Reporting Segments

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Reporting Segments

Reporting Segments

The Company's business is comprised of two reporting segments: Engine and Drivetrain. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems.

The Company allocates resources to each segment based upon the projected after-tax return on invested capital ("ROIC") of its business initiatives. ROIC is comprised of Adjusted EBIT after deducting notional taxes compared to the projected average capital investment required. Adjusted EBIT is comprised of earnings before interest, income taxes and noncontrolling interest (“EBIT") adjusted for restructuring, goodwill impairment charges, affiliates' earnings and other items not reflective of on-going operating income or loss.

Adjusted EBIT is the measure of segment income or loss used by the Company. The Company believes Adjusted EBIT is most reflective of the operational profitability or loss of our reporting segments. The following tables show segment information and Adjusted EBIT for the Company's reporting segments.

Net Sales by Reporting Segment

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2015			2014			2015			2014
Engine	$	1,308.9		$	1,412.4		$	4,102.8		$	4,322.0
Drivetrain	583.7			627.0			1,821.8			2,016.4
Inter-segment eliminations	(8.6		)	(7.3		)	(24.5		)	(25.2		)
Net sales	$	1,884.0		$	2,032.1		$	5,900.1		$	6,313.2

Adjusted Earnings Before Interest, Income Taxes and Noncontrolling Interest (“Adjusted EBIT”)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2015			2014			2015			2014
Engine	$	211.9		$	222.6		$	670.3		$	696.0
Drivetrain	70.3			68.0			213.4			237.6
Adjusted EBIT	282.2			290.6			883.7			933.6
Restructuring expense	9.3			13.1			41.3			67.6
Merger and acquisition expense	3.9			—			3.9			—
Gain on previously held equity interest	—			—			(10.8		)	—
Pension settlement	—			2.7			—			2.7
Corporate, including equity in affiliates' earnings and stock-based compensation	23.2			22.3			81.8			76.0
Interest income	(2.0		)	(1.4		)	(5.3		)	(4.3		)
Interest expense and finance charges	15.0			9.0			42.6			26.2
Earnings before income taxes and noncontrolling interest	232.8			244.9			730.2			765.4
Provision for income taxes	66.9			71.9			219.2			225.3
Net earnings	165.9			173.0			511.0			540.1
Net earnings attributable to the noncontrolling interest, net of tax	8.5			6.4			26.6			24.2
Net earnings attributable to BorgWarner Inc.	$	157.4		$	166.6		$	484.4		$	515.9

Total Assets

(in millions)	September 30, 2015		December 31, 2014
Engine	$	4,032.2	$	3,936.2
Drivetrain	1,880.4		1,783.5
Total	5,912.6		5,719.7
Corporate *	1,774.5		1,508.3
Total assets	$	7,687.1	$	7,228.0

____________________________________

*    Corporate assets include investments and other long-term receivables and deferred income taxes.