The Company periodically receives government grants representing assistance provided by a government. These government grants are generally received in cash and typically provide reimbursement related to acquisition of property and equipment, product development or local governmental economic relief. The government grants are generally amortized using a systematic and rational method over the life of the grant. |
Derivative financial instruments | Derivative financial instruments The Company recognizes that certain normal business transactions and foreign currency operations 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 |
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. |
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, “Compensation - Retirement Benefits.” Disability, early retirement and other postretirement employee benefits are accounted for in accordance with ASC Topic 712, “Compensation - Nonretirement Postemployment Benefits.” 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. |
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, “Income Taxes,” 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 and assessing the need for valuation allowances. 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. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” It is expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require the following annual disclosures about transactions with a government: (i) information about the nature of the transactions and the related accounting policy used to account for the transactions; (ii) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. This guidance was effective for annual reporting periods beginning after December 15, 2021. The Company adopted this guidance prospectively as of January 1, 2022, and there was no impact on the Consolidated Financial Statements; however, the Company has included the required disclosures. Refer to Note 1, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements above for more detail. Accounting Standards Not Yet Adopted In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” It requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. This guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Fair Values of Assets Acquired and Liabilities | The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of July 29, 2022, the acquisition date: (in millions) Initial Allocation Measurement Period Adjustments Revised Allocation ASSETS Current assets $ 7 $ — $ 7 Goodwill 104 — 104 Other intangible assets, net 27 — 27 Other non-current assets 4 — 4 Total assets acquired 142 — 142 LIABILITIES Current liabilities 3 — 3 Other non-current liabilities 8 — 8 Total liabilities assumed 11 — 11 Net assets acquired $ 131 $ — $ 131 The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of March 31, 2022, the acquisition date: (in millions) Initial Allocation Measurement Period Adjustments Revised Allocation ASSETS Current assets $ 8 $ (2) $ 6 Property, plant and equipment, net 9 2 11 Goodwill 132 (20) 112 Other intangible assets, net 87 — 87 Total assets acquired 236 (20) 216 LIABILITIES Current liabilities 2 — 2 Other non-current liabilities 22 — 22 Total liabilities assumed 24 — 24 Net assets acquired $ 212 $ (20) $ 192 The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the acquisition date and subsequent measurement period adjustments: (in millions) Initial Allocation Measurement Period Adjustments Final Allocation ASSETS Cash and cash equivalents (including restricted cash of $16 million) $ 29 $ — $ 29 Receivables, net 16 — 16 Inventories, net 42 (2) 40 Prepayments and other current assets 5 — 5 Property, plant and equipment, net 106 (3) 103 Goodwill 707 (3) 704 Other intangible assets, net 130 — 130 Other non-current assets — 7 7 Total assets acquired 1,035 (1) 1,034 LIABILITIES Notes payable and other short-term debt 8 — 8 Accounts payable 22 — 22 Other current liabilities 13 6 19 Long-term debt 69 — 69 Other non-current liabilities 39 (7) 32 Total liabilities assumed 151 (1) 150 Noncontrolling interests 96 — 96 Net assets and noncontrolling interest acquired $ 788 $ — $ 788 |
Schedule of Other Intangible Assets Acquired | The following table summarizes the other intangible assets acquired: (in millions) Estimated Life Estimated Fair Value Developed technology 13 years $ 22 Customer relationships 8 years 5 Total other intangible assets $ 27 The following table summarizes the other intangible assets acquired: (in millions) Estimated Life Estimated Fair Value Customer relationships 12 years $ 62 Manufacturing processes (know-how) 10 years 25 Total other intangible assets $ 87 The following table summarizes the other intangible assets acquired: (in millions) Estimated Life Estimated Fair Value Amortized intangible assets: Developed technology 5 years $ 70 Customer relationships 11 years 25 Total amortized intangible assets 95 Unamortized trade names Indefinite 35 Total other intangible assets $ 130 |
Schedule of Purchase Price Consideration | The following table summarizes the purchase price for Delphi Technologies: (in millions, except for share data) BorgWarner common stock issued for purchase of Delphi Technologies 37,188,819 BorgWarner share price at October 1, 2020 $ 39.54 Fair value of stock consideration $ 1,470 Stock compensation consideration 7 Total stock consideration $ 1,477 Cash consideration 18 Repayment of Delphi Technologies’ debt 896 Total consideration $ 2,391 |
Schedule of Pro Forma Financial Information | The following table summarizes the net sales and earnings related to Delphi Technologies’ operations that have been included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2020, following the October 1, 2020 acquisition date: (in millions) Net sales $ 1,120 Net earnings attributable to BorgWarner Inc. $ 30 Actual Pro forma (unaudited) Year Ended December 31, (in millions) 2022 2021 2020 Net sales $ 15,801 $ 14,838 $ 12,792 Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 616 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue from contracts with customers by reporting segment and region for the years ended December 31, 2022, 2021, and 2020. The balances for the years ended December 31, 2021 and 2020 have been recast for inter-segment transitions of certain businesses that were completed during 2022. Refer to Note 24, Reporting Segments and Related Information to the Consolidated Financial Statements for more information. Year ended December 31, 2022 ( in millions ) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Total North America $ 1,989 $ 1,868 $ 473 $ 711 $ 5,041 Europe 2,845 1,195 913 401 5,354 Asia 2,018 2,377 599 64 5,058 Other 182 — 67 99 348 Total $ 7,034 $ 5,440 $ 2,052 $ 1,275 $ 15,801 Year ended December 31, 2021 ( in millions ) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Total North America $ 1,664 $ 1,616 $ 302 $ 643 $ 4,225 Europe 2,805 973 1,004 423 5,205 Asia 2,103 2,329 627 61 5,120 Other 148 — 63 77 288 Total $ 6,720 $ 4,918 $ 1,996 $ 1,204 $ 14,838 Year ended December 31, 2020 ( in millions ) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Total North America $ 1,358 $ 1,284 $ 67 $ 348 $ 3,057 Europe 2,458 733 277 91 3,559 Asia 1,585 1,631 180 15 3,411 Other 95 — 13 30 138 Total $ 5,496 $ 3,648 $ 537 $ 484 $ 10,165 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The Company’s restructuring expenses consist primarily of employee termination benefits (principally severance and/or other termination benefits) and other costs, which are primarily professional fees and costs related to facility closures and exits. (in millions) Air Management e-Propulsion & Drivetrain Fuel Systems Aftermarket Corporate Total Year ended December 31, 2022 Employee termination benefits $ 24 $ 13 $ 3 $ — $ — $ 40 Other 2 9 8 — — 19 Total restructuring expense $ 26 $ 22 $ 11 $ — $ — $ 59 Year ended December 31, 2021 Employee termination benefits $ 34 $ 12 $ 53 $ — $ — $ 99 Other 18 43 1 — 2 64 Total restructuring expense $ 52 $ 55 $ 54 $ — $ 2 $ 163 Year ended December 31, 2020 Employee termination benefits $ 50 $ 54 $ 8 $ 1 $ 44 $ 157 Other 29 16 — — 1 46 Total restructuring expense $ 79 $ 70 $ 8 $ 1 $ 45 $ 203 |
Schedule of Restructuring Reserve of Roll Forward of the Restructuring Liability | The following table displays a rollforward of the restructuring liability recorded within the Company’s Consolidated Balance Sheets and the related cash flow activity: (in millions) Employee termination benefits Other Total Balance at January 1, 2021 $ 160 $ 13 $ 173 Restructuring expense, net 99 64 163 Cash payments (128) (61) (189) Foreign currency translation adjustment and other (5) (3) (8) Balance at December 31, 2021 126 13 139 Restructuring expense, net 40 19 59 Cash payments (99) (28) (127) Foreign currency translation adjustment and other (8) 5 (3) Balance at December 31, 2022 $ 59 $ 9 $ 68 Less: Non-current restructuring liability 22 — 22 Current restructuring liability at December 31, 2022 $ 37 $ 9 $ 46 |
RESEARCH AND DEVELOPMENT COSTS
RESEARCH AND DEVELOPMENT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Schedule of Research and Development Costs | The following table presents the Company’s gross and net expenditures on R&D activities: Year Ended December 31, (in millions) 2022 2021 2020 Gross R&D expenditures $ 968 $ 930 $ 533 Customer reimbursements (182) (223) (57) Net R&D expenditures $ 786 $ 707 $ 476 |
OTHER OPERATING EXPENSE, NET (T
OTHER OPERATING EXPENSE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Expense (Income), Net | Items included in Other operating expense, net consist of: Year Ended December 31, (in millions) 2022 2021 2020 Merger, acquisition and divestiture expense, net $ 40 $ 50 $ 96 Asset impairments 30 14 17 (Gain) loss on sales of businesses (13) 29 — Intangible asset accelerated amortization (Note 12) — — 38 Other income, net 1 (12) (13) Other operating expense, net $ 58 $ 81 $ 138 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Earnings before income taxes and the provision for income taxes are presented in the following table. Year Ended December 31, (in millions) 2022 2021 2020 Earnings (loss) before income taxes: U.S. 1 $ 51 $ (423) $ 437 Non-U.S. 1 1,267 1,212 527 Total $ 1,318 $ 789 $ 964 Provision for income taxes: Current: Federal $ 75 $ 43 $ 19 State 7 7 2 Foreign 276 276 252 Total current expense 358 326 273 Deferred: Federal (58) (98) 70 State (9) (13) 11 Foreign 1 (65) 43 Total deferred (benefit) expense (66) (176) 124 Total provision for income taxes $ 292 $ 150 $ 397 __________________________ 1 In 2021, the U.S. loss before income taxes was primarily related to the $362 million unrealized loss related to the Company’s investment in Romeo Power, Inc. In 2020, the Company recognized a $382 million unrealized gain related to its investment in Romeo Power, Inc. |
Schedule of Effective Income Tax Rate Reconciliation | 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) 2022 2021 2020 Income taxes at U.S. statutory rate of 21% $ 277 $ 166 $ 203 Increases (decreases) resulting from: Valuation allowance adjustments, net 67 39 53 Net tax on remittance of foreign earnings 36 43 93 Foreign rate differentials 25 36 21 Reserve adjustments, settlements and claims 16 (17) 45 Impact of tax law and rate change 2 (20) — State taxes, net of federal benefit (4) (9) 10 Affiliates' earnings (6) (10) (4) U.S. tax on non-U.S. earnings (11) 4 10 Changes in accounting methods and filing positions (14) (18) (18) Tax credits (16) (5) (12) Enhanced research and development deductions (42) (27) (9) Tax holidays (43) (76) (36) Other, net 5 44 41 Provision for income taxes, as reported $ 292 $ 150 $ 397 |
Schedule of Reconciliation of Total Gross Unrecognized Tax Benefits | A roll forward of the Company’s total gross unrecognized tax benefits is presented below: (in millions) 2022 2021 2020 Balance, January 1 $ 221 $ 231 $ 146 Additions based on tax positions related to current year 20 23 14 Acquisitions — 8 54 (Reductions) additions for tax positions of prior years (8) — 9 Reductions for lapse in statute of limitations (14) (36) (5) Reductions for closure of tax audits and settlements (21) — — Translation adjustment (14) (5) 13 Balance, December 31 $ 184 $ 221 $ 231 |
Schedule of Tax Jurisdiction | 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 2015 and prior Japan 2018 and prior Barbados 2016 and prior Luxembourg 2016 and prior China 2015 and prior Mexico 2015 and prior France 2015 and prior Poland 2016 and prior Germany 2011 and prior South Korea 2015 and prior Hungary 2015 and prior United Kingdom 2015 and prior |
Schedule of Deferred Tax Assets (Liabilities) | The components of deferred tax assets and liabilities consist of the following: December 31, (in millions) 2022 2021 Deferred tax assets: Net operating loss and capital loss carryforwards $ 607 $ 634 Interest limitation carryforwards 156 123 Research and development capitalization 146 91 Pension and other postretirement benefits 45 41 Employee compensation 46 44 Warranty 31 31 State tax credits 29 28 Unrecognized tax benefits 24 32 Unrealized loss on equity securities 8 — Foreign tax credits 7 8 Other comprehensive loss — 39 Other 167 167 Total deferred tax assets $ 1,266 $ 1,238 Valuation allowance (591) (551) Net deferred tax asset $ 675 $ 687 Deferred tax liabilities: Goodwill and intangible assets (267) (274) Unremitted foreign earnings (141) (146) Fixed assets (121) (126) Other comprehensive income (14) — Unrealized gain on equity securities — (5) Other (87) (88) Total deferred tax liabilities $ (630) $ (639) Net deferred taxes $ 45 $ 48 |
RECEIVABLES, NET (Tables)
RECEIVABLES, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The table below provides details of receivables as of December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Receivables, net: Customers $ 2,823 $ 2,522 Indirect taxes 319 240 Other 199 149 Gross receivables 3,341 2,911 Allowance for credit losses (18) (13) Total receivables, net $ 3,323 $ 2,898 |
Schedule of Accounts Receivable, Allowance for Credit Loss | The table below summarizes the activity in the allowance for credit losses for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (in millions) 2022 2021 2020 Beginning balance, January 1 $ (13) $ (11) $ (6) Provision (6) (3) (11) Write-offs — — 7 Translation adjustment and other 1 1 (1) Ending balance, December 31 $ (18) $ (13) $ (11) Factoring |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | A summary of Inventories, net is presented below: December 31, ( in millions ) 2022 2021 Raw material and supplies $ 1,203 $ 1,057 Work-in-progress 176 175 Finished goods 333 327 FIFO inventories 1,712 1,559 LIFO reserve (25) (25) Inventories, net $ 1,687 $ 1,534 |
OTHER CURRENT AND NON-CURRENT_2
OTHER CURRENT AND NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Additional Related Assets | Additional detail related to assets is presented below: December 31, ( in millions) 2022 2021 Prepayments and other current assets: Prepaid tooling $ 82 $ 81 Prepaid taxes 40 64 Customer incentive payments (Note 3) 34 36 Derivative instruments 18 13 Contract assets (Note 3) 16 17 Prepaid insurance 11 9 Prepaid engineering 9 27 Other 59 74 Total prepayments and other current assets $ 269 $ 321 Investments and long-term receivables: Investment in debt securities $ 455 $ — Investment in equity affiliates 279 298 Long-term receivables 87 102 Investment in equity securities 75 130 Total investments and long-term receivables $ 896 $ 530 Other non-current assets: Deferred income taxes (Note 7) $ 239 $ 254 Operating leases (Note 22) 199 185 Customer incentive payments (Note 3) 99 137 Derivative instruments 68 8 Other 63 99 Total other non-current assets $ 668 $ 683 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net is stated at cost less accumulated depreciation and amortization, and consisted of: December 31, ( in millions) 2022 2021 Land, land use rights and buildings $ 1,440 $ 1,504 Machinery and equipment 5,917 5,807 Finance lease assets 15 13 Construction in progress 610 471 Total property, plant and equipment, gross 7,982 7,795 Less: accumulated depreciation 3,904 3,713 Property, plant and equipment, net, excluding tooling 4,078 4,082 Tooling, net of amortization 287 313 Property, plant and equipment, net $ 4,365 $ 4,395 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | A summary of the changes in the carrying amount of goodwill is presented in the following tables. The prior period balances have been recast for inter-segment transitions of certain businesses that were completed during 2022. Refer to Note 24, “Reporting Segments and Related Information” for more information. 2022 (in millions) Air Management e-Propulsion & Drivetrain Aftermarket Fuel Systems Total Gross goodwill balance, January 1 $ 1,466 $ 1,890 $ 380 $ 45 $ 3,781 Accumulated impairment losses, January 1 (502) — — — (502) Net goodwill balance, January 1 $ 964 $ 1,890 $ 380 $ 45 $ 3,279 Goodwill during the year: Acquisitions 1 (Note 2) 126 132 — — 258 Measurement period adjustments (Note 2) — (20) — — (20) Other, primarily translation adjustment (26) (88) (6) — (120) Net goodwill balance, December 31 $ 1,064 $ 1,914 $ 374 $ 45 $ 3,397 2021 (in millions) Air Management e-Propulsion & Drivetrain Aftermarket Fuel Systems Total Gross goodwill balance, January 1 $ 1,472 $ 1,244 $ 368 $ 45 $ 3,129 Accumulated impairment losses, January 1 (502) — — — (502) Net goodwill balance, January 1 $ 970 $ 1,244 $ 368 $ 45 $ 2,627 Goodwill during the year: Acquisitions 1 (Note 2) — 707 — — 707 Measurement period adjustments 2 (1) 26 16 — 41 Disposition 3 (Note 2) — (12) — — (12) Other, primarily translation adjustment (5) (75) (4) — (84) Net goodwill balance, December 31 $ 964 $ 1,890 $ 380 $ 45 $ 3,279 _____________________________ 1 Acquisitions relate to the Company’s 2022 purchases of Drivetek, Rhombus and Santroll, and the 2021 purchase of AKASOL. 2 Measurement period adjustments primarily relate to the 2020 acquisition of Delphi Technologies. 3 Disposition relates to the Company’s 2021 sale of Water Valley. |
Schedule of Intangible Assets Gross Roll Forward | The Company’s other intangible assets, primarily from acquisitions, consist of the following: December 31, 2022 December 31, 2021 (in millions) Estimated useful lives (years) Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Patented and unpatented technology 5 - 15 $ 492 $ 141 $ 351 $ 443 $ 105 $ 338 Customer relationships 7 - 15 901 351 550 877 310 567 Miscellaneous 2 - 5 10 6 4 14 7 7 Total amortized intangible assets 1,403 498 905 1,334 422 912 Unamortized trade names 146 — 146 179 — 179 Total other intangible assets $ 1,549 $ 498 $ 1,051 $ 1,513 $ 422 $ 1,091 A roll forward of the gross carrying amounts and related accumulated amortization of the Company’s other intangible assets is presented below: Gross carrying amounts Accumulated amortization (in millions) 2022 2021 2022 2021 Beginning balance, January 1 $ 1,513 $ 1,452 $ 422 $ 356 Acquisitions 1 (Note 2) 132 130 — — Impairment 2 (41) (14) (3) — Amortization — — 97 88 Translation adjustment (55) (55) (18) (22) Ending balance, December 31 $ 1,549 $ 1,513 $ 498 $ 422 _____________________________ 1 Acquisitions relate to the Company’s 2022 purchases of Drivetek, Rhombus and Santroll, and the 2021 purchase of AKASOL. 2 During the fourth quarter of 2022, the Company recorded an impairment charge of $30 million to remove an indefinite-lived trade name as the Company no longer plans to utilize this trade name in the business. In 2021, the Company performed a quantitative impairment test over its indefinite-lived trade names, which indicated that for one trade name the fair value was less than the carrying value. Therefore, the Company recorded an impairment charge to reduce the carrying value to the fair value. |
PRODUCT WARRANTY (Tables)
PRODUCT WARRANTY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes the activity in the product warranty accrual accounts: (in millions) 2022 2021 Beginning balance, January 1 $ 236 $ 253 Acquisitions/dispositions — 4 Provisions for current period sales 103 83 Adjustments of prior estimates 1 14 142 Payments 1 (96) (240) Other, primarily translation adjustment (12) (6) Ending balance, December 31 $ 245 $ 236 _____________________________ 1 In December 2021, the Company settled and paid a warranty claim for $130 million. The Company had been working with an OEM customer through the warranty process during 2021, and in December 2021, as a result of discussions that occurred in the fourth quarter, the Company (without admission of liability) and the customer reached an agreement to fully resolve the claim for $130 million. This resulted in an adjustment to prior estimates of $124 million during the year ended December 31, 2021. The Company is pursuing a partial recovery of this claim through its insurance coverage. No amounts have been recorded to date and there can be no assurance that there will be any recovery. The product warranty liability is classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2022 2021 Other current liabilities $ 142 $ 128 Other non-current liabilities 103 108 Total product warranty liability $ 245 $ 236 |
NOTES PAYABLE AND DEBT (Tables)
NOTES PAYABLE AND DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The Company had short-term and long-term debt outstanding as follows: December 31, (in millions) 2022 2021 Short-term debt Short-term borrowings $ 58 $ 62 Long-term debt 3.375% Senior notes due 03/15/25 ($500 million par value) 499 498 5.000% Senior notes due 10/01/25 ($800 million par value) 1 866 889 2.650% Senior notes due 07/01/27 ($1,100 million par value) 1,092 1,092 7.125% Senior notes due 02/15/29 ($121 million par value) 120 119 1.000% Senior notes due 05/19/31 (€1,000 million par value) 1,051 1,117 4.375% Senior notes due 03/15/45 ($500 million par value) 495 494 Term loan facilities, finance leases and other 47 56 Total long-term debt 4,170 4,265 Less: current portion 4 4 Long-term debt, net of current portion $ 4,166 $ 4,261 _____________________________ 1 These notes include the fair value step-up from the Delphi Technologies acquisition. The fair value step-up was calculated based on observable market data and is amortized as a reduction to interest expense over the remaining life of the instrument using the effective interest method. |
Schedule of Consolidated Statements of Operations | The following table provides details on Interest expense, net included in the Consolidated Statements of Operations: Year Ended December 31, (in millions) 2022 2021 2020 Interest expense $ 78 $ 105 $ 73 Interest income (26) (12) (12) Interest expense, net $ 52 $ 93 $ 61 |
Schedule of Annual Principal Payments | Annual principal payments required as of December 31, 2022 are as follows: (in millions) 2023 $ 62 2024 7 2025 1,307 2026 7 2027 1,106 After 2027 1,707 Total payments $ 4,196 Add: unamortized premiums, net of discount 32 Total $ 4,228 |
OTHER CURRENT AND NON-CURRENT_3
OTHER CURRENT AND NON-CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Additional Details Related to Other Liabilities | Additional detail related to liabilities is presented in the table below: December 31, (in millions) 2022 2021 Other current liabilities: Payroll and employee related $ 398 $ 330 Customer related 202 220 Product warranties (Note 13) 142 128 Income taxes payable 142 105 Indirect taxes 125 106 Accrued freight 44 46 Operating leases (Note 22) 42 43 Deferred engineering 39 44 Employee termination benefits (Note 4) 37 85 Supplier related 23 18 Interest 22 23 Dividends payable 21 18 Other non-income taxes 19 22 Insurance 19 19 Earn-out liability 16 — Contract liabilities (Note 3) 16 21 Legal and professional fees 15 8 Retirement related (Note 18) 13 16 Mandatorily redeemable noncontrolling interest liability (Note 2) — 58 Other 155 146 Total other current liabilities $ 1,490 $ 1,456 Other non-current liabilities: Other income tax liabilities $ 242 $ 274 Deferred income taxes (Note 7) 194 206 Operating leases (Note 22) 166 152 Product warranties (Note 13) 103 108 Deferred income 66 68 Employee termination benefits (Note 4) 22 41 Other 68 115 Total other non-current liabilities $ 861 $ 964 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following tables classify assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021: Basis of fair value measurements Balance at December 31, 2022 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 1 (in millions) Assets: Receivables $ 11 $ — $ 2 $ 9 C $ — Long-term receivables $ 13 $ — $ 13 $ — C $ — Investment in debt securities $ 455 $ — $ 455 $ — A $ — Investment in equity securities $ 29 $ — $ — $ — — $ 29 Foreign currency contracts $ 18 $ — $ 18 $ — A $ — Net investment hedge contracts $ 68 $ — $ 68 $ — A $ — Liabilities: Current earn-out liability $ 21 $ — $ — $ 21 C $ — Non-current earn-out liability $ 10 $ — $ — $ 10 C $ — Foreign currency contracts $ 11 $ — $ 11 $ — A $ — Net investment hedge contracts $ 1 $ — $ 1 $ — A $ — Basis of fair value measurements (in millions) Balance at December 31, 2021 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 1 Assets: Investment in equity securities $ 87 $ 70 $ — $ — A $ 17 Long-term receivables $ 35 $ — $ 17 $ 18 C $ — Foreign currency contracts $ 13 $ — $ 13 $ — A $ — Net investment hedge contracts $ 8 $ — $ 8 $ — A $ — Liabilities: Foreign currency contracts $ 8 $ — $ 8 $ — A $ — Net investment hedge contracts $ 54 $ — $ 54 $ — A $ — _____________________________ 1 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 that have underlying assets in fixed income securities, equity securities, and other assets and the fair values have been estimated using the net asset value of the Company's ownership interest in partners' capital. The Company’s redemption of its investments with |
Schedule of Fair Value Defined Benefit Plan Assets Measured at Recurring and Non-Recurring Basis | The following tables classify the Company’s defined benefit plan assets measured at fair value on a recurring basis: Basis of fair value measurements (in millions) Balance at December 31, 2022 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 3 U.S. Plans: Fixed income securities $ 89 $ — $ — $ — — $ 89 Equity securities 17 — — — — 17 Alternative credit fund 20 — — — — 20 Cash 3 3 — — A — $ 129 $ 3 $ — $ — $ 126 Non-U.S. Plans: Fixed income securities $ 525 $ 54 $ — $ — A $ 471 Equity securities 142 113 — — A 29 Cash 147 147 — — A — Insurance contract 2 69 — — 69 C — Real estate and other 273 — 20 46 A,C 207 $ 1,156 $ 314 $ 20 $ 115 $ 707 Basis of fair value measurements (in millions) Balance at December 31, 2021 Quoted prices in active markets for identical items Significant other observable inputs Significant unobservable inputs Valuation technique Assets measured at NAV 3 U.S. Plans: Fixed income securities $ 129 $ — $ — $ — — $ 129 Equity securities 28 — — — — 28 Alternative credit fund 19 — — — — 19 Cash 1 1 — — A — $ 177 $ 1 $ — $ — $ 176 Non-U.S. Plans: Fixed income securities $ 710 $ 116 $ — $ — A $ 594 Equity securities 412 363 — — A 49 Cash 1 338 338 — — A — Insurance contract 2 108 — — 108 C — Real estate and other 481 124 18 127 A,C 212 $ 2,049 $ 941 $ 18 $ 235 $ 855 _____________________________ 1 As of December 31, 2021, £122 million in the Company’s non-U.S. plans was deemed cash in-transit and classified as a Level 1 investment. 2 A BorgWarner defined benefit plan in the United Kingdom owns 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. 3 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 that have underlying assets in fixed income securities, equity securities, and other assets. |
Schedule of 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 Using Significant Unobservable Inputs (Level 3) (in millions) Insurance contract Real estate trust fund Balance at January 1, 2021 $ 113 $ 86 Purchases, sales and settlements — 36 Benefits paid (4) — Unrealized gains on assets still held at the reporting date 1 7 Translation adjustment (2) (2) Balance at December 31, 2021 $ 108 $ 127 Purchases, sales and settlements — (93) Realized gains — 3 Benefits paid (5) — Unrealized (losses) gains on assets still held at the reporting date (20) 25 Translation adjustment (14) (16) Balance at December 31, 2022 $ 69 $ 46 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Foreign Exchange Derivative Contracts Outstanding | The following foreign currency derivative contracts were outstanding and mature through the ending duration noted below: Foreign currency derivatives (in millions) 1 Functional currency Traded currency Notional in traded currency Notional in traded currency Ending duration Brazilian Real U.S. Dollar 14 23 Dec-23 British Pound Euro 10 42 Feb-23 Chinese Renminbi British Pound 23 26 Dec-23 Chinese Renminbi Euro 42 26 Dec-23 Chinese Renminbi U.S. Dollar 276 185 Dec-24 Euro British Pound 63 6 Dec-24 Euro Polish Zloty 489 394 Dec-24 Euro U.S. Dollar 139 86 Dec-24 U.S. Dollar British Pound 17 13 Dec-23 U.S. Dollar Chinese Renminbi 1,402 — Jun-23 U.S. Dollar Euro 45 28 Mar-23 U.S. Dollar Korean Won 51,786 49,919 Nov-23 U.S. Dollar Mexico Peso 3,465 2,619 Dec-24 U.S. Dollar Singapore Dollar — 27 N/A U.S. Dollar Thailand Baht 1,790 1,720 May-23 _____________________________ |
Schedule of Foreign Exchange Contracts, Statement of Financial Position | At December 31, 2022 and 2021, the following cross-currency swap contracts were outstanding: Cross-currency swaps ( in millions ) December 31, 2022 December 31, 2021 Ending duration U.S. Dollar to Euro: Fixed receiving notional $ 1,100 $ 1,100 Jul-27 Fixed paying notional € 976 € 976 Jul-27 U.S. Dollar to Euro: Fixed receiving notional $ 500 $ 500 Mar-25 Fixed paying notional € 450 € 450 Mar-25 U.S. Dollar to Japanese Yen: Fixed receiving notional $ — $ 100 Feb-23 Fixed paying notional ¥ — ¥ 10,978 Feb-23 Fixed receiving notional $ 100 $ — Feb-29 Fixed paying notional ¥ 12,724 ¥ — Feb-29 |
Schedule of Derivative Instruments in Statement of Financial Position | At December 31, 2022 and 2021, the following amounts were recorded in the Consolidated Balance Sheets as being payable to or receivable from counterparties under ASC Topic 815, “Derivatives and Hedging”: ( in millions ) Assets Liabilities Derivatives designated as hedging instruments Under Topic 815: Balance Sheet Location December 31, 2022 December 31, 2021 Balance Sheet Location December 31, 2022 December 31, 2021 Foreign currency Prepayments and other current assets $ 15 $ 7 Other current liabilities $ 9 $ 8 Foreign currency Other non-current assets $ — $ — Other non-current liabilities $ 1 $ — Net investment hedges Other non-current assets $ 68 $ 8 Other non-current liabilities $ 1 $ 54 Derivatives not designated as hedging instruments: Foreign currency Prepayments and other current assets $ 3 $ 6 Other current liabilities $ 1 $ — |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | (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, 2022 December 31, 2021 Net investment hedges: Foreign currency $ (4) $ (10) $ — Cross-currency swaps 67 (46) — Foreign currency-denominated debt 133 66 — Total $ 196 $ 10 $ — Gains and losses on derivative instruments designated as net investment hedges were recognized in other comprehensive income (loss) during the periods presented below. ( in millions ) Year Ended December 31, Net investment hedges 2022 2021 2020 Foreign currency $ 6 $ (9) $ (2) Cross-currency swaps $ 129 $ 115 $ (155) Foreign currency-denominated debt $ 67 $ 84 $ (51) |
Schedule of Derivative Instruments | 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, 2022 (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 $ 15,801 $ 12,700 $ 1,610 $ (325) Gain (loss) on cash flow hedging relationships: Foreign currency Gain recognized in other comprehensive income $ 4 Year ended December 31, 2021 ( 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 $ 14,838 $ 11,983 $ 1,460 $ 100 Gain (loss) on cash flow hedging relationships: Foreign currency Loss recognized in other comprehensive income $ (4) Gain (loss) reclassified from AOCI to income $ 1 $ (4) $ (1) $ — Year ended December 31, 2020 (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 $ 10,165 $ 8,255 $ 951 $ 76 Gain (loss) on cash flow hedging relationships: Foreign currency Loss recognized in other comprehensive income $ (1) Gain (loss) reclassified from AOCI to income $ — $ 1 $ (2) $ — |
Schedule of Derivative Instruments, Gains | Derivatives designated as net investment hedge instruments as defined by ASC Topic 815 held during the period resulted in the following gains recorded in Interest expense on components excluded from the assessment of effectiveness: ( in millions ) Year Ended December 31, Net investment hedges 2022 2021 2020 Cross-currency swaps $ 26 $ 22 $ 18 |
Schedule of Derivatives Not Designated as Hedging Instruments | 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 recorded in income: (in millions) Year Ended December 31, Contract Type Location 2022 2021 2020 Foreign Currency Selling, general and administrative expenses $ 22 $ 13 $ 3 |
RETIREMENT BENEFIT PLANS (Table
RETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Expense for Defined Contribution and Defined Benefit Pension Plans and Other Post Employment Defined Benefit Plans | 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) 2022 2021 2020 Defined contribution expense $ 59 $ 58 $ 38 Defined benefit pension (income) expense (10) (19) 15 Other postretirement employee benefit income (1) (1) (1) Total $ 48 $ 38 $ 52 |
Schedule of Reconciliation of Plans' Benefit Obligations, Plan Assets, Funded Status and Recognition | 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 2022 2021 Year Ended December 31, (in millions) U.S. Non-U.S. U.S. Non-U.S. 2022 2021 Change in projected benefit obligation: Projected benefit obligation, January 1 $ 183 $ 2,227 $ 202 $ 2,527 $ 54 $ 65 Service cost — 20 — 25 — — Interest cost 4 37 3 30 1 1 Plan amendments — (11) — 1 — — Settlement and curtailment (6) (3) (4) (13) — — Actuarial gain (33) (685) (7) (208) (13) (6) Currency translation — (200) — (59) — — Acquisition — 8 — — — — Benefits paid (12) (71) (11) (76) (5) (6) Projected benefit obligation, December 31 1 $ 136 $ 1,322 $ 183 $ 2,227 $ 37 $ 54 Change in plan assets: Fair value of plan assets, January 1 $ 177 $ 2,049 $ 187 $ 2,041 Actual return on plan assets (33) (655) 5 110 Employer contribution 2 20 — 24 Settlements (5) (4) (4) (11) Currency translation — (189) — (39) Acquisition — 6 — — Benefits paid (12) (71) (11) (76) Fair value of plan assets, December 31 $ 129 $ 1,156 $ 177 $ 2,049 Funded status $ (7) $ (166) $ (6) $ (178) $ (37) $ (54) Amounts in the Consolidated Balance Sheets consist of: Non-current assets $ — $ 26 $ — $ 68 $ — $ — Current liabilities (1) (6) (2) (7) (6) (7) Non-current liabilities (6) (186) (4) (239) (31) (47) Net amount $ (7) $ (166) $ (6) $ (178) $ (37) $ (54) Amounts in accumulated other comprehensive loss consist of: Net actuarial loss $ 80 $ 104 $ 84 $ 74 $ (3) $ 10 Net prior service (credit) cost (3) (9) (3) 2 (11) (13) Net amount $ 77 $ 95 $ 81 $ 76 $ (14) $ (3) Total accumulated benefit obligation for all plans $ 136 $ 1,279 $ 183 $ 2,183 _____________________________ 1 The decrease in the projected benefit obligation was primarily due to actuarial gains during the period. The main driver of these gains was the increase of 2.97% in the weighted average discount rate for Non-U.S. plans. |
Schedule of Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets | The funded status of pension plans with accumulated benefit obligations in excess of plan assets is as follows: December 31, (in millions) 2022 2021 Accumulated benefit obligation $ (1,185) $ (658) Plan assets 1,022 442 Deficiency $ (163) $ (216) Pension deficiency by country: United States $ (6) $ (6) United Kingdom (38) (11) Germany (34) (89) Other (85) (110) Total pension deficiency $ (163) $ (216) |
Schedule of Funded Status of Pension Plans With Accumulated Benefit Obligations in Excess of Plan Assets | The funded status of pension plans with projected benefit obligations in excess of plan assets is as follows: December 31, (in millions) 2022 2021 Projected benefit obligation $ (1,223) $ (731) Plan assets 1,026 478 Deficiency $ (197) $ (253) Pension deficiency by country: United States $ (6) $ (6) United Kingdom (38) (11) Germany (35) (95) Other (118) (141) Total pension deficiency $ (197) $ (253) |
Schedule of Weighted Average Asset Allocations of Funded Pensions Plans and Target Allocations | 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 2022 2021 U.S. Plans: Alternative credit, real estate, cash and other 18 % 12 % 7% - 17% Fixed income securities 69 % 72 % 70% - 80% Equity securities 13 % 16 % 9% - 19% 100 % 100 % Non-U.S. Plans: Insurance contract, real estate, cash and other 1 42 % 45 % 22% - 32% Fixed income securities 1 46 % 35 % 54% - 64% Equity securities 12 % 20 % 9% - 19% 100 % 100 % _____________________________ 1 As of December 31, 2021, £122 million in the Company’s non-U.S. plans was deemed cash in-transit, driving the variances between actual allocation and target allocation. |
Schedule of Components of Net Periodic Benefit Cost | 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, 2022 2021 2020 Year Ended December 31, (in millions) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. 2022 2021 2020 Service cost $ — $ 20 $ — $ 25 $ — $ 21 $ — $ — $ — Interest cost 4 37 3 30 5 16 1 1 2 Expected return on plan assets (8) (75) (10) (83) (10) (36) — — — Settlements, curtailments and other 3 — 2 (2) — 5 — — — Amortization of unrecognized prior service (credit) cost (1) — (1) — — — (2) (3) (4) Amortization of unrecognized loss 3 7 4 13 3 11 — 1 1 Net periodic cost (income) $ 1 $ (11) $ (2) $ (17) $ (2) $ 17 $ (1) $ (1) $ (1) |
Schedule of Defined Benefit Plan Weighted Average Assumptions Used in Calculating Benefit Obligations | The Company’s weighted average assumptions used to determine the benefit obligations for its defined benefit pension and other postretirement employee benefit plans were as follows: December 31, (percent) 2022 2021 U.S. pension plans: Discount rate 5.46 2.73 Rate of compensation increase N/A N/A U.S. other postretirement employee benefit plans: Discount rate 5.41 2.46 Rate of compensation increase N/A N/A Non-U.S. pension plans: Discount rate 1 4.94 1.97 Rate of compensation increase 3.76 3.21 ________________ 1 Includes 4.94% and 1.91% for the U.K. pension plans for December 31, 2022 and 2021, respectively. 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 were as follows: Year Ended December 31, (percent) 2022 2021 2020 U.S. pension plans: Discount rate 2.73 2.31 3.17 Effective interest rate on benefit obligation 2.18 1.62 2.73 Expected long-term rate of return on assets 4.75 5.75 6.00 Average rate of increase in compensation N/A N/A N/A U.S. other postretirement plans: Discount rate 2.46 1.93 2.95 Effective interest rate on benefit obligation 1.84 1.21 2.50 Expected long-term rate of return on assets N/A N/A N/A Average rate of increase in compensation N/A N/A N/A Non-U.S. pension plans: Discount rate 1 1.97 1.44 1.69 Effective interest rate on benefit obligation 1.83 1.24 2.19 Expected long-term rate of return on assets 2 4.10 4.10 4.75 Average rate of increase in compensation 3.21 3.23 3.10 ________________ 1 Includes 1.91%, 1.39% and 1.82% for the U.K. pension plans for December 31, 2022, 2021 and 2020, respectively. 2 Includes 4.12%, 4.00% and 3.97% for the U.K. pension plans for December 31, 2022, 2021 and 2020, respectively. |
Schedule of Defined Benefit Plan Estimated Future Benefit Payments | 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. 2023 $ 14 $ 73 $ 6 2024 14 71 5 2025 13 71 5 2026 13 74 4 2027 13 78 4 2028-2032 52 441 13 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Compensation Expense | Restricted stock compensation expense recorded in the Consolidated Statements of Operations is as follows: Year Ended December 31, (in millions, except per share data) 2022 2021 2020 Restricted stock compensation expense $ 37 $ 37 $ 31 Restricted stock compensation expense, net of tax $ 28 $ 28 $ 23 |
Schedule of Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | A summary of the status of the Company’s nonvested restricted stock for employees and non-employee directors is as follows: Shares subject to restriction Weighted average grant date fair value Nonvested at January 1, 2020 1,664 $ 44.26 Granted 810 $ 33.94 Vested (600) $ 44.85 Forfeited (80) $ 40.20 Converted 1 346 $ 39.54 Nonvested at December 31, 2020 2,140 $ 39.58 Granted 1,175 $ 43.66 Vested (845) $ 43.34 Forfeited (107) $ 39.86 Nonvested at December 31, 2021 2,363 $ 40.24 Granted 1,060 $ 44.32 Vested (862) $ 38.68 Forfeited (188) $ 42.09 Nonvested at December 31, 2022 2,373 $ 42.47 ________________ 1 Represents outstanding Delphi Technologies restricted stock converted to BorgWarner restricted stock. The Delphi Technologies awards were converted using an exchange ratio of 0.4307 at the close of the acquisition. |
Schedule of Share-Based Payment Arrangement, Performance Shares, Activity | The amounts expensed and common stock issued for performance share units for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, 2022 2021 2020 Expense (in millions) Number of shares issued (in thousands) Expense (in millions) Number of shares issued (in thousands) Expense (in millions) Number of shares issued (in thousands) Total Stockholder Return $ 7 — $ 6 — $ 5 165 Other Performance-Based 31 305 18 148 5 340 Total $ 38 305 $ 24 148 $ 10 505 A summary of the status of the Company’s nonvested performance share units for the years ended December 31, 2022, 2021 and 2020 were as follows: Total Stockholder Return Other Performance-Based Number of shares (in thousands) Weighted average grant date fair value Number of shares (in thousands) Weighted average grant date fair value Nonvested at January 1, 2020 240 $ 64.61 240 $ 48.52 Granted 137 $ 28.55 253 $ 34.15 Vested (89) $ 69.75 (89) $ 51.29 Forfeited (17) $ 57.36 (19) $ 44.19 Nonvested at December 31, 2020 271 $ 45.20 385 $ 38.66 Granted 135 $ 70.39 404 $ 45.30 Vested (143) $ 47.93 (143) $ 41.92 Forfeited (4) $ 37.28 (6) $ 36.79 Nonvested at December 31, 2021 259 $ 56.90 640 $ 42.14 Granted 138 $ 66.96 415 $ 44.33 Vested (127) $ 28.55 (234) $ 34.73 Forfeited (20) $ 59.87 (56) $ 43.35 Nonvested at December 31, 2022 250 $ 76.68 765 $ 45.51 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the activity within accumulated other comprehensive loss: (in millions) Foreign currency translation adjustments Hedge instruments Defined benefit postretirement plans Total Beginning Balance, January 1, 2020 $ (497) $ — $ (230) $ (727) Comprehensive (loss) income before reclassifications 133 (1) (131) 1 Income taxes associated with comprehensive (loss) income before reclassifications 43 — 18 61 Reclassification from accumulated other comprehensive (loss) income — 1 16 17 Income taxes reclassified into net earnings — — (3) (3) Ending Balance December 31, 2020 $ (321) $ — $ (330) $ (651) Comprehensive (loss) income before reclassifications 1 (59) (4) 255 192 Income taxes associated with comprehensive (loss) income before reclassifications (43) — (64) (107) Reclassification from accumulated other comprehensive (loss) income — 4 14 18 Income taxes reclassified into net earnings — — (3) (3) Ending Balance December 31, 2021 $ (423) $ — $ (128) $ (551) Comprehensive (loss) income before reclassifications (287) 4 (14) (297) Income taxes associated with comprehensive (loss) income before reclassifications (40) — 7 (33) Reclassification from accumulated other comprehensive (loss) income — — 7 7 Income taxes reclassified into net earnings — — (2) (2) Ending Balance December 31, 2022 $ (750) $ 4 $ (130) $ (876) _____________________________ 1 The increase in the defined benefit postretirement plans comprehensive income before reclassifications is primarily due to actuarial gains during the period. Refer to Note 18 “Retirement Benefit Plans,” for more information. |
LEASES AND COMMITMENTS (Tables)
LEASES AND COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Assets and Lease Liabilities | The following table presents the lease assets and lease liabilities as of December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Assets Balance Sheet Location Operating leases Other non-current assets $ 199 $ 185 Finance leases Property, plant and equipment, net 10 11 Total lease assets $ 209 $ 196 Liabilities Current Operating leases Other current liabilities $ 42 $ 43 Finance leases Notes payable and other short-term debt 3 2 Non-current Operating leases Other non-current liabilities 166 152 Finance leases Long-term debt 9 11 Total lease liabilities $ 220 $ 208 |
Schedule of Lease, Cost | The following table presents lease obligations arising from obtaining leased assets for the years ended December 31, 2022 and 2021: December 31, (in millions) 2022 2021 Operating leases $ 39 $ 27 Finance leases 2 1 Total lease obligations $ 41 $ 28 December 31, 2022 2021 Weighted average remaining lease term (years) Operating leases 6 7 Finance leases 6 7 Weighted average discount rate Operating leases 2.2 % 2.0 % Finance leases 3.2 % 3.0 % |
Schedule of Maturity of Operating Lease Liabilities | The following table presents the maturity of lease liabilities as of December 31, 2022: (in millions) Operating leases Finance leases 2023 $ 47 $ 2 2024 40 2 2025 37 2 2026 32 2 2027 26 2 After 2027 44 3 Total (undiscounted) lease payments $ 226 $ 13 Less: Imputed interest 18 1 Present value of lease liabilities $ 208 $ 12 |
Schedule of Maturity of Finance Lease Liabilities | The following table presents the maturity of lease liabilities as of December 31, 2022: (in millions) Operating leases Finance leases 2023 $ 47 $ 2 2024 40 2 2025 37 2 2026 32 2 2027 26 2 After 2027 44 3 Total (undiscounted) lease payments $ 226 $ 13 Less: Imputed interest 18 1 Present value of lease liabilities $ 208 $ 12 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | 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) 2022 2021 2020 Basic earnings per share: Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 500 Weighted average shares of common stock outstanding 235.5 238.1 213.0 Basic earnings per share of common stock $ 4.01 $ 2.25 $ 2.35 Diluted earnings per share: Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 500 Weighted average shares of common stock outstanding 235.5 238.1 213.0 Effect of stock-based compensation 1.3 1.4 1.0 Weighted average shares of common stock outstanding including dilutive shares 236.8 239.5 214.0 Diluted earnings per share of common stock $ 3.99 $ 2.24 $ 2.34 Antidilutive stock-based awards excluded from the calculation of diluted earnings per share — — — |
REPORTING SEGMENTS AND RELATE_2
REPORTING SEGMENTS AND RELATED INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables show segment information and Segment Adjusted Operating Income for the Company’s reporting segments: 2022 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures 1 (in millions) Customers Inter-segment Net Air Management $ 7,034 $ 95 $ 7,129 $ 5,376 $ 245 $ 192 e-Propulsion & Drivetrain 5,440 185 5,625 6,416 278 415 Fuel Systems 2,052 262 2,314 2,227 140 99 Aftermarket 1,275 10 1,285 1,281 23 16 Inter-segment eliminations — (552) (552) — — — Total 15,801 — 15,801 15,300 686 722 Corporate 2 — — — 1,694 35 1 Consolidated $ 15,801 $ — $ 15,801 $ 16,994 $ 721 $ 723 2021 Segment information Net sales Year-end assets Depreciation/ amortization Long-lived asset expenditures 1 (in millions) Customers Inter-segment Net Air Management $ 6,720 $ 100 $ 6,820 $ 5,274 $ 268 $ 239 e-Propulsion & Drivetrain 4,918 168 5,086 6,122 278 262 Fuel Systems 1,996 241 2,237 2,306 166 125 Aftermarket 1,204 8 1,212 1,204 24 6 Inter-segment eliminations — (517) (517) — — — Total 14,838 — 14,838 14,906 736 632 Corporate 2 — — — 1,669 36 34 Consolidated $ 14,838 $ — $ 14,838 $ 16,575 $ 772 $ 666 2020 Segment information Net sales Year-end assets Depreciation/ amortization 3 Long-lived asset expenditures 1 (in millions) Customers Inter-segment Net Air Management $ 5,496 $ 68 $ 5,564 $ 5,385 $ 235 $ 202 e-Propulsion & Drivetrain 3,648 47 3,695 5,017 242 185 Fuel Systems 537 56 593 2,375 38 29 Aftermarket 484 4 488 1,177 21 9 Inter-segment eliminations — (175) (175) — — — Total 10,165 — 10,165 13,954 536 425 Corporate 2 — — — 2,075 32 16 Consolidated $ 10,165 $ — $ 10,165 $ 16,029 $ 568 $ 441 _______________ 1 Long-lived asset expenditures include capital expenditures and tooling outlays. 2 Corporate assets include cash and cash equivalents, investments and long-term receivables, and deferred income taxes. 3 In 2020, e-Propulsion & Drivetrain includes $38 million related to accelerated amortization for certain intangibles, refer to Note 12, “Goodwill and Other Intangibles,” for more information. Segment Adjusted Operating Income Year Ended December 31, (in millions) 2022 2021 2020 Air Management $ 1,068 $ 1,064 $ 762 e-Propulsion & Drivetrain 379 458 368 Fuel Systems 249 235 49 Aftermarket 196 164 54 Segment Adjusted Operating Income 1,892 1,921 1,233 Corporate, including stock-based compensation 289 302 192 Intangible asset amortization expense 97 88 89 Restructuring expense 59 163 203 Merger, acquisition and divestiture expense, net 40 50 96 Asset impairments and lease modifications 30 17 17 (Gain) loss on sales of businesses (13) 29 — Other non-comparable items 16 (3) (9) Customer warranty settlement (Note 21) — 124 — Amortization of inventory fair value adjustment — — 27 Equity in affiliates' earnings, net of tax (38) (48) (18) Unrealized loss (gain) on debt and equity securities 73 362 (382) Interest expense, net 52 93 61 Other postretirement income (31) (45) (7) Earnings before income taxes and noncontrolling interest 1,318 789 964 Provision for income taxes 292 150 397 Net earnings 1,026 639 567 Net earnings attributable to the noncontrolling interest, net of tax 82 102 67 Net earnings attributable to BorgWarner Inc. $ 944 $ 537 $ 500 |
Schedule of Revenue from External Customers and Long-lived Assets, by Geographical Areas | Net sales Long-lived assets (in millions) 2022 2021 2020 2022 2021 2020 United States $ 3,054 $ 2,490 $ 2,023 $ 635 $ 625 $ 937 Europe: Germany 1,439 1,342 1,175 355 405 338 Poland 1,086 1,121 696 328 324 352 United Kingdom 837 821 276 195 215 229 Other Europe 1,992 1,921 1,412 709 713 804 Total Europe 5,354 5,205 3,559 1,587 1,657 1,723 China 3,383 3,518 2,269 1,045 1,042 1,055 Mexico 1,987 1,736 1,035 653 623 367 South Korea 1,046 1,096 814 220 256 301 Other foreign 977 793 465 225 192 208 Total $ 15,801 $ 14,838 $ 10,165 $ 4,365 $ 4,395 $ 4,591 |
OPERATING CASH FLOWS AND OTHE_2
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Year Ended December 31, (in millions) 2022 2021 2020 OPERATING Net earnings $ 1,026 $ 639 $ 567 Adjustments to reconcile net earnings to net cash flows from operations: Depreciation and tooling amortization 624 684 479 Intangible asset amortization 97 88 89 Restructuring expense, net of cash paid 45 123 135 Stock-based compensation expense 75 62 41 (Gain) loss on sales of businesses (15) 29 — Loss on debt extinguishment — 20 — Asset impairments 30 14 17 Unrealized loss (gain) on debt and equity securities 73 362 (382) Deferred income tax (benefit) provision (65) (180) 123 Gain on insurance recovery received for property damages — (5) (9) Other non-cash adjustments (31) (31) (13) Net earnings adjustments to reconcile to net cash flows from operations 1,859 1,805 1,047 Retirement plan contributions (26) (30) (182) Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments: Receivables (564) (59) 27 Inventories (215) (268) (28) Prepayments and other current assets 28 11 23 Accounts payable and accrued expenses 438 (134) 186 Prepaid taxes and income taxes payable 63 8 35 Other assets and liabilities (14) (27) 76 Net cash provided by operating activities $ 1,569 $ 1,306 $ 1,184 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the year for: Interest $ 138 $ 130 $ 97 Income taxes, net of refunds $ 319 $ 342 $ 205 Non-cash investing transactions: Period end accounts payable related to property, plant and equipment purchases $ 241 $ 142 $ 182 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) joint_venture | Nov. 16, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of investments (in joint ventures) | joint_venture | 3 | ||
Restricted cash | $ 5 | $ 3 | |
Inventories, net | 1,687 | 1,534 | |
LIFO reserve | 25 | 25 | |
Debt securities | $ 500 | ||
Selling general and administrative expenses | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Government grant related credits | 52 | ||
Cost of sales | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Government grant related credits | 9 | ||
Other current liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Government grant related liabilities | 3 | ||
Other non-current liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Government grant related liabilities | 53 | ||
United States | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Inventories, net | $ 184 | $ 178 | |
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalized contract costs, amortization period (in years) | 3 years | ||
Standard product warranty term (in years) | 1 year | ||
Minimum | Long-term Supply Arrangements | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property, plant and equipment, useful life (in years) | 3 years | ||
Minimum | Building | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property, plant and equipment, useful life (in years) | 15 years | ||
Minimum | Machinery and equipment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property, plant and equipment, useful life (in years) | 3 years | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalized contract costs, amortization period (in years) | 7 years | ||
Standard product warranty term (in years) | 3 years | ||
Maximum | Long-term Supply Arrangements | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property, plant and equipment, useful life (in years) | 5 years | ||
Maximum | Building | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property, plant and equipment, useful life (in years) | 40 years | ||
Maximum | Machinery and equipment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property, plant and equipment, useful life (in years) | 12 years | ||
NSK-Warner K.K | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Ownership percentage in investee | 50% | ||
Turbo Energy Private Limited | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Ownership percentage in investee | 32.60% | ||
Delphi-TVS Diesel Systems Ltd | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Ownership percentage in investee | 52.50% |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Narrative (Details) € / shares in Units, $ / shares in Units, ¥ in Millions, ¥ in Millions, SFr in Millions | 1 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 01, 2022 USD ($) | Dec. 01, 2022 CHF (SFr) | Sep. 20, 2022 USD ($) | Sep. 20, 2022 CNY (¥) | Jul. 29, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2022 JPY (¥) | Dec. 31, 2021 USD ($) $ / shares | Oct. 01, 2020 USD ($) $ / shares | Feb. 28, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2020 USD ($) | Dec. 31, 2022 CHF (SFr) | Sep. 20, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 JPY (¥) | Feb. 10, 2022 | Dec. 17, 2021 USD ($) | Dec. 17, 2021 EUR (€) € / shares | Oct. 25, 2021 USD ($) | Aug. 02, 2021 | Jun. 04, 2021 USD ($) | Jun. 04, 2021 EUR (€) | May 19, 2021 EUR (€) | Dec. 29, 2020 | Jun. 19, 2020 USD ($) | Sep. 30, 2019 USD ($) | May 31, 2019 USD ($) | |
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Goodwill | $ 3,279,000,000 | $ 3,397,000,000 | $ 3,397,000,000 | $ 3,397,000,000 | $ 3,279,000,000 | $ 2,627,000,000 | ||||||||||||||||||||||||||
Common stock, par value (in dollar per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||||||||||||||||
Amortization of inventory fair value adjustment | $ 0 | $ 0 | 27,000,000 | |||||||||||||||||||||||||||||
Acquisition-related costs | 40,000,000 | 50,000,000 | 96,000,000 | |||||||||||||||||||||||||||||
Cash consideration | 312,000,000 | 759,000,000 | 449,000,000 | |||||||||||||||||||||||||||||
Loss on divestiture | 13,000,000 | (29,000,000) | 0 | |||||||||||||||||||||||||||||
Water Valley | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Net sales | 177,000,000 | |||||||||||||||||||||||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Water Valley | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Disposal group, consideration | $ 57,000,000 | 57,000,000 | ||||||||||||||||||||||||||||||
Cash consideration | 39,000,000 | |||||||||||||||||||||||||||||||
Potential earn out payments | 30,000,000 | 30,000,000 | ||||||||||||||||||||||||||||||
Estimated payout | 18,000,000 | 18,000,000 | ||||||||||||||||||||||||||||||
Estimate of expected earn-out, loss | 9,000,000 | |||||||||||||||||||||||||||||||
Loss on divestiture | 22,000,000 | (22,000,000) | ||||||||||||||||||||||||||||||
Assets held for sale | 99,000,000 | 99,000,000 | ||||||||||||||||||||||||||||||
Goodwill | 12,000,000 | 12,000,000 | ||||||||||||||||||||||||||||||
Liabilities | 20,000,000 | 20,000,000 | ||||||||||||||||||||||||||||||
Senior Notes | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Debt instrument face value | $ 800,000,000 | $ 1,100,000,000 | ||||||||||||||||||||||||||||||
Senior Notes | 1.000% Senior notes due 05/19/31 (€1,000 million par value) | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Debt instrument stated interest rate | 1% | 1% | 1% | |||||||||||||||||||||||||||||
Debt instrument face value | € | € 1,000,000,000 | € 1,000,000,000 | ||||||||||||||||||||||||||||||
Senior Notes | DT Notes | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Debt instrument stated interest rate | 5% | |||||||||||||||||||||||||||||||
Romeo Power Inc. | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Noncontrolling interest | 14% | |||||||||||||||||||||||||||||||
BorgWarner Romeo Power LLC | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Investment fair value | $ 30,000,000 | |||||||||||||||||||||||||||||||
Corporate Joint Venture | BorgWarner Romeo Power LLC | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Noncontrolling interest | 60% | |||||||||||||||||||||||||||||||
Romeo Power Inc. | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Ownership interest equity interest | 20% | |||||||||||||||||||||||||||||||
Unrealized loss (gain) on debt and equity securities | (39,000,000) | (362,000,000) | 382,000,000 | |||||||||||||||||||||||||||||
Equity Securities, FV-NI | $ 70,000,000 | $ 70,000,000 | ||||||||||||||||||||||||||||||
BorgWarner Romeo Power LLC | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Investment fair value | $ 30,000,000 | |||||||||||||||||||||||||||||||
Percent of ownership interest disposal | 60% | |||||||||||||||||||||||||||||||
Proceeds from divestiture of equity method investment | $ 29,000,000 | |||||||||||||||||||||||||||||||
Business combination fair value reduced by discount | 5% | |||||||||||||||||||||||||||||||
BorgWarner Romeo Power LLC | Corporate Joint Venture | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Equity securities without readily determinable fair value | $ 10,000,000 | |||||||||||||||||||||||||||||||
Gain on sale of investments | 22,000,000 | |||||||||||||||||||||||||||||||
Hubei Surpass Sun Electric Charging Business Member | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Business consideration | $ 60,000,000 | ¥ 410 | ||||||||||||||||||||||||||||||
Payments to acquire businesses | 39,000,000 | ¥ 267 | ||||||||||||||||||||||||||||||
Contractual earn-out payments | $ 21,000,000 | ¥ 143 | ||||||||||||||||||||||||||||||
Retention payment payable period | 2 years | 2 years | ||||||||||||||||||||||||||||||
Drivetek AG | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Payments to acquire businesses | $ 29,000,000 | SFr 27 | ||||||||||||||||||||||||||||||
Contractual earn-out payments | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | SFr 10 | ||||||||||||||||||||||||||||
Retention payment payable period | 3 years | 3 years | ||||||||||||||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100% | 100% | 100% | 100% | ||||||||||||||||||||||||||||
Other non-current liability | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, assets | 49,000,000 | 49,000,000 | 49,000,000 | |||||||||||||||||||||||||||||
Estimated fair value of goodwill and intangibles | 40,000,000 | 40,000,000 | 40,000,000 | |||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, liabilities | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||||||||||||||||||||
Goodwill | 22,000,000 | 22,000,000 | 22,000,000 | |||||||||||||||||||||||||||||
Other intangible assets, net | 18,000,000 | 18,000,000 | 18,000,000 | |||||||||||||||||||||||||||||
Rhombus Energy Solutions | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Payments to acquire businesses | $ 131,000,000 | |||||||||||||||||||||||||||||||
Contractual earn-out payments | $ 30,000,000 | |||||||||||||||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100% | |||||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, assets | $ 142,000,000 | 142,000,000 | 142,000,000 | 142,000,000 | ||||||||||||||||||||||||||||
Estimated fair value of goodwill and intangibles | 27,000,000 | 27,000,000 | 27,000,000 | |||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, liabilities | 11,000,000 | 11,000,000 | 11,000,000 | 11,000,000 | ||||||||||||||||||||||||||||
Goodwill | 104,000,000 | 104,000,000 | 104,000,000 | 104,000,000 | ||||||||||||||||||||||||||||
Measurement period adjustments, current liabilities | 0 | |||||||||||||||||||||||||||||||
Other intangible assets, net | 27,000,000 | 27,000,000 | 27,000,000 | 27,000,000 | ||||||||||||||||||||||||||||
Rhombus Energy Solutions | Employee Retention Payment Member | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Contractual earn-out payments | $ 25,000,000 | |||||||||||||||||||||||||||||||
Retention payment payable period | 3 years | |||||||||||||||||||||||||||||||
Santoll Automotive Components | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Business consideration | $ 192,000,000 | |||||||||||||||||||||||||||||||
Payments to acquire businesses | 157,000,000 | |||||||||||||||||||||||||||||||
Contractual earn-out payments | $ 47,000,000 | ¥ 300 | ||||||||||||||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100% | 100% | ||||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, assets | $ 236,000,000 | 216,000,000 | 216,000,000 | 216,000,000 | ||||||||||||||||||||||||||||
Estimated fair value of goodwill and intangibles | 87,000,000 | |||||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, liabilities | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | ||||||||||||||||||||||||||||
Goodwill | 132,000,000 | 112,000,000 | 112,000,000 | 112,000,000 | ||||||||||||||||||||||||||||
Base purchase price | 152,000,000 | ¥ 1,000 | ||||||||||||||||||||||||||||||
Estimated earn-out payments | 40,000,000 | ¥ 250 | 21,000,000 | |||||||||||||||||||||||||||||
Post-closing adjustments through reduction of payment | 5,000,000 | |||||||||||||||||||||||||||||||
Measurement period adjustments, current liabilities | 0 | |||||||||||||||||||||||||||||||
Other intangible assets, net | $ 87,000,000 | 87,000,000 | 87,000,000 | 87,000,000 | ||||||||||||||||||||||||||||
AKASOL | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 93% | 93% | 100% | 100% | 89% | 89% | ||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, assets | $ 1,034,000,000 | $ 1,035,000,000 | ||||||||||||||||||||||||||||||
Estimated fair value of goodwill and intangibles | 95,000,000 | |||||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed, liabilities | 150,000,000 | 151,000,000 | ||||||||||||||||||||||||||||||
Goodwill | 704,000,000 | 704,000,000 | 704,000,000 | 704,000,000 | 707,000,000 | |||||||||||||||||||||||||||
Business acquisition, preacquisition contingency, amount of settlement | 788,000,000 | € 648,000,000 | ||||||||||||||||||||||||||||||
Financial liabilities assumed | 77,000,000 | € 64,000,000 | ||||||||||||||||||||||||||||||
Purchase of additional shares of AKASOL | 33,000,000 | € 28,000,000 | ||||||||||||||||||||||||||||||
Share price (in euro per share) | € / shares | € 119.16 | |||||||||||||||||||||||||||||||
Noncontrolling interest | 96,000,000 | $ 58,000,000 | € 51,000,000 | 96,000,000 | ||||||||||||||||||||||||||||
Net sales | $ 67,000,000 | |||||||||||||||||||||||||||||||
Other intangible assets, net | $ 130,000,000 | $ 130,000,000 | ||||||||||||||||||||||||||||||
Delphi Technologies PLC | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Business consideration | $ 2,391,000,000 | |||||||||||||||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100% | |||||||||||||||||||||||||||||||
Net sales | 15,801,000,000 | 14,838,000,000 | $ 12,792,000,000 | |||||||||||||||||||||||||||||
Fixed exchange ratio | 0.4307 | |||||||||||||||||||||||||||||||
Common stock, par value (in dollar per share) | $ / shares | $ 0.01 | |||||||||||||||||||||||||||||||
Acquisition-related costs | $ 89,000,000 | |||||||||||||||||||||||||||||||
Cash consideration | $ 18,000,000 | |||||||||||||||||||||||||||||||
Romeo Power Inc. | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Equity securities without readily determinable fair value | $ 50,000,000 | |||||||||||||||||||||||||||||||
Romeo Power Inc. | Romeo Power Inc. | ||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||
Equity Securities, FV-NI | $ 31,000,000 | $ 31,000,000 | $ 31,000,000 |
ACQUISITIONS AND DISPOSITIONS_2
ACQUISITIONS AND DISPOSITIONS - Fair Values of Assets Acquired and Liabilities (Details) € in Millions, $ in Millions | 5 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended | |||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jul. 29, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 17, 2021 USD ($) | Dec. 17, 2021 EUR (€) | Jun. 04, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
ASSETS | |||||||||||
Goodwill | $ 3,397 | $ 3,397 | $ 3,397 | $ 3,279 | $ 2,627 | ||||||
Measurement period adjustments, goodwill | (20) | $ 41 | |||||||||
Rhombus Energy Solutions | |||||||||||
ASSETS | |||||||||||
Current assets | 7 | 7 | 7 | $ 7 | |||||||
Measurement period adjustments, cash and cash equivalents, current assets | 0 | ||||||||||
Goodwill | 104 | 104 | 104 | 104 | |||||||
Measurement period adjustments, goodwill | 0 | ||||||||||
Other intangible assets, net | 27 | 27 | 27 | 27 | |||||||
Measurement period adjustments, other intangible assets, net | 0 | ||||||||||
Other non-current assets | 4 | 4 | 4 | 4 | |||||||
Measurement period adjustments, other non current assets | 0 | ||||||||||
Total assets acquired | 142 | 142 | 142 | 142 | |||||||
Measurement period adjustments, total assets acquired | 0 | ||||||||||
LIABILITIES | |||||||||||
Current liabilities | 3 | 3 | 3 | 3 | |||||||
Measurement period adjustments, current liabilities | 0 | ||||||||||
Other non-current liabilities | 8 | 8 | 8 | 8 | |||||||
Measurement period adjustments, other non-current liabilities | 0 | ||||||||||
Total liabilities assumed | 11 | 11 | 11 | 11 | |||||||
Measurement period adjustments, total liabilities assumed | 0 | ||||||||||
Net assets acquired | 131 | 131 | 131 | $ 131 | |||||||
Measurement period adjustments, net assets acquired | 0 | ||||||||||
Santoll Automotive Components | |||||||||||
ASSETS | |||||||||||
Current assets | 6 | 6 | 6 | $ 8 | |||||||
Measurement period adjustments, cash and cash equivalents, current assets | (2) | ||||||||||
Property, plant and equipment, net | 11 | 11 | 11 | 9 | |||||||
Measurement period adjustments, property, plant and equipment, net | 2 | ||||||||||
Goodwill | 112 | 112 | 112 | 132 | |||||||
Measurement period adjustments, goodwill | (20) | ||||||||||
Other intangible assets, net | 87 | 87 | 87 | 87 | |||||||
Measurement period adjustments, other intangible assets, net | 0 | ||||||||||
Total assets acquired | 216 | 216 | 216 | 236 | |||||||
Measurement period adjustments, total assets acquired | (20) | ||||||||||
LIABILITIES | |||||||||||
Current liabilities | 2 | 2 | 2 | 2 | |||||||
Measurement period adjustments, current liabilities | 0 | ||||||||||
Other non-current liabilities | 22 | 22 | 22 | 22 | |||||||
Measurement period adjustments, other non-current liabilities | 0 | ||||||||||
Total liabilities assumed | 24 | 24 | 24 | 24 | |||||||
Measurement period adjustments, total liabilities assumed | 0 | ||||||||||
Net assets acquired | 192 | 192 | 192 | $ 212 | |||||||
Measurement period adjustments, net assets acquired | (20) | ||||||||||
AKASOL | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ 29 | $ 29 | |||||||||
Measurement period adjustments, cash and cash equivalents | 0 | ||||||||||
Receivables, net | 16 | 16 | |||||||||
Measurement period adjustments, receivables, net | 0 | ||||||||||
Inventories, net | 40 | 42 | |||||||||
Measurement period adjustments, inventories, net | (2) | ||||||||||
Prepayments and other current assets | 5 | 5 | |||||||||
Measurement period adjustments, prepayments and other current assets | 0 | ||||||||||
Property, plant and equipment, net | 103 | 106 | |||||||||
Measurement period adjustments, property, plant and equipment, net | (3) | ||||||||||
Goodwill | $ 704 | $ 704 | $ 704 | 704 | 707 | ||||||
Measurement period adjustments, goodwill | (3) | ||||||||||
Other intangible assets, net | 130 | 130 | |||||||||
Measurement period adjustments, other intangible assets, net | 0 | ||||||||||
Other non-current assets | 7 | 0 | |||||||||
Measurement period adjustments, other non current assets | 7 | ||||||||||
Total assets acquired | 1,034 | 1,035 | |||||||||
Measurement period adjustments, total assets acquired | (1) | ||||||||||
LIABILITIES | |||||||||||
Notes payable and other short-term debt | 8 | 8 | |||||||||
Measurement period adjustments, notes payable and other short-term debt | 0 | ||||||||||
Accounts payable | 22 | 22 | |||||||||
Measurement period adjustments, accounts payable | 0 | ||||||||||
Other current liabilities | 19 | 13 | |||||||||
Measurement period adjustments, other current liabilities | 6 | ||||||||||
Long-term debt | 69 | 69 | |||||||||
Measurement period adjustments, long-term debt | 0 | ||||||||||
Other non-current liabilities | 32 | 39 | |||||||||
Measurement period adjustments, other non-current liabilities | (7) | ||||||||||
Total liabilities assumed | 150 | 151 | |||||||||
Measurement period adjustments, total liabilities assumed | (1) | ||||||||||
Noncontrolling interests | 96 | $ 58 | € 51 | 96 | |||||||
Measurement period adjustments, noncontrolling interests | 0 | ||||||||||
Net assets and noncontrolling interest acquired | 788 | 788 | |||||||||
Measurement period adjustments, net assets and noncontrolling interests | $ 0 | ||||||||||
Restricted cash | $ 16 |
ACQUISITIONS AND DISPOSITIONS_3
ACQUISITIONS AND DISPOSITIONS - Schedule of Other Intangible Assets Acquired (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Mar. 31, 2022 | Jun. 04, 2021 | Dec. 31, 2022 | Jul. 29, 2022 | Jun. 30, 2022 | |
Rhombus Energy Solutions | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 27 | ||||
Total other intangible assets | $ 27 | $ 27 | |||
Rhombus Energy Solutions | Developed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Life | 13 years | ||||
Estimated Fair Value | $ 22 | ||||
Rhombus Energy Solutions | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Life | 8 years | ||||
Estimated Fair Value | $ 5 | ||||
Santoll Automotive Components | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 87 | ||||
Total other intangible assets | $ 87 | $ 87 | |||
Santoll Automotive Components | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Life | 12 years | ||||
Estimated Fair Value | $ 62 | ||||
Santoll Automotive Components | Manufacturing processes (know-how) | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Life | 10 years | ||||
Estimated Fair Value | $ 25 | ||||
AKASOL | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 95 | ||||
Total other intangible assets | 130 | $ 130 | |||
AKASOL | Trade Names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Unamortized trade names | $ 35 | ||||
AKASOL | Developed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Life | 5 years | ||||
Estimated Fair Value | $ 70 | ||||
AKASOL | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Life | 11 years | ||||
Estimated Fair Value | $ 25 |
ACQUISITIONS AND DISPOSITIONS_4
ACQUISITIONS AND DISPOSITIONS - Summary of Purchase Price Consideration (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Oct. 01, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Stock compensation consideration | $ 7 | |||
Cash consideration | $ 312 | $ 759 | $ 449 | |
Delphi Technologies PLC | ||||
Business Acquisition [Line Items] | ||||
BorgWarner common stock issued for purchase of Delphi Technologies (in shares) | 37,188,819 | |||
BorgWarner share price at October 1, 2020 | $ 39.54 | |||
Fair value of stock consideration | $ 1,470 | |||
Stock compensation consideration | 7 | |||
Total stock consideration | 1,477 | |||
Cash consideration | 18 | |||
Repayment of Delphi Technologies’ debt | 896 | |||
Total consideration | $ 2,391 |
ACQUISITIONS AND DISPOSITIONS_5
ACQUISITIONS AND DISPOSITIONS - Net Sales and Earnings Consolidated Statements of Operations (Details) - Delphi Technologies PLC $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |
Net sales | $ 1,120 |
Net earnings attributable to BorgWarner Inc. | $ 30 |
ACQUISITIONS AND DISPOSITIONS_6
ACQUISITIONS AND DISPOSITIONS - Pro Forma Financial Information (Details) - Delphi Technologies PLC - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Net sales | $ 15,801 | $ 14,838 | $ 12,792 |
Net earnings attributable to BorgWarner Inc. | $ 944 | $ 537 | $ 616 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from External Customer [Line Items] | ||
Allowance for credit loss | $ 16 | $ 17 |
Liability, current | 16 | 21 |
Deferred income | 66 | 68 |
Customer incentive payments (Note 3) | 34 | 36 |
Customer incentive payments (Note 3) | $ 99 | 137 |
Minimum | ||
Revenue from External Customer [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction (in years) | 3 years | |
Maximum | ||
Revenue from External Customer [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction (in years) | 7 years | |
Prepayments and other current assets | ||
Revenue from External Customer [Line Items] | ||
Customer incentive payments (Note 3) | $ 34 | 36 |
Other non-current assets | ||
Revenue from External Customer [Line Items] | ||
Customer incentive payments (Note 3) | 99 | 137 |
Other current liabilities | ||
Revenue from External Customer [Line Items] | ||
Liability, current | $ 16 | $ 21 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | |||
Net sales | $ 15,801 | $ 14,838 | $ 10,165 |
Air Management | |||
Revenue from External Customer [Line Items] | |||
Net sales | 7,034 | 6,720 | 5,496 |
e-Propulsion & Drivetrain | |||
Revenue from External Customer [Line Items] | |||
Net sales | 5,440 | 4,918 | 3,648 |
Fuel Systems | |||
Revenue from External Customer [Line Items] | |||
Net sales | 2,052 | 1,996 | 537 |
Aftermarket | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,275 | 1,204 | 484 |
North America | |||
Revenue from External Customer [Line Items] | |||
Net sales | 5,041 | 4,225 | 3,057 |
North America | Air Management | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,989 | 1,664 | 1,358 |
North America | e-Propulsion & Drivetrain | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,868 | 1,616 | 1,284 |
North America | Fuel Systems | |||
Revenue from External Customer [Line Items] | |||
Net sales | 473 | 302 | 67 |
North America | Aftermarket | |||
Revenue from External Customer [Line Items] | |||
Net sales | 711 | 643 | 348 |
Europe | |||
Revenue from External Customer [Line Items] | |||
Net sales | 5,354 | 5,205 | 3,559 |
Europe | Air Management | |||
Revenue from External Customer [Line Items] | |||
Net sales | 2,845 | 2,805 | 2,458 |
Europe | e-Propulsion & Drivetrain | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,195 | 973 | 733 |
Europe | Fuel Systems | |||
Revenue from External Customer [Line Items] | |||
Net sales | 913 | 1,004 | 277 |
Europe | Aftermarket | |||
Revenue from External Customer [Line Items] | |||
Net sales | 401 | 423 | 91 |
Asia | |||
Revenue from External Customer [Line Items] | |||
Net sales | 5,058 | 5,120 | 3,411 |
Asia | Air Management | |||
Revenue from External Customer [Line Items] | |||
Net sales | 2,018 | 2,103 | 1,585 |
Asia | e-Propulsion & Drivetrain | |||
Revenue from External Customer [Line Items] | |||
Net sales | 2,377 | 2,329 | 1,631 |
Asia | Fuel Systems | |||
Revenue from External Customer [Line Items] | |||
Net sales | 599 | 627 | 180 |
Asia | Aftermarket | |||
Revenue from External Customer [Line Items] | |||
Net sales | 64 | 61 | 15 |
Other | |||
Revenue from External Customer [Line Items] | |||
Net sales | 348 | 288 | 138 |
Other | Air Management | |||
Revenue from External Customer [Line Items] | |||
Net sales | 182 | 148 | 95 |
Other | e-Propulsion & Drivetrain | |||
Revenue from External Customer [Line Items] | |||
Net sales | 0 | 0 | 0 |
Other | Fuel Systems | |||
Revenue from External Customer [Line Items] | |||
Net sales | 67 | 63 | 13 |
Other | Aftermarket | |||
Revenue from External Customer [Line Items] | |||
Net sales | $ 99 | $ 77 | $ 30 |
RESTRUCTURING - Reserve by Type
RESTRUCTURING - Reserve by Type of Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | $ 45 | $ 123 | $ 135 |
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 0 | 2 | 45 |
Air Management | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 26 | ||
e-Propulsion & Drivetrain | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 22 | 70 | |
Fuel Systems | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 11 | 54 | 8 |
Aftermarket | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 0 | 0 | 1 |
Employee termination benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 40 | 99 | 157 |
Employee termination benefits | Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 0 | 0 | 44 |
Employee termination benefits | Air Management | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 24 | 34 | 50 |
Employee termination benefits | e-Propulsion & Drivetrain | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 13 | 12 | 54 |
Employee termination benefits | Fuel Systems | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 3 | 53 | 8 |
Employee termination benefits | Aftermarket | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 0 | 0 | 1 |
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 19 | 64 | 46 |
Other | Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 0 | 2 | 1 |
Other | Air Management | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 2 | 18 | 29 |
Other | e-Propulsion & Drivetrain | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 9 | 43 | 16 |
Other | Fuel Systems | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | 8 | 1 | 0 |
Other | Aftermarket | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expense | $ 0 | $ 0 | $ 0 |
RESTRUCTURING - Roll Forward of
RESTRUCTURING - Roll Forward of Restructuring Liability (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | $ 139 | $ 173 | |
Restructuring expense, net | 59 | 163 | $ 203 |
Cash payments | (127) | (189) | |
Foreign currency translation adjustment and other | (3) | (8) | |
Restructuring reserve, ending balance | 68 | 139 | 173 |
Less: Non-current restructuring liability | 22 | ||
Current restructuring liability | 46 | ||
Employee termination benefits | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 126 | 160 | |
Restructuring expense, net | 40 | 99 | |
Cash payments | (99) | (128) | |
Foreign currency translation adjustment and other | (8) | (5) | |
Restructuring reserve, ending balance | 59 | 126 | 160 |
Less: Non-current restructuring liability | 22 | ||
Current restructuring liability | 37 | ||
Other | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 13 | 13 | |
Restructuring expense, net | 19 | 64 | |
Cash payments | (28) | (61) | |
Foreign currency translation adjustment and other | 5 | (3) | |
Restructuring reserve, ending balance | 9 | $ 13 | $ 13 |
Less: Non-current restructuring liability | 0 | ||
Current restructuring liability | $ 9 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) employee program | Dec. 31, 2021 USD ($) employee | Dec. 31, 2020 USD ($) employee | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 59 | $ 163 | $ 203 | |
Restructuring expense, net of cash paid | $ 45 | 123 | 135 | |
Number of voluntary termination programs (in programs) | program | 2 | |||
Corporate, Non-Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | $ 0 | 2 | 45 | |
2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | 36 | 103 | ||
Restructuring and related plan | 300 | |||
Restructuring cost, incurred to date | 287 | |||
Delphi Technologies Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 54 | 5 | 60 | |
Restructuring cost, incurred to date | 67 | |||
Air Management | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 26 | |||
Air Management | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | $ 26 | $ 52 | $ 79 | |
Number of positions eliminated (in employees) | employee | 74 | 140 | 200 | |
e-Propulsion & Drivetrain | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | $ 22 | $ 70 | ||
e-Propulsion & Drivetrain | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | 10 | |||
Restructuring expense, net of cash paid | $ 55 | 70 | ||
e-Propulsion & Drivetrain | 2022 Individually Approved Actions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 12 | |||
Fuel Systems | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 11 | 54 | 8 | |
Termination Benefit | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | 18 | |||
Termination Benefit | Air Management | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 18 | 23 | 27 | |
Severance Costs and Professional Fees | Air Management | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | 25 | |||
Facility Closure | e-Propulsion & Drivetrain | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | 55 | |||
Restructuring expense, net of cash paid | $ 35 | |||
Facility Closure | e-Propulsion & Drivetrain | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated (in employees) | employee | 80 | |||
Facility Closure | e-Propulsion & Drivetrain | Europe | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated (in employees) | employee | 350 | |||
Employee Termination Benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 40 | $ 99 | ||
Restructuring expense, net of cash paid | 40 | 99 | 157 | |
Employee Termination Benefits | Corporate, Non-Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 0 | 0 | 44 | |
Employee Termination Benefits | Air Management | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 24 | 34 | 50 | |
Employee Termination Benefits | Air Management | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 33 | |||
Number of positions eliminated (in employees) | employee | 200 | |||
Employee Termination Benefits | Air Management | Delphi Technologies Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | 4 | |||
Employee Termination Benefits | e-Propulsion & Drivetrain | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 13 | 12 | $ 54 | |
Employee Termination Benefits | Fuel Systems | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 3 | 53 | 8 | |
Employee Termination Benefits | Fuel Systems | Delphi Technologies Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | 5 | 54 | ||
Severance Costs, Equipment Relocation and Professional Fees | e-Propulsion & Drivetrain | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 19 | 15 | ||
Equipment Relocation and Professional Fees | Fuel Systems | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net of cash paid | $ 6 | |||
Special Termination Benefits | Air Management | 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expense, net | $ 19 |
RESEARCH AND DEVELOPMENT COST_2
RESEARCH AND DEVELOPMENT COSTS - Research and Development Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development [Abstract] | |||
Gross R&D expenditures | $ 968 | $ 930 | $ 533 |
Customer reimbursements | (182) | (223) | (57) |
Net R&D expenditures | $ 786 | $ 707 | $ 476 |
RESEARCH AND DEVELOPMENT COST_3
RESEARCH AND DEVELOPMENT COSTS - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development [Abstract] | |||
Net R&D expenditures as a percentage of net sales (in percent) | 5% | 4.80% | 4.70% |
OTHER OPERATING EXPENSE, NET -
OTHER OPERATING EXPENSE, NET - Other Operating Expense (Income), Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |||
Merger, acquisition and divestiture expense, net | $ 40 | $ 50 | $ 96 |
Asset impairments | 30 | 14 | 17 |
(Gain) loss on sales of businesses | (13) | 29 | 0 |
Intangible asset accelerated amortization | 0 | 0 | 38 |
Other income, net | 1 | (12) | (13) |
Other operating expense, net | $ 58 | $ 81 | $ 138 |
OTHER OPERATING EXPENSE, NET _2
OTHER OPERATING EXPENSE, NET - Narrative (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) facility | |
Schedule of Equity Method Investments [Line Items] | ||||
Merger, acquisition and divestiture expense | $ 54 | |||
Gain related to change in estimate of expected earn-out | 14 | |||
Merger, acquisition and divestiture expense, net | 40 | $ 50 | $ 96 | |
(Gain) loss on sales of businesses | 13 | (29) | 0 | |
Asset impairments | 30 | 14 | $ 17 | |
Number of facility closures | facility | 2 | |||
Trade Names | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Asset impairments | 30 | |||
Previous divestiture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
(Gain) loss on sales of businesses | 9 | |||
BorgWarner Romeo Power LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
(Gain) loss on sales of businesses | $ 22 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Water Valley | ||||
Schedule of Equity Method Investments [Line Items] | ||||
(Gain) loss on sales of businesses | $ 22 | (22) | ||
e-Propulsion & Drivetrain | ||||
Schedule of Equity Method Investments [Line Items] | ||||
(Gain) loss on sales of businesses | (7) | |||
Asset impairments | 38 | |||
Asset impairment | $ 8 | |||
Aftermarket | Trade Names | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Asset impairments | $ 14 | |||
Air Management | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Asset impairment | $ 9 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
U.S. | $ 51 | $ (423) | $ 437 |
Non-U.S. | 1,267 | 1,212 | 527 |
Earnings before income taxes and noncontrolling interest | 1,318 | 789 | 964 |
Federal | 75 | 43 | 19 |
State | 7 | 7 | 2 |
Foreign | 276 | 276 | 252 |
Total current expense | 358 | 326 | 273 |
Federal | (58) | (98) | 70 |
State | (9) | (13) | 11 |
Foreign | 1 | (65) | 43 |
Total deferred (benefit) expense | (66) | (176) | 124 |
Provision for income taxes | 292 | 150 | 397 |
Romeo Power Inc. | |||
Operating Loss Carryforwards [Line Items] | |||
Unrealized loss (gain) on debt and equity securities | $ (39) | $ (362) | $ 382 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate reconciliation (in percent) | 22% | 19% | 41% | |||
Tax holiday, tax benefit | $ 43 | $ 76 | $ 36 | |||
Tax deductions for qualifying research and development expenditure | 42 | 27 | 9 | |||
Foreign rate differentials | 25 | 36 | 21 | |||
Tax adjustment | 33 | (34) | ||||
Net tax on remittance of foreign earnings | $ 49 | 36 | 43 | 93 | ||
Net expense related to valuation allowances | 67 | 39 | 53 | |||
Interest expense | 5 | 16 | 21 | |||
Payment for penalties and interest accrued | $ 51 | 57 | 51 | |||
Unrecognized tax benefits that would impact effective tax rate | 218 | |||||
Unrecognized tax benefits | 221 | 184 | 221 | $ 231 | $ 146 | |
Operating loss carryforwards, state and local | 23 | |||||
Deferred tax liabilities, undistributed foreign earnings | 146 | 141 | 146 | |||
Deferred tax liability not reported, undistributed earnings of foreign subsidiaries | 1,100 | |||||
Amount of unrecognized deferred tax liability | 70 | |||||
Other current liabilities | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Unrecognized tax benefits | 26 | |||||
Non-U.S. Tax Jurisdiction | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax holiday, tax benefit | $ 28 | 55 | ||||
Foreign rate differentials | 20 | |||||
Tax adjustment | $ 36 | |||||
Operating loss carryforwards | 584 | |||||
Operating loss carryforwards, subject to expiration | 374 | |||||
Operating loss carryforwards, not subject to expiration | 210 | |||||
Operating loss carryforwards, valuation allowance | 449 | |||||
State and Local Jurisdiction | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards, subject to expiration | 21 | |||||
Operating loss carryforwards, not subject to expiration | 2 | |||||
Operating loss carryforwards, valuation allowance | 17 | |||||
Tax credit carryforwards, other | 29 | |||||
Tax credit carryforward, valuation allowance | $ 29 |
INCOME TAXES - Income Tax Recon
INCOME TAXES - Income Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income taxes at U.S. statutory rate of 21% | $ 277 | $ 166 | $ 203 | |
Valuation allowance adjustments, net | 67 | 39 | 53 | |
Net tax on remittance of foreign earnings | $ 49 | 36 | 43 | 93 |
Foreign rate differentials | 25 | 36 | 21 | |
U.S. tax on non-U.S. earnings | (11) | 4 | 10 | |
Changes in accounting methods and filing positions | (14) | (18) | (18) | |
State taxes, net of federal benefit | (4) | (9) | 10 | |
Impact of tax law and rate change | 2 | (20) | 0 | |
Affiliates' earnings | (6) | (10) | (4) | |
Reserve adjustments, settlements and claims | 16 | (17) | 45 | |
Tax credits | (16) | (5) | (12) | |
Enhanced research and development deductions | (42) | (27) | (9) | |
Tax holidays | (43) | (76) | (36) | |
Other, net | 5 | 44 | 41 | |
Provision for income taxes, as reported | $ 292 | $ 150 | $ 397 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of the total gross unrecognized tax benefits | |||
Balance, January 1 | $ 221 | $ 231 | $ 146 |
Additions based on tax positions related to current year | 20 | 23 | 14 |
Acquisitions | 0 | 8 | 54 |
(Reductions) additions for tax positions of prior years | (8) | 0 | 9 |
Reductions for lapse in statute of limitations | (14) | (36) | (5) |
Reductions for closure of tax audits and settlements | (21) | 0 | 0 |
Translation adjustment | (14) | (5) | 13 |
Balance, December 31 | $ 184 | $ 221 | $ 231 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss and capital loss carryforwards | $ 607 | $ 634 |
Interest limitation carryforwards | 156 | 123 |
Research and development capitalization | 146 | 91 |
Pension and other postretirement benefits | 45 | 41 |
Employee compensation | 46 | 44 |
Warranty | 31 | 31 |
State tax credits | 29 | 28 |
Unrecognized tax benefits | 24 | 32 |
Unrealized loss on equity securities | 8 | 0 |
Foreign tax credits | 7 | 8 |
Other comprehensive loss | 0 | 39 |
Other | 167 | 167 |
Total deferred tax assets | 1,266 | 1,238 |
Valuation allowance | (591) | (551) |
Net deferred tax asset | 675 | 687 |
Deferred tax liabilities: | ||
Goodwill and intangible assets | (267) | (274) |
Unremitted foreign earnings | (141) | (146) |
Fixed assets | (121) | (126) |
Other comprehensive income | (14) | 0 |
Unrealized gain on equity securities | 0 | (5) |
Other | (87) | (88) |
Total deferred tax liabilities | (630) | (639) |
Net deferred taxes | $ 45 | $ 48 |
RECEIVABLES, NET- Details of Re
RECEIVABLES, NET- Details of Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||||
Customers | $ 2,823 | $ 2,522 | ||
Indirect taxes | 319 | 240 | ||
Other | 199 | 149 | ||
Gross receivables | 3,341 | 2,911 | ||
Allowance for credit losses | (18) | (13) | $ (11) | $ (6) |
Total receivables, net | $ 3,323 | $ 2,898 |
RECEIVABLES, NET- Allowance for
RECEIVABLES, NET- Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance, January 1 | $ (13) | $ (11) | $ (6) |
Provision | (6) | (3) | (11) |
Write-offs | 0 | 0 | 7 |
Translation adjustment and other | 1 | 1 | (1) |
Ending balance, December 31 | $ (18) | $ (13) | $ (11) |
RECEIVABLES, NET - Narrative (D
RECEIVABLES, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Receivables [Abstract] | |||
Sale of receivables | $ 41 | $ 142 | $ 156 |
Expenses related to sale of receivables | $ 1 | $ 5 | $ 3 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $ 1,203 | $ 1,057 |
Work-in-progress | 176 | 175 |
Finished goods | 333 | 327 |
FIFO inventories | 1,712 | 1,559 |
LIFO reserve | (25) | (25) |
Inventories, net | $ 1,687 | $ 1,534 |
OTHER CURRENT AND NON-CURRENT_4
OTHER CURRENT AND NON-CURRENT ASSETS (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Prepayments and other current assets: | ||
Prepaid tooling | $ 82 | $ 81 |
Prepaid taxes | 40 | 64 |
Customer incentive payments (Note 3) | 34 | 36 |
Derivative instruments | 18 | 13 |
Contract assets (Note 3) | 16 | 17 |
Prepaid insurance | 11 | 9 |
Prepaid engineering | 9 | 27 |
Other | 59 | 74 |
Total prepayments and other current assets | 269 | 321 |
Investments and long-term receivables: | ||
Investment in debt securities | 455 | 0 |
Investment in equity affiliates | 279 | 298 |
Long-term receivables | 87 | 102 |
Investment in equity securities | 75 | 130 |
Total investments and long-term receivables | 896 | 530 |
Other non-current assets: | ||
Deferred income taxes (Note 7) | 239 | 254 |
Operating leases | 199 | 185 |
Customer incentive payments (Note 3) | 99 | 137 |
Derivative instruments | 68 | 8 |
Other | 63 | 99 |
Total other non-current assets | $ 668 | $ 683 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Finance lease assets | $ 15 | $ 13 |
Total property, plant and equipment, gross | 7,982 | 7,795 |
Less: accumulated depreciation | 3,904 | 3,713 |
Property, plant and equipment, net, excluding tooling | 4,078 | 4,082 |
Tooling, net of amortization | 287 | 313 |
Property, plant and equipment, net | 4,365 | 4,395 |
Land, land use rights and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 1,440 | 1,504 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 5,917 | 5,807 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 610 | $ 471 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Interest costs capitalized | $ 18 | $ 12 | $ 8 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the carrying amount of goodwill | |||
Gross goodwill balance, January 1 | $ 3,781 | $ 3,129 | |
Accumulated impairment losses, January 1 | (502) | $ (502) | |
Goodwill, Beginning Balance | 3,279 | 2,627 | |
Acquisitions | 258 | 707 | |
Measurement period adjustments | (20) | 41 | |
Disposition | (12) | ||
Other, primarily translation adjustment | (120) | (84) | |
Goodwill, Ending Balance | 3,397 | 3,279 | |
Air Management | |||
Changes in the carrying amount of goodwill | |||
Gross goodwill balance, January 1 | 1,466 | 1,472 | |
Accumulated impairment losses, January 1 | (502) | (502) | |
Goodwill, Beginning Balance | 964 | 970 | |
Acquisitions | 126 | 0 | |
Measurement period adjustments | 0 | (1) | |
Disposition | 0 | ||
Other, primarily translation adjustment | (26) | (5) | |
Goodwill, Ending Balance | 1,064 | 964 | |
e-Propulsion & Drivetrain | |||
Changes in the carrying amount of goodwill | |||
Gross goodwill balance, January 1 | 1,890 | 1,244 | |
Accumulated impairment losses, January 1 | 0 | 0 | |
Goodwill, Beginning Balance | 1,890 | 1,244 | |
Acquisitions | 132 | 707 | |
Measurement period adjustments | (20) | 26 | |
Disposition | (12) | ||
Other, primarily translation adjustment | (88) | (75) | |
Goodwill, Ending Balance | 1,914 | 1,890 | |
Aftermarket | |||
Changes in the carrying amount of goodwill | |||
Gross goodwill balance, January 1 | 380 | 368 | |
Accumulated impairment losses, January 1 | 0 | 0 | |
Goodwill, Beginning Balance | 380 | 368 | |
Acquisitions | 0 | 0 | |
Measurement period adjustments | 0 | 16 | |
Disposition | 0 | ||
Other, primarily translation adjustment | (6) | (4) | |
Goodwill, Ending Balance | 374 | 380 | |
Fuel Systems | |||
Changes in the carrying amount of goodwill | |||
Gross goodwill balance, January 1 | 45 | 45 | |
Accumulated impairment losses, January 1 | 0 | $ 0 | |
Goodwill, Beginning Balance | 45 | 45 | |
Acquisitions | 0 | 0 | |
Measurement period adjustments | 0 | 0 | |
Disposition | 0 | ||
Other, primarily translation adjustment | 0 | 0 | |
Goodwill, Ending Balance | $ 45 | $ 45 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-Lived Intangible Assets, Gross | $ 1,403 | $ 1,334 | |
Amortized intangible assets, accumulated amortization | 498 | 422 | $ 356 |
Amortized intangible assets, net | 905 | 912 | |
Intangible assets, gross (excluding goodwill) | 1,549 | 1,513 | 1,452 |
Other intangible assets, net | 1,051 | 1,091 | |
Amortized intangible assets, future amortization expense [Abstract] | |||
Intangible asset amortization | 97 | 88 | 89 |
Asset impairments | 30 | 14 | $ 17 |
Future amortization expense - 2022 | 95 | ||
Future amortization expense - 2023 | 95 | ||
Future amortization expense - 2024 | 94 | ||
Future amortization expense - 2025 | 86 | ||
Future amortization expense - 2026 | 80 | ||
Future amortization expense - Thereafter | 455 | ||
Patented and unpatented technology | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-Lived Intangible Assets, Gross | 492 | 443 | |
Amortized intangible assets, accumulated amortization | 141 | 105 | |
Amortized intangible assets, net | 351 | 338 | |
Customer relationships | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-Lived Intangible Assets, Gross | 901 | 877 | |
Amortized intangible assets, accumulated amortization | 351 | 310 | |
Amortized intangible assets, net | 550 | 567 | |
Miscellaneous | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-Lived Intangible Assets, Gross | 10 | 14 | |
Amortized intangible assets, accumulated amortization | 6 | 7 | |
Amortized intangible assets, net | 4 | 7 | |
Unamortized trade names | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Indefinite-Lived Trade Names | 146 | 179 | |
Amortized intangible assets, future amortization expense [Abstract] | |||
Asset impairments | $ 30 | ||
e-Propulsion & Drivetrain | |||
Amortized intangible assets, future amortization expense [Abstract] | |||
Asset impairments | $ 38 | ||
Minimum | |||
Amortized intangible assets, future amortization expense [Abstract] | |||
Goodwill impairment test, weighted average cost of capital discount rate for future cash flow (as a percent) | 11% | ||
Estimated fair values of goodwill exceeded their carrying values (as a percent) | 25% | ||
Minimum | Patented and unpatented technology | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Estimated useful lives (years) | 5 years | ||
Minimum | Customer relationships | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Estimated useful lives (years) | 7 years | ||
Minimum | Miscellaneous | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Estimated useful lives (years) | 2 years | ||
Maximum | |||
Amortized intangible assets, future amortization expense [Abstract] | |||
Goodwill impairment test, weighted average cost of capital discount rate for future cash flow (as a percent) | 14.50% | ||
Estimated fair values of goodwill exceeded their carrying values (as a percent) | 153% | ||
Maximum | Patented and unpatented technology | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Estimated useful lives (years) | 15 years | ||
Maximum | Customer relationships | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Estimated useful lives (years) | 15 years | ||
Maximum | Miscellaneous | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Estimated useful lives (years) | 5 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES - Rollforward of Intangible assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Gross carrying amounts | |||
Beginning balance, January 1 | $ 1,513 | $ 1,452 | |
Acquisitions | 132 | 130 | |
Impairment | (41) | (14) | |
Amortization | 0 | 0 | |
Translation adjustment | (55) | (55) | |
Ending balance, December 31 | 1,549 | 1,513 | $ 1,452 |
Accumulated amortization | |||
Beginning balance, January 1 | 422 | 356 | |
Acquisitions | 0 | 0 | |
Impairment | (3) | 0 | |
Amortization | 97 | 88 | 89 |
Translation adjustment | (18) | (22) | |
Ending balance, December 31 | 498 | 422 | 356 |
Asset impairments | $ 30 | $ 14 | $ 17 |
PRODUCT WARRANTY (Details)
PRODUCT WARRANTY (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning balance, January 1 | $ 236 | $ 253 |
Acquisitions/dispositions | 0 | 4 |
Provisions for current period sales | 103 | 83 |
Adjustments of prior estimates | 14 | 142 |
Payments | (96) | (240) |
Other, primarily translation adjustment | (12) | (6) |
Ending balance, December 31 | 245 | 236 |
Product Warranty Accrual, Balance Sheet Classification [Abstract] | ||
Other current liabilities | 142 | 128 |
Other non-current liabilities | 103 | 108 |
Total product warranty liability | 245 | 236 |
Loss contingency accrual | $ 130 | |
Loss contingency accrual, payment | $ 124 |
NOTES PAYABLE AND DEBT - Debt O
NOTES PAYABLE AND DEBT - Debt Outstanding (Details) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 04, 2021 EUR (€) | May 19, 2021 EUR (€) | Oct. 01, 2020 USD ($) | Jun. 19, 2020 USD ($) |
Long-term debt | ||||||
Total long-term debt | $ 4,170,000,000 | $ 4,265,000,000 | ||||
Less: current portion | 4,000,000 | 4,000,000 | ||||
Long-term debt, net of current portion | 4,166,000,000 | 4,261,000,000 | ||||
Senior Notes | ||||||
Long-term debt | ||||||
Debt instrument face value | $ 800,000,000 | $ 1,100,000,000 | ||||
Short-term borrowings | ||||||
Short-term debt | ||||||
Short-term borrowings | 58,000,000 | 62,000,000 | ||||
Senior Notes Due November 2022 | Senior Notes | ||||||
