FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Assets and Liabilities Measured at Fair Value

The following tables classify assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:


			Basis of fair value measurements
	Balance at December 31, 2025		Quoted prices in active markets for identical items (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Valuation technique	Assets measured at NAV1
(in millions)
Assets:



Investment in equity securities	$	28	$	—	$	—	$	—	—	$	28
Foreign currency contracts	$	22	$	—	$	22	$	—	A	$	—
Net investment hedge contracts	$	23	$	—	$	23	$	—	A	$	—
Liabilities:
Current earn-out liabilities	$	3	$	—	$	—	$	3	C	$	—

Foreign currency contracts	$	19	$	—	$	19	$	—	A	$	—

Net investment hedge contracts	$	94	$	—	$	94	$	—	A	$	—


			Basis of fair value measurements
(in millions)	Balance at December 31, 2024		Quoted prices in active markets for identical items (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Valuation technique	Assets measured at NAV1
Assets:


Investment in equity securities	$	25	$	—	$	—	$	—	—	$	25
Foreign currency contracts	$	24	$	—	$	24	$	—	A	$	—
Net investment hedge contracts	$	84	$	—	$	84	$	—	A	$	—
Liabilities:
Current earn-out liabilities	$	4	$	—	$	—	$	4	C	$	—
Non-current earn-out liabilities	$	3	$	—	$	—	$	3	C	$	—
Foreign currency contracts	$	32	$	—	$	32	$	—	A	$	—

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1 Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These amounts represent investments in commingled and managed funds that have underlying assets in fixed income securities, equity securities, and other assets and the fair values have been estimated using the net asset value of the Company's ownership interest in partners' capital. The Company’s redemption of its investments with the funds is governed by the partnership agreements and subject to approval from the general partners. With the exception of annual distributions in connection with the Company’s deemed tax liability, distributions from each fund will be received as the underlying investments of the funds are liquidated, the timing of which is unknown.

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables provide a reconciliation of the Company’s Level 3 earn-out assets and liabilities:


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(in millions)	Current earn-out liabilities		Non-current earn-out liabilities




Balance at January 1, 2025	$	4	$	3

Reclassification	3		(3)
Earn-out settlements	(4)		—
Balance at December 31, 2025	$	3	$	—

The following tables provide a reconciliation of the Company’s Level 3 defined benefit plans assets:


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(in millions)	Insurance contract







Balance at January 1, 2025	$	98
Purchases, sales and settlements	33


Benefits paid	(8)

Translation adjustment	8
Balance at December 31, 2025	$	131

Schedule of Fair Value Defined Benefit Plan Assets Measured at Recurring and Non-Recurring Basis

The following tables provide a reconciliation of the Company’s defined benefit plans assets measured at fair value on a recurring basis:


			Basis of fair value measurements
(in millions)	Balance at December 31, 2025		Quoted prices in active markets for identical items (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Valuation technique	Assets measured at NAV2
U.S. Plans:
Fixed income securities	$	77	$	—	$	—	$	—	—	$	77
Equity securities	4		—		—		—		—	4
Alternative credit fund	15		—		—		—		—	15
Cash	29		29		—		—		A	—
	$	125	$	29	$	—	$	—		$	96
Non-U.S. Plans:
Fixed income securities	$	144	$	26	$	—	$	—	A	$	118
Equity securities	90		72		—		—		A	18
Cash	1		1		—		—		A	—
Insurance contract1	131		—		—		131		C	—
Real estate and other	66		37		12		—		A,C	17
	$	432	$	136	$	12	$	131		$	153


			Basis of fair value measurements
(in millions)	Balance at December 31, 2024		Quoted prices in active markets for identical items (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Valuation technique	Assets measured at NAV2
U.S. Plans:
Fixed income securities	$	76	$	—	$	—	$	—	—	$	76
Equity securities	16		—		—		—		—	16
Alternative credit fund	15		—		—		—		—	15
Cash	19		19		—		—		A	—
	$	126	$	19	$	—	$	—		$	107
Non-U.S. Plans:
Fixed income securities	$	141	$	23	$	—	$	—	A	$	118
Equity securities	73		60		—		—		A	13
Cash	33		33		—		—		A	—
Insurance contract1	98		—		—		98		C	—
Real estate and other	35		5		13		—		A,C	17
	$	380	$	121	$	13	$	98		$	148

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1 A BorgWarner defined benefit plan in the United Kingdom owns an insurance contract that guarantees payment of specified pension liabilities. The Company measures the fair value of the insurance asset by projecting expected future cash flows from the contract and discounting them to present value based on current market rates, including an assessment for non-performance risk of the insurance company. The assumptions used to project expected future cash flows are based on actuarial estimates and are unobservable; therefore, the contract is categorized within Level 3 of the hierarchy.

2 Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These amounts represent investments in commingled and managed funds that have underlying assets in fixed income securities, equity securities, and other assets.