Welcome Investor Day

September 7, 2016 1

Welcome Investor Day

September 7, 2016 | Scott Gallett, Vice President Marketing 2

Safe Harbor Statement Statements contained in this presentation may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act (the “Act”) that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could,“ "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "initiative," "intends," "outlook,“ "plans," "potential," "project," "pursue," "seek," "should," "target," "when," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements, other than statements of historical fact, that we expect or anticipate will or may occur in the future regarding our financial position, business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success and other such matters, are forward-looking statements. These statements are based on assumptions and analysis made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. Forward-looking statements are not guarantees of performance and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this document. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control and include risks noted under Item 1A, “Risk Factors,” of our Annual Report on Form 10-K and in other reports that we file with the Securities and Exchange Commission. We do not undertake any obligation to update or announce publicly any updates to or revision to any of the forward-looking statements in this Form 10-Q to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements. This section is intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Act. This should not be construed as a complete list of all of the economic, competitive, governmental, technological and other factors that could adversely affect our expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, operations, liquidity, financial condition and prospects.

© BorgWarner Inc.

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Investor Day Outline          

10:40 11:10 11:20 11:30 11:40 11:50 12:00 2:35 2:45 3:15

Keynote Address – James Verrier, President and CEO Vehicle Mobility Trends – Chris Thomas, Chief Technology Officer Combustion – Frederic Lissalde, President Turbo Systems Hybrid – Stefan Demmerle, President PowerDrive Systems Electric – Joe Fadool, President Morse Systems Commercial Vehicle – Brady Ericson, President Emissions Systems Static Displays, Demonstration Vehicles & Lunch – Scott Gallett, Vice President Marketing Financial Discipline – Ron Hundzinski, Chief Financial Officer Q&A – James and Ron Closing – James

© BorgWarner Inc.

4

Vehicle Mobility Trends

autonomous driving

© BorgWarner Inc.

shared cars and rideshare

connected cars

efficiency/CO2 emissions

5

Core Purpose Remains Unchanged POINT A

POINT B

THERE WILL ALWAYS BE A NEED FOR A

PROPULSION SYSTEM © BorgWarner Inc.

6

Vehicle Propulsion System Categories

© BorgWarner Inc.

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Electric Hybrid Combustion

Light Vehicle Production 2% CAGR

0.5M

91M

23% CAGR

3M

2.3M 18M

29% CAGR

88M

-0.3% CAGR

2016 IHS UNITS*

© BorgWarner Inc.

107M

86M

2023 IHS UNITS*

*Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

8

Growth and Participation in Combustion Market and Participation

Revenue

aCPV (Average Content Per Vehicle) Combustion Vehicles with BW Content

88M

86M

2023

CAGR

5% aCPV

$185 2016

© BorgWarner Inc.

44% 2016 IHS UNITS*

*Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

aCPV

53%

$215 2023 IHS UNITS*

9

Combustion Propulsion* Combustion Products: 

Timing system



Variable cam timing



Exhaust gas recirculation



Clutch plates



All-wheel drive systems



Enhanced starters



Fans & fan drives Stop/Start Accumulator



Pictured products and many more… • Includes engines, transmissions and all-wheel drive systems with no electrification, includes stop/start. All prices are estimates, actual prices will vary

© BorgWarner Inc.

$45

Turbocharger

Dual Clutch and Control Module

$250 $350 10

Growth and Participation in Hybrid Revenue

aCPV (Average Content Per Vehicle) Hybrid Vehicles with BW Content

18M

Market and Participation

2023

CAGR

54% aCPV

$140 2016

© BorgWarner Inc.

aCPV

3M 20% 2016 IHS UNITS*

*Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

$225

42% 2023 IHS UNITS*

11

Hybrid Propulsion* Combustion Products PLUS Hybrid Specific Products 

Exhaust heat recovery systems



Electric drive motors



Disconnect clutch and controls



Pictured products and many more… eBooster®

$200

Belt Alternator Starter

$250

P2 Motor/Clutch Module

Electric All-Wheel Drive

$900 $1200

* Includes mild, full and plug-in hybrid All prices are estimates, actual prices will vary

© BorgWarner Inc.

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Growth and Participation in Electric Revenue

aCPV (Average Content Per Vehicle) Electric Vehicles with BW Content

2.3M

Market and Participation

2023

CAGR

53% aCPV

aCPV

$620 2016

© BorgWarner Inc.

0.5M

3%

2016 IHS UNITS* *Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

$285

29% 2023 IHS UNITS*

13

Electric Propulsion* Electric Vehicle Products: 

Electric all-wheel drive



Liquid heater



Auxiliary coolant pump



Fuel Cell air supply



Transmission Chain



Pictured products and many more… Friction Plates

* Includes battery electric vehicles, range extenders and fuel cells. All prices are estimates, actual prices will vary

© BorgWarner Inc.

$40

Cabin Air Heater

eGearDrive®

Electric Drive Motor

Electric Drive Module

$200 $500 $700 $1100 14

Electric Hybrid Combustion

Excellent Balance – Light Vehicle

96.1%

2016 IHS UNITS*

© BorgWarner Inc.

0.6%

0.1%

3.3%

1.1%

98.7%

2016 BWA REVENUE (USD)

1.6%

2.2% 17.2%

14.8%

80.6%

83.6%

2023 IHS UNITS*

*Source market data: IHS Light Vehicle Forecast (June 2016)

2023 BWA REVENUE (USD)

15

Complementing Organic Growth with Acquisition Downsized Turbocharged Efficient Internal Combustion Engines

Trend

Select BWA Products Turbochargers

1993 Select BWA Milestones

Variable Cam Timing

Exhaust Gas Recirculation

2023

2008 Acquired turbocharger businesses

© BorgWarner Inc.

Acquired EGR cooler business

16

Complementing Organic Growth with Acquisition Trend

Advanced Drivetrain

Select BWA Products Dual Clutch Transmission Modules

1993 Select BWA Milestones

© BorgWarner Inc.

Front Wheel Drive All-Wheel Drive Coupling

2023

2008 Developed and launched DCT

Acquired FWD All-Wheel Drive coupling business

17

Complementing Organic Growth with Acquisition Trend

Electrification

Select BWA Products eGearDrive® Transmission

1993 Select BWA Milestones

© BorgWarner Inc.

2008 Developed and launched electric vehicle transmission

Electric Drive Motor

P2 Motor & Clutch module

2023 Acquired rotating electrics business

18

Complementing Organic Growth with Acquisition Downsized Turbocharged Efficient Internal Combustion Engines

Trend

Advanced Drivetrain Electrification

Select BWA Products Turbochargers

Variable Cam Timing

Dual Clutch Transmission Modules

1993 Select BWA Milestones

eGearDrive® Transmission

Exhaust Gas Recirculation

Front Wheel Drive All-Wheel Drive Coupling

© BorgWarner Inc.

Developed and launched DCT

Developed and launched electric vehicle transmission

P2 Motor & Clutch module

2023

2008 Acquired turbocharger businesses

Electric Drive Motor

Acquired EGR cooler business

Acquired FWD All-Wheel Drive coupling business

Acquired rotating electrics business

19

Strong Global Customer Relationships

Europe Asia ex. China China Americas

© BorgWarner Inc.

38% 14% 14% 34%

Europe

38%

China

VW/Audi Daimler Ford Renault BMW PSA FCA GM CV Other

10% 5% 3% 3% 2% 2% 2% 1% 3% 7%

VW/Audi Ford GM Other China

Asia ex. China

14%

Hyundai/Kia Other Asia ex. China

*2016 Sales outlook includes net sales from Remy as of January 13, 2016

9% 5%

Americas Ford FCA GM Asian OEMs Commercial Vehicles Other

14% 3% 2% 1% 8% 34% 9% 5% 3% 2% 7% 8%

20

Zone of Growth - Organic

Mid-to-high single digit

© BorgWarner Inc.

21

Summary 

Vehicle mobility trends are good for our business, all still need a propulsion system



BorgWarner’s product portfolio is diverse, deep and well positioned for future propulsion needs



Our technologies strength will continue to be a key differentiator for us with our customers



Results in a zone of growth of mid to high single digits



Financial Strength and Discipline will continue

© BorgWarner Inc.

22

Investor Day

September 7, 2016 23

Mobility Trends

September 7, 2016 | Prof. Christopher Thomas, Chief Technology Officer 24

Vehicle Mobility Trends

autonomous driving

© BorgWarner Inc.

shared cars and rideshare

connected cars

efficiency/CO2 emissions

25

Mobility Trends – Key Points 1. Understanding and impact on our business 2. Mobility trends all need a propulsion system 3. Continued drive for efficiency continues to be a large growth opportunity

© BorgWarner Inc.

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Autonomous Vehicles Key Points: 

Lower levels of autonomy around us today 

autonomous driving

© BorgWarner Inc.

Includes cruise control, active cruise control, autonomous emergency braking, lane keeping, automatic parking



Higher levels of autonomy require redundant systems



Joint development programs

Propulsion System: 

Neutral for lower levels of autonomous vehicles



Full Hybrids favored for higher levels

27

Shared Cars and Rideshare Key Points: 

Most prominent in urban areas



Business based ownership and decisions



Total Cost of ownership



Maximum up-time, minimal refueling time

Propulsion System:

shared cars and rideshare

© BorgWarner Inc.



48V mild hybrids favored



All propulsion types used today and into future

28

Connected Cars Key Points: 

Vehicles communicate with each other and surroundings



Improves safety and efficiency



Accidents avoided and routes changed to avoid congestion



Reduction in the duty cycle for stopping, idling, accelerating

Propulsion System: Neutral

connected cars

© BorgWarner Inc.



Will improve efficiency of all vehicles



Combustion vehicles will benefit most

29

Efficiency / CO2 Emissions Key Points: 

Cost per % fuel economy improvement is King

Balanced global propulsion system mix:

efficiency/CO2 emissions

© BorgWarner Inc.



Downsized, turbocharged, direct injection, variable cam timing, and stop/start (2016 high end technology)



More advanced combustion engines = above plus cooled EGR, VTG turbochargers, variable valve lift, high energy ignition coils



Advanced combustion with 48V Mild Hybrid



Advanced combustion with high voltage Full Plug-in Hybrid



Electric Vehicle

30

Summary – Mobility Trends  Vehicle mobility trends are good for our business, all still need a propulsion system  We understand the interactions between the mobility trends and the impact on our business  Efficiency/CO2 regulations in combustion, hybrid, and electric vehicles remain a big growth opportunity

© BorgWarner Inc.

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Investor Day

September 7, 2016 32

Combustion

September 7, 2016 | Frederic Lissalde, President Turbo Systems 33

Combustion © BorgWarner Inc.

34

Definition – Combustion Vehicles that have an internal combustion engine and no electric motors that help propulsion  Propulsion system includes transmissions and all-wheel drive systems

© BorgWarner Inc.

35

Combustion – Key Point #1 1. Efficient combustion propulsion systems will play a key role in meeting government regulations Passenger car CO2 emissions and fuel consumption, normalized to NEDC

Source ICCT

© BorgWarner Inc.

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Combustion – Key Point #2 2. Continued extreme pressure for innovation  $/% fuel economy

© BorgWarner Inc.

37

Combustion – Key Points #3 3. Industry penetration rates continue to grow Technology Penetration % - Combustion Only (includes S/S) - Gas & Diesel 2016

2026

Turbochargers

42%

55%

Exhaust Gas Recirculation

29%

47%

Variable Cam Timing

54%

70%

8%

10%

35%

65%

Dual Clutch Transmission Stop/Start

© BorgWarner Inc.