Long-term debt | ||||||
Debt instrument stated interest rate | 1.80% | |||||
Debt instrument face value | € | € 500,000,000 | |||||
3.375% Senior notes due 03/15/25 ($500 million par value) | Senior Notes | ||||||
Long-term debt | ||||||
Long-term Debt | $ 499,000,000 | 498,000,000 | ||||
Debt instrument stated interest rate | 3.375% | |||||
Debt instrument face value | $ 500,000,000 | |||||
5.000% Senior notes due 10/01/25 ($800 million par value)1 | Senior Notes | ||||||
Long-term debt | ||||||
Long-term Debt | $ 866,000,000 | 889,000,000 | ||||
Debt instrument stated interest rate | 5% | |||||
Debt instrument face value | $ 800,000,000 | |||||
2.650% Senior notes due 07/01/27 ($1,100 million par value) | Senior Notes | ||||||
Long-term debt | ||||||
Long-term Debt | 1,092,000,000 | 1,092,000,000 | ||||
Debt instrument stated interest rate | 2.65% | |||||
7.125% Senior notes due 02/15/29 ($121 million par value) | Senior Notes | ||||||
Long-term debt | ||||||
Long-term Debt | $ 120,000,000 | 119,000,000 | ||||
Debt instrument stated interest rate | 7.125% | |||||
Debt instrument face value | $ 121,000,000 | |||||
1.000% Senior notes due 05/19/31 (€1,000 million par value) | Senior Notes | ||||||
Long-term debt | ||||||
Long-term Debt | 1,051,000,000 | 1,117,000,000 | ||||
Debt instrument stated interest rate | 1% | 1% | ||||
Debt instrument face value | € | € 1,000,000,000 | € 1,000,000,000 | ||||
4.375% Senior notes due 03/15/45 ($500 million par value) | Senior Notes | ||||||
Long-term debt | ||||||
Long-term Debt | $ 495,000,000 | 494,000,000 | ||||
Debt instrument stated interest rate | 4.375% | |||||
Debt instrument face value | $ 500,000,000 | |||||
Term loan facilities, finance leases and other | Term Loan | ||||||
Long-term debt | ||||||
Long-term Debt | $ 47,000,000 | $ 56,000,000 |
NOTES PAYABLE AND DEBT - Narrat
NOTES PAYABLE AND DEBT - Narrative (Details) | 12 Months Ended | ||||||||
Jun. 18, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 04, 2021 EUR (€) | May 19, 2021 EUR (€) | Oct. 01, 2020 USD ($) | Jun. 19, 2020 USD ($) | Mar. 13, 2020 USD ($) | |
Line of Credit Facility [Line Items] | |||||||||
Short-term, weighted average interest rate on borrowings outstanding | 0.90% | 1% | |||||||
Debt, weighted average interest rate | 2.50% | 2.50% | |||||||
Loss on debt extinguishment | $ 0 | $ (20,000,000) | $ 0 | ||||||
Maximum line of credit potential additional increase | 2,000,000,000 | ||||||||
Estimated fair value of senior unsecured notes | 3,553,000,000 | 4,421,000,000 | |||||||
Debt, difference between fair value and carrying value | (570,000,000) | 212,000,000 | |||||||
Outstanding letters of credit | 38,000,000 | 35,000,000 | |||||||
Maturity Period Feb 2029 | U.S. Dollar | Cross-currency swaps | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Cash proceeds | 16,000,000 | ||||||||
Senior Notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument face value | $ 800,000,000 | $ 1,100,000,000 | |||||||
Short-term borrowings | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Short-term borrowings | 58,000,000 | 62,000,000 | |||||||
Senior Notes Due November 2022 | Senior Notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument face value | € | € 500,000,000 | ||||||||
Debt instrument stated interest rate | 1.80% | ||||||||
Loss on debt extinguishment | $ 20,000,000 | ||||||||
1.000% Senior notes due 05/19/31 (€1,000 million par value) | Senior Notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument face value | € | € 1,000,000,000 | € 1,000,000,000 | |||||||
Debt instrument stated interest rate | 1% | 1% | |||||||
Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Multi-currency revolving credit agreement, maximum borrowing capacity | $ 2,000,000,000 | ||||||||
Maximum line of credit potential additional increase | $ 1,000,000,000 | ||||||||
Long-term line of credit | 0 | 0 | |||||||
Commercial Paper | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Multi-currency revolving credit agreement, current borrowing capacity | 2,000,000,000 | ||||||||
Short-term, Unsecured Commercial Paper Notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term line of credit | $ 0 | $ 0 |
NOTES PAYABLE AND DEBT - Consol
NOTES PAYABLE AND DEBT - Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 78 | $ 105 | $ 73 |
Interest income | (26) | (12) | (12) |
Interest expense, net | $ 52 | $ 93 | $ 61 |
NOTES PAYABLE AND DEBT - Annual
NOTES PAYABLE AND DEBT - Annual Principal Payments (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 62 |
2024 | 7 |
2025 | 1,307 |
2026 | 7 |
2027 | 1,106 |
After 2027 | 1,707 |
Total payments | 4,196 |
Add: unamortized premiums, net of discount | 32 |
Total | $ 4,228 |
OTHER CURRENT AND NON-CURRENT_5
OTHER CURRENT AND NON-CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Other current liabilities: | ||
Payroll and employee related | $ 398 | $ 330 |
Customer related | 202 | 220 |
Product warranties | 142 | 128 |
Income taxes payable | 142 | 105 |
Indirect taxes | 125 | 106 |
Accrued freight | 44 | 46 |
Operating leases | 42 | 43 |
Deferred engineering | 39 | 44 |
Employee termination benefits | 37 | 85 |
Supplier related | 23 | 18 |
Interest | 22 | 23 |
Dividends payable | 21 | 18 |
Other non-income taxes | 19 | 22 |
Insurance | 19 | 19 |
Earn-out liability | 16 | 0 |
Contract liabilities | 16 | 21 |
Legal and professional fees | 15 | 8 |
Retirement related | 13 | 16 |
Mandatorily redeemable noncontrolling interest liability | 0 | 58 |
Other | 155 | 146 |
Total other current liabilities | 1,490 | 1,456 |
Other non-current liabilities: | ||
Other income tax liabilities | 242 | 274 |
Deferred income taxes | 194 | 206 |
Operating Lease | 166 | 152 |
Product warranties | 103 | 108 |
Deferred income | 66 | 68 |
Employee termination benefits | 22 | 41 |
Other | 68 | 115 |
Total other non-current liabilities | $ 861 | $ 964 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Nov. 16, 2022 | Dec. 31, 2021 |
Assets, Fair Value Disclosure [Abstract] | |||
Debt securities | $ 500 | ||
Liabilities, Fair Value Disclosure [Abstract] | |||
Current earn-out liability | $ 16 | $ 0 | |
Valuation, Market Approach | Fair Value, Recurring | |||
Assets, Fair Value Disclosure [Abstract] | |||
Debt securities | 455 | ||
Investment in equity securities | 29 | 87 | |
Foreign currency contracts | 18 | 13 | |
Net investment hedge contracts | 68 | 8 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Foreign currency contracts | 11 | 8 | |
Net investment hedge contracts | 1 | 54 | |
Valuation, Market Approach | Fair Value, Recurring | Quoted prices in active markets for identical items (Level 1) | |||
Assets, Fair Value Disclosure [Abstract] | |||
Debt securities | 0 | ||
Investment in equity securities | 0 | 70 | |
Foreign currency contracts | 0 | 0 | |
Net investment hedge contracts | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Foreign currency contracts | 0 | 0 | |
Net investment hedge contracts | 0 | 0 | |
Valuation, Market Approach | Fair Value, Recurring | Significant other observable inputs (Level 2) | |||
Assets, Fair Value Disclosure [Abstract] | |||
Debt securities | 455 | ||
Investment in equity securities | 0 | 0 | |
Foreign currency contracts | 18 | 13 | |
Net investment hedge contracts | 68 | 8 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Foreign currency contracts | 11 | 8 | |
Net investment hedge contracts | 1 | 54 | |
Valuation, Market Approach | Fair Value, Recurring | Significant unobservable inputs (Level 3) | |||
Assets, Fair Value Disclosure [Abstract] | |||
Debt securities | 0 | ||
Investment in equity securities | 0 | 0 | |
Foreign currency contracts | 0 | 0 | |
Net investment hedge contracts | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Foreign currency contracts | 0 | 0 | |
Net investment hedge contracts | 0 | 0 | |
Valuation, Market Approach | Fair Value, Recurring | Assets measured at NAV | |||
Assets, Fair Value Disclosure [Abstract] | |||
Debt securities | 0 | ||
Investment in equity securities | 29 | 17 | |
Foreign currency contracts | 0 | 0 | |
Net investment hedge contracts | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Foreign currency contracts | 0 | 0 | |
Net investment hedge contracts | 0 | ||
Valuation, Income Approach | Fair Value, Recurring | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 11 | 35 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Current earn-out liability | 21 | ||
Non-current earn-out liability | 10 | ||
Valuation, Income Approach | Fair Value, Recurring | Long Term Receivables | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 13 | ||
Valuation, Income Approach | Fair Value, Recurring | Quoted prices in active markets for identical items (Level 1) | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Current earn-out liability | 0 | ||
Non-current earn-out liability | 0 | ||
Valuation, Income Approach | Fair Value, Recurring | Quoted prices in active markets for identical items (Level 1) | Long Term Receivables | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 0 | ||
Valuation, Income Approach | Fair Value, Recurring | Significant other observable inputs (Level 2) | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 2 | 17 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Current earn-out liability | 0 | ||
Non-current earn-out liability | 0 | ||
Valuation, Income Approach | Fair Value, Recurring | Significant other observable inputs (Level 2) | Long Term Receivables | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 13 | ||
Valuation, Income Approach | Fair Value, Recurring | Significant unobservable inputs (Level 3) | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 9 | 18 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Current earn-out liability | 21 | ||
Non-current earn-out liability | 10 | ||
Valuation, Income Approach | Fair Value, Recurring | Significant unobservable inputs (Level 3) | Long Term Receivables | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 0 | ||
Valuation, Income Approach | Fair Value, Recurring | Assets measured at NAV | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | 0 | ||
Liabilities, Fair Value Disclosure [Abstract] | |||
Current earn-out liability | 0 | ||
Non-current earn-out liability | 0 | ||
Valuation, Income Approach | Fair Value, Recurring | Assets measured at NAV | Long Term Receivables | |||
Assets, Fair Value Disclosure [Abstract] | |||
Long-term receivables | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Defin
FAIR VALUE MEASUREMENTS - Defined Benefit Plan Assets (Details) - Fair Value, Recurring £ in Millions, $ in Millions | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 GBP (£) |
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | $ 129 | $ 177 | |
United States | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 3 | 1 | |
United States | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 126 | 176 | |
United States | Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 89 | 129 | |
United States | Fixed income securities | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 89 | 129 | |
United States | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 17 | 28 | |
United States | Equity securities | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 17 | 28 | |
United States | Alternative credit fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 20 | 19 | |
United States | Alternative credit fund | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 20 | 19 | |
United States | Cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 3 | 1 | |
United States | Cash | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Fixed income securities | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Fixed income securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Fixed income securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Equity securities | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Equity securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Equity securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Alternative credit fund | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Alternative credit fund | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Alternative credit fund | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Cash | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 3 | 1 | |
United States | Valuation, Market Approach | Cash | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
United States | Valuation, Market Approach | Cash | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 1,156 | 2,049 | |
Non-U.S. | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 314 | 941 | |
Non-U.S. | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 20 | 18 | |
Non-U.S. | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 115 | 235 | |
Non-U.S. | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 707 | 855 | |
Non-U.S. | Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 525 | 710 | |
Non-U.S. | Fixed income securities | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 471 | 594 | |
Non-U.S. | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 142 | 412 | |
Non-U.S. | Equity securities | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 29 | 49 | |
Non-U.S. | Cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 147 | 338 | |
Non-U.S. | Cash | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 69 | 108 | |
Non-U.S. | Insurance contract | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Real estate and other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 273 | 481 | |
Non-U.S. | Real estate and other | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 207 | 212 | |
Non-U.S. | Valuation, Market Approach | Fixed income securities | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 54 | 116 | |
Non-U.S. | Valuation, Market Approach | Fixed income securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Fixed income securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Equity securities | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 113 | 363 | |
Non-U.S. | Valuation, Market Approach | Equity securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Equity securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Cash | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 147 | 338 | £ 122 |
Non-U.S. | Valuation, Market Approach | Cash | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Cash | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Insurance contract | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Insurance contract | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 0 | |
Non-U.S. | Valuation, Market Approach | Insurance contract | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 69 | 108 | |
Non-U.S. | Valuation, Market Approach | Real estate and other | Quoted prices in active markets for identical items (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 0 | 124 | |
Non-U.S. | Valuation, Market Approach | Real estate and other | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | 20 | 18 | |
Non-U.S. | Valuation, Market Approach | Real estate and other | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, amount | $ 46 | $ 127 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Level 3 Defined Benefit Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Insurance contract | ||
Change in plan assets: | ||
Fair value, beginning balance | $ 108 | $ 113 |
Purchases, sales and settlements | 0 | 0 |
Realized gains | 0 | |
Benefits paid | (5) | (4) |
Unrealized (losses) gains on assets still held at the reporting date | (20) | 1 |
Translation adjustment | (14) | (2) |
Fair value, ending balance | 69 | 108 |
Real estate trust fund | ||
Change in plan assets: | ||
Fair value, beginning balance | 127 | 86 |
Purchases, sales and settlements | (93) | 36 |
Realized gains | 3 | |
Benefits paid | 0 | 0 |
Unrealized (losses) gains on assets still held at the reporting date | 25 | 7 |
Translation adjustment | (16) | (2) |
Fair value, ending balance | $ 46 | $ 127 |
FINANCIAL INSTRUMENTS - Foreign
FINANCIAL INSTRUMENTS - Foreign Currency Derivative Contract (Details) € in Millions, ₩ in Millions, ฿ in Millions, ¥ in Millions, £ in Millions, zł in Millions, $ in Millions, $ in Millions, $ in Millions | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 PLN (zł) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 KRW (₩) | Dec. 31, 2022 MXN ($) | Dec. 31, 2022 SGD ($) | Dec. 31, 2022 THB (฿) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2021 GBP (£) | Dec. 31, 2021 PLN (zł) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2021 KRW (₩) | Dec. 31, 2021 MXN ($) | Dec. 31, 2021 SGD ($) | Dec. 31, 2021 THB (฿) |
Brazilian Real | Foreign currency | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Derivative, notional amount | $ 14 | $ 23 | ||||||||||||||||
British Pound | Foreign currency | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Derivative, notional amount | € | € 10 | € 42 | ||||||||||||||||
Chinese Renminbi | Foreign currency | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Derivative, notional amount | 276 | 42 | £ 23 | ¥ 1,402 | 185 | 26 | £ 26 | ¥ 0 | ||||||||||
Euro | Foreign currency | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Derivative, notional amount | 139 | 63 | zł 489 | 86 | 6 | zł 394 | ||||||||||||
U.S. Dollar | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Derivative, notional amount | $ 10 | $ 10 | ||||||||||||||||
U.S. Dollar | Foreign currency | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Derivative, notional amount | € 45 | £ 17 | ₩ 51,786 | $ 3,465 | $ 0 | ฿ 1,790 | € 28 | £ 13 | ₩ 49,919 | $ 2,619 | $ 27 | ฿ 1,720 |
FINANCIAL INSTRUMENTS - Cross-C
FINANCIAL INSTRUMENTS - Cross-Currency Swap Contract (Details) € in Millions, ¥ in Millions, ¥ in Millions, $ in Millions | 12 Months Ended | ||||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 JPY (¥) | May 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2021 JPY (¥) | |
U.S. Dollar | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | $ 10 | $ 10 | |||||||
Cross-currency swaps | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | $ 100 | ||||||||
Cross-currency swaps | U.S. Dollar | Maturity Period July 2027 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | 1,100 | 1,100 | |||||||
Cross-currency swaps | U.S. Dollar | Maturity Period March 2025 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | 500 | 500 | |||||||
Cross-currency swaps | U.S. Dollar | Maturity Period Feb 2023 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | 0 | 100 | |||||||
Cross-currency swaps | U.S. Dollar | Maturity Period Feb 2029 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | 100 | $ 100 | $ 0 | ||||||
Cash proceeds | $ 16 | ||||||||
Cross-currency swaps | Euro | Maturity Period July 2027 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | € | € 976 | € 976 | |||||||
Cross-currency swaps | Euro | Maturity Period March 2025 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | € | € 450 | € 450 | |||||||
Cross-currency swaps | Euro | Maturity Period Feb 2029 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | ¥ | ¥ 12,724 | ¥ 0 | |||||||
Cross-currency swaps | Japanese yen | Maturity Period Feb 2023 | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | ¥ | ¥ 0 | ¥ 10,978 |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2021 USD ($) | Jun. 04, 2021 EUR (€) | May 19, 2021 EUR (€) | Oct. 01, 2020 USD ($) | Jun. 19, 2020 USD ($) | |
Derivative [Line Items] | |||||
Derivative, Loss, Statement of Income or Comprehensive Income [Extensible Enumeration] | Hedge instruments | ||||
Derivative, loss on derivative | $ | $ 50,000,000 | ||||
Senior Notes | |||||
Derivative [Line Items] | |||||
Debt instrument face value | $ | $ 800,000,000 | $ 1,100,000,000 | |||
Senior Notes Due November 2022 | Senior Notes | |||||
Derivative [Line Items] | |||||
Debt instrument face value | € | € 500,000,000 | ||||
Debt instrument stated interest rate | 1.80% | ||||
1.000% Senior notes due 05/19/31 (€1,000 million par value) | Senior Notes | |||||
Derivative [Line Items] | |||||
Debt instrument face value | € | € 1,000,000,000 | € 1,000,000,000 | |||
Debt instrument stated interest rate | 1% | 1% |
FINANCIAL INSTRUMENTS - Balance
