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Business Segment Information
 3 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Business Segment Information Business Segment Information
The company defines its operating segments as components of its business where separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The company’s Chief Operating Decision Maker ("CODM") is the Chief Executive Officer.
In the second quarter of fiscal year 2019, the company realigned its operations resulting in a change to its operating and reportable segments. As of the second quarter of fiscal year 2019, the reportable segments are (1) Commercial Truck and (2) Aftermarket, Industrial and Trailer. Prior year reportable segment financial results have been recast for these changes.
      The company has two reportable segments at December 31, 2019, as follows:
•
The Commercial Truck segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, primarily for medium- and heavy-duty trucks and other applications in North America, South America, Europe and Asia Pacific. This segment also includes the company's aftermarket businesses in Asia Pacific and South America.
•
The Aftermarket, Industrial and Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers, primarily in North America and Europe. In addition, this segment supplies drivetrain systems and certain components, including axles, drivelines, brakes and suspension systems for military, construction, bus and coach, fire and emergency and other applications in North America and Europe. It also supplies a variety of undercarriage products and systems for trailer applications in North America.

     Segment adjusted EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expense, asset impairment charges and other special items as determined by management. Segment adjusted EBITDA excludes unallocated legacy and corporate income (expense), net. The company uses segment adjusted EBITDA as the primary basis for the CODM to evaluate the performance of each of its reportable segments.
     The accounting policies of the segments are the same as those applied in the Condensed Consolidated Financial Statements, except for the use of segment adjusted EBITDA. The company may allocate certain common costs, primarily corporate functions, between the segments differently than the company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such as information technology, finance, communications, legal and human resources. The company does not allocate interest expense and certain legacy and other corporate costs not directly associated with the segment.
     Segment information is summarized as follows (in millions):


Commercial Truck
 
Aftermarket,
Industrial and Trailer
 
Eliminations
 
Total
Three Months Ended December 31, 2019
 
 
 
 
 
 
 
External Sales
$
590

 
$
311

 
$
—

 
$
901

Intersegment Sales
32

 
6

 
(38
)
 
—

Total Sales
$
622

 
$
317

 
$
(38
)
 
$
901

Three Months Ended December 31, 2018 (1)
 
 
 
 
 
 
 
External Sales
$
744

 
$
294

 
$
—

 
$
1,038

Intersegment Sales
35

 
9

 
(44
)
 
—

Total Sales
$
779

 
$
303

 
$
(44
)
 
$
1,038


(1) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes.



 
Three Months Ended December 31,
 
2019
 
2018 (3)
Segment adjusted EBITDA:
 
 
 
Commercial Truck
$
56

 
$
77

Aftermarket, Industrial and Trailer
40

 
40

Segment adjusted EBITDA
96


117

Unallocated legacy and corporate expense, net (1)
2

 
2

Interest expense, net
(14
)
 
(14
)
Provision for income taxes
(13
)
 
(21
)
Depreciation and amortization
(24
)
 
(22
)
Noncontrolling interests
(2
)
 
(2
)
Loss on sale of receivables
(1
)
 
(1
)
Restructuring
(5
)
 
—

Asbestos related liability remeasurement (2)
—

 
31

Income from continuing operations attributable to Meritor, Inc.
$
39


$
90



(1) 
Unallocated legacy and corporate income (expense), net represents items that are not directly related to the company's business segments. These items primarily include asbestos-related charges and settlements, pension and retiree medical costs associated with sold businesses, and other legacy costs for environmental and product liability.
(2)
The three months ended December 31, 2018 includes $31 million related to the remeasurement of the Maremont asbestos liability based on the Maremont prepackaged plan of reorganization.
(3) 
Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes.
 
December 31,
2019
 
September 30,
2019
Segment Assets:
 
 
 
Commercial Truck
$
1,700

 
$
1,659

Aftermarket, Industrial and Trailer
839

 
815

Total segment assets
2,539

 
2,474

Corporate (1)
597

 
567

Less: Accounts receivable sold under off-balance sheet factoring programs (2) 
(240
)
 
(226
)
Total assets
$
2,896

 
$
2,815


(1) 
Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs.
(2) 
At December 31, 2019 and September 30, 2019, segment assets include $240 million and $226 million, respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 11). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances.