Rule 3-10 of Regulation S-X requires that separate financial information for issuers and guarantors of registered securities be filed in certain circumstances. Certain of the company's 100-percent-owned subsidiaries, as defined in the credit agreement (the "Guarantors"), irrevocably and unconditionally guarantee amounts outstanding under the senior secured revolving credit facility on a joint and several basis. Similar subsidiary guarantees were provided for the benefit of the holders of the notes outstanding under the company's indentures (see Note 17).



	Three Months Ended March 31, 2020
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	515		$	356		$	—		$	871
Subsidiaries	—			21			27			(48		)	—
Total sales	—			536			383			(48		)	871
Cost of sales	(11		)	(461		)	(333		)	48			(757		)
GROSS PROFIT	(11		)	75			50			—			114
Selling, general and administrative	(9		)	(33		)	(17		)	—			(59		)
Income from WABCO distribution termination	265			—			—			—			265
Other operating expense, net	(1		)	(6		)	(3		)	—			(10		)
OPERATING INCOME	244			36			30			—			310
Other income (expense), net	44			(9		)	(21		)	—			14
Equity in earnings of affiliates	—			5			1			—			6
Interest income (expense), net	(31		)	9			6			—			(16		)
INCOME BEFORE INCOME TAXES	257			41			16			—			314
Provision for income taxes	(58		)	(11		)	(4		)	—			(73		)
Equity income from continuing operations of subsidiaries	41			2			—			(43		)	—
INCOME FROM CONTINUING OPERATIONS	240			32			12			(43		)	241
INCOME FROM DISCONTINUED OPERATIONS, net of tax	1			1			1			(2		)	1
NET INCOME	241			33			13			(45		)	242
Less: Net income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	241		$	33		$	12		$	(45	)	$	241



	Three Months Ended March 31, 2020
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	241		$	33		$	13		$	(45	)	$	242
Other comprehensive loss, net of tax	(59		)	(70		)	(71		)	141			(59		)
Total comprehensive income (loss)	182			(37		)	(58		)	96			183
Less: Comprehensive income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
Comprehensive income (loss) attributable to Meritor, Inc.	$	182		$	(37	)	$	(59	)	$	96		$	182



	Three Months Ended March 31, 2019
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	677		$	479		$	—		$	1,156
Subsidiaries	—			28			51			(79		)	—
Total sales	—			705			530			(79		)	1,156
Cost of sales	(16		)	(590		)	(455		)	79			(982		)
GROSS PROFIT	(16		)	115			75			—			174
Selling, general and administrative	(28		)	(30		)	(15		)	—			(73		)
Other operating income, net	—			—			1			—			1
OPERATING INCOME (LOSS)	(44		)	85			61			—			102
Other income (expense), net	50			(14		)	(27		)	—			9
Equity in earnings of affiliates	—			3			3			—			6
Interest income (expense), net	(33		)	12			6			—			(15		)
INCOME (LOSS) BEFORE INCOME TAXES	(27		)	86			43			—			102
Benefit (provision) for income taxes	20			(22		)	(25		)	—			(27		)
Equity income from continuing operations of subsidiaries	80			9			—			(89		)	—
INCOME FROM CONTINUING OPERATIONS	73			73			18			(89		)	75
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(1		)	—			—			—			(1		)
NET INCOME	72			73			18			(89		)	74
Less: Net income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	72		$	73		$	16		$	(89	)	$	72



	Three Months Ended March 31, 2019
	Parent		Guarantors		Non- Guarantors			Elims			Consolidated
Net income	$	72	$	73	$	18		$	(89	)	$	74
Other comprehensive income, net of tax	7		1		1			(2		)	7
Total comprehensive income	79		74		19			(91		)	81
Less: Comprehensive income attributable to noncontrolling interests	—		—		(2		)	—			(2		)
Comprehensive income attributable to Meritor, Inc.	$	79	$	74	$	17		$	(91	)	$	79



	Six Months Ended March 31, 2020
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,050		$	722		$	—		$	1,772
Subsidiaries	—			44			62			(106		)	—
Total sales	—			1,094			784			(106		)	1,772
Cost of sales	(27		)	(930		)	(680		)	106			(1,531		)
GROSS PROFIT	(27		)	164			104			—			241
Selling, general and administrative	(33		)	(62		)	(34		)	—			(129		)
Income from WABCO distribution termination	265			—			—			—			265
Other operating expense, net	(1		)	(6		)	(8		)	—			(15		)
OPERATING INCOME	204			96			62			—			362
Other income (expense), net	44			(2		)	(18		)	—			24
Equity in earnings of affiliates	—			9			3			—			12
Interest income (expense), net	(62		)	20			12			—			(30		)
INCOME BEFORE INCOME TAXES	186			123			59			—			368
Provision for income taxes	(46		)	(26		)	(14		)	—			(86		)
Equity income from continuing operations of subsidiaries	139			30			—			(169		)	—
INCOME FROM CONTINUING OPERATIONS	279			127			45			(169		)	282
INCOME FROM DISCONTINUED OPERATIONS, net of tax	1			1			1			(2		)	1
NET INCOME	280			128			46			(171		)	283
Less: Net income attributable to noncontrolling interests	—			—			(3		)	—			(3		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	280		$	128		$	43		$	(171	)	$	280



	Six Months Ended March 31, 2020
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	280		$	128		$	46		$	(171	)	$	283
Other comprehensive loss, net of tax	(33		)	(40		)	(39		)	79			(33		)
Total comprehensive income	247			88			7			(92		)	250
Less: Comprehensive income attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income attributable to Meritor, Inc.	$	247		$	88		$	4		$	(92	)	$	247



	Six Months Ended March 31, 2019
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	1,266		$	928		$	—		$	2,194
Subsidiaries	—			60			108			(168		)	—
Total sales	—			1,326			1,036			(168		)	2,194
Cost of sales	(31		)	(1,124		)	(892		)	168			(1,879		)
GROSS PROFIT	(31		)	202			144			—			315
Selling, general and administrative	(53		)	(57		)	3			—			(107		)
Other operating income, net	—			—			1			—			1
OPERATING INCOME (LOSS)	(84		)	145			148			—			209
Other income (expense), net	50			(9		)	(21		)	—			20
Equity in earnings of affiliates	—			10			5			—			15
Interest income (expense), net	(65		)	24			12			—			(29		)
INCOME (LOSS) BEFORE INCOME TAXES	(99		)	170			144			—			215
Benefit (provision) for income taxes	31			(34		)	(45		)	—			(48		)
Equity income from continuing operations of subsidiaries	231			49			—			(280		)	—
INCOME FROM CONTINUING OPERATIONS	163			185			99			(280		)	167
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(1		)	—			—			—			(1		)
NET INCOME	162			185			99			(280		)	166
Less: Net income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	162		$	185		$	95		$	(280	)	$	162



	Six Months Ended March 31, 2019
	Parent		Guarantors			Non- Guarantors			Elims			Consolidated
Net income	$	162	$	185		$	99		$	(280	)	$	166
Other comprehensive income (loss), net of tax	4		(7		)	(8		)	16			5
Total comprehensive income	166		178			91			(264		)	171
Less: Comprehensive income attributable to noncontrolling interests	—		—			(5		)	—			(5		)
Comprehensive income attributable to Meritor, Inc.	$	166	$	178		$	86		$	(264	)	$	166



	March 31, 2020
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	351	$	4		$	153	$	—		$	508
Receivables trade and other, net	—		78			388		—			466
Inventories	—		297			232		—			529
Other current assets	6		10			19		—			35
TOTAL CURRENT ASSETS	357		389			792		—			1,538
NET PROPERTY	21		265			223		—			509
GOODWILL	—		360			140		—			500
OTHER ASSETS	177		239			262		—			678
INVESTMENTS IN SUBSIDIARIES	4,531		888			—		(5,419		)	—
TOTAL ASSETS	$	5,086	$	2,141		$	1,417	$	(5,419	)	$	3,225
CURRENT LIABILITIES:
Short-term debt	$	33	$	—		$	105	$	—		$	138
Accounts and notes payable	50		226			265		—			541
Other current liabilities	68		90			99		—			257
TOTAL CURRENT LIABILITIES	151		316			469		—			936
LONG-TERM DEBT	1,200		—			3		—			1,203
RETIREMENT BENEFITS	291		1			23		—			315
INTERCOMPANY PAYABLE (RECEIVABLE)	2,932		(3,030		)	98		—			—
OTHER LIABILITIES	120		124			103		—			347
EQUITY ATTRIBUTABLE TO MERITOR, INC.	392		4,730			689		(5,419		)	392
NONCONTROLLING INTERESTS	—		—			32		—			32
TOTAL LIABILITIES AND EQUITY	$	5,086	$	2,141		$	1,417	$	(5,419	)	$	3,225



