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OPERATIONS BY REPORTING SEGMENT AND GEOGRAPHIC AREA
 12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
OPERATIONS BY REPORTING SEGMENT AND GEOGRAPHIC AREA
OPERATIONS BY REPORTING SEGMENT AND GEOGRAPHIC AREA
The Company operates with two end-customer focused business segments. The Powertrain segment focuses on original equipment powertrain products for automotive, heavy duty, and industrial applications. The Motorparts segment sells and distributes a broad portfolio of products in the global aftermarket, while also serving original equipment manufacturers with products including braking, wipers, and a limited range of chassis components. This organizational model allows for a strong product line focus benefitting both original equipment and aftermarket customers and enables the Company to be responsive to customers’ needs for superior products and to promote greater identification with its premium brands. Additionally, this organizational model enhances management focus to capitalize on opportunities for organic or acquisition growth, profit improvement, resource utilization, and business model optimization in line with the unique requirements of the two different customer bases. Reporting units are components of the Company’s reporting segments (which are also its operating segments) and generally align with specific product groups for Powertrain and regions for Motorparts for which segment managers regularly review operating results.

Management utilizes Operational EBITDA as the key performance measure of segment profitability and uses the measure in its financial and operational decision making processes; for internal reporting; and for planning and forecasting purposes to effectively allocate resources. Operational EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation and amortization), as adjusted for additional amounts. Examples of these adjustments include impairment charges related to goodwill, other long-lived assets and investments; restructuring charges; certain gains or losses on the settlement/extinguishment of obligations; and receivable financing charges. During 2015, the Company modified its definition of Operational EBITDA to adjust for financing charges related to certain receivable financing programs. Comparable periods have been adjusted to conform to this definition.

Operational EBITDA presents a performance measure exclusive of capital structure and the method by which net assets were acquired, disposed of, or financed. Management believes this measure provides additional transparency into its core operations and is most reflective of the operational profitability or loss of the Company’s operating segments and reporting units. The measure also allows management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among operating segments.

Operational EBITDA should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income, which is the most directly comparable financial measure to Operational EBITDA that is in accordance with U.S. GAAP. Operational EBITDA, as determined and measured by the Company, should not be compared to similarly titled measures reported by other companies.

Net sales:
 
 
Year Ended December 31
 
 
2015
 
2014
 
2013
Powertrain
 
$
4,450

 
$
4,430

 
$
4,173

Motorparts
 
3,253

 
3,192

 
2,935

Inter-segment eliminations
 
(284
)
 
(305
)
 
(322
)
Total
 
$
7,419

 
$
7,317

 
$
6,786

 
 
 
 
 
 
 
Inter-segment eliminations attributable to sales from Powertrain to Motorparts
 
$
252

 
$
267

 
$
284

Inter-segment eliminations attributable to sales from Motorparts to Powertrain
 
$
32

 
$
38

 
$
38


Cost of products sold:
 
 
Year Ended December 31
 
 
2015
 
2014
 
2013
Powertrain
 
$
(3,913
)
 
$
(3,897
)
 
$
(3,656
)
Motorparts
 
(2,716
)
 
(2,668
)
 
(2,432
)
Inter-segment eliminations
 
284

 
305

 
322

Total
 
$
(6,345
)
 
$
(6,260
)
 
$
(5,766
)

Gross profit:
 
 
Year Ended December 31
 
 
2015
 
2014
 
2013
Powertrain
 
$
537

 
$
533

 
$
517

Motorparts
 
537

 
524

 
503

Total
 
$
1,074

 
$
1,057

 
$
1,020


Operational EBITDA and the reconciliation to net income (loss) is as follows:
 
 
Year Ended December 31
 
 
2015
 
2014
 
2013
Powertrain
 
$
428

 
$
431

 
$
381

Motorparts
 
216

 
199

 
217

Total Operational EBITDA
 
644

 
630

 
598

Items required to reconcile Operational EBITDA to EBITDA:
 
 
 
 
 
 
Restructuring charges and asset impairments (a)
 
(121
)
 
(110
)
 
(29
)
Goodwill and intangible impairment expense, net
 
(94
)
 
(120
)
 
—

Loss on debt extinguishment
 
—

 
(24
)
 
—

Loss on sale of equity method investment
 
(11
)
 
—

 
—

Financing charges
 
(9
)
 
(6
)
 
(7
)
Discontinued operations
 
7

 
—

 
(52
)
Acquisition related costs
 
(6
)
 
(16
)
 
(5
)
Segmentation costs
 
(4
)
 
(10
)
 
—

Other (b)
 
(1
)
 
5

 
(7
)
EBITDA
 
405

 
349

 
498

 
 
 
 
 
 
 
Items required to reconcile EBITDA to net income (loss):
 
 
 
 
 
 
Depreciation and amortization
 
(341
)
 
(334
)
 
(294
)
Interest expense, net
 
(138
)
 
(120
)
 
(99
)
Income tax (expense) benefit
 
(30
)
 
(56
)
 
(56
)
Net income (loss)
 
(104
)
 
(161
)
 
49


 
 
 
 
 
 
 
Footnotes:
 
2015
 
2014
 
2013
(a) Restructuring charges and asset impairments, net:
 
(Millions of Dollars)
Restructuring charges related to severance and other charges, net
 
$
(89
)
 
$
(86
)
 
$
(21
)
Asset impairments, including impairments related to restructuring activities
 
(32
)
 
(24
)
 
(8
)
Total Restructuring charges
 
$
(121
)
 
$
(110
)
 
$
(29
)
 
 
 
 
 
 
 
(b) Other reconciling items:
 
 
 
 
 
 
Headquarters relocation costs
 
$
—

 
$
(6
)
 
$
—

Non-service cost components associated with U.S. based funded pension plans
 
1

 
6

 
(2
)
Stock appreciation rights
 
1

 
4

 
(5
)
Other
 
(3
)
 
1

 
—

 
 
$
(1
)
 
$
5

 
$
(7
)

Total assets, capital expenditures, and depreciation and amortization information by reporting segment is as set forth in the tables below. Goodwill was assigned to reporting segments and reporting units based on individual reporting unit fair values over values attributed to specific intangible and tangible assets.
 
 
Total Assets
 
Capital Expenditures
 
Depreciation and
Amortization
 
 
December 31
 
Year Ended December 31
 
Year Ended December 31
 
 
2015
 
2014
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Powertrain
 
$
3,997

 
$
3,485

 
$
301

 
$
268

 
$
276

 
$
208

 
$
196

 
$
178

Motorparts
 
3,141

 
3,355

 
131

 
130

 
86

 
119

 
114

 
100

Total Reporting Segment
 
7,138

 
6,840

 
432

 
398

 
362

 
327

 
310

 
278

Corporate
 
100

 
227

 
8

 
20

 
13

 
14

 
24

 
16

Discontinued operations
 
—

 
—

 
—

 
—

 
5

 
—

 
—

 
2

Total Company
 
$
7,238

 
$
7,067

 
$
440

 
$
418

 
$
380

 
$
341

 
$
334

 
$
296



The following table shows geographic information:
 
 
Net Sales
 
Net PPE
 
 
Year Ended December 31
 
December 31
 
 
2015
 
2014
 
2013
 
2015
 
2014
United States
 
$
2,803

 
$
2,667

 
$
2,516

 
$
683

 
$
607

Germany
 
1,469

 
1,494

 
1,326

 
464

 
423

China
 
467

 
446

 
361

 
277

 
234

Mexico
 
422

 
375

 
341

 
155

 
143

France
 
399

 
398

 
390

 
67

 
55

Italy
 
262

 
290

 
286

 
62

 
69

Belgium
 
257

 
272

 
312

 
14

 
16

United Kingdom
 
218

 
242

 
233

 
72

 
77

India
 
210

 
203

 
198

 
141

 
134

Other
 
912

 
930

 
823

 
418

 
402

 
 
$
7,419

 
$
7,317

 
$
6,786

 
$
2,353

 
$
2,160




The following table shows nonconsolidated affiliates information:
 
 
Equity Earnings of Nonconsolidated Affiliates, Net of Tax
 
Investments In Nonconsolidated Affiliates
 
 
Year Ended December 31
 
Year Ended December 31
 
 
2015
 
2014
 
2013
 
2015
 
2014
Powertrain
 
$
43

 
$
35

 
$
25

 
$
248

 
$
210

Motorparts
 
13

 
13

 
9

 
48

 
59

Total Company
 
$
56

 
$
48

 
$
34

 
$
296

 
$
269