COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Dec. 31, 2019 | Jan. 29, 2020 | |
Cover page. | ||
Document type | 10-Q | |
Document quarterly report | true | |
Document period end date | Dec. 29, 2019 | |
Document transition report | false | |
Commission file no. | 1-15983 | |
Entity registrant name | MERITOR, INC. | |
Entity incorporation, state or country code | IN | |
I.R.S. employer identification no. | 38-3354643 | |
Address of principal executive offices, line 1 | 2135 West Maple Road, | |
Address of principal executive offices, city or town | Troy, | |
Address of principal executive offices, state | MI | |
Zip code | 48084-7186 | |
City area code | 248 | |
Local phone number | 435-1000 | |
Title of 12(b) security | Common Stock, $1 Par Value | |
Trading symbol | MTOR | |
Security exchange name | NYSE | |
Entity current reporting status | Yes | |
Entity interactive data current | Yes | |
Entity filer category | Large Accelerated Filer | |
Entity small business | false | |
Entity emerging growth company | false | |
Entity shell company | false | |
Entity common stock, shares outstanding | 73,910,025 | |
Amendment flag | false | |
Entity central index key | 0001113256 | |
Current fiscal year end date | --09-30 | |
Document fiscal year focus | 2020 | |
Document fiscal period focus | Q1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Sales | $ 901 | $ 1,038 |
Cost of sales | (774) | (897) |
GROSS MARGIN | 127 | 141 |
Selling, general and administrative | (70) | (34) |
Other operating expense, net | (5) | 0 |
OPERATING INCOME | 52 | 107 |
Other income, net | 10 | 11 |
Equity in earnings of affiliates | 6 | 9 |
Interest expense, net | (14) | (14) |
INCOME BEFORE INCOME TAXES | 54 | 113 |
Provision for income taxes | (13) | (21) |
INCOME FROM CONTINUING OPERATIONS | 41 | 92 |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | 0 | 0 |
NET INCOME | 41 | 92 |
Less: Net income attributable to noncontrolling interests | (2) | (2) |
NET INCOME ATTRIBUTABLE TO MERITOR, INC. | 39 | 90 |
NET INCOME ATTRIBUTABLE TO MERITOR, INC. | ||
Net income from continuing operations | 39 | 90 |
Income from discontinued operations | 0 | 0 |
Net income | $ 39 | $ 90 |
BASIC EARNINGS PER SHARE | ||
Continuing operations (in usd per share) | $ 0.50 | $ 1.06 |
Discontinued operations (in usd per share) | 0 | 0 |
Basic earnings per share (in usd per share) | 0.50 | 1.06 |
DILUTED EARNINGS PER SHARE | ||
Continuing operations (in usd per share) | 0.48 | 1.03 |
Discontinued operations (in usd per share) | 0 | 0 |
Diluted earnings per share (in usd per share) | $ 0.48 | $ 1.03 |
Basic average common shares outstanding (in shares) | 78.2 | 84.8 |
Diluted average common shares outstanding (in shares) | 80.7 | 87.5 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 41 | $ 92 |
Foreign currency translation adjustments: | ||
Attributable to Meritor, Inc. | 21 | (4) |
Attributable to noncontrolling interest | 0 | 1 |
Pension and other postretirement benefit related adjustments | 3 | 0 |
Unrealized gain on cash flow hedges | 2 | |
Unrealized gain on cash flow hedges | 1 | |
Other comprehensive income (loss), net of tax | 26 | (2) |
Total comprehensive income | 67 | 90 |
Less: Comprehensive income attributable to noncontrolling interest | (2) | (3) |
Comprehensive income attributable to Meritor, Inc. | $ 65 | $ 87 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 108 | $ 108 |
Receivables trade and other, net | 478 | 551 |
Inventories | 556 | 526 |
Other current assets | 37 | 31 |
TOTAL CURRENT ASSETS | 1,179 | 1,216 |
NET PROPERTY | 517 | 515 |
GOODWILL | 486 | 478 |
OTHER ASSETS | 714 | 606 |
TOTAL ASSETS | 2,896 | 2,815 |
CURRENT LIABILITIES: | ||
Short-term debt | 178 | 41 |
Accounts and notes payable | 540 | 610 |
Other current liabilities | 264 | 285 |
TOTAL CURRENT LIABILITIES | 982 | 936 |
LONG-TERM DEBT | 901 | 902 |
RETIREMENT BENEFITS | 330 | 336 |
OTHER LIABILITIES | 299 | 226 |
TOTAL LIABILITIES | 2,512 | 2,400 |
COMMITMENTS AND CONTINGENCIES (See Note 20) | ||
EQUITY: | ||
Common stock (December 31, 2019 and September 30, 2019, 105.3 and 104.1 shares issued and 77.8 and 81.4 shares outstanding, respectively) | 105 | 104 |
Additional paid-in capital | 804 | 803 |
Retained earnings | 530 | 491 |
Treasury stock, at cost (December 31, 2019 and September 30, 2019, 27.6 and 22.7 shares, respectively) | (432) | (332) |
Accumulated other comprehensive loss | (655) | (681) |
Total equity attributable to Meritor, Inc. | 352 | 385 |
Noncontrolling interests | 32 | 30 |
TOTAL EQUITY | 384 | 415 |
TOTAL LIABILITIES AND EQUITY | $ 2,896 | $ 2,815 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - shares shares in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares issued (in shares) | 105.3 | 104.1 |
Common shares outstanding (in shares) | 77.8 | 81.4 |
Treasury stock (in shares) | 27.6 | 22.7 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 41 | $ 92 |
Less: Income from discontinued operations, net of tax | 0 | 0 |
INCOME FROM CONTINUING OPERATIONS | 41 | 92 |
Adjustments to income from continuing operations to arrive at cash provided by (used for) operating activities: | ||
Depreciation and amortization | 24 | 22 |
Deferred income tax expense | 3 | 3 |
Restructuring costs | 5 | 0 |
Equity in earnings of affiliates | (6) | (9) |
Pension and retiree medical income | (10) | (9) |
Asbestos related liability remeasurement | 0 | (31) |
Other adjustments to income from continuing operations | 3 | 5 |
Dividends received from equity method investments | 0 | 1 |
Pension and retiree medical contributions | (3) | (3) |
Restructuring payments | (7) | (1) |
Changes in off-balance sheet accounts receivable securitization and factoring programs | 7 | 38 |
Changes in receivables, inventories and accounts payable | (31) | (52) |
Changes in other current assets and liabilities | (28) | (40) |
Changes in other assets and liabilities | (16) | (4) |
Operating cash flows provided by (used for) continuing operations | (18) | 12 |
Operating cash flows used for discontinued operations | (1) | (1) |
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (19) | 11 |
INVESTING ACTIVITIES | ||
Capital expenditures | (16) | (23) |
Cash paid for investment in Transportation Power, Inc. | 0 | (3) |
Other investing activities | 0 | (1) |
CASH USED FOR INVESTING ACTIVITIES | (16) | (27) |
FINANCING ACTIVITIES | ||
Securitization | 72 | 33 |
Borrowings against revolving line of credit | 65 | 45 |
Term loan payments | (3) | 0 |
Other financing activities | 0 | (1) |
Net change in debt | 134 | 77 |
Repurchase of common stock | (100) | (50) |
CASH PROVIDED BY FINANCING ACTIVITIES | 34 | 27 |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1 | 1 |
CHANGE IN CASH AND CASH EQUIVALENTS | 0 | 12 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 108 | 115 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 108 | $ 127 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Equity Attributable to Meritor, Inc. | Noncontrolling Interests |
Beginning balance at Sep. 30, 2018 | $ 317 | $ 102 | $ 787 | $ 200 | $ (236) | $ (566) | $ 287 | $ 30 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 90 | 90 | (3) | 87 | 3 | |||
Equity based compensation expense | 5 | 5 | 5 | |||||
Vesting of equity based awards | 0 | 2 | (2) | |||||
Repurchase of common stock | (50) | (50) | (50) | |||||
Ending Balance at Dec. 31, 2018 | 362 | 104 | 790 | 290 | (286) | (569) | 329 | 33 |
Beginning balance at Sep. 30, 2019 | 415 | 104 | 803 | 491 | (332) | (681) | 385 | 30 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 67 | 39 | 26 | 65 | 2 | |||
Equity based compensation expense | 3 | 3 | 3 | |||||
Vesting of equity based awards | 0 | 1 | (1) | |||||
Repurchase of common stock | (100) | (100) | (100) | |||||
Other equity adjustments | (1) | (1) | (1) | |||||
Ending Balance at Dec. 31, 2019 | $ 384 | $ 105 | $ 804 | $ 530 | $ (432) | $ (655) | $ 352 | $ 32 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2019 | |
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 Condensed Consolidated Financial Statements are those of the company and its consolidated subsidiaries. In the opinion of the company, the unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting solely of adjustments of a normal, recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. These statements should be read in conjunction with the company’s audited consolidated financial statements and notes thereto included in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2019 . The Condensed Consolidated Balance Sheet data as of September 30, 2019 was derived from audited financial statements but does not include all annual disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three months ended December 31, 2019 are not necessarily indicative of the results for the full year. The company’s fiscal year ends on the Sunday nearest September 30, and its fiscal quarters generally end on the Sundays nearest December 31, March 31 and June 30. The first quarter of fiscal years 2020 and 2019 ended on December 29, 2019 and December 30, 2018 , respectively. Fiscal year 2019 ended on September 29, 2019. All year and quarter references relate to the company’s fiscal year and fiscal quarters, unless otherwise stated. For ease of presentation, September 30 and December 31 are used consistently throughout this report to represent the fiscal year end and first fiscal quarter end, respectively. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
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 unit awards and convertible securities, if applicable. A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions): Three Months Ended December 31, 2019 2018 Basic average common shares outstanding 78.2 84.8 Impact of restricted shares, restricted share units and performance share units 1.6 2.1 Impact of convertible notes 0.9 0.6 Diluted average common shares outstanding 80.7 87.5 |
Equity Based Compensation
Equity Based Compensation | 3 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Equity Based Compensation | Equity Based Compensation In November 2019, 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 $25.25 , which was the company’s share price on the grant date of December 1, 2019. 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 $25.25 , which was the company's share price on the grant date of December 1, 2019. 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, 2019 to September 30, 2022, measured at the end of the performance period. The number of performance share units that vest will depend on adjusted EBITDA margin, new business wins, free cash flow conversion and adjusted diluted earnings per share from continuing operations which are all weighted at 25% . The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.4 million performance share units. For the three months ended December 31, 2019 and December 31, 2018 , the dilutive impact of previously issued restricted shares, restricted share units and performance share units was 1.6 million and 2.1 million shares, respectively. For the three months ended December 31, 2019 and December 31, 2018 , compensation cost related to restricted shares, restricted share units and performance share units was $3 million and $5 million , respectively. For the three months ended December 31, 2019 and December 31, 2018 , 0.9 million and 0.6 million shares, respectively, were included in the computation of diluted earnings per share, as the company's average stock price during these periods exceeded the conversion price for the 7.875 |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Standards | New Accounting Standards Accounting standards implemented during fiscal year 2020 On October 1, 2019, the company implemented ASU 2016-02, Leases (Topic 842). The company elected the practical expedient package which allowed the company to not reassess whether existing contracts contain a lease and to not reassess classification of existing leases. The company also adopted ASU 2018-11 Leases (Topic 842) Targeted Improvements, electing to not separate lease and non-lease components in contracts that contain both and electing to not restate comparative periods when adopting ASU 2016-02. As a result, the company recognized a right-of-use asset and lease liability as a lessee for substantially all existing operating leases and has included new and expanded disclosures. (See Note 6) Accounting standards to be implemented The following represent the standards that may result in a significant change in practice and/or have a significant financial impact on the company. 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 guidance on its accounting policies and its Condensed 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 beginning after December 15, 2019, including interim periods within those fiscal years. 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 Condensed Consolidated Financial Statements. |
Revenue
Revenue | 3 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of revenue In the following tables, revenue is disaggregated for each of our operating segments by primary geographical market for the three months ended December 31, 2019 and 2018 . Three Months Ended December 31, 2019 Primary Geographical Market Commercial Truck Aftermarket, Industrial and Trailer Total U.S. $ 292 $ 243 $ 535 Canada — 14 14 Mexico 34 9 43 Total North America 326 266 592 Sweden 62 — 62 Italy 45 4 49 United Kingdom 33 2 35 Other Europe 1 37 38 Total Europe 141 43 184 Brazil 53 1 54 China 34 — 34 India 22 1 23 Other Asia-Pacific 14 — 14 Total sales $ 590 $ 311 $ 901 Three Months Ended December 31, 2018 (1) Primary Geographical Market Commercial Truck Aftermarket, Industrial and Trailer Total U.S. $ 350 $ 240 $ 590 Canada — 18 18 Mexico 47 10 57 Total North America 397 268 665 Sweden 74 — 74 Italy 57 4 61 United Kingdom 41 3 44 Other Europe 3 19 22 Total Europe 175 26 201 Brazil 50 — 50 China 41 — 41 India 57 — 57 Other Asia-Pacific 24 — 24 Total sales $ 744 $ 294 $ 1,038 (1) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes. Contract balances As of December 31, 2019 and September 30, 2019 , Trade receivables, net, which are included in Receivables, trade and other, net, on the Condensed Consolidated Balance Sheet, were $451 million and $517 million , respectively. For the three months ended December 31, 2019 and December 31, 2018 , the company had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Condensed Consolidated Balance Sheet as of December 31, 2019 and December 31, 2018 |
Leases
Leases | 3 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The company’s lease portfolio is comprised of leases of real estate, including manufacturing and office facilities, and leases of personal property, including machinery and equipment and IT equipment. Operating leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheet and related lease expense is recognized on a straight-line basis over the lease term. Short-term lease costs and variable lease costs were insignificant in the three months ended December 31, 2019 . For all asset classes, the company has elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts that contain both. These lease agreements are accounted for as a single lease component for all classes of underlying assets. The company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As the discount rate implicit in the lease is typically unknown, the discount rate used to determine the lease liability for the majority of our leases is the collateralized incremental borrowing rate in the applicable geographic area for a similar term and amount as the lease agreement. Components of lease expense Three Months Ended December 31, 2019 Finance lease costs $ 1 Operating lease costs 5 Total lease costs $ 6 The following table provides a summary of the location and amounts related to finance leases recognized in the Condensed Consolidated Balance Sheet. Classification December 31, 2019 Finance lease right-of-use assets Net Property $ 7 Finance lease liabilities Short-term debt 2 Finance lease liabilities Long-term debt 5 The following table provides a summary of the location and amounts related to operating leases recognized in the Condensed Consolidated Balance Sheet. Classification December 31, 2019 Operating lease right-of-use assets Other assets $ 78 Operating lease liabilities Other current liabilities 14 Operating lease liabilities Other liabilities 64 The following tables summarize additional information related to our lease agreements. Supplemental cash flow information related to leases Three Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5 Operating cash flows from finance leases — Financing cash flows from finance leases 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases 4 Finance leases 2 Supplemental balance sheet information related to leases December 31, 2019 Weighted-average remaining lease term (years): Operating leases 8.7 Finance leases 2.7 Weighted-average discount rate: Operating leases 4.5 % Finance leases 9.1 % Maturities Operating Leases Finance Leases 2020 (excluding the three months ended December 31, 2019) $ 13 $ 2 2021 16 3 2022 13 2 2023 11 1 2024 8 — Thereafter 35 — Total lease payments 96 8 Less: Impact of discounting future lease payments (18 ) (1 ) Present value of lease liabilities $ 78 $ 7 Disclosures related to periods prior to adoption of ASU 2016-02 Cash obligations under future minimum rental commitments under operating leases as of September 30, 2019 are shown in the table below. 2020 2021 2022 2023 2024 Thereafter Total Lease commitments $ 18 $ 15 $ 14 $ 13 $ 13 $ 25 $ 98 |
