REPORTING SEGMENTS AND RELATED INFORMATION

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

REPORTING SEGMENTS AND RELATED INFORMATION

REPORTING SEGMENTS AND RELATED INFORMATION

The Company’s business is comprised of four reporting segments: Air Management, e-Propulsion & Drivetrain, Fuel Injection and Aftermarket. 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. ROIC is comprised of Segment Adjusted EBIT after deducting notional taxes compared to the projected average capital investment required. 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 ongoing operating income or loss.

Segment Adjusted EBIT is the measure of segment income or loss used by the Company. The Company believes Segment Adjusted EBIT is most reflective of the operational profitability or loss of our reporting segments. The following tables show segment information and Segment 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)	2021		2020		2021		2020
Air Management	$	1,854	$	826	$	3,865	$	2,260
e-Propulsion & Drivetrain	1,337		607		2,803		1,467
Fuel Injection	480		—		955		—
Aftermarket	226		—		423		—
Inter-segment eliminations	(139)		(7)		(279)		(22)
Net sales	$	3,758	$	1,426	$	7,767	$	3,705

Segment Adjusted EBIT

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2021		2020		2021		2020
Air Management	$	277	$	28	$	599	$	236
e-Propulsion & Drivetrain	132		1		269		64
Fuel Injection	38		—		71		—
Aftermarket	32		—		53		—
Segment Adjusted EBIT	479		29		992		300
Corporate, including stock-based compensation	78		38		147		75
Restructuring expense	62		37		92		52
Merger, acquisition and divestiture expense	15		21		28		42
Loss on sale	7		—		7		—
Asset impairments	—		17		—		17
Net gain on insurance recovery for property damage	—		(6)		(2)		(6)
Equity in affiliates’ earnings, net of tax	(16)		(2)		(28)		(7)
Unrealized loss on equity securities	4		—		276		9
Interest income	(3)		(3)		(6)		(5)
Interest expense	42		18		63		30
Other postretirement income	(12)		(1)		(23)		(3)
Earnings (loss) before income taxes and noncontrolling interest	302		(90)		438		96
Provision (benefit) for income taxes	28		(6)		70		43
Net earnings (loss)	274		(84)		$	368	$	53
Net earnings attributable to noncontrolling interest, net of tax	27		14		56		22
Net earnings (loss) attributable to BorgWarner Inc.	$	247	$	(98)	$	312	$	31