Discontinued Operations

6 Months Ended

Mar. 31, 2012

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

4. Discontinued Operations

Results of discontinued operations are summarized as follows (in millions):

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2012			2011			2012			2011
Sales	$	—		$	19		$	2		$	336
Operating income (loss), net	$	—		$	(1	)	$	—		$	13
Gain (loss) on sale of businesses, net		—			19			(1	)		19
Restructuring costs		—			(6	)		(1	)		(7	)
Charge for legal contingency (see Note 20)		(6	)		—			(9	)		—
Environmental remediation charges		(2	)		(1	)		(2	)		(1	)
Other, net		(2	)		(4	)		(6	)		(7	)
Income (loss) before income taxes		(10	)		7			(19	)		17
Benefit (provision) for income taxes		1			4			1			(2	)
Income (loss) from discontinued operations
attributable to Meritor, Inc.	$	(9	)	$	11		$	(18	)	$	15

In conjunction with the company’s long-term strategic objective to focus on supplying the commercial vehicle on- and off-highway markets for original equipment manufacturers, aftermarket and industrial customers, the company previously announced its intent to divest the Light Vehicle Systems (LVS) business groups in their entirety. In November 2011, the company sold its damper business located in Leicester, England. With the sale of this business, the company has completed the divestiture of its LVS businesses.

In the second quarter of fiscal year 2011, the company announced the planned closure of its European Trailer (EU Trailer) business which was part of the company’s Aftermarket & Trailer segment. All manufacturing operations and use of productive assets ceased prior to September 30, 2011. The company sold certain long-lived and current assets of the business to a third party during the fourth quarter of fiscal year 2011. The European Trailer business is presented in discontinued operations for all periods presented.

The following summarizes significant items included in income from discontinued operations in the consolidated statement of operations for the three- and six-month periods ended March 31, 2012 and 2011:

     Sales from discontinued operations in the three month period ended March 31, 2011 were $19 million, which primarily related to the company’s EU Trailer business. Sales in the six month period ended March 31, 2011 were $336 million, which included $298 million in Body Systems and $30 million in EU Trailer.

     Operating income (loss), net from discontinued operations in the three and six month periods ended March 31, 2011 represents income from normal operating activities of businesses, primarily Body Systems, included in discontinued operations.

Net gain (loss) on sale of businesses: The loss on sale of business in the six month period ended March 31, 2012 relates to the sale of the company’s damper business located in Leicester, England during the first quarter of fiscal year 2012. In the second quarter of fiscal year 2011, the company recognized a pre-tax gain of $32 million ($32 million after tax) on the sale of the Body Systems business and a pre-tax loss of $13 million ($13 million after tax) on the sale of its Gabriel Europe business.

Restructuring costs: In the second quarter of fiscal year 2011, the company recognized $6 million of restructuring charges associated with the closure of its EU Trailer business. The company recognized additional restructuring charges of $1 million associated with EU Trailer closure in the first six months of fiscal year 2012.

Other: These charges primarily relate to charges for changes in estimates and adjustments for certain assets and liabilities retained from previously sold businesses and indemnities provided at the time of sale, and costs associated with the divestiture actions.