LONG-TERM DEBT (Tables)

12 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

Long-Term Debt, net of discounts where applicable, is summarized as follows (in millions):

	September 30,
	2019			2018
3.25 percent convertible notes due 2037 (1)(3)	$	319		$	318
4.0 percent convertible notes due 2027(1)(4)	—			24
7.875 percent convertible notes due 2026(1)(5)	23			22
Term loan	175			—
6.25 percent notes due 2024(2)(6)	444			444
Capital lease obligation	7			7
Borrowings and securitization	9			46
Unamortized discount on convertible notes (7)	(34		)	(37		)
Subtotal	943			824
Less: current maturities	(41		)	(94		)
Long-term debt	$	902		$	730

⁽¹⁾ The 3.25 percent, 4.0 percent and 7.875 percent convertible notes contain a put and call feature, which allows for earlier redemption beginning in 2025, 2019 and 2020, respectively.

⁽²⁾ The 6.25 percent notes contain a call option, which allows for early redemption by Meritor.

⁽³⁾ The 3.25 percent convertible notes due 2037 are presented net of $6 million and $7 million unamortized issuance costs as of September 30, 2019 and September 30, 2018, respectively.

⁽⁴⁾ The 4.0 percent convertible notes due 2027 are presented net of unamortized issuance costs of an insignificant amount as of September 30, 2018.

⁽⁵⁾ The 7.875 percent convertible notes due 2026 are presented net of unamortized issuance costs of an insignificant amount as of September 30, 2019 and September 30, 2018, and an insignificant amount and $1 million original issuance discount as of September 30, 2019 and September 30, 2018, respectively.

⁽⁶⁾ The 6.25 percent notes due 2024 are presented net of $6 million unamortized issuance costs as of September 30, 2019 and September 30, 2018.

⁽⁷⁾ The carrying amount of the equity component related to convertible debt.

Debt instrument redemption summary

On or after February 15, 2019, the company may redeem, at its option, from time to time, the 6.25 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.25 Percent Notes

to be redeemed) set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on February 15 of the years indicated below:

Year	Redemption Price
2019	103.125%
2020	102.083%
2021	101.042%
2022 and thereafter	100.000%

On or after June 15, 2016, the company could redeem, at its option, from time to time, the 6.75 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.75 Percent Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, had they been redeemed during the 12-month period beginning on June 15 of the years indicated below:

Year	Redemption Price
2016	105.063%
2017	103.375%
2018	101.688%
2019 and thereafter	100.000%

Schedule of principle and unamortized discount on convertible notes

The following table summarizes the principal amounts and related unamortized discount on all convertible notes (in millions):

	September 30, 2019			September 30, 2018
Principal amount of convertible notes	$	348		$	372
Unamortized discount on convertible notes and issuance costs	(40		)	(45		)
Net carrying value	$	308		$	327

Summary of convertible notes

The following table summarizes other information related to the convertible notes:

	Convertible Notes
		7.875%		3.25%
Total amortization period for debt discount (in years):		8		8
Remaining amortization period for debt discount (in years):		1		6
Effective interest rates on convertible notes:		10.9	%	5.6	%

Schedule of interest costs on convertible notes

The following table summarizes interest costs recognized on convertible notes (in millions):

	Year Ended September 30,
	2019		2018		2017
Contractual interest coupon	$	17	$	17	$	17
Amortization of debt discount	2		2		8
Repurchase of convertible notes	—		—		31
Total	$	19	$	19	$	56

Schedule of long-term debt maturities

As of September 30, 2019, the company is contractually obligated to make payments as follows (in millions):

	Total		2020		2021		2022		2023		2024 (2)		Thereafter (3)
Total debt (1)	$	989	$	10	$	11	$	19	$	28	$	573	$	348

(1) Total debt excludes unamortized discount on convertible notes of $34 million, unamortized issuance costs of $12 million, and original issuance discount of an insignificant amount.

(2) Includes the 6.25 Percent Notes, which contains a call feature that allows for early redemption

(3)

Includes the 3.25 Percent Convertible Notes and 7.875 Percent Convertible Notes, which contain a put and call feature that allows for earlier redemption beginning in 2025 and 2020, respectively.

Future minimum lease payments for capital leases

As of September 30, 2019, the future minimum lease payments for noncancelable capital leases with initial terms in excess of one year were as follows:

	Total			2020			2021		2022		2023		2024		Thereafter
Capital lease obligation	$	8		$	2		$	3	$	2	$	1	$	—	$	—
Less: amounts representing interest	(1		)	(1		)	—		—		—		—		—
Principal on capital lease	$	7		$	1		$	3	$	2	$	1	$	—	$	—