COVER PAGE
COVER PAGE - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Nov. 16, 2021 | Mar. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 3, 2021 | ||
Current Fiscal Year End Date | --10-03 | ||
Document Transition Report | false | ||
Entity File Number | 1-15983 | ||
Entity Registrant Name | MERITOR, INC. | ||
Entity Incorporation, State or Country Code | IN | ||
Entity Tax Identification Number | 38-3354643 | ||
Entity Address, Address Line One | 2135 West Maple Road | ||
Entity Address, City or Town | Troy, | ||
Entity Address, State or Province | MI | ||
Entity Address, Postal 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 Well-Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,088,013,296 | ||
Entity Common Stock, Shares Outstanding (in shares) | 70,076,049 | ||
Documents Incorporated by Reference | Certain information contained in the definitive Proxy Statement for the Annual Meeting of Shareholders of the registrant to be held on January 27, 2022 is incorporated by reference into Part III. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001113256 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | |||
Sales | $ 3,833 | $ 3,044 | $ 4,388 |
Cost of sales | (3,328) | (2,716) | (3,748) |
GROSS PROFIT | 505 | 328 | 640 |
Selling, general and administrative | (270) | (221) | (256) |
Income from WABCO distribution termination | 0 | 265 | 0 |
Other operating expense, net | (17) | (40) | (21) |
OPERATING INCOME | 218 | 332 | 363 |
Other income, net | 61 | 46 | 40 |
Equity in earnings of affiliates | 34 | 14 | 31 |
Interest expense, net | (79) | (66) | (57) |
INCOME BEFORE INCOME TAXES | 234 | 326 | 377 |
Provision for income taxes | (24) | (78) | (82) |
INCOME FROM CONTINUING OPERATIONS | 210 | 248 | 295 |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax | (1) | 1 | 1 |
NET INCOME | 209 | 249 | 296 |
Less: Net income attributable to noncontrolling interests | (10) | (4) | (5) |
Net income | 199 | 245 | 291 |
NET INCOME ATTRIBUTABLE TO MERITOR, INC. | |||
Net income from continuing operations | 200 | 244 | 290 |
Income (loss) from discontinued operations | (1) | 1 | 1 |
Net income | $ 199 | $ 245 | $ 291 |
BASIC EARNINGS PER SHARE | |||
Continuing operations (in dollars per share) | $ 2.79 | $ 3.30 | $ 3.49 |
Discontinued operations (in dollars per share) | (0.01) | 0.01 | 0.01 |
Basic earnings per share (in dollars per share) | 2.78 | 3.31 | 3.50 |
DILUTED EARNINGS PER SHARE | |||
Continuing operations (in dollars per share) | 2.74 | 3.23 | 3.36 |
Discontinued operations (in dollars per share) | (0.01) | 0.01 | 0.01 |
Diluted earnings per share (in dollars per share) | $ 2.73 | $ 3.24 | $ 3.37 |
Basic average common shares outstanding (in shares) | 71.7 | 74 | 83.2 |
Diluted average common shares outstanding (in shares) | 72.8 | 75.6 | 86.3 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 209 | $ 249 | $ 296 |
Other comprehensive income: | |||
Foreign currency translation adjustments | 24 | (21) | (18) |
Pension and other postretirement benefit related adjustments (net of tax of $5, $27 and $22 for the year ended September 30, 2021, 2020 and 2019, respectively) | (43) | 89 | (96) |
Unrealized gain (loss) on cash flow hedges | 1 | 0 | (2) |
Total comprehensive income | 191 | 317 | 180 |
Less: Comprehensive income attributable to noncontrolling interest | (10) | (5) | (4) |
Comprehensive income attributable to Meritor | $ 181 | $ 312 | $ 176 |
CONSOLIDATED STATEMENT OF COM_2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Pension and other postretirement benefit, tax | $ 5 | $ 27 | $ 22 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 101 | $ 315 |
Receivables, trade and other, net | 534 | 479 |
Inventories | 601 | 435 |
Other current assets | 50 | 54 |
TOTAL CURRENT ASSETS | 1,286 | 1,283 |
NET PROPERTY | 517 | 515 |
GOODWILL | 507 | 501 |
OTHER ASSETS | 628 | 585 |
TOTAL ASSETS | 2,938 | 2,884 |
CURRENT LIABILITIES: | ||
Short-term debt | 19 | 39 |
Accounts and notes payable | 573 | 423 |
Other current liabilities | 308 | 264 |
TOTAL CURRENT LIABILITIES | 900 | 726 |
LONG-TERM DEBT | 1,008 | 1,188 |
RETIREMENT BENEFITS | 191 | 196 |
OTHER LIABILITIES | 224 | 279 |
TOTAL LIABILITIES | 2,323 | 2,389 |
COMMITMENTS AND CONTINGENCIES (NOTE 22) | ||
EQUITY: | ||
Common stock (September 30, 2021 and 2020, 104.0 and 103.7 shares issued and 70.1 and 72.3 shares outstanding, respectively) | 105 | 105 |
Additional paid-in capital | 798 | 808 |
Retained earnings | 935 | 736 |
Treasury stock, at cost (September 30, 2021 and September 30, 2020, 33.9 and 31.4 shares, respectively) | (632) | (573) |
Accumulated other comprehensive loss | (632) | (614) |
Total equity attributable to Meritor, Inc. | 574 | 462 |
Noncontrolling interests | 41 | 33 |
TOTAL EQUITY | 615 | 495 |
TOTAL LIABILITIES AND EQUITY | $ 2,938 | $ 2,884 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - shares shares in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock issued (in shares) | 104 | 103.7 |
Common stock outstanding (in shares) | 70.1 | 72.3 |
Treasury stock, at cost (in shares) | 33.9 | 31.4 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES | |||
CASH PROVIDED BY OPERATING ACTIVITIES (see Note 24) | $ 197 | $ 265 | $ 256 |
INVESTING ACTIVITIES | |||
Capital expenditures | (90) | (85) | (103) |
Cash paid for business acquisitions, net of cash received | 0 | 0 | (168) |
Cash paid for investment in Transportation Power, Inc. | 0 | (13) | (6) |
Other investing activities | (8) | 9 | 6 |
CASH USED FOR INVESTING ACTIVITIES | (98) | (89) | (271) |
FINANCING ACTIVITIES | |||
Securitization | 0 | (8) | (38) |
Proceeds from debt issuances | 275 | 300 | 0 |
Repurchase of convertible notes | (53) | 0 | 0 |
Borrowings against revolving line of credit | 0 | 304 | 190 |
Repayments of revolving line of credit | 0 | (304) | (190) |
Term loan borrowings | 0 | 0 | 175 |
Redemption of notes | (458) | 0 | (24) |
Term loan payments | (13) | (8) | 0 |
Debt issuance costs | (5) | (5) | (4) |
Other financing activities | (1) | (2) | (2) |
Net change in debt | (255) | 277 | 107 |
Repurchase of common stock | (59) | (241) | (96) |
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | (314) | 36 | 11 |
EFFECT OF CHANGES IN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1 | (5) | (3) |
CHANGE IN CASH AND CASH EQUIVALENTS | (214) | 207 | (7) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 315 | 108 | 115 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 101 | $ 315 | $ 108 |
CONSOLIDATED STATEMENT OF EQUIT
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. | Non- controlling 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) | 180 | 291 | (115) | 176 | 4 | |||
Vesting of restricted stock | 0 | 2 | (2) | |||||
Equity based compensation expense | 18 | 18 | 18 | |||||
Repurchase of common stock | (96) | (96) | (96) | |||||
Non-controlling interest dividends | (4) | (4) | ||||||
Ending balance at Sep. 30, 2019 | 415 | 104 | 803 | 491 | (332) | (681) | 385 | 30 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 317 | 245 | 67 | 312 | 5 | |||
Vesting of restricted stock | 0 | 1 | (1) | |||||
Equity based compensation expense | 7 | 7 | 7 | |||||
Repurchase of common stock | (241) | (241) | (241) | |||||
Non-controlling interest dividends | (2) | (2) | ||||||
Other | (1) | (1) | (1) | 0 | ||||
Ending balance at Sep. 30, 2020 | 495 | 105 | 808 | 736 | (573) | (614) | 462 | 33 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 191 | 199 | (18) | 181 | 10 | |||
Repurchase of convertible notes | (30) | (30) | (30) | |||||
Equity based compensation expense | 20 | 20 | 20 | |||||
Repurchase of common stock | (59) | (59) | (59) | |||||
Non-controlling interest dividends | (2) | (2) | ||||||
Ending balance at Sep. 30, 2021 | $ 615 | $ 105 | $ 798 | $ 935 | $ (632) | $ (632) | $ 574 | $ 41 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Meritor, Inc. (the "company" or "Meritor"), headquartered in Troy, Michigan, is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers ("OEMs") and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, military, bus and coach, construction and other industrial OEMs and certain aftermarkets. The Consolidated Financial Statements are those of the company and its consolidated subsidiaries. The company’s fiscal year ends on the Sunday nearest September 30. The 2021, 2020 and 2019 fiscal years ended on October 3, 2021, September 27, 2020 and September 29, 2019, respectively. All year and quarter references relate to the company’s fiscal year and fiscal quarters, unless otherwise stated. For ease of presentation, September 30 is used consistently throughout this report to represent the fiscal year end. COVID-19 Pandemic Update The COVID-19 pandemic adversely affected the company's financial performance in the second, third and fourth quarters of fiscal year 2020 and the beginning of fiscal year 2021. In response to the COVID-19 pandemic, government health officials recommended and mandated precautions to mitigate the spread of the virus, including shelter in-place orders, prohibitions on public gatherings and other similar measures. As a result, the company and certain of the company's customers and suppliers temporarily closed select manufacturing locations beginning late in the second quarter of fiscal year 2020, continuing into the third quarter of fiscal year 2020. All of the company’s facilities have been fully operational since the end of fiscal year 2020 and its salaried employees have begun returning to work in person. Production volume levels continued to increase through the fourth quarter of fiscal year 2020 and into fiscal year 2021. There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company's industry, customers, operations, workforce, supply chains, distribution systems and availability of manufacturing inputs. As a result, the ultimate impact on the company's business, financial condition or operating results cannot be reasonably estimated at this time. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Significant estimates and assumptions were used to review goodwill and other long-lived assets for impairment (see Notes 6 and 10), environmental liabilities (see Notes 13, 14 and 22), product warranty liabilities (see Note 13 and 14), long-term incentive compensation plan obligations (see Note 18), retiree medical and pension obligations (see Notes 19 and 20), income taxes (see Note 21), and contingencies, including asbestos (see Note 22). Concentration of Credit Risk In the normal course of business, the company provides credit to customers. The company limits its credit risk by performing ongoing credit evaluations of its customers and maintaining reserves for potential credit losses and through accounts receivable factoring programs. The company’s accounts receivables are generally due from medium- and heavy-duty truck OEMs, specialty vehicle manufacturers, aftermarket customers, and trailer producers. The company’s ten largest customers accounted for 75 percent, 69 percent and 77 percent of sales in fiscal years 2021, 2020 and 2019, respectively. Sales to the company's top three customers were 53 percent, 50 percent and 54 percent of total sales in fiscal years 2021, 2020 and 2019, respectively. At September 30, 2021 and 2020, 20 percent and 25 percent, respectively, of the company's trade accounts receivable were from the company's three largest customers. Consolidation and Joint Ventures The Consolidated Financial Statements include the accounts of the company and those subsidiaries in which the company has control. All intercompany balances and transactions are eliminated in consolidation. The results of operations of controlled subsidiaries are included in the Consolidated Financial Statements and are offset by a related noncontrolling interest recorded for the noncontrolling partners’ ownership. Investments in affiliates that are not controlled are reported using the equity method of accounting (see Note 12). Foreign Currency Local currencies are generally considered the functional currencies for operations outside the U.S. For operations reporting in local currencies, assets and liabilities are translated at year-end exchange rates with cumulative currency translation adjustments included as a component of Accumulated Other Comprehensive Loss in the Consolidated Balance Sheet. Income and expense items are translated at average rates of exchange during the year. Impairment of Long-Lived Assets Long-lived assets, excluding goodwill, to be held and used are reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset group is not recoverable, based on undiscounted cash flows over the remaining useful life of the primary asset of the group, and the long lived asset group's carrying value exceeds the fair value. Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. Allowance for Doubtful Accounts The company's allowance for credit losses on accounts receivable reflects management's estimate of credit losses, measured primarily using historical experience as well as current economic conditions and forecasts that affect the collectability of the reported amount. Changes in expected credit losses on accounts receivable during the period are recognized in the income statement. 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 restricted shares, restricted share units, performance share units, and convertible securities, if applicable. A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions): Year Ended September 30, 2021 2020 2019 Basic average common shares outstanding 71.7 74.0 83.2 Impact of restricted shares, restricted share units and performance share units 1.1 0.8 2.2 Impact of convertible notes — 0.8 0.9 Diluted average common shares outstanding 72.8 75.6 86.3 In November 2020, the Board of Directors approved a grant of 0.3 million 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 $26.98, which was the company’s share price on the grant date of December 1, 2020. 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 $26.98, which was the company's share price on the grant date of December 1, 2020. 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, 2020 to September 30, 2023, measured at the end of the performance period. The number of performance share units that vest will depend on adjusted EBITDA margin and adjusted diluted earnings per share from continuing operations (which, solely for purposes of our long-term incentive plan, includes an adjustment for the value of deferred tax assets in jurisdictions with net operating loss carry forwards or tax credits) which are each weighted at 50%. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.3 million performance share units. In November 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, each of which is 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. In November 2018, the Board of Directors approved a grant of performance share units to all executives eligible to participate in the company's 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 $16.50, which was the company’s share price on the grant date of December 1, 2018. The Board of Directors also approved a grant of 0.4 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 $16.50, which was the company's share price on the grant date of December 1, 2018. 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, 2018 to September 30, 2021, measured at the end of the performance period. The number of performance share units that vest will depend on adjusted EBITDA margin and adjusted diluted earnings per share from continuing operations at the following weights: 50% associated with achieving an adjusted EBITDA margin target and 50% associated with achieving an adjusted diluted earnings per share from continuing operations target. The number of performance share units that vest will be between 0% and 200% of the grant date amount of 0.5 million performance share units. On December 1, 2020, in response to retention and attrition concerns resulting from the COVID-19 pandemic’s impact on the company’s incentive compensation plans, and to continue to incentivize executive performance in a difficult and uncertain environment, the Compensation Committee of the Board of Directors adjusted the threshold level of the performance metrics required to be achieved for payout for the fiscal 2019-2021 performance cycle. The target and maximum levels were not modified. The impact of this adjustment did not have a material impact on the company's Consolidated Financial Statements. Other Other significant accounting policies are included in the related notes, specifically, goodwill (Note 6), inventories (Note 9), property and depreciation (Note 10), product warranties (Note 13), financial instruments (Note 16), equity based compensation (Note 18), retirement medical plans (Note 19), retirement pension plans (Note 20), income taxes (Note 21) and environmental and asbestos-related liabilities (Note 22). Accounting standards implemented during fiscal year 2021 On October 1, 2020, the company implemented Accounting Standards Update ("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 guidance had an impact on the company's accounting policies and procedures related to calculation of allowance for doubtful accounts receivable but did not have a material impact on its Consolidated Financial Statements. On October 1, 2020, the company implemented 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 guidance did not have a material impact on the company's Consolidated Financial Statements. 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 August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASC 470-20 outlines five models to allocate the proceeds attributable to the issuance of a convertible debt instrument. This ASU removes from U.S. GAAP the separation models for convertible debt with a cash conversion feature (CCF) and convertible debt with a beneficial conversion feature (BCF). As a result of adopting this ASU, entities are not required to separately present in equity an embedded conversion feature in such debt. Instead, they should account for a convertible debt instrument wholly as debt. Applying the separation models in ASC 470-20 to convertible instruments with a CCF or BCF involved the recognition of a debt discount, which is amortized to interest expense. The elimination of CCF and BCF models will reduce reported interest expense and increase reported net income for convertible instruments issued within the scope of those models before the adoption of ASU 2020-06. The amendments in this update are required to be adopted by public business entities in fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal year beginning after December 15, 2020, including interim periods within those fiscal years. Entities are permitted to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The company will early adopt the ASU in the first quarter of fiscal year 2022 on a modified retrospective basis. Upon adoption, additional paid in capital is expected to be reduced by approximately $41 million and the 3.25 percent convertible notes due 2037 (the "3.25 Percent Convertible Notes") is expected to be increased by approximately $23 million for the recombination of the equity conversion component of our convertible debt remaining outstanding, which was initially separated and recorded in equity. The net effect of these adjustments will be recorded as an increase in the balance of opening retained earnings as of October 1, 2021. Adoption of the ASU will result in the reduction of interest expense for the year ending September 30, 2022 and until the 3.25 Percent Convertible Notes are settled. The reduction in interest expense will increase both basic and diluted earnings per share. The required use of the if-converted method is not expected to have a significant impact on the calculation of common share equivalents included in the measure of our diluted earnings per share for the company’s 3.25 Percent Convertible Notes. The adoption of the ASU will have no impact on the Consolidated Statement of Cash Flows. |
ACQUISITIONS AND DIVESTITURE
ACQUISITIONS AND DIVESTITURE | 12 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURE | ACQUISITIONS AND DIVESTITURE Acquisition of TransPower Business On January 16, 2020, Meritor acquired 100 percent of the voting equity interest of Transportation Power, Inc. ("TransPower") for a cash purchase price of approximately $15 million, subject to certain purchase price adjustments. Prior to the acquisition, the fair value of the company’s investment in TransPower was $12 million. The TransPower acquisition was accounted for as a business combination. As of March 31, 2021, the company finalized all measurement period adjustments related to the TransPower acquisition. Since completion of initial estimates in the fourth quarter of fiscal year 2020, the company recorded a net $2 million measurement period adjustment to decrease the fair value of identifiable net assets acquired in the TransPower transaction, resulting in a corresponding $2 million increase to goodwill. These adjustments were made to reflect additional available information and updated valuation results, which included valuation of technology and customer relationships. All goodwill resulting from the acquisition of TransPower was assigned to the Commercial Truck reportable segment (see Note 6). Recorded goodwill consists largely of the synergies and economies of scale expected from combining the operations of the company and TransPower. Estimated Fair Value As of Measurement Period Adjustments As of Purchase price $ 15 $ — $ 15 Investments in TransPower 12 — 12 $ 27 $ — $ 27 Assets acquired and liabilities assumed: Cash 2 — 2 Receivables, net 5 — 5 Inventories, net 8 — 8 PP&E 9 (5) 4 Identifiable intangible assets 11 1 12 Other assets (1) — (1) Accounts payable (3) — (3) Other current liabilities (17) 2 (15) Total identifiable net assets acquired 14 (2) 12 Goodwill and other intangible assets resulting from the acquisition of TransPower 13 2 15 $ 27 $ — $ 27 Sale of Ownership Interest in Meritor WABCO JV In the fourth quarter of fiscal year 2017, Meritor, Inc. closed on the sale of its interest in Meritor WABCO Vehicle Control Systems ("Meritor WABCO") to a subsidiary of its joint venture partner, WABCO Holdings Inc. ("WABCO"). The total purchase price for the sale was $250 million. The company remained the exclusive distributor of a certain range of WABCO's aftermarket products in the United States and Canada and the non-exclusive distributor of these products in Mexico for a period of up to 10 years following the completion of the transaction. The purchase agreement included a provision regarding certain future options of the parties to terminate the distribution arrangement at certain points during the first three and a half years after the closing at an exercise price of between $225 million and $265 million based on the earnings of the business. On September 13, 2019, the company gave notice of its intention to exercise its option to terminate the aftermarket distribution arrangement with WABCO. On March 13, 2020 the company closed on the transaction and received $265 million, from WABCO in connection with the termination of the arrangement. |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2021 | |
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 other equipment and IT equipment. Operating leases with an initial term of 12 months or less are not recorded in the 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 twelve months ended September 30, 2021 and September 30, 2020. 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 (in millions) September 30, 2021 2020 Finance lease costs $ 3 $ 3 Operating lease costs 19 20 Total lease costs $ 22 $ 23 The following table provides a summary of the location and amounts related to finance leases recognized in the Consolidated Balance Sheet (in millions). September 30, Classification 2021 2020 Finance lease right-of-use assets Net Property $ 9 $ 5 Finance lease liabilities Short-term debt 1 3 Finance lease liabilities Long-term debt 9 3 The following table provides a summary of the location and amounts related to operating leases recognized in the Consolidated Balance Sheet (in millions). September 30, Classification 2021 2020 Operating lease right-of-use assets Other assets $ 62 $ 70 Operating lease liabilities Other current liabilities 13 15 Operating lease liabilities Other liabilities 53 59 The following tables summarize additional information related to our lease agreements. Supplemental cash flow information related to leases (in millions) September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 19 $ 19 Operating cash flows used for finance leases 1 — Financing cash flows used for finance leases 1 2 Right-of-use assets obtained in exchange for lease obligations: Operating leases 7 8 Finance leases 6 3 Supplemental balance sheet information related to leases September 30, 2021 2020 Weighted-average remaining lease term (years): Operating leases 8.32 8.55 Finance leases 9.82 2.21 Weighted-average discount rate: Operating leases 4.6 % 4.5 % Finance leases 10.1 % 5.0 % Maturities (in millions) Operating Leases Finance Leases 2022 16 2 2023 14 1 2024 10 1 2025 8 1 Thereafter 35 13 Total lease payments 83 18 Less: Impact of discounting future lease payments (17) (8) Present value of lease liabilities $ 66 $ 10 |
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 other equipment and IT equipment. Operating leases with an initial term of 12 months or less are not recorded in the 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 twelve months ended September 30, 2021 and September 30, 2020. 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 (in millions) September 30, 2021 2020 Finance lease costs $ 3 $ 3 Operating lease costs 19 20 Total lease costs $ 22 $ 23 The following table provides a summary of the location and amounts related to finance leases recognized in the Consolidated Balance Sheet (in millions). September 30, Classification 2021 2020 Finance lease right-of-use assets Net Property $ 9 $ 5 Finance lease liabilities Short-term debt 1 3 Finance lease liabilities Long-term debt 9 3 The following table provides a summary of the location and amounts related to operating leases recognized in the Consolidated Balance Sheet (in millions). September 30, Classification 2021 2020 Operating lease right-of-use assets Other assets $ 62 $ 70 Operating lease liabilities Other current liabilities 13 15 Operating lease liabilities Other liabilities 53 59 The following tables summarize additional information related to our lease agreements. Supplemental cash flow information related to leases (in millions) September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 19 $ 19 Operating cash flows used for finance leases 1 — Financing cash flows used for finance leases 1 2 Right-of-use assets obtained in exchange for lease obligations: Operating leases 7 8 Finance leases 6 3 Supplemental balance sheet information related to leases September 30, 2021 2020 Weighted-average remaining lease term (years): Operating leases 8.32 8.55 Finance leases 9.82 2.21 Weighted-average discount rate: Operating leases 4.6 % 4.5 % Finance leases 10.1 % 5.0 % Maturities (in millions) Operating Leases Finance Leases 2022 16 2 2023 14 1 2024 10 1 2025 8 1 Thereafter 35 13 Total lease payments 83 18 Less: Impact of discounting future lease payments (17) (8) Present value of lease liabilities $ 66 $ 10 |
REVENUE
REVENUE | 12 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue is measured based on the consideration to which the company expects to be entitled, and is presented net of any estimates of customer sales allowances, incentives, rebates, and returns. The company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost, as opposed to a distinct performance obligation, and are included in cost of sales. Nature of goods and services The following is a description of principal activities - separated by reportable segments - from which the company generates its revenue. 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. It also supplies a variety of undercarriage products and systems for trailer applications in North America. This segment also includes the company's aftermarket businesses in Asia Pacific and South America. The Aftermarket & Industrial segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers, primarily in North America and Europe. In addition, this segment supplies drivetrain systems and certain components, including axles, drivelines, brakes and suspension systems for military, construction, bus and coach, fire and emergency and other applications in North America and Europe. Although the company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the term of the arrangements and a contract does not exist under the scope of Topic 606 until prices and volumes are known. As such, individual customer releases or purchase orders represent the contract with the customer. The company accounts for individual products and services separately if they are distinct (i.e., if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The company has identified certain performance obligations related to brake pad fitting and axle dressing where it is acting as an agent and, therefore, recognizes revenue on a net basis for satisfaction of those performance obligations. The company recognizes revenue for the sale of goods at the point in time when the customer takes control of the goods. As such, revenue is recognized upon shipment of product and transfer of ownership to the customer. The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e., customer sales allowances, incentives, rebates, and returns). Provisions for customer sales allowances, incentives, rebates, and returns are recorded as a reduction of sales at the time of revenue recognition based primarily on historical experience. The company’s payment terms with customers are customary and vary by customer and geography but typically range from 30 to 90 days. The company provides warranties on some of its products. The company records estimated product warranty costs at the time of shipment of products to customers (see Note 13 and Note 14). Disaggregation of revenue In the following tables, revenue is disaggregated for each of our reportable segments by primary geographical market for the year ended September 30, 2021 and 2020. Year Ended September 30, 2021 Primary Geographical Market Commercial Truck Aftermarket & Industrial Total U.S. $ 1,342 $ 715 $ 2,057 Canada — 55 55 Mexico 175 22 197 Total North America 1,517 792 2,309 Sweden 276 — 276 Italy 222 18 240 United Kingdom 142 11 153 Other Europe 9 142 151 Total Europe 649 171 820 Brazil 315 2 317 China 128 2 130 India 146 — 146 Other Asia-Pacific 111 — 111 Total sales $ 2,866 $ 967 $ 3,833 Year Ended September 30, 2020 Primary Geographical Market Commercial Truck Aftermarket & Industrial Total U.S. $ 1,052 $ 731 $ 1,783 Canada — 54 54 Mexico 129 18 147 Total North America 1,181 803 1,984 Sweden 202 — 202 Italy 153 13 166 United Kingdom 105 9 114 Other Europe 5 134 139 Total Europe 465 156 621 Brazil 170 2 172 China 134 1 135 India 70 2 72 Other Asia-Pacific 60 — 60 Total sales $ 2,080 $ 964 $ 3,044 Contract balances As of September 30, 2021 and September 30, 2020, Trade receivables, net, which are included in Receivables, trade and other, net, on the Consolidated Balance Sheet, were $471 million and $421 million, respectively. For the year ended September 30, 2021, the company had $1 million of bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Consolidated Balance Sheet as of September 30, 2021. Contract costs The company applies the practical expedient provided in Topic 606 and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the company otherwise would have recognized is one year or less. The costs which are not capitalized are included in cost of sales. |
GOODWILL
