BUSINESS SEGMENT INFORMATION

12 Months Ended

Sep. 30, 2013

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. On November 12, 2012, the company announced a revised management reporting structure resulting in two business segments. Prior period segment financial information presented has been recast to reflect the revised reporting structure.

The company has two reportable segments at September 30, 2013, as follows:

• The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, primarily for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. This segment also includes the company's aftermarket business in Asia Pacific and South America; and; 

• The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts, including transmissions, to commercial vehicle and industrial aftermarket customers. This segment also supplies a wide variety of undercarriage products and systems for trailer applications in North America.

Segment 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 costs and asset impairment charges. The company uses Segment EBITDA as the primary basis for the Chief Operating Decision Maker (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 Consolidated Financial Statements, except for the use of Segment 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 Segments’ EBITDA.

Segment information is summarized as follows (in millions):

	Commercial Truck & Industrial		Aftermarket & Trailer		Elims			Total
Fiscal year 2013 Sales:
External Sales	$	2,825	$	876	$	—		$	3,701
Intersegment Sales	95		22		(117		)	—
Total Sales	$	2,920	$	898	$	(117	)	$	3,701
Fiscal year 2012 Sales:
External Sales	$	3,509	$	909	$	—		$	4,418
Intersegment Sales	104		28		(132		)	—
Total Sales	$	3,613	$	937	$	(132	)	$	4,418
Fiscal year 2011 Sales:
External Sales	$	3,701	$	921	$	—		$	4,622
Intersegment Sales	127		28		(155		)	—
Total Sales	$	3,828	$	949	$	(155	)	$	4,622

Segment EBITDA:	2013			2012			2011
Commercial Truck & Industrial	$	192		$	270		$	260
Aftermarket & Trailer	84			81			98
Segment EBITDA	276			351			358
Unallocated legacy and corporate expense, net (1)	(15		)	(24		)	(11		)
Interest expense, net	(126		)	(95		)	(95		)
Provision for income taxes	(63		)	(56		)	(77		)
Depreciation and amortization	(67		)	(63		)	(66		)
Loss on sale of receivables	(6		)	(9		)	(10		)
Restructuring costs	(26		)	(39		)	(22		)
Specific warranty contingency, net of supplier recovery	(7		)	—			—
Pension settlement losses	(109		)	—			—
Gain on sale of equity investment	125			—			—
Gain on sale of property	—			16			—
Other income, net	—			—			5
Noncontrolling interests	(2		)	(11		)	(17		)
Income (loss) from continuing operations attributable to Meritor, Inc.	$	(20	)	$	70		$	65

(1) Unallocated legacy and corporate expense, net represents items that are not directly related to our business segments and primarily include pension and retiree medical costs associated with sold businesses and other legacy costs for environmental and product liability. In fiscal year 2013, unallocated legacy and corporate costs, net includes approximately $4 million of executive severance related to the company's former Chief Executive Officer. In fiscal year 2013 and 2012, the company recognized $7 million and $18 million charge associated with the valuation and remeasurement of asbestos-related liabilities, respectively.

Depreciation and Amortization:	2013			2012			2011
Commercial Truck & Industrial (1)	$	60		$	58		$	60
Aftermarket & Trailer	7			5			6
Total depreciation and amortization	$	67		$	63		$	66
Capital Expenditures:	2013			2012			2011
Commercial Truck & Industrial (1)	$	46		$	79		$	97
Aftermarket & Trailer	8			10			8
Total capital expenditures	$	54		$	89		$	105
Segment Assets:	2013			2012			2011
Commercial Truck & Industrial (1)	$	1,822		$	1,799		$	1,983
Aftermarket & Trailer	485			470			473
Total segment assets	2,307			2,269			2,456
Corporate(2)	568			487
Less: Accounts receivable sold under off-balance sheet factoring programs(3)	(305		)	(255		)
Total assets	$	2,570		$	2,501

(1) In fiscal year 2013, the company reorganized its management structure resulting in two reportable segments. Prior period segment financial information presented has been recast to reflect the revised reporting structure.

(2) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs.

(3) At September 30, 2013 and September 30, 2012, segment assets include $305 million and $255 million, respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (See Note 6). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances.

Sales by geographic area are based on the location of the selling unit. Information on the company’s geographic areas is summarized as follows (in millions): 

Sales by Geographic Area:
	2013		2012		2011
U.S.	$	1,425	$	1,698	$	1,513
Canada	80		87		100
Mexico	615		726		597
Total North America	2,120		2,511		2,210
Sweden	366		403		427
Italy	216		189		116
France	27		82		264
Other Europe	163		200		207
Total Europe	772		874		1,014
South America, primarily Brazil	449		470		746
China	138		255		312
India	114		194		240
Other Asia Pacific	108		114		100
Total sales	$	3,701	$	4,418	$	4,622

Assets by Geographic Area:
	2013		2012
U.S.	$	1,130	$	1,089
Canada	81		77
Mexico	240		172
Total North America	1,451		1,338
Sweden	125		118
United Kingdom	157		125
Italy	86		89
Other Europe	192		138
Total Europe	560		470
South America, primarily Brazil	297		345
China	153		225
Other Asia Pacific	109		123
Total	$	2,570	$	2,501

Sales to AB Volvo represented approximately 24 percent, 22 percent and 24 percent of the company’s sales in each of fiscal years 2013, 2012 and 2011, respectively. Sales to Daimler AG represented approximately 15 percent, 15 percent and 11 percent of the company’s sales in fiscal years 2013, 2012 and 2011, respectively. Sales to Navistar International Corporation represented approximately 10 percent of the company’s sales in fiscal year 2013, and 11 percent for fiscal years 2012 and 2011, respectively. No other customer comprised 10 percent or more of the company’s sales in any of the three fiscal years ended September 30, 2013.