38

Growth and Participation in Combustion Market and Participation

Revenue

aCPV (Average Content Per Vehicle) Combustion Vehicles with BW Content

88M

86M

2023

CAGR

5% aCPV

$185 2016

© BorgWarner Inc.

44% 2016 IHS UNITS*

*Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

aCPV

53%

$215 2023 IHS UNITS*

39

Select Combustion Vehicles with BWA Content  Audi A6

P0

P2

 Hyundai Santa Fe

 BYD S7

 Jaguar F-PACE

 Chevrolet Malibu

 Mercedes E-Class

 Jeep Grand Cherokee

 Nissan Sentra

 Ford F-Series

 Toyota Tundra

 Ford Escape / Kuga

 Volkswagen Golf

 Honda CR-V

 And another ~800+ nameplates

© BorgWarner Inc.

P3

40

Combustion – Select Customer Awards Turbochargers: 1.0L gas EU 1.0L gas Asia 1.5L gas Asia

P0

Stop/Start Accumulators: N. America (2) Asia (2)

© BorgWarner Inc.

EGR Modules: P2 N. America (3) EU Asia (2)

P3

Variable Cam Timing: Americas (3) EU (2) Asia (2)

41

Combustion Vehicle Summary  Combustion propulsion systems continue to be a large part of the market  The drive for more efficient combustion engines continues  Penetration rates for BorgWarner products continue to grow  We are growing our market penetration and average content per vehicle

© BorgWarner Inc.

42

Investor Day

September 7, 2016 43

Hybrid

September 7, 2016 | Stefan Demmerle, President PowerDrive Systems 44

Hybrid © BorgWarner Inc.

45

Definition - Hybrid Vehicles that have an internal combustion engine and have some ability to propel the vehicle in combination with an electric motor © BorgWarner Inc.

46

Definition - Hybrid Propulsion power delivered from the electric motor can vary dramatically  Mild Hybrids vehicles with small electric motors and an internal combustion engine that can provide propulsion together to propel the vehicle  Full Hybrids vehicles with larger electric motors and an internal combustion engine that can each propel the vehicle alone or work together  Plug-in hybrids vehicle that uses an energy storage device that can be plugged into an external power source to recharge the battery

© BorgWarner Inc.

47

Hybrid – Key Point #1 1. Wide variety of architectures, customers deciding what mix of hybrid, combustion and electric is best for them  48V mild hybrid systems forecast to be the majority of the volume  BorgWarner’s portfolio includes a wide variety of hybrid specific products for all types of hybrids

© BorgWarner Inc.

48

Hybrid – Key Point #2 2. Hybrids use highly efficient internal combustion engines Technology Penetration % - Hybrid Only - Gas & Diesel 2016

2026

Turbochargers

18%

56%

Exhaust Gas Recirculation

12%

41%

Variable Cam Timing

52%

68%

 Hybrids drive increasing demand for BorgWarner’s efficient ICE products © BorgWarner Inc.

49

Hybrid Architecture Electric motors of different sizes and power levels can be placed in various positions throughout the propulsion system

P1 P3

P0

© BorgWarner Inc.

P2

P4

PS

50

Growth and Participation in Hybrid Revenue

aCPV (Average Content Per Vehicle) Hybrid Vehicles with BW Content

18M

Market and Participation

2023

CAGR

54% aCPV

$140 2016

© BorgWarner Inc.

aCPV

3M 20% 2016 IHS UNITS*

*Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

$225

42% 2023 IHS UNITS*

51

Select Hybrid vehicles with BWA Products  Audi A3

 Hyundai Sonata

 BMW 3 Series

 Mercedes C-Class

 BYD Tanga

 Toyota Camry

 Chevrolet Malibu

 Volkswagen Jetta

 Chevrolet Volt

 Volvo XC90

 Ford Fusion

 And another ~20+ nameplates

© BorgWarner Inc.

52

Hybrid – Select Customer Awards IBAS: 48V Asia & 200V EU

eBooster®: 48V EU (2)

© BorgWarner Inc.