	September 30, 2019
	Parent		Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	4	$	4		$	100	$	—		$	108
Receivables trade and other, net	3		92			456		—			551
Inventories	—		292			234		—			526
Other current assets	6		10			15		—			31
TOTAL CURRENT ASSETS	13		398			805		—			1,216
NET PROPERTY	21		260			234		—			515
GOODWILL	—		337			141		—			478
OTHER ASSETS	170		225			211		—			606
INVESTMENTS IN SUBSIDIARIES	4,432		899			—		(5,331		)	—
TOTAL ASSETS	$	4,636	$	2,119		$	1,391	$	(5,331	)	$	2,815
CURRENT LIABILITIES:
Short-term debt	$	32	$	—		$	9	$	—		$	41
Accounts and notes payable	53		283			274		—			610
Other current liabilities	77		109			99		—			285
TOTAL CURRENT LIABILITIES	162		392			382		—			936
LONG-TERM DEBT	898		—			4		—			902
RETIREMENT BENEFITS	312		1			23		—			336
INTERCOMPANY PAYABLE (RECEIVABLE)	2,833		(3,005		)	172		—			—
OTHER LIABILITIES	46		112			68		—			226
EQUITY ATTRIBUTABLE TO MERITOR, INC.	385		4,619			712		(5,331		)	385
NONCONTROLLING INTERESTS	—		—			30		—			30
TOTAL LIABILITIES AND EQUITY	$	4,636	$	2,119		$	1,391	$	(5,331	)	$	2,815



	Six Months Ended March 31, 2020
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	370		$	17		$	(97	)	$	—	$	290
INVESTING ACTIVITIES
Capital expenditures	(1		)	(17		)	(15		)	—		(33		)
Cash paid for acquisition of TransPower, net of cash acquired	(13		)	—			—			—		(13		)
Other investing activities	9			—			—					9
CASH USED FOR INVESTING ACTIVITIES	(5		)	(17		)	(15		)	—		(37		)
FINANCING ACTIVITIES
Securitization	—			—			96			—		96
Borrowings against revolving line of credit	304			—			—			—		304
Term loan payments	(4		)	—			—			—		(4		)
Repurchase of common stock	(241		)	—			—			—		(241		)
Intercompany advances	(76		)	—			76			—		—
Other financing activities	(1		)	—			—			—		(1		)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	(18		)	—			172			—		154
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			(7		)	—		(7		)
CHANGE IN CASH AND CASH EQUIVALENTS	347			—			53			—		400
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	4			4			100			—		108
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	351		$	4		$	153		$	—	$	508



	Six Months Ended March 31, 2019
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	32		$	23		$	(4	)	$	—	$	51
INVESTING ACTIVITIES
Capital expenditures	(2		)	(23		)	(19		)	—		(44		)
Cash paid for investment in TransPower	(3		)	—			—			—		(3		)
CASH USED FOR INVESTING ACTIVITIES	(5		)	(23		)	(19		)	—		(47		)
FINANCING ACTIVITIES
Securitization	—			—			48			—		48
Redemption of notes	(19		)	—			—			—		(19		)
Repurchase of common stock	(50		)	—			—			—		(50		)
Intercompany advances	29			—			(29		)	—		—
Other financing activities	—			(1		)	—			—		(1		)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	(40		)	(1		)	19			—		(22		)
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			1			—		1
CHANGE IN CASH AND CASH EQUIVALENTS	(13		)	(1		)	(3		)	—		(17		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	24			6			85			—		115
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	11		$	5		$	82		$	—	$	98

Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. As of March 31, 2020 and September 30, 2019, Parent-only obligations included $295 million and $315 million of pension and retiree medical benefits, respectively (see Note 19). All debt is debt of the Parent other than $108 million and $13 million at March 31, 2020 and September 30, 2019, respectively (see Note 17), which is primarily related to U.S. accounts receivable securitization and financing lease obligations. There were $23 million cash dividends paid to the Parent by subsidiaries and investments accounted for by the equity method for the six months ended March 31, 2020. There were $29 million of cash dividends paid to the Parent by subsidiaries and investments accounted for by the equity method for the six months ended March 31, 2019.