REPORTING SEGMENTS AND RELATED INFORMATION

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

REPORTING SEGMENTS AND RELATED INFORMATION

REPORTING SEGMENTS AND RELATED INFORMATION

The Company’s business is aggregated into four reporting segments which are further described below. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems.

•Air Management. This segment develops and manufactures products to improve fuel economy, reduce emissions and enhance performance. The Air Management segment’s technologies include turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, canisters, cabin heaters, battery modules and systems, battery packs, battery heaters and battery charging.

•e-Propulsion & Drivetrain. This segment develops and manufactures products to improve fuel economy, reduce emissions and enhance performance in combustion, hybrid and electric vehicles. The e-Propulsion & Drivetrain segment’s technologies include rotating electrical components, power electronics, control modules, software, friction and mechanical products for automatic transmissions and torque-management products.

•Fuel Injection. This segment includes gasoline and diesel fuel injection components and systems. The gasoline fuel injection portfolio includes a full suite of fuel injection technologies – including pumps, injectors, fuel rail assemblies and complete systems – that deliver greater efficiency for traditional and hybrid vehicles with gasoline combustion engines.

•Aftermarket. Through this segment, the Company sells products and services to independent aftermarket customers and original equipment service customers. The aftermarket product portfolio includes a wide range of solutions covering the fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics categories.

Segment Adjusted EBIT is the measure of segment income or loss used by the Company. Segment Adjusted EBIT is comprised of earnings before interest, income taxes and noncontrolling interest (“EBIT”) adjusted for restructuring, merger, acquisition and divestiture expense, impairment charges, affiliates’ earnings and other items not reflective of on-going operating income or loss. The Company believes Segment Adjusted EBIT is most reflective of the operational profitability or loss of its reporting segments.

The following tables show segment information and Segment Adjusted EBIT for the Company’s reporting segments:

2021 Segment information
	Net sales						Year-end assets		Depreciation/ amortization		Long-lived asset expenditures1
(in millions)	Customers		Inter-segment		Net
Air Management	$	7,146	$	152	$	7,298	$	6,729	$	305	$	281
e-Propulsion & Drivetrain	5,209		169		5,378		5,527		284		237
Fuel Injection	1,637		189		1,826		1,782		142		110
Aftermarket	846		7		853		815		5		4
Inter-segment eliminations	—		(517)		(517)		—		—		—
Total	14,838		—		14,838		14,853		736		632
Corporate2	—		—		—		1,722		36		34
Consolidated	$	14,838	$	—	$	14,838	$	16,575	$	772	$	666

2020 Segment information
	Net sales						Year-end assets		Depreciation/ amortization3		Long-lived asset expenditures1
(in millions)	Customers		Inter-segment		Net
Air Management	$	5,598	$	80	$	5,678	$	5,714	$	241	$	210
e-Propulsion & Drivetrain	3,940		49		3,989		5,412		261		192
Fuel Injection	435		44		479		1,964		32		21
Aftermarket	192		2		194		806		2		2
Inter-segment eliminations	—		(175)		(175)		—		—		—
Total	10,165		—		10,165		13,896		536		425
Corporate2	—		—		—		2,133		32		16
Consolidated	$	10,165	$	—	$	10,165	$	16,029	$	568	$	441

2019 Segment information
	Net sales						Year-end assets		Depreciation/ amortization		Long-lived asset expenditures1
(in millions)	Customers		Inter-segment		Net
Air Management	$	6,153	$	61	$	6,214	$	4,536	$	227	$	219
e-Propulsion & Drivetrain	4,015		—		4,015		4,075		183		254
Inter-segment eliminations	—		(61)		(61)		—		—		—
Total	10,168		—		10,168		8,611		410		473
Corporate2	—		—		—		1,091		29		8
Consolidated	$	10,168	$	—	$	10,168	$	9,702	$	439	$	481

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1 Long-lived asset expenditures include capital expenditures and tooling outlays.

