BorgWarner
BWA
#1710
Rank
$12.37 B
Marketcap
$60.78
Share price
0.66%
Change (1 day)
37.32%
Change (1 year)
BorgWarner Inc. is an American worldwide automotive industry components and parts supplier, primarily known for its powertrain products
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<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

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<B>Washington, D.C. 20549</B>
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<B><FONT size="4">Form&nbsp;10-K</FONT></B>
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<B>Annual Report Pursuant to Section&nbsp;13 or 15(d)</B>
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<B>of the Securities Exchange Act of 1934</B>
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<TD align="left"><B>For the fiscal year ended December&nbsp;31, 1999</B></TD>
<TD align="right"><B>Commission file number:&nbsp;1-12162</B></TD>
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<B><FONT size="5">BorgWarner Inc.</FONT></B>

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<B>(formerly known as Borg-Warner Automotive, Inc.)</B>
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<FONT size="2">(Exact name of registrant as specified in its
charter)</FONT>
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<B>Delaware</B></FONT></TD>
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<B>13-3404508</B></FONT></TD>
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(State of Incorporation)</FONT></TD>
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(I.R.S.&nbsp;Employer Identification No.)</FONT></TD>
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<B>200&nbsp;South Michigan Avenue</B>

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<B>Chicago, Illinois 60604</B>
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<B>(312)&nbsp;322-8500</B>
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<FONT size="2">(Address and telephone number of principal
executive offices)</FONT>
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Securities registered pursuant to Section&nbsp;12(b) of the Act:

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<TD align="center" nowrap><FONT size="2"><B>Name of each exchange</B></FONT></TD>
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<TD align="center" nowrap><FONT size="2"><B>Title of each class</B></FONT></TD>
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<TD align="center" nowrap><FONT size="2"><B>on which registered</B></FONT></TD>
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Common Stock, par value $.01 per share</FONT></TD>
<TD></TD>
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New&nbsp;York Stock Exchange</FONT></TD>
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<P align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities registered pursuant to Section&nbsp;12(g) of the Act:
None

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check-mark whether the
registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12&nbsp;months (or for such shorter period
that the registrant was required to file such reports), and
(2)&nbsp;has been subject to such filing requirements for the
past 90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Yes <U>X</U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate market value of the voting stock of the registrant
held by stockholders (not including voting stock held by
directors and executive officers of the registrant) on
March&nbsp;15, 2000 was approximately $878&nbsp;million. As of
March&nbsp;15, 2000, the registrant had 26,685,733 shares of
Common Stock outstanding.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check-mark if disclosure of delinquent filers
pursuant to Item&nbsp;405 of Regulation&nbsp;S-K is not contained
herein, and will not be contained, to the best of
registrant&#146;s knowledge, in definitive proxy or information
statements incorporated by reference in Part&nbsp;III of this
Form&nbsp;10-K or any amendment to this
Form&nbsp;10-K.&nbsp;&nbsp;X

<P align="center"><B>DOCUMENTS INCORPORATED BY REFERENCE</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Portions of the following documents are incorporated herein by
reference into the Part of the Form&nbsp;10-K indicated.

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<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Part of Form&nbsp;10-K</B></FONT></TD>
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<TD></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>into which</B></FONT></TD>
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<TD align="center" nowrap><FONT size="2"><B>Document</B></FONT></TD>
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<TD align="center" nowrap><FONT size="2"><B>incorporated</B></FONT></TD>
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<TD align="left" valign="top"><FONT size="2">
BorgWarner Inc. 1999&nbsp;Annual Report to Stockholders</FONT></TD>
<TD></TD>
<TD align="center" valign="bottom"><FONT size="2">
Parts&nbsp;I, II and IV</FONT></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD align="left" valign="top"><FONT size="2">
BorgWarner Inc. Proxy Statement for the 2000&nbsp;Annual Meeting
of<BR>
Stockholders</FONT></TD>
<TD></TD>
<TD align="center" valign="bottom"><FONT size="2">
Part&nbsp;III</FONT></TD>
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<P align="center"><B>BORGWARNER INC.</B>

<P align="center">
<B>FORM&nbsp;10-K</B>

<P align="center">
<B>YEAR ENDED DECEMBER&nbsp;31, 1999</B>

<P align="center">
<B>INDEX</B>

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<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
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<TD width="3%">&nbsp;</TD>
<TD width="78%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
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<TD width="1%">&nbsp;</TD>
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<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Item</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"></TD>
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<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Page</B></FONT></TD>
</TR>

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<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD colspan="9" align="center" valign="top"><FONT size="2"><B>PART&nbsp;I</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">1.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Business</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">2.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">3.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Legal Proceedings</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
<TD></TD>
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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">4.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Submission of Matters to a Vote of Security Holders</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD colspan="9" align="center" valign="top"><FONT size="2"><B>PART&nbsp;II</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">5.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Market for the Registrant&#146;s Common Equity and Related
Stockholder Matters</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">6.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Selected Financial Data</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">7.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Management&#146;s Discussion and Analysis of Financial Condition
and<BR>
Results of Operations</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">7a</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Market Risk Disclosure</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">8.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Financial Statements and Supplementary Data</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">9.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Changes in and Disagreements with Accountants on Accounting and<BR>
Financial Disclosure</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD colspan="9" align="center" valign="top"><FONT size="2"><B>PART&nbsp;III</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">10.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Directors and Executive Officers of the Registrant</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">11.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Executive Compensation</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
<TD></TD>
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<TR><TD><TR><TD><TR><TD><TR><TD>

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<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">12.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Security Ownership of Certain Beneficial Owners and Management</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">13.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Certain Relationships and Related Transactions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD colspan="9" align="center" valign="top"><FONT size="2"><B>PART&nbsp;IV</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">14.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Exhibits, Financial Statement Schedules, and Reports on
Form&nbsp;8-K</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
<TD></TD>
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<P align="center"><B>PART I</B>

<P align="left"><B>Item&nbsp;1. Business</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BorgWarner Inc. (formerly Borg-Warner Automotive, Inc.) (the
&#147;Company&#148;), a Delaware corporation, was incorporated in
1987. The Company is a leading, global Tier I supplier of highly
engineered systems and components, primarily for vehicle
powertrain applications. These products are manufactured and sold
worldwide, primarily to original equipment manufacturers
(&#147;OEMs&#148;) of passenger cars, sport utility vehicles,
trucks, commercial transportation products and industrial
equipment. The Company operates 60 manufacturing and technical
facilities in 14 countries serving customers in North America,
South America, Europe and Asia, and is an original equipment
supplier to every major OEM in the world.

<P align="left"><B>Financial Information About Segments</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Incorporated herein by reference is Note&nbsp;12 of the Notes to
the Consolidated Financial Statements on pages 40 through 42 of
the Company&#146;s Annual Report for the year ended
December&nbsp;31, 1999 (the &#147;Company&#146;s Annual
Report&#148;) filed as an exhibit to this report.

