DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Nov. 14, 2018 | Mar. 31, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MERITOR INC | ||
Entity Central Index Key | 1,113,256 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Filer Category | Large Accelerated Filer | ||
Trading Symbol | MTOR | ||
Entity Common Stock, Shares Outstanding | 84,876,805 | ||
Document Period End Date | Sep. 30, 2018 | ||
Document Type | 10-K | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 | ||
Amendment Flag | false | ||
Entity Well-Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,766,433,323 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | |||
Sales | $ 4,178,000,000 | $ 3,347,000,000 | $ 3,199,000,000 |
Cost of sales | (3,524,000,000) | (2,863,000,000) | (2,763,000,000) |
GROSS MARGIN | 654,000,000 | 484,000,000 | 436,000,000 |
Selling, general and administrative | (317,000,000) | (264,000,000) | (213,000,000) |
Restructuring costs | (6,000,000) | (6,000,000) | (16,000,000) |
Goodwill impairment | 15,000,000 | ||
Other operating expense, net | (14,000,000) | (7,000,000) | (3,000,000) |
OPERATING INCOME (LOSS) | 317,000,000 | 207,000,000 | 204,000,000 |
Other income (expense), net | 1,000,000 | 2,000,000 | (1,000,000) |
Gain on sale of equity investment | 0 | 243,000,000 | 0 |
Equity in earnings of affiliates | 27,000,000 | 48,000,000 | 36,000,000 |
Interest expense, net | (67,000,000) | (119,000,000) | (84,000,000) |
INCOME (LOSS) BEFORE INCOME TAXES | 278,000,000 | 381,000,000 | 155,000,000 |
Benefit (provision) for income taxes | (149,000,000) | (52,000,000) | 424,000,000 |
INCOME FROM CONTINUING OPERATIONS | 129,000,000 | 329,000,000 | 579,000,000 |
LOSS FROM DISCONTINUED OPERATIONS, net of tax | (3,000,000) | (1,000,000) | (4,000,000) |
NET INCOME | 126,000,000 | 328,000,000 | 575,000,000 |
Less: Net income attributable to noncontrolling interests | (9,000,000) | (4,000,000) | (2,000,000) |
NET INCOME ATTRIBUTABLE TO MERITOR, INC. | 117,000,000 | 324,000,000 | 573,000,000 |
NET INCOME ATTRIBUTABLE TO MERITOR, INC. | |||
Net income from continuing operations | 120,000,000 | 325,000,000 | 577,000,000 |
Loss from discontinued operations | (3,000,000) | (1,000,000) | (4,000,000) |
Net income | $ 117,000,000 | $ 324,000,000 | $ 573,000,000 |
BASIC EARNINGS (LOSS) PER SHARE | |||
Basic earnings (loss) per share from continuing operations (in dollars per share) | $ 1.37 | $ 3.69 | $ 6.40 |
Basic earnings (loss) per share from discontinued operations (in dollars per share) | (0.03) | (0.01) | (0.04) |
Basic earnings (loss) per share (in dollars per share) | 1.34 | 3.68 | 6.36 |
DILUTED EARNINGS (LOSS) PER SHARE | |||
Diluted earnings (loss) per share from continuing operations (in dollars per share) | 1.31 | 3.60 | 6.27 |
Diluted earnings (loss) per share from discontinued operations (in dollars per share) | (0.03) | (0.01) | (0.04) |
Diluted earnings (loss) per share (in dollars per share) | $ 1.28 | $ 3.59 | $ 6.23 |
Basic average common shares outstanding (in shares) | 87.5 | 88 | 90.1 |
Diluted average common shares outstanding (in shares) | 91.2 | 90.2 | 92 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 126 | $ 328 | $ 575 |
Other comprehensive income: | |||
Foreign currency translation adjustments | (51) | 25 | (12) |
Pension and other postretirement benefit related adjustments (net of tax of $6, $147 and $33 for the year ended September 30, 2018, 2017 and 2016, respectively) | 24 | 240 | (35) |
Unrealized gain (loss) on investment and foreign exchange contracts | 4 | (1) | 4 |
Total comprehensive income | 103 | 592 | 532 |
Less: Comprehensive income attributable to noncontrolling interest | (7) | (4) | (2) |
Comprehensive income attributable to Meritor, Inc. | $ 96 | $ 588 | $ 530 |
CONSOLIDATED STATEMENT OF COM_2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Pension and other postretirement benefit, tax | $ 6 | $ 147 | $ 33 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | [1] | $ 115 | $ 88 |
Receivables, trade and other, net | [1] | 588 | 789 |
Inventories | [1] | 477 | 378 |
Other current assets | 46 | 43 | |
TOTAL CURRENT ASSETS | 1,226 | 1,298 | |
NET PROPERTY | [1] | 483 | 474 |
GOODWILL | [1] | 421 | 414 |
OTHER ASSETS | [1] | 596 | 596 |
TOTAL ASSETS | 2,726 | 2,782 | |
CURRENT LIABILITIES: | |||
Short-term debt | 94 | 288 | |
Accounts and notes payable | [1] | 700 | 622 |
Other current liabilities | 290 | 272 | |
TOTAL CURRENT LIABILITIES | 1,084 | 1,182 | |
LONG-TERM DEBT | 730 | 750 | |
RETIREMENT BENEFITS | 262 | 314 | |
OTHER LIABILITIES | 332 | 239 | |
TOTAL LIABILITIES | 2,408 | 2,485 | |
COMMITMENTS AND CONTINGENCIES (NOTE 24) | |||
MEZZANINE EQUITY | |||
Convertible debt with cash settlement | 1 | 2 | |
EQUITY: | |||
Common stock (September 30, 2018 and 2017, 102.2 and 101.4 shares issued and 84.9 and 88.6 shares outstanding, respectively) | 102 | 101 | |
Additional paid-in capital | 787 | 765 | |
Retained earnings | 200 | 83 | |
Treasury stock, at cost (September 30, 2018 and September 30, 2017, 17.3 and 12.8 shares, respectively) | (236) | (136) | |
Accumulated other comprehensive loss | (566) | (545) | |
Total equity attributable to Meritor, Inc. | 287 | 268 | |
Noncontrolling interests | [1] | 30 | 27 |
TOTAL EQUITY | 317 | 295 | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | 2,726 | 2,782 | |
Net property | 2 | ||
Goodwill | 1 | ||
Other assets | 1 | ||
Reportable Legal Entities | Non- Guarantors | |||
CURRENT ASSETS: | |||
Cash and cash equivalents | 85 | 75 | |
Receivables, trade and other, net | 524 | 493 | |
Inventories | 235 | 194 | |
Other current assets | 28 | 32 | |
TOTAL CURRENT ASSETS | 872 | 794 | |
NET PROPERTY | 218 | 226 | |
GOODWILL | 171 | 177 | |
OTHER ASSETS | 235 | 219 | |
TOTAL ASSETS | 1,496 | 1,416 | |
CURRENT LIABILITIES: | |||
Short-term debt | 47 | 91 | |
Accounts and notes payable | 339 | 321 | |
Other current liabilities | 142 | 134 | |
TOTAL CURRENT LIABILITIES | 528 | 546 | |
LONG-TERM DEBT | 4 | 7 | |
RETIREMENT BENEFITS | 21 | 23 | |
OTHER LIABILITIES | 158 | 106 | |
MEZZANINE EQUITY | |||
Convertible debt with cash settlement | 0 | 0 | |
EQUITY: | |||
Total equity attributable to Meritor, Inc. | 440 | 413 | |
Noncontrolling interests | 30 | 27 | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | $ 1,496 | 1,416 | |
Net property | 3 | ||
Cash and cash equivalents | 1 | ||
Receivables, trade and other, net | 13 | ||
Inventories | 2 | ||
Accounts and notes payable | 12 | ||
Noncontrolling interests | $ 2 | ||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - shares shares in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock issued (in shares) | 102.2 | 101.4 |
Common stock outstanding (in shares) | 84.9 | 88.6 |
Treasury stock, at cost (in shares) | 17.3 | 12.8 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |||
OPERATING ACTIVITIES | |||||
CASH PROVIDED BY OPERATING ACTIVITIES (see Note 27) | $ 251 | $ 176 | $ 204 | ||
INVESTING ACTIVITIES | |||||
Capital expenditures | (104) | (95) | (93) | ||
Proceeds from prior year sale of equity method investment | 250 | 0 | 0 | ||
Cash paid for investment in Transportation Power, Inc. | (6) | 0 | 0 | ||
Proceeds from sale of a business | 4 | 0 | 0 | ||
Proceeds from sale of assets | 2 | 0 | 0 | ||
Cash paid for acquisitions | (35) | (34) | |||
Other investing activities | 0 | 0 | 3 | ||
Net investing cash flows provided by (used for) continuing operations | 111 | (129) | (90) | ||
Net investing cash flows provided by discontinued operations | 0 | 2 | 4 | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 111 | (127) | (86) | ||
FINANCING ACTIVITIES | |||||
Borrowings and securitization | (43) | 89 | 0 | ||
Proceeds from debt issuances | 0 | 325 | 0 | ||
Redemption of notes | (181) | (103) | 0 | ||
Repayment of notes and term loan | 0 | (408) | (55) | ||
Debt issuance costs | 0 | (12) | 0 | ||
Other financing activities | (5) | (13) | (16) | ||
Net change in debt | (229) | (122) | (71) | ||
Repurchase of common stock | (100) | 0 | (81) | ||
CASH USED FOR FINANCING ACTIVITIES | (329) | (122) | (152) | ||
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (6) | 1 | 1 | ||
CHANGE IN CASH AND CASH EQUIVALENTS | 27 | (72) | (33) | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 88 | [1] | 160 | 193 | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 115 | [1] | 88 | [1] | 160 |
AA Gear & Manufacturing, Inc. | |||||
INVESTING ACTIVITIES | |||||
Cash paid for acquisitions | (35) | 0 | 0 | ||
Fabco Holdings, Inc. | |||||
INVESTING ACTIVITIES | |||||
Cash paid for acquisitions | $ 0 | $ (34) | $ 0 | ||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) - USD ($) $ in Millions | Total | Total Equity (Deficit) Attributable to Meritor, Inc. | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Beginning balance at Sep. 30, 2015 | $ (646) | $ (671) | $ 99 | $ 865 | $ (814) | $ (55) | $ (766) | $ 25 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 532 | 530 | 573 | (43) | 2 | |||
Equity based compensation expense | 9 | 9 | 9 | |||||
Repurchase of common stock | (81) | (81) | (81) | |||||
Non-controlling interest dividends | (2) | (2) | ||||||
Other | 2 | 2 | 2 | |||||
Ending Balance at Sep. 30, 2016 | (186) | (211) | 99 | 876 | (241) | (136) | (809) | 25 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 592 | 588 | 324 | 264 | 4 | |||
Vesting of restricted stock | 0 | 2 | (2) | |||||
Repurchase of convertible notes | (156) | (156) | (156) | |||||
Issuance of convertible notes | 41 | 41 | 41 | |||||
Equity based compensation expense | 19 | 19 | 19 | |||||
Debt issuance costs | (1) | (1) | (1) | |||||
Stock option exercises | 2 | 2 | 2 | |||||
Convertible securities with cash settlement | (2) | (2) | (2) | |||||
Non-controlling interest dividends | (2) | (2) | ||||||
Other | (12) | (12) | (12) | |||||
Ending Balance at Sep. 30, 2017 | 295 | 268 | 101 | 765 | 83 | (136) | (545) | 27 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 103 | 96 | 117 | (21) | 7 | |||
Vesting of restricted stock | 0 | 1 | (1) | |||||
Equity based compensation expense | 20 | 20 | 20 | |||||
Repurchase of common stock | (100) | (100) | (100) | |||||
Convertible securities with cash settlement | 1 | 1 | 1 | |||||
Non-controlling interest dividends | (2) | (2) | ||||||
Other | 0 | 2 | 2 | (2) | ||||
Ending Balance at Sep. 30, 2018 | $ 317 | $ 287 | $ 102 | $ 787 | $ 200 | $ (236) | $ (566) | $ 30 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Meritor, Inc. (the "company" or "Meritor"), headquartered in Troy, Michigan, is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers ("OEMs") and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, military, bus and coach, construction and other industrial OEMs and certain aftermarkets. The consolidated financial statements are those of the company and its consolidated subsidiaries. Certain businesses are reported in discontinued operations in the consolidated statement of operations, consolidated statement of cash flows and related notes for all periods presented. Additional information regarding discontinued operations is discussed in Note 3. The company’s fiscal year ends on the Sunday nearest September 30. The 2018 , 2017 and 2016 fiscal years ended on September 30, 2018 , October 1, 2017 and October 2, 2016 , respectively. All year and quarter references relate to the company’s fiscal year and fiscal quarters, unless otherwise stated. For ease of presentation, September 30 is used consistently throughout this report to represent the fiscal year end. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Significant estimates and assumptions were used to review goodwill and other long-lived assets for impairment (see Notes 5 and 12), costs associated with the company’s restructuring actions (see Note 6), product warranty liabilities (see Note 15), long-term incentive compensation plan obligations (see Note 20), retiree medical and pension obligations (see Notes 21 and 22), income taxes (see Note 23), and contingencies including asbestos (see Note 24). Concentration of Credit Risk In the normal course of business, the company provides credit to customers. The company limits its credit risk by performing ongoing credit evaluations of its customers and maintaining reserves for potential credit losses and through accounts receivable factoring programs. The company’s accounts receivables are generally due from medium- and heavy-duty truck OEMs, specialty vehicle manufacturers, aftermarket customers, and trailer producers. The company’s ten largest customers accounted for 75 percent , 74 percent and 73 percent of sales in fiscal years 2018 , 2017 and 2016 , respectively. Sales to the company's top three customers were 52 percent , 49 percent and 50 percent of total sales in fiscal years 2018 , 2017 and 2016 , respectively. At September 30, 2018 and 2017 , 23 percent of the company's trade accounts receivable were from the company's three largest customers. Consolidation and Joint Ventures The consolidated financial statements include the accounts of the company and those subsidiaries in which the company has control. All intercompany balances and transactions are eliminated in consolidation. The results of operations of controlled subsidiaries are included in the consolidated financial statements and are offset by a related noncontrolling interest recorded for the noncontrolling partners’ ownership. Investments in affiliates that are not controlled are reported using the equity method of accounting (see Note 14). Foreign Currency Local currencies are generally considered the functional currencies for operations outside the U.S. For operations reporting in local currencies, assets and liabilities are translated at year-end exchange rates with cumulative currency translation adjustments included as a component of Accumulated Other Comprehensive Loss in the consolidated balance sheet. Income and expense items are translated at average rates of exchange during the year. Impairment of Long-Lived Assets Long-lived assets, excluding goodwill, to be held and used are reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value exceeds the fair value. Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. Discontinued Operations A business component that either has been disposed of or is classified as held for sale is reported as discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The results of discontinued operations are aggregated and presented separately in the consolidated statement of operations and consolidated statement of cash flows (see Note 3). Revenue Recognition Revenues are recognized upon shipment of product and transfer of ownership to the customer. Provisions for customer sales allowances and incentives are recorded as a reduction of sales at the time of product shipment. Allowance for Doubtful Accounts An allowance for uncollectible trade receivables is recorded when accounts are deemed uncollectible based on consideration of write-off history, aging analysis, and any specific, known troubled accounts. Earnings per Share Basic earnings (loss) per share is calculated using the weighted average number of shares outstanding during each period. The diluted earnings (loss) per share calculation includes the impact of dilutive common stock options, restricted shares, restricted share units, performance share units, and convertible securities, if applicable. A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions): Year Ended September 30, 2018 2017 2016 Basic average common shares outstanding 87.5 88.0 90.1 Impact of restricted shares, restricted share units and performance share units 2.8 1.7 1.9 Impact of convertible notes 0.9 0.5 — Diluted average common shares outstanding 91.2 90.2 92.0 In November 2017, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the long-term incentive plan. Each performance share unit represents the right to receive one share of common stock or its cash equivalent upon achievement of certain performance and time vesting criteria. The fair value of each performance share unit was $24.79 , which was the company’s share price on the grant date of December 1, 2017. The Board of Directors also approved a grant of 0.3 million restricted share units to these executives. The restricted share units vest at the earlier of three years from the date of grant or upon termination of employment with the company under certain circumstances. The fair value of each restricted share unit was $24.79 , which was the company's share price on the grant date of December 1, 2017. The actual number of performance share units that will vest depends upon the company’s performance relative to the established performance metrics for the three -year performance period of October 1, 2017 to September 30, 2020, measured at the end of the performance period. The number of performance share units that vest will depend on adjusted EBITDA margin and adjusted diluted earnings per share from continuing operations at the following weights: 50% associated with achieving an adjusted EBITDA margin target and 50% associated with achieving an adjusted diluted earnings per share from continuing operations target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.3 million performance share units. In November 2016, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the long-term incentive plan. Each performance share unit represents the right to receive one share of common stock or its cash equivalent upon achievement of certain performance and time vesting criteria. The fair value of each performance share unit was $12.77 , which was the company’s share price on the grant date of December 1, 2016. The Board of Directors also approved a grant of 0.5 million restricted share units to these executives. The restricted share units vest at the earlier of three years from the date of grant or upon termination of employment with the company under certain circumstances. The fair value of each restricted share unit was $12.77 , which was the company's share price on the grant date of December 1, 2016. The actual number of performance share units that will vest depends upon the company’s performance relative to the established M2019 goals for the three -year performance period of October 1, 2016 to September 30, 2019, measured at the end of the performance period. The number of performance share units that vest will depend on meeting the established M2019 goals at the following weights: 50% associated with achieving an Adjusted diluted earnings per share from continuing operations target, 25% associated with achieving a target for revenue growth above market and 25% associated with achieving a Net debt to Adjusted EBITDA target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.6 million performance share units. In November 2015, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the long-term incentive plan. Each performance share unit represents the right to receive one share of common stock or its cash equivalent upon achievement of certain performance and time vesting criteria. The fair value of each performance share unit was $10.51 , which was the company’s share price on the grant date of December 1, 2015. The Board of Directors also approved a grant of 0.5 million restricted share units to these executives. The restricted share units vest at the earlier of three years from the date of grant or upon termination of employment with the company under certain circumstances. The fair value of each restricted share unit was $10.51 , which was the company's share price on the grant date of December 1, 2015. The actual number of performance share units that will vest depends upon the company’s performance relative to the established performance metrics for the three -year performance period of October 1, 2015 to September 30, 2018, measured at the end of the performance period. The number of performance share units that vest will depend on Adjusted EBITDA margin and Adjusted diluted earnings per share from continuing operations at the following weights: 50% associated with achieving an Adjusted EBITDA margin target and 50% associated with achieving an Adjusted diluted earnings per share from continuing operations target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.7 million performance share units. For the years ended September 30, 2018 , 2017 and 2016 , the dilutive impact of previously issued restricted shares, restricted share units, and performance share units was 2.8 million , 1.7 million and 1.9 million , respectively. For the years ended September 30, 2018 , 2017 and 2016 , compensation cost related to restricted shares, restricted share units, performance share units and stock options was $20 million , $19 million and $9 million , respectively. For the fiscal years ended 2018 and 2017, 0.9 million and 0.5 million shares were included in the computation of diluted earnings per share because the average stock price exceeded the conversion price for the 7.875 percent convertible notes due 2026. For the year ended September 30, 2016, the company's convertible senior unsecured notes were excluded from the computation of diluted earnings per share, as the company's average stock price during this period was less than the conversion price for the 7.875 percent convertible notes due 2026. Other Other significant accounting policies are included in the related notes, specifically, goodwill (Note 5), inventories (Note 10), property and depreciation (Note 12), capitalized software (Note 13), product warranties (Note 15), financial instruments (Note 18), equity based compensation (Note 20), retirement medical plans (Note 21), retirement pension plans (Note 22), income taxes (Note 23) and environmental and asbestos-related liabilities (Note 24). Accounting standards implemented during fiscal year 2018 In July 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-09, Codification Improvements. The amendments in this ASU result from the FASB’s standing project to address suggestions on the Accounting Standards Codification ("ASC") and to make other incremental improvements to GAAP. The amendments include changes to clarify the ASC or correct unintended application of guidance that is not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Some of the amendments in this ASU were effective upon issuance. Others have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. And some are conforming amendments that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original ASU. The amendments that were effective upon issuance did not have a material impact on the company's consolidated financial statements. The company plans to implement the remaining amendments beginning October 1, 2019 and is currently evaluating the potential impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendment changes the recognition and presentation requirements of hedge accounting, including eliminating the requirement to separately measure and report hedge ineffectiveness and presenting all items that affect earnings in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting components excluded from the assessment of hedge effectiveness. Changes to income statement classification and financial statement disclosures will be applied prospectively from the date of adoption. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance eliminates the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. The revised guidance will be applied prospectively, and is effective for calendar year-end SEC filers in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. The company adopted this standard in the fourth quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests held through Related Parties that are under Common Control, which alters how a decision maker needs to consider indirect interests in a variable interest entity ("VIE") held through an entity under common control. Under the ASU, if a decision maker is required to evaluate whether it is the primary beneficiary of a VIE, it will need to consider only its proportionate indirect interest in the VIE held through a common control party. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU intends to simplify how share-based payments are accounted for, including accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The company adopted this standard in the first quarter of fiscal year 2018. Following adoption of this standard, all excess tax benefits and all tax deficiencies generated in the current and future periods will be prospectively recorded as income tax benefit or expense in the company’s consolidated statement of operations in the reporting period in which they occur. An income tax benefit of approximately $1 million was recognized in the quarterly period ended December 31, 2017 as a result of the adoption of ASU 2016-09 and a corresponding $1 million increase in income from continuing operations and net income was recognized during such quarter. In March 2016, the FASB issued ASU 2016-07, Investments—Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting. The ASU eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments. The ASU clarifies that an exercise contingency itself does not need to be evaluated to determine whether it is in an embedded derivative, just the underlying option. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. The update clarifies that a change in a counterparty to a derivative instrument designated as a hedging instrument would not require the entity to dedesignate the hedging relationship and discontinue the application of hedge accounting. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires entities that measure inventory using first-in, first-out ("FIFO") or average cost to measure inventory at the lower of cost and net realizable value. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. Accounting standards to be implemented In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). This ASU requires that implementation costs incurred by customers in a cloud computing arrangement be deferred and recognized over the term of the arrangement, if those costs would have been capitalized in a software licensing arrangement under the internal-use software guidance under ASC 350-40. For public business entities, amendments in this update are effective for fiscal years ending after December 15, 2020. Early adoption is permitted, including adoption in any interim period, for all entities. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this ASU amend ASC 715-20 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. For public business entities, amendments in this update are effective for fiscal years ending after December 15, 2020. Early adoption is permitted for all entities. An entity should apply the amendments in this update on a retrospective basis to all periods presented. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU add, modify, and eliminate certain disclosure requirements on fair value measurements in Topic 820. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. Others should be applied retrospectively. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. The amendments in this ASU affect the guidance issued in ASU 2016-02, Leases (Topic 842), which is not yet effective. The amendments provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The effective date for this ASU is the same as that for ASU 2016-02 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2019 in connection with its planned implementation of ASU 2016-02 and is currently assessing the impact of this new transition method on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to (Topic 842). The amendments in this ASU affect narrow aspects of the guidance issued in ASU 2016-02, Leases (Topic 842), which is not yet effective. The effective date and transition requirements for this ASU are the same as those for ASU 2016-02 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2019 in connection with its planned implementation of ASU 2016-02 and is currently assessing the potential impact of this new guidance on its accounting policies and its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 ("U.S. tax reform") from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on when an entity would be required to apply modification accounting. This standard is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in this update should be applied prospectively. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 affects entities who own investments in callable debt securities and aligns the amortization period of premiums on callable debt securities to expectations incorporated in market pricing on the underlying securities. This standard is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings at the beginning of the adoption period. The company does not expect a material impact on its consolidated financial statements from adoption of this guidance. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new guidance requires entities to only include the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, are to be included in a separate line item(s) outside of any sub-total of operating income. ASU 2017-07 also provides guidance that only the service cost component of net benefit cost is eligible for capitalization. This standard is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The revisions in this amendment are to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 provides guidance which defines an "in substance nonfinancial asset"; unifies guidance related to partial sales of nonfinancial assets; eliminates rules specifically addressing sales of real estate; removes exceptions to the financial asset derecognition model; and clarifies the accounting for contributions of nonfinancial assets to joint ventures. The effective date and the transition requirements for the amendments in ASU 2017-05 are the same as the effective date and transition requirements in Topic 606, described below. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU provides clarification on the definition of a business and adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. To be considered a business under the new guidance, it must include an input and a substantive process that together significantly contribute to the ability to create output. The amendment removes the evaluation of whether a market participant could replace missing elements. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and will be applied prospectively. The potential impact of this new guidance will be assessed for future acquisitions or dispositions, but it is not expected to have a material impact on the company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU was issued to remove the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The amendments in this update are effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted; however, the guidance can only be adopted in the first interim period of a fiscal year. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force). The ASU was issued to reduce differences in practice with respect to how specific transactions are classified in the statement of cash flows. The update provides guidance on the following eight types of transactions: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investments, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The amendments in this update are effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including accounts receivable. The ASU also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The amendments in this update are required to be adopted by public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The company is currently evaluating the potential impact of this new guidance on its accounting policies and its consolidated financial statements. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The ASU clarifies the assessment of the likelihood that revenue will be collected from a contract, the guidance for presenting sales taxes and similar taxes, and the timing for measuring customer payments that are not in cash. The ASU also establishes a practical expedient for contract modifications at the transition. The amendments in this update affect the guidance in ASU 2014-09, which is not effective yet. The effective date and the transition requirements for the amendments in ASU 2016-12 are the same as the effective date and transition requirements in ASU 2014-09 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2018 in connection with its planned implementation of ASU 2014-09. Please see discussion of ASU 2014-09 below. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update). The ASU was issued to remove from the ASC certain SEC staff guidance that the SEC staff stated would be rescinded: Revenue and Expense Recognition for Freight Services in Process; Accounting for Shipping and Handling Fees and Costs; and Accounting for Consideration Given by a Vendor to a Customer (including a Reseller of the Vendor’s Products). The amendments in this update affect the guidance in ASU 2014-09, which is not effective yet. The effective date and the transition requirements for the amendments in ASU 2016-11 are the same as the effective date and transition |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS Results of the discontinued operations are summarized as follows (in millions): Year Ended September 30, 2018 2017 2016 Sales $ — $ — $ — Litigation settlement (2 ) — (3 ) Other, net (2 ) (1 ) (4 ) Loss before income taxes (4 ) (1 ) (7 ) Benefit from income taxes 1 — 3 Loss from discontinued operations attributable to Meritor, Inc. $ (3 ) $ (1 ) $ (4 ) Loss from discontinued operations attributable to the company for the twelve months ended September 30, 2018 was primarily related to changes in estimates related to legal costs incurred in connection with a previously divested business. Prior Period Divestiture MSSC In October 2009, the company closed on the sale of its 57 percent interest in MSSC, a joint venture that manufactured and supplied automotive coil springs, torsion bars and stabilizer bars in North America, to the joint venture partner, a subsidiary of Mitsubishi Steel Mfg. Co., LTD (MSM). In connection with the sale of its interest in MSSC, the company agreed to indemnify the buyer for its share of potential obligations related to pension funding shortfall, environmental and other contingencies, and valuation of certain accounts receivable and inventories. The company's estimated exposure under these indemnities at September 30, 2017 was approximately $1 million . During the fourth quarter of fiscal year 2018, the company determined with confirmation from MSSC that the obligation was no longer probable and therefore the company released the accrual. Adjustments to amounts previously reported in discontinued operations that are related to the disposal of the company’s MSSC business are reflected in discontinued operations for all periods presented. |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 12 Months Ended |
Sep. 30, 2018 | |
Assets And Liabilities Held-For-Sale [Abstract] | |
ASSETS AND LIABILITIES HELD FOR SALE | ASSETS AND LIABILITIES HELD FOR SALE In fiscal year 2018, management approved plans to sell $2 million of property in various locations, of which $1 million was within the Aftermarket & Industrial reporting segment and $1 million was within corporate locations. The company expects to sell the assets within one year from management's approval of the plans. The assets met the criteria for presentation as held for sale as of September 30, 2018. Meritor Huayang Vehicle Braking Company Ltd. During the first quarter of fiscal year 2017, management approved a plan to sell Meritor Huayang Vehicle Braking Company Ltd. within the Commercial Truck & Trailer reporting segment. The company expected to sell the business within one year from management's approval of the plan. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of September 30, 2017. Assets and liabilities held for sale are measured at the lower of the carrying value or fair value less costs to sell. Upon meeting the held for sale criteria, the company determined the carrying value of the business exceeded the fair value less costs to sell. As a result, an impairment charge of $3 million was recorded within other operating expense, net in the company’s consolidated statement of operations during fiscal year 2017. On February 7, 2018, Meritor completed the sale of its equity interest in Meritor Huayang Vehicle Braking Company Ltd. All assets and liabilities of the business were transferred at closing. |
GOODWILL
GOODWILL | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL In accordance with ASC Topic 350-20, "Intangibles – Goodwill and Other", goodwill is reviewed for impairment annually during the fourth quarter of the fiscal year or more frequently if certain indicators arise. If business conditions or other factors cause the operating results and cash flows of a reporting unit to decline, the company may be required to record impairment charges for goodwill at that time. The company tests goodwill for impairment at a level of reporting referred to as a reporting unit, which is an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. When two or more components of an operating segment have similar economic characteristics, the components are aggregated and deemed a single reporting unit. An operating segment is deemed to be a reporting unit if all of its components are similar, if none of its components are a reporting unit, or if the segment comprises only a single component. Annual Impairment Analysis ASC Topic 350 allows entities to perform an initial qualitative evaluation to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The results of this qualitative assessment determine whether it is necessary to perform the quantitative impairment test. As allowed by the revised guidance, the company has elected to bypass the qualitative assessment for fiscal year 2018 and proceed directly to the quantitative impairment test. Excluding the qualitative evaluation discussed above, the quantitative goodwill impairment review is a comparison of the fair value of a reporting unit with its carrying amount. Estimates of fair value are primarily determined by using discounted cash flows and market multiples on earnings. If the carrying amount of a reporting unit exceeds its fair value, an impairment charge based on that difference will be recorded. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of any impairment charge recorded. Discounted cash flow methods are dependent upon assumptions of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. For fiscal year 2018, the fair value of all of the company’s reporting units exceeded their carrying values. Realignment of Reporting Units As discussed in Note 25, the company realigned its operations in the second quarter of fiscal year 2018, resulting in a change to its reportable segments. As a result of the change in reportable segments, the company's reporting units changed. The Commercial Truck & Trailer segment contains two reporting units. The Aftermarket & Industrial segment contains three reporting units. Goodwill was reassigned to the new reporting units using a relative fair value allocation. Acquisition of AA Gear & Manufacturing, Inc. Business On April 30, 2018, the company acquired substantially all of the assets of AA Gear & Manufacturing, Inc. and its subsidiaries ("AAG") for a cash purchase price of approximately $35 million and the assumption of certain liabilities. The AAG acquisition was accounted for as a business combination. The company recorded provisional goodwill in the amount of $9 million for the excess of consideration paid over the fair value of the individual assets acquired and liabilities assumed, excluding identifiable intangible assets. This recorded goodwill consists largely of the synergies and economies of scale expected from combining the operations of the company and AAG. All of the goodwill was assigned to the Commercial Truck & Trailer reportable segment. All goodwill recognized is expected to be deductible for income tax purposes over the next 15 years . Acquisition of Fabco Holdings, Inc. Business On August 31, 2017, the company acquired certain assets of Fabco, including its product portfolio and related technologies, for a cash purchase price of $34 million and the assumption of certain liabilities. The Fabco acquisition was accounted for as a business combination. As a result, we recorded goodwill in the amount of $20 million for the excess of consideration paid over the fair value of the individual assets acquired and liabilities assumed, excluding identifiable intangible assets. This recorded goodwill consists largely of the synergies and economies of scale expected from combining the operations of the company and Fabco. All of the goodwill was assigned to the Aftermarket & Industrial reportable segment. A summary of the changes in the carrying value of goodwill is presented below (in millions): Commercial Truck & Trailer Aftermarket & Industrial Total Goodwill (1) $ 280 $ 125 $ 405 Accumulated impairment losses (1) — (15 ) (15 ) Balance at September 30, 2016 (1) 280 110 390 Goodwill acquired from acquisition (1) — 19 19 Foreign currency translation (1) 3 2 5 Balance at September 30, 2017 (1) 283 131 414 Adjustment due to sale of a business (see Note 7) (1 ) — (1 ) Fabco measurement period adjustment (see Note 7) — 1 1 Goodwill acquired from acquisition (see Note 7) 9 — 9 Foreign currency translation (2 ) — (2 ) Balance at September 30, 2018 $ 289 $ 132 $ 421 (1) Amounts have been recast to reflect reportable segment changes (see Note 25). |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING COSTS | RESTRUCTURING COSTS At September 30, 2018 and 2017 , $4 million and $6 million , respectively, of restructuring reserves primarily related to unpaid employee termination benefits remained in the consolidated balance sheet. Asset impairment charges relate to manufacturing facilities that have been sold and machinery and equipment that became idle and obsolete as a result of these actions. The following table summarizes changes in restructuring reserves (in millions): Employee Termination Benefits Asset Impairment Plant Shutdown & Other Total Balance at September 30, 2015 $ 10 $ — $ — $ 10 Activity during the period: Charges to continuing operations 15 — 1 16 Cash payments – continuing operations (11 ) — — (11 ) Other 1 — — 1 Balance at September 30, 2016 15 — 1 16 Activity during the period: Charges to continuing operations 5 — 1 6 Cash payments – continuing operations (14 ) — (1 ) (15 ) Other (1 ) — — (1 ) Balance at September 30, 2017 5 — 1 6 Activity during the period: Charges to continuing operations 6 — — 6 Cash payments – continuing operations (7 ) — (1 ) (8 ) Total restructuring reserves, end of year 4 — — 4 Less: non-current restructuring reserves (1 ) — — (1 ) Restructuring reserves – current, at September 30, 2018 $ 3 $ — $ — $ 3 Restructuring costs attributable to the company’s business segments during fiscal years 2018 , 2017 and 2016 are as follows (in millions): Commercial Truck & Trailer Aftermarket & Industrial Corporate Total Fiscal year 2018: Segment Realignment Program $ — $ 3 $ — $ 3 Other 1 1 1 3 Total restructuring costs $ 1 $ 4 $ 1 $ 6 Fiscal year 2017 (1) : Aftermarket actions — 4 — 4 Other 2 — — 2 Total restructuring costs $ 2 $ 4 $ — $ 6 Fiscal year 2016 (1) : Market related actions $ 5 $ 1 $ 2 $ 8 Aftermarket actions — 5 — 5 Other 1 2 — 3 Total restructuring costs $ 6 $ 8 $ 2 $ 16 (1) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. Segment Realignment Program: On March 12, 2018, the company announced a realignment of operations to further drive long-term strategic objectives while also assigning new responsibilities as part of its commitment to leadership development. As a part of this program, the company approved various labor restructuring actions in the Aftermarket & Industrial segment. The company recorded $3 million of restructuring costs during fiscal year 2018, in connection with this program. These actions were substantially complete as of fiscal year 2018. Other Restructuring Actions: During fiscal year 2018, the company recorded restructuring costs of $3 million primarily associated with labor reduction programs in the Commercial Truck & Trailer segment and Aftermarket & Industrial segment. Fiscals 2017 & 2016 Aftermarket Actions: During the third quarter of fiscal year 2016, the company approved various restructuring plans in the North American and European Aftermarket businesses. The company recorded $5 million of restructuring costs during the third quarter of fiscal year 2016 and $4 million of restructuring costs during fiscal year 2017. Restructuring actions associated with these plans were substantially complete as of September 30, 2017. Fiscal 2016 Market Related Actions: In response to the decline in revenue in North America and South America, during the fourth quarter of fiscal year 2016, the company approved various headcount reduction plans targeting different areas of the business. During the fourth quarter of fiscal year 2016, the company incurred a total of $5 million in restructuring costs in the Commercial Truck & Trailer segment, $1 million in Aftermarket & Industrial segments and $2 million in its corporate locations. Restructuring actions with these plans were substantially complete as of September 30, 2017. Other Fiscal 2016 Actions : During the first half of fiscal year 2016, the company recorded restructuring costs of $3 million primarily associated with a labor reduction program in China in the Commercial Truck & Trailer segment and a labor reduction program in the Aftermarket & Industrial segment. Restructuring actions with these plans were substantially complete as of September 30, 2016. |
ACQUISITIONS AND DIVESTITURE
ACQUISITIONS AND DIVESTITURE | 12 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURE | ACQUISITIONS AND DIVESTITURE Acquisition of AAG Business On April 30, 2018, the company acquired substantially all of the assets of AAG for a cash purchase price of approximately $35 million and the assumption of certain liabilities. AAG provides low-to-medium volume batch manufacturing for complex gear and shaft applications, as well as quick-turnaround prototyping solutions and emergency plant support. The AAG acquisition was accounted for as a business combination. Since completion of initial estimates in the third quarter of fiscal year 2018, the company recorded measurement period adjustments to decrease the purchase price and decrease the provisional fair value of identifiable net assets acquired and liabilities assumed in the AAG transaction, which had a net zero impact to goodwill. This adjustment was made to reflect additional available information and updated preliminary valuation results. The measurement period remains open to finalize the working capital adjustment and the value of intangible assets and to obtain more information on an open warranty claim. The company is reviewing and may record other additional measurement period adjustments in fiscal year 2019. All goodwill resulting from the acquisition of AAG was assigned to the Commercial Truck & Trailer reportable segment (see Note 5). Estimated Fair Value As of June 30, 2018 Measurement Period Adjustments As of September 30, 2018 Purchase price $ 36 $ (1 ) $ 35 Acquired assets and liabilities Accounts Receivable and Accounts Payable, net 2 — 2 Inventory 5 — 5 Fixed Assets 5 (1 ) 4 Intangible Assets 15 — 15 Total identifiable net assets acquired 27 (1 ) 26 Goodwill resulting from the acquisition of AAG 9 — 9 $ 36 $ (1 ) $ 35 Acquisition of Fabco Business On August 31, 2017, the company acquired certain assets of Fabco, including the product portfolio and related technologies, for a cash purchase price of $34 million and the assumption of certain liabilities. The Fabco acquisition was accounted for as a business combination. As of September, 30, 2018, the company finalized all measurement period adjustments related to the Fabco acquisition. Since completion of initial estimates in the fourth quarter of fiscal year 2017, the company recorded a net $1 million measurement period adjustment to decrease the fair value of identifiable net assets acquired in the Fabco transaction, resulting in a corresponding $1 million increase to goodwill. These adjustment were made to reflect additional available information and updated valuation results, which included valuation of trademarks, technology and customer relationships. All goodwill resulting from the Fabco acquisition was assigned to the Aftermarket and Industrial reportable segment (see Note 5). Estimated Fair Value As of September 30, 2017 Measurement Period Adjustments As of September 30, 2018 Purchase price $ 34 $ — $ 34 Assets acquired and liabilities assumed Receivables 5 — 5 Inventories 13 (1 ) 12 Property, plant and equipment 9 (2 ) 7 Intangible assets — 3 3 Accounts payable (6 ) — (6 ) Other current liabilities (6 ) (1 ) (7 ) Total identifiable net assets acquired 15 (1 ) 14 Goodwill resulting from the acquisition of Fabco 19 1 20 $ 34 $ — $ 34 Divestiture of Meritor Huayang Vehicle Braking Company Ltd. On February 7, 2018, Meritor completed the sale of its equity interest in Meritor Huayang Vehicle Braking Company Ltd. All assets and liabilities of the business were transferred at closing. As a result of the divestiture and prior period held for sale classification, a pretax impairment charge of $3 million was previously recorded within other operating expense, net in the company’s consolidated statement of operations for fiscal year 2017. |
ACCOUNTS RECEIVABLE FACTORING A
ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION | 12 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable Factoring And Securitization [Abstract] | |
ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION | ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION Off-balance sheet arrangements Swedish Factoring Facility: The company has an arrangement to sell trade receivables from AB Volvo through one of its European subsidiaries. Under this arrangement with Nordea Bank, which expires in March 2020, the company can sell up to, at any point in time, €155 million ( $181 million ) of eligible trade receivables. The amount of eligible receivables sold may exceed Nordea Bank's commitment at Nordea Bank's discretion. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €136 million ( $158 million ) and €139 million ( $164 million ) of this accounts receivable factoring facility as of September 30, 2018 and 2017 , respectively. The facility is backed by a 364 -day liquidity commitment from Nordea Bank which extends through February 12, 2019. The commitment is subject to standard terms and conditions for this type of arrangement. U.S. Factoring Facility: The company has an arrangement to sell trade receivables from AB Volvo and its U.S. subsidiaries through one of its U.S. subsidiaries. Under this arrangement with Nordea Bank, which expires in February 2019, the company can sell up to, at any point in time, €80 million ( $93 million ) of eligible trade receivables. The amount of eligible receivables sold may exceed Nordea Bank’s commitment at Nordea Bank’s discretion. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €45 million ( $53 million ) and €37 million ( $43 million ) of this accounts receivable factoring facility as of September 30, 2018 and 2017 , respectively. United Kingdom Factoring Facility: The company has an arrangement to sell trade receivables from AB Volvo and its European subsidiaries through one of its United Kingdom subsidiaries. Under this arrangement with Nordea Bank, which expires in February 2022, the company can sell up to, at any point in time, €25 million ( $29 million ) of eligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €8 million ( $9 million ) and €7 million ( $9 million ) of this accounts receivable factoring facility as of September 30, 2018 and 2017 , respectively. The agreement is subject to standard terms and conditions for these types of arrangements including a sole discretion clause whereby the bank retains the right to not purchase receivables, which has not been invoked since the inception of the program. Italy Factoring Facility: The company has an arrangement to sell trade receivables from AB Volvo and its European subsidiaries through one of its Italian subsidiaries. Under this arrangement with Nordea Bank, which expires in June 2022, the company can sell up to, at any point in time, €30 million ( $35 million ) of eligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €24 million ( $28 million ) and €22 million ( $26 million ) of this accounts receivable factoring facility as of September 30, 2018 and 2017 , respectively. The agreement is subject to standard terms and conditions for these types of arrangements including a sole discretion clause whereby the bank retains the right to not purchase receivables, which has not been invoked since the inception of the program. In addition to the above facilities, a number of the company’s subsidiaries, primarily in Europe, factor eligible accounts receivable with financial institutions. Certain receivables are factored without recourse to the company and are excluded from accounts receivable in the consolidated balance sheet. The amount of factored receivables excluded from accounts receivable under these arrangements were $12 million and $19 million at September 30, 2018 and 2017 , respectively. Total costs associated with all of the off-balance sheet arrangements described above were $5 million in fiscal years 2018 , 2017 and 2016 , respectively, and are included in selling, general and administrative expenses in the consolidated statement of operations. On-balance sheet arrangements As of September 30, 2018, the U.S. accounts receivables securitization facility with PNC bank had a facility size of $100 million . On October 4, 2018, the company entered into an amendment that increased the size of the facility to $110 million and extended its expiration date to December 2021. The maximum permitted priority debt-to-EBITDA ratio as of the last day of each fiscal quarter under the facility is 2.25 to 1.00 . This program is provided by PNC Bank, National Association, as Administrator and Purchaser, and the other Purchasers and Purchaser Agents party to the agreement from time to time (participating lenders). Under this program, the company has the ability to sell an undivided percentage ownership interest in substantially all of its trade receivables (excluding the receivables due from AB Volvo and subsidiaries eligible for sale under the U.S. accounts receivable factoring facility) of certain U.S. subsidiaries to ArvinMeritor Receivables Corporation ("ARC"), a wholly-owned, special purpose subsidiary. ARC funds these purchases with borrowings from participating lenders under a loan agreement. This program also includes a letter of credit facility pursuant to which ARC may request the issuance of letters of credit issued for the company’s U.S. subsidiaries (originators) or their designees, which when issued will constitute a utilization of the facility for the amount of letters of credit issued. Amounts outstanding under this agreement are collateralized by eligible receivables purchased by ARC and are reported as short-term debt in the consolidated balance sheet. As of September 30, 2018 , $46 million was outstanding under this program, and $11 million was outstanding under related letters of credit. As of September 30, 2017 , $89 million was outstanding under this program, and no amounts were outstanding under related letters of credit. This securitization program contains a cross-default to the revolving credit facility. At certain times during any given month, the company may sell eligible accounts receivable under this program to fund intra-month working capital needs. In such months, the company would then typically utilize the cash received from customers throughout the month to repay the borrowings under the program. Accordingly, during any given month, the company may borrow under this program in amounts exceeding the amounts shown as outstanding at fiscal year ends. |
OTHER OPERATING EXPENSE, NET
OTHER OPERATING EXPENSE, NET | 12 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
OTHER OPERATING EXPENSE, NET | OTHER OPERATING EXPENSE, NET Other operating expense, net for fiscal years 2018, 2017 and 2016 primarily relates to environmental remediation costs incurred by the company (see Note 24). |
INVENTORIES
INVENTORIES | 12 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) and are summarized as follows (in millions): September 30, 2018 2017 Finished goods $ 170 $ 139 Work in process 41 34 Raw materials, parts and supplies 266 205 Total $ 477 $ 378 |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
Other Current Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | OTHER CURRENT ASSETS Other current assets are summarized as follows (in millions): September 30, 2018 2017 Asbestos-related recoveries (see Note 24) $ 16 $ 14 Prepaid and other 30 29 Other current assets $ 46 $ 43 |
NET PROPERTY
NET PROPERTY | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
NET PROPERTY | NET PROPERTY Property is stated at cost. Depreciation of property is based on estimated useful lives, generally using the straight-line method. Estimated useful lives for buildings and improvements range from 10 to 50 years and estimated useful lives for machinery and equipment range from 3 to 20 years. Significant improvements are capitalized, and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. Company-owned tooling is classified as property and depreciated over the shorter of its expected life or the life of the production contract, generally not to exceed three years . In accordance with the FASB guidance on property, plant and equipment, the company reviews the carrying value of long-lived assets, excluding goodwill, to be held and used, for impairment whenever events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value is not recoverable and exceeds estimated fair value. Net property is summarized as follows (in millions): September 30, 2018 2017 Property at cost: Land and land improvements $ 29 $ 30 Buildings 228 240 Machinery and equipment 914 892 Company-owned tooling 130 126 Construction in progress 81 69 Total 1,382 1,357 Less: accumulated depreciation (899 ) (883 ) Net property $ 483 $ 474 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
Other Assets, Noncurrent [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other assets are summarized as follows (in millions): September 30, 2018 2017 Investments in non-consolidated joint ventures (see Note 14) $ 102 $ 101 Asbestos-related recoveries (see Note 24) 76 32 Unamortized revolver debt issuance costs (see Note 17) 7 8 Capitalized software costs, net (1) 26 27 Deferred income tax assets (see Note 23) 140 229 Assets for uncertain tax positions (see Note 23) 53 48 Prepaid pension costs (see Note 22) 152 135 Intangible assets (2) 18 1 Other (3) 22 15 Other assets $ 596 $ 596 (1) In accordance with FASB ASC Topic 350-40, costs relating to internally developed or purchased software in the preliminary project stage and the post-implementation stage are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight-line basis over the estimated economic useful life of the software. (2) Primarily relates to customer relationships. As of September 30, 2018, the gross carrying value was $22 million and the accumulated amortization was $4 million . As of September 30, 2017, the gross carrying value was 1 million and the accumulated amortization was insignificant. The weighted average amortization periods for customer relationships is approximately 19 years. (3) As of September 30, 2017, includes reserves for Rockwell insurance policies in dispute. The company holds a variable interest in a joint venture that is a variable interest entity ("VIE") accounted for under the equity method of accounting. The joint venture manufactures components for commercial vehicle applications primarily on behalf of the company. The variable interest relates to a supply arrangement between the company and the joint venture whereby the company supplies certain components to the joint venture on a cost-plus basis. The company is not the primary beneficiary of the joint venture, as the joint venture partner has shared or absolute control over key manufacturing operations, labor relationships, financing activities and certain other functions of the joint venture. Therefore, the company does not consolidate the joint venture. At September 30, 2018 and September 30, 2017, the company’s investment in the joint venture was $63 million and $54 million , respectively. TransPower Meritor completed $3 million strategic investments in Transportation Power, Inc. ("TransPower") in each of the first and third quarters of fiscal year 2018. The company holds a variable interest in TransPower, a VIE. TransPower develops electrical drive solutions and supplies integrated drive systems, full electric truck solutions and energy-storage subsystems to major manufacturers of trucks, school buses, refuse vehicles and terminal tractors. The company is not the primary beneficiary of TransPower, as other owners have control over the significant activities of TransPower, including the development of intellectual property and manufacturing. Therefore, the company does not consolidate TransPower. At September 30, 2018, the company’s investment in TransPower was $6 million , representing the company’s maximum exposure to loss. |
INVESTMENTS IN NON-CONSOLIDATED
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES | 12 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES | INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES The company’s non-consolidated joint ventures and related direct ownership interest are as follows: September 30, 2018 2017 2016 Meritor WABCO Vehicle Control Systems (Commercial Truck & Trailer) — % — % 50 % Master Sistemas Automotivos Ltda. (Commercial Truck & Trailer) 49 % 49 % 49 % Sistemas Automotrices de Mexico S.A. de C.V. (Commercial Truck & Trailer) 50 % 50 % 50 % Ege Fren Sanayii ve Ticaret A.S. (Commercial Truck & Trailer) 49 % 49 % 49 % Automotive Axles Limited (Commercial Truck & Trailer) 36 % 36 % 36 % In the fourth quarter of fiscal year 2017, Meritor, Inc. closed on the sale of its interest in Meritor WABCO Vehicle Control Systems ("Meritor WABCO") to a subsidiary of its joint venture partner, WABCO Holdings Inc. The total purchase price for the sale was $250 million , which was recorded as a receivable as of September 30, 2017. The Company also received a final partnership distribution of $8 million in the fourth quarter of fiscal year 2017, immediately prior to closing. The Company will remain the exclusive distributor of a certain range of WABCO Holdings Inc.’s aftermarket products in the United States and Canada and the non-exclusive distributor in Mexico for a period of 10 years following the completion of the transaction, and the purchase agreement includes provisions regarding certain future options of the parties to terminate, at certain points during the first three and a half years , these distribution arrangements at an exercise price of between $225 million and $265 million based on the earnings of the business. The company’s investments in non-consolidated joint ventures are as follows (in millions): September 30, 2018 2017 (1) Commercial Truck & Trailer $ 102 $ 101 Aftermarket & Industrial — — Total investments in non-consolidated joint ventures $ 102 $ 101 (1) Amounts for the year ended September 30, 2017 have been recast to reflect reportable segment changes. The company’s equity in earnings of non-consolidated joint ventures is as follows (in millions): Year Ended September 30, 2018 2017 (1) 2016 (1) Commercial Truck & Trailer $ 27 $ 48 $ 36 Aftermarket & Industrial — — — Total equity in earnings of affiliates $ 27 $ 48 $ 36 (1) Amounts for the years ended September 30, 2017 and September 30, 2016 have been recast to reflect reportable segment changes. The summarized financial information presented below represents the combined accounts of the company’s non-consolidated joint ventures related to its continuing operations (in millions): September 30, 2018 2017 (1) Current assets $ 390 $ 326 Non-current assets 163 151 Total assets $ 553 $ 477 Current liabilities $ 282 $ 183 Non-current liabilities 66 98 Total liabilities $ 348 $ 281 (1) Does not include Meritor WABCO Vehicle Control Systems. Year Ended September 30, 2018 2017 2016 Sales $ 1,101 $ 1,156 $ 1,101 Gross profit 154 200 165 Net income 59 101 73 Dividends received from the company’s non-consolidated joint ventures were $17 million in fiscal year 2018 , $44 million in fiscal year 2017 and $37 million in fiscal year 2016 . Dividends from Meritor WABCO were $36 million in fiscal year 2017, which includes a $8 million final partnership distribution received immediately prior to closing of the sale transaction on October 1, 2017, and $33 million in fiscal year 2016. The company had sales to its non-consolidated joint ventures of approximately $7 million , $2 million and $9 million in fiscal years 2018 , 2017 and 2016 , respectively. These sales exclude sales of $196 million , $138 million and $124 million in fiscal years 2018 , 2017 and 2016 , respectively, to a joint venture in the company’s Commercial Truck & Trailer segment, which are eliminated as the company purchases these components back after value add provided by the joint venture. The company had purchases from its non-consolidated joint ventures of approximately $843 million , $787 million and $753 million in fiscal years 2018 , 2017 and 2016 , respectively. Additionally, the company leases space and provides certain administrative and technical services to various non-consolidated joint ventures. The company collected $11 million , $6 million and $12 million for such leases and services during fiscal years 2018 , 2017 and 2016 , respectively. Amounts due from the company’s non-consolidated joint ventures were $43 million and $36 million at September 30, 2018 and 2017 , respectively, and are included in Receivables, trade and other, net in the consolidated balance sheet. Amounts due to the company’s non-consolidated joint ventures were $110 million and $99 million at September 30, 2018 and 2017 , respectively, and are included in Accounts payable in the consolidated balance sheet. The fair value of the company’s investment in its Automotive Axles Limited joint venture was approximately $91 million and $72 million at September 30, 2018 and 2017 , respectively, based on quoted market prices as this joint venture is listed and publicly traded on the Bombay Stock Exchange in India. The company holds a variable interest in a joint venture accounted for under the equity method of accounting. The joint venture manufactures components for commercial vehicle applications primarily on behalf of the company. The variable interest relates to a supply arrangement between the company and the joint venture whereby the company supplies certain components to the joint venture on a cost-plus basis. The company is not the primary beneficiary of the joint venture, as the joint venture partner has shared or had absolute control over key manufacturing operations, labor relationships, financing activities and certain other functions of the joint venture. Therefore, the company does not consolidate the joint venture. At September 30, 2018 and 2017, the company’s investment in the joint venture was $63 million and $54 million , respectively, representing the company’s maximum exposure to loss. This amount is included in investments in non-consolidated joint ventures (see Note 13). |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Sep. 30, 2018 | |
Other Current Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Other current liabilities are summarized as follows (in millions): September 30, 2018 2017 Compensation and benefits $ 122 $ 117 Income taxes 27 11 Taxes other than income taxes 25 34 Accrued interest 11 9 Product warranties 19 18 Environmental reserves (see Note 24) 8 5 Restructuring (see Note 6) 3 5 Asbestos-related liabilities (see Note 24) 18 19 Indemnity obligations (see Note 24) 1 2 Other 56 52 Other current liabilities $ 290 $ 272 The company records estimated product warranty costs at the time of shipment of products to customers. Warranty reserves are primarily based on factors that include past claims experience, sales history, product manufacturing and engineering changes and industry developments. Liabilities for product recall campaigns are recorded at the time the company’s obligation is probable and can be reasonably estimated. Policy repair actions to maintain customer relationships are recorded as other liabilities at the time an obligation is probable and can be reasonably estimated. Product warranties, including recall campaigns, not expected to be paid within one year are recorded as a non-current liability. A summary of the changes in product warranties is as follows (in millions): September 30, 2018 2017 2016 Total product warranties – beginning of year $ 45 $ 44 $ 48 Accruals for product warranties 22 14 10 Payments (16 ) (17 ) (14 ) Change in estimates and other 3 4 — Total product warranties – end of year 54 45 44 Less: non-current product warranties (see Note 16) (35 ) (27 ) (26 ) Product warranties – current $ 19 $ 18 $ 18 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | OTHER LIABILITIES Other liabilities are summarized as follows (in millions): September 30, 2018 2017 Asbestos-related liabilities (see Note 24) $ 193 $ 124 Restructuring (see Note 6) 1 1 Deferred income tax liabilities (see Note 23) 16 12 Liabilities for uncertain tax positions (see Note 23) 48 32 Product warranties (see Note 15) 35 27 Environmental (see Note 24) 9 4 Indemnity obligations (see Note 24) 9 10 Other 21 29 Other liabilities $ 332 $ 239 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-Term Debt, net of discounts where applicable, is summarized as follows (in millions): September 30, 2018 2017 3.25 percent convertible notes due 2037 (1)(3) $ 318 $ 317 4.0 percent convertible notes due 2027 (1)(4) 24 24 7.875 percent convertible notes due 2026 (1)(5) 22 22 6.75 percent notes due 2021 (2)(6) — 173 6.25 percent notes due 2024 (2)(7) 444 443 Capital lease obligation 7 12 Borrowings and securitization 46 89 Unamortized discount on convertible notes (8) (37 ) (42 ) Subtotal 824 1,038 Less: current maturities (94 ) (288 ) Long-term debt $ 730 $ 750 (1) The 3.25 percent, 4.0 percent and 7.875 percent convertible notes contain a put and call feature, which allows for earlier redemption beginning in 2025, 2019 and 2020, respectively. (2) The 6.75 percent and 6.25 percent notes contain a call option, which allows for early redemption by the issuer. (3) The 3.25 percent convertible notes due 2037 are presented net of $7 million and $8 million unamortized issuance costs as of September 30, 2018 and September 30, 2017, respectively. (4) The 4.0 percent convertible notes due 2027 are presented net of unamortized issuance costs of an insignificant amount as of September 30, 2018 and September 30, 2017 . (5) The 7.875 percent convertible notes due 2026 are presented net of unamortized issuance costs of an insignificant amount as of September 30, 2018 and September 30, 2017 , an d $1 million original issuance discount as of September 30, 2018 and September 30, 2017 . (6) The 6.75 percent notes due 2021 are presented net of $2 million unamortized issuance costs as of September 30, 2017 . (7) The 6.25 percent notes due 2024 are presented net of $6 million and $7 million unamortized issuance costs as of September 30, 2018 and September 30, 2017 , respectively. (8) The carrying amount of the equity component related to convertible debt. Repurchase of Debt Securities On September 28, 2017, the company redeemed $100 million of the $275 million aggregate principal amount outstanding of the company's 6.75 percent notes due 2021 (the " 6.75 Percent Notes") at a price of $1,033.75 per $1,000 of principal amount, plus accrued and unpaid interest. As a result, a loss on debt extinguishment of $5 million was recorded in the company's consolidated statement of operations within Interest expense, net. The redemption was made under the company's July 2016 debt repurchase authorization (see Note 19). On November 2, 2017, the company redeemed the remaining $175 million aggregate principal amount outstanding of the company's 6.75 Percent Notes at a price of $ 1,033.75 per $ 1,000 of principal amount, plus accrued and unpaid interest. The redemption resulted in a loss on debt extinguishment of approximately $8 million . The loss on debt extinguishment is included in Interest expense, net in the consolidated statement of operations. The redemption was made pursuant to a special authorization from the Board of Directors in connection with the sale of the company's interest in Meritor WABCO in the fourth quarter of fiscal year 2017. The company used the net proceeds, after issuance costs and discounts, of approximately $317 million from the offering of the 3.25 percent senior convertible notes due 2037 (the " 3.25 Percent Convertible Notes") to acquire portions of its outstanding 7.875 percent senior convertible notes due 2026 (the " 7.875 Percent Convertible Notes") and its 4.0 percent senior convertible notes due 2027 (the " 4.0 Percent Convertible Notes") in transactions that settled concurrently with the closing of the 3.25 Percent Convertible Note offering on September 22, 2017. In total, the company repurchased $117 million of the $140 million principal amount of its 7.875 Percent Convertible Notes and $119 million of the $143 million principal amount of its 4.0 Percent Convertible Notes. The 7.875 Percent Convertible Notes and 4.0 Percent Convertible Notes were repurchased at premiums equal to 130 percent and 16 percent , respectively, above their principal amount. These repurchases were accounted for as extinguishments of debt, and accordingly the company recognized a loss on debt extinguishment of $31 million in the aggregate ( $23 million with respect to the 7.875 Percent Convertible Notes and $8 million with respect to the 4.0 Percent Convertible Notes). The loss on extinguishment was recorded in the consolidated statement of operations within Interest expense, net during fiscal year 2017. On March 1, 2016, substantially all $55 million principal amount outstanding of the company's 4.625 percent convertible notes due 2026 (the "4.625 Percent Convertible Notes") were repurchased at 100 percent of their face value. On April 15, 2016, the remaining 4.625 Percent Convertible Notes were redeemed at 100 percent of the face value. As of September 30, 2016, none of the 4.625 Percent Convertible Notes were outstanding. The repurchases were made under the company's equity and equity linked repurchase authorization (see Note 19). The repurchase program under this authorization was complete as of September 30, 2016. Current Classification of 4.0 Percent Convertible Notes The 4.0 Percent Convertible Notes were classified as current as of September 30, 2018 as the securities are redeemable at the option of the holder on February 15, 2019, at a repurchase price in cash equal to 100 percent of the accreted principal amount of the securities to be repurchased plus accrued and unpaid interest. The 4.0 Percent Convertible Notes were classified as noncurrent as of September 30, 2017. Current Classification of 6.75 Percent Notes As of September 30, 2017, the company announced its intention to redeem all of the remaining $175 million aggregate principal amount then outstanding of the company's 6.75 Percent Notes. On November 2, 2017, all of the $175 million aggregate principal amount outstanding of the company's 6.75 Percent Notes was redeemed at a price of $1,033.75 per $1,000 of principal amount, plus accrued and unpaid interest. As a result, the 6.75 Percent Notes were classified as current as of September 30, 2017. Current Classification of 7.875 Percent Convertible Notes The 7.875 Percent Convertible Notes were classified as current as of September 30, 2018 as the holders are entitled to convert all or a portion of their 7.875 Percent Convertible Notes at any time beginning October 1, 2018 and prior to the close of business on December 31, 2018 at a rate of 83.3333 shares of common stock per $1,000 principal amount at maturity of the 7.875 Percent Convertible Notes (representing a conversion price of approximately $12.00 per share). The 7.875 Percent Convertible Notes are convertible as the closing price of shares of the company's common stock for at least 20 trading days during the 30 consecutive trading-day period ending on September 28, 2018 was greater than 120 percent of the $12.00 conversion price associated with the 7.875 Percent Convertible Notes. The 7.875 Percent Convertible Notes were classified as current as of September 30, 2017 as the holders were entitled to convert all or a portion of their 7.875 Percent Convertible Notes at any time beginning October 1, 2017 and prior to the close of business on December 30, 2017 at a rate of 83.3333 shares of common stock per $1,000 principal amount at maturity of the 7.875 Percent Convertible Notes (representing a conversion price of approximately $12.00 per share). The 7.875 Percent Convertible Notes were convertible as the closing price of shares of the company's common stock for at least 20 trading days during the 30 consecutive trading-day period ending on September 29, 2017 was greater than 120 percent of the $12.00 conversion price associated with the 7.875 Percent Convertible Notes. The 7.875 Percent Convertible Notes surrendered for conversion, if any, would be settled in cash up to the principal amount at maturity of the 7.875 Percent Convertible Notes and cash, stock or a combination of cash and stock, at the company’s election, for the remainder of the conversion value of the 7.875 Percent Convertible Notes in excess of the principal amount at maturity and cash in lieu of any fractional shares, subject to and in accordance with the provisions of the indenture that governs the 7.875 Percent Convertible Notes. As a result of the 7.875 Percent Convertible Notes becoming currently convertible for cash up to the principal amount of $23 million at the holder's option, $1 million and $2 million of permanent equity was reclassified as mezzanine equity as of September 30, 2018 and September 30, 2017, respectively. Revolving Credit Facility On March 31, 2017, the company amended and restated its revolving credit facility. Pursuant to the revolving credit agreement, as amended, the company has a $525 million revolving credit facility that matures in March 2022. Additionally, $4 million was capitalized as deferred issuance costs and will be amortized over the term of the agreement. The availability under this facility is dependent upon various factors, including performance against certain financial covenants as highlighted below. The availability under the revolving credit facility is subject to certain financial covenants based on (i) the ratio of the company’s priority debt (consisting principally of amounts outstanding under the revolving credit facility, U.S. accounts receivable securitization and factoring programs, and third-party non-working capital foreign debt) to EBITDA and (ii) the amount of annual capital expenditures. The company is required to maintain a total priority-debt-to-EBITDA ratio, as defined in the agreement, of 2.25 to 1.00 or less as of the last day of each fiscal quarter throughout the term of the agreement. The availability under the revolving credit facility is also subject to a collateral test, pursuant to which borrowings on the revolving credit facility cannot exceed 1.0 x the collateral test value. The collateral test is performed on a quarterly basis. At September 30, 2018 , the revolving credit facility was collateralized by approximately $875 million of the company's assets, primarily consisting of eligible domestic U.S. accounts receivable, inventory, plant, property and equipment, intellectual property and the company's investment in all or a portion of certain of its wholly-owned subsidiaries. Borrowings under the revolving credit facility are subject to interest based on quoted LIBOR rates plus a margin and a commitment fee on undrawn amounts, both of which are based upon the company's current corporate credit rating. At September 30, 2018 , the margin over LIBOR rate was 275 basis points , and the commitment fee was 37.5 basis points . Overnight revolving credit loans are at the prime rate plus a margin of 175 basis points . Certain of the company's subsidiaries, as defined in the revolving credit agreement, irrevocably and unconditionally guarantee amounts outstanding under the revolving credit facility. Similar subsidiary guarantees are provided for the benefit of the holders of the publicly held notes outstanding under the company's indentures (see Note 28). No borrowings were outstanding under the revolving credit facility at September 30, 2018 and September 30, 2017 . The amended and extended revolving credit facility includes $100 million of availability for the issuance of letters of credit. At September 30, 2018 and September 30, 2017, there were no letters of credit outstanding under the revolving credit facility. Debt Securities In December 2017, the company filed a shelf registration statement with the SEC, registering an indeterminate amount of debt and/or equity securities that the company may offer in one or more offerings on terms to be determined at the time of sale. The December 2017 shelf registration statement superseded and replaced the shelf registration statement filed in December 2014, as amended. 3.25 Percent Convertible Notes On September 22, 2017, the company issued $325 million principal amount of the 3.25 Percent Convertible Notes. The 3.25 Percent Convertible Notes were sold in an underwritten offering to qualified institutional buyers in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The 3.25 Percent Convertible Notes were issued in minimum denominations of $1,000 principal amount per note and multiples of $1,000 in excess thereof. Net proceeds received by the company, after issuance costs and discounts, were approximately $317 million . The company pays 3.25 percent cash interest per year on the principal amount of the 3.25 Percent Convertible Notes, payable semi-annually in arrears on April 15 and October 15 of each year, beginning April 15, 2018, to holders of record at the close of business on the preceding April 1 or October 1, respectively. Interest accrues on the principal amount of the 3.25 Percent Convertible Notes from and including the date the 3.25 Percent Convertible Notes were issued or from and including the last date in respect of which interest has been paid or provided for, as the case may be, to, but excluding, the next interest payment date. The 3.25 Percent Convertible Notes are fully and unconditionally guaranteed on a senior unsecured basis by the company’s wholly-owned subsidiaries that guarantee the company’s amended and restated revolving credit facility. The 3.25 Percent Convertible Notes are the company’s senior unsecured obligations and rank equally in right of payment with all of the company’s existing and future senior unsecured indebtedness and effectively junior to any of the company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness. The guarantee by each subsidiary guarantor will rank equally with existing and future senior unsecured indebtedness of such subsidiary and effectively junior to all of the existing and future secured indebtedness of such subsidiary, to the extent of the value of the assets securing such indebtedness. The 3.25 Percent Convertible Notes will be convertible into cash up to the principal amount of the 3.25 Percent Convertible Notes surrendered for conversion and the company will pay or deliver, as the case may be, cash, shares of the company’s common stock or a combination of cash and shares of the company’s common stock, at the company’s election, in respect of the remainder, if any, of the company’s conversion obligation in excess of the principal amount of the notes being converted. The initial conversion rate, subject to adjustment, is 25.0474 shares of common stock per $1,000 principal amount of the 3.25 Percent Convertible Notes (which represents an initial conversion price of $39.92 per share). Holders may convert their notes, at their option, only under the following circumstances prior to the close of business on the business day immediately preceding July 15, 2037, other than during the period from and including July 15, 2025 to the close of business on the business day immediately preceding October 15, 2025: • during any calendar quarter after the calendar quarter ending on December 31, 2017, if the closing sale price of the company’s common stock for 20 or more trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including the last trading day of the immediately preceding calendar quarter equals or exceeds 130 percent of the applicable conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 3.25 Percent Convertible Notes for each trading day during such five consecutive trading day period was less than 98 percent of the product of the closing price of the company’s common stock and the conversion rate on each such trading day; • if the company calls any of the 3.25 Percent Convertible Notes for redemption, at any time from the delivery of the redemption notice through the close of business on the scheduled trading day immediately preceding the redemption date; or • upon the occurrence of specified corporate transactions. During the period from and including July 15, 2025 to the close of business on the business day immediately preceding October 15, 2025, and on or after July 15, 2037 until the close of business on the business day immediately preceding the maturity date, holders may convert 3.25 Percent Convertible Notes at any time, regardless of the foregoing circumstances. On or after October 15, 2025, but prior to July 15, 2037, the company may redeem the 3.25 Percent Convertible Notes at the company’s option, in whole or in part, at a redemption price in cash equal to 100 percent of the principal amount of the 3.25 Percent Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Further, holders may require the company to purchase all or a portion of their 3.25 Percent Convertible Notes at a purchase price in cash equal to 100 percent of the principal amount of the 3.25 Percent Convertible Notes to be purchased, plus accrued and unpaid interest to, but excluding, the repurchase date, on October 15, 2025 or upon certain fundamental changes. The maximum number of shares of common stock into which the 3.25 Percent Convertible Notes are convertible is approximately 8 million shares. Accounting guidance requires that cash-settled convertible debt, such as the 3.25 Percent Convertible Notes, be separated into debt and equity components at issuance and a value be assigned to each. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value, representing the value assigned to the equity component, is recorded as a debt discount. The company measures the debt component at fair value by utilizing a discounted cash flow model. This model utilizes observable inputs such as contractual repayment terms, benchmark forward yield curves, yield curves and quoted market prices of its own nonconvertible debt. The yield curves are acquired from an independent source that is widely used in the financial industry and reviewed internally by personnel with appropriate expertise in valuation methodologies. 6.25 Percent Notes On February 13, 2014, the company completed a public offering of debt securities consisting of the issuance of $225 million principal amount of 10 -year, 6.25 percent notes due 2024 (the "Initial 6.25 Percent Notes"). The offering and sale were made pursuant to the company's February 2012 shelf registration statement. The Initial 6.25 Percent Notes were issued under the company's indenture dated as of April 1, 1998, as supplemented. The Initial 6.25 Percent Notes were issued at 100 percent of their principal amount. The proceeds from the sale of the Initial 6.25 Percent Notes were $225 million and, together with cash on hand, were primarily used to repurchase $250 million principal amount of the company’s previously outstanding 10.625 percent notes due 2018. On June 11, 2015, the company completed a public offering of an additional $225 million aggregate principal amount of 6.25 percent notes due 2024 (the "Additional 6.25 Percent Notes") in an underwritten public offering pursuant to the company's December 2014 shelf registration statement. The proceeds from the sale of the Additional 6.25 Percent Notes were used to replenish available cash used to pay $179 million , including premium and fees, to repurchase $110 million principal amount at maturity of the company's 7.875 Percent Convertible Notes. The company used the remaining net proceeds to purchase an annuity to satisfy its obligations under the Canadian and German pension plans for its employees and for general corporate purposes. The Additional 6.25 Percent Notes constitute a further issuance of, and are fungible with, the $225 million aggregate principal amount of Initial 6.25 Percent Notes that the company issued on February 13, 2014 and form a single series with the Initial 6.25 Percent Notes (collectively, the " 6.25 Percent Notes"). The Additional 6.25 Percent Notes have terms identical to the Initial 6.25 Percent Notes, other than issue date and offering price, and have the same CUSIP number as the Initial 6.25 Percent Notes. Upon completion of the offering, the aggregate principal amount of outstanding 6.25 Percent Notes was $450 million . The 6.25 Percent Notes bear interest at a fixed rate of 6.25 percent per annum. The company pays interest on the 6.25 Percent Notes semi-annually in arrears on February 15 and August 15 of each year. The 6.25 Percent Notes constitute senior unsecured obligations of the company and rank equally in right of payment with existing and future senior unsecured indebtedness and effectively junior to existing and future secured indebtedness. The 6.25 Percent Notes are guaranteed on a senior unsecured basis by each of the company's subsidiaries from time to time guaranteeing its senior secured credit facility. The guarantees rank equally with existing and future senior unsecured indebtedness of the guarantors and will be effectively subordinated to all of the existing and future secured indebtedness of the guarantors, to the extent of the value of the assets securing such indebtedness. Prior to February 15, 2019, the company may redeem, at its option, from time to time, the 6.25 Percent Notes, in whole or in part, at a redemption price equal to 100 percent of the principal amount of the 6.25 Percent Notes to be redeemed, plus an applicable make-whole premium (as defined in the indenture under which the 6.25 Percent Notes were issued) and any accrued and unpaid interest. On or after February 15, 2019, the company may redeem, at its option, from time to time, the 6.25 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.25 Percent Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on February 15 of the years indicated below: Year Redemption Price 2019 103.125% 2020 102.083% 2021 101.042% 2022 and thereafter 100.000% If a Change of Control (as defined in the indenture under which the 6.25 Percent Notes were issued) occurs, unless the company has exercised its right to redeem the 6.25 Percent Notes, each holder of 6.25 Percent Notes may require the company to repurchase some or all of such holder's 6.25 Percent Notes at a purchase price equal to 101 percent of the principal amount of the 6.25 Percent Notes to be repurchased, plus accrued and unpaid interest, if any. 6.75 Percent Notes On May 31, 2013, the company completed an offering of debt securities consisting of the issuance of $275 million principal amount of the 6.75 Percent Notes. The offering and sale were made pursuant to the company's February 2012 shelf registration statement. The 6.75 Percent Notes were issued under the company's indenture dated as of April 1, 1998, as supplemented. The 6.75 Percent Notes were issued at 100 percent of their principal amount. The proceeds from the sale of the 6.75 Percent Notes were $275 million and were primarily used to complete a cash tender offer for $167 million of the 8.125 percent notes due 2015. The 6.75 Percent Notes bore interest at a fixed rate of 6.75 percent per annum. The company paid interest on the 6.75 Percent Notes semi-annually in arrears on June 15 and December 15 of each year. The 6.75 Percent Notes constituted senior unsecured obligations of the company and ranked equally in right of payment with existing and future senior unsecured indebtedness and effectively junior to existing and future secured indebtedness to the extent of the security therefor. The 6.75 Percent Notes were guaranteed on a senior unsecured basis by each of the company's subsidiaries from time to time guaranteeing its senior secured credit facility. The guarantees ranked equally with existing and future senior unsecured indebtedness of the guarantors and were effectively subordinated to all of the existing and future secured indebtedness of the guarantors, to the extent of the value of the assets securing such indebtedness. Prior to June 15, 2016, the company could redeem, at its option, from time to time, the 6.75 Percent Notes, in whole or in part, at a redemption price equal to 100 percent of the principal amount of the 6.75 Percent Notes to be redeemed plus an applicable make-whole premium (as defined in the indenture under which the 6.75 Percent Notes were issued) and any accrued and unpaid interest. On or after June 15, 2016, the company could redeem, at its option, from time to time, the 6.75 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.75 Percent Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, had they been redeemed during the 12-month period beginning on June 15 of the years indicated below: Year Redemption Price 2016 105.063% 2017 103.375% 2018 101.688% 2019 and thereafter 100.000% Prior to June 15, 2016, the company could also redeem, at its option, from time to time, up to 35 percent of the aggregate principal amount of the 6.75 Percent Notes with the net cash proceeds of one or more public sales of the company's common stock at a redemption price equal to 106.75 percent of the principal amount, plus accrued and unpaid interest, if any, so long as at least 65 percent of the aggregate principal amount of 6.75 Percent Notes originally issued remained outstanding after each such redemption and notice of any such redemption was mailed within 90 days after any such sale of common stock. If a Change of Control (as defined in the indenture under which the 6.75 Percent Notes were issued) occurred, unless the company had exercised its right to redeem the 6.75 Percent Notes, each holder of 6.75 Percent Notes could have required the company to repurchase some or all of such holder's 6.75 Percent Notes at a purchase price equal to 101 percent of the principal amount of the 6.75 Percent Notes to be repurchased, plus accrued and unpaid interest, if any. As of September 30, 2018 , the 6.75 Percent Notes were fully redeemed. As of September 30, 2017, $ 173 million principal amount of the 6.75 Percent Notes remained outstanding. 7.875 Percent Convertible Notes In December 2012, the company issued $250 million principal amount of 7.875 Percent Convertible Notes. The 7.875 Percent Convertible Notes were sold by the company to qualified institutional buyers in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The 7.875 Percent Convertible Notes have an initial principal amount of $900 per note and will accrete to $1,000 per note on December 1, 2020 at an effective interest rate of 10.9 percent . Net proceeds received by the company, after issuance costs and discounts, were approximately $220 million . The company pays 7.875 percent cash interest on the principal amount of the 7.875 Percent Convertible Notes semi-annually in arrears on June 1 and December 1 of each year to holders of record at the close of business on the preceding May 15 and November 15, respectively, and at maturity to the holders that present the 7.875 Percent Convertible Notes for payment. Interest accrues on the principal amount thereof from and including the date the 7.875 Percent Convertible Notes were issued or from and including the last date in respect of which interest has been paid or provided for, as the case may be, to, but excluding, the next interest payment date. The 7.875 Percent Convertible Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of the company's subsidiaries. The 7.875 Percent Convertible Notes are senior unsecured obligations and rank equally in right of payment with all of the company's existing and future senior unsecured indebtedness and are junior to any of the company's existing and future secured indebtedness. The 7.875 Percent Convertible Notes will be convertible into cash up to the principal amount at maturity of the 7.875 Percent Convertible Note surrendered for conversion and, if applicable, shares of the company's common stock (subject to a conversion share cap as described below), based on an initial conversion rate, subject to adjustment, equivalent to 83.3333 shares per $1,000 principal amount at maturity of 7.875 Percent Convertible Notes (which represents an initial conversion price of $12.00 per share), only under the following circumstances: • prior to June 1, 2025, during any calendar quarter after the calendar quarter ending December 31, 2012, if the closing sale price of the company's common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 120 percent of the applicable conversion price in effect on the last trading day of the immediately preceding calendar quarter; • prior to June 1, 2025, during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount at maturity of 7.875 Percent Convertible Notes was equal to or less than 97 percent of the conversion value of the 7.875 Percent Convertible Notes on each trading day during such five consecutive trading day period; • prior to June 1, 2025, if the company has called the 7.875 Percent Convertible Notes for redemption; • prior to June 1, 2025, upon the occurrence of specified corporate transactions; or • at any time on or after June 1, 2025. On or after December 1, 2020, the company may redeem the 7.875 Percent Convertible Notes at its option, in whole or in part, at a redemption price in cash equal to 100 percent of the principal amount at maturity of the 7.875 Percent Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Further, holders may require the company to purchase all or a portion of their 7.875 Percent Convertible Notes at a purchase price in cash equal to 100 percent of the principal amount at maturity of the 7.875 Percent Convertible Notes to be purchased, plus accrued and unpaid interest, on December 1, 2020 or upon certain fundamental changes. The maximum number of shares of common stock into which the 7.875 Percent Convertible Notes are convertible is approximately 2 million shares. The company used the net proceeds of approximately $220 million from the offering of the 7.875 Percent Convertible Notes (after discounts and issuance costs) and additional cash to acquire a portion of its outstanding 4.625 Percent Convertible Notes in transactions that settled concurrently with the closing of the 7.875 Percent Convertible Note offering. Approximately $245 million of $300 million principal amount of the 4.625 Percent Convertible Notes were repurchased for an aggregate purchase price of approximately $236 million (including accrued interest). Accounting guidance requires that cash-settled convertible debt, such as the 7.875 Percent Convertible Notes, be separated into debt and equity components at issuance and a value be assigned to each. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value, representing the value assigned to the equity component, is recorded as a debt discount. The company measures the debt component at fair value by utilizing a discounted cash flow model. This model utilizes observable inputs such as contractual repayment terms, benchmark forward yield curves, yield curves and quoted market prices of its own nonconvertible debt. The yield curves are acquired from an independent source that is widely used in the financial industry and reviewed internally by personnel with appropriate expertise in valuation methodologies. Approximately $23 million principal amount of the 7.875 Percent Convertible Notes remained outstanding as of September 30, 2018 and September 30, 2017 . 4.0 Percent Convertible Notes In February 2007, the company issued $200 million principal amount of 4.0 Percent Convertible Notes. The 4.0 Percent Convertible Notes bear cash interest at a rate of 4.0 percent per annum from the date of issuance through February 15, 2019, payable semi-annually in arrears on February 15 and August 15 of each year. After February 15, 2019, the |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The company’s financial instruments include cash and cash equivalents, short-term debt, long-term debt, and foreign exchange forward and options contracts. The company uses derivatives for hedging and non-trading purposes in order to manage its foreign exchange rate exposures. Foreign Exchange Contracts As a result of the company’s substantial international operations, it is exposed to foreign currency risks that arise from normal business operations, including in connection with transactions that are denominated in foreign currencies. In addition, the company translates sales and financial results denominated in foreign currencies into U.S. dollars for purposes of its consolidated financial statements. As a result, appreciation of the U.S. dollar against these foreign currencies generally will have a negative impact on reported revenues and operating income, while depreciation of the U.S. dollar against these foreign currencies will generally have a positive effect on reported revenues and operating income. For fiscal year 2016, our reported financial results were adversely affected by appreciation of the U.S. dollar against foreign currencies. For fiscal years 2017 and 2018, our reported financial results benefited from depreciation of the U.S. dollar against foreign currencies. The company has a foreign currency cash flow hedging program to reduce the company’s exposure to changes in exchange rates on foreign currency purchases and sales. The company uses foreign currency forward contracts to manage the company’s exposures arising from foreign currency exchange risk. Gains and losses on the underlying foreign currency exposures are partially offset with gains and losses on the foreign currency forward contracts. Under this foreign currency cash flow hedging program, the company has designated the foreign exchange contracts as cash flow hedges of underlying forecasted foreign currency purchases and sales. Changes in the fair value of these contracts are recorded in accumulated other comprehensive loss (AOCL) in the consolidated balance sheet and are recognized in operating income when the underlying forecasted transaction impacts earnings. The terms of these contracts generally require the company to place cash on deposit as collateral if the fair value of these contracts represents a liability for the company and exceeds the collateral threshold. The fair values of the foreign exchange derivative instruments and any related collateral cash deposits are presented on a net basis as the derivative contracts are subject to master netting arrangements. At September 30, 2018 , 2017 and 2016 , the notional amount of the company's foreign exchange contracts outstanding under its foreign currency cash flow hedging program was $154 million , $126 million , and $190 million , respectively. The company classifies the cash flows associated with these contracts in cash flows from operating activities in the consolidated statement of cash flows. This is consistent with the classification of the cash flows associated with the underlying hedged item. From time to time the company hedges against foreign currency exposure related to translations to U.S. dollars of financial results denominated in foreign currencies. Changes in fair value associated with these contracts are recorded in other income (expense), net, in the consolidated statement of operations. The company also uses option contracts to mitigate foreign currency exposure on expected future Indian Rupee-denominated purchases. Changes in fair value associated with these contracts are recorded in cost of sales in the consolidated statement of operations. The following table summarizes the impact of the company’s derivatives instruments on comprehensive income for fiscal years ended September 30 (in millions): Location of Gain (Loss) 2018 2017 2016 Derivatives designated as hedging instruments: Amount of gain (loss) recognized in AOCL AOCL $ 3 $ (1 ) $ (3 ) Amount of gain (loss) reclassified from AOCL into income Cost of Sales (1 ) 1 (4 ) Derivatives not designated as hedging instruments: Amount of gain (loss) recognized in income Cost of Sales (2 ) 1 (1 ) Derivatives not designated as hedging instruments: Amount of gain (loss) recognized in income Other Income (expense) 2 — (1 ) Fair Value Fair values of financial instruments are summarized as follows (in millions): September 30, September 30, Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 115 $ 115 $ 88 $ 88 Short-term debt 94 116 288 329 Long-term debt 730 776 750 859 Foreign exchange forward contracts (other assets) 2 2 — — Foreign exchange forward contracts (other liabilities) — — 3 3 Foreign currency option contracts (other assets) — — 3 3 Cross-currency Swap (other assets) 6 6 — — The following table reflects the offsetting of derivative assets and liabilities (in millions): September 30, 2018 September 30, 2017 Gross Gross Amounts Net Amounts Gross Gross Amounts Net Amounts Derivative Asset Foreign exchange forward contract 2 — 2 — — — Cross-currency swap 6 — 6 — — — Derivative Liabilities Foreign exchange forward contract — — — 3 — 3 Fair Value The current FASB guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical instruments (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 inputs use quoted prices in active markets for identical instruments. • Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar instruments in active markets and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related instrument. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest priority level input that is significant to the valuation. The company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. Fair value of financial instruments by the valuation hierarchy at September 30, 2018 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 115 $ — $ — Short-term debt — 114 2 Long-term debt — 771 5 Foreign exchange forward contracts (asset) — 2 — Foreign exchange forward contracts (liability) — — — Foreign currency option contracts (other assets) — — — Cross-currency Swap (other assets) — 6 — Fair value of financial instruments by the valuation hierarchy at September 30, 2017 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 88 $ — $ — Short-term debt — 325 4 Long-term debt — 851 8 Foreign exchange forward contracts (asset) — — — Foreign exchange forward contracts (liability) — 3 — Foreign currency option contracts (other assets) — — 3 Cross-currency Swap (other assets) — — — The tables below provide a reconciliation of changes in fair value of the Level 3 financial assets and liabilities measured at fair value in the consolidated balance sheet for the twelve months ended September 30, 2018 and September 30, 2017 , respectively. No transfers of assets between any of the Levels occurred during these periods. Twelve months ended September 30, 2018 (in millions) Short-term foreign currency option contracts (asset) Long-term foreign currency option contracts (asset) Total Fair Value as of September 30, 2017 $ 2 $ 1 $ 3 Total unrealized gains (losses): Included in other income — — — Included in cost of sales (1 ) (1 ) (2 ) Total realized gains (losses): Included in other income 1 — 1 Included in cost of sales — — — Purchases, issuances, sales and settlements: Purchases — — — Settlements (2 ) — (2 ) Transfer in and / or out of Level 3 (1) — — — Reclass between short-term and long-term — — — Fair Value as of September 30, 2018 $ — $ — $ — (1) Transfers as of the last day of the reporting period Twelve months ended September 30, 2017 (in millions) Short-term foreign currency option contracts (asset) Long-term foreign currency option contracts (asset) Total Fair Value as of September 30, 2016 $ — $ 2 $ 2 Total unrealized gains (losses): Included in other income — — — Included in cost of sales — 2 2 Total realized gains (losses): Included in other income — — — Included in cost of sales — — — Purchases, issuances, sales and settlements: Purchases 1 1 2 Settlements (2 ) (1 ) (3 ) Transfer in and / or out of Level 3 (1) — — — Reclass between short-term and long-term 3 (3 ) — Fair Value as of September 30, 2017 $ 2 $ 1 $ 3 (1) Transfers as of the last day of the reporting period Cash and cash equivalents — All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. The carrying value approximates fair value because of the short maturity of these instruments. The company did not have any cash equivalents at September 30, 2018 or September 30, 2017 . Short- and long-term debt — Fair values are based on transaction prices at public exchange for publicly traded debt. For debt instruments that are not publicly traded, fair values are based on interest rates that would be currently available to the company for issuance of similar types of debt instruments with similar terms and remaining maturities. Foreign exchange forward contracts — The company uses foreign exchange forward purchase and sale contracts with terms of 15 months or less to hedge its exposure to changes in foreign currency exchange rates. The fair value of foreign exchange forward contracts is based on a model which incorporates observable inputs including quoted spot rates, forward exchange rates and discounted future expected cash flows utilizing market interest rates with similar quality and maturity characteristics. For derivative instruments that are designated and qualify as cash flow hedges, changes in the fair value of the contracts are recorded in AOCL in the statement of shareholders’ equity and is recognized in operating income when the underlying forecasted transaction impacts earnings. Foreign currency option contracts — The company uses option contracts to mitigate foreign exchange exposure on expected future Indian Rupee-denominated purchases. As of September 30, 2018 and September 30, 2017 , the notional amount of the company's Indian rupee foreign exchange contracts outstanding was $180 million and $172 million , respectively. The company did not elect hedge accounting for these derivatives. Changes in fair value associated with these contracts are recorded in cost of sales in the consolidated statement of operations. The company uses option contracts to mitigate foreign exchange exposure on expected future South Korean won-denominated purchases. As of September 30, 2018 , the notional amount of the company’s South Korean won option contracts outstanding was $41 million . As of September 30, 2017 , there were no South Korean won foreign exchange option contracts outstanding. The company did not elect hedge accounting for these derivatives. Changes in fair value associated with these contracts are recorded in cost of sales in the consolidated statement of operations. The company uses foreign currency option contracts to mitigate foreign currency exposure on expected future Brazilian real-denominated purchases. As of September 30, 2018 , the notional amount of the company's Brazilian real foreign exchange contracts outstanding was $16 million . As of September 30, 2017 , there were no Brazilian real foreign exchange option contracts outstanding. The company did not elect hedge accounting for these derivatives. Changes in fair value associated with these contracts are recorded in cost of sales in the consolidated statement of operations. The company uses option contracts to mitigate the risk of volatility in the translation of euro earnings to U.S. dollars. As of September 30, 2018 , there were no euro foreign exchange option contracts outstanding. As of September 30, 2017 , the notional amount of the company’s euro option contracts outstanding was $58 million . These option contracts did not qualify for a hedge accounting election. Changes in fair value associated with these contracts are recorded in the consolidated statement of operations in other income, net. The company uses option contracts to mitigate the risk of volatility in the translation of Swedish krona to U.S. dollars. As of September 30, 2018 , there were no Swedish krona foreign exchange option contracts outstanding. As of September 30, 2017 , the notional amount of the company’s Swedish krona option contracts outstanding was $71 million . These option contracts did not qualify for a hedge accounting election. Changes in fair value associated with these contracts are recorded in the consolidated statement of operations in other income, net. The fair value of foreign exchange option contracts is based on third-party proprietary models, which incorporate inputs at varying unobservable weights of quoted spot rates, market volatility, forward rates and time utilizing market instruments with similar quality and maturity characteristics. Cross-currency swap contracts — The company uses cross-currency swap contracts to hedge a portion of its net investment in a foreign subsidiary against volatility in foreign exchange rates. These derivative instruments are designated and qualify as hedges of net investments in foreign operations using the spot method to assess effectiveness. Settlements and changes in fair values of the instruments are recognized in foreign currency translation adjustments, a component of other comprehensive income (loss) on the consolidated statement of comprehensive income (loss), to offset the changes in the values of the net investments being hedged. In the third quarter of fiscal year 2018, the company entered into multiple cross-currency swaps with a combined notional amount of $225 million . As of September 30, 2018 , the notional amount of the company's cross-currency swap contracts outstanding was $225 million . These swaps hedged a portion of the net investment in a certain European subsidiary against volatility in the EUR/USD foreign exchange rate. They mature in May 2021. The fair value of cross-currency swap contracts is based on a model which incorporates observable inputs, including quoted spot rates, forward exchange rates and discounted future expected cash flows, utilizing market interest rates with similar quality and maturity characteristics. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Common Stock The company is authorized to issue 500 million shares of common stock, with a par value of $1 per share, and 30 million shares of Preferred Stock, without par value, of which 2 million shares are designated as Series A Junior Participating Preferred Stock ("Junior Preferred Stock"). No shares of Preferred Stock or Junior Preferred Stock have been issued. In the first quarter of fiscal year 2018, the company filed a shelf registration statement with the SEC, registering an indeterminate amount of debt and/or equity securities that may be offered in one or more offerings on terms to be determined at the time of sale. The company has reserved approximately 13 million shares of common stock in connection with its 2010 Long-Term Incentive Plan, as amended ("LTIP") for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, performance shares, restricted share units and stock awards to key employees and directors. At September 30, 2018 , there were 4.3 million shares available for future grants under the LTIP. Repurchase Authorizations On November 2, 2018, the Board of Directors authorized the repurchase of up to $200 million of the company's common stock and up to $100 million aggregate principal amount of any of the company's debt securities (including convertible debt securities), in each case from time to time through open market purchases, privately negotiated transactions or otherwise, subject to compliance with legal and regulatory requirements and the company's debt covenants. These authorizations supersede the remaining authority under the prior July 2016 repurchase authorizations. On July 21, 2016, the Board of Directors authorized the repurchase of up to $100 million of the company’s common stock and up to $150 million aggregate principal amount of any of the company’s debt securities (including convertible debt securities), in each case from time to time through open market purchases, privately negotiated transactions or otherwise, until September 30, 2019, subject to compliance with legal and regulatory requirements and the company's debt covenants. This repurchase authorization superseded and replaced the January 2015 repurchase authorization described below. During fiscal year 2018, the company repurchased 4.5 million shares of common stock for $100 million (including commission costs), pursuant to this authorization. The repurchase program under the $100 million equity repurchase authorization was complete as of September 30, 2018. The amount remaining available for repurchases under the debt repurchase authorization was $50 million as of September 30, 2018. There was an insignificant amount of common stock and $100 million in debt security repurchases that were made under these authorizations during fiscal year 2017. In June 2014, the company's Board of Directors authorized the repurchase of up to $210 million of the company's equity and equity-linked securities (including convertible debt securities), subject to the achievement of its M2016 net debt reduction target and compliance with legal and regulatory requirements and its debt covenants. During fiscal year 2016, the company repurchased 8.7 million shares of common stock for $81 million (including commission costs) and all $55 million outstanding principal amount 4.625% convertible notes at 100 percent of the face value of the notes. In the aggregate, the company repurchased 12.8 million of its shares of common stock for $136 million (including commission costs), $19 million principal amount of its 4.0 percent convertible notes, and all of the $55 million outstanding principal amount 4.625% convertible notes at 100 percent of the face value of the notes (see Note 17). The repurchase program under the $210 million authorization was complete as of September 30, 2016. In January 2015, the Offering Committee of the company's Board of Directors authorized the repurchase of up to $150 million aggregate principal amount of any of the company's debt securities (including convertible debt securities). No repurchases were made under this authorization prior to its replacement with the authorization in July 2016 described above. Accumulated Other Comprehensive Loss (AOCL) The components of AOCL as reported in the Consolidated Balance Sheet and Statement of Equity (Deficit), and the changes in AOCL by components, net of tax, are as follows (in millions): Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) Total Balance at September 30, 2017 $ (41 ) $ (500 ) $ (4 ) $ (545 ) Other comprehensive income (loss) before reclassification (49 ) 8 3 (38 ) Amounts reclassified from accumulated other comprehensive loss — 16 1 17 Net current-period other comprehensive income (loss) $ (49 ) $ 24 $ 4 $ (21 ) Balance at September 30, 2018 $ (90 ) $ (476 ) $ — $ (566 ) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Amortization of prior service credits $ (35 ) (a) Amortization of actuarial losses 46 (a) Recognized prior service costs and actuarial losses due to settlement 6 (a) 17 Total before tax (1 ) Tax (benefit) expense $ 16 Net of tax Total reclassifications for the period $ 16 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 21 and 22 for additional details), which is recorded in cost of sales and selling, general and administrative expenses. Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Loss Total Balance at September 30, 2016 $ (66 ) $ (740 ) $ (3 ) $ (809 ) Other comprehensive income (loss) before reclassification 25 200 (1 ) 224 Amounts reclassified from accumulated other comprehensive loss — 40 — 40 Net current-period other comprehensive income (loss) $ 25 $ 240 $ (1 ) $ 264 Balance at September 30, 2017 $ (41 ) $ (500 ) $ (4 ) $ (545 ) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Amortization of prior service costs $ (5 ) (a) Amortization of actuarial losses 45 (a) 40 Total before tax (12 ) Tax (benefit) expense $ 28 Net of tax Total reclassifications for the period $ 28 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 21 and 22 for additional details), which is recorded in cost of sales and selling, general and administrative expenses. Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Loss Total Balance at September 30, 2015 $ (54 ) $ (705 ) $ (7 ) $ (766 ) Other comprehensive income (loss) before reclassification (12 ) (70 ) 4 (78 ) Amounts reclassified from accumulated other comprehensive loss — 35 — 35 Net current-period other comprehensive income (loss) $ (12 ) $ (35 ) $ 4 $ (43 ) Balance at September 30, 2016 $ (66 ) $ (740 ) $ (3 ) $ (809 ) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Amortization of prior service costs $ (1 ) (a) Amortization of actuarial losses 36 (a) 35 Total before tax — Tax (benefit) expense $ 35 Net of tax Total reclassifications for the period $ 35 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 21 and 22 for additional details), which is recorded in cost of sales and selling, general and administrative expenses. |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY BASED COMPENSATION | EQUITY BASED COMPENSATION Stock Options Under the company’s incentive plans, stock options are typically granted at prices equal to the fair value on the grant date and have a maximum term of 10 years . Stock options generally vest over a three -year period from the grant date. There were 0.2 million stock options that were exercised in fiscal year 2017. No stock options were granted or exercised during fiscal years 2018 or 2016. No stock options were granted in fiscal year 2017. There were no stock options outstanding as of September 30, 2018. Stock-based compensation is measured at the grant date based on the fair value of the award and is generally recognized as expense ratably on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. Compensation expense is recognized for the non-vested portion of previously issued stock options. No compensation expense associated with the expensing of stock options was recognized in fiscal years 2018, 2017 or 2016. Restricted Stock and Restricted Share Units The company has granted shares of restricted stock and restricted share units to certain employees and non-employee members of the Board of Directors in accordance with the existing plans. The company measures the grant date fair value of these stock-based awards at the market price of the company’s common stock as of the date of the grant. Employee awards typically vest at the end of three years and are subject to continued employment by the employee. Compensation cost associated with stock-based awards is recognized ratably over the vesting period. Cash dividends on the restricted stock, if any, are reinvested in additional shares of common stock during the vesting period. The following is a rollforward of the company’s non-vested restricted stock and restricted share units as of September 30, 2018 , and the activity during fiscal year 2018 is summarized as follows (shares in thousands): Non-vested Shares Number of Shares Weighted-Average Grant-Date Fair Value Non-vested - beginning of year 1,514 $ 12.10 Granted 355 24.93 Vested (361 ) 13.91 Forfeited (44 ) 17.98 Non-vested - end of year 1,464 14.59 In fiscal years 2018 , 2017 and 2016 , the company granted 0.4 million , 0.6 million , and 0.7 million shares of restricted stock and restricted share units, respectively. The grant date weighted average fair value of these restricted share units was $24.93 , $13.29 and $9.72 for shares of restricted stock and restricted share units granted in fiscal years 2018 , 2017 and 2016 , respectively. The number of non-vested restricted shares and restricted share units as of September 30, 2018 was 1.5 million . The per share weighted average fair value of these non-vested shares was $14.59 . As of September 30, 2018 , there was $8 million of total unrecognized compensation costs related to non-vested restricted shares and restricted share units. These costs are expected to be recognized over a weighted average period of 1.02 years. Total compensation expense recognized for restricted stock and restricted share units was $8 million , $7 million and $5 million in fiscal years 2018 , 2017 and 2016 , respectively. Performance Share Units The company has granted performance share units to all executives eligible to participate in the LTIP. The company measures the grant date fair value of these units-based awards at the market price of the company’s common stock as of the date of the grant. Compensation cost associated with these stock-based awards is recognized ratably over the vesting period. In November 2017, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the LTIP. Each performance share unit represents the right to receive one share of common stock or its cash equivalent upon achievement of certain performance and time vesting criteria. The fair value of each performance share unit was $24.79 , which was the company’s share price on the grant date of December 1, 2017. The Board of Directors also approved a grant of 0.3 million restricted share units to these executives. The restricted share units vest at the earlier of three years from the date of grant or upon termination of employment with the company under certain circumstances. The fair value of each restricted share unit was $24.79 , which was the company's share price on the grant date of December 1, 2017. The actual number of performance share units that will vest depends upon the company’s performance relative to the established performance metrics for the three-year performance period of October 1, 2017 to September 30, 2020, measured at the end of the performance period. The actual number of performance share units that will vest will depend on adjusted EBITDA margin and adjusted diluted earnings per share from continuing operations at the following weights: 50% associated with achieving an adjusted EBITDA margin target and 50% associated with achieving an adjusted diluted earnings per share from continuing operations target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.3 million performance share units. In November 2016, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the LTIP. Each performance share unit represents the right to receive one share of common stock or its cash equivalent upon achievement of certain performance and time vesting criteria. The fair value of each performance share unit was $12.77 , which was the company’s share price on the grant date of December 1, 2016. The Board of Directors also approved a grant of 0.5 million restricted share units to these executives. The restricted share units vest at the earlier of three years from the date of grant or upon termination of employment with the company under certain circumstances. The fair value of each restricted share unit was $12.77 , which was the company's share price on the grant date of December 1, 2016. The actual number of performance share units that will vest depends upon the company’s performance relative to the established M2019 goals for the three -year performance period of October 1, 2016 to September 30, 2019, measured at the end of the performance period. The number of performance share units that vest will depend on meeting the established M2019 goals at the following weights: 50% associated with achieving an Adjusted diluted earnings per share from continuing operations target, 25% associated with achieving targets for revenue growth above market and 25% associated with achieving a Net debt to Adjusted EBITDA target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.6 million performance share units. In November 2015, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the LTIP. Each performance share unit represents the right to receive one share of common stock or its cash equivalent upon achievement of certain performance and time vesting criteria. The fair value of each performance share unit was $10.51 , which was the company’s share price on the grant date of December 1, 2015. The Board of Directors also approved a grant of 0.5 million restricted share units to these executives. The restricted share units vest at the earlier of three years from the date of grant or upon termination of employment with the company under certain circumstances. The fair value of each restricted share unit was $10.51 , which was the company's share price on the grant date of December 1, 2015. The actual number of performance share units that will vest depends upon the company’s performance relative to the established performance metrics for the three -year performance period of October 1, 2015 to September 30, 2018, measured at the end of the performance period. The number of performance share units will depend on Adjusted EBITDA margin and Adjusted diluted earnings per share from continuing operations at the following weights: 50% associated with achieving an Adjusted EBITDA margin target and 50% associated with achieving an Adjusted diluted earnings per share from continuing operations target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.7 million performance share units. The following is a rollforward of the company’s non-vested performance share units as of September 30, 2018 , and the activity during fiscal year 2018 is summarized as follows (shares in thousands): Non-vested Shares Number of Shares Weighted-Average Grant-Date Fair Value Non-vested - beginning of year 1,813 $ 11.93 Granted 362 24.69 Vested (411 ) 13.11 Forfeited (152 ) 15.26 Non-vested - end of year 1,612 14.18 There were 0.4 million performance share units granted during fiscal 2018 and 1.6 million of non-vested performance shares as of September 30, 2018 . The per share weighted average fair value of the performance share units was $14.18 as of September 30, 2018 . For the years ended September 30, 2018 , 2017 and 2016 , compensation cost recognized related to the performance share units was $14 million , $14 million and $6 million , respectively. As of September 30, 2018 , there were $12 million of total unrecognized compensation costs related to non-vested performance share unit equity compensation arrangements. These costs are expected to be recognized over a weighted average period of 1.05 years . |
RETIREMENT MEDICAL PLANS
RETIREMENT MEDICAL PLANS | 12 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan, Postretirement Medical Plan with Prescription Drug Benefits [Abstract] | |
RETIREMENT MEDICAL PLANS | RETIREMENT MEDICAL PLANS The company has retirement medical plans that cover certain of its U.S. and non-U.S. employees, including certain employees of divested businesses, and provide for medical payments to eligible employees and dependents upon retirement. These plans are unfunded. On September 8, 2017, the company determined to modify the benefits provided to certain former union employee retirees. Under these modifications, which may be amended at the company’s discretion at any time, the company expects to provide (i) each retiree over the age of 65 with a defined contribution of $4,000 annually and (ii) each retiree under the age of 65 with a level of benefits generally equivalent to those currently provided to the company’s active employees, in each case and as currently contemplated, for a period of seven years. These benefit modifications generated a $315 million prior service credit in September 2017, which will be amortized over the retirees’ average life expectancy, which is currently estimated to be 10 years . The mortality assumptions for participants in the company’s U.S. plans incorporates future mortality improvements from tables published by the Society of Actuaries ("SOA"). In October 2014, the SOA issued new mortality and mortality improvement tables that raised the life expectancies. The company reviewed the new SOA mortality and mortality improvement tables and utilized an actuary to conduct a study based on the company’s plan participants. The company determined that the best representation of the plans' mortality is to utilize the new SOA mortality and mortality improvement tables as the reference table for credibility-weighted mortality rates, blended with company-specific mortality based on the study conducted by the actuary. The company incorporated the updated tables into the 2015 year-end measurement of the plans’ benefit obligations. As a result of this change in actuarial assumption, the company’s U.S. OPEB obligations decreased by $18 million in the fourth quarter of fiscal year 2015. The company considers improvement scales released annually by the SOA. In fiscal year 2018, the company adopted a modified MP-2017 scale. Adopting the modified MP-2017 scale did not have a material effect on the company's U.S. OPEB obligations. The company’s retiree medical obligations were measured as of September 30, 2018 , 2017 , and 2016 . The following are the assumptions used in the measurement of the accumulated postretirement benefit obligation ("APBO") and retiree medical expense: 2018 2017 2016 Discount rate 4.05 % 3.32 % 3.45 % Health care cost trend rate 6.18 % 6.52 % 7.10 % Ultimate health care trend rate 4.63 % 4.65 % 4.75 % Year ultimate rate is reached 2024 2024 2024 The assumptions noted above are used to calculate the APBO for each fiscal year end and retiree medical expense for the subsequent fiscal year. The discount rate is used to calculate the present value of the APBO. This rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical benefits. The company has used the corporate AA/Aa bond rate for this assumption. The health care cost trend rate represents the company’s expected annual rates of change in the cost of health care benefits. The company’s projection for fiscal year 2019 health care cost trend rate is 6.18 percent . The APBO as of the September 30, 2018 and 2017 measurement dates are summarized as follows (in millions): 2018 2017 Retirees $ 86 $ 104 Employees eligible to retire — — Total $ 86 $ 104 The following reconciles the change in APBO and the amounts included in the consolidated balance sheet for years ended September 30, 2018 and 2017 , respectively (in millions): 2018 2017 APBO — beginning of year $ 104 $ 445 Interest cost 3 14 Actuarial loss gain (5 ) (8 ) Plan amendment — (315 ) Foreign currency rate changes (1 ) — Benefit payments (1) (15 ) (32 ) APBO — end of year 86 104 Retiree medical liability $ 86 $ 104 (1) Net of subsidies and rebates available under Employer Group Waiver Plan ("EGWP"). Actuarial losses(gains) relate to changes in the discount rate and other actuarial assumptions. In accordance with ASC Topic 715, "Compensation – Retirement Benefits", a portion of the actuarial losses is not subject to amortization. The actuarial losses that are subject to amortization are generally amortized over the average lifetime of inactive participants of approximately 10 years . The Medicare Prescription Drug Improvement and Modernization Act of 2003 provides for a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit at least actuarially equivalent to the benefit established by the law. The company provides retiree medical benefits under certain plans that exceed the value of the benefits that are provided by the Medicare Part D plan. Therefore, management concluded that these plans are at least actuarially equivalent to the Medicare Part D plan and the company is eligible for the federal subsidy. In September 2011, in connection with the Health Care and Education Reconciliation Act of 2010, the company converted its current prescription drug program for certain retirees to a group-based, company-sponsored Medicare Part D program, or EGWP. In September 2012, the company converted certain additional groups of retirees to EGWP and as a result, reduced its APBO by an additional amount of approximately $25 million . In 2013, the company began using the Part D subsidies delivered through EGWP to reduce its net retiree medical costs. As a result of this change in assumption, the company reduced its APBO by approximately $35 million . These reductions to APBO are being amortized over an average expected lifetime of inactive participants of approximately 10 years. The retiree medical liability is included in the consolidated balance sheet as follows (in millions): September 30, 2018 2017 Current — included in compensation and benefits $ 13 $ 18 Long-term — included in retirement benefits 73 86 Retiree medical liability $ 86 $ 104 The following table summarizes the amounts included in AOCL net of tax related to retiree medical liabilities as of September 30, 2018 and 2017 and changes recognized in Other Comprehensive Income (Loss) net of tax for the years ended September 30, 2018 and 2017 . Net Actuarial Loss Prior Service Cost (Benefit) Total Balance at September 30, 2017 $ 92 $ (203 ) $ (111 ) Net actuarial gain for the year (5 ) — (5 ) Amortization for the year (17 ) 35 18 Deferred tax impact 6 (10 ) (4 ) Balance at September 30, 2018 $ 76 $ (178 ) $ (102 ) Balance at September 30, 2016 $ 107 $ (11 ) $ 96 Net actuarial gain for the year (8 ) — (8 ) Recognized prior service costs due to plan amendment — (315 ) (315 ) Amortization for the year (15 ) 5 (10 ) Deferred tax impact 8 118 126 Balance at September 30, 2017 $ 92 $ (203 ) $ (111 ) The net actuarial loss and prior service benefit that are estimated to be amortized from AOCL into net periodic retiree medical income in fiscal year 2019 are $(15) million and $35 million , respectively. The components of retiree medical expense for years ended September 30 are as follows (in millions): 2018 2017 2016 Service cost $ — $ — $ — Interest cost 3 14 18 Amortization of: Prior service benefit (35 ) (5 ) (1 ) Actuarial losses 17 15 13 Retiree medical (income) expense $ (15 ) $ 24 $ 30 A one-percentage point change in the assumed health care cost trend rate for all years to, and including, the ultimate rate would have the following effects (in millions): 2018 2017 Effect on total service and interest cost 1% Increase $ — $ — 1% Decrease — — Effect on APBO 1% Increase 4 5 1% Decrease (4 ) (4 ) The company expects future benefit payments as follows (in millions): Gross Benefit Payments Gross Receipts (1) Fiscal 2019 $ 14 $ — Fiscal 2020 13 — Fiscal 2021 12 — Fiscal 2022 11 — Fiscal 2023 10 — Fiscal 2024 – 2028 21 1 (1) Consists of subsidies and rebates available under EGWP. |
RETIREMENT PENSION PLANS
RETIREMENT PENSION PLANS | 12 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
RETIREMENT PENSION PLANS | RETIREMENT PENSION PLANS The company sponsors defined benefit pension plans that cover certain of its U.S. and non-U.S. employees. Pension benefits for salaried employees are based on years of credited service and compensation. Pension benefits for hourly employees are based on years of service and specified benefit amounts. The company’s funding policy provides that annual contributions to the pension trusts will be at least equal to the minimum amounts required by ERISA in the U.S. and the actuarial recommendations or statutory requirements in other countries. The mortality assumptions for participants in the company’s U.S. plans incorporates future mortality improvements from tables published by the SOA. In October 2014, the SOA issued new mortality and mortality improvement tables that raised the life expectancies. The company reviewed the new SOA mortality and mortality improvement tables and utilized an actuary to conduct a study based on the company’s plan participants. The company determined that the best representation of the plans' mortality is to utilize the new SOA mortality and mortality improvement tables as the reference table for credibility-weighted mortality rates, blended with company specific mortality based on the study conducted by the actuary. The company incorporated the updated tables into the 2015 year-end measurement of the plans’ benefit obligations. As a result of this change in actuarial assumption, the company’s U.S. pension obligations increased by $24 million in the fourth quarter of fiscal year 2015. The company considers improvement scales released annually by the SOA. In fiscal year 2018, the company adopted a modified MP-2017 scale. Adopting the modified MP-2017 scale did not have a material effect on the company's U.S. pension obligations. On August 1, 2010, the company amended its defined benefit pension plan in the United Kingdom to cease the accrual of future benefits for all of its active plan participants. Subsequent to the freeze date, the company began making contributions to its defined contribution savings plan on behalf of the affected employees. The amount of the savings plan contribution is based on a percentage of the employees’ pay. These changes did not affect then-current retirees. The company began recording the impact of the plan freeze in the fourth quarter of fiscal year 2010. Subsequent to the plan freeze, accumulated actuarial losses are being amortized into net periodic pension expense over the average life expectancy of inactive plan participants of approximately 26 years rather than over their remaining average service life. The U.K. pension program provides participants with the election to receive a lump-sum settlement of their remaining pension benefit that, if accepted, would settle the company's obligation to them. The company recognized a $6 million settlement loss during the fourth quarter of fiscal year 2018 associated with these payouts. In April 2007, the company announced a freeze of its defined benefit pension plan for salaried and non-represented employees in the United States, effective January 1, 2008. The change affected approximately 3,800 employees including certain employees who continued to accrue benefits for an additional transition period, ending June 30, 2011. After these freeze dates, the company started making additional contributions to its defined contribution savings plan on behalf of the affected employees. The amount of the savings plan contribution is based on a percentage of the employees’ pay, with the contribution percentage increasing as a function of employees’ age. These changes do not affect plan participants who had retired prior to the freeze dates or represented employees. Accumulated actuarial losses are being amortized into net periodic pension expense over the average life expectancy of inactive plan participants of approximately 17 years. In June 2013, the company amended its U.S. Retirement Plan to allow all terminated vested participants with an accrued benefit of $5,000 or less to receive a full lump-sum distribution of their benefit. The lump-sum amounts were rolled into individual retirement accounts for those participants that had an accrued benefit of $1,000 to $5,000 who did not make an affirmative election to receive their benefits. For those participants with an accrued benefit of less than $1,000 , the benefits were automatically distributed to the participant. Effective October 2014, the company amended the U.S. Retirement Plan to include an additional distribution option in the form of a lump sum benefit from the plan. The majority of plan members are eligible for this distribution option following termination or when making their retirement payment election. The lump sum benefit equals the present value of a member's vested accrued benefit paid in one lump sum payment. The company’s pension obligations are measured as of September 30, 2018 , 2017 and 2016 . The U.S. plans include qualified and non-qualified pension plans. The company’s only significant remaining non-U.S. plan is located in the United Kingdom. The following are the significant assumptions used in the measurement of the projected benefit obligation ("PBO") and net periodic pension expense: U.S. Plans 2018 2017 2016 Discount rate 4.30% 3.70% — 3.75% 3.50% — 3.55% Assumed return on plan assets (beginning of the year) 7.75% 7.75% 7.75% U.K. Plan 2018 2017 2016 Discount rate 2.90% 2.80% 2.50% Assumed return on plan assets (beginning of the year) 6.00% 6.00% 6.00% The discount rate is used to calculate the present value of the PBO at the balance sheet date and net periodic pension expense for the subsequent fiscal year. The rate used reflects a rate of return on high-quality fixed income investments that match the duration of expected benefit payments. Generally, the company uses a portfolio of long-term corporate AA/Aa bonds that match the duration of the expected benefit payments, except for the company's U.K. pension plan which uses an annualized yield curve, to establish the discount rate for this assumption. The assumed return on plan assets is used to determine net periodic pension expense. The rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the target asset allocations. An incremental amount for active plan asset management and diversification, where appropriate, is included in the rate of return assumption. The return assumption is reviewed annually. The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans. The accompanying disclosures include pension obligations associated with businesses classified as discontinued operations. The following table reconciles the change in the PBO, the change in plan assets and amounts included in the consolidated balance sheet for the years ended September 30, 2018 and 2017 , respectively (in millions): 2018 2017 U.S. Non- U.S. Total U.S. Non- U.S. Total PBO — beginning of year $ 1,036 $ 599 $ 1,635 $ 1,112 $ 616 $ 1,728 Interest cost 38 16 54 38 15 53 Actuarial gain (70 ) (9 ) (79 ) (32 ) (21 ) (53 ) Prior service cost — — — 1 — 1 Settlements — (18 ) (18 ) — — — Benefit payments (82 ) (19 ) (101 ) (83 ) (30 ) (113 ) Foreign currency rate changes — (15 ) (15 ) — 19 19 PBO — end of year $ 922 $ 554 $ 1,476 $ 1,036 $ 599 $ 1,635 Change in plan assets Fair value of assets — beginning of year $ 821 $ 730 $ 1,551 $ 834 $ 734 $ 1,568 Actual return on plan assets — 32 32 65 1 66 Employer contributions 5 1 6 5 1 6 Settlements — (22 ) (22 ) — — — Benefit payments (82 ) (19 ) (101 ) (83 ) (30 ) (113 ) Foreign currency rate changes — (20 ) (20 ) — 24 24 Fair value of assets — end of year $ 744 $ 702 $ 1,446 $ 821 $ 730 $ 1,551 Funded status $ (178 ) $ 148 $ (30 ) $ (215 ) $ 131 $ (84 ) Amounts included in the consolidated balance sheet at September 30, 2018 and 2017 are comprised of the following (in millions): 2018 2017 U.S. Non-U.S. Total U.S. Non-U.S. Total Non-current assets $ — $ 152 $ 152 $ — $ 135 $ 135 Current liabilities (5 ) — (5 ) (5 ) — (5 ) Retirement benefits-non-current (173 ) (4 ) (177 ) (210 ) (4 ) (214 ) Net amount recognized $ (178 ) $ 148 $ (30 ) $ (215 ) $ 131 $ (84 ) The following tables summarize the amounts included in AOCL net of tax related to pension liabilities as of September 30, 2018 and 2017 and changes recognized in Other Comprehensive Income (Loss) net of tax for the year ended September 30, 2018 . Net Actuarial Loss U.S. Non-U.S. Total Balance at September 30, 2017 $ 418 $ 193 $ 611 Net prior service cost for the year — — — Net actuarial gain for the year (11 ) 3 (8 ) Amortization for the year (23 ) (6 ) (29 ) Deferred tax impact 10 — 10 Settlements — (6 ) (6 ) Balance at September 30, 2018 $ 394 $ 184 $ 578 Balance at September 30, 2016 $ 454 $ 190 $ 644 Net prior service cost for the year 1 — $ 1 Net actuarial gain for the year (36 ) 11 (25 ) Amortization for the year (22 ) (8 ) (30 ) Deferred tax impact 21 — 21 Balance at September 30, 2017 $ 418 $ 193 $ 611 The company estimates that $23 million of net actuarial losses will be amortized from AOCL into net periodic pension expense during fiscal year 2019 . The non-current portion of the pension liability is included in Retirement Benefits in the consolidated balance sheet as follows (in millions): September 30, 2018 2017 Pension liability $ 177 $ 214 Retiree medical liability — long term (see Note 21) 73 86 Other 12 14 Total retirement benefits $ 262 $ 314 In accordance with FASB guidance, the PBO, accumulated benefit obligation ("ABO") and fair value of plan assets are required to be disclosed for all plans where the ABO is in excess of plan assets. The difference between the PBO and ABO is that the PBO includes projected compensation increases. Additional information is as follows (in millions): 2018 2017 ABO Exceeds Assets Assets Exceed ABO Total ABO Exceeds Assets Assets Exceed ABO Total PBO $ 926 $ 550 $ 1,476 $ 1,041 $ 594 $ 1,635 ABO 926 550 1,476 1,041 594 1,635 Plan Assets 744 702 1,446 821 730 1,551 The components of net periodic pension expense are as follows (in millions): 2018 2017 2016 Service cost $ — $ — $ 1 Interest cost 54 53 65 Assumed rate of return on plan assets (99 ) (96 ) (99 ) Amortization of — Actuarial losses 29 30 23 Settlement loss 6 — — Net periodic pension income $ (10 ) $ (13 ) $ (10 ) Disclosures on investment policies and strategies, categories of plan assets, fair value measurements of plan assets, and significant concentrations of risk are included below. Investment Policy and Strategy The company’s primary investment objective for its pension plan assets is to generate a total investment return sufficient to meet present and future benefit payments while minimizing the company’s cash contributions over the life of the plans. In order to accomplish this objective, the company maintains target allocations to identify and manage exposures. The target asset allocation ranges for the U.S. plan are 20 – 50 percent equity investments, 30 – 60 percent fixed income investments and 10 – 25 percent alternative investments. Alternative investments include private equities, real estate, hedge funds, diversified growth funds, and partnership interests. The target asset allocation ranges for the non-U.S. plans are 15 – 35 percent equity investments, 30 – 60 percent fixed income investments, 0 – 10 percent real estate and 10 – 30 percent alternative investments. Investment strategies and policies for the company’s pension plan assets reflect a balance of risk-reducing and return-seeking considerations. The objective of minimizing the volatility of assets relative to liabilities is addressed primarily through asset diversification. Assets are broadly diversified across several asset classes to achieve risk-adjusted returns that accomplish this objective. The majority of pension plan assets are externally managed through active managers. Managers are only permitted to invest within established asset classes and follow the strategies for which they have been appointed. The company uses investment guidelines and reviews asset returns and investment decisions made by the managers to ensure that they are in accordance with the company’s strategies. Concentration of Risk The company seeks to mitigate risks relative to performance of the plan assets. Assets are invested in various classes with different risk and return characteristics in order to ensure that they are sufficient to pay benefits. The company’s investment strategies incorporate a return-seeking approach through equity and alternative investments, while seeking to minimize the volatility of the plans’ assets relative to its liabilities through investments in fixed income securities. The significant areas of risk related to these strategies include equity, interest rate, and operating risk. A portion of plan assets is allocated to equity and alternative investments that are expected, over time, to earn higher returns. Within this return-seeking portfolio, asset diversification is utilized to reduce uncompensated risk. Plan assets are also allocated to fixed income investments, which seek to minimize interest rate risk volatility relative to pension liabilities. The fixed income portfolio partially matches the long-dated nature of the pension liabilities reducing interest rate risk. Interest rate decreases generally increase the value of fixed income assets, partially offsetting the related increase in the liabilities, while interest rate increases generally result in a decline in the value of fixed income assets while reducing the present value of the liabilities. Operating risks consist of the risks of inadequate diversification and weak controls. The company has established policies and procedures in order to mitigate this risk by monitoring investment manager performance, reviewing periodic compliance information, and ensuring that the plans’ managers invest in accordance with the company’s investment strategies. Fair Value of Investments The current FASB guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 inputs use quoted prices in active markets for identical assets that the Plan has the ability to access. • Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets in active markets and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest priority level input that is significant to the valuation. The company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. Following are descriptions, valuation methodologies and other information related to plan assets. Cash and cash equivalents : The fair value of cash and cash equivalents is valued at cost. Equity Securities : The overall equity category includes common and preferred stocks issued by U.S. and international companies as well as equity funds that invest in these instruments. All investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost. The aggregate equity portfolio is diversified to avoid exposure to any investment strategy, single economic sector, industry group, or individual security. The fair value of equity securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. Most of the equity investments allow daily redemptions, with some providing monthly liquidity or requiring a 30-day notice. Fixed Income Securities : The overall fixed income category includes U.S. dollar-denominated and international marketable bonds and convertible debt securities as well as fixed income funds that invest in these instruments. All assets generally allow near-term liquidity and are held in issues which are actively traded to facilitate transactions at minimum cost. The aggregate fixed income portfolio is diversified to avoid exposure to any investment strategy, maturity, issuer or credit quality. The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. U.S. fixed income securities typically offer daily liquidity, with only one investment allowing quarterly redemptions. International and emerging fixed income investment vehicles generally provide daily liquidity. Commingled Funds : The fair value of commingled funds is determined by a custodian. The custodian obtains valuations from underlying fund managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading activity to derive prices. The company and custodian review the methods used by the underlying managers to value the assets. Real Estate : Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets. The fair value of real estate investments is valued by the fund managers. The fund managers value the real estate investments via independent third-party appraisals on a periodic basis. Assumptions used to revalue the properties are updated every quarter. For the component of the real estate portfolio under development, the investments are carried at cost, which approximates fair value, until they are completed and valued by a third-party appraiser. Due to the long-term nature of real estate investments, liquidity is provided on a quarterly basis. Futures Contracts : The plan enters into futures contracts in the normal course of its investing activities to manage market risk and to achieve overall investment portfolio objectives. The credit risk associated with these contracts is minimal as they are traded on organized exchanges and settled daily. The fair value of futures contracts is determined by direct quoted market prices. Cash margin for these futures contracts is included in Cash and Cash Equivalents in the leveling table. Alternatives/Partnerships/Private Equity : This category includes investments in private equity and hedge funds. Such investments may be made directly or through pooled funds, including fund of funds structures. The fair market value of the company’s interest in partnerships and private equity is valued by the fund managers. The valuation is based on the net present value of observable inputs (dividends, cash flows, earnings, etc.), which are discounted at applicable discount rates. The company and custodian review the methods used by the underlying managers to value the assets. Most of these investments offer quarterly redemption opportunities. Some partnerships and private equity investments, due to the nature of their investment strategy and underlying holdings, offer less frequent liquidity. When available, liquidity events are closely evaluated. The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The fair value of plan assets at September 30, 2018 by asset category is as follows (in millions): U.S. Plans 2018 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 51 $ — $ — $ 51 U.S. – Small cap 24 — — 24 Private equity — — 17 17 International equity 29 — — 29 Equity investments measured at net asset value (1) — — — 191 Total equity investments $ 104 $ — $ 17 $ 312 Fixed income investments U.S. fixed income $ 1 $ 164 $ — $ 165 Emerging fixed income — 20 — 20 Partnerships fixed income 13 — — 13 Fixed income investments measured at net asset value (1) — — — 34 Total fixed income $ 14 $ 184 $ — $ 232 Alternatives – Partnerships — — 83 83 Alternatives – Partnerships measured at net asset value (1) — — — 85 Cash and cash equivalents — 32 — 32 Total assets at fair value $ 118 $ 216 $ 100 $ 744 Non-U.S. Plans 2018 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 171 $ — $ — $ 171 Total equity investments $ 171 $ — $ — $ 171 Fixed income investments Other fixed income investments $ 5 $ 145 $ — $ 150 Fixed income investments measured at net asset value (1) — — — 194 Total fixed income $ 5 $ 145 $ — $ 344 Commingled funds — 5 — 5 Alternative investments measured at net asset value (1) — — — 137 Real estate measured at net asset value (1) — — — 41 Cash and cash equivalents — 4 — 4 Total assets at fair value $ 176 $ 154 $ — $ 702 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. The fair value of plan assets at September 30, 2017 by asset category is as follows (in millions): U.S. Plans 2017 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 54 $ — $ — $ 54 U.S. – Small cap 26 — — 26 Private equity — — 19 19 International equity 37 — — 37 Equity investments measured at net asset value (1) — — — 195 Total equity investments $ 117 $ — $ 19 $ 331 Fixed income investments U.S. fixed income $ 5 $ 213 $ — $ 218 Emerging fixed income — 22 — 22 Partnerships fixed income 14 — — 14 Fixed income investments measured at net asset value (1) — — — 37 Total fixed income $ 19 $ 235 $ — $ 291 Alternatives – Partnerships — — 77 77 Alternatives – Partnerships measured at net asset value (1) — — — 88 Cash and cash equivalents — 34 — 34 Total assets at fair value $ 136 $ 269 $ 96 $ 821 Non-U.S. Plans 2017 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 168 $ — $ — $ 168 Total equity investments $ 168 $ — $ — $ 168 Fixed income investments Other fixed income investments $ 5 $ 149 $ — $ 154 Fixed income investments measured at net asset value (1) — — — 226 Total fixed income $ 5 $ 149 $ — $ 380 Commingled funds — 5 — 5 Alternative investments measured at net asset value (1) — — — 136 Real estate measured at net asset value (1) — — — 40 Cash and cash equivalents — 1 — 1 Total assets at fair value $ 173 $ 155 $ — $ 730 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. Unfunded Commitment As of September 30, 2018 , the U.S. plan had $6 million of unfunded investment commitments related to plan assets. The majority of this amount is attributed to partnership investments that the plan will invest in gradually over the course of several years. Non-U.S. plans currently do not have any unfunded commitments. The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2018 (in millions): U.S. Plans 2018 Fair Value at October 1, 2017 Return on Plan Assets: Attributable to Assets Held at September 30, 2018 Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2018 Asset Category Private equity $ 19 $ (3 ) $ 1 $ — $ — $ 17 Alternatives – Partnerships 77 6 — — — 83 Total Level 3 fair value $ 96 $ 3 $ 1 $ — $ — $ 100 The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2017 (in millions): U.S. Plans 2017 Fair Value at October 1, 2016 Return on Plan Assets: Attributable to Assets Held at September 30, 2017 Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2017 Asset Category Private equity $ 11 $ 4 $ 4 $ — $ — $ 19 Partnerships – Fixed income 1 — — (1 ) — — Alternatives – Partnerships 77 4 1 (5 ) — 77 Total Level 3 fair value $ 89 $ 8 $ 5 $ (6 ) $ — $ 96 Information about the expected cash flows for the U.S. and non-U.S. pension plans is as follows (in millions): U.S. Non U.S. Total Expected employer contributions: Fiscal 2019 $ 5 $ 1 $ 6 Expected benefit payments: Fiscal 2019 71 29 100 Fiscal 2020 70 25 95 Fiscal 2021 69 25 94 Fiscal 2022 68 25 93 Fiscal 2023 67 25 92 Fiscal 2024-2028 314 128 442 The company also sponsors certain defined contribution savings plans for eligible employees. Expense related to these plans, including company matching contributions, was $21 million , $18 million and $16 million for fiscal years 2018 , 2017 and 2016 , respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provisions were calculated based upon the following components of income before income taxes (in millions): 2018 2017 2016 U.S. income $ 85 $ 252 $ 71 Foreign income 193 129 84 Total $ 278 $ 381 $ 155 The components of the benefit (provision) for income taxes are summarized as follows (in millions): 2018 2017 2016 Current tax benefit (expense): U.S. $ (24 ) $ (1 ) $ (1 ) Foreign (51 ) (11 ) 11 State and local — (2 ) (1 ) Total current tax benefit (expense) (75 ) (14 ) 9 Deferred tax benefit (expense): U.S. (76 ) (28 ) 394 Foreign 5 (9 ) (22 ) State and local (3 ) (1 ) 43 Total deferred tax benefit (74 ) (38 ) 415 Income tax benefit (expense) $ (149 ) $ (52 ) $ 424 The deferred tax expense or benefit represents tax effects of current year deductions or items of income that will be recognized in future periods for tax purposes. The fiscal year 2018 deferred income tax expense in the U.S. was primarily attributable to the revaluation of deferred tax assets for the new effective tax rate and the utilization of the foreign tax credit related to the transition tax. The deferred income tax expense in the U.S. in fiscal year 2017 was primarily attributable to the tax effect of the gain on sale of equity investment, partially offset by the additional reversal of a valuation allowance. In fiscal year 2016, the U.S. and state and local deferred tax benefit was primarily attributable to the valuation allowance reversal in the U.S. Net current and non-current deferred income tax assets (liabilities) included in the consolidated balance sheet consist of the tax effects of temporary differences related to the following (in millions): September 30, 2018 2017 Accrued compensation and benefits $ 15 $ 32 Accrued product warranties 11 14 Inventory costs 6 9 Receivables 8 18 Environmental 28 31 Accrued retiree healthcare benefits 21 39 Retirement pension plans 41 92 Property 10 10 Loss and credit carryforwards 278 349 Other 19 40 Sub-total 437 634 Less: Valuation allowances (236 ) (307 ) Deferred income taxes - asset $ 201 $ 327 Taxes on undistributed income $ (14 ) $ (7 ) Intangible assets (54 ) (87 ) Debt basis difference (9 ) (16 ) Deferred income taxes - liability $ (77 ) $ (110 ) Net deferred income tax assets $ 124 $ 217 Net non-current deferred income tax assets (liabilities) are included in the consolidated balance sheet as follows (in millions): September 30, 2018 2017 Other assets (see Note 13) $ 140 $ 229 Other liabilities (see Note 16) (16 ) (12 ) Net non-current deferred income taxes — asset $ 124 $ 217 In prior years, the company established valuation allowances against its U.S. net deferred tax assets and the net deferred tax assets of its 100% -owned subsidiaries in France, Germany, Italy, Sweden, the U.K. and certain other countries. In evaluating its ability to recover these net deferred tax assets, the company utilizes a consistent approach which considers its historical operating results, including an assessment of the degree to which any gains or losses are driven by items that are unusual in nature and tax planning strategies. In addition, the company reviews changes in near-term market conditions and other factors that impact future operating results. In fiscal year 2018, the net deferred tax assets were reduced primarily due to the legislative changes in the U.S. During the fourth quarter of fiscal year 2016, as a result of sustained profitability in the U.S. evidenced by a strong earnings history, future forecasted earnings, and additional positive evidence, the company determined it was more likely than not it would be able to realize deferred tax assets in the U.S. Accordingly, the company reversed a portion of the valuation allowance in the U.S., resulting in a non-cash income tax benefit of $438 million . In the fourth quarter of fiscal year 2017, an additional $52 million of the valuation allowance in the U.S. was released due to increased profitability. During the fourth quarter of fiscal year 2016, due to a three-year cumulative loss and future economic uncertainty, the company concluded that a valuation allowance was required in Brazil. After sustaining profitability in fiscal years 2017 and 2018, Brazil now has three year cumulative income. In addition, the economy in Brazil has improved and the company now has future forecasted income. As such, the company reversed the valuation allowance from Brazil, resulting in a non-cash income tax benefit of $9 million in the fourth quarter of fiscal year 2018. As of September 30, 2018, the company continues to maintain the valuation allowances in France, the U.K. and certain other jurisdictions, as the company believes the negative evidence that it will be able to recover these net deferred tax assets continues to outweigh the positive evidence. If, in the future, the company generates taxable income on a sustained basis, its conclusion regarding the need for valuation allowances in these jurisdictions could change. The expiration periods for deferred tax assets related to net operating losses and tax credit carryforwards as of September 30, 2018 are included below (in millions). Also included are the associated valuation allowances on these deferred tax assets (in millions). Fiscal Year Expiration Periods 2019-2023 2024-2033 2034-2038 Indefinite Total Net Operating Losses and Tax Credit Carryforwards $ 15 $ 55 $ 11 $ 197 $ 278 Valuation Allowances on these Deferred Tax Assets $ 10 $ 17 $ — $ 187 $ 214 Realization of deferred tax assets representing net operating loss carryforwards for which a valuation allowance has not been provided is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. Although realization is not assured, management believes it is more likely than not that such deferred tax assets will be realized. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if the company is unable to generate sufficient future taxable income during the carryforward period. As a result of the U.S. tax reform, pursuant to SAB 118, the company recognized a provisional one-time transition tax related to the $1,170 million undistributed earnings of foreign subsidiaries. No additional provision has been made for U.S., state or foreign taxes related to the distribution of the earnings which have been asserted as permanently reinvested. Quantification of the deferred tax liability, if any, associated with permanently reinvested earnings is not practicable. The company’s provision for income taxes was different from the provision for income taxes calculated at the U.S. statutory rate for the reasons set forth below (in millions): 2018 2017 2016 Expense for income taxes at statutory tax rate $ (68 ) $ (133 ) $ (54 ) State and local income taxes (2 ) (14 ) (7 ) Foreign income taxed at rates other than statutory (4 ) 9 5 Legislative changes (126 ) — (14 ) Joint venture equity income 6 7 3 Tax effect of nonfunctional currency transaction 2 (2 ) (30 ) Correlated tax relief — 7 51 U.S. tax impact on distributions from subsidiaries and joint ventures (4 ) (8 ) 14 Nondeductible expenses (8 ) (10 ) (12 ) Tax credits 9 14 61 Valuation allowances 40 56 418 Impact of capital loss 1 15 — Other 5 7 (11 ) Income tax benefit (expense) $ (149 ) $ (52 ) $ 424 On December 22, 2017, the U.S. government enacted the U.S. tax reform. The U.S. tax reform made broad and complex changes to the U.S. tax code that affected the company's fiscal year ended September 30, 2018, including, but not limited to, reducing the U.S. federal corporate tax rate and requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. The U.S. tax reform reduced the federal corporate tax rate to 21 percent effective January 1, 2018. Section 15 of the Internal Revenue Code of 1986, as amended, stipulates that the company's fiscal year ended September 30, 2018 had a blended corporate tax rate of 24.5 percent , which is based on the applicable tax rates before and after the U.S. tax reform and the number of days in the year. The SEC staff issued Staff Accounting Bulletin ("SAB") 118, which provides guidance on accounting for the tax effects of the U.S. tax reform. SAB 118 provides a measurement period that should not extend beyond one year from the U.S. tax reform enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the U.S. tax reform for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the U.S. tax reform is incomplete but the company is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the U.S. tax reform. Specifically, the company included discrete tax expense in its first quarter financial statements for fiscal year 2018 related to provisional amounts under SAB 118 for the impact of the revaluation of U.S. deferred tax assets and liabilities due to the federal income tax rate reduction from 35 percent to 21 percent. In order to properly account for the blended tax rate in place for fiscal year 2018, the company estimated the deferred tax assets and liabilities expected to reverse during the current fiscal year and applied a tax rate of 24.5 percent . All other deferred tax assets and liabilities are expected to reverse in fiscal year 2019 or later and were revalued at 21 percent . Additionally, the company estimated its liability and included provisional amounts for the one-time transition tax as a discrete tax expense. The company will elect to offset the liability associated with this transition tax by utilizing foreign tax credit carryovers. The revaluation of the deferred tax assets and the transition tax resulted in a non-cash charge of $77 million in the first quarter of fiscal year 2018. For September 30, 2018, the amount recorded for the revaluation of deferreds, transition tax and other tax reform related adjustments is $89 million . As of the fourth quarter of fiscal year 2018, the company has revalued all US deferred tax assets to the appropriate amount and refined its accumulated earnings and profits pools and allocation of cash and non-cash earnings for purposes of calculating the transition tax liability. For purposes of SAB 118, the company considers their accounting for the revaluation of U.S. deferred tax assets complete. The company continues to refine its accumulated earnings and profits pools for purposes of calculating the transition tax liability and considers this accounting to be provisional as of September 30, 2018. The company expects to finalize their accounting for the transition tax in Q1 2019. No other provisions of U.S. tax reform had a material financial statement impact for the fiscal year ended September 30, 2018. With respect to the U.S. tax reform provision on global intangible low-tax income, which will apply to us starting in fiscal 2019, the company has elected to treat GILTI as a period cost and, therefore, has not recognized deferred taxes for basis differences that may reverse as GILTI in future periods. In fiscal year 2016, the company determined it is now more favorable to claim a U.S. foreign tax credit rather than deduct foreign taxes paid, and as a result, a $2 million , $11 million and $61 million income tax benefit was recorded in fiscal years 2018, 2017 and 2016, respectively. In 2018, the company utilized $28 million of historical foreign tax credits to offset the liability associated with the U.S. transition tax. Additionally, the company recorded a U.S. tax benefit related to U.S. research and development tax credits of $6 million in fiscal year 2018. The total amount of gross unrecognized tax benefits the company recorded in accordance with ASC Topic 740 as of September 30, 2018 was $261 million , of which $215 million represents the amount that, if recognized, would favorably affect the effective income tax rate in future periods. A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period is as follows (in millions): 2018 2017 2016 Balance at beginning of the period $ 269 $ 243 $ 207 Additions to tax positions recorded during the current year — — 39 Additions to tax positions recorded during the prior year — 26 — Reductions to tax position recorded in prior years (6 ) — — Reductions to tax positions due to lapse of statutory limits (1 ) (2 ) (3 ) Translation, other (1 ) 2 — Balance at end of the period $ 261 $ 269 $ 243 The company’s continuing practice is to recognize interest and penalties on uncertain tax positions in the provision for income taxes in the consolidated statement of operations. At September 30, 2018 and September 30, 2017 , the company recorded assets of $13 million and $9 million , respectively of interest on uncertain tax positions in the consolidated balance sheet. In addition, penalties of $1 million were recorded as of September 30, 2018 and September 30, 2017 . The income tax benefit related to interest was $4 million , $5 million and $8 million for the years ended September 30, 2018 , 2017 and 2016, respectively. The income tax benefit related to penalties was immaterial for years ended September 30, 2018 , 2017 and 2016. The company files tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. The company’s Canadian federal income tax returns for fiscal years 2015 and 2016 are currently under audit. The company's German subsidiary is currently under audit for fiscal years 2008 through 2013. The company's Indian subsidiary is currently under audit for fiscal years 2015 and 2016. In addition, the company is under audit in various state tax jurisdictions for various years. It is reasonably possible that audit settlements, the conclusion of current examinations or the expiration of the statute of limitations in several jurisdictions could change the company’s unrecognized tax benefits during the next twelve months. It is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefit in the next twelve months. In addition to the audits listed above, the company has open tax years primarily from 2001-2017 with various significant taxing jurisdictions, including the U.S., Brazil, Canada, China, Italy, Mexico, Sweden and the U.K. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. The company has recorded a tax benefit only for those positions that meet the more-likely-than-not standard. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Environmental Federal, state and local requirements relating to the discharge of substances into the environment, the disposal of hazardous wastes and other activities affecting the environment have, and will continue to have, an impact on the operations of the company. The process of estimating environmental liabilities is complex and dependent upon evolving physical and scientific data at the sites, uncertainties as to remedies and technologies to be used and the outcome of discussions with regulatory agencies. The company records liabilities for environmental issues in the accounting period in which they are considered to be probable and the cost can be reasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the company records a liability for its allocable share of costs related to its involvement with the site, as well as an allocable share of costs related to insolvent parties or unidentified shares. At environmental sites in which the company is the only potentially responsible party, the company records a liability for the total probable and estimable costs of remediation before consideration of recovery from insurers or other third parties. The company has been designated as a potentially responsible party at ten Superfund sites, excluding sites as to which the company’s records disclose no involvement or as to which the company’s liability has been finally determined. These sites include a location in Grenada, Mississippi that was designated as a Superfund site by the U.S. Environmental Protection Agency in September of 2018. Management estimates the total reasonably possible costs the company could incur for the remediation of Superfund sites at September 30, 2018 to be approximately $24 million , of which $12 million is recorded as a liability. Included in reasonably possible amounts are estimates for certain remediation actions that may be required if current actions are deemed inadequate by the regulators. Environmental remediation costs recorded with respect to the Superfund were $12 million in fiscal year 2018 and were not substantial in fiscal years 2017 and 2016 . In addition to the Superfund sites, various other lawsuits, claims and proceedings have been asserted against the company, alleging violations of federal, state and local environmental protection requirements, or seeking remediation of alleged environmental impairments, principally at previously disposed-of properties. For these matters, management has estimated the total reasonably possible costs the company could incur at September 30, 2018 to be approximately $10 million , of which $5 million is probable and recorded as a liability. During each of the fiscal years 2018 , 2017 and 2016 , the company recorded environmental remediation costs of $2 million , $3 million and $3 million , respectively, with respect to these matters, resulting from revised estimates to remediate these sites. Included in the company’s environmental liabilities are costs for on-going operation, maintenance and monitoring at environmental sites in which remediation has been put into place. This liability is discounted using discount rates in the range of 1.75 to 2.75 percent and is approximately $13 million at September 30, 2018 . The undiscounted estimate of these costs is approximately $15 million . The following are the components of the Superfund and non-Superfund environmental reserves (in millions): Superfund Sites Non-Superfund Sites Total Balance at September 30, 2017 $ 2 $ 7 $ 9 Transition of Grenada to Superfund Site 2 (2 ) — Payments and other (4 ) (2 ) (6 ) Accruals 12 2 14 Balance at September 30, 2018 $ 12 $ 5 $ 17 There were $12 million , $ 3 million , and $3 million of environmental remediation costs recognized in other operating expense in the consolidated statement of operations in fiscal years 2018, 2017 and 2016, respectively. Environmental reserves are included in Other Current Liabilities (see Note 15) and Other Liabilities (see Note 16) in the consolidated balance sheet. The actual amount of costs or damages for which the company may be held responsible could materially exceed the foregoing estimates because of uncertainties, including the financial condition of other potentially responsible parties, the success of the remediation, discovery of new contamination and other factors that make it difficult to predict actual costs accurately. However, based on management’s assessment, after consulting with outside advisors that specialize in environmental matters, and subject to the difficulties inherent in estimating these future costs, the company believes that its expenditures for environmental capital investment and remediation necessary to comply with present regulations governing environmental protection and other expenditures for the resolution of environmental claims will not have a material effect on the company’s business, financial condition or results of operations. In addition, in future periods, new laws and regulations, changes in remediation plans, advances in technology and additional information about the ultimate clean-up remedies could significantly change the company’s estimates. Management cannot assess the possible effect of compliance with future requirements. In April 2016, the company was served with several complaints filed against the company and other defendants in the United States District Court for the Northern District of Mississippi. The complaints were amended in July 2016. These complaints allege damages, including diminution of property value, concealment/fraud and emotional distress resulting from alleged environmental pollution in and around a neighborhood in Grenada, Mississippi. Rockwell owned and operated a facility near the neighborhood from 1965 to 1985. The company filed answers to the complaints in July 2016. In May 2017, the company was served with a complaint filed against the company and other defendants by the Mississippi Attorney General in the Chancery Court of Grenada County, Mississippi. The complaint alleges that operations at the above-referenced Grenada facility caused contamination of off-site groundwater and surface waters. The company removed this action to the United States District Court for the Northern District of Mississippi, after which plaintiffs filed a motion to remand the case to the Chancery Court, which was granted in March 2018. In April, May and July 2018, the company was served with additional property damage, personal injury and wrongful death lawsuits naming the company and others as defendants, which were brought by current and former residents of the same neighborhood. The company intends to defend itself vigorously against these claims. The company believes at this time that liabilities associated with these cases, while possible, are not probable and estimable, and therefore has not recorded any accrual for them as of September 30, 2018 and 2017 . Further, a reasonably possible range of loss cannot be estimated at this time. Asbestos Maremont Corporation ("Maremont"), a subsidiary of Meritor, manufactured friction products containing asbestos from 1953 through 1977, when it sold its friction product business. Arvin Industries, Inc., a predecessor of the company, acquired Maremont in 1986. Maremont and many other companies are defendants in suits brought by individuals claiming personal injuries as a result of exposure to asbestos-containing products. Maremont had approximately 1,700 and 2,800 pending asbestos-related claims at September 30, 2018 and 2017 , respectively. Although Maremont has been named in these cases, in the cases where actual injury has been alleged, very few claimants have established that a Maremont product caused their injuries. Plaintiffs’ lawyers often sue dozens or even hundreds of defendants in individual lawsuits, seeking damages against all named defendants irrespective of the disease or injury and irrespective of any causal connection with a particular product. For these reasons, the total number of claims filed is not necessarily the most meaningful factor in determining Maremont's asbestos related liability. Pending and Future Claims : Maremont engaged a third-party advisor with extensive experience in assessing asbestos-related liabilities to conduct a study to estimate its potential undiscounted liability for pending and future asbestos-related claims, as of September 30, 2018. On a continual basis, management monitors the underlying claims data and experience, for the purpose of assessing the appropriateness of the assumptions used to estimate the liability. The increase in the estimated liability from the prior year study at both the low end and high end of the range reflects a change in the forecast horizon utilized to estimate future claims, excluding legal costs and any potential recovery from insurance carriers. Previously, Maremont’s pending and future claims estimates were based on a ten-year forecast period. In fiscal year 2018, the company moved to a penultimate horizon for estimating Maremont’s pending and future claims estimates. The penultimate horizon is defined as the second-to-last day of claims estimated to occur. The longer horizon estimate is now considered reasonable based on factors including Maremont's recent history and experience, the disciplined management of asbestos related litigation, an observance of trends indicating diminished volatility and greater consistency in Maremont's observable claims data, the maturity of the asbestos litigation overall and experience in recent insurance negotiations. As of September 30, 2018 ,the estimated range of equally likely possibilities of Maremont’s obligation for asbestos-related claims over the next 41 years was $107 million to $195 million . Based on the information contained in the actuarial study, and all other available information considered, Maremont concluded that no amount within the range of potential liability was more likely than any other and, therefore, recorded the low end of the range. Maremont recognized a liability for pending and future claims over the next 41 years of $107 million as of September 30, 2018 and a ten-year liability of $68 million as of September 30, 2017. The ultimate cost of resolving pending and future claims is estimated based on the history of claims and expenses for plaintiffs represented by law firms in jurisdictions with an established history with Maremont. Maremont recognized $38 million and $5 million of expense in fiscal years 2018 and 2017 , respectively, associated with its annual valuation of asbestos-related liabilities and receivables. Recoveries : Maremont has historically had insurance that reimburses a meaningful portion of the costs incurred defending against asbestos-related claims. The expected insurance receivable related to future asbestos-related liabilities was $24 million and $25 million as of September 30, 2018 and 2017 , respectively. The receivable is for coverage primarily provided by one insurance carrier based on a coverage-in-place agreement. Maremont currently expects to exhaust the remaining limits provided by this coverage sometime in the next three-to-five years. The difference between the estimated liability and insurance receivable is primarily related to exhaustion of settled insurance coverage within the forecasted period and proceeds from settled insurance policies. Maremont maintained insurance coverage with other insurance carriers that management believed also provided coverage for indemnity and defense costs. During fiscal year 2013, Maremont re-initiated lawsuits against these carriers, seeking a declaration of its rights to coverage for asbestos claims and to facilitate an orderly and timely collection of insurance proceeds. During the first quarter of fiscal year 2016, the dispute related to these insurance policies was settled. As part of this settlement, on December 12, 2015, Maremont received $17 million in cash, of which $5 million was recognized as a reduction in asbestos expense and $12 million was recorded as a liability to the insurance carrier as it is required to be returned to the carrier if additional asbestos liability is not incurred. During the fourth quarter of fiscal year 2016, Maremont recognized an additional $9 million of the cash settlement proceeds as a reduction in asbestos expense. During the first quarter of fiscal year 2017, the company recognized the remaining $3 million of the cash settlement proceeds as a reduction in asbestos expense. The settlement also provides additional recovery for Maremont if certain future defense and indemnity spending thresholds are met. The amounts recorded for the asbestos-related reserves and recoveries from insurance companies are based upon assumptions and estimates derived from currently known facts. All such estimates of liabilities and recoveries for asbestos-related claims are subject to considerable uncertainty because such liabilities and recoveries are influenced by variables that are difficult to predict. The future litigation environment for Maremont could change significantly from its past experience, due, for example, to changes in the mix of claims filed against Maremont in terms of plaintiffs’ law firm, jurisdiction and disease; legislative or regulatory developments; Maremont’s approach to defending claims; or payments to plaintiffs from other defendants. Estimated recoveries are influenced by coverage issues among insurers and the continuing solvency of various insurance companies. If the assumptions with respect to the estimation period, the nature of pending and future claims, the cost to resolve claims and the amount of available insurance prove to be incorrect, the actual amount of liability for Maremont’s asbestos-related claims, and the effect on the company, could differ materially from current estimates and, therefore, could have a material impact on the company’s financial condition and results of operations. Maremont’s asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions): September 30, 2018 2017 Pending and future claims $ 107 $ 68 Billed but unpaid claims 2 2 Asbestos-related liabilities $ 109 $ 70 Asbestos-related insurance recoveries $ 24 $ 25 A portion of the asbestos-related recoveries and reserves are included in Other Current Assets and Liabilities , with the majority of the amounts recorded in Other Assets and Liabilities (see Notes 11, 13, 15 and 16). Assumptions: The following assumptions were made by Maremont after consultation with consultants and are included in the study: • Pending and future claims were estimated for a 41 year period ending in fiscal year 2059; • The litigation environment remains consistent throughout the forecast horizon; • On a per claim basis, defense and indemnity costs for pending and future claims will be at the level consistent with Maremont’s recent experience. Rockwell — ArvinMeritor, Inc. ("AM"), a predecessor of Meritor, along with many other companies, has also been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos used in certain components of Rockwell products many years ago. Liability for these claims was transferred at the time of the spin-off of the automotive business from Rockwell in 1997. Rockwell had approximately 1,400 and 1,600 pending active asbestos claims in lawsuits that name AM, together with many other companies, as defendants at September 30, 2018 and 2017 , respectively. A significant portion of the claims do not identify any of Rockwell’s products or specify which of the claimants, if any, were exposed to asbestos attributable to Rockwell’s products, and past experience has shown that the vast majority of the claimants will likely never identify any of Rockwell’s products. Historically, AM has been dismissed from the vast majority of similar claims filed in the past with no payment to claimants. For those claimants who do show that they worked with Rockwell’s products, management nevertheless believes it has meritorious defenses, in substantial part due to the integrity of the products involved and the lack of any impairing medical condition on the part of many claimants. Pending and Future Claims : The company engaged a third-party advisor with extensive experience in assessing asbestos-related liabilities to conduct a study to estimate its potential undiscounted liability for pending and future asbestos-related claims as of September 30, 2018. On a continual basis, management monitors the underlying claims data and experience, for the purpose of assessing the appropriateness of the assumptions used to estimate the liability. The increase in the estimated liability from the prior year study at both the low end and high end reflects a change in the forecast horizon utilized to estimate future claims, excluding legal costs and any potential recovery from insurance carriers. Previously, the company’s pending and future claims estimates were based on a ten-year forecast period. In fiscal year 2018, the company moved to a penultimate horizon for estimating our pending and future claims estimates. The penultimate horizon is defined as the second-to-last day of claims estimated to occur. The longer horizon estimate is now considered reasonable based on factors including the company's recent history and experience, the disciplined management of asbestos related litigation, an observance of trends indicating diminished volatility and greater consistency in the company's observable claims data, the maturity of the asbestos litigation overall and experience in recent insurance negotiations. As of September 30, 2018 , the estimated probable range of equally likely possibilities of the company’s obligation for asbestos-related claims over the next 41 years is $103 million to $186 million . Based on the information contained in the actuarial study, and all other available information considered, management concluded that no amount within the range of potential liability was more likely than any other and, therefore, recorded the low end of the range. The company recognized a liability for pending and future claims over the next 41 years of $103 million as of September 30, 2018 compared to the ten-year liability of $63 million as of September 30, 2017 . The ultimate cost of resolving pending and future claims is estimated based on the history of claims and expenses for plaintiffs represented by law firms in jurisdictions with an established history with Rockwell. Recoveries: Rockwell has insurance coverage that management believes covers indemnity and defense costs, over and above self-insurance retentions, for a significant portion of these claims. In 2004, the company initiated litigation against certain of these carriers to enforce the insurance policies. During the fourth quarter of fiscal year 2016, the company executed settlement agreements with two of these carriers, thereby resolving the litigation against those particular carriers. Pursuant to the terms of one of those settlement agreements, in the fourth quarter of fiscal year 2016 the company received $32 million in cash from an insurer, of which $10 million was recognized as a reduction in asbestos expense, and $22 million was recorded as a liability to the insurance carrier as it is required to be returned to the carrier if additional asbestos liability is not ultimately incurred. During fiscal years 2018 and 2017, Rockwell recognized an additional $12 million and $10 million , respectively of the cash settlement proceeds as a reduction in asbestos expense. Pursuant to the terms of a second settlement agreement, in the fourth quarter of fiscal year 2016 the company recorded a $12 million receivable to reflect expected reimbursement of future defense and indemnity payments under a coverage-in-place arrangement with that insurer. During the fourth quarter of fiscal year 2018, the company entered into a settlement agreement to resolve additional disputed coverage resulting from asbestos claims. On September 15, 2018, the company received $3 million in cash and $28 million recorded as an insurance receivable related to this settlement. The insurance receivables for Rockwell’s asbestos-related liabilities totaled $68 million and $38 million as of September 30, 2018 and 2017, respectively. Included in these amounts are increases to previous settlement receivables resulting from the extended forecast horizon which led to a balance of $40 million for those previous settlement receivables as of September 30, 2018 . Also, during the third quarter of fiscal year 2016, the company reached a settlement, relating to certain proofs of claim filed by the company under certain insurance policies, with an insolvent insurer for $5.5 million (the "allowed claim"). On June 17, 2016, the company entered into an assignment of claim (the "Assignment") with Macquarie Bank to assign the allowed claim the company had against the insolvent insurer. The Assignment was approved by the liquidator, which resulted in the company receiving $3 million in the third quarter of fiscal year 2016. The amounts recorded for the asbestos-related reserves and recoveries from insurance companies are based upon assumptions and estimates derived from currently known facts. All such estimates of liabilities and recoveries for asbestos-related claims are subject to considerable uncertainty because such liabilities and recoveries are influenced by variables that are difficult to predict. The future litigation environment for Rockwell could change significantly from its past experience, due, for example, to changes in the mix of claims filed against Rockwell in terms of plaintiffs’ law firm, jurisdiction and disease; legislative or regulatory developments; the company’s approach to defending claims; or payments to plaintiffs from other defendants. Estimated recoveries are influenced by coverage issues among insurers and the continuing solvency of various insurance companies. If the assumptions with respect to the estimation period, the nature of pending claims, the cost to resolve claims and the amount of available insurance prove to be incorrect, the actual amount of liability for Rockwell asbestos-related claims, and the effect on the company, could differ materially from current estimates and, therefore, could have a material impact on the company’s financial condition and results of operations. The Rockwell legacy asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions): September 30, 2018 2017 Pending and future claims $ 103 $ 63 Billed but unpaid claims 2 2 Asbestos-related liabilities $ 105 $ 65 Asbestos-related insurance recoveries $ 68 $ 38 Assumptions: The following assumptions were made by the company after consultation with consultants and are included in the study: • Pending and future claims were estimated for a 41 year period ending in fiscal year 2059; • The litigation environment remains consistent throughout the forecast horizon; • On a per claim basis, defense and indemnity costs for pending and future claims will be at the level consistent with the company’s recent experience. Indemnification The company has agreed to indemnify others in conjunction with certain transactions, primarily divestitures. These indemnities address a variety of matters, which may include environmental, tax, asbestos and employment-related matters, and the periods of indemnification vary in duration. In December 2005, the company guaranteed a third party’s obligation to reimburse another party for payment of health and prescription drug benefits to a group of retired employees. The retirees were former employees of a wholly-owned subsidiary of the company prior to it being acquired by the company. The wholly-owned subsidiary, which was part of the company’s light vehicle aftermarket business, was sold by the company in fiscal year 2006. Prior to May 2009, except as set forth hereinafter, the third party met its obligations to reimburse the other party. In May 2009, the third party filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code requiring the company to recognize its obligations under the guarantee. The company recorded a $28 million liability in fiscal year 2009 for this matter. At September 30, 2018 and September 30, 2017 , the remaining estimated liability for this matter was approximately $9 million and $10 million , respectively. In connection with the sale of its interest in MSSC in October 2009, the company agreed to indemnify the buyer for its share of potential obligations related to pension funding shortfall, environmental and other contingencies, and valuation of certain accounts receivable and inventories. The company's estimated exposure under these indemnities at September 30, 2017 was approximately $1 million . During the fourth quarter of fiscal year 2018, the company determined with confirmation from MSSC that the obligation was no longer probable and therefore the company released the accrual. The company is not aware of any other claims or other information that would give rise to material payments under such indemnities. Other The company identified certain sales transactions for which value-added tax may have been required to be remitted to certain tax jurisdictions for tax years 2011 through 2018. At both September 30, 2018 and September 30, 2017 , the company’s estimate of the probable liability was $3 million and $12 million , respectively. On June 24, 2014, the company filed a complaint in the Circuit Court for Oakland County, Michigan against a supplier alleging that certain bearings supplied by the supplier for TL Trailer Axles were faulty, and as a result, the company suffered product liability damages and expenses with respect to vehicle recalls. On May 13, 2016, the company entered into a settlement agreement with the supplier pursuant to which the company received approximately $6 million , which was recognized as a reduction of selling, general and administrative expenses in the consolidated statement of operations in the third quarter of fiscal year 2016. The settlement does not relieve the company of its current liability for past or future claims related to TL Axles. The company has the right to seek future indemnification from the supplier with respect to any currently unasserted claims. On July 5, 2017, the company's subsidiary, Meritor Heavy Vehicle Systems, LLC, fully and finally resolved all claims with respect to its various legal proceedings with Sistemas Automotrices de Mexico, S.A. de C.V. ("Sisamex"), its Mexican joint venture with Quimmco, S.A. de C.V. ("Quimmco"), that were originally filed in 2014 in the District Court for the Northern District of Illinois regarding Sisamex’s rights to manufacture certain products and the components thereof for sale in Mexico. The parties entered into a confidential settlement agreement and release pursuant to which the parties agreed to dismiss, with prejudice, all of the legal proceedings between them, and the company agreed to pay Quimmco a settlement of $10 million , which the company paid in the fourth quarter of fiscal year 2017. In addition, various lawsuits, claims and proceedings, other than those specifically disclosed in the consolidated financial statements, have been or may be instituted or asserted against the company, relating to the conduct of the company’s business, including those pertaining to product liability, warranty or recall claims, intellectual property, safety and health, contract and employment matters. Although the outcome of other litigation cannot be predicted with certainty, and some lawsuits, claims or proceedings may be disposed of unfavorably to the company, management believes the disposition of matters that are pending will not have a material effect on the company’s business, financial condition, results of operations or cash flows. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Sep. 30, 2018 | |
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 March 12, 2018, the company announced a realignment of operations to further drive long-term strategic objectives while also assigning new responsibilities as part of its commitment to leadership development. As part of this realignment, reportable segments changed. As of the second quarter of fiscal year 2018, the company's reportable segments are (1) Commercial Truck & Trailer and (2) Aftermarket & Industrial. Prior year reportable segment financial results have been recast for these changes. The company has two reportable segments at September 30, 2018 , as follows: • The Commercial Truck & Trailer 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. It also supplies a variety of undercarriage products and systems for trailer applications in North America. This segment also includes the company's aftermarket businesses in Asia Pacific and South America. • The Aftermarket & Industrial 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. 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 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 & Trailer Aftermarket & Industrial Elims Total Fiscal year 2018 Sales: External Sales $ 3,171 $ 1,007 $ — $ 4,178 Intersegment Sales 154 17 (171 ) — Total Sales $ 3,325 $ 1,024 $ (171 ) $ 4,178 Fiscal year 2017 Sales (1) : External Sales $ 2,467 $ 880 $ — $ 3,347 Intersegment Sales 139 20 (159 ) — Total Sales $ 2,606 $ 900 $ (159 ) $ 3,347 Fiscal year 2016 Sales (1) : External Sales $ 2,332 $ 867 $ — $ 3,199 Intersegment Sales 133 19 (152 ) — Total Sales $ 2,465 $ 886 $ (152 ) $ 3,199 (1) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. Segment adjusted EBITDA: 2018 2017 (2) 2016 (2) Commercial Truck & Trailer $ 345 $ 234 $ 207 Aftermarket & Industrial 142 116 116 Segment adjusted EBITDA 487 350 323 Unallocated legacy and corporate income (expense), net (1) (13 ) (3 ) 4 Interest expense, net (67 ) (119 ) (84 ) Gain on sale of equity investment — 243 — Benefit (provision) for income taxes (149 ) (52 ) 424 Depreciation and amortization (84 ) (75 ) (67 ) Loss on sale of receivables (5 ) (5 ) (5 ) Restructuring costs (6 ) (6 ) (16 ) Asbestos related items (3) (25 ) — — Pension settlement loss (4) (6 ) — — Asset impairment charges (3 ) (4 ) — Noncontrolling interests (9 ) (4 ) (2 ) Income from continuing operations attributable to Meritor, Inc. $ 120 $ 325 $ 577 (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) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. (3) The year ended September 30, 2018 includes $25 million related to the change in estimate resulting from change in estimated forecast horizon and an asbestos insurance settlement. (4) The year ended September 30, 2018 includes $6 million related to the U.K. pension settlement loss. Depreciation and Amortization: 2018 2017 (1) 2016 (1) Commercial Truck & Trailer $ 72 $ 66 $ 59 Aftermarket & Industrial 12 9 8 Total depreciation and amortization $ 84 $ 75 $ 67 Capital Expenditures: 2018 2017 (1) 2016 (1) Commercial Truck & Trailer $ 88 $ 84 $ 82 Aftermarket & Industrial 16 11 11 Total capital expenditures $ 104 $ 95 $ 93 Segment Assets: 2018 2017 (2) Commercial Truck & Trailer $ 1,858 $ 1,708 Aftermarket & Industrial 495 466 Total segment assets 2,353 2,174 Corporate (3) 633 869 Less: Accounts receivable sold under off-balance sheet factoring programs (4) (260 ) (261 ) Total assets $ 2,726 $ 2,782 (1) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. (2) Amounts as of September 30, 2017 have been recast to reflect reportable segment changes, including the reallocation of goodwill. (3) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs. (4) At September 30, 2018 and September 30, 2017 , segments assets include $260 million and $261 million , respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 8). 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: 2018 2017 2016 U.S. $ 2,289 $ 1,761 $ 1,617 Canada 72 69 67 Mexico 221 234 390 Total North America 2,582 2,064 2,074 Sweden 311 273 250 Italy 243 210 201 United Kingdom 179 149 136 Other Europe 103 83 86 Total Europe 836 715 673 Brazil 224 168 130 China 196 127 84 India 231 184 152 Other Asia-Pacific 109 89 86 Total sales $ 4,178 $ 3,347 $ 3,199 Assets by Geographic Area: 2018 2017 U.S. $ 1,350 $ 1,489 Canada 36 29 Mexico 224 204 Total North America 1,610 1,722 Sweden 138 123 Italy 86 70 United Kingdom 263 241 Other Europe 171 184 Total Europe 658 618 Brazil 161 164 China 123 127 India 100 84 Other Asia-Pacific 74 67 Total $ 2,726 $ 2,782 Sales to AB Volvo represented approximately 23 percent , 22 percent and 23 percent of the company’s sales in fiscal years 2018 , 2017 and 2016 , respectively. Sales to Daimler AG represented approximately 17 percent , 17 percent and 18 percent of the company’s sales in fiscal years 2018 , 2017 and 2016 , respectively. Sales to PACCAR represented approximately 12 percent , 10 percent and 9 percent of the company's sales in fiscal years 2018 , 2017 and 2016 , respectively. No other customer comprised 10 percent or more of the company’s total sales in any of the three fiscal years ended September 30, 2018 . |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following is a condensed summary of the company’s unaudited quarterly results of continuing operations for fiscal years 2018 and 2017 . Per share amounts are based on the weighted average shares outstanding for that quarter. Earnings per share for the year may not equal the sum of the four fiscal quarters’ earnings per share due to changes in basic and diluted shares outstanding. 2018 Fiscal Quarters (Unaudited) First Second Third Fourth 2018 (In millions, except share related data) Sales $ 903 $ 1,066 $ 1,129 $ 1,080 $ 4,178 Cost of sales (763 ) (888 ) (952 ) (921 ) (3,524 ) Gross margin 140 178 177 159 654 Provision for income taxes (83 ) (22 ) (26 ) (18 ) (149 ) Net income (loss) (34 ) 60 67 33 126 Net income (loss) from continuing operations attributable to Meritor, Inc. (35 ) 57 66 32 120 Net income (loss) attributable to Meritor, Inc. (36 ) 57 64 32 117 Basic earnings (loss) per share from continuing operations $ (0.40 ) $ 0.64 $ 0.76 $ 0.37 $ 1.37 Diluted earnings (loss) per share from continuing operations $ (0.40 ) $ 0.63 $ 0.73 $ 0.36 $ 1.31 The company recognized restructuring costs in its continuing operations during fiscal year 2018 as follows: $2 million in the first quarter, $1 million in the second quarter, $3 million in the third quarter and no restructuring costs in the fourth quarter (see Note 6). During the fourth quarter of fiscal year 2018, the company recognized a $6 million loss associated with the UK pension settlement loss. During the fourth quarter of fiscal year 2018, the company recognized $25 million net expense, related to the change in estimate resulting from change in estimated forecast horizon and an asbestos insurance settlement. The year ended September 30, 2018 includes $57 million of non-cash tax expense related to the revaluation of the company's deferred tax assets and liabilities as a result of the U.S. tax reform, $26 million of non-cash tax expense related to the one-time deemed repatriation of accumulated foreign earnings and $6 million of non-cash tax expense related to other adjustments. During the fourth quarter of fiscal year 2018, the company recognized a $9 million reversal of a Brazil valuation allowance, partially offset by a $2 million increase in valuation allowances for certain U.S. state jurisdictions. 2017 Fiscal Quarters (Unaudited) First Second Third Fourth 2017 (In millions, except share related data) Sales $ 699 $ 806 $ 920 $ 922 $ 3,347 Cost of sales (610 ) (685 ) (778 ) (790 ) (2,863 ) Gross margin 89 121 142 132 484 Provision for income taxes (6 ) (13 ) (11 ) (22 ) (52 ) Net income 16 23 51 238 328 Net income from continuing operations attributable to Meritor, Inc. 15 22 49 239 325 Net income attributable to Meritor, Inc. 15 22 48 239 324 Basic earnings per share from continuing operations $ 0.17 $ 0.25 $ 0.55 $ 2.70 $ 3.69 Diluted earnings per share from continuing operations $ 0.17 $ 0.24 $ 0.52 $ 2.63 $ 3.60 The company recognized restructuring costs in its continuing operations during fiscal year 2017 as follows: an insignificant amount in the first quarter, $4 million in the second quarter, an insignificant amount in the third quarter and $2 million in the fourth quarter (see Note 6). During the third quarter of fiscal year 2017, the company resolved all claims with Sisamex and entered into a confidential settlement agreement in which the company paid $10 million to Quimmco (see Note 24). During the fourth quarter of fiscal year 2017, the company entered into an agreement to sell its interest in Meritor WABCO to a subsidiary of its joint venture partner, WABCO Holdings Inc. The total purchase price for the sale was $250 million , and the company also received an $8 million partnership distribution immediately prior to the transaction closing on October 1, 2017. The company recognized a $243 million pre-tax ( $154 million , after-tax) gain associated with this sale. During the fourth quarter of fiscal year 2017, the company recognized a $52 million income tax benefit related to the partial reversal of the U.S. valuation allowance and a $15 million income tax benefit related to capital losses associated with the sale of an equity investment. Also in the fourth quarter of fiscal year 2017, the company recognized a $36 million loss on debt extinguishment ( $22 million , after-tax). |
OPERATING CASH FLOWS AND OTHER
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Sep. 30, 2018 | |
Operating Cash Flow Disclosure [Abstract] | |
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION | OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION Year Ended September 30, 2018 2017 2016 (in millions) OPERATING ACTIVITIES Net income $ 126 $ 328 $ 575 Less: Loss from discontinued operations, net of tax (3 ) (1 ) (4 ) Income from continuing operations 129 329 579 Adjustments to income from continuing operations to arrive at cash provided by operating activities: Depreciation and amortization 84 75 67 Deferred income tax expense (benefit) 74 38 (415 ) Restructuring costs 6 6 16 Loss on debt extinguishment 8 36 — Goodwill and asset impairment 3 4 — Equity in earnings of affiliates (27 ) (48 ) (36 ) Stock compensation expense 20 19 9 Provision for doubtful accounts (1 ) 1 2 Pension and retiree medical expense (benefit) (31 ) 11 20 Pension settlement loss 6 — — Gain on sale of equity method investment — (243 ) — Gain on sale of property — — (2 ) Dividends received from equity method investments 17 44 37 Pension and retiree medical contributions (21 ) (38 ) (42 ) Restructuring payments (8 ) (15 ) (11 ) Changes in off-balance sheet receivable securitization and factoring programs 11 26 (31 ) Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations: Receivables (98 ) (160 ) 89 Inventories (112 ) (43 ) 28 Accounts payable 97 133 (89 ) Other current assets and liabilities 36 16 (18 ) Other assets and liabilities 59 (12 ) 6 Operating cash flows provided by continuing operations 252 179 209 Operating cash flows used for discontinued operations (1 ) (3 ) (5 ) CASH PROVIDED BY OPERATING ACTIVITIES $ 251 $ 176 $ 204 September 30, 2018 2017 2016 (In millions) Balance sheet data: Allowance for doubtful accounts $ 4 $ 5 $ 6 Statement of operations data: Maintenance and repairs expense 52 46 45 Research, development and engineering expense 73 69 68 Depreciation expense 74 67 61 Rental expense 18 14 15 Interest income 3 3 3 Interest expense (70 ) (122 ) (87 ) Statement of cash flows data: Interest payments, net of receipts 49 75 71 Income tax payments, net of refunds 33 22 24 Non-cash investing activities - capital asset additions from capital leases 4 — — |
SUPPLEMENTAL PARENT AND GUARANT
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 12 Months Ended |
Sep. 30, 2018 | |
Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Article 3-10 of Regulation S-X (S-X Rule 3-10) requires that separate financial information for issuers and guarantors of registered securities be filed in certain circumstances. Certain of the company's 100% 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 publicly-held notes outstanding under the company's indentures (see Note 17). Schedule I of Article 5-04 of Regulation S-X (S-X Rule 5-04) requires that condensed financial information of the registrant ("Parent") be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. As of September 30, 2018 , net assets of certain subsidiaries in China and India and certain unconsolidated subsidiaries that are restricted by law from transfer by cash dividends, loans or advances to Meritor, Inc did not exceed 25 percent of the consolidated net assets of Meritor, Inc. As of September 30, 2018 the amount of the net assets restricted from transfer by law was $39 million . In lieu of providing separate audited financial statements for the Parent and Guarantors, the company has included the accompanying condensed consolidating financial statements as permitted by S-X Rules 3-10 and 5-04. These condensed consolidating financial statements are presented on the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the parent's share of the subsidiary's cumulative results of operations, capital contributions and distribution and other equity changes. The Guarantor subsidiaries are combined in the condensed consolidated financial statements. MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions) Fiscal Year Ended September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 2,290 $ 1,888 $ — $ 4,178 Subsidiaries — 143 219 (362 ) — Total sales — 2,433 2,107 (362 ) 4,178 Cost of sales (57 ) (2,037 ) (1,792 ) 362 (3,524 ) GROSS MARGIN (57 ) 396 315 — 654 Selling, general and administrative (89 ) (104 ) (124 ) — (317 ) Restructuring costs (1 ) (3 ) (2 ) — (6 ) Other operating expense, net (14 ) (1 ) 1 — (14 ) OPERATING INCOME (LOSS) (161 ) 288 190 — 317 Other income (expense), net 58 17 (74 ) — 1 Equity in earnings of affiliates — 19 8 — 27 Interest income (expense), net (118 ) 29 22 — (67 ) INCOME (LOSS) BEFORE INCOME TAXES (221 ) 353 146 — 278 Benefit (provision) for income taxes (2 ) (81 ) (66 ) — (149 ) Equity income from continuing operations of subsidiaries 343 88 — (431 ) — INCOME FROM CONTINUING OPERATIONS 120 360 80 (431 ) 129 LOSS FROM DISCONTINUED OPERATIONS, net of tax (3 ) (1 ) (1 ) 2 (3 ) NET INCOME 117 359 79 (429 ) 126 Less: Net income attributable to noncontrolling interests — — (9 ) — (9 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 117 $ 359 $ 70 $ (429 ) $ 117 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Year Ended September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 117 $ 359 $ 79 $ (429 ) $ 126 Other comprehensive income (21 ) (42 ) (41 ) 81 (23 ) Total comprehensive income 96 317 38 (348 ) 103 Less: Comprehensive income attributable to noncontrolling interests — — (7 ) — (7 ) Comprehensive income attributable to Meritor, Inc. $ 96 $ 317 $ 31 $ (348 ) $ 96 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions) Fiscal Year Ended September 30, 2017 Parent Guarantors Non-Guarantors Elims Consolidated Sales External $ — $ 1,762 $ 1,585 $ — $ 3,347 Subsidiaries — 123 149 (272 ) — Total sales — 1,885 1,734 (272 ) 3,347 Cost of sales (62 ) (1,583 ) (1,490 ) 272 (2,863 ) GROSS MARGIN (62 ) 302 244 — 484 Selling, general and administrative (82 ) (100 ) (82 ) — (264 ) Restructuring costs 2 (2 ) (6 ) — (6 ) Other operating expense, net (3 ) (1 ) (3 ) — (7 ) OPERATING INCOME (LOSS) (145 ) 199 153 — 207 Other income (expense), net 39 (11 ) (26 ) — 2 Gain on sale of equity investment — 243 — — 243 Equity in earnings of affiliates — 42 6 — 48 Interest income (expense), net (168 ) 35 14 — (119 ) INCOME (LOSS) BEFORE INCOME TAXES (274 ) 508 147 — 381 Benefit (provision) for income taxes 96 (126 ) (22 ) — (52 ) Equity income from continuing operations of subsidiaries 503 114 — (617 ) — INCOME FROM CONTINUING OPERATIONS 325 496 125 (617 ) 329 LOSS FROM DISCONTINUED OPERATIONS, net of tax (1 ) (1 ) (1 ) 2 (1 ) NET INCOME 324 495 124 (615 ) 328 Less: Net income attributable to noncontrolling interests — — (4 ) — (4 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 324 $ 495 $ 120 $ (615 ) $ 324 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Year Ended September 30, 2017 Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 324 $ 495 $ 124 $ (615 ) $ 328 Other comprehensive income 264 21 23 (44 ) 264 Total comprehensive income 588 516 147 (659 ) 592 Less: Comprehensive income attributable to noncontrolling interests — — (4 ) — (4 ) Comprehensive income attributable to Meritor, Inc. $ 588 $ 516 $ 143 $ (659 ) $ 588 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions) Fiscal Year Ended September 30, 2016 (1) Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 1,616 $ 1,583 $ — $ 3,199 Subsidiaries — 112 61 (173 ) — Total sales — 1,728 1,644 (173 ) 3,199 Cost of sales (57 ) (1,439 ) (1,440 ) 173 (2,763 ) GROSS MARGIN (57 ) 289 204 — 436 Selling, general and administrative (64 ) (79 ) (70 ) — (213 ) Restructuring costs (7 ) (4 ) (5 ) — (16 ) Other operating expense, net (3 ) — — — (3 ) OPERATING INCOME (LOSS) (131 ) 206 129 — 204 Other income (expense), net 34 (35 ) — — (1 ) Equity in earnings of affiliates — 32 4 — 36 Interest income (expense), net (117 ) 26 7 — (84 ) INCOME (LOSS) BEFORE INCOME TAXES (214 ) 229 140 — 155 Benefit (provision) for income taxes 526 (102 ) — — 424 Equity income from continuing operations of subsidiaries 265 120 — (385 ) — INCOME FROM CONTINUING OPERATIONS 577 247 140 (385 ) 579 LOSS FROM DISCONTINUED OPERATIONS, net of tax (4 ) (4 ) (2 ) 6 (4 ) NET INCOME 573 243 138 (379 ) 575 Less: Net income attributable to noncontrolling interests — — (2 ) — (2 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 573 $ 243 $ 136 $ (379 ) $ 573 (1) Amounts have been recast. See Long-term Debt (Note 17). MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Year Ended September 30, 2016 (1) Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 573 $ 243 $ 138 $ (379 ) $ 575 Other comprehensive income (loss) (43 ) 11 (44 ) 33 (43 ) Total comprehensive income 530 254 94 (346 ) 532 Less: Comprehensive income attributable to noncontrolling interests — — (2 ) — (2 ) Comprehensive income attributable to Meritor, Inc. $ 530 $ 254 $ 92 $ (346 ) $ 530 (1) Amounts have been recast. See Long-term Debt (Note 17). MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING BALANCE SHEET (In millions) September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS Cash and cash equivalents $ 24 $ 6 $ 85 $ — $ 115 Receivables, trade and other, net 2 62 524 — 588 Inventories — 242 235 — 477 Other current assets 6 12 28 — 46 TOTAL CURRENT ASSETS 32 322 872 — 1,226 NET PROPERTY (1) 24 241 218 — 483 GOODWILL — 250 171 — 421 OTHER ASSETS 179 182 235 — 596 INVESTMENTS IN SUBSIDIARIES 3,583 855 — (4,438 ) — TOTAL ASSETS $ 3,818 $ 1,850 $ 1,496 $ (4,438 ) $ 2,726 CURRENT LIABILITIES Short-term debt $ 47 $ — $ 47 $ — $ 94 Accounts and notes payable 64 297 339 — 700 Other current liabilities 77 71 142 — 290 TOTAL CURRENT LIABILITIES 188 368 528 — 1,084 LONG-TERM DEBT 726 — 4 — 730 RETIREMENT BENEFITS 241 — 21 — 262 INTERCOMPANY PAYABLE (RECEIVABLE) 2,325 (2,640 ) 315 — — OTHER LIABILITIES 50 124 158 — 332 MEZZANINE EQUITY 1 — — — 1 EQUITY ATTRIBUTABLE TO MERITOR, INC. 287 3,998 440 (4,438 ) 287 NONCONTROLLING INTERESTS — — 30 — 30 TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 3,818 $ 1,850 $ 1,496 $ (4,438 ) $ 2,726 (1) As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. $1 million of the assets and liabilities held for sale are included in the Parent column and $1 million of the assets and liabilities held for sale are included in the Guarantor column. MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING BALANCE SHEET (In millions) September 30, 2017 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS Cash and cash equivalents (1) $ 10 $ 3 $ 75 $ — $ 88 Receivables, trade and other, net (1) — 296 493 — 789 Inventories (1) — 184 194 — 378 Other current assets 5 6 32 — 43 TOTAL CURRENT ASSETS 15 489 794 — 1,298 NET PROPERTY (1) 21 227 226 — 474 GOODWILL (1) — 237 177 — 414 OTHER ASSETS 271 106 219 — 596 INVESTMENTS IN SUBSIDIARIES 3,222 787 — (4,009 ) — TOTAL ASSETS $ 3,529 $ 1,846 $ 1,416 $ (4,009 ) $ 2,782 CURRENT LIABILITIES Short-term debt $ 195 $ 2 $ 91 $ — $ 288 Accounts and notes payable (1) 55 246 321 — 622 Other current liabilities 69 69 134 — 272 TOTAL CURRENT LIABILITIES 319 317 546 — 1,182 LONG-TERM DEBT 743 — 7 — 750 RETIREMENT BENEFITS 291 — 23 — 314 INTERCOMPANY PAYABLE (RECEIVABLE) 1,866 (2,160 ) 294 — — OTHER LIABILITIES 40 93 106 — 239 MEZZANINE EQUITY 2 — — — 2 EQUITY ATTRIBUTABLE TO MERITOR, INC. 268 3,596 413 (4,009 ) 268 NONCONTROLLING INTERESTS (1) — — 27 — 27 TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 3,529 $ 1,846 $ 1,416 $ (4,009 ) $ 2,782 (1) As of September 30, 2017, Assets and Liabilities held for sale were: (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viiii) $2 million Noncontrolling interests. These assets and liabilities held for sale are included in the Non-Guarantors column, other than $1 million of Net property that is included in the Guarantor column. MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions) Fiscal Year Ended September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 59 $ 55 $ 137 $ — $ 251 INVESTING ACTIVITIES Capital expenditures (10 ) (49 ) (45 ) — (104 ) Cash paid for the acquisition of AA Gear & Manufacturing Inc. (35 ) — — — (35 ) Cash paid for investment in Transportation Power, Inc. (6 ) — — — (6 ) Proceeds from sale of a business 4 — — — 4 Proceeds from sale of assets — — 2 — 2 Proceeds from prior year sale of equity method investment 250 — — — 250 CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 203 (49 ) (43 ) — 111 FINANCING ACTIVITIES Borrowings and securitization — — (43 ) — (43 ) Redemption of notes (181 ) — — — (181 ) Intercompany advances 35 — (35 ) — — Repurchase of common stock (100 ) — — — (100 ) Other financing activities (2 ) (3 ) — — (5 ) CASH USED FOR FINANCING ACTIVITIES (248 ) (3 ) (78 ) — (329 ) EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — (6 ) — (6 ) CHANGE IN CASH AND CASH EQUIVALENTS 14 3 10 — 27 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10 3 75 — 88 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 24 $ 6 $ 85 $ — $ 115 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions) Fiscal Year Ended September 30, 2017 Parent Guarantors Non- Guarantors Elims Consolidated CASH PROVIDED BY OPERATING ACTIVITIES $ 33 $ 85 $ 58 $ — $ 176 INVESTING ACTIVITIES Capital expenditures (9 ) (51 ) (35 ) — (95 ) Cash paid for the acquisition of Fabco — (32 ) (2 ) — (34 ) Net investing cash flows provided by discontinued operations — 2 — — 2 CASH USED FOR INVESTING ACTIVITIES (9 ) (81 ) (37 ) — (127 ) FINANCING ACTIVITIES Borrowings and securitization — — 89 — 89 Proceeds from debt issuance 325 — — — 325 Redemption of notes (103 ) — — — (103 ) Repayment of notes and term loan (408 ) — — — (408 ) Other financing activities (1 ) (3 ) (9 ) — (13 ) Debt issuance costs (12 ) — — — (12 ) Intercompany advances 95 — (95 ) — — CASH USED FOR FINANCING ACTIVITIES (104 ) (3 ) (15 ) — (122 ) EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS (80 ) 1 7 — (72 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 90 2 68 — 160 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 10 $ 3 $ 75 $ — $ 88 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions) Fiscal Year Ended September 30, 2016 (1) Parent Guarantors Non- Guarantors Elims Consolidated CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 196 $ 39 $ (31 ) $ — $ 204 INVESTING ACTIVITIES Capital expenditures (19 ) (43 ) (31 ) — (93 ) Other investing activities — 4 (1 ) — 3 Net investing cash flows provided by discontinued operations — 1 3 — 4 CASH USED FOR INVESTING ACTIVITIES (19 ) (38 ) (29 ) — (86 ) FINANCING ACTIVITIES Repayment of notes and term loan (55 ) — — — (55 ) Other financing cash flows (1 ) (4 ) (11 ) — (16 ) Repurchase of common stock (81 ) — — — (81 ) Intercompany advances (23 ) — 23 — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (160 ) (4 ) 12 — (152 ) EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS 17 (3 ) (47 ) — (33 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 73 5 115 — 193 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 90 $ 2 $ 68 $ — $ 160 (1) Amounts have been recast. See Long-term Debt (Note 17). Basis of Presentation Certain information and footnote disclosures normally included in financial statements prepared in conformity with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As of September 30, 2018 and 2017 , Parent-only obligations included $248 million and $303 million , respectively, of pension and retiree medical benefits (see Notes 21 and 22). All debt is debt of the Parent other than $51 million and $100 million at September 30, 2018 and 2017 , respectively, (see Note 17) and is primarily related to capital lease obligations and lines of credit. Cash dividends paid to the parent by subsidiaries and investments accounted for by the equity method were $29 million , $1 million , $25 million for 2018 , 2017 , and 2016 , respectively. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Significant estimates and assumptions were used to review goodwill and other long-lived assets for impairment (see Notes 5 and 12), costs associated with the company’s restructuring actions (see Note 6), product warranty liabilities (see Note 15), long-term incentive compensation plan obligations (see Note 20), retiree medical and pension obligations (see Notes 21 and 22), income taxes (see Note 23), and contingencies including asbestos (see Note 24). |
Concentration of Credit Risk | Concentration of Credit Risk In the normal course of business, the company provides credit to customers. The company limits its credit risk by performing ongoing credit evaluations of its customers and maintaining reserves for potential credit losses and through accounts receivable factoring programs. The company’s accounts receivables are generally due from medium- and heavy-duty truck OEMs, specialty vehicle manufacturers, aftermarket customers, and trailer producers. |
Consolidation and Joint Ventures | Consolidation and Joint Ventures The consolidated financial statements include the accounts of the company and those subsidiaries in which the company has control. All intercompany balances and transactions are eliminated in consolidation. The results of operations of controlled subsidiaries are included in the consolidated financial statements and are offset by a related noncontrolling interest recorded for the noncontrolling partners’ ownership. Investments in affiliates that are not controlled are reported using the equity method of accounting (see Note 14). |
Foreign Currency | Foreign Currency Local currencies are generally considered the functional currencies for operations outside the U.S. For operations reporting in local currencies, assets and liabilities are translated at year-end exchange rates with cumulative currency translation adjustments included as a component of Accumulated Other Comprehensive Loss in the consolidated balance sheet. Income and expense items are translated at average rates of exchange during the year. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, excluding goodwill, to be held and used are reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value exceeds the fair value. Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. |
Discontinued Operations | Discontinued Operations A business component that either has been disposed of or is classified as held for sale is reported as discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The results of discontinued operations are aggregated and presented separately in the consolidated statement of operations and consolidated statement of cash flows (see Note 3). |
Revenue Recognition | Revenue Recognition Revenues are recognized upon shipment of product and transfer of ownership to the customer. Provisions for customer sales allowances and incentives are recorded as a reduction of sales at the time of product shipment. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts An allowance for uncollectible trade receivables is recorded when accounts are deemed uncollectible based on consideration of write-off history, aging analysis, and any specific, known troubled accounts. |
Earnings per Share | Earnings per Share Basic earnings (loss) per share is calculated using the weighted average number of shares outstanding during each period. The diluted earnings (loss) per share calculation includes the impact of dilutive common stock options, restricted shares, restricted share units, performance share units, and convertible securities, if applicable. |
Other | Other Other significant accounting policies are included in the related notes, specifically, goodwill (Note 5), inventories (Note 10), property and depreciation (Note 12), capitalized software (Note 13), product warranties (Note 15), financial instruments (Note 18), equity based compensation (Note 20), retirement medical plans (Note 21), retirement pension plans (Note 22), income taxes (Note 23) and environmental and asbestos-related liabilities (Note 24). |
Accounting Standards Implemented and to be Implemented | Accounting standards implemented during fiscal year 2018 In July 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-09, Codification Improvements. The amendments in this ASU result from the FASB’s standing project to address suggestions on the Accounting Standards Codification ("ASC") and to make other incremental improvements to GAAP. The amendments include changes to clarify the ASC or correct unintended application of guidance that is not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Some of the amendments in this ASU were effective upon issuance. Others have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. And some are conforming amendments that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original ASU. The amendments that were effective upon issuance did not have a material impact on the company's consolidated financial statements. The company plans to implement the remaining amendments beginning October 1, 2019 and is currently evaluating the potential impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendment changes the recognition and presentation requirements of hedge accounting, including eliminating the requirement to separately measure and report hedge ineffectiveness and presenting all items that affect earnings in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting components excluded from the assessment of hedge effectiveness. Changes to income statement classification and financial statement disclosures will be applied prospectively from the date of adoption. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance eliminates the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. The revised guidance will be applied prospectively, and is effective for calendar year-end SEC filers in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. The company adopted this standard in the fourth quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests held through Related Parties that are under Common Control, which alters how a decision maker needs to consider indirect interests in a variable interest entity ("VIE") held through an entity under common control. Under the ASU, if a decision maker is required to evaluate whether it is the primary beneficiary of a VIE, it will need to consider only its proportionate indirect interest in the VIE held through a common control party. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU intends to simplify how share-based payments are accounted for, including accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The company adopted this standard in the first quarter of fiscal year 2018. Following adoption of this standard, all excess tax benefits and all tax deficiencies generated in the current and future periods will be prospectively recorded as income tax benefit or expense in the company’s consolidated statement of operations in the reporting period in which they occur. An income tax benefit of approximately $1 million was recognized in the quarterly period ended December 31, 2017 as a result of the adoption of ASU 2016-09 and a corresponding $1 million increase in income from continuing operations and net income was recognized during such quarter. In March 2016, the FASB issued ASU 2016-07, Investments—Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting. The ASU eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments. The ASU clarifies that an exercise contingency itself does not need to be evaluated to determine whether it is in an embedded derivative, just the underlying option. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. The update clarifies that a change in a counterparty to a derivative instrument designated as a hedging instrument would not require the entity to dedesignate the hedging relationship and discontinue the application of hedge accounting. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires entities that measure inventory using first-in, first-out ("FIFO") or average cost to measure inventory at the lower of cost and net realizable value. The company adopted this standard in the first quarter of fiscal year 2018. This guidance did not have a material impact on the consolidated financial statements. Accounting standards to be implemented In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). This ASU requires that implementation costs incurred by customers in a cloud computing arrangement be deferred and recognized over the term of the arrangement, if those costs would have been capitalized in a software licensing arrangement under the internal-use software guidance under ASC 350-40. For public business entities, amendments in this update are effective for fiscal years ending after December 15, 2020. Early adoption is permitted, including adoption in any interim period, for all entities. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this ASU amend ASC 715-20 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. For public business entities, amendments in this update are effective for fiscal years ending after December 15, 2020. Early adoption is permitted for all entities. An entity should apply the amendments in this update on a retrospective basis to all periods presented. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU add, modify, and eliminate certain disclosure requirements on fair value measurements in Topic 820. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. Others should be applied retrospectively. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. The amendments in this ASU affect the guidance issued in ASU 2016-02, Leases (Topic 842), which is not yet effective. The amendments provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The effective date for this ASU is the same as that for ASU 2016-02 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2019 in connection with its planned implementation of ASU 2016-02 and is currently assessing the impact of this new transition method on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to (Topic 842). The amendments in this ASU affect narrow aspects of the guidance issued in ASU 2016-02, Leases (Topic 842), which is not yet effective. The effective date and transition requirements for this ASU are the same as those for ASU 2016-02 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2019 in connection with its planned implementation of ASU 2016-02 and is currently assessing the potential impact of this new guidance on its accounting policies and its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 ("U.S. tax reform") from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on when an entity would be required to apply modification accounting. This standard is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in this update should be applied prospectively. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 affects entities who own investments in callable debt securities and aligns the amortization period of premiums on callable debt securities to expectations incorporated in market pricing on the underlying securities. This standard is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings at the beginning of the adoption period. The company does not expect a material impact on its consolidated financial statements from adoption of this guidance. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new guidance requires entities to only include the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, are to be included in a separate line item(s) outside of any sub-total of operating income. ASU 2017-07 also provides guidance that only the service cost component of net benefit cost is eligible for capitalization. This standard is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The revisions in this amendment are to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 provides guidance which defines an "in substance nonfinancial asset"; unifies guidance related to partial sales of nonfinancial assets; eliminates rules specifically addressing sales of real estate; removes exceptions to the financial asset derecognition model; and clarifies the accounting for contributions of nonfinancial assets to joint ventures. The effective date and the transition requirements for the amendments in ASU 2017-05 are the same as the effective date and transition requirements in Topic 606, described below. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU provides clarification on the definition of a business and adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. To be considered a business under the new guidance, it must include an input and a substantive process that together significantly contribute to the ability to create output. The amendment removes the evaluation of whether a market participant could replace missing elements. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and will be applied prospectively. The potential impact of this new guidance will be assessed for future acquisitions or dispositions, but it is not expected to have a material impact on the company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU was issued to remove the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The amendments in this update are effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted; however, the guidance can only be adopted in the first interim period of a fiscal year. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force). The ASU was issued to reduce differences in practice with respect to how specific transactions are classified in the statement of cash flows. The update provides guidance on the following eight types of transactions: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investments, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The amendments in this update are effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including accounts receivable. The ASU also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The amendments in this update are required to be adopted by public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The company is currently evaluating the potential impact of this new guidance on its accounting policies and its consolidated financial statements. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The ASU clarifies the assessment of the likelihood that revenue will be collected from a contract, the guidance for presenting sales taxes and similar taxes, and the timing for measuring customer payments that are not in cash. The ASU also establishes a practical expedient for contract modifications at the transition. The amendments in this update affect the guidance in ASU 2014-09, which is not effective yet. The effective date and the transition requirements for the amendments in ASU 2016-12 are the same as the effective date and transition requirements in ASU 2014-09 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2018 in connection with its planned implementation of ASU 2014-09. Please see discussion of ASU 2014-09 below. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update). The ASU was issued to remove from the ASC certain SEC staff guidance that the SEC staff stated would be rescinded: Revenue and Expense Recognition for Freight Services in Process; Accounting for Shipping and Handling Fees and Costs; and Accounting for Consideration Given by a Vendor to a Customer (including a Reseller of the Vendor’s Products). The amendments in this update affect the guidance in ASU 2014-09, which is not effective yet. The effective date and the transition requirements for the amendments in ASU 2016-11 are the same as the effective date and transition requirements in ASU 2014-09 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2018 in connection with its planned implementation of ASU 2014-09. Please see discussion of ASU 2014-09 below. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing. The ASU provides guidance regarding the identification of performance and licensing obligations. The amendments in this update affect the guidance in ASU 2014-09, which is not effective yet. The effective date and the transition requirements for the amendments in ASU 2016-10 are the same as the effective date and transition requirements in ASU 2014-09 as described below. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2018 in connection with its planned implementation of ASU 2014-09. Please see discussion of ASU 2014-09 below. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net) to clarify certain aspects of the principal-versus-agent guidance in its new revenue recognition standard. The amendments in this update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in ASU 2016-08 are the same as the effective date and transition requirements of ASU 2014-09. Therefore, the company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2018 in connection with its planned implementation of ASU 2014-09. Please see discussion of ASU 2014-09 below. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update will require lessees to recognize a right-of-use asset and lease liability for substantially all leases. The standard is required to be adopted by public business entities in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2019 and is currently assessing the potential impact of this new guidance on its accounting policies and its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The company does not expect a material impact on its consolidated financial statements from adoption of this guidance. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service and requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 was originally effective for fiscal periods beginning after December 15, 2016, including interim periods within those fiscal periods. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year making it effective for fiscal periods beginning after December 15, 2017, including interim periods within those fiscal periods, while also providing for early adoption but not before the original effective date. The company plans to implement this standard in the first quarter of the fiscal year beginning October 1, 2018 using the modified-retrospective transition method. The company is concluding the assessment phase of its implementation of this standard. The company does not expect a material impact on its consolidated financial statements from adoption of this guidance. Disclosure requirements under this standard have been significantly expanded in comparison to the disclosure requirements under current GAAP. The company has completed its assessment of the new disclosure requirements and is in the process of drafting its disclosures for both interim and annual periods under Topic 606, and the company has determined that it will further disaggregate revenue by presenting revenue by geographic region for each of its reportable segments. |
Inventories | Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) |
Net Property | Property is stated at cost. Depreciation of property is based on estimated useful lives, generally using the straight-line method. Estimated useful lives for buildings and improvements range from 10 to 50 years and estimated useful lives for machinery and equipment range from 3 to 20 years. Significant improvements are capitalized, and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. Company-owned tooling is classified as property and depreciated over the shorter of its expected life or the life of the production contract, generally not to exceed three years . In accordance with the FASB guidance on property, plant and equipment, the company reviews the carrying value of long-lived assets, excluding goodwill, to be held and used, for impairment whenever events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value is not recoverable and exceeds estimated fair value. |
Product Warranty | The company records estimated product warranty costs at the time of shipment of products to customers. Warranty reserves are primarily based on factors that include past claims experience, sales history, product manufacturing and engineering changes and industry developments. Liabilities for product recall campaigns are recorded at the time the company’s obligation is probable and can be reasonably estimated. Policy repair actions to maintain customer relationships are recorded as other liabilities at the time an obligation is probable and can be reasonably estimated. Product warranties, including recall campaigns, not expected to be paid within one year are recorded as a non-current liability. |
Environmental | Environmental Federal, state and local requirements relating to the discharge of substances into the environment, the disposal of hazardous wastes and other activities affecting the environment have, and will continue to have, an impact on the operations of the company. The process of estimating environmental liabilities is complex and dependent upon evolving physical and scientific data at the sites, uncertainties as to remedies and technologies to be used and the outcome of discussions with regulatory agencies. The company records liabilities for environmental issues in the accounting period in which they are considered to be probable and the cost can be reasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the company records a liability for its allocable share of costs related to its involvement with the site, as well as an allocable share of costs related to insolvent parties or unidentified shares. At environmental sites in which the company is the only potentially responsible party, the company records a liability for the total probable and estimable costs of remediation before consideration of recovery from insurers or other third parties. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Basic Average Common Shares Outstanding to Diluted Average Common Shares Outstanding | A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions): Year Ended September 30, 2018 2017 2016 Basic average common shares outstanding 87.5 88.0 90.1 Impact of restricted shares, restricted share units and performance share units 2.8 1.7 1.9 Impact of convertible notes 0.9 0.5 — Diluted average common shares outstanding 91.2 90.2 92.0 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of discontinued operations | Results of the discontinued operations are summarized as follows (in millions): Year Ended September 30, 2018 2017 2016 Sales $ — $ — $ — Litigation settlement (2 ) — (3 ) Other, net (2 ) (1 ) (4 ) Loss before income taxes (4 ) (1 ) (7 ) Benefit from income taxes 1 — 3 Loss from discontinued operations attributable to Meritor, Inc. $ (3 ) $ (1 ) $ (4 ) |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the Changes in the Carrying Value of Goodwill | A summary of the changes in the carrying value of goodwill is presented below (in millions): Commercial Truck & Trailer Aftermarket & Industrial Total Goodwill (1) $ 280 $ 125 $ 405 Accumulated impairment losses (1) — (15 ) (15 ) Balance at September 30, 2016 (1) 280 110 390 Goodwill acquired from acquisition (1) — 19 19 Foreign currency translation (1) 3 2 5 Balance at September 30, 2017 (1) 283 131 414 Adjustment due to sale of a business (see Note 7) (1 ) — (1 ) Fabco measurement period adjustment (see Note 7) — 1 1 Goodwill acquired from acquisition (see Note 7) 9 — 9 Foreign currency translation (2 ) — (2 ) Balance at September 30, 2018 $ 289 $ 132 $ 421 (1) Amounts have been recast to reflect reportable segment changes (see Note 25). |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Restructuring Reserves | The following table summarizes changes in restructuring reserves (in millions): Employee Termination Benefits Asset Impairment Plant Shutdown & Other Total Balance at September 30, 2015 $ 10 $ — $ — $ 10 Activity during the period: Charges to continuing operations 15 — 1 16 Cash payments – continuing operations (11 ) — — (11 ) Other 1 — — 1 Balance at September 30, 2016 15 — 1 16 Activity during the period: Charges to continuing operations 5 — 1 6 Cash payments – continuing operations (14 ) — (1 ) (15 ) Other (1 ) — — (1 ) Balance at September 30, 2017 5 — 1 6 Activity during the period: Charges to continuing operations 6 — — 6 Cash payments – continuing operations (7 ) — (1 ) (8 ) Total restructuring reserves, end of year 4 — — 4 Less: non-current restructuring reserves (1 ) — — (1 ) Restructuring reserves – current, at September 30, 2018 $ 3 $ — $ — $ 3 |
Schedule of Restructuring Expense Recognized By Segment | Restructuring costs attributable to the company’s business segments during fiscal years 2018 , 2017 and 2016 are as follows (in millions): Commercial Truck & Trailer Aftermarket & Industrial Corporate Total Fiscal year 2018: Segment Realignment Program $ — $ 3 $ — $ 3 Other 1 1 1 3 Total restructuring costs $ 1 $ 4 $ 1 $ 6 Fiscal year 2017 (1) : Aftermarket actions — 4 — 4 Other 2 — — 2 Total restructuring costs $ 2 $ 4 $ — $ 6 Fiscal year 2016 (1) : Market related actions $ 5 $ 1 $ 2 $ 8 Aftermarket actions — 5 — 5 Other 1 2 — 3 Total restructuring costs $ 6 $ 8 $ 2 $ 16 (1) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. |
ACQUISITIONS AND DIVESTITURE (T
ACQUISITIONS AND DIVESTITURE (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | Estimated Fair Value As of September 30, 2017 Measurement Period Adjustments As of September 30, 2018 Purchase price $ 34 $ — $ 34 Assets acquired and liabilities assumed Receivables 5 — 5 Inventories 13 (1 ) 12 Property, plant and equipment 9 (2 ) 7 Intangible assets — 3 3 Accounts payable (6 ) — (6 ) Other current liabilities (6 ) (1 ) (7 ) Total identifiable net assets acquired 15 (1 ) 14 Goodwill resulting from the acquisition of Fabco 19 1 20 $ 34 $ — $ 34 Estimated Fair Value As of June 30, 2018 Measurement Period Adjustments As of September 30, 2018 Purchase price $ 36 $ (1 ) $ 35 Acquired assets and liabilities Accounts Receivable and Accounts Payable, net 2 — 2 Inventory 5 — 5 Fixed Assets 5 (1 ) 4 Intangible Assets 15 — 15 Total identifiable net assets acquired 27 (1 ) 26 Goodwill resulting from the acquisition of AAG 9 — 9 $ 36 $ (1 ) $ 35 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) and are summarized as follows (in millions): September 30, 2018 2017 Finished goods $ 170 $ 139 Work in process 41 34 Raw materials, parts and supplies 266 205 Total $ 477 $ 378 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Other Current Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets are summarized as follows (in millions): September 30, 2018 2017 Asbestos-related recoveries (see Note 24) $ 16 $ 14 Prepaid and other 30 29 Other current assets $ 46 $ 43 |
NET PROPERTY (Tables)
NET PROPERTY (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Net Property | Net property is summarized as follows (in millions): September 30, 2018 2017 Property at cost: Land and land improvements $ 29 $ 30 Buildings 228 240 Machinery and equipment 914 892 Company-owned tooling 130 126 Construction in progress 81 69 Total 1,382 1,357 Less: accumulated depreciation (899 ) (883 ) Net property $ 483 $ 474 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of Other Assets | Other assets are summarized as follows (in millions): September 30, 2018 2017 Investments in non-consolidated joint ventures (see Note 14) $ 102 $ 101 Asbestos-related recoveries (see Note 24) 76 32 Unamortized revolver debt issuance costs (see Note 17) 7 8 Capitalized software costs, net (1) 26 27 Deferred income tax assets (see Note 23) 140 229 Assets for uncertain tax positions (see Note 23) 53 48 Prepaid pension costs (see Note 22) 152 135 Intangible assets (2) 18 1 Other (3) 22 15 Other assets $ 596 $ 596 (1) In accordance with FASB ASC Topic 350-40, costs relating to internally developed or purchased software in the preliminary project stage and the post-implementation stage are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight-line basis over the estimated economic useful life of the software. (2) Primarily relates to customer relationships. As of September 30, 2018, the gross carrying value was $22 million and the accumulated amortization was $4 million . As of September 30, 2017, the gross carrying value was 1 million and the accumulated amortization was insignificant. The weighted average amortization periods for customer relationships is approximately 19 years. (3) As of September 30, 2017, includes reserves for Rockwell insurance policies in dispute. |
INVESTMENTS IN NON-CONSOLIDAT_2
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Non-Consolidated Joint Ventures and Direct Ownership Interests | The company’s non-consolidated joint ventures and related direct ownership interest are as follows: September 30, 2018 2017 2016 Meritor WABCO Vehicle Control Systems (Commercial Truck & Trailer) — % — % 50 % Master Sistemas Automotivos Ltda. (Commercial Truck & Trailer) 49 % 49 % 49 % Sistemas Automotrices de Mexico S.A. de C.V. (Commercial Truck & Trailer) 50 % 50 % 50 % Ege Fren Sanayii ve Ticaret A.S. (Commercial Truck & Trailer) 49 % 49 % 49 % Automotive Axles Limited (Commercial Truck & Trailer) 36 % 36 % 36 % |
Schedule Of Investments In Non-Consolidated Joint Ventures | The company’s investments in non-consolidated joint ventures are as follows (in millions): September 30, 2018 2017 (1) Commercial Truck & Trailer $ 102 $ 101 Aftermarket & Industrial — — Total investments in non-consolidated joint ventures $ 102 $ 101 (1) Amounts for the year ended September 30, 2017 have been recast to reflect reportable segment changes. |
Schedule of Equity in Earnings of Non-Consolidated Joint Ventures | The company’s equity in earnings of non-consolidated joint ventures is as follows (in millions): Year Ended September 30, 2018 2017 (1) 2016 (1) Commercial Truck & Trailer $ 27 $ 48 $ 36 Aftermarket & Industrial — — — Total equity in earnings of affiliates $ 27 $ 48 $ 36 (1) Amounts for the years ended September 30, 2017 and September 30, 2016 have been recast to reflect reportable segment changes. |
Summarized Balance Sheet Information Of Non-Consolidated Joint Ventures | The summarized financial information presented below represents the combined accounts of the company’s non-consolidated joint ventures related to its continuing operations (in millions): September 30, 2018 2017 (1) Current assets $ 390 $ 326 Non-current assets 163 151 Total assets $ 553 $ 477 Current liabilities $ 282 $ 183 Non-current liabilities 66 98 Total liabilities $ 348 $ 281 (1) Does not include Meritor WABCO Vehicle Control Systems. |
Summarized Income Statement Information Of Non-Consolidated Joint Ventures | Year Ended September 30, 2018 2017 2016 Sales $ 1,101 $ 1,156 $ 1,101 Gross profit 154 200 165 Net income 59 101 73 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Other Current Liabilities Disclosure [Abstract] | |
Schedule Of Other Current Liabilities | Other current liabilities are summarized as follows (in millions): September 30, 2018 2017 Compensation and benefits $ 122 $ 117 Income taxes 27 11 Taxes other than income taxes 25 34 Accrued interest 11 9 Product warranties 19 18 Environmental reserves (see Note 24) 8 5 Restructuring (see Note 6) 3 5 Asbestos-related liabilities (see Note 24) 18 19 Indemnity obligations (see Note 24) 1 2 Other 56 52 Other current liabilities $ 290 $ 272 |
Schedule of Product Warranties | A summary of the changes in product warranties is as follows (in millions): September 30, 2018 2017 2016 Total product warranties – beginning of year $ 45 $ 44 $ 48 Accruals for product warranties 22 14 10 Payments (16 ) (17 ) (14 ) Change in estimates and other 3 4 — Total product warranties – end of year 54 45 44 Less: non-current product warranties (see Note 16) (35 ) (27 ) (26 ) Product warranties – current $ 19 $ 18 $ 18 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule Of Other Liabilities | Other liabilities are summarized as follows (in millions): September 30, 2018 2017 Asbestos-related liabilities (see Note 24) $ 193 $ 124 Restructuring (see Note 6) 1 1 Deferred income tax liabilities (see Note 23) 16 12 Liabilities for uncertain tax positions (see Note 23) 48 32 Product warranties (see Note 15) 35 27 Environmental (see Note 24) 9 4 Indemnity obligations (see Note 24) 9 10 Other 21 29 Other liabilities $ 332 $ 239 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Long-Term Debt, net of discounts where applicable, is summarized as follows (in millions): September 30, 2018 2017 3.25 percent convertible notes due 2037 (1)(3) $ 318 $ 317 4.0 percent convertible notes due 2027 (1)(4) 24 24 7.875 percent convertible notes due 2026 (1)(5) 22 22 6.75 percent notes due 2021 (2)(6) — 173 6.25 percent notes due 2024 (2)(7) 444 443 Capital lease obligation 7 12 Borrowings and securitization 46 89 Unamortized discount on convertible notes (8) (37 ) (42 ) Subtotal 824 1,038 Less: current maturities (94 ) (288 ) Long-term debt $ 730 $ 750 (1) The 3.25 percent, 4.0 percent and 7.875 percent convertible notes contain a put and call feature, which allows for earlier redemption beginning in 2025, 2019 and 2020, respectively. (2) The 6.75 percent and 6.25 percent notes contain a call option, which allows for early redemption by the issuer. (3) The 3.25 percent convertible notes due 2037 are presented net of $7 million and $8 million unamortized issuance costs as of September 30, 2018 and September 30, 2017, respectively. (4) The 4.0 percent convertible notes due 2027 are presented net of unamortized issuance costs of an insignificant amount as of September 30, 2018 and September 30, 2017 . (5) The 7.875 percent convertible notes due 2026 are presented net of unamortized issuance costs of an insignificant amount as of September 30, 2018 and September 30, 2017 , an d $1 million original issuance discount as of September 30, 2018 and September 30, 2017 . (6) The 6.75 percent notes due 2021 are presented net of $2 million unamortized issuance costs as of September 30, 2017 . (7) The 6.25 percent notes due 2024 are presented net of $6 million and $7 million unamortized issuance costs as of September 30, 2018 and September 30, 2017 , respectively. (8) The carrying amount of the equity component related to convertible debt. |
Debt instrument redemption summary | On or after February 15, 2019, the company may redeem, at its option, from time to time, the 6.25 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.25 Percent Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on February 15 of the years indicated below: Year Redemption Price 2019 103.125% 2020 102.083% 2021 101.042% 2022 and thereafter 100.000% On or after June 15, 2016, the company could redeem, at its option, from time to time, the 6.75 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.75 Percent Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, had they been redeemed during the 12-month period beginning on June 15 of the years indicated below: Year Redemption Price 2016 105.063% 2017 103.375% 2018 101.688% 2019 and thereafter 100.000% |
Schedule of principle and unamortized discount on convertible notes | The following table summarizes the principal amounts and related unamortized discount on all convertible notes (in millions): September 30, September 30, Principal amount of convertible notes $ 372 $ 372 Unamortized discount on convertible notes (45 ) (51 ) Net carrying value $ 327 $ 321 |
Summary of convertible notes | The following table summarizes other information related to the convertible notes: Convertible Notes 4.0% 7.875% 3.25% Total amortization period for debt discount (in years): 12 8 8 Remaining amortization period for debt discount (in years): 1 2 7 Effective interest rates on convertible notes: 7.9 % 10.9 % 5.6 % |
Schedule of interest costs on convertible notes | The following table summarizes interest costs recognized on convertible notes (in millions): Year Ended September 30, 2018 2017 2016 Contractual interest coupon $ 17 $ 17 $ 18 Amortization of debt discount 2 8 8 Repurchase of convertible notes — 31 — Total $ 19 $ 56 $ 26 |
Schedule of long-term debt maturities | As of September 30, 2018 , the company is contractually obligated to make payments as follows (in millions): Total 2019 2020 2021 2022 2023 Thereafter (2) Total debt (1) $ 875 $ 2 $ 1 $ 48 $ 1 $ — $ 823 (1) Total debt excludes unamortized discount on convertible notes of $37 million , unamortized issuance costs of $13 million , and original issuance discount of $1 million . (2) Includes the company's 6.25 percent notes, which contains a call feature that allows for early redemption and includes the company's 3.25 percent, 4.0 percent and 7.875 percent convertible notes, which contain a put and call feature that allows for earlier redemption beginning in 2025, 2019 and 2020, respectively. |
Future minimum lease payments for capital leases | As of September 30, 2018, the future minimum lease payments for noncancelable capital leases with initial terms in excess of one year were as follows: Total 2019 2020 2021 2022 2023 Thereafter Capital lease obligation $ 9 $ 2 $ 2 $ 2 $ 2 $ 1 $ — Less amounts representing interest (2 ) (1 ) (1 ) — — — — Principal on capital lease $ 7 $ 1 $ 1 $ 2 $ 2 $ 1 $ — |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the impact of derivatives on comprehensive income | The following table summarizes the impact of the company’s derivatives instruments on comprehensive income for fiscal years ended September 30 (in millions): Location of Gain (Loss) 2018 2017 2016 Derivatives designated as hedging instruments: Amount of gain (loss) recognized in AOCL AOCL $ 3 $ (1 ) $ (3 ) Amount of gain (loss) reclassified from AOCL into income Cost of Sales (1 ) 1 (4 ) Derivatives not designated as hedging instruments: Amount of gain (loss) recognized in income Cost of Sales (2 ) 1 (1 ) Derivatives not designated as hedging instruments: Amount of gain (loss) recognized in income Other Income (expense) 2 — (1 ) |
Summary of fair value of financial instruments | Fair values of financial instruments are summarized as follows (in millions): September 30, September 30, Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 115 $ 115 $ 88 $ 88 Short-term debt 94 116 288 329 Long-term debt 730 776 750 859 Foreign exchange forward contracts (other assets) 2 2 — — Foreign exchange forward contracts (other liabilities) — — 3 3 Foreign currency option contracts (other assets) — — 3 3 Cross-currency Swap (other assets) 6 6 — — |
Schedule of offsetting of derivative assets and liabilities | The following table reflects the offsetting of derivative assets and liabilities (in millions): September 30, 2018 September 30, 2017 Gross Gross Amounts Net Amounts Gross Gross Amounts Net Amounts Derivative Asset Foreign exchange forward contract 2 — 2 — — — Cross-currency swap 6 — 6 — — — Derivative Liabilities Foreign exchange forward contract — — — 3 — 3 |
Fair value of financial instruments by the valuation hierarchy | Fair value of financial instruments by the valuation hierarchy at September 30, 2018 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 115 $ — $ — Short-term debt — 114 2 Long-term debt — 771 5 Foreign exchange forward contracts (asset) — 2 — Foreign exchange forward contracts (liability) — — — Foreign currency option contracts (other assets) — — — Cross-currency Swap (other assets) — 6 — Fair value of financial instruments by the valuation hierarchy at September 30, 2017 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 88 $ — $ — Short-term debt — 325 4 Long-term debt — 851 8 Foreign exchange forward contracts (asset) — — — Foreign exchange forward contracts (liability) — 3 — Foreign currency option contracts (other assets) — — 3 Cross-currency Swap (other assets) — — — |
Reconciliation of changes in fair value of Level 3 financial assets and liabilities | The tables below provide a reconciliation of changes in fair value of the Level 3 financial assets and liabilities measured at fair value in the consolidated balance sheet for the twelve months ended September 30, 2018 and September 30, 2017 , respectively. No transfers of assets between any of the Levels occurred during these periods. Twelve months ended September 30, 2018 (in millions) Short-term foreign currency option contracts (asset) Long-term foreign currency option contracts (asset) Total Fair Value as of September 30, 2017 $ 2 $ 1 $ 3 Total unrealized gains (losses): Included in other income — — — Included in cost of sales (1 ) (1 ) (2 ) Total realized gains (losses): Included in other income 1 — 1 Included in cost of sales — — — Purchases, issuances, sales and settlements: Purchases — — — Settlements (2 ) — (2 ) Transfer in and / or out of Level 3 (1) — — — Reclass between short-term and long-term — — — Fair Value as of September 30, 2018 $ — $ — $ — (1) Transfers as of the last day of the reporting period Twelve months ended September 30, 2017 (in millions) Short-term foreign currency option contracts (asset) Long-term foreign currency option contracts (asset) Total Fair Value as of September 30, 2016 $ — $ 2 $ 2 Total unrealized gains (losses): Included in other income — — — Included in cost of sales — 2 2 Total realized gains (losses): Included in other income — — — Included in cost of sales — — — Purchases, issuances, sales and settlements: Purchases 1 1 2 Settlements (2 ) (1 ) (3 ) Transfer in and / or out of Level 3 (1) — — — Reclass between short-term and long-term 3 (3 ) — Fair Value as of September 30, 2017 $ 2 $ 1 $ 3 (1) Transfers as of the last day of the reporting period |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Components of accumulated other comprehensive loss | The components of AOCL as reported in the Consolidated Balance Sheet and Statement of Equity (Deficit), and the changes in AOCL by components, net of tax, are as follows (in millions): Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) Total Balance at September 30, 2017 $ (41 ) $ (500 ) $ (4 ) $ (545 ) Other comprehensive income (loss) before reclassification (49 ) 8 3 (38 ) Amounts reclassified from accumulated other comprehensive loss — 16 1 17 Net current-period other comprehensive income (loss) $ (49 ) $ 24 $ 4 $ (21 ) Balance at September 30, 2018 $ (90 ) $ (476 ) $ — $ (566 ) Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Loss Total Balance at September 30, 2016 $ (66 ) $ (740 ) $ (3 ) $ (809 ) Other comprehensive income (loss) before reclassification 25 200 (1 ) 224 Amounts reclassified from accumulated other comprehensive loss — 40 — 40 Net current-period other comprehensive income (loss) $ 25 $ 240 $ (1 ) $ 264 Balance at September 30, 2017 $ (41 ) $ (500 ) $ (4 ) $ (545 ) Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Loss Total Balance at September 30, 2015 $ (54 ) $ (705 ) $ (7 ) $ (766 ) Other comprehensive income (loss) before reclassification (12 ) (70 ) 4 (78 ) Amounts reclassified from accumulated other comprehensive loss — 35 — 35 Net current-period other comprehensive income (loss) $ (12 ) $ (35 ) $ 4 $ (43 ) Balance at September 30, 2016 $ (66 ) $ (740 ) $ (3 ) $ (809 ) |
Changes in accumulated other comprehensive income | Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Amortization of prior service costs $ (5 ) (a) Amortization of actuarial losses 45 (a) 40 Total before tax (12 ) Tax (benefit) expense $ 28 Net of tax Total reclassifications for the period $ 28 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 21 and 22 for additional details), which is recorded in cost of sales and selling, general and administrative expenses. Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Amortization of prior service credits $ (35 ) (a) Amortization of actuarial losses 46 (a) Recognized prior service costs and actuarial losses due to settlement 6 (a) 17 Total before tax (1 ) Tax (benefit) expense $ 16 Net of tax Total reclassifications for the period $ 16 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 21 and 22 for additional details), which is recorded in cost of sales and selling, general and administrative expenses. Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Amortization of prior service costs $ (1 ) (a) Amortization of actuarial losses 36 (a) 35 Total before tax — Tax (benefit) expense $ 35 Net of tax Total reclassifications for the period $ 35 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 21 and 22 for additional details), which is recorded in cost of sales and selling, general and administrative expenses. |
EQUITY BASED COMPENSATION (Tabl
EQUITY BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Rollforward of non-vested restricted stock, restricted share, and performance share units and activity | The following is a rollforward of the company’s non-vested performance share units as of September 30, 2018 , and the activity during fiscal year 2018 is summarized as follows (shares in thousands): Non-vested Shares Number of Shares Weighted-Average Grant-Date Fair Value Non-vested - beginning of year 1,813 $ 11.93 Granted 362 24.69 Vested (411 ) 13.11 Forfeited (152 ) 15.26 Non-vested - end of year 1,612 14.18 The following is a rollforward of the company’s non-vested restricted stock and restricted share units as of September 30, 2018 , and the activity during fiscal year 2018 is summarized as follows (shares in thousands): Non-vested Shares Number of Shares Weighted-Average Grant-Date Fair Value Non-vested - beginning of year 1,514 $ 12.10 Granted 355 24.93 Vested (361 ) 13.91 Forfeited (44 ) 17.98 Non-vested - end of year 1,464 14.59 |
RETIREMENT MEDICAL PLANS (Table
RETIREMENT MEDICAL PLANS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan, Postretirement Medical Plan with Prescription Drug Benefits [Abstract] | |
Schedule Of Retiree Medical Liability Expense Assumptions | The following are the assumptions used in the measurement of the accumulated postretirement benefit obligation ("APBO") and retiree medical expense: 2018 2017 2016 Discount rate 4.05 % 3.32 % 3.45 % Health care cost trend rate 6.18 % 6.52 % 7.10 % Ultimate health care trend rate 4.63 % 4.65 % 4.75 % Year ultimate rate is reached 2024 2024 2024 |
Retiree Medical Liability Components As of Balance Sheet Date | The APBO as of the September 30, 2018 and 2017 measurement dates are summarized as follows (in millions): 2018 2017 Retirees $ 86 $ 104 Employees eligible to retire — — Total $ 86 $ 104 |
Rollforward Of Retiree Medical Liability | The following reconciles the change in APBO and the amounts included in the consolidated balance sheet for years ended September 30, 2018 and 2017 , respectively (in millions): 2018 2017 APBO — beginning of year $ 104 $ 445 Interest cost 3 14 Actuarial loss gain (5 ) (8 ) Plan amendment — (315 ) Foreign currency rate changes (1 ) — Benefit payments (1) (15 ) (32 ) APBO — end of year 86 104 Retiree medical liability $ 86 $ 104 (1) Net of subsidies and rebates available under Employer Group Waiver Plan ("EGWP"). |
Schedule Of Retiree Medical Liability Current and Long Term Components | The retiree medical liability is included in the consolidated balance sheet as follows (in millions): September 30, 2018 2017 Current — included in compensation and benefits $ 13 $ 18 Long-term — included in retirement benefits 73 86 Retiree medical liability $ 86 $ 104 |
Amount Of Retiree Medical Obligations Recorded In Accumulated Other Comprehensive Loss Net Of Tax | The following table summarizes the amounts included in AOCL net of tax related to retiree medical liabilities as of September 30, 2018 and 2017 and changes recognized in Other Comprehensive Income (Loss) net of tax for the years ended September 30, 2018 and 2017 . Net Actuarial Loss Prior Service Cost (Benefit) Total Balance at September 30, 2017 $ 92 $ (203 ) $ (111 ) Net actuarial gain for the year (5 ) — (5 ) Amortization for the year (17 ) 35 18 Deferred tax impact 6 (10 ) (4 ) Balance at September 30, 2018 $ 76 $ (178 ) $ (102 ) Balance at September 30, 2016 $ 107 $ (11 ) $ 96 Net actuarial gain for the year (8 ) — (8 ) Recognized prior service costs due to plan amendment — (315 ) (315 ) Amortization for the year (15 ) 5 (10 ) Deferred tax impact 8 118 126 Balance at September 30, 2017 $ 92 $ (203 ) $ (111 ) |
Components Of Retiree Medical Expense | The components of retiree medical expense for years ended September 30 are as follows (in millions): 2018 2017 2016 Service cost $ — $ — $ — Interest cost 3 14 18 Amortization of: Prior service benefit (35 ) (5 ) (1 ) Actuarial losses 17 15 13 Retiree medical (income) expense $ (15 ) $ 24 $ 30 |
Retiree Medical Plan Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates | A one-percentage point change in the assumed health care cost trend rate for all years to, and including, the ultimate rate would have the following effects (in millions): 2018 2017 Effect on total service and interest cost 1% Increase $ — $ — 1% Decrease — — Effect on APBO 1% Increase 4 5 1% Decrease (4 ) (4 ) |
Retiree Medical Plan Estimated Future Benefit Payments | The company expects future benefit payments as follows (in millions): Gross Benefit Payments Gross Receipts (1) Fiscal 2019 $ 14 $ — Fiscal 2020 13 — Fiscal 2021 12 — Fiscal 2022 11 — Fiscal 2023 10 — Fiscal 2024 – 2028 21 1 (1) Consists of subsidies and rebates available under EGWP. |
RETIREMENT PENSION PLANS (Table
RETIREMENT PENSION PLANS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of US Pension Benefit Obligation Expense and Net Expense Assumptions | The following are the significant assumptions used in the measurement of the projected benefit obligation ("PBO") and net periodic pension expense: U.S. Plans 2018 2017 2016 Discount rate 4.30% 3.70% — 3.75% 3.50% — 3.55% Assumed return on plan assets (beginning of the year) 7.75% 7.75% 7.75% |
Schedule of Non-US Pension Benefit Obligation Expense and Net Expense Assumptions | U.K. Plan 2018 2017 2016 Discount rate 2.90% 2.80% 2.50% Assumed return on plan assets (beginning of the year) 6.00% 6.00% 6.00% |
Rollforward of Pension Liability and Pension Plan Assets | The following table reconciles the change in the PBO, the change in plan assets and amounts included in the consolidated balance sheet for the years ended September 30, 2018 and 2017 , respectively (in millions): 2018 2017 U.S. Non- U.S. Total U.S. Non- U.S. Total PBO — beginning of year $ 1,036 $ 599 $ 1,635 $ 1,112 $ 616 $ 1,728 Interest cost 38 16 54 38 15 53 Actuarial gain (70 ) (9 ) (79 ) (32 ) (21 ) (53 ) Prior service cost — — — 1 — 1 Settlements — (18 ) (18 ) — — — Benefit payments (82 ) (19 ) (101 ) (83 ) (30 ) (113 ) Foreign currency rate changes — (15 ) (15 ) — 19 19 PBO — end of year $ 922 $ 554 $ 1,476 $ 1,036 $ 599 $ 1,635 Change in plan assets Fair value of assets — beginning of year $ 821 $ 730 $ 1,551 $ 834 $ 734 $ 1,568 Actual return on plan assets — 32 32 65 1 66 Employer contributions 5 1 6 5 1 6 Settlements — (22 ) (22 ) — — — Benefit payments (82 ) (19 ) (101 ) (83 ) (30 ) (113 ) Foreign currency rate changes — (20 ) (20 ) — 24 24 Fair value of assets — end of year $ 744 $ 702 $ 1,446 $ 821 $ 730 $ 1,551 Funded status $ (178 ) $ 148 $ (30 ) $ (215 ) $ 131 $ (84 ) |
Schedule of Balance Sheet Classification of Net Pension Liability | Amounts included in the consolidated balance sheet at September 30, 2018 and 2017 are comprised of the following (in millions): 2018 2017 U.S. Non-U.S. Total U.S. Non-U.S. Total Non-current assets $ — $ 152 $ 152 $ — $ 135 $ 135 Current liabilities (5 ) — (5 ) (5 ) — (5 ) Retirement benefits-non-current (173 ) (4 ) (177 ) (210 ) (4 ) (214 ) Net amount recognized $ (178 ) $ 148 $ (30 ) $ (215 ) $ 131 $ (84 ) |
Schedule of Pension Costs Recognized in Other Comprehensive Loss | The following tables summarize the amounts included in AOCL net of tax related to pension liabilities as of September 30, 2018 and 2017 and changes recognized in Other Comprehensive Income (Loss) net of tax for the year ended September 30, 2018 . Net Actuarial Loss U.S. Non-U.S. Total Balance at September 30, 2017 $ 418 $ 193 $ 611 Net prior service cost for the year — — — Net actuarial gain for the year (11 ) 3 (8 ) Amortization for the year (23 ) (6 ) (29 ) Deferred tax impact 10 — 10 Settlements — (6 ) (6 ) Balance at September 30, 2018 $ 394 $ 184 $ 578 Balance at September 30, 2016 $ 454 $ 190 $ 644 Net prior service cost for the year 1 — $ 1 Net actuarial gain for the year (36 ) 11 (25 ) Amortization for the year (22 ) (8 ) (30 ) Deferred tax impact 21 — 21 Balance at September 30, 2017 $ 418 $ 193 $ 611 |
Pension and Other Postretirement Benefits | The non-current portion of the pension liability is included in Retirement Benefits in the consolidated balance sheet as follows (in millions): September 30, 2018 2017 Pension liability $ 177 $ 214 Retiree medical liability — long term (see Note 21) 73 86 Other 12 14 Total retirement benefits $ 262 $ 314 |
Schedule of Projected Benefit Obligation Accumulated Benefit Obligation and Plan Assets | Additional information is as follows (in millions): 2018 2017 ABO Exceeds Assets Assets Exceed ABO Total ABO Exceeds Assets Assets Exceed ABO Total PBO $ 926 $ 550 $ 1,476 $ 1,041 $ 594 $ 1,635 ABO 926 550 1,476 1,041 594 1,635 Plan Assets 744 702 1,446 821 730 1,551 |
Schedule of Net Periodic Pension Benefit Costs | The components of net periodic pension expense are as follows (in millions): 2018 2017 2016 Service cost $ — $ — $ 1 Interest cost 54 53 65 Assumed rate of return on plan assets (99 ) (96 ) (99 ) Amortization of — Actuarial losses 29 30 23 Settlement loss 6 — — Net periodic pension income $ (10 ) $ (13 ) $ (10 ) |
Pension Plan Investments Measured at Fair Value by Level Within Fair Value Hierarchy | The fair value of plan assets at September 30, 2018 by asset category is as follows (in millions): U.S. Plans 2018 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 51 $ — $ — $ 51 U.S. – Small cap 24 — — 24 Private equity — — 17 17 International equity 29 — — 29 Equity investments measured at net asset value (1) — — — 191 Total equity investments $ 104 $ — $ 17 $ 312 Fixed income investments U.S. fixed income $ 1 $ 164 $ — $ 165 Emerging fixed income — 20 — 20 Partnerships fixed income 13 — — 13 Fixed income investments measured at net asset value (1) — — — 34 Total fixed income $ 14 $ 184 $ — $ 232 Alternatives – Partnerships — — 83 83 Alternatives – Partnerships measured at net asset value (1) — — — 85 Cash and cash equivalents — 32 — 32 Total assets at fair value $ 118 $ 216 $ 100 $ 744 Non-U.S. Plans 2018 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 171 $ — $ — $ 171 Total equity investments $ 171 $ — $ — $ 171 Fixed income investments Other fixed income investments $ 5 $ 145 $ — $ 150 Fixed income investments measured at net asset value (1) — — — 194 Total fixed income $ 5 $ 145 $ — $ 344 Commingled funds — 5 — 5 Alternative investments measured at net asset value (1) — — — 137 Real estate measured at net asset value (1) — — — 41 Cash and cash equivalents — 4 — 4 Total assets at fair value $ 176 $ 154 $ — $ 702 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. The fair value of plan assets at September 30, 2017 by asset category is as follows (in millions): U.S. Plans 2017 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 54 $ — $ — $ 54 U.S. – Small cap 26 — — 26 Private equity — — 19 19 International equity 37 — — 37 Equity investments measured at net asset value (1) — — — 195 Total equity investments $ 117 $ — $ 19 $ 331 Fixed income investments U.S. fixed income $ 5 $ 213 $ — $ 218 Emerging fixed income — 22 — 22 Partnerships fixed income 14 — — 14 Fixed income investments measured at net asset value (1) — — — 37 Total fixed income $ 19 $ 235 $ — $ 291 Alternatives – Partnerships — — 77 77 Alternatives – Partnerships measured at net asset value (1) — — — 88 Cash and cash equivalents — 34 — 34 Total assets at fair value $ 136 $ 269 $ 96 $ 821 Non-U.S. Plans 2017 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 168 $ — $ — $ 168 Total equity investments $ 168 $ — $ — $ 168 Fixed income investments Other fixed income investments $ 5 $ 149 $ — $ 154 Fixed income investments measured at net asset value (1) — — — 226 Total fixed income $ 5 $ 149 $ — $ 380 Commingled funds — 5 — 5 Alternative investments measured at net asset value (1) — — — 136 Real estate measured at net asset value (1) — — — 40 Cash and cash equivalents — 1 — 1 Total assets at fair value $ 173 $ 155 $ — $ 730 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. |
Changes in Level 3, Pension Plan Investments | The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2018 (in millions): U.S. Plans 2018 Fair Value at October 1, 2017 Return on Plan Assets: Attributable to Assets Held at September 30, 2018 Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2018 Asset Category Private equity $ 19 $ (3 ) $ 1 $ — $ — $ 17 Alternatives – Partnerships 77 6 — — — 83 Total Level 3 fair value $ 96 $ 3 $ 1 $ — $ — $ 100 The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2017 (in millions): U.S. Plans 2017 Fair Value at October 1, 2016 Return on Plan Assets: Attributable to Assets Held at September 30, 2017 Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2017 Asset Category Private equity $ 11 $ 4 $ 4 $ — $ — $ 19 Partnerships – Fixed income 1 — — (1 ) — — Alternatives – Partnerships 77 4 1 (5 ) — 77 Total Level 3 fair value $ 89 $ 8 $ 5 $ (6 ) $ — $ 96 |
Pension Plan Estimated Future Contributions and Benefit Payments | Information about the expected cash flows for the U.S. and non-U.S. pension plans is as follows (in millions): U.S. Non U.S. Total Expected employer contributions: Fiscal 2019 $ 5 $ 1 $ 6 Expected benefit payments: Fiscal 2019 71 29 100 Fiscal 2020 70 25 95 Fiscal 2021 69 25 94 Fiscal 2022 68 25 93 Fiscal 2023 67 25 92 Fiscal 2024-2028 314 128 442 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Tax | The income tax provisions were calculated based upon the following components of income before income taxes (in millions): 2018 2017 2016 U.S. income $ 85 $ 252 $ 71 Foreign income 193 129 84 Total $ 278 $ 381 $ 155 |
Summary of Components of the Benefit (Provision) for Income Taxes | The components of the benefit (provision) for income taxes are summarized as follows (in millions): 2018 2017 2016 Current tax benefit (expense): U.S. $ (24 ) $ (1 ) $ (1 ) Foreign (51 ) (11 ) 11 State and local — (2 ) (1 ) Total current tax benefit (expense) (75 ) (14 ) 9 Deferred tax benefit (expense): U.S. (76 ) (28 ) 394 Foreign 5 (9 ) (22 ) State and local (3 ) (1 ) 43 Total deferred tax benefit (74 ) (38 ) 415 Income tax benefit (expense) $ (149 ) $ (52 ) $ 424 |
Summary of the Tax Effects of Temporary Differences | Net current and non-current deferred income tax assets (liabilities) included in the consolidated balance sheet consist of the tax effects of temporary differences related to the following (in millions): September 30, 2018 2017 Accrued compensation and benefits $ 15 $ 32 Accrued product warranties 11 14 Inventory costs 6 9 Receivables 8 18 Environmental 28 31 Accrued retiree healthcare benefits 21 39 Retirement pension plans 41 92 Property 10 10 Loss and credit carryforwards 278 349 Other 19 40 Sub-total 437 634 Less: Valuation allowances (236 ) (307 ) Deferred income taxes - asset $ 201 $ 327 Taxes on undistributed income $ (14 ) $ (7 ) Intangible assets (54 ) (87 ) Debt basis difference (9 ) (16 ) Deferred income taxes - liability $ (77 ) $ (110 ) Net deferred income tax assets $ 124 $ 217 |
Schedule of Net Current and Non-Current Deferred Income Tax Assets (Liabilities) | Net non-current deferred income tax assets (liabilities) are included in the consolidated balance sheet as follows (in millions): September 30, 2018 2017 Other assets (see Note 13) $ 140 $ 229 Other liabilities (see Note 16) (16 ) (12 ) Net non-current deferred income taxes — asset $ 124 $ 217 |
Summary of Tax Credit Carryforwards and Deferred Tax Assets | The expiration periods for deferred tax assets related to net operating losses and tax credit carryforwards as of September 30, 2018 are included below (in millions). Also included are the associated valuation allowances on these deferred tax assets (in millions). Fiscal Year Expiration Periods 2019-2023 2024-2033 2034-2038 Indefinite Total Net Operating Losses and Tax Credit Carryforwards $ 15 $ 55 $ 11 $ 197 $ 278 Valuation Allowances on these Deferred Tax Assets $ 10 $ 17 $ — $ 187 $ 214 |
Reconciliation of Income Tax (Benefit) Provision at the U.S Statutory Rate | The company’s provision for income taxes was different from the provision for income taxes calculated at the U.S. statutory rate for the reasons set forth below (in millions): 2018 2017 2016 Expense for income taxes at statutory tax rate $ (68 ) $ (133 ) $ (54 ) State and local income taxes (2 ) (14 ) (7 ) Foreign income taxed at rates other than statutory (4 ) 9 5 Legislative changes (126 ) — (14 ) Joint venture equity income 6 7 3 Tax effect of nonfunctional currency transaction 2 (2 ) (30 ) Correlated tax relief — 7 51 U.S. tax impact on distributions from subsidiaries and joint ventures (4 ) (8 ) 14 Nondeductible expenses (8 ) (10 ) (12 ) Tax credits 9 14 61 Valuation allowances 40 56 418 Impact of capital loss 1 15 — Other 5 7 (11 ) Income tax benefit (expense) $ (149 ) $ (52 ) $ 424 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period is as follows (in millions): 2018 2017 2016 Balance at beginning of the period $ 269 $ 243 $ 207 Additions to tax positions recorded during the current year — — 39 Additions to tax positions recorded during the prior year — 26 — Reductions to tax position recorded in prior years (6 ) — — Reductions to tax positions due to lapse of statutory limits (1 ) (2 ) (3 ) Translation, other (1 ) 2 — Balance at end of the period $ 261 $ 269 $ 243 |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Environmental Loss Contingencies by Site | The following are the components of the Superfund and non-Superfund environmental reserves (in millions): Superfund Sites Non-Superfund Sites Total Balance at September 30, 2017 $ 2 $ 7 $ 9 Transition of Grenada to Superfund Site 2 (2 ) — Payments and other (4 ) (2 ) (6 ) Accruals 12 2 14 Balance at September 30, 2018 $ 12 $ 5 $ 17 |
Asbestos Related Reserves and Recoveries | Maremont’s asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions): September 30, 2018 2017 Pending and future claims $ 107 $ 68 Billed but unpaid claims 2 2 Asbestos-related liabilities $ 109 $ 70 Asbestos-related insurance recoveries $ 24 $ 25 he Rockwell legacy asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions): September 30, 2018 2017 Pending and future claims $ 103 $ 63 Billed but unpaid claims 2 2 Asbestos-related liabilities $ 105 $ 65 Asbestos-related insurance recoveries $ 68 $ 38 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information is summarized as follows (in millions): Commercial Truck & Trailer Aftermarket & Industrial Elims Total Fiscal year 2018 Sales: External Sales $ 3,171 $ 1,007 $ — $ 4,178 Intersegment Sales 154 17 (171 ) — Total Sales $ 3,325 $ 1,024 $ (171 ) $ 4,178 Fiscal year 2017 Sales (1) : External Sales $ 2,467 $ 880 $ — $ 3,347 Intersegment Sales 139 20 (159 ) — Total Sales $ 2,606 $ 900 $ (159 ) $ 3,347 Fiscal year 2016 Sales (1) : External Sales $ 2,332 $ 867 $ — $ 3,199 Intersegment Sales 133 19 (152 ) — Total Sales $ 2,465 $ 886 $ (152 ) $ 3,199 (1) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. |
Segment Income Attributable to Parent | Segment adjusted EBITDA: 2018 2017 (2) 2016 (2) Commercial Truck & Trailer $ 345 $ 234 $ 207 Aftermarket & Industrial 142 116 116 Segment adjusted EBITDA 487 350 323 Unallocated legacy and corporate income (expense), net (1) (13 ) (3 ) 4 Interest expense, net (67 ) (119 ) (84 ) Gain on sale of equity investment — 243 — Benefit (provision) for income taxes (149 ) (52 ) 424 Depreciation and amortization (84 ) (75 ) (67 ) Loss on sale of receivables (5 ) (5 ) (5 ) Restructuring costs (6 ) (6 ) (16 ) Asbestos related items (3) (25 ) — — Pension settlement loss (4) (6 ) — — Asset impairment charges (3 ) (4 ) — Noncontrolling interests (9 ) (4 ) (2 ) Income from continuing operations attributable to Meritor, Inc. $ 120 $ 325 $ 577 (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) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. (3) The year ended September 30, 2018 includes $25 million related to the change in estimate resulting from change in estimated forecast horizon and an asbestos insurance settlement. (4) The year ended September 30, 2018 includes $6 million related to the U.K. pension settlement loss. |
Schedule of Segment Assets | Depreciation and Amortization: 2018 2017 (1) 2016 (1) Commercial Truck & Trailer $ 72 $ 66 $ 59 Aftermarket & Industrial 12 9 8 Total depreciation and amortization $ 84 $ 75 $ 67 Capital Expenditures: 2018 2017 (1) 2016 (1) Commercial Truck & Trailer $ 88 $ 84 $ 82 Aftermarket & Industrial 16 11 11 Total capital expenditures $ 104 $ 95 $ 93 Segment Assets: 2018 2017 (2) Commercial Truck & Trailer $ 1,858 $ 1,708 Aftermarket & Industrial 495 466 Total segment assets 2,353 2,174 Corporate (3) 633 869 Less: Accounts receivable sold under off-balance sheet factoring programs (4) (260 ) (261 ) Total assets $ 2,726 $ 2,782 (1) Fiscal year 2017 and 2016 have been recast to reflect reportable segment changes. (2) Amounts as of September 30, 2017 have been recast to reflect reportable segment changes, including the reallocation of goodwill. (3) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs. (4) At September 30, 2018 and September 30, 2017 , segments assets include $260 million and $261 million , respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 8). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances. |
Schedule of Revenues and Assets by Geographical Areas | 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: 2018 2017 2016 U.S. $ 2,289 $ 1,761 $ 1,617 Canada 72 69 67 Mexico 221 234 390 Total North America 2,582 2,064 2,074 Sweden 311 273 250 Italy 243 210 201 United Kingdom 179 149 136 Other Europe 103 83 86 Total Europe 836 715 673 Brazil 224 168 130 China 196 127 84 India 231 184 152 Other Asia-Pacific 109 89 86 Total sales $ 4,178 $ 3,347 $ 3,199 Assets by Geographic Area: 2018 2017 U.S. $ 1,350 $ 1,489 Canada 36 29 Mexico 224 204 Total North America 1,610 1,722 Sweden 138 123 Italy 86 70 United Kingdom 263 241 Other Europe 171 184 Total Europe 658 618 Brazil 161 164 China 123 127 India 100 84 Other Asia-Pacific 74 67 Total $ 2,726 $ 2,782 |
QUARTERLY FINANCIAL INFORMATI_2
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Results | 2017 Fiscal Quarters (Unaudited) First Second Third Fourth 2017 (In millions, except share related data) Sales $ 699 $ 806 $ 920 $ 922 $ 3,347 Cost of sales (610 ) (685 ) (778 ) (790 ) (2,863 ) Gross margin 89 121 142 132 484 Provision for income taxes (6 ) (13 ) (11 ) (22 ) (52 ) Net income 16 23 51 238 328 Net income from continuing operations attributable to Meritor, Inc. 15 22 49 239 325 Net income attributable to Meritor, Inc. 15 22 48 239 324 Basic earnings per share from continuing operations $ 0.17 $ 0.25 $ 0.55 $ 2.70 $ 3.69 Diluted earnings per share from continuing operations $ 0.17 $ 0.24 $ 0.52 $ 2.63 $ 3.60 The following is a condensed summary of the company’s unaudited quarterly results of continuing operations for fiscal years 2018 and 2017 . Per share amounts are based on the weighted average shares outstanding for that quarter. Earnings per share for the year may not equal the sum of the four fiscal quarters’ earnings per share due to changes in basic and diluted shares outstanding. 2018 Fiscal Quarters (Unaudited) First Second Third Fourth 2018 (In millions, except share related data) Sales $ 903 $ 1,066 $ 1,129 $ 1,080 $ 4,178 Cost of sales (763 ) (888 ) (952 ) (921 ) (3,524 ) Gross margin 140 178 177 159 654 Provision for income taxes (83 ) (22 ) (26 ) (18 ) (149 ) Net income (loss) (34 ) 60 67 33 126 Net income (loss) from continuing operations attributable to Meritor, Inc. (35 ) 57 66 32 120 Net income (loss) attributable to Meritor, Inc. (36 ) 57 64 32 117 Basic earnings (loss) per share from continuing operations $ (0.40 ) $ 0.64 $ 0.76 $ 0.37 $ 1.37 Diluted earnings (loss) per share from continuing operations $ (0.40 ) $ 0.63 $ 0.73 $ 0.36 $ 1.31 |
OPERATING CASH FLOWS AND OTHE_2
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Operating Cash Flow Disclosure [Abstract] | |
Schedule of Operating Cash Flows | Year Ended September 30, 2018 2017 2016 (in millions) OPERATING ACTIVITIES Net income $ 126 $ 328 $ 575 Less: Loss from discontinued operations, net of tax (3 ) (1 ) (4 ) Income from continuing operations 129 329 579 Adjustments to income from continuing operations to arrive at cash provided by operating activities: Depreciation and amortization 84 75 67 Deferred income tax expense (benefit) 74 38 (415 ) Restructuring costs 6 6 16 Loss on debt extinguishment 8 36 — Goodwill and asset impairment 3 4 — Equity in earnings of affiliates (27 ) (48 ) (36 ) Stock compensation expense 20 19 9 Provision for doubtful accounts (1 ) 1 2 Pension and retiree medical expense (benefit) (31 ) 11 20 Pension settlement loss 6 — — Gain on sale of equity method investment — (243 ) — Gain on sale of property — — (2 ) Dividends received from equity method investments 17 44 37 Pension and retiree medical contributions (21 ) (38 ) (42 ) Restructuring payments (8 ) (15 ) (11 ) Changes in off-balance sheet receivable securitization and factoring programs 11 26 (31 ) Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations: Receivables (98 ) (160 ) 89 Inventories (112 ) (43 ) 28 Accounts payable 97 133 (89 ) Other current assets and liabilities 36 16 (18 ) Other assets and liabilities 59 (12 ) 6 Operating cash flows provided by continuing operations 252 179 209 Operating cash flows used for discontinued operations (1 ) (3 ) (5 ) CASH PROVIDED BY OPERATING ACTIVITIES $ 251 $ 176 $ 204 |
Schedule of Supplemental Disclosures | September 30, 2018 2017 2016 (In millions) Balance sheet data: Allowance for doubtful accounts $ 4 $ 5 $ 6 Statement of operations data: Maintenance and repairs expense 52 46 45 Research, development and engineering expense 73 69 68 Depreciation expense 74 67 61 Rental expense 18 14 15 Interest income 3 3 3 Interest expense (70 ) (122 ) (87 ) Statement of cash flows data: Interest payments, net of receipts 49 75 71 Income tax payments, net of refunds 33 22 24 Non-cash investing activities - capital asset additions from capital leases 4 — — |
SUPPLEMENTAL PARENT AND GUARA_2
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Statement of Operations | MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions) Fiscal Year Ended September 30, 2017 Parent Guarantors Non-Guarantors Elims Consolidated Sales External $ — $ 1,762 $ 1,585 $ — $ 3,347 Subsidiaries — 123 149 (272 ) — Total sales — 1,885 1,734 (272 ) 3,347 Cost of sales (62 ) (1,583 ) (1,490 ) 272 (2,863 ) GROSS MARGIN (62 ) 302 244 — 484 Selling, general and administrative (82 ) (100 ) (82 ) — (264 ) Restructuring costs 2 (2 ) (6 ) — (6 ) Other operating expense, net (3 ) (1 ) (3 ) — (7 ) OPERATING INCOME (LOSS) (145 ) 199 153 — 207 Other income (expense), net 39 (11 ) (26 ) — 2 Gain on sale of equity investment — 243 — — 243 Equity in earnings of affiliates — 42 6 — 48 Interest income (expense), net (168 ) 35 14 — (119 ) INCOME (LOSS) BEFORE INCOME TAXES (274 ) 508 147 — 381 Benefit (provision) for income taxes 96 (126 ) (22 ) — (52 ) Equity income from continuing operations of subsidiaries 503 114 — (617 ) — INCOME FROM CONTINUING OPERATIONS 325 496 125 (617 ) 329 LOSS FROM DISCONTINUED OPERATIONS, net of tax (1 ) (1 ) (1 ) 2 (1 ) NET INCOME 324 495 124 (615 ) 328 Less: Net income attributable to noncontrolling interests — — (4 ) — (4 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 324 $ 495 $ 120 $ (615 ) $ 324 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions) Fiscal Year Ended September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 2,290 $ 1,888 $ — $ 4,178 Subsidiaries — 143 219 (362 ) — Total sales — 2,433 2,107 (362 ) 4,178 Cost of sales (57 ) (2,037 ) (1,792 ) 362 (3,524 ) GROSS MARGIN (57 ) 396 315 — 654 Selling, general and administrative (89 ) (104 ) (124 ) — (317 ) Restructuring costs (1 ) (3 ) (2 ) — (6 ) Other operating expense, net (14 ) (1 ) 1 — (14 ) OPERATING INCOME (LOSS) (161 ) 288 190 — 317 Other income (expense), net 58 17 (74 ) — 1 Equity in earnings of affiliates — 19 8 — 27 Interest income (expense), net (118 ) 29 22 — (67 ) INCOME (LOSS) BEFORE INCOME TAXES (221 ) 353 146 — 278 Benefit (provision) for income taxes (2 ) (81 ) (66 ) — (149 ) Equity income from continuing operations of subsidiaries 343 88 — (431 ) — INCOME FROM CONTINUING OPERATIONS 120 360 80 (431 ) 129 LOSS FROM DISCONTINUED OPERATIONS, net of tax (3 ) (1 ) (1 ) 2 (3 ) NET INCOME 117 359 79 (429 ) 126 Less: Net income attributable to noncontrolling interests — — (9 ) — (9 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 117 $ 359 $ 70 $ (429 ) $ 117 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (In millions) Fiscal Year Ended September 30, 2016 (1) Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 1,616 $ 1,583 $ — $ 3,199 Subsidiaries — 112 61 (173 ) — Total sales — 1,728 1,644 (173 ) 3,199 Cost of sales (57 ) (1,439 ) (1,440 ) 173 (2,763 ) GROSS MARGIN (57 ) 289 204 — 436 Selling, general and administrative (64 ) (79 ) (70 ) — (213 ) Restructuring costs (7 ) (4 ) (5 ) — (16 ) Other operating expense, net (3 ) — — — (3 ) OPERATING INCOME (LOSS) (131 ) 206 129 — 204 Other income (expense), net 34 (35 ) — — (1 ) Equity in earnings of affiliates — 32 4 — 36 Interest income (expense), net (117 ) 26 7 — (84 ) INCOME (LOSS) BEFORE INCOME TAXES (214 ) 229 140 — 155 Benefit (provision) for income taxes 526 (102 ) — — 424 Equity income from continuing operations of subsidiaries 265 120 — (385 ) — INCOME FROM CONTINUING OPERATIONS 577 247 140 (385 ) 579 LOSS FROM DISCONTINUED OPERATIONS, net of tax (4 ) (4 ) (2 ) 6 (4 ) NET INCOME 573 243 138 (379 ) 575 Less: Net income attributable to noncontrolling interests — — (2 ) — (2 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 573 $ 243 $ 136 $ (379 ) $ 573 (1) Amounts have been recast. See Long-term Debt (Note 17). |
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Year Ended September 30, 2017 Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 324 $ 495 $ 124 $ (615 ) $ 328 Other comprehensive income 264 21 23 (44 ) 264 Total comprehensive income 588 516 147 (659 ) 592 Less: Comprehensive income attributable to noncontrolling interests — — (4 ) — (4 ) Comprehensive income attributable to Meritor, Inc. $ 588 $ 516 $ 143 $ (659 ) $ 588 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Year Ended September 30, 2016 (1) Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 573 $ 243 $ 138 $ (379 ) $ 575 Other comprehensive income (loss) (43 ) 11 (44 ) 33 (43 ) Total comprehensive income 530 254 94 (346 ) 532 Less: Comprehensive income attributable to noncontrolling interests — — (2 ) — (2 ) Comprehensive income attributable to Meritor, Inc. $ 530 $ 254 $ 92 $ (346 ) $ 530 (1) Amounts have been recast. See Long-term Debt (Note 17). MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Year Ended September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 117 $ 359 $ 79 $ (429 ) $ 126 Other comprehensive income (21 ) (42 ) (41 ) 81 (23 ) Total comprehensive income 96 317 38 (348 ) 103 Less: Comprehensive income attributable to noncontrolling interests — — (7 ) — (7 ) Comprehensive income attributable to Meritor, Inc. $ 96 $ 317 $ 31 $ (348 ) $ 96 |
Schedule of Condensed Consolidating Balance Sheet | MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING BALANCE SHEET (In millions) September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS Cash and cash equivalents $ 24 $ 6 $ 85 $ — $ 115 Receivables, trade and other, net 2 62 524 — 588 Inventories — 242 235 — 477 Other current assets 6 12 28 — 46 TOTAL CURRENT ASSETS 32 322 872 — 1,226 NET PROPERTY (1) 24 241 218 — 483 GOODWILL — 250 171 — 421 OTHER ASSETS 179 182 235 — 596 INVESTMENTS IN SUBSIDIARIES 3,583 855 — (4,438 ) — TOTAL ASSETS $ 3,818 $ 1,850 $ 1,496 $ (4,438 ) $ 2,726 CURRENT LIABILITIES Short-term debt $ 47 $ — $ 47 $ — $ 94 Accounts and notes payable 64 297 339 — 700 Other current liabilities 77 71 142 — 290 TOTAL CURRENT LIABILITIES 188 368 528 — 1,084 LONG-TERM DEBT 726 — 4 — 730 RETIREMENT BENEFITS 241 — 21 — 262 INTERCOMPANY PAYABLE (RECEIVABLE) 2,325 (2,640 ) 315 — — OTHER LIABILITIES 50 124 158 — 332 MEZZANINE EQUITY 1 — — — 1 EQUITY ATTRIBUTABLE TO MERITOR, INC. 287 3,998 440 (4,438 ) 287 NONCONTROLLING INTERESTS — — 30 — 30 TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 3,818 $ 1,850 $ 1,496 $ (4,438 ) $ 2,726 (1) As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. $1 million of the assets and liabilities held for sale are included in the Parent column and $1 million of the assets and liabilities held for sale are included in the Guarantor column. MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING BALANCE SHEET (In millions) September 30, 2017 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS Cash and cash equivalents (1) $ 10 $ 3 $ 75 $ — $ 88 Receivables, trade and other, net (1) — 296 493 — 789 Inventories (1) — 184 194 — 378 Other current assets 5 6 32 — 43 TOTAL CURRENT ASSETS 15 489 794 — 1,298 NET PROPERTY (1) 21 227 226 — 474 GOODWILL (1) — 237 177 — 414 OTHER ASSETS 271 106 219 — 596 INVESTMENTS IN SUBSIDIARIES 3,222 787 — (4,009 ) — TOTAL ASSETS $ 3,529 $ 1,846 $ 1,416 $ (4,009 ) $ 2,782 CURRENT LIABILITIES Short-term debt $ 195 $ 2 $ 91 $ — $ 288 Accounts and notes payable (1) 55 246 321 — 622 Other current liabilities 69 69 134 — 272 TOTAL CURRENT LIABILITIES 319 317 546 — 1,182 LONG-TERM DEBT 743 — 7 — 750 RETIREMENT BENEFITS 291 — 23 — 314 INTERCOMPANY PAYABLE (RECEIVABLE) 1,866 (2,160 ) 294 — — OTHER LIABILITIES 40 93 106 — 239 MEZZANINE EQUITY 2 — — — 2 EQUITY ATTRIBUTABLE TO MERITOR, INC. 268 3,596 413 (4,009 ) 268 NONCONTROLLING INTERESTS (1) — — 27 — 27 TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 3,529 $ 1,846 $ 1,416 $ (4,009 ) $ 2,782 (1) As of September 30, 2017, Assets and Liabilities held for sale were: (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viiii) $2 million Noncontrolling interests. These assets and liabilities held for sale are included in the Non-Guarantors column, other than $1 million of Net property that is included in the Guarantor column. |
Schedule of Condensed Consolidating Statement of Cash Flows | MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions) Fiscal Year Ended September 30, 2018 Parent Guarantors Non- Guarantors Elims Consolidated CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 59 $ 55 $ 137 $ — $ 251 INVESTING ACTIVITIES Capital expenditures (10 ) (49 ) (45 ) — (104 ) Cash paid for the acquisition of AA Gear & Manufacturing Inc. (35 ) — — — (35 ) Cash paid for investment in Transportation Power, Inc. (6 ) — — — (6 ) Proceeds from sale of a business 4 — — — 4 Proceeds from sale of assets — — 2 — 2 Proceeds from prior year sale of equity method investment 250 — — — 250 CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 203 (49 ) (43 ) — 111 FINANCING ACTIVITIES Borrowings and securitization — — (43 ) — (43 ) Redemption of notes (181 ) — — — (181 ) Intercompany advances 35 — (35 ) — — Repurchase of common stock (100 ) — — — (100 ) Other financing activities (2 ) (3 ) — — (5 ) CASH USED FOR FINANCING ACTIVITIES (248 ) (3 ) (78 ) — (329 ) EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — (6 ) — (6 ) CHANGE IN CASH AND CASH EQUIVALENTS 14 3 10 — 27 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10 3 75 — 88 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 24 $ 6 $ 85 $ — $ 115 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions) Fiscal Year Ended September 30, 2017 Parent Guarantors Non- Guarantors Elims Consolidated CASH PROVIDED BY OPERATING ACTIVITIES $ 33 $ 85 $ 58 $ — $ 176 INVESTING ACTIVITIES Capital expenditures (9 ) (51 ) (35 ) — (95 ) Cash paid for the acquisition of Fabco — (32 ) (2 ) — (34 ) Net investing cash flows provided by discontinued operations — 2 — — 2 CASH USED FOR INVESTING ACTIVITIES (9 ) (81 ) (37 ) — (127 ) FINANCING ACTIVITIES Borrowings and securitization — — 89 — 89 Proceeds from debt issuance 325 — — — 325 Redemption of notes (103 ) — — — (103 ) Repayment of notes and term loan (408 ) — — — (408 ) Other financing activities (1 ) (3 ) (9 ) — (13 ) Debt issuance costs (12 ) — — — (12 ) Intercompany advances 95 — (95 ) — — CASH USED FOR FINANCING ACTIVITIES (104 ) (3 ) (15 ) — (122 ) EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS (80 ) 1 7 — (72 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 90 2 68 — 160 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 10 $ 3 $ 75 $ — $ 88 MERITOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions) Fiscal Year Ended September 30, 2016 (1) Parent Guarantors Non- Guarantors Elims Consolidated CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 196 $ 39 $ (31 ) $ — $ 204 INVESTING ACTIVITIES Capital expenditures (19 ) (43 ) (31 ) — (93 ) Other investing activities — 4 (1 ) — 3 Net investing cash flows provided by discontinued operations — 1 3 — 4 CASH USED FOR INVESTING ACTIVITIES (19 ) (38 ) (29 ) — (86 ) FINANCING ACTIVITIES Repayment of notes and term loan (55 ) — — — (55 ) Other financing cash flows (1 ) (4 ) (11 ) — (16 ) Repurchase of common stock (81 ) — — — (81 ) Intercompany advances (23 ) — 23 — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (160 ) (4 ) 12 — (152 ) EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS 17 (3 ) (47 ) — (33 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 73 5 115 — 193 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 90 $ 2 $ 68 $ — $ 160 (1) Amounts have been recast. See Long-term Debt (Note 17). |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 01, 2017 | Dec. 01, 2016 | Dec. 01, 2015 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2015 |
Significant Accounting Policies [Line Items] | ||||||||||
Compensation costs recognized | $ 20 | $ 19 | $ 9 | |||||||
Impact of convertible notes (in shares) | 900,000 | 500,000 | 0 | |||||||
Income tax benefit as a result of adopted accounting standards | $ (1) | |||||||||
Increase in income from continuing operations | $ 129 | $ 329 | $ 579 | |||||||
Convertible Notes | 7.875% convertible notes due 2026 | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Stated interest rate | 7.875% | |||||||||
Executive Officer | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Number of shares issuable per performance share unit (in shares) | 1 | 1 | 1 | |||||||
Restricted Stock Units (RSUs) | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Shares granted in period (in shares) | 400,000 | 600,000 | 700,000 | |||||||
Vesting term | 3 years | |||||||||
Restricted Stock Units (RSUs) | Executive Officer | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Exercise price (usd per share) | $ 24.79 | $ 12.77 | $ 10.51 | |||||||
Shares granted in period (in shares) | 300,000 | 500,000 | 500,000 | |||||||
Vesting term | 3 years | 3 years | 3 years | |||||||
Performance Shares | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Compensation costs recognized | $ 14 | $ 14 | $ 6 | |||||||
Performance Shares | Executive Officer | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Exercise price (usd per share) | $ 24.79 | $ 12.77 | $ 10.51 | |||||||
Restricted Shares, Restricted Share Units and Performance Share Units | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Impact of instruments attributable to dilutive effect of share-based payment arrangements (in shares) | 2,800,000 | 1,700,000 | 1,900,000 | |||||||
Ten Customers | Customer Concentration Risk | Sales | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Concentration risk from significant customers, percentage | 75.00% | 74.00% | 73.00% | |||||||
Three Customers | Customer Concentration Risk | Sales | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Concentration risk from significant customers, percentage | 52.00% | 49.00% | 50.00% | |||||||
Three Customers | Customer Concentration Risk | Trade Accounts Receivable | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Concentration risk from significant customers, percentage | 23.00% | 23.00% | ||||||||
Performance period of October 1, 2017 to September 30, 2020 | Performance Shares | Executive Officer | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance period | 3 years | |||||||||
Shares authorized for grant (in shares) | 300,000 | |||||||||
Performance period of October 1, 2017 to September 30, 2020 | Performance Shares | Executive Officer | Minimum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 0.00% | |||||||||
Performance period of October 1, 2017 to September 30, 2020 | Performance Shares | Executive Officer | Maximum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 200.00% | |||||||||
Performance period of October 1, 2017 to September 30, 2020 | Performance Shares | Executive Officer | Performance Objective One | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 50.00% | |||||||||
Performance period of October 1, 2017 to September 30, 2020 | Performance Shares | Executive Officer | Performance Objective Two | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 50.00% | |||||||||
Performance period of October 1, 2016 to September 30, 2019 | Performance Shares | Executive Officer | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance period | 3 years | |||||||||
Shares authorized for grant (in shares) | 600,000 | |||||||||
Performance period of October 1, 2016 to September 30, 2019 | Performance Shares | Executive Officer | Minimum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 0.00% | |||||||||
Performance period of October 1, 2016 to September 30, 2019 | Performance Shares | Executive Officer | Maximum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 200.00% | |||||||||
Performance period of October 1, 2016 to September 30, 2019 | Performance Shares | Executive Officer | Performance Objective One | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 50.00% | |||||||||
Performance period of October 1, 2016 to September 30, 2019 | Performance Shares | Executive Officer | Performance Objective Two | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 25.00% | |||||||||
Performance period of October 1, 2016 to September 30, 2019 | Performance Shares | Executive Officer | Performance Objective Three | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 25.00% | |||||||||
Performance period of October 1, 2015 to September 30, 2018 | Performance Shares | Executive Officer | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance period | 3 years | |||||||||
Shares authorized for grant (in shares) | 700,000 | |||||||||
Performance period of October 1, 2015 to September 30, 2018 | Performance Shares | Executive Officer | Minimum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 0.00% | |||||||||
Performance period of October 1, 2015 to September 30, 2018 | Performance Shares | Executive Officer | Maximum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 200.00% | |||||||||
Performance period of October 1, 2015 to September 30, 2018 | Performance Shares | Executive Officer | Performance Objective One | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 50.00% | |||||||||
Performance period of October 1, 2015 to September 30, 2018 | Performance Shares | Executive Officer | Performance Objective Two | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Award vesting rights percentage | 50.00% | |||||||||
Accounting Standards Update 2016-09 | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Increase in income from continuing operations | $ (1) |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Average Common Shares (Details) - shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Basic average common shares outstanding (in shares) | 87.5 | 88 | 90.1 |
Impact of convertible notes (in shares) | 0.9 | 0.5 | 0 |
Diluted average common shares outstanding (in shares) | 91.2 | 90.2 | 92 |
Restricted Shares, Restricted Share Units and Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Impact of instruments attributable to dilutive effect of share-based payment arrangements (in shares) | 2.8 | 1.7 | 1.9 |
DISCONTINUED OPERATIONS - Summa
DISCONTINUED OPERATIONS - Summary of Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Sales | $ 0 | $ 0 | $ 0 |
Litigation settlement | (2) | 0 | (3) |
Other, net | (2) | (1) | (4) |
Loss before income taxes | (4) | (1) | (7) |
Benefit from income taxes | 1 | 0 | 3 |
Loss from discontinued operations attributable to Meritor, Inc. | $ (3) | $ (1) | $ (4) |
DISCONTINUED OPERATIONS - Addit
DISCONTINUED OPERATIONS - Additional Information (Details) - MSSC - USD ($) $ in Millions | 1 Months Ended | |
Oct. 31, 2009 | Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Ownership before transaction | 57.00% | |
Exposure under indemnity | $ 1 |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | |
Long Lived Assets Held-for-sale [Line Items] | ||
Property in various locations up for sell | $ 2 | |
Impairment charge on assets held for sale | $ 3 | |
Aftermarket & Industrial | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Property in various locations up for sell | 1 | |
Corporate | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Property in various locations up for sell | $ 1 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Apr. 30, 2018 | Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||||
Goodwill [Line Items] | ||||||||||||
Purchase price | $ 35 | $ 34 | ||||||||||
Goodwill [Roll Forward] | ||||||||||||
Goodwill, beginning balance | 414 | [1] | 390 | $ 405 | ||||||||
Accumulated impairment losses | (15) | |||||||||||
Adjustment due to sale of a business (see Note 7) | (1) | |||||||||||
Fabco measurement period adjustment (see Note 7) | 1 | |||||||||||
Goodwill acquired from acquisition (see Note 7) | 9 | 19 | ||||||||||
Foreign currency translation | (2) | 5 | ||||||||||
Goodwill, ending balance | $ 421 | [1] | $ 414 | [1] | 421 | [1] | 414 | [1] | 390 | |||
Commercial Truck & Trailer | ||||||||||||
Goodwill [Roll Forward] | ||||||||||||
Goodwill, beginning balance | 283 | 280 | 280 | |||||||||
Accumulated impairment losses | 0 | |||||||||||
Adjustment due to sale of a business (see Note 7) | (1) | |||||||||||
Fabco measurement period adjustment (see Note 7) | 0 | |||||||||||
Goodwill acquired from acquisition (see Note 7) | 9 | 0 | ||||||||||
Foreign currency translation | (2) | 3 | ||||||||||
Goodwill, ending balance | 289 | 283 | 289 | 283 | 280 | |||||||
Aftermarket & Industrial | ||||||||||||
Goodwill [Roll Forward] | ||||||||||||
Goodwill, beginning balance | 131 | 110 | 125 | |||||||||
Accumulated impairment losses | (15) | |||||||||||
Adjustment due to sale of a business (see Note 7) | 0 | |||||||||||
Fabco measurement period adjustment (see Note 7) | 1 | |||||||||||
Goodwill acquired from acquisition (see Note 7) | 0 | 19 | ||||||||||
Foreign currency translation | 0 | 2 | ||||||||||
Goodwill, ending balance | 132 | 131 | 132 | 131 | 110 | |||||||
AA Gear & Manufacturing, Inc. | ||||||||||||
Goodwill [Line Items] | ||||||||||||
Purchase price | 35 | $ 36 | $ 35 | 35 | 0 | 0 | ||||||
Goodwill [Roll Forward] | ||||||||||||
Goodwill, ending balance | 9 | $ 9 | $ 9 | $ 9 | ||||||||
AA Gear & Manufacturing, Inc. | Commercial Truck & Trailer | ||||||||||||
Goodwill [Line Items] | ||||||||||||
Expected deductible tax period | 15 years | |||||||||||
Fabco Holdings, Inc. | ||||||||||||
Goodwill [Line Items] | ||||||||||||
Purchase price | 34 | 34 | $ 34 | $ 0 | 34 | $ 0 | ||||||
Goodwill [Roll Forward] | ||||||||||||
Goodwill, beginning balance | 19 | |||||||||||
Goodwill, ending balance | $ 20 | $ 19 | $ 20 | $ 19 | ||||||||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
RESTRUCTURING COSTS - Changes i
RESTRUCTURING COSTS - Changes in Restructuring Reserves (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Reserve [Roll Forward] | |||||||||
Restructuring reserve, period start | $ 6,000,000 | $ 6,000,000 | $ 16,000,000 | $ 10,000,000 | |||||
Charges to continuing operations | $ 0 | $ 3,000,000 | $ 1,000,000 | 2,000,000 | $ 2,000,000 | $ 4,000,000 | 6,000,000 | 6,000,000 | 16,000,000 |
Cash payments – continuing operations | (8,000,000) | (15,000,000) | (11,000,000) | ||||||
Other | (1,000,000) | 1,000,000 | |||||||
Restructuring reserve, period end | 4,000,000 | 6,000,000 | 4,000,000 | 6,000,000 | 16,000,000 | ||||
Less: non-current restructuring reserves | (1,000,000) | (1,000,000) | (1,000,000) | (1,000,000) | |||||
Restructuring reserves – current | 3,000,000 | 5,000,000 | 3,000,000 | 5,000,000 | |||||
Employee Termination Benefits | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Restructuring reserve, period start | 5,000,000 | 5,000,000 | 15,000,000 | 10,000,000 | |||||
Charges to continuing operations | 6,000,000 | 5,000,000 | 15,000,000 | ||||||
Cash payments – continuing operations | (7,000,000) | (14,000,000) | (11,000,000) | ||||||
Other | (1,000,000) | 1,000,000 | |||||||
Restructuring reserve, period end | 4,000,000 | 5,000,000 | 4,000,000 | 5,000,000 | 15,000,000 | ||||
Less: non-current restructuring reserves | (1,000,000) | (1,000,000) | |||||||
Restructuring reserves – current | 3,000,000 | 3,000,000 | |||||||
Asset Impairment | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Restructuring reserve, period start | 0 | 0 | 0 | 0 | |||||
Charges to continuing operations | 0 | 0 | 0 | ||||||
Cash payments – continuing operations | 0 | 0 | 0 | ||||||
Other | 0 | 0 | |||||||
Restructuring reserve, period end | 0 | 0 | 0 | 0 | 0 | ||||
Less: non-current restructuring reserves | 0 | 0 | |||||||
Restructuring reserves – current | 0 | 0 | |||||||
Plant Shutdown & Other | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Restructuring reserve, period start | $ 1,000,000 | 1,000,000 | 1,000,000 | 0 | |||||
Charges to continuing operations | 0 | 1,000,000 | 1,000,000 | ||||||
Cash payments – continuing operations | (1,000,000) | (1,000,000) | 0 | ||||||
Other | 0 | 0 | |||||||
Restructuring reserve, period end | 0 | $ 1,000,000 | 0 | $ 1,000,000 | $ 1,000,000 | ||||
Less: non-current restructuring reserves | 0 | 0 | |||||||
Restructuring reserves – current | $ 0 | $ 0 |
RESTRUCTURING COSTS - Restructu
RESTRUCTURING COSTS - Restructuring Expense Recognized By Segment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | $ 0 | $ 3,000,000 | $ 1,000,000 | $ 2,000,000 | $ 2,000,000 | $ 4,000,000 | $ 6,000,000 | $ 6,000,000 | $ 16,000,000 | ||
Corporate | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 1,000,000 | 0 | 2,000,000 | ||||||||
Commercial Truck & Trailer | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 1,000,000 | 2,000,000 | 6,000,000 | ||||||||
Aftermarket & Industrial | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 4,000,000 | 4,000,000 | 8,000,000 | ||||||||
Segment Realignment Program | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 3,000,000 | ||||||||||
Segment Realignment Program | Corporate | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 0 | ||||||||||
Segment Realignment Program | Commercial Truck & Trailer | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 0 | ||||||||||
Segment Realignment Program | Aftermarket & Industrial | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 3,000,000 | ||||||||||
Aftermarket actions | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 4,000,000 | 5,000,000 | |||||||||
Aftermarket actions | Corporate | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 0 | 0 | |||||||||
Aftermarket actions | Commercial Truck & Trailer | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 0 | 0 | |||||||||
Aftermarket actions | Aftermarket & Industrial | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | $ 5,000,000 | 4,000,000 | 5,000,000 | ||||||||
Market related actions | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 8,000,000 | ||||||||||
Market related actions | Corporate | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | $ 2,000,000 | 2,000,000 | |||||||||
Market related actions | Commercial Truck & Trailer | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 5,000,000 | 5,000,000 | |||||||||
Market related actions | Aftermarket & Industrial | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | $ 1,000,000 | 1,000,000 | |||||||||
Other | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 3,000,000 | 2,000,000 | 3,000,000 | ||||||||
Other | Corporate | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 1,000,000 | 0 | 0 | ||||||||
Other | Commercial Truck & Trailer | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | 1,000,000 | 2,000,000 | 1,000,000 | ||||||||
Other | Aftermarket & Industrial | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring costs | $ 1,000,000 | $ 0 | $ 2,000,000 |
RESTRUCTURING COSTS - Additiona
RESTRUCTURING COSTS - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 0 | $ 3,000,000 | $ 1,000,000 | $ 2,000,000 | $ 2,000,000 | $ 4,000,000 | $ 6,000,000 | $ 6,000,000 | $ 16,000,000 | |||
Corporate | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 1,000,000 | 0 | 2,000,000 | |||||||||
Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 4,000,000 | 4,000,000 | 8,000,000 | |||||||||
Commercial Truck & Trailer | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 1,000,000 | 2,000,000 | 6,000,000 | |||||||||
Segment Realignment Program | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 3,000,000 | |||||||||||
Segment Realignment Program | Corporate | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 0 | |||||||||||
Segment Realignment Program | Commercial Truck & Trailer and Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 3,000,000 | |||||||||||
Segment Realignment Program | Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 3,000,000 | |||||||||||
Segment Realignment Program | Commercial Truck & Trailer | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 0 | |||||||||||
Other | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 3,000,000 | 2,000,000 | 3,000,000 | |||||||||
Other | Corporate | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 1,000,000 | 0 | 0 | |||||||||
Other | Commercial Truck & Trailer and Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 3,000,000 | 3,000,000 | ||||||||||
Other | Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 1,000,000 | 0 | 2,000,000 | |||||||||
Other | Commercial Truck & Trailer | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 1,000,000 | 2,000,000 | 1,000,000 | |||||||||
Aftermarket actions | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 4,000,000 | 5,000,000 | ||||||||||
Aftermarket actions | Corporate | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 0 | 0 | ||||||||||
Aftermarket actions | Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 5,000,000 | 4,000,000 | 5,000,000 | |||||||||
Aftermarket actions | Commercial Truck & Trailer | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 0 | 0 | ||||||||||
Market related actions | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 8,000,000 | |||||||||||
Market related actions | Corporate | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 2,000,000 | 2,000,000 | ||||||||||
Market related actions | Aftermarket & Industrial | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | 1,000,000 | 1,000,000 | ||||||||||
Market related actions | Commercial Truck & Trailer | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring costs | $ 5,000,000 | $ 5,000,000 |
ACQUISITIONS AND DIVESTITURE -
ACQUISITIONS AND DIVESTITURE - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Apr. 30, 2018 | Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||||||||
Total purchase price | $ 35 | $ 34 | |||||||
Impairment charge on assets held for sale | 3 | ||||||||
AA Gear & Manufacturing, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Total purchase price | $ 35 | $ 36 | $ 35 | 35 | 0 | $ 0 | |||
Measurement period adjustment to net assets acquired | $ 1 | ||||||||
Corresponding increase to goodwill | $ 0 | ||||||||
Fabco Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Total purchase price | $ 34 | $ 34 | $ 34 | 0 | $ 34 | $ 0 | |||
Measurement period adjustment to net assets acquired | 1 | ||||||||
Corresponding increase to goodwill | $ 1 |
ACQUISITIONS AND DIVESTITURE _2
ACQUISITIONS AND DIVESTITURE - Purchase Price Allocation (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Apr. 30, 2018 | Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price | $ 35 | $ 34 | |||||||||||||
Assets acquired and liabilities assumed | |||||||||||||||
Goodwill | $ 421 | [1] | $ 414 | [1] | $ 421 | [1] | 421 | [1] | 414 | [1] | $ 390 | $ 405 | |||
AA Gear & Manufacturing, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price | 35 | $ 36 | $ 35 | 35 | 0 | 0 | |||||||||
Assets acquired and liabilities assumed | |||||||||||||||
Accounts Receivable and Accounts Payable, net | 2 | 2 | 2 | 2 | |||||||||||
Inventories, net | 5 | 5 | 5 | 5 | |||||||||||
Property, plant and equipment | 4 | 5 | 4 | 4 | |||||||||||
Intangible assets | 15 | 15 | 15 | 15 | |||||||||||
Total identifiable net assets acquired | 26 | 27 | 27 | 26 | 26 | ||||||||||
Goodwill | 9 | 9 | $ 9 | 9 | 9 | ||||||||||
Total assets acquired, goodwill, and liabilities assumed | 35 | $ 36 | 35 | 35 | |||||||||||
Measurement Period Adjustments | |||||||||||||||
Purchase price | (1) | ||||||||||||||
Accounts Receivable and Accounts Payable, net | 0 | ||||||||||||||
Inventories | 0 | ||||||||||||||
Property, plant and equipment | (1) | ||||||||||||||
Intangible assets | 0 | ||||||||||||||
Total identifiable net assets acquired | (1) | ||||||||||||||
Goodwill resulting from the acquisitions | 0 | ||||||||||||||
Total assets acquired, goodwill, and liabilities assumed | (1) | ||||||||||||||
Fabco Holdings, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price | 34 | 34 | $ 34 | 0 | 34 | $ 0 | |||||||||
Assets acquired and liabilities assumed | |||||||||||||||
Receivables, net | 5 | 5 | 5 | 5 | 5 | ||||||||||
Inventories, net | 12 | 13 | 12 | 12 | 13 | ||||||||||
Property, plant and equipment | 7 | 9 | 7 | 7 | 9 | ||||||||||
Intangible assets | 3 | 0 | 3 | 3 | 0 | ||||||||||
Accounts payable | (6) | (6) | (6) | (6) | (6) | ||||||||||
Other current liabilities | (7) | (6) | (7) | (7) | (6) | ||||||||||
Total identifiable net assets acquired | 14 | 15 | 14 | 14 | 15 | ||||||||||
Goodwill | 20 | 19 | 20 | 20 | 19 | ||||||||||
Total assets acquired, goodwill, and liabilities assumed | $ 34 | $ 34 | $ 34 | 34 | $ 34 | ||||||||||
Measurement Period Adjustments | |||||||||||||||
Purchase price | 0 | ||||||||||||||
Receivables | 0 | ||||||||||||||
Inventories | (1) | ||||||||||||||
Property, plant and equipment | (2) | ||||||||||||||
Intangible assets | 3 | ||||||||||||||
Accounts payable | 0 | ||||||||||||||
Other current liabilities | (1) | ||||||||||||||
Total identifiable net assets acquired | (1) | ||||||||||||||
Goodwill resulting from the acquisitions | 1 | ||||||||||||||
Total assets acquired, goodwill, and liabilities assumed | $ 0 | ||||||||||||||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
ACCOUNTS RECEIVABLE FACTORING_2
ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION (Details) | Oct. 04, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2017EUR (€) | Sep. 30, 2017USD ($) |
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Costs associated with off-balance sheet factoring arrangements | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||||
U.S. Securitization Financing Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Maximum limit for securitization financing arrangement | $ 100,000,000 | |||||||
Outstanding balance under accounts receivable securitization program | 46,000,000 | $ 89,000,000 | ||||||
Amount outstanding, letters of credit | 11,000,000 | 0 | ||||||
Sweden Factoring Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Maximum limit for sale of eligible trade receivables | € 155,000,000 | 181,000,000 | ||||||
Utilization of accounts receivable factoring facility under arrangement | 136,000,000 | 158,000,000 | € 139,000,000 | 164,000,000 | ||||
U.S Factoring Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Maximum limit for sale of eligible trade receivables | 80,000,000 | 93,000,000 | ||||||
Utilization of accounts receivable factoring facility under arrangement | 45,000,000 | 53,000,000 | 37,000,000 | 43,000,000 | ||||
United Kingdom Factoring Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Maximum limit for sale of eligible trade receivables | 25,000,000 | 29,000,000 | ||||||
Utilization of accounts receivable factoring facility under arrangement | 8,000,000 | 9,000,000 | 7,000,000 | 9,000,000 | ||||
Italy Factoring Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Maximum limit for sale of eligible trade receivables | 30,000,000 | 35,000,000 | ||||||
Utilization of accounts receivable factoring facility under arrangement | € 24,000,000 | 28,000,000 | € 22,000,000 | 26,000,000 | ||||
Other Factoring Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Utilization of accounts receivable factoring facility under arrangement | $ 12,000,000 | $ 19,000,000 | ||||||
Subsequent Event | U.S. Securitization Financing Facility | ||||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||||
Maximum limit for securitization financing arrangement | $ 110,000,000 | |||||||
Required ratio of total priority debt to EBITDA through period end | 2.25 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |||
Finished goods | $ 170 | $ 139 | |
Work in process | 41 | 34 | |
Raw materials, parts and supplies | 266 | 205 | |
Total | [1] | $ 477 | $ 378 |
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Other Current Assets Disclosure [Abstract] | ||
Asbestos-related recoveries (see Note 24) | $ 16 | $ 14 |
Prepaid and other | 30 | 29 |
Other current assets | $ 46 | $ 43 |
NET PROPERTY - Additional Infor
NET PROPERTY - Additional Information (Details) | 12 Months Ended |
Sep. 30, 2018 | |
Minimum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 10 years |
Minimum | Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 3 years |
Maximum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 50 years |
Maximum | Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 20 years |
Maximum | Company-owned tooling | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 3 years |
NET PROPERTY - Schedule of Net
NET PROPERTY - Schedule of Net Property (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property, gross | $ 1,382 | $ 1,357 | |
Less: accumulated depreciation | (899) | (883) | |
Net property | [1] | 483 | 474 |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | 29 | 30 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | 228 | 240 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | 914 | 892 | |
Company-owned tooling | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | 130 | 126 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | $ 81 | $ 69 | |
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | ||
Other Assets, Noncurrent [Abstract] | |||||
Investments in non-consolidated joint ventures (see Note 14) | $ 102 | $ 101 | |||
Asbestos-related recoveries (see Note 24) | 76 | 32 | |||
Unamortized revolver debt issuance costs (see Note 17) | 7 | 8 | |||
Capitalized software costs, net | 26 | 27 | |||
Deferred income tax assets (see Note 23) | 140 | 229 | |||
Assets for uncertain tax positions (see Note 23) | 53 | 48 | |||
Prepaid pension costs (see Note 22) | 152 | 135 | |||
Intangible assets | 18 | 1 | |||
Other | 22 | 15 | |||
Other assets | [1] | 596 | 596 | ||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 18 | 1 | |||
Investments in non-consolidated joint ventures | 102 | 101 | |||
Customer Relationships | |||||
Other Assets, Noncurrent [Abstract] | |||||
Intangible assets | 22 | 1 | |||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 22 | 1 | |||
Accumulated amortization | $ 4 | ||||
Weighted average amortization period | 19 years | ||||
Corporate Joint Venture | |||||
Other Assets, Noncurrent [Abstract] | |||||
Investments in non-consolidated joint ventures (see Note 14) | $ 63 | 54 | |||
Finite-Lived Intangible Assets [Line Items] | |||||
Investments in non-consolidated joint ventures | 63 | $ 54 | |||
Variable Interest Entity, Not Primary Beneficiary | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Investment owned at cost | $ 6 | $ 3 | $ 3 | ||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
INVESTMENTS IN NON-CONSOLIDAT_3
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Non-Consolidated Joint Ventures and Direct Ownership Interests (Details) | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest | 100.00% | ||
Meritor WABCO Vehicle Control Systems (Commercial Truck & Trailer) | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest | 0.00% | 0.00% | 50.00% |
Master Sistemas Automotivos Ltda. (Commercial Truck & Trailer) | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest | 49.00% | 49.00% | 49.00% |
Sistemas Automotrices de Mexico S.A. de C.V. (Commercial Truck & Trailer) | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest | 50.00% | 50.00% | 50.00% |
Ege Fren Sanayii ve Ticaret A.S. (Commercial Truck & Trailer) | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest | 49.00% | 49.00% | 49.00% |
Automotive Axles Limited (Commercial Truck & Trailer) | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest | 36.00% | 36.00% | 36.00% |
INVESTMENTS IN NON-CONSOLIDAT_4
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Additional Information (Details) - USD ($) $ in Millions | Oct. 01, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Schedule of Equity Method Investments [Line Items] | ||||||
Purchase price of sale | $ 250 | $ 0 | $ 0 | |||
Dividends/Distributions received from the company's non-consolidated joint ventures | 17 | 44 | 37 | |||
Sales to non-consolidated joint ventures | 7 | 2 | 9 | |||
Sales excluded from non-consolidated joint ventures through intercompany eliminations | 196 | 138 | 124 | |||
Purchases from non-consolidated joint ventures | 843 | 787 | 753 | |||
Lease and services payments from non-consolidated joint ventures | 11 | 6 | 12 | |||
Amounts due from non-consolidated joint ventures | $ 43 | $ 36 | 43 | 36 | ||
Amounts due to non-consolidated joint ventures | 110 | 99 | 110 | 99 | ||
Maximum exposure to loss in non-consolidated joint venture | 63 | 54 | 63 | 54 | ||
Automotive Axles Limited (Commercial Truck & Trailer) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Fair value of investment | $ 91 | 72 | 91 | 72 | ||
Meritor WABCO JV | WABCO Holdings Inc. | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Purchase price of sale | 250 | $ 250 | ||||
Dividends/Distributions received from the company's non-consolidated joint ventures | $ 8 | $ 8 | $ 36 | $ 33 | ||
Meritor WABCO JV | WABCO Holdings Inc. | Minimum | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Distribution rights, term | 10 years | |||||
Option to terminate distribution rights, term | 3 years 6 months | |||||
Contract termination expense | $ 225 | |||||
Meritor WABCO JV | WABCO Holdings Inc. | Maximum | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Contract termination expense | $ 265 |
INVESTMENTS IN NON-CONSOLIDAT_5
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Investments In Non-Consolidated Joint Ventures (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Segment Reporting Information [Line Items] | ||
Investments in non-consolidated joint ventures | $ 102 | $ 101 |
Commercial Truck & Trailer | ||
Segment Reporting Information [Line Items] | ||
Investments in non-consolidated joint ventures | 102 | 101 |
Aftermarket & Industrial | ||
Segment Reporting Information [Line Items] | ||
Investments in non-consolidated joint ventures | $ 0 | $ 0 |
INVESTMENTS IN NON-CONSOLIDAT_6
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Equity in Earnings of Non-Consolidated Joint Ventures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Equity in earnings of affiliates | $ 27 | $ 48 | $ 36 |
Commercial Truck & Trailer | |||
Segment Reporting Information [Line Items] | |||
Equity in earnings of affiliates | 27 | 48 | 36 |
Aftermarket & Industrial | |||
Segment Reporting Information [Line Items] | |||
Equity in earnings of affiliates | $ 0 | $ 0 | $ 0 |
INVESTMENTS IN NON-CONSOLIDAT_7
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Balance Sheet Information Of Non-Consolidated Joint Ventures (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Equity Method Investment, Summarized Financial Information, Assets [Abstract] | ||
Current assets | $ 390 | $ 326 |
Non-current assets | 163 | 151 |
Total assets | 553 | 477 |
Equity Method Investment, Summarized Financial Information, Liabilities [Abstract] | ||
Current liabilities | 282 | 183 |
Non-current liabilities | 66 | 98 |
Total liabilities | $ 348 | $ 281 |
INVESTMENTS IN NON-CONSOLIDAT_8
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Income Statement Information Of Non-Consolidated Joint Ventures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||
Sales | $ 1,101 | $ 1,156 | $ 1,101 |
Gross profit | 154 | 200 | 165 |
Net income | $ 59 | $ 101 | $ 73 |
OTHER CURRENT LIABILITIES - Sch
OTHER CURRENT LIABILITIES - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Other Current Liabilities Disclosure [Abstract] | |||
Compensation and benefits | $ 122 | $ 117 | |
Income taxes | 27 | 11 | |
Taxes other than income taxes | 25 | 34 | |
Accrued interest | 11 | 9 | |
Product warranties | 19 | 18 | $ 18 |
Environmental reserves (see Note 24) | 8 | 5 | |
Restructuring (see Note 6) | 3 | 5 | |
Asbestos-related liabilities (see Note 24) | 18 | 19 | |
Indemnity obligations (see Note 24) | 1 | 2 | |
Other | 56 | 52 | |
Other current liabilities | $ 290 | $ 272 |
OTHER CURRENT LIABILITIES - S_2
OTHER CURRENT LIABILITIES - Schedule of Product Warranties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Liabilities, Current [Roll Forward] | |||
Total product warranties - beginning of year | $ 45 | $ 44 | $ 48 |
Accruals for product warranties | 22 | 14 | 10 |
Payments | (16) | (17) | (14) |
Change in estimates and other | 3 | 4 | 0 |
Total product warranties - end of year | 54 | 45 | 44 |
Less: non-current product warranties (see Note 16) | (35) | (27) | (26) |
Product warranties | $ 19 | $ 18 | $ 18 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Other Liabilities Disclosure [Abstract] | |||
Asbestos-related liabilities (see Note 24) | $ 193 | $ 124 | |
Restructuring (see Note 6) | 1 | 1 | |
Deferred income tax liabilities (see Note 23) | 16 | 12 | |
Liabilities for uncertain tax positions (see Note 23) | 48 | 32 | |
Product warranties (see Note 15) | 35 | 27 | $ 26 |
Environmental (see Note 24) | 9 | 4 | |
Indemnity obligations (see Note 24) | 9 | 10 | |
Other | 21 | 29 | |
Other liabilities | $ 332 | $ 239 |
LONG-TERM DEBT - Summary of Lon
LONG-TERM DEBT - Summary of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 22, 2017 |
Debt Instrument [Line Items] | |||
Capital lease obligation | $ 7 | $ 12 | |
Borrowings and securitization | 46 | 89 | |
Subtotal | 824 | 1,038 | |
Less: current maturities | (94) | (288) | |
Long-term debt | 730 | 750 | |
Unamortized issuance costs | 7 | 8 | |
Unamortized discount on convertible notes | |||
Debt Instrument [Line Items] | |||
Unamortized discount on convertible notes | (37) | (42) | |
Unamortized discount on convertible notes | 37 | 42 | |
Convertible Notes | |||
Debt Instrument [Line Items] | |||
Unamortized discount on convertible notes | (45) | (51) | |
Unamortized issuance costs | 13 | ||
Unamortized discount on convertible notes | 45 | 51 | |
Convertible Notes | 3.25% convertible notes due 2037 | |||
Debt Instrument [Line Items] | |||
Debt | $ 318 | 317 | |
Stated interest rate | 3.25% | ||
Unamortized issuance costs | $ 7 | 8 | |
Convertible Notes | 4.00% convertible notes due 2027 | |||
Debt Instrument [Line Items] | |||
Debt | $ 24 | 24 | $ 143 |
Stated interest rate | 4.00% | ||
Convertible Notes | 7.875% convertible notes due 2026 | |||
Debt Instrument [Line Items] | |||
Debt | $ 22 | 22 | $ 140 |
Unamortized discount on convertible notes | $ (1) | (1) | |
Stated interest rate | 7.875% | ||
Unamortized discount on convertible notes | $ 1 | 1 | |
Senior Notes | 6.75% notes due 2021 | |||
Debt Instrument [Line Items] | |||
Debt | $ 0 | 173 | |
Stated interest rate | 6.75% | ||
Unamortized issuance costs | 2 | ||
Senior Notes | 6.25% notes due 2024 | |||
Debt Instrument [Line Items] | |||
Debt | $ 444 | 443 | |
Stated interest rate | 6.25% | ||
Unamortized issuance costs | $ 6 | $ 7 |
LONG-TERM DEBT - Repurchase of
LONG-TERM DEBT - Repurchase of Debt Securities (Details) - USD ($) | Nov. 02, 2017 | Sep. 28, 2017 | Sep. 22, 2017 | Apr. 15, 2016 | Mar. 01, 2016 | May 31, 2013 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 11, 2015 | Dec. 31, 2012 | Feb. 28, 2007 |
Debt Instrument [Line Items] | |||||||||||||
Net loss on debt extinguishment | $ 22,000,000 | ||||||||||||
Proceeds from debt issuances | $ 0 | $ 325,000,000 | $ 0 | ||||||||||
Senior Notes | 6.75% notes due 2021 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Extinguishment of debt, amount | $ 100,000,000 | ||||||||||||
Debt instrument, face amount | $ 275,000,000 | ||||||||||||
Stated interest rate | 6.75% | ||||||||||||
Redemption premium | $ 1,033.75 | $ 1,033.75 | |||||||||||
Net loss on debt extinguishment | 8,000,000 | $ 5,000,000 | |||||||||||
Repurchased principal amount of debt | $ 175,000,000 | ||||||||||||
Proceeds from debt issuances | $ 275,000,000 | ||||||||||||
Debt | 173,000,000 | $ 0 | 173,000,000 | ||||||||||
Convertible Notes | 3.25% convertible notes due 2037 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 325,000,000 | ||||||||||||
Stated interest rate | 3.25% | ||||||||||||
Proceeds from debt issuances | 317,000,000 | ||||||||||||
Debt | 317,000,000 | $ 318,000,000 | 317,000,000 | ||||||||||
Convertible Notes | 7.875% convertible notes due 2026 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Extinguishment of debt, amount | 117,000,000 | ||||||||||||
Debt instrument, face amount | $ 250,000,000 | ||||||||||||
Stated interest rate | 7.875% | ||||||||||||
Net loss on debt extinguishment | 23,000,000 | ||||||||||||
Repurchased principal amount of debt | $ 110,000,000 | ||||||||||||
Debt | $ 140,000,000 | 22,000,000 | $ 22,000,000 | 22,000,000 | |||||||||
Repurchase price percentage | 130.00% | ||||||||||||
Redemption price | 100.00% | ||||||||||||
Convertible Notes | 4.00% convertible notes due 2027 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Extinguishment of debt, amount | $ 119,000,000 | ||||||||||||
Debt instrument, face amount | $ 200,000,000 | ||||||||||||
Stated interest rate | 4.00% | ||||||||||||
Net loss on debt extinguishment | 8,000,000 | ||||||||||||
Debt | $ 143,000,000 | $ 24,000,000 | $ 24,000,000 | $ 24,000,000 | |||||||||
Repurchase price percentage | 16.00% | ||||||||||||
Redemption price | 100.00% | ||||||||||||
Convertible Notes | 7.875% and 4.00% convertible notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net loss on debt extinguishment | $ 31,000,000 | ||||||||||||
Convertible Notes | 4.625% convertible notes due 2026 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate | 462.50% | 4.625% | |||||||||||
Repurchased principal amount of debt | $ 55,000,000 | 55,000,000 | 245,000,000 | ||||||||||
Debt | $ 0 | $ 300,000,000 | |||||||||||
Repurchase price percentage | 100.00% | ||||||||||||
Redemption price | 100.00% | 100.00% |
LONG-TERM DEBT - Current Classi
LONG-TERM DEBT - Current Classification of Notes (Details) | 12 Months Ended | |||||
Sep. 30, 2018USD ($)trading_day$ / sharesshares | Sep. 30, 2017USD ($) | Nov. 02, 2017USD ($) | Sep. 28, 2017USD ($) | Jun. 11, 2015USD ($) | Dec. 31, 2012$ / shares | |
Convertible Notes | 4.00% convertible notes due 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 4.00% | |||||
Redemption price percentage | 100.00% | |||||
Conversion price (in dollars per share) | $ / shares | $ 26.73 | |||||
Convertible Notes | 7.875% convertible notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 7.875% | |||||
Repurchased principal amount of debt | $ 110,000,000 | |||||
Shares issuable upon conversion (in shares) | shares | 83.3333 | |||||
Conversion price (in dollars per share) | $ / shares | $ 12 | $ 12 | ||||
Threshold trading days | trading_day | 20 | |||||
Threshold consecutive trading days | trading_day | 30 | |||||
Threshold percentage of stock price trigger | 120.00% | |||||
Carrying amount of equity component | $ 23,000,000 | |||||
Permanent equity reclassified to mezzanine | $ 1,000,000 | $ 2,000,000 | ||||
Senior Notes | 6.75% notes due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 6.75% | |||||
Redemption price percentage | 100.00% | |||||
Repurchased principal amount of debt | $ 175,000,000 | |||||
Redemption premium | $ 1,033.75 | $ 1,033.75 |
LONG-TERM DEBT - Revolving Cred
LONG-TERM DEBT - Revolving Credit Facility (Details) - Revolving Credit Facility | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Required ratio of total priority debt to EBITDA through period end | 2.25 | ||
Unused capacity, commitment fee percentage | 0.375% | ||
Amount outstanding | $ 0 | $ 0 | |
Amount outstanding, letters of credit | $ 0 | $ 0 | |
LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.75% | ||
Revolving Credit Facility with Conversion Election Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 525,000,000 | ||
Deferred issuance costs | $ 4,000,000 | ||
Amended Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Collateral maximum test value | 1 | ||
Value of company assets collateralized | $ 875,000,000 | ||
Maximum limit on issuance of letters of credit | $ 100,000,000 | ||
Overnight Revolving Credit Loans | Prime Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% |
LONG-TERM DEBT - 3.25 Percent C
LONG-TERM DEBT - 3.25 Percent Convertible Notes (Details) | Sep. 22, 2017USD ($)dtrading_day$ / shares$ / noteshares | Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Debt Instrument [Line Items] | ||||
Proceeds from debt issuances | $ | $ 0 | $ 325,000,000 | $ 0 | |
3.25% convertible notes due 2037 | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 3.25% | |||
Debt instrument, face amount | $ | $ 325,000,000 | |||
Initial principal amount per note (in dollars per note) | $ / note | 1,000 | |||
Subsequent principal amount | $ / note | 1,000 | |||
Proceeds from debt issuances | $ | $ 317,000,000 | |||
Shares issuable upon conversion (in shares) | shares | 25.0474 | |||
Conversion price (in dollars per share) | $ / shares | $ 39.92 | |||
Maximum number of common stock convertible notes are convertible into (in shares) | shares | 8,000,000 | |||
3.25% convertible notes due 2037 | Convertible Notes | Redemption period one | ||||
Debt Instrument [Line Items] | ||||
Redemption price percentage | 100.00% | |||
3.25% convertible notes due 2037 | Convertible Notes | Conversion Condition One | ||||
Debt Instrument [Line Items] | ||||
Threshold trading days | trading_day | 20 | |||
Threshold consecutive trading days | trading_day | 30 | |||
Threshold percentage of stock price trigger | 130.00% | |||
3.25% convertible notes due 2037 | Convertible Notes | Conversion Condition Two | ||||
Debt Instrument [Line Items] | ||||
Threshold consecutive trading days | trading_day | 5 | |||
Threshold percentage of stock price trigger | 98.00% | |||
Threshold number of business days | d | 5 |
LONG-TERM DEBT - 6.25 Percent N
LONG-TERM DEBT - 6.25 Percent Notes (Details) - USD ($) | Jun. 11, 2015 | Feb. 13, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 22, 2017 | Dec. 31, 2012 |
Debt Instrument [Line Items] | |||||||
Proceeds from debt issuance | $ 0 | $ 325,000,000 | $ 0 | ||||
6.25% notes due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from debt issuance | $ 225,000,000 | ||||||
Senior Notes | 6.25% notes due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 6.25% | ||||||
Debt instrument, face amount | $ 225,000,000 | ||||||
Debt term | 10 years | ||||||
Issuance price of principle | 10000.00% | ||||||
Debt | $ 444,000,000 | 443,000,000 | |||||
Redemption price percentage | 100.00% | ||||||
Senior Notes | 6.25% notes due 2024 | Redemption period one | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 103.125% | ||||||
Senior Notes | 6.25% notes due 2024 | Redemption period two | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 102.083% | ||||||
Senior Notes | 6.25% notes due 2024 | Redemption period three | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 101.042% | ||||||
Senior Notes | 6.25% notes due 2024 | Redemption period four | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100.00% | ||||||
Senior Notes | 6.25% notes due 2024 | Change in control | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 101.00% | ||||||
Senior Notes | 10.625% notes due 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 1062.50% | ||||||
Repurchased principal amount of debt | $ 250,000,000 | ||||||
Promissory Notes | 6.25% notes due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 225,000,000 | $ 225,000,000 | |||||
Debt | 450,000,000 | ||||||
Convertible Notes | 7.875% convertible notes due 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 7.875% | ||||||
Debt instrument, face amount | $ 250,000,000 | ||||||
Repurchased principal amount of debt | 110,000,000 | ||||||
Repayments of convertible debt | $ 179,000,000 | ||||||
Debt | $ 22,000,000 | $ 22,000,000 | $ 140,000,000 |
LONG-TERM DEBT - 6.75 Percent N
LONG-TERM DEBT - 6.75 Percent Notes (Details) - USD ($) | May 31, 2013 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Nov. 02, 2017 |
Debt Instrument [Line Items] | |||||
Proceeds from debt issuance | $ 0 | $ 325,000,000 | $ 0 | ||
8.125% notes due 2015 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 8.125% | ||||
Senior Notes | 6.75% notes due 2021 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.75% | ||||
Debt instrument, face amount | $ 275,000,000 | ||||
Issuance price of principle | 100.00% | ||||
Proceeds from debt issuance | $ 275,000,000 | ||||
Repurchased principal amount of debt | $ 175,000,000 | ||||
Redemption price percentage | 100.00% | ||||
Percentage of principal that may be redeemed | 35.00% | ||||
Percentage of principal outstanding | 65.00% | ||||
Long-term debt | $ 0 | $ 173,000,000 | |||
Senior Notes | 6.75% notes due 2021 | Redemption period one | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 105.063% | ||||
Senior Notes | 6.75% notes due 2021 | Redemption period two | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 103.375% | ||||
Senior Notes | 6.75% notes due 2021 | Redemption period three | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 101.688% | ||||
Senior Notes | 6.75% notes due 2021 | Redemption period four | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 100.00% | ||||
Senior Notes | 6.75% notes due 2021 | Equity clawback | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 106.75% | ||||
Senior Notes | 6.75% notes due 2021 | Change in control | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 101.00% | ||||
Senior Notes | 8.125% notes due 2015 | |||||
Debt Instrument [Line Items] | |||||
Repurchased principal amount of debt | $ 167,000,000 |
LONG-TERM DEBT - 7.875 Percent
LONG-TERM DEBT - 7.875 Percent Convertible Notes (Details) - Convertible Notes | Apr. 15, 2016 | Mar. 01, 2016USD ($) | Dec. 31, 2012USD ($)$ / shares$ / noteshares | Sep. 30, 2018USD ($)dtrading_day$ / sharesshares | Sep. 30, 2017USD ($) | Sep. 22, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 11, 2015USD ($) |
7.875% convertible notes due 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 7.875% | |||||||
Debt instrument, face amount | $ 250,000,000 | |||||||
Initial principal amount per note (in dollars per note) | $ / note | 900 | |||||||
Face principal amount per note | $ 1,000 | |||||||
Effective interest rates on convertible notes | 10.90% | |||||||
Proceeds from convertible debt | $ 220,000,000 | |||||||
Equivalent shares of common stock per 1000 principal amount of convertible notes (in shares) | shares | 83.3333 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 12 | $ 12 | ||||||
Threshold trading days | trading_day | 20 | |||||||
Threshold consecutive trading days | trading_day | 30 | |||||||
Threshold percentage of stock price trigger | 120.00% | |||||||
Redemption price | 100.00% | |||||||
Maximum number of common stock convertible notes are convertible into (in shares) | shares | 2,000,000 | |||||||
Repurchased principal amount of debt | $ 110,000,000 | |||||||
Debt | $ 22,000,000 | $ 22,000,000 | $ 140,000,000 | |||||
Debt outstanding, gross | $ 23,000,000 | $ 23,000,000 | ||||||
7.875% convertible notes due 2026 | Triggering Event One | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | trading_day | 20 | |||||||
Threshold consecutive trading days | trading_day | 30 | |||||||
Threshold percentage of stock price trigger | 120.00% | |||||||
7.875% convertible notes due 2026 | Triggering Event Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | d | 5 | |||||||
Threshold consecutive trading days | trading_day | 5 | |||||||
Threshold percentage of stock price trigger | 97.00% | |||||||
4.625% convertible notes due 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 462.50% | 4.625% | ||||||
Redemption price | 100.00% | 100.00% | ||||||
Repurchased principal amount of debt | $ 55,000,000 | $ 245,000,000 | $ 55,000,000 | |||||
Debt | 300,000,000 | $ 0 | ||||||
Convertible note repurchase price | $ 236,000,000 |
LONG-TERM DEBT - 4.0 Percent Co
LONG-TERM DEBT - 4.0 Percent Convertible Notes (Details) - Convertible Notes - 4.00% convertible notes due 2027 | 12 Months Ended | ||
Sep. 30, 2018USD ($)dtrading_day$ / shares$ / noteshares | Sep. 30, 2017USD ($) | Feb. 28, 2007USD ($) | |
Debt Instrument [Line Items] | |||
Stated interest rate | 4.00% | ||
Debt instrument, face amount | $ | $ 200,000,000 | ||
Equivalent shares of common stock per 1000 principal amount of convertible notes (in shares) | shares | 37.4111 | ||
Initial principal amount per note (in dollars per note) | $ / note | 1,000 | ||
Conversion price (in dollars per share) | $ / shares | $ 26.73 | ||
Maximum number of common stock convertible notes are convertible into (in shares) | shares | 1,000,000 | ||
Redemption option price | 100.00% | ||
Redemption price | 100.00% | ||
Debt outstanding, gross | $ | $ 24,000,000 | $ 24,000,000 | |
Triggering Event One | |||
Debt Instrument [Line Items] | |||
Threshold trading days | d | 20 | ||
Threshold consecutive trading days | trading_day | 30 | ||
Threshold percentage of stock price trigger | 120.00% | ||
Triggering Event Two | |||
Debt Instrument [Line Items] | |||
Threshold trading days | d | 5 | ||
Threshold consecutive trading days | trading_day | 5 | ||
Threshold percentage of stock price trigger | 97.00% |
LONG-TERM DEBT - Summaries of C
LONG-TERM DEBT - Summaries of Convertible Notes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Repurchase of convertible notes | $ 36 | $ 8 | $ 36 | $ 0 |
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of convertible notes | 372 | 372 | 372 | |
Unamortized discount on convertible notes | (51) | (45) | (51) | |
Net carrying value | $ 321 | 327 | 321 | |
Contractual interest coupon | 17 | 17 | 18 | |
Amortization of debt discount | 2 | 8 | 8 | |
Repurchase of convertible notes | 0 | 31 | 0 | |
Total | $ 19 | $ 56 | $ 26 | |
Convertible Notes | 4.0% | ||||
Debt Instrument [Line Items] | ||||
Total amortization period for debt discount (in years) | 12 years | |||
Remaining amortization period for debt discount (in years) | 1 year | |||
Effective interest rates on convertible notes | 7.90% | |||
Convertible Notes | 7.875% | ||||
Debt Instrument [Line Items] | ||||
Total amortization period for debt discount (in years) | 8 years | |||
Remaining amortization period for debt discount (in years) | 2 years | |||
Effective interest rates on convertible notes | 10.90% | |||
Convertible Notes | 3.25% | ||||
Debt Instrument [Line Items] | ||||
Total amortization period for debt discount (in years) | 8 years | |||
Remaining amortization period for debt discount (in years) | 7 years | |||
Effective interest rates on convertible notes | 5.60% |
LONG-TERM DEBT - Debt Maturitie
LONG-TERM DEBT - Debt Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 22, 2017 |
Long-term debt by fiscal year maturity [Abstract] | |||
Unamortized issuance costs | $ 7 | $ 8 | |
Convertible Notes | |||
Long-term debt by fiscal year maturity [Abstract] | |||
Unamortized issuance costs, fair value of equity component | 37 | ||
Unamortized issuance costs | 13 | ||
Original issuance discount | 1 | ||
Convertible Notes | Debt maturities at Principal Amount | |||
Long-term debt by fiscal year maturity [Abstract] | |||
Long-term debt, total | 875 | ||
2,019 | 2 | ||
2,020 | 1 | ||
2,021 | 48 | ||
2,022 | 1 | ||
2,023 | 0 | ||
Thereafter | 823 | ||
Convertible Notes | 3.25% convertible notes due 2037 | |||
Long-term debt by fiscal year maturity [Abstract] | |||
Long-term debt, total | 318 | 317 | |
Unamortized issuance costs | $ 7 | 8 | |
Stated interest rate | 3.25% | ||
Convertible Notes | 4.00% convertible notes due 2027 | |||
Long-term debt by fiscal year maturity [Abstract] | |||
Long-term debt, total | $ 24 | 24 | $ 143 |
Stated interest rate | 4.00% | ||
Convertible Notes | 7.875% convertible notes due 2026 | |||
Long-term debt by fiscal year maturity [Abstract] | |||
Long-term debt, total | $ 22 | 22 | $ 140 |
Stated interest rate | 7.875% | ||
Senior Notes | 6.25% notes due 2024 | |||
Long-term debt by fiscal year maturity [Abstract] | |||
Long-term debt, total | $ 444 | 443 | |
Unamortized issuance costs | $ 6 | $ 7 | |
Stated interest rate | 6.25% |
LONG-TERM DEBT - Capital Leases
LONG-TERM DEBT - Capital Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Capital Leased Assets [Line Items] | ||
Capital lease term | 60 months | |
Future Minimum Payments Due by Fiscal Year Maturity | ||
Capital lease obligation, Total | $ 9 | |
Capital lease obligation, 2019 | 2 | |
Capital lease obligation, 2020 | 2 | |
Capital lease obligation, 2021 | 2 | |
Capital lease obligation, 2022 | 2 | |
Capital lease obligation, 2023 | 1 | |
Capital lease obligation, Thereafter | 0 | |
Less amounts representing interest, Total | (2) | |
Less amounts representing interest, 2019 | (1) | |
Less amounts representing interest, 2020 | (1) | |
Less amounts representing interest, 2021 | 0 | |
Less amounts representing interest, 2022 | 0 | |
Less amounts representing interest, 2023 | 0 | |
Less amounts representing interest, Thereafter | 0 | |
Principal on capital lease, Total | 7 | |
Principal on capital lease, 2019 | 1 | |
Principal on capital lease, 2020 | 1 | |
Principal on capital lease, 2021 | 2 | |
Principal on capital lease, 2022 | 2 | |
Principal on capital lease, 2023 | 1 | |
Principal on capital lease, Thereafter | 0 | |
Capital Lease Arrangements | ||
Capital Leased Assets [Line Items] | ||
Amount outstanding under capital leases | $ 1 | $ 3 |
Capital Lease Arrangements | Five-Year Swap Rate | ||
Capital Leased Assets [Line Items] | ||
Basis spread on variable rate | 5.64% | |
Other Capital Lease Arrangements | ||
Capital Leased Assets [Line Items] | ||
Amount outstanding under capital leases | $ 6 | $ 10 |
LONG-TERM DEBT - Letter of Cred
LONG-TERM DEBT - Letter of Credit Facilities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Feb. 21, 2014 |
Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Maximum limit on issuance of letters of credit | $ 25 | ||
Amount outstanding, letters of credit | $ 1 | $ 18 | |
Other Letters of Credit Arrangements | |||
Debt Instrument [Line Items] | |||
Amount outstanding, letters of credit | $ 19 | $ 5 |
LONG-TERM DEBT - Export Financi
LONG-TERM DEBT - Export Financing Arrangements and Other (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 |
Promissory Notes | Export financing arrangements and other | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.50% | ||
China | Notes Payable to Banks | Other Export Financing Arrangements | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 22 | $ 24 | |
Debt default, amount | $ 35 |
LONG-TERM DEBT - Operating Leas
LONG-TERM DEBT - Operating Leases (Details) $ in Millions | Sep. 30, 2018USD ($) |
Future Minimum Lease Payments Under Operating Leases | |
2,019 | $ 17 |
2,020 | 14 |
2,021 | 13 |
2,022 | 13 |
2,023 | 13 |
Thereafter | $ 25 |
FINANCIAL INSTRUMENTS - Additio
FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||
Cash equivalents | $ 0 | $ 0 | ||
Foreign Exchange Forward | ||||
Derivative [Line Items] | ||||
Term of derivative contract | 15 years | |||
Cross-currency swap | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | $ 225,000,000 | $ 225,000,000 | ||
India, Rupees | Foreign Currency Option Contracts | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | 180,000,000 | 172,000,000 | ||
South Korean Won | Foreign Currency Option Contracts | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | 41,000,000 | 0 | ||
Brazilian Real | Foreign Currency Option Contracts | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | 16,000,000 | 0 | ||
Euro Member Countries, Euro | Foreign Currency Option Contracts | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | 0 | 58,000,000 | ||
Sweden, Kronor | Foreign Currency Option Contracts | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | 0 | 71,000,000 | ||
Cash Flow Hedging | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Notional amount of foreign exchange contracts outstanding | $ 154,000,000 | $ 126,000,000 | $ 190,000,000 |
FINANCIAL INSTRUMENTS - The Imp
FINANCIAL INSTRUMENTS - The Impact of Derivatives on Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain (loss) recognized in AOCL | $ 3 | $ (1) | $ (3) |
Designated as Hedging Instrument | Cost of Sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain (loss) reclassified from AOCL into income | (1) | 1 | (4) |
Not Designated as Hedging Instrument | Cost of Sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain (loss) recognized in income | (2) | 1 | (1) |
Not Designated as Hedging Instrument | Other Income (expense) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain (loss) recognized in income | $ 2 | $ 0 | $ (1) |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Carrying Value | ||
Fair Value | ||
Cash and cash equivalents | $ 115 | $ 88 |
Short-term debt | 94 | 288 |
Long-term debt | 730 | 750 |
Fair Value | ||
Fair Value | ||
Cash and cash equivalents | 115 | 88 |
Short-term debt | 116 | 329 |
Long-term debt | 776 | 859 |
Foreign Exchange Forward | Carrying Value | ||
Fair Value | ||
Foreign exchange forward contracts (other assets) | 2 | 0 |
Foreign exchange forward contracts (other liabilities) | 0 | 3 |
Foreign Exchange Forward | Fair Value | ||
Fair Value | ||
Foreign exchange forward contracts (other assets) | 2 | 0 |
Foreign exchange forward contracts (other liabilities) | 0 | 3 |
Foreign Currency Option Contracts | Carrying Value | ||
Fair Value | ||
Foreign currency option contracts (other assets) | 0 | 3 |
Foreign Currency Option Contracts | Fair Value | ||
Fair Value | ||
Foreign currency option contracts (other assets) | 0 | 3 |
Cross-currency swap | Carrying Value | ||
Fair Value | ||
Cross-currency Swap (other assets) | 6 | 0 |
Cross-currency swap | Fair Value | ||
Fair Value | ||
Cross-currency Swap (other assets) | $ 6 | $ 0 |
FINANCIAL INSTRUMENTS - Offsett
FINANCIAL INSTRUMENTS - Offsetting of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Foreign Exchange Forward | ||
Offsetting Derivative Asset | ||
Gross Amounts Recognized | $ 2 | $ 0 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 2 | 0 |
Offsetting Derivative Liabilities | ||
Gross Amounts Recognized | 0 | 3 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 0 | 3 |
Cross-currency swap | ||
Offsetting Derivative Asset | ||
Gross Amounts Recognized | 6 | 0 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | $ 6 | $ 0 |
FINANCIAL INSTRUMENTS - Fair _2
FINANCIAL INSTRUMENTS - Fair Value of Financial Instruments by the Valuation Hierarchy (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Cash and cash equivalents | $ 115 | $ 88 |
Short-term debt | 0 | 0 |
Long-term debt | 0 | 0 |
Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term debt | 114 | 325 |
Long-term debt | 771 | 851 |
Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term debt | 2 | 4 |
Long-term debt | 5 | 8 |
Foreign Exchange Forward | Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contracts (other assets) | 0 | 0 |
Foreign exchange forward contracts (other liabilities) | 0 | 0 |
Foreign Exchange Forward | Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contracts (other assets) | 2 | 0 |
Foreign exchange forward contracts (other liabilities) | 0 | 3 |
Foreign Exchange Forward | Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contracts (other assets) | 0 | 0 |
Foreign exchange forward contracts (other liabilities) | 0 | 0 |
Foreign Currency Option Contracts | Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency option contracts (other assets) | 0 | 0 |
Foreign Currency Option Contracts | Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency option contracts (other assets) | 0 | 0 |
Foreign Currency Option Contracts | Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency option contracts (other assets) | 0 | 3 |
Cross-currency swap | Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Cross-currency Swap (other assets) | 0 | 0 |
Cross-currency swap | Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Cross-currency Swap (other assets) | 6 | 0 |
Cross-currency swap | Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Cross-currency Swap (other assets) | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Changes
FINANCIAL INSTRUMENTS - Changes in Fair Value of Level 3 Financial Assets and Liabilities (Details) - Level 3 - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair Value, beginning balance | $ 3 | $ 2 |
Purchases, issuances, sales and settlements: | ||
Purchases | 0 | 2 |
Settlements | (2) | (3) |
Transfer in and / or out of Level 3 | 0 | 0 |
Reclass between short-term and long-term | 0 | 0 |
Fair Value, ending balance | 0 | 3 |
Foreign Currency Option Contracts | Other Current Assets | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair Value, beginning balance | 2 | 0 |
Purchases, issuances, sales and settlements: | ||
Purchases | 0 | 1 |
Settlements | (2) | (2) |
Transfer in and / or out of Level 3 | 0 | 0 |
Reclass between short-term and long-term | 0 | 3 |
Fair Value, ending balance | 0 | 2 |
Foreign Currency Option Contracts | Other Noncurrent Assets | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair Value, beginning balance | 1 | 2 |
Purchases, issuances, sales and settlements: | ||
Purchases | 0 | 1 |
Settlements | 0 | (1) |
Transfer in and / or out of Level 3 | 0 | 0 |
Reclass between short-term and long-term | 0 | (3) |
Fair Value, ending balance | 0 | 1 |
Other Income | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Total unrealized gains (losses) | 0 | 0 |
Total realized gains (losses) | 1 | 0 |
Other Income | Foreign Currency Option Contracts | Other Current Assets | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Total unrealized gains (losses) | 0 | 0 |
Total realized gains (losses) | 1 | 0 |
Other Income | Foreign Currency Option Contracts | Other Noncurrent Assets | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Total unrealized gains (losses) | 0 | 0 |
Total realized gains (losses) | 0 | 0 |
Cost of Sales | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Total unrealized gains (losses) | (2) | 2 |
Total realized gains (losses) | 0 | 0 |
Cost of Sales | Foreign Currency Option Contracts | Other Current Assets | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Total unrealized gains (losses) | (1) | 0 |
Total realized gains (losses) | 0 | 0 |
Cost of Sales | Foreign Currency Option Contracts | Other Noncurrent Assets | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Total unrealized gains (losses) | (1) | 2 |
Total realized gains (losses) | $ 0 | $ 0 |
SHAREHOLDERS' EQUITY - Addition
SHAREHOLDERS' EQUITY - Additional Information (Details) - USD ($) | Sep. 22, 2017 | Sep. 30, 2018 | Sep. 30, 2016 | Nov. 02, 2018 | Sep. 30, 2017 | Jul. 21, 2016 | Apr. 15, 2016 | Mar. 01, 2016 | Jan. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2012 |
Class of Stock [Line Items] | |||||||||||
Common stock authorized (in shares) | 500,000,000 | ||||||||||
Common stock par value (in dollars per share) | $ 1 | ||||||||||
Preferred stock authorized (in shares) | 30,000,000 | ||||||||||
Common stock reserved for issuance under long-term incentive plan (in shares) | 13,000,000 | ||||||||||
Common stock available for future grants under long-term incentive plan (in shares) | 4,300,000 | ||||||||||
Treasury stock acquired during period (in shares) | 4,500,000 | 8,700,000 | |||||||||
Repurchase of common stock | $ (100,000,000) | $ (81,000,000) | |||||||||
Treasury stock acquired to date, at cost (in shares) | 17,300,000 | 12,800,000 | 12,800,000 | ||||||||
Treasury stock, at cost including commission | $ 236,000,000 | $ 136,000,000 | $ 136,000,000 | ||||||||
M2016 Strategy | Equity And Equity-Linked Securities, Including Convertible Debt Securities | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock repurchase, authorized amount | $ 210,000,000 | ||||||||||
Debt Securities | |||||||||||
Class of Stock [Line Items] | |||||||||||
Repurchase program, authorized amount | $ 150,000,000 | $ 150,000,000 | |||||||||
Remaining authorized amount | $ 50,000,000 | ||||||||||
Repurchased principal amount of debt | $ 100,000,000 | ||||||||||
4.625% convertible notes due 2026 | Convertible Notes | |||||||||||
Class of Stock [Line Items] | |||||||||||
Repurchased principal amount of debt | $ 55,000,000 | $ 55,000,000 | $ 245,000,000 | ||||||||
Stated interest rate | 4.625% | 462.50% | |||||||||
Repurchase price percentage | 100.00% | ||||||||||
4.00% convertible notes due 2027 | Convertible Notes | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stated interest rate | 4.00% | ||||||||||
Repurchase price percentage | 16.00% | ||||||||||
Principal amount repurchased | $ 19,000,000 | ||||||||||
Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock repurchase, authorized amount | $ 100,000,000 | ||||||||||
Series A Junior Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock authorized (in shares) | 2,000,000 | ||||||||||
Preferred stock issued (in shares) | 0 | ||||||||||
Subsequent Event | Debt Securities | |||||||||||
Class of Stock [Line Items] | |||||||||||
Repurchase program, authorized amount | $ 100,000,000 | ||||||||||
Subsequent Event | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock repurchase, authorized amount | $ 200,000,000 |
SHAREHOLDERS' EQUITY - Componen
SHAREHOLDERS' EQUITY - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | $ (545) | $ (809) | $ (766) |
Other comprehensive income (loss) before reclassification | (38) | 224 | (78) |
Amounts reclassified from accumulated other comprehensive loss | 17 | 40 | 35 |
Net current-period other comprehensive income (loss) | (21) | 264 | (43) |
Ending balance | (566) | (545) | (809) |
Foreign Currency Translation | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (41) | (66) | (54) |
Other comprehensive income (loss) before reclassification | (49) | 25 | (12) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Net current-period other comprehensive income (loss) | (49) | 25 | (12) |
Ending balance | (90) | (41) | (66) |
Employee Benefit Related Adjustments | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (500) | (740) | (705) |
Other comprehensive income (loss) before reclassification | 8 | 200 | (70) |
Amounts reclassified from accumulated other comprehensive loss | 16 | 40 | 35 |
Net current-period other comprehensive income (loss) | 24 | 240 | (35) |
Ending balance | (476) | (500) | (740) |
Unrealized Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (4) | (3) | (7) |
Other comprehensive income (loss) before reclassification | 3 | (1) | 4 |
Amounts reclassified from accumulated other comprehensive loss | 1 | 0 | 0 |
Net current-period other comprehensive income (loss) | 4 | (1) | 4 |
Ending balance | $ 0 | $ (4) | $ (3) |
SHAREHOLDERS' EQUITY - Changes
SHAREHOLDERS' EQUITY - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Net income (loss) before tax | $ 129 | $ 329 | $ 579 | ||||||||
Tax (benefit) expense | $ (18) | $ (26) | $ (22) | $ (83) | $ (22) | $ (11) | $ (13) | $ (6) | (149) | (52) | 424 |
NET INCOME | $ 33 | $ 67 | $ 60 | $ (34) | $ 238 | $ 51 | $ 23 | $ 16 | 126 | 328 | 575 |
Amount Reclassified from Accumulated Other Comprehensive Loss | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
NET INCOME | 16 | 28 | 35 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss | Employee Benefit Related Adjustments | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Amortization of prior service (credits) costs | (35) | (5) | (1) | ||||||||
Amortization of actuarial losses | 46 | 45 | 36 | ||||||||
Recognized prior service costs and actuarial losses due to settlement | 6 | ||||||||||
Net income (loss) before tax | 17 | 40 | 35 | ||||||||
Tax (benefit) expense | (1) | (12) | 0 | ||||||||
NET INCOME | $ 16 | $ 28 | $ 35 |
EQUITY BASED COMPENSATION - Add
EQUITY BASED COMPENSATION - Additional Information (Details) - USD ($) | Dec. 01, 2017 | Dec. 01, 2016 | Dec. 01, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense recognized for share based payments | $ 20,000,000 | $ 19,000,000 | $ 9,000,000 | ||||||
Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares issuable per performance share unit (in shares) | 1 | 1 | 1 | ||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options expiration period | 10 years | ||||||||
Vesting term | 3 years | ||||||||
Stock options exercised (in shares) | 0 | 200,000 | 0 | ||||||
Options granted (in shares) | 0 | 0 | |||||||
Number of options outstanding (in shares) | 0 | ||||||||
Compensation expense recognized for share based payments | $ 0 | $ 0 | $ 0 | ||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting term | 3 years | ||||||||
Shares granted in period (in shares) | 400,000 | 600,000 | 700,000 | ||||||
Weighted average grant-date fair value non-vested restricted shares and share units granted during period (usd per share) | $ 24.93 | $ 13.29 | $ 9.72 | ||||||
Restricted Stock Units (RSUs) | Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting term | 3 years | 3 years | 3 years | ||||||
Shares granted in period (in shares) | 300,000 | 500,000 | 500,000 | ||||||
Exercise price (usd per share) | $ 24.79 | $ 12.77 | $ 10.51 | ||||||
Restricted Stock and Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense recognized for share based payments | $ 8,000,000 | $ 7,000,000 | $ 5,000,000 | ||||||
Weighted average grant-date fair value non-vested restricted shares and share units granted during period (usd per share) | $ 24.93 | ||||||||
Equity instruments other than options outstanding (in shares) | 1,464,000 | 1,514,000 | |||||||
Weighted average fair value (usd per share) | $ 14.59 | $ 12.10 | |||||||
Total unrecognized compensation costs related to non-vested equity compensation arrangements | $ 8,000,000 | ||||||||
Weighted average period for compensation cost recognition | 1 year 9 days | ||||||||
Granted (in shares) | 355,000 | ||||||||
Performance Shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense recognized for share based payments | $ 14,000,000 | $ 14,000,000 | $ 6,000,000 | ||||||
Weighted average grant-date fair value non-vested restricted shares and share units granted during period (usd per share) | $ 24.69 | ||||||||
Equity instruments other than options outstanding (in shares) | 1,612,000 | 1,813,000 | |||||||
Weighted average fair value (usd per share) | $ 14.18 | $ 11.93 | |||||||
Total unrecognized compensation costs related to non-vested equity compensation arrangements | $ 12,000,000 | ||||||||
Weighted average period for compensation cost recognition | 12 months 20 days | ||||||||
Granted (in shares) | 362,000 | ||||||||
Performance Shares | Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price (usd per share) | $ 24.79 | $ 12.77 | $ 10.51 | ||||||
Performance Shares | Executive Officer | Performance period of October 1, 2017 to September 30, 2020 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares authorized for grant (in shares) | 300,000 | ||||||||
Performance period | 3 years | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2017 to September 30, 2020 | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance-based vesting percentage | 0.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2017 to September 30, 2020 | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance-based vesting percentage | 200.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2017 to September 30, 2020 | Performance Objective One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 50.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2017 to September 30, 2020 | Performance Objective Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 50.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2016 to September 30, 2019 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares authorized for grant (in shares) | 600,000 | ||||||||
Performance period | 3 years | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2016 to September 30, 2019 | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance-based vesting percentage | 0.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2016 to September 30, 2019 | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance-based vesting percentage | 200.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2016 to September 30, 2019 | Performance Objective One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 50.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2016 to September 30, 2019 | Performance Objective Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 25.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2016 to September 30, 2019 | Performance Objective Three | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 25.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2015 to September 30, 2018 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares authorized for grant (in shares) | 700,000 | ||||||||
Performance period | 3 years | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2015 to September 30, 2018 | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance-based vesting percentage | 0.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2015 to September 30, 2018 | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance-based vesting percentage | 200.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2015 to September 30, 2018 | Performance Objective One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 50.00% | ||||||||
Performance Shares | Executive Officer | Performance period of October 1, 2015 to September 30, 2018 | Performance Objective Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting rights percentage | 50.00% |
EQUITY BASED COMPENSATION - Rol
EQUITY BASED COMPENSATION - Rollforward of Restricted Stock, Restricted Share, and Performance Share Units and Activity (Details) shares in Thousands | 12 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Restricted Stock and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested - beginning of year (in shares) | shares | 1,514 |
Granted (in shares) | shares | 355 |
Vested (in shares) | shares | (361) |
Forfeited (in shares) | shares | (44) |
Non-vested - end of year (in shares) | shares | 1,464 |
Weighted-Average Grant-Date Fair Value | |
Non-vested - beginning of year, weighted-average grant-day fair value (usd per share) | $ / shares | $ 12.10 |
Granted, weighted-average grant-day fair value (usd per share) | $ / shares | 24.93 |
Vested, weighted-average grant-day fair value (usd per share) | $ / shares | 13.91 |
Forfeited, weighted-average grant-day fair value (usd per share) | $ / shares | 17.98 |
Non-vested - end of year, weighted-average grant-day fair value (usd per share) | $ / shares | $ 14.59 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested - beginning of year (in shares) | shares | 1,813 |
Granted (in shares) | shares | 362 |
Vested (in shares) | shares | (411) |
Forfeited (in shares) | shares | (152) |
Non-vested - end of year (in shares) | shares | 1,612 |
Weighted-Average Grant-Date Fair Value | |
Non-vested - beginning of year, weighted-average grant-day fair value (usd per share) | $ / shares | $ 11.93 |
Granted, weighted-average grant-day fair value (usd per share) | $ / shares | 24.69 |
Vested, weighted-average grant-day fair value (usd per share) | $ / shares | 13.11 |
Forfeited, weighted-average grant-day fair value (usd per share) | $ / shares | 15.26 |
Non-vested - end of year, weighted-average grant-day fair value (usd per share) | $ / shares | $ 14.18 |
RETIREMENT MEDICAL PLANS - Addi
RETIREMENT MEDICAL PLANS - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2012 | Sep. 30, 2015 | Sep. 30, 2018 | Sep. 30, 2013 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Health care cost trend rate (weighted average) | 6.18% | |||||
Reduction in APBO from subsidy | $ 25,000,000 | $ 35,000,000 | ||||
Net actuarial loss estimated to be amortized from accumulated other comprehensive loss | $ (15,000,000) | |||||
The prior service benefit estimated to be amortized from accumulated other comprehensive loss to periodic benefits cost | $ 35,000,000 | |||||
Postemployment Retirement Benefits | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Annual defined contribution per retiree | $ 4,000 | |||||
Average remaining service period of active participants | 7 years | |||||
Prior service credit to be amortized | $ 315,000,000 | |||||
Average period of amortization, inactive plan participants | 10 years | |||||
U.S. Retiree Medical Plan | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Average remaining service period of active participants | 10 years | |||||
Average period of amortization, inactive plan participants | 10 years | |||||
Health care cost trend rate (weighted average) | 6.52% | 6.18% | 7.10% | |||
Change in Assumptions for Pension Plans | Postemployment Retirement Benefits | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Change in mortality assumptions | $ 18,000,000 |
RETIREMENT MEDICAL PLANS - Reti
RETIREMENT MEDICAL PLANS - Retiree Medical Liability Expense Assumptions (Details) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Assumptions Used In Measurement of Retiree Medical Liability and Expense | |||
Health care cost trend rate (weighted average) | 6.18% | ||
U.S. Retiree Medical Plan | |||
Assumptions Used In Measurement of Retiree Medical Liability and Expense | |||
Discount rate | 4.05% | 3.32% | 3.45% |
Health care cost trend rate (weighted average) | 6.18% | 6.52% | 7.10% |
Ultimate health care trend rate | 4.63% | 4.65% | 4.75% |
Year ultimate rate is reached | 2,024 | 2,024 | 2,024 |
RETIREMENT MEDICAL PLANS - Re_2
RETIREMENT MEDICAL PLANS - Retiree Medical Liability Components As of Balance Sheet Date (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | $ 1,476 | $ 1,635 | |
U.S. Retiree Medical Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | 86 | 104 | $ 445 |
U.S. Retiree Medical Plan | Retirees | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | 86 | 104 | |
U.S. Retiree Medical Plan | Employees eligible to retire | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | $ 0 | $ 0 |
RETIREMENT MEDICAL PLANS - Roll
RETIREMENT MEDICAL PLANS - Rollforward Of Retiree Medical Liability (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Beginning of year | $ 1,635 | ||
Actuarial loss gain | 23 | ||
End of year | 1,476 | $ 1,635 | |
U.S. Retiree Medical Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Beginning of year | 104 | 445 | |
Interest cost | 3 | 14 | $ 18 |
Actuarial loss gain | (5) | (8) | |
Plan amendment | 0 | (315) | |
Foreign currency rate changes | (1) | 0 | |
Benefit payments | (15) | (32) | |
End of year | 86 | 104 | $ 445 |
Retiree medical liability | $ 86 | $ 104 |
RETIREMENT MEDICAL PLANS - Re_3
RETIREMENT MEDICAL PLANS - Retiree Medical Liability Current and Long Term Components (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Retiree Medical Liability Current And Long Term Components | ||
Long-term — included in retirement benefits | $ 262 | $ 314 |
U.S. Retiree Medical Plan | ||
Retiree Medical Liability Current And Long Term Components | ||
Current — included in compensation and benefits | 13 | 18 |
Long-term — included in retirement benefits | 73 | 86 |
Retiree medical liability | $ 86 | $ 104 |
RETIREMENT MEDICAL PLANS - Amou
RETIREMENT MEDICAL PLANS - Amount Of Retiree Medical Obligations Recorded In Accumulated Other Comprehensive Loss Net Of Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Deferred tax impact | $ 6 | $ 147 | $ 33 |
U.S. Retiree Medical Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Balance, beginning | (111) | 96 | |
Net actuarial (gain) loss for the year | (5) | (8) | |
Recognized prior service costs due to plan amendment | (315) | ||
Amortization for the year | 18 | (10) | |
Deferred tax impact | (4) | 126 | |
Balance, ending | (102) | (111) | 96 |
U.S. Retiree Medical Plan | Net Actuarial Loss | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Balance, beginning | 92 | 107 | |
Net actuarial (gain) loss for the year | (5) | (8) | |
Recognized prior service costs due to plan amendment | 0 | ||
Amortization for the year | (17) | (15) | |
Deferred tax impact | 6 | 8 | |
Balance, ending | 76 | 92 | 107 |
U.S. Retiree Medical Plan | Prior Service Cost (Benefit) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Balance, beginning | (203) | (11) | |
Net actuarial (gain) loss for the year | 0 | 0 | |
Recognized prior service costs due to plan amendment | (315) | ||
Amortization for the year | 35 | 5 | |
Deferred tax impact | (10) | 118 | |
Balance, ending | $ (178) | $ (203) | $ (11) |
RETIREMENT MEDICAL PLANS - Comp
RETIREMENT MEDICAL PLANS - Components Of Retiree Medical Expense (Details) - U.S. Retiree Medical Plan - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 0 | $ 0 | $ 0 |
Interest cost | 3 | 14 | 18 |
Amortization of - Prior service cost (benefit) | (35) | (5) | (1) |
Actuarial losses | 17 | 15 | 13 |
Net periodic expense (income) | $ (15) | $ 24 | $ 30 |
RETIREMENT MEDICAL PLANS - Re_4
RETIREMENT MEDICAL PLANS - Retiree Medical Plan Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Retiree Medical Plan Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Abstract] | ||
Effect on total service and interest cost 1% increase | $ 0 | $ 0 |
Effect on total service and interest cost 1% decrease | 0 | 0 |
Effect on APBO 1% increase | 4 | 5 |
Effect on APBO 1% decrease | $ (4) | $ (4) |
RETIREMENT MEDICAL PLANS - Re_5
RETIREMENT MEDICAL PLANS - Retiree Medical Plan Estimated Future Benefit Payments (Details) - U.S. Retiree Medical Plan $ in Millions | Sep. 30, 2018USD ($) |
Gross Benefit Payments | |
Fiscal 2,019 | $ 14 |
Fiscal 2,020 | 13 |
Fiscal 2,021 | 12 |
Fiscal 2,022 | 11 |
Fiscal 2,023 | 10 |
Fiscal 2024 – 2028 | 21 |
Gross Receipts | |
Fiscal 2,019 | 0 |
Fiscal 2,020 | 0 |
Fiscal 2,021 | 0 |
Fiscal 2,022 | 0 |
Fiscal 2,023 | 0 |
Fiscal 2024 – 2028 | $ 1 |
RETIREMENT PENSION PLANS - Addi
RETIREMENT PENSION PLANS - Additional Information (Details) | Jan. 02, 2008employee | Sep. 30, 2018USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2013USD ($) |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Settlements | $ 6,000,000 | $ 0 | $ 0 | ||||
Net actuarial loss (gain) for the year | 23,000,000 | ||||||
Defined contribution savings plan expense | 21,000,000 | 18,000,000 | 16,000,000 | ||||
Pension Plan | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Settlements | 6,000,000 | 0 | $ 0 | ||||
Net actuarial loss (gain) for the year | $ (79,000,000) | (53,000,000) | |||||
Pension Plan | U.S. Plans | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Average period of amortization, inactive plan participants | 17 years | ||||||
Number of employees earning service for an additional transition period (ending June 30, 2011) | employee | 3,800 | ||||||
Lump sum distribution - maximum | $ 5,000 | ||||||
Lump sum distribution - minimum | $ 1,000 | ||||||
Net actuarial loss (gain) for the year | $ (70,000,000) | (32,000,000) | |||||
Unfunded investment commitments | $ 6,000,000 | $ 6,000,000 | |||||
Pension Plan | U.S. Plans | Minimum | Equity Investments | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 20.00% | 20.00% | |||||
Pension Plan | U.S. Plans | Minimum | Fixed Income Investments | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 30.00% | 30.00% | |||||
Pension Plan | U.S. Plans | Minimum | Alternative investments measured at net asset value | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 10.00% | 10.00% | |||||
Pension Plan | U.S. Plans | Maximum | Equity Investments | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 50.00% | 50.00% | |||||
Pension Plan | U.S. Plans | Maximum | Fixed Income Investments | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 60.00% | 60.00% | |||||
Pension Plan | U.S. Plans | Maximum | Alternative investments measured at net asset value | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 25.00% | 25.00% | |||||
Pension Plan | Non-U.S. Plans | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Net actuarial loss (gain) for the year | $ (9,000,000) | $ (21,000,000) | |||||
Pension Plan | Non-U.S. Plans | United Kingdom | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Average period of amortization, inactive plan participants | 26 years | ||||||
Settlements | $ 6,000,000 | ||||||
Pension Plan | Non-U.S. Plans | Minimum | Fixed Income Investments | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 30.00% | 30.00% | |||||
Pension Plan | Non-U.S. Plans | Minimum | Alternative investments measured at net asset value | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 10.00% | 10.00% | |||||
Pension Plan | Non-U.S. Plans | Minimum | Equity Securities | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 15.00% | 15.00% | |||||
Pension Plan | Non-U.S. Plans | Minimum | Real estate measured at net asset value | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 0.00% | 0.00% | |||||
Pension Plan | Non-U.S. Plans | Maximum | Fixed Income Investments | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 60.00% | 60.00% | |||||
Pension Plan | Non-U.S. Plans | Maximum | Alternative investments measured at net asset value | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 30.00% | 30.00% | |||||
Pension Plan | Non-U.S. Plans | Maximum | Equity Securities | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 35.00% | 35.00% | |||||
Pension Plan | Non-U.S. Plans | Maximum | Real estate measured at net asset value | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Target asset allocation | 10.00% | 10.00% | |||||
Pension Plan | Change in Assumptions for Pension Plans | U.S. Plans | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Pension obligations increase | $ 24,000,000 |
RETIREMENT PENSION PLANS - Sche
RETIREMENT PENSION PLANS - Schedule of US Pension Benefit Obligation Expense and Net Expense Assumptions (Details) - Pension Plan - U.S. Plans | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 4.30% | ||
Assumed return on plan assets (beginning of the year) | 7.75% | 7.75% | 7.75% |
Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.70% | 3.50% | |
Maximum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.75% | 3.55% |
RETIREMENT PENSION PLANS - Sc_2
RETIREMENT PENSION PLANS - Schedule of Non-US Pension Benefit Obligation Expense and Net Expense Assumptions (Details) - Pension Plan - Non-U.S. Plans | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 2.90% | 2.80% | 2.50% |
Assumed return on plan assets (beginning of the year) | 6.00% | 6.00% | 6.00% |
RETIREMENT PENSION PLANS - Roll
RETIREMENT PENSION PLANS - Rollforward of Pension Liability and Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Change in PBO | |||
Beginning of year | $ 1,635 | ||
Actuarial loss gain | 23 | ||
End of year | 1,476 | $ 1,635 | |
Change in plan assets | |||
Fair value of assets - beginning of year | 1,551 | ||
Fair value of assets - end of year | 1,446 | 1,551 | |
Pension Plan | |||
Change in PBO | |||
Beginning of year | 1,635 | 1,728 | |
Interest cost | 54 | 53 | $ 65 |
Actuarial loss gain | (79) | (53) | |
Prior service cost | 0 | 1 | |
Settlements | (18) | 0 | |
Benefit payments | (101) | (113) | |
Foreign currency rate changes | (15) | 19 | |
End of year | 1,476 | 1,635 | 1,728 |
Change in plan assets | |||
Fair value of assets - beginning of year | 1,551 | 1,568 | |
Actual return on plan assets | 32 | 66 | |
Employer contributions | 6 | 6 | |
Settlements | (22) | 0 | |
Benefit payments | (101) | (113) | |
Foreign currency rate changes | (20) | 24 | |
Fair value of assets - end of year | 1,446 | 1,551 | 1,568 |
Funded status | (30) | (84) | |
U.S. Plans | Pension Plan | |||
Change in PBO | |||
Beginning of year | 1,036 | 1,112 | |
Interest cost | 38 | 38 | |
Actuarial loss gain | (70) | (32) | |
Prior service cost | 0 | 1 | |
Settlements | 0 | 0 | |
Benefit payments | (82) | (83) | |
Foreign currency rate changes | 0 | 0 | |
End of year | 922 | 1,036 | 1,112 |
Change in plan assets | |||
Fair value of assets - beginning of year | 821 | 834 | |
Actual return on plan assets | 0 | 65 | |
Employer contributions | 5 | 5 | |
Settlements | 0 | 0 | |
Benefit payments | (82) | (83) | |
Foreign currency rate changes | 0 | 0 | |
Fair value of assets - end of year | 744 | 821 | 834 |
Funded status | (178) | (215) | |
Non-U.S. Plans | Pension Plan | |||
Change in PBO | |||
Beginning of year | 599 | 616 | |
Interest cost | 16 | 15 | |
Actuarial loss gain | (9) | (21) | |
Prior service cost | 0 | 0 | |
Settlements | (18) | 0 | |
Benefit payments | (19) | (30) | |
Foreign currency rate changes | (15) | 19 | |
End of year | 554 | 599 | 616 |
Change in plan assets | |||
Fair value of assets - beginning of year | 730 | 734 | |
Actual return on plan assets | 32 | 1 | |
Employer contributions | 1 | 1 | |
Settlements | (22) | 0 | |
Benefit payments | (19) | (30) | |
Foreign currency rate changes | (20) | 24 | |
Fair value of assets - end of year | 702 | 730 | $ 734 |
Funded status | $ 148 | $ 131 |
RETIREMENT PENSION PLANS - Sc_3
RETIREMENT PENSION PLANS - Schedule of Balance Sheet Classification of Net Pension Liability (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Retirement benefits-non-current | $ (262) | $ (314) |
Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 152 | 135 |
Current liabilities | (5) | (5) |
Retirement benefits-non-current | (177) | (214) |
Net amount recognized | (30) | (84) |
U.S. Plans | Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 0 | 0 |
Current liabilities | (5) | (5) |
Retirement benefits-non-current | (173) | (210) |
Net amount recognized | (178) | (215) |
Non-U.S. Plans | Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 152 | 135 |
Current liabilities | 0 | 0 |
Retirement benefits-non-current | (4) | (4) |
Net amount recognized | $ 148 | $ 131 |
RETIREMENT PENSION PLANS - Sc_4
RETIREMENT PENSION PLANS - Schedule of Pension Costs Recognized in Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Pension and other postretirement benefit, tax | $ 6 | $ 147 | $ 33 |
Net Actuarial Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Settlements | (6) | ||
Pension Plan | Net Actuarial Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Balance, beginning | 611 | 644 | |
Net prior service cost for the year | 0 | 1 | |
Net actuarial (gain) loss for the year | (8) | (25) | |
Amortization for the year | (29) | (30) | |
Pension and other postretirement benefit, tax | 10 | 21 | |
Balance, ending | 578 | 611 | 644 |
U.S. Plans | Net Actuarial Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Settlements | 0 | ||
U.S. Plans | Pension Plan | Net Actuarial Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Balance, beginning | 418 | 454 | |
Net prior service cost for the year | 0 | 1 | |
Net actuarial (gain) loss for the year | (11) | (36) | |
Amortization for the year | (23) | (22) | |
Pension and other postretirement benefit, tax | 10 | 21 | |
Balance, ending | 394 | 418 | 454 |
Non-U.S. Plans | Net Actuarial Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Settlements | (6) | ||
Non-U.S. Plans | Pension Plan | Net Actuarial Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Balance, beginning | 193 | 190 | |
Net prior service cost for the year | 0 | 0 | |
Net actuarial (gain) loss for the year | 3 | 11 | |
Amortization for the year | (6) | (8) | |
Pension and other postretirement benefit, tax | 0 | 0 | |
Balance, ending | $ 184 | $ 193 | $ 190 |
RETIREMENT PENSION PLANS - Pens
RETIREMENT PENSION PLANS - Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Retirement Benefits [Abstract] | ||
Pension liability | $ 177 | $ 214 |
Retiree medical liability — long term (see Note 21) | 73 | 86 |
Other | 12 | 14 |
Total retirement benefits | $ 262 | $ 314 |
RETIREMENT PENSION PLANS - Sc_5
RETIREMENT PENSION PLANS - Schedule of Projected Benefit Obligation Accumulated Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Retirement Benefits [Abstract] | ||
ABO Exceeds Assets, PBO | $ 926 | $ 1,041 |
ABO Exceeds Assets, ABO | 926 | 1,041 |
ABO Exceeds Assets, Plan Assets | 744 | 821 |
Assets Exceed ABO, PBO | 550 | 594 |
Assets Exceed ABO, ABO | 550 | 594 |
Assets Exceed ABO, Plan Assets | 702 | 730 |
PBO | 1,476 | 1,635 |
ABO | 1,476 | 1,635 |
Total assets at fair value | $ 1,446 | $ 1,551 |
RETIREMENT PENSION PLANS - Sc_6
RETIREMENT PENSION PLANS - Schedule of Net Periodic Pension Benefit Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Settlement loss | $ 6 | $ 0 | $ 0 |
Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 0 | 0 | 1 |
Interest cost | 54 | 53 | 65 |
Assumed rate of return on plan assets | (99) | (96) | (99) |
Amortization of - Actuarial losses | 29 | 30 | 23 |
Settlement loss | 6 | 0 | 0 |
Net periodic expense (income) | $ (10) | $ (13) | $ (10) |
RETIREMENT PENSION PLANS - Pe_2
RETIREMENT PENSION PLANS - Pension Plan Investments Measured at Fair Value by Level Within Fair Value Hierarchy (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | $ 1,446 | $ 1,551 | |
Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 1,446 | 1,551 | $ 1,568 |
Pension Plan | U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 744 | 821 | 834 |
Pension Plan | U.S. Plans | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 51 | 54 | |
Pension Plan | U.S. Plans | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 24 | 26 | |
Pension Plan | U.S. Plans | Private equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 17 | 19 | |
Pension Plan | U.S. Plans | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 29 | 37 | |
Pension Plan | U.S. Plans | Equity investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 191 | 195 | |
Pension Plan | U.S. Plans | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 312 | 331 | |
Pension Plan | U.S. Plans | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 165 | 218 | |
Pension Plan | U.S. Plans | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 20 | 22 | |
Pension Plan | U.S. Plans | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 13 | 14 | |
Pension Plan | U.S. Plans | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 34 | 37 | |
Pension Plan | U.S. Plans | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 232 | 291 | |
Pension Plan | U.S. Plans | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 83 | 77 | |
Pension Plan | U.S. Plans | Alternatives – Partnerships measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 85 | 88 | |
Pension Plan | U.S. Plans | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 32 | 34 | |
Pension Plan | U.S. Plans | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 744 | 821 | |
Pension Plan | U.S. Plans | Level 1 | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 51 | 54 | |
Pension Plan | U.S. Plans | Level 1 | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 24 | 26 | |
Pension Plan | U.S. Plans | Level 1 | Private equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 29 | 37 | |
Pension Plan | U.S. Plans | Level 1 | Equity investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 104 | 117 | |
Pension Plan | U.S. Plans | Level 1 | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 1 | 5 | |
Pension Plan | U.S. Plans | Level 1 | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 13 | 14 | |
Pension Plan | U.S. Plans | Level 1 | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 14 | 19 | |
Pension Plan | U.S. Plans | Level 1 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Alternatives – Partnerships measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 118 | 136 | |
Pension Plan | U.S. Plans | Level 2 | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Private equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Equity investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 164 | 213 | |
Pension Plan | U.S. Plans | Level 2 | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 20 | 22 | |
Pension Plan | U.S. Plans | Level 2 | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 184 | 235 | |
Pension Plan | U.S. Plans | Level 2 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Alternatives – Partnerships measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 32 | 34 | |
Pension Plan | U.S. Plans | Level 2 | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 216 | 269 | |
Pension Plan | U.S. Plans | Level 3 | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Private equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 17 | 19 | |
Pension Plan | U.S. Plans | Level 3 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Equity investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 17 | 19 | |
Pension Plan | U.S. Plans | Level 3 | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 83 | 77 | |
Pension Plan | U.S. Plans | Level 3 | Alternatives – Partnerships measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 100 | 96 | |
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 702 | 730 | $ 734 |
Pension Plan | Non-U.S. Plans | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 171 | 168 | |
Pension Plan | Non-U.S. Plans | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 171 | 168 | |
Pension Plan | Non-U.S. Plans | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 150 | 154 | |
Pension Plan | Non-U.S. Plans | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 194 | 226 | |
Pension Plan | Non-U.S. Plans | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 344 | 380 | |
Pension Plan | Non-U.S. Plans | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Comingled funds | 5 | 5 | |
Pension Plan | Non-U.S. Plans | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 137 | ||
Pension Plan | Non-U.S. Plans | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 136 | ||
Pension Plan | Non-U.S. Plans | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Real estate | 41 | 40 | |
Pension Plan | Non-U.S. Plans | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 4 | 1 | |
Pension Plan | Non-U.S. Plans | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 702 | 730 | |
Pension Plan | Non-U.S. Plans | Level 1 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 171 | 168 | |
Pension Plan | Non-U.S. Plans | Level 1 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 171 | 168 | |
Pension Plan | Non-U.S. Plans | Level 1 | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 5 | 5 | |
Pension Plan | Non-U.S. Plans | Level 1 | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 5 | 5 | |
Pension Plan | Non-U.S. Plans | Level 1 | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Comingled funds | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | ||
Pension Plan | Non-U.S. Plans | Level 1 | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | ||
Pension Plan | Non-U.S. Plans | Level 1 | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Real estate | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 176 | 173 | |
Pension Plan | Non-U.S. Plans | Level 2 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 145 | 149 | |
Pension Plan | Non-U.S. Plans | Level 2 | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 145 | 149 | |
Pension Plan | Non-U.S. Plans | Level 2 | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Comingled funds | 5 | 5 | |
Pension Plan | Non-U.S. Plans | Level 2 | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | ||
Pension Plan | Non-U.S. Plans | Level 2 | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | ||
Pension Plan | Non-U.S. Plans | Level 2 | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Real estate | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 4 | 1 | |
Pension Plan | Non-U.S. Plans | Level 2 | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 154 | 155 | |
Pension Plan | Non-U.S. Plans | Level 3 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Equity investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fixed income investments | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Comingled funds | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | ||
Pension Plan | Non-U.S. Plans | Level 3 | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Alternative investments | 0 | ||
Pension Plan | Non-U.S. Plans | Level 3 | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Real estate | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Total assets at fair value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | $ 0 | $ 0 |
RETIREMENT PENSION PLANS - Chan
RETIREMENT PENSION PLANS - Changes in Level 3, Pension Plan Investments (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Return on Plan Assets: Attributable to Assets Held at Period End | $ 32 | $ 66 |
U.S. Plans | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Return on Plan Assets: Attributable to Assets Held at Period End | 0 | 65 |
U.S. Plans | Level 3 | Private equity | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair Value, beginning of period | 19 | 11 |
Return on Plan Assets: Attributable to Assets Held at Period End | (3) | 4 |
Purchases | 1 | 4 |
Settlements | 0 | 0 |
Net Transfers Into (Out of) Level 3 | 0 | 0 |
Fair Value, end of period | 17 | 19 |
U.S. Plans | Level 3 | Partnerships Fixed Income | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair Value, beginning of period | 0 | 1 |
Return on Plan Assets: Attributable to Assets Held at Period End | 0 | |
Purchases | 0 | |
Settlements | (1) | |
Net Transfers Into (Out of) Level 3 | 0 | |
Fair Value, end of period | 0 | |
U.S. Plans | Level 3 | Alternatives – Partnerships | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair Value, beginning of period | 77 | 77 |
Return on Plan Assets: Attributable to Assets Held at Period End | 6 | 4 |
Purchases | 0 | 1 |
Settlements | 0 | (5) |
Net Transfers Into (Out of) Level 3 | 0 | 0 |
Fair Value, end of period | 83 | 77 |
U.S. Plans | Level 3 | Total Level 3 fair value | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair Value, beginning of period | 96 | 89 |
Return on Plan Assets: Attributable to Assets Held at Period End | 3 | 8 |
Purchases | 1 | 5 |
Settlements | 0 | (6) |
Net Transfers Into (Out of) Level 3 | 0 | 0 |
Fair Value, end of period | $ 100 | $ 96 |
RETIREMENT PENSION PLANS - Pe_3
RETIREMENT PENSION PLANS - Pension Plan Estimated Future Contributions and Benefit Payments (Details) - Pension Plan $ in Millions | Sep. 30, 2018USD ($) |
Expected employer contributions: | |
Expected employer contributions, Fiscal 2018 | $ 6 |
Expected benefit payments: | |
Fiscal 2,019 | 100 |
Fiscal 2,020 | 95 |
Fiscal 2,021 | 94 |
Fiscal 2,022 | 93 |
Fiscal 2,023 | 92 |
Fiscal 2024 – 2028 | 442 |
U.S. Plans | |
Expected employer contributions: | |
Expected employer contributions, Fiscal 2018 | 5 |
Expected benefit payments: | |
Fiscal 2,019 | 71 |
Fiscal 2,020 | 70 |
Fiscal 2,021 | 69 |
Fiscal 2,022 | 68 |
Fiscal 2,023 | 67 |
Fiscal 2024 – 2028 | 314 |
Non-U.S. Plans | |
Expected employer contributions: | |
Expected employer contributions, Fiscal 2018 | 1 |
Expected benefit payments: | |
Fiscal 2,019 | 29 |
Fiscal 2,020 | 25 |
Fiscal 2,021 | 25 |
Fiscal 2,022 | 25 |
Fiscal 2,023 | 25 |
Fiscal 2024 – 2028 | $ 128 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Before Income Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. income | $ 85 | $ 252 | $ 71 |
Foreign income | 193 | 129 | 84 |
INCOME (LOSS) BEFORE INCOME TAXES | $ 278 | $ 381 | $ 155 |
INCOME TAXES - Components of th
INCOME TAXES - Components of the Benefit (Provision) for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Current tax benefit (expense): | |||||||||||
U.S. | $ (24) | $ (1) | $ (1) | ||||||||
Foreign | (51) | (11) | 11 | ||||||||
State and local | 0 | (2) | (1) | ||||||||
Total current tax benefit (expense) | (75) | (14) | 9 | ||||||||
Deferred tax benefit (expense): | |||||||||||
U.S. | (76) | (28) | 394 | ||||||||
Foreign | 5 | (9) | (22) | ||||||||
State and local | (3) | (1) | 43 | ||||||||
Total deferred tax benefit | (74) | (38) | 415 | ||||||||
Income tax benefit (expense) | $ (18) | $ (26) | $ (22) | $ (83) | $ (22) | $ (11) | $ (13) | $ (6) | $ (149) | $ (52) | $ 424 |
INCOME TAXES - Summary of the T
INCOME TAXES - Summary of the Tax Effects of Temporary Differences (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Accrued compensation and benefits | $ 15 | $ 32 |
Accrued product warranties | 11 | 14 |
Inventory costs | 6 | 9 |
Receivables | 8 | 18 |
Environmental | 28 | 31 |
Accrued retiree healthcare benefits | 21 | 39 |
Retirement pension plans | 41 | 92 |
Property | 10 | 10 |
Loss and credit carryforwards | 278 | 349 |
Other | 19 | 40 |
Sub-total | 437 | 634 |
Less: Valuation allowances | (236) | (307) |
Deferred income taxes - asset | 201 | 327 |
Taxes on undistributed income | (14) | (7) |
Intangible assets | (54) | (87) |
Debt basis difference | (9) | (16) |
Deferred income taxes - liability | (77) | (110) |
Net deferred income tax assets | $ 124 | $ 217 |
INCOME TAXES - Schedule of Net
INCOME TAXES - Schedule of Net Current and Non-Current Deferred Income Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | ||
Other assets (see Note 13) | $ 140 | $ 229 |
Other liabilities (see Note 16) | (16) | (12) |
Net non-current deferred income taxes — asset | $ 124 | $ 217 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax [Line Items] | |||||||||||||
Subsidiary, ownership percentage | 100.00% | ||||||||||||
Undistributed earnings in foreign subsidiaries on which income taxes have not been provided | $ 1,170 | ||||||||||||
Effective tax rate | 24.50% | ||||||||||||
Change in deferred tax asset, net valuation | 21.00% | ||||||||||||
Non-cash charge from revaluation of deferred tax asset | $ 77 | $ 89 | |||||||||||
Tax (benefit) expense | $ (18) | $ (26) | $ (22) | $ (83) | $ (22) | $ (11) | $ (13) | $ (6) | (149) | $ (52) | $ 424 | ||
Foreign tax credits utilized | 28 | ||||||||||||
Research and development tax credits | 6 | ||||||||||||
Gross unrecognized tax benefits | 261 | 269 | $ 243 | 261 | 269 | 243 | $ 207 | ||||||
Unrecognized tax benefits that would impact effective tax rate | 215 | 215 | |||||||||||
Interest on uncertain tax positions accrued | 13 | 9 | 13 | 9 | |||||||||
Penalties on uncertain tax positions accrued | 1 | 1 | 1 | 1 | |||||||||
Income tax penalties and interest expense | 4 | 5 | 8 | ||||||||||
Restatement Adjustment | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Tax (benefit) expense | $ 2 | $ 11 | $ 61 | ||||||||||
U.S. | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Non-cash expense (benefit) for the reversal of valuation allowances | (52) | $ (438) | |||||||||||
Tax (benefit) expense | $ 15 | ||||||||||||
Brazil | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Non-cash expense (benefit) for the reversal of valuation allowances | $ (9) |
INCOME TAXES - Tax Credit Carry
INCOME TAXES - Tax Credit Carryforwards and Deferred Tax Assets (Details) $ in Millions | Sep. 30, 2018USD ($) |
Operating Loss Carryforwards [Line Items] | |
Net Operating Losses and Tax Credit Carryforwards | $ 278 |
Valuation Allowances on these Deferred Tax Assets | 214 |
2019-2023 | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Losses and Tax Credit Carryforwards | 15 |
Valuation Allowances on these Deferred Tax Assets | 10 |
2024-2033 | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Losses and Tax Credit Carryforwards | 55 |
Valuation Allowances on these Deferred Tax Assets | 17 |
2034-2038 | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Losses and Tax Credit Carryforwards | 11 |
Valuation Allowances on these Deferred Tax Assets | 0 |
Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Losses and Tax Credit Carryforwards | 197 |
Valuation Allowances on these Deferred Tax Assets | $ 187 |
INCOME TAXES - Income Tax (Bene
INCOME TAXES - Income Tax (Benefit) Provision at the U.S Statutory Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Expense for income taxes at statutory tax rate | $ (68) | $ (133) | $ (54) | ||||||||
State and local income taxes | (2) | (14) | (7) | ||||||||
Foreign income taxed at rates other than statutory | (4) | 9 | 5 | ||||||||
Legislative changes | (126) | 0 | (14) | ||||||||
Joint venture equity income | 6 | 7 | 3 | ||||||||
Tax effect of nonfunctional currency transaction | 2 | (2) | (30) | ||||||||
Correlated tax relief | 0 | 7 | 51 | ||||||||
U.S. tax impact on distributions from subsidiaries and joint ventures | (4) | (8) | 14 | ||||||||
Nondeductible expenses | (8) | (10) | (12) | ||||||||
Tax credits | 9 | 14 | 61 | ||||||||
Valuation allowances | 40 | 56 | 418 | ||||||||
Impact of capital loss | 1 | 15 | 0 | ||||||||
Other | 5 | 7 | (11) | ||||||||
Income tax benefit (expense) | $ (18) | $ (26) | $ (22) | $ (83) | $ (22) | $ (11) | $ (13) | $ (6) | (149) | (52) | 424 |
Restatement Adjustment | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Income tax benefit (expense) | $ 2 | $ 11 | $ 61 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 269 | $ 243 | $ 207 |
Additions to tax positions recorded during the current year | 0 | 0 | 39 |
Additions to tax positions recorded during the prior year | 0 | 26 | 0 |
Reductions to tax position recorded in prior years | (6) | 0 | 0 |
Reductions to tax positions due to lapse of statutory limits | (1) | (2) | (3) |
Translation, other | (1) | 2 | 0 |
Unrecognized tax benefits, ending balance | $ 261 | $ 269 | $ 243 |
CONTINGENCIES - Additional Info
CONTINGENCIES - Additional Information (Details) $ in Millions | Sep. 15, 2018USD ($) | Dec. 12, 2015USD ($) | Sep. 30, 2017USD ($)claim | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2018USD ($)siteclaim | Sep. 30, 2017USD ($)claim | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2009USD ($) |
Loss Contingencies [Line Items] | |||||||||||
Environmental contingencies accrued | $ 9 | $ 17 | $ 9 | ||||||||
Estimated environmental liabilities for ongoing operations, maintenance and monitoring discounted amount | 13 | ||||||||||
Estimated environmental liabilities for ongoing operations, maintenance and monitoring undiscounted amount | 15 | ||||||||||
Litigation settlement | $ 2 | 0 | $ 3 | ||||||||
Super Fund | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of superfund sites | site | 10 | ||||||||||
Indemnity Obligations | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Guarantee obligations recorded | 10 | $ 9 | 10 | $ 28 | |||||||
Minimum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental liabilities discounted rate | 1.75% | ||||||||||
Maximum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental liabilities discounted rate | 2.75% | ||||||||||
Maremont Asbestos | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental contingencies accrued | $ 70 | $ 109 | $ 70 | ||||||||
Number of pending asbestos-related claims | claim | 2,800 | 1,700 | 2,800 | ||||||||
Period for incurring loss | 41 years | ||||||||||
Loss contingency accrual | $ 68 | $ 107 | $ 68 | ||||||||
Charge based on annual valuation of asbestos | 38 | 5 | |||||||||
Insurance receivable | 25 | $ 24 | 25 | ||||||||
Period for settlement | 41 years | ||||||||||
Asbestos-related insurance recoveries | 25 | $ 24 | 25 | ||||||||
Maremont Asbestos | Minimum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Possible claims | 107 | ||||||||||
Maremont Asbestos | Maximum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Possible claims | 195 | ||||||||||
Rockwell Asbestos | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental contingencies accrued | $ 65 | $ 105 | $ 65 | ||||||||
Number of pending asbestos-related claims | claim | 1,600 | 1,400 | 1,600 | ||||||||
Period for incurring loss | 41 years | ||||||||||
Possible claims | $ 63 | $ 103 | $ 63 | ||||||||
Insurance receivable | $ 28 | ||||||||||
Litigation settlement | $ 3 | ||||||||||
Period for settlement | 41 years | ||||||||||
Asbestos-related insurance recoveries | 38 | $ 68 | 38 | ||||||||
Gain recognized associated with annual valuation | 40 | ||||||||||
Rockwell Asbestos | Minimum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Possible claims | 103 | ||||||||||
Rockwell Asbestos | Maximum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Possible claims | 186 | ||||||||||
TL Trailer Axles | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Litigation settlement | $ 6 | ||||||||||
Sistemas Automotrices De Mexico S.A. De C.V. | Settled Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Settlement awarded to other party | 10 | $ 10 | |||||||||
Superfund Sites | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental costs reasonably possible | 24 | ||||||||||
Environmental contingencies accrued | 2 | 12 | 2 | ||||||||
Environmental remediation costs | 12 | ||||||||||
Non-Superfund Sites | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental costs reasonably possible | 10 | ||||||||||
Environmental contingencies accrued | 7 | 5 | 7 | ||||||||
Environmental remediation costs | 2 | 3 | 3 | ||||||||
Other Income (expense) | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Environmental remediation costs | 12 | 3 | 3 | ||||||||
Tax Years 2008 Through 2015 | Value Added Tax | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency accrual | 12 | 3 | 12 | ||||||||
Insurance Settlement | Maremont Asbestos | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency accrual | $ 12 | $ 3 | |||||||||
Litigation settlement | 17 | ||||||||||
Litigation settlement expense | $ 5 | $ 9 | |||||||||
Insurance Settlement | Rockwell Asbestos | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency accrual | 22 | 22 | |||||||||
Insurance receivable | 12 | $ 12 | |||||||||
Litigation settlement | 32 | 3 | |||||||||
Litigation settlement expense | $ 10 | $ 12 | 10 | ||||||||
Insurance Settlement | Rockwell Asbestos | Settled Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Litigation settlement | $ 5.5 | ||||||||||
MSSC | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Exposure under indemnity | $ 1 | $ 1 |
CONTINGENCIES - Environmental L
CONTINGENCIES - Environmental Loss Contingencies by Site (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Environmental Contingencies, beginning balance | $ 9 |
Transition of Grenada to Superfund Site | 0 |
Payments and other | (6) |
Accruals | 14 |
Environmental Contingencies, ending balance | 17 |
Superfund Sites | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Environmental Contingencies, beginning balance | 2 |
Transition of Grenada to Superfund Site | 2 |
Payments and other | (4) |
Accruals | 12 |
Environmental Contingencies, ending balance | 12 |
Non-Superfund Sites | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Environmental Contingencies, beginning balance | 7 |
Transition of Grenada to Superfund Site | (2) |
Payments and other | (2) |
Accruals | 2 |
Environmental Contingencies, ending balance | $ 5 |
CONTINGENCIES - Asbestos Relate
CONTINGENCIES - Asbestos Related Reserves and Recoveries (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Loss Contingencies [Line Items] | ||
Asbestos-related liabilities | $ 17 | $ 9 |
Maremont Asbestos | ||
Loss Contingencies [Line Items] | ||
Pending and future claims | 107 | 68 |
Billed but unpaid claims | 2 | 2 |
Asbestos-related liabilities | 109 | 70 |
Asbestos-related insurance recoveries | 24 | 25 |
Rockwell Asbestos | ||
Loss Contingencies [Line Items] | ||
Pending and future claims | 103 | 63 |
Billed but unpaid claims | 2 | 2 |
Asbestos-related liabilities | 105 | 65 |
Asbestos-related insurance recoveries | $ 68 | $ 38 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Additional Information (Details) - segment | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of reportable segments | 2 | ||
AB Volvo | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 23.00% | 22.00% | 23.00% |
Daimler AG | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 17.00% | 17.00% | 18.00% |
PACCAR | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 12.00% | 10.00% | 9.00% |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Summary of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Total sales | $ 1,080 | $ 1,129 | $ 1,066 | $ 903 | $ 922 | $ 920 | $ 806 | $ 699 | $ 4,178 | $ 3,347 | $ 3,199 |
Commercial Truck & Trailer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | 3,171 | 2,467 | 2,332 | ||||||||
Aftermarket & Industrial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | 1,007 | 880 | 867 | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | 4,178 | 3,347 | 3,199 | ||||||||
Operating Segments | Commercial Truck & Trailer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | 3,325 | 2,606 | 2,465 | ||||||||
Operating Segments | Aftermarket & Industrial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | 1,024 | 900 | 886 | ||||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | (171) | (159) | (152) | ||||||||
Eliminations | Commercial Truck & Trailer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | 154 | 139 | 133 | ||||||||
Eliminations | Aftermarket & Industrial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total sales | $ 17 | $ 20 | $ 19 |
BUSINESS SEGMENT INFORMATION _3
BUSINESS SEGMENT INFORMATION - Segment Income Attributable to Parent (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Interest expense, net | $ (67,000,000) | $ (119,000,000) | $ (84,000,000) | ||||||||
Gain on sale of equity investment | 0 | 243,000,000 | 0 | ||||||||
Benefit (provision) for income taxes | $ (18,000,000) | $ (26,000,000) | $ (22,000,000) | $ (83,000,000) | $ (22,000,000) | $ (11,000,000) | $ (13,000,000) | $ (6,000,000) | (149,000,000) | (52,000,000) | 424,000,000 |
Depreciation and amortization | (84,000,000) | (75,000,000) | (67,000,000) | ||||||||
Restructuring costs | 0 | (3,000,000) | (1,000,000) | (2,000,000) | (2,000,000) | (4,000,000) | (6,000,000) | (6,000,000) | (16,000,000) | ||
Pension settlement loss | (6,000,000) | 0 | 0 | ||||||||
Asset impairment charges | (3,000,000) | (4,000,000) | 0 | ||||||||
Noncontrolling interests | (9,000,000) | (4,000,000) | (2,000,000) | ||||||||
Income from continuing operations attributable to Meritor, Inc. | 32,000,000 | $ 66,000,000 | $ 57,000,000 | $ (35,000,000) | $ 239,000,000 | $ 49,000,000 | $ 22,000,000 | $ 15,000,000 | 120,000,000 | 325,000,000 | 577,000,000 |
Commercial Truck & Trailer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | (72,000,000) | (66,000,000) | (59,000,000) | ||||||||
Restructuring costs | (1,000,000) | (2,000,000) | (6,000,000) | ||||||||
Aftermarket & Industrial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | (12,000,000) | (9,000,000) | (8,000,000) | ||||||||
Restructuring costs | (4,000,000) | (4,000,000) | (8,000,000) | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment adjusted EBITDA | 487,000,000 | 350,000,000 | 323,000,000 | ||||||||
Operating Segments | Commercial Truck & Trailer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment adjusted EBITDA | 345,000,000 | 234,000,000 | 207,000,000 | ||||||||
Operating Segments | Aftermarket & Industrial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment adjusted EBITDA | 142,000,000 | 116,000,000 | 116,000,000 | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Unallocated legacy and corporate income (expense), net | (13,000,000) | (3,000,000) | 4,000,000 | ||||||||
Interest expense, net | (67,000,000) | (119,000,000) | (84,000,000) | ||||||||
Gain on sale of equity investment | 0 | 243,000,000 | 0 | ||||||||
Benefit (provision) for income taxes | (149,000,000) | (52,000,000) | 424,000,000 | ||||||||
Depreciation and amortization | (84,000,000) | (75,000,000) | (67,000,000) | ||||||||
Loss on sale of receivables | (5,000,000) | (5,000,000) | (5,000,000) | ||||||||
Restructuring costs | (6,000,000) | (6,000,000) | (16,000,000) | ||||||||
Asbestos related items | (25,000,000) | (25,000,000) | 0 | 0 | |||||||
Pension settlement loss | (6,000,000) | 0 | 0 | ||||||||
Asset impairment charges | (3,000,000) | (4,000,000) | 0 | ||||||||
Noncontrolling interests | (9,000,000) | (4,000,000) | (2,000,000) | ||||||||
Pension Plan | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Pension settlement loss | $ (6,000,000) | $ 0 | $ 0 | ||||||||
Pension Plan | United Kingdom | Non-U.S. Plans | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Pension settlement loss | $ (6,000,000) |
BUSINESS SEGMENT INFORMATION _4
BUSINESS SEGMENT INFORMATION - Schedule of Segment Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | $ 84 | $ 75 | $ 67 |
Total capital expenditures | 104 | 95 | 93 |
TOTAL ASSETS | 2,726 | 2,782 | |
Commercial Truck & Trailer | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 72 | 66 | 59 |
Total capital expenditures | 88 | 84 | 82 |
Aftermarket & Industrial | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 12 | 9 | 8 |
Total capital expenditures | 16 | 11 | 11 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | 2,353 | 2,174 | |
Operating Segments | Commercial Truck & Trailer | |||
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | 1,858 | 1,708 | |
Operating Segments | Aftermarket & Industrial | |||
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | 495 | 466 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | 633 | 869 | |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 84 | 75 | $ 67 |
Less: Accounts receivable sold under off-balance sheet factoring programs (4) | $ (260) | $ (261) |
BUSINESS SEGMENT INFORMATION _5
BUSINESS SEGMENT INFORMATION - Schedule of Revenues and Assets by Geographical Areas (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | $ 1,080 | $ 1,129 | $ 1,066 | $ 903 | $ 922 | $ 920 | $ 806 | $ 699 | $ 4,178 | $ 3,347 | $ 3,199 |
Total assets excluding discontinued operations | 2,726 | 2,782 | 2,726 | 2,782 | |||||||
U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 2,289 | 1,761 | 1,617 | ||||||||
Total assets excluding discontinued operations | 1,350 | 1,489 | 1,350 | 1,489 | |||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 72 | 69 | 67 | ||||||||
Total assets excluding discontinued operations | 36 | 29 | 36 | 29 | |||||||
Mexico | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 221 | 234 | 390 | ||||||||
Total assets excluding discontinued operations | 224 | 204 | 224 | 204 | |||||||
Total North America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 2,582 | 2,064 | 2,074 | ||||||||
Total assets excluding discontinued operations | 1,610 | 1,722 | 1,610 | 1,722 | |||||||
Sweden | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 311 | 273 | 250 | ||||||||
Total assets excluding discontinued operations | 138 | 123 | 138 | 123 | |||||||
Italy | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 243 | 210 | 201 | ||||||||
Total assets excluding discontinued operations | 86 | 70 | 86 | 70 | |||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 179 | 149 | 136 | ||||||||
Total assets excluding discontinued operations | 263 | 241 | 263 | 241 | |||||||
Other Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 103 | 83 | 86 | ||||||||
Total assets excluding discontinued operations | 171 | 184 | 171 | 184 | |||||||
Total Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 836 | 715 | 673 | ||||||||
Total assets excluding discontinued operations | 658 | 618 | 658 | 618 | |||||||
Brazil | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 224 | 168 | 130 | ||||||||
Total assets excluding discontinued operations | 161 | 164 | 161 | 164 | |||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 196 | 127 | 84 | ||||||||
Total assets excluding discontinued operations | 123 | 127 | 123 | 127 | |||||||
India | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 231 | 184 | 152 | ||||||||
Total assets excluding discontinued operations | 100 | 84 | 100 | 84 | |||||||
Other Asia-Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 109 | 89 | $ 86 | ||||||||
Total assets excluding discontinued operations | $ 74 | $ 67 | $ 74 | $ 67 |
QUARTERLY FINANCIAL INFORMATI_3
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) - Summary of Unaudited Quarterly Results (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 1,080 | $ 1,129 | $ 1,066 | $ 903 | $ 922 | $ 920 | $ 806 | $ 699 | $ 4,178 | $ 3,347 | $ 3,199 |
Cost of sales | (921) | (952) | (888) | (763) | (790) | (778) | (685) | (610) | (3,524) | (2,863) | (2,763) |
Gross margin | 159 | 177 | 178 | 140 | 132 | 142 | 121 | 89 | 654 | 484 | 436 |
Benefit (provision) for income taxes | (18) | (26) | (22) | (83) | (22) | (11) | (13) | (6) | (149) | (52) | 424 |
Net income | 33 | 67 | 60 | (34) | 238 | 51 | 23 | 16 | 126 | 328 | 575 |
Income from continuing operations attributable to Meritor, Inc. | 32 | 66 | 57 | (35) | 239 | 49 | 22 | 15 | 120 | 325 | 577 |
NET INCOME ATTRIBUTABLE TO MERITOR, INC. | $ 32 | $ 64 | $ 57 | $ (36) | $ 239 | $ 48 | $ 22 | $ 15 | $ 117 | $ 324 | $ 573 |
Basic earnings (loss) per share from continuing operations (in dollars per share) | $ 0.37 | $ 0.76 | $ 0.64 | $ (0.40) | $ 2.70 | $ 0.55 | $ 0.25 | $ 0.17 | $ 1.37 | $ 3.69 | $ 6.40 |
Diluted earnings (loss) per share from continuing operations (in dollars per share) | $ 0.36 | $ 0.73 | $ 0.63 | $ (0.40) | $ 2.63 | $ 0.52 | $ 0.24 | $ 0.17 | $ 1.31 | $ 3.60 | $ 6.27 |
QUARTERLY FINANCIAL INFORMATI_4
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) - Additional Information (Details) - USD ($) | Oct. 01, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Quarterly Financial Information [Line Items] | |||||||||||||
Restructuring costs | $ 0 | $ 3,000,000 | $ 1,000,000 | $ 2,000,000 | $ 2,000,000 | $ 4,000,000 | $ 6,000,000 | $ 6,000,000 | $ 16,000,000 | ||||
Settlements | 6,000,000 | 0 | 0 | ||||||||||
Transition tax charge to income | 57,000,000 | ||||||||||||
Repatriation of foreign earnings | 26,000,000 | ||||||||||||
Other tax adjustments | 6,000,000 | ||||||||||||
Purchase price of sale | 250,000,000 | 0 | 0 | ||||||||||
Dividends/Distributions received from the company's non-consolidated joint ventures | 17,000,000 | 44,000,000 | 37,000,000 | ||||||||||
Gain on sale of equity method investment, pre-tax | 0 | 243,000,000 | 0 | ||||||||||
Income tax expense (benefit) | 18,000,000 | $ 26,000,000 | $ 22,000,000 | $ 83,000,000 | 22,000,000 | $ 11,000,000 | $ 13,000,000 | $ 6,000,000 | 149,000,000 | 52,000,000 | (424,000,000) | ||
Loss on debt extinguishment | 36,000,000 | 8,000,000 | 36,000,000 | 0 | |||||||||
Net loss on debt extinguishment | 22,000,000 | ||||||||||||
Brazil | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Non-cash expense (benefit) for the reversal of valuation allowances | 9,000,000 | ||||||||||||
U.S. | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Non-cash expense (benefit) for the reversal of valuation allowances | 52,000,000 | $ 438,000,000 | |||||||||||
Increase in valuation allowance | 2,000,000 | ||||||||||||
Income tax expense (benefit) | (15,000,000) | ||||||||||||
WABCO Holdings Inc. | Meritor WABCO JV | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Purchase price of sale | 250,000,000 | 250,000,000 | |||||||||||
Dividends/Distributions received from the company's non-consolidated joint ventures | $ 8,000,000 | 8,000,000 | 36,000,000 | 33,000,000 | |||||||||
Gain on sale of equity method investment, pre-tax | 243,000,000 | ||||||||||||
Gain on sale of equity method investment, after tax | 154,000,000 | ||||||||||||
Settled Litigation | Sistemas Automotrices De Mexico S.A. De C.V. | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Settlement awarded to other party | $ 10,000,000 | $ 10,000,000 | |||||||||||
Pension Plan | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Settlements | 6,000,000 | 0 | 0 | ||||||||||
Non-U.S. Plans | Pension Plan | United Kingdom | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Settlements | 6,000,000 | ||||||||||||
Segment Reconciling Items | |||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||
Restructuring costs | 6,000,000 | 6,000,000 | 16,000,000 | ||||||||||
Settlements | 6,000,000 | 0 | 0 | ||||||||||
Asbestos related items | $ 25,000,000 | 25,000,000 | 0 | 0 | |||||||||
Income tax expense (benefit) | $ 149,000,000 | $ 52,000,000 | $ (424,000,000) |
OPERATING CASH FLOWS AND OTHE_3
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Operating Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Cash Flow Disclosure [Abstract] | |||||||||||
Net income | $ 33 | $ 67 | $ 60 | $ (34) | $ 238 | $ 51 | $ 23 | $ 16 | $ 126 | $ 328 | $ 575 |
Less: Loss from discontinued operations, net of tax | (3) | (1) | (4) | ||||||||
Income from continuing operations | 129 | 329 | 579 | ||||||||
Adjustments to income from continuing operations to arrive at cash provided by operating activities: | |||||||||||
Depreciation and amortization | 84 | 75 | 67 | ||||||||
Deferred income tax expense (benefit) | 74 | 38 | (415) | ||||||||
Restructuring costs | 6 | 6 | 16 | ||||||||
Loss on debt extinguishment | $ 36 | 8 | 36 | 0 | |||||||
Goodwill and asset impairment | 3 | 4 | 0 | ||||||||
Equity in earnings of affiliates | (27) | (48) | (36) | ||||||||
Stock compensation expense | 20 | 19 | 9 | ||||||||
Provision for doubtful accounts | (1) | 1 | 2 | ||||||||
Pension and retiree medical expense (benefit) | (31) | 11 | 20 | ||||||||
Settlement loss | 6 | 0 | 0 | ||||||||
Gain on sale of equity method investment | 0 | (243) | 0 | ||||||||
Gain on sale of property | 0 | 0 | (2) | ||||||||
Dividends received from equity method investments | 17 | 44 | 37 | ||||||||
Pension and retiree medical contributions | (21) | (38) | (42) | ||||||||
Restructuring payments | (8) | (15) | (11) | ||||||||
Changes in off-balance sheet receivable securitization and factoring programs | 11 | 26 | (31) | ||||||||
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations: | |||||||||||
Receivables | (98) | (160) | 89 | ||||||||
Inventories | (112) | (43) | 28 | ||||||||
Accounts payable | 97 | 133 | (89) | ||||||||
Other current assets and liabilities | 36 | 16 | (18) | ||||||||
Other assets and liabilities | 59 | (12) | 6 | ||||||||
Operating cash flows provided by continuing operations | 252 | 179 | 209 | ||||||||
Operating cash flows used for discontinued operations | (1) | (3) | (5) | ||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ 251 | $ 176 | $ 204 |
OPERATING CASH FLOWS AND OTHE_4
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Supplemental Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Balance sheet data: | |||
Allowance for doubtful accounts | $ 4 | $ 5 | $ 6 |
Statement of operations data: | |||
Maintenance and repairs expense | 52 | 46 | 45 |
Research, development and engineering expense | 73 | 69 | 68 |
Depreciation expense | 74 | 67 | 61 |
Rental expense | 18 | 14 | 15 |
Interest income | 3 | 3 | 3 |
Interest expense | (70) | (122) | (87) |
Statement of cash flows data: | |||
Interest payments, net of receipts | 49 | 75 | 71 |
Income tax payments, net of refunds | 33 | 22 | 24 |
Non-cash investing activities - capital asset additions from capital leases | $ 4 | $ 0 | $ 0 |
SUPPLEMENTAL PARENT AND GUARA_3
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Disclosures [Line Items] | |||
Ownership percentage | 100.00% | ||
Threshold for reporting consolidating financial statements | 25.00% | ||
Minimum amount of subsidiary restricted assets that exceed consolidated net assets, as a percentage | 25.00% | ||
Amount of restricted net assets for consolidated and unconsolidated subsidiaries | $ 39 | ||
Parent | |||
Supplemental Disclosures [Line Items] | |||
Pension and Retiree Medical Liabilities | 248 | $ 303 | |
Proceeds from consolidated subsidiaries and equity method investments | 29 | 1 | $ 25 |
Subsidiaries | |||
Supplemental Disclosures [Line Items] | |||
Debt and capital lease obligations | $ 51 | $ 100 |
SUPPLEMENTAL PARENT AND GUARA_4
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Statement of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sales | |||||||||||
External | $ 4,178,000,000 | $ 3,347,000,000 | $ 3,199,000,000 | ||||||||
Subsidiaries | 0 | 0 | 0 | ||||||||
Total sales | $ 1,080,000,000 | $ 1,129,000,000 | $ 1,066,000,000 | $ 903,000,000 | $ 922,000,000 | $ 920,000,000 | $ 806,000,000 | $ 699,000,000 | 4,178,000,000 | 3,347,000,000 | 3,199,000,000 |
Cost of sales | (921,000,000) | (952,000,000) | (888,000,000) | (763,000,000) | (790,000,000) | (778,000,000) | (685,000,000) | (610,000,000) | (3,524,000,000) | (2,863,000,000) | (2,763,000,000) |
Gross margin | 159,000,000 | 177,000,000 | 178,000,000 | 140,000,000 | 132,000,000 | 142,000,000 | 121,000,000 | 89,000,000 | 654,000,000 | 484,000,000 | 436,000,000 |
Selling, general and administrative | (317,000,000) | (264,000,000) | (213,000,000) | ||||||||
Restructuring costs | 0 | (3,000,000) | (1,000,000) | (2,000,000) | (2,000,000) | (4,000,000) | (6,000,000) | (6,000,000) | (16,000,000) | ||
Other operating expense, net | (14,000,000) | (7,000,000) | (3,000,000) | ||||||||
OPERATING INCOME (LOSS) | 317,000,000 | 207,000,000 | 204,000,000 | ||||||||
Other income (expense), net | 1,000,000 | 2,000,000 | (1,000,000) | ||||||||
Gain on sale of equity investment | 243,000,000 | ||||||||||
Equity in earnings of affiliates | 27,000,000 | 48,000,000 | 36,000,000 | ||||||||
Interest income (expense), net | (67,000,000) | (119,000,000) | (84,000,000) | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 278,000,000 | 381,000,000 | 155,000,000 | ||||||||
Benefit (provision) for income taxes | (18,000,000) | (26,000,000) | (22,000,000) | (83,000,000) | (22,000,000) | (11,000,000) | (13,000,000) | (6,000,000) | (149,000,000) | (52,000,000) | 424,000,000 |
Equity income from continuing operations of subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) before tax | 129,000,000 | 329,000,000 | 579,000,000 | ||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax | (3,000,000) | (1,000,000) | (4,000,000) | ||||||||
NET INCOME | 33,000,000 | 67,000,000 | 60,000,000 | (34,000,000) | 238,000,000 | 51,000,000 | 23,000,000 | 16,000,000 | 126,000,000 | 328,000,000 | 575,000,000 |
Less: Net income attributable to noncontrolling interests | (9,000,000) | (4,000,000) | (2,000,000) | ||||||||
Net income | $ 32,000,000 | $ 64,000,000 | $ 57,000,000 | $ (36,000,000) | $ 239,000,000 | $ 48,000,000 | $ 22,000,000 | $ 15,000,000 | 117,000,000 | 324,000,000 | 573,000,000 |
Reportable Legal Entities | Parent | |||||||||||
Sales | |||||||||||
External | 0 | 0 | 0 | ||||||||
Subsidiaries | 0 | 0 | 0 | ||||||||
Total sales | 0 | 0 | 0 | ||||||||
Cost of sales | (57,000,000) | (62,000,000) | (57,000,000) | ||||||||
Gross margin | (57,000,000) | (62,000,000) | (57,000,000) | ||||||||
Selling, general and administrative | (89,000,000) | (82,000,000) | (64,000,000) | ||||||||
Restructuring costs | (1,000,000) | 2,000,000 | (7,000,000) | ||||||||
Other operating expense, net | (14,000,000) | (3,000,000) | (3,000,000) | ||||||||
OPERATING INCOME (LOSS) | (161,000,000) | (145,000,000) | (131,000,000) | ||||||||
Other income (expense), net | 58,000,000 | 39,000,000 | 34,000,000 | ||||||||
Gain on sale of equity investment | 0 | ||||||||||
Equity in earnings of affiliates | 0 | 0 | 0 | ||||||||
Interest income (expense), net | (118,000,000) | (168,000,000) | (117,000,000) | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (221,000,000) | (274,000,000) | (214,000,000) | ||||||||
Benefit (provision) for income taxes | (2,000,000) | 96,000,000 | 526,000,000 | ||||||||
Equity income from continuing operations of subsidiaries | 343,000,000 | 503,000,000 | 265,000,000 | ||||||||
Net income (loss) before tax | 120,000,000 | 325,000,000 | 577,000,000 | ||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax | (3,000,000) | (1,000,000) | (4,000,000) | ||||||||
NET INCOME | 117,000,000 | 324,000,000 | 573,000,000 | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income | 117,000,000 | 324,000,000 | 573,000,000 | ||||||||
Reportable Legal Entities | Guarantors | |||||||||||
Sales | |||||||||||
External | 2,290,000,000 | 1,762,000,000 | 1,616,000,000 | ||||||||
Subsidiaries | 143,000,000 | 123,000,000 | 112,000,000 | ||||||||
Total sales | 2,433,000,000 | 1,885,000,000 | 1,728,000,000 | ||||||||
Cost of sales | (2,037,000,000) | (1,583,000,000) | (1,439,000,000) | ||||||||
Gross margin | 396,000,000 | 302,000,000 | 289,000,000 | ||||||||
Selling, general and administrative | (104,000,000) | (100,000,000) | (79,000,000) | ||||||||
Restructuring costs | (3,000,000) | (2,000,000) | (4,000,000) | ||||||||
Other operating expense, net | (1,000,000) | (1,000,000) | 0 | ||||||||
OPERATING INCOME (LOSS) | 288,000,000 | 199,000,000 | 206,000,000 | ||||||||
Other income (expense), net | 17,000,000 | (11,000,000) | (35,000,000) | ||||||||
Gain on sale of equity investment | 243,000,000 | ||||||||||
Equity in earnings of affiliates | 19,000,000 | 42,000,000 | 32,000,000 | ||||||||
Interest income (expense), net | 29,000,000 | 35,000,000 | 26,000,000 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 353,000,000 | 508,000,000 | 229,000,000 | ||||||||
Benefit (provision) for income taxes | (81,000,000) | (126,000,000) | (102,000,000) | ||||||||
Equity income from continuing operations of subsidiaries | 88,000,000 | 114,000,000 | 120,000,000 | ||||||||
Net income (loss) before tax | 360,000,000 | 496,000,000 | 247,000,000 | ||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax | (1,000,000) | (1,000,000) | (4,000,000) | ||||||||
NET INCOME | 359,000,000 | 495,000,000 | 243,000,000 | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income | 359,000,000 | 495,000,000 | 243,000,000 | ||||||||
Reportable Legal Entities | Non- Guarantors | |||||||||||
Sales | |||||||||||
External | 1,888,000,000 | 1,585,000,000 | 1,583,000,000 | ||||||||
Subsidiaries | 219,000,000 | 149,000,000 | 61,000,000 | ||||||||
Total sales | 2,107,000,000 | 1,734,000,000 | 1,644,000,000 | ||||||||
Cost of sales | (1,792,000,000) | (1,490,000,000) | (1,440,000,000) | ||||||||
Gross margin | 315,000,000 | 244,000,000 | 204,000,000 | ||||||||
Selling, general and administrative | (124,000,000) | (82,000,000) | (70,000,000) | ||||||||
Restructuring costs | (2,000,000) | (6,000,000) | (5,000,000) | ||||||||
Other operating expense, net | 1,000,000 | (3,000,000) | 0 | ||||||||
OPERATING INCOME (LOSS) | 190,000,000 | 153,000,000 | 129,000,000 | ||||||||
Other income (expense), net | (74,000,000) | (26,000,000) | 0 | ||||||||
Gain on sale of equity investment | 0 | ||||||||||
Equity in earnings of affiliates | 8,000,000 | 6,000,000 | 4,000,000 | ||||||||
Interest income (expense), net | 22,000,000 | 14,000,000 | 7,000,000 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 146,000,000 | 147,000,000 | 140,000,000 | ||||||||
Benefit (provision) for income taxes | (66,000,000) | (22,000,000) | 0 | ||||||||
Equity income from continuing operations of subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) before tax | 80,000,000 | 125,000,000 | 140,000,000 | ||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax | (1,000,000) | (1,000,000) | (2,000,000) | ||||||||
NET INCOME | 79,000,000 | 124,000,000 | 138,000,000 | ||||||||
Less: Net income attributable to noncontrolling interests | (9,000,000) | (4,000,000) | (2,000,000) | ||||||||
Net income | 70,000,000 | 120,000,000 | 136,000,000 | ||||||||
Elims | |||||||||||
Sales | |||||||||||
External | 0 | 0 | 0 | ||||||||
Subsidiaries | (362,000,000) | (272,000,000) | (173,000,000) | ||||||||
Total sales | (362,000,000) | (272,000,000) | (173,000,000) | ||||||||
Cost of sales | 362,000,000 | 272,000,000 | 173,000,000 | ||||||||
Gross margin | 0 | 0 | 0 | ||||||||
Selling, general and administrative | 0 | 0 | 0 | ||||||||
Restructuring costs | 0 | 0 | 0 | ||||||||
Other operating expense, net | 0 | 0 | 0 | ||||||||
OPERATING INCOME (LOSS) | 0 | 0 | 0 | ||||||||
Other income (expense), net | 0 | 0 | 0 | ||||||||
Gain on sale of equity investment | 0 | ||||||||||
Equity in earnings of affiliates | 0 | 0 | 0 | ||||||||
Interest income (expense), net | 0 | 0 | 0 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 0 | 0 | 0 | ||||||||
Benefit (provision) for income taxes | 0 | 0 | 0 | ||||||||
Equity income from continuing operations of subsidiaries | (431,000,000) | (617,000,000) | (385,000,000) | ||||||||
Net income (loss) before tax | (431,000,000) | (617,000,000) | (385,000,000) | ||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax | 2,000,000 | 2,000,000 | 6,000,000 | ||||||||
NET INCOME | (429,000,000) | (615,000,000) | (379,000,000) | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income | $ (429,000,000) | $ (615,000,000) | $ (379,000,000) |
SUPPLEMENTAL PARENT AND GUARA_5
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | $ 33 | $ 67 | $ 60 | $ (34) | $ 238 | $ 51 | $ 23 | $ 16 | $ 126 | $ 328 | $ 575 |
Other comprehensive income (loss) | (23) | 264 | (43) | ||||||||
Total comprehensive income | 103 | 592 | 532 | ||||||||
Less: Comprehensive income attributable to noncontrolling interest | (7) | (4) | (2) | ||||||||
Comprehensive income attributable to Meritor, Inc. | 96 | 588 | 530 | ||||||||
Reportable Legal Entities | Parent | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 117 | 324 | 573 | ||||||||
Other comprehensive income (loss) | (21) | 264 | (43) | ||||||||
Total comprehensive income | 96 | 588 | 530 | ||||||||
Less: Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Comprehensive income attributable to Meritor, Inc. | 96 | 588 | 530 | ||||||||
Reportable Legal Entities | Guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 359 | 495 | 243 | ||||||||
Other comprehensive income (loss) | (42) | 21 | 11 | ||||||||
Total comprehensive income | 317 | 516 | 254 | ||||||||
Less: Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Comprehensive income attributable to Meritor, Inc. | 317 | 516 | 254 | ||||||||
Reportable Legal Entities | Non- Guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 79 | 124 | 138 | ||||||||
Other comprehensive income (loss) | (41) | 23 | (44) | ||||||||
Total comprehensive income | 38 | 147 | 94 | ||||||||
Less: Comprehensive income attributable to noncontrolling interest | (7) | (4) | (2) | ||||||||
Comprehensive income attributable to Meritor, Inc. | 31 | 143 | 92 | ||||||||
Elims | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | (429) | (615) | (379) | ||||||||
Other comprehensive income (loss) | 81 | (44) | 33 | ||||||||
Total comprehensive income | (348) | (659) | (346) | ||||||||
Less: Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Comprehensive income attributable to Meritor, Inc. | $ (348) | $ (659) | $ (346) |
SUPPLEMENTAL PARENT AND GUARA_6
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ 115 | [1] | $ 88 | [1] | $ 160 | $ 193 | |
Receivables, trade and other, net | [1] | 588 | 789 | ||||
Inventories | [1] | 477 | 378 | ||||
Other current assets | 46 | 43 | |||||
TOTAL CURRENT ASSETS | 1,226 | 1,298 | |||||
NET PROPERTY | [1] | 483 | 474 | ||||
GOODWILL | 421 | [1] | 414 | [1] | 390 | 405 | |
OTHER ASSETS | [1] | 596 | 596 | ||||
INVESTMENTS IN SUBSIDIARIES | 0 | 0 | |||||
TOTAL ASSETS | 2,726 | 2,782 | |||||
CURRENT LIABILITIES | |||||||
Short-term debt | 94 | 288 | |||||
Accounts and notes payable | [1] | 700 | 622 | ||||
Other current liabilities | 290 | 272 | |||||
TOTAL CURRENT LIABILITIES | 1,084 | 1,182 | |||||
LONG-TERM DEBT | 730 | 750 | |||||
RETIREMENT BENEFITS | 262 | 314 | |||||
INTERCOMPANY PAYABLE (RECEIVABLE) | 0 | 0 | |||||
OTHER LIABILITIES | 332 | 239 | |||||
MEZZANINE EQUITY | 1 | 2 | |||||
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 287 | 268 | |||||
NONCONTROLLING INTERESTS | [1] | 30 | 27 | ||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | 2,726 | 2,782 | |||||
Net property | 2 | ||||||
Goodwill | 1 | ||||||
Other assets | 1 | ||||||
Reportable Legal Entities | Parent | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | 24 | 10 | 90 | 73 | |||
Receivables, trade and other, net | 2 | 0 | |||||
Inventories | 0 | 0 | |||||
Other current assets | 6 | 5 | |||||
TOTAL CURRENT ASSETS | 32 | 15 | |||||
NET PROPERTY | 24 | 21 | |||||
GOODWILL | 0 | 0 | |||||
OTHER ASSETS | 179 | 271 | |||||
INVESTMENTS IN SUBSIDIARIES | 3,583 | 3,222 | |||||
TOTAL ASSETS | 3,818 | 3,529 | |||||
CURRENT LIABILITIES | |||||||
Short-term debt | 47 | 195 | |||||
Accounts and notes payable | 64 | 55 | |||||
Other current liabilities | 77 | 69 | |||||
TOTAL CURRENT LIABILITIES | 188 | 319 | |||||
LONG-TERM DEBT | 726 | 743 | |||||
RETIREMENT BENEFITS | 241 | 291 | |||||
INTERCOMPANY PAYABLE (RECEIVABLE) | 2,325 | 1,866 | |||||
OTHER LIABILITIES | 50 | 40 | |||||
MEZZANINE EQUITY | 1 | 2 | |||||
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 287 | 268 | |||||
NONCONTROLLING INTERESTS | 0 | 0 | |||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | 3,818 | 3,529 | |||||
Net property | 1 | ||||||
Reportable Legal Entities | Guarantors | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | 6 | 3 | 2 | 5 | |||
Receivables, trade and other, net | 62 | 296 | |||||
Inventories | 242 | 184 | |||||
Other current assets | 12 | 6 | |||||
TOTAL CURRENT ASSETS | 322 | 489 | |||||
NET PROPERTY | 241 | 227 | |||||
GOODWILL | 250 | 237 | |||||
OTHER ASSETS | 182 | 106 | |||||
INVESTMENTS IN SUBSIDIARIES | 855 | 787 | |||||
TOTAL ASSETS | 1,850 | 1,846 | |||||
CURRENT LIABILITIES | |||||||
Short-term debt | 0 | 2 | |||||
Accounts and notes payable | 297 | 246 | |||||
Other current liabilities | 71 | 69 | |||||
TOTAL CURRENT LIABILITIES | 368 | 317 | |||||
LONG-TERM DEBT | 0 | 0 | |||||
RETIREMENT BENEFITS | 0 | 0 | |||||
INTERCOMPANY PAYABLE (RECEIVABLE) | (2,640) | (2,160) | |||||
OTHER LIABILITIES | 124 | 93 | |||||
MEZZANINE EQUITY | 0 | 0 | |||||
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 3,998 | 3,596 | |||||
NONCONTROLLING INTERESTS | 0 | 0 | |||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | 1,850 | 1,846 | |||||
Net property | 1 | 1 | |||||
Reportable Legal Entities | Non- Guarantors | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | 85 | 75 | 68 | 115 | |||
Receivables, trade and other, net | 524 | 493 | |||||
Inventories | 235 | 194 | |||||
Other current assets | 28 | 32 | |||||
TOTAL CURRENT ASSETS | 872 | 794 | |||||
NET PROPERTY | 218 | 226 | |||||
GOODWILL | 171 | 177 | |||||
OTHER ASSETS | 235 | 219 | |||||
INVESTMENTS IN SUBSIDIARIES | 0 | 0 | |||||
TOTAL ASSETS | 1,496 | 1,416 | |||||
CURRENT LIABILITIES | |||||||
Short-term debt | 47 | 91 | |||||
Accounts and notes payable | 339 | 321 | |||||
Other current liabilities | 142 | 134 | |||||
TOTAL CURRENT LIABILITIES | 528 | 546 | |||||
LONG-TERM DEBT | 4 | 7 | |||||
RETIREMENT BENEFITS | 21 | 23 | |||||
INTERCOMPANY PAYABLE (RECEIVABLE) | 315 | 294 | |||||
OTHER LIABILITIES | 158 | 106 | |||||
MEZZANINE EQUITY | 0 | 0 | |||||
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 440 | 413 | |||||
NONCONTROLLING INTERESTS | 30 | 27 | |||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | 1,496 | 1,416 | |||||
Cash and cash equivalents | 1 | ||||||
Receivables, trade and other, net | 13 | ||||||
Inventories | 2 | ||||||
Net property | 3 | ||||||
Accounts and notes payable | 12 | ||||||
Noncontrolling interests | 2 | ||||||
Elims | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 | |||
Receivables, trade and other, net | 0 | 0 | |||||
Inventories | 0 | 0 | |||||
Other current assets | 0 | 0 | |||||
TOTAL CURRENT ASSETS | 0 | 0 | |||||
NET PROPERTY | 0 | 0 | |||||
GOODWILL | 0 | 0 | |||||
OTHER ASSETS | 0 | 0 | |||||
INVESTMENTS IN SUBSIDIARIES | (4,438) | (4,009) | |||||
TOTAL ASSETS | (4,438) | (4,009) | |||||
CURRENT LIABILITIES | |||||||
Short-term debt | 0 | 0 | |||||
Accounts and notes payable | 0 | 0 | |||||
Other current liabilities | 0 | 0 | |||||
TOTAL CURRENT LIABILITIES | 0 | 0 | |||||
LONG-TERM DEBT | 0 | 0 | |||||
RETIREMENT BENEFITS | 0 | 0 | |||||
INTERCOMPANY PAYABLE (RECEIVABLE) | 0 | 0 | |||||
OTHER LIABILITIES | 0 | 0 | |||||
MEZZANINE EQUITY | 0 | 0 | |||||
EQUITY ATTRIBUTABLE TO MERITOR, INC. | (4,438) | (4,009) | |||||
NONCONTROLLING INTERESTS | 0 | 0 | |||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | $ (4,438) | $ (4,009) | |||||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |
SUPPLEMENTAL PARENT AND GUARA_7
SUPPLEMENTAL PARENT AND GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Schedule of Statement of Cash Flows [Line Items] | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ 251 | $ 176 | $ 204 | ||
INVESTING ACTIVITIES | |||||
Capital expenditures | (104) | (95) | (93) | ||
Cash paid for acquisitions | (35) | (34) | |||
Cash paid for investment in Transportation Power, Inc. | (6) | 0 | 0 | ||
Proceeds from sale of a business | 4 | 0 | 0 | ||
Proceeds from sale of assets | 2 | 0 | 0 | ||
Proceeds from prior year sale of equity method investment | 250 | 0 | 0 | ||
Other investing activities | 0 | 0 | 3 | ||
Net investing cash flows provided by discontinued operations | 0 | 2 | 4 | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 111 | (127) | (86) | ||
FINANCING ACTIVITIES | |||||
Borrowings and securitization | (43) | 89 | 0 | ||
Proceeds from debt issuance | 0 | 325 | 0 | ||
Redemption of notes | (181) | (103) | 0 | ||
Repayment of notes and term loan | 0 | (408) | (55) | ||
Other financing activities | (5) | (13) | (16) | ||
Intercompany advances | 0 | 0 | 0 | ||
Repurchase of common stock | (100) | 0 | (81) | ||
Debt issuance costs | 0 | (12) | 0 | ||
CASH USED FOR FINANCING ACTIVITIES | (329) | (122) | (152) | ||
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (6) | 1 | 1 | ||
CHANGE IN CASH AND CASH EQUIVALENTS | 27 | (72) | (33) | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 88 | [1] | 160 | 193 | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 115 | [1] | 88 | [1] | 160 |
Reportable Legal Entities | Parent | |||||
Schedule of Statement of Cash Flows [Line Items] | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | 59 | 33 | 196 | ||
INVESTING ACTIVITIES | |||||
Capital expenditures | (10) | (9) | (19) | ||
Cash paid for acquisitions | (35) | 0 | |||
Cash paid for investment in Transportation Power, Inc. | (6) | ||||
Proceeds from sale of a business | 4 | ||||
Proceeds from sale of assets | 0 | ||||
Proceeds from prior year sale of equity method investment | 250 | ||||
Other investing activities | 0 | ||||
Net investing cash flows provided by discontinued operations | 0 | 0 | |||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 203 | (9) | (19) | ||
FINANCING ACTIVITIES | |||||
Borrowings and securitization | 0 | 0 | |||
Proceeds from debt issuance | 325 | ||||
Redemption of notes | (181) | (103) | |||
Repayment of notes and term loan | (408) | (55) | |||
Other financing activities | (2) | (1) | (1) | ||
Intercompany advances | 35 | 95 | (23) | ||
Repurchase of common stock | (100) | (81) | |||
Debt issuance costs | (12) | ||||
CASH USED FOR FINANCING ACTIVITIES | (248) | (104) | (160) | ||
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 | ||
CHANGE IN CASH AND CASH EQUIVALENTS | 14 | (80) | 17 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 10 | 90 | 73 | ||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 24 | 10 | 90 | ||
Reportable Legal Entities | Guarantors | |||||
Schedule of Statement of Cash Flows [Line Items] | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | 55 | 85 | 39 | ||
INVESTING ACTIVITIES | |||||
Capital expenditures | (49) | (51) | (43) | ||
Cash paid for acquisitions | 0 | (32) | |||
Cash paid for investment in Transportation Power, Inc. | 0 | ||||
Proceeds from sale of a business | 0 | ||||
Proceeds from sale of assets | 0 | ||||
Proceeds from prior year sale of equity method investment | 0 | ||||
Other investing activities | 4 | ||||
Net investing cash flows provided by discontinued operations | 2 | 1 | |||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | (49) | (81) | (38) | ||
FINANCING ACTIVITIES | |||||
Borrowings and securitization | 0 | 0 | |||
Proceeds from debt issuance | 0 | ||||
Redemption of notes | 0 | 0 | |||
Repayment of notes and term loan | 0 | 0 | |||
Other financing activities | (3) | (3) | (4) | ||
Intercompany advances | 0 | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | |||
Debt issuance costs | 0 | ||||
CASH USED FOR FINANCING ACTIVITIES | (3) | (3) | (4) | ||
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 | ||
CHANGE IN CASH AND CASH EQUIVALENTS | 3 | 1 | (3) | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 3 | 2 | 5 | ||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 6 | 3 | 2 | ||
Reportable Legal Entities | Non- Guarantors | |||||
Schedule of Statement of Cash Flows [Line Items] | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | 137 | 58 | (31) | ||
INVESTING ACTIVITIES | |||||
Capital expenditures | (45) | (35) | (31) | ||
Cash paid for acquisitions | 0 | (2) | |||
Cash paid for investment in Transportation Power, Inc. | 0 | ||||
Proceeds from sale of a business | 0 | ||||
Proceeds from sale of assets | 2 | ||||
Proceeds from prior year sale of equity method investment | 0 | ||||
Other investing activities | (1) | ||||
Net investing cash flows provided by discontinued operations | 0 | 3 | |||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | (43) | (37) | (29) | ||
FINANCING ACTIVITIES | |||||
Borrowings and securitization | (43) | 89 | |||
Proceeds from debt issuance | 0 | ||||
Redemption of notes | 0 | 0 | |||
Repayment of notes and term loan | 0 | 0 | |||
Other financing activities | 0 | (9) | (11) | ||
Intercompany advances | (35) | (95) | 23 | ||
Repurchase of common stock | 0 | 0 | |||
Debt issuance costs | 0 | ||||
CASH USED FOR FINANCING ACTIVITIES | (78) | (15) | 12 | ||
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (6) | 1 | 1 | ||
CHANGE IN CASH AND CASH EQUIVALENTS | 10 | 7 | (47) | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 75 | 68 | 115 | ||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 85 | 75 | 68 | ||
Elims | |||||
Schedule of Statement of Cash Flows [Line Items] | |||||
CASH PROVIDED BY OPERATING ACTIVITIES | 0 | 0 | 0 | ||
INVESTING ACTIVITIES | |||||
Capital expenditures | 0 | 0 | 0 | ||
Cash paid for acquisitions | 0 | 0 | |||
Cash paid for investment in Transportation Power, Inc. | 0 | ||||
Proceeds from sale of a business | 0 | ||||
Proceeds from sale of assets | 0 | ||||
Proceeds from prior year sale of equity method investment | 0 | ||||
Other investing activities | 0 | ||||
Net investing cash flows provided by discontinued operations | 0 | 0 | |||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 0 | 0 | 0 | ||
FINANCING ACTIVITIES | |||||
Borrowings and securitization | 0 | 0 | |||
Proceeds from debt issuance | 0 | ||||
Redemption of notes | 0 | 0 | |||
Repayment of notes and term loan | 0 | 0 | |||
Other financing activities | 0 | 0 | 0 | ||
Intercompany advances | 0 | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | |||
Debt issuance costs | 0 | ||||
CASH USED FOR FINANCING ACTIVITIES | 0 | 0 | 0 | ||
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 | ||
CHANGE IN CASH AND CASH EQUIVALENTS | 0 | 0 | 0 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 0 | 0 | 0 | ||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 0 | $ 0 | $ 0 | ||
[1] | As of September 30, 2018, Assets and Liabilities held for sale consisted of $2 million Net property. As of September 30, 2017, Assets and Liabilities held for sale consisted of (i) $1 million Cash and cash equivalents; (ii) $13 million Receivables, trade and other, net; (iii) $2 million Inventories; (iv) $3 million Net property; (v) $1 million Goodwill; (vi) $1 million Other assets; (vii) $12 million Accounts and notes payable; and (viii) $2 million Noncontrolling interests. |