Reporting Segments

9 Months Ended

Sep. 30, 2014

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,
(millions of dollars)	2014			2013			2014			2013
Engine	$	1,412.4		$	1,210.3		$	4,322.0		$	3,756.1
Drivetrain	627.0			604.0			2,016.4			1,818.9
Inter-segment eliminations	(7.3		)	(8.1		)	(25.2		)	(23.8		)
Net sales	$	2,032.1		$	1,806.2		$	6,313.2		$	5,551.2

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(millions of dollars)	2014			2013			2014			2013
Engine	$	222.6		$	195.5		$	696.0		$	618.1
Drivetrain	68.0			65.9			237.6			181.7
Adjusted EBIT	290.6			261.4			933.6			799.8
Restructuring expense	13.1			—			67.6			—
Pension settlement	2.7			—			2.7			—
Program termination agreement	—			—			—			11.3
Retirement related obligations	—			—			—			5.9
Corporate, including equity in affiliates' earnings and stock-based compensation	22.3			25.4			76.0			83.9
Interest income	(1.4		)	(1.3		)	(4.3		)	(3.3		)
Interest expense and finance charges	9.0			8.1			26.2			26.6
Earnings before income taxes and noncontrolling interest	244.9			229.2			765.4			675.4
Provision for income taxes	71.9			56.3			225.3			173.8
Net earnings	173.0			172.9			540.1			501.6
Net earnings attributable to the noncontrolling interest, net of tax	6.4			6.1			24.2			18.7
Net earnings attributable to BorgWarner Inc.	$	166.6		$	166.8		$	515.9		$	482.9

Total Assets

(millions of dollars)	September 30, 2014		December 31, 2013
Engine	$	3,968.6	$	3,519.1
Drivetrain	1,793.6		1,786.6
Total	5,762.2		5,305.7
Corporate (a)	1,520.1		1,611.3
Total assets	$	7,282.3	$	6,917.0

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(a) Corporate assets include investments and advances and deferred income taxes.