<P align="left"><B>Narrative Description of Operating Segments</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s products fall into five reportable operating
segments: Air/ Fluid Systems, Cooling Systems, Morse TEC,
TorqTransfer Systems and Transmission Systems. TorqTransfer
Systems was previously named Powertrain Systems and Transmission
Systems was previously known as Automatic Transmission Systems.
The name changes were made to recognize the expanded growth
opportunities for each of these businesses. Net revenues by
segment for the three years ended December&nbsp;31, 1999, 1998
and 1997, are as follows (in millions of dollars):

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<TR>
<TD width="63%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD colspan="11"></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="11"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="11"><HR size="1"></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
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<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Air/ Fluid Systems</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">491.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">351.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">342.4</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Cooling Systems</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">142.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Morse TEC</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">856.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">536.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">349.0</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
TorqTransfer Systems</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">563.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">518.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">613.6</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Transmission Systems</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">413.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">355.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">369.4</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Divested operations</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">41.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">121.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">150.2</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Interbusiness eliminations</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">(49.7</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">(45.7</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">(57.6</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="left"><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="left"><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="left"><HR size="1"></TD>
<TD></TD>

</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Net sales</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">2,458.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1,836.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1,767.0</FONT></TD>
<TD></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="left"><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="left"><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="left"><HR size="4" noshade></TD>
<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The sales information presented above excludes the sales by the
Company&#146;s unconsolidated joint ventures. See &#147;Joint
Ventures.&#148; Such sales totaled approximately
$287&nbsp;million in 1999, $247&nbsp;million in 1998 and $336
million in 1997.

<P align="left"><I>Air/ Fluid Systems</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Air/ Fluid Systems designs and manufactures sophisticated
mechanical, electro-mechanical and electronic components and
systems used for engine air intake and exhaust management, fuel
and vapor management, electronically controlled automatic
transmissions and steering and suspension systems. Key products
for engine air intake management produced by the Company include
throttle bodies, intake manifolds, throttle position sensors, and
complete engine induction systems. The Company&#146;s products
for emissions control and improved gas mileage include mechanical
and electrical air pumps, air control valves and pressure
feedback exhaust gas re-circulation valves. The fuel management
and vapor recovery products include roll valves, canister purge
solenoids and complete vapor recovery systems. Air/ Fluid Systems
also produces fuel tanks used on commercial vehicle applications
and oil pumps.

<P align="center">3



<P align="left"><I>Cooling Systems</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cooling Systems, the Company&#146;s newest segment, is a
combination of the businesses acquired from Eaton Corporation and
the Schwitzer cooling businesses acquired as part of the Kuhlman
Corporation acquisition in 1999. Cooling Systems manufactures
viscous fan clutches, on-off fan drives and fans which are used
as part of the engine cooling system. Product features include
improved fuel economy and emissions control by minimizing
parasitic power loss. These products are provided from facilities
in the U.S., Germany, U.K., Brazil, Korea and China. The Company
believes it is a leading global supplier of such products but
competes with other large independent producers as well as
divisions of its OEM customers.

<P align="left"><I>Morse TEC</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Morse TEC manufactures chain and chain systems, including
HY-VO&#174; front-wheel drive (&#147;FWD&#148;) transmission
chain and four-wheel drive (&#147;4WD&#148;) chain, MORSE
GEMINI&#153; Chain Systems, timing chain and timing chain
systems, crankshaft and camshaft sprockets, chain tensioners and
snubbers and turbochargers for passenger car and commercial
vehicle applications.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
HY-VO&#174; chain is used in transmissions and for 4WD transfer
case applications. Transmission chain is used to transfer power
from the engine to the transmission. The Company&#146;s MORSE
GEMINI&#153; Chain System emits significantly less chain pitch
frequency noise than conventional transmission chain systems. The
chain in a transfer case distributes power between the front and
rear output shafts which, in turn, drive the front and rear
wheels. The Company believes it is the world&#146;s leading
manufacturer of chain for FWD transmissions and 4WD transfer
cases. The Company is an original equipment supplier to every
major manufacturer that uses chain for such applications.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s timing chain system is used on Ford&#146;s new
family of overhead cam engines, including the Duratech and
Triton engines, as well as Chrysler&#146;s 2.7 liter, 3.7 liter
and 4.7 liter overhead cam engines. The Company has been selected
to provide timing systems for a number of Japanese and European
applications beginning in 1999. The Company believes that it is
the world&#146;s leading manufacturer of timing chain.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This segment also provides turbochargers for passenger car,
commercial vehicle and industrial applications for diesel and
gasoline engine manufacturers in Europe, North America, South
America and Asia. In December&nbsp;1998, the Company announced
the completion of its purchase of the European turbocharger
business of AG K&#252;hnle, Kopp &#38; Kausch (&#147;AG
K&#252;hnle&#148;), renaming it 3K-Warner Turbosystems GmbH
(&#147;3K-Warner&#148;). In 1999, the business was expanded by
the addition of the Schwitzer Group turbocharger portion of the
Kuhlman Corporation acquisition. A turbocharger is a device
designed to force additional intake air into the engine to create
a cleaner and more powerful ignition. Benefits of turbocharging
in both passenger car and commercial vehicle applications include
greater power for a given engine size, improved fuel economy and
significantly reduced emissions. The Company believes it the
second leading manufacturer of turbochargers in the world.

<P align="left"><I>TorqTransfer Systems</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TorqTransfer Systems&#146; products include 4WD and all-wheel
drive transfer cases and related systems to transfer torque
within the drivetrain.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transfer cases are installed primarily on light trucks and
sport-utility vehicles. A transfer case attaches to the
transmission and distributes torque to the front and rear axles
for 4WD, improving vehicle control during off-road use and in a
variety of road conditions. The Company has designed and
developed an exclusive 4WD Torque-on-Demand&#174;
(&#147;TOD&#148;) transfer case system, which allows vehicles to
automatically shift from two-wheel drive to 4WD when electronic
sensors indicate it is necessary. The TOD transfer case is
available on the Ford Explorer, the best selling sport-utility
vehicle in the United States in 1999, 1998 and 1997, and the Ford
Expedition, Lincoln Navigator, Isuzu Trooper and SsangYong Musso
from Daewoo.

<P align="center">4



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales of 4WD transfer cases represented 22%, 27% and 34% of the
Company&#146;s total revenues for 1999, 1998 and 1997,
respectively. The Company believes that it is the world&#146;s
leading independent manufacturer of 4WD transfer cases, producing
approximately 1.2&nbsp;million transfer cases in 1999. The
Company&#146;s largest customer of 4WD transfer cases is Ford
Motor Company. The Company supplies the majority of the 4WD
transfer cases for Ford, including those installed in the Ford
Explorer, the Ford Expedition, the Ford F-150 and Ranger pick-up
trucks, the Mercury Mountaineer and the Lincoln Navigator.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company supplies transfer cases for the Mercedes-Benz 4WD
vehicle, which was first made available to consumers in 1997 and
is manufactured at Mercedes-Benz&#146;s United States
passenger-vehicle manufacturing facility. Under a five-year
agreement, which has a three-year extension provision, the
Company developed and supplies Mercedes-Benz with two-speed,
electronically controlled, all-wheel drive transfer cases that
are compatible with its anti-skid braking system.

<P align="left"><I>Transmission Systems</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company engineers and manufactures components for automatic
transmissions and the systems that combine such components around
the world. Principal product lines include friction plates,
one-way clutches, transmission bands and torque converter lock-up
clutches for automatic transmissions. The Company is a supplier
to virtually every major automatic transmission manufacturer in
the world. The Company&#146;s 50%-owned joint venture in Japan,
NSK-Warner Kabushiki Kaisha (&#147;NSK Warner&#148;), is a
leading producer of friction plates and one-way clutches in
Japan.

<P align="left"><B>Acquisitions during 1999</B>

<P align="left">
<I>Kuhlman Corporation</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;1, 1999, the Company acquired all the outstanding
shares of common stock of Kuhlman Corporation
(&#147;Kuhlman&#148;), for a purchase price of
$693.0&nbsp;million. The Company also assumed $131.6&nbsp;million
of Kuhlman&#146;s existing indebtedness, which it subsequently
refinanced. The Company funded the transaction by issuing common
stock and by borrowing approximately $543.2&nbsp;million.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Kuhlman was a diversified industrial manufacturing company that
operated in two product segments: vehicle and electrical
products. In vehicle products, Kuhlman&#146;s Schwitzer Group and
Kysor were leading worldwide manufacturers of proprietary engine
components, including turbochargers, fans and fan drives, fuel
tanks, instrumentation, heating/ ventilation/ air conditioning
systems, and other products for commercial transportation and
industrial equipment. The vehicle products units have been
integrated into the Company&#146;s Air/ Fluid Systems, Cooling
Systems and Morse TEC operating segments.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The electrical products businesses acquired from Kuhlman
consisted of Kuhlman Electric Corporation (&#147;Kuhlman
Electric&#148;) and Coleman Cable Systems, Inc. (&#147;Coleman
Cable&#148;). These businesses manufactured transformers for the
utility industry and wire and cable for utilities and other
industries. At the time of the Kuhlman acquisition, the Company
announced that it intended to sell the businesses by the end of
the year. As of December&nbsp;31, 1999, the Company had completed
the sales of both Kuhlman Electric and Coleman Cable. The
Company received cash proceeds of approximately
$227.1&nbsp;million and $30.3&nbsp;million face value debt
instruments from the buyers of the businesses. The debt
instruments were adjusted to a carrying value of
$12.9&nbsp;million because of their terms and credit-worthiness.

<P align="left"><I>Eaton Corporation&#146;s Fluid Power Acquisition</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective October&nbsp;1, 1999, the Company acquired Eaton
Corporation&#146;s Fluid Power Division, one of the world&#146;s
leading manufacturers of powertrain cooling solutions for the
global automotive industry, for $321.7&nbsp;million. To partially
finance the acquisition, the Company issued $150&nbsp;million of
8.0% senior unsecured notes maturing September&nbsp;2019. Cash
from operations funded the remainder of

<P align="center">5



<DIV align="left">
the acquisition price. The Fluid Power Division designs and
produces a variety of viscous fan drive cooling systems primarily
for passenger vehicles such as light trucks, sport-utility
vehicles and vans. It has been combined with the commercial
cooling systems business acquired from Kuhlman in March to form
the Company&#146;s newest segment, Cooling Systems.
</DIV>

<P align="left"><B>Joint Ventures</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has five joint ventures in which it has a
less-than-100% ownership interest. Results from three of these
ventures, in which the Company is the majority owner, are
consolidated as part of the Company&#146;s results. The
Company&#146;s ownership interest in the two unconsolidated joint
ventures NSK-Warner and Beijing Warner Gear Co., Ltd. are 50%
and 49.9%, respectively. These investments are reported using the
equity method.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Management of the unconsolidated joint ventures is shared with
the Company&#146;s respective joint venture partners. Certain
information concerning the Company&#146;s joint ventures is set
forth below:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="3%">&nbsp;</TD>
<TD width="21%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="16%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="16%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>

<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percentage</B></FONT></TD>
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Fiscal</B></FONT></TD>
</TR>

<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Owned by</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Location</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999 Sales</B></FONT></TD>
</TR>

<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Year</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>the</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>of</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Joint Venture</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>($ in</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="2"><FONT size="2"><B>Joint Venture</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Products</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Organized</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Company</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Operation</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Partner</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>millions)</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="2"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
<TD colspan="2" align="left" valign="top"><FONT size="2">
Unconsolidated</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
NSK-Warner K.K</FONT></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Friction products</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1964</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">Japan</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Nippon Seiko K.K.</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">275</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Beijing Warner<BR>
Gear Co., Ltd.</FONT></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Manual transmissions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1992</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">49.9</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">China</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Beijing Gear Works</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
<TD></TD>
</TR>

<TR>
<TD colspan="2" align="left" valign="top"><FONT size="2">
Consolidated</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive Korea, Inc.</FONT></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Friction products</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1987</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">Korea</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
NSK Warner K.K.</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">38</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Divgi-Warner Limited</FONT></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Transfer cases, manual transmissions and automatic locking hubs</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1995</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">India</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Divgi Metalwares, Ltd.</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Shenglong</FONT></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Fans, fan drives</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">China</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Ningbo Shenglong Group Co., Ltd.</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
(Ningbo) Co. Ltd.</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="4%"></TD>
<TD width="96%"></TD>
</TR>

<TR valign="top">
<TD>(a)&nbsp;</TD>
<TD align="left">
Sales for Borg-Warner Shenglong (Ningbo) Co. Ltd. represent full
year 1999 results. The Company only recorded results for two
months worth of sales because it began consolidating Borg-Warner
Shenglong (Ningbo) Co. Ltd. in November of 1999.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Note&nbsp;12 of the Notes to Consolidated Financial
Statements on pages 40 through 42 of the Company&#146;s Annual
Report for geographic information.

<P align="left"><B>Customers</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Approximately 75% of the Company&#146;s total sales in 1999 were
to automotive OEMs, with the remaining 25% of the Company&#146;s
sales to a diversified group of industrial, construction and
agricultural vehicle manufacturers, auto part manufacturers and
to distributors of automotive aftermarket and replacement parts.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s worldwide sales in 1999 to Ford,
DaimlerChrysler Corporation and General Motors Corporation
constituted approximately 28%, 17% and 12%, respectively, of its
1999 consolidated sales. Approximately 25% of consolidated sales
for 1999 were outside the United States, including exports.
However, a substantial portion of such sales were to foreign OEMs
of vehicles that are, in turn, exported to the United States.
See Note&nbsp;12 of the Notes to Consolidated Financial
Statements on pages&nbsp;40 through 42 of the Company&#146;s
Annual Report.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s automotive products are sold directly to OEMs
pursuant to the terms and conditions of the OEMs&#146; purchase
orders, and deliveries are subject to periodic authorizations
based upon the production schedules of the OEMs. The Company
ships its products directly from its plants to the OEMs.

<P align="center">6



<P align="left"><B>Sales and Marketing</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the Company&#146;s operating segments has its own sales
function headed by a vice president of sales. Account executives
for each group are assigned to serve specific OEM customers for
one or more of a business group&#146;s products. Such account
executives spend the majority of their time in direct contact
with OEM purchasing and engineering employees and are responsible
for servicing existing business and for identifying and
obtaining new business. Because of their close relationship with
the OEMs, account executives are able to identify and meet
customers&#146; needs based upon their knowledge of the
Company&#146;s products and design and manufacturing
capabilities. Upon securing a new order, account executives
participate in product launch team activities as a key interface
to the customers.

<P align="left"><B>Research and Development</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the Company&#146;s operating segments has its own
research and development (&#147;R&#38;D&#148;) organization. Over
500&nbsp;employees, including engineers, mechanics and
technicians, are engaged in R&#38;D activities at Company
facilities worldwide. The Company also operates testing
facilities such as prototype, measurement and calibration, life
testing and dynamometer laboratories.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
By working closely with the OEMs and anticipating their future
product needs, the Company&#146;s R&#38;D personnel conceive,
design, develop and manufacture new proprietary automotive
components and systems. R&#38;D personnel also work to improve
current products and production processes. The Company believes
its commitment to R&#38;D will allow it to obtain new orders from
its OEM customers.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consistent with its strategy of developing technologically
innovative products, the Company spent approximately
$91.6&nbsp;million, $65.1&nbsp;million and $59.0&nbsp;million in
1999, 1998 and 1997, respectively, on R&#38;D activities. Not
included in the reported R&#38;D activities were
customer-sponsored R&#38;D activities that were approximately
$9.4&nbsp;million, $8.4&nbsp;million and $8.0&nbsp;million in
1999, 1998 and 1997, respectively.

<P align="left"><B>Patents and Licenses</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has approximately 2,500 active domestic and foreign
patents and patent applications pending or under preparation, and
receives royalties from licensing patent rights to others. While
it considers its patents on the whole to be important, the
Company does not consider any single patent, group of related
patents or any single license essential to its operations in the
aggregate or to the operations of any of the Company&#146;s
business groups individually. The expiration of the patents
individually and in the aggregate is not expected to have a
material effect on the Company&#146;s financial position or
future operating results. The Company owns numerous trademarks,
some of which are valuable but none of which are essential to its
business in the aggregate.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company owns the &#147;BorgWarner&#148; and &#147;Borg-Warner
Automotive&#148; trade names and housemarks, and variations
thereof, which are material to the Company&#146;s business.

<P align="left"><B>Competition</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the Company&#146;s operating segments competes worldwide
with a number of other manufacturers and distributors which
produce and sell similar products. Price, quality and
technological innovation are the primary elements of competition.
Competitors include vertically integrated units of the
Company&#146;s major OEM customers, as well as a large number of
independent domestic and international suppliers. Many of these
companies are larger and have greater resources than the Company.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A number of the Company&#146;s major OEM customers manufacture,
for their own use and for others, products which compete with the
Company&#146;s products. Although these OEM customers have
indicated that they will continue to rely on outside suppliers,
the OEMs could elect to manufacture products to meet their own
requirements or to compete with the Company. There can be no
assurance that the Company&#146;s business will not be adversely
affected by increased competition in the markets in which it
operates.

<P align="center">7



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The competitive environment has changed dramatically over the
past few years as the Company&#146;s traditional United States
OEM customers, faced with intense international competition, have
expanded their worldwide sourcing of components with the stated
objective of better competing with lower-cost imports. As a
result, the Company has experienced competition from suppliers in
other parts of the world enjoying economic advantages such as
lower labor costs, lower health care costs and, in some cases,
export subsidies and/or raw materials subsidies.

<P align="left"><B>Employees</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 1999, the Company and its consolidated
subsidiaries had approximately 14,400 salaried and hourly
employees (as compared with approximately 10,100 employees at
December&nbsp;31, 1998), of which approximately 9,900 were U.S.
employees. Approximately 43% of the Company&#146;s domestic
hourly workers are unionized. The hourly workers at the
Company&#146;s European facilities are also unionized. The
Company believes its present relations with employees to be
satisfactory.

<P align="left"><B>Raw Materials</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the Company&#146;s operating segments believes that its
supplies of raw materials for manufacturing requirements in 2000
are adequate and are available from multiple sources. It is
common, however, for customers to require their prior approval
before certain raw materials or components can be used, thereby
reducing sources of supply that would otherwise be available.
Manufacturing operations for each of the Company&#146;s operating
segments are dependent upon natural gas, fuel oil, propane and
electricity.

<P align="left"><B>Environmental Regulation and Proceedings</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s operations are subject to federal, state,
local and foreign laws and regulations governing, among other
things, emissions to air, discharge to waters and the generation,
handling, storage, transportation, treatment and disposal of
waste and other materials. The Company believes that its
business, operations and facilities have been and are being
operated in compliance in all material respects with applicable
environmental and health and safety laws and regulations, many of
which provide for substantial fines and criminal sanctions for
violations. However, the operation of automotive parts
manufacturing plants entails risks in these areas, and there can
be no assurance that the Company will not incur material costs or
liabilities. In addition, potentially significant expenditures
could be required in order to comply with evolving environmental
and health and safety laws, regulations or requirements that may
be adopted or imposed in the future.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company believes that the overall impact of compliance with
regulations and legislation protecting the environment will not
have a material effect on its financial position or future
operating results, although no assurance can be given in this
regard. Capital expenditures and expenses in 1999 attributable to
compliance with such legislation were not material.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 (&#147;PRPs&#148;) at
various hazardous waste disposal sites under the Comprehensive
Environmental Response, Compensation and Liability Act
(&#147;Superfund&#148;) and equivalent state laws and, as such,
may be liable for the cost of cleanup and other remedial
activities at 40 such sites. Responsibility for cleanup and other
remedial activities at a Superfund site is typically shared
among PRPs based on an allocation formula.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on information available to the Company which, in most
cases, includes: an estimate of allocation of liability among
PRPs; the probability that other PRPs, many of whom are large,
solvent public companies, will fully pay the costs apportioned to
them; currently available information from PRPs and/or federal
or state environmental agencies concerning the scope of
contamination and estimated remediation costs; remediation
alternatives; estimated legal fees; and other factors, the

<P align="center">8



<DIV align="left">
Company has established a reserve for indicated environmental
liabilities in the aggregate amount of approximately
$17.8&nbsp;million at December&nbsp;31, 1999. The Company expects
this amount to be expended over the next three to five years.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company believes that none of these matters, individually or
in the aggregate, will have a material adverse effect on its
financial position or future operating results, generally either
because estimates of the maximum potential liability at a site
are not large or because liability will be shared with other
PRPs, although no assurance can be given with respect to the
ultimate outcome of any such matter.

<P align="left"><B>Executive Officers</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Set forth below are the names, ages, positions and certain other
information concerning the executive officers of the Company as
of March&nbsp;15, 2000.

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="34%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="55%">&nbsp;</TD>
</TR>

<TR>
<TD align="center" nowrap><FONT size="2"><B>Name</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Age</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Position with Company</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
John F. Fiedler</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">61</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Chairman and Chief Executive Officer</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Lawrence B. Skatoff</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Executive Vice President and Chief Financial Officer</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
William C. Cline</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President and Controller</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Gary P. Fukayama</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Executive Vice President</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Christopher A. Gebelein</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President&#151;Business Development</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Laurene H. Horiszny</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">44</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President, Secretary and General Counsel</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
John A. Kalina</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President, Chief Information Officer</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Geraldine Kinsella</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President&#151;Human Resources</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Timothy Manganello</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
John J. McGill</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Jeffrey L. Obermayer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">44</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President and Treasurer</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Ronald M. Ruzic</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">61</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Executive Vice President</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
Robert D. Welding</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Executive Vice President</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
F. Lee Wilson</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="bottom"><FONT size="2">
Vice President</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Fiedler has been Chairman of the Board of Directors
since March 1996 and has been Chief Executive Officer of the
Company since January&nbsp;1995. He was President from
June&nbsp;1994 to March&nbsp;1996.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Skatoff has been Executive Vice President and Chief
Financial Officer since January&nbsp;2000. He was Senior Vice
President and Chief Financial Officer at Premark International
Inc. from September&nbsp;1991 to December&nbsp;1999.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Cline has been Vice President and Controller of the
Company since May&nbsp;1993.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Fukayama has been Executive Vice President of the
Company since November&nbsp;1992. He has been Group President of
BorgWarner Air/ Fluid Systems Inc. since May&nbsp;1996. He was
President and General Manager of Borg-Warner Automotive Automatic
Transmission Systems Corporation from January&nbsp;1995 to
April&nbsp;1996.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Gebelein has been Vice President&#151;Business
Development of the Company since January&nbsp;1995.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Ms.&nbsp;Horiszny has been Vice President, Secretary and General
Counsel of the Company since May&nbsp;1993.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Kalina has been Vice President, Chief Information
Officer of the Company since January&nbsp;1999. He was an
Executive IT Consultant for IBM from August&nbsp;1997 until
January&nbsp;1999 and was Chief Information Officer for Walbro
Corporation from September&nbsp;1995 until December&nbsp;1996.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Ms.&nbsp;Kinsella has been Vice President&#151;Human Resources of
the Company since May&nbsp;1993.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Manganello has been Vice President of the Company and
President and General Manager of BorgWarner TorqTransfer Systems
Inc. since February&nbsp;1999. He was Vice President, Operations
of Borg-Warner Automotive Powertrain Systems Corporation, Muncie
Plant from December&nbsp;1995 until

<P align="center">9



<DIV align="left">
January&nbsp;1999. He was Vice President, Business Development of
Borg-Warner Automotive Powertrain Systems Corporation, from
October&nbsp;1994 until November&nbsp;1995.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;McGill has been Vice President of the Company and
President and General Manager of BorgWarner Cooling Systems Inc.
since October&nbsp;1999. He was General Manager of Eaton&#146;s
Fluid Power Division from January&nbsp;1998 to October 1999. He
was General Manager of Eaton&#146;s Torque Control Products from
April&nbsp;1996 to January&nbsp;1998 and was Operations Manager
of Eaton&#146;s Engine Components from April&nbsp;1994 to
April&nbsp;1996.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Obermayer has been Vice President and Treasurer of the
Company since December&nbsp;1999. He was Acting Treasurer from
June&nbsp;1999 until December&nbsp;1999 and Vice President,
Finance &#38; Business Development&nbsp;&#151; ATS Group from
May&nbsp;1999 until December&nbsp;1999. He was Vice President and
Controller of ATS Group from October&nbsp;1996 until
April&nbsp;1999 and was Director, Financial Planning &#38;
Investments from January&nbsp;1994 until September&nbsp;1996.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Ruzic has been Executive Vice President of the Company
and Group President of BorgWarner Morse TEC Inc. since
October&nbsp;1992, Chairman of 3K-Warner Turbosystems since
September&nbsp;1998 and Vice Chairman of AG K&#252;hnle since
September 1997.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Welding has been Executive Vice President of the Company
since November&nbsp;1999 and has been President of BorgWarner
Transmission Systems Inc. since May&nbsp;1996. He was Vice
President of the Company from May&nbsp;1996 until
October&nbsp;1999 and was Vice President&#151;Operations of
Borg-Warner Automotive Automatic Transmission Systems
Corporation, Bellwood Plant, from November&nbsp;1993 to
May&nbsp;1996.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Wilson has been Vice President of the Company and
President and General Manager of BorgWarner Turbo Systems Inc.
since January&nbsp;2000. He was a Director for Allied Signal
Aerospace (n/k/a Honeywell) for various product lines from
October&nbsp;1997 to December&nbsp;1999.

<P align="left"><B>Item&nbsp;2. Properties</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 1999, the Company had 49 manufacturing
facilities strategically located throughout the United States and
worldwide. In addition to its domestic manufacturing facilities,
the Company has four facilities in Germany, two facilities in
England, Wales, Korea, Brazil, Japan and India, and one facility
in each of Canada, Italy, Mexico, China, France and Taiwan. The
Company also has numerous sales offices, warehouses and technical
centers. The Company&#146;s executive offices, which are leased,
are located in Chicago, Illinois. In general, the Company
believes that its properties are in good condition and are
adequate to meet its current and reasonably anticipated needs.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is additional information concerning the
headquarters and the major manufacturing plants operated by the
Company and its consolidated subsidiaries. Unless otherwise
noted, these plants are owned by the Company.

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="82%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percent of</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Capacity</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Utilization</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><FONT size="2"><B>Locations</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>(1)(2)</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
<I>Air/ Fluid Systems</I></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2"><I>73.8%</I></FONT></TD>
<TD></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Headquarters: Warren, Michigan<BR>
Blytheville, Arkansas; Buffalo, New York (leased); Charlotte,
North Carolina; Chester, South Carolina; Dixon, Illinois; Grand
Rapids, Michigan (leased); Sallisaw, Oklahoma; Springfield, Ohio;
Tulle, France; Walker, Michigan; Water Valley, Mississippi;
White Pigeon, Michigan</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

<TR>
<TD colspan="5">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
<I>Cooling Systems</I></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2"><I>76.4%</I></FONT></TD>
<TD></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Headquarters: Marshall, Michigan<BR>
Bradford, England (leased); Cadillac, Michigan; Markdorf,
Germany; Changwon, South Korea (leased); Fletcher, North
Carolina; Gainesville, Georgia (leased); Ningbo, China; Sao Jose
dos Campos, Brazil (leased)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">10



<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="82%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percent of</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Capacity</B></FONT></TD>
</TR>

<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Utilization</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><FONT size="2"><B>Locations</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>(1)(2)</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
<I>Morse TEC</I></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2"><I>98.5%</I></FONT></TD>
<TD></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Headquarters: Ithaca, New York; Indianapolis, Indiana<BR>
Arcore, Italy; Asheville, North Carolina; Bradford, England;
Campinas Sao Paolo, Brazil; Guadalajara, Mexico; Hengoed, Wales;
Ithaca, New York; Nabari City, Japan; Simcoe, Ontario, Canada;
Spring Lake, Michigan; Tainan Shien, Taiwan; Kirchheimbolanden,
Germany</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

<TR>
<TD colspan="5">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
<I>TorqTransfer Systems</I></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2"><I>124.9%</I></FONT></TD>
<TD></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Headquarters: Sterling Heights, Michigan<BR>
Cary, North Carolina; Livonia, Michigan; Longview, Texas
(leased); Margam, Wales; Muncie, Indiana; Pune, India (60% JV);
Seneca, South Carolina; Sirsi, India (60% JV)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

<TR>
<TD colspan="5">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
<I>Transmission Systems</I></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2"><I>136.6%</I></FONT></TD>
<TD></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
Headquarters: Lombard, Illinois<BR>
Bellwood, Illinois; Coldwater, Michigan; Eumsung, Korea (80% JV);
Frankfort, Illinois; Heidelberg, Germany; Ketsch, Germany;
Margam, Wales</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="4%"></TD>
<TD width="96%"></TD>
</TR>

<TR valign="top">
<TD>(1)&nbsp;</TD>
<TD align="left">
The figure shown in each case is a weighted average of the
percentage utilization of each major plant within the category,
with an individual plant weighted in proportion to the number of
employees employed when such plant runs at 100% capacity.
Capacity utilization at the 100% level is defined as operating
five days per week, with two eight-hour shifts per day and normal
vacation schedules.</TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>(2)&nbsp;</TD>
<TD align="left">
The table excludes joint ventures owned 50% or less.</TD>
</TR>

</TABLE>

<P align="left"><B>Item&nbsp;3. Legal Proceedings</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is presently, and is from time to time, subject to
claims and suits arising in the ordinary course of its business.
In certain such actions, plaintiffs request punitive or other
damages that may not be covered by insurance. The Company
believes that it has established adequate provisions for
litigation liabilities in its financial statements in accordance
with generally accepted accounting principles. These provisions
include both legal fees and possible outcomes of legal
proceedings.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It is the opinion of the Company that the various asserted claims
and litigation in which the Company is currently involved will
not materially affect its financial position or future operating
results, although no assurance can be given with respect to the
ultimate outcome for any such claim or litigation.

<P align="left"><B>Item&nbsp;4. Submission of Matters to a Vote of Security
Holders</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There were no matters submitted to the security holders of the
Company during the fourth quarter of 1999.

<P align="left">

<!-- link1 "PART II" -->

<DIV align="center">
<B>PART II</B>
</DIV>

<P align="left"><B>Item&nbsp;5. Market for the Registrant&#146;s Common Equity
and Related Stockholder Matters</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s Common Stock is listed for trading on the New
York Stock Exchange. As of March&nbsp;15, 2000, there were
approximately 3,300 holders of record of Common Stock.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has paid cash dividends of $.15 per share on its
Common Stock and Non-Voting Common Stock during each quarter for
the last two fiscal years. While the Company currently expects
that comparable quarterly cash dividends will continue to be paid
in the future, the dividend policy is subject to review and
change at the discretion of the Board of Directors.

<P align="center">11



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
High and low sales prices (as reported on the New York Stock
Exchange composite tape) for the Common Stock for each quarter in
1998 and 1999 were:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="73%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>

<TR>
<TD align="center" nowrap><FONT size="2"><B>Quarter ended</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>High</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Low</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
<TD align="left" valign="top"><FONT size="2">
March&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">64.500</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">49.625</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
June&nbsp;30, 1998</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">68.125</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">43.688</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
September&nbsp;30, 1998</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">51.563</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">37.063</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">55.813</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">33.313</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
March&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">56.000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">42.438</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
June&nbsp;30, 1999</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">60.000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">46.375</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
September&nbsp;30, 1999</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">57.875</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">40.875</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
<TD align="left" valign="top"><FONT size="2">
December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">43.375</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">36.750</FONT></TD>
<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left"><B>Item&nbsp;6.&nbsp;Selected Financial Data</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Selected Financial Data for the five years ended
December&nbsp;31, 1999 with respect to the following line items
set forth on page&nbsp;43 of the Company&#146;s Annual Report is
incorporated herein by reference and made a part of this report:
net sales; net earnings; net earnings per share; total assets;
total debt; and cash dividend declared per share. See the
material incorporated herein by reference in response to
Item&nbsp;7 of this report for a discussion of the factors that
materially affect the comparability of the information contained
in such data.

<P align="left"><B>Item&nbsp;7.&nbsp;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations set forth on pages&nbsp;18
through 24 in the Company&#146;s Annual Report are incorporated
herein by reference and made a part of this report.

<P align="left"><B>Item&nbsp;7a.&nbsp;Market Risk Disclosure</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to interest rate risk and foreign
currency exchange risk is contained on page&nbsp;24 of the
Company&#146;s Annual Report and is incorporated herein by
reference. Information with respect to the levels of indebtedness
subject to interest rate fluctuation is contained in Note&nbsp;6
of the Notes to Consolidated Financial Statements on
pages&nbsp;33 and 34 of the Company&#146;s Annual Report and is
incorporated herein by reference. Information with respect to the Company&#146;s level of business outside the United States which is subject to foreign currency exchange rate market risk is contained in Note&nbsp;12 of the Notes to Consolidated Financial
Statements on page&nbsp;42 under the caption &#147;Geographic Information and is incorporated herein by reference.&#148;

<P align="left"><B>Item&nbsp;8.&nbsp;Financial Statements and Supplementary Data
</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Consolidated Financial Statements (including the notes
thereto) of the Company and the Independent Auditors&#146; Report
as set forth on pages&nbsp;25 through 43 in the Company&#146;s
Annual Report are incorporated herein by reference and made a
part of this report. Supplementary financial information
regarding quarterly results of operations (unaudited) for the
years ended December&nbsp;31, 1999 and 1998 is set forth on
page&nbsp;42 of the Company&#146;s Annual Report. For a list of
financial statements filed as part of this report, see
Item&nbsp;14, &#147;Exhibits, Financial Statement Schedules, and
Reports on Form&nbsp;8-K&#148; beginning on page&nbsp;13.

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="6%"></TD>
<TD width="94%"></TD>
</TR>

<TR valign="top">
<TD><B>Item&nbsp;9.&nbsp;</B></TD>
<TD>
<B>Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure</B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.

<P align="center">12



<P align="left">

<!-- link1 "PART III" -->

<DIV align="center">
<B>PART III</B>
</DIV>

<P align="left"><B>Item&nbsp;10.&nbsp;Directors and Executive Officers of the
Registrant</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to directors and nominees for election
as directors of the Company under the caption &#147;Election of
Directors&#148; on pages&nbsp;1 through 4 of the Company&#146;s
Proxy Statement and information under the caption
&#147;Section&nbsp;16(a) Beneficial Ownership Reporting
Compliance&#148; on page&nbsp;6 of the Company&#146;s Proxy
Statement is incorporated herein by reference and made a part of
this report. Information with respect to executive officers of
the Company is set forth in Part&nbsp;I of this report.

<P align="left"><B>Item&nbsp;11.&nbsp;Executive Compensation</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to compensation of executive officers
and directors of the Company under the captions
&#147;Compensation of Directors&#148; on page&nbsp;4 of the
Company&#146;s Proxy Statement and &#147;Executive
Compensation,&#148; &#147;Stock Options,&#148; &#147;Long-Term
Incentive Plans,&#148; and &#147;Employment Agreements&#148; on
pages&nbsp;7 through 10 of the Company&#146;s Proxy Statement is
incorporated herein by reference and made a part of this report.

<P align="left"><B>Item&nbsp;12.&nbsp;Security Ownership of Certain Beneficial
Owners and Management</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to security ownership by persons known
to the Company to beneficially own more than five percent of the
Company&#146;s Common Stock, by directors and nominees for
directors of the Company and by all directors and executive
officers of the Company as a group under the caption &#147;Stock
Ownership&#148; on page&nbsp;6 of the Company&#146;s Proxy
Statement is incorporated herein by reference and made a part of
this report.

<P align="left"><B>Item&nbsp;13.&nbsp;Certain Relationships and Related
Transactions</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to certain relationships and related
transactions under the caption &#147;Certain Relationships and
Related Transactions&#148; on page&nbsp;16 of the Company&#146;s
Proxy Statement is incorporated herein by reference and made a
part of this report.

<P align="left">

<!-- link1 "PART IV" -->

<DIV align="center">
<B>PART IV</B>
</DIV>

<P align="left"><B>Item&nbsp;14.&nbsp;Exhibits, Financial Statement Schedules,
and Reports on Form&nbsp;8-K</B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
(a)&nbsp; 1.&nbsp;The following consolidated financial statements
of the Company on pages 25 through 43 of the Company&#146;s
Annual Report are incorporated herein by reference:</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="10%"></TD>
<TD width="90%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Independent Auditors&#146; Report</TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Consolidated Statements of Operations&nbsp;&#151; years ended
December&nbsp;31, 1999, 1998 and 1997</TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Consolidated Balance Sheets&nbsp;&#151; December&nbsp;31, 1999
and 1998</TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Consolidated Statements of Cash Flows&nbsp;&#151; years ended
December&nbsp;31, 1999, 1998 and 1997</TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Consolidated Statements of Stockholders&#146; Equity&nbsp;&#151;
years ended December&nbsp;31, 1999, 1998 and 1997</TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Notes to Consolidated Financial Statements</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
&nbsp;&nbsp;&nbsp;&nbsp; 2. Certain schedules for which
provisions are made in the applicable accounting regulations of
the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have
been omitted.</TD>
</TR>

</TABLE>

<P align="center">13


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
&nbsp;&nbsp;&nbsp;&nbsp; 3. The exhibits filed in response to
Item&nbsp;601 of Regulation&nbsp;S-K are listed in the
Exhibit&nbsp;Index on page&nbsp;A-1.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD>(b)&nbsp;</TD>
<TD align="left">
Reports on Form&nbsp;8-K.</TD>
</TR>

</TABLE>

<P align="left">
(1)&nbsp; On October&nbsp;6, 1999, the Company filed a report on
Form&nbsp;8-K announcing that it had completed the public
offering of $150,000,000 aggregate principal amount of its 8%
Senior Notes due 2019.

<P align="left">
(2)&nbsp; On October&nbsp;15, 1999, the Company filed a report on
Form&nbsp;8-K announcing that it had completed the previously
announced acquisition of the Fluid Power Division of Eaton
Corporation.

<P align="center">14



<P align="center"><B>SIGNATURES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Pursuant to the requirements of Section&nbsp;13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.</B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="38%"></TD>
<TD width="62%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
BORGWARNER INC.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="38%"></TD>
<TD width="2%"></TD>
<TD width="60%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD>By:&nbsp;</TD>
<TD align="left">
/s/ JOHN F. FIEDLER</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="38%"></TD>
<TD width="62%"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
<HR size="1" align="left"></TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="center">
John F. Fiedler</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="center">
<I>Chairman and Chief Executive Officer</I></TD>
</TR>

<TR>
<TD>&nbsp;</TD>
</TR>

<TR valign="top">
<TD>&nbsp;</TD>
<TD align="left">
Date: March&nbsp;22, 2000</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on
this 22nd day of March, 2000.</B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="50%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="47%">&nbsp;</TD>
</TR>

<TR>
<TD align="center" nowrap><FONT size="2"><B>Signature</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Title</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ JOHN F. FIEDLER<BR>
<HR size="1">John F. Fiedler</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Chairman of the Board of Directors and Chief Executive Officer
(Principal Executive Officer)</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ LAWRENCE B. SKATOFF<BR>
<HR size="1">Lawrence B. Skatoff</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Executive Vice President and Chief Financial Officer (Principal
Financial Officer)</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ WILLIAM C. CLINE<BR>
<HR size="1">William C. Cline</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Vice President and Controller<BR>
(Principal Accounting Officer)</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ PHYLLIS O. BONANNO<BR>
<HR size="1">Phyllis O. Bonanno</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ ANDREW F. BRIMMER<BR>
<HR size="1">Andrew F. Brimmer</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ WILLIAM E. BUTLER<BR>
<HR size="1">William E. Butler</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ JERE A. DRUMMOND<BR>
<HR size="1">Jere A. Drummond</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ PAUL E. GLASKE<BR>
<HR size="1">Paul E. Glaske</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ IVAN W. GORR<BR>
<HR size="1">Ivan W. Gorr</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ JAMES J. KERLEY<BR>
<HR size="1">James J. Kerley</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ ALEXIS P. MICHAS<BR>
<HR size="1">Alexis P. Michas</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ JOHN RAU<BR>
<HR size="1">John Rau</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR>
<TD align="center" valign="top"><FONT size="2">
/s/ JOHN F. FIEDLER<BR>
<HR size="1">John F. Fiedler</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
As attorney-in-fact for the directors marked by an asterisk.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">15



<P align="center"><B>EXHIBIT INDEX</B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="86%">&nbsp;</TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exhibit</B></FONT></TD>
<TD></TD>
<TD></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Document Description</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*3.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit&nbsp;No.&nbsp;3.1 of the
Company&#146;s Quarterly Report on Form&nbsp;10-Q for the quarter
ended September&nbsp;30, 1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*3.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
By-laws of the Company (incorporated by reference to Exhibit
No.&nbsp;3.2 of the Company&#146;s Quarterly Report on
Form&nbsp;10-Q for the quarter ended September&nbsp;30, 1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*3.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Certificate of Designation, Preferences and Rights of
Series&nbsp;A Junior Participating Preferred Stock (incorporated
by reference to Exhibit&nbsp;3.3 of the Company&#146;s Annual
Report on Form&nbsp;10-K for the year ended December&nbsp;31,
1999).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*4.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Indenture, dated as of November&nbsp;1, 1996, between Borg-Warner
Automotive, Inc. and The First National Bank of Chicago
(incorporated by reference to Exhibit&nbsp;No.&nbsp;4.1 to
Registration Statement No.&nbsp;333-14717).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*4.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Indenture, dated as of February&nbsp;15, 1999, between
Borg-Warner Automotive, Inc. and The First National Bank of
Chicago (incorporated by reference to Exhibit&nbsp;No.&nbsp;4.1
to Amendment No.&nbsp;1 to Registration Statement
No.&nbsp;333-66879).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*4.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Rights Agreement, dated as of July&nbsp;22, 1998, between
Borg-Warner Automotive, Inc. and ChaseMellon Shareholder
Services, L.L.C. (incorporated by reference to Exhibit&nbsp;4.1
to the Registration Statement on Form&nbsp;8-A filed on
July&nbsp; 24, 1998).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Credit Agreement dated as of December&nbsp;7, 1994 among
Borg-Warner Automotive, Inc., as Borrower, the Lenders listed
therein, as Lenders, Chemical Bank and the Bank of Nova Scotia,
as Co-Arrangers, Chemical Bank, as Administrative Agent and The
Bank of Nova Scotia as Documentation Agent (incorporated by
reference to Exhibit&nbsp; No.&nbsp;10.1 to the Company&#146;s
Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 1994).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Amendment of Credit Agreement dated as of December&nbsp;
15, 1995 (incorporated by reference to Exhibit&nbsp;10.2 of the
Company&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 1995).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Second Amendment of Credit Agreement dated as of January&nbsp;
16, 1996 (incorporated by reference to Exhibit&nbsp;10.3 of the
Company&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 1996).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Replacement and Restatement Agreement dated as of October&nbsp;
10, 1996 to the Credit Agreement dated as of December&nbsp;7,
1994 (incorporated by reference to Exhibit&nbsp;10.1 on
Form&nbsp; 10-Q for the quarter ended September&nbsp;30, 1996).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amendment to Credit Agreement dated as of February&nbsp;2, 1999
to the Credit Agreement dated as of December&nbsp;7, 1994
(incorporated by reference to Exhibit&nbsp;10.5 of the
Company&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 1998).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Distribution and Indemnity Agreement dated January&nbsp;27, 1993
between Borg-Warner Automotive, Inc. and Borg-Warner Security
Corporation (incorporated by reference to Exhibit&nbsp;
No.&nbsp;10.2 to Registration Statement No.&nbsp;33-64934).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.7</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Tax Sharing Agreement dated January&nbsp;27, 1993 between
Borg-Warner Automotive, Inc. and Borg-Warner Security Corporation
(incorporated by reference to Exhibit&nbsp;No.&nbsp;10.3 to
Registration Statement No.&nbsp;33-64934).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Management Stock Option Plan, as
amended (incorporated by reference to Exhibit&nbsp;No.&nbsp;10.6
to Registration Statement No.&nbsp;33-64934).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. 1993 Stock Incentive Plan as amended
effective November&nbsp;8, 1995 (incorporated by reference to
Appendix&nbsp;A of the Company&#146;s Proxy Statement dated
March&nbsp;20, 1998).</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">A-1



<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="86%">&nbsp;</TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exhibit</B></FONT></TD>
<TD></TD>
<TD></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Document Description</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Receivables Transfer Agreement dated as of January&nbsp;28, 1994
among BWA Receivables Corporation, ABN AMRO Bank N.V. as Agent
and the Program LOC Provider and Windmill Funding Corporation
(incorporated by reference to Exhibit&nbsp;No.&nbsp; 10.12 to the
Company&#146;s Annual Report on Form&nbsp;10-K for the year
ended December&nbsp;31, 1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.11</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amended and Restated Receivables Loan Agreement dated as of
December&nbsp;23, 1998 among BWA Receivables Corporation, as
Borrower, Borg-Warner Automotive, Inc., as Collection Agent, ABN
AMRO Bank N.V., as Agent, the Banks from time to time party
hereto, ABN AMRO Bank N.V., as the Program LOC Provider and the
Program LOC Provider and Windmill Funding Corporation
(incorporated by reference to Exhibit&nbsp;No.&nbsp; 10.11 of the
Company&#146;s Annual Report on Form&nbsp;10-K for the year
ended December&nbsp;31, 1998).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.12</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Amendment dated as of March&nbsp;25, 1999 to Amended and
Restated Receivables Loan Agreement dated as of December&nbsp;
23, 1998 (incorporated by reference to Exhibit&nbsp;No.&nbsp;10.1
to the Company&#146;s Quarterly Report on Form&nbsp;10-Q for the
quarter ended September&nbsp;30, 1999).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">10.13</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Second Amendment dated as of December&nbsp;22, 1999 to Amended
and Restated Receivables Loan Agreement dated as of
December&nbsp;23, 1998.</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.14</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Service Agreement, dated as of December&nbsp;31, 1992, by and
between Borg-Warner Security Corporation and Borg-Warner
Automotive, Inc. (incorporated by reference to
Exhibit&nbsp;No.&nbsp; 10.10 to Registration Statement
No.&nbsp;33-64934).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.15</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Transitional Income Guidelines for
Executive Officers amended as of May&nbsp;1, 1989 (incorporated
by reference to Exhibit&nbsp;10.16 to the Company&#146;s Annual
Report on Form&nbsp;10-K for the year ended December&nbsp;31,
1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.16</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Management Incentive Bonus Plan
dated January&nbsp;1, 1994 (incorporated by reference to
Exhibit&nbsp;No.&nbsp;10.18 to the Company&#146;s Annual Report
on Form&nbsp; 10-K for the year ended December&nbsp;31, 1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Retirement Savings Excess Benefit
Plan dated January&nbsp;27, 1993 (incorporated by reference to
Exhibit&nbsp;No.&nbsp;10.20 of the Company&#146;s Annual Report
on Form&nbsp;10-K for the year ended December&nbsp;31, 1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.18</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Retirement Savings Plan dated
January&nbsp;27, 1993 as further amended and restated effective
as of April&nbsp;1, 1994 (incorporated by reference to
Exhibit&nbsp; 10.18 to the Company&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 1995).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.19</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Deferred Compensation Plan dated
January&nbsp;1, 1994 (incorporated by reference to
Exhibit&nbsp;No.&nbsp;10.24 of the Company&#146;s Annual Report
on Form&nbsp; 10-K for the year ended December&nbsp;31, 1993).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.20</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Form of Employment Agreement for John&nbsp;F. Fiedler
(incorporated by reference to Exhibit&nbsp;No.&nbsp;10.0 of the
Company&#146;s Quarterly Report on Form&nbsp;10-Q for the quarter
ended June&nbsp;30, 1994).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.21</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amended Form of Employment Agreement for John&nbsp;F. Fiedler
dated January&nbsp;27, 1998 (incorporated by reference to
Exhibit&nbsp;10.21 of the Company&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 1997).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Form of Change of Control Employment Agreement for Executive
Officers (incorporated by reference to Exhibit&nbsp;No.&nbsp;10.1
to the Company&#146;s Quarterly Report on Form&nbsp;10-Q for the
Quarter ended September&nbsp;30, 1997).</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">A-2



<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="86%">&nbsp;</TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exhibit</B></FONT></TD>
<TD></TD>
<TD></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap><FONT size="2"><B>Document Description</B></FONT></TD>
</TR>

<TR>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.23</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amendment to the Change of Control Employment Agreement between
the Company and John&nbsp;F. Fiedler dated effective
January&nbsp;30, 1998 (incorporated by reference to Exhibit&nbsp;
10.23 of the Company&#146;s Annual Report on Form&nbsp;10-K for
the year ended December&nbsp;31, 1997).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.24</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Assignment of Trademarks and License Agreement (incorporated by
reference to Exhibit&nbsp;No.&nbsp;10.0 of the Company&#146;s
Quarterly Report on Form&nbsp;10-Q for the quarter ended
September&nbsp;30, 1994).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amendment to Assignment of Trademarks and License Agreement
(incorporated by reference to Exhibit&nbsp;No.&nbsp;10.23 of the
Company&#146;s Form&nbsp;10-K for the year ended
December&nbsp;31, 1998).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">&#134;*10.26</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Borg-Warner Automotive, Inc. Executive Stock Performance Plan
(incorporated by reference to Exhibit&nbsp;No.&nbsp;10.23 of the
Company&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 1995).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.27</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Agreement of Purchase and Sale dated as of May&nbsp;31, 1996 by
and among Coltec Industries Inc., Holley Automotive Group, Ltd.,
Holley Automotive Inc., Coltec Automotive Inc., and Holley
Automotive Systems GmbH and Borg-Warner Automotive, Inc.,
Borg-Warner Automotive Air/ Fluid Systems Corporation and
Borg-Warner Automotive Air/ Fluid Systems Corporation of Michigan
(incorporated by reference to Exhibit&nbsp;10.1 of the
Company&#146;s Current Report on Form&nbsp;8-K dated as of
June&nbsp;17, 1996).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">*10.28</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Agreement and Plan of Merger dated as of December&nbsp;17, 1998
by and between Borg-Warner Automotive, Inc., BWA Merger Corp. and
Kuhlman Corporation (incorporated by reference to Exhibit&nbsp;2
of the Company&#146;s Current Report on Form&nbsp;8-K dated as
of December&nbsp;21, 1998).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">10.29</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Asset Purchase Agreement dated as of August&nbsp;2, 1999 among
Eaton Corporation, the Seller Subsidiaries, Borg-Warner
Automotive, Inc. and the Buyer Subsidiaries.</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">13.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Annual Report to Stockholders for the year ended December&nbsp;
31, 1999 with manually signed Independent Auditors&#146; Report.
(The Annual Report, except for those portions which are expressly
incorporated by reference in the Form&nbsp;10-K, is furnished
for the information of the Commission and is not deemed filed as
part of the Form&nbsp;10-K).</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">21.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Subsidiaries of the Company.</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Independent Auditors&#146; Consent.</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">27.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Financial Data Schedule.</FONT></TD>
</TR>

<TR>
<TD></TD>
<TD align="right" valign="top" nowrap><FONT size="2">99.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Cautionary Statements.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="2%"></TD>
<TD width="98%"></TD>
</TR>

<TR valign="top">
<TD>*&nbsp;</TD>
<TD align="left">
Incorporated by reference.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
<TD width="1%"></TD>
<TD width="99%"></TD>
</TR>

<TR valign="top">
<TD>&#134;&nbsp;</TD>
<TD align="left">
Indicates a management contract or compensatory plan or
arrangement required to be filed pursuant to Item&nbsp;14(c).</TD>
</TR>

</TABLE>

<P align="center">A-3