Reporting Segments

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Reporting Disclosure

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 profit or loss.

Adjusted EBIT is the measure of segment profit 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, including Adjusted EBIT, for the Company's reporting segments:

Net Sales by Reporting Segment

	Three Months Ended September 30,						Nine Months Ended September 30,
(millions of dollars)	2011			2010			2011			2010
Engine	$	1,258.2		$	1,018.8		$	3,805.5		$	2,942.4
Drivetrain	538.7			397.1			1,550.8			1,191.6
Inter-segment eliminations	(5.1		)	(5.0		)	(15.3		)	(14.6		)
Net sales	$	1,791.8		$	1,410.9		$	5,341.0		$	4,119.4

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(millions of dollars)	2011			2010			2011			2010
Engine	$	188.2		$	136.4		$	571.5		$	375.9
Drivetrain	43.5			31.1			114.4			105.1
Adjusted EBIT	231.7			167.5			685.9			481.0
Patent infringement settlement, net of legal costs incurred	—			—			(29.1		)	—
Environmental litigation settlement	—			—			—			28.0
BERU - Eichenauer equity investment gain	—			—			—			(8.0		)
Corporate, including equity in affiliates' earnings and stock-based compensation	21.4			34.0			80.6			84.3
Interest income	(1.3		)	(0.6		)	(3.5		)	(1.8		)
Interest expense and finance charges	18.5			18.4			57.4			46.8
Earnings before income taxes and noncontrolling interest	193.1			115.7			580.5			331.7
Provision for income taxes	46.4			4.2			137.1			51.1
Net earnings	146.7			111.5			443.4			280.6
Net earnings attributable to the noncontrolling interest, net of tax	5.1			4.8			15.3			14.9
Net earnings attributable to BorgWarner Inc.	$	141.6		$	106.7		$	428.1		$	265.7

Total Assets

(millions of dollars)	September 30, 2011		December 31, 2010
Engine	$	3,436.7	$	3,277.7
Drivetrain	1,579.0		1,230.5
Total	5,015.7		4,508.2
Corporate (a)	1,078.6		1,046.8
Total assets	$	6,094.3	$	5,555.0

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(a) Corporate assets include equity in affiliates, investments and advances and deferred income taxes.