Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule of condensed consolidating statement of operations

	Three Months Ended June 30, 2019
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	696		$	470		$	—		$	1,166
Subsidiaries	—			24			46			(70		)	—
Total sales	—			720			516			(70		)	1,166
Cost of sales	(17		)	(599		)	(441		)	70			(987		)
GROSS MARGIN	(17		)	121			75			—			179
Selling, general and administrative	(30		)	(28		)	(15		)	—			(73		)
Restructuring	—			1			—			—			1
Other operating expense, net	(3		)	—			—			—			(3		)
OPERATING INCOME (LOSS)	(50		)	94			60			—			104
Other income (expense), net	14			(2		)	(2		)	—			10
Equity in earnings of affiliates	—			6			3			—			9
Interest income (expense), net	(32		)	11			7			—			(14		)
INCOME (LOSS) BEFORE INCOME TAXES	(68		)	109			68			—			109
Benefit (provision) for income taxes	19			(18		)	(22		)	—			(21		)
Equity income from continuing operations of subsidiaries	134			37			—			(171		)	—
INCOME FROM CONTINUING OPERATIONS	85			128			46			(171		)	88
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax	1			—			—			—			1
NET INCOME	86			128			46			(171		)	89
Less: Net income attributable to noncontrolling interests	—			—			(3		)	—			(3		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	86		$	128		$	43		$	(171	)	$	86

	Three Months Ended June 30, 2018 (1)
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	629		$	500		$	—		$	1,129
Subsidiaries	—			40			61			(101		)	—
Total sales	—			669			561			(101		)	1,129
Cost of sales	(20		)	(559		)	(481		)	101			(959		)
GROSS MARGIN	(20		)	110			80			—			170
Selling, general and administrative	(30		)	(27		)	(19		)	—			(76		)
Restructuring	(2		)	(1		)	—			—			(3		)
OPERATING INCOME (LOSS)	(52		)	82			61			—			91
Other income (expense), net	28			(15		)	(4		)	—			9
Equity in earnings of affiliates	—			6			3			—			9
Interest income (expense), net	(26		)	6			6			—			(14		)
INCOME (LOSS) BEFORE INCOME TAXES	(50		)	79			66			—			95
Benefit (provision) for income taxes	7			(13		)	(20		)	—			(26		)
Equity income from continuing operations of subsidiaries	109			39			—			(148		)	—
INCOME FROM CONTINUING OPERATIONS	66			105			46			(148		)	69
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(2		)	(2		)	(2		)	4			(2		)
NET INCOME	64			103			44			(144		)	67
Less: Net income attributable to noncontrolling interests	—			—			(3		)	—			(3		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	64		$	103		$	41		$	(144	)	$	64

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

	Nine Months Ended June 30, 2019
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,962		$	1,398		$	—		$	3,360
Subsidiaries	—			84			154			(238		)	—
Total sales	—			2,046			1,552			(238		)	3,360
Cost of sales	(48		)	(1,723		)	(1,333		)	238			(2,866		)
GROSS MARGIN	(48		)	323			219			—			494
Selling, general and administrative	(83		)	(85		)	(12		)	—			(180		)
Restructuring	—			1			1			—			2
Other operating expense, net	(3		)	—			—			—			(3		)
OPERATING INCOME (LOSS)	(134		)	239			208			—			313
Other income (expense), net	64			(11		)	(23		)	—			30
Equity in earnings of affiliates	—			16			8			—			24
Interest income (expense), net	(97		)	35			19			—			(43		)
INCOME (LOSS) BEFORE INCOME TAXES	(167		)	279			212			—			324
Benefit (provision) for income taxes	50			(52		)	(67		)	—			(69		)
Equity income from continuing operations of subsidiaries	365			86			—			(451		)	—
INCOME FROM CONTINUING OPERATIONS	248			313			145			(451		)	255
LOSS FROM DISCONTINUED OPERATIONS, net of tax	—			—			—			—			—
NET INCOME	248			313			145			(451		)	255
Less: Net income attributable to noncontrolling interests	—			—			(7		)	—			(7		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	248		$	313		$	138		$	(451	)	$	248

