Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Schedule of condensed consolidating statement of operations

	Three Months Ended December 31, 2018
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	589		$	449		$	—		$	1,038
Subsidiaries	—			32			57			(89		)	—
Total sales	—			621			506			(89		)	1,038
Cost of sales	(15		)	(534		)	(437		)	89			(897		)
GROSS MARGIN	(15		)	87			69			—			141
Selling, general and administrative	(25		)	(27		)	18			—			(34		)
OPERATING INCOME (LOSS)	(40		)	60			87			—			107
Other income, net	—			5			6			—			11
Equity in earnings of affiliates	—			7			2			—			9
Interest income (expense), net	(32		)	12			6			—			(14		)
INCOME (LOSS) BEFORE INCOME TAXES	(72		)	84			101			—			113
Benefit (provision) for income taxes	11			(12		)	(20		)	—			(21		)
Equity income from continuing operations of subsidiaries	151			40			—			(191		)	—
INCOME FROM CONTINUING OPERATIONS	90			112			81			(191		)	92
LOSS FROM DISCONTINUED OPERATIONS, net of tax	—			—			—			—			—
NET INCOME	90			112			81			(191		)	92
Less: Net income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	90		$	112		$	79		$	(191	)	$	90

	Three Months Ended December 31, 2017 (1)
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	468		$	435		$	—		$	903
Subsidiaries	—			32			44			(76		)	—
Total sales	—			500			479			(76		)	903
Cost of sales	(19		)	(418		)	(410		)	76			(771		)
GROSS MARGIN	(19		)	82			69			—			132
Selling, general and administrative	(28		)	(20		)	(19		)	—			(67		)
Restructuring costs	—			—			(2		)	—			(2		)
Other operating expense, net	(1		)	—			—			—			(1		)
OPERATING INCOME (LOSS)	(48		)	62			48			—			62
Other income (expense), net	4			6			(3		)	—			7
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	)

⁽¹⁾ Prior period has been recast, see Note 20.

Schedule of condensed consolidating statement of comprehensive income (loss)

	Three Months Ended December 31, 2018
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	90		$	112		$	81		$	(191	)	$	92
Other comprehensive loss, net of tax	(3		)	(8		)	(9		)	18			(2		)
Total comprehensive income	87			104			72			(173		)	90
Less: Comprehensive income attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income attributable to Meritor, Inc.	$	87		$	104		$	69		$	(173	)	$	87

	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 loss (income) attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income (loss) attributable to Meritor, Inc.	$	(41	)	$	62		$	29		$	(91	)	$	(41	)

Schedule of condensed consolidating balance sheet

	December 31, 2018
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	24	$	8		$	95	$	—		$	127
Receivables trade and other, net	5		57			477		—			539
Inventories	—		268			254		—			522
Other current assets	6		13			33		—			52
TOTAL CURRENT ASSETS	35		346			859		—			1,240
NET PROPERTY	23		242			216		—			481
GOODWILL	—		250			168		—			418
OTHER ASSETS	178		192			224		—			594
INVESTMENTS IN SUBSIDIARIES	3,744		893			—		(4,637		)	—
TOTAL ASSETS	$	3,980	$	1,923		$	1,467	$	(4,637	)	$	2,733
CURRENT LIABILITIES:
Short-term debt	$	92	$	—		$	80	$	—		$	172
Accounts and notes payable	49		284			347		—			680
Other current liabilities	79		54			167		—			300
TOTAL CURRENT LIABILITIES	220		338			594		—			1,152
LONG-TERM DEBT	727		—			4		—			731
RETIREMENT BENEFITS	234		—			20		—			254
INTERCOMPANY PAYABLE (RECEIVABLE)	2,419		(2,659		)	240		—			—
OTHER LIABILITIES	50		122			61		—			233
MEZZANINE EQUITY	1		—			—		—			1
EQUITY ATTRIBUTABLE TO MERITOR, INC.	329		4,122			515		(4,637		)	329
NONCONTROLLING INTERESTS	—		—			33		—			33
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	3,980	$	1,923		$	1,467	$	(4,637	)	$	2,733

	September 30, 2018
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	24	$	6		$	85	$	—		$	115
Receivables trade and other, net	2		62			524		—			588
Inventories	—		242			235		—			477
Other current assets	6		12			28		—			46
TOTAL CURRENT ASSETS	32		322			872		—			1,226
NET PROPERTY	24		241			218		—			483
GOODWILL	—		250			171		—			421
OTHER ASSETS	179		182			235		—			596
INVESTMENTS IN SUBSIDIARIES	3,583		855			—		(4,438		)	—
TOTAL ASSETS	$	3,818	$	1,850		$	1,496	$	(4,438	)	$	2,726
CURRENT LIABILITIES:
Short-term debt	$	47	$	—		$	47	$	—		$	94
Accounts and notes payable	64		297			339		—			700
Other current liabilities	77		71			142		—			290
TOTAL CURRENT LIABILITIES	188		368			528		—			1,084
LONG-TERM DEBT	726		—			4		—			730
RETIREMENT BENEFITS	241		—			21		—			262
INTERCOMPANY PAYABLE (RECEIVABLE)	2,325		(2,640		)	315		—			—
OTHER LIABILITIES	50		124			158		—			332
MEZZANINE EQUITY	1		—			—		—			1
EQUITY ATTRIBUTABLE TO MERITOR, INC.	287		3,998			440		(4,438		)	287
NONCONTROLLING INTERESTS	—		—			30		—			30
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	3,818	$	1,850		$	1,496	$	(4,438	)	$	2,726

Schedule of condensed consolidating statement of cash flows

	Three Months Ended December 31, 2018
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	(9	)	$	15		$	5		$	—	$	11
INVESTING ACTIVITIES
Capital expenditures	(1		)	(12		)	(10		)	—		(23		)
Cash paid for investment in Transportation Power, Inc.	(3		)	—			—			—		(3		)
Other investing activities	—			—			(1		)			(1		)
CASH USED FOR INVESTING ACTIVITIES	(4		)	(12		)	(11		)	—		(27		)
FINANCING ACTIVITIES
Borrowings and securitization	45			—			33			—		78
Repurchase of common stock	(50		)	—			—			—		(50		)
Intercompany advances	18			—			(18		)	—		—
Other financing activities	—			(1		)	—			—		(1		)
CASH PROVIDED BY FINANCING ACTIVITIES	13			(1		)	15			—		27
EFFECT OF CHANGES IN FOREIGN CURRENCY        EXCHANGE RATES ON CASH AND CASH        EQUIVALENTS	—			—			1			—		1
CHANGE IN CASH AND CASH EQUIVALENTS	—			2			10			—		12
CASH AND CASH EQUIVALENTS AT BEGINNING        OF PERIOD	24			6			85			—		115
CASH AND CASH EQUIVALENTS AT END OF        PERIOD	$	24		$	8		$	95		$	—	$	127

	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