XML 15 R29.htm IDEA: XBRL DOCUMENT v3.20.1
Business Segment Information
 6 Months Ended
Mar. 31, 2020
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.
      The company has two reportable segments at March 31, 2020, 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 March 31, 2020
 
 
 
 
 
 
 
External Sales
$
557

 
$
314

 
$
—

 
$
871

Intersegment Sales
31

 
5

 
(36
)
 
—

Total Sales
$
588

 
$
319

 
$
(36
)
 
$
871

Three Months Ended March 31, 2019 
 
 
 
 
 
 
 
External Sales
$
837

 
$
319

 
$
—

 
$
1,156

Intersegment Sales
39

 
10

 
(49
)
 
—

Total Sales
$
876

 
$
329

 
$
(49
)
 
$
1,156





Commercial Truck
 
Aftermarket,
 Industrial and Trailer
 
Eliminations
 
Total
Six Months Ended March 31, 2020
 
 
 
 
 
 
 
External Sales
$
1,147

 
$
625

 
$
—

 
$
1,772

Intersegment Sales
63

 
11

 
(74
)
 
—

Total Sales
$
1,210

 
$
636

 
$
(74
)
 
$
1,772

Six Months Ended March 31, 2019 
 
 
 
 
 
 
 
External Sales
$
1,581

 
$
613

 
$
—

 
$
2,194

Intersegment Sales
74

 
19

 
(93
)
 
—

Total Sales
$
1,655

 
$
632

 
$
(93
)
 
$
2,194




 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Segment adjusted EBITDA:
 
 
 
 
 
 
 
Commercial Truck
$
55

 
$
88

 
$
111

 
$
165

Aftermarket, Industrial and Trailer
49

 
52

 
89

 
92

Segment adjusted EBITDA
104


140

 
200

 
257

Unallocated legacy and corporate expense, net (1)
3

 
(1
)
 
5

 
1

Interest expense, net
(16
)
 
(15
)
 
(30
)
 
(29
)
Provision for income taxes
(73
)
 
(27
)
 
(86
)
 
(48
)
Depreciation and amortization
(26
)
 
(21
)
 
(50
)
 
(43
)
Noncontrolling interests
(1
)
 
(2
)
 
(3
)
 
(4
)
Loss on sale of receivables
(1
)
 
(2
)
 
(2
)
 
(3
)
Restructuring
(10
)
 
1

 
(15
)
 
1

Transaction costs
(5
)
 
—

 
(5
)
 
—

Income from WABCO distribution termination
265

 
—

 
265

 
—

Asbestos related liability remeasurement (2)
—

 
—

 
—

 
31

Income from continuing operations attributable to Meritor, Inc.
$
240


$
73

 
$
279

 
$
163



(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 six months ended March 31, 2019 includes $31 million related to the remeasurement of the Maremont asbestos liability based on the Maremont prepackaged plan of reorganization.
 
March 31,
2020
 
September 30,
2019
Segment Assets:
 
 
 
Commercial Truck
$
1,682

 
$
1,659

Aftermarket, Industrial and Trailer
810

 
815

Total segment assets
2,492

 
2,474

Corporate (1)
977

 
567

Less: Accounts receivable sold under off-balance sheet factoring programs (2) 
(244
)
 
(226
)
Total assets
$
3,225

 
$
2,815


(1) 
Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs.
(2) 
At March 31, 2020 and September 30, 2019, segment assets include $244 million and $226 million, respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 10). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances.