Reporting Segments

6 Months Ended

Jun. 30, 2020

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 that 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. 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"). ROIC is comprised of Adjusted EBIT after deducting notional taxes compared to the projected average capital investment required.

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 its 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 June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Engine	$	826	$	1,569	$	2,260	$	3,167
Drivetrain	607		998		1,467		1,980
Inter-segment eliminations	(7)		(16)		(22)		(30)
Net sales	$	1,426	$	2,551	$	3,705	$	5,117

Adjusted EBIT

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Engine	$	28	$	249	$	236	$	490
Drivetrain	1		102		64		207
Adjusted EBIT	29		351		300		697
Restructuring expense	37		13		52		27
Merger, acquisition and divestiture expense	21		5		42		6
Asset impairments	17		—		26		—
Net gain on insurance proceeds for property damage	(6)		—		(6)		—
Unfavorable arbitration loss	—		—		—		14
Officer stock awards modification	—		—		—		2
Corporate, including stock-based compensation	38		48		75		99
Equity in affiliates’ earnings, net of tax	(2)		(9)		(7)		(18)
Interest income	(3)		(2)		(5)		(5)
Interest expense	18		14		30		28
Other postretirement (income) expense	(1)		27		(3)		27
(Loss) earnings before income taxes and noncontrolling interest	(90)		255		96		517
(Benefit) provision for income taxes	(6)		73		43		164
Net (loss) earnings	$	(84)	$	182	$	53	$	353
Net earnings attributable to the noncontrolling interest, net of tax	14		10		22		21
Net (loss) earnings attributable to BorgWarner Inc.	$	(98)	$	172	$	31	$	332

Total Assets

	June 30,		December 31,
(in millions)	2020		2019
Engine	$	4,218	$	4,536
Drivetrain	3,821		4,075
Total	8,039		8,611
Corporate *	2,298		1,091
Total assets	$	10,337	$	9,702

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