With regards to our IR calendar, we will be attending several conferences over the next few months. August 13, we'll be at the JPMorgan Automotive Conference in New York. September 5, we'll be at the Credit Suisse Automotive Conference also in New York. September 11, we'll be at the RBC Globalists Industrials Conference in Las Vegas. And on September 13, we'll be at the Morgan Stanley Global Auto and Industrials Conference in New York.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 on our 10-K. Our actual results may differ significantly from the matters discussed today. Now moving on to our results. Tim Manganello, Chairman and CEO, will comment on the second quarter and current industry trends. And then Ron Hundzinski, our CFO, will discuss the details of our operating results and also our outlook for the remainder of 2012. Also on the call, we'll have James Verrier, President and Chief Operating Officer; and Robin Adams, Vice Chairman and Chief Administrative Officer. With that, I'll turn it over to Tim. Timothy M. Manganello Thank you, Ken, and good day, everyone. Today, I'm very pleased to review our strong second quarter results, as well as our second quarter accomplishments. First, our second quarter results. Reported sales were $1.9 billion, up 2% from the same period last year. However, foreign currencies were working against us during the quarter. On a comparable basis, excluding currency, BorgWarner sales were up nearly 10% versus about 2% for the global market if you exclude total Japanese vehicle production. U.S. GAAP earnings were $1 per share. Excluding noncomparable items, our earnings were $1.36 per share, a new record for the company. Our reported operating income margin was 10.4%. Excluding the impact of noncomparable items, our operating income margin was 12.5%, also a new record. This is an outstanding margin performance in a very challenging market.
Two key factors drove our results. Increased global demand for our products and efficient execution by our operating units. And on the Engine Group, second quarter sales were about $1.3 billion, down 2% from a year ago. However, sales were up 7%, excluding currency and 2011 divestitures. The Engine Group continues to perform very well and results were led by strong sales growth in the engine timing systems, including variable cam timing; greater sales of emissions products; and higher turbochargers sales in Asia and North America. In the quarter, the Engine Group margin was 16.6%, another all-time record.Now the Drivetrain Group also had strong second quarter results. Sales were about $590 million, up 13% from the second quarter 2011. Excluding currency, sales were up 20%. Drivetrain results were driven by increased sales of DCT modules in Europe; growth in our traditional automatic transmission components in North America and Korea; and higher sales of all-wheel-drive systems around the world. In the quarter, the Drivetrain Group margin was 9.2%, up from a year ago. And Drivetrain Group is still on target to achieve a 9% or better operating margin we expect for the full year. Now BorgWarner also continues to reinvest in our business. Our near-term capital spending plan includes increased capacity for dual-clutch transmission modules in Europe, engine timing systems in Asia, transfer cases in North America and turbochargers all over the world. Now for the quarter, we spent about 5% of sales on CapEx and continued to invest in technology, which is a lifeblood of our company. We spent about 3.6% of sales in R&D for the quarter. Now I'm also proud to review some exciting accomplishments and announcements that we made during the quarter. BorgWarner's silent chain and compact hydraulic tensioner helped improve fuel economy for Daihatsu's 660cc I3 engine. In fact, Daihatsu presented us with a Supplier's Excellence Award for our contributions towards their engines outstanding fuel economy. The engine launched on the Mira e:S and will drive several other minicars for the Japanese market. BorgWarner is also supplying turbochargers for BYD's new 1.5-liter GDI engine. This is the first GDI engine ever developed in-house by a domestic Chinese OEM. The engine launched in the top selling G6 sedan and will be available for other models. The engine is also Euro 5 compliant. BorgWarner's friction plates enabled ZF's new full hybrid 8-speed automatic transmission to shift smoothly between the electric motor and the engine. The transmission launched in the 2012 Audi Q5 Hybrid Quattro. It will also be featured in other vehicles soon. And BorgWarner recently announced the sale of its spark plug business, part of the BERU acquisition in 2005. Sales were approximately $80 million in 2011 and this will allow us to continue our focus on expanding BERU's core product lines, including glow plugs, diesel cold start systems and other gasoline ignition systems, including EcoFlash. Read the rest of this transcript for free on seekingalpha.com