Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Mar. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Schedule of Condensed Consolidating Statement of Operations

	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, 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

	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, 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

Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss)

	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
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
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
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

Schedule of Condensed Consolidating Balance Sheet

	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

Schedule of Condensed Consolidating Statement of Cash Flows

	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