	Nine Months Ended June 30, 2018 (1)
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,663		$	1,435		$	—		$	3,098
Subsidiaries	—			107			159			(266		)	—
Total sales	—			1,770			1,594			(266		)	3,098
Cost of sales	(57		)	(1,477		)	(1,357		)	266			(2,625		)
GROSS MARGIN	(57		)	293			237			—			473
Selling, general and administrative	(90		)	(74		)	(54		)	—			(218		)
Restructuring	(2		)	(2		)	(2		)	—			(6		)
Other operating expense, net	(10		)	(1		)	(1		)	—			(12		)
OPERATING INCOME (LOSS)	(159		)	216			180			—			237
Other income (expense), net	70			(10		)	(36		)	—			24
Equity in earnings of affiliates	—			14			6			—			20
Interest income (expense), net	(91		)	21			16			—			(54		)
INCOME (LOSS) BEFORE INCOME TAXES	(180		)	241			166			—			227
Provision for income taxes	(8		)	(75		)	(48		)	—			(131		)
Equity income from continuing operations of subsidiaries	276			100			—			(376		)	—
INCOME FROM CONTINUING OPERATIONS	88			266			118			(376		)	96
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(3		)	(2		)	(2		)	4			(3		)
NET INCOME	85			264			116			(372		)	93
Less: Net income attributable to noncontrolling interests	—			—			(8		)	—			(8		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	85		$	264		$	108		$	(372	)	$	85

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

Schedule of condensed consolidating statement of comprehensive income (loss)

	Three Months Ended June 30, 2019
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	86		$	128		$	46		$	(171	)	$	89
Other comprehensive loss, net of tax	(7		)	(2		)	(3		)	4			(8		)
Total comprehensive income	79			126			43			(167		)	81
Less: Comprehensive income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Comprehensive income attributable to Meritor, Inc.	$	79		$	126		$	41		$	(167	)	$	79

	Three Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	64		$	103		$	44		$	(144	)	$	67
Other comprehensive loss, net of tax	(48		)	(57		)	(8		)	63			(50		)
Total comprehensive income	16			46			36			(81		)	17
Less: Comprehensive income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive income attributable to Meritor, Inc.	$	16		$	46		$	35		$	(81	)	$	16

	Nine Months Ended June 30, 2019
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	248		$	313		$	145		$	(451	)	$	255
Other comprehensive loss, net of tax	(3		)	(9		)	(11		)	20			(3		)
Total comprehensive income	245			304			134			(431		)	252
Less: Comprehensive income attributable to noncontrolling interests	—			—			(7		)	—			(7		)
Comprehensive income attributable to Meritor, Inc.	$	245		$	304		$	127		$	(431	)	$	245

	Nine Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	85		$	264		$	116		$	(372	)	$	93
Other comprehensive income (loss), net of tax	(33		)	(45		)	6			38			(34		)
Total comprehensive income	52			219			122			(334		)	59
Less: Comprehensive income attributable to noncontrolling interests	—			—			(7		)	—			(7		)
Comprehensive income attributable to Meritor, Inc.	$	52		$	219		$	115		$	(334	)	$	52

Schedule of condensed consolidating balance sheet

	June 30, 2019
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	27	$	5		$	79	$	—		$	111
Receivables trade and other, net	3		81			541		—			625
Inventories	—		260			231		—			491
Other current assets	4		11			17		—			32
TOTAL CURRENT ASSETS	34		357			868		—			1,259
NET PROPERTY	21		240			220		—			481
GOODWILL	—		254			167		—			421
OTHER ASSETS	147		189			231		—			567
INVESTMENTS IN SUBSIDIARIES	4,188		960			—		(5,148		)	—
TOTAL ASSETS	$	4,390	$	2,000		$	1,486	$	(5,148	)	$	2,728
CURRENT LIABILITIES:
Short-term debt	$	23	$	—		$	1	$	—		$	24
Accounts and notes payable	54		292			345		—			691
Other current liabilities	144		65			87		—			296
TOTAL CURRENT LIABILITIES	221		357			433		—			1,011
LONG-TERM DEBT	730		—			4		—			734
RETIREMENT BENEFITS	218		—			20		—			238
INTERCOMPANY PAYABLE (RECEIVABLE)	2,691		(2,856		)	165		—			—
OTHER LIABILITIES	55		118			61		—			234
MEZZANINE EQUITY	1		—			—		—			1
EQUITY ATTRIBUTABLE TO MERITOR, INC.	474		4,381			767		(5,148		)	474
NONCONTROLLING INTERESTS	—		—			36		—			36
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	4,390	$	2,000		$	1,486	$	(5,148	)	$	2,728

	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

	Nine Months Ended June 30, 2019
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES	$	8		$	32		$	154		$	—	$	194
INVESTING ACTIVITIES
Capital expenditures	(2		)	(32		)	(29		)	—		(63		)
Cash paid for investment in Transportation Power, Inc.	(6		)	—			—			—		(6		)
Proceeds from settlement of cross-currency swaps	17			—			—			—		17
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	9			(32		)	(29		)	—		(52		)
FINANCING ACTIVITIES
Borrowings and securitization	—			—			(46		)	—		(46		)
Redemption of notes	(24		)	—			—			—		(24		)
Deferred issuance costs	(4		)	—			—			—		(4		)
Repurchase of common stock	(71		)	—			—			—		(71		)
Intercompany advances	86			—			(86		)	—		—
Other financing activities	(1		)	(1		)	—			—		(2		)
CASH USED FOR FINANCING ACTIVITIES	(14		)	(1		)	(132		)	—		(147		)
EFFECT OF CHANGES IN FOREIGN CURRENCY        EXCHANGE RATES ON CASH AND CASH        EQUIVALENTS	—			—			1			—		1
CHANGE IN CASH AND CASH EQUIVALENTS	3			(1		)	(6		)	—		(4		)
CASH AND CASH EQUIVALENTS AT BEGINNING        OF PERIOD	24			6			85			—		115
CASH AND CASH EQUIVALENTS AT END OF        PERIOD	$	27		$	5		$	79		$	—	$	111

	Nine Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR)        OPERATING ACTIVITIES	$	(26	)	$	31		$	186		$	—	$	191
INVESTING ACTIVITIES
Capital expenditures	(3		)	(25		)	(24		)	—		(52		)
Proceeds from sale of a business	4			—			—			—		4
Proceeds from prior year sale of equity method investment	250			—			—			—		250
Cash paid for investment in Transportation Power, Inc.	(6		)	—			—			—		(6		)
Cash paid for acquisition of AA Gear & Manufacturing, Inc.	(36		)	—			—			—		(36		)
Proceeds from sale of assets	—			—			2			—		2
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	209			(25		)	(22		)	—		162
FINANCING ACTIVITIES
Borrowings and securitization	—			—			(89		)	—		(89		)
Redemption of notes	(181		)	—			—			—		(181		)
Repurchase of common stock	(63		)	—			—			—		(63		)
Intercompany advances	67			—			(67		)	—		—
Other financing activities	(1		)	(2		)	—			—		(3		)
CASH USED FOR FINANCING ACTIVITIES	(178		)	(2		)	(156		)	—		(336		)
EFFECT OF CHANGES IN FOREIGN CURRENCY        EXCHANGE RATES ON CASH AND CASH        EQUIVALENTS	—			—			(5		)	—		(5		)
CHANGE IN CASH AND CASH EQUIVALENTS	5			4			3			—		12
CASH AND CASH EQUIVALENTS AT BEGINNING        OF PERIOD	10			3			75			—		88
CASH AND CASH EQUIVALENTS AT END OF        PERIOD	$	15		$	7		$	78		$	—	$	100