GOODWILL | 12 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL In accordance with ASC Topic 350-20, "Intangibles – Goodwill and Other", goodwill is reviewed for impairment annually during the fourth quarter of the fiscal year or more frequently if certain indicators arise. If business conditions or other factors cause the operating results and cash flows of a reporting unit to decline, the company may be required to record impairment charges for goodwill at that time. The company tests goodwill for impairment at a level of reporting referred to as a reporting unit, which is an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. When two or more components of an operating segment have similar economic characteristics, the components are aggregated and deemed a single reporting unit. An operating segment is deemed to be a reporting unit if all of its components are similar, if none of its components are a reporting unit, or if the segment comprises only a single component. Annual Impairment Analysis ASC Topic 350 allows entities to perform an initial qualitative evaluation to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The results of this qualitative assessment determine whether it is necessary to perform the quantitative impairment test. As allowed by the revised guidance, the company has elected to bypass the qualitative assessment for fiscal year 2021 and proceed directly to the quantitative impairment test. Excluding the qualitative evaluation discussed above, the quantitative goodwill impairment review is a comparison of the fair value of a reporting unit with its carrying amount. Estimates of fair value are primarily determined by using discounted cash flows and market multiples on earnings. If the carrying amount of a reporting unit exceeds its fair value, an impairment charge based on that difference will be recorded. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of any impairment charge recorded. Discounted cash flow methods are dependent upon assumptions of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. For fiscal year 2021, the fair value of all of the company’s reporting units exceeded their carrying values. Realignment of Reporting Units The company realigned its operations in the second quarter of the fiscal year 2021, resulting in a change to its operating segments. The company's reportable segments remained unchanged. As a result of the change in operating segments, the company's goodwill reporting units changed. The Commercial Truck segment contains two reporting units. The Aftermarket & and Industrial segment contains three reporting units. A summary of the changes in the carrying value of goodwill is presented below (in millions): Commercial Truck Aftermarket & Industrial Total Goodwill $ 287 $ 206 $ 493 Accumulated impairment losses — (15) (15) Balance at September 30, 2019 287 191 478 AxleTech measurement period adjustment — 5 5 Goodwill acquired from TransPower acquisition (see Note 3) 13 — 13 Foreign currency translation 4 1 5 Balance at September 30, 2020 304 197 501 TransPower measurement period adjustment (see Note 3) 2 — 2 Foreign currency translation 3 1 4 Balance at September 30, 2021 $ 309 $ 198 $ 507 |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 12 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING COSTS | RESTRUCTURING COSTS At September 30, 2021 and 2020, $6 million and $10 million, respectively, of restructuring reserves primarily related to unpaid employee termination benefits remained in the Consolidated Balance Sheet. The following table summarizes changes in restructuring reserves (in millions): Employee Plant Total Balance at September 30, 2018 $ 4 $ — $ 4 Activity during the period: Charges 8 — 8 Cash payments (5) — (5) Other 1 — 1 Balance at September 30, 2019 8 — 8 Activity during the period: Charges 27 — 27 Cash payments (25) — (25) Balance at September 30, 2020 10 — 10 Activity during the period: Charges 8 5 13 Cash payments (13) — (13) Other — (4) (4) Total restructuring reserves, end of year 5 1 6 Less: non-current restructuring reserves (1) — (1) Restructuring reserves – current, at September 30, 2021 $ 4 $ 1 $ 5 Restructuring costs attributable to the company’s business segments during fiscal years 2021, 2020 and 2019 are as follows (in millions): Commercial Truck Aftermarket & Industrial Total Fiscal year 2021 Footprint Actions $ — $ 10 $ 10 Global Restructuring Program 2020 3 — 3 Total restructuring costs $ 3 $ 10 $ 13 Fiscal year 2020: Global Restructuring Program 2020 $ 7 $ 3 $ 10 Global Restructuring Program 2019 11 2 13 AxleTech — 2 2 Other 1 1 2 Total restructuring costs $ 19 $ 8 $ 27 Fiscal year 2019: Global Restructuring Program 2019 $ 6 $ 1 $ 7 AxleTech — 3 3 Other (1) (1) (2) Total restructuring costs $ 5 $ 3 $ 8 Footprint Actions: On November 11, 2020, the company approved a restructuring plan to close three U.S. manufacturing plants and one European administration office in its Aftermarket & Industrial segment and consolidate their operations into existing facilities. The site closures include: • Chicago, Illinois • Livermore, California • Livonia, Michigan • Zurich, Switzerland The closures impact approximately 150 hourly and salaried workers. These restructuring plans are intended to optimize the company’s manufacturing footprint, reduce costs and increase efficiencies. With this restructuring plan, the company expects to incur approximately $14 million in restructuring charges in the Aftermarket & Industrial segment, consisting of impairment of long-lived assets of $3 million, severance related costs of $5 million and other associated costs of $6 million. During the first twelve months of fiscal year 2021, the company incurred $10 million in restructuring costs related to this plan. Restructuring actions associated with this plan are expected to be substantially complete by the end of the first quarter of fiscal year 2022. Global Restructuring Programs : On June 2, 2020, the company approved and began executing a restructuring plan to reduce labor costs and align with current market forecasts. Under this program, the company expects to incur approximately $13 million in employee severance costs in connection with approximately eight percent of its global salaried positions, and will eliminate certain hourly roles. During fiscal year 2020, the company incurred $10 million in restructuring costs related to this program, of which $7 million was in the Commercial Truck segment and $3 million was in the Aftermarket & Industrial segment. During the first twelve months of fiscal year 2021, the company incurred $3 million in restructuring costs related to this plan in the Commercial Truck segment. Restructuring actions associated with this plan are substantially complete. On September 27, 2019, the company approved and began executing a restructuring plan to reduce salaried and hourly headcount globally. This restructuring plan was intended to reduce labor costs in response to an anticipated decline in most global truck and trailer market volumes. During the fourth quarter of fiscal year 2019, the company incurred $6 million in restructuring costs in the Commercial Truck segment and $1 million in the Aftermarket & Industrial segment. During fiscal |
ACCOUNTS RECEIVABLE FACTORING A
ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION | 12 Months Ended |
Sep. 30, 2021 | |
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 (in millions): Current Expiration Total Facility Size as of 9/30/21 Utilized as of 9/30/21 Utilized as of 9/30/20 EUR USD EUR USD EUR USD On-balance sheet arrangement: Committed U.S. accounts receivable securitization (1) March 2024 N/A $ 110 N/A $ 3 N/A $ 3 Total on-balance sheet arrangement N/A $ 110 N/A $ 3 N/A $ 3 Off-balance sheet arrangements: Committed Swedish factoring facility (2)(3) March 2024 € 155 $ 179 € 75 $ 88 € 86 $ 100 Committed U.S. factoring facility (2) February 2023 N/A 75 N/A 49 N/A 30 Uncommitted U.K. factoring facility February 2022 25 29 2 2 1 1 Uncommitted Italy factoring facility June 2022 30 35 14 17 8 9 Other uncommitted factoring facilities (4) None N/A N/A 15 17 12 14 Total off-balance sheet arrangements € 210 $ 318 € 106 $ 173 € 107 $ 154 (1) Availability subject to adequate eligible accounts receivable available for sale. The utilized amount includes $3 million of letters of credit as of each of September 30, 2021 and September 30, 2020. (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, 2022. (4) There is no explicit facility size under the factoring agreement, but the counterparty approves the purchase of receivable tranches at its discretion. On-balance sheet arrangement U.S. Securitization Facility: As of September 30, 2020, the U.S. accounts receivables securitization facility with PNC bank had a facility size of $95 million. On March 31, 2021, the company increased the size of the facility to $110 million. The maximum permitted priority debt-to-EBITDA ratio as of the last day of each fiscal quarter under the facility is 2.25 to 1.00. This program is provided by PNC Bank, National Association, as Administrator and Purchaser, and the other Purchasers and Purchaser Agents party to the agreement from time to time (participating lenders). Under this program, the company has the ability to sell an undivided percentage ownership interest in substantially all of its trade receivables (excluding the receivables due from AB Volvo and subsidiaries eligible for sale under the U.S. accounts receivable factoring facility) of certain U.S. subsidiaries to ArvinMeritor Receivables Corporation ("ARC"), a wholly-owned, special purpose subsidiary. ARC funds these purchases with borrowings from participating lenders under a loan agreement. This program also includes a letter of credit facility pursuant to which ARC may request the issuance of letters of credit issued for the company’s U.S. subsidiaries (originators) or their designees, which when issued will constitute a utilization of the facility for the amount of letters of credit issued. Amounts outstanding under this agreement are collateralized by eligible receivables purchased by ARC and are reported as short-term debt in the Consolidated Balance Sheet. As of September 30, 2021, there were no borrowings outstanding under this program, and $3 million was outstanding under related letters of credit. As of September 30, 2020, were no borrowings outstanding under this program, and $3 million was outstanding under related letters of credit. This securitization program contains a cross-default to the revolving credit facility. At certain times during any given month, the company may sell eligible accounts receivable under this program to fund intra-month working capital needs. In such months, the company would then typically utilize the cash received from customers throughout the month to repay the borrowings under the program. Accordingly, during any given month, the company may borrow under this program in amounts exceeding the amounts shown as outstanding at fiscal year ends. Off-balance sheet arrangements Total costs associated with all of the off-balance sheet arrangements described above were $4 million, $4 million and $6 million in fiscal years 2021, 2020 and 2019, respectively, and are included in selling, general and administrative expenses in the Consolidated Statement of Operations. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) and are summarized as follows (in millions): September 30, 2021 2020 Finished goods $ 137 $ 119 Work in process 47 38 Raw materials, parts and supplies 417 278 Total $ 601 $ 435 |
NET PROPERTY
NET PROPERTY | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
NET PROPERTY | NET PROPERTY Property is stated at cost. Depreciation of property is based on estimated useful lives, generally using the straight-line method. Estimated useful lives for buildings and improvements range from 10 to 50 years and estimated useful lives for machinery and equipment range from 3 to 25 years. Significant improvements are capitalized, and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. Company-owned tooling is classified as property and depreciated over the shorter of its expected life or the life of the production contract, generally not to exceed three years. In accordance with the FASB guidance on property, plant and equipment, the company reviews the carrying value of long-lived assets, excluding goodwill, to be held and used, for impairment whenever events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value is not recoverable and exceeds estimated fair value. Net property is summarized as follows (in millions): September 30, 2021 2020 Property at cost: Land and land improvements $ 41 $ 32 Buildings 231 228 Machinery and equipment 1,051 1,002 Company-owned tooling 164 151 Construction in progress 63 63 Total 1,550 1,476 Less: Accumulated depreciation (1,033) (961) Net property $ 517 $ 515 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Sep. 30, 2021 | |
Other Assets, Noncurrent [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other assets are summarized as follows (in millions): September 30, 2021 2020 Prepaid pension costs (see Note 20) $ 191 $ 179 Deferred income tax assets (see Note 21) 42 30 Investments in non-consolidated joint ventures (see Note 12) 132 107 Other 263 269 Other assets $ 628 $ 585 |
INVESTMENTS IN NON-CONSOLIDATED
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES | 12 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES | INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES The company’s non-consolidated joint ventures and related direct ownership interest are as follows: September 30, 2021 2020 2019 Master Sistemas Automotivos Ltda. 49 % 49 % 49 % Sistemas Automotrices de Mexico S.A. de C.V. 50 % 50 % 50 % Ege Fren Sanayii ve Ticaret A.S. 49 % 49 % 49 % Automotive Axles Limited 36 % 36 % 36 % The company’s investments in non-consolidated joint ventures are $132 million as of September 30, 2021 and $107 million as of September 30, 2020. The company's equity in earnings of non-consolidated joint ventures are $34 million and $14 million for the fiscal years ended September 30, 2021 and September 30, 2020, respectively. The results of the company's non-consolidated joint ventures are included in the Commercial Truck reporting segment. The summarized financial information presented below represents the combined accounts of the company’s non-consolidated joint ventures related to its continuing operations (in millions): September 30, 2021 2020 Current assets $ 456 $ 308 Non-current assets 214 200 Total assets $ 670 $ 508 Current liabilities $ 293 $ 209 Non-current liabilities 112 87 Total liabilities $ 405 $ 296 Year Ended September 30, 2021 2020 2019 Sales $ 1,011 $ 696 $ 1,231 Gross profit 119 76 147 Net income 72 30 63 Dividends received from the company’s non-consolidated joint ventures were $7 million in fiscal year 2021, $10 million in fiscal year 2020 and $23 million in fiscal year 2019. The company had sales to its non-consolidated joint ventures of approximately $8 million, $9 million and $9 million in fiscal years 2021, 2020 and 2019, respectively. These sales exclude sales of $133 million, $92 million and $193 million in fiscal years 2021, 2020 and 2019, respectively, to a joint venture in the company’s Commercial Truck segment, which are eliminated as the company purchases these components back after value add provided by the joint venture. The company had purchases from its non-consolidated joint ventures of approximately $744 million, $509 million and $940 million in fiscal years 2021, 2020 and 2019, respectively. Additionally, the company leases space and provides certain administrative and technical services to various non-consolidated joint ventures. The company collected $9 million, $14 million and $12 million for such leases and services during fiscal years 2021, 2020 and 2019, respectively. Amounts due from the company’s non-consolidated joint ventures were $24 million and $23 million at September 30, 2021 and 2020, respectively, and are included in Receivables, trade and other, net in the Consolidated Balance Sheet. Amounts due to the company’s non-consolidated joint ventures were $97 million and $56 million at September 30, 2021 and 2020, respectively, and are included in Accounts and notes payable in the Consolidated Balance Sheet. The fair value of the company’s investment in its Automotive Axles Limited joint venture was approximately $90 million and $54 million at September 30, 2021 and 2020, respectively, based on quoted market prices, as this joint venture is listed and publicly traded on the Bombay Stock Exchange in India. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Sep. 30, 2021 | |
Other Current Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Other current liabilities are summarized as follows (in millions): September 30, 2021 2020 Compensation and benefits $ 125 $ 91 Income taxes 17 6 Product warranties 15 19 Other 151 148 Other current liabilities $ 308 $ 264 The company records estimated product warranty costs at the time of shipment of products to customers. Warranty reserves are primarily based on factors that include past claims experience, sales history, product manufacturing and engineering changes and industry developments. Liabilities for product recall campaigns are recorded at the time the company’s obligation is probable and can be reasonably estimated. Policy repair actions to maintain customer relationships are recorded as other liabilities at the time an obligation is probable and can be reasonably estimated. Product warranties, including recall campaigns, not expected to be paid within one year are recorded as a non-current liability. A summary of the changes in product warranties is as follows (in millions): September 30, 2021 2020 2019 Total product warranties – beginning of year $ 54 $ 50 $ 54 Accruals for product warranties 16 25 23 Payments (17) (19) (20) Change in estimates and other (10) (2) (7) Total product warranties – end of year 43 54 50 Less: non-current product warranties (see Note 14) (28) (35) (32) Product warranties – current $ 15 $ 19 $ 18 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Sep. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | OTHER LIABILITIES Other liabilities are summarized as follows (in millions): September 30, 2021 2020 Asbestos-related liabilities (see Note 22) $ 52 $ 67 Liabilities for uncertain tax positions (see Note 21) 52 73 Product warranties (see Note 13) 28 35 Other 92 104 Other liabilities $ 224 $ 279 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt, net of discounts where applicable, is summarized as follows (in millions): September 30, 2021 2020 3.25 percent convertible notes due 2037 (1) $ 321 $ 320 7.875 percent convertible notes due 2026 (3) — 23 4.50 percent notes due 2028 (2) 270 — 6.25 percent notes due 2025 (2)(4) 296 295 6.25 percent notes due 2024 (5) — 446 Term loan due 2024 153 166 Finance lease obligation 10 6 Unamortized discount on convertible notes (6) (23) (29) Subtotal 1,027 1,227 Less: current maturities (19) (39) Long-term debt $ 1,008 $ 1,188 (1) The 3.25 percent convertible notes due 2037 contain a put and call feature, which allows for early redemption beginning in 2025. The 3.25 percent convertible notes due 2037 are presented net of $4 million and $5 million unamortized issuance costs as of September 30, 2021 and September 30, 2020, respectively. (2) The 4.50 percent notes due 2028 and 6.25 percent notes due 2025 contain a call option, which allows for early redemption by the company. The 4.50 percent notes due 2028 are presented net of $5 million unamortized issuance costs as of September 30, 2021. (3) The 7.875 percent convertible notes due 2026 are presented net of an insignificant amount of unamortized issuance costs and original issuance discount as of September 30, 2020. (4) The 6.25 percent notes due 2025 are presented net of $4 million and $5 million unamortized issuance costs as of September 30, 2021 and September 30, 2020, respectively. (5) The 6.25 percent notes due 2024 are presented net of $4 million unamortized issuance costs as of September 30, 2020. (6) The carrying amount of the equity component related to convertible debt. Redemption of 7.875 Percent Convertible Notes On October 16, 2020, the company announced that it had issued a notice of redemption for all of the outstanding $23 million aggregate accreted principal amount of its 7.875 percent convertible notes due 2026 (the "7.875 Percent Convertible Notes"). As a result of the issuance of the notice of redemption, the 7.875 Percent Convertible Notes were convertible at any time prior to the close of business on November 30, 2020 at a rate of 83.3333 shares of common stock per $1,000 original principal amount of the 7.875 Percent Convertible Notes. All remaining outstanding 7.875 Percent Convertible Notes were surrendered in November 2020 for conversion and were settled in cash up to the accreted principal amount of the 7.875 Percent Convertible Notes and also settled in cash for the remainder of the conversion obligation in excess of the accreted principal amount, in accordance with the provisions of the indenture that governed the 7.875 Percent Convertible Notes. The conversion of the 7.875 Percent Convertible Notes was settled for $53 million, of which $23 million represented principal repayment and $30 million represented the payment of conversion in excess of the accreted principal. There was no loss on extinguishment. As of December 31, 2020, the 7.875 Percent Convertible Notes were fully redeemed. The 7.875 Percent Convertible Notes were classified as current as of September 30, 2020. Redemption of 6.25 Percent Notes due 2024 On December 16, 2020, the company redeemed $275 million of the outstanding $450 million aggregate principal amount of its 6.25 percent notes due 2024 (the "6.25 Percent Notes due 2024") for an aggregate purchase price of $287 million (including accrued interest of $6 million). The redemption price was equal to 102.083% of the principal amount of the 6.25 Percent Notes due 2024 redeemed, plus accrued and unpaid interest thereon up to but excluding the redemption date of December 16, 2020. This redemption was accounted for as an extinguishment of debt, and accordingly the company recognized a loss on debt extinguishment of $8 million. The loss on extinguishment is recorded in the Consolidated Statement of Operations within Interest expense, net. On June 3, 2021, the company redeemed the remaining $175 million principal amount of the 6.25 Percent Notes due 2024 for an aggregate purchase price of $180 million (including accrued interest of $3 million). The redemption price was equal to 101.042% of the principal amount of the 6.25 Percent Notes due 2024, plus accrued and unpaid interest thereon up to but excluding the redemption date of June 3, 2021. The redemption was accounted for as an extinguishment of debt, and accordingly the company recognized a loss on debt extinguishment of $3 million. The loss on extinguishment is recorded in the Consolidated Statement of Operations within Interest expense, net. 4.50 Percent Notes due 2028 On December 1, 2020, the company completed the offering and sale of $275 million aggregate principal amount of its 4.5 percent notes due 2028 (the "4.50 Percent Notes"), including related guarantees by the subsidiaries of the company who from time to time guarantee the company’s senior secured revolving credit facility as it may be amended, extended, replaced or refinanced, or any subsequent credit facility, to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the Securities Act in a private placement exempt from the registration requirements of the Securities Act. The net proceeds to the company from the sale of the 4.50 Percent Notes after deducting estimated offering expenses payable by the company were approximately $270 million. The company used the net proceeds from the offering, together with cash on hand, to redeem $275 million of the outstanding $450 million aggregate principal amount of its 6.25 Percent Notes due 2024, as described above. The 4.50 Percent Notes will mature on December 15, 2028 and bear interest at a fixed rate of 4.500% per annum. The company will pay interest on the 4.50 Percent Notes from December 1, 2020 semi-annually, in arrears, on June 15 and December 15 of each year, beginning June 15, 2021. The 4.50 Percent Notes constitute senior unsecured obligations of the company and rank equally in right of payment with its existing and future senior unsecured indebtedness, and effectively junior to its existing and future secured indebtedness to the extent of the security therefor. The 4.50 Percent Notes provide that, prior to December 15, 2023, the company may redeem, at its option, from time to time, the 4.50 Percent Notes, in whole or in part, at a redemption price equal to the sum of (i) 100% of the principal amount of the 4.50 Percent Notes to be redeemed, plus (ii) the applicable premium as of the redemption date on the 4.50 Percent Notes to be redeemed, plus (iii) accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date) on the 4.50 Percent Notes to be redeemed. The 4.50 Percent Notes provide that, on or after December 15, 2023, the company may redeem, at its option, from time to time, the 4.50 Percent Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 4.50 Percent Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date) on the 4.50 Percent Notes to be redeemed, if redeemed during the 12-month period beginning on December 15 of the years indicated below: Year Redemption Price 2023 102.250 % 2024 101.125 % 2025 and thereafter 100.000 % The 4.50 Percent Notes also provide that, prior to December 15, 2023, the company may redeem, at its option, from time to time, up to 35% of the aggregate principal amount of the 4.50 Percent Notes with the net cash proceeds of one or more public sales of the company’s common stock at a redemption price equal to 104.500% of the principal amount of the 4.50 Percent Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date) on the 4.50 Percent Notes to be redeemed so long as at least 65% of the aggregate principal amount of the 4.50 Percent Notes remains outstanding after each such redemption and notice of any such redemption is mailed within 90 days of any such sale of common stock. If a change of control (as defined in the ninth supplemental indenture under which the 4.50 Percent Notes were issued) occurs, unless the company has exercised its right to redeem the 4.50 Percent Notes, each holder of the 4.50 Percent Notes may require the company to repurchase some or all of such holder’s 4.50 Percent Notes at a purchase price equal to 101% of the principal amount of the 4.50 Percent Notes to be repurchased, plus accrued and unpaid interest, if any, to, but not including, the repurchase date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the repurchase date) on the 4.50 Percent Notes to be repurchased. 6.25 Percent Notes due 2025 On June 8, 2020, the company completed the offering and sale of $300 million aggregate principal amount of its 6.25 percent notes due 2025 (the "6.25 Percent Notes due 2025") to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons in offshore transactions in reliance of Regulation S under the Securities Act in a private placement, exempt from the registration requirements of the Securities Act. The 6.25 Percent Notes due 2025 were issued pursuant to the company's indenture dated as of April 1, 1998, as supplemented. The net proceeds from the sale of the 6.25 Percent Notes due 2025 were $295 million and were used to repay approximately $295 million of the outstanding $304 million balance under the company's senior secured revolving credit facility. The 6.25 Percent Notes due 2025 will mature on June 1, 2025 and bear interest at a fixed rate of 6.25 percent per annum. The company will pay interest on the 6.25 Percent Notes due 2025 semi-annually, in arrears, on June 1 and December 1 of each year, beginning December 1, 2020. The 6.25 Percent Notes due 2025 will constitute senior unsecured obligations of the company and will rank equally in right of payment with its existing and future senior unsecured indebtedness, and effectively junior to its existing and future secured indebtedness to the extent of the security therefor. The 6.25 Percent Notes due 2025 provide that, prior to June 1, 2022, the company may redeem, at its option, from time to time, the 6.25 Percent Notes due 2025, in whole or in part, at a redemption price equal to the sum of (i) 100 percent of the principal amount of the 6.25 Percent Notes due 2025 to be redeemed, plus (ii) the applicable premium as of the redemption date on the 6.25 Percent Notes due 2025 to be redeemed, plus (iii) accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date) on the 6.25 Percent Notes due 2025 to be redeemed. For purposes of such calculation, the “applicable premium” means, with respect to the 6.25 Percent Notes due 2025 at any redemption date, the greater of (i) 1.0 percent of the principal amount of such 6.25 Percent Notes due 2025 and (ii) the excess of (A) the present value at such redemption date of (1) 103.125 percent of the principal amount of such 6.25 Percent Notes due 2025 plus (2) all remaining required interest payments due on such 6.25 Percent Notes due 2025 through June 1, 2022 (excluding accrued and unpaid interest, if any, to the redemption date), computed using a discount rate equal to the treasury rate plus 50 basis points, over (B) 100 percent of the principal amount of such 6.25 Percent Notes due 2025. The 6.25 Percent Notes due 2025 provide that, on or after June 1, 2022, the company may redeem, at its option, from time to time, the 6.25 Percent Notes due 2025, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the 6.25 Percent Notes due 2025 to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date) on the 6.25 Percent Notes due 2025 to be redeemed, if redeemed during the 12-month period beginning on June 1 of the years indicated below: Year Redemption Price 2022 103.125 % 2023 101.563 % 2024 and thereafter 100.000 % The 6.25 Percent Notes due 2025 provide that, prior to June 1, 2022, the company may redeem, at its option, from time to time, up to 35 percent of the aggregate principal amount of the 6.25 Percent Notes due 2025 with the net cash proceeds of one or more public sales of the company’s common stock at a redemption price equal to 106.25 percent of the principal amount of the 6.25 Percent Notes due 2025 to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date) on the 6.25 Percent Notes due 2025 to be redeemed so long as at least 65 percent of the aggregate principal amount of the 6.25 Percent Notes due 2025 remains outstanding after each such redemption and notice of any such redemption is mailed within 90 days of any such sale of common stock. If a Change of Control (as defined in the eighth supplemental indenture under which the 6.25 Percent Notes due 2025 were issued) occurs, unless the company has exercised its right to redeem the 6.25 Percent Notes due 2025, each holder of 6.25 Percent Notes due 2025 may require the company to repurchase some or all of such holder’s 6.25 Percent Notes due 2025 at a purchase price equal to 101 percent of the principal amount of the 6.25 Percent Notes due 2025 to be repurchased, plus accrued and unpaid interest, if any, to, but not including, the payment date (subject to the right of holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the payment date) on the 6.25 Percent Notes due 2025 to be repurchased. 3.25 Percent Convertible Notes due 2037 The 3.25 Percent Convertible Notes will mature on October 15, 2037, unless earlier redeemed, repurchased or converted, and bear interest at a fixed rate of 3.25% percent per annum. The company pays interest on the 3.25 Percent Notes due 2037 semi-annually, in arrears, on April 15 and October 15 of each year. The 3.25 percent Convertible Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantors. The 3.25 Percent Convertible Notes are the company’s senior unsecured obligations and rank equally in right of payment with all of the company’s existing and future senior unsecured indebtedness and effectively junior to any of the company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness. The guarantee by each Guarantor ranks equally with existing and future senior unsecured indebtedness of such Guarantor and effectively junior to all of the existing and future secured indebtedness of such Guarantor, to the extent of the value of the assets securing such indebtedness. The 3.25 Percent Convertible Notes will be convertible into cash up to the principal amount of the 3.25 Percent Convertible Notes surrendered for conversion and the company will pay or deliver, as the case may be, cash, shares of the company’s common stock or a combination of cash and shares of the company’s common stock, at the company’s election, in respect of the remainder, if any, of the company’s conversion obligation in excess of the principal amount of the notes being converted. The initial conversion rate, subject to adjustment, is 25.0474 shares of common stock per $1,000 principal amount of the 3.25 Percent Convertible Notes (which represents an initial conversion price of $39.92 per share). Holders may convert their notes, at their option, only under the following circumstances prior to the close of business on the business day immediately preceding July 15, 2037, other than during the period from and including July 15, 2025 to the close of business on the business day immediately preceding October 15, 2025: • During any calendar quarter after the calendar quarter ending on December 31, 2017, if the closing sale price of the company’s common stock for 20 or more trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including the last trading day of the immediately preceding calendar quarter equals or exceeds 130 percent of the applicable conversion price on each applicable trading day; • During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 3.25 Percent Convertible Notes for each trading day during such five consecutive trading day period was less than 98 percent of the product of the closing price of the company’s common stock and the conversion rate on each such trading day; • If the company calls any of the 3.25 Percent Convertible Notes for redemption, at any time from the delivery of the redemption notice through the close of business on the scheduled trading day immediately preceding the redemption date; or • Upon the occurrence of specified corporate transactions. During the period from and including July 15, 2025 to the close of business on the business day immediately preceding October 15, 2025, and on or after July 15, 2037 until the close of business on the business day immediately preceding the maturity date, holders may convert 3.25 Percent Convertible Notes at any time, regardless of the foregoing circumstances. On or after October 15, 2025, but prior to July 15, 2037, the company may redeem the 3.25 Percent Convertible Notes at the company’s option, in whole or in part, at a redemption price in cash equal to 100 percent of the principal amount of the 3.25 Percent Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Further, holders may require the company to purchase all or a portion of their 3.25 Percent Convertible Notes at a purchase price in cash equal to 100 percent of the principal amount of the 3.25 Percent Convertible Notes to be purchased, plus accrued and unpaid interest to, but excluding, the repurchase date, on October 15, 2025 or upon certain fundamental changes. The maximum number of shares of common stock into which the 3.25 Percent Convertible Notes are convertible is approximately 8 million shares. The following table summarizes the principal amounts and related unamortized discount on all convertible notes (in millions): September 30, 2021 2020 Principal amount of convertible notes $ 325 $ 348 Unamortized discount on convertible notes and issuance costs (27) (34) Net carrying value $ 298 $ 314 The following table summarizes other information related to the convertible notes: Convertible Notes 3.25% Total amortization period for debt discount (in years): 8 Remaining amortization period for debt discount (in years): 4 Effective interest rates on convertible notes: 5.6 % The following table summarizes interest costs recognized on convertible notes (in millions): Year Ended September 30, 2021 2020 2019 Contractual interest coupon $ 16 $ 17 $ 17 Amortization of debt discount 1 2 2 Repurchase of convertible notes 11 — — Total $ 28 $ 19 $ 19 Senior Secured Revolving Credit Facility On November 9, 2020, the senior secured revolving credit facility was increased by $60 million to $685 million through the addition of a new lender. The availability under the senior secured revolving credit facility is subject to a financial covenant 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. Availability under the senior secured revolving credit facility was constrained to $601 million on the last day of the fourth quarter of fiscal year 2021 due primarily to lower EBITDA in the first quarter of fiscal year 2021, which was impacted by the COVID-19 pandemic. The company has full availability until the next measurement point at the end of the first quarter of fiscal year 2022. Borrowings under the senior secured revolving credit facility are subject to interest based on quoted LIBOR rates plus a margin and a commitment fee on undrawn amounts, both of which are based upon the company's current corporate credit rating. At September 30, 2021, 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 100% owned subsidiaries, as defined in the revolving credit agreement (collectively, the "Guarantors") irrevocably and unconditionally guarantee amounts outstanding under the senior secured revolving credit facility on a joint and several basis. Similar subsidiary guarantees are provided for the benefit of the holders of the notes outstanding under the company's indentures. The notes are guaranteed on a senior unsecured basis by each of the company’s subsidiaries from time to time guaranteeing its senior secured revolving credit facility, as it may be amended, extended, replaced or refinanced, or any subsequent credit facility. The guarantees remain in effect until the earlier to occur of payment in full of the notes or termination or release of the applicable corresponding guarantee under the company’s senior secured revolving credit facility, as it may be amended, extended, replaced or refinanced, or any subsequent credit facility. The guarantees rank equally with existing and future senior unsecured indebtedness of the Guarantors and are effectively subordinated to all of the existing and future secured indebtedness of the Guarantors, to the extent of the value of the assets securing such indebtedness. No borrowings were outstanding under the senior secured revolving credit facility at September 30, 2021 and September 30, 2020. The amended and extended senior secured revolving credit facility includes $100 million of availability for the issuance of letters of credit. At September 30, 2021 and September 30, 2020, there were no letters of credit outstanding under the senior secured revolving credit facility. Debt Securities In November 2020, the company filed a shelf registration statement with the SEC registering an indeterminate amount of debt and/or equity securities that the company may offer in one or more offerings on terms to be determined at the time of sale. The November 2020 shelf registration statement superseded and replaced the company's shelf registration statement filed in December 2017. Debt Maturities As of September 30, 2021, the company is contractually obligated to make payments as follows (in millions): Total 2022 2023 2024 2025 (2) 2026 Thereafter (3)(4) Total debt (1) $ 1,053 $ 18 $ 13 $ 122 $ 300 $ — $ 600 (1) Total debt excludes unamortized discount on convertible notes of $23 million and unamortized issuance costs of $13 million. (2) Includes the 6.25 Percent Notes due 2025, which contain a call feature that allows for early redemption. (3) Includes the 3.25 Percent Convertible Notes due 2037, which contain a put and call feature that allows for early redemption beginning in 2025. (4) Includes the 4.50 Percent Notes due 2028, which contain a call feature that allows for early redemption. Letter of Credit Facilities The company had $14 million and $11 million of letters of credit outstanding through letter of credit facilities as of September 30, 2021 and 2020, respectively. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The company’s financial instruments include cash and cash equivalents, short-term debt, long-term debt, and foreign exchange forward and options contracts. The company uses derivatives for hedging and non-trading purposes in order to manage its foreign exchange rate exposures. Foreign Exchange Contracts As a result of the company’s substantial international operations, it is exposed to foreign currency risks that arise from normal business operations, including in connection with transactions that are denominated in foreign currencies. In addition, the company translates sales and financial results denominated in foreign currencies into U.S. dollars for purposes of its Consolidated Financial Statements. As a result, appreciation of the U.S. dollar against these foreign currencies generally will have a negative impact on reported revenues and operating income, while depreciation of the U.S. dollar against these foreign currencies will generally have a positive effect on reported revenues and operating income. The company has a foreign currency cash flow hedging program to reduce the company’s exposure to changes in exchange rates on foreign currency purchases and sales. The company uses foreign currency forward contracts to manage the company’s exposures arising from foreign currency exchange risk. Gains and losses on the underlying foreign currency exposures are partially offset with gains and losses on the foreign currency forward contracts. Under this foreign currency cash flow hedging program, the company has designated the foreign exchange contracts as cash flow hedges of underlying forecasted foreign currency purchases and sales. Changes in the fair value of these contracts are recorded in accumulated other comprehensive income (AOCI) in the Consolidated Balance Sheet and are recognized in operating income when the underlying forecasted transaction impacts earnings. The terms of these contracts generally require the company to place cash on deposit as collateral if the fair value of these contracts represents a liability for the company and exceeds the collateral threshold. The fair values of the foreign exchange derivative instruments and any related collateral cash deposits are presented on a net basis as the derivative contracts are subject to master netting arrangements. At September 30, 2021, 2020 and 2019, the notional amount of the company's foreign exchange contracts outstanding under its foreign currency cash flow hedging program was $107 million, $65 million, and $110 million, respectively. The company classifies the cash flows associated with these contracts in cash flows from operating activities in the Consolidated Statement of Cash Flows. This is consistent with the classification of the cash flows associated with the underlying hedged item. From time to time the company hedges against foreign currency exposure related to translations to U.S. dollars of financial results denominated in foreign currencies. Changes in fair value associated with these contracts are recorded in other income (expense), net, in the Consolidated Statement of Operations. The company also uses option contracts to mitigate foreign currency exposure on expected future foreign currency-denominated purchases. Changes in fair value associated with these contracts are recorded in cost of sales in the Consolidated Statement of Operations. The following table summarizes the impact of the company’s derivatives instruments on comprehensive income for fiscal years ended September 30 (in millions): Location of 2021 2020 2019 Derivatives designated as hedging instruments: Amount of gain recognized in AOCI AOCI $ 3 $ 4 $ 19 Amount of gain (loss) reclassified from AOCI into income Cost of Sales 1 (1) 4 Derivatives not designated as hedging instruments: Other Income (expense) (1) 1 1 Fair Value Fair values of financial instruments are summarized as follows (in millions): September 30, 2021 September 30, 2020 Carrying Fair Carrying Fair Cash and cash equivalents $ 101 $ 101 $ 315 $ 315 Short-term debt 19 19 39 58 Long-term debt 1,008 1,082 1,188 1,259 Foreign currency option contracts (other assets) — — 1 1 Foreign exchange forward contracts (other assets) 1 1 — — Foreign exchange forward contracts (other liabilities) — — 1 1 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 varying terms that extend through fiscal year 2025 to hedge its exposure to changes in foreign currency exchange rates. As of September 30, 2021 and September 30, 2020, the notional amount of the company's foreign exchange contracts outstanding under its foreign currency cash flow hedging program was $107 million and $65 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 are recorded in AOCI in the Consolidated Statement of Equity and is recognized in operating income when the underlying forecasted transaction impacts earnings. Foreign currency option contracts — The company uses option contracts to mitigate foreign exchange exposure on expected future foreign currency-denominated purchases. As of September 30, 2021 and September 30, 2020, the notional amount of the foreign exchange option contracts outstanding was $49 million and $39 million, respectively. The company did not elect hedge accounting for these derivatives. Changes in fair value associated with these contracts are recorded in cost of sales in the Consolidated Statement of Operations. The company uses option contracts to mitigate the risk of volatility in the translation of foreign currency earnings to U.S. dollars. As of September 30, 2021, the company had no option contracts outstanding. As of September 30, 2020, the notional amount of the company's option contracts outstanding was $24 million. These option contracts did not qualify for a hedge accounting election. Changes in fair value associated with these contracts are recorded in the Consolidated Statement of Operations in other income, net. The fair value of foreign exchange option contracts is based on third-party proprietary models, which incorporate inputs at varying unobservable weights of quoted spot rates, market volatility, forward rates and time utilizing market instruments with similar quality and maturity characteristics. The following table reflects the offsetting of derivative assets and liabilities (in millions): September 30, 2021 September 30, 2020 Gross Gross Amounts Net Amounts Gross Gross Amounts Net Amounts Derivative Asset Foreign currency option contract — — — 1 — 1 Foreign exchange forward contracts 1 — 1 — — — Derivative Liabilities Foreign exchange forward contract — — — 1 — 1 Fair Value The current FASB guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical instruments (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 inputs use quoted prices in active markets for identical instruments. • Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar instruments in active markets and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related instrument. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest priority level input that is significant to the valuation. The company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. Fair value of financial instruments by the valuation hierarchy at September 30, 2021 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 101 $ — $ — Short-term debt — — 19 Long-term debt — 937 145 Foreign exchange forward contracts (asset) — 1 — Fair value of financial instruments by the valuation hierarchy at September 30, 2020 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 315 $ — $ — Short-term debt — 43 15 Long-term debt — 1,103 156 Foreign exchange forward contracts (liability) — 1 — Foreign currency option contracts (other assets) — 1 — |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY There were no dividends declared or paid by the company in fiscal years 2021, 2020 or 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. The company is authorized to iss ue 500 million shares of common stock, with a par value of $1 per share, and 30 million shares of preferred stock, without par value ("Preferred Stock"), of which 2 million shares are designated as Series A Junior Participating Preferred Stock ("Junior Preferred Stock"). No shares of Preferred Stock or Junior Preferred Stock have been issued. In November 2020, the company filed a shelf registration statement with the SEC, registering an indeterminate amount of debt and/or equity securities that may be offered in one or more offerings on terms to be determined at the time of sale. The company has reserved approximately 4 million shares of common stock in connection with its 2020 Long-Term Incentive Plan ("LTIP") f or grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, performance sha res, restricted share units and stock awards to key employees and directors. At September 30, 2021, there were 3.5 million shares available for future grants under the LTIP. Repurchase Authorizations On July 28, 2021, the Board of Directors authorized the repurchase of up to $250 million of the company's common stock. 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. As of September 30, 2021, the amount remaining available for repurchases was $250 million under this common stock repurchase authorization. On July 26, 2019, the Board of Directors authorized the repurchase of up to $250 million of the company’s common stock 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. This authorization superseded the remaining authority under the prior November 2018 equity repurchase authorization described below. On November 7, 2019, the Board of Directors increased the amount of the repurchase authorization to $325 million. As of the end of fiscal year 2020, the company had repurchased 11.8 million shares of common stock for $266 million (including commission costs) pursuant to this authorization. During fiscal year 2021, the company repurchased 2.5 million shares of common stock for $59 million (including commission costs) pursuant to this authorization. No amounts remained outstanding under this common stock authorization as of September 30, 2021. 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. During fiscal year 2019, the company repurchased 4.0 million shares of common stock for $71 million (including commission costs) pursuant to the common stock repurchase authorization. As of September 30, 2021, the amount remaining available for debt repurchases was $76 million under the debt repurchase authorization. Accumulated Other Comprehensive Income (AOCI) The components of AOCI as reported in the Consolidated Balance Sheet and Statement of Equity, and the changes in AOCI by components, net of tax, are as follows (in millions): Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) on cash flow hedges Total Balance at September 30, 2020 $ (129) $ (483) $ (2) $ (614) Other comprehensive income (loss) before reclassification 24 (52) 2 (26) Amounts reclassified from accumulated other comprehensive loss — 9 (1) 8 Net current-period other comprehensive income (loss) $ 24 $ (43) $ 1 $ (18) Balance at September 30, 2021 $ (105) $ (526) $ (1) $ (632) 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 Amortization of prior service benefit $ (35) (a) Amortization of actuarial losses 45 (a) 10 Total before tax (1) Tax benefit Total reclassifications for the period $ 9 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Notes 19 and 20 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, 2019 $ (107) $ (572) $ (2) $ (681) Other comprehensive income (loss) before reclassification (22) 79 (1) 56 Amounts reclassified from accumulated other comprehensive loss — 10 1 11 Net current-period other comprehensive income (loss) $ (22) $ 89 $ — $ 67 Balance at September 30, 2020 $ (129) $ (483) $ (2) $ (614) 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 Amortization of prior service benefit $ (36) (a) Amortization of actuarial losses 47 (a) 11 Total before tax (1) Tax benefit Total reclassifications for the period $ 10 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Notes 19 and 20 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 (loss) before reclassification (17) (100) 2 (115) Amounts reclassified from accumulated other comprehensive loss — 4 (4) — Net current-period other comprehensive loss $ (17) $ (96) $ (2) $ (115) Balance at September 30, 2019 $ (107) $ (572) $ (2) $ (681) 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 Amortization of prior service benefit $ (35) (a) Amortization of actuarial losses 39 (a) 4 Total before tax — Tax benefit Total reclassifications for the period $ 4 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Notes 19 and 20 for additional details), which is recorded in other income (expense), net. |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY BASED COMPENSATION | EQUITY BASED COMPENSATION Restricted Stock and Restricted Share Units The company has granted shares of restricted stock and restricted share units to certain employees and non-employee members of the Board of Directors in accordance with its existing plans. The company measures the grant date fair value of these stock-based awards at the market price of the company’s common stock as of the date of the grant. Employee awards typically vest at the end of three years and are subject to continued employment by the employee. Compensation cost associated with stock-based awards is recognized ratably over the vesting period. Cash dividends on the restricted stock, if any, are reinvested in additional shares of common stock during the vesting period. The following is a rollforward of the company’s non-vested restricted stock and restricted share units as of September 30, 2021, and the activity during fiscal year 2021 is summarized as follows (shares in thousands): Number of Weighted-Average Balance at September 30, 2020 1,175 $ 21.75 Granted 522 26.64 Vested (288) 24.91 Forfeited (79) 22.87 Balance at September 30, 2021 1,330 22.91 In fiscal years 2021, 2020 and 2019, the company granted 0.5 million, 0.6 million, and 0.5 million shares of restricted stock and restricted share units, respectively. The grant date weighted average fair value of these shares of restricted stock and restricted share units was $26.64, $23.77 and $17.24 for shares of restricted stock and restricted share units granted in fiscal years 2021, 2020 and 2019, respectively. As of September 30, 2021, there was $12 million of total unrecognized compensation costs related to non-vested shares of restricted stock and restricted share units. These costs are expected to be recognized over a weighted average period of 1.97 years. Total compensation expense recognized for restricted stock and restricted share units was $9 million in fiscal year 2021 and $8 million in each of fiscal years 2020 and 2019. Performance Share Units The company has granted performance share units to all executives eligible to participate in the LTIP. The company measures the grant date fair value of these units-based awards at the market price of the company’s common stock as of the date of the grant. Compensation cost associated with these stock-based awards is recognized ratably over the vesting period. Refer to Note 2 for descriptions of the performance share unit awards. The following is a rollforward of the company’s non-vested performance share units as of September 30, 2021, and the activity during fiscal year 2021 is summarized as follows (shares in thousands): Number of Weighted-Average Grant-Date Fair Value (1) Balance at September 30, 2020 1,036 $ 25.64 Granted 457 26.90 Vested — — Forfeited (325) 25.05 Balance at September 30, 2021 1,168 26.30 (1) The 1,036 beginning outstanding performance share units weighted-average grant-date fair value amount was reported as $21.52 ending outstanding performance share units weighted-average grant-date fair value in the fiscal year 2020 Form 10-K. Due to the modification as described in Note 2, the value of the weighted-average grant-date fair value was increased to $25.64. There were 0.5 million performance share units granted during fiscal 2021. The grant date weighted average fair value of these performance share units was $26.90. For the years ended September 30, 2021 and 2019, compensation costs recognized for the performance share units were $11 million and $10 million, respectively. For the year ended September 30, 2020, compensation costs recognized for the performance share units was $1 million of income due to decreased performance payouts. As of September 30, 2021, there were $12 million of total unrecognized compensation costs related to non-vested performance share unit equity compensation arrangements. These costs are expected to be recognized over a weighted average period of 1.90 years. |
RETIREMENT MEDICAL PLANS
RETIREMENT MEDICAL PLANS | 12 Months Ended |
Sep. 30, 2021 | |
Defined Benefit Plan, Postretirement Medical Plan with Prescription Drug Benefits [Abstract] | |
RETIREMENT MEDICAL PLANS | RETIREMENT MEDICAL PLANS The company has retirement medical plans that cover certain of its U.S. and non-U.S. employees, including certain employees of divested businesses, and provide for medical payments to eligible employees and dependents upon retirement. These plans are unfunded. On September 17, 2020, the company notified certain medical plan participants that it would further amend the benefits provided to these former union employee retirees. Under these modifications, which may be amended at the company’s discretion at any time, the company reduced the defined contribution to $500 per year until 2024. These benefit modifications generated a $7 million prior service credit in September 2020, which will be amortized over the retirees’ average life expectancy, which is currently estimated to be 9 years. On September 23, 2019, the company notified certain medical plan participants that it would amend the benefits provided to these former union employee retirees. Under these modifications, which may be amended at the company’s discretion at any time, the company reduced the defined contribution to $3,000 in 2020, decreasing by $600 each year thereafter until 2024. These benefit modifications generated a $15 million prior service credit in September 2019, which will be amortized over the retirees’ average life expectancy, which is currently estimated to be 9 years. On September 8, 2017, the company determined to modify the benefits provided to certain former union employee retirees. Under these modifications, which may be amended at the company’s discretion at any time, the company expected to provide (i) each retiree over the age of 65 with a defined contribution of $4,000 annually and (ii) each retiree under the age of 65 with a level of benefits generally equivalent to those currently provided to the company’s active employees, in each case and as currently contemplated, for a period of seven years. These benefit modifications generated a $315 million prior service credit in September 2017, which will be amortized over the retirees’ average life expectancy, which is currently estimated to be 9 years. The mortality assumptions for participants in the company’s U.S. plans incorporates future mortality improvements from tables published by the Society of Actuaries ("SOA"). The company reviewed the new SOA mortality and mortality improvement tables and utilized an actuary to conduct a study based on the company’s plan participants. The company determined that the best representation of the plans' mortality is to utilize the new SOA mortality and mortality improvement tables as the reference table for credibility-weighted mortality rates, blended with company-specific mortality based on the study conducted by the actuary. The company considers improvement scales released annually by the SOA. The company’s retiree medical obligations were measured as of September 30, 2021, 2020 and 2019. The following are the assumptions used in the measurement of the accumulated postretirement benefit obligation ("APBO") and retiree medical expense: 2021 2020 2019 Discount rate 2.95 % 2.56 % 2.98 % Health care cost trend rate 5.84 % 6.07 % 6.36 % Ultimate health care trend rate 4.68 % 4.67 % 4.69 % Year ultimate rate is reached 2028 2028 2028 The assumptions noted above are used to calculate the APBO for each fiscal year end and retiree medical expense for the subsequent fiscal year. The discount rate is used to calculate the present value of the APBO. This rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical benefits. The company has used the corporate AA/Aa bond rate for this assumption. The health care cost trend rate represents the company’s expected annual rates of change in the cost of health care benefits. The company’s projection for fiscal year 2022 health care cost trend rate is 5.84 percent. The APBO is summarized as follows (in millions): September 30, 2021 2020 Retirees $ 42 $ 52 Employees eligible to retire — — Total $ 42 $ 52 The following reconciles the change in APBO and the amounts included in the Consolidated Balance Sheet for years ended September 30, 2021 and 2020, respectively (in millions): September 30, 2021 2020 APBO — beginning of year $ 52 $ 67 Interest cost 1 2 Actuarial loss (gain) (7) — Plan amendment — (7) Foreign currency rate changes 1 — Benefit payments (1) (5) (10) APBO — end of year 42 52 Other — — Retiree medical liability $ 42 $ 52 (1) Net of subsidies and rebates available under Employer Group Waiver Plan ("EGWP"). Actuarial loss (gain) relates to changes in the discount rate and other actuarial assumptions. In accordance with ASC Topic 715, "Compensation – Retirement Benefits", a portion of the actuarial losses is not subject to amortization. The actuarial losses that are subject to amortization are generally amortized over the average lifetime of inactive participants of approximately 9 years. The retiree medical liability is included in the Consolidated Balance Sheet as follows (in millions): September 30, 2021 2020 Current — included in compensation and benefits $ 5 $ 6 Long-term — included in retirement benefits 37 46 Retiree medical liability $ 42 $ 52 The following table summarizes the amounts included in AOCL net of tax related to retiree medical liabilities as of September 30, 2021 and 2020 and changes recognized in Other Comprehensive Income (Loss) net of tax for the years ended September 30, 2021 and 2020. Net Actuarial Prior Total Balance at September 30, 2020 $ 64 $ (139) $ (75) Net actuarial loss for the year (7) — (7) Recognized prior service costs due to plan amendment — — — Amortization for the year (13) 35 22 Deferred tax impact 5 (7) (2) Balance at September 30, 2021 $ 49 $ (111) $ (62) Balance at September 30, 2019 $ 70 $ (165) $ (95) Net actuarial loss for the year — — — Recognized prior service costs due to plan amendment — (7) (7) Amortization for the year (14) 36 22 Deferred tax impact 8 (3) 5 Balance at September 30, 2020 $ 64 $ (139) $ (75) The net actuarial loss and prior service benefit that are estimated to be amortized from AOCL into net periodic retiree medical income in fiscal year 2022 are $(11) million and $34 million, respectively. The components of retiree medical expense for the years ended September 30 are as follows (in millions): 2021 2020 2019 Service cost $ — $ — $ — Interest cost 1 2 3 Amortization of: Prior service benefit (35) (36) (35) Actuarial losses 13 14 15 Retiree medical income $ (21) $ (20) $ (17) A one-percentage point change in the assumed health care cost trend rate for all years to, and including, the ultimate rate would have the following effects (in millions): 2021 2020 Effect on total service and interest cost 1% Increase $ — $ — 1% Decrease — — Effect on APBO 1% Increase 4 6 1% Decrease (4) (5) The company expects future benefit payments as follows (in millions): Gross Gross Receipts (1) Fiscal 2022 $ 5 $ — Fiscal 2023 5 — Fiscal 2024 4 — Fiscal 2025 3 — Fiscal 2026 3 — Fiscal 2027 – 2030 11 1 (1) Consists of subsidies and rebates available under EGWP. |
RETIREMENT PENSION PLANS
RETIREMENT PENSION PLANS | 12 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
RETIREMENT PENSION PLANS | RETIREMENT PENSION PLANS The company sponsors defined benefit pension plans that cover certain of its U.S. and non-U.S. employees. Pension benefits for salaried employees are based on years of credited service and compensation. Pension benefits for hourly employees are based on years of service and specified benefit amounts. The company’s funding policy provides that annual contributions to the pension trusts will be at least equal to the minimum amounts required by ERISA in the U.S. and the actuarial recommendations or statutory requirements in other countries. The mortality assumptions for participants in the company’s U.S. plans incorporates future mortality improvements from tables published by the SOA. The company reviewed the new SOA mortality and mortality improvement tables and utilized an actuary to conduct a study based on the company’s plan participants. The company determined that the best representation of the plans' mortality is to utilize the new SOA mortality and mortality improvement tables as the reference table for credibility-weighted mortality rates, blended with company specific mortality based on the study conducted by the actuary. The company's defined benefit pension plan in the United Kingdom was amended to cease the accrual of future benefits for all of its active plan participants. Subsequent to the freeze date, the company began making contributions to its defined contribution savings plan on behalf of the affected employees. The amount of the savings plan contribution is based on a percentage of the employees’ pay. These changes did not affect then-current retirees. Subsequent to the plan freeze, accumulated actuarial losses are being amortized into net periodic pension expense over the average life expectancy of inactive plan participants of approximately 25 years rather than over their remaining average service. The company's defined benefit pension plan for salaried and non-represented employees in the United States is frozen. After the plan was frozen, the company started making additional contributions to its defined contribution savings plan on behalf of the affected employees. These additional contributions have been suspended since May 2020 and are anticipated to be suspended for the foreseeable future. The amount of the savings plan contribution is based on a percentage of the employees’ pay, with the contribution percentage increasing as a function of employees’ age. These changes do not affect plan participants who had retired prior to the freeze dates or represented employees. Accumulated actuarial losses are being amortized into net periodic pension expense over the average life expectancy of inactive plan participants of approximately 15 years. The company's U.S. Retirement Plan includes an additional distribution option in the form of a lump sum benefit from the plan. The majority of plan members are eligible for this distribution option following termination or when making their retirement payment election. The lump sum benefit equals the present value of a member's vested accrued benefit paid in one lump sum payment. The company’s pension obligations are measured as of September 30, 2021, 2020 and 2019. The U.S. plans include qualified and non-qualified pension plans. The company’s only significant remaining non-U.S. plan is located in the United Kingdom. The following are the significant assumptions used in the measurement of the projected benefit obligation ("PBO") and net periodic pension expense: U.S. Plans 2021 2020 2019 Discount rate 2.80% - 2.85% 2.50% - 2.60% 3.10% - 3.15% Assumed return on plan assets (beginning of the year) 7.75% 7.75% 7.75% U.K. Plan 2021 2020 2019 Discount rate 2.10% 1.70% 1.80% Assumed return on plan assets (beginning of the year) 5.00% 5.75% 6.00% The discount rate is used to calculate the present value of the PBO at the balance sheet date and net periodic pension expense for the subsequent fiscal year. The rate used reflects a rate of return on high-quality fixed income investments that match the duration of expected benefit payments. Generally, the company uses a portfolio of long-term corporate AA/Aa bonds that match the duration of the expected benefit payments, except for the company's U.K. pension plan which uses an annualized yield curve, to establish the discount rate for this assumption. The assumed return on plan assets is used to determine net periodic pension expense. The rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the target asset allocations. An incremental amount for active plan asset management and diversification, where appropriate, is included in the rate of return assumption. The return assumption is reviewed annually. The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans. The accompanying disclosures include pension obligations associated with businesses classified as discontinued operations. The following table reconciles the change in the PBO, the change in plan assets and amounts included in the Consolidated Balance Sheet for the years ended September 30, 2021 and 2020, respectively (in millions): 2021 2020 U.S. Non- U.S. Total U.S. Non- U.S. Total PBO — beginning of year $ 1,027 $ 602 $ 1,629 $ 1,006 $ 621 $ 1,627 Interest cost 26 9 35 31 11 42 Actuarial (gain) loss (29) (22) (51) 64 (24) 40 Amendments 4 1 5 — — — Benefit payments (72) (27) (99) (74) (25) (99) Foreign currency rate changes — 35 35 — 19 19 PBO — end of year $ 956 $ 598 $ 1,554 $ 1,027 $ 602 $ 1,629 Change in plan assets Fair value of assets — beginning of year $ 893 $ 776 $ 1,669 $ 741 $ 764 $ 1,505 Actual return on plan assets (5) (10) (15) 221 12 233 Employer contributions 5 — 5 5 — 5 Benefit payments (72) (27) (99) (74) (25) (99) Foreign currency rate changes — 45 45 — 25 25 Fair value of assets — end of year $ 821 $ 784 $ 1,605 $ 893 $ 776 $ 1,669 Funded status - over (under) $ (135) $ 186 $ 51 $ (134) $ 174 $ 40 Amounts included in the Consolidated Balance Sheet at September 30, 2021 and 2020 are comprised of the following (in millions): 2021 2020 U.S. Non-U.S. Total U.S. Non-U.S. Total Non-current assets $ — $ 191 $ 191 $ — $ 179 $ 179 Current liabilities (5) — (5) (5) — (5) Retirement benefits-non-current (130) (5) (135) (129) (5) (134) Net amount recognized $ (135) $ 186 $ 51 $ (134) $ 174 $ 40 The following tables summarize the amounts included in AOCL net of tax related to pension liabilities as of September 30, 2021 and 2020 and changes recognized in Other Comprehensive Income (Loss) net of tax for the year ended September 30, 2021. Net Actuarial Loss U.S. Non-U.S. Total Balance at September 30, 2020 $ 362 $ 196 $ 558 Net actuarial loss for the year 39 26 65 Amortization for the year (27) (5) (32) Deferred tax impact (3) — (3) Balance at September 30, 2021 $ 371 $ 217 $ 588 Balance at September 30, 2019 $ 467 $ 200 $ 667 Net actuarial loss for the year (101) 3 (98) Amortization for the year (26) (7) (33) Deferred tax impact 22 — 22 Balance at September 30, 2020 $ 362 $ 196 $ 558 The company estimates that $28 million of net actuarial losses will be amortized from AOCL into net periodic pension expense during fiscal year 2022. The non-current portion of the pension liability is included in Retirement Benefits in the Consolidated Balance Sheet as follows (in millions): September 30, 2021 2020 Pension liability $ 135 $ 134 Retiree medical liability — long term (see Note 19) 37 46 Other 19 16 Total retirement benefits $ 191 $ 196 In accordance with FASB guidance, the PBO, accumulated benefit obligation ("ABO") and fair value of plan assets are required to be disclosed for all plans where the ABO is in excess of plan assets. The difference between the PBO and ABO is that the PBO includes projected compensation increases. Additional information is as follows (in millions): 2021 2020 ABO Assets Total ABO Assets Total PBO $ 962 $ 592 $ 1,554 $ 1,032 $ 597 $ 1,629 ABO 962 592 1,554 1,032 597 1,629 Plan Assets 821 784 1,605 893 776 1,669 The components of net periodic pension income are as follows (in millions): 2021 2020 2019 Service cost $ — $ — $ — Interest cost 35 42 53 Assumed rate of return on plan assets (98) (97) (97) Amortization of actuarial losses 32 33 24 Settlement gain (1) — — Net periodic pension income $ (32) $ (22) $ (20) Disclosures on investment policies and strategies, categories of plan assets, fair value measurements of plan assets, and significant concentrations of risk are included below. Investment Policy and Strategy The company’s primary investment objective for its pension plan assets is to generate a total investment return sufficient to meet present and future benefit payments while minimizing the company’s cash contributions over the life of the plans. In order to accomplish this objective, the company maintains target allocations to identify and manage exposures. The target asset allocation ranges for the U.S. plans are 20–50 percent equity investments, 30–60 percent fixed income investments and 10–30 percent alternative investments. Alternative investments include private equities, real estate, hedge funds, diversified growth funds, and partnership interests. The target asset allocation ranges for the non-U.S. plans are 15–35 percent equity investments, 30–40 percent fixed income investments, 0–15 percent real estate and 15–35 percent alternative investments. Investment strategies and policies for the company’s pension plan assets reflect a balance of risk-reducing and return-seeking considerations. The objective of minimizing the volatility of assets relative to liabilities is addressed primarily through asset diversification. Assets are broadly diversified across several asset classes to achieve risk-adjusted returns that accomplish this objective. The majority of pension plan assets are externally managed through active managers. Managers are only permitted to invest within established asset classes and follow the strategies for which they have been appointed. The company uses investment guidelines and reviews asset returns and investment decisions made by the managers to ensure that they are in accordance with the company’s strategies. Concentration of Risk The company seeks to mitigate risks relative to performance of the plan assets. Assets are invested in various classes with different risk and return characteristics in order to ensure that they are sufficient to pay benefits. The company’s investment strategies incorporate a return-seeking approach through equity and alternative investments, while seeking to minimize the volatility of the plans’ assets relative to its liabilities through investments in fixed income securities. The significant areas of risk related to these strategies include equity, interest rate, and operating risk. A portion of plan assets is allocated to equity and alternative investments that are expected, over time, to earn higher returns. Within this return-seeking portfolio, asset diversification is utilized to reduce uncompensated risk. Plan assets are also allocated to fixed income investments, which seek to minimize interest rate risk volatility relative to pension liabilities. The fixed income portfolio partially matches the long-dated nature of the pension liabilities reducing interest rate risk. Interest rate decreases generally increase the value of fixed income assets, partially offsetting the related increase in the liabilities, while interest rate increases generally result in a decline in the value of fixed income assets while reducing the present value of the liabilities. Operating risks consist of the risks of inadequate diversification and weak controls. The company has established policies and procedures in order to mitigate this risk by monitoring investment manager performance, reviewing periodic compliance information, and ensuring that the plans’ managers invest in accordance with the company’s investment strategies. Fair Value of Investments The current FASB guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 inputs use quoted prices in active markets for identical assets that the Plan has the ability to access. • Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets in active markets and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest priority level input that is significant to the valuation. The company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. Following are descriptions, valuation methodologies and other information related to plan assets. Cash and cash equivalents : The fair value of cash and cash equivalents is valued at cost. Equity Securities : The overall equity category includes common and preferred stocks issued by U.S. and international companies as well as equity funds that invest in these instruments. All investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost. The aggregate equity portfolio is diversified to avoid exposure to any investment strategy, single economic sector, industry group, or individual security. The fair value of equity securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. Most of the equity investments allow daily redemptions, with some requiring a 30-60 day notice. Fixed Income Securities : The overall fixed income category includes U.S. dollar-denominated and international marketable bonds and convertible debt securities as well as fixed income funds that invest in these instruments. All assets generally allow near-term liquidity and are held in issues which are actively traded to facilitate transactions at minimum cost. The aggregate fixed income portfolio is diversified to avoid exposure to any investment strategy, maturity, issuer or credit quality. The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. U.S. fixed income securities typically offer daily liquidity, with only one investment allowing quarterly redemptions. International and emerging fixed income investment vehicles generally provide daily liquidity. Commingled Funds : The fair value of commingled funds is determined by a custodian. The custodian obtains valuations from underlying fund managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading activity to derive prices. The company and custodian review the methods used by the underlying managers to value the assets. Real Estate : Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets. The fair value of real estate investments is valued by the fund managers. The fund managers value the real estate investments via independent third-party appraisals on a periodic basis. Assumptions used to revalue the properties are updated every quarter. For the component of the real estate portfolio under development, the investments are carried at cost, which approximates fair value, until they are completed and valued by a third-party appraiser. Due to the long-term nature of real estate investments, liquidity is provided on a quarterly basis. Insurance Contract : The plan entered into a pensioner buy-in insurance contract which reimburses the plan for specified benefit payment streams. The valuation for the buy-in contract is calculated on an insurer pricing basis and is estimated using unobservable inputs. Futures Contracts : The plan enters into futures contracts in the normal course of its investing activities to manage market risk and to achieve overall investment portfolio objectives. The credit risk associated with these contracts is minimal as they are traded on organized exchanges and settled daily. The fair value of futures contracts is determined by direct quoted market prices. Cash margin for these futures contracts is included in Cash and Cash Equivalents in the leveling table. Alternatives/Partnerships/Private Equity : This category includes investments in private equity and hedge funds in addition to entering into futures contracts across various asset classes. Such investments may be made directly or through pooled funds, including fund of funds structures. The fair market value of the company’s interest in partnerships and private equity is valued by the fund managers. The valuation is based on the net present value of observable inputs (dividends, cash flows, earnings, etc.), which are discounted at applicable discount rates. The company and custodian review the methods used by the underlying managers to value the assets. Most of these investments offer quarterly redemption opportunities while some offer daily liquidity. Some partnerships and private equity investments, due to the nature of their investment strategy and underlying holdings, offer less frequent liquidity. When available, liquidity events are closely evaluated. The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The fair value of plan assets at September 30, 2021 by asset category is as follows (in millions): U.S. Plans 2021 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 73 $ — $ — $ 73 U.S. – Small cap 24 — — 24 International equity 12 — — 12 Equity investments measured at net asset value (1) — — — 189 Total equity investments $ 109 $ — $ — $ 298 Fixed income investments U.S. fixed income $ 15 $ 310 $ — $ 325 Emerging fixed income — 20 — 20 Fixed income investments measured at net asset value (1) — — — 31 Total fixed income $ 15 $ 330 $ — $ 376 Alternatives – Partnerships — — 5 5 Alternatives – Partnerships measured at net asset value (1) — — — 91 Cash and cash equivalents — 51 — 51 Total assets at fair value $ 124 $ 381 $ 5 $ 821 Non-U.S. Plans 2021 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 141 $ — $ — $ 141 Total equity investments $ 141 $ — $ — $ 141 Fixed income investments Other fixed income investments $ 5 $ 170 $ — $ 175 Fixed income investments measured at net asset value (1) — — — 168 Total fixed income $ 5 $ 170 $ — $ 343 Commingled funds — 2 — 2 Alternative investments measured at net asset value (1) — — — 102 Real estate measured at net asset value (1) — — — 42 Cash and cash equivalents — 28 — 28 Insurance contract (2) — — 126 126 Total assets at fair value $ 146 $ 200 $ 126 $ 784 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. (2) In fiscal year 2020, the company entered into an insurance contract. The purchase of the insurance contract provided an observable market value and the contract was classified as a level 2 asset. In fiscal year 2021, the market value is no longer observable, therefore, the contract is classified as a level 3 asset. The fair value of plan assets at September 30, 2020 by asset category is as follows (in millions): U.S. Plans 2020 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 209 $ — $ — $ 209 U.S. – Small cap 15 — — 15 International equity 12 — — 12 Equity investments measured at net asset value (1) — — — 189 Total equity investments $ 236 $ — $ — $ 425 Fixed income investments U.S. fixed income $ 9 $ 270 $ — $ 279 Emerging fixed income — 13 — 13 Partnerships fixed income — — — — Fixed income investments measured at net asset value (1) — — — 26 Total fixed income $ 9 $ 283 $ — $ 318 Alternatives 9 — — 9 Alternatives – Partnerships — — 5 5 Alternatives – Partnerships measured at net asset value (1) — — — 74 Cash and cash equivalents — 62 — 62 Total assets at fair value $ 254 $ 345 $ 5 $ 893 Non-U.S. Plans 2020 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 180 $ — $ — $ 180 Total equity investments $ 180 $ — $ — $ 180 Fixed income investments Other fixed income investments $ 5 $ 214 $ — $ 219 Fixed income investments measured at net asset value (1) — — — 71 Total fixed income $ 5 $ 214 $ — $ 290 Commingled funds — 2 — 2 Alternative investments measured at net asset value (1) — — — 127 Real estate measured at net asset value (1) — — — 37 Cash and cash equivalents — 9 — 9 Insurance contract — 131 — 131 Total assets at fair value $ 185 $ 356 $ — $ 776 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. Unfunded Commitment As of September 30, 2021, the U.S. plan had $6 million of unfunded investment commitments related to plan assets. The majority of this amount is attributed to partnership investments that the plan will invest in gradually over the course of several years. Non-U.S. plans currently do not have any unfunded commitments. The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2021 (in millions): All Plans 2021 Fair Value at October 1, 2020 Return on Plan Assets: Attributable to Assets Held at Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2021 Asset Category Insurance contract $ — $ — $ — $ — $ 126 $ 126 Alternatives – Partnerships 5 1 — (1) — 5 Total Level 3 fair value $ 5 $ 1 $ — $ (1) $ 126 $ 131 The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2020 (in millions): All Plans 2020 Fair Value at October 1, 2019 Return on Plan Assets: Attributable to Assets Held at September 30, 2020 Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2020 Asset Category Private equity $ 19 $ — $ — $ — $ (19) $ — Alternatives – Partnerships 86 1 — (1) (81) 5 Total Level 3 fair value $ 105 $ 1 $ — $ (1) $ (100) $ 5 Information about the expected cash flows for the U.S. and non-U.S. pension plans is as follows (in millions): U.S. Non U.S. Total Expected employer contributions: Fiscal 2022 $ 5 $ — $ 5 Expected benefit payments: Fiscal 2022 70 27 97 Fiscal 2023 67 27 94 Fiscal 2024 67 27 94 Fiscal 2025 65 27 92 Fiscal 2026 63 28 91 Fiscal 2027-2031 292 139 431 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provisions were calculated based upon the following components of income before income taxes (in millions): 2021 2020 2019 U.S. income $ 12 $ 268 $ 194 Foreign income 222 58 183 Total $ 234 $ 326 $ 377 The components of the provision (benefit) for income taxes are summarized as follows (in millions): 2021 2020 2019 Current tax expense (benefit): U.S. $ (8) $ 20 $ 1 Foreign 42 16 40 State and local 3 4 1 Total current tax expense 37 40 42 Deferred tax expense (benefit): U.S. (9) 40 34 Foreign (2) (5) 6 State and local (2) 3 — Total deferred tax expense (benefit) (13) 38 40 Income tax expense $ 24 $ 78 $ 82 The deferred tax expense or benefit represents tax effects of current year deductions or items of income that will be recognized in future periods for tax purposes. The fiscal year 2021 current income tax benefit in the U.S. was primarily attributable to tax initiatives that were undertaken during the year that resulted in the generation and utilization of foreign tax credits. Net deferred income tax assets (liabilities) included in the Consolidated Balance Sheet consist of the tax effects of temporary differences related to the following (in millions): September 30, 2021 2020 Accrued compensation and benefits $ 23 $ 13 Accrued product warranties 10 11 Inventory costs 18 12 Receivables 9 8 Accrued retiree healthcare benefits 11 13 Retirement pension plans 18 25 Property 17 9 Lease liabilities 16 18 Net operating losses and tax credit carryforwards 247 215 Other 10 21 Sub-total 379 345 Less: Valuation allowances (250) (226) Deferred income taxes - asset $ 129 $ 119 Taxes on undistributed income $ (11) $ (11) Intangible assets (69) (65) Lease assets (15) (17) Other — (7) Deferred income taxes - liability $ (95) $ (100) Net deferred income tax assets $ 34 $ 19 Net deferred income tax assets (liabilities) are included in the Consolidated Balance Sheet as follows (in millions): September 30, 2021 2020 Other assets (see Note 11) $ 42 $ 30 Other liabilities (see Note 14) (8) (11) Net deferred income taxes - asset $ 34 $ 19 Valuation Allowances As of September 30, 2021, the company continues to maintain valuation allowances in the U.K., France, Germany and certain other jurisdictions, as the company believes the negative evidence continues to outweigh the positive evidence that it will be able to recover these net deferred tax assets. 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. In evaluating its ability to recover these net deferred tax assets, the company utilizes a consistent approach which considers its historical operating results, including an assessment of the degree to which any gains or losses are driven by items that are unusual in nature and tax planning strategies. In addition, the company reviews changes in near-term market conditions and other factors that impact future operating results. The expiration periods for deferred tax assets related to net operating losses and tax credit carryforwards as of September 30, 2021 are included below (in millions). Also included are the associated valuation allowances on these deferred tax assets (in millions). Fiscal Year Expiration Periods 2021-2025 2026-2035 2036-2040 Indefinite Total Net operating losses and tax credit carryforwards $ 5 $ 13 $ — $ 229 $ 247 Valuation allowances on these deferred tax assets $ 4 $ 11 $ — $ 225 $ 240 Realization of deferred tax assets representing net operating loss and tax credit carryforwards for which a valuation allowance has not been provided is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. Although realization is not assured, management believes it is more likely than not that such deferred tax assets will be realized. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if the company is unable to generate sufficient future taxable income during the carryforward period. The company’s provision (benefit) for income taxes was different from the provision for income taxes calculated at the U.S. statutory rate for the reasons set forth below (in millions): September 30, 2021 2020 2019 Expense for income taxes at statutory tax rate $ 49 $ 68 $ 79 State and local income taxes 4 5 3 Foreign income taxed at rates other than statutory 10 2 11 Legislative changes (36) (10) 1 Joint venture equity income (7) (3) (6) Nondeductible expenses 15 11 16 Tax credits (58) (8) (11) Valuation allowances 17 10 (7) Tax audit adjustments — 5 — Discharge of intercompany indebtedness 38 — — Reversal of uncertain tax positions due to statute expirations (13) (3) (1) Other 5 1 (3) Income tax expense $ 24 $ 78 $ 82 In fiscal year 2021, a tax law change in the U.K. resulted in a benefit of $35 million from the remeasurement of net deferred tax assets. The benefit does not impact income tax expense since it is offset by a corresponding valuation allowance in the U.K. Also, the company undertook certain tax initiatives that resulted in a net tax benefit of $10 million, which consisted of $51 million of tax credits, $38 million of tax expense related to the discharge of intercompany indebtedness and $3 million of other tax expense. At September 30, 2021 and 2020, $1,041 million and $1,161 million, respectively, of non-U.S. earnings were considered indefinitely reinvested in operations outside the U.S., for which deferred taxes have not been provided. Quantification of the deferred tax liability, if any, associated with permanently reinvested earnings is not practicable. The total amount of gross unrecognized tax benefits the company recorded in accordance with ASC Topic 740 was $287 million, $283 million and $276 million, as of September 30, 2021, 2020 and 2019, respectively, of which $239 million, $234 million and $230 million, represents the amount that, if recognized, would favorably affect the effective income tax rate in future periods. A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period is as follows (in millions): September 30, 2021 2020 2019 Balance at beginning of the period $ 283 $ 276 $ 261 Additions to tax positions recorded during the current year 18 4 11 Additions to tax positions recorded during the prior year 3 5 9 Reductions to tax position recorded in prior years — (1) — Reductions to tax positions due to lapse of statutory limits (17) (4) (4) Translation, other — 3 (1) Balance at end of the period $ 287 $ 283 $ 276 The company’s continuing practice is to recognize interest and penalties on uncertain tax positions in the provision for income taxes in the Consolidated Statement of Operations. At September 30, 2021 and 2020, the company recorded assets of $21 million and $13 million, respectively, of interest on uncertain tax positions in the Consolidated Balance Sheet. The company files tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. The company’s Canadian federal income tax returns for fiscal years 2015 and 2016 are currently under audit. The company's Indian subsidiary is currently under audit for fiscal years 2015 and 2016. The company's French subsidiary is under audit for fiscal years 2018-2020. In addition, the company is under audit in various state tax jurisdictions for various years. It is reasonably possible that audit settlements, the conclusion of current examinations or the expiration of the statute of limitations in several jurisdictions could change the company’s unrecognized tax benefits during the next twelve months. It is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefit in the next twelve months. In addition to the audits listed above, the company has open tax years primarily from 2001-2020 with various significant taxing jurisdictions, including the U.S., Brazil, Canada, China, Italy, Mexico, Sweden and the U.K. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. The company has recorded a tax benefit only for those positions that meet the more-likely-than-not standard. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which includes various income and payroll tax provisions, was signed into law by the U.S. government. In addition, various other coronavirus tax relief initiatives have been implemented around the world. These tax initiatives did not have a material impact on the Consolidated Financial Statements for the fiscal years ended September 30, 2021 and 2020. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Sep. 30, 2021 | |
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 at which the company is the only potentially responsible party, the company records a liability for the total probable and estimable costs of remediation before consideration of recovery from insurers or other third parties. The company has been designated as a potentially responsible party at ten Superfund sites, excluding sites as to which the company’s records disclose no involvement or as to which the company’s liability has been finally determined. Management estimates the total reasonably possible costs the company could incur for the remediation of Superfund sites at September 30, 2021 to be approximately $22 million, of which $9 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. Environmental remediation costs recorded with respect to the Superfund sites were $1 million in fiscal year 2021, $4 million in fiscal year 2020 and $2 million in fiscal year 2019. In addition to the Superfund sites, various other lawsuits, claims and proceedings have been asserted against the company, alleging violations of federal, state and local environmental protection requirements, or seeking remediation of alleged environmental impairments, principally at previously disposed-of properties. For these matters, management has estimated the total reasonably possible costs the company could incur at September 30, 2021 to be approximately $10 million, of which $4 million is probable and recorded as a liability. The company recorded environmental remediation costs of $0 million in 2021 and $2 million in 2020 and 2019 with respect to these matters, resulting from revised estimates to remediate these sites. Included in the company’s environmental liabilities are costs for on-going operation, maintenance and monitoring at environmental sites in which remediation has been put into place. This liability is discounted using discount rates in the range of 0.00 to 1.50 percent and is approximately $12 million at September 30, 2021. The undiscounted estimate of these costs is approximately $13 million. The following are the components of the Superfund and non-Superfund environmental reserves (in millions): Superfund Non-Superfund Total Balance at September 30, 2020 $ 11 $ 5 $ 16 Payments and other (3) (1) (4) Accruals 1 — 1 Balance at September 30, 2021 $ 9 $ 4 $ 13 There were $2 million, $6 million, and $3 million of environmental remediation costs recognized in other operating expense in the Consolidated Statement of Operations in fiscal years 2021, 2020 and 2019, respectively. Environmental reserves are included in Other Current Liabilitie s (see Note 13) and Other Liabilities (see Note 14 ) in the Consolidated Balance Sheet. The actual amount of costs or damages for which the company may be held responsible could materially exceed the foregoing estimates because of uncertainties, including the financial condition of other potentially responsible parties, the success of the remediation, discovery of new contamination and other factors that make it difficult to predict actual costs accurately. However, based on management’s assessment, after consulting with outside advisors that specialize in environmental matters, and subject to the difficulties inherent in estimating these future costs, the company believes that its expenditures for environmental capital investment and remediation necessary to comply with present regulations governing environmental protection and other expenditures for the resolution of environmental claims will not have a material effect on the company’s business, financial condition or results of operations. In addition, in future periods, new laws and regulations, changes in remediation plans, advances in technology and additional information about the ultimate clean-up remedies could significantly change the company’s estimates. Management cannot assess the possible effect of compliance with future requirements. 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 Consolidated Balance Sheet and the results of Maremont’s operations were eliminated from the company’s consolidated results of operations as Maremont became subject to the control of a court. Deconsolidation had an insignificant impact on the 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 $48 million, consisting of cash and repayment of 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 the 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 — ArvinMeritor, Inc. ("AM"), a predecessor of Meritor, along with many other companies, has also been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos used in certain components of Rockwell products many years ago. Liability for these claims was transferred at the time of the spin-off of the automotive business from Rockwell in 1997. Rockwell had approximately 600 and 1,200 pending active asbestos claims in lawsuits that name AM as a defendant at September 30, 2021 and 2020, respectively. In March 2021, AM entered into a tolling agreement with an asbestos plaintiff's law firm. Under the terms of this agreement, AM agreed to toll the statute of limitations from expiring on asbestos claims in exchange for the plaintiff's law firm agreeing not to raise a claim until there is a product identification linking AM. The plaintiff's law firm also agreed to dismiss pending active claims for which product identification was not yet determined. There were approximately 600 claims dismissed as a result of this tolling agreement in the third fiscal quarter of fiscal year 2021. According to the terms of the tolling agreement, if the plaintiff's law firm subsequently links AM's products to the plaintiff, they will refile a claim against AM. A significant portion of the claims do not identify any of Rockwell’s products or specify which of the claimants, if any, were exposed to asbestos attributable to Rockwell’s products, and past experience has shown that the vast majority of the claimants will likely never identify any of Rockwell’s products. Historically, AM has been dismissed from the vast majority of similar claims filed in the past with no payment to claimants. For those claimants who do show that they worked with Rockwell’s products, management nevertheless believes it has meritorious defenses, in substantial part due to the integrity of the products involved and the lack of any impairing medical condition on the part of many claimants. Pending and Future Claims : The company engaged a third-party advisor with 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, 2021. On a continual basis, management monitors the underlying claims data and experience, for the purpose of assessing the appropriateness of the assumptions used to estimate the liability. As of September 30, 2021, the best estimate of the company’s obligation for asbestos-related claims over the next 37 years is $60 million. The company recognized a liability for pending and future claims of $60 million as of September 30, 2021 and $78 million as of September 30, 2020. The ultimate cost of resolving pending and future claims is estimated based on the history of claims and expenses for plaintiffs represented by law firms in jurisdictions with an established history with Rockwell. Recoveries: Rockwell has insurance coverage that management believes covers indemnity and defense costs, over and above self-insurance retentions, for a significant portion of these claims. The company recognizes insurance recoveries when the claim for recovery is deemed probable and to the extent an insurable loss has been recognized in the financial statements. The company’s determination is based on analysis of the underlying insurance policies, historical experience with insurers, ongoing review of the solvency of insurers, and consideration of any insurance settlements. The insurance receivables for Rockwell’s asbestos-related liabilities totaled $51 million and $62 million as of September 30, 2021 and 2020, 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. However, the amount of reasonably possible and estimable losses in excess of the recorded asbestos-related liabilities was determined to be immaterial. The Rockwell legacy asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions): September 30, 2021 2020 Pending and future claims $ 60 $ 78 Billed but unpaid claims 1 1 Asbestos-related liabilities $ 61 $ 79 Asbestos-related insurance recoveries $ 51 $ 62 Assumptions : The following assumptions were made by the company after consultation with consultants and are included in the study: • Pending and future claims were estimated for a 37 year period ending in fiscal year 2058; • The litigation environment remains consistent throughout the forecast horizon; • On a per claim basis, defense and indemnity costs for pending and future claims will be at the level consistent with the company’s recent experience. Indemnification The company has agreed to indemnify others in conjunction with certain transactions, primarily divestitures. These indemnities address a variety of matters, which may include environmental, tax, asbestos and employment-related matters, and the periods of indemnification vary in duration. The company is not aware of any other claims or other information that would give rise to material payments under such indemnities. Other |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The company defines its operating segments as components of its business where separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The company’s Chief Operating Decision Maker ("CODM") is the Chief Executive Officer. The company has two reportable segments at September 30, 2021, 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. It also supplies a variety of undercarriage products and systems for trailer applications in North America. This segment also includes the company's aftermarket businesses in Asia Pacific and South America. • The Aftermarket & Industrial segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers, primarily in North America and Europe. In addition, this segment supplies drivetrain systems and certain components, including axles, drivelines, brakes and suspension systems for military, construction, bus and coach, fire and emergency and other applications in North America and Europe. Segment adjusted EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expense, asset impairment charges and other special items as determined by management. Segment adjusted EBITDA excludes unallocated legacy and corporate income (expense), net. The company uses segment adjusted EBITDA as the primary basis for the CODM to evaluate the performance of each of its reportable segments. The accounting policies of the segments are the same as those applied in the Consolidated Financial Statements, except for the use of segment adjusted EBITDA. The company may allocate certain common costs, primarily corporate functions, between the segments differently than the company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such as information technology, finance, communications, legal and human resources. The company does not allocate interest expense and certain legacy and other corporate costs not directly associated with the segment. Segment information is summarized as follows (in millions): Commercial Truck Aftermarket & Industrial Elims Total Fiscal year 2021 Sales: External Sales $ 2,866 $ 967 $ — $ 3,833 Intersegment Sales 142 22 (164) — Total Sales $ 3,008 $ 989 $ (164) $ 3,833 Fiscal year 2020 Sales: External Sales $ 2,080 $ 964 $ — $ 3,044 Intersegment Sales 110 17 (127) — Total Sales $ 2,190 $ 981 $ (127) $ 3,044 Fiscal year 2019 Sales: External Sales $ 3,307 $ 1,081 $ — $ 4,388 Intersegment Sales 149 19 (168) — Total Sales $ 3,456 $ 1,100 $ (168) $ 4,388 Year Ended September 30, 2021 2020 2019 Segment adjusted EBITDA: Commercial Truck $ 259 $ 116 $ 342 Aftermarket & Industrial 139 150 175 Segment adjusted EBITDA 398 266 517 Unallocated legacy and corporate income, net (1) 13 6 3 Interest expense, net (79) (66) (57) Provision for income taxes (24) (78) (82) Depreciation and amortization (103) (101) (87) Loss on sale of receivables (4) (4) (6) Restructuring costs (13) (27) (8) Brazilian VAT Credit (2) 22 — — Transaction costs — (5) (6) Asbestos related items (3) — — 31 Asset impairment charges — (8) (10) Income from WABCO distribution termination — 265 — Noncontrolling interests (10) (4) (5) Income from continuing operations attributable to Meritor, Inc. $ 200 $ 244 $ 290 (1) Unallocated legacy and corporate income, 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) Amount relates to a pre-tax loss recovery, net of legal expenses, on the overpayment of VAT in Brazil. (3) The year ended September 30, 2019 includes $31 million related to the remeasurement of the Maremont net asbestos liability based on the Plan. Year ended September 30, 2021 2020 2019 Depreciation and Amortization: Commercial Truck $ 80 $ 76 $ 73 Aftermarket & Industrial 23 25 14 Total depreciation and amortization $ 103 $ 101 $ 87 Capital Expenditures: Commercial Truck $ 76 $ 68 $ 88 Aftermarket & Industrial 14 17 15 Total capital expenditures $ 90 $ 85 $ 103 September 30, 2021 2020 Segment Assets: Commercial Truck $ 1,961 $ 1,666 Aftermarket & Industrial 654 658 Total segment assets 2,615 2,324 Corporate (1) 496 714 Less: Accounts receivable sold under off-balance sheet factoring programs (2) (173) (154) Total assets $ 2,938 $ 2,884 (1) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs. (2) At September 30, 2021 and September 30, 2020, segments assets include $173 million and $154 million, respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (see Note 8). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances. Sales by geographic area are based on the location of the selling unit. Information on the company’s geographic areas is summarized as follows (in millions): Year ended September 30, 2021 2020 2019 Sales by Geographic Area: U.S. $ 2,057 $ 1,783 $ 2,622 Canada 55 54 69 Mexico 197 147 249 Total North America 2,309 1,984 2,940 Sweden 276 202 276 Italy 240 166 234 United Kingdom 153 114 165 Other Europe 151 139 91 Total Europe 820 621 766 Brazil 317 172 248 China 130 135 153 India 146 72 197 Other Asia-Pacific 111 60 84 Total sales $ 3,833 $ 3,044 $ 4,388 September 30, 2021 2020 Assets by Geographic Area: U.S. $ 1,424 $ 1,458 Canada 36 35 Mexico 212 190 Total North America 1,672 1,683 Sweden 137 136 Italy 94 111 United Kingdom 290 270 Other Europe 205 269 Total Europe 726 786 Brazil 214 132 China 145 130 India 92 76 Other Asia-Pacific 89 77 Total $ 2,938 $ 2,884 Sales to AB Volvo represented approximately 24 percent, 21 percent and 22 percent of the company’s sales in fiscal years 2021, 2020 and 2019, respectively. Sales to Daimler AG represented approximately 16 percent, 17 percent and 19 percent of the company’s sales in fiscal years 2021, 2020 and 2019, respectively. Sales to PACCAR represented approximately 13 percent, 12 percent and 13 percent of the company's sales in fiscal years 2021, 2020 and 2019, respectively. Sales to Navistar represented approximately 7 percent, 8 percent and 10 percent of the company’s sales in fiscal years 2021, 2020 and 2019, respectively. No other customer comprised 10 percent or more of the company’s total sales in any of the three fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019. |
OPERATING CASH FLOWS AND OTHER
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Sep. 30, 2021 | |
Operating Cash Flow Disclosure [Abstract] | |
