PHINIA settles tax dispute with BorgWarner, expects $39 million third-quarter loss
PHINIA agreed on October 15, 2025 to settle claims BorgWarner brought in Delaware Superior Court over pre-spin-off tax refunds, under which PHINIA will make Settlement Payments totaling $78 million through 2026 and receive about $7 million from BorgWarner. The company expects to record a $39 million loss in the third quarter of 2025 and to exclude it from adjusted EBITDA and adjusted free cash flow as a separation-related charge.
- Settlement Payments: $31 million in Q4 2025, $21 million in Q1 2026, and $26 million over 2026 as refunds are received
- BorgWarner to pay PHINIA about $7 million for pre-spin-off corporate income tax reimbursement in Q4 2025
- Expected third-quarter 2025 loss of about $39 million, net of amounts previously recorded
- Company believes research and development credits could bring up to about $29 million in cash by end of 2026