Borgwarner Inc. · NYSE:BWA
Borgwarner — Merger or Acquisition (January 2020)
21 slides from Borgwarner's merger presentation, Jan 28, 2020
Slide 1: BorgWarner to Acquire Delphi Technologies: Strengthens Propulsion Systems Leadership
BorgWarner to Acquire Delphi Technologies: , Strengthens Propulsion Systems Leadership January 2020 BorgWarner
Slide 2: Forward-Looking Statements
Forward-Looking Statements ‘This communication may contain forwardiooking statements as contemplated by the 1295 Private Securties Ligation Reform Actthat reflect, when made, Delphi Technologies ar dorgiarners respective curren views wath recpectofuure events ncldng tne proposes raneacton, and ianca
Slide 3: A Propulsion Systems Leader, Well Positioned for the Future
A Propulsion Systems Leader, Well Positioned for the Future BorgWarner’s acq n of Delphi Technologies strengthen its propulsion systems leadership Reinforces leadership in electrified propulsion systems Increases power electronics scale, technology, talent and adds to system capabilities Enhances co
Slide 4: Delphi Technologies Overview
Delphi Technologies Overview Pioneers in propulsion technologies, solutions and services for global OEMs and the Aftermarket Key Facts & Figures Comprehensive portfolio of advanced technologies for ICE and electrified vehicles to meet current and future market needs ®& Strong position in pressure fu
Slide 5: Compelling transaction for Delphi Technologies' stakeholders
Compelling transaction for Delphi Technologies’ stakeholders Combination allows Delphi Technologies to become part of a pioneering propulsion technologies company with enhanced scale and unique capabilities Delphi Technologies’ shareholders receive ability to benefit from future upside and enhanced
Slide 6: Strengthens Scale and Expertise in Electrification
Strengthens Scale and Expertise in Electrification 3 BorgWarner _—¢ BorgWarner Delphi Technologies Mechanical, clutching, ‘Award-winning motors Leadership in power and hydraulic controls provide industry, electronics, software, expertise leading technology and controls € 2 . C4 20 eGearDrive® Electr
Slide 7: Journey to Advanced Propulsion and Electrification
Journey to Advanced Propulsion and Electrification Complementing Organic Growth with Acquisitions Launchedelectrcdrive Launched 48-votteBooster® Developed groundbreaking Won contractto supply P2 on- Wan frsteTurbo™*award with Unveiled fuly integrated dive module (eDM) electricaly driven compressor S
Slide 8: Evolution of Combustion, Hybrid, and Electric (C-H-E) Mix
Evolution of Combustion, Hybrid, and Electric (“C-H-E”) Mix 2023 Light Vehicle Market (Units) 2023 Light Vehicle Net Sales Mix 8% 6% 129 25% 30% MM Electric (OM Hybrid EE combustion 64% 59% IHS BWA DLPH Pro Forma BWA Consistent with BorgWarner’s stated C-H-E propulsion strategy Souci enc (ra Ei) saa
Slide 9: Strengthens Combustion Leadership
Strengthens Combustion Leadership Delphi Fuel Assembly / Engine / Transmission Delivery Controllers Technologies Management Air Path, Mechanical, and All Wheel Drive Fuel Injection and Electronics i ' i ' ' ' i ' Boosting Exhaust Gas i ' i i i ' i i Representative Examples © BorgWarner Inc Q BorgWar
Slide 10: Enhances Market Balance
Enhances Market Balance End Market Mix (2019 Preliminary Sales) Geographic Mix (2019 Preliminary Sales) RoW Aftermarket Asia Pacific z Europe Commerical Vehicle OEM North America Nn pro forma revenue provides enhanced end market exposure vehicle and aftermarket while maintaining geographic
Slide 11: Adds Scale and Capabilities Across Propulsion Portfolio
Adds Scale and Capabilities Across Propulsion Portfolio oe ~ 2 SS = aeagts Deora] * BorgWarner Broad portfolio of combustion | * Broad portfolio of hybrid + Broad portfolio of electric |» Broad portfolio of technologies technologies technologies. ‘combustion, hybrid, and electric technologies + Abil
Slide 12: Transaction Summary
Transaction Summary + Ina 100% stock transaction, Delphi Technologies’ shareholders will receive a fixed exchange ratio of 0.4534x BorgWamer shares per each of their existing Delphi Technologies shares at closing + Implied purchase price of $17.39 per Delphi Technologies share ( + $1.5 billion in Bo
Slide 13: Pro Forma Financial Outlook
Pro Forma Financial Outlook Delphi 3 BorgWarner #8 BorgWarner Technologies Pro Forma Avg. Annual Market Outgrowth (2021E-2023E) Continued mid-term industry outgrowth gus ~4.5% ~3% Significant long-term revenue synergy potential focusedon electrified vehicles Pro Forma Adj. Margin Outlook r 12.1% any
Slide 14: Cost Savings Support Meaningful EPS Accretion
Cost Savings Support Meaningful EPS Accretion Cost Synergies Driven by SG&A and Procurement Savings ($ in millions) Coming Sates i Excl. Amort. of Intangibles'”) 1 Procurement 2021E 2022E 2023E 2021E 2022E Long-Term Revenue Synergies Provide New Share Repurchase Program Additional Opportunity Provid
Slide 15: $1 Billion Share Repurchase Program
$1 Billion Share Repurchase Program 2014-2018 Accumulated Capital New Share Repurchase Program Deployment Mix) = Consistentwith existing capital allocation strategy Dividends = To be executed over the next three years = Demonstrates confidencein long-term free cash flow generation er valueto our sha
Slide 16: A Propulsion Systems Leader, Well Positioned for the Future
A Propulsion Systems Leader, Well Positioned for the Future BorgWarner’s acq n of Delphi Technologies strengthen its propulsion systems leadership Reinforces leadership in electrified propulsion systems Increases power electronics scale, technology, talent and adds to system capabilities Enhances co
Slide 17: Appendix
Appendix BorgWarner
Slide 18: Combined Capabilities Across Propulsion Types
Combined Capabilities Across Propulsion Types ) @ © = 2 we | @ «s < 64 @ Ot & te Oo a Ge ay Pe & HE - f ¢ & ° : @ 6 £ bi ‘Transmission Contolers
Slide 19: Strengthens BorgWarner's power electronics (PE) products, capabilities and scale
Strengthens BorgWarner’s power electronics (PE) products, capabilities and scale Enhances BorgWarner’s combustion, commercial vehicle and aftermarket businesses Consistent with BorgWarner’s balanced propulsion strategy Products: high voltage inverters, converters, on-board chargers and battery manag
Slide 20: Financial Benefits
Financial Benefits Transaction Terms consdrton $3.3B 0.4534 Enterprise Value Shares of BorgWarner common stock per Delphi Technologies share Ownership — | Closing (¥ofconbned Conpory) Expected in 2H 2020 vet Subject to DelphiTechologies Technologies stockholder approval, the satisfaction of customar
Slide 21: BorgWarner to Acquire Delphi Technologies
BORGWARNER TO ACQUIRE DELPHI TECHNOLOGIES: CREATING A PROPULSION SYSTEMS LEADER WELL POSITIONED FOR THE FUTURE Forward-Looking Statements This communication may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that reflect, when made, Delphi Tec