Leases | Leases The company’s lease portfolio is comprised of leases of real estate, including manufacturing and office facilities, and leases of personal property, including machinery and equipment and IT equipment. Operating leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheet and related lease expense is recognized on a straight-line basis over the lease term. Short-term lease costs and variable lease costs were insignificant in the three months ended December 31, 2019 . For all asset classes, the company has elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts that contain both. These lease agreements are accounted for as a single lease component for all classes of underlying assets. The company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As the discount rate implicit in the lease is typically unknown, the discount rate used to determine the lease liability for the majority of our leases is the collateralized incremental borrowing rate in the applicable geographic area for a similar term and amount as the lease agreement. Components of lease expense Three Months Ended December 31, 2019 Finance lease costs $ 1 Operating lease costs 5 Total lease costs $ 6 The following table provides a summary of the location and amounts related to finance leases recognized in the Condensed Consolidated Balance Sheet. Classification December 31, 2019 Finance lease right-of-use assets Net Property $ 7 Finance lease liabilities Short-term debt 2 Finance lease liabilities Long-term debt 5 The following table provides a summary of the location and amounts related to operating leases recognized in the Condensed Consolidated Balance Sheet. Classification December 31, 2019 Operating lease right-of-use assets Other assets $ 78 Operating lease liabilities Other current liabilities 14 Operating lease liabilities Other liabilities 64 The following tables summarize additional information related to our lease agreements. Supplemental cash flow information related to leases Three Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5 Operating cash flows from finance leases — Financing cash flows from finance leases 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases 4 Finance leases 2 Supplemental balance sheet information related to leases December 31, 2019 Weighted-average remaining lease term (years): Operating leases 8.7 Finance leases 2.7 Weighted-average discount rate: Operating leases 4.5 % Finance leases 9.1 % Maturities Operating Leases Finance Leases 2020 (excluding the three months ended December 31, 2019) $ 13 $ 2 2021 16 3 2022 13 2 2023 11 1 2024 8 — Thereafter 35 — Total lease payments 96 8 Less: Impact of discounting future lease payments (18 ) (1 ) Present value of lease liabilities $ 78 $ 7 Disclosures related to periods prior to adoption of ASU 2016-02 Cash obligations under future minimum rental commitments under operating leases as of September 30, 2019 are shown in the table below. 2020 2021 2022 2023 2024 Thereafter Total Lease commitments $ 18 $ 15 $ 14 $ 13 $ 13 $ 25 $ 98 |
Goodwill
Goodwill | 3 Months Ended |
Dec. 31, 2019 | |
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. A summary of the changes in the carrying value of goodwill by the company’s two reportable segments are presented below (in millions): Commercial Truck Aftermarket, Industrial and Trailer Total Goodwill $ 261 $ 232 $ 493 Accumulated impairment losses — (15 ) (15 ) Beginning Balance at September 30, 2019 261 217 478 AxleTech measurement period adjustment (see Note 10) — 2 2 Foreign currency translation 4 2 6 Ending Balance at December 31, 2019 $ 265 $ 221 $ 486 |
Restructuring Costs
Restructuring Costs | 3 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs Restructuring reserves, primarily related to unpaid employee termination benefits, were $5 million at December 31, 2019 and $8 million at September 30, 2019 . Restructuring costs are recorded within Other operating expense, net within the Condensed Consolidated Statement of Operations. The changes in restructuring reserves for the three months ended December 31, 2019 and 2018 are as follows (in millions): Total Beginning Balance at September 30, 2019 $ 8 Activity during the period: Charges to continuing operations 5 Cash payments – continuing operations (7 ) Other (1 ) Total restructuring reserves at December 31, 2019 5 Less: non-current restructuring reserves — Restructuring reserves – current, at December 31, 2019 $ 5 Balance at September 30, 2018 $ 4 Activity during the period: Charges to continuing operations — Cash payments – continuing operations (1 ) Total restructuring reserves at December 31, 2018 3 Less: non-current restructuring reserves (1 ) Restructuring reserves – current, at December 31, 2018 $ 2 |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For each interim reporting period, the company makes an estimate of the effective tax rate expected to be applicable for the full fiscal year pursuant to FASB ASC Topic 740-270, "Accounting for Income Taxes in Interim Periods." The rate so determined is used in providing for income taxes on a year-to-date basis. Jurisdictions with a projected loss for the year or an actual year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of including these jurisdictions on the quarterly effective rate calculation could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. Income tax expense (benefit) is allocated among continuing operations, discontinued operations and other comprehensive income ("OCI"). Such allocation is applied by tax jurisdiction, and in periods in which there is a pre-tax loss from continuing operations and pre-tax income in another category, such as discontinued operations or OCI, income tax expense is allocated to the other sources of income, with a related benefit recorded in continuing operations. In evaluating the ability to recover its 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. As of December 31, 2019, the company continues to maintain the valuation allowances in France, Germany, 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. For the three months ended December 31, 2019, the company had approximately $3 million of net pre-tax income compared to $6 million of net pre-tax income in the same period in fiscal year 2019 in tax jurisdictions in which tax expense (benefit) is not recorded. |
Acquisition
Acquisition | 3 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition Acquisition of AxleTech Business On July 26, 2019, the company acquired 100 percent of the voting equity interest of the AxleTech group companies for approximately $179 million in cash, subject to certain purchase price adjustments. The company funded the acquisition with the term loan under the revolving credit agreement (see Note 17). The acquisition of AxleTech enhances Meritor’s growth platform with the addition of a complementary product portfolio that includes a full line of independent suspensions, axles, braking solutions and drivetrain components across the off-highway, defense, specialty and aftermarket markets. AxleTech operates within Meritor’s Aftermarket, Industrial and Trailer segment. Since completion of initial estimates in the fourth quarter of fiscal year 2019, the company recorded $2 million in measurement period adjustments to decrease the provisional fair value of receivables acquired in the AxleTech transaction, resulting in a corresponding $2 million increase in goodwill. This adjustment was made to reflect additional available information. The measurement period remains open to finalize the value of tangible and intangible assets. The company is reviewing and may record other additional measurement period adjustments in fiscal year 2020. All goodwill resulting from the acquisition of AxleTech was assigned to the Aftermarket, Industrial and Trailer reportable segment (see Note 7). |
Accounts Receivable Factoring a
Accounts Receivable Factoring and Securitization | 3 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable Factoring And Securitization [Abstract] | |
Accounts Receivable Factoring and Securitization | Accounts Receivable Factoring and Securitization The company has a U.S. accounts receivable securitization facility with PNC Bank and participates in various accounts receivable factoring programs, primarily with Nordea Bank for trade receivables from AB Volvo, as follows: Current Expiration Total Facility Size as of 12/31/19 Utilized as of 12/31/19 Utilized as of 9/30/19 EUR USD EUR USD EUR USD On-balance sheet arrangement Committed U.S. accounts receivable securitization (1) December 2022 N/A $ 115 N/A $ 84 N/A $ 13 Total on-balance sheet arrangement: (1) N/A $ 115 N/A $ 84 N/A $ 13 Off-balance sheet arrangements Committed Swedish factoring facility (2)(3) March 2020 (5) € 155 $ 169 € 128 $ 140 € 109 $ 119 Committed U.S. factoring facility (2) February 2023 N/A 75 N/A 55 N/A 58 Uncommitted U.K. factoring facility February 2022 25 27 3 4 6 6 Uncommitted Italy factoring facility June 2022 30 33 21 23 21 23 Other uncommitted factoring facilities (4) None N/A N/A 17 18 18 20 Total off-balance sheet arrangements € 210 $ 304 € 169 $ 240 € 154 $ 226 (1) Availability subject to adequate eligible accounts receivable available for sale. The utilized amount includes $4 million of letters of credit as of December 31, 2019 and September 30, 2019 . (2) Actual amounts may exceed the bank's commitment at the bank's discretion. (3) The facility is backed by a 364 -day liquidity commitment from Nordea Bank which extends through June 22, 2020. (4) There is no explicit facility size under the agreement, but the counterparty approves the purchase of receivable tranches at its discretion. (5) The company is working to extend this arrangement before its current maturity date. Off-balance sheet arrangements Total costs associated with all of the off-balance sheet arrangements described above were $1 million for the three months ended December 31, 2019 and 2018 , and are included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations. |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2019 | |
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): December 31, September 30, Finished goods $ 159 $ 153 Work in process 44 39 Raw materials, parts and supplies 353 334 Total $ 556 $ 526 |
Net Property
Net Property | 3 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Net Property | Net Property Net property is summarized as follows (in millions): December 31, September 30, Property at cost: Land and land improvements $ 31 $ 31 Buildings 228 224 Machinery and equipment 962 935 Company-owned tooling 142 136 Construction in progress 67 74 Total 1,430 1,400 Less: accumulated depreciation (913 ) (885 ) Net property $ 517 $ 515 |
Other Assets
Other Assets | 3 Months Ended |
Dec. 31, 2019 | |
Other Assets, Noncurrent [Abstract] | |
Other Assets | Other Assets Other assets are summarized as follows (in millions): December 31, September 30, Investments in non-consolidated joint ventures $ 115 $ 110 Deferred income tax assets, net 139 122 Prepaid pension costs 163 149 Other 297 225 Other assets $ 714 $ 606 |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Dec. 31, 2019 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities are summarized as follows (in millions): December 31, September 30, Compensation and benefits $ 87 $ 125 Product warranties 17 18 Other 160 142 Other current liabilities $ 264 $ 285 Compensation and benefits includes the current portion of pension and retiree medical liability, accrued incentive compensation, salary and wages and accrued vacation, holiday and sick leave pay. A summary of the changes in product warranties is as follows (in millions): Three Months Ended December 31, 2019 2018 Total product warranties – beginning of period $ 50 $ 54 Accruals for product warranties 3 7 Payments (7 ) (5 ) Change in estimates and other — (1 ) Total product warranties – end of period 46 55 Less: Non-current product warranties (29 ) (36 ) Product warranties – current $ 17 $ 19 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities Other liabilities are summarized as follows (in millions): December 31, September 30, Asbestos-related liabilities (see Note 20) $ 81 $ 82 Product warranties (see Note 15) 29 32 Other 189 112 Other liabilities $ 299 $ 226 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-Term debt, net of discounts where applicable, is summarized as follows (in millions): December 31, September 30, 3.25 percent convertible notes due 2037 $ 319 $ 319 7.875 percent convertible notes due 2026 23 23 Term loan due 2024 172 175 6.25 percent notes due 2024 445 444 Financing lease obligation 7 7 Borrowings and securitization 145 9 Unamortized discount on convertible notes (32 ) (34 ) Subtotal 1,079 943 Less: current maturities (178 ) (41 ) Long-term debt $ 901 $ 902 Current Classification of 7.875 Percent Convertible Notes The 7.875 percent senior convertible notes due 2026 (the " 7.875 Percent Convertible Notes") were classified as current as of December 31, 2019 as the holders are entitled to convert all or a portion of their 7.875 Percent Convertible Notes at any time beginning January 1, 2020 and prior to the close of business on March 31, 2020 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 December 31, 2019 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 also classified as current as of September 30, 2019 . 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. Revolving Credit Facility On June 7, 2019, the company amended and restated its revolving credit facility. Pursuant to the revolving credit agreement as amended, the company has a $625 million revolving credit facility and a $175 million term loan facility, which was utilized for the company's acquisition of AxleTech, that mature in June 2024 (with a springing maturity in November 2023 if the outstanding amount of the 6.25 percent notes due 2024 is greater than $ 75 million at that time). The availability under the revolving credit 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 the ratio of the company’s priority debt (consisting principally of amounts outstanding under the revolving credit facility, the U.S. accounts receivable securitization and factoring programs, and third-party non-working capital foreign debt) to EBITDA. The company is required to maintain a total priority debt-to-EBITDA ratio, as defined in the revolving credit agreement, of 2.25 to 1.00 or less as of the last day of each fiscal quarter throughout the term of the agreement. 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 either the company’s current corporate credit rating or its total leverage ratio, as defined in the revolving credit agreement. At December 31, 2019 , the margin over LIBOR rate was 200 basis points and the commitment fee was 30 basis points . Overnight revolving credit loans are at the prime rate plus a margin of 100 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 23 ). At December 31, 2019 , there were $65 million in borrowings outstanding under the revolving credit facility. At September 30, 2019 , there were no borrowings outstanding under the revolving credit facility. The amended and extended revolving credit facility includes $100 million of availability for the issuance of letters of credit. At December 31, 2019 and September 30, 2019 , there were no letters of credit outstanding under the revolving credit facility. Other One of the company's consolidated joint ventures in China participates in a bills of exchange program to settle its obligations with its trade suppliers. These programs are common in China and generally require the participation of local banks. Under these programs, the company's joint venture issues notes payable through the participating banks to its trade suppliers. If the issued notes payable remain unpaid on their respective due dates, this could constitute an event of default under the company’s revolving credit facility if the defaulted amount exceeds $35 million per bank. As of December 31, 2019 and September 30, 2019 , the company had $ 18 million and $30 million |
Financial Instruments
Financial Instruments | 3 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Fair values of financial instruments are summarized as follows (in millions): December 31, 2019 September 30, 2019 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 108 $ 108 $ 108 $ 108 Short-term debt 178 208 41 60 Long-term debt 901 987 902 953 Foreign exchange forward contracts (other assets) 2 2 — — Foreign currency option contracts (other assets) 1 1 — — Cross-currency swaps (other assets) 6 6 10 10 Cross-currency swaps (other liabilities) 5 5 5 5 The following table reflects the offsetting of derivative assets and liabilities (in millions): December 31, 2019 September 30, 2019 Gross Gross Amounts Net Amounts Gross Gross Amounts Net Amounts Derivative Assets Foreign exchange forward contracts 2 — 2 — — — Cross-currency swaps 6 — 6 10 — 10 Foreign currency option contracts 1 — 1 — — — Derivative Liabilities Cross-currency swaps 5 — 5 5 — 5 Fair Value 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 December 31, 2019 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 108 $ — $ — Short-term debt — 132 76 Long-term debt — 818 169 Foreign exchange forward contracts (other assets) — 2 — Foreign exchange forward contracts (other liabilities) — — — Foreign currency option contracts (other assets) — 1 — Cross-currency swaps (other assets) — 6 — Cross-currency swaps (other liabilities) — 5 — Fair value of financial instruments by the valuation hierarchy at September 30, 2019 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 108 $ — $ — Short-term debt — 49 11 Long-term debt — 782 171 Foreign exchange forward contracts (other liabilities) — — — Foreign currency option contracts (other assets) — — — Cross-currency swaps (other assets) — 10 — Cross-currency swaps (other liabilities) — 5 — No transfers of assets between any of the Levels occurred during the three months ended December 31, 2019 and 2018. 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. 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 18 months or less to hedge its exposure to changes in foreign currency exchange rates. As of December 31, 2019 and September 30, 2019 , the notional amount of the company's foreign exchange contracts outstanding under its foreign currency cash flow hedging program was $85 million and $110 million , respectively. 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 is recorded in Accumulated Other Comprehensive Income (Loss) in the statement of shareholders’ equity and is recognized in operating income when the underlying forecasted transaction impacts earnings. Foreign exchange swap contracts - The company uses foreign exchange swap purchase and sale contracts with terms of 18 months or less to hedge its exposure related to changes in foreign currency exchange rates on short term intercompany loans. As of December 31, 2019 , the notional amount of the company’s foreign exchange swap contracts was $72 million . As of September 30, 2019 , there were no foreign exchange swap 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 Condensed Consolidated Statement of Operations. Foreign currency option contracts — The company uses option contracts to mitigate foreign exchange exposure on expected future foreign currency-denominated purchases. As of December 31, 2019 and September 30, 2019 , the notional amount of the company's foreign exchange contracts outstanding was $105 million and $139 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 Condensed Consolidated Statement of Operations. The company uses option contracts to mitigate the risk of volatility in the translation of foreign currency earnings to U.S. dollars. As of December 31, 2019 and September 30, 2019 , the notional amount of the company's option contracts outstanding was $64 million and $28 million , respectively. These option contracts did not qualify for a hedge accounting election. Changes in fair value associated with these contracts are recorded in the Condensed Consolidated Statement of Operations in other income, net. The fair value of foreign currency 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. Changes in fair values of the instruments are recognized in foreign currency translation adjustments, a component of other comprehensive income (loss) in the Condensed 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 2019, the company entered into multiple cross-currency swaps with a combined notional amount of $225 million and maturities in October 2022. As of both December 31, 2019 and September 30, 2019 , the notional amount of the company's cross-currency swap contracts outstanding was $225 million . These swaps hedge a portion of the net investment in a certain European subsidiary against volatility in the euro/U.S. dollar foreign exchange rate. 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. |
Retirement Benefit Liabilities
Retirement Benefit Liabilities | 3 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Liabilities | Retirement Benefit Liabilities Retirement benefit liabilities consisted of the following (in millions): December 31, September 30, Retiree medical liability $ 66 $ 67 Pension liability 263 271 Other 18 14 Subtotal 347 352 Less: current portion (included in compensation and benefits, Note 15) (17 ) (16 ) Retirement benefits $ 330 $ 336 The components of net periodic pension and retiree medical income included in continuing operations for the three months ended December 31 are as follows (in millions): 2019 2018 Pension Retiree Medical Pension Retiree Medical Interest cost $ (11 ) $ — $ (13 ) $ (1 ) Assumed return on plan assets 24 — 24 — Amortization of prior service benefit — 9 — 9 Recognized actuarial loss (8 ) (4 ) (6 ) (4 ) Total income $ 5 $ 5 $ 5 $ 4 For the three months ended December 31, 2019 and 2018 , the non-service cost components of the net periodic pension and Other Post-Employment Benefits ("OPEB") income were $10 million and $9 million , respectively, and are presented in Other income, net. |
Contingencies
Contingencies | 3 Months Ended |
Dec. 31, 2019 | |
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 Meritor is the only potentially responsible 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. Superfund is a United States federal government program designed to fund the cleanup of sites contaminated with hazardous substances and pollutants. Management estimates the total reasonably possible costs the company could incur for the remediation of the ten Superfund sites at December 31, 2019 to be approximately $23 million , of which $11 million is probable and 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. 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 December 31, 2019 to be approximately $13 million , of which $4 million is probable and recorded as a liability. 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 1.50 to 2.25 percent and is approximately $15 million at December 31, 2019 . The undiscounted estimate of these costs is approximately $16 million . The following are the components of the Superfund and non-Superfund environmental reserves (in millions): Superfund Sites Non-Superfund Sites Total Beginning Balance at September 30, 2019 $ 11 $ 4 $ 15 Payments and other (1 ) — (1 ) Accruals 1 — 1 Ending Balance at December 31, 2019 $ 11 $ 4 $ 15 Environmental reserves are included in Other Current Liabilities (see Note 15 ) and Other Liabilities (see Note 16 ) in the Condensed 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. Subsequently, the company removed this action to the United States District Court for the Northern District of Mississippi. However, plaintiffs’ motion to remand the case to the Chancery Court 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 entered into settlement negotiations with plaintiffs and recorded an accrual in the second quarter of fiscal year 2019. 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. In the first quarter of fiscal year 2019, Maremont and its three wholly-owned subsidiaries, Maremont Exhaust Products, Inc., AVM, Inc., and Former Ride Control Operating Company, Inc., began to solicit votes from asbestos claimants in favor of a Joint Pre-Packaged Plan of Reorganization (the "Plan"). On January 18, 2019, the Plan was approved by voting asbestos claimants and, on January 22, 2019, Maremont and its subsidiaries voluntarily filed cases under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") seeking to implement the Plan through the Chapter 11 cases. Among other things, the Plan was intended to permanently resolve all current and future asbestos claims related to Maremont's historical asbestos-related activities through the creation of a trust pursuant to Section 524(g) of the U.S. Bankruptcy Code (the "524(g) Trust"). Meritor determined that the net amount of $51 million Maremont would be required to contribute to the 524(g) Trust according to the Plan represented Meritor's best estimate of Maremont's net asbestos liability. As a result, Meritor recognized $31 million of income related to remeasuring the Maremont net asbestos liability based on the terms of the Plan. As of January 22, 2019, Maremont and its subsidiaries were deconsolidated from the Condensed Consolidated Balance Sheet and the results of Maremont's operations were eliminated from the Condensed Consolidated Statement of Operations as Maremont became subject to the control of a court. Deconsolidation had an insignificant impact on the Condensed Consolidated Statement of Operations. The Plan was confirmed by the Bankruptcy Court on May 17, 2019 and approved by the United States District Court for the District of Delaware on June 27, 2019. On July 9, 2019, the company contributed cash and repaid a loan to Maremont and Maremont funded the 524(g) Trust with such cash and its other assets, including its existing insurance policies. As a result, all current and future asbestos claims related to Maremont’s historical asbestos-related activities have been channeled to the 524(g) Trust, which will process and satisfy all such claims going forward pursuant to its resolution and payment procedures. Rockwell International Corporation ("Rockwell") — ArvinMeritor, Inc. ("AM"), a predecessor of Meritor, along with many other companies, has 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. There were approximately 1,400 pending active asbestos claims in lawsuits that name AM, together with many other companies, as defendants at December 31, 2019 and September 30, 2019 . A significant portion of the claims do not identify any Rockwell products or specify which of the claimants, if any, were exposed to asbestos attributable to Rockwell products, and past experience has shown that the vast majority of the claimants will likely never identify any of Rockwell 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 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, 2019. Management continuously monitors the underlying claims data and experience for the purpose of assessing the appropriateness of the assumptions used to estimate the liability. As of September 30, 2019 , the estimated probable range of equally likely possibilities of the company’s obligation for asbestos-related claims over the next 40 years is $91 million to $181 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 a liability at the low end of the range. The company recognized a liability for pending and future claims over the next 40 years of $90 million as of December 31, 2019 and $91 million as of September 30, 2019 . Recoveries : AM has insurance coverage that management believes covers indemnity and defense costs, over and above self-insurance retentions, for a significant portion of these claims. The insurance receivables for Rockwell asbestos-related liabilities totaled $60 million and $61 million as of December 31, 2019 and September 30, 2019 , respectively. 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. Indemnification The company has provided indemnities 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. The company is not aware of any claims or other information that would give rise to material payments under such indemnification obligations. Other |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity There were no dividends declared or paid in the first quarter of fiscal years 2020 and 2019. The payment of cash dividends and the amount of any dividend are subject to review and change at the discretion of the company's Board of Directors. Common Stock and Debt Repurchase Authorizations On November 7, 2019, the Board of Directors authorized the repurchase of up to $325 million of the company's common stock, which was an increase from the prior $250 million authorization approved on July 26, 2019. Repurchases can be made 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. During fiscal year 2019, the company repurchased 1.3 million shares of common stock for $25 million (including commission costs) pursuant to this common stock repurchase authorization. During the first quarter of fiscal year 2020, the company repurchased 4.9 million shares of common stock for $100 million (including commission costs) pursuant to this authorization. As of December 31, 2019, the amount remaining available for repurchases under this common stock repurchase authorization was $200 million . 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. The remaining authority under the common stock repurchase authorization was superseded by the July 2019 authorization described above. As of December 31, 2019 and September 30, 2019 , the amount remaining available for repurchase under this debt repurchase authorization was $76 million . Accumulated Other Comprehensive Loss ("AOCL") The components of AOCL and the changes in AOCL by components, net of tax, for the three months ended December 31, 2019 and 2018 are as follows (in millions): Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) on cash flow hedges Total Balance at September 30, 2019 $ (107 ) $ (572 ) $ (2 ) $ (681 ) Other comprehensive income before reclassification 21 — — 21 Amounts reclassified from accumulated other comprehensive loss — 3 2 5 Net current-period other comprehensive income 21 3 2 26 Balance at December 31, 2019 $ (86 ) $ (569 ) $ — $ (655 ) Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Prior service benefit $ (9 ) (a) Actuarial losses 12 (a) 3 Total before tax — Tax benefit Total reclassifications for the period $ 3 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 19 for additional details), which is recorded in other income (expense), net. Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) on cash flow hedges Total Balance at September 30, 2018 $ (90 ) $ (476 ) $ — $ (566 ) Other comprehensive income before reclassification (4 ) (1 ) — (5 ) Amounts reclassified from accumulated other comprehensive loss — 1 1 2 Net current-period other comprehensive income $ (4 ) $ — $ 1 $ (3 ) Balance at December 31, 2018 $ (94 ) $ (476 ) $ 1 $ (569 ) Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Prior service benefit $ (9 ) (b) Actuarial losses $ 10 (b) 1 Total before tax — Tax benefit Total reclassifications for the period $ 1 Net of tax (b) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 19 for additional details), which is recorded in other income (expense), net. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Dec. 31, 2019 | |
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. In the second quarter of fiscal year 2019, the company realigned its operations resulting in a change to its operating and reportable segments. As of the second quarter of fiscal year 2019, the reportable segments are (1) Commercial Truck and (2) Aftermarket, Industrial and Trailer. Prior year reportable segment financial results have been recast for these changes. The company has two reportable segments at December 31, 2019 , as follows: • The Commercial Truck segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, primarily for medium- and heavy-duty trucks and other applications in North America, South America, Europe and Asia Pacific. This segment also includes the company's aftermarket businesses in Asia Pacific and South America. • The Aftermarket, Industrial and Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers, primarily in North America and Europe. In addition, this segment supplies drivetrain systems and certain components, including axles, drivelines, brakes and suspension systems for military, construction, bus and coach, fire and emergency and other applications in North America and Europe. It also supplies a variety of undercarriage products and systems for trailer applications in North America. Segment adjusted EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expense, asset impairment charges and other special items as determined by management. Segment adjusted EBITDA excludes unallocated legacy and corporate income (expense), net. The company uses segment adjusted EBITDA as the primary basis for the CODM to evaluate the performance of each of its reportable segments. The accounting policies of the segments are the same as those applied in the Condensed Consolidated Financial Statements, except for the use of segment adjusted EBITDA. The company may allocate certain common costs, primarily corporate functions, between the segments differently than the company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such as information technology, finance, communications, legal and human resources. The company does not allocate interest expense and certain legacy and other corporate costs not directly associated with the segment. Segment information is summarized as follows (in millions): Commercial Truck Aftermarket, Eliminations Total Three Months Ended December 31, 2019 External Sales $ 590 $ 311 $ — $ 901 Intersegment Sales 32 6 (38 ) — Total Sales $ 622 $ 317 $ (38 ) $ 901 Three Months Ended December 31, 2018 (1) External Sales $ 744 $ 294 $ — $ 1,038 Intersegment Sales 35 9 (44 ) — Total Sales $ 779 $ 303 $ (44 ) $ 1,038 (1) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes. Three Months Ended December 31, 2019 2018 (3) Segment adjusted EBITDA: Commercial Truck $ 56 $ 77 Aftermarket, Industrial and Trailer 40 40 Segment adjusted EBITDA 96 117 Unallocated legacy and corporate expense, net (1) 2 2 Interest expense, net (14 ) (14 ) Provision for income taxes (13 ) (21 ) Depreciation and amortization (24 ) (22 ) Noncontrolling interests (2 ) (2 ) Loss on sale of receivables (1 ) (1 ) Restructuring (5 ) — Asbestos related liability remeasurement (2) — 31 Income from continuing operations attributable to Meritor, Inc. $ 39 $ 90 (1) Unallocated legacy and corporate income (expense), net represents items that are not directly related to the company's business segments. These items primarily include asbestos-related charges and settlements, pension and retiree medical costs associated with sold businesses, and other legacy costs for environmental and product liability. (2) The three months ended December 31, 2018 includes $31 million related to the remeasurement of the Maremont asbestos liability based on the Maremont prepackaged plan of reorganization. (3) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes. December 31, September 30, Segment Assets: Commercial Truck $ 1,700 $ 1,659 Aftermarket, Industrial and Trailer 839 815 Total segment assets 2,539 2,474 Corporate (1) 597 567 Less: Accounts receivable sold under off-balance sheet factoring programs (2) (240 ) (226 ) Total assets $ 2,896 $ 2,815 (1) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs. (2) At December 31, 2019 and September 30, 2019 , segment assets include $240 million and $226 million , respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 11 |
Supplemental Guarantor Condense
Supplemental Guarantor Condensed Consolidating Financial Statements | 3 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements Rule 3-10 of Regulation S-X requires that separate financial information for issuers and guarantors of registered securities be filed in certain circumstances. Certain of the company's 100 -percent-owned subsidiaries, as defined in the credit agreement (the "Guarantors"), irrevocably and unconditionally guarantee amounts outstanding under the senior secured revolving credit facility on a joint and several basis. Similar subsidiary guarantees were provided for the benefit of the holders of the notes outstanding under the company's indentures (see Note 17 ). Three Months Ended December 31, 2019 Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 535 $ 366 $ — $ 901 Subsidiaries — 23 35 (58 ) — Total sales — 558 401 (58 ) 901 Cost of sales (16 ) (469 ) (347 ) 58 (774 ) GROSS MARGIN (16 ) 89 54 — 127 Selling, general and administrative (24 ) (29 ) (17 ) — (70 ) Other operating expense, net — — (5 ) — (5 ) OPERATING INCOME (LOSS) (40 ) 60 32 — 52 Other income, net — 7 3 — 10 Equity in earnings of affiliates — 4 2 — 6 Interest income (expense), net (31 ) 11 6 — (14 ) INCOME (LOSS) BEFORE INCOME TAXES (71 ) 82 43 — 54 Benefit (provision) for income taxes 12 (15 ) (10 ) — (13 ) Equity income from continuing operations of subsidiaries 98 28 — (126 ) — INCOME FROM CONTINUING OPERATIONS 39 95 33 (126 ) 41 INCOME FROM DISCONTINUED OPERATIONS, net of tax — — — — — NET INCOME 39 95 33 (126 ) 41 Less: Net income attributable to noncontrolling interests — — (2 ) — (2 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 39 $ 95 $ 31 $ (126 ) $ 39 Three Months Ended December 31, 2019 Parent Guarantors Non- Elims Consolidated Net income $ 39 $ 95 $ 33 $ (126 ) $ 41 Other comprehensive income, net of tax 26 30 32 (62 ) 26 Total comprehensive income 65 125 65 (188 ) 67 Less: Comprehensive income attributable to — — (2 ) — (2 ) Comprehensive income attributable to Meritor, Inc. $ 65 $ 125 $ 63 $ (188 ) $ 65 Three Months Ended December 31, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 589 $ 449 $ — $ 1,038 Subsidiaries — 32 57 (89 ) — Total sales — 621 506 (89 ) 1,038 Cost of sales (15 ) (534 ) (437 ) 89 (897 ) GROSS MARGIN (15 ) 87 69 — 141 Selling, general and administrative (25 ) (27 ) 18 — (34 ) OPERATING INCOME (LOSS) (40 ) 60 87 — 107 Other income, net — 5 6 — 11 Equity in earnings of affiliates — 7 2 — 9 Interest income (expense), net (32 ) 12 6 — (14 ) INCOME (LOSS) BEFORE INCOME TAXES (72 ) 84 101 — 113 Benefit (provision) for income taxes 11 (12 ) (20 ) — (21 ) Equity income from continuing operations of subsidiaries 151 40 — (191 ) — INCOME FROM CONTINUING OPERATIONS 90 112 81 (191 ) 92 INCOME FROM DISCONTINUED OPERATIONS, net of tax — — — — — NET INCOME 90 112 81 (191 ) 92 Less: Net income attributable to noncontrolling interests — — (2 ) — (2 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 90 $ 112 $ 79 $ (191 ) $ 90 Three Months Ended December 31, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 90 $ 112 $ 81 $ (191 ) $ 92 Other comprehensive loss, net of tax (3 ) (8 ) (9 ) 18 (2 ) Total comprehensive income 87 104 72 (173 ) 90 Less: Comprehensive income attributable to noncontrolling interests — — (3 ) — (3 ) Comprehensive income attributable to Meritor, Inc. $ 87 $ 104 $ 69 $ (173 ) $ 87 December 31, 2019 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS: Cash and cash equivalents $ 13 $ 5 $ 90 $ — $ 108 Receivables trade and other, net 3 82 393 — 478 Inventories — 308 248 — 556 Other current assets 7 10 20 — 37 TOTAL CURRENT ASSETS 23 405 751 — 1,179 NET PROPERTY 22 257 238 — 517 GOODWILL — 337 149 — 486 OTHER ASSETS 182 252 280 — 714 INVESTMENTS IN SUBSIDIARIES 4,575 958 — (5,533 ) — TOTAL ASSETS $ 4,802 $ 2,209 $ 1,418 $ (5,533 ) $ 2,896 CURRENT LIABILITIES: Short-term debt $ 97 $ — $ 81 $ — $ 178 Accounts and notes payable 19 251 270 — 540 Other current liabilities 74 88 102 — 264 TOTAL CURRENT LIABILITIES 190 339 453 — 982 LONG-TERM DEBT 897 — 4 — 901 RETIREMENT BENEFITS 305 1 24 — 330 INTERCOMPANY PAYABLE (RECEIVABLE) 2,997 (3,012 ) 15 — — OTHER LIABILITIES 61 124 114 — 299 EQUITY ATTRIBUTABLE TO MERITOR, INC. 352 4,757 776 (5,533 ) 352 NONCONTROLLING INTERESTS — — 32 — 32 TOTAL LIABILITIES AND EQUITY $ 4,802 $ 2,209 $ 1,418 $ (5,533 ) $ 2,896 September 30, 2019 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS: Cash and cash equivalents $ 4 $ 4 $ 100 $ — $ 108 Receivables trade and other, net 3 92 456 — 551 Inventories — 292 234 — 526 Other current assets 6 10 15 — 31 TOTAL CURRENT ASSETS 13 398 805 — 1,216 NET PROPERTY 21 260 234 — 515 GOODWILL — 337 141 — 478 OTHER ASSETS 170 225 211 — 606 INVESTMENTS IN SUBSIDIARIES 4,432 899 — (5,331 ) — TOTAL ASSETS $ 4,636 $ 2,119 $ 1,391 $ (5,331 ) $ 2,815 CURRENT LIABILITIES: Short-term debt $ 32 $ — $ 9 $ — $ 41 Accounts and notes payable 53 283 274 — 610 Other current liabilities 77 109 99 — 285 TOTAL CURRENT LIABILITIES 162 392 382 — 936 LONG-TERM DEBT 898 — 4 — 902 RETIREMENT BENEFITS 312 1 23 — 336 INTERCOMPANY PAYABLE (RECEIVABLE) 2,833 (3,005 ) 172 — — OTHER LIABILITIES 46 112 68 — 226 EQUITY ATTRIBUTABLE TO MERITOR, INC. 385 4,619 712 (5,331 ) 385 NONCONTROLLING INTERESTS — — 30 — 30 TOTAL LIABILITIES AND EQUITY $ 4,636 $ 2,119 $ 1,391 $ (5,331 ) $ 2,815 Three Months Ended December 31, 2019 Parent Guarantors Non- Guarantors Elims Consolidated CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 65 $ 9 $ (93 ) $ — $ (19 ) INVESTING ACTIVITIES Capital expenditures — (8 ) (8 ) — (16 ) CASH USED FOR INVESTING ACTIVITIES — (8 ) (8 ) — (16 ) FINANCING ACTIVITIES Securitization — — 72 — 72 Borrowings against revolving line of credit 65 — — — 65 Term loan payments (3 ) — — — (3 ) Repurchase of common stock (100 ) — — — (100 ) Intercompany advances (18 ) — 18 — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (56 ) — 90 — 34 EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS 9 1 (10 ) — — CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4 4 100 — 108 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 13 $ 5 $ 90 $ — $ 108 Three Months Ended December 31, 2018 Parent Guarantors Non- Guarantors Elims Consolidated CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ (9 ) $ 15 $ 5 $ — $ 11 INVESTING ACTIVITIES Capital expenditures (1 ) (12 ) (10 ) — (23 ) Cash paid for investment in Transportation Power, Inc. (3 ) — — — (3 ) Other investing activities — — (1 ) — (1 ) CASH USED FOR INVESTING ACTIVITIES (4 ) (12 ) (11 ) — (27 ) FINANCING ACTIVITIES Securitization — — 33 — 33 Borrowings against revolving line of credit 45 — — — 45 Repurchase of common stock (50 ) — — — (50 ) Intercompany advances 18 — (18 ) — — Other financing activities — (1 ) — — (1 ) CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 13 (1 ) 15 — 27 EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS — 2 10 — 12 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 24 6 85 — 115 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24 $ 8 $ 95 $ — $ 127 Basis of Presentation Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. As of December 31, 2019 and September 30, 2019 , Parent-only obligations included $ 305 million and $315 million of pension and retiree medical benefits, respectively (see Note 19 ). All debt is debt of the Parent other than $ 85 million and $13 million at December 31, 2019 and September 30, 2019 , respectively (see Note 17 ), and is primarily related to U.S. accounts receivable securitization and financing lease obligations. There were no cash dividends paid to the Parent by subsidiaries and investments accounted for by the equity method for the three months ended December 31, 2019 and December 31, 2018 , respectively. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event TransPower As of December 31, 2019 , the fair value of the company’s investment in Transportation Power Inc. ("TransPower") was $12 million . On January 16, 2020, Meritor acquired 100 percent of the voting equity interest of TransPower for an additional $16 million . |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Standards | New Accounting Standards Accounting standards implemented during fiscal year 2020 On October 1, 2019, the company implemented ASU 2016-02, Leases (Topic 842). The company elected the practical expedient package which allowed the company to not reassess whether existing contracts contain a lease and to not reassess classification of existing leases. The company also adopted ASU 2018-11 Leases (Topic 842) Targeted Improvements, electing to not separate lease and non-lease components in contracts that contain both and electing to not restate comparative periods when adopting ASU 2016-02. As a result, the company recognized a right-of-use asset and lease liability as a lessee for substantially all existing operating leases and has included new and expanded disclosures. (See Note 6) Accounting standards to be implemented The following represent the standards that may result in a significant change in practice and/or have a significant financial impact on the company. 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 guidance on its accounting policies and its Condensed 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 beginning after December 15, 2019, including interim periods within those fiscal years. 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 Condensed Consolidated Financial Statements. |
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) |
Fair Value | Fair Value 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. |
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 Meritor is the only potentially responsible |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic Average Common Shares Outstanding | A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions): Three Months Ended December 31, 2019 2018 Basic average common shares outstanding 78.2 84.8 Impact of restricted shares, restricted share units and performance share units 1.6 2.1 Impact of convertible notes 0.9 0.6 Diluted average common shares outstanding 80.7 87.5 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Operating Segment | In the following tables, revenue is disaggregated for each of our operating segments by primary geographical market for the three months ended December 31, 2019 and 2018 . Three Months Ended December 31, 2019 Primary Geographical Market Commercial Truck Aftermarket, Industrial and Trailer Total U.S. $ 292 $ 243 $ 535 Canada — 14 14 Mexico 34 9 43 Total North America 326 266 592 Sweden 62 — 62 Italy 45 4 49 United Kingdom 33 2 35 Other Europe 1 37 38 Total Europe 141 43 184 Brazil 53 1 54 China 34 — 34 India 22 1 23 Other Asia-Pacific 14 — 14 Total sales $ 590 $ 311 $ 901 Three Months Ended December 31, 2018 (1) Primary Geographical Market Commercial Truck Aftermarket, Industrial and Trailer Total U.S. $ 350 $ 240 $ 590 Canada — 18 18 Mexico 47 10 57 Total North America 397 268 665 Sweden 74 — 74 Italy 57 4 61 United Kingdom 41 3 44 Other Europe 3 19 22 Total Europe 175 26 201 Brazil 50 — 50 China 41 — 41 India 57 — 57 Other Asia-Pacific 24 — 24 Total sales $ 744 $ 294 $ 1,038 (1) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Cost | Supplemental balance sheet information related to leases December 31, 2019 Weighted-average remaining lease term (years): Operating leases 8.7 Finance leases 2.7 Weighted-average discount rate: Operating leases 4.5 % Finance leases 9.1 % Supplemental cash flow information related to leases Three Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5 Operating cash flows from finance leases — Financing cash flows from finance leases 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases 4 Finance leases 2 Components of lease expense Three Months Ended December 31, 2019 Finance lease costs $ 1 Operating lease costs 5 Total lease costs $ 6 |
Assets and Liabilities, Lessee | The following table provides a summary of the location and amounts related to finance leases recognized in the Condensed Consolidated Balance Sheet. Classification December 31, 2019 Finance lease right-of-use assets Net Property $ 7 Finance lease liabilities Short-term debt 2 Finance lease liabilities Long-term debt 5 The following table provides a summary of the location and amounts related to operating leases recognized in the Condensed Consolidated Balance Sheet. Classification December 31, 2019 Operating lease right-of-use assets Other assets $ 78 Operating lease liabilities Other current liabilities 14 Operating lease liabilities Other liabilities 64 |
Maturities of Operating Lease Liabilities | Maturities Operating Leases Finance Leases 2020 (excluding the three months ended December 31, 2019) $ 13 $ 2 2021 16 3 2022 13 2 2023 11 1 2024 8 — Thereafter 35 — Total lease payments 96 8 Less: Impact of discounting future lease payments (18 ) (1 ) Present value of lease liabilities $ 78 $ 7 |
Maturities of Finance Lease Liabilities | Maturities Operating Leases Finance Leases 2020 (excluding the three months ended December 31, 2019) $ 13 $ 2 2021 16 3 2022 13 2 2023 11 1 2024 8 — Thereafter 35 — Total lease payments 96 8 Less: Impact of discounting future lease payments (18 ) (1 ) Present value of lease liabilities $ 78 $ 7 |
Schedule of Future Minimum Rental Commitments under Operating Leases | Cash obligations under future minimum rental commitments under operating leases as of September 30, 2019 are shown in the table below. 2020 2021 2022 2023 2024 Thereafter Total Lease commitments $ 18 $ 15 $ 14 $ 13 $ 13 $ 25 $ 98 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of the Changes in Carrying Value of Goodwill | A summary of the changes in the carrying value of goodwill by the company’s two reportable segments are presented below (in millions): Commercial Truck Aftermarket, Industrial and Trailer Total Goodwill $ 261 $ 232 $ 493 Accumulated impairment losses — (15 ) (15 ) Beginning Balance at September 30, 2019 261 217 478 AxleTech measurement period adjustment (see Note 10) — 2 2 Foreign currency translation 4 2 6 Ending Balance at December 31, 2019 $ 265 $ 221 $ 486 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Restructuring Reserves | The changes in restructuring reserves for the three months ended December 31, 2019 and 2018 are as follows (in millions): Total Beginning Balance at September 30, 2019 $ 8 Activity during the period: Charges to continuing operations 5 Cash payments – continuing operations (7 ) Other (1 ) Total restructuring reserves at December 31, 2019 5 Less: non-current restructuring reserves — Restructuring reserves – current, at December 31, 2019 $ 5 Balance at September 30, 2018 $ 4 Activity during the period: Charges to continuing operations — Cash payments – continuing operations (1 ) Total restructuring reserves at December 31, 2018 3 Less: non-current restructuring reserves (1 ) Restructuring reserves – current, at December 31, 2018 $ 2 |
Accounts Receivable Factoring_2
Accounts Receivable Factoring and Securitization (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable Factoring And Securitization [Abstract] | |
Summary of Accounts Receivable Factoring and Securitization | The company has a U.S. accounts receivable securitization facility with PNC Bank and participates in various accounts receivable factoring programs, primarily with Nordea Bank for trade receivables from AB Volvo, as follows: Current Expiration Total Facility Size as of 12/31/19 Utilized as of 12/31/19 Utilized as of 9/30/19 EUR USD EUR USD EUR USD On-balance sheet arrangement Committed U.S. accounts receivable securitization (1) December 2022 N/A $ 115 N/A $ 84 N/A $ 13 Total on-balance sheet arrangement: (1) N/A $ 115 N/A $ 84 N/A $ 13 Off-balance sheet arrangements Committed Swedish factoring facility (2)(3) March 2020 (5) € 155 $ 169 € 128 $ 140 € 109 $ 119 Committed U.S. factoring facility (2) February 2023 N/A 75 N/A 55 N/A 58 Uncommitted U.K. factoring facility February 2022 25 27 3 4 6 6 Uncommitted Italy factoring facility June 2022 30 33 21 23 21 23 Other uncommitted factoring facilities (4) None N/A N/A 17 18 18 20 Total off-balance sheet arrangements € 210 $ 304 € 169 $ 240 € 154 $ 226 (1) Availability subject to adequate eligible accounts receivable available for sale. The utilized amount includes $4 million of letters of credit as of December 31, 2019 and September 30, 2019 . (2) Actual amounts may exceed the bank's commitment at the bank's discretion. (3) The facility is backed by a 364 -day liquidity commitment from Nordea Bank which extends through June 22, 2020. (4) There is no explicit facility size under the agreement, but the counterparty approves the purchase of receivable tranches at its discretion. (5) The company is working to extend this arrangement before its current maturity date. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of 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): December 31, September 30, Finished goods $ 159 $ 153 Work in process 44 39 Raw materials, parts and supplies 353 334 Total $ 556 $ 526 |
Net Property (Tables)
Net Property (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Net Property | Net property is summarized as follows (in millions): December 31, September 30, Property at cost: Land and land improvements $ 31 $ 31 Buildings 228 224 Machinery and equipment 962 935 Company-owned tooling 142 136 Construction in progress 67 74 Total 1,430 1,400 Less: accumulated depreciation (913 ) (885 ) Net property $ 517 $ 515 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Other Assets, Noncurrent [Abstract] | |
Summary of Other Assets | Other assets are summarized as follows (in millions): December 31, September 30, Investments in non-consolidated joint ventures $ 115 $ 110 Deferred income tax assets, net 139 122 Prepaid pension costs 163 149 Other 297 225 Other assets $ 714 $ 606 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Other Liabilities, Current [Abstract] | |
Summary of Other Current Liabilities | Other current liabilities are summarized as follows (in millions): December 31, September 30, Compensation and benefits $ 87 $ 125 Product warranties 17 18 Other 160 142 Other current liabilities $ 264 $ 285 |
Summary of Changes in Product Warranties | A summary of the changes in product warranties is as follows (in millions): Three Months Ended December 31, 2019 2018 Total product warranties – beginning of period $ 50 $ 54 Accruals for product warranties 3 7 Payments (7 ) (5 ) Change in estimates and other — (1 ) Total product warranties – end of period 46 55 Less: Non-current product warranties (29 ) (36 ) Product warranties – current $ 17 $ 19 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Liabilities | Other liabilities are summarized as follows (in millions): December 31, September 30, Asbestos-related liabilities (see Note 20) $ 81 $ 82 Product warranties (see Note 15) 29 32 Other 189 112 Other liabilities $ 299 $ 226 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-Term debt, net of discounts where applicable, is summarized as follows (in millions): December 31, September 30, 3.25 percent convertible notes due 2037 $ 319 $ 319 7.875 percent convertible notes due 2026 23 23 Term loan due 2024 172 175 6.25 percent notes due 2024 445 444 Financing lease obligation 7 7 Borrowings and securitization 145 9 Unamortized discount on convertible notes (32 ) (34 ) Subtotal 1,079 943 Less: current maturities (178 ) (41 ) Long-term debt $ 901 $ 902 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Financial Instruments | Fair values of financial instruments are summarized as follows (in millions): December 31, 2019 September 30, 2019 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 108 $ 108 $ 108 $ 108 Short-term debt 178 208 41 60 Long-term debt 901 987 902 953 Foreign exchange forward contracts (other assets) 2 2 — — Foreign currency option contracts (other assets) 1 1 — — Cross-currency swaps (other assets) 6 6 10 10 Cross-currency swaps (other liabilities) 5 5 5 5 |
Offsetting of Derivative Assets and Liabilities | The following table reflects the offsetting of derivative assets and liabilities (in millions): December 31, 2019 September 30, 2019 Gross Gross Amounts Net Amounts Gross Gross Amounts Net Amounts Derivative Assets Foreign exchange forward contracts 2 — 2 — — — Cross-currency swaps 6 — 6 10 — 10 Foreign currency option contracts 1 — 1 — — — Derivative Liabilities Cross-currency swaps 5 — 5 5 — 5 |
Fair Value of Financial Instruments by Valuation Hierarchy | Fair value of financial instruments by the valuation hierarchy at December 31, 2019 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 108 $ — $ — Short-term debt — 132 76 Long-term debt — 818 169 Foreign exchange forward contracts (other assets) — 2 — Foreign exchange forward contracts (other liabilities) — — — Foreign currency option contracts (other assets) — 1 — Cross-currency swaps (other assets) — 6 — Cross-currency swaps (other liabilities) — 5 — Fair value of financial instruments by the valuation hierarchy at September 30, 2019 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 108 $ — $ — Short-term debt — 49 11 Long-term debt — 782 171 Foreign exchange forward contracts (other liabilities) — — — Foreign currency option contracts (other assets) — — — Cross-currency swaps (other assets) — 10 — Cross-currency swaps (other liabilities) — 5 — |
Retirement Benefit Liabilities
Retirement Benefit Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Summary of Retirement Benefit Liabilities | Retirement benefit liabilities consisted of the following (in millions): December 31, September 30, Retiree medical liability $ 66 $ 67 Pension liability 263 271 Other 18 14 Subtotal 347 352 Less: current portion (included in compensation and benefits, Note 15) (17 ) (16 ) Retirement benefits $ 330 $ 336 |
Components of Net Periodic Pension and Retiree Medical Income | The components of net periodic pension and retiree medical income included in continuing operations for the three months ended December 31 are as follows (in millions): 2019 2018 Pension Retiree Medical Pension Retiree Medical Interest cost $ (11 ) $ — $ (13 ) $ (1 ) Assumed return on plan assets 24 — 24 — Amortization of prior service benefit — 9 — 9 Recognized actuarial loss (8 ) (4 ) (6 ) (4 ) Total income $ 5 $ 5 $ 5 $ 4 |
Contingencies (Tables)
Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Environmental Reserves | The following are the components of the Superfund and non-Superfund environmental reserves (in millions): Superfund Sites Non-Superfund Sites Total Beginning Balance at September 30, 2019 $ 11 $ 4 $ 15 Payments and other (1 ) — (1 ) Accruals 1 — 1 Ending Balance at December 31, 2019 $ 11 $ 4 $ 15 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components of AOCL and the changes in AOCL by components, net of tax, for the three months ended December 31, 2019 and 2018 are as follows (in millions): Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) on cash flow hedges Total Balance at September 30, 2019 $ (107 ) $ (572 ) $ (2 ) $ (681 ) Other comprehensive income before reclassification 21 — — 21 Amounts reclassified from accumulated other comprehensive loss — 3 2 5 Net current-period other comprehensive income 21 3 2 26 Balance at December 31, 2019 $ (86 ) $ (569 ) $ — $ (655 ) Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) on cash flow hedges Total Balance at September 30, 2018 $ (90 ) $ (476 ) $ — $ (566 ) Other comprehensive income before reclassification (4 ) (1 ) — (5 ) Amounts reclassified from accumulated other comprehensive loss — 1 1 2 Net current-period other comprehensive income $ (4 ) $ — $ 1 $ (3 ) Balance at December 31, 2018 $ (94 ) $ (476 ) $ 1 $ (569 ) |
Reclassification Out of Accumulated Other Comprehensive Income | Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Prior service benefit $ (9 ) (b) Actuarial losses $ 10 (b) 1 Total before tax — Tax benefit Total reclassifications for the period $ 1 Net of tax (b) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Note 19 for additional details), which is recorded in other income (expense), net. Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statement of Operations Employee Benefit Related Adjustment Prior service benefit $ (9 ) (a) Actuarial losses 12 (a) 3 Total before tax — Tax benefit Total reclassifications for the period $ 3 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 19 for additional details), which is recorded in other income (expense), net. |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information is summarized as follows (in millions): Commercial Truck Aftermarket, Eliminations Total Three Months Ended December 31, 2019 External Sales $ 590 $ 311 $ — $ 901 Intersegment Sales 32 6 (38 ) — Total Sales $ 622 $ 317 $ (38 ) $ 901 Three Months Ended December 31, 2018 (1) External Sales $ 744 $ 294 $ — $ 1,038 Intersegment Sales 35 9 (44 ) — Total Sales $ 779 $ 303 $ (44 ) $ 1,038 (1) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes. |
Segment Income Attributable to Parent | Three Months Ended December 31, 2019 2018 (3) Segment adjusted EBITDA: Commercial Truck $ 56 $ 77 Aftermarket, Industrial and Trailer 40 40 Segment adjusted EBITDA 96 117 Unallocated legacy and corporate expense, net (1) 2 2 Interest expense, net (14 ) (14 ) Provision for income taxes (13 ) (21 ) Depreciation and amortization (24 ) (22 ) Noncontrolling interests (2 ) (2 ) Loss on sale of receivables (1 ) (1 ) Restructuring (5 ) — Asbestos related liability remeasurement (2) — 31 Income from continuing operations attributable to Meritor, Inc. $ 39 $ 90 (1) Unallocated legacy and corporate income (expense), net represents items that are not directly related to the company's business segments. These items primarily include asbestos-related charges and settlements, pension and retiree medical costs associated with sold businesses, and other legacy costs for environmental and product liability. (2) The three months ended December 31, 2018 includes $31 million related to the remeasurement of the Maremont asbestos liability based on the Maremont prepackaged plan of reorganization. (3) Amounts for the three months ended December 31, 2018 have been recast to reflect reportable segment changes. |
Schedule of Segment Assets | December 31, September 30, Segment Assets: Commercial Truck $ 1,700 $ 1,659 Aftermarket, Industrial and Trailer 839 815 Total segment assets 2,539 2,474 Corporate (1) 597 567 Less: Accounts receivable sold under off-balance sheet factoring programs (2) (240 ) (226 ) Total assets $ 2,896 $ 2,815 (1) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs. (2) At December 31, 2019 and September 30, 2019 , segment assets include $240 million and $226 million , respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 11 ). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances. |
Supplemental Guarantor Conden_2
Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Condensed Consolidating Statement of Operations | Three Months Ended December 31, 2019 Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 535 $ 366 $ — $ 901 Subsidiaries — 23 35 (58 ) — Total sales — 558 401 (58 ) 901 Cost of sales (16 ) (469 ) (347 ) 58 (774 ) GROSS MARGIN (16 ) 89 54 — 127 Selling, general and administrative (24 ) (29 ) (17 ) — (70 ) Other operating expense, net — — (5 ) — (5 ) OPERATING INCOME (LOSS) (40 ) 60 32 — 52 Other income, net — 7 3 — 10 Equity in earnings of affiliates — 4 2 — 6 Interest income (expense), net (31 ) 11 6 — (14 ) INCOME (LOSS) BEFORE INCOME TAXES (71 ) 82 43 — 54 Benefit (provision) for income taxes 12 (15 ) (10 ) — (13 ) Equity income from continuing operations of subsidiaries 98 28 — (126 ) — INCOME FROM CONTINUING OPERATIONS 39 95 33 (126 ) 41 INCOME FROM DISCONTINUED OPERATIONS, net of tax — — — — — NET INCOME 39 95 33 (126 ) 41 Less: Net income attributable to noncontrolling interests — — (2 ) — (2 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 39 $ 95 $ 31 $ (126 ) $ 39 Three Months Ended December 31, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Sales External $ — $ 589 $ 449 $ — $ 1,038 Subsidiaries — 32 57 (89 ) — Total sales — 621 506 (89 ) 1,038 Cost of sales (15 ) (534 ) (437 ) 89 (897 ) GROSS MARGIN (15 ) 87 69 — 141 Selling, general and administrative (25 ) (27 ) 18 — (34 ) OPERATING INCOME (LOSS) (40 ) 60 87 — 107 Other income, net — 5 6 — 11 Equity in earnings of affiliates — 7 2 — 9 Interest income (expense), net (32 ) 12 6 — (14 ) INCOME (LOSS) BEFORE INCOME TAXES (72 ) 84 101 — 113 Benefit (provision) for income taxes 11 (12 ) (20 ) — (21 ) Equity income from continuing operations of subsidiaries 151 40 — (191 ) — INCOME FROM CONTINUING OPERATIONS 90 112 81 (191 ) 92 INCOME FROM DISCONTINUED OPERATIONS, net of tax — — — — — NET INCOME 90 112 81 (191 ) 92 Less: Net income attributable to noncontrolling interests — — (2 ) — (2 ) NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 90 $ 112 $ 79 $ (191 ) $ 90 |
