INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES

The company’s non-consolidated joint ventures and related direct ownership interest are as follows:



	September 30,
	2017		2016		2015
Meritor WABCO Vehicle Control Systems (Commercial Truck & Industrial)	—	%	50	%	50	%
Master Sistemas Automotivos Ltda. (Commercial Truck & Industrial)	49	%	49	%	49	%
Sistemas Automotrices de Mexico S.A. de C.V. (Commercial Truck & Industrial)	50	%	50	%	50	%
Ege Fren Sanayii ve Ticaret A.S. (Commercial Truck & Industrial)	49	%	49	%	49	%
Automotive Axles Limited (Commercial Truck & Industrial)	36	%	36	%	36	%

In the fourth quarter of fiscal year 2017, Meritor, Inc. 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, which is recorded as a receivable as of September 30, 2017. The Company also received a final partnership distribution of $8 million in the fourth quarter of fiscal year 2017, 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 for a period of 10 years 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 company’s investments in non-consolidated joint ventures are as follows (in millions):



	September 30,
	2017		2016
Commercial Truck & Industrial	$	101	$	100
Aftermarket & Trailer	—		—
Total investments in non-consolidated joint ventures	$	101	$	100

The company’s equity in earnings of non-consolidated joint ventures is as follows (in millions):



	Year Ended September 30,
	2017		2016		2015
Commercial Truck & Industrial	$	48	$	36	$	39
Aftermarket & Trailer	—		—		—
Total equity in earnings of affiliates	$	48	$	36	$	39

The summarized financial information presented below represents the combined accounts of the company’s non-consolidated joint ventures related to its continuing operations (in millions):



	September 30,
	2017 ⁽¹⁾		2016
Current assets	$	326	$	337
Non-current assets	151		151
Total assets	$	477	$	488

Current liabilities	$	183	$	192
Non-current liabilities	98		103
Total liabilities	$	281	$	295

⁽¹⁾ Does not include Meritor WABCO Vehicle Control Systems.



	Year Ended September 30,
	2017		2016		2015
Sales	$	1,156	$	1,101	$	1,288
Gross profit	200		165		187
Net income	101		73		83

Dividends received from the company’s non-consolidated joint ventures were $44 million in fiscal year 2017, $37 million in fiscal year 2016 and $32 million in fiscal year 2015. Dividends from the company's Meritor WABCO joint venture were $36 million, which includes a $8 million final partnership distribution received immediately prior to closing of the sale transaction on October 1, 2017, $33 million and $24 million in fiscal years 2017, 2016 and 2015, respectively.

The company had sales to its non-consolidated joint ventures of approximately $2 million, $9 million and $5 million in fiscal years 2017, 2016 and 2015, respectively. These sales exclude sales of $138 million, $124 million and $135 million in fiscal years 2017, 2016 and 2015, respectively, to a joint venture in the company’s Commercial Truck & Industrial segment, which are eliminated as the company purchases these components back after value add provided by the joint venture. The company had purchases from its non-consolidated joint ventures of approximately $787 million, $753 million and $855 million in fiscal years 2017, 2016 and 2015, respectively. Additionally, the company leases space and provides certain administrative and technical services to various non-consolidated joint ventures. The company collected $6 million, $12 million and $9 million for such leases and services during fiscal years 2017, 2016 and 2015, respectively.

Amounts due from the company’s non-consolidated joint ventures were $36 million and $22 million at September 30, 2017 and 2016, respectively, and are included in Receivables, trade and other, net in the consolidated balance sheet. Amounts due to the company’s non-consolidated joint ventures were $99 million and $84 million at September 30, 2017 and 2016, respectively, and are included in Accounts payable in the consolidated balance sheet.

The fair value of the company’s investment in its Automotive Axles Limited joint venture was approximately $72 million and $59 million at September 30, 2017 and 2016, respectively, based on quoted market prices as this joint venture is listed and publicly traded on the Bombay Stock Exchange in India.

The company holds a variable interest in a joint venture accounted for under the equity method of accounting. The joint venture manufactures components for commercial vehicle applications primarily on behalf of the company. The variable interest relates to a supply arrangement between the company and the joint venture whereby the company supplies certain components to the joint venture on a cost-plus basis. The company is not the primary beneficiary of the joint venture, as the joint venture partner has shared or absolute control over key manufacturing operations, labor relationships, financing activities and certain other functions of the joint venture. Therefore, the company does not consolidate the joint venture. At September 30, 2017 and 2016, the company’s investment in the joint venture was $54 million and $45 million, respectively, representing the company’s maximum exposure to loss. This amount is included in investments in non-consolidated joint ventures (see Note 13).