BORGWARNER INC

Previous wording

In June 2023, the Company announced the next phase of its Charging Forward strategy, which focuses on profitably growing eProducts while maximizing the value of the Company’s Foundational products portfolio. Foundational products include all products utilized on internal combustion engines plus those same products and components that are also included in hybrid powertrains. As a result of executing its strategy, the Company expects that, by 2027, it will achieve over $10 billion in annual eProduct sales, deliver eProduct adjusted operating margin of approximately 7% and maintain its double-digit adjusted operating margin for its Foundational products portfolio. During the three months ended March 31, 2024 and 2023, the Company’s eProducts revenue was approximately $506 million and $415 million, respectively, or 14% and 12% of its total revenue, respectively.

Current wording

In June 2023, the Company announced the next phase of its Charging Forward strategy, which focuses on profitably growing eProducts while maximizing the value of the Company’s Foundational products portfolio. Foundational products include all products utilized on internal combustion engines plus those same products and components that are also included in hybrid powertrains. During the six months ended June 30, 2024 and 2023, the Company’s eProducts revenue was approximately $1,082 million and $922 million, respectively, or 15% and 13% of its total revenue, respectively.

Previous wording

On July 3, 2023, BorgWarner completed the previously announced spin-off (“Spin-Off”) of its Fuel Systems and Aftermarket segments in a transaction intended to qualify as tax free to the Company’s stockholders for U.S. federal income tax purposes, which was accomplished by the distribution of 100% of the outstanding common stock of PHINIA, Inc. (“PHINIA”) to holders of record of common stock of the Company on a pro-rata basis. Each holder of record of common stock of the Company received one share of PHINIA common stock for every five shares of common stock of the Company held on June 23, 2023, the record date for the distribution (“Distribution Date”). In lieu of fractional shares of PHINIA, stockholders of the Company received cash. PHINIA is an independent public company trading under the symbol “PHIN” on the New York Stock Exchange.

Current wording

On July 3, 2023, BorgWarner completed the previously announced spin-off (“Spin-Off”) of its Fuel Systems and Aftermarket segments in a transaction intended to qualify as tax free to the Company’s stockholders for U.S. federal income tax purposes, which was accomplished by the distribution of 100% of the outstanding common stock of PHINIA, Inc. (“PHINIA”) to holders of record of common stock of the Company on a pro-rata basis. Each holder of record of common stock of the Company received one share of PHINIA common stock for every five shares of common stock of the Company held on June 23, 2023, the record date for the distribution. In lieu of fractional shares of PHINIA, stockholders of the Company received cash. PHINIA is an independent public company trading under the symbol “PHIN” on the New York Stock Exchange.

Previous wording

On December 1, 2023, the Company completed its acquisition of the electric hybrid systems business segment of Eldor Corporation (“Eldor”), which is headquartered in Italy. The Company expects the acquisition to complement its existing ePropulsion product portfolio by enhancing the Company’s engineering capabilities in power electronics. The Company paid €72 million ($78 million) at closing and is obligated to remit up to €175 million ($191 million) of earn-out payments that could be paid over the two years following closing. The Company’s current estimates indicate that the minimum threshold for the earn-out target will not be achieved; thus, no amount of the potential earn-out payments has been included in the purchase consideration.

Current wording

On December 1, 2023, the Company completed its acquisition of the electric hybrid systems business segment of Eldor Corporation (“Eldor”), which is headquartered in Italy. The Company expects the acquisition to complement its existing ePropulsion product portfolio by enhancing the Company’s engineering capabilities in power electronics. The Company paid €72 million ($78 million) at closing and is obligated to remit up to €175 million ($191 million) of earn-out payments that could be paid over the two years following closing.

Previous wording

The Company expects global market production to be flat or to decrease modestly year over year in 2024. However, the Company expects net new business-related sales growth, due to the increased penetration of BorgWarner products, including eProducts, to drive a sales increase despite flat or decreased market production. As a result, the Company expects increased revenue in 2024, excluding the impact of foreign currencies. The Company expects the earnings benefit of this revenue growth to be partially offset by the negative earnings impact of the acquisition of Eldor.

Current wording

The Company expects global market production to decrease modestly year-over-year in 2024. However, the Company expects net new business-related sales growth, due to the increased penetration of BorgWarner products, including eProducts, to drive a modest sales increase despite the decreased market production. As a result, the Company expects increased revenue in 2024, excluding the impact of foreign currencies. The Company expects the earnings benefit of this revenue growth to be partially offset by the increased investments made in Research and Development (“R&D”).

Previous wording

Net sales for the three months ended March 31, 2024 totaled $3,595 million, an increase of $212 million, or 6%, compared to the three months ended March 31, 2023. The change in net sales for the three months ended March 31, 2024 was primarily driven by the following:

Current wording

Net sales for the three months ended June 30, 2024 totaled $3,603 million, a decrease of $68 million, or 2%, compared to the three months ended June 30, 2023. The change in net sales for the three months ended June 30, 2024 was primarily driven by the following:

Previous wording

Cost of sales and cost of sales as a percentage of net sales were $2,951 million and 82.1%, respectively, during the three months ended March 31, 2024, compared to $2,806 million and 82.9%, respectively, during the three months ended March 31, 2023. The change in cost of sales for the three months ended March 31, 2024 was primarily driven by the following:

Current wording

Cost of sales and cost of sales as a percentage of net sales were $2,918 million and 81.0%, respectively, during the three months ended June 30, 2024, compared to $2,991 million and 81.5%, respectively, during the three months ended June 30, 2023. The change in cost of sales for the three months ended June 30, 2024 was primarily driven by the following:

Previous wording

•Fluctuations in foreign currencies resulted in a year-over-year decrease in cost of sales of approximately $23 million primarily due to the weakening of the Chinese Renminbi and Korean Won, partially offset by the strengthening of the Euro, in each case relative to the U.S. Dollar.

Current wording

•Fluctuations in foreign currencies resulted in a year-over-year decrease in cost of sales of approximately $48 million primarily due to the weakening of the Chinese Renminbi, Korean Won, and Euro, in each case relative to the U.S. Dollar.

Previous wording

Gross profit and gross margin were $644 million and 17.9%, respectively, during the three months ended March 31, 2024, compared to $577 million and 17.1%, respectively, during the three months ended March 31, 2023. The increase in gross margin was primarily due to the factors discussed above.

Current wording

Gross profit and gross margin were $685 million and 19.0%, respectively, during the three months ended June 30, 2024, compared to $680 million and 18.5%, respectively, during the three months ended June 30, 2023. The increase in gross margin was primarily due to the factors discussed above.

Previous wording

SG&A for the three months ended March 31, 2024 was $329 million as compared to $299 million for the three months ended March 31, 2023. SG&A as a percentage of net sales was 9.2% and 8.8% for the three months ended March 31, 2024 and 2023, respectively. The change in SG&A was primarily attributable to:

Current wording

SG&A for the three months ended June 30, 2024 was $341 million as compared to $334 million for the three months ended June 30, 2023. SG&A as a percentage of net sales was 9.5% and 9.1% for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

•Research and Development (“R&D”) costs increased by $21 million. R&D costs, net of customer reimbursements, were 5.2% of net sales for the three months ended March 31, 2024, compared to 4.9% of net sales for the three months ended March 31, 2023. The increase in R&D costs, net of customer reimbursements, was primarily due to increasing net investment related to the Company’s eProduct portfolio.

Current wording

The change in SG&A was primarily attributable Research and Development (“R&D”) costs that increased by $6 million. R&D costs, net of customer reimbursements, were 5.2% of net sales for the three months ended June 30, 2024, compared to 5.0% of net sales for the three months ended June 30, 2023. The increase in R&D costs, net of customer reimbursements, was primarily due to increasing net investment related to the Company’s eProduct portfolio.

Previous wording

Restructuring expense was $19 million and $3 million for the three months ended March 31, 2024 and 2023, respectively, primarily related to employee termination benefits. Refer to Note 5 “Restructuring” to the Condensed Consolidated Financial Statements in Item 1 of this report for more information.

Current wording

Restructuring expense was $25 million and $9 million for the three months ended June 30, 2024 and 2023, respectively, primarily related to employee termination benefits. Refer to Note 5, “Restructuring,” to the Condensed Consolidated Financial Statements in Item 1 of this report for more information.

Previous wording

In 2023, the Company announced a $130 million to $150 million restructuring plan to address structural costs primarily in its Foundational products businesses. During the three months ended March 31, 2024 and 2023, the Company recorded $19 million and $3 million, respectively, of restructuring costs related to this plan. The resulting gross savings related to this plan are expected to be in the range of $80 million to $90 million annually by 2027 and are being utilized to sustain overall operating margin profile and cost competitiveness. Nearly all of the restructuring charges are expected to be cash expenditures, funded by cash on hand.

Current wording

In 2023, the Company announced a $130 million to $150 million restructuring plan to address structural costs primarily in its Foundational products businesses. During the three and six months ended June 30, 2024 and 2023, the Company recorded $15 million and $9 million, respectively, of restructuring costs related to this plan. The resulting gross savings related to this plan are expected to be in the range of at least $80 million to $90 million annually by 2027 and are being utilized to sustain overall operating margin profile and cost competitiveness. Nearly all of the restructuring charges are expected to be cash expenditures, funded by cash on hand.

Previous wording

Interest expense, net was $5 million and $10 million for the three months ended March 31, 2024 and 2023, respectively. This decrease was primarily due to the reduction in interest following a debt extinguishment completed in September 2023 and higher interest rates on cash and cash equivalents balances.

Current wording

Interest expense, net was $8 million and $12 million for the three months ended June 30, 2024 and 2023, respectively. This decrease was primarily due to the reduction in interest following a debt extinguishment completed in September 2023 and higher interest rates on cash and cash equivalents balances.

Previous wording

Provision for income taxes was $62 million for the three months ended March 31, 2024, resulting in an effective rate of 21%. This compared to $67 million, or an effective rate of 27%, for the three months ended March 31, 2023. During the three months ended March 31, 2024, a discrete tax benefit of $1 million was recorded related to various changes in filling positions for prior years. During the three months ended March 31, 2023, a discrete tax benefit of $13 million was recorded related to the resolution of tax audits, and a $10 million discrete tax expense was recorded for the impact of enacted tax law changes.

Current wording

(Benefit) provision for income taxes was a benefit of $31 million for the three months ended June 30, 2024, resulting in an effective rate of (10)%. This compared to a provision of $30 million, or an effective rate of 11%, for the three months ended June 30, 2023. During the three months ended June 30, 2024, the Company recorded a discrete tax benefit of $89 million related to a reduction in certain unrecognized tax benefits and accrued interest for matters where the statute of limitations lapsed. In addition, the Company recorded a discrete tax benefit of $4 million related to net changes to valuation allowances. During the three months ended June 30, 2023, the Company recorded a discrete tax benefit of approximately $29 million in relation to the Spin-Off and a $10 million discrete tax benefit relating to various immaterial tax adjustments.

Previous wording

•Favorable volume, mix and net new business increased sales approximately $233 million, or 7%. This increase was primarily driven by growth despite a decline in market production, which the Company believes reflects higher demand for its products. The weighted average market production as estimated by the Company was down approximately 1% from the three months ended March 31, 2023. Weighted average market production reflects light and commercial vehicle production as reported by IHS weighted for the Company’s geographic exposure, as estimated by the Company.

Current wording

•Favorable volume, mix and net new business increased sales approximately $221 million, or 3%. This increase was primarily driven by growth despite flat market production, which the Company believes reflects higher demand for its products. The weighted average market production as estimated by the Company, was flat from the six months ended June 30, 2023. Weighted average market production reflects light and commercial vehicle production as reported by IHS weighted for the Company’s geographic exposure, as estimated by the Company.

Previous wording

•Higher sales volume, mix and net new business increased cost of sales by approximately $166 million.

Current wording

•Higher sales volume, mix and net new business and purchasing savings increased cost of sales by approximately $123 million.

Previous wording

During the three months ended March 31, 2024 and 2023, the Company recorded merger and acquisition expense, net of $2 million and $8 million, respectively, primarily related to professional fees associated with specific acquisition initiatives.

Current wording

•Merger and acquisition expense of $5 million and $16 million, primarily related to professional fees associated with specific acquisition initiatives during the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Equity in affiliates’ earnings, net of tax was $5 million and $1 million for the three months ended March 31, 2024 and 2023, respectively. This line item is driven by the results of the Company’s unconsolidated joint ventures.

Current wording

Equity in affiliates’ earnings, net of tax was $17 million and $13 million for the six months ended June 30, 2024 and 2023, respectively. This line item is driven by the results of the Company’s unconsolidated joint ventures.

Previous wording

Unrealized loss on debt and equity securities was $2 million and $15 million for the three months ended March 31, 2024 and 2023, respectively. This line item reflects the net unrealized gains or losses recognized due to valuing the Company’s investments at fair value. The amount recorded during the three months ended March 31, 2023 was primarily related to losses recognized to adjust the Company’s investment in Wolfspeed Inc. (“Wolfspeed”) convertible debt securities to fair value. The Company sold its Wolfspeed convertible debt securities during the third and fourth quarters of 2023.

Current wording

Unrealized loss on equity and debt securities was $2 million and $69 million for the six months ended June 30, 2024 and 2023, respectively. This line item reflects the net unrealized gains or losses recognized due to valuing the Company’s investments at fair value. For the six months ended June 30, 2023, this primarily related to losses recognized to adjust the Company’s investment in Wolfspeed convertible debt securities to fair value. The Company sold its Wolfspeed convertible debt securities during the third and fourth quarters of 2023.

Previous wording

The Company’s earnings per diluted share were $0.93 and $0.72 for the three months ended March 31, 2024 and 2023, respectively. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for each of the periods then ended. The Company believes the following table is useful in highlighting non-comparable items that impacted its earnings per diluted share:

Current wording

The Company’s earnings per diluted share were $1.39 and $0.97 for the three months ended June 30, 2024 and 2023, respectively and $2.32 and $1.69 for the six months ended June 30, 2024 and 2023, respectively. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for each of the periods then ended. The Company believes the following table is useful in highlighting non-comparable items that impacted its earnings per diluted share:

Previous wording

Company’s reportable segments 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 (Loss) is most reflective of the operational profitability or loss of our reportable segments.

Current wording

Segment Adjusted Operating Income (Loss) is the measure of segment income or loss used by the Company. Segment Adjusted Operating Income (Loss) is comprised of operating income for the Company’s reportable segments 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 (Loss) is most reflective of the operational profitability or loss of our reportable segments.

Previous wording

The following tables presents net sales and Segment Adjusted Operating Income (Loss) for the Company’s reportable segments:

Current wording

The following tables present net sales and Segment Adjusted Operating Income (Loss) for the Company’s reportable segments:

Previous wording

The Air Management segment’s net sales increased $51 million, or 3%, and Segment Adjusted Operating Income increased $23 million from the three months ended March 31, 2023. Foreign currencies resulted in a year-over-year decrease in sales of approximately $9 million primarily due to the weakening of the Chinese Renminbi and Korean Won, partially offset by the strengthening of the Euro, in each case relative to the U.S. Dollar. Acquisitions contributed $5 million in additional sales during the three months ended March 31, 2024. The increase excluding these items was primarily due to approximately $55 million of volume, mix, and net new business driven by increased demand for turbochargers in North America and high voltage coolant heaters in China and Europe, as well as, non-contractual commercial negotiations and normal contractual customer commodity pass-through arrangements with the Company’s customers. Segment Adjusted Operating Margin was 15.2% for the three months ended March 31, 2024, compared to 14.4% during the three months ended March 31, 2023. The Segment Adjusted Operating Income increase was primarily due to conversion on higher sales and customer recoveries, partially offset by higher input costs due to R&D investments.

Current wording

The Air Management segment’s net sales decreased $53 million, or 3%, and Segment Adjusted Operating Income decreased $1 million from the three months ended June 30, 2023. Foreign currencies resulted in a year-over-year decrease in sales of approximately $33 million primarily due to the weakening of the Euro, Chinese Renminbi and Korean Won, in each case relative to the U.S. Dollar. The decrease excluding the impact of foreign currencies was primarily due to approximately $20 million of a reduction in volume, mix, and net new business driven by lower non-contractual commercial negotiations and normal contractual customer commodity pass-through arrangements with the Company’s customers. Segment Adjusted Operating Margin was 15.4% for the three months ended June 30, 2024, compared to 15.0% during the three months ended June 30, 2023. The Segment Adjusted Operating Income remained flat primarily due to lower customer recoveries, offset by savings related to purchasing and restructuring.

Previous wording

The Drivetrain & Battery Systems segment’s net sales increased $203 million, or 21%, and Segment Adjusted Operating Income increased $47 million from the three months ended March 31, 2023. Foreign currencies resulted in a year-over-year decrease in sales of approximately $13 million primarily due to the weakening of the Chinese Renminbi relative to the U.S. Dollar. The increase excluding the impact of foreign currencies was primarily due to approximately $216 million of volume, mix and net new business driven by increased demand for battery system products in Europe and drivetrain system products in China. Segment Adjusted Operating Margin was 13.6% for the three months ended March 31, 2024, compared to 11.6% during the three months ended March 31, 2023. The Segment Adjusted Operating Income increase was primarily due to conversion on higher sales.

Current wording

The Drivetrain & Battery Systems segment’s net sales increased $79 million, or 7%, and Segment Adjusted Operating Income increased $34 million from the three months ended June 30, 2023. Foreign currencies resulted in a year-over-year decrease in sales of approximately $20 million primarily due to the weakening of the Chinese Renminbi, Korean Won and Euro, in each case relative to the U.S. Dollar. The increase excluding the impact of foreign currencies was primarily due to approximately $99 million of volume, mix and net new business driven by increased demand for battery system products in Europe and North America and drivetrain system products in Asia. Segment Adjusted Operating Margin was 14.7% for the three months ended June 30, 2024, compared to 12.7% during the three months ended June 30, 2023. The Segment Adjusted Operating Income increase was primarily due to conversion on higher sales and purchasing savings.

Previous wording

TheePropulsion segment’s net sales decreased $51 million, or 10%, and Segment Adjusted Operating Loss increased $27 million from the three months ended March 31, 2023. Foreign currencies resulted in a year-over-year decrease in sales of approximately $10 million primarily due to the weakening of the Chinese Renminbi relative to the U.S. Dollar. Acquisitions contributed $6 million in additional sales during the three months ended March 31, 2024. The decrease excluding these items was primarily due to approximately $47 million of a reduction in volume, mix and net new business driven by decreased demand for the Company’s light vehicle eProducts in North America. Segment Adjusted Operating Margin was (14.2)% for the three months ended March 31, 2024, compared to (7.2)% during the three months ended March 31, 2023. The Segment Adjusted Operating Loss was primarily due to investments in R&D for eProducts. The Segment Adjusted Operating Loss increased due to lower sales, higher R&D investments and impacts related to the Eldor acquisition.

Current wording

TheePropulsion segment’s net sales decreased $102 million, or 18%, and Segment Adjusted Operating Loss increased $30 million from the three months ended June 30, 2023. Foreign currencies resulted in a year-over-year decrease in sales of approximately $9 million primarily due to the weakening of the Chinese Renminbi relative to the U.S. Dollar. Acquisitions contributed $6 million in additional sales during the three months ended June 30, 2024. The decrease excluding these items was primarily due to approximately $99 million of a reduction in volume, mix and net new business driven by decreased demand for the Company’s light vehicle eProducts in North America and China. Segment Adjusted Operating Margin was (10.6)% for the three months ended June 30, 2024, compared to (3.4)% during the three months ended June 30, 2023. The Segment Adjusted Operating Loss was primarily due to investments in R&D for eProducts. The Segment Adjusted Operating Loss increased due to lower sales, higher R&D investments and impacts related to the Eldor acquisition.

Previous wording

The Company maintains various liquidity sources, including cash and cash equivalents and the unused portion of its multi-currency revolving credit agreement. As of March 31, 2024, the Company had liquidity of $3,037 million, comprised of cash and cash equivalent balances of $1,037 million and an undrawn revolving credit facility of $2,000 million. The Company was in full compliance with its covenants under the revolving credit facility and had full access to its undrawn revolving credit facility. Given the Company’s strong liquidity position, management believes that it will have sufficient liquidity and will maintain compliance with all covenants through at least the next 12 months.

Current wording

The Company maintains various liquidity sources, including cash and cash equivalents and the unused portion of its multi-currency revolving credit agreement. As of June 30, 2024, the Company had liquidity of $3,288 million, comprised of cash, cash equivalent and restricted cash balances of $1,288 million and an undrawn revolving credit facility of $2,000 million. The Company was in full compliance with its covenants under the revolving credit facility and had full access to its undrawn revolving credit facility. Given the Company’s strong liquidity position, management believes that it will have sufficient liquidity and will maintain compliance with all covenants through at least the next 12 months.

