0001113256-17-000094.txt : 20171005 0001113256-17-000094.hdr.sgml : 20171005 20171005163629 ACCESSION NUMBER: 0001113256-17-000094 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20171005 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20171005 DATE AS OF CHANGE: 20171005 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERITOR INC CENTRAL INDEX KEY: 0001113256 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 383354643 STATE OF INCORPORATION: IN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15983 FILM NUMBER: 171125020 BUSINESS ADDRESS: STREET 1: 2135 W MAPLE ROAD CITY: TROY STATE: MI ZIP: 48084 BUSINESS PHONE: 248-435-1000 MAIL ADDRESS: STREET 1: 2135 W MAPLE ROAD CITY: TROY STATE: MI ZIP: 48084 FORMER COMPANY: FORMER CONFORMED NAME: ARVINMERITOR INC DATE OF NAME CHANGE: 20000511 FORMER COMPANY: FORMER CONFORMED NAME: MU SUB INC DATE OF NAME CHANGE: 20000501 8-K 1 mtor-20171005x8kxcover.htm CURRENT REPORT Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 2017
MERITOR, INC.
(Exact name of registrant as specified in its charter)
Indiana
     
1-15983
     
38-3354643
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File No.)
 
Identification No.)

2135 West Maple Road
Troy, Michigan
(Address of principal executive offices)
48084-7186
(Zip code)
Registrant’s telephone number, including area code: (248) 435-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [  ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]





Item 2.01. Completion of Acquisition or Disposition of Assets.
On October 1, 2017, Meritor, Inc. (the “Company”) closed on the sale of its interest in Meritor WABCO Vehicle Control Systems (the “Meritor WABCO JV”) to a subsidiary of its joint venture partner, WABCO Holdings Inc. The total purchase price for the sale was $250 million, and the Company also received a final partnership distribution of $8 million immediately prior to closing.
The Company will remain the exclusive distributor of a certain range of WABCO Holdings Inc.’s aftermarket products in the United States and Canada and the non-exclusive distributor in Mexico following the completion of the transaction, and the purchase agreement includes provisions regarding certain future options of the parties to terminate, at certain points during the first three and a half years, these distribution arrangements at an exercise price of between $225 million and $265 million based on the earnings of the business.
The foregoing description is only a summary of, and is qualified in its entirety by reference to, the terms of the Purchase and Option Agreement regarding the Meritor WABCO JV sale which was filed as Exhibit 10-a to the Company’s Current Report on Form 8-K filed September 18, 2017.
The unaudited pro forma financial statements of the Company giving effect to the foregoing transaction are attached hereto as Exhibit 99-a and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following pro forma condensed consolidated financial statements of the Company are included below:
•
Unaudited Pro Forma Condensed Consolidated Statement of Operations for nine months ended June 30, 2017
•
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended September 30, 2016
•
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2017
Unaudited Pro Forma Condensed Consolidated Financial Information
The unaudited pro forma condensed consolidated financial information presented below is for informational purposes only and does not purport to represent, or be indicative of, what the results of operations or financial position of the Company would have been had the transactions specified below occurred on the dates indicated, or to project the results of operations or financial position of the Company for any future periods. The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments set forth in the accompanying notes. Management believes that the assumptions used and adjustments made are reasonable under the circumstances and all necessary adjustments have been made.
The unaudited pro forma condensed consolidated financial information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements and related notes thereto of the Company for the nine months ended June 30, 2017 included in the Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017, and for the year ended September 30, 2016 included in the Annual Report on Form 10-K filed with the SEC on December 1, 2016.
Unaudited pro forma condensed consolidated financial information as of June 30, 2017 and for the nine months ended June 30, 2017
As noted above, the Company completed the sale of its interest in the Meritor WABCO JV on October 1, 2017. The unaudited pro forma condensed consolidated statement of operations for the nine months ended June 30, 2017 and the unaudited pro forma condensed consolidated balance sheet at June 30, 2017 include adjustments to the historical financial statements to reflect the disposition of the Company's interest in the Meritor WABCO JV.
The historical financial information as of June 30, 2017 and for the nine months ended June 30, 2017 has been derived from the unaudited consolidated financial statements included in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 3, 2017. The unaudited pro forma condensed consolidated statement of operations for the nine months ended June 30, 2017 was prepared as if the disposition of the Company's interest in the Meritor WABCO JV occurred on the first day of the fiscal year. The unaudited pro forma condensed consolidated balance sheet was prepared as if the disposition occurred as of June 30, 2017.
Unaudited pro forma condensed consolidated financial information for the year ended September 30, 2016
The historical financial information for the year ended September 30, 2016 has been derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K filed with the SEC on December 1, 2016.