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION | OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION Year Ended September 30, 2021 2020 2019 (in millions) OPERATING ACTIVITIES Net income $ 209 $ 249 $ 296 Less: Income (loss) from discontinued operations, net of tax (1) 1 1 Income from continuing operations 210 248 295 Adjustments to income from continuing operations to arrive at cash provided by operating activities: Depreciation and amortization 103 101 87 Deferred income tax expense (income) (13) 38 40 Restructuring costs 13 27 8 Loss on debt extinguishment, net 11 — — Asset impairment charges — 8 10 Equity in earnings of affiliates (34) (14) (31) Stock compensation expense 20 7 18 Pension and retiree medical income (53) (42) (37) Asbestos related liability remeasurement — — (31) Contribution to Maremont trust — — (48) Dividends received from equity method investments 7 10 23 Pension and retiree medical contributions (10) (15) (16) Restructuring payments (13) (25) (5) Changes in off-balance sheet receivable securitization and factoring programs 13 (77) (18) Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations: Receivables (61) 147 80 Inventories (164) 100 9 Accounts payable 139 (186) (103) Other current assets and liabilities 52 (64) (3) Other assets and liabilities (22) 2 (22) Operating cash flows provided by continuing operations 198 265 256 Operating cash flows used for discontinued operations (1) — — CASH PROVIDED BY OPERATING ACTIVITIES $ 197 $ 265 $ 256 September 30, 2021 2020 2019 (In millions) Balance sheet data: Allowance for doubtful accounts $ 3 $ 3 $ 3 Statement of operations data: Maintenance and repairs expense 55 47 55 Research, development and engineering expense 76 74 75 Depreciation expense 87 87 76 Rental expense 19 19 19 Interest income 2 4 4 Interest expense (81) (70) (61) Statement of cash flows data: Interest payments, net of receipts 57 48 41 Income tax payments, net of refunds 22 55 64 Non-cash investing activities - capital asset additions from finance leases 3 — — |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Significant estimates and assumptions were used to review goodwill and other long-lived assets for impairment (see Notes 6 and 10), environmental liabilities (see Notes 13, 14 and 22), product warranty liabilities (see Note 13 and 14), long-term incentive compensation plan obligations (see Note 18), retiree medical and pension obligations (see Notes 19 and 20), income taxes (see Note 21), and contingencies, including asbestos (see Note 22). |
Concentration of Credit Risk | Concentration of Credit RiskIn the normal course of business, the company provides credit to customers. The company limits its credit risk by performing ongoing credit evaluations of its customers and maintaining reserves for potential credit losses and through accounts receivable factoring programs. The company’s accounts receivables are generally due from medium- and heavy-duty truck OEMs, specialty vehicle manufacturers, aftermarket customers, and trailer producers. |
Consolidation and Joint Ventures | Consolidation and Joint Ventures The Consolidated Financial Statements include the accounts of the company and those subsidiaries in which the company has control. All intercompany balances and transactions are eliminated in consolidation. The results of operations of controlled subsidiaries are included in the Consolidated Financial Statements and are offset by a related noncontrolling interest recorded for the noncontrolling partners’ ownership. |
Foreign Currency | Foreign Currency |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, excluding goodwill, to be held and used are reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset group is not recoverable, based on undiscounted cash flows over the remaining useful life of the primary asset of the group, and the long lived asset group's carrying value exceeds the fair value. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts |
Earnings per Share | Earnings per Share |
Other | Other Other significant accounting policies are included in the related notes, specifically, goodwill (Note 6), inventories (Note 9), property and depreciation (Note 10), product warranties (Note 13), financial instruments (Note 16), equity based compensation (Note 18), retirement medical plans (Note 19), retirement pension plans (Note 20), income taxes (Note 21) and environmental and asbestos-related liabilities (Note 22). |
Accounting Standards Implemented and to be Implemented | Accounting standards implemented during fiscal year 2021 On October 1, 2020, the company implemented Accounting Standards Update ("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 guidance had an impact on the company's accounting policies and procedures related to calculation of allowance for doubtful accounts receivable but did not have a material impact on its Consolidated Financial Statements. On October 1, 2020, the company implemented 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 guidance did not have a material impact on the company's Consolidated Financial Statements. 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 August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASC 470-20 outlines five models to allocate the proceeds attributable to the issuance of a convertible debt instrument. This ASU removes from U.S. GAAP the separation models for convertible debt with a cash conversion feature (CCF) and convertible debt with a beneficial conversion feature (BCF). As a result of adopting this ASU, entities are not required to separately present in equity an embedded conversion feature in such debt. Instead, they should account for a convertible debt instrument wholly as debt. Applying the separation models in ASC 470-20 to convertible instruments with a CCF or BCF involved the recognition of a debt discount, which is amortized to interest expense. The elimination of CCF and BCF models will reduce reported interest expense and increase reported net income for convertible instruments issued within the scope of those models before the adoption of ASU 2020-06. The amendments in this update are required to be adopted by public business entities in fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal year beginning after December 15, 2020, including interim periods within those fiscal years. Entities are permitted to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The company will early adopt the ASU in the first quarter of fiscal year 2022 on a modified retrospective basis. Upon adoption, additional paid in capital is expected to be reduced by approximately $41 million and the 3.25 percent convertible notes due 2037 (the "3.25 Percent Convertible Notes") is expected to be increased by approximately $23 million for the recombination of the equity conversion component of our convertible debt remaining outstanding, which was initially separated and recorded in equity. The net effect of these adjustments will be recorded as an increase in the balance of opening retained earnings as of October 1, 2021. Adoption of the ASU will result in the reduction of interest expense for the year ending September 30, 2022 and until the 3.25 Percent Convertible Notes are settled. The reduction in interest expense will increase both basic and diluted earnings per share. The required use of the if-converted method is not expected to have a significant impact on the calculation of common share equivalents included in the measure of our diluted earnings per share for the company’s 3.25 Percent Convertible Notes. The adoption of the ASU will have no impact on the Consolidated Statement of Cash Flows. |
Revenue and Contract Costs | Revenue is measured based on the consideration to which the company expects to be entitled, and is presented net of any estimates of customer sales allowances, incentives, rebates, and returns. The company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost, as opposed to a distinct performance obligation, and are included in cost of sales. Nature of goods and services The following is a description of principal activities - separated by reportable segments - from which the company generates its revenue. 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. It also supplies a variety of undercarriage products and systems for trailer applications in North America. This segment also includes the company's aftermarket businesses in Asia Pacific and South America. The Aftermarket & Industrial segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers, primarily in North America and Europe. In addition, this segment supplies drivetrain systems and certain components, including axles, drivelines, brakes and suspension systems for military, construction, bus and coach, fire and emergency and other applications in North America and Europe. Although the company may enter into long-term supply arrangements with its major customers, the prices and volumes are not fixed over the term of the arrangements and a contract does not exist under the scope of Topic 606 until prices and volumes are known. As such, individual customer releases or purchase orders represent the contract with the customer. The company accounts for individual products and services separately if they are distinct (i.e., if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The company has identified certain performance obligations related to brake pad fitting and axle dressing where it is acting as an agent and, therefore, recognizes revenue on a net basis for satisfaction of those performance obligations. The company recognizes revenue for the sale of goods at the point in time when the customer takes control of the goods. As such, revenue is recognized upon shipment of product and transfer of ownership to the customer. The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e., customer sales allowances, incentives, rebates, and returns). Provisions for customer sales allowances, incentives, rebates, and returns are recorded as a reduction of sales at the time of revenue recognition based primarily on historical experience. The company’s payment terms with customers are customary and vary by customer and geography but typically range from 30 to 90 days. The company provides warranties on some of its products. The company records estimated product warranty costs at the time of shipment of products to customers (see Note 13 and Note 14). Contract costs The company applies the practical expedient provided in Topic 606 and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the company otherwise would have recognized is one year or less. The costs which are not capitalized are included in cost of sales. |
Inventories | Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) |
Net Property | Property is stated at cost. Depreciation of property is based on estimated useful lives, generally using the straight-line method. Estimated useful lives for buildings and improvements range from 10 to 50 years and estimated useful lives for machinery and equipment range from 3 to 25 years. Significant improvements are capitalized, and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. Company-owned tooling is classified as property and depreciated over the shorter of its expected life or the life of the production contract, generally not to exceed three years. In accordance with the FASB guidance on property, plant and equipment, the company reviews the carrying value of long-lived assets, excluding goodwill, to be held and used, for impairment whenever events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value is not recoverable and exceeds estimated fair value. |
Product Warranty | The company records estimated product warranty costs at the time of shipment of products to customers. Warranty reserves are primarily based on factors that include past claims experience, sales history, product manufacturing and engineering changes and industry developments. Liabilities for product recall campaigns are recorded at the time the company’s obligation is probable and can be reasonably estimated. Policy repair actions to maintain customer relationships are recorded as other liabilities at the time an obligation is probable and can be reasonably estimated. Product warranties, including recall campaigns, not expected to be paid within one year are recorded as a non-current liability. |
Fair Value Measurement | Fair Value of Investments The current FASB guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 inputs use quoted prices in active markets for identical assets that the Plan has the ability to access. • Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets in active markets and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest priority level input that is significant to the valuation. The company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. Following are descriptions, valuation methodologies and other information related to plan assets. Cash and cash equivalents : The fair value of cash and cash equivalents is valued at cost. Equity Securities : The overall equity category includes common and preferred stocks issued by U.S. and international companies as well as equity funds that invest in these instruments. All investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost. The aggregate equity portfolio is diversified to avoid exposure to any investment strategy, single economic sector, industry group, or individual security. The fair value of equity securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. Most of the equity investments allow daily redemptions, with some requiring a 30-60 day notice. Fixed Income Securities : The overall fixed income category includes U.S. dollar-denominated and international marketable bonds and convertible debt securities as well as fixed income funds that invest in these instruments. All assets generally allow near-term liquidity and are held in issues which are actively traded to facilitate transactions at minimum cost. The aggregate fixed income portfolio is diversified to avoid exposure to any investment strategy, maturity, issuer or credit quality. The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. U.S. fixed income securities typically offer daily liquidity, with only one investment allowing quarterly redemptions. International and emerging fixed income investment vehicles generally provide daily liquidity. Commingled Funds : The fair value of commingled funds is determined by a custodian. The custodian obtains valuations from underlying fund managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading activity to derive prices. The company and custodian review the methods used by the underlying managers to value the assets. Real Estate : Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets. The fair value of real estate investments is valued by the fund managers. The fund managers value the real estate investments via independent third-party appraisals on a periodic basis. Assumptions used to revalue the properties are updated every quarter. For the component of the real estate portfolio under development, the investments are carried at cost, which approximates fair value, until they are completed and valued by a third-party appraiser. Due to the long-term nature of real estate investments, liquidity is provided on a quarterly basis. Insurance Contract : The plan entered into a pensioner buy-in insurance contract which reimburses the plan for specified benefit payment streams. The valuation for the buy-in contract is calculated on an insurer pricing basis and is estimated using unobservable inputs. Futures Contracts : The plan enters into futures contracts in the normal course of its investing activities to manage market risk and to achieve overall investment portfolio objectives. The credit risk associated with these contracts is minimal as they are traded on organized exchanges and settled daily. The fair value of futures contracts is determined by direct quoted market prices. Cash margin for these futures contracts is included in Cash and Cash Equivalents in the leveling table. Alternatives/Partnerships/Private Equity : This category includes investments in private equity and hedge funds in addition to entering into futures contracts across various asset classes. Such investments may be made directly or through pooled funds, including fund of funds structures. The fair market value of the company’s interest in partnerships and private equity is valued by the fund managers. The valuation is based on the net present value of observable inputs (dividends, cash flows, earnings, etc.), which are discounted at applicable discount rates. The company and custodian review the methods used by the underlying managers to value the assets. Most of these investments offer quarterly redemption opportunities while some offer daily liquidity. Some partnerships and private equity investments, due to the nature of their investment strategy and underlying holdings, offer less frequent liquidity. When available, liquidity events are closely evaluated. The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
Environmental | EnvironmentalFederal, 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 at which the company is the only potentially responsible party, the company records a liability for the total probable and estimable costs of remediation before consideration of recovery from insurers or other third parties. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Basic Average Common Shares Outstanding to Diluted Average Common Shares Outstanding | A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions): Year Ended September 30, 2021 2020 2019 Basic average common shares outstanding 71.7 74.0 83.2 Impact of restricted shares, restricted share units and performance share units 1.1 0.8 2.2 Impact of convertible notes — 0.8 0.9 Diluted average common shares outstanding 72.8 75.6 86.3 |
ACQUISITIONS AND DIVESTITURE (T
ACQUISITIONS AND DIVESTITURE (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Allocation | Estimated Fair Value As of Measurement Period Adjustments As of Purchase price $ 15 $ — $ 15 Investments in TransPower 12 — 12 $ 27 $ — $ 27 Assets acquired and liabilities assumed: Cash 2 — 2 Receivables, net 5 — 5 Inventories, net 8 — 8 PP&E 9 (5) 4 Identifiable intangible assets 11 1 12 Other assets (1) — (1) Accounts payable (3) — (3) Other current liabilities (17) 2 (15) Total identifiable net assets acquired 14 (2) 12 Goodwill and other intangible assets resulting from the acquisition of TransPower 13 2 15 $ 27 $ — $ 27 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of Lease Cost | Components of lease expense (in millions) September 30, 2021 2020 Finance lease costs $ 3 $ 3 Operating lease costs 19 20 Total lease costs $ 22 $ 23 Supplemental cash flow information related to leases (in millions) September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 19 $ 19 Operating cash flows used for finance leases 1 — Financing cash flows used for finance leases 1 2 Right-of-use assets obtained in exchange for lease obligations: Operating leases 7 8 Finance leases 6 3 Supplemental balance sheet information related to leases September 30, 2021 2020 Weighted-average remaining lease term (years): Operating leases 8.32 8.55 Finance leases 9.82 2.21 Weighted-average discount rate: Operating leases 4.6 % 4.5 % Finance leases 10.1 % 5.0 % |
Schedule of Lease Assets and Liabilities | The following table provides a summary of the location and amounts related to finance leases recognized in the Consolidated Balance Sheet (in millions). September 30, Classification 2021 2020 Finance lease right-of-use assets Net Property $ 9 $ 5 Finance lease liabilities Short-term debt 1 3 Finance lease liabilities Long-term debt 9 3 The following table provides a summary of the location and amounts related to operating leases recognized in the Consolidated Balance Sheet (in millions). September 30, Classification 2021 2020 Operating lease right-of-use assets Other assets $ 62 $ 70 Operating lease liabilities Other current liabilities 13 15 Operating lease liabilities Other liabilities 53 59 |
Schedule of Maturities of Operating Lease Liabilities | Maturities (in millions) Operating Leases Finance Leases 2022 16 2 2023 14 1 2024 10 1 2025 8 1 Thereafter 35 13 Total lease payments 83 18 Less: Impact of discounting future lease payments (17) (8) Present value of lease liabilities $ 66 $ 10 |
Schedule of Maturities of Finance Lease Liabilities | Maturities (in millions) Operating Leases Finance Leases 2022 16 2 2023 14 1 2024 10 1 2025 8 1 Thereafter 35 13 Total lease payments 83 18 Less: Impact of discounting future lease payments (17) (8) Present value of lease liabilities $ 66 $ 10 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Operating Segment | In the following tables, revenue is disaggregated for each of our reportable segments by primary geographical market for the year ended September 30, 2021 and 2020. Year Ended September 30, 2021 Primary Geographical Market Commercial Truck Aftermarket & Industrial Total U.S. $ 1,342 $ 715 $ 2,057 Canada — 55 55 Mexico 175 22 197 Total North America 1,517 792 2,309 Sweden 276 — 276 Italy 222 18 240 United Kingdom 142 11 153 Other Europe 9 142 151 Total Europe 649 171 820 Brazil 315 2 317 China 128 2 130 India 146 — 146 Other Asia-Pacific 111 — 111 Total sales $ 2,866 $ 967 $ 3,833 Year Ended September 30, 2020 Primary Geographical Market Commercial Truck Aftermarket & Industrial Total U.S. $ 1,052 $ 731 $ 1,783 Canada — 54 54 Mexico 129 18 147 Total North America 1,181 803 1,984 Sweden 202 — 202 Italy 153 13 166 United Kingdom 105 9 114 Other Europe 5 134 139 Total Europe 465 156 621 Brazil 170 2 172 China 134 1 135 India 70 2 72 Other Asia-Pacific 60 — 60 Total sales $ 2,080 $ 964 $ 3,044 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the Changes in the Carrying Value of Goodwill | A summary of the changes in the carrying value of goodwill is presented below (in millions): Commercial Truck Aftermarket & Industrial Total Goodwill $ 287 $ 206 $ 493 Accumulated impairment losses — (15) (15) Balance at September 30, 2019 287 191 478 AxleTech measurement period adjustment — 5 5 Goodwill acquired from TransPower acquisition (see Note 3) 13 — 13 Foreign currency translation 4 1 5 Balance at September 30, 2020 304 197 501 TransPower measurement period adjustment (see Note 3) 2 — 2 Foreign currency translation 3 1 4 Balance at September 30, 2021 $ 309 $ 198 $ 507 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Restructuring Reserves | The following table summarizes changes in restructuring reserves (in millions): Employee Plant Total Balance at September 30, 2018 $ 4 $ — $ 4 Activity during the period: Charges 8 — 8 Cash payments (5) — (5) Other 1 — 1 Balance at September 30, 2019 8 — 8 Activity during the period: Charges 27 — 27 Cash payments (25) — (25) Balance at September 30, 2020 10 — 10 Activity during the period: Charges 8 5 13 Cash payments (13) — (13) Other — (4) (4) Total restructuring reserves, end of year 5 1 6 Less: non-current restructuring reserves (1) — (1) Restructuring reserves – current, at September 30, 2021 $ 4 $ 1 $ 5 |
Schedule of Restructuring Expense Recognized By Segment | Restructuring costs attributable to the company’s business segments during fiscal years 2021, 2020 and 2019 are as follows (in millions): Commercial Truck Aftermarket & Industrial Total Fiscal year 2021 Footprint Actions $ — $ 10 $ 10 Global Restructuring Program 2020 3 — 3 Total restructuring costs $ 3 $ 10 $ 13 Fiscal year 2020: Global Restructuring Program 2020 $ 7 $ 3 $ 10 Global Restructuring Program 2019 11 2 13 AxleTech — 2 2 Other 1 1 2 Total restructuring costs $ 19 $ 8 $ 27 Fiscal year 2019: Global Restructuring Program 2019 $ 6 $ 1 $ 7 AxleTech — 3 3 Other (1) (1) (2) Total restructuring costs $ 5 $ 3 $ 8 |
ACCOUNTS RECEIVABLE FACTORING_2
ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable Factoring And Securitization [Abstract] | |
Schedule 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 (in millions): Current Expiration Total Facility Size as of 9/30/21 Utilized as of 9/30/21 Utilized as of 9/30/20 EUR USD EUR USD EUR USD On-balance sheet arrangement: Committed U.S. accounts receivable securitization (1) March 2024 N/A $ 110 N/A $ 3 N/A $ 3 Total on-balance sheet arrangement N/A $ 110 N/A $ 3 N/A $ 3 Off-balance sheet arrangements: Committed Swedish factoring facility (2)(3) March 2024 € 155 $ 179 € 75 $ 88 € 86 $ 100 Committed U.S. factoring facility (2) February 2023 N/A 75 N/A 49 N/A 30 Uncommitted U.K. factoring facility February 2022 25 29 2 2 1 1 Uncommitted Italy factoring facility June 2022 30 35 14 17 8 9 Other uncommitted factoring facilities (4) None N/A N/A 15 17 12 14 Total off-balance sheet arrangements € 210 $ 318 € 106 $ 173 € 107 $ 154 (1) Availability subject to adequate eligible accounts receivable available for sale. The utilized amount includes $3 million of letters of credit as of each of September 30, 2021 and September 30, 2020. (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, 2022. (4) There is no explicit facility size under the factoring agreement, but the counterparty approves the purchase of receivable tranches at its discretion. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) and are summarized as follows (in millions): September 30, 2021 2020 Finished goods $ 137 $ 119 Work in process 47 38 Raw materials, parts and supplies 417 278 Total $ 601 $ 435 |
NET PROPERTY (Tables)
NET PROPERTY (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Net Property | Net property is summarized as follows (in millions): September 30, 2021 2020 Property at cost: Land and land improvements $ 41 $ 32 Buildings 231 228 Machinery and equipment 1,051 1,002 Company-owned tooling 164 151 Construction in progress 63 63 Total 1,550 1,476 Less: Accumulated depreciation (1,033) (961) Net property $ 517 $ 515 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of Other Assets | Other assets are summarized as follows (in millions): September 30, 2021 2020 Prepaid pension costs (see Note 20) $ 191 $ 179 Deferred income tax assets (see Note 21) 42 30 Investments in non-consolidated joint ventures (see Note 12) 132 107 Other 263 269 Other assets $ 628 $ 585 |
INVESTMENTS IN NON-CONSOLIDAT_2
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Non-Consolidated Joint Ventures and Direct Ownership Interests | The company’s non-consolidated joint ventures and related direct ownership interest are as follows: September 30, 2021 2020 2019 Master Sistemas Automotivos Ltda. 49 % 49 % 49 % Sistemas Automotrices de Mexico S.A. de C.V. 50 % 50 % 50 % Ege Fren Sanayii ve Ticaret A.S. 49 % 49 % 49 % Automotive Axles Limited 36 % 36 % 36 % |
Summarized Balance Sheet Information of Non-Consolidated Joint Ventures | The summarized financial information presented below represents the combined accounts of the company’s non-consolidated joint ventures related to its continuing operations (in millions): September 30, 2021 2020 Current assets $ 456 $ 308 Non-current assets 214 200 Total assets $ 670 $ 508 Current liabilities $ 293 $ 209 Non-current liabilities 112 87 Total liabilities $ 405 $ 296 |
Summarized Income Statement Information of Non-Consolidated Joint Ventures | Year Ended September 30, 2021 2020 2019 Sales $ 1,011 $ 696 $ 1,231 Gross profit 119 76 147 Net income 72 30 63 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Other Current Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities are summarized as follows (in millions): September 30, 2021 2020 Compensation and benefits $ 125 $ 91 Income taxes 17 6 Product warranties 15 19 Other 151 148 Other current liabilities $ 308 $ 264 |
Schedule of Product Warranties | A summary of the changes in product warranties is as follows (in millions): September 30, 2021 2020 2019 Total product warranties – beginning of year $ 54 $ 50 $ 54 Accruals for product warranties 16 25 23 Payments (17) (19) (20) Change in estimates and other (10) (2) (7) Total product warranties – end of year 43 54 50 Less: non-current product warranties (see Note 14) (28) (35) (32) Product warranties – current $ 15 $ 19 $ 18 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Schedule Of Other Liabilities | Other liabilities are summarized as follows (in millions): September 30, 2021 2020 Asbestos-related liabilities (see Note 22) $ 52 $ 67 Liabilities for uncertain tax positions (see Note 21) 52 73 Product warranties (see Note 13) 28 35 Other 92 104 Other liabilities $ 224 $ 279 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt, net of discounts where applicable, is summarized as follows (in millions): September 30, 2021 2020 3.25 percent convertible notes due 2037 (1) $ 321 $ 320 7.875 percent convertible notes due 2026 (3) — 23 4.50 percent notes due 2028 (2) 270 — 6.25 percent notes due 2025 (2)(4) 296 295 6.25 percent notes due 2024 (5) — 446 Term loan due 2024 153 166 Finance lease obligation 10 6 Unamortized discount on convertible notes (6) (23) (29) Subtotal 1,027 1,227 Less: current maturities (19) (39) Long-term debt $ 1,008 $ 1,188 (1) The 3.25 percent convertible notes due 2037 contain a put and call feature, which allows for early redemption beginning in 2025. The 3.25 percent convertible notes due 2037 are presented net of $4 million and $5 million unamortized issuance costs as of September 30, 2021 and September 30, 2020, respectively. (2) The 4.50 percent notes due 2028 and 6.25 percent notes due 2025 contain a call option, which allows for early redemption by the company. The 4.50 percent notes due 2028 are presented net of $5 million unamortized issuance costs as of September 30, 2021. (3) The 7.875 percent convertible notes due 2026 are presented net of an insignificant amount of unamortized issuance costs and original issuance discount as of September 30, 2020. (4) The 6.25 percent notes due 2025 are presented net of $4 million and $5 million unamortized issuance costs as of September 30, 2021 and September 30, 2020, respectively. (5) The 6.25 percent notes due 2024 are presented net of $4 million unamortized issuance costs as of September 30, 2020. (6) The carrying amount of the equity component related to convertible debt. |
Schedule of Debt Instrument Redemption | Notes to be redeemed, if redeemed during the 12-month period beginning on December 15 of the years indicated below: Year Redemption Price 2023 102.250 % 2024 101.125 % 2025 and thereafter 100.000 % Year Redemption Price 2022 103.125 % 2023 101.563 % 2024 and thereafter 100.000 % |
Schedule of Principle and Unamortized Discount on Convertible Notes | The following table summarizes the principal amounts and related unamortized discount on all convertible notes (in millions): September 30, 2021 2020 Principal amount of convertible notes $ 325 $ 348 Unamortized discount on convertible notes and issuance costs (27) (34) Net carrying value $ 298 $ 314 |
Schedule of Convertible Notes | The following table summarizes other information related to the convertible notes: Convertible Notes 3.25% Total amortization period for debt discount (in years): 8 Remaining amortization period for debt discount (in years): 4 Effective interest rates on convertible notes: 5.6 % |
Schedule of Interest Costs on Convertible Notes | The following table summarizes interest costs recognized on convertible notes (in millions): Year Ended September 30, 2021 2020 2019 Contractual interest coupon $ 16 $ 17 $ 17 Amortization of debt discount 1 2 2 Repurchase of convertible notes 11 — — Total $ 28 $ 19 $ 19 |
Schedule of Long-term Debt Maturities | As of September 30, 2021, the company is contractually obligated to make payments as follows (in millions): Total 2022 2023 2024 2025 (2) 2026 Thereafter (3)(4) Total debt (1) $ 1,053 $ 18 $ 13 $ 122 $ 300 $ — $ 600 (1) Total debt excludes unamortized discount on convertible notes of $23 million and unamortized issuance costs of $13 million. (2) Includes the 6.25 Percent Notes due 2025, which contain a call feature that allows for early redemption. (3) Includes the 3.25 Percent Convertible Notes due 2037, which contain a put and call feature that allows for early redemption beginning in 2025. (4) Includes the 4.50 Percent Notes due 2028, which contain a call feature that allows for early redemption. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the Impact of Derivatives on Comprehensive Income | The following table summarizes the impact of the company’s derivatives instruments on comprehensive income for fiscal years ended September 30 (in millions): Location of 2021 2020 2019 Derivatives designated as hedging instruments: Amount of gain recognized in AOCI AOCI $ 3 $ 4 $ 19 Amount of gain (loss) reclassified from AOCI into income Cost of Sales 1 (1) 4 Derivatives not designated as hedging instruments: Other Income (expense) (1) 1 1 |
Summary of Fair Value of Financial Instruments | Fair values of financial instruments are summarized as follows (in millions): September 30, 2021 September 30, 2020 Carrying Fair Carrying Fair Cash and cash equivalents $ 101 $ 101 $ 315 $ 315 Short-term debt 19 19 39 58 Long-term debt 1,008 1,082 1,188 1,259 Foreign currency option contracts (other assets) — — 1 1 Foreign exchange forward contracts (other assets) 1 1 — — Foreign exchange forward contracts (other liabilities) — — 1 1 |
Schedule of Offsetting of Derivative Assets and Liabilities | The following table reflects the offsetting of derivative assets and liabilities (in millions): September 30, 2021 September 30, 2020 Gross Gross Amounts Net Amounts Gross Gross Amounts Net Amounts Derivative Asset Foreign currency option contract — — — 1 — 1 Foreign exchange forward contracts 1 — 1 — — — Derivative Liabilities Foreign exchange forward contract — — — 1 — 1 |
Fair Value of Financial Instruments by the Valuation Hierarchy | Fair value of financial instruments by the valuation hierarchy at September 30, 2021 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 101 $ — $ — Short-term debt — — 19 Long-term debt — 937 145 Foreign exchange forward contracts (asset) — 1 — Fair value of financial instruments by the valuation hierarchy at September 30, 2020 is as follows (in millions): Level 1 Level 2 Level 3 Cash and cash equivalents $ 315 $ — $ — Short-term debt — 43 15 Long-term debt — 1,103 156 Foreign exchange forward contracts (liability) — 1 — Foreign currency option contracts (other assets) — 1 — |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of AOCI as reported in the Consolidated Balance Sheet and Statement of Equity, and the changes in AOCI by components, net of tax, are as follows (in millions): Foreign Currency Translation Employee Benefit Related Adjustments Unrealized Income (Loss) on cash flow hedges Total Balance at September 30, 2020 $ (129) $ (483) $ (2) $ (614) Other comprehensive income (loss) before reclassification 24 (52) 2 (26) Amounts reclassified from accumulated other comprehensive loss — 9 (1) 8 Net current-period other comprehensive income (loss) $ 24 $ (43) $ 1 $ (18) Balance at September 30, 2021 $ (105) $ (526) $ (1) $ (632) 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 (loss) before reclassification (22) 79 (1) 56 Amounts reclassified from accumulated other comprehensive loss — 10 1 11 Net current-period other comprehensive income (loss) $ (22) $ 89 $ — $ 67 Balance at September 30, 2020 $ (129) $ (483) $ (2) $ (614) 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 (loss) before reclassification (17) (100) 2 (115) Amounts reclassified from accumulated other comprehensive loss — 4 (4) — Net current-period other comprehensive loss $ (17) $ (96) $ (2) $ (115) Balance at September 30, 2019 $ (107) $ (572) $ (2) $ (681) |