Previous wording

As of March 31, 2024, cash balances of $625 million were held by the Company’s subsidiaries outside the United States. Cash and cash equivalents held by these subsidiaries are used to fund foreign operational activities and future investments, including acquisitions. The majority of cash held outside the United States is available for repatriation. The Company uses its U.S. liquidity primarily for various corporate purposes, including but not limited to debt service, share repurchases, dividend distributions, acquisitions and other corporate expenses.

Current wording

As of June 30, 2024, cash and cash equivalent balances of $744 million were held by the Company’s subsidiaries outside the United States. Cash and cash equivalents held by these subsidiaries are used to fund foreign operational activities and future investments, including acquisitions. The majority of cash held outside the United States is available for repatriation. The Company uses its U.S. liquidity primarily for various corporate purposes, including but not limited to debt service, share repurchases, dividend distributions, acquisitions and other corporate expenses.

Previous wording

On February 7, 2024 and April 24, 2024, the Company’s Board of Directors declared quarterly cash dividends of $0.11 per share of common stock, respectively. The dividend declared in the first quarter was paid on March 15, 2024, and the dividend declared in the second quarter will be paid on June 17, 2024.

Current wording

On February 7, 2024, April 24, 2024 and July 23, 2024, the Company’s Board of Directors declared quarterly cash dividends of $0.11 per share of common stock, respectively. The dividends declared in the first quarter and second quarter were paid on March 15, 2024 and June 17, 2024, respectively. The dividend declared in the third quarter will be paid on September 16, 2024.

Previous wording

Net cash used in operating activities was $118 million for the three months ended March 31, 2024 compared to net cash provided by operating activities of $59 million for the three months ended March 31, 2023. The decrease for the three months ended March 31, 2024 compared with the three months ended March 31, 2023 was primarily due to increased working capital investments and cash tax payments.

Current wording

Net cash provided by operating activities was $344 million for the six months ended June 30, 2024 compared to $289 million for the six months ended June 30, 2023. The increase for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 was primarily due to higher net earnings adjusted for non-cash charges and changes in working capital.

Previous wording

Net cash used in investing activities was $175 million during the first three months of 2024 compared to $244 million during the first three months of 2023. In 2023, the Company paid $19 million related to the acquisition of the electric vehicle solution, smart grid and smart energy businesses of Hubei Surpass Sun Electric. As a percentage of sales, capital expenditures were 5.3% and 7.1% for the three months ended March 31, 2024 and 2023, respectively. The year over year reduction in capital expenditures was primarily due to lower eProduct investments.

Current wording

Net cash used in investing activities was $313 million during the first six months of 2024 compared to $436 million during the first six months of 2023. In 2023, the Company acquired the electric vehicle solution, smart grid and smart energy businesses of Hubei Surpass Sun Electric. As a percentage of sales, capital expenditures were 4.9% and 6.2% for the six months ended June 30, 2024 and 2023, respectively. The year-over-year reduction in capital expenditures was primarily due to lower eProduct investments.

Previous wording

Net cash used in financing activities was $183 million during the first three months of 2024 compared to $90 million during the first three months of 2023. Net cash used in financing activities during the three months ended March 31, 2024 was primarily related to the $100 million of BorgWarner share repurchases, $25 million in dividends paid to the Company’s stockholders and $23 million in dividends paid to noncontrolling stockholders of the Company’s consolidated joint ventures.

Current wording

Net cash used in financing activities was $242 million during the first six months of 2024 compared to $208 million during the first six months of 2023. Net cash used in financing activities during the six months ended June 30, 2024 was primarily related to the $100 million of BorgWarner share repurchases, $50 million in dividends paid to the Company’s stockholders and $55 million in dividends paid to noncontrolling stockholders of the Company’s consolidated joint ventures.

Previous wording

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, governmental investigations and related proceedings, general liability and 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 believe that adverse outcomes in any of these commercial and legal claims, actions and complaints are reasonably likely to 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.

Current wording

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, governmental investigations and related proceedings, general liability and 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 does not believe that adverse outcomes in any of these commercial and legal claims, actions and complaints are reasonably likely to 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.