Thank you, Sharon. Good morning everyone, and thank you for joining us today.

We issued our earnings release earlier this morning. It is posted on our website, borgwarner.com, on our home page and on our Investor Relations home page.

With regard to our Investor Relations calendar, we will be attending multiple conferences between now and our next earnings release. Please see the Events section of our Investor Relations home page for a full list.

Before we begin, I need to inform you that during this call, we may make forward-looking statements which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today.

During today's presentation, we will highlight certain non-GAAP measures in order to provide a clearer picture of how the core business performed and for comparison purposes to prior periods. When you hear us say on a comparable basis, that means excluding the impact of FX, net M&A, and other non-comparable items.

When you hear us say adjusted, that means excluding non-comparable items. When you hear us say organic, that means excluding the impact of FX and net M&A.

We will also refer to our growth compared to our markets. When you hear us say market, that means the change in light and commercial vehicle production weighted for our geographic exposure.

Our outgrowth is defined as our organic revenue change versus the market. Please note that we've posted an earnings call presentation to the IR page of our website.

We encourage you to follow along these slides during our discussion. With that, I'm happy to turn the call over to Fred.

Thank you Pat and good day to everyone. We're very pleased to share our results today for the first quarter of 2021 and provide an overall company update starting on Slide 5.

I'm very proud of our strong start of the year despite the component supply headwinds. With just over 4 billion in sales our first quarter revenue increased over 18% organically.

This compares to a market being up less than 13%. So our outgrowth was about 570 basis points for the quarter which was ahead of our expectation and our guidance for the year.

We saw strong outgrowth in North America and Europe. Our earnings per share increased year-over-year due to the impact of our higher revenue.

Our incremental margin performance was in line with our expectations. We delivered strong free cash flow of 147 million for the quarter, a good start towards our full year guidance.

We also secured additional new business awards for electrified vehicles which I will speak about in a moment. And finally during the quarter we announced our planned acquisition of AKASOL.

The key strategic elements of the AKASOL acquisitions are detailed on Slide 6. Based on the last couple of years of experience we have in this space we're believers in the prospect of easy battery systems and are very familiar with the industry players.

As a leader in this space AKASOL had been on our radar for a long time as a potential partner. We're confident that AKASOL is an excellent strategic fit for BorgWarner and we are really excited about adding their capabilities to our portfolio.

In particular, we are attracted to AKASOL’s following strengths; flexible battery technology across multiple cell architectures, proven technology and products with established manufacturing facilities already in serial production today, strong order backlog of about $2.4 billion primarily from leading OEMs, and a focus on the bus CV and off-highway application. We're extremely excited and expect to complete the transaction during the second quarter.

Next I would like to highlight a significant new program win for electric vehicles on Slide 7. BorgWarner's integrated drive module or as we call it our iDM was selected by a major non-Chinese Asian OEM for its upcoming global A-segment electric vehicle production planned to start in mid-2023.

This is a significant program for the company as it is our first iDM award combining BorgWarner’s and legacy Delphi Technologies portfolio. It is a validation of the potential we saw in bringing our two companies together.

I want to thank the team’s intense efforts to get to such a significant booking only seven months after the close of the Delphi transaction. And there is more to come.

This idea features our electric motor, [indiscernible], and our integrated power electronics. It operates at 400 volts and has exceptional peak power of 135 KW.

The iDM weight and space are reduced by integrating our gearbox, our 400 volt silicon inverter, and our motor. This results in a maximized power density and functionality.

The iDM also offers a scalable and modular inverter design making it easily adaptable to customer requirements. This is an important step for the company with a great partner.

Next on Slide 8 let me summarize our new strategy called Project Charging Forward that we unveiled at our Investor Day in late March. With successful execution of this strategy we expect to deliver over 25% of our revenue from electric vehicles by 2025 and approximately 45% by 2030.

That compares to under 3% of revenue today. Project Charging Forward has three pillars; one, we plan to profitably scale eLVs through our continued integration of Delphi and our ability to capture synergies.

The new iDM win is a great example. We would also pursue other organic and inorganic actions.

Two, we intend to expand more aggressively into eCVs. We will do that by leveraging our strong intimacy with CV customers as well as our position in eLVs.

We're building out a go-to-market product portfolio and operation capabilities organically and inorganically. Our AKASOL acquisition is a key part of this expansion.

And three, we plan to optimize our combustion portfolio, reducing our exposure by disposing part of the portfolio that we believe our lower growth that don’t have path to product to ship, or that are not expected to deliver strong margins. We believe we can fund the EV growth underlying Project Charging Forward primarily from the capital generated by our existing operations.

This is not a sudden change in the company's direction, it is a logical extension to what we've been building since 2015. We're excited about the acceleration of the market towards electrification and about the momentum that we are building with our customers.

I want to take a moment to thank all the BorgWarner employees who are working very hard to both manage the present and accelerate the future of the company to what’s best. Next on Slide 9, I'm proud to announce that BorgWarner achieved The Great Place to Work Certified Status for the second consecutive year.

Great Place to Work is the global authority on workplace culture. This certification validates BorgWarner’s positive work environment.

I've said before that the BorgWarner secret sauce starts with our people. To lead, develop, and attract the best talents we strive to be an employer of choice where we operate around the world.

We cultivate a workplace environment that is collaborative, transparent, inclusive, and that promotes continuous learning and excellence. So let me summarize our first quarter results and our outlook.

The first quarter was a good start to the year, particularly considering the supply challenges currently impacting the industry. We delivered strong top line growth and we believe we're tracking well towards our full year margin and free cash flow objectives.

Our first quarter performance has led us to increase our full year revenue and adjusted earnings per share guidance despite a lower industrial production outlook, as Kevin will detail. As we look beyond 2021, I'm extremely excited about our long-term positioning.

We are continuing to take significant steps that we believe will help us to secure our profitable growth well into the future. We are winning in line with our expectations in the electric world, both from a component standpoint like inverters and e-heaters for example, and also from the latest generation systems standpoint with our iDMs.

We're focusing on the disciplined inorganic investment approach, like the planned acquisition of AKASOL which adds great technology to our portfolio while supplementing our growth profile. With that, I'll turn the call over to you, Kevin.

Thank you Fred and good morning everyone. Before I review the financials in detail, I'd like to provide a quick overview of the two key takeaways from our first quarter results.

First, our revenue came in stronger than we were expecting going into the year. This was driven by the fact that we delivered solid outgrowth with both the legacy BorgWarner and former Delphi Technologies businesses performing better than expected.

Second, our margin and cash flow performance in the quarter were strong, driven by the topline results as well as our cost saving measures. So let's turn to Slide 10.

As we look at our year-over-year revenue walk for Q1, we begin with pro forma 2020 revenue of $3.2 billion, which includes $945 million of revenue from Delphi Technologies. You can see the foreign currencies increased revenue by about 6% from a year ago, then our organic growth year-over-year was over 18%, compared to a less than 13% increase in weighted average market production.

That translates to 570 basis points of outgrowth in the quarter, which breaks down as follows; in Europe, we outperformed by mid to high single digits, driven by growth in small gasoline turbochargers and strong performance in multiple former Delfi Technologies businesses, most notably fuel injection. In North America we outperformed the market by high single-digits as we saw a nice benefit from the ramp up of the new Ford F-150 and other new business launches.

In China, we underperformed the market by mid-single-digits against very strong outperformance in the first quarter of 2020. Also keep in mind, Q1 was a very unusual quarter last year in the face of COVID-19 primarily in China.

The sum of all this was just over $4 billion of revenue in Q1, which was a new quarterly record for the company. Now, we do believe that some of the strong outgrowth we delivered in Q1 was a result of the production of build and hold vehicles by our customers in multiple regions of the world.

That means it's likely that some level of our reported outgrowth in Q1 is inflated due to a pull forward of production into the quarter. This will have an offsetting impact on our expected out growth later in the year.

However, our outgrowth for the full year is still expected to be above our prior guidance as I will discuss further in a moment. With all that background in mind, we're pleased with the strong start to 2021.

Now, let's look at our earnings and cash flow performance on Slide 11. Our first quarter adjusted operating income was $444 million compared to the pro forma 274 million in the first quarter of 2020.

This yielded an adjusted operating margin of 11.1%, which was up compared to the 10.3% margin for BorgWarner only in the first quarter of 2020. On a comparable basis, excluding the impact of foreign exchange, adjusted operating income increased $145 million on 591 million of higher sales.

That translates to an incremental margin of roughly 25%. This solid performance was driven by conversion on higher volumes, restructuring savings, and Delphi Technologies synergies in excess of purchase price amortization.

We were particularly pleased with this performance given elevated supplier costs that we experienced during the quarter. Moving on to free cash flow, we're proud of the fact that we generated $147 million of positive free cash flow during the first quarter, which was roughly flat year-over-year despite increased investment in working capital.

