SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)

12 Months Ended

Sep. 30, 2017

Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract]

Schedule of Condensed Consolidating Statement of Operations

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions)


	Fiscal Year Ended September 30, 2015 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,734		$	1,771		$	—		$	3,505
Subsidiaries	—			129			71			(200		)	—
Total sales	—			1,863			1,842			(200		)	3,505
Cost of sales	(52		)	(1,576		)	(1,615		)	200			(3,043		)
GROSS MARGIN	(52		)	287			227			—			462
Selling, general and administrative	(53		)	(111		)	(79		)	—			(243		)
Restructuring costs	(2		)	(5		)	(9		)	—			(16		)
Pension settlement losses	—			—			(59		)	—			(59		)
Goodwill impairment	—			(15		)	—			—			(15		)
Other operating income (expense), net	(2		)	(2		)	3			—			(1		)
OPERATING INCOME (LOSS)	(109		)	154			83			—			128
Other income (expense), net	36			18			(49		)	—			5
Equity in earnings of affiliates	—			36			3			—			39
Interest income (expense), net	(138		)	25			8			—			(105		)
INCOME (LOSS) BEFORE INCOME TAXES	(211		)	233			45			—			67
Benefit (provision) for income taxes	(2		)	2			(1		)	—			(1		)
Equity income from continuing operations of subsidiaries	278			35			—			(313		)	—
INCOME FROM CONTINUING OPERATIONS	65			270			44			(313		)	66
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(1		)	(1		)	(1		)	2			(1		)
NET INCOME	64			269			43			(311		)	65
Less: Net income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	64		$	269		$	42		$	(311	)	$	64

(1) Amounts have been recast. See Long-term Debt (Note 17).

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions)


	Fiscal Year Ended September 30, 2017
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,762		$	1,585		$	—		$	3,347
Subsidiaries	—			123			149			(272		)	—
Total sales	—			1,885			1,734			(272		)	3,347
Cost of sales	(62		)	(1,583		)	(1,490		)	272			(2,863		)
GROSS MARGIN	(62		)	302			244			—			484
Selling, general and administrative	(82		)	(100		)	(82		)	—			(264		)
Restructuring costs	2			(2		)	(6		)	—			(6		)
Other operating expense, net	(3		)	(1		)	(3		)	—			(7		)
OPERATING INCOME (LOSS)	(145		)	199			153			—			207
Other income (expense), net	39			(11		)	(26		)	—			2
Gain on sale of equity investment	—			243			—			—			243
Equity in earnings of affiliates	—			42			6			—			48
Interest income (expense), net	(168		)	35			14			—			(119		)
INCOME (LOSS) BEFORE INCOME TAXES	(274		)	508			147			—			381
Benefit (provision) for income taxes	96			(126		)	(22		)	—			(52		)
Equity income from continuing operations of subsidiaries	503			114			—			(617		)	—
INCOME FROM CONTINUING OPERATIONS	325			496			125			(617		)	329
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(1		)	(1		)	(1		)	2			(1		)
NET INCOME	324			495			124			(615		)	328
Less: Net income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	324		$	495		$	120		$	(615	)	$	324

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions)


	Fiscal Year Ended September 30, 2016⁽¹⁾
	Parent			Guarantors			Non-Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,616		$	1,583		$	—		$	3,199
Subsidiaries	—			112			61			(173		)	—
Total sales	—			1,728			1,644			(173		)	3,199
Cost of sales	(57		)	(1,439		)	(1,440		)	173			(2,763		)
GROSS MARGIN	(57		)	289			204			—			436
Selling, general and administrative	(64		)	(79		)	(70		)	—			(213		)
Restructuring costs	(7		)	(4		)	(5		)	—			(16		)
Other operating expense, net	(3		)	—			—			—			(3		)
OPERATING INCOME (LOSS)	(131		)	206			129			—			204
Other income (expense), net	34			(35		)	—			—			(1		)
Equity in earnings of affiliates	—			32			4			—			36
Interest income (expense), net	(117		)	26			7			—			(84		)
INCOME (LOSS) BEFORE INCOME TAXES	(214		)	229			140			—			155
Benefit (provision) for income taxes	526			(102		)	—			—			424
Equity income from continuing operations of subsidiaries	265			120			—			(385		)	—
INCOME FROM CONTINUING OPERATIONS	577			247			140			(385		)	579
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(4		)	(4		)	(2		)	6			(4		)
NET INCOME	573			243			138			(379		)	575
Less: Net income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	573		$	243		$	136		$	(379	)	$	573

(1) Amounts have been recast. See Long-term Debt (Note 17).

Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss)

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions)


	Fiscal Year Ended September 30, 2017
	Parent		Guarantors		Non- Guarantors			Elims			Consolidated
Net income	$	324	$	495	$	124		$	(615	)	$	328
Other comprehensive income	264		21		23			(44		)	264
Total comprehensive income	588		516		147			(659		)	592
Less: Comprehensive income attributable to noncontrolling interests	—		—		(4		)	—			(4		)
Comprehensive income attributable to Meritor, Inc.	$	588	$	516	$	143		$	(659	)	$	588

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions)


	Fiscal Year Ended September 30, 2016⁽¹⁾
	Parent			Guarantors		Non- Guarantors			Elims			Consolidated
Net income	$	573		$	243	$	138		$	(379	)	$	575
Other comprehensive income (loss)	(43		)	11		(44		)	33			(43		)
Total comprehensive income	530			254		94			(346		)	532
Less: Comprehensive income attributable to noncontrolling interests	—			—		(2		)	—			(2		)
Comprehensive income attributable to Meritor, Inc.	$	530		$	254	$	92		$	(346	)	$	530

(1) Amounts have been recast. See Long-term Debt (Note 17).

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions)


	Fiscal Year Ended September 30, 2015 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	64		$	269		$	43		$	(311	)	$	65
Other comprehensive income	(17		)	(77		)	(18		)	93			(19		)
Total comprehensive income	47			192			25			(218		)	46
Less: Comprehensive income attributable to noncontrolling interests	—			—			1			—			1
Comprehensive income attributable to Meritor, Inc.	$	47		$	192		$	26		$	(218	)	$	47

(1) Amounts have been recast. See Long-term Debt (Note 17).

Schedule of Condensed Consolidating Balance Sheet

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING BALANCE SHEET (In millions)


	September 30, 2017
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS
Cash and cash equivalents ⁽¹⁾	$	10	$	3		$	75	$	—		$	88
Receivables, trade and other, net ⁽¹⁾	—		296			493		—			789
Inventories ⁽¹⁾	—		184			194		—			378
Other current assets	5		6			32		—			43
TOTAL CURRENT ASSETS	15		489			794		—			1,298
NET PROPERTY ⁽¹⁾	21		227			226		—			474
GOODWILL ⁽¹⁾	—		237			177		—			414
OTHER ASSETS ⁽¹⁾	271		106			219		—			596
INVESTMENTS IN SUBSIDIARIES	3,222		787			—		(4,009		)	—
TOTAL ASSETS	$	3,529	$	1,846		$	1,416	$	(4,009	)	$	2,782
CURRENT LIABILITIES
Short-term debt	$	195	$	2		$	91	$	—		$	288
Accounts and notes payable ⁽¹⁾	55		246			321		—			622
Other current liabilities	69		69			134		—			272
TOTAL CURRENT LIABILITIES	319		317			546		—			1,182
LONG-TERM DEBT	743		—			7		—			750
RETIREMENT BENEFITS	291		—			23		—			314
INTERCOMPANY PAYABLE (RECEIVABLE)	1,866		(2,160		)	294		—			—
OTHER LIABILITIES	40		93			106		—			239
MEZZANINE EQUITY	2		—			—		—			2
EQUITY (DEFICIT) ATTRIBUTABLE TO MERITOR, INC.	268		3,596			413		(4,009		)	268
NONCONTROLLING INTERESTS ⁽¹⁾	—		—			27		—			27
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY (DEFICIT)	$	3,529	$	1,846		$	1,416	$	(4,009	)	$	2,782

(1) As of September 30, 2017, Assets and Liabilities held for sale were: (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. These assets and liabilities held for sale are included in the Non-Guarantors column, other than $1 million of Net property that is included in the Guarantor column.

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING BALANCE SHEET (In millions)


	September 30, 2016 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS
Cash and cash equivalents ⁽²⁾	$	90		$	2		$	68	$	—		$	160
Receivables, trade and other, net ⁽²⁾	1			39			356		—			396
Inventories ⁽²⁾	—			143			173		—			316
Other current assets	5			4			24		—			33
TOTAL CURRENT ASSETS	96			188			621		—			905
NET PROPERTY ⁽²⁾	22			198			219		—			439
GOODWILL ⁽²⁾	—			219			171		—			390
OTHER ASSETS	447			108			205		—			760
INVESTMENTS IN SUBSIDIARIES	2,575			679			—		(3,254		)	—
TOTAL ASSETS	$	3,140		$	1,392		$	1,216	$	(3,254	)	$	2,494
CURRENT LIABILITIES
Short-term debt	$	1		$	4		$	9	$	—		$	14
Accounts and notes payable ⁽²⁾	42			172			261		—			475
Other current liabilities	90			59			119		—			268
TOTAL CURRENT LIABILITIES	133			235			389		—			757
LONG-TERM DEBT	971			3			8		—			982
RETIREMENT BENEFITS	680			—			23		—			703
INTERCOMPANY PAYABLE (RECEIVABLE)	1,534			(1,902		)	368		—			—
OTHER LIABILITIES	34			97			107		—			238
EQUITY (DEFICIT) ATTRIBUTABLE TO MERITOR, INC.	(212		)	2,959			296		(3,254		)	(211		)
NONCONTROLLING INTERESTS ⁽²⁾	—			—			25		—			25
TOTAL LIABILITIES AND EQUITY(DEFICIT)	$	3,140		$	1,392		$	1,216	$	(3,254	)	$	2,494

(1) Amounts have been recast. See Long-term Debt (Note 17).

(2) As of September 30, 2016, Assets and Liabilities held for sale were: (i) $1 million Cash and cash equivalents; (ii) $8 million Receivables, trade and other, net; (iii) $1 million Inventories; (iv) $6 million Net property; (v) $5 million Accounts and notes payable; and (vi) $3 million Noncontrolling interests. These assets and liabilities held for sale are included in the Non-Guarantors column, other than $1 million of Net property that is included in the Guarantor column.

Schedule of Condensed Consolidating Statement of Cash Flows

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions)


	Fiscal Year Ended September 30, 2017
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	33		$	85		$	58		$	—	$	176
INVESTING ACTIVITIES
Capital expenditures	(9		)	(51		)	(35		)	—		(95		)
Cash paid for the acquisition of Fabco	—			(32		)	(2		)	—		(34		)
Net investing cash flows provided by discontinued operations	—			2			—			—		2
CASH USED FOR INVESTING ACTIVITIES	(9		)	(81		)	(37		)	—		(127		)
FINANCING ACTIVITIES
Borrowings and securitization	—			—			89			—		89
Proceeds from debt issuances	325			—			—			—		325
Redemption of notes	(103		)	—			—			—		(103		)
Repayment of notes and term loan	(408		)	—			—			—		(408		)
Other financing activities	(1		)	(3		)	(9		)	—		(13		)
Debt issuance costs	(12		)	—			—			—		(12		)
Intercompany advances	95			—			(95		)	—		—
CASH USED FOR FINANCING ACTIVITIES	(104		)	(3		)	(15		)	—		(122		)
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			1			—		1
CHANGE IN CASH AND CASH EQUIVALENTS	(80		)	1			7			—		(72		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	90			2			68			—		160
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	10		$	3		$	75		$	—	$	88

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions)


	Fiscal Year Ended September 30, 2016 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	196		$	39		$	(31	)	$	—	$	204
INVESTING ACTIVITIES
Capital expenditures	(19		)	(43		)	(31		)	—		(93		)
Other investing activities	—			4			(1		)	—		3
Net investing cash flows provided by discontinued operations	—			1			3			—		4
CASH USED FOR INVESTING ACTIVITIES	(19		)	(38		)	(29		)	—		(86		)
FINANCING ACTIVITIES
Repayment of notes and term loan	(55		)	—			—			—		(55		)
Other financing cash flows	(1		)	(4		)	(11		)	—		(16		)
Repurchase of common stock	(81		)	—			—			—		(81		)
Intercompany advances	(23		)	—			23			—		—
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	(160		)	(4		)	12			—		(152		)
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			1			—		1
CHANGE IN CASH AND CASH EQUIVALENTS	17			(3		)	(47		)	—		(33		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	73			5			115			—		193
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	90		$	2		$	68		$	—	$	160

(1) Amounts have been recast. See Long-term Debt (Note 17).

MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions)


	Fiscal Year Ended September 30, 2015 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	57		$	62		$	(22	)	$	—	$	97
INVESTING ACTIVITIES
Capital expenditures	(4		)	(41		)	(34		)	—		(79		)
Cash paid for acquisition of Morganton	—			(16		)	—			—		(16		)
Other investing activities	—			—			4			—		4
Net investing cash flows provided by discontinued operations	—			1			3			—		4
CASH USED FOR INVESTING ACTIVITIES	(4		)	(56		)	(27		)	—		(87		)
FINANCING ACTIVITIES
Proceeds from debt issuance	225			—			—			—		225
Repayment of notes and term loan	(199		)	—			—			—		(199		)
Debt issuance costs	(4		)	—			—			—		(4		)
Other financing cash flows	—			(5		)	(4		)	—		(9		)
Repurchase of common stock	(55		)	—			—			—		(55		)
CASH USED FOR FINANCING ACTIVITIES	(33		)	(5		)	(4		)	—		(42		)
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			(22		)	—		(22		)
CHANGE IN CASH AND CASH EQUIVALENTS	2			1			(57		)	—		(54		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	71			4			172			—		247
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	73		$	5		$	115		$	—	$	193

(1) Amounts have been recast. See Long-term Debt (Note 17).