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | Three Months Ended December 31, 2019 Parent Guarantors Non- Elims Consolidated Net income $ 39 $ 95 $ 33 $ (126 ) $ 41 Other comprehensive income, net of tax 26 30 32 (62 ) 26 Total comprehensive income 65 125 65 (188 ) 67 Less: Comprehensive income attributable to — — (2 ) — (2 ) Comprehensive income attributable to Meritor, Inc. $ 65 $ 125 $ 63 $ (188 ) $ 65 Three Months Ended December 31, 2018 Parent Guarantors Non- Guarantors Elims Consolidated Net income $ 90 $ 112 $ 81 $ (191 ) $ 92 Other comprehensive loss, net of tax (3 ) (8 ) (9 ) 18 (2 ) Total comprehensive income 87 104 72 (173 ) 90 Less: Comprehensive income attributable to noncontrolling interests — — (3 ) — (3 ) Comprehensive income attributable to Meritor, Inc. $ 87 $ 104 $ 69 $ (173 ) $ 87 |
Schedule of Condensed Consolidating Balance Sheet | December 31, 2019 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS: Cash and cash equivalents $ 13 $ 5 $ 90 $ — $ 108 Receivables trade and other, net 3 82 393 — 478 Inventories — 308 248 — 556 Other current assets 7 10 20 — 37 TOTAL CURRENT ASSETS 23 405 751 — 1,179 NET PROPERTY 22 257 238 — 517 GOODWILL — 337 149 — 486 OTHER ASSETS 182 252 280 — 714 INVESTMENTS IN SUBSIDIARIES 4,575 958 — (5,533 ) — TOTAL ASSETS $ 4,802 $ 2,209 $ 1,418 $ (5,533 ) $ 2,896 CURRENT LIABILITIES: Short-term debt $ 97 $ — $ 81 $ — $ 178 Accounts and notes payable 19 251 270 — 540 Other current liabilities 74 88 102 — 264 TOTAL CURRENT LIABILITIES 190 339 453 — 982 LONG-TERM DEBT 897 — 4 — 901 RETIREMENT BENEFITS 305 1 24 — 330 INTERCOMPANY PAYABLE (RECEIVABLE) 2,997 (3,012 ) 15 — — OTHER LIABILITIES 61 124 114 — 299 EQUITY ATTRIBUTABLE TO MERITOR, INC. 352 4,757 776 (5,533 ) 352 NONCONTROLLING INTERESTS — — 32 — 32 TOTAL LIABILITIES AND EQUITY $ 4,802 $ 2,209 $ 1,418 $ (5,533 ) $ 2,896 September 30, 2019 Parent Guarantors Non- Guarantors Elims Consolidated CURRENT ASSETS: Cash and cash equivalents $ 4 $ 4 $ 100 $ — $ 108 Receivables trade and other, net 3 92 456 — 551 Inventories — 292 234 — 526 Other current assets 6 10 15 — 31 TOTAL CURRENT ASSETS 13 398 805 — 1,216 NET PROPERTY 21 260 234 — 515 GOODWILL — 337 141 — 478 OTHER ASSETS 170 225 211 — 606 INVESTMENTS IN SUBSIDIARIES 4,432 899 — (5,331 ) — TOTAL ASSETS $ 4,636 $ 2,119 $ 1,391 $ (5,331 ) $ 2,815 CURRENT LIABILITIES: Short-term debt $ 32 $ — $ 9 $ — $ 41 Accounts and notes payable 53 283 274 — 610 Other current liabilities 77 109 99 — 285 TOTAL CURRENT LIABILITIES 162 392 382 — 936 LONG-TERM DEBT 898 — 4 — 902 RETIREMENT BENEFITS 312 1 23 — 336 INTERCOMPANY PAYABLE (RECEIVABLE) 2,833 (3,005 ) 172 — — OTHER LIABILITIES 46 112 68 — 226 EQUITY ATTRIBUTABLE TO MERITOR, INC. 385 4,619 712 (5,331 ) 385 NONCONTROLLING INTERESTS — — 30 — 30 TOTAL LIABILITIES AND EQUITY $ 4,636 $ 2,119 $ 1,391 $ (5,331 ) $ 2,815 |
Schedule of Condensed Consolidating Statement of Cash Flows | Three Months Ended December 31, 2019 Parent Guarantors Non- Guarantors Elims Consolidated CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 65 $ 9 $ (93 ) $ — $ (19 ) INVESTING ACTIVITIES Capital expenditures — (8 ) (8 ) — (16 ) CASH USED FOR INVESTING ACTIVITIES — (8 ) (8 ) — (16 ) FINANCING ACTIVITIES Securitization — — 72 — 72 Borrowings against revolving line of credit 65 — — — 65 Term loan payments (3 ) — — — (3 ) Repurchase of common stock (100 ) — — — (100 ) Intercompany advances (18 ) — 18 — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (56 ) — 90 — 34 EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS 9 1 (10 ) — — CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4 4 100 — 108 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 13 $ 5 $ 90 $ — $ 108 Three Months Ended December 31, 2018 Parent Guarantors Non- Guarantors Elims Consolidated CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ (9 ) $ 15 $ 5 $ — $ 11 INVESTING ACTIVITIES Capital expenditures (1 ) (12 ) (10 ) — (23 ) Cash paid for investment in Transportation Power, Inc. (3 ) — — — (3 ) Other investing activities — — (1 ) — (1 ) CASH USED FOR INVESTING ACTIVITIES (4 ) (12 ) (11 ) — (27 ) FINANCING ACTIVITIES Securitization — — 33 — 33 Borrowings against revolving line of credit 45 — — — 45 Repurchase of common stock (50 ) — — — (50 ) Intercompany advances 18 — (18 ) — — Other financing activities — (1 ) — — (1 ) CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 13 (1 ) 15 — 27 EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 1 — 1 CHANGE IN CASH AND CASH EQUIVALENTS — 2 10 — 12 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 24 6 85 — 115 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24 $ 8 $ 95 $ — $ 127 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation of common shares (Details) - shares shares in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Basic average common shares outstanding (in shares) | 78.2 | 84.8 |
Impact of restricted shares, restricted share units and performance share units (in shares) | 1.6 | 2.1 |
Impact of convertible notes (in shares) | 0.9 | 0.6 |
Diluted average common shares outstanding (in shares) | 80.7 | 87.5 |
Equity Based Compensation - Add
Equity Based Compensation - Additional information (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2019 |
Class of Stock [Line Items] | ||||
Impact of restricted shares, restricted share units and performance share units (in shares) | 1,600,000 | 2,100,000 | ||
Share-based compensation expense | $ 3 | $ 5 | ||
Impact of convertible notes (in shares) | 900,000 | 600,000 | ||
Convertible Notes Payable | 7.875% Convertible Notes Due 2026 | ||||
Class of Stock [Line Items] | ||||
Interest rate | 7.875% | |||
Executive Officer | ||||
Class of Stock [Line Items] | ||||
Number or shares issuable per performance share unit (in shares) | 1 | |||
Exercise price (in usd per share) | $ 25.25 | |||
Executive Officer | Restricted Share Units (RSUs) | ||||
Class of Stock [Line Items] | ||||
Shares granted (in shares) | 300,000 | |||
Vesting period | 3 years | |||
Executive Officer | Performance Shares | ||||
Class of Stock [Line Items] | ||||
Exercise price (in usd per share) | $ 25.25 | |||
Executive Officer | Performance Shares | Performance period of October 1, 2019 to September 30, 2022 | ||||
Class of Stock [Line Items] | ||||
Shares authorized for grant (in shares) | 400,000 | |||
Executive Officer | Performance Shares | Performance period of October 1, 2019 to September 30, 2022 | Performance Objective One | ||||
Class of Stock [Line Items] | ||||
Award vesting rights percentage | 25.00% | |||
Executive Officer | Performance Shares | Performance period of October 1, 2019 to September 30, 2022 | Minimum | ||||
Class of Stock [Line Items] | ||||
Performance-based vesting percentage | 0.00% | |||
Executive Officer | Performance Shares | Performance period of October 1, 2019 to September 30, 2022 | Maximum | ||||
Class of Stock [Line Items] | ||||
Performance-based vesting percentage | 200.00% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Sales | $ 901 | $ 1,038 | |
Trade receivables, net | 451 | $ 517 | |
U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 535 | 590 | |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 14 | 18 | |
Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 43 | 57 | |
Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 592 | 665 | |
Sweden | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 62 | 74 | |
Italy | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 49 | 61 | |
United Kingdom | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 35 | 44 | |
Other Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 38 | 22 | |
Total Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 184 | 201 | |
Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 54 | 50 | |
China | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 34 | 41 | |
India | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 23 | 57 | |
Other Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 14 | 24 | |
Commercial Truck | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 590 | 744 | |
Commercial Truck | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 292 | 350 | |
Commercial Truck | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 0 | 0 | |
Commercial Truck | Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 34 | 47 | |
Commercial Truck | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 326 | 397 | |
Commercial Truck | Sweden | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 62 | 74 | |
Commercial Truck | Italy | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 45 | 57 | |
Commercial Truck | United Kingdom | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 33 | 41 | |
Commercial Truck | Other Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1 | 3 | |
Commercial Truck | Total Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 141 | 175 | |
Commercial Truck | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 53 | 50 | |
Commercial Truck | China | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 34 | 41 | |
Commercial Truck | India | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 22 | 57 | |
Commercial Truck | Other Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 14 | 24 | |
Aftermarket, Industrial and Trailer | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 311 | 294 | |
Aftermarket, Industrial and Trailer | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 243 | 240 | |
Aftermarket, Industrial and Trailer | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 14 | 18 | |
Aftermarket, Industrial and Trailer | Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 9 | 10 | |
Aftermarket, Industrial and Trailer | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 266 | 268 | |
Aftermarket, Industrial and Trailer | Sweden | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 0 | 0 | |
Aftermarket, Industrial and Trailer | Italy | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 4 | 4 | |
Aftermarket, Industrial and Trailer | United Kingdom | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 2 | 3 | |
Aftermarket, Industrial and Trailer | Other Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 37 | 19 | |
Aftermarket, Industrial and Trailer | Total Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 43 | 26 | |
Aftermarket, Industrial and Trailer | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1 | 0 | |
Aftermarket, Industrial and Trailer | China | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 0 | 0 | |
Aftermarket, Industrial and Trailer | India | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1 | 0 | |
Aftermarket, Industrial and Trailer | Other Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Sales | $ 0 | $ 0 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Finance lease costs | $ 1 |
Operating lease costs | 5 |
Total lease costs | $ 6 |
Leases - Schedule of Leases in
Leases - Schedule of Leases in Consolidated Balance Sheet (Details) $ in Millions | Dec. 31, 2019USD ($) |
Finance Lease Assets And Liabilities Lessee | |
Finance lease right-of-use assets, Net Property | $ 7 |
Finance lease liabilities, Short-term debt | 2 |
Finance lease liabilities, Long-term debt | 5 |
Operating Lease Assets And Liabilities Lessee | |
Operating lease right-of-use assets, Other assets | 78 |
Operating lease liabilities, Other current liabilities | 14 |
Operating lease liabilities, Other liabilities | $ 64 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 5 |
Operating cash flows from finance leases | 0 |
Financing cash flows from finance leases | 1 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | 4 |
Finance leases | $ 2 |
Leases - Remaining Lease term a
Leases - Remaining Lease term and Discount Rate (Details) | Dec. 31, 2019 |
Weighted-average remaining lease term (years): | |
Operating leases | 8 years 8 months 12 days |
Finance leases | 2 years 8 months 12 days |
Weighted-average discount rate: | |
Operating leases | 4.50% |
Finance leases | 9.10% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 (excluding the three months ended December 31, 2019) | $ 13 |
2021 | 16 |
2022 | 13 |
2023 | 11 |
2024 | 8 |
Thereafter | 35 |
Total lease payments | 96 |
Less: Impact of discounting future lease payments | (18) |
Present value of lease liabilities | 78 |
Finance Leases | |
2020 (excluding the three months ended December 31, 2019) | 2 |
2021 | 3 |
2022 | 2 |
2023 | 1 |
2024 | 0 |
Thereafter | 0 |
Total lease payments | 8 |
Less: Impact of discounting future lease payments | (1) |
Present value of lease liabilities | $ 7 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Commitments under Operating Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 18 |
2021 | 15 |
2022 | 14 |
2023 | 13 |
2024 | 13 |
Thereafter | 25 |
Total | $ 98 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) | 3 Months Ended |
Dec. 31, 2019segment | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of reportable segments | 2 |
Goodwill - Changes in the Carry
Goodwill - Changes in the Carrying Value of Goodwill (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 493 | |
Accumulated impairment losses | (15) | |
Goodwill [Roll Forward] | ||
Goodwill net, Beginning balance | $ 478 | |
AxleTech measurement period adjustment (see Note 10) | 2 | |
Foreign currency translation | 6 | |
Goodwill net, Ending balance | 478 | 486 |
Commercial Truck | ||
Goodwill [Line Items] | ||
Goodwill | 261 | |
Accumulated impairment losses | 0 | |
Goodwill [Roll Forward] | ||
Goodwill net, Beginning balance | 261 | |
AxleTech measurement period adjustment (see Note 10) | 0 | |
Foreign currency translation | 4 | |
Goodwill net, Ending balance | 261 | 265 |
Aftermarket, Industrial and Trailer | ||
Goodwill [Line Items] | ||
Goodwill | 232 | |
Accumulated impairment losses | (15) | |
Goodwill [Roll Forward] | ||
Goodwill net, Beginning balance | 217 | |
AxleTech measurement period adjustment (see Note 10) | 2 | |
Foreign currency translation | 2 | |
Goodwill net, Ending balance | $ 217 | $ 221 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Activity during the period: | ||
Charges to continuing operations | $ 5 | $ 0 |
Cash payments – continuing operations | (7) | (1) |
Total | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 8 | 4 |
Activity during the period: | ||
Charges to continuing operations | 5 | 0 |
Cash payments – continuing operations | (7) | (1) |
Other | (1) | |
Ending balance | 5 | 3 |
Less: non-current restructuring reserves | 0 | (1) |
Restructuring reserves – current | $ 5 | $ 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Net pre-tax income (loss) tax benefit not recorded | $ 3 | $ 6 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Millions | Jul. 26, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Increase to goodwill | $ 2 | |
AxleTech | ||
Business Acquisition [Line Items] | ||
Percentage of shares acquired | 100.00% | |
Purchase price | $ 179 | |
Adjustments decrease in receivables | 2 | |
Increase to goodwill | $ 2 |
Accounts Receivable Factoring_3
Accounts Receivable Factoring and Securitization (Details) | 3 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | Sep. 30, 2019EUR (€) | Sep. 30, 2019USD ($) | |
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
On-balance sheet arrangement, Total Facility Size | $ 115,000,000 | |||||
On-balance sheet arrangement, Utilized | 84,000,000 | $ 13,000,000 | ||||
Off-balance sheet arrangement, Total Facility Size | € 210,000,000 | 304,000,000 | ||||
Off-balance sheet arrangement, Utilized | 169,000,000 | 240,000,000 | € 154,000,000 | 226,000,000 | ||
Costs associated with off balance sheet factoring arrangements | $ 1,000,000 | $ 1,000,000 | ||||
Committed U.S. accounts receivable securitization | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
On-balance sheet arrangement, Total Facility Size | 115,000,000 | |||||
On-balance sheet arrangement, Utilized | 84,000,000 | 13,000,000 | ||||
Committed U.S. accounts receivable securitization | Letter of Credit | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
Letters of credit outstanding | 4,000,000 | 4,000,000 | ||||
Committed Swedish factoring facility | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
Off-balance sheet arrangement, Total Facility Size | 155,000,000 | 169,000,000 | ||||
Off-balance sheet arrangement, Utilized | 128,000,000 | 140,000,000 | 109,000,000 | 119,000,000 | ||
Liquidity commitment | 364 days | |||||
Committed U.S. factoring facility | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
Off-balance sheet arrangement, Total Facility Size | 75,000,000 | |||||
Off-balance sheet arrangement, Utilized | 55,000,000 | 58,000,000 | ||||
Uncommitted U.K. factoring facility | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
Off-balance sheet arrangement, Total Facility Size | 25,000,000 | 27,000,000 | ||||
Off-balance sheet arrangement, Utilized | 3,000,000 | 4,000,000 | 6,000,000 | 6,000,000 | ||
Uncommitted Italy factoring facility | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
Off-balance sheet arrangement, Total Facility Size | 30,000,000 | 33,000,000 | ||||
Off-balance sheet arrangement, Utilized | 21,000,000 | 23,000,000 | 21,000,000 | 23,000,000 | ||
Other uncommitted factoring facilities | ||||||
Accounts Receivable Factoring And Securitization [Line Items] | ||||||
Off-balance sheet arrangement, Utilized | € 17,000,000 | $ 18,000,000 | € 18,000,000 | $ 20,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 159 | $ 153 |
Work in process | 44 | 39 |
Raw materials, parts and supplies | 353 | 334 |
Total inventories | $ 556 | $ 526 |
Net Property (Details)
Net Property (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property at cost | $ 1,430 | $ 1,400 |
Less: accumulated depreciation | (913) | (885) |
Net property | 517 | 515 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property at cost | 31 | 31 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property at cost | 228 | 224 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property at cost | 962 | 935 |
Company-owned tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property at cost | 142 | 136 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property at cost | $ 67 | $ 74 |
Other Assets - Summary of Other
Other Assets - Summary of Other Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Other Assets, Noncurrent [Abstract] | ||
Investments in non-consolidated joint ventures | $ 115 | $ 110 |
Deferred income tax assets, net | 139 | 122 |
Prepaid pension costs | 163 | 149 |
Other | 297 | 225 |
Other assets | $ 714 | $ 606 |
Other Current Liabilities - Sum
Other Current Liabilities - Summary of other current liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities, Current [Abstract] | |||
Compensation and benefits | $ 87 | $ 125 | |
Product warranties | 17 | 18 | $ 19 |
Other | 160 | 142 | |
Other current liabilities | $ 264 | $ 285 |
Other Current Liabilities - S_2
Other Current Liabilities - Summary of changes in product warranties (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Total product warranties – beginning of period | $ 50 | $ 54 | |
Accruals for product warranties | 3 | 7 | |
Payments | (7) | (5) | |
Change in estimates and other | 0 | (1) | |
Total product warranties – end of period | 46 | 55 | |
Less: Non-current product warranties | (29) | (36) | $ (32) |
Product warranties – current | $ 17 | $ 19 | $ 18 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | |||
Asbestos-related liabilities (see Note 20) | $ 81 | $ 82 | |
Product warranties (see Note 15) | 29 | 32 | $ 36 |
Other | 189 | 112 | |
Other liabilities | $ 299 | $ 226 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Debt | $ 172 | $ 175 |
Financing lease obligation | 7 | |
Financing lease obligation | 7 | |
Subtotal | 1,079 | 943 |
Less: current maturities | (178) | (41) |
Long-term debt | 901 | 902 |
Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Unamortized discount on convertible notes | $ (32) | (34) |
3.25 percent convertible notes due 2037 | Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.25% | |
Debt | $ 319 | 319 |
7.875 percent convertible notes due 2026 | Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.875% | |
Debt | $ 23 | 23 |
6.25 percent notes due 2024 | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.25% | |
Debt | $ 445 | 444 |
Borrowings and securitization | ||
Debt Instrument [Line Items] | ||
Borrowings and securitization | $ 145 | $ 9 |
Long-Term Debt - Current Classi
Long-Term Debt - Current Classification of Notes (Details) - Convertible Notes Payable - 7.875 percent convertible notes due 2026 | 3 Months Ended |
Dec. 31, 2019trading_day$ / shares | |
Debt Instrument [Line Items] | |
Interest rate | 7.875% |
Trading days | 20 |
Consecutive trading days | 30 |
Threshold percentage of stock price trigger (greater than) | 120.00% |
Redemption Period One | |
Debt Instrument [Line Items] | |
Conversion ratio of common stock per principal | 83.3333 |
Conversion price (in usd per share) | $ / shares | $ 12 |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility (Details) | 3 Months Ended | |||
Dec. 31, 2019USD ($) | Nov. 30, 2023USD ($) | Sep. 30, 2019USD ($) | Jun. 07, 2019USD ($) | |
6.25 percent notes due 2024 | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 6.25% | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Borrowings outstanding | $ 65,000,000 | $ 0 | ||
Letters of credit outstanding | $ 0 | $ 0 | ||
Revolving Credit Facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 200.00% | |||
Unused capacity, commitment fee percentage | 30.00% | |||
Revolving Credit Facility | Triggering Event One | ||||
Line of Credit Facility [Line Items] | ||||
Debt-to-EBITDA ratio | 2.25 | |||
Revolving Credit Facility | Amended Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 625,000,000 | |||
Maximum limit on issuance, letters of credit | $ 100,000,000 | |||
Revolving Credit Facility | Overnight Revolving Credit Loans | Prime Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 100.00% | |||
Term Loan Facility | Line of Credit | Amended Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Principle amount of debt | $ 175,000,000 | |||
Forecast | 6.25 percent notes due 2024 | ||||
Line of Credit Facility [Line Items] | ||||
Borrowings outstanding | $ 75,000,000 |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) - USD ($) | Dec. 31, 2019 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt outstanding | $ 172,000,000 | $ 175,000,000 |
China | Notes Payable to Banks | Other Export Financing Arrangements | ||
Debt Instrument [Line Items] | ||
Debt default, amount | 35,000,000 | |
Long-term debt outstanding | $ 18,000,000 | $ 30,000,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 108 | $ 108 |
Short-term debt | 178 | 41 |
Long-term debt | 901 | 902 |
Carrying Value | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 2 | 0 |
Carrying Value | Foreign currency option contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 1 | 0 |
Carrying Value | Cross-currency swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 6 | 10 |
Cross-currency swaps (other liabilities) | 5 | 5 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 108 | 108 |
Short-term debt | 208 | 60 |
Long-term debt | 987 | 953 |
Fair Value | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 2 | 0 |
Fair Value | Foreign currency option contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 1 | 0 |
Fair Value | Cross-currency swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 6 | 10 |
Cross-currency swaps (other liabilities) | $ 5 | $ 5 |
Financial Instruments - Offsett
Financial Instruments - Offsetting of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Foreign exchange forward contracts | ||
Derivative Assets | ||
Gross Amounts Recognized | $ 2 | $ 0 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 2 | 0 |
Cross-currency swaps | ||
Derivative Assets | ||
Gross Amounts Recognized | 6 | 10 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 6 | 10 |
Derivative Liabilities | ||
Gross Amounts Recognized | 5 | 5 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 5 | 5 |
Foreign currency option contracts | ||
Derivative Assets | ||
Gross Amounts Recognized | 1 | 0 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | $ 1 | $ 0 |
Financial Instruments - Fair _2
Financial Instruments - Fair Value of Financial Instruments by Valuation Hierarchy (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 108 | $ 108 |
Short-term debt | 0 | 0 |
Long-term debt | 0 | 0 |
Level 1 | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | |
Derivative liabilities | 0 | 0 |
Level 1 | Foreign currency option contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Level 1 | Cross-currency swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term debt | 132 | 49 |
Long-term debt | 818 | 782 |
Level 2 | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 2 | |
Derivative liabilities | 0 | 0 |
Level 2 | Foreign currency option contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 1 | 0 |
Level 2 | Cross-currency swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 6 | 10 |
Derivative liabilities | 5 | 5 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term debt | 76 | 11 |
Long-term debt | 169 | 171 |
Level 3 | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | |
Derivative liabilities | 0 | 0 |
Level 3 | Foreign currency option contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Level 3 | Cross-currency swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | |
Foreign exchange swap contracts | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Term of foreign exchange forward contract | 18 months | ||
Derivative, notional amount | $ 72,000,000 | $ 0 | |
Foreign currency option contracts | India, Rupees | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative, notional amount | 105,000,000 | 139,000,000 | |
Foreign currency option contracts | Euro | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative, notional amount | 64,000,000 | 28,000,000 | |
Cross-currency swaps | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative, notional amount | $ 225,000,000 | 225,000,000 | $ 225,000,000 |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign exchange forward contracts | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Term of foreign exchange forward contract | 18 months | ||
Derivative, notional amount | $ 85,000,000 | $ 110,000,000 |
Retirement Benefit Liabilitie_2
Retirement Benefit Liabilities - Summary of retirement benefits (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Retirement Benefits [Abstract] | ||
Retiree medical liability | $ 66 | $ 67 |
Pension liability | 263 | 271 |
Other | 18 | 14 |
Subtotal | 347 | 352 |
Less: current portion (included in compensation and benefits, Note 15) | (17) | (16) |
Retirement benefits | $ 330 | $ 336 |
Retirement Benefit Liabilitie_3
Retirement Benefit Liabilities - Components of net periodic pension and retiree medical income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pension | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Interest cost | $ (11) | $ (13) |
Assumed return on plan assets | 24 | 24 |
Amortization of prior service benefit | 0 | 0 |
Recognized actuarial loss | (8) | (6) |
Total income | 5 | 5 |
Retiree Medical | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Interest cost | 0 | (1) |
Assumed return on plan assets | 0 | 0 |
Amortization of prior service benefit | 9 | 9 |
Recognized actuarial loss | (4) | (4) |
Total income | $ 5 | $ 4 |
Retirement Benefit Liabilitie_4
Retirement Benefit Liabilities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Non-service cost components of the net periodic pension and OPEB income | $ 10 | $ 9 |
Contingencies - Additional Info
Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Dec. 31, 2019USD ($)siteclaim | Dec. 31, 2018USD ($) | Sep. 30, 2019USD ($)claim | |
Loss Contingencies [Line Items] | |||
Environmental accrual balance | $ 15 | $ 15 | |
Discounted amount environmental accrual for on-going operations maintenance and monitoring | 15 | ||
Undiscounted amount environmental accrual for on-going operations maintenance and monitoring | 16 | ||
Asbestos related liability remeasurement | $ 0 | $ 31 | |
Maremont Asbestos | |||
Loss Contingencies [Line Items] | |||
Damages sought | 51 | ||
Asbestos related liability remeasurement | $ 31 | ||
Obligation period for asbestos personal injury claims | 40 years | ||
Rockwell Asbestos | |||
Loss Contingencies [Line Items] | |||
Number of pending claims | claim | 1,400 | 1,400 | |
Pending and future claims | $ 90 | $ 91 | |
Asbestos-related insurance recoveries | $ 60 | 61 | |
Low Range | |||
Loss Contingencies [Line Items] | |||
Site contingency, accrual, discount rate | 1.50% | ||
Low Range | Rockwell Asbestos | |||
Loss Contingencies [Line Items] | |||
Possible loss | 91 | ||
High Range | |||
Loss Contingencies [Line Items] | |||
Site contingency, accrual, discount rate | 2.25% | ||
High Range | Rockwell Asbestos | |||
Loss Contingencies [Line Items] | |||
Possible loss | 181 | ||
Superfund Sites | |||
Loss Contingencies [Line Items] | |||
Number of Superfund environmental sites | site | 10 | ||
Environmental costs reasonably possible | $ 23 | ||
Environmental accrual balance | 11 | 11 | |
Non-Superfund Sites | |||
Loss Contingencies [Line Items] | |||
Environmental costs reasonably possible | 13 | ||
Environmental accrual balance | $ 4 | $ 4 |
Contingencies - Summary of envi
Contingencies - Summary of environmental reserves (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Beginning balance | $ 15 |
Payments and other | (1) |
Accruals | 1 |
Ending balance | 15 |
Superfund Sites | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Beginning balance | 11 |
Payments and other | (1) |
Accruals | 1 |
Ending balance | 11 |
Non-Superfund Sites | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Beginning balance | 4 |
Payments and other | 0 |
Accruals | 0 |
Ending balance | $ 4 |
Shareholders' Equity - Common S
Shareholders' Equity - Common Stock and Debt Repurchase Authorizations (Details) - USD ($) shares in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Nov. 07, 2019 | Jul. 26, 2019 | Nov. 02, 2018 | |
Class of Stock [Line Items] | ||||||
Dividends declared or paid | $ 0 | $ 0 | ||||
Debt Securities | ||||||
Class of Stock [Line Items] | ||||||
Debt repurchase program, amount authorized | $ 100,000,000 | |||||
Remaining authorized repurchase amount under debt repurchase | $ 76,000,000 | $ 76,000,000 | ||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Authorized repurchase of securities, with debt reduction target (up to) | $ 325,000,000 | $ 250,000,000 | $ 200,000,000 | |||
Number of shares authorized to be repurchased (in shares) | 4.9 | 1.3 | ||||
Shares repurchased during period | $ 100,000,000 | $ 25,000,000 | ||||
Remaining authorized repurchase amount under the stock repurchase program | $ 200,000,000 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Beginning balance | $ (681) | $ (566) |
Other comprehensive income before reclassification | 21 | (5) |
Amounts reclassified from accumulated other comprehensive loss | 5 | 2 |
Net current-period other comprehensive income | 26 | (3) |
Ending balance | (655) | (569) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Beginning balance | (107) | (90) |
Other comprehensive income before reclassification | 21 | (4) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net current-period other comprehensive income | 21 | (4) |
Ending balance | (86) | (94) |
Employee Benefit Related Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Beginning balance | (572) | (476) |
Other comprehensive income before reclassification | 0 | (1) |
Amounts reclassified from accumulated other comprehensive loss | 3 | 1 |
Net current-period other comprehensive income | 3 | 0 |
Ending balance | (569) | (476) |
Unrealized Income (Loss) on cash flow hedges | ||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Beginning balance | (2) | 0 |
Other comprehensive income before reclassification | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 2 | 1 |
Net current-period other comprehensive income | 2 | 1 |
Ending balance | $ 0 | $ 1 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Tax benefit | $ (13) | $ (21) |
INCOME FROM CONTINUING OPERATIONS | 41 | 92 |
Amount Reclassified from Accumulated Other Comprehensive Income | Employee Benefit Related Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Prior service benefit | (9) | (9) |
Actuarial losses | 12 | 10 |
Total before tax | 3 | 1 |
Tax benefit | 0 | 0 |
INCOME FROM CONTINUING OPERATIONS | $ 3 | $ 1 |
Business Segment Information -
Business Segment Information - Summary of Segment Information (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 901 | $ 1,038 |
Commercial Truck | ||
Segment Reporting Information [Line Items] | ||
Sales | 590 | 744 |
Aftermarket, Industrial and Trailer | ||
Segment Reporting Information [Line Items] | ||
Sales | 311 | 294 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Sales | (38) | (44) |
Eliminations | Commercial Truck | ||
Segment Reporting Information [Line Items] | ||
Sales | 32 | 35 |
Eliminations | Aftermarket, Industrial and Trailer | ||
Segment Reporting Information [Line Items] | ||
Sales | 6 | 9 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Sales | 901 | 1,038 |
Operating Segments | Commercial Truck | ||
Segment Reporting Information [Line Items] | ||
Sales | 622 | 779 |
Operating Segments | Aftermarket, Industrial and Trailer | ||
Segment Reporting Information [Line Items] | ||
Sales | $ 317 | $ 303 |
Business Segment Information _2
Business Segment Information - Segment Income Attributable to Parent (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Interest expense, net | $ (14) | $ (14) |
Provision for income taxes | (13) | (21) |
Depreciation and amortization | (24) | (22) |
Noncontrolling interests | (2) | (2) |
Restructuring | (5) | 0 |
Asbestos related liability remeasurement | 0 | 31 |
Net income | 39 | 90 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | 96 | 117 |
Operating Segments | Commercial Truck | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | 56 | 77 |
Operating Segments | Aftermarket, Industrial and Trailer | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | 40 | 40 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Unallocated legacy and corporate income, net | 2 | 2 |
Interest expense, net | (14) | (14) |
Provision for income taxes | (13) | (21) |
Depreciation and amortization | (24) | (22) |
Noncontrolling interests | (2) | (2) |
Loss on sale of receivables | (1) | (1) |
Restructuring | (5) | 0 |
Asbestos related liability remeasurement | $ 0 | 31 |
Maremont Asbestos | ||
Segment Reporting Information [Line Items] | ||
Asbestos related liability remeasurement | $ 31 |
Business Segment Information _3
Business Segment Information - Schedule of Segment Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 2,896 | $ 2,815 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,539 | 2,474 |
Operating Segments | Commercial Truck | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,700 | 1,659 |
Operating Segments | Aftermarket, Industrial and Trailer | ||
Segment Reporting Information [Line Items] | ||
Total assets | 839 | 815 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total assets | 597 | 567 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Less: Accounts receivable sold under off-balance sheet factoring programs | (240) | (226) |
Accounts receivable sold under off-balance sheet factoring programs | $ 240 | $ 226 |
Supplemental Guarantor Conden_3
Supplemental Guarantor Condensed Consolidating Financial Statements - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |||
Parent's total ownership, percentage | 100.00% | ||
Parent | |||
Condensed Financial Statements, Captions [Line Items] | |||
Pension and retiree benefits, parent obligation | $ 305,000,000 | $ 315,000,000 | |
Proceeds from investment in subsidiary | 0 | $ 0 | |
Subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Debt and capital lease obligations, subsidiary portion | $ 85,000,000 | $ 13,000,000 |
Supplemental Guarantor Conden_4
Supplemental Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Sales | ||
Sales | $ 901 | $ 1,038 |
Cost of sales | (774) | (897) |
GROSS MARGIN | 127 | 141 |
Selling, general and administrative | (70) | (34) |
Other operating income, net | (5) | 0 |
OPERATING INCOME | 52 | 107 |
Other income, net | 10 | 11 |
Equity in earnings of affiliates | 6 | 9 |
Interest income (expense), net | (14) | (14) |
INCOME BEFORE INCOME TAXES | 54 | 113 |
Benefit (provision) for income taxes | (13) | (21) |
Equity income from continuing operations of subsidiaries | 0 | 0 |
INCOME FROM CONTINUING OPERATIONS | 41 | 92 |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | 0 | 0 |
NET INCOME | 41 | 92 |
Less: Net income attributable to noncontrolling interests | (2) | (2) |
Net income | 39 | 90 |
Eliminations | ||
Sales | ||
Sales | (58) | (89) |
Cost of sales | 58 | 89 |
GROSS MARGIN | 0 | 0 |
Selling, general and administrative | 0 | 0 |
Other operating income, net | 0 | |
OPERATING INCOME | 0 | 0 |
Other income, net | 0 | 0 |
Equity in earnings of affiliates | 0 | 0 |
Interest income (expense), net | 0 | 0 |
INCOME BEFORE INCOME TAXES | 0 | 0 |
Benefit (provision) for income taxes | 0 | 0 |
Equity income from continuing operations of subsidiaries | (126) | (191) |
INCOME FROM CONTINUING OPERATIONS | (126) | (191) |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | 0 | 0 |
NET INCOME | (126) | (191) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income | (126) | (191) |
Parent | ||
Sales | ||
Sales | 0 | 0 |
Parent | Eliminations | ||
Sales | ||
Sales | 0 | 0 |
Parent | Reportable Legal Entities | ||
Sales | ||
Sales | 0 | 0 |
Cost of sales | (16) | (15) |
GROSS MARGIN | (16) | (15) |
Selling, general and administrative | (24) | (25) |
Other operating income, net | 0 | |
OPERATING INCOME | (40) | (40) |
Other income, net | 0 | 0 |
Equity in earnings of affiliates | 0 | 0 |
Interest income (expense), net | (31) | (32) |
INCOME BEFORE INCOME TAXES | (71) | (72) |
Benefit (provision) for income taxes | 12 | 11 |
Equity income from continuing operations of subsidiaries | 98 | 151 |
INCOME FROM CONTINUING OPERATIONS | 39 | 90 |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | 0 | 0 |
NET INCOME | 39 | 90 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income | 39 | 90 |
Guarantors | ||
Sales | ||
Sales | 535 | 589 |
Guarantors | Eliminations | ||
Sales | ||
Sales | 23 | 32 |
Guarantors | Reportable Legal Entities | ||
Sales | ||
Sales | 558 | 621 |
Cost of sales | (469) | (534) |
GROSS MARGIN | 89 | 87 |
Selling, general and administrative | (29) | (27) |
Other operating income, net | 0 | |
OPERATING INCOME | 60 | 60 |
Other income, net | 7 | 5 |
Equity in earnings of affiliates | 4 | 7 |
Interest income (expense), net | 11 | 12 |
INCOME BEFORE INCOME TAXES | 82 | 84 |
Benefit (provision) for income taxes | (15) | (12) |
Equity income from continuing operations of subsidiaries | 28 | 40 |
INCOME FROM CONTINUING OPERATIONS | 95 | 112 |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | 0 | 0 |
NET INCOME | 95 | 112 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income | 95 | 112 |
Non- Guarantors | ||
Sales | ||
Sales | 366 | 449 |
Non- Guarantors | Eliminations | ||
Sales | ||
Sales | 35 | 57 |
Non- Guarantors | Reportable Legal Entities | ||
Sales | ||
Sales | 401 | 506 |
Cost of sales | (347) | (437) |
GROSS MARGIN | 54 | 69 |
Selling, general and administrative | (17) | 18 |
Other operating income, net | (5) | |
OPERATING INCOME | 32 | 87 |
Other income, net | 3 | 6 |
Equity in earnings of affiliates | 2 | 2 |
Interest income (expense), net | 6 | 6 |
INCOME BEFORE INCOME TAXES | 43 | 101 |
Benefit (provision) for income taxes | (10) | (20) |
Equity income from continuing operations of subsidiaries | 0 | 0 |
INCOME FROM CONTINUING OPERATIONS | 33 | 81 |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | 0 | 0 |
NET INCOME | 33 | 81 |
Less: Net income attributable to noncontrolling interests | (2) | (2) |
Net income | $ 31 | $ 79 |
Supplemental Guarantor Conden_5
Supplemental Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Statement of Income Captions [Line Items] | ||
Net income | $ 41 | $ 92 |
Other comprehensive income (loss), net of tax | 26 | (2) |
Total comprehensive income | 67 | 90 |
Less: Comprehensive income attributable to noncontrolling interests | (2) | (3) |
Comprehensive income attributable to Meritor, Inc. | 65 | 87 |
Eliminations | ||
Condensed Statement of Income Captions [Line Items] | ||
Net income | (126) | (191) |
Other comprehensive income (loss), net of tax | (62) | 18 |
Total comprehensive income | (188) | (173) |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Meritor, Inc. | (188) | (173) |
Parent | Reportable Legal Entities | ||
Condensed Statement of Income Captions [Line Items] | ||
Net income | 39 | 90 |
Other comprehensive income (loss), net of tax | 26 | (3) |
Total comprehensive income | 65 | 87 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Meritor, Inc. | 65 | 87 |
Guarantors | Reportable Legal Entities | ||
Condensed Statement of Income Captions [Line Items] | ||
Net income | 95 | 112 |
Other comprehensive income (loss), net of tax | 30 | (8) |
Total comprehensive income | 125 | 104 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Meritor, Inc. | 125 | 104 |
Non- Guarantors | Reportable Legal Entities | ||
Condensed Statement of Income Captions [Line Items] | ||
Net income | 33 | 81 |
Other comprehensive income (loss), net of tax | 32 | (9) |
Total comprehensive income | 65 | 72 |
Less: Comprehensive income attributable to noncontrolling interests | (2) | (3) |
Comprehensive income attributable to Meritor, Inc. | $ 63 | $ 69 |
Supplemental Guarantor Conden_6
Supplemental Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 108 | $ 108 |
Receivables trade and other, net | 478 | 551 |
Inventories | 556 | 526 |
Other current assets | 37 | 31 |
TOTAL CURRENT ASSETS | 1,179 | 1,216 |
NET PROPERTY | 517 | 515 |
GOODWILL | 486 | 478 |
OTHER ASSETS | 714 | 606 |
INVESTMENTS IN SUBSIDIARIES | 0 | 0 |
TOTAL ASSETS | 2,896 | 2,815 |
CURRENT LIABILITIES: | ||
Short-term debt | 178 | 41 |
Accounts and notes payable | 540 | 610 |
Other current liabilities | 264 | 285 |
TOTAL CURRENT LIABILITIES | 982 | 936 |
LONG-TERM DEBT | 901 | 902 |
RETIREMENT BENEFITS | 330 | 336 |
INTERCOMPANY PAYABLE (RECEIVABLE) | 0 | 0 |
OTHER LIABILITIES | 299 | 226 |
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 352 | 385 |
NONCONTROLLING INTERESTS | 32 | 30 |
TOTAL LIABILITIES AND EQUITY | 2,896 | 2,815 |
Eliminations | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | 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 | (5,533) | (5,331) |
TOTAL ASSETS | (5,533) | (5,331) |
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 |
EQUITY ATTRIBUTABLE TO MERITOR, INC. | (5,533) | (5,331) |
NONCONTROLLING INTERESTS | 0 | 0 |
TOTAL LIABILITIES AND EQUITY | (5,533) | (5,331) |
Parent | Reportable Legal Entities | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | 13 | 4 |
Receivables trade and other, net | 3 | 3 |
Inventories | 0 | 0 |
Other current assets | 7 | 6 |
TOTAL CURRENT ASSETS | 23 | 13 |
NET PROPERTY | 22 | 21 |
GOODWILL | 0 | 0 |
OTHER ASSETS | 182 | 170 |
INVESTMENTS IN SUBSIDIARIES | 4,575 | 4,432 |
TOTAL ASSETS | 4,802 | 4,636 |
CURRENT LIABILITIES: | ||
Short-term debt | 97 | 32 |
Accounts and notes payable | 19 | 53 |
Other current liabilities | 74 | 77 |
TOTAL CURRENT LIABILITIES | 190 | 162 |
LONG-TERM DEBT | 897 | 898 |
RETIREMENT BENEFITS | 305 | 312 |
INTERCOMPANY PAYABLE (RECEIVABLE) | 2,997 | 2,833 |
OTHER LIABILITIES | 61 | 46 |
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 352 | 385 |
NONCONTROLLING INTERESTS | 0 | 0 |
TOTAL LIABILITIES AND EQUITY | 4,802 | 4,636 |
Guarantors | Reportable Legal Entities | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | 5 | 4 |
Receivables trade and other, net | 82 | 92 |
Inventories | 308 | 292 |
Other current assets | 10 | 10 |
TOTAL CURRENT ASSETS | 405 | 398 |
NET PROPERTY | 257 | 260 |
GOODWILL | 337 | 337 |
OTHER ASSETS | 252 | 225 |
INVESTMENTS IN SUBSIDIARIES | 958 | 899 |
TOTAL ASSETS | 2,209 | 2,119 |
CURRENT LIABILITIES: | ||
Short-term debt | 0 | 0 |
Accounts and notes payable | 251 | 283 |
Other current liabilities | 88 | 109 |
TOTAL CURRENT LIABILITIES | 339 | 392 |
LONG-TERM DEBT | 0 | 0 |
RETIREMENT BENEFITS | 1 | 1 |
INTERCOMPANY PAYABLE (RECEIVABLE) | (3,012) | (3,005) |
OTHER LIABILITIES | 124 | 112 |
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 4,757 | 4,619 |
NONCONTROLLING INTERESTS | 0 | 0 |
TOTAL LIABILITIES AND EQUITY | 2,209 | 2,119 |
Non- Guarantors | Reportable Legal Entities | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | 90 | 100 |
Receivables trade and other, net | 393 | 456 |
Inventories | 248 | 234 |
Other current assets | 20 | 15 |
TOTAL CURRENT ASSETS | 751 | 805 |
NET PROPERTY | 238 | 234 |
GOODWILL | 149 | 141 |
OTHER ASSETS | 280 | 211 |
INVESTMENTS IN SUBSIDIARIES | 0 | 0 |
TOTAL ASSETS | 1,418 | 1,391 |
CURRENT LIABILITIES: | ||
Short-term debt | 81 | 9 |
Accounts and notes payable | 270 | 274 |
Other current liabilities | 102 | 99 |
TOTAL CURRENT LIABILITIES | 453 | 382 |
LONG-TERM DEBT | 4 | 4 |
RETIREMENT BENEFITS | 24 | 23 |
INTERCOMPANY PAYABLE (RECEIVABLE) | 15 | 172 |
OTHER LIABILITIES | 114 | 68 |
EQUITY ATTRIBUTABLE TO MERITOR, INC. | 776 | 712 |
NONCONTROLLING INTERESTS | 32 | 30 |
TOTAL LIABILITIES AND EQUITY | $ 1,418 | $ 1,391 |
Supplemental Guarantor Conden_7
Supplemental Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | $ (19) | $ 11 |
INVESTING ACTIVITIES | ||
Capital expenditures | (16) | (23) |
Cash paid for investment in Transportation Power, Inc. | 0 | (3) |
Other investing activities | 0 | (1) |
CASH USED FOR INVESTING ACTIVITIES | (16) | (27) |
FINANCING ACTIVITIES | ||
Securitization | 72 | 33 |
Borrowings against revolving line of credit | 65 | 45 |
Term loan payments | (3) | 0 |
Repurchase of common stock | (100) | (50) |
Intercompany advances | 0 | 0 |
Other financing activities | 0 | (1) |
CASH PROVIDED BY FINANCING ACTIVITIES | 34 | 27 |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1 | 1 |
CHANGE IN CASH AND CASH EQUIVALENTS | 0 | 12 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 108 | 115 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 108 | 127 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 0 | 0 |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | 0 |
Cash paid for investment in Transportation Power, Inc. | 0 | |
Other investing activities | 0 | |
CASH USED FOR INVESTING ACTIVITIES | 0 | 0 |
FINANCING ACTIVITIES | ||
Securitization | 0 | 0 |
Borrowings against revolving line of credit | 0 | 0 |
Term loan payments | 0 | |
Repurchase of common stock | 0 | 0 |
Intercompany advances | 0 | 0 |
Other financing activities | 0 | |
CASH PROVIDED BY FINANCING ACTIVITIES | 0 | 0 |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
CHANGE IN CASH AND CASH EQUIVALENTS | 0 | 0 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 0 | 0 |
Parent | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 65 | (9) |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | (1) |
Cash paid for investment in Transportation Power, Inc. | (3) | |
Other investing activities | 0 | |
CASH USED FOR INVESTING ACTIVITIES | 0 | (4) |
FINANCING ACTIVITIES | ||
Securitization | 0 | 0 |
Borrowings against revolving line of credit | 65 | 45 |
Term loan payments | (3) | |
Repurchase of common stock | (100) | (50) |
Intercompany advances | (18) | 18 |
Other financing activities | 0 | |
CASH PROVIDED BY FINANCING ACTIVITIES | (56) | 13 |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
CHANGE IN CASH AND CASH EQUIVALENTS | 9 | 0 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4 | 24 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 13 | 24 |
Guarantors | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 9 | 15 |
INVESTING ACTIVITIES | ||
Capital expenditures | (8) | (12) |
Cash paid for investment in Transportation Power, Inc. | 0 | |
Other investing activities | 0 | |
CASH USED FOR INVESTING ACTIVITIES | (8) | (12) |
FINANCING ACTIVITIES | ||
Securitization | 0 | 0 |
Borrowings against revolving line of credit | 0 | 0 |
Term loan payments | 0 | |
Repurchase of common stock | 0 | 0 |
Intercompany advances | 0 | 0 |
Other financing activities | (1) | |
CASH PROVIDED BY FINANCING ACTIVITIES | 0 | (1) |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
CHANGE IN CASH AND CASH EQUIVALENTS | 1 | 2 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4 | 6 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 5 | 8 |
Non- Guarantors | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (93) | 5 |
INVESTING ACTIVITIES | ||
Capital expenditures | (8) | (10) |
Cash paid for investment in Transportation Power, Inc. | 0 | |
Other investing activities | (1) | |
CASH USED FOR INVESTING ACTIVITIES | (8) | (11) |
FINANCING ACTIVITIES | ||
Securitization | 72 | 33 |
Borrowings against revolving line of credit | 0 | 0 |
Term loan payments | 0 | |
Repurchase of common stock | 0 | 0 |
Intercompany advances | 18 | (18) |
Other financing activities | 0 | |
CASH PROVIDED BY FINANCING ACTIVITIES | 90 | 15 |
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1 | 1 |
CHANGE IN CASH AND CASH EQUIVALENTS | (10) | 10 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 100 | 85 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 90 | $ 95 |
Subsequent Event (Details)
Subsequent Event (Details) - TransPower - USD ($) $ in Millions | Jan. 16, 2020 | Dec. 31, 2019 |
Variable Interest Entity, Not Primary Beneficiary | ||
Subsequent Event [Line Items] | ||
Maximum exposure to loss | $ 12 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Percentage of voting equity interest acquired | 10000.00% | |
Purchase price | $ 16 |