2 Corporate assets include cash and cash equivalents, investments and long-term receivables, and deferred income taxes.

3 In 2020, e-Propulsion & Drivetrain includes $38 million related to accelerated amortization for certain intangibles, refer to Note 12, “Goodwill and Other Intangibles,” for more information.

Adjusted earnings before interest, income taxes and noncontrolling interest (“Segment Adjusted EBIT”)

	Year Ended December 31,
(in millions)	2021		2020		2019
Air Management	$	1,070	$	762	$	995
e-Propulsion & Drivetrain	486		359		443
Fuel Injection	170		39		—
Aftermarket	107		22		—
Segment Adjusted EBIT	1,833		1,182		1,438
Corporate, including stock-based compensation	302		192		206
Restructuring expense	163		203		72
Customer warranty settlement (Note 21)	124		—		—
Merger, acquisition and divestiture expense	50		96		11
Loss on sales of businesses	29		—		7
Asset impairments and lease modifications	17		17		—
Net gain on insurance recovery for property damage	(3)		(9)		—
Intangible asset accelerated amortization (Note 12)	—		38		—
Amortization of inventory fair value adjustment	—		27		—
Gain on derecognition of subsidiary (Note 21)	—		—		(177)
Unfavorable arbitration loss	—		—		14
Officer stock awards modification	—		—		2
Equity in affiliates' earnings, net of tax	(48)		(18)		(32)
Unrealized loss (gain) on equity securities	362		(382)		—
Interest expense, net	93		61		43
Other postretirement (income) expense	(45)		(7)		27
Earnings before income taxes and noncontrolling interest	789		964		1,265
Provision for income taxes	150		397		468
Net earnings	639		567		797
Net earnings attributable to the noncontrolling interest, net of tax	102		67		51
Net earnings attributable to BorgWarner Inc.	$	537	$	500	$	746

Geographic Information

During the year ended December 31, 2021, approximately 83% of the Company’s consolidated net sales were outside the United States (“U.S.”), attributing sales to the location of production rather than the location of the customer. Outside the U.S., China, Mexico, Germany, Poland, South Korea and the United Kingdom exceeded 5% of consolidated net sales during the year ended December 31, 2021. The Company’s investments in equity securities are excluded from the definition of long-lived assets, as are goodwill and certain other non-current assets.

	Net sales						Long-lived assets
(in millions)	2021		2020		2019		2021		2020		2019
United States	$	2,490	$	2,023	$	2,335	$	625	$	937	$	752
Europe:
Germany	1,342		1,175		1,507		405		338		328
Poland	1,121		696		627		324		352		180
United Kingdom	821		276		171		215		229		56
Hungary	469		458		589		193		184		164
Other Europe	1,452		954		916		520		620		229
Total Europe	5,205		3,559		3,810		1,657		1,723		957
China	3,518		2,269		1,711		1,042		1,055		605
Mexico	1,736		1,035		1,040		623		367		247
South Korea	1,096		814		786		256		301		221
Other foreign	793		465		486		192		208		152
Total	$	14,838	$	10,165	$	10,168	$	4,395	$	4,591	$	2,934

Sales to Major Customers

Consolidated net sales to Ford (including its subsidiaries) were approximately 10%, 13% and 15% for the years ended December 31, 2021, 2020 and 2019, respectively. Consolidated net sales to Volkswagen (including its subsidiaries) were approximately 9%, 11% and 11% for the years ended December 31, 2021, 2020 and 2019. Such sales consisted of a variety of products to a variety of customer locations and regions. No other single customer accounted for more than 10% of consolidated net sales in any of the years presented.

Sales by Product Line

Sales of turbochargers for light vehicles represented approximately 19%, 24% and 28% of consolidated net sales for the years ended December 31, 2021, 2020 and 2019, respectively. No other single product line accounted for more than 10% of consolidated net sales in any of the years presented.

Subsequent Event

In January 2022, the Company announced that the starter and alternator business currently reported in its e-Propulsion & Drivetrain segment will transition to the Aftermarket segment effective January 1, 2022.