Let's now turn to Slide 12, where you can see our perspectives of global industry production for 2021. As a reminder, our market assumptions incorporate our view of both the light vehicle and on highway commercial vehicle markets.

As you can see, we expect our global weighted light vehicle and commercial vehicle markets to increase in the range of 9% to 12%, which is down from our previous assumption of an 11% to 14% increase. This reduction to our prior market outlook reflects the ongoing impact of the semiconductor shortage on industry production.

Looking at this by region, we're planning for North America to be up 17% to 20%. We see the largest incremental impact of the semiconductor shortage in North America, with our market expectations down approximately 500 basis points from our initial assumptions.

In Europe, we expect a blended market increase of 9% to 12%, with that range being down approximately 200 basis points from our earlier planning assumption. And in China, we expect the overall market to be roughly flat year-over-year, similar to our previous estimate.

Now, let's talk about our full year financial outlook on Slide 13. Starting with our pro forma 2020 sales, which includes $2.6 billion of revenue from the first three quarters of Delphi Technologies in 2020.

As you know, those revenues were not part of our P&L last year, but to provide year-over-year comparability we thought this pro forma revenue approach for the 2020 baseline would be useful. You can see that our end market assumptions from the prior slide are expected to drive an increase in revenue of roughly $0.9 billion to $1.3 billion.

Next, we expect to drive market outgrowth for the full year of approximately 300 to 500 basis points, which is a meaningful step up from our previous guidance of 100 to 300 basis points. Our higher outgrowth guidance is based on the stronger than expected outgrowth in the first quarter and outgrowth for the balance of the year being higher than our previous guidance based on better than previously expected revenue trends in a number of former Delphi Technologies product lines.

Based on these assumptions, we expect our 2021 organic revenue to increase about 12% to 17% relative to 2020 pro forma revenue. Then adding a $400 million benefit from stronger foreign currencies, we're projecting total 2021 revenue to be in the range of $14.8 billion to $15.4 billion.

That's up from our prior guidance by about $100 million at both ends of the revenue range. Even with weaker end market outlook, our stronger revenue outgrowth is driving an overall increase in our revenue guidance from the guidance we gave last quarter.

Also, you should note that we're maintaining a wider than typical revenue range at this point of the year due to the wide range of potential production scenarios that I discussed on the previous slide, which stems from the volatility and uncertainty in end markets arising from the industrywide semiconductor issues. From a margin perspective, we expect our full year adjusted operating margin to be in the range of 10.1% to 10.5%, compared to a pro forma 2020 adjusted operating margin of 8.3%.

This contemplates the business delivering full year incrementals in the low 20% range before the impact of Delphi related cost synergies and purchase price accounting. From a cost synergy perspective, our margin guidance includes $70 million to $80 million of incremental benefit in 2021.

That puts us right on track to achieve 50% of our total expected cost synergies in 2021 and based on our year-to-date performance, we believe that we're tracking at the high end of this range. Based on this revenue and margin outlook, we're expecting full year adjusted EPS of $4 to $4.35 per diluted share, which is an increase from our prior guidance of $3.85 to $4.25 per diluted share.

I would point out that this guidance now assumes a 31% tax rate versus our prior guidance of 32% as a result of the successful execution of certain international tax planning initiatives. And finally, we continue to expect that we'll deliver free cash flow in the $800 million to $900 million range for the full year.

This is flat with our prior guidance as we expect the higher sales outlook to drive an increase in working capital that largely offset higher adjusted operating income. This would still represent a record annual free cash flow generation for the company.

That's our 2021 outlook. Let's turn to Slide 14 for an update on the near-term actions related to Project Charging Forward.

On the acquisition front, we believe we remain on track to complete the AKASOL acquisition in the second quarter. We've now received regulatory approvals in all required jurisdictions.

The tender offer is in progress, with the final acceptance period expected to be completed later this month and then with a closing shortly thereafter. AKASOL represents an important part of Project Charging Forward as it represents approximately 20% to 25% of the estimated 2025 revenue from acquisitions underlying our plan.

And it significantly increases our exposure to the eCV space. As it relates to portfolio optimization, we continue to target combustion related dispositions with annual revenue of approximately $1 billion to be executed over the next 12 to 18 months.

The process for these dispositions is underway. We would expect to update you on our progress there as we get closer to executing those transactions.

So let me summarize my financial remarks. Overall we had a really solid start to the year despite the industry supply headwinds.

We delivered 570 basis points of market outgrowth and 11.1% adjusted operating margin and $147 million of free cash flow. And we increased our full year revenue and earnings guidance despite moderating our industry production assumptions.

Looking beyond our near-term results, we're taking the necessary steps to accelerate the company's progression towards electrification. The AKASOL acquisition and today's iDM announcement are great examples of our progression.

And importantly, we're executing our strategy from a position of financial strength. Ultimately, we expect that the successful execution of our strategy will drive value creation for our shareholders.

With that, I'd like to turn the call back over to Pat.

Thank you, Kevin. Sharon we are ready to open up for questions.

Thanks so much team. Wanted to ask two high level questions around EV demand and the first is around lead times.

The business that you're winning in 2021 for the most part is it fair to say that the start of production for 2025 and beyond I was kind of surprised by the comments that you made about the iDM would be as early as 2023. Just trying to get a sense of the mega awards out there and what type of lead times we're looking at?

Yeah. We're talking about start of production in the second half of 2023.

This is something that depending on the production ramp up can be very well achieved. I don't see any issues with that at all.

But is it sort of surprising that they're leading that business out to be awarded so soon or is it maybe you just were only able to actually disclose that you had that specific customer just now?

No, we're disclosing that win pretty much at the same time we wanted. We're not disclosing the name as you've noticed and we'll do that when we can.

Hi Chris, I think it's hard to say but it's normally -- it is a three-year type of a lead time. So most of the production awards we would be looking to win in 2021 are probably more likely going to be in that 2024, 2025 time frame.

But there's some fluctuation around that and this one happens to launch later in the latter part of 2023.

No, it's super helpful. I mean the reason I ask is basically there was another European supplier that was mentioning some of the mega programs like VW.

Basically we're only going to award business for 2025, 2026, 2027 later in the year. So I just wanted to check with you guys, it's super helpful.

The second question is maybe by region and I know it's hard to be this sort of overarching question, but where do you think specifically for the BorgWarner suite of products, are you seeing right now the most amount of interest when we think about it on a region basis?

No, I think on the [indiscernible] we see growth in all regions and some regions will be more on component, some regions will be more on systems, even if that is not a clean cut. We see growth in all major region.

It is also true that those -- the regions don't move at the same pace on the electrification so you see potential growth in North America a little bit later than in other parts of the world.

Great, and then if I could sneak in one last one just to be greedy, I mean, the iDM win looks super interesting. Since it's in A-segment car, should we expect lower content per vehicle or can you still get that 1500 plus data you had sort of laid out in some of the detail at the Analyst Day?

I'm not totally able to answer the price point at this point in time. I don't think you can adjust the price point depending on the size.

There is a little bit of that, but I am not in the position to answer that in detail Chris.

Fair, thanks so much Fred.

Hey, good morning guys. On the guidance, could you just provide some context on the second quarter in terms of what you're seeing thus far in OEM build schedules related to the chip shortage and just how you foresee that situation playing out in the back half relative to the market assumptions you laid out?

As you know we're not providing quarterly guidance, but what I can tell you is that we do expect the bigger impact from the semiconductor shortage issue to occur really in the second quarter and a little less so in the third quarter. If you look at, the way I would help you dimension it is, if you look at what's implied at the mid-point of our guide for instance, about the last nine months, it implies that the average quarterly revenue somewhere in that $3.7 billion zip code, and you should assume that probably again, the semiconductor issue is more likely going to have a bigger impact in the near-term as opposed to the back end of the year.

Okay. That makes sense.

And then on BorgWarner's outgrowth, I mean, clearly the first quarter came in stronger. To provide color from maybe a product perspective, segment perspective, I mean, what drove the quarter strength because, I mean, I thought the first half you had a difficult diesel comp from an outgrowth standpoint.

So just curious on the upside and how we should be thinking about crossover markets the rest of the year and then I guess also within the context of the chip shortage and lower volumes maybe near term?

Yeah. I mean, I think a few of the things that we saw from a pure product perspective, the Ford F-150 launch was actually helpful in terms of driving some of the outgrowth that we saw in North America.

We saw gas turbo business in Europe, which was helpful, and we saw good performance across the legacy Delphi Technologies businesses, stronger than what we were anticipating as we started the year particularly in the fuel injection business. So, I mean I think we saw it across a wide variety of our businesses.

And so as we look at the back half of the year, you saw that we took up the full year outgrowth guidance. I think before we were at 100 to 300 basis points for the full year, now we're seeing the full year is 300 to 500 basis points based on both what we saw in Q1, as well as what we're expecting in the back nine months of the year.

So in the last nine months of the year, I think it stacks up to be about 200 to 450 basis points or so of implied outgrowth in that full year guide.

Yeah, very helpful. Thanks.

Hi, good morning. Thanks for taking the questions.

So the organic growth in the quarter just year-over-year being paced by e-propulsion and drive train at 36%, what were the major drivers of that growth, just trying to get a sense if the segment is more geographically weighted to last year's more effected markets, whether there was some significant e-business growth, I mean, just give us some color on the segment?

Yeah, I mean, we're not -- we haven't really disclosed outgrowth by segment, but clearly when you look at that segment that we do have a lot of business in that segment coming out of China and the global markets were simply up a lot more in China. If you look at our global way to production, it increased about 80% in China versus you look at Europe and North America, much smaller increases or even down in North America on a blended basis.

So that's part of the reason you see stronger revenue numbers year-over-year in that business. It has a little bit more disproportionate skewing to the Chinese market than some of our other businesses.

Sure, makes sense. Thanks.

And then maybe just if you can comment on the drivers for the increased CAPEX outlook, stressing out those new programs getting pulled forward and the other factors to consider in increasing the CAPEX outlook for the year?

Not specifically. I think as we've just rolled up our programs and rolled up our forecast, we've realized that it probably needed to take that up a little bit.

Along with that there are some of the investments we're making associated with the Delphi Technologies integration particularly on the IT side that are actually being bucketed in capital that we didn't anticipate. We thought it would be in a different line item.

So we're bucketing that now on CAPEX as well. So that has a little bit of an impact, although that's just a left pocket right pocket when it comes to free cash flow outlook.

Makes sense. Alright, thanks very much for the color.

Hi, good morning. Thank you.

Just wanted to start on the growth side. One of your key customers is highlighting a particularly challenged volume outlook.

So maybe you could just give us a sense for -- and I know you've given us some ranges there, but to what extent is this end market guidance reflecting maybe some of the more draconian outlooks that have been cited? And also if you could just comment on the quarter, how much revenue growth did you get from maybe partially built vehicles, vehicles that may not be reflected in the production builds, but that you shipped goods to?

As we look at, I mean, you can see our end market production assumptions. We've taken down about 200 basis points globally, which factors in the intelligence we have based on production schedules, based on conversations with our customers, and based on other things that we see going on in the marketplace.

So, based on the things we've seen, announced or discussed with customers as late as last week, that's contemplated in our full year guidance. And that's part of the reason we took our guidance down from a production perspective, particularly in the North American market.

Well, I'm sorry, Dan what was the second part of your question?

Was there any growth benefit or revenue benefit in 1Q from partially built vehicles?

Yes, we think the answer to that is yes although it's hard to tell for certain. When you look at that outgrowth coming in at about 570 basis points, as we're trying to sort through the numbers, it's not a 100% clear, but our expectation is the amount of outperformance we're generating relative to call it that 300 to 500 basis points full year is probably the amount that's arguably linked to the build and hold vehicles that we're seeing.

But it's really hard to dimension that for sure, but that's our assumption at the moment.

Great, great. And then my follow-up is really just more of a I'd say a follow-up from the Investor Day, and it's around silicon carbide and high voltage inverters.

So, I think this is an area that you mentioned you have some market leadership, you've obviously got some pretty chunky winds here. The content could be a pretty material step up over some of the base IGBT could you just maybe walk us through your view of how you see mix for yourself or for the industry of silicon carbide or high voltage versus IGBT over time, maybe the margin and content differences and you know, where -- how is the competitive environment different, wondering is there -- as we get more silicon carbide, does that incrementally favor you more versus some of your competition?

Yeah, you see, one of the advantage that we have is that we can do lower voltage silicon, higher voltage silicon carbide, very high voltage or 800 volts silicon carbide and we are positioning ourselves more in the high voltage or let's say lower losses type of product, more efficient product with silicon carbide. The tendency is to increase efficiency so the tendency is to go to those direction of a higher efficiency technologies.

At the end of the day, it's the customer's choice who wants to -- who's going to decide what they want. And so you can count by is primarily on high-end vehicles today.

They might find their way down to the two other ranges in the future.

And the competitive environment, your competitive positioning versus others on silicon carbide or high voltage?

I really like where we are.

Okay, great. Thank you.

Hi everybody. So it does look like the adjustments that you're making in the global production and North American production go beyond what we heard from Ford last week.

And I'm just wondering if whether you think your customers are providing transparency into the constraints that are kind of bubbling up through the supply chain from tier three to tier twos at this level, obviously some questions about that in light of what we saw from Ford and do you see other OEMs moderating their forecast anywhere near what we're seeing for that one customer?

So what I would say is that for sure we are very aware about what we are delivering. Meaning that we are on top of making sure that we can continue the flow of product and we have a lot of three-party meetings with our customers, ourselves, and the semiconductor suppliers.

And we manage that very, very, very intensively and very as accurately as we can. We see some customers that have announced shut down.

Obviously, we are sometimes aware through the schedule changes, but we are more aware through the discussions that we have with our customers, more than looking at the schedules and that is informing also our market intelligence on what is likely to happen.

Okay. I was hoping maybe you just can elaborate on just two points.

One is the strong turbo and GDI mix. Are there any changes that are happening here, obviously we've seen very strong performance in hybrids in Europe recently, but are you detecting any kind of durable strength that's happening there and any color on what you've experienced in terms of commodity costs and your outlook for that?

So obviously Rod, there is a strong demand for efficient downsize gasoline engine and all efficient downsize gasoline engine are usually turbocharged and include GDA injection, right. So, that is one key element for combustion based engines, as well as for hybrid based engines.

The second part of your question is around raw material. We are seeing some increases.

We have incorporated what we had seen so far in our guide, and the color I wanted to give you is that on the biggest raw material purchases, we have about 60% pass through with our customers. And when we go into discussing those items with them, we usually do a little bit better than that.

So that's the situation on raw material. And yes, we're seeing some inflation.

What’s the magnitude of that?

We're not disclosing that. It's just embedded in our guidance and so the good news is we're able to offset that with the performance we're seeing in the business and able to actually even take up the bottom end of our margin range for the full year.

Understood. Thank you.

Thanks everyone. Maybe just to follow-up on that last point with Kevin.

So, you are pointing to some weaker margins over the balance of the year, and now as you pointed out, like the average sort of revenue is lower in the first quarter. So, is it really just a volume sort of flow-through dynamic or is there sort of a less or a bigger net raw material headwind, or maybe some other things like freight has obviously been some that's been called out as big constraint in the system?

Yeah. I mean, it's really fundamentally linked to volume more than anything else.

If you look at what's implied by our guide about the back half of the year, it still suggests that we're going to convert in the low 20%, call it 23% to 25% over the last nine months of the year. Pretty much in line with what we saw in Q1 on a year-over-year basis.

So, nothing beyond volume. Certainly there's puts and takes in our P&L.

You have certain things going one way, certain things going in other, but overall what it comes down to in our guide is really the conversion on incremental revenue.

Okay. Second question would be on the iDM award, the first using combined BorgWarner and Delphi Technologies.

I know you said it's for A-segment of vehicle. Can you just spend a little time talking about like how scalable is that, that was what you're showing there for larger vehicles and is it actually like an easier or harder for larger small vehicles, I imagine each comes with some of its own engineering complexities?

It is scalable. It's is modular from an inverter standpoint, the building blocks are modular.

Same for a motor standpoint, we have family of motor and the transmission that is hosting the whole thing. We size up depending on the talk that we need to give.

So it's fairly modular. I would not think that smaller iDMs or A Class vehicle iDM are more or less complicated than C Class vehicle iDMs, there are different types of complexities.

For sure, with the customers that we have, wait, perfect NVH, and good power density, very good power density with key elements for us to win this program, as way of competitiveness hopefully. And I think this is the recipe for success for the other iDMs that will hopefully come in the future.

So you will see a continuous booking, both from a component standpoint, power electronics, combined power electronics boxes, combining inverters and DCDC converter, or any other type of combination. You will see also hopefully continuous booking on the system like this iDM.

Okay. If I could just sneak one in, any update on the billion dollars of dispositions or the market for that, that you expect by next year and like can we expect some of that to occur in 2021?

Yeah, I think the process is underway. Nothing to report, obviously we're 45 days removed from announcing our Project Charging Forward strategy.

And I think we still feel good about the ability to deliver on that approximately $1 billion of dispositions over the next 12 to 18 months. So we'll update you when we're closer to executing transactions, but nothing additional to report at this point sitting here today.

Okay, thank you.

Good morning guys. Just a first question to follow-up on the production outlook.

Without naming names or maybe if you could give us groups, how variable to the upside and the downside are the changes in schedules been. Because it just seems like some automakers, particularly Japanese who've gone through this with the tsunami in the past had a better handle on this and had higher buffer stocks.

Europeans, maybe somewhere in the middle and it seems like the North American companies are less prepared for this. And that's the reason there's maybe these extreme divergences as opposed to the companies not being up to date.

I'm just curious what your perspective on sort of the variances between your customer's preparedness to this and why we might be seeing these divergences?

So the thing is it varies a lot of cross region across customers. It depends upon their sourcing strategies and things like that.

We -- and by program, it's very difficult for us to figure out those dynamics. We're not in that detail of what OEMs -- what the OEM's issues and details are, right.

So what I can tell you is that it varies, and I don't have a way to ring fence this either by region or by customer types. It's not possible at least for us.

Okay, and then maybe just a follow up on the iDM, congrats on the award, it is the kind of thing that everybody was skeptical that you would ever get and it seems like you've gotten it pretty early on. So it's a good sign.

As you think about this transition towards the electric powertrain, they're sort of skeptics on your company to believe the automakers are going to in source everything. And then there some optimists or realists as I would call them that they understand at least part of the parts that will get outsourced and maybe over time, full iDM's might be a way things go.

As you look at the shift in technology, how different do you think it is versus other shifts in technology you have seen in the past where the automakers are trying to learn what's going on, and sometimes they might in source and sometimes they might outsource and how do you think this is going to shape up differently or similarly to pass transitions in technology?

So John, I think at the end of the day, product leadership and scale will prevail. The force of that will win.

There will be some insourcing, the market is very big and the content per vehicle that we have on E is three times more than we have on C. And I gave some examples sometimes then one inverter is equivalent to pretty much what we can sell if we say it all on combustion.

So as you mentioned, the iDM is a very, very good example. There is more to come on system outsourcing.

And again you will see some customers that are outsourcing. They won't learn in order to buy better.

Some customers will in-source some platforms, outsource some others, and that varies across customers and across region. And that will also vary over time where I think when suppliers like us will have a very good product leadership and scale in an iDM, for example, but you have other products.

I think, the likelihood for us to be able to sell more systems is becoming -- will become higher over time.

But I'm sorry, just one follow up on that. How different do you think that is in the commercial vehicle market, I mean, it just seems like there's huge potential for outsourcing there, consolidation with the AKASOL acquisition.

It seems like your right to play is pretty strong. I mean, is there even a greater opportunity on the commercial vehicle side, at least for the foreseeable future?

I would say that, especially on the battery pack stand point, there is obviously way more opportunities on the commercial vehicle for us then on Pascal, that is one of the reason why we went and focused on commercial vehicle, that recharging systems, and battery systems. So, on the, on that front, there is certainly more room for outsourcing than on the Pascal side.

And on the iDM?

Well, on the iDM, I think generally the likelihood of outsourcing in commercial vehicle by the volumes of those industries and by the diversity of what is required is at the high level leading to maybe more outsourcing than in other segments. You will see in the commercial vehicle I think maybe more combination of motor and power electronics as those two go together, one controls the other than iDMs from a commercial view propulsion standpoint.

Okay, thank you very much.

Hi, good morning everybody. I was hoping to follow-up on your comments about the insourcing versus outsourcing of electric power train.

And wondering how much we can read into these specific first win. So, are you able to comment on whether this customer has other EVs either up or coming up and what would the sourcing strategy have been on those, so I'm wondering if there's a way to read into a shift towards sort of like more insourcing or whether depending on which platform and which class of vehicle there's sort of like different sourcing strategy within that one OEM?

Obviously won't give you -- can’t give you detail on the customer. What I can give you is that I think what it means is that, great technology is making a difference.

And in line with my prepared remarks, I want to again thank the BorgWarner team that have been working since the closing of the Delphi transaction together to get in the world of this magnitude and that strategic impact seven months after close I think is pretty remarkable.

Yes, definitely. Are you able to comment on the volume expected for this program?

No, I can't.

Okay. So I guess then the different topics, so the volatility around the semi shortages, I was wondering how do you manage this on the ground and I guess in your operations, not to keep baking on Ford, but I guess I get some pretty clear outlook last week.

Feels like a lot of their factories may be shut for a prolonged amount of time in Europe potentially, six to eight weeks or so. And so, -- and with pretty low amount of notice, a little notice, so how do you manage this in terms of cost efficiencies and making sure that things continue to run at the right level of margin?

So there is two facets to that. First is the facet of what we supply to our customers that as semiconductor and we are working very well with our customers and with our semi-conductor suppliers in order to keep it going.

Second is when we are impacted by somebody else's shut down and you're taking for that as an example well, we are agile enough to be able to manage that. And, with the notice we have, this is something that we do for a living.

We can flex and this particular element is in the grand scheme of BorgWarner. It is not going to move the needle to a point where it is impacting us too much, and the plants and the plant managers know how to flex, where they have to flex in order to cope with the latest schedules.

Guys that great to hear and then the final follow-up on this topic is you are mentioning it in the prepared remarks some supplier elevated costs, anyway to quantify this and how material dose were in the quarter?

Yeah, there were two things that are really impacting us. One of the bigger item was really a troubled supplier situation that we have impacting one of our segment in Europe and you'll see that disclosed in the 10-Q as well and that had about an $80 million impact in the quarter.

And then the second as we talked about earlier is that the impact of commodity costs on it but we are seeing some escalation there. As Fred noted we do have recovery mechanisms for the underlying movement in the raw materials that are just a subset of our material purchases but that does have an impact on us and we will continue to have an impact as we look ahead to the balance of the year but again both those things are contemplated in the 11% margin performance in Q1 as well as the full your guide of 10.1 to 10.5.

Great thank you.

Hey, good morning and good afternoon. Maybe starting with a follow-up on that last semi-conductor point.

Just given your electronics mix you referenced discussions ongoing with your semiconductor partners. I guess can you talk about if you're currently seeing any price inflation in electronics or if you expect to see increases and then also was curious to hear if you get so if you see an opportunity to pass through.

We're not saying anything important so far?

It is -- the situation is as you know still very volatile but we've not been faced with those types of demand yet.

Okay, got it, thank you. And then maybe quickly shifting gears, you raced your commercial vehicle underlying outlook, just curious if you could talk a bit more about contribution to the quarter and how you're thinking about the CV outgrowth through the balance of the year that would be great?

Yeah, I mean that the main thing that we saw from a CV perspective was really China coming in a little bit stronger including one from a production standpoint than what we were previously guiding to. But that's really all that is coming on at this point.

It's mainly coming from that.

Okay, got it, thanks. And Kevin maybe one quick follow-up on that, can you remind us of typical an incremental margin contribution from commercial vehicles?

We haven’t broken it down between commercial vehicle and light vehicle. I think it is appropriate to think of us just in totality as being normally in that high teens from a conversion standpoint.

Obviously our guide this year both will be delivered in Q1e and what we're guiding to for the full year suggest that we are in the low 20 percentiles from a conversion year-over-year perspective which would contemplate anything in both the CV and the light vehicle space. And obviously we're getting a tailwind from things like the cost synergies in excess of purchase price amortization, getting a tail wind from the execution of our restructuring initiatives both in the legacy BorgWarner side and project pioneered at Delphi and so it is leading the conversion that this year is in the low 20s right now.

Okay, great. That's helpful.

Thank you.

Yes, good day everyone. It's a less glamorous part of the E drive and power electronics businessman in pure [indiscernible] but can you comment a bit on the pace of your business and plug in hybrids and just how that couldn't hold in the next couple of years before further inflection and perhaps later in the decade or mid-decade?

We are seeing a pool, a strong pool actually for plug in hybrids especially coming from Europe. Also a little bit from China.

And as you know Brian we are more into the high voltage plug in hybrids more than in the lower voltages and we see strong pool. We are very, very happy with the programs that we had and the pool that we are seeing especially in Europe.

Okay and I can think of few people that fit on commodities but in the past there been some hot special alloys. I think forget which the alloy that paid you about five to six years ago was.

It is not going to be a particular problem now in terms of the input cost of that alloy. And two, are you now fully protected with pass throughs of that particular alloy?

Yeah, I mean when it comes to steel costs we are seeing underlying inflationary pressures in the raw material underlying our material. Remember material spend for us runs around 55% of revenue and the underlying raw material is a relatively modest percentage of that.

But within that spend, the bulk of which from a raw material exposure perspective would be on the steel side we are seeing some inflationary pressures. But as Fred mentioned we do have cost recovery mechanisms with our customers associated with the underlying raw material increases.

But there is an impact, it's hitting us this year and it's embedded in our guidance.

Okay, thank you.

Going to thank you all for your great questions today. Sharon you can go ahead and close out the call.