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QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 12 Months Ended
Sep. 30, 2015
Quarterly Financial Information Disclosure [Abstract]  
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 
The following is a condensed summary of the company’s unaudited quarterly results of continuing operations for fiscal years 2015 and 2014. Per share amounts are based on the weighted average shares outstanding for that quarter. Earnings per share for the year may not equal the sum of the four fiscal quarters’ earnings per share due to changes in basic and diluted shares outstanding.
 
 
2015 Fiscal Quarters (Unaudited)
 
First
 
Second
 
Third
 
Fourth
 
2015
 
(In millions, except share related data)
Sales
$
879

 
$
864

 
$
909

 
$
853

 
$
3,505

Cost of sales
(764
)
 
(749
)
 
(785
)
 
(745
)
 
(3,043
)
Gross margin
115

 
115

 
124

 
108

 
462

Benefit (provision) for income taxes
(7
)
 
(6
)
 
(6
)
 
18

 
(1
)
Net income (loss)
30

 
43

 
14

 
(22
)
 
65

Net income (loss) from continuing operations attributable to Meritor, Inc.
32

 
39

 
15

 
(21
)
 
65

Net income (loss) attributable to Meritor, Inc.
29

 
43

 
13

 
(21
)
 
64

Basic earnings (loss) per share from continuing operations
$
0.33

 
$
0.40

 
$
0.15

 
$
(0.22
)
 
$
0.67

Diluted earnings (loss) per share from continuing operations
$
0.32

 
$
0.38

 
$
0.15

 
$
(0.22
)
 
$
0.65



The company recognized restructuring costs in its continuing operations during fiscal year 2015 as follows: $3 million in the first quarter, $3 million in the second quarter, $9 million in the third quarter and $1 million in the fourth quarter (see Note 5). During the fourth quarter of fiscal year 2015, the company settled the remaining liabilities associated with its German and Canadian pension plans and recognized a pre-tax settlement loss of $59 million associated with the annuity purchases and lump-sum payments (see Note 21). During the fourth quarter of fiscal year 2015 the company recorded an impairment of $15 million of goodwill (see Note 4). In addition, the company recorded an impairment of $2 million of long-lived assets in the fourth quarter of fiscal year 2015 (see Note 11). During the fourth quarter of fiscal year 2015, as a result of sustained profitability in Germany, Italy, Mexico and Sweden evidenced by a strong earnings history and additional positive evidence, the company determined it was more likely than not future earnings will be sufficient to realize deferred tax assets in these jurisdictions. Accordingly, the company reversed valuation allowances in Germany, Italy, Mexico, and Sweden, resulting in non-cash income tax benefits of $16 million.

 
2014 Fiscal Quarters (Unaudited)
 
First
 
Second
 
Third
 
Fourth
 
2014
 
(In millions, except share related data)
Sales
$
900

 
$
954

 
$
979

 
$
933

 
$
3,766

Cost of sales
(795
)
 
(836
)
 
(855
)
 
(793
)
 
(3,279
)
Gross margin
105

 
118

 
124

 
140

 
487

Provision for income taxes
(11
)
 
(8
)
 
(12
)
 
—

 
(31
)
Net income
13

 
3

 
234

 
4

 
254

Net income from continuing operations attributable to Meritor, Inc.
12

 
1

 
237

 
29

 
279

Net income attributable to Meritor, Inc.
11

 
1

 
234

 
3

 
249

Basic earnings per share from continuing operations
$
0.12

 
$
0.01

 
$
2.43

 
$
0.30

 
$
2.86

Diluted earnings per share from continuing operations
$
0.12

 
$
0.01

 
$
2.34

 
$
0.29

 
$
2.81



The company recognized restructuring costs in its continuing operations during fiscal year 2014 as follows: $1 million in the first quarter, $2 million in the second quarter and $7 million in the fourth quarter (see Note 5). During the fourth quarter of fiscal year 2014, the company reduced retiree medical expense by $15 million, in cost of sales on the consolidated statement of operations, due to a triggered curtailment (see Note 20). Net income in the third quarter of fiscal year 2014 includes after-tax proceeds of $209 million representing the Company's share based on its ownership interest in ZF Meritor including a recovery of current and prior years' attorney expenses paid by Meritor.