FINANCIAL INSTRUMENTS - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Designated as Hedging Instrument | Foreign currency | Prepayments and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 15 | $ 7 |
Designated as Hedging Instrument | Foreign currency | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Designated as Hedging Instrument | Foreign currency | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 9 | 8 |
Designated as Hedging Instrument | Foreign currency | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 1 | 0 |
Designated as Hedging Instrument | Cross-currency swaps | Other non-current assets | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 68 | 8 |
Designated as Hedging Instrument | Cross-currency swaps | Other non-current liabilities | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 1 | 54 |
Not Designated as Hedging Instrument | Foreign currency | Prepayments and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 3 | 6 |
Not Designated as Hedging Instrument | Foreign currency | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 1 | $ 0 |
FINANCIAL INSTRUMENTS - AOCI (D
FINANCIAL INSTRUMENTS - AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | $ 196 | $ 10 |
Gain (loss) expected to be reclassified to income in one year or less | 0 | |
Foreign currency | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | (4) | (10) |
Gain (loss) expected to be reclassified to income in one year or less | 0 | |
Cross-currency swaps | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | 67 | (46) |
Gain (loss) expected to be reclassified to income in one year or less | 0 | |
Foreign currency-denominated debt | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive income (loss), cumulative changes in net gain (loss) from hedges, before tax | 133 | $ 66 |
Gain (loss) expected to be reclassified to income in one year or less | $ 0 |
FINANCIAL INSTRUMENTS - Income
FINANCIAL INSTRUMENTS - Income Statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivatives, Fair Value [Line Items] | |||
Net sales | $ 15,801 | $ 14,838 | $ 10,165 |
Cost of sales | 12,700 | 11,983 | 8,255 |
Selling, general and administrative expenses | 1,610 | 1,460 | 951 |
Other comprehensive income | (325) | 100 | 76 |
Gain (loss) on cash flow hedging relationships: | |||
Gain (loss) recognized in other comprehensive income (loss) | 4 | (1) | |
Gain (loss) reclassified from AOCI to income | $ 0 | 0 | |
Loss recognized in other comprehensive income | |||
Gain (loss) on cash flow hedging relationships: | |||
Gain (loss) recognized in other comprehensive income (loss) | (4) | ||
Cash Flow Hedging | Foreign currency | Gain (loss) reclassified from AOCI to income | |||
Derivatives, Fair Value [Line Items] | |||
Net sales | 1 | 0 | |
Cost of sales | (4) | 1 | |
Selling, general and administrative expenses | $ (1) | $ (2) |
FINANCIAL INSTRUMENTS - Other C
FINANCIAL INSTRUMENTS - Other Comprehensive Income (Loss) (Details) - Net Investment Hedging - Other comprehensive income (loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Foreign currency | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains and (losses) on derivative instruments | $ 6 | $ (9) | $ (2) |
Cross-currency swaps | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains and (losses) on derivative instruments | 129 | 115 | (155) |
Foreign currency-denominated debt | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains and (losses) on derivative instruments | $ 67 | $ 84 | $ (51) |
FINANCIAL INSTRUMENTS - Derivat
FINANCIAL INSTRUMENTS - Derivative Instruments Gains (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net Investment Hedging | Cross-currency swaps | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), after Adjustments and Tax, Parent | $ 26 | $ 22 | $ 18 |
FINANCIAL INSTRUMENTS - Deriv_2
FINANCIAL INSTRUMENTS - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative [Line Items] | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses |
Foreign currency | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Gain (loss) on derivatives not designated as hedges | $ 22 | $ 13 | $ 3 |
RETIREMENT BENEFIT PLANS - Narr
RETIREMENT BENEFIT PLANS - Narrative (Details) £ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 GBP (£) | Dec. 31, 2020 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution expense | $ 59 | $ 58 | $ 38 | |
Contribution amount | $ 137 | £ 100 | ||
Payments for contractual obligation | $ 7 | |||
Health care cost trend rate assumed for next fiscal year | 6.50% | |||
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 4.75% | |||
Minimum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Future employer contributions | $ 20 | |||
Maximum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Future employer contributions | $ 30 |
RETIREMENT BENEFIT PLANS - Expe
RETIREMENT BENEFIT PLANS - Expense for Defined Contribution and Defined Benefit Pension Plans and Other Post Employment Defined Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Defined contribution expense | $ 59 | $ 58 | $ 38 |
Defined benefit pension (income) expense | (10) | (19) | 15 |
Other postretirement employee benefit income | (1) | (1) | (1) |
Total | $ 48 | $ 38 | $ 52 |
RETIREMENT BENEFIT PLANS - Bene
RETIREMENT BENEFIT PLANS - Benefit Obligation and Plan Assets (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Change in plan assets: | |||
Funded status | $ (163) | $ (216) | |
Amounts in the Consolidated Balance Sheets consist of: | |||
Non-current liabilities | $ (223) | (290) | |
Amounts in accumulated other comprehensive loss consist of: | |||
Weighted average discount rate | 0.0297 | ||
Other postretirement employee benefits | |||
Change in projected benefit obligation: | |||
Projected benefit obligation, January 1 | $ 54 | 65 | |
Service cost | 0 | 0 | $ 0 |
Interest cost | 1 | 1 | 2 |
Plan amendments | 0 | 0 | |
Settlement and curtailment | 0 | 0 | |
Actuarial gain | (13) | (6) | |
Currency translation | 0 | 0 | |
Acquisition | 0 | 0 | |
Benefits paid | (5) | (6) | |
Projected benefit obligation, December 31 | 37 | 54 | 65 |
Change in plan assets: | |||
Funded status | (37) | (54) | |
Amounts in the Consolidated Balance Sheets consist of: | |||
Non-current assets | 0 | 0 | |
Current liabilities | (6) | (7) | |
Non-current liabilities | (31) | (47) | |
Net amount | (37) | (54) | |
Amounts in accumulated other comprehensive loss consist of: | |||
Net actuarial loss | (3) | 10 | |
Net prior service (credit) cost | (11) | (13) | |
Net amount | (14) | (3) | |
United States | |||
Change in plan assets: | |||
Funded status | (6) | (6) | |
United States | Pension benefits | |||
Change in projected benefit obligation: | |||
Projected benefit obligation, January 1 | 183 | 202 | |
Service cost | 0 | 0 | 0 |
Interest cost | 4 | 3 | 5 |
Plan amendments | 0 | 0 | |
Settlement and curtailment | (6) | (4) | |
Actuarial gain | (33) | (7) | |
Currency translation | 0 | 0 | |
Acquisition | 0 | 0 | |
Benefits paid | (12) | (11) | |
Projected benefit obligation, December 31 | 136 | 183 | 202 |
Change in plan assets: | |||
Fair value, beginning balance | 177 | 187 | |
Actual return on plan assets | (33) | 5 | |
Employer contribution | 2 | 0 | |
Settlements | (5) | (4) | |
Currency translation | 0 | 0 | |
Acquisition | 0 | 0 | |
Benefits paid | (12) | (11) | |
Fair value, ending balance | 129 | 177 | 187 |
Funded status | (7) | (6) | |
Amounts in the Consolidated Balance Sheets consist of: | |||
Non-current assets | 0 | 0 | |
Current liabilities | (1) | (2) | |
Non-current liabilities | (6) | (4) | |
Net amount | (7) | (6) | |
Amounts in accumulated other comprehensive loss consist of: | |||
Net actuarial loss | 80 | 84 | |
Net prior service (credit) cost | (3) | (3) | |
Net amount | 77 | 81 | |
Total accumulated benefit obligation for all plans | 136 | 183 | |
Non-U.S. | Pension benefits | |||
Change in projected benefit obligation: | |||
Projected benefit obligation, January 1 | 2,227 | 2,527 | |
Service cost | 20 | 25 | 21 |
Interest cost | 37 | 30 | 16 |
Plan amendments | (11) | 1 | |
Settlement and curtailment | (3) | (13) | |
Actuarial gain | (685) | (208) | |
Currency translation | (200) | (59) | |
Acquisition | 8 | 0 | |
Benefits paid | (71) | (76) | |
Projected benefit obligation, December 31 | 1,322 | 2,227 | 2,527 |
Change in plan assets: | |||
Fair value, beginning balance | 2,049 | 2,041 | |
Actual return on plan assets | (655) | 110 | |
Employer contribution | 20 | 24 | |
Settlements | (4) | (11) | |
Currency translation | (189) | (39) | |
Acquisition | 6 | 0 | |
Benefits paid | (71) | (76) | |
Fair value, ending balance | 1,156 | 2,049 | $ 2,041 |
Funded status | (166) | (178) | |
Amounts in the Consolidated Balance Sheets consist of: | |||
Non-current assets | 26 | 68 | |
Current liabilities | (6) | (7) | |
Non-current liabilities | (186) | (239) | |
Net amount | (166) | (178) | |
Amounts in accumulated other comprehensive loss consist of: | |||
Net actuarial loss | 104 | 74 | |
Net prior service (credit) cost | (9) | 2 | |
Net amount | 95 | 76 | |
Total accumulated benefit obligation for all plans | $ 1,279 | $ 2,183 |
RETIREMENT BENEFIT PLANS - Fund
RETIREMENT BENEFIT PLANS - Funded Status of Plans with ABO in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accumulated benefit obligations | ||
Accumulated benefit obligation | $ (1,185) | $ (658) |
Plan assets | 1,022 | 442 |
Funded status of plan | (163) | (216) |
Projected benefit obligations | ||
Projected benefit obligation | (1,223) | (731) |
Plan assets | 1,026 | 478 |
Total pension deficiency | (197) | (253) |
United States | ||
Accumulated benefit obligations | ||
Funded status of plan | (6) | (6) |
Projected benefit obligations | ||
Total pension deficiency | (6) | (6) |
United Kingdom | ||
Accumulated benefit obligations | ||
Funded status of plan | (38) | (11) |
Projected benefit obligations | ||
Total pension deficiency | (38) | (11) |
Germany | ||
Accumulated benefit obligations | ||
Funded status of plan | (34) | (89) |
Projected benefit obligations | ||
Total pension deficiency | (35) | (95) |
Other foreign | ||
Accumulated benefit obligations | ||
Funded status of plan | (85) | (110) |
Projected benefit obligations | ||
Total pension deficiency | $ (118) | $ (141) |
RETIREMENT BENEFIT PLANS - Asse
RETIREMENT BENEFIT PLANS - Asset Allocations (Details) £ in Millions, $ in Millions | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 GBP (£) | Dec. 31, 2020 USD ($) |
United States | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | $ 129 | $ 177 | ||
United States | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 3 | 1 | ||
United States | Equity securities | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 17 | 28 | ||
United States | Equity securities | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | Valuation, Market Approach | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 0 | 0 | ||
United States | Cash | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 3 | 1 | ||
United States | Cash | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | Valuation, Market Approach | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | $ 3 | $ 1 | ||
United States | Pension benefits | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 100% | 100% | 100% | |
Defined benefit plan, plan assets, amount | $ 129 | $ 177 | $ 187 | |
United States | Pension benefits | Real estate and other | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 18% | 12% | 12% | |
United States | Pension benefits | Fixed income securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 69% | 72% | 72% | |
United States | Pension benefits | Equity securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 13% | 16% | 16% | |
Non-U.S. | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | $ 1,156 | $ 2,049 | ||
Non-U.S. | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 314 | 941 | ||
Non-U.S. | Real estate and other | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 273 | 481 | ||
Non-U.S. | Real estate and other | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | Valuation, Market Approach | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 0 | 124 | ||
Non-U.S. | Insurance contract | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 69 | 108 | ||
Non-U.S. | Insurance contract | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | Valuation, Market Approach | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 0 | 0 | ||
Non-U.S. | Equity securities | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 142 | 412 | ||
Non-U.S. | Equity securities | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | Valuation, Market Approach | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 113 | 363 | ||
Non-U.S. | Cash | Fair Value, Recurring | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | 147 | 338 | ||
Non-U.S. | Cash | Quoted prices in active markets for identical items (Level 1) | Fair Value, Recurring | Valuation, Market Approach | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Defined benefit plan, plan assets, amount | $ 147 | $ 338 | £ 122 | |
Non-U.S. | Pension benefits | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 100% | 100% | 100% | |
Defined benefit plan, plan assets, amount | $ 1,156 | $ 2,049 | $ 2,041 | |
Non-U.S. | Pension benefits | Fixed income securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 46% | 35% | 35% | |
Non-U.S. | Pension benefits | Insurance contract | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 42% | 45% | 45% | |
Non-U.S. | Pension benefits | Equity securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Actual allocation, percentage | 12% | 20% | 20% | |
Minimum | United States | Pension benefits | Real estate and other | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 7% | |||
Minimum | United States | Pension benefits | Fixed income securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 70% | |||
Minimum | United States | Pension benefits | Equity securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 9% | |||
Minimum | Non-U.S. | Pension benefits | Fixed income securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 54% | |||
Minimum | Non-U.S. | Pension benefits | Insurance contract | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 22% | |||
Minimum | Non-U.S. | Pension benefits | Equity securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 9% | |||
Maximum | United States | Pension benefits | Real estate and other | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 17% | |||
Maximum | United States | Pension benefits | Fixed income securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 80% | |||
Maximum | United States | Pension benefits | Equity securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 19% | |||
Maximum | Non-U.S. | Pension benefits | Fixed income securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 64% | |||
Maximum | Non-U.S. | Pension benefits | Insurance contract | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 32% | |||
Maximum | Non-U.S. | Pension benefits | Equity securities | ||||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | ||||
Plan assets, target allocation, percentage | 19% |
RETIREMENT BENEFIT PLANS - Net
RETIREMENT BENEFIT PLANS - Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other postretirement employee benefits | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | $ 0 | $ 0 | $ 0 |
Interest cost | 1 | 1 | 2 |
Expected return on plan assets | 0 | 0 | 0 |
Settlements, curtailments and other | 0 | 0 | 0 |
Amortization of unrecognized prior service (credit) cost | (2) | (3) | (4) |
Amortization of unrecognized loss | 0 | 1 | 1 |
Net periodic cost (income) | (1) | (1) | (1) |
United States | Pension benefits | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 0 | 0 | 0 |
Interest cost | 4 | 3 | 5 |
Expected return on plan assets | (8) | (10) | (10) |
Settlements, curtailments and other | 3 | 2 | 0 |
Amortization of unrecognized prior service (credit) cost | (1) | (1) | 0 |
Amortization of unrecognized loss | 3 | 4 | 3 |
Net periodic cost (income) | 1 | (2) | (2) |
Non-U.S. | Pension benefits | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 20 | 25 | 21 |
Interest cost | 37 | 30 | 16 |
Expected return on plan assets | (75) | (83) | (36) |
Settlements, curtailments and other | 0 | (2) | 5 |
Amortization of unrecognized prior service (credit) cost | 0 | 0 | 0 |
Amortization of unrecognized loss | 7 | 13 | 11 |
Net periodic cost (income) | $ (11) | $ (17) | $ 17 |
RETIREMENT BENEFIT PLANS - Assu
RETIREMENT BENEFIT PLANS - Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other postretirement employee benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 2.46% | 1.93% | 2.95% |
Effective interest rate on benefit obligation | 1.84% | 1.21% | 2.50% |
United States | Pension benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 5.46% | 2.73% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 2.73% | 2.31% | 3.17% |
Effective interest rate on benefit obligation | 2.18% | 1.62% | 2.73% |
Expected long-term rate of return on assets | 4.75% | 5.75% | 6% |
United States | Other postretirement employee benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 5.41% | 2.46% | |
Non-U.S. | Pension benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 4.94% | 1.97% | |
Rate of compensation increase | 3.76% | 3.21% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 1.97% | 1.44% | 1.69% |
Effective interest rate on benefit obligation | 1.83% | 1.24% | 2.19% |
Expected long-term rate of return on assets | 4.10% | 4.10% | 4.75% |
Average rate of increase in compensation | 3.21% | 3.23% | 3.10% |
United Kingdom | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 4.94% | 1.91% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 1.91% | 1.39% | 1.82% |
Effective interest rate on benefit obligation | 4.12% | 4% | 3.97% |
RETIREMENT BENEFIT PLANS - Esti
RETIREMENT BENEFIT PLANS - Estimated Future Payments (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Other postretirement employee benefits | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2023 | $ 6 |
2024 | 5 |
2025 | 5 |
2026 | 4 |
2027 | 4 |
2028-2032 | 13 |
United States | Pension benefits | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2023 | 14 |
2024 | 14 |
2025 | 13 |
2026 | 13 |
2027 | 13 |
2028-2032 | 52 |
Non-U.S. | Pension benefits | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2023 | 73 |
2024 | 71 |
2025 | 71 |
2026 | 74 |
2027 | 78 |
2028-2032 | $ 441 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 2,200,000 | ||
Restricted stock unrecognized compensation, period | 2 years | ||
Award vesting percentage | 200% | ||
Unrecognized compensation expense | $ 8 | ||
Delphi Technologies PLC | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares registered for future issuance (in shares) | 2,200,000 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 1,060,000 | 1,175,000 | 810,000 |
Restricted stock unrecognized compensation, amount | $ 46 | ||
Restricted stock unrecognized compensation, period | 1 year 2 months 12 days | ||
Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restriction periods (in years) | 2 years | ||
Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restriction periods (in years) | 3 years | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock unrecognized compensation, amount | $ 10 | ||
Restricted stock unrecognized compensation, period | 1 year 8 months 12 days | ||
Share-based payment award, percentage of outstanding stock maximum | 200% | ||
Other Performance-Based | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 415,000 | 404,000 | 253,000 |
Share-based payment award, percentage of outstanding stock maximum | 200% | ||
Period for recognition (in years) | 3 years | ||
Adjusted Earnings Per Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period for recognition (in years) | 3 years | ||
eProducts Revenue Mix | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock unrecognized compensation, amount | $ 17 | ||
Restricted stock unrecognized compensation, period | 1 year 6 months | ||
Share-based payment award, percentage of outstanding stock maximum | 200% | ||
Cumulative Free Cash Flow | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock unrecognized compensation, amount | $ 13 | ||
Restricted stock unrecognized compensation, period | 1 year 8 months 12 days | ||
Share-based payment award, percentage of outstanding stock maximum | 200% | ||
Period for recognition (in years) | 3 years | ||
Management | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 1,000,000 | ||
Director | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 100,000 | ||
2018 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 7,000,000 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Compensation Expense (Details) - Restricted Stock - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock compensation expense | $ 37 | $ 37 | $ 31 |
Restricted stock compensation expense, net of tax | $ 28 | $ 28 | $ 23 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock and Restricted Stock Unit, Activity (Details) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares | |
Weighted average grant date fair value | |||
Vested weighted average exercise price (in dollar per share) | $ 28.55 | ||
Debt instrument, convertible, conversion ratio | 0.4307 | ||
Restricted Stock | |||
Number of shares (in thousands) | |||
Nonvested ending Balance (in shares) | shares | 2,363 | 2,140 | 1,664 |
Granted (in shares) | shares | 1,060 | 1,175 | 810 |
Vested (in shares) | shares | (862) | (845) | (600) |
Forfeited (in shares) | shares | (188) | (107) | (80) |
Converted (in shares) | shares | 346 | ||
Nonvested ending Balance (in shares) | shares | 2,373 | 2,363 | 2,140 |
Weighted average grant date fair value | |||
Nonvested weighted average exercise price beginning balance (in dollar per share) | $ 40.24 | $ 39.58 | $ 44.26 |
Granted the weighted average exercise price (in dollar per share) | 44.32 | 43.66 | 33.94 |
Vested weighted average exercise price (in dollar per share) | 38.68 | 43.34 | 44.85 |
Forfeited weighted average exercise price (in dollar per share) | 42.09 | 39.86 | 40.20 |
Converted weighted average exercise price (in dollar per share) | 39.54 | ||
Nonvested weighted average exercise price beginning balance (in dollar per share) | $ 42.47 | $ 40.24 | $ 39.58 |
STOCK-BASED COMPENSATION - Expe
STOCK-BASED COMPENSATION - Expense for Performance Based Shares Units (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share plan expense | $ 38 | $ 24 | $ 10 |
Performance share plan, shares issued in period | 305 | 148 | 505 |
Total Stockholder Return | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share plan expense | $ 7 | $ 6 | $ 5 |
Performance share plan, shares issued in period | 0 | 0 | 165 |
Other Performance-Based | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share plan expense | $ 31 | $ 18 | $ 5 |
Performance share plan, shares issued in period | 305 | 148 | 340 |
STOCK-BASED COMPENSATION - Perf
STOCK-BASED COMPENSATION - Performance Share Plans (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted average grant date fair value | |||
Vested weighted average exercise price (in dollar per share) | $ 28.55 | ||
Total Stockholder Return | |||
Number of shares (in thousands) | |||
Nonvested ending Balance (in shares) | 259 | 271 | 240 |
Granted (in shares) | 138 | 135 | 137 |
Vested (in shares) | (127) | (143) | (89) |
Forfeited (in shares) | (20) | (4) | (17) |
Nonvested ending Balance (in shares) | 250 | 259 | 271 |
Weighted average grant date fair value | |||
Nonvested weighted average exercise price beginning balance (in dollar per share) | $ 56.90 | $ 45.20 | $ 64.61 |
Granted the weighted average exercise price (in dollar per share) | 66.96 | 70.39 | 28.55 |
Vested weighted average exercise price (in dollar per share) | 47.93 | 69.75 | |
Forfeited weighted average exercise price (in dollar per share) | 59.87 | 37.28 | 57.36 |
Nonvested weighted average exercise price beginning balance (in dollar per share) | $ 76.68 | $ 56.90 | $ 45.20 |
Other Performance-Based | |||
Number of shares (in thousands) | |||
Nonvested ending Balance (in shares) | 640 | 385 | 240 |
Granted (in shares) | 415 | 404 | 253 |
Vested (in shares) | (234) | (143) | (89) |
Forfeited (in shares) | (56) | (6) | (19) |
Nonvested ending Balance (in shares) | 765 | 640 | 385 |
Weighted average grant date fair value | |||
Nonvested weighted average exercise price beginning balance (in dollar per share) | $ 42.14 | $ 38.66 | $ 48.52 |
Granted the weighted average exercise price (in dollar per share) | 44.33 | 45.30 | 34.15 |
Vested weighted average exercise price (in dollar per share) | 34.73 | 41.92 | 51.29 |
Forfeited weighted average exercise price (in dollar per share) | 43.35 | 36.79 | 44.19 |
Nonvested weighted average exercise price beginning balance (in dollar per share) | $ 45.51 | $ 42.14 | $ 38.66 |
Period for recognition (in years) | 3 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 7,262 | ||
Comprehensive (loss) income before reclassifications | (297) | $ 192 | $ 1 |
Income taxes associated with comprehensive (loss) income before reclassifications | (33) | (107) | 61 |
Reclassification from accumulated other comprehensive (loss) income | 7 | 18 | 17 |
Income taxes reclassified into net earnings | (292) | (150) | (397) |
Ending balance | 7,508 | 7,262 | |
Gain (loss) reclassified from AOCI to income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Income taxes reclassified into net earnings | (2) | (3) | (3) |
Accumulated other comprehensive income (loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (551) | (651) | (727) |
Ending balance | (876) | (551) | (651) |
Foreign currency translation adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (423) | (321) | (497) |
Comprehensive (loss) income before reclassifications | (287) | (59) | 133 |
Income taxes associated with comprehensive (loss) income before reclassifications | (40) | (43) | 43 |
Reclassification from accumulated other comprehensive (loss) income | 0 | 0 | 0 |
Ending balance | (750) | (423) | (321) |
Foreign currency translation adjustments | Gain (loss) reclassified from AOCI to income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Income taxes reclassified into net earnings | 0 | 0 | 0 |
Hedge instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Comprehensive (loss) income before reclassifications | 4 | (4) | (1) |
Income taxes associated with comprehensive (loss) income before reclassifications | 0 | 0 | 0 |
Reclassification from accumulated other comprehensive (loss) income | 0 | 4 | 1 |
Ending balance | 4 | 0 | 0 |
Hedge instruments | Gain (loss) reclassified from AOCI to income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Income taxes reclassified into net earnings | 0 | 0 | 0 |
Defined benefit postretirement plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (128) | (330) | (230) |
Comprehensive (loss) income before reclassifications | (14) | 255 | (131) |
Income taxes associated with comprehensive (loss) income before reclassifications | 7 | (64) | 18 |
Reclassification from accumulated other comprehensive (loss) income | 7 | 14 | 16 |
Ending balance | (130) | (128) | (330) |
Defined benefit postretirement plans | Gain (loss) reclassified from AOCI to income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Income taxes reclassified into net earnings | $ (2) | $ (3) | $ (3) |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) site | Dec. 31, 2021 USD ($) site | |
Commitments and Contingencies Disclosure [Abstract] | ||
Waste disposal sites | 26 | 26 |
Accrual for environmental loss contingencies | $ | $ 7 | $ 7 |
Number of sites with accrual | 8 | |
Completed or near completed clean up activities | 18 | 18 |
LEASES AND COMMITMENTS - Operat
LEASES AND COMMITMENTS - Operating Lease Assets and Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Operating leases | $ 199 | $ 185 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Finance leases | $ 10 | $ 11 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Total lease assets | $ 209 | $ 196 |
Current | ||
Operating leases | $ 42 | $ 43 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | Other Liabilities, Current |
Finance leases | $ 3 | $ 2 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Notes payable and other short-term debt | Notes payable and other short-term debt |
Non-current | ||
Operating leases noncurrent | $ 166 | $ 152 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | Other non-current liabilities |
Finance leases | $ 9 | $ 11 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt | Long-term debt |
Total lease liabilities | $ 220 | $ 208 |
LEASES AND COMMITMENTS - Narrat
LEASES AND COMMITMENTS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Operating leases | $ 39 | $ 27 | |
Operating lease costs | 50 | 57 | $ 29 |
Operating cash flows for operating leases | 50 | 54 | 29 |
Short-term lease costs | $ 25 | $ 21 | $ 21 |
LEASES AND COMMITMENTS - Lease
LEASES AND COMMITMENTS - Lease Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating leases | $ 39 | $ 27 |
Finance leases | 2 | 1 |
Total lease obligations | $ 41 | $ 28 |
LEASES AND COMMITMENTS - Maturi
LEASES AND COMMITMENTS - Maturity of Lease Liabilities (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Operating leases | |
2023 | $ 47 |
2024 | 40 |
2025 | 37 |
2026 | 32 |
2027 | 26 |
After 2027 | 44 |
Total (undiscounted) lease payments | 226 |
Less: Imputed interest | 18 |
Total lease liabilities | 208 |
Finance leases | |
2023 | 2 |
2024 | 2 |
2025 | 2 |
2026 | 2 |
2027 | 2 |
After 2027 | 3 |
Total (undiscounted) lease payments | 13 |
Less: Imputed interest | 1 |
Present value of lease liabilities | $ 12 |
LEASES AND COMMITMENTS - Terms
LEASES AND COMMITMENTS - Terms and Discounts Under Operating Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted average remaining lease term (years) | ||
Operating leases | 6 years | 7 years |
Finance leases | 6 years | 7 years |
Weighted average discount rate | ||
Operating leases | 2.20% | 2% |
Finance leases | 3.20% | 3% |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | Oct. 01, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Performance shares excluded from diluted earnings per share (in shares) | 0.8 | 0.8 | 0.2 | |
Diluted shares from earnings (in shares) | 9 | |||
Delphi Technologies | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Issued acquisition (in shares) | 37 |
EARNINGS PER SHARE - Earnings P
EARNINGS PER SHARE - Earnings Per Share Reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic earnings per share: | |||
Net earnings attributable to BorgWarner Inc. | $ 944 | $ 537 | $ 500 |
Weighted average shares of common stock outstanding (in shares) | 235.5 | 238.1 | 213 |
Basic earnings per share of common stock (in dollar per share) | $ 4.01 | $ 2.25 | $ 2.35 |
Diluted earnings per share: | |||
Net earnings attributable to BorgWarner Inc. | $ 944 | $ 537 | $ 500 |
Basic (in shares) | 235.5 | 238.1 | 213 |
Effect of stock-based compensation (in shares) | 1.3 | 1.4 | 1 |
Weighted average shares of common stock outstanding including dilutive shares (in shares) | 236.8 | 239.5 | 214 |
Diluted earnings per share of common stock (in dollar per share) | $ 3.99 | $ 2.24 | $ 2.34 |
Antidilutive securities excluded from computation of earnings per share ( in shares) | 0 | 0 | 0 |
REPORTING SEGMENTS AND RELATE_3
REPORTING SEGMENTS AND RELATED INFORMATION - Disaggregation (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments (in segments) | segment | 4 | ||
Net sales | $ 15,801 | $ 14,838 | $ 10,165 |
Year-end assets | 16,994 | 16,575 | 16,029 |
Depreciation/ amortization | 721 | 772 | 568 |
Long-lived asset expenditures | 723 | 666 | 441 |
Asset impairments | 30 | 14 | 17 |
Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 15,801 | 14,838 | 10,165 |
Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | 0 |
e-Propulsion & Drivetrain | |||
Segment Reporting Information [Line Items] | |||
Asset impairments | 38 | ||
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 15,801 | 14,838 | 10,165 |
Year-end assets | 15,300 | 14,906 | 13,954 |
Depreciation/ amortization | 686 | 736 | 536 |
Long-lived asset expenditures | 722 | 632 | 425 |
Operating Segments | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 15,801 | 14,838 | 10,165 |
Operating Segments | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | 0 |
Operating Segments | Air Management | |||
Segment Reporting Information [Line Items] | |||
Net sales | 7,129 | 6,820 | 5,564 |
Year-end assets | 5,376 | 5,274 | 5,385 |
Depreciation/ amortization | 245 | 268 | 235 |
Long-lived asset expenditures | 192 | 239 | 202 |
Operating Segments | Air Management | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 7,034 | 6,720 | 5,496 |
Operating Segments | Air Management | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 95 | 100 | 68 |
Operating Segments | e-Propulsion & Drivetrain | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,625 | 5,086 | 3,695 |
Year-end assets | 6,416 | 6,122 | 5,017 |
Depreciation/ amortization | 278 | 278 | 242 |
Long-lived asset expenditures | 415 | 262 | 185 |
Operating Segments | e-Propulsion & Drivetrain | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,440 | 4,918 | 3,648 |
Operating Segments | e-Propulsion & Drivetrain | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 185 | 168 | 47 |
Operating Segments | Fuel Systems | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,314 | 2,237 | 593 |
Year-end assets | 2,227 | 2,306 | 2,375 |
Depreciation/ amortization | 140 | 166 | 38 |
Long-lived asset expenditures | 99 | 125 | 29 |
Operating Segments | Fuel Systems | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,052 | 1,996 | 537 |
Operating Segments | Fuel Systems | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 262 | 241 | 56 |
Operating Segments | Aftermarket | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,285 | 1,212 | 488 |
Year-end assets | 1,281 | 1,204 | 1,177 |
Depreciation/ amortization | 23 | 24 | 21 |
Long-lived asset expenditures | 16 | 6 | 9 |
Operating Segments | Aftermarket | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,275 | 1,204 | 484 |
Operating Segments | Aftermarket | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 10 | 8 | 4 |
Inter-segment eliminations | |||
Segment Reporting Information [Line Items] | |||
Net sales | (552) | (517) | (175) |
Year-end assets | 0 | 0 | 0 |
Depreciation/ amortization | 0 | 0 | 0 |
Long-lived asset expenditures | 0 | 0 | 0 |
Inter-segment eliminations | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | 0 |
Inter-segment eliminations | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | (552) | (517) | (175) |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | 0 |
Year-end assets | 1,694 | 1,669 | 2,075 |
Depreciation/ amortization | 35 | 36 | 32 |
Long-lived asset expenditures | 1 | 34 | 16 |
Corporate | Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | 0 |
Corporate | Inter-segment | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 0 | $ 0 | $ 0 |
REPORTING SEGMENTS AND RELATE_4
REPORTING SEGMENTS AND RELATED INFORMATION - Adjusted Operating Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Adjusted Operating Income | $ 1,892 | $ 1,921 | $ 1,233 |
Corporate, including stock-based compensation | 289 | 302 | 192 |
Intangible asset amortization expense | 97 | 88 | 89 |
Restructuring expense | 59 | 163 | 203 |
Merger, acquisition and divestiture expense, net | 40 | 50 | 96 |
Asset impairments and lease modifications | 30 | 17 | 17 |
(Gain) loss on sales of businesses | (13) | 29 | 0 |
Other non-comparable items | 16 | (3) | (9) |
Customer warranty settlement | 0 | 124 | 0 |
Amortization of inventory fair value adjustment | 0 | 0 | 27 |
Equity in affiliates’ earnings, net of tax | (38) | (48) | (18) |
Unrealized loss (gain) on debt and equity securities | (73) | (362) | 382 |
Interest expense, net | 52 | 93 | 61 |
Other postretirement income | (31) | (45) | (7) |
Earnings before income taxes and noncontrolling interest | 1,318 | 789 | 964 |
Provision for income taxes | 292 | 150 | 397 |
Net earnings | 1,026 | 639 | 567 |
Net earnings attributable to the noncontrolling interest, net of tax | 82 | 102 | 67 |
Net earnings attributable to BorgWarner Inc. | 944 | 537 | 500 |
Air Management | |||
Segment Reporting Information [Line Items] | |||
Adjusted Operating Income | 1,068 | 1,064 | 762 |
e-Propulsion & Drivetrain | |||
Segment Reporting Information [Line Items] | |||
Adjusted Operating Income | 379 | 458 | 368 |
(Gain) loss on sales of businesses | 7 | ||
Fuel Systems | |||
Segment Reporting Information [Line Items] | |||
Adjusted Operating Income | 249 | 235 | 49 |
Aftermarket | |||
Segment Reporting Information [Line Items] | |||
Adjusted Operating Income | $ 196 | $ 164 | $ 54 |
REPORTING SEGMENTS AND RELATE_5
REPORTING SEGMENTS AND RELATED INFORMATION - Geographic Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 15,801 | $ 14,838 | $ 10,165 |
Long-lived assets | 4,365 | 4,395 | 4,591 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 3,054 | 2,490 | 2,023 |
Long-lived assets | 635 | 625 | 937 |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 5,354 | 5,205 | 3,559 |
Long-lived assets | 1,587 | 1,657 | 1,723 |
Germany | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,439 | 1,342 | 1,175 |
Long-lived assets | 355 | 405 | 338 |
Poland | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,086 | 1,121 | 696 |
Long-lived assets | 328 | 324 | 352 |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 837 | 821 | 276 |
Long-lived assets | 195 | 215 | 229 |
Other Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,992 | 1,921 | 1,412 |
Long-lived assets | 709 | 713 | 804 |
China | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 3,383 | 3,518 | 2,269 |
Long-lived assets | 1,045 | 1,042 | 1,055 |
Mexico | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,987 | 1,736 | 1,035 |
Long-lived assets | 653 | 623 | 367 |
South Korea | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,046 | 1,096 | 814 |
Long-lived assets | 220 | 256 | 301 |
Other foreign | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 977 | 793 | 465 |
Long-lived assets | $ 225 | $ 192 | $ 208 |
REPORTING SEGMENTS AND RELATE_6
REPORTING SEGMENTS AND RELATED INFORMATION - Major Customers & Products (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | |||
Minimum percentage in consolidated sales of countries by certain countries | 5% | ||
Revenue Benchmark | Geographic Concentration Risk | Outside U.S. | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 81% | ||
Revenue Benchmark | Turbochargers | Product Concentration Risk | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 20% | 19% | 24% |
Revenue Benchmark | Ford | Customer Concentration Risk | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 13% | 10% | 13% |
Revenue Benchmark | Volkswagen | Customer Concentration Risk | |||
Revenue from External Customer [Line Items] | |||
Percentage of net sales | 8% | 9% | 11% |
OPERATING CASH FLOWS AND OTHE_3
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |||
Net earnings | $ 1,026 | $ 639 | $ 567 |
Adjustments to reconcile net earnings to net cash flows from operations: | |||
Depreciation and tooling amortization | 624 | 684 | 479 |
Intangible asset amortization | 97 | 88 | 89 |
Restructuring expense, net of cash paid | 45 | 123 | 135 |
Stock-based compensation expense | 75 | 62 | 41 |
(Gain) loss on sales of businesses | (15) | 29 | 0 |
Loss on debt extinguishment | 0 | 20 | 0 |
Asset impairments | 30 | 14 | 17 |
Unrealized loss (gain) on debt and equity securities | 73 | 362 | (382) |
Deferred income tax (benefit) provision | (65) | (180) | 123 |
Gain on insurance recovery received for property damages | 0 | (5) | (9) |
Other non-cash adjustments | (31) | (31) | (13) |
Net earnings adjustments to reconcile to net cash flows from operations | 1,859 | 1,805 | 1,047 |
Retirement plan contributions | (26) | (30) | (182) |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments: | |||
Receivables | (564) | (59) | 27 |
Inventories | (215) | (268) | (28) |
Prepayments and other current assets | 28 | 11 | 23 |
Accounts payable and accrued expenses | 438 | (134) | 186 |
Prepaid taxes and income taxes payable | 63 | 8 | 35 |
Other assets and liabilities | (14) | (27) | 76 |
Net cash provided by operating activities | 1,569 | 1,306 | 1,184 |
Cash paid during the year for: | |||
Interest | 138 | 130 | 97 |
Income taxes, net of refunds | 319 | 342 | 205 |
Non-cash investing transactions: | |||
Period end accounts payable related to property, plant and equipment purchases | $ 241 | $ 142 | $ 182 |