Wet disconnect and controls: Asia

Chain Drive: Asia

P3

Exhaust Heat Recovery System: N. America

53

Hybrid Summary  Hybrid market is growing quickly  We have a wide variety of hybrid specific products  Hybrids use highly efficient internal combustion engines  Hybrids are additive to our business  We are winning business, increasing our penetration and content per vehicle © BorgWarner Inc.

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Investor Day

September 7, 2016 55

Electric

September 7, 2016 | Joe Fadool, President Morse Systems 56

Electric © BorgWarner Inc.

57

Definition – Electric An electric vehicle is propelled purely by an electric motor or sometimes multiple electric motors.

© BorgWarner Inc.

58

Definition - Electric The electric motor(s) get their energy from a battery.  Battery Electric Vehicles (BEV’s) have just the battery as the power source and when it runs out you need to plug it in to recharge it.  Range Extended Electric Vehicles include the battery which supplies the power to the motor to drive the wheels, but there is a small efficient internal combustion engine in the vehicle that acts as a generator to charge the battery and/or give electrical power directly to the electric motor.  Fuel Cell vehicles fall into this category

© BorgWarner Inc.

59

Electric – Some Key Points Electric Propulsion systems have 5 main areas:  Electric Motor  Transmission  Power Electronics  Thermal Management  Battery

© BorgWarner Inc.

60

Electric – Some Key Points BorgWarner supplies products in these four areas:  Electric Motor  Transmission  Power Electronics  Thermal Management  Battery

© BorgWarner Inc.

61

Millions

Electric Vehicle Forecast l 7

 IHS predicts strong EV growth with 19% CAGR

6 5 4 3 IHS Forecast 2 1 0 2016

© BorgWarner Inc.

2021

2026

62

Millions

Electric Vehicle Forecast 7

 IHS predicts strong EV growth  Asia represents 40% of units in 2026

6 5 4 3 IHS Forecast NA Brands

2 Asia Brands

1 EU Brands

0 2016

© BorgWarner Inc.

2021

2026

63

Millions

Electric Vehicle Forecast 7

 IHS predicts strong EV growth  Asia represents 40% of units in 2026

6 5 Including OEM announcements

4 3 IHS Forecast NA Brands

2 Asia Brands

 VW, Tesla and (Toyota fuel cells, Daimler) have publicly announced significantly higher goals

1 EU Brands

0 2016

© BorgWarner Inc.

2021

2026

64

Millions

Electric Vehicle Forecast 7

Optimistic Forecast

6 5 Including OEM announcements

4 3 IHS Forecast NA Brands

2 Asia Brands

1 EU Brands

 IHS predicts strong EV growth  Asia represents 40% of units in 2026  VW, Tesla and Toyota fuel cells have publicly announced significantly higher goals  Growth opportunity for BorgWarner

0 2016

© BorgWarner Inc.

2021

2026

65

Electric Vehicle Market Influencers  Government  Battery cost  Vehicle range  Performance  Infrastructure / recharge time  Consumer demand / passion

© BorgWarner Inc.

66

Growth and Participation in Electric Revenue

aCPV (Average Content Per Vehicle) Electric Vehicles with BW Content

2.3M

Market and Participation

2023

CAGR

53% aCPV

aCPV

$620 2016

© BorgWarner Inc.

0.5M

3%

2016 IHS UNITS* *Source market data: IHS Light Vehicle Forecast (June 2016) All values are approximate

$285

29% 2023 IHS UNITS*

67

Electric - Select Customer Awards P0

eGearDrive® Transmission: Asia (4)

© BorgWarner Inc.

Electric Drive Motor: N. America

P2

P3

Electric Drive Module: Asia

68

Electric - Select Customer Awards Cabin Air Heater: N. America (2)

P0

Liquid Battery Heater: Asia

P2

Friction Plates: EU

P3

Auxiliary Coolant Pump: Asia

© BorgWarner Inc.

69

Electric Summary  Electric vehicles present some high dollar product opportunities  Our product offering serves 4 of the 5 main propulsion and efficiency areas  We are uniquely positioned to deliver mechanical and electrical products and modules  We are winning business and actively working with traditional and new vehicle manufacturers globally

© BorgWarner Inc.

70

Investor Day

September 7, 2016 71

Commercial Vehicle

September 7, 2016 | Brady Ericson, President Emissions Systems 72

Commercial Vehicle © BorgWarner Inc.

73

Definition – Commercial Vehicle Includes on-highway vehicles (over six tons), off-highway, construction, agricultural, mining and marine Roughly 6 million unit annual market

© BorgWarner Inc.

74

Commercial Vehicle Key Points Similar drive for efficiency as light vehicle market Greater pull from market rather than legislative push  Total Cost of Ownership and Functionality  Fuel Efficiency  Up-time / Reliability  Job Efficiency - Autonomous / Platooning  Operator Satisfaction

© BorgWarner Inc.

75

Commercial Vehicle Key Points  Variation in duty cycles also drives need for innovative and proven product solutions  Technology transfer will continue between Commercial and Light vehicles

© BorgWarner Inc.

76

Making Commercial Vehicles Efficient

© BorgWarner Inc.

77

Commercial - Select Customer Awards P2

Turbocharger: N. America EU (3) Asia S. America

Electric Drive motor: Asia

EGR module: EU (2)

Heavy Duty Transfer Case: N. America

© BorgWarner Inc.

78

Commercial Vehicle Summary  Continues to be an important portion of our business going forward  Similar drive for efficiency and trends as light vehicles, U.S. Gov’t regulations  We have specific products for the hybrid and electric trend and they are additive to our CV combustion business  Technology transfer between Commercial and Light Vehicle continues

© BorgWarner Inc.

79

Investor Day

September 7, 2016 80

Static Displays, Demo Vehicles, Lunch

September 7, 2016 | Scott Gallett, Vice President Marketing 81

Vehicle Propulsion System Categories

© BorgWarner Inc.

82

Logistics  Lunch available now through 2:15 Group 1  Now – 1:15 Demo Vehicles  1:15 – 1:45 Lunch  1:45 – 2:30 Static Displays

Group 2  Now – 12:30 Lunch  12:30 – 1:15 Static Displays  1:15 – 2:30 Demo Vehicles

 2:35 – Resume group presentations with Ron Hundzinski, CFO

© BorgWarner Inc.

83

Investor Day Outline          

10:40 11:10 11:20 11:30 11:40 11:50 12:00 2:35 2:45 3:15

Keynote Address – James Verrier, President and CEO Vehicle Mobility Trends – Chris Thomas, Chief Technology Officer Combustion – Frederic Lissalde, President Turbo Systems Hybrid – Stefan Demmerle, President PowerDrive Systems Electric – Joe Fadool, President Morse Systems Commercial Vehicle – Brady Ericson, President Emissions Systems Static Displays, Demonstration Vehicles & Lunch – Scott Gallett, Vice President Marketing Financial Discipline – Ron Hundzinski, Chief Financial Officer Q&A – James and Ron Closing – James

© BorgWarner Inc.

84

Financial Discipline

September 7, 2016 | Ron Hundzinski, Chief Financial Officer 85

Zone of Growth - Organic

Mid-to-high single digit

© BorgWarner Inc.

86

BorgWarner  Product leaders in clean, efficient propulsion system technology  A trusted global partner  Financial focus on ROIC, operating margins and economic value

© BorgWarner Inc.

87

Delivering Operating Margins Strong Operating Income Margins 12.4%

12.9%

13.0%

11.1%

11.7%

2011

2012

2013

2014

2015*

>12%

9.3%

2010

© BorgWarner Inc.

2016E*

88

Delivering ROIC 20.0%

21.7% Income Margins Strong Operating 20.7%

19.4%

16.7%

2010

© BorgWarner Inc.

2011

2012

2013

2014

18.3%

~18%

2015

2016E

89

Favorable Market Dynamics 1. Demand for combustion technology remains strong 2. For all architectures – combustion, hybrid and electric:  Similar competitive landscape  Opportunity for differentiation through manufacturing and product technology

3. OEMs reliance on the supply base for component level and system level technology is on the rise

© BorgWarner Inc.

90

Competitive Landscape Average number of major competitors is similar for each product category

Turbochargers

Belt Alternator Starters

Drive Motors

VCT

Hybrid Drive Motors

Transmissions

EGR

Disconnect Clutches

Transmission Friction Transmission Controls Timing Systems

~6

Hybrid Modules Power Electronics

~5

Power Electronics

~6

Battery Thermal Mgmt Cabin Heating

eBooster

Starters/Alternators All-Wheel Drive

© BorgWarner Inc.

91

BorgWarner’s Economic Moat Evolving portfolio aligned with market trends

Direct Competition

Deep, tribal knowledge of critical propulsion system technologies

BWA Margins

Economic valuebased business model

Emerging Alternative Technologies

Operational excellence

© BorgWarner Inc.

92

Expected Returns Incremental Sales

$1.00

Incremental Operating Income

$0.13 - $0.16

Incremental Capex & Working Capital

$0.55 - $0.60

ROIC

~20%

Focus and return on invested capital, margins & economic value remains strong © BorgWarner Inc.

93

Summary  Confident in our long-term profitable growth  Excited about our current and future products and future complementary acquisitions  Balanced participation in light vehicle propulsion systems minimizes risk  Financial Discipline will continue

© BorgWarner Inc.

94

Investor Day

September 7, 2016 95

Investor Day

Q&A

September 7, 2016 96

Investor Day

September 7, 2016 97

Combustion - Select Customer Awards  Variable cam timing Americas (3) (2017, 2018, 2019)  Stop/Start accumulator N. America (2) (2017, 2018)  Variable cam timing EU (2017, 2019), Asia (2018, 2019)  EGR module EU (2017), Asia (2) (2018, 2019)  EGR module N. America (3) (2018, 2018, 2018)  Plug top ignition coils EU (2) (2018, 2020)  Gas 1.0L turbocharger EU (2019), Asia (2019)  Stop/Start accumulator Asia (2) (2019, 2019)  Plug top Ignition coils Asia (2019)  Gas 1.5L turbocharger Asia (2020) © BorgWarner Inc.

98

Hybrid - Select Customer Awards  Chain drive for P3 Asia (2016)  Wet disconnect and controls for P2 Asia (2) (2016, 2018)  48V iBAS for P0 Asia (2017)  eBooster® EU (2) (2017, 2017)  200V iBAS for P0 EU (2019)  Exhaust heat recovery system N. America (2019)

© BorgWarner Inc.

99

Electric - Select Customer Awards  Auxiliary coolant pump Asia (2016)  eGearDrive® transmission Asia (2017, 2017, 2018, 2018)  Electric Drive Module Asia (2017)  Cabin Air Heater N. America (2017, 2019)  Electric Drive Motor N. America (2018)  Liquid heater Asia (2018)  Transmission friction plates EU (2019)

© BorgWarner Inc.

100

Commercial - Select Customer Awards  Turbocharger: N. America (2017)  Turbocharger: S. America (2017)  Turbocharger: Asia (2017)  Turbocharger: EU (2018, 2018, 2018)  Transfer-case: N. America (2018)  Exhaust Gas Recirculation Module: N. America (2018, 2018)  Electric Drive motor: Asia (2019)

© BorgWarner Inc.

101

Summary 

Vehicle mobility trends are good for our business, all still need a propulsion system



BorgWarner’s product portfolio is diverse, deep and well positioned for future propulsion needs



Our technologies strength will continue to be a key differentiator for us with our customers



Results in a zone of growth of mid to high single digits



Financial Strength and Discipline will continue

© BorgWarner Inc.

102

Thank you! © BorgWarner Inc.

103

Investor Day

September 7, 2016 104