BORGWARNER INC | 2013 | FY | 3

BALANCE SHEET INFORMATION

Detailed balance sheet data is as follows:

 
December 31,
(millions of dollars)
2013
 
2012
Receivables, net:
 

 
 

Customers
$
1,067.5

 
$
1,014.6

Other
183.1

 
134.8

Gross receivables
1,250.6

 
1,149.4

Bad debt allowance(a)
(2.1
)
 
(2.1
)
Total receivables, net
$
1,248.5

 
$
1,147.3

Inventories, net:
 

 
 

Raw material and supplies
$
279.8

 
$
264.0

Work in progress
78.0

 
82.0

Finished goods
116.3

 
117.6

FIFO inventories
474.1

 
463.6

LIFO reserve
(16.0
)
 
(16.0
)
Total inventories, net
$
458.1

 
$
447.6

Prepayments and other current assets:


 
 

Prepaid tooling
$
37.1

 
$
39.1

Prepaid taxes
12.3

 
0.7

Derivatives
3.4

 
5.7

Other
30.9

 
22.0

Total prepayments and other current assets
$
83.7

 
$
67.5

Property, plant and equipment, net:
 

 
 

Land and land use rights
$
87.2

 
$
76.4

Buildings
666.7

 
640.8

Machinery and equipment
1,897.5

 
2,282.4

Capital leases
2.4

 
2.3

Construction in progress
272.3

 
243.7

Property, plant and equipment, gross
2,926.1

 
3,245.6

Accumulated depreciation
(1,099.3
)
 
(1,567.0
)
Property, plant & equipment, net, excluding tooling
1,826.8

 
1,678.6

Tooling, net of amortization
112.6

 
109.4

Property, plant & equipment, net
$
1,939.4

 
$
1,788.0

Investments and advances:
 

 
 

Investment in equity affiliates
$
201.5

 
$
217.7

Other investments and advances
203.6

 
165.0

Total investments and advances
$
405.1

 
$
382.7

Other non-current assets:
 

 
 

Deferred income taxes
$
257.6

 
$
244.1

Other intangible assets
169.5

 
206.3

Product liability insurance asset
96.7

 
85.6

Other
53.2

 
39.9

Total other non-current assets
$
577.0

 
$
575.9


 
December 31,
(millions of dollars)
2013
 
2012
Accounts payable and accrued expenses:
 

 
 

Trade payables
$
872.6

 
$
815.4

Trade payables for capital expenditures
62.8

 
39.8

Payroll and employee related
184.6

 
180.7

Customer related
49.7

 
36.3

Product liability
41.1

 
36.5

Product warranties
38.4

 
33.1

Retirement related
21.8

 
27.9

Dividends payable to noncontrolling shareholders
16.7

 
9.5

Interest
12.0

 
11.7

Severance
11.3

 
8.9

Insurance
8.2

 
9.2

Legal and professional fees
7.8

 
4.2

Derivatives
7.4

 
9.8

Current deferred income taxes
3.9

 
1.4

Environmental
1.1

 
1.6

Other
44.4

 
61.2

Total accounts payable and accrued expenses
$
1,383.8

 
$
1,287.2

Other non-current liabilities:
 

 
 

Deferred income taxes
$
81.3

 
$
89.4

Product liability
55.6

 
49.1

Deferred revenue
46.2

 
30.5

Product warranties
34.3

 
31.8

Cross-currency swaps and derivatives
24.3

 
58.1

Environmental
2.9

 
2.3

Other
82.2

 
56.9

Total other non-current liabilities
$
326.8

 
$
318.1


 (a) Bad debt allowance:
2013
 
2012
 
2011
Beginning balance, January 1
$
(2.1
)
 
$
(4.3
)
 
$
(4.0
)
Provision
(0.3
)
 
(0.8
)
 
(1.4
)
Write-offs
0.4

 
3.0

 
1.0

Translation adjustment and other
(0.1
)
 
—

 
0.1

Ending balance, December 31
$
(2.1
)
 
$
(2.1
)
 
$
(4.3
)


As of December 31, 2013 and December 31, 2012, accounts payable of $62.8 million and $39.8 million, respectively, were related to property, plant and equipment purchases.

Interest costs capitalized for the years ended December 31, 2013 and 2012 were $11.9 million and $17.8 million, respectively.

NSK-Warner KK ("NSK-Warner")

The Company has a 50% interest in NSK-Warner, a joint venture based in Japan that manufactures automatic transmission components. The Company's share of the earnings reported by NSK-Warner is accounted for using the equity method of accounting. NSK-Warner is the joint venture partner with a 40% interest in the Drivetrain Group's South Korean subsidiary, BorgWarner Transmission Systems Korea Inc. Dividends from NSK-Warner were $31.0 million, $28.1 million and $33.4 million in calendar years ended December 31, 2013, 2012 and 2011, respectively.

NSK-Warner has a fiscal year-end of March 31. The Company's equity in the earnings of NSK-Warner consists of the 12 months ended November 30. Following is summarized financial data for NSK-Warner, translated using the ending or periodic rates, as of and for the years ended November 30, 2013, 2012 and 2011 (unaudited):

 
November 30,
 
 
(millions of dollars)
2013
 
2012
 
 
Balance sheets:


 
 

 
 

Cash and securities
$
118.3

 
$
123.3

 
 
Current assets, including cash and securities
313.6

 
320.0

 
 
Non-current assets
156.1

 
175.3

 
 
Current liabilities
166.8

 
147.4

 
 
Non-current liabilities
40.7

 
50.2

 
 
Total equity
262.2

 
297.7

 
 
 
 
 
 
 
 
 
Year Ended November 30,
(millions of dollars)
2013
 
2012
 
2011
Statements of operations:
 

 
 

 
 

Net sales
$
604.0

 
$
696.7

 
$
655.2

Gross profit
126.6

 
138.2

 
128.5

Net earnings
68.3

 
68.5

 
61.6



NSK-Warner had no debt outstanding as of November 30, 2013 and 2012. Purchases by the Company from NSK-Warner were $22.8 million, $22.8 million and $16.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.

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