XML 46 R30.htm IDEA: XBRL DOCUMENT v3.6.0.2
Business Segment Information
 3 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Business Segment Information
Business Segment Information
The company defines its operating segments as components of its business where separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer.
      The company has two reportable segments at December 31, 2016, as follows:
•
The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, primarily for medium- and heavy-duty trucks, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. This segment also includes the company's aftermarket businesses in Asia Pacific and South America; and
•
The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers. This segment also supplies a wide variety of undercarriage products and systems for trailer applications in North America.

     Segment EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expense and asset impairment charges. The company uses Segment EBITDA as the primary basis for the CODM to evaluate the performance of each of its reportable segments.
     The accounting policies of the segments are the same as those applied in the condensed consolidated financial statements, except for the use of Segment EBITDA. The company may allocate certain common costs, primarily corporate functions, between the segments differently than the company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such as information technology, finance, communications, legal and human resources. The company does not allocate interest expense and certain legacy and other corporate costs not directly associated with the segment.
     Segment information is summarized as follows (in millions):
 
Commercial Truck
& Industrial
 
Aftermarket
& Trailer
 
Eliminations
 
Total
Three Months Ended December 31, 2016
 
 
 
 
 
 
 
External Sales
$
521

 
$
178

 
$
—

 
$
699

Intersegment Sales
18

 
6

 
(24
)
 
—

Total Sales
$
539

 
$
184

 
$
(24
)
 
$
699

Three Months Ended December 31, 2015
 
 
 
 
 
 
 
External Sales
$
613

 
$
196

 
$
—

 
$
809

Intersegment Sales
20

 
7

 
(27
)
 
—

Total Sales
$
633

 
$
203

 
$
(27
)
 
$
809

 
 
 
 
 
 
 
 


 
Three Months Ended
December 31,
 
2016
 
2015
Segment EBITDA:
 
 
 
Commercial Truck & Industrial
$
42

 
$
52

Aftermarket & Trailer
22

 
20

Segment EBITDA
64


72

Unallocated legacy and corporate income, net (1)
—

 
4

Interest expense, net
(21
)
 
(22
)
Provision for income taxes
(6
)
 
(7
)
Depreciation and amortization
(17
)
 
(15
)
Noncontrolling interests
(1
)
 
(1
)
Loss on sale of receivables
(1
)
 
(2
)
Asset impairment charges
(3
)
 
—

Restructuring costs
—

 
(1
)
Income from continuing operations attributable to Meritor, Inc.
$
15


$
28


(1)
Unallocated legacy and corporate income, net represents items that are not directly related to the company's business segments. These items primarily include asbestos-related charges and settlements, pension and retiree medical costs associated with sold businesses, and other legacy costs for environmental and product liability.
    
Segment Assets:
December 31,
2016
 
September 30,
2016
Commercial Truck & Industrial
$
1,414

 
$
1,433

Aftermarket & Trailer
424

 
436

Total segment assets
1,838

 
1,869

Corporate (1)
805

 
845

Less: Accounts receivable sold under off-balance sheet factoring programs(2) 
(249
)
 
(220
)
Total assets
$
2,394

 
$
2,494


(1) 
Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs.
(2) 
At December 31, 2016 and September 30, 2016, segment assets include $249 million and $220 million, respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 9). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances.