AUBURN HILLS, MI — BorgWarner has provided 2006 earnings guidance of $4.22 to $4.57 per diluted share on a U.S. GAAP basis, which includes (16 cents) to (18 cents) per diluted share negative impact of the implementation of FAS 123(R) and (12 cents) to (25 cents) per diluted share negative impact of weaker foreign currencies. Excluding the implementation of FAS 123(R) and the impact of currency, earnings growth is expected to be in line with BorgWarner historical growth rates of approximately 10 percent.

“Our robust pipeline of new business and proven ability to participate in the fastest growing segments of the auto market are expected to generate healthy growth for BorgWarner in 2006,” said Timothy Manganello, chairman and CEO. “We expect that our technologies, developed to enhance fuel economy, performance, vehicle stability and emissions, will continue to drive long term growth.”

The company said it expects to achieve 2006 sales growth in a range of 5 percent to 7 percent, or 9 percent to 11 percent excluding the impact of currency. The outlook for global vehicle production is moderate as North American and European vehicle production is expected to be flat, although solid growth is anticipated in Asia. Despite an expectation of modest industry growth, the company said it expects sales growth in every major product family, in both the engine group and the drivetrain group, in 2006.

Manganello noted that currency fluctuations have impacted results over the past few years and are expected to do so again in 2006. BorgWarner expects the Euro, on average, to trade in a range of $1.15 to $1.20, compared with $1.25 in 2005 and a current spot rate of approximately $1.21. The company also expects the Japanese Yen, on average, to be weaker in 2006 with the dollar trading in a range of 115 yen to 110 yen, versus 110 yen in 2005 and a current spot rate of approximately 114 yen.

“The unfavorable impact of weaker foreign currencies in 2006 is a reversal of the tailwind those currencies provided in 2004. Despite currency fluctuations, our business fundamentals remain strong,” said Manganello.

The company said it expects to maintain operating margins in 2006 despite continued raw material and energy cost increases, rising healthcare costs and the costs related to global expansion.

To learn more about BorgWarner, go to: www.borgwarner.com .

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