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REPORTING SEGMENTS AND RELATED INFORMATION | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
REPORTING SEGMENTS AND RELATED INFORMATION | REPORTABLE SEGMENTS AND RELATED INFORMATION The Company discloses segment information under four reportable segments, consistent with the operating segments that are evaluated by management, including the chief operating decision maker (“CODM”). The Company’s CODM is its Chief Executive Officer. The reportable segments are further described below. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems. In previous years, the Company presented its results under three reportable segments: Air Management, Drivetrain & Battery Systems and ePropulsion. Effective July 1, 2024, the Company implemented a new business unit and management structure designed to further enhance the execution of the Company’s strategy. The Company now reports its results in the following four reportable segments: Turbos & Thermal Technologies, Drivetrain & Morse Systems, PowerDrive Systems and Battery & Charging Systems. The reportable segment disclosures have been updated accordingly, which included recasting prior period information for the new reporting structure. •Turbos & Thermal Technologies. This segment’s products include turbochargers, eBoosters, eTurbos, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters and battery heaters. •Drivetrain & Morse Systems. This segment’s products include control modules, friction and mechanical clutch products for automatic transmissions, torque-management products and rear-wheel drive (“RWD”) and all-wheel drive (“AWD”) transfer case systems and coupling systems. Additionally, the Drivetrain & Morse Systems products include chain systems and variable camshaft phasing products. •PowerDrive Systems (formerly ePropulsion). This segment’s products include power electronics such as inverters, onboard chargers, DC/DC converters and combination boxes, rotating electric machines, fully integrated drive modules (consisting of inverter, eMotor and gear reducer), and electronic controls. •Battery & Charging Systems. This segment’s products include high-performance lithium-ion battery systems for electrified bus-, truck- and off-highway applications and DC (direct current) fast chargers suitable for all types of electric vehicles. Segment Adjusted Operating Income (Loss) is the measure of segment income or loss used by the Company. Segment Adjusted Operating Income (Loss) is comprised of operating income adjusted for restructuring, merger, acquisition and divestiture expense, intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment Adjusted Operating Income (Loss) is most reflective of the operational profitability or loss of its reportable segments. The Company’s CODM uses Segment Adjusted Operating Income (Loss) and the expenses disclosed below to assess the performance of its reportable segments. The CODM uses this information to assist with decisions about future growth, capital investments and cost reduction initiatives by reviewing trends in the business, monitoring variances to historical results and previously forecasted information and performing other analytical comparisons. The following tables show segment information and Segment Adjusted Operating Income (Loss) for the Company’s reportable segments:
2024 Segment information |  |  |  |  |  |
| Net sales |  | Year-end assets |  | Depreciation/ amortization |  | Long-lived asset expenditures 1
(in millions) | Customers |  | Inter-segment |  | Net |  |  |
Turbos & Thermal Technologies | $ | 5,885 |  |  | $ | 2 |  |  | $ | 5,887 |  |  | $ | 3,693 |  |  | $ | 177 |  |  | $ | 170 |
Drivetrain & Morse Systems | 5,564 |  |  | 13 |  |  | 5,577 |  |  | 3,872 |  |  | 246 |  |  | 115 |
PowerDrive Systems | 1,908 |  |  | 29 |  |  | 1,937 |  |  | 2,792 |  |  | 164 |  |  | 291 |
Battery & Charging Systems | 729 |  |  | — |  |  | 729 |  |  | 1,082 |  |  | 57 |  |  | 82 |
Inter-segment eliminations | — |  |  | (44) |  |  | (44) |  |  | — |  |  | — |  |  | — |
Total | 14,086 |  |  | — |  |  | 14,086 |  |  | 11,439 |  |  | 644 |  |  | 658 |
Corporate 2 | — |  |  | — |  |  | — |  |  | 2,554 |  |  | 29 |  |  | 13 |
Consolidated | $ | 14,086 |  |  | $ | — |  |  | $ | 14,086 |  |  | $ | 13,993 |  |  | $ | 673 |  |  | $ | 671 |
2023 Segment information |  |  |  |  |  |
| Net sales |  | Year-end assets |  | Depreciation/ amortization |  | Long-lived asset expenditures 1
(in millions) | Customers |  | Inter-segment |  | Net |  |  |
Turbos & Thermal Technologies | $ | 6,007 |  |  | $ | 5 |  |  | $ | 6,012 |  |  | $ | 3,938 |  |  | $ | 170 |  |  | $ | 184 |
Drivetrain & Morse Systems | 5,543 |  |  | 6 |  |  | 5,549 |  |  | 4,262 |  |  | 215 |  |  | 134 |
PowerDrive Systems | 2,102 |  |  | 64 |  |  | 2,166 |  |  | 3,185 |  |  | 127 |  |  | 384 |
Battery & Charging Systems | 546 |  |  | — |  |  | 546 |  |  | 1,335 |  |  | 39 |  |  | 96 |
Inter-segment eliminations | — |  |  | (75) |  |  | (75) |  |  | — |  |  | — |  |  | — |
Total | 14,198 |  |  | — |  |  | 14,198 |  |  | 12,720 |  |  | 551 |  |  | 798 |
Corporate 2 | — |  |  | — |  |  | — |  |  | 1,733 |  |  | 31 |  |  | 34 |
Consolidated | $ | 14,198 |  |  | $ | — |  |  | $ | 14,198 |  |  | $ | 14,453 |  |  | $ | 582 |  |  | $ | 832 |
2022 Segment information |  |  |  |  |  |
| Net sales |  | Year-end assets |  | Depreciation/ amortization |  | Long-lived asset expenditures 1
(in millions) | Customers |  | Inter-segment |  | Net |  |  |
Turbos & Thermal Technologies | $ | 5,468 |  |  | $ | (13) |  |  | $ | 5,455 |  |  | $ | 3,882 |  |  | $ | 162 |  |  | $ | 129 |
Drivetrain & Morse Systems | 5,027 |  |  | 1 |  |  | 5,028 |  |  | 4,240 |  |  | 218 |  |  | 167 |
PowerDrive Systems | 1,806 |  |  | 100 |  |  | 1,906 |  |  | 2,349 |  |  | 111 |  |  | 257 |
Battery & Charging Systems | 334 |  |  | 1 |  |  | 335 |  |  | 1,178 |  |  | 29 |  |  | 57 |
Inter-segment eliminations | — |  |  | (89) |  |  | (89) |  |  | — |  |  | — |  |  | — |
Total | 12,635 |  |  | — |  |  | 12,635 |  |  | 11,649 |  |  | 520 |  |  | 610 |
Corporate 2 | — |  |  | — |  |  | — |  |  | 1,683 |  |  | 32 |  |  | 12 |
Consolidated | $ | 12,635 |  |  | $ | — |  |  | $ | 12,635 |  |  | $ | 13,332 |  |  | $ | 552 |  |  | $ | 622 |
_______________
1 Long-lived asset expenditures include capital expenditures and tooling outlays.
2 Corporate assets include cash and cash equivalents, investments and long-term receivables, and deferred income taxes.
The following tables show segment expenses for the Company’s reportable segments. These expenses do not include non-comparable items that are excluded in the calculation of Segment Adjusted Operating Income (Loss): Segment Expenses
| Year ended December 31, 2024
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems
Net sales | $ | 5,887 |  |  | $ | 5,577 |  |  | $ | 1,937 |  |  | $ | 729 |
Cost of sales | 4,724 |  |  | 4,413 |  |  | 1,648 |  |  | 681 |
Selling, general and administrative expenses - R&D, net | 170 |  |  | 118 |  |  | 384 |  |  | 51 |
Selling, general and administrative expenses - Other | 114 |  |  | 38 |  |  | 60 |  |  | 47 |
Other segment items 1 | 2 |  |  | (2) |  |  | (11) |  |  | (3) |
Segment Adjusted Operating Income (Loss) | $ | 877 |  |  | $ | 1,010 |  |  | $ | (144) |  |  | $ | (47) |
| Year ended December 31, 2023
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems
Net sales | $ | 6,012 |  |  | $ | 5,549 |  |  | $ | 2,166 |  |  | $ | 546 |
Cost of sales | 4,865 |  |  | 4,413 |  |  | 1,826 |  |  | 581 |
Selling, general and administrative expenses - R&D, net | 175 |  |  | 122 |  |  | 362 |  |  | 44 |
Selling, general and administrative expenses - Other | 100 |  |  | 49 |  |  | 73 |  |  | 40 |
Other segment items 1 | (2) |  |  | 7 |  |  | (5) |  |  | (3) |
Segment Adjusted Operating Income (Loss) | $ | 874 |  |  | $ | 958 |  |  | $ | (90) |  |  | $ | (116) |
| Year ended December 31, 2022
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems
Net sales | $ | 5,455 |  |  | $ | 5,028 |  |  | $ | 1,906 |  |  | $ | 335 |
Cost of sales | 4,392 |  |  | 4,045 |  |  | 1,558 |  |  | 327 |
Selling, general and administrative expenses - R&D, net | 181 |  |  | 138 |  |  | 344 |  |  | 24 |
Selling, general and administrative expenses - Other | 104 |  |  | 60 |  |  | 91 |  |  | 23 |
Other segment items 1 | (5) |  |  | 2 |  |  | 1 |  |  | 5 |
Segment Adjusted Operating Income (Loss) | $ | 783 |  |  | $ | 783 |  |  | $ | (88) |  |  | $ | (44) |
_______________
1 Other segment items include other income and expenses to derive at segment adjusted operating income.
Segment Adjusted Operating Income (Loss)
| Year Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
Turbos & Thermal Technologies | $ | 877 |  |  | $ | 874 |  |  | $ | 783 |
Drivetrain & Morse Systems | 1,010 |  |  | 958 |  |  | 783 |
PowerDrive Systems | (144) |  |  | (90) |  |  | (88) |
Battery & Charging Systems | (47) |  |  | (116) |  |  | (44) |
Segment Adjusted Operating Income | 1,696 |  |  | 1,626 |  |  | 1,434 |
Corporate, including stock-based compensation | 279 |  |  | 278 |  |  | 282 |
Restructuring expense | 74 |  |  | 79 |  |  | 48 |
Intangible asset amortization expense | 69 |  |  | 67 |  |  | 69 |
Impairment charges | 646 |  |  | 29 |  |  | 30 |
Accelerated depreciation | 50 |  |  | 4 |  |  | — |
Change in accounting method | (29) |  |  | — |  |  | — |
Adjustments associated with Spin-Off related balances | 17 |  |  | — |  |  | — |
Commercial contract settlement | 15 |  |  | — |  |  | — |
Loss (gain) on sale of businesses | 6 |  |  | (5) |  |  | (13) |
Merger and acquisition expense, net | 2 |  |  | 23 |  |  | 9 |
Loss (gain) on sale of assets | 2 |  |  | (13) |  |  | — |
Other non-comparable items | 19 |  |  | 4 |  |  | — |
Equity in affiliates' earnings, net of tax | (27) |  |  | (30) |  |  | (28) |
Unrealized and realized loss on equity and debt securities | 1 |  |  | 174 |  |  | 73 |
Interest expense, net | 20 |  |  | 10 |  |  | 51 |
Other postretirement expense (income) | 13 |  |  | 15 |  |  | — |
Earnings from continuing operations before income taxes and noncontrolling interest | $ | 539 |  |  | $ | 991 |  |  | $ | 913 |
Geographic Information During the year ended December 31, 2024, approximately 84% of the Company’s consolidated net sales were outside the U.S., attributing sales to the location of production rather than the location of the customer. Outside the U.S., China, Mexico, Germany, Poland, Hungary and South Korea exceeded 5% of consolidated net sales during the year ended December 31, 2024. The following table shows sales to customers and property, plant and equipment by country.
| Sales |  | Property, plant and equipment
(in millions) | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
United States | $ | 2,240 |  |  | $ | 2,334 |  |  | $ | 2,143 |  |  | $ | 718 |  |  | $ | 778 |  |  | $ | 469 |
Europe: |  |  |  |  |  |  |  |  |  |  |
Germany | 1,680 |  |  | 1,669 |  |  | 1,443 |  |  | 352 |  |  | 393 |  |  | 354 |
Poland | 1,160 |  |  | 1,121 |  |  | 937 |  |  | 356 |  |  | 342 |  |  | 277 |
Hungary | 820 |  |  | 904 |  |  | 636 |  |  | 154 |  |  | 167 |  |  | 170 |
Other Europe | 1,586 |  |  | 1,387 |  |  | 1,057 |  |  | 472 |  |  | 456 |  |  | 327 |
Total Europe | 5,246 |  |  | 5,081 |  |  | 4,073 |  |  | 1,334 |  |  | 1,358 |  |  | 1,128 |
China | 2,862 |  |  | 2,998 |  |  | 2,864 |  |  | 720 |  |  | 876 |  |  | 821 |
Mexico | 1,644 |  |  | 1,759 |  |  | 1,726 |  |  | 412 |  |  | 374 |  |  | 612 |
South Korea | 1,181 |  |  | 1,163 |  |  | 1,073 |  |  | 189 |  |  | 197 |  |  | 205 |
Other foreign | 913 |  |  | 863 |  |  | 756 |  |  | 202 |  |  | 200 |  |  | 191 |
Total | $ | 14,086 |  |  | $ | 14,198 |  |  | $ | 12,635 |  |  | $ | 3,575 |  |  | $ | 3,783 |  |  | $ | 3,426 |
Sales to Major Customers Consolidated net sales to Ford (including its subsidiaries) were approximately 13%, 14% and 15% for the years ended December 31, 2024, 2023 and 2022, respectively. Consolidated net sales to Volkswagen (including its subsidiaries) were approximately 10%, 11% and 9% for the years ended December 31, 2024, 2023 and 2022. Such sales consisted of a variety of products to a variety of customer locations and regions. No other single customer accounted for more than 10% of consolidated net sales in any of the years presented. Sales by Product Line Sales of turbochargers for light vehicles represented approximately 21%, 22% and 25% of consolidated net sales for the years ended December 31, 2024, 2023 and 2022, respectively. No other single product line accounted for more than 10% of consolidated net sales in any of the years presented.

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