BorgWarner Enters Into Crystal Springs Settlement; Revises 2005 Expectations to a Range of $4.15 to $4.31 Per Share; Business Fundamentals Remain Strong

Jul 08, 2005, 01:00 ET from BorgWarner Inc.

    AUBURN HILLS, Mich., July 8 /PRNewswire-FirstCall/ -- BorgWarner Inc.
 (NYSE:   BWA) has entered into a settlement regarding approximately 90% of
 claims related to previously disclosed alleged environmental contamination
 from a Kuhlman Electric Corporation ("KEC") plant site in Crystal Springs,
 Mississippi.  The contamination predates BorgWarner's purchase of Kuhlman
 Corporation, the former parent company of KEC.  BorgWarner and other
 defendants will pay up to $39 million in three equal installments ending on
 January 2, 2006.
     "We are pleased to have the vast majority of this issue behind us and
 expect that the remainder can be resolved quickly and in a satisfactory
 manner," said Timothy Manganello, Chairman and CEO of BorgWarner.
     The company will incur an after-tax charge of approximately $29 million in
 the second quarter, or $0.50 per share, as a result of anticipated costs
 associated with settling all Crystal Springs-related claims.  BorgWarner is
 also vigorously pursuing recovery of the settlement amount from various
 insurance carriers and other third parties and will reflect those recoveries
 as income in future periods as they become resolved.
     As a result of the $0.50 per share after-tax charge, the company says it
 now expects 2005 earnings per share in a range of $4.15 to $4.31 which
 includes the ($0.50) per share second quarter charge related to the Crystal
 Springs settlement and $0.38 per share associated with divestitures, the
 release of tax accruals and net of the immediate write-off of the excess
 purchase price associated with Beru's in-process R&D reported in the first
 quarter.  Previous earnings guidance for 2005 was $4.65 to $4.81 per share.
 The company reconfirms its expectations for earnings per share in a range of
 $4.27 to $4.43 on its base business plus the anticipated contribution from
 Beru, excluding the aforementioned items.
     Auburn Hills, Michigan-based BorgWarner Inc. (NYSE:   BWA) is a product
 leader in highly engineered components and systems for vehicle powertrain
 applications worldwide.  The company operates manufacturing and technical
 facilities in 62 locations in 17 countries.  Customers include Ford,
 DaimlerChrysler, General Motors, VW/Audi, Toyota, Hyundai/Kia, Renault/Nissan,
 Honda, Caterpillar, Navistar International, Peugeot and BMW.  The Internet
 address for BorgWarner is: http://www.borgwarner.com .
     Statements contained in this news release may contain forward-looking
 statements as contemplated by the 1995 Private Securities Litigation Reform
 Act that are based on management's current expectations, estimates and
 projections.  Words such as "expects," "anticipates," "intends," "plans,"
 "believes," "estimates," variations of such words and similar expressions are
 intended to identify such forward-looking statements.  Forward-looking
 statements are subject to risks and uncertainties, many of which are difficult
 to predict and generally beyond the control of the Company, that could cause
 actual results to differ materially from those expressed, projected or implied
 in or by the forward-looking statements.  Such risks and uncertainties
 include:  fluctuations in domestic or foreign automotive production, the
 continued use of outside suppliers by original equipment manufacturers,
 fluctuations in demand for vehicles containing the Company's products, general
 economic conditions, as well as other risks detailed in the Company's filings
 with the Securities and Exchange Commission, including the Cautionary
 Statements filed as Exhibit 99.1 to the Form 10-K for the fiscal year ended
 December 31, 2004.  The Company does not undertake any obligation to update
 any forward-looking statement.
 
 

SOURCE BorgWarner Inc.
    AUBURN HILLS, Mich., July 8 /PRNewswire-FirstCall/ -- BorgWarner Inc.
 (NYSE:   BWA) has entered into a settlement regarding approximately 90% of
 claims related to previously disclosed alleged environmental contamination
 from a Kuhlman Electric Corporation ("KEC") plant site in Crystal Springs,
 Mississippi.  The contamination predates BorgWarner's purchase of Kuhlman
 Corporation, the former parent company of KEC.  BorgWarner and other
 defendants will pay up to $39 million in three equal installments ending on
 January 2, 2006.
     "We are pleased to have the vast majority of this issue behind us and
 expect that the remainder can be resolved quickly and in a satisfactory
 manner," said Timothy Manganello, Chairman and CEO of BorgWarner.
     The company will incur an after-tax charge of approximately $29 million in
 the second quarter, or $0.50 per share, as a result of anticipated costs
 associated with settling all Crystal Springs-related claims.  BorgWarner is
 also vigorously pursuing recovery of the settlement amount from various
 insurance carriers and other third parties and will reflect those recoveries
 as income in future periods as they become resolved.
     As a result of the $0.50 per share after-tax charge, the company says it
 now expects 2005 earnings per share in a range of $4.15 to $4.31 which
 includes the ($0.50) per share second quarter charge related to the Crystal
 Springs settlement and $0.38 per share associated with divestitures, the
 release of tax accruals and net of the immediate write-off of the excess
 purchase price associated with Beru's in-process R&D reported in the first
 quarter.  Previous earnings guidance for 2005 was $4.65 to $4.81 per share.
 The company reconfirms its expectations for earnings per share in a range of
 $4.27 to $4.43 on its base business plus the anticipated contribution from
 Beru, excluding the aforementioned items.
     Auburn Hills, Michigan-based BorgWarner Inc. (NYSE:   BWA) is a product
 leader in highly engineered components and systems for vehicle powertrain
 applications worldwide.  The company operates manufacturing and technical
 facilities in 62 locations in 17 countries.  Customers include Ford,
 DaimlerChrysler, General Motors, VW/Audi, Toyota, Hyundai/Kia, Renault/Nissan,
 Honda, Caterpillar, Navistar International, Peugeot and BMW.  The Internet
 address for BorgWarner is: http://www.borgwarner.com .
     Statements contained in this news release may contain forward-looking
 statements as contemplated by the 1995 Private Securities Litigation Reform
 Act that are based on management's current expectations, estimates and
 projections.  Words such as "expects," "anticipates," "intends," "plans,"
 "believes," "estimates," variations of such words and similar expressions are
 intended to identify such forward-looking statements.  Forward-looking
 statements are subject to risks and uncertainties, many of which are difficult
 to predict and generally beyond the control of the Company, that could cause
 actual results to differ materially from those expressed, projected or implied
 in or by the forward-looking statements.  Such risks and uncertainties
 include:  fluctuations in domestic or foreign automotive production, the
 continued use of outside suppliers by original equipment manufacturers,
 fluctuations in demand for vehicles containing the Company's products, general
 economic conditions, as well as other risks detailed in the Company's filings
 with the Securities and Exchange Commission, including the Cautionary
 Statements filed as Exhibit 99.1 to the Form 10-K for the fiscal year ended
 December 31, 2004.  The Company does not undertake any obligation to update
 any forward-looking statement.
 
 SOURCE  BorgWarner Inc.

RELATED LINKS

http://www.bwauto.com