The unaudited pro forma condensed consolidated statement of operations for the year ended September 30, 2016 was prepared as if the disposition occurred on the first day of the fiscal year.

(d) Exhibits




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MERITOR, INC.
 
 
 
 
 
 
 
By:  
/s/  April Miller Boise
 
              April Miller Boise
 
Senior Vice President, General Counsel & Corporate Secretary
 



Date: October 5, 2017




EXHIBIT INDEX



EX-99.A 2 exhibit99a.htm UNAUDITED PRO FORMA STATEMENTS OF MERITOR, INC. Exhibit


Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the nine months ended June 30, 2017
(In millions except for per share amounts)

 
 
As Reported
(a)
 
Pro Forma Adjustments
 
Pro Forma
Sales
 
$
2,425

 
$
—

 
$
2,425

Cost of Sales
 
(2,073
)
 
—

 
(2,073
)
GROSS MARGIN
 
352

 
—

 
352

Selling, general and administrative
 
(192
)
 
(3
)
(b)
(195
)
Restructuring costs
 
(4
)
 
—

 
(4
)
Other operating expense, net
 
(5
)
 
—

 
(5
)
OPERATING INCOME
 
151

 
(3
)
 
148

Other income, net
 
1

 
—

 
1

Equity in earnings of affiliates
 
32

 
(19
)
(c)
13

Interest expense, net
 
(63
)
 
—

 
(63
)
INCOME BEFORE INCOME TAXES
 
121

 
(22
)
 
99

Provision for income taxes
 
(30
)
 
7

(d)
(23
)
Net income attributable to noncontrolling interests
 
(5
)
 
—

 
(5
)
INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO MERITOR, INC.
 
86

 
(15
)
 
71

 
 
 
 
 
 
 
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
 
 
 
 
Basic
 
$
0.98

 
 
 
$
0.81

Diluted
 
$
0.94

 
 
 
$
0.78

 
 
 
 
 
 

Basic average common shares outstanding
 
87.9

 
 
 
87.9

Diluted average common shares outstanding
 
91.4

 
 
 
91.4

 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Represents historical condensed consolidated statement of operations as reported by the Company for the nine months ended June 30, 2017.
 
(b) Represents purchased employee and other services provided to the Meritor WABCO JV by the Company during the nine months ended June 30, 2017, which will not continue after varying agreed upon transition periods of up to two years.
 
 
 
 
 
 
 
(c) Represents the elimination of the equity in earnings of the Company's investment in the Meritor WABCO JV from the continuing operations of the Company for the nine months ended June 30, 2017.
 
 
 
 
 
 
 
(d) Represents the estimated income tax effect of the pro-forma adjustments for the nine months ended June 30, 2017. The tax effect of the pro-forma adjustments was calculated using the statutory rates in effect for the periods presented.






Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the year ended September 30, 2016
(In millions except for per share amounts)

 
 
As Reported
(a)
 
Pro Forma Adjustments
 
Pro Forma
Sales
 
$
3,199

 
$
—

 
$
3,199

Cost of Sales
 
(2,763
)
 
—

 
(2,763
)
GROSS MARGIN
 
436

 
—

 
436

Selling, general and administrative
 
(213
)
 
(4
)
(b)
(217
)
Restructuring costs
 
(16
)
 
—

 
(16
)
Other operating expense, net
 
(3
)
 
—

 
(3
)
OPERATING INCOME
 
204

 
(4
)
 
200

Other expense, net
 
(1
)
 
—

 
(1
)
Equity in earnings of affiliates
 
36

 
(26
)
(c)
10

Interest expense, net
 
(84
)
 
—

 
(84
)
INCOME BEFORE INCOME TAXES
 
155

 
(30
)
 
125

Benefit for income taxes
 
424

 
10

(d)
434

Net income attributable to noncontrolling interests
 
(2
)
 
—

 
(2
)
INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO MERITOR, INC.
 
577

 
(20
)
 
557

 
 
 
 
 
 
 
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
 
 
 
 
Basic
 
$
6.40

 
 
 
$
6.18

Diluted
 
$
6.27

 
 
 
$
6.05

 
 
 
 
 
 
 
Basic average common shares outstanding
 
90.1

 
 
 
90.1

Diluted average common shares outstanding
 
92.0

 
 
 
92.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Represents historical condensed consolidated statement of operations as reported by the Company for the year ended September 30, 2016.
 
