BORGWARNER INCBWA

BORGWARNER INC Earnings Per Share Disclosure

10-KFiled Feb 11, 20262 min read
EARNINGS PER SHARE
The Company presents both basic and diluted earnings per share of common stock (“EPS”) amounts. Basic EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock outstanding during the reporting period. Diluted EPS is calculated by dividing net earnings attributable to BorgWarner Inc. by the weighted average shares of common stock and common stock equivalents outstanding during the reporting period.

The dilutive impact of stock-based compensation is calculated using the treasury stock method. The treasury stock method assumes that the Company uses the assumed proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed
proceeds under the treasury stock method include the purchase price that the grantee will pay in the future and compensation cost for future service that the Company has not yet recognized. The dilutive effects of performance-based stock awards described in Note 19, “Stock-Based Compensation,” to the Consolidated Financial Statements are included in the computation of diluted earnings per share at the level the related performance criteria are met through the respective balance sheet date. There were 1.3 million, 0.9 million and 0.7 million performance stock units excluded from the computation of the diluted earnings per share for the years ended December 31, 2025, 2024 and 2023, respectively. These units were excluded because the related performance criteria had not been met as of the balance sheet dates.

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock:
Year Ended December 31,
(in millions except share and per share amounts)202520242023
Basic earnings per share:   
Net earnings from continuing operations$277 $367 $632 
Weighted average shares of common stock outstanding214.2 223.5 232.8 
Basic earnings per share of common stock$1.29 $1.64 $2.71 
Diluted earnings per share:  
Net earnings from continuing operations$277 $367 $632 
Weighted average shares of common stock outstanding214.2 223.5 232.8 
Effect of stock-based compensation2.2 1.3 1.6 
Weighted average shares of common stock outstanding, including dilutive shares 216.4 224.8 234.4 
Diluted earnings per share of common stock$1.28 $1.63 $2.70 

Historical Timeline

Fiscal YearFiled
2025Feb 11, 2026Showing above
2024Feb 6, 2025
2023Feb 8, 2024
2022Feb 9, 2023
2021Feb 15, 2022
2020Feb 22, 2021
2019Feb 13, 2020
2018Feb 19, 2019
2017Feb 8, 2018
2016Feb 9, 2017
2015Feb 11, 2016

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

Income TaxesRevenueFair ValuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance