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REPORTABLE SEGMENTS | 6 Months Ended
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Jun. 30, 2025
Segment Reporting [Abstract] |
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS 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 that are managed separately as each represents a specific grouping of related automotive components and systems. 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. As further described in Note 3, “Acquisitions and Dispositions,” in February 2025, the Company made the decision to exit its charging business within the Battery & Charging Systems reportable segment. This plan did not result in a change to the Company’s reportable segments. 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 for the Company’s reportable segments adjusted to exclude 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 our 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 net sales, segment expenses, Segment Adjusted Operating Income (Loss) and other segment information for the Company’s reportable segments. The segment expenses do not include non-comparable items that are excluded in the calculation of Segment Adjusted Operating Income (Loss): Net Sales and Expenses by Reportable Segment
| Three Months Ended June 30, 2025
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Inter-segment eliminations |  | Total
Net sales - customers | $ | 1,480 |  |  | $ | 1,424 |  |  | $ | 575 |  |  | $ | 159 |  |  | $ | — |  |  | $ | 3,638 |
Net sales - inter-segment | 1 |  |  | 5 |  |  | 6 |  |  | — |  |  | (12) |  |  | — |
Net sales | $ | 1,481 |  |  | $ | 1,429 |  |  | $ | 581 |  |  | $ | 159 |  |  | $ | (12) |  |  | $ | 3,638 |
Cost of sales | 1,181 |  |  | 1,129 |  |  | 510 |  |  | 151 |  |  |  |  |
Selling, general and administrative expenses - R&D, net | 44 |  |  | 32 |  |  | 93 |  |  | 10 |  |  |  |  |
Selling, general and administrative expenses - Other | 28 |  |  | 8 |  |  | 15 |  |  | 9 |  |  |  |  |
Other segment items 1 | 1 |  |  | — |  |  | (4) |  |  | 1 |  |  |  |  |
Segment Adjusted Operating Income (Loss) | $ | 227 |  |  | $ | 260 |  |  | $ | (33) |  |  | $ | (12) |  |  |  |  |
| Six Months Ended June 30, 2025
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Inter-segment eliminations |  | Total
Net sales - customers | $ | 2,934 |  |  | $ | 2,780 |  |  | $ | 1,130 |  |  | $ | 309 |  |  | $ | — |  |  | $ | 7,153 |
Net sales - inter-segment | 1 |  |  | 10 |  |  | 12 |  |  | — |  |  | (23) |  |  | — |
Net sales | $ | 2,935 |  |  | $ | 2,790 |  |  | $ | 1,142 |  |  | $ | 309 |  |  | $ | (23) |  |  | $ | 7,153 |
Cost of sales | 2,332 |  |  | 2,208 |  |  | 1,002 |  |  | 301 |  |  |  |  |
Selling, general and administrative expenses - R&D, net | 85 |  |  | 61 |  |  | 192 |  |  | 21 |  |  |  |  |
Selling, general and administrative expenses - Other | 55 |  |  | 18 |  |  | 29 |  |  | 20 |  |  |  |  |
Other segment items 1 | 1 |  |  | — |  |  | (5) |  |  | 1 |  |  |  |  |
Segment Adjusted Operating Income (Loss) | $ | 462 |  |  | $ | 503 |  |  | $ | (76) |  |  | $ | (34) |  |  |  |  |
| Three Months Ended June 30, 2024
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Inter-segment eliminations |  | Total
Net sales - customers | $ | 1,515 |  |  | $ | 1,440 |  |  | $ | 455 |  |  | $ | 193 |  |  | $ | — |  |  | $ | 3,603 |
Net sales - inter-segment | — |  |  | 2 |  |  | 9 |  |  | — |  |  | (11) |  |  | — |
Net sales | $ | 1,515 |  |  | $ | 1,442 |  |  | $ | 464 |  |  | $ | 193 |  |  | $ | (11) |  |  | $ | 3,603 |
Cost of sales | 1,219 |  |  | 1,143 |  |  | 401 |  |  | 179 |  |  |  |  |
Selling, general and administrative expenses - R&D, net | 43 |  |  | 25 |  |  | 103 |  |  | 12 |  |  |  |  |
Selling, general and administrative expenses - Other | 28 |  |  | 9 |  |  | 10 |  |  | 11 |  |  |  |  |
Other segment items 1 | 1 |  |  | (1) |  |  | (1) |  |  | 1 |  |  |  |  |
Segment Adjusted Operating Income (Loss) | $ | 224 |  |  | $ | 266 |  |  | $ | (49) |  |  | $ | (10) |  |  |  |  |
| Six Months Ended June 30, 2024
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Inter-segment eliminations |  | Total
Net sales - customers | $ | 3,087 |  |  | $ | 2,856 |  |  | $ | 885 |  |  | $ | 370 |  |  | $ | — |  |  | $ | 7,198 |
Net sales - inter-segment | 2 |  |  | 5 |  |  | 15 |  |  | — |  |  | (22) |  |  | — |
Net sales | $ | 3,089 |  |  | $ | 2,861 |  |  | $ | 900 |  |  | $ | 370 |  |  | $ | (22) |  |  | $ | 7,198 |
Cost of sales | 2,494 |  |  | 2,267 |  |  | 787 |  |  | 350 |  |  |  |  |
Selling, general and administrative expenses - R&D, net | 85 |  |  | 57 |  |  | 203 |  |  | 24 |  |  |  |  |
Selling, general and administrative expenses - Other | 56 |  |  | 18 |  |  | 23 |  |  | 22 |  |  |  |  |
Other segment items 1 | 2 |  |  | — |  |  | (2) |  |  | (1) |  |  |  |  |
Segment Adjusted Operating Income (Loss) | $ | 452 |  |  | $ | 519 |  |  | $ | (111) |  |  | $ | (25) |  |  |  |  |
_______________
1 Other segment items include other income and expenses to derive at segment adjusted operating income.
Segment Adjusted Operating Income (Loss)
| Three Months Ended June 30, |  | Six Months Ended June 30,
(in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Turbos & Thermal Technologies | $ | 227 |  |  | $ | 224 |  |  | $ | 462 |  |  | $ | 452 |
Drivetrain & Morse Systems | 260 |  |  | 266 |  |  | 503 |  |  | 519 |
PowerDrive Systems | (33) |  |  | (49) |  |  | (76) |  |  | (111) |
Battery & Charging Systems | (12) |  |  | (10) |  |  | (34) |  |  | (25) |
Segment Adjusted Operating Income | 442 |  |  | 431 |  |  | 855 |  |  | 835 |
Corporate, including stock-based compensation | 69 |  |  | 55 |  |  | 130 |  |  | 120 |
Restructuring expense (Note 5) | 17 |  |  | 25 |  |  | 48 |  |  | 44 |
Impairment charges | 3 |  |  | — |  |  | 42 |  |  | — |
Intangible asset amortization expense | 16 |  |  | 17 |  |  | 33 |  |  | 34 |
Costs to exit charging business | 6 |  |  | — |  |  | 32 |  |  | — |
Accelerated depreciation | 21 |  |  | 8 |  |  | 21 |  |  | 8 |
Write-off of customer incentive asset | 7 |  |  | — |  |  | 7 |  |  | — |
Chief Executive Officer ("CEO") transition compensation | 6 |  |  | — |  |  | 6 |  |  | — |
Loss on sale of assets | 5 |  |  | — |  |  | 5 |  |  | — |
Merger and acquisition expense, net | — |  |  | — |  |  | 2 |  |  | 5 |
Loss (gain) on sale of businesses | — |  |  | — |  |  | 1 |  |  | (3) |
Commercial contract settlement | — |  |  | 15 |  |  | — |  |  | 15 |
Adjustments associated with Spin-Off related balances | 2 |  |  | 11 |  |  | (1) |  |  | 11 |
Other non-comparable items | 1 |  |  | 3 |  |  | 3 |  |  | 9 |
Equity in affiliates’ earnings, net of tax | (8) |  |  | (12) |  |  | (18) |  |  | (17) |
Unrealized (gain) loss on equity securities | (1) |  |  | — |  |  | (1) |  |  | 2 |
Interest expense, net | 12 |  |  | 8 |  |  | 24 |  |  | 13 |
Other postretirement expense | 2 |  |  | 3 |  |  | 5 |  |  | 6 |
Earnings from continuing operations before income taxes and noncontrolling interest | $ | 284 |  |  | $ | 298 |  |  | $ | 516 |  |  | $ | 588 |
Segment information
|  | Depreciation and amortization |  | Long-lived asset expenditures 1 |  | Total assets
(in millions) |  | Three Months Ended June 30, 2025 |  | Three Months Ended June 30, 2024 |  | Three Months Ended June 30, 2025 |  | Three Months Ended June 30, 2024 |  | June 30, 2025 |  | December 31, 2024
Turbos & Thermal Technologies |  | $ | 42 |  |  | $ | 44 |  |  | $ | 28 |  |  | $ | 41 |  |  | $ | 3,935 |  |  | $ | 3,693 |
Drivetrain & Morse Systems |  | 70 |  |  | 56 |  |  | 17 |  |  | 24 |  |  | 3,925 |  |  | 3,872 |
PowerDrive Systems |  | 45 |  |  | 41 |  |  | 24 |  |  | 66 |  |  | 2,885 |  |  | 2,792 |
Battery & Charging Systems |  | 15 |  |  | 11 |  |  | 4 |  |  | 29 |  |  | 1,038 |  |  | 1,082 |
Total |  | 172 |  |  | 152 |  |  | 73 |  |  | 160 |  |  | 11,783 |  |  | 11,439 |
Corporate 2 |  | 7 |  |  | 8 |  |  | 4 |  |  | 5 |  |  | 2,616 |  |  | 2,554 |
Consolidated |  | $ | 179 |  |  | $ | 160 |  |  | $ | 77 |  |  | $ | 165 |  |  | $ | 14,399 |  |  | $ | 13,993 |
|  | Depreciation and amortization |  | Long-lived asset expenditures 1 |  |  |  |
|  | Six Months Ended June 30, 2025 |  | Six Months Ended June 30, 2024 |  | Six Months Ended June 30, 2025 |  | Six Months Ended June 30, 2024 |  |  |  |
Turbos & Thermal Technologies |  | $ | 82 |  |  | $ | 87 |  |  | $ | 69 |  |  | $ | 81 |  |  |  |  |
Drivetrain & Morse Systems |  | 119 |  |  | 108 |  |  | 41 |  |  | 59 |  |  |  |  |
PowerDrive Systems |  | 88 |  |  | 77 |  |  | 68 |  |  | 154 |  |  |  |  |
Battery & Charging Systems |  | 31 |  |  | 23 |  |  | 12 |  |  | 51 |  |  |  |  |
Total |  | 320 |  |  | 295 |  |  | 190 |  |  | 345 |  |  |  |  |
Corporate |  | 14 |  |  | 15 |  |  | 6 |  |  | 10 |  |  |  |  |
Consolidated |  | $ | 334 |  |  | $ | 310 |  |  | $ | 196 |  |  | $ | 355 |  |  |  |  |
_______________
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.

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- Definition The entire disclosure for reporting segments including data and tables. 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