(b) Represents purchased employee and other services provided to the Meritor WABCO JV by the Company during the year ended September 30, 2016, which will not continue after varying agreed upon transition periods of up to two years.
 
 
 
 
 
 
 
(c) Represents the elimination of the equity in earnings of the Company's investment in the Meritor WABCO JV from the continuing operations of the Company for the year ended September 30, 2016.
 
 
 
 
 
 
 
(d) Represents the estimated income tax effect of the pro-forma adjustments for the year ended September 30, 2016. The tax effect of the pro-forma adjustments was calculated using the statutory rates in effect for the periods presented.








Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of June 30, 2017
(In millions)

 
 
As Reported
(a)
 
Pro Forma
Adjustments
 
Pro Forma
CURRENT ASSETS:
 
 
 
 
 
 
Cash and cash equivalents (h)
 
$
231

 
$
250

(b)
$
481

Receivables, trade and other, net (h)
 
500

 
(4
)
(c)
496

Inventories (h)
 
360

 
—

 
360

Other current assets
 
37

 
—

 
37

TOTAL CURRENT ASSETS
 
1,128

 
246

 
1,374

Net property (h)
 
430

 
—

 
430

Goodwill (h)
 
391

 
—

 
391

Other assets
 
763

 
(97
)
(d)
666

TOTAL ASSETS
 
$
2,712

 
$
149

 
$
2,861

 
 
 
 
 
 
 
LIABILITIES, MEZZANINE EQUITY AND EQUITY (DEFICIT)
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
Short-term debt
 
$
132

 
$
—

 
$
132

Accounts and notes payable (h)
 
602

 
(4
)
(e)
598

Other current liabilities
 
277

 
1

(f)
278

TOTAL CURRENT LIABILITIES
 
1,011

 
(3
)
 
1,008

Long-term debt
 
858

 
—

 
858

Retirement benefits
 
667

 
—

 
667

Other liabilities
 
220

 
4

(f)
224

TOTAL LIABILITIES
 
2,756

 
1

 
2,757

MEZZANINE EQUITY
 
 
 
 
 
 
Convertible debt with cash settlement
 
12

 
—

 
12

EQUITY (DEFICIT):
 
 
 
 
 
 
Common stock (101.4 shares issued and 88.6 shares outstanding)
 
101

 
—

 
101

Additional paid-in capital
 
875

 
—

 
875

Accumulated deficit
 
(156
)
 
148

(g)
(8
)
Treasury stock, at cost (12.8 shares)
 
(136
)
 
—

 
(136
)
Accumulated other comprehensive loss
 
(768
)
 
—

 
(768
)
Total deficit attributable to Meritor, Inc.
 
(84
)
 
148

 
64

Noncontrolling interests (h)
 
28

 
—

 
28

TOTAL EQUITY (DEFICIT)
 
(56
)
 
148

 
92

TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY (DEFICIT)
 
$
2,712

 
$
149

 
$
2,861

 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Represents historical condensed consolidated balance sheet as reported by the Company as of June 30, 2017.
 
 
 
 
 
 
 
(b) Represents cash proceeds from the sale of the Company's investment in the Meritor WABCO JV.
 
 
 
 
 
 
 




(c) Represents amounts due to the Company from the Meritor WABCO JV for employee and other services provided by or paid for by the Company, which will not continue after varying agreed upon transition periods of up to two years.
 
 
 
 
 
 
 
(d) Includes $84 million of net operating losses and certain income tax credits used related to the transaction and $13 million related to the elimination of the Company's investment as of June 30, 2017 in the Meritor WABCO JV.
 
 
 
 
 
 
 
(e) Represents amounts owed by the Company to third parties for goods and services provided to the Meritor WABCO JV and paid for by the Company, which will not be paid by the Company after varying agreed upon transition periods of up to two years.
 
 
 
 
 
 
 
(f) Represents estimated tax liabilities related to the transaction. 
 
 
 
 
 
 
 
(g) Represents the estimated $243 million gain on sale of the Company's investment in the Meritor WABCO JV net of the estimated $89 million of associated tax expense, calculated with the statutory rate in effect during the period and $6 million related to the Meritor WABCO JV pre-closing distribution and dividends, net of other items. The estimated gain has not been reflected in the pro forma condensed statement of operations as it is considered to be nonrecurring in nature.     
 
 
 
 
 
 
 
(h) As of June 30, 2017, Assets and Liabilities held for sale were: (i) $1 million Cash and cash equivalents; (ii) $11 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $10 million Accounts and notes payable; and (vii) $2 million Noncontrolling interests.