Note 17. Segments

The components that management establishes for purposes of making decisions about an enterprise’s operating matters are referred to as “operating segments.” We manage our operations globally through four operating segments: Light Vehicle Driveline, Commercial Vehicle, Off-Highway and Power Technologies.

We report the results of our operating segments and related disclosures about each of our segments on the basis that is used internally for evaluating segment performance and deciding how to allocate resources to those segments. The primary measure of operating results is segment EBITDA. The most significant impact on our ongoing results of operations as a result of applying fresh start accounting following our emergence from bankruptcy was higher depreciation and amortization. Management believes by using segment EBITDA, a performance measure which excludes depreciation and amortization, the comparability of results is enhanced. In addition, segment EBITDA is an important measure since the financial covenants in our debt agreements are based, in part, on EBITDA. Our segments are charged for corporate and other shared administrative costs.

Segment information —

	2012							2011
			Inter-								Inter-
Three Months Ended	External		Segment			Segment		External			Segment			Segment
September 30,	Sales		Sales			EBITDA		Sales			Sales			EBITDA
LVD	$	659	$	46		$	68	$	689		$	50		$	74
Power Technologies		242		6			29		256			7			31
Commercial Vehicle		471		34			45		611			34			61
Off-Highway		343		12			48		385			15			42
Eliminations and other				(98	)				(1	)		(106	)
Total	$	1,715	$	-		$	190	$	1,940		$	-		$	208

Nine Months Ended
September 30,
LVD	$	2,121	$	148		$	207	$	2,016		$	159		$	200
Power Technologies		772		17			106		792			21			108
Commercial Vehicle		1,535		106			163		1,669			93			159
Off-Highway		1,187		44			153		1,172			46			134
Eliminations and other				(315	)							(319	)
Total	$	5,615	$	-		$	629	$	5,649		$	-		$	601

Reconciliation of segment EBITDA to consolidated net income —

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Segment EBITDA	$	190		$	208		$	629		$	601
Corporate expense and other items, net		(1	)		(8	)		(8	)		(20	)
Expenses previously allocated to Structures					(1	)					(1	)
Depreciation		(46	)		(51	)		(140	)		(159	)
Amortization of intangibles		(22	)		(23	)		(66	)		(68	)
Restructuring		(6	)		(22	)		(30	)		(60	)
Loss on extinguishment of debt											(53	)
Gain on sale of equity investment					60						60
Strategic transaction and other expenses		(4	)		(4	)		(8	)		(9	)
Impairment and loss on sale of assets					(5	)		(6	)		(6	)
Stock compensation expense		(3	)		(1	)		(12	)		(5	)
Foreign exchange on intercompany loans and market value adjustments on forwards		3						2			(1	)
Interest expense		(22	)		(20	)		(63	)		(59	)
Interest income		6			7			17			20
Income from continuing operations before
income taxes		95			140			315			240
Income tax expense		33			30			97			93
Equity in earnings of affiliates		(2	)		6			4			17
Income from continuing operations		60			116			222			164
Loss from discontinued operations					(4	)					(7	)
Net income	$	60		$	112		$	222		$	157