Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule of condensed consolidating statement of operations



	Three Months Ended December 31, 2017
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	468		$	435		$	—		$	903
Subsidiaries	—			32			44			(76		)	—
Total sales	—			500			479			(76		)	903
Cost of sales	(14		)	(418		)	(407		)	76			(763		)
GROSS MARGIN	(14		)	82			72			—			140
Selling, general and administrative	(28		)	(20		)	(19		)	—			(67		)
Restructuring costs	—			—			(2		)	—			(2		)
Other operating expense, net	(1		)	—			—						(1		)
OPERATING INCOME (LOSS)	(43		)	62			51			—			70
Other income (expense), net	(1		)	6			(6		)	—			(1		)
Equity in earnings of affiliates	—			4			1			—			5
Interest income (expense), net	(37		)	9			4			—			(24		)
INCOME (LOSS) BEFORE INCOME TAXES	(81		)	81			50			—			50
Provision for income taxes	(23		)	(49		)	(11		)	—			(83		)
Equity income from continuing operations of subsidiaries	69			37			—			(106		)	—
INCOME (LOSS) FROM CONTINUING OPERATIONS	(35		)	69			39			(106		)	(33		)
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(1		)	—			—			—			(1		)
NET INCOME (LOSS)	(36		)	69			39			(106		)	(34		)
Less: Net income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
NET INCOME (LOSS) ATTRIBUTABLE TO MERITOR, INC.	$	(36	)	$	69		$	37		$	(106	)	$	(36	)



	Three Months Ended December 31, 2016 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	325		$	374		$	—		$	699
Subsidiaries	—			26			12			(38		)	—
Total sales	—			351			386			(38		)	699
Cost of sales	(14		)	(297		)	(337		)	38			(610		)
GROSS MARGIN	(14		)	54			49			—			89
Selling, general and administrative	(23		)	(18		)	(12		)	—			(53		)
Restructuring costs	2			—			(2		)	—			—
Other operating expense, net	—			—			(3		)	—			(3		)
OPERATING INCOME (LOSS)	(35		)	36			32			—			33
Other income (expense), net	(1		)	—			1			—			—
Equity in earnings of affiliates	—			9			1			—			10
Interest income (expense), net	(33		)	10			2			—			(21		)
INCOME (LOSS) BEFORE INCOME TAXES	(69		)	55			36			—			22
Benefit (provision) for income taxes	20			(20		)	(6		)	—			(6		)
Equity income from continuing operations of subsidiaries	64			27			—			(91		)	—
INCOME FROM CONTINUING OPERATIONS	15			62			30			(91		)	16
INCOME FROM DISCONTINUED OPERATIONS, net of tax	—			—			—			—			—
NET INCOME	15			62			30			(91		)	16
Less: Net income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	15		$	62		$	29		$	(91	)	$	15


⁽¹⁾	Amounts have been recast to reflect the release of certain guarantors in accordance with the company’s senior secured revolving credit facility.

Schedule of condensed consolidating statement of comprehensive income (loss)



	Three Months Ended December 31, 2017
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income (loss)	$	(36	)	$	69		$	39		$	(106	)	$	(34	)
Other comprehensive loss, net of tax	(5		)	(7		)	(7		)	15			(4		)
Total comprehensive income (loss)	(41		)	62			32			(91		)	(38		)
Less: Comprehensive income attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income (loss) attributable to Meritor, Inc.	$	(41	)	$	62		$	29		$	(91	)	$	(41	)



	Three Months Ended December 31, 2016 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	15		$	62		$	30		$	(91	)	$	16
Other comprehensive loss	(16		)	(25		)	(27		)	50			(18		)
Total comprehensive income (loss)	(1		)	37			3			(41		)	(2		)
Less: Comprehensive income attributable to noncontrolling interests	—			—			1			—			1
Comprehensive income (loss) attributable to Meritor, Inc.	$	(1	)	$	37		$	4		$	(41	)	$	(1	)


⁽¹⁾	Amounts have been recast to reflect the release of certain guarantors in accordance with the company’s senior secured revolving credit facility.

Schedule of condensed consolidating balance sheet



	December 31, 2017
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents ⁽¹⁾	$	23	$	3		$	90	$	—		$	116
Receivables trade and other, net ⁽¹⁾	1		37			418		—			456
Inventories ⁽¹⁾	—		204			223		—			427
Other current assets	6		7			30		—			43
TOTAL CURRENT ASSETS	30		251			761		—			1,042
NET PROPERTY ⁽¹⁾	21		223			220		—			464
GOODWILL ⁽¹⁾	—		236			178		—			414
OTHER ASSETS ⁽¹⁾	195		113			217		—			525
INVESTMENTS IN SUBSIDIARIES	3,327		823			—		(4,150		)	—
TOTAL ASSETS	$	3,573	$	1,646		$	1,376	$	(4,150	)	$	2,445
CURRENT LIABILITIES:
Short-term debt	$	22	$	2		$	39	$	—		$	63
Accounts and notes payable ⁽¹⁾	18		236			338		—			592
Other current liabilities	62		54			122		—			238
TOTAL CURRENT LIABILITIES	102		292			499		—			893
LONG-TERM DEBT	744		—			7		—			751
RETIREMENT BENEFITS	276		—			22		—			298
INTERCOMPANY PAYABLE (RECEIVABLE)	2,178		(2,437		)	259		—			—
OTHER LIABILITIES	38		92			108		—			238
MEZZANINE EQUITY	2		—			—		—			2
EQUITY ATTRIBUTABLE TO MERITOR, INC.	233		3,699			451		(4,150		)	233
NONCONTROLLING INTERESTS ⁽¹⁾	—		—			30		—			30
TOTAL LIABILITIES, MEZZANINE EQUITY AND DEFICIT	$	3,573	$	1,646		$	1,376	$	(4,150	)	$	2,445

⁽¹⁾ As of December 31, 2017, Assets and Liabilities held for sale were: (i) $3 million Cash and cash equivalents; (ii) $14 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $15 million Accounts and notes payable; and (vii) $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.



	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.

Schedule of condensed consolidating statement of cash flows



	Three Months Ended December 31, 2017
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	(75	)	$	10		$	98		$	—	$	33
INVESTING ACTIVITIES
Capital expenditures	(1		)	(9		)	(8		)	—		(18		)
Proceeds from prior year sale of equity method investment	250			—			—			—		250
Cash paid for investment in Transportation Power, Inc.	(3		)	—			—			—		(3		)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	246			(9		)	(8		)	—		229
FINANCING ACTIVITIES
Borrowings and securitization	—			—			(51		)	—		(51		)
Redemption of notes	(181		)	—			—			—		(181		)
Intercompany advances	23			—			(23		)	—		—
Other financing activities	—			(1		)	—			—		(1		)
CASH USED FOR FINANCING ACTIVITIES	(158		)	(1		)	(74		)	—		(233		)
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			(1		)	—		(1		)
CHANGE IN CASH AND CASH EQUIVALENTS	13			—			15			—		28
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	10			3			75			—		88
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	23		$	3		$	90		$	—	$	116



	Three Months Ended December 31, 2016 ⁽¹⁾
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	(44	)	$	6		$	24		$	—	$	(14	)
INVESTING ACTIVITIES
Capital expenditures	(5		)	(7		)	(5		)	—		(17		)
Net investing cash flows provided by discontinued operations	—			2			—			—		2
CASH USED FOR INVESTING ACTIVITIES	(5		)	(5		)	(5		)	—		(15		)
FINANCING ACTIVITIES
Intercompany advances	24			—			(24		)	—		—
Other financing activities	—			(1		)	(3		)	—		(4		)
CASH USED FOR FINANCING ACTIVITIES	24			(1		)	(27		)	—		(4		)
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			(2		)	—		(2		)
CHANGE IN CASH AND CASH EQUIVALENTS	(25		)	—			(10		)	—		(35		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	90			4			66			—		160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	65		$	4		$	56		$	—	$	125


⁽¹⁾	Amounts have been recast to reflect the release of certain guarantors in accordance with the company’s senior secured revolving credit facility.