Changes in 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 Amortization of prior service benefit $ (35) (a) Amortization of actuarial losses 45 (a) 10 Total before tax (1) Tax benefit Total reclassifications for the period $ 9 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Notes 19 and 20 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 Amortization of prior service benefit $ (36) (a) Amortization of actuarial losses 47 (a) 11 Total before tax (1) Tax benefit Total reclassifications for the period $ 10 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Notes 19 and 20 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 Amortization of prior service benefit $ (35) (a) Amortization of actuarial losses 39 (a) 4 Total before tax — Tax benefit Total reclassifications for the period $ 4 Net of tax (a) These accumulated other comprehensive income components are included in the computation of net periodic pension and retiree medical expense (see Notes 19 and 20 for additional details), which is recorded in other income (expense), net. |
EQUITY BASED COMPENSATION (Tabl
EQUITY BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Roll forward of Non-vested Restricted Stock, Restricted Share and Performance Share Units and Activity | The following is a rollforward of the company’s non-vested restricted stock and restricted share units as of September 30, 2021, and the activity during fiscal year 2021 is summarized as follows (shares in thousands): Number of Weighted-Average Balance at September 30, 2020 1,175 $ 21.75 Granted 522 26.64 Vested (288) 24.91 Forfeited (79) 22.87 Balance at September 30, 2021 1,330 22.91 The following is a rollforward of the company’s non-vested performance share units as of September 30, 2021, and the activity during fiscal year 2021 is summarized as follows (shares in thousands): Number of Weighted-Average Grant-Date Fair Value (1) Balance at September 30, 2020 1,036 $ 25.64 Granted 457 26.90 Vested — — Forfeited (325) 25.05 Balance at September 30, 2021 1,168 26.30 |
RETIREMENT MEDICAL PLANS (Table
RETIREMENT MEDICAL PLANS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Defined Benefit Plan, Postretirement Medical Plan with Prescription Drug Benefits [Abstract] | |
Schedule of Retiree Medical Liability Expense Assumptions | The following are the assumptions used in the measurement of the accumulated postretirement benefit obligation ("APBO") and retiree medical expense: 2021 2020 2019 Discount rate 2.95 % 2.56 % 2.98 % Health care cost trend rate 5.84 % 6.07 % 6.36 % Ultimate health care trend rate 4.68 % 4.67 % 4.69 % Year ultimate rate is reached 2028 2028 2028 |
Retiree Medical Liability Components as of Balance Sheet Date | The APBO is summarized as follows (in millions): September 30, 2021 2020 Retirees $ 42 $ 52 Employees eligible to retire — — Total $ 42 $ 52 |
Rollforward of Retiree Medical Liability | The following reconciles the change in APBO and the amounts included in the Consolidated Balance Sheet for years ended September 30, 2021 and 2020, respectively (in millions): September 30, 2021 2020 APBO — beginning of year $ 52 $ 67 Interest cost 1 2 Actuarial loss (gain) (7) — Plan amendment — (7) Foreign currency rate changes 1 — Benefit payments (1) (5) (10) APBO — end of year 42 52 Other — — Retiree medical liability $ 42 $ 52 (1) Net of subsidies and rebates available under Employer Group Waiver Plan ("EGWP"). |
Schedule of Retiree Medical Liability Current and Long Term Components | The retiree medical liability is included in the Consolidated Balance Sheet as follows (in millions): September 30, 2021 2020 Current — included in compensation and benefits $ 5 $ 6 Long-term — included in retirement benefits 37 46 Retiree medical liability $ 42 $ 52 |
Retiree Medical Obligations Recorded in Accumulated Other Comprehensive Loss Net of Tax | he following table summarizes the amounts included in AOCL net of tax related to retiree medical liabilities as of September 30, 2021 and 2020 and changes recognized in Other Comprehensive Income (Loss) net of tax for the years ended September 30, 2021 and 2020. Net Actuarial Prior Total Balance at September 30, 2020 $ 64 $ (139) $ (75) Net actuarial loss for the year (7) — (7) Recognized prior service costs due to plan amendment — — — Amortization for the year (13) 35 22 Deferred tax impact 5 (7) (2) Balance at September 30, 2021 $ 49 $ (111) $ (62) Balance at September 30, 2019 $ 70 $ (165) $ (95) Net actuarial loss for the year — — — Recognized prior service costs due to plan amendment — (7) (7) Amortization for the year (14) 36 22 Deferred tax impact 8 (3) 5 Balance at September 30, 2020 $ 64 $ (139) $ (75) |
Components of Retiree Medical Expense | The components of retiree medical expense for the years ended September 30 are as follows (in millions): 2021 2020 2019 Service cost $ — $ — $ — Interest cost 1 2 3 Amortization of: Prior service benefit (35) (36) (35) Actuarial losses 13 14 15 Retiree medical income $ (21) $ (20) $ (17) |
Retiree Medical Plan Effect of One Percentage Point Change in Assumed Health Care Cost Trend Rates | A one-percentage point change in the assumed health care cost trend rate for all years to, and including, the ultimate rate would have the following effects (in millions): 2021 2020 Effect on total service and interest cost 1% Increase $ — $ — 1% Decrease — — Effect on APBO 1% Increase 4 6 1% Decrease (4) (5) |
Retiree Medical Plan Estimated Future Benefit Payments | The company expects future benefit payments as follows (in millions): Gross Gross Receipts (1) Fiscal 2022 $ 5 $ — Fiscal 2023 5 — Fiscal 2024 4 — Fiscal 2025 3 — Fiscal 2026 3 — Fiscal 2027 – 2030 11 1 (1) Consists of subsidies and rebates available under EGWP. |
RETIREMENT PENSION PLANS (Table
RETIREMENT PENSION PLANS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of US Pension Benefit Obligation Expense and Net Expense Assumptions | The following are the significant assumptions used in the measurement of the projected benefit obligation ("PBO") and net periodic pension expense: U.S. Plans 2021 2020 2019 Discount rate 2.80% - 2.85% 2.50% - 2.60% 3.10% - 3.15% Assumed return on plan assets (beginning of the year) 7.75% 7.75% 7.75% |
Schedule of Non-US Pension Benefit Obligation Expense and Net Expense Assumptions | U.K. Plan 2021 2020 2019 Discount rate 2.10% 1.70% 1.80% Assumed return on plan assets (beginning of the year) 5.00% 5.75% 6.00% |
Rollforward of Pension Liability and Pension Plan Assets | The following table reconciles the change in the PBO, the change in plan assets and amounts included in the Consolidated Balance Sheet for the years ended September 30, 2021 and 2020, respectively (in millions): 2021 2020 U.S. Non- U.S. Total U.S. Non- U.S. Total PBO — beginning of year $ 1,027 $ 602 $ 1,629 $ 1,006 $ 621 $ 1,627 Interest cost 26 9 35 31 11 42 Actuarial (gain) loss (29) (22) (51) 64 (24) 40 Amendments 4 1 5 — — — Benefit payments (72) (27) (99) (74) (25) (99) Foreign currency rate changes — 35 35 — 19 19 PBO — end of year $ 956 $ 598 $ 1,554 $ 1,027 $ 602 $ 1,629 Change in plan assets Fair value of assets — beginning of year $ 893 $ 776 $ 1,669 $ 741 $ 764 $ 1,505 Actual return on plan assets (5) (10) (15) 221 12 233 Employer contributions 5 — 5 5 — 5 Benefit payments (72) (27) (99) (74) (25) (99) Foreign currency rate changes — 45 45 — 25 25 Fair value of assets — end of year $ 821 $ 784 $ 1,605 $ 893 $ 776 $ 1,669 Funded status - over (under) $ (135) $ 186 $ 51 $ (134) $ 174 $ 40 |
Schedule of Balance Sheet Classification of Net Pension Liability | Amounts included in the Consolidated Balance Sheet at September 30, 2021 and 2020 are comprised of the following (in millions): 2021 2020 U.S. Non-U.S. Total U.S. Non-U.S. Total Non-current assets $ — $ 191 $ 191 $ — $ 179 $ 179 Current liabilities (5) — (5) (5) — (5) Retirement benefits-non-current (130) (5) (135) (129) (5) (134) Net amount recognized $ (135) $ 186 $ 51 $ (134) $ 174 $ 40 |
Schedule of Pension Costs Recognized in Other Comprehensive Loss | The following tables summarize the amounts included in AOCL net of tax related to pension liabilities as of September 30, 2021 and 2020 and changes recognized in Other Comprehensive Income (Loss) net of tax for the year ended September 30, 2021. Net Actuarial Loss U.S. Non-U.S. Total Balance at September 30, 2020 $ 362 $ 196 $ 558 Net actuarial loss for the year 39 26 65 Amortization for the year (27) (5) (32) Deferred tax impact (3) — (3) Balance at September 30, 2021 $ 371 $ 217 $ 588 Balance at September 30, 2019 $ 467 $ 200 $ 667 Net actuarial loss for the year (101) 3 (98) Amortization for the year (26) (7) (33) Deferred tax impact 22 — 22 Balance at September 30, 2020 $ 362 $ 196 $ 558 |
Pension and Other Postretirement Benefits | The non-current portion of the pension liability is included in Retirement Benefits in the Consolidated Balance Sheet as follows (in millions): September 30, 2021 2020 Pension liability $ 135 $ 134 Retiree medical liability — long term (see Note 19) 37 46 Other 19 16 Total retirement benefits $ 191 $ 196 |
Schedule of Projected Benefit Obligation Accumulated Benefit Obligation and Plan Assets | Additional information is as follows (in millions): 2021 2020 ABO Assets Total ABO Assets Total PBO $ 962 $ 592 $ 1,554 $ 1,032 $ 597 $ 1,629 ABO 962 592 1,554 1,032 597 1,629 Plan Assets 821 784 1,605 893 776 1,669 |
Schedule of Net Periodic Pension Benefit Costs | The components of net periodic pension income are as follows (in millions): 2021 2020 2019 Service cost $ — $ — $ — Interest cost 35 42 53 Assumed rate of return on plan assets (98) (97) (97) Amortization of actuarial losses 32 33 24 Settlement gain (1) — — Net periodic pension income $ (32) $ (22) $ (20) |
Pension Plan Investments Measured at Fair Value by Level Within Fair Value Hierarchy | The fair value of plan assets at September 30, 2021 by asset category is as follows (in millions): U.S. Plans 2021 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 73 $ — $ — $ 73 U.S. – Small cap 24 — — 24 International equity 12 — — 12 Equity investments measured at net asset value (1) — — — 189 Total equity investments $ 109 $ — $ — $ 298 Fixed income investments U.S. fixed income $ 15 $ 310 $ — $ 325 Emerging fixed income — 20 — 20 Fixed income investments measured at net asset value (1) — — — 31 Total fixed income $ 15 $ 330 $ — $ 376 Alternatives – Partnerships — — 5 5 Alternatives – Partnerships measured at net asset value (1) — — — 91 Cash and cash equivalents — 51 — 51 Total assets at fair value $ 124 $ 381 $ 5 $ 821 Non-U.S. Plans 2021 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 141 $ — $ — $ 141 Total equity investments $ 141 $ — $ — $ 141 Fixed income investments Other fixed income investments $ 5 $ 170 $ — $ 175 Fixed income investments measured at net asset value (1) — — — 168 Total fixed income $ 5 $ 170 $ — $ 343 Commingled funds — 2 — 2 Alternative investments measured at net asset value (1) — — — 102 Real estate measured at net asset value (1) — — — 42 Cash and cash equivalents — 28 — 28 Insurance contract (2) — — 126 126 Total assets at fair value $ 146 $ 200 $ 126 $ 784 (1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. (2) In fiscal year 2020, the company entered into an insurance contract. The purchase of the insurance contract provided an observable market value and the contract was classified as a level 2 asset. In fiscal year 2021, the market value is no longer observable, therefore, the contract is classified as a level 3 asset. The fair value of plan assets at September 30, 2020 by asset category is as follows (in millions): U.S. Plans 2020 Asset Category Level 1 Level 2 Level 3 Total Equity investments U.S. – Large cap $ 209 $ — $ — $ 209 U.S. – Small cap 15 — — 15 International equity 12 — — 12 Equity investments measured at net asset value (1) — — — 189 Total equity investments $ 236 $ — $ — $ 425 Fixed income investments U.S. fixed income $ 9 $ 270 $ — $ 279 Emerging fixed income — 13 — 13 Partnerships fixed income — — — — Fixed income investments measured at net asset value (1) — — — 26 Total fixed income $ 9 $ 283 $ — $ 318 Alternatives 9 — — 9 Alternatives – Partnerships — — 5 5 Alternatives – Partnerships measured at net asset value (1) — — — 74 Cash and cash equivalents — 62 — 62 Total assets at fair value $ 254 $ 345 $ 5 $ 893 Non-U.S. Plans 2020 Asset Category Level 1 Level 2 Level 3 Total Equity investments International equity $ 180 $ — $ — $ 180 Total equity investments $ 180 $ — $ — $ 180 Fixed income investments Other fixed income investments $ 5 $ 214 $ — $ 219 Fixed income investments measured at net asset value (1) — — — 71 Total fixed income $ 5 $ 214 $ — $ 290 Commingled funds — 2 — 2 Alternative investments measured at net asset value (1) — — — 127 Real estate measured at net asset value (1) — — — 37 Cash and cash equivalents — 9 — 9 Insurance contract — 131 — 131 Total assets at fair value $ 185 $ 356 $ — $ 776 |
Changes in Level 3, Pension Plan Investments | The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2021 (in millions): All Plans 2021 Fair Value at October 1, 2020 Return on Plan Assets: Attributable to Assets Held at Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2021 Asset Category Insurance contract $ — $ — $ — $ — $ 126 $ 126 Alternatives – Partnerships 5 1 — (1) — 5 Total Level 3 fair value $ 5 $ 1 $ — $ (1) $ 126 $ 131 The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2020 (in millions): All Plans 2020 Fair Value at October 1, 2019 Return on Plan Assets: Attributable to Assets Held at September 30, 2020 Purchases Settlements Net Transfers Into (Out of) Level 3 Fair Value at September 30, 2020 Asset Category Private equity $ 19 $ — $ — $ — $ (19) $ — Alternatives – Partnerships 86 1 — (1) (81) 5 Total Level 3 fair value $ 105 $ 1 $ — $ (1) $ (100) $ 5 |
Pension Plan Estimated Future Contributions and Benefit Payments | Information about the expected cash flows for the U.S. and non-U.S. pension plans is as follows (in millions): U.S. Non U.S. Total Expected employer contributions: Fiscal 2022 $ 5 $ — $ 5 Expected benefit payments: Fiscal 2022 70 27 97 Fiscal 2023 67 27 94 Fiscal 2024 67 27 94 Fiscal 2025 65 27 92 Fiscal 2026 63 28 91 Fiscal 2027-2031 292 139 431 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Tax | The income tax provisions were calculated based upon the following components of income before income taxes (in millions): 2021 2020 2019 U.S. income $ 12 $ 268 $ 194 Foreign income 222 58 183 Total $ 234 $ 326 $ 377 |
Summary of Components of the Benefit (Provision) for Income Taxes | The components of the provision (benefit) for income taxes are summarized as follows (in millions): 2021 2020 2019 Current tax expense (benefit): U.S. $ (8) $ 20 $ 1 Foreign 42 16 40 State and local 3 4 1 Total current tax expense 37 40 42 Deferred tax expense (benefit): U.S. (9) 40 34 Foreign (2) (5) 6 State and local (2) 3 — Total deferred tax expense (benefit) (13) 38 40 Income tax expense $ 24 $ 78 $ 82 |
Summary of the Tax Effects of Temporary Differences | Net deferred income tax assets (liabilities) included in the Consolidated Balance Sheet consist of the tax effects of temporary differences related to the following (in millions): September 30, 2021 2020 Accrued compensation and benefits $ 23 $ 13 Accrued product warranties 10 11 Inventory costs 18 12 Receivables 9 8 Accrued retiree healthcare benefits 11 13 Retirement pension plans 18 25 Property 17 9 Lease liabilities 16 18 Net operating losses and tax credit carryforwards 247 215 Other 10 21 Sub-total 379 345 Less: Valuation allowances (250) (226) Deferred income taxes - asset $ 129 $ 119 Taxes on undistributed income $ (11) $ (11) Intangible assets (69) (65) Lease assets (15) (17) Other — (7) Deferred income taxes - liability $ (95) $ (100) Net deferred income tax assets $ 34 $ 19 |
Schedule of Net Current and Non-Current Deferred Income Tax Assets (Liabilities) | Net deferred income tax assets (liabilities) are included in the Consolidated Balance Sheet as follows (in millions): September 30, 2021 2020 Other assets (see Note 11) $ 42 $ 30 Other liabilities (see Note 14) (8) (11) Net deferred income taxes - asset $ 34 $ 19 |
Summary of Tax Credit Carryforwards and Deferred Tax Assets | The expiration periods for deferred tax assets related to net operating losses and tax credit carryforwards as of September 30, 2021 are included below (in millions). Also included are the associated valuation allowances on these deferred tax assets (in millions). Fiscal Year Expiration Periods 2021-2025 2026-2035 2036-2040 Indefinite Total Net operating losses and tax credit carryforwards $ 5 $ 13 $ — $ 229 $ 247 Valuation allowances on these deferred tax assets $ 4 $ 11 $ — $ 225 $ 240 |
Reconciliation of Income Tax (Benefit) Provision at the U.S Statutory Rate | The company’s provision (benefit) for income taxes was different from the provision for income taxes calculated at the U.S. statutory rate for the reasons set forth below (in millions): September 30, 2021 2020 2019 Expense for income taxes at statutory tax rate $ 49 $ 68 $ 79 State and local income taxes 4 5 3 Foreign income taxed at rates other than statutory 10 2 11 Legislative changes (36) (10) 1 Joint venture equity income (7) (3) (6) Nondeductible expenses 15 11 16 Tax credits (58) (8) (11) Valuation allowances 17 10 (7) Tax audit adjustments — 5 — Discharge of intercompany indebtedness 38 — — Reversal of uncertain tax positions due to statute expirations (13) (3) (1) Other 5 1 (3) Income tax expense $ 24 $ 78 $ 82 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period is as follows (in millions): September 30, 2021 2020 2019 Balance at beginning of the period $ 283 $ 276 $ 261 Additions to tax positions recorded during the current year 18 4 11 Additions to tax positions recorded during the prior year 3 5 9 Reductions to tax position recorded in prior years — (1) — Reductions to tax positions due to lapse of statutory limits (17) (4) (4) Translation, other — 3 (1) Balance at end of the period $ 287 $ 283 $ 276 |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Environmental Loss Contingencies by Site | The following are the components of the Superfund and non-Superfund environmental reserves (in millions): Superfund Non-Superfund Total Balance at September 30, 2020 $ 11 $ 5 $ 16 Payments and other (3) (1) (4) Accruals 1 — 1 Balance at September 30, 2021 $ 9 $ 4 $ 13 |
Asbestos Related Reserves and Recoveries | The Rockwell legacy asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions): September 30, 2021 2020 Pending and future claims $ 60 $ 78 Billed but unpaid claims 1 1 Asbestos-related liabilities $ 61 $ 79 Asbestos-related insurance recoveries $ 51 $ 62 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information is summarized as follows (in millions): Commercial Truck Aftermarket & Industrial Elims Total Fiscal year 2021 Sales: External Sales $ 2,866 $ 967 $ — $ 3,833 Intersegment Sales 142 22 (164) — Total Sales $ 3,008 $ 989 $ (164) $ 3,833 Fiscal year 2020 Sales: External Sales $ 2,080 $ 964 $ — $ 3,044 Intersegment Sales 110 17 (127) — Total Sales $ 2,190 $ 981 $ (127) $ 3,044 Fiscal year 2019 Sales: External Sales $ 3,307 $ 1,081 $ — $ 4,388 Intersegment Sales 149 19 (168) — Total Sales $ 3,456 $ 1,100 $ (168) $ 4,388 |
Segment Income Attributable to Parent | Year Ended September 30, 2021 2020 2019 Segment adjusted EBITDA: Commercial Truck $ 259 $ 116 $ 342 Aftermarket & Industrial 139 150 175 Segment adjusted EBITDA 398 266 517 Unallocated legacy and corporate income, net (1) 13 6 3 Interest expense, net (79) (66) (57) Provision for income taxes (24) (78) (82) Depreciation and amortization (103) (101) (87) Loss on sale of receivables (4) (4) (6) Restructuring costs (13) (27) (8) Brazilian VAT Credit (2) 22 — — Transaction costs — (5) (6) Asbestos related items (3) — — 31 Asset impairment charges — (8) (10) Income from WABCO distribution termination — 265 — Noncontrolling interests (10) (4) (5) Income from continuing operations attributable to Meritor, Inc. $ 200 $ 244 $ 290 (1) Unallocated legacy and corporate income, 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) Amount relates to a pre-tax loss recovery, net of legal expenses, on the overpayment of VAT in Brazil. |
Schedule of Segment Assets | Year ended September 30, 2021 2020 2019 Depreciation and Amortization: Commercial Truck $ 80 $ 76 $ 73 Aftermarket & Industrial 23 25 14 Total depreciation and amortization $ 103 $ 101 $ 87 Capital Expenditures: Commercial Truck $ 76 $ 68 $ 88 Aftermarket & Industrial 14 17 15 Total capital expenditures $ 90 $ 85 $ 103 September 30, 2021 2020 Segment Assets: Commercial Truck $ 1,961 $ 1,666 Aftermarket & Industrial 654 658 Total segment assets 2,615 2,324 Corporate (1) 496 714 Less: Accounts receivable sold under off-balance sheet factoring programs (2) (173) (154) Total assets $ 2,938 $ 2,884 (1) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs. |
Schedule of Revenues and Assets by Geographical Areas | Sales by geographic area are based on the location of the selling unit. Information on the company’s geographic areas is summarized as follows (in millions): Year ended September 30, 2021 2020 2019 Sales by Geographic Area: U.S. $ 2,057 $ 1,783 $ 2,622 Canada 55 54 69 Mexico 197 147 249 Total North America 2,309 1,984 2,940 Sweden 276 202 276 Italy 240 166 234 United Kingdom 153 114 165 Other Europe 151 139 91 Total Europe 820 621 766 Brazil 317 172 248 China 130 135 153 India 146 72 197 Other Asia-Pacific 111 60 84 Total sales $ 3,833 $ 3,044 $ 4,388 September 30, 2021 2020 Assets by Geographic Area: U.S. $ 1,424 $ 1,458 Canada 36 35 Mexico 212 190 Total North America 1,672 1,683 Sweden 137 136 Italy 94 111 United Kingdom 290 270 Other Europe 205 269 Total Europe 726 786 Brazil 214 132 China 145 130 India 92 76 Other Asia-Pacific 89 77 Total $ 2,938 $ 2,884 |
OPERATING CASH FLOWS AND OTHE_2
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Operating Cash Flow Disclosure [Abstract] | |
Schedule of Operating Cash Flows | Year Ended September 30, 2021 2020 2019 (in millions) OPERATING ACTIVITIES Net income $ 209 $ 249 $ 296 Less: Income (loss) from discontinued operations, net of tax (1) 1 1 Income from continuing operations 210 248 295 Adjustments to income from continuing operations to arrive at cash provided by operating activities: Depreciation and amortization 103 101 87 Deferred income tax expense (income) (13) 38 40 Restructuring costs 13 27 8 Loss on debt extinguishment, net 11 — — Asset impairment charges — 8 10 Equity in earnings of affiliates (34) (14) (31) Stock compensation expense 20 7 18 Pension and retiree medical income (53) (42) (37) Asbestos related liability remeasurement — — (31) Contribution to Maremont trust — — (48) Dividends received from equity method investments 7 10 23 Pension and retiree medical contributions (10) (15) (16) Restructuring payments (13) (25) (5) Changes in off-balance sheet receivable securitization and factoring programs 13 (77) (18) Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations: Receivables (61) 147 80 Inventories (164) 100 9 Accounts payable 139 (186) (103) Other current assets and liabilities 52 (64) (3) Other assets and liabilities (22) 2 (22) Operating cash flows provided by continuing operations 198 265 256 Operating cash flows used for discontinued operations (1) — — CASH PROVIDED BY OPERATING ACTIVITIES $ 197 $ 265 $ 256 |
Schedule of Cash Flow, Supplemental Disclosures | September 30, 2021 2020 2019 (In millions) Balance sheet data: Allowance for doubtful accounts $ 3 $ 3 $ 3 Statement of operations data: Maintenance and repairs expense 55 47 55 Research, development and engineering expense 76 74 75 Depreciation expense 87 87 76 Rental expense 19 19 19 Interest income 2 4 4 Interest expense (81) (70) (61) Statement of cash flows data: Interest payments, net of receipts 57 48 41 Income tax payments, net of refunds 22 55 64 Non-cash investing activities - capital asset additions from finance leases 3 — — |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 01, 2021 | Dec. 01, 2020 | Dec. 01, 2019 | Dec. 01, 2018 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2018 |
Significant Accounting Policies [Line Items] | ||||||||||
Reduction in additional paid in capital | $ (798) | $ (808) | ||||||||
3.25% convertible notes due 2037 | Convertible Notes | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Interest rate (percent) | 3.25% | 3.25% | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Reduction in additional paid in capital | $ 41 | |||||||||
Cumulative Effect, Period of Adoption, Adjustment | 3.25% convertible notes due 2037 | Convertible Notes | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Debt instrument increase | $ 23 | |||||||||
Restricted Stock Units (RSUs) | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Vesting term | 3 years | |||||||||
Shares granted in period (in shares) | 500,000 | 600,000 | 500,000 | |||||||
Executive Officer | Performance Shares | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Shares authorized for grant (in shares) | 300,000 | |||||||||
Number of shares issuable per performance share unit (in shares) | 1 | 1 | 1 | |||||||
Exercise price (in dollars per share) | $ 26.98 | $ 25.25 | $ 16.50 | |||||||
Performance period | 3 years | 3 years | 3 years | |||||||
Shares granted in period (in shares) | 300,000 | 400,000 | 500,000 | |||||||
Executive Officer | Performance Shares | Performance Objective One | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Weighting for each of four performance metrics | 50.00% | 25.00% | 50.00% | |||||||
Executive Officer | Performance Shares | Performance Objective One | Minimum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 0.00% | 0.00% | 0.00% | |||||||
Executive Officer | Performance Shares | Performance Objective One | Maximum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Performance-based vesting percentage | 200.00% | 200.00% | 200.00% | |||||||
Executive Officer | Restricted Stock Units (RSUs) | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Shares authorized for grant (in shares) | 300,000 | 300,000 | 400,000 | |||||||
Exercise price (in dollars per share) | $ 26.98 | $ 25.25 | $ 16.50 | |||||||
Vesting term | 3 years | 3 years | 3 years | |||||||
Ten Customers | Customer Concentration Risk | Sales | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Concentration risk from significant customers, percentage | 75.00% | 69.00% | 77.00% | |||||||
Three Customers | Customer Concentration Risk | Sales | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Concentration risk from significant customers, percentage | 53.00% | 50.00% | 54.00% | |||||||
Three Customers | Customer Concentration Risk | Trade Accounts Receivable | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Concentration risk from significant customers, percentage | 20.00% | 25.00% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Average Common Shares (Details) - shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | |||
Basic average common shares outstanding (in shares) | 71.7 | 74 | 83.2 |
Impact of restricted shares, restricted share units and performance share units (in shares) | 1.1 | 0.8 | 2.2 |
Impact of convertible notes (in shares) | 0 | 0.8 | 0.9 |
Diluted average common shares outstanding (in shares) | 72.8 | 75.6 | 86.3 |
ACQUISITIONS AND DIVESTITURE -
ACQUISITIONS AND DIVESTITURE - Additional Information (Details) - USD ($) $ in Millions | Mar. 13, 2020 | Jan. 16, 2020 | Sep. 30, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Business Acquisition [Line Items] | ||||||
Increase to goodwill | $ 2 | $ 5 | ||||
Income from WABCO distribution termination | 0 | 265 | $ 0 | |||
Meritor WABCO JV | WABCO Holdings Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price of sale | $ 250 | |||||
Distribution rights, term (up to) | 10 years | |||||
Income from WABCO distribution termination | $ 265 | |||||
Meritor WABCO JV | WABCO Holdings Inc. | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
WABCO termination period (in years) | 3 years 6 months | |||||
Contract termination expense | $ 225 | |||||
Meritor WABCO JV | WABCO Holdings Inc. | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Contract termination expense | $ 265 | |||||
TransPower | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting equity interest acquired | 100.00% | |||||
Purchase price | $ 15 | 15 | 15 | |||
Investments in TransPower | $ 12 | 12 | $ 12 | |||
Decrease to fair value of identifiable net assets acquired | 2 | |||||
Increase to goodwill | $ 2 |
ACQUISITIONS AND DIVESTITURE _2
ACQUISITIONS AND DIVESTITURE - Purchase Price Allocation (Details) - TransPower - USD ($) $ in Millions | Jan. 16, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Purchase price | $ 15 | $ 15 | $ 15 |
Investments in TransPower | $ 12 | 12 | 12 |
Total | 27 | 27 | |
Assets acquired and liabilities assumed: | |||
Cash | 2 | 2 | |
Receivables, net | 5 | 5 | |
Inventories, net | 8 | 8 | |
PP&E | 4 | 9 | |
Identifiable intangible assets | 12 | 11 | |
Other assets | (1) | (1) | |
Accounts payable | (3) | (3) | |
Other current liabilities | (15) | (17) | |
Total identifiable net assets acquired | 12 | 14 | |
Goodwill and other intangible assets resulting from the acquisition of TransPower | 15 | 13 | |
Identifiable net assets and goodwill acquired | 27 | $ 27 | |
Measurement Period Adjustments | |||
Purchase price | 0 | ||
Investments in TransPower | 0 | ||
Total | 0 | ||
Cash | 0 | ||
Receivables, net | 0 | ||
Inventories, net | 0 | ||
PP&E | (5) | ||
Identifiable intangible assets | 1 | ||
Other assets | 0 | ||
Accounts payable | 0 | ||
Other current liabilities | 2 | ||
Total identifiable net assets acquired | (2) | ||
Goodwill and other intangible assets resulting from the acquisition of TransPower | 2 | ||
Identifiable net assets and goodwill acquired | $ 0 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Finance lease costs | $ 3 | $ 3 |
Operating lease costs | 19 | 20 |
Total lease costs | $ 22 | $ 23 |
LEASES - Leases in Condensed Co
LEASES - Leases in Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Finance Lease Assets And Liabilities Lessee | ||
Finance lease right-of-use assets, Balance Sheet [Extensible List] | NET PROPERTY | NET PROPERTY |
Finance lease liabilities, current, Balance Sheet [Extensible List] | Debt, Current | Debt, Current |
Finance lease liabilities, noncurrent, Balance Sheet [Extensible List] | Long-term debt | Long-term debt |
Finance lease right-of-use assets, Net Property | $ 9 | $ 5 |
Finance lease liabilities, Short-term debt | 1 | 3 |
Finance lease liabilities, Long-term debt | $ 9 | $ 3 |
Operating Lease Assets And Liabilities Lessee | ||
Operating lease right-of-use assets, Balance Sheet [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Operating lease liabilities, current, Balance Sheet [Extensible List] | Other Liabilities, Current | Other Liabilities, Current |
Operating lease liabilities, noncurrent, Balance Sheet [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Operating lease right-of-use assets, Other assets | $ 62 | $ 70 |
Operating lease liabilities, Other current liabilities | 13 | 15 |
Operating lease liabilities, Other liabilities | $ 53 | $ 59 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used for operating leases | $ 19 | $ 19 |
Operating cash flows used for finance leases | 1 | 0 |
Financing cash flows used for finance leases | 1 | 2 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 7 | 8 |
Finance leases | $ 6 | $ 3 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) | Sep. 30, 2021 | Sep. 30, 2020 |
Weighted-average remaining lease term (years): | ||
Operating leases | 8 years 3 months 25 days | 8 years 6 months 18 days |
Finance leases | 9 years 9 months 25 days | 2 years 2 months 15 days |
Weighted-average discount rate: | ||
Operating leases | 4.60% | 4.50% |
Finance leases | 10.10% | 5.00% |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Operating Leases | ||
2022 | $ 16 | |
2023 | 14 | |
2024 | 10 | |
2025 | 8 | |
Thereafter | 35 | |
Total lease payments | 83 | |
Less: Impact of discounting future lease payments | (17) | |
Present value of lease liabilities | 66 | |
Finance Leases | ||
2022 | 2 | |
2023 | 1 | |
2024 | 1 | |
2025 | 1 | |
Thereafter | 13 | |
Total lease payments | 18 | |
Less: Impact of discounting future lease payments | (8) | |
Present value of lease liabilities | $ 10 | $ 6 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Sales | $ 3,833 | $ 3,044 | $ 4,388 |
Trade receivables, net | 471 | 421 | |
Provision for doubtful accounts | 1 | ||
U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 2,057 | 1,783 | 2,622 |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 55 | 54 | 69 |
Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 197 | 147 | 249 |
Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 2,309 | 1,984 | 2,940 |
Sweden | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 276 | 202 | 276 |
Italy | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 240 | 166 | 234 |
United Kingdom | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 153 | 114 | 165 |
Other Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 151 | 139 | |
Total Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 820 | 621 | 766 |
Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 317 | 172 | 248 |
China | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 130 | 135 | 153 |
India | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 146 | 72 | $ 197 |
Other Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 111 | 60 | |
Commercial Truck | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 2,866 | 2,080 | |
Commercial Truck | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,342 | 1,052 | |
Commercial Truck | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 0 | 0 | |
Commercial Truck | Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 175 | 129 | |
Commercial Truck | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,517 | 1,181 | |
Commercial Truck | Sweden | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 276 | 202 | |
Commercial Truck | Italy | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 222 | 153 | |
Commercial Truck | United Kingdom | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 142 | 105 | |
Commercial Truck | Other Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 9 | 5 | |
Commercial Truck | Total Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 649 | 465 | |
Commercial Truck | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 315 | 170 | |
Commercial Truck | China | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 128 | 134 | |
Commercial Truck | India | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 146 | 70 | |
Commercial Truck | Other Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 111 | 60 | |
Aftermarket & Industrial | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 967 | 964 | |
Aftermarket & Industrial | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 715 | 731 | |
Aftermarket & Industrial | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 55 | 54 | |
Aftermarket & Industrial | Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 22 | 18 | |
Aftermarket & Industrial | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 792 | 803 | |
Aftermarket & Industrial | Sweden | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 0 | 0 | |
Aftermarket & Industrial | Italy | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 18 | 13 | |
Aftermarket & Industrial | United Kingdom | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 11 | 9 | |
Aftermarket & Industrial | Other Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 142 | 134 | |
Aftermarket & Industrial | Total Europe | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 171 | 156 | |
Aftermarket & Industrial | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 2 | 2 | |
Aftermarket & Industrial | China | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 2 | 1 | |
Aftermarket & Industrial | India | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 0 | 2 | |
Aftermarket & Industrial | Other Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Sales | $ 0 | $ 0 |
GOODWILL (Details)
GOODWILL (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021USD ($)unit | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Goodwill [Line Items] | |||
Goodwill | $ 493 | ||
Accumulated impairment losses | (15) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 501 | $ 478 | |
Measurement period adjustment | 2 | 5 | |
Goodwill acquired from TransPower acquisition (see Note 3) | 13 | ||
Foreign currency translation | 4 | 5 | |
Goodwill, ending balance | $ 507 | 501 | |
Commercial Truck | |||
Goodwill [Line Items] | |||
Number of reporting units | unit | 2 | ||
Goodwill | 287 | ||
Accumulated impairment losses | 0 | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 304 | 287 | |
Measurement period adjustment | 2 | 0 | |
Goodwill acquired from TransPower acquisition (see Note 3) | 13 | ||
Foreign currency translation | 3 | 4 | |
Goodwill, ending balance | $ 309 | 304 | |
Aftermarket & Industrial | |||
Goodwill [Line Items] | |||
Number of reporting units | unit | 3 | ||
Goodwill | 206 | ||
Accumulated impairment losses | $ (15) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 197 | 191 | |
Measurement period adjustment | 0 | 5 | |
Goodwill acquired from TransPower acquisition (see Note 3) | 0 | ||
Foreign currency translation | 1 | 1 | |
Goodwill, ending balance | $ 198 | $ 197 |
RESTRUCTURING COSTS - Additiona
RESTRUCTURING COSTS - Additional Information (Details) $ in Millions | Nov. 11, 2020USD ($)positionofficeplant | Sep. 30, 2019USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 02, 2020USD ($) | Sep. 30, 2018USD ($) |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve | $ 8 | $ 6 | $ 10 | $ 8 | $ 4 | ||
Restructuring costs | 13 | 27 | 8 | ||||
Employee Termination Benefits | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve | 8 | 5 | 10 | 8 | $ 4 | ||
Restructuring costs | 8 | 27 | 8 | ||||
Footprint Actions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of positions expected to be eliminated | position | 150 | ||||||
Restructuring costs | 10 | ||||||
Footprint Actions | Aftermarket & Industrial | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs expected to incur | $ 14 | ||||||
Restructuring costs | 10 | ||||||
Footprint Actions | Aftermarket & Industrial | Asset Impairment | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs expected to incur | 3 | ||||||
Footprint Actions | Aftermarket & Industrial | Employee Termination Benefits | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs expected to incur | 5 | ||||||
Footprint Actions | Aftermarket & Industrial | Other | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs expected to incur | $ 6 | ||||||
Global Restructuring Program 2020 | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 3 | 10 | |||||
Global Restructuring Program 2020 | Employee Termination Benefits | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs expected to incur | $ 13 | ||||||
Percentage of global salaried positions affected | 8.00% | ||||||
Global Restructuring Program 2020 | Aftermarket & Industrial | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 3 | ||||||
Global Restructuring Program 2020 | Commercial Truck | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | $ 3 | 7 | |||||
Global Restructuring Program 2019 | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 13 | 7 | |||||
Global Restructuring Program 2019 | Aftermarket & Industrial | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 1 | 2 | |||||
Global Restructuring Program 2019 | Commercial Truck | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 6 | 11 | |||||
AxleTech | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 2 | $ 3 | |||||
AxleTech | Aftermarket & Industrial | Employee Termination Benefits | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | $ 3 | $ 2 | |||||
U.S. | Footprint Actions | Aftermarket & Industrial | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected number of facilities to close | plant | 3 | ||||||
Total Europe | Footprint Actions | Aftermarket & Industrial | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected number of facilities to close | office | 1 |
RESTRUCTURING COSTS - Changes i
RESTRUCTURING COSTS - Changes in Restructuring Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, period start | $ 10 | $ 8 | $ 4 |
Charges | 13 | 27 | 8 |
Cash payments | (13) | (25) | (5) |
Other | (4) | 1 | |
Restructuring reserve, period end | 6 | 10 | 8 |
Less: non-current restructuring reserves | (1) | ||
Restructuring reserves – current | 5 | ||
Employee Termination Benefits | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, period start | 10 | 8 | 4 |
Charges | 8 | 27 | 8 |
Cash payments | (13) | (25) | (5) |
Other | 0 | 1 | |
Restructuring reserve, period end | 5 | 10 | 8 |
Less: non-current restructuring reserves | (1) | ||
Restructuring reserves – current | 4 | ||
Plant Shutdown & Other | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, period start | 0 | 0 | 0 |
Charges | 5 | 0 | 0 |
Cash payments | 0 | 0 | 0 |
Other | (4) | 0 | |
Restructuring reserve, period end | 1 | $ 0 | $ 0 |
Less: non-current restructuring reserves | 0 | ||
Restructuring reserves – current | $ 1 |
RESTRUCTURING COSTS - Restructu
RESTRUCTURING COSTS - Restructuring Expense Recognized By Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 13 | $ 27 | $ 8 | |
Commercial Truck | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 3 | 19 | 5 | |
Aftermarket & Industrial | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 10 | 8 | 3 | |
Footprint Actions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 10 | |||
Footprint Actions | Commercial Truck | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | |||
Footprint Actions | Aftermarket & Industrial | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 10 | |||
Footprint Actions | Aftermarket & Industrial | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 10 | |||
Global Restructuring Program 2020 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 3 | 10 | ||
Global Restructuring Program 2020 | Commercial Truck | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 3 | 7 | ||
Global Restructuring Program 2020 | Commercial Truck | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 3 | 7 | ||
Global Restructuring Program 2020 | Aftermarket & Industrial | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 3 | |||
Global Restructuring Program 2020 | Aftermarket & Industrial | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | 3 | ||
Global Restructuring Program 2019 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 13 | 7 | ||
Global Restructuring Program 2019 | Commercial Truck | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 6 | 11 | ||
Global Restructuring Program 2019 | Commercial Truck | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 11 | 6 | ||
Global Restructuring Program 2019 | Aftermarket & Industrial | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 1 | 2 | ||
Global Restructuring Program 2019 | Aftermarket & Industrial | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 2 | 1 | ||
AxleTech | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 2 | 3 | ||
AxleTech | Commercial Truck | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 0 | ||
AxleTech | Aftermarket & Industrial | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 2 | 3 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 2 | (2) | ||
Other | Commercial Truck | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 1 | (1) | ||
Other | Aftermarket & Industrial | Operating Segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 1 | $ (1) |
ACCOUNTS RECEIVABLE FACTORING_3
ACCOUNTS RECEIVABLE FACTORING AND SECURITIZATION (Details) € in Millions | 12 Months Ended | |||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2021EUR (€) | Mar. 31, 2021USD ($) | Sep. 30, 2020EUR (€) | |
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Maximum limit for securitization financing arrangement | $ 110,000,000 | |||||
Utilization of securitization financing arrangement | 3,000,000 | $ 3,000,000 | ||||
Maximum limit for sale of eligible trade receivables | 318,000,000 | € 210 | ||||
Utilization of accounts receivable factoring facility under arrangement | 173,000,000 | 154,000,000 | 106 | € 107 | ||
Costs associated with off-balance sheet factoring arrangements | 4,000,000 | 4,000,000 | $ 6,000,000 | |||
Committed U.S. Accounts Receivable Securitization | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Maximum limit for securitization financing arrangement | 110,000,000 | 95,000,000 | $ 110,000,000 | |||
Utilization of securitization financing arrangement | $ 3,000,000 | 3,000,000 | ||||
Required ratio of total priority debt to EBITDA through period end | 2.25 | |||||
Outstanding balance under accounts receivable securitization program | $ 0 | 0 | ||||
Committed U.S. Accounts Receivable Securitization | Letter of Credit | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Amount outstanding, letters of credit | 3,000,000 | 3,000,000 | ||||
Committed Swedish Factoring Facility | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Maximum limit for sale of eligible trade receivables | 179,000,000 | 155 | ||||
Utilization of accounts receivable factoring facility under arrangement | $ 88,000,000 | 100,000,000 | 75 | 86 | ||
Days of liquidity | 364 days | |||||
Committed U.S Factoring Facility | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Maximum limit for sale of eligible trade receivables | $ 75,000,000 | |||||
Utilization of accounts receivable factoring facility under arrangement | 49,000,000 | 30,000,000 | ||||
Uncommitted U.K. Factoring Facility | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Maximum limit for sale of eligible trade receivables | 29,000,000 | 25 | ||||
Utilization of accounts receivable factoring facility under arrangement | 2,000,000 | 1,000,000 | 2 | 1 | ||
Uncommitted Italy Factoring Facility | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Maximum limit for sale of eligible trade receivables | 35,000,000 | 30 | ||||
Utilization of accounts receivable factoring facility under arrangement | 17,000,000 | 9,000,000 | 14 | 8 | ||
Other Uncommitted Factoring Facilities | ||||||
Accounts Receivable Factoring and Securitization [Line Items] | ||||||
Utilization of accounts receivable factoring facility under arrangement | $ 17,000,000 | $ 14,000,000 | € 15 | € 12 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 137 | $ 119 |
Work in process | 47 | 38 |
Raw materials, parts and supplies | 417 | 278 |
Total | $ 601 | $ 435 |
NET PROPERTY - Additional Infor
NET PROPERTY - Additional Information (Details) | 12 Months Ended |
Sep. 30, 2021 | |
Minimum | Building and Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 10 years |
Minimum | Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 3 years |
Maximum | Building and Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 50 years |
Maximum | Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 25 years |
Maximum | Company-owned tooling | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property (in years) | 3 years |
NET PROPERTY - Schedule of Net
NET PROPERTY - Schedule of Net Property (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 1,550 | $ 1,476 |
Less: Accumulated depreciation | (1,033) | (961) |
Net property | 517 | 515 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 41 | 32 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 231 | 228 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 1,051 | 1,002 |
Company-owned tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 164 | 151 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 63 | $ 63 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Other Assets, Noncurrent [Abstract] | ||
Prepaid pension costs (see Note 20) | $ 191 | $ 179 |
Deferred income tax assets (see Note 21) | 42 | 30 |
Investments in non-consolidated joint ventures (see Note 12) | 132 | 107 |
Other | 263 | 269 |
Other assets | 628 | 585 |
Finite-Lived Intangible Assets [Line Items] | ||
Investments in non-consolidated joint ventures | 132 | 107 |
Corporate Joint Venture | ||
Other Assets, Noncurrent [Abstract] | ||
Investments in non-consolidated joint ventures (see Note 12) | 69 | 65 |
Finite-Lived Intangible Assets [Line Items] | ||
Investments in non-consolidated joint ventures | $ 69 | $ 65 |
INVESTMENTS IN NON-CONSOLIDAT_3
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Non-Consolidated Joint Ventures and Direct Ownership Interests (Details) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Master Sistemas Automotivos Ltda. | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest (percent) | 49.00% | 49.00% | 49.00% |
Sistemas Automotrices de Mexico S.A. de C.V. | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest (percent) | 50.00% | 50.00% | 50.00% |
Ege Fren Sanayii ve Ticaret A.S. | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest (percent) | 49.00% | 49.00% | 49.00% |
Automotive Axles Limited | |||
Schedule of Equity Method Investments [Line Items] | |||
Non-consolidated joint ventures and related direct ownership interest (percent) | 36.00% | 36.00% | 36.00% |
INVESTMENTS IN NON-CONSOLIDAT_4
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Investments in non-consolidated joint ventures | $ 132 | $ 107 | |
Equity in earnings of affiliates | 34 | 14 | $ 31 |
Dividends/Distributions received from the company's non-consolidated joint ventures | 7 | 10 | 23 |
Sales to non-consolidated joint ventures | 8 | 9 | 9 |
Sales excluded from non-consolidated joint ventures through intercompany eliminations | 133 | 92 | 193 |
Purchases from non-consolidated joint ventures | 744 | 509 | 940 |
Lease and services payments from non-consolidated joint ventures | 9 | 14 | $ 12 |
Amounts due from non-consolidated joint ventures | 24 | 23 | |
Amounts due to non-consolidated joint ventures | 97 | 56 | |
Automotive Axles Limited | |||
Schedule of Equity Method Investments [Line Items] | |||
Fair value of investment | 90 | 54 | |
Commercial Truck | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in non-consolidated joint ventures | 132 | 107 | |
Equity in earnings of affiliates | $ 34 | $ 14 |
INVESTMENTS IN NON-CONSOLIDAT_5
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Balance Sheet Information Of Non-Consolidated Joint Ventures (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 1,286 | $ 1,283 |
TOTAL ASSETS | 2,938 | 2,884 |
Current liabilities | 900 | 726 |
TOTAL LIABILITIES | 2,323 | 2,389 |
Equity Method Investment | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 456 | 308 |
Non-current assets | 214 | 200 |
TOTAL ASSETS | 670 | 508 |
Current liabilities | 293 | 209 |
Non-current liabilities | 112 | 87 |
TOTAL LIABILITIES | $ 405 | $ 296 |
INVESTMENTS IN NON-CONSOLIDAT_6
INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES - Income Statement Information Of Non-Consolidated Joint Ventures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Sales | $ 3,833 | $ 3,044 | $ 4,388 |
Gross profit | 505 | 328 | 640 |
Net income | 199 | 245 | 291 |
Equity Method Investment | |||
Schedule of Equity Method Investments [Line Items] | |||
Sales | 1,011 | 696 | 1,231 |
Gross profit | 119 | 76 | 147 |
Net income | $ 72 | $ 30 | $ 63 |
OTHER CURRENT LIABILITIES - Sch
OTHER CURRENT LIABILITIES - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Other Current Liabilities Disclosure [Abstract] | |||
Compensation and benefits | $ 125 | $ 91 | |
Income taxes | 17 | 6 | |
Product warranties | 15 | 19 | $ 18 |
Other | 151 | 148 | |
Other current liabilities | $ 308 | $ 264 |
OTHER CURRENT LIABILITIES - S_2
OTHER CURRENT LIABILITIES - Schedule of Product Warranties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Liabilities, Current [Roll Forward] | |||
Total product warranties – beginning of year | $ 54 | $ 50 | $ 54 |
Accruals for product warranties | 16 | 25 | 23 |
Payments | (17) | (19) | (20) |
Change in estimates and other | (10) | (2) | (7) |
Total product warranties – end of year | 43 | 54 | 50 |
Less: non-current product warranties (see Note 14) | (28) | (35) | (32) |
Product warranties – current | $ 15 | $ 19 | $ 18 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Other Liabilities Disclosure [Abstract] | |||
Asbestos-related liabilities (see Note 22) | $ 52 | $ 67 | |
Liabilities for uncertain tax positions (see Note 21) | 52 | 73 | |
Product warranties (see Note 13) | 28 | 35 | $ 32 |
Other | 92 | 104 | |
Other liabilities | $ 224 | $ 279 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Oct. 01, 2021 | Sep. 30, 2021 | Dec. 16, 2020 | Dec. 01, 2020 | Oct. 16, 2020 | Sep. 30, 2020 | Jun. 08, 2020 |
Debt Instrument [Line Items] | |||||||
Finance lease obligation | $ 10 | $ 6 | |||||
Subtotal | 1,027 | 1,227 | |||||
Less: current maturities | (19) | (39) | |||||
Long-term debt | 1,008 | 1,188 | |||||
Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Unamortized discount on convertible notes | (23) | (29) | |||||
Unamortized issuance costs | $ 13 | ||||||
Convertible Notes | 3.25% convertible notes due 2037 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 3.25% | 3.25% | |||||
Debt | $ 321 | 320 | |||||
Unamortized issuance costs | $ 4 | 5 | |||||
Convertible Notes | 7.875% convertible notes due 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 7.875% | ||||||
Debt | $ 0 | $ 23 | 23 | ||||
Senior Notes | 4.50 percent notes due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 4.50% | 4.50% | |||||
Long-term debt outstanding | $ 270 | 0 | |||||
Unamortized issuance costs | $ 5 | ||||||
Senior Notes | 6.25% notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 6.25% | 6.25% | |||||
Long-term debt outstanding | $ 296 | 295 | |||||
Unamortized issuance costs | $ 4 | 5 | |||||
Senior Notes | 6.25% notes due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 625.00% | 6.25% | |||||
Debt | $ 450 | $ 450 | |||||
Long-term debt outstanding | $ 0 | 446 | |||||
Unamortized issuance costs | 4 | ||||||
Term loan | Term loan due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 153 | $ 166 |
LONG-TERM DEBT - 7.875 Percent
LONG-TERM DEBT - 7.875 Percent Convertible Notes (Details) | Nov. 30, 2020USD ($) | Oct. 16, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Debt Instrument [Line Items] | |||||
Repurchase of convertible notes | $ 53,000,000 | $ 0 | $ 0 | ||
Loss on extinguishment | $ 11,000,000 | 0 | $ 0 | ||
Convertible Notes | 7.875% convertible notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate (percent) | 7.875% | ||||
Principal amount | $ 23,000,000 | $ 0 | $ 23,000,000 | ||
Repurchase of convertible notes | 53,000,000 | ||||
Repurchased principal amount of debt | 23,000,000 | ||||
Debt instrument, repurchase amount, excess of accreted principal | 30,000,000 | ||||
Loss on extinguishment | $ 0 | ||||
Convertible Notes | 7.875% convertible notes | Debt Instrument, Redemption, Period One | |||||
Debt Instrument [Line Items] | |||||
Conversion ratio of common stock per principal | 83.3333 | ||||
Principal amount per note for conversion | $ 1,000 |
LONG-TERM DEBT - 6.25 Percent N
LONG-TERM DEBT - 6.25 Percent Notes due 2024 (Details) - USD ($) | Jun. 03, 2021 | Dec. 16, 2020 | Dec. 01, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||||||
Redemption of notes | $ 458,000,000 | $ 0 | $ 24,000,000 | |||
Loss on extinguishment | $ 11,000,000 | $ 0 | $ 0 | |||
6.25% notes due 2024 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (percent) | 6.25% | 625.00% | ||||
Redemption of notes | $ 175,000,000 | $ 275,000,000 | $ 275,000,000 | |||
Principal amount | 450,000,000 | $ 450,000,000 | ||||
Debt instrument aggregate purchase price | 180,000,000 | 287,000,000 | ||||
Debt instrument accrued interest repurchase amount | $ 3,000,000 | $ 6,000,000 | ||||
Debt instrument, redemption price | 101.042% | 102.083% | ||||
Loss on extinguishment | $ 3,000,000 | $ 8,000,000 |
LONG-TERM DEBT - 4.50 Percent N
LONG-TERM DEBT - 4.50 Percent Notes due (Details) - USD ($) | Jun. 03, 2021 | Dec. 16, 2020 | Dec. 01, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||||||
Redemption of notes | $ 458,000,000 | $ 0 | $ 24,000,000 | |||
Senior Notes | 4.50 percent notes due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (percent) | 4.50% | 4.50% | ||||
Debt instrument, face amount | $ 275,000,000 | |||||
Proceeds from debt issuances | $ 270,000,000 | |||||
Percentage of principal that may be redeemed | 35.00% | |||||
Percentage of principal outstanding | 65.00% | |||||
Senior Notes | 4.50 percent notes due 2028 | Prior to December 15, 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption Price | 100.00% | 104.50% | ||||
Senior Notes | 4.50 percent notes due 2028 | 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption Price | 102.25% | |||||
Senior Notes | 4.50 percent notes due 2028 | 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption Price | 101.125% | |||||
Senior Notes | 4.50 percent notes due 2028 | 2025 and thereafter | ||||||
Debt Instrument [Line Items] | ||||||
Redemption Price | 100.00% | |||||
Senior Notes | 4.50 percent notes due 2028 | Change in Control Redemption | ||||||
Debt Instrument [Line Items] | ||||||
Redemption Price | 101.00% | |||||
Senior Notes | 6.25% notes due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (percent) | 6.25% | 625.00% | ||||
Redemption of notes | $ 175,000,000 | $ 275,000,000 | $ 275,000,000 | |||
Debt | $ 450,000,000 | $ 450,000,000 | ||||
Redemption Price | 101.042% | 102.083% |
LONG-TERM DEBT - 6.25 Percent_2
LONG-TERM DEBT - 6.25 Percent Notes due 2025 (Details) - USD ($) | Jun. 08, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||||
Repayment amount | $ 0 | $ 304,000,000 | $ 190,000,000 | |
6.25% notes due 2025 | Prior to June 1, 2022 | ||||
Debt Instrument [Line Items] | ||||
Redemption Price | 106.25% | |||
Senior Notes | 6.25% notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate (percent) | 6.25% | 6.25% | ||
Debt instrument, face amount | $ 300,000,000 | |||
Proceeds from debt issuances | $ 295,000,000 | |||
Redemption Price | 100.00% | |||
Premium as a percentage of principal to be earned in the event of redemption | 1.00% | |||
Basis spread on variable rate | 0.50% | |||
Percentage of principal that may be redeemed | 35.00% | |||
Percentage of principal outstanding | 65.00% | |||
Senior Notes | 6.25% notes due 2025 | Prior to June 1, 2022 | ||||
Debt Instrument [Line Items] | ||||
Redemption Price | 100.00% | |||
Senior Notes | 6.25% notes due 2025 | 2022 | ||||
Debt Instrument [Line Items] | ||||
Redemption Price | 103.125% | 103.125% | ||
Senior Notes | 6.25% notes due 2025 | 2023 | ||||
Debt Instrument [Line Items] | ||||
Redemption Price | 101.563% | |||
Senior Notes | 6.25% notes due 2025 | 2024 and thereafter | ||||
Debt Instrument [Line Items] | ||||
Redemption Price | 100.00% | |||
Senior Notes | 6.25% notes due 2025 | Change in Control Redemption | ||||
Debt Instrument [Line Items] | ||||
Redemption Price | 101.00% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 0 | $ 0 | ||
Revolving Credit Facility | Amended Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Repayment amount | $ 295,000,000 | |||
Amount outstanding | $ 304,000,000 |
LONG-TERM DEBT - 3.25 Percent C
LONG-TERM DEBT - 3.25 Percent Convertible Notes (Details) - 3.25% convertible notes due 2037 - Convertible Notes | Sep. 22, 2017trading_dayd$ / shares$ / noteshares | Oct. 01, 2021 | Sep. 30, 2021 |
Debt Instrument [Line Items] | |||
Interest rate (percent) | 3.25% | 3.25% | |
Shares issuable upon conversion (in shares) | shares | 25.0474 | ||
Initial principal amount per note (in dollars per note) | $ / note | 1,000 | ||
Conversion price (in dollars per share) | $ / shares | $ 39.92 | ||
Maximum number of common stock convertible notes are convertible into (in shares) | shares | 8,000,000 | ||
Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption Price | 100.00% | ||
Conversion Condition One | |||
Debt Instrument [Line Items] | |||
Threshold trading days | 20 | ||
Threshold consecutive trading days | 30 | ||
Threshold percentage of stock price trigger | 130.00% | ||
Conversion Condition Two | |||
Debt Instrument [Line Items] | |||
Threshold consecutive trading days | 5 | ||
Threshold percentage of stock price trigger | 98.00% | ||
Threshold number of business days | d | 5 |
LONG-TERM DEBT - Summaries of C
LONG-TERM DEBT - Summaries of Convertible Notes (Details) - Convertible Notes - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | |||
Principal amount of convertible notes | $ 325 | $ 348 | |
Unamortized discount on convertible notes and issuance costs | (27) | (34) | |
Net carrying value | 298 | 314 | |
Contractual interest coupon | 16 | 17 | $ 17 |
Amortization of debt discount | 1 | 2 | 2 |
Repurchase of convertible notes | 11 | 0 | 0 |
Total | $ 28 | $ 19 | $ 19 |
3.25% | |||
Debt Instrument [Line Items] | |||
Total amortization period for debt discount (in years) | 8 years | ||
Remaining amortization period for debt discount (in years) | 4 years | ||
Effective interest rates on convertible notes | 5.60% |
LONG-TERM DEBT - Revolving Cred
LONG-TERM DEBT - Revolving Credit Facility (Details) - Revolving Credit Facility | Nov. 09, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 08, 2020USD ($) | Jun. 07, 2019 |
Debt Instrument [Line Items] | |||||
Amount outstanding | $ 0 | $ 0 | |||
Amount outstanding, letters of credit | $ 0 | $ 0 | |||
LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.00% | ||||
Unused capacity, commitment fee percentage | 0.30% | ||||
Amended Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility increased | $ 60,000,000 | ||||
Maximum borrowing capacity | $ 685,000,000 | ||||
Priority-debt-to-EBITDA ratio | 2.25 | ||||
Revolving credit facility increased | $ 601,000,000 | ||||
Amount outstanding | $ 304,000,000 | ||||
Maximum limit on issuance of letters of credit | $ 100,000,000 | ||||
Overnight Revolving Credit Loans | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% |
LONG-TERM DEBT - Debt Maturitie
LONG-TERM DEBT - Debt Maturities (Details) - USD ($) $ in Millions | Oct. 01, 2021 | Sep. 30, 2021 | Dec. 01, 2020 | Sep. 30, 2020 | Jun. 08, 2020 |
Convertible Notes | |||||
Long-term debt by fiscal year maturity [Abstract] | |||||
Unamortized issuance costs, fair value of equity component | $ 23 | ||||
Unamortized issuance costs | 13 | ||||
Convertible Notes | Debt maturities at Principal Amount | |||||
Long-term debt by fiscal year maturity [Abstract] | |||||
Total | 1,053 | ||||
2022 | 18 | ||||
2023 | 13 | ||||
2024 | 122 | ||||
2025 | 300 | ||||
2026 | 0 | ||||
Thereafter | 600 | ||||
Convertible Notes | 3.25% convertible notes | |||||
Long-term debt by fiscal year maturity [Abstract] | |||||
Unamortized issuance costs | $ 4 | $ 5 | |||
Interest rate (percent) | 3.25% | 3.25% | |||
Senior Notes | 6.25% notes due 2025 | |||||
Long-term debt by fiscal year maturity [Abstract] | |||||
Total | $ 296 | 295 | |||
Unamortized issuance costs | $ 4 | 5 | |||
Interest rate (percent) | 6.25% | 6.25% | |||
Senior Notes | 4.50 percent notes due 2028 | |||||
Long-term debt by fiscal year maturity [Abstract] | |||||
Total | $ 270 | $ 0 | |||
Unamortized issuance costs | $ 5 | ||||
Interest rate (percent) | 4.50% | 4.50% |
LONG-TERM DEBT - Letter of Cred
LONG-TERM DEBT - Letter of Credit Facilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Other Letters of Credit Arrangements | ||
Debt Instrument [Line Items] | ||
Amount outstanding, letters of credit | $ 14 | $ 11 |
LONG-TERM DEBT - Other (Details
LONG-TERM DEBT - Other (Details) - China - Notes Payable to Banks - Other Export Financing Arrangements - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||
Debt default, amount | $ 35 | |
Long-term debt | $ 25 | $ 16 |
FINANCIAL INSTRUMENTS - Additio
FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Foreign Exchange Option Purchase Risk | |||
Derivative [Line Items] | |||
Aggregate notional amount | $ 49,000,000 | $ 39,000,000 | |
Foreign Currency Option Contracts, Translation Risk | |||
Derivative [Line Items] | |||
Aggregate notional amount | 0 | 24,000,000 | |
Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Aggregate notional amount | 107,000,000 | 65,000,000 | $ 110,000,000 |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign exchange forward contracts | |||
Derivative [Line Items] | |||
Aggregate notional amount | $ 107,000,000 | $ 65,000,000 |
FINANCIAL INSTRUMENTS - The Imp
FINANCIAL INSTRUMENTS - The Impact of Derivatives on Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain recognized in AOCI | $ 3 | $ 4 | $ 19 |
Designated as Hedging Instrument | Cost of Sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain (loss) reclassified from AOCI into income | 1 | (1) | 4 |
Not Designated as Hedging Instrument | Other Income (expense) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain (loss) recognized in income | $ (1) | $ 1 | $ 1 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Carrying Value | ||
Fair Value | ||
Cash and cash equivalents | $ 101 | $ 315 |
Short-term debt | 19 | 39 |
Long-term debt | 1,008 | 1,188 |
Carrying Value | Foreign currency option contract | ||
Fair Value | ||
Foreign currency contract assets | 0 | 1 |
Carrying Value | Foreign exchange forward contracts | ||
Fair Value | ||
Foreign currency contract assets | 1 | 0 |
Foreign currency contract liabilities | 0 | 1 |
Fair Value | ||
Fair Value | ||
Cash and cash equivalents | 101 | 315 |
Short-term debt | 19 | 58 |
Long-term debt | 1,082 | 1,259 |
Fair Value | Foreign currency option contract | ||
Fair Value | ||
Foreign currency contract assets | 0 | 1 |
Fair Value | Foreign exchange forward contracts | ||
Fair Value | ||
Foreign currency contract assets | 1 | 0 |
Foreign currency contract liabilities | $ 0 | $ 1 |
FINANCIAL INSTRUMENTS - Offsett
FINANCIAL INSTRUMENTS - Offsetting of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Foreign currency option contract | ||
Derivative Asset | ||
Gross Amounts Recognized | $ 0 | $ 1 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 0 | 1 |
Foreign exchange forward contracts | ||
Derivative Asset | ||
Gross Amounts Recognized | 1 | 0 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | 1 | 0 |
Derivative Liabilities | ||
Gross Amounts Recognized | 0 | 1 |
Gross Amounts Offset | 0 | 0 |
Net Amounts Reported | $ 0 | $ 1 |
FINANCIAL INSTRUMENTS - Fair _2
FINANCIAL INSTRUMENTS - Fair Value of Financial Instruments by the Valuation Hierarchy (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Cash and cash equivalents | $ 101 | $ 315 |
Short-term debt | 0 | 0 |
Long-term debt | 0 | 0 |
Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term debt | 0 | 43 |
Long-term debt | 937 | 1,103 |
Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term debt | 19 | 15 |
Long-term debt | 145 | 156 |
Foreign exchange forward contracts | Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contract assets | 0 | |
Foreign currency contract liabilities | 0 | |
Foreign exchange forward contracts | Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contract assets | 1 | |
Foreign currency contract liabilities | 1 | |
Foreign exchange forward contracts | Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contract assets | $ 0 | |
Foreign currency contract liabilities | 0 | |
Foreign currency option contract | Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contract assets | 0 | |
Foreign currency option contract | Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contract assets | 1 | |
Foreign currency option contract | Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contract assets | $ 0 |
SHAREHOLDERS' EQUITY - Addition
SHAREHOLDERS' EQUITY - Additional Information (Details) - USD ($) | 12 Months Ended | 14 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Jul. 28, 2021 | Nov. 07, 2019 | Jul. 26, 2019 | Nov. 02, 2018 | |
Class of Stock [Line Items] | ||||||||
Dividends declared or paid | $ 0 | $ 0 | $ 0 | |||||
Common stock authorized (in shares) | 500,000,000 | |||||||
Common stock par value (in dollars per share) | $ 1 | |||||||
Preferred stock authorized (in shares) | 30,000,000 | |||||||
Preferred stock issued (in shares) | 0 | |||||||
Common stock reserved for issuance under long-term incentive plan (in shares) | 4,000,000 | |||||||
Common stock available for future grants under long-term incentive plan (in shares) | 3,500,000 | |||||||
Remaining authorized debt repurchase amount | $ 76,000,000 | |||||||
Repurchase Program, July 2021 | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase, authorized amount | $ 250,000,000 | |||||||
Remaining authorized stock repurchase amount | 250,000,000 | |||||||
Repurchase Program, July 2019 | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase, authorized amount | $ 250,000,000 | |||||||
Repurchase Progam, November 2019 | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase, authorized amount | $ 325,000,000 | |||||||
Repurchase Program, July And November 2019 | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Remaining authorized stock repurchase amount | $ 0 | |||||||
Common stock repurchased (in shares) | 2,500,000 | 11,800,000 | ||||||
Value of common stock repurchased | $ 59,000,000 | $ 266,000,000 | ||||||
Repurchase Progam, November 2018 | Debt Securities | ||||||||
Class of Stock [Line Items] | ||||||||
Repurchase program, authorized amount | $ 100,000,000 | |||||||
Repurchase Progam, November 2018 | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase, authorized amount | $ 200,000,000 | |||||||
Common stock repurchased (in shares) | 4,000,000 | |||||||
Value of common stock repurchased | $ 71,000,000 | |||||||
Series A Junior Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock authorized (in shares) | 2,000,000 | |||||||
Preferred stock issued (in shares) | 0 |
SHAREHOLDERS' EQUITY - Componen
SHAREHOLDERS' EQUITY - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | $ 495 | $ 415 | $ 317 |
Other comprehensive income (loss) before reclassification | (26) | 56 | (115) |
Amounts reclassified from accumulated other comprehensive loss | 8 | 11 | 0 |
Net current-period other comprehensive income (loss) | (18) | 67 | (115) |
Ending balance | 615 | 495 | 415 |
Foreign Currency Translation | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (129) | (107) | (90) |
Other comprehensive income (loss) before reclassification | 24 | (22) | (17) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Net current-period other comprehensive income (loss) | 24 | (22) | (17) |
Ending balance | (105) | (129) | (107) |
Employee Benefit Related Adjustments | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (483) | (572) | (476) |
Other comprehensive income (loss) before reclassification | (52) | 79 | (100) |
Amounts reclassified from accumulated other comprehensive loss | 9 | 10 | 4 |
Net current-period other comprehensive income (loss) | (43) | 89 | (96) |
Ending balance | (526) | (483) | (572) |
Unrealized Income (Loss) on cash flow hedges | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (2) | (2) | 0 |
Other comprehensive income (loss) before reclassification | 2 | (1) | 2 |
Amounts reclassified from accumulated other comprehensive loss | (1) | 1 | (4) |
Net current-period other comprehensive income (loss) | 1 | 0 | (2) |
Ending balance | (1) | (2) | (2) |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | |||
Beginning balance | (614) | (681) | (566) |
Ending balance | $ (632) | $ (614) | $ (681) |
SHAREHOLDERS' EQUITY - Changes
SHAREHOLDERS' EQUITY - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other income (expense), net | $ 61 | $ 46 | $ 40 |
INCOME (LOSS) BEFORE INCOME TAXES | 234 | 326 | 377 |
Tax benefit | 24 | 78 | 82 |
Net income | 209 | 249 | 296 |
Amount Reclassified from Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net income | 9 | 10 | 4 |
Amount Reclassified from Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other income (expense), net | (35) | (36) | (35) |
Amount Reclassified from Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other income (expense), net | 45 | 47 | 39 |
Amount Reclassified from Accumulated Other Comprehensive Income | Employee Benefit Related Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
INCOME (LOSS) BEFORE INCOME TAXES | 10 | 11 | 4 |
Tax benefit | $ (1) | $ (1) | $ 0 |
EQUITY BASED COMPENSATION - Add
EQUITY BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting term | 3 years | ||
Shares granted in period (in shares) | 500 | 600 | 500 |
Weighted average grant-date fair value non-vested restricted shares and share units granted during period (in dollars per share) | $ 26.64 | $ 23.77 | $ 17.24 |
Restricted Stock and Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value non-vested restricted shares and share units granted during period (in dollars per share) | $ 26.64 | ||
Total unrecognized compensation costs related to non-vested equity compensation arrangements | $ 12 | ||
Weighted average period for compensation cost recognition | 1 year 11 months 19 days | ||
Compensation costs (income) recognized | $ 9 | $ 8 | $ 8 |
Granted (in shares) | 522 | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value non-vested restricted shares and share units granted during period (in dollars per share) | $ 26.90 | ||
Total unrecognized compensation costs related to non-vested equity compensation arrangements | $ 12 | ||
Weighted average period for compensation cost recognition | 1 year 10 months 24 days | ||
Compensation costs (income) recognized | $ 11 | $ 1 | $ 10 |
Granted (in shares) | 457 |
EQUITY BASED COMPENSATION - Rol
EQUITY BASED COMPENSATION - Rollforward of Restricted Stock, Restricted Share, and Performance Share Units and Activity (Details) shares in Thousands | 12 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Restricted Stock and Restricted Stock Units | |
Number of Shares | |
Beginning balance (in shares) | shares | 1,175 |
Granted (in shares) | shares | 522 |
Vested (in shares) | shares | (288) |
Forfeited (in shares) | shares | (79) |
Ending balance (in shares) | shares | 1,330 |
Weighted-Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ 21.75 |
Granted (in dollars per share) | 26.64 |
Vested (in dollars per share) | 24.91 |
Forfeited (in dollars per share) | 22.87 |
Ending balance (in dollars per share) | $ 22.91 |
Performance Shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 1,036 |
Granted (in shares) | shares | 457 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (325) |
Ending balance (in shares) | shares | 1,168 |
Weighted-Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ 25.64 |
Granted (in dollars per share) | 26.90 |
Vested (in dollars per share) | 0 |
Forfeited (in dollars per share) | 25.05 |
Ending balance (in dollars per share) | 26.30 |
Performance Shares | Previously Reported | |
Weighted-Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ 21.52 |
Ending balance (in dollars per share) |
RETIREMENT MEDICAL PLANS - Addi
RETIREMENT MEDICAL PLANS - Additional Information (Details) - USD ($) | Sep. 17, 2020 | Sep. 23, 2019 | Sep. 08, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2017 | Sep. 30, 2021 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Health care cost trend rate | 5.84% | ||||||
Net actuarial loss estimated to be amortized from accumulated other comprehensive loss | $ (11,000,000) | ||||||
The prior service benefit estimated to be amortized from accumulated other comprehensive loss to periodic benefits cost | $ 34,000,000 | ||||||
Postemployment Retirement Benefits | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Annual decrease in contribution | $ 500 | $ 600 | |||||
Prior service credit to be amortized | $ 7,000,000 | $ 15,000,000 | $ 315,000,000 | ||||
Average period of amortization, inactive plan participants | 9 years | 9 years | 9 years | ||||
Annual defined contribution per retiree | $ 3,000 | $ 4,000 | |||||
Average remaining service period of active participants | 7 years | ||||||
U.S. Retiree Medical Plan | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Average period of amortization, inactive plan participants | 9 years | ||||||
Health care cost trend rate | 6.07% | 6.36% | 5.84% |
RETIREMENT MEDICAL PLANS - Reti
RETIREMENT MEDICAL PLANS - Retiree Medical Liability Expense Assumptions (Details) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Assumptions Used In Measurement of Retiree Medical Liability and Expense | |||
Health care cost trend rate | 5.84% | ||
U.S. Retiree Medical Plan | |||
Assumptions Used In Measurement of Retiree Medical Liability and Expense | |||
Discount rate | 2.95% | 2.56% | 2.98% |
Health care cost trend rate | 5.84% | 6.07% | 6.36% |
Ultimate health care trend rate | 4.68% | 4.67% | 4.69% |
Year ultimate rate is reached | 2028 | 2028 | 2028 |
RETIREMENT MEDICAL PLANS - Re_2
RETIREMENT MEDICAL PLANS - Retiree Medical Liability Components As of Balance Sheet Date (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | $ 1,554 | $ 1,629 | |
U.S. Retiree Medical Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | 42 | 52 | $ 67 |
U.S. Retiree Medical Plan | Retirees | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | 42 | 52 | |
U.S. Retiree Medical Plan | Employees eligible to retire | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit obligation | $ 0 | $ 0 |
RETIREMENT MEDICAL PLANS - Roll
RETIREMENT MEDICAL PLANS - Rollforward Of Retiree Medical Liability (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Beginning balance | $ 1,629 | ||
Actuarial loss (gain) | 28 | ||
Ending balance | 1,554 | $ 1,629 | |
U.S. Retiree Medical Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Beginning balance | 52 | 67 | |
Interest cost | 1 | 2 | $ 3 |
Actuarial loss (gain) | (7) | 0 | |
Plan amendment | 0 | (7) | |
Foreign currency rate changes | 1 | 0 | |
Benefit payments | (5) | (10) | |
Ending balance | 42 | 52 | $ 67 |
Other | 0 | 0 | |
Retiree medical liability | $ 42 | $ 52 |
RETIREMENT MEDICAL PLANS - Re_3
RETIREMENT MEDICAL PLANS - Retiree Medical Liability Current and Long Term Components (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Retiree Medical Liability Current And Long Term Components | ||
Long-term — included in retirement benefits | $ 191 | $ 196 |
U.S. Retiree Medical Plan | ||
Retiree Medical Liability Current And Long Term Components | ||
Current — included in compensation and benefits | 5 | 6 |
Long-term — included in retirement benefits | 37 | 46 |
Retiree medical liability | $ 42 | $ 52 |
RETIREMENT MEDICAL PLANS - Amou
RETIREMENT MEDICAL PLANS - Amount Of Retiree Medical Obligations Recorded In Accumulated Other Comprehensive Loss Net Of Tax (Details) - U.S. Retiree Medical Plan - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Balance, beginning | $ (75) | $ (95) |
Net actuarial loss for the year | (7) | 0 |
Recognized prior service costs due to plan amendment | 0 | (7) |
Amortization for the year | 22 | 22 |
Deferred tax impact | (2) | 5 |
Balance, ending | (62) | (75) |
Net Actuarial Loss | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Balance, beginning | 64 | 70 |
Net actuarial loss for the year | (7) | 0 |
Recognized prior service costs due to plan amendment | 0 | 0 |
Amortization for the year | (13) | (14) |
Deferred tax impact | 5 | 8 |
Balance, ending | 49 | 64 |
Prior Service Cost (Benefit) | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Balance, beginning | (139) | (165) |
Net actuarial loss for the year | 0 | 0 |
Recognized prior service costs due to plan amendment | 0 | (7) |
Amortization for the year | 35 | 36 |
Deferred tax impact | (7) | (3) |
Balance, ending | $ (111) | $ (139) |
RETIREMENT MEDICAL PLANS - Comp
RETIREMENT MEDICAL PLANS - Components Of Retiree Medical Expense (Details) - U.S. Retiree Medical Plan - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 0 | $ 0 | $ 0 |
Interest cost | 1 | 2 | 3 |
Prior service benefit | (35) | (36) | (35) |
Actuarial losses | 13 | 14 | 15 |
Net periodic income | $ (21) | $ (20) | $ (17) |
RETIREMENT MEDICAL PLANS - Re_4
RETIREMENT MEDICAL PLANS - Retiree Medical Plan Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Retiree Medical Plan Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Abstract] | ||
Effect on total service and interest cost 1% increase | $ 0 | $ 0 |
Effect on total service and interest cost 1% decrease | 0 | 0 |
Effect on APBO 1% increase | 4 | 6 |
Effect on APBO 1% decrease | $ (4) | $ (5) |
RETIREMENT MEDICAL PLANS - Re_5
RETIREMENT MEDICAL PLANS - Retiree Medical Plan Estimated Future Benefit Payments (Details) - U.S. Retiree Medical Plan $ in Millions | Sep. 30, 2021USD ($) |
Gross Benefit Payments | |
Fiscal 2022 | $ 5 |
Fiscal 2023 | 5 |
Fiscal 2024 | 4 |
Fiscal 2025 | 3 |
Fiscal 2026 | 3 |
Fiscal 2027 – 2030 | 11 |
Gross Receipts | |
Fiscal 2022 | 0 |
Fiscal 2023 | 0 |
Fiscal 2024 | 0 |
Fiscal 2025 | 0 |
Fiscal 2026 | 0 |
Fiscal 2027 – 2030 | $ 1 |
RETIREMENT PENSION PLANS - Addi
RETIREMENT PENSION PLANS - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Net actuarial loss (gain) for the year | $ 28 | ||
Defined contribution savings plan expense | 17 | $ 14 | $ 21 |
Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Net actuarial loss (gain) for the year | $ (51) | 40 | |
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Average period of amortization, inactive plan participants | 25 years | ||
Net actuarial loss (gain) for the year | $ (22) | (24) | |
Pension Plan | Non-U.S. Plans | Minimum | Equity Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 15.00% | ||
Pension Plan | Non-U.S. Plans | Minimum | Fixed Income Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 30.00% | ||
Pension Plan | Non-U.S. Plans | Minimum | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 15.00% | ||
Pension Plan | Non-U.S. Plans | Minimum | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 0.00% | ||
Pension Plan | Non-U.S. Plans | Maximum | Equity Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 35.00% | ||
Pension Plan | Non-U.S. Plans | Maximum | Fixed Income Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 40.00% | ||
Pension Plan | Non-U.S. Plans | Maximum | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 35.00% | ||
Pension Plan | Non-U.S. Plans | Maximum | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 15.00% | ||
Pension Plan | U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Average period of amortization, inactive plan participants | 15 years | ||
Net actuarial loss (gain) for the year | $ (29) | $ 64 | |
Unfunded investment commitments | $ 6 | ||
Pension Plan | U.S. Plans | Minimum | Equity Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 20.00% | ||
Pension Plan | U.S. Plans | Minimum | Fixed Income Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 30.00% | ||
Pension Plan | U.S. Plans | Minimum | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 10.00% | ||
Pension Plan | U.S. Plans | Maximum | Equity Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 50.00% | ||
Pension Plan | U.S. Plans | Maximum | Fixed Income Investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 60.00% | ||
Pension Plan | U.S. Plans | Maximum | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target asset allocation | 30.00% |
RETIREMENT PENSION PLANS - Sche
RETIREMENT PENSION PLANS - Schedule of US and Non-US Pension Benefit Obligation Expense and Net Expense Assumptions (Details) - Pension Plan | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assumed return on plan assets (beginning of the year) | 7.75% | 7.75% | 7.75% |
U.S. Plans | Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 2.80% | 2.50% | 3.10% |
U.S. Plans | Maximum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 2.85% | 2.60% | 3.15% |
U.K. Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 2.10% | 1.70% | 1.80% |
Assumed return on plan assets (beginning of the year) | 5.00% | 5.75% | 6.00% |
RETIREMENT PENSION PLANS - Roll
RETIREMENT PENSION PLANS - Rollforward of Pension Liability and Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Change in PBO | |||
Beginning balance | $ 1,629 | ||
Actuarial (gain) loss | 28 | ||
Ending balance | 1,554 | $ 1,629 | |
Change in plan assets | |||
Fair value of assets — beginning of year | 1,669 | ||
Fair value of assets — end of year | 1,605 | 1,669 | |
Pension Plan | |||
Change in PBO | |||
Beginning balance | 1,629 | 1,627 | |
Interest cost | 35 | 42 | $ 53 |
Actuarial (gain) loss | (51) | 40 | |
Amendments | 5 | 0 | |
Benefit payments | (99) | (99) | |
Foreign currency rate changes | 35 | 19 | |
Ending balance | 1,554 | 1,629 | 1,627 |
Change in plan assets | |||
Fair value of assets — beginning of year | 1,669 | 1,505 | |
Actual return on plan assets | (15) | 233 | |
Employer contributions | 5 | 5 | |
Benefit payments | (99) | (99) | |
Foreign currency rate changes | 45 | 25 | |
Fair value of assets — end of year | 1,605 | 1,669 | 1,505 |
Funded status - over (under) | 51 | 40 | |
U.S. | Pension Plan | |||
Change in PBO | |||
Beginning balance | 1,027 | 1,006 | |
Interest cost | 26 | 31 | |
Actuarial (gain) loss | (29) | 64 | |
Amendments | 4 | 0 | |
Benefit payments | (72) | (74) | |
Foreign currency rate changes | 0 | 0 | |
Ending balance | 956 | 1,027 | 1,006 |
Change in plan assets | |||
Fair value of assets — beginning of year | 893 | 741 | |
Actual return on plan assets | (5) | 221 | |
Employer contributions | 5 | 5 | |
Benefit payments | (72) | (74) | |
Foreign currency rate changes | 0 | 0 | |
Fair value of assets — end of year | 821 | 893 | 741 |
Funded status - over (under) | (135) | (134) | |
Non- U.S. | Pension Plan | |||
Change in PBO | |||
Beginning balance | 602 | 621 | |
Interest cost | 9 | 11 | |
Actuarial (gain) loss | (22) | (24) | |
Amendments | 1 | 0 | |
Benefit payments | (27) | (25) | |
Foreign currency rate changes | 35 | 19 | |
Ending balance | 598 | 602 | 621 |
Change in plan assets | |||
Fair value of assets — beginning of year | 776 | 764 | |
Actual return on plan assets | (10) | 12 | |
Employer contributions | 0 | 0 | |
Benefit payments | (27) | (25) | |
Foreign currency rate changes | 45 | 25 | |
Fair value of assets — end of year | 784 | 776 | $ 764 |
Funded status - over (under) | $ 186 | $ 174 |
RETIREMENT PENSION PLANS - Sc_2
RETIREMENT PENSION PLANS - Schedule of Balance Sheet Classification of Net Pension Liability (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Retirement benefits-non-current | $ (191) | $ (196) |
Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 191 | 179 |
Current liabilities | (5) | (5) |
Retirement benefits-non-current | (135) | (134) |
Net amount recognized | 51 | 40 |
U.S. | Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 0 | 0 |
Current liabilities | (5) | (5) |
Retirement benefits-non-current | (130) | (129) |
Net amount recognized | (135) | (134) |
Non- U.S. | Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 191 | 179 |
Current liabilities | 0 | 0 |
Retirement benefits-non-current | (5) | (5) |
Net amount recognized | $ 186 | $ 174 |
RETIREMENT PENSION PLANS - Sc_3
RETIREMENT PENSION PLANS - Schedule of Pension Costs Recognized in Other Comprehensive Loss (Details) - Pension Plan - Net Actuarial Loss - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Balance, beginning | $ 558 | $ 667 |
Net actuarial loss for the year | 65 | (98) |
Amortization for the year | (32) | (33) |
Deferred tax impact | (3) | 22 |
Balance, ending | 588 | 558 |
U.S. | ||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Balance, beginning | 362 | 467 |
Net actuarial loss for the year | 39 | (101) |
Amortization for the year | (27) | (26) |
Deferred tax impact | (3) | 22 |
Balance, ending | 371 | 362 |
Non- U.S. | ||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Roll Forward] | ||
Balance, beginning | 196 | 200 |
Net actuarial loss for the year | 26 | 3 |
Amortization for the year | (5) | (7) |
Deferred tax impact | 0 | 0 |
Balance, ending | $ 217 | $ 196 |
RETIREMENT PENSION PLANS - Pens
RETIREMENT PENSION PLANS - Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Retirement Benefits [Abstract] | ||
Pension liability | $ 135 | $ 134 |
Retiree medical liability — long term (see Note 19) | 37 | 46 |
Other | 19 | 16 |
Total retirement benefits | $ 191 | $ 196 |
RETIREMENT PENSION PLANS - Sc_4
RETIREMENT PENSION PLANS - Schedule of Projected Benefit Obligation Accumulated Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Retirement Benefits [Abstract] | ||
ABO Exceeds Assets, PBO | $ 962 | $ 1,032 |
ABO Exceeds Assets, ABO | 962 | 1,032 |
ABO Exceeds Assets, Plan Assets | 821 | 893 |
Assets Exceed ABO, PBO | 592 | 597 |
Assets Exceed ABO, ABO | 592 | 597 |
Assets Exceed ABO, Plan Assets | 784 | 776 |
PBO | 1,554 | 1,629 |
ABO | 1,554 | 1,629 |
Total assets at fair value | $ 1,605 | $ 1,669 |
RETIREMENT PENSION PLANS - Sc_5
RETIREMENT PENSION PLANS - Schedule of Net Periodic Pension Benefit Costs (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 0 | $ 0 | $ 0 |
Interest cost | 35 | 42 | 53 |
Assumed rate of return on plan assets | (98) | (97) | (97) |
Amortization of actuarial losses | 32 | 33 | 24 |
Settlement gain | (1) | 0 | 0 |
Net periodic income | $ (32) | $ (22) | $ (20) |
RETIREMENT PENSION PLANS - Pe_2
RETIREMENT PENSION PLANS - Pension Plan Investments Measured at Fair Value by Level Within Fair Value Hierarchy (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | $ 1,605 | $ 1,669 | |
Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 1,605 | 1,669 | $ 1,505 |
Pension Plan | Level 3 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 131 | 5 | 105 |
Pension Plan | Level 3 | Private equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 0 | 19 | |
Pension Plan | Level 3 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 5 | 5 | 86 |
Pension Plan | U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 821 | 893 | 741 |
Pension Plan | U.S. Plans | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 73 | 209 | |
Pension Plan | U.S. Plans | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 24 | 15 | |
Pension Plan | U.S. Plans | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 12 | 12 | |
Pension Plan | U.S. Plans | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 298 | 425 | |
Pension Plan | U.S. Plans | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 325 | 279 | |
Pension Plan | U.S. Plans | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 20 | 13 | |
Pension Plan | U.S. Plans | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | ||
Pension Plan | U.S. Plans | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 376 | 318 | |
Pension Plan | U.S. Plans | Alternatives | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 9 | ||
Pension Plan | U.S. Plans | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 5 | 5 | |
Pension Plan | U.S. Plans | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 51 | 62 | |
Pension Plan | U.S. Plans | Level 1 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 124 | 254 | |
Pension Plan | U.S. Plans | Level 1 | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 73 | 209 | |
Pension Plan | U.S. Plans | Level 1 | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 24 | 15 | |
Pension Plan | U.S. Plans | Level 1 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 12 | 12 | |
Pension Plan | U.S. Plans | Level 1 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 109 | 236 | |
Pension Plan | U.S. Plans | Level 1 | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 15 | 9 | |
Pension Plan | U.S. Plans | Level 1 | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | ||
Pension Plan | U.S. Plans | Level 1 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 15 | 9 | |
Pension Plan | U.S. Plans | Level 1 | Alternatives | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 9 | ||
Pension Plan | U.S. Plans | Level 1 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 381 | 345 | |
Pension Plan | U.S. Plans | Level 2 | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 310 | 270 | |
Pension Plan | U.S. Plans | Level 2 | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 20 | 13 | |
Pension Plan | U.S. Plans | Level 2 | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | ||
Pension Plan | U.S. Plans | Level 2 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 330 | 283 | |
Pension Plan | U.S. Plans | Level 2 | Alternatives | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | ||
Pension Plan | U.S. Plans | Level 2 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 2 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 51 | 62 | |
Pension Plan | U.S. Plans | Level 3 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 5 | 5 | |
Pension Plan | U.S. Plans | Level 3 | U.S. – Large cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | U.S. – Small cap | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | U.S. fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Emerging fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Partnerships fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | ||
Pension Plan | U.S. Plans | Level 3 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Level 3 | Alternatives | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | ||
Pension Plan | U.S. Plans | Level 3 | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 5 | 5 | |
Pension Plan | U.S. Plans | Level 3 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | U.S. Plans | Net asset value | Equity investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 189 | 189 | |
Pension Plan | U.S. Plans | Net asset value | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 31 | 26 | |
Pension Plan | U.S. Plans | Net asset value | Alternatives – Partnerships | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 91 | 74 | |
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 784 | 776 | $ 764 |
Pension Plan | Non-U.S. Plans | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 141 | 180 | |
Pension Plan | Non-U.S. Plans | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 141 | 180 | |
Pension Plan | Non-U.S. Plans | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 175 | 219 | |
Pension Plan | Non-U.S. Plans | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 343 | 290 | |
Pension Plan | Non-U.S. Plans | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 2 | 2 | |
Pension Plan | Non-U.S. Plans | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 28 | 9 | |
Pension Plan | Non-U.S. Plans | Insurance contract (2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 126 | 131 | |
Pension Plan | Non-U.S. Plans | Level 1 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 146 | 185 | |
Pension Plan | Non-U.S. Plans | Level 1 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 141 | 180 | |
Pension Plan | Non-U.S. Plans | Level 1 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 141 | 180 | |
Pension Plan | Non-U.S. Plans | Level 1 | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 5 | 5 | |
Pension Plan | Non-U.S. Plans | Level 1 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 5 | 5 | |
Pension Plan | Non-U.S. Plans | Level 1 | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Insurance contract (2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 200 | 356 | |
Pension Plan | Non-U.S. Plans | Level 2 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 170 | 214 | |
Pension Plan | Non-U.S. Plans | Level 2 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 170 | 214 | |
Pension Plan | Non-U.S. Plans | Level 2 | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 2 | 2 | |
Pension Plan | Non-U.S. Plans | Level 2 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 28 | 9 | |
Pension Plan | Non-U.S. Plans | Level 2 | Insurance contract (2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 131 | |
Pension Plan | Non-U.S. Plans | Level 3 | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total assets at fair value | 126 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | International equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Total equity investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Other fixed income investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Total fixed income | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Commingled funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Insurance contract (2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 126 | 0 | |
Pension Plan | Non-U.S. Plans | Net asset value | Fixed income investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 168 | 71 | |
Pension Plan | Non-U.S. Plans | Net asset value | Alternative investments measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | 102 | 127 | |
Pension Plan | Non-U.S. Plans | Net asset value | Real estate measured at net asset value | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets at fair value | $ 42 | $ 37 |
RETIREMENT PENSION PLANS - Chan
RETIREMENT PENSION PLANS - Changes in Level 3, Pension Plan Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of assets — beginning of year | $ 1,669 | |
Fair value of assets — end of year | 1,605 | $ 1,669 |
Pension Plan | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of assets — beginning of year | 1,669 | 1,505 |
Fair value of assets — end of year | 1,605 | 1,669 |
Pension Plan | Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of assets — beginning of year | 5 | 105 |
Return on Plan Assets: Attributable to Assets Held at Period End | 1 | 1 |
Purchases | 0 | 0 |
Settlements | (1) | (1) |
Net Transfers Into (Out of) Level 3 | 126 | (100) |
Fair value of assets — end of year | 131 | 5 |
Pension Plan | Level 3 | Insurance contract | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of assets — beginning of year | 0 | |
Return on Plan Assets: Attributable to Assets Held at Period End | 0 | |
Purchases | 0 | |
Settlements | 0 | |
Net Transfers Into (Out of) Level 3 | 126 | |
Fair value of assets — end of year | 126 | 0 |
Pension Plan | Level 3 | Private equity | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of assets — beginning of year | 0 | 19 |
Return on Plan Assets: Attributable to Assets Held at Period End | 0 | |
Purchases | 0 | |
Settlements | 0 | |
Net Transfers Into (Out of) Level 3 | (19) | |
Fair value of assets — end of year | 0 | |
Pension Plan | Level 3 | Alternatives – Partnerships | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of assets — beginning of year | 5 | 86 |
Return on Plan Assets: Attributable to Assets Held at Period End | 1 | 1 |
Purchases | 0 | 0 |
Settlements | (1) | (1) |
Net Transfers Into (Out of) Level 3 | 0 | (81) |
Fair value of assets — end of year | $ 5 | $ 5 |
RETIREMENT PENSION PLANS - Pe_3
RETIREMENT PENSION PLANS - Pension Plan Estimated Future Contributions and Benefit Payments (Details) - Pension Plan $ in Millions | Sep. 30, 2021USD ($) |
Expected employer contributions: | |
Fiscal 2022 | $ 5 |
Expected benefit payments: | |
Fiscal 2022 | 97 |
Fiscal 2023 | 94 |
Fiscal 2024 | 94 |
Fiscal 2025 | 92 |
Fiscal 2026 | 91 |
Fiscal 2027-2031 | 431 |
U.S. | |
Expected employer contributions: | |
Fiscal 2022 | 5 |
Expected benefit payments: | |
Fiscal 2022 | 70 |
Fiscal 2023 | 67 |
Fiscal 2024 | 67 |
Fiscal 2025 | 65 |
Fiscal 2026 | 63 |
Fiscal 2027-2031 | 292 |
Non- U.S. | |
Expected employer contributions: | |
Fiscal 2022 | 0 |
Expected benefit payments: | |
Fiscal 2022 | 27 |
Fiscal 2023 | 27 |
Fiscal 2024 | 27 |
Fiscal 2025 | 27 |
Fiscal 2026 | 28 |
Fiscal 2027-2031 | $ 139 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Before Income Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
U.S. income | $ 12 | $ 268 | $ 194 |
Foreign income | 222 | 58 | 183 |
INCOME (LOSS) BEFORE INCOME TAXES | $ 234 | $ 326 | $ 377 |
INCOME TAXES - Components of th
INCOME TAXES - Components of the Benefit (Provision) for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Current tax expense (benefit): | |||
U.S. | $ (8) | $ 20 | $ 1 |
Foreign | 42 | 16 | 40 |
State and local | 3 | 4 | 1 |
Total current tax expense | 37 | 40 | 42 |
Deferred tax expense (benefit): | |||
U.S. | (9) | 40 | 34 |
Foreign | (2) | (5) | 6 |
State and local | (2) | 3 | 0 |
Total deferred tax expense (benefit) | (13) | 38 | 40 |
Income tax expense | $ 24 | $ 78 | $ 82 |
INCOME TAXES - Summary of the T
INCOME TAXES - Summary of the Tax Effects of Temporary Differences (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Income Tax Disclosure [Abstract] | ||
Accrued compensation and benefits | $ 23 | $ 13 |
Accrued product warranties | 10 | 11 |
Inventory costs | 18 | 12 |
Receivables | 9 | 8 |
Accrued retiree healthcare benefits | 11 | 13 |
Retirement pension plans | 18 | 25 |
Property | 17 | 9 |
Lease liabilities | 16 | 18 |
Net operating losses and tax credit carryforwards | 247 | 215 |
Other | 10 | 21 |
Sub-total | 379 | 345 |
Less: Valuation allowances | (250) | (226) |
Deferred income taxes - asset | 129 | 119 |
Taxes on undistributed income | (11) | (11) |
Intangible assets | (69) | (65) |
Lease assets | (15) | (17) |
Other | 0 | (7) |
Deferred income taxes - liability | (95) | (100) |
Net deferred income tax assets | $ 34 | $ 19 |
INCOME TAXES - Schedule of Net
INCOME TAXES - Schedule of Net Current and Non-Current Deferred Income Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Income Tax Disclosure [Abstract] | ||
Other assets (see Note 11) | $ 42 | $ 30 |
Other liabilities (see Note 14) | (8) | (11) |
Net deferred income tax assets | $ 34 | $ 19 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | ||||
Legislative changes | $ (36) | $ (10) | $ 1 | |
Tax benefit as the result of tax initiatives | 10 | |||
Tax credits as the result of tax initiatives | 51 | |||
Discharge of intercompany indebtedness | 38 | 0 | 0 | |
Other tax expense | 3 | |||
Undistributed earnings in foreign subsidiaries on which income taxes have not been provided | 1,041 | 1,161 | ||
Gross unrecognized tax benefits | 287 | 283 | 276 | $ 261 |
Unrecognized tax benefits that would impact effective tax rate | 239 | 234 | $ 230 | |
Interest on uncertain tax positions accrued | 21 | $ 13 | ||
United Kingdom | ||||
Operating Loss Carryforwards [Line Items] | ||||
Legislative changes | $ 35 |
INCOME TAXES - Tax Credit Carry
INCOME TAXES - Tax Credit Carryforwards and Deferred Tax Assets (Details) $ in Millions | Sep. 30, 2021USD ($) |
Operating Loss Carryforwards [Line Items] | |
Net operating losses and tax credit carryforwards | $ 247 |
Valuation allowances on these deferred tax assets | 240 |
2021-2025 | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses and tax credit carryforwards | 5 |
Valuation allowances on these deferred tax assets | 4 |
2026-2035 | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses and tax credit carryforwards | 13 |
Valuation allowances on these deferred tax assets | 11 |
2036-2040 | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses and tax credit carryforwards | 0 |
Valuation allowances on these deferred tax assets | 0 |
Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses and tax credit carryforwards | 229 |
Valuation allowances on these deferred tax assets | $ 225 |
INCOME TAXES - Income Tax (Bene
INCOME TAXES - Income Tax (Benefit) Provision at the U.S Statutory Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Expense for income taxes at statutory tax rate | $ 49 | $ 68 | $ 79 |
State and local income taxes | 4 | 5 | 3 |
Foreign income taxed at rates other than statutory | 10 | 2 | 11 |
Legislative changes | (36) | (10) | 1 |
Joint venture equity income | (7) | (3) | (6) |
Nondeductible expenses | 15 | 11 | 16 |
Tax credits | (58) | (8) | (11) |
Valuation allowances | 17 | 10 | (7) |
Tax audit adjustments | 0 | 5 | 0 |
Discharge of intercompany indebtedness | 38 | 0 | 0 |
Reversal of uncertain tax positions due to statute expirations | (13) | (3) | (1) |
Other | 5 | 1 | (3) |
Income tax expense | $ 24 | $ 78 | $ 82 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 283 | $ 276 | $ 261 |
Additions to tax positions recorded during the current year | 18 | 4 | 11 |
Additions to tax positions recorded during the prior year | 3 | 5 | 9 |
Reductions to tax position recorded in prior years | 0 | (1) | 0 |
Reductions to tax positions due to lapse of statutory limits | (17) | (4) | (4) |
Translation, other | 0 | 3 | |
Translation, other | (1) | ||
Unrecognized tax benefits, ending balance | $ 287 | $ 283 | $ 276 |
CONTINGENCIES - Additional Info
CONTINGENCIES - Additional Information (Details) $ in Millions | Jul. 09, 2019USD ($) | Jan. 22, 2019USD ($) | Jun. 30, 2021claim | Sep. 30, 2021USD ($)siteclaim | Sep. 30, 2020USD ($)claim | Sep. 30, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||
Environmental contingencies accrued | $ 13 | $ 16 | ||||
Estimated environmental liabilities for ongoing operations, maintenance and monitoring discounted amount | 12 | |||||
Estimated environmental liabilities for ongoing operations, maintenance and monitoring undiscounted amount | 13 | |||||
Income (loss) related to remeasuring net asbestos liability | 0 | 0 | $ 31 | |||
Maremont Asbestos | ||||||
Loss Contingencies [Line Items] | ||||||
Net amount of damages sought | $ 51 | |||||
Income (loss) related to remeasuring net asbestos liability | $ 31 | |||||
Company contributions to trust in management of asbestos claims | $ 48 | |||||
Rockwell Asbestos | ||||||
Loss Contingencies [Line Items] | ||||||
Environmental contingencies accrued | $ 61 | $ 79 | ||||
Number of pending asbestos-related claims | claim | 600 | 1,200 | ||||
Number of claims dismissed | claim | 600 | |||||
Period for incurring loss | 37 years | |||||
Possible claims | $ 60 | |||||
Pending and future claims | 60 | $ 78 | ||||
Asbestos-related insurance recoveries | $ 51 | 62 | ||||
Period for settlement | 37 years | |||||
Other Income (expense) | ||||||
Loss Contingencies [Line Items] | ||||||
Environmental remediation costs | $ 2 | 6 | 3 | |||
Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Environmental liabilities discounted rate | 0.00% | |||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Environmental liabilities discounted rate | 1.50% | |||||
Super Fund | ||||||
Loss Contingencies [Line Items] | ||||||
Number of superfund sites | site | 10 | |||||
Environmental costs reasonably possible | $ 22 | |||||
Environmental contingencies accrued | 9 | 11 | ||||
Environmental remediation costs | 1 | 4 | 2 | |||
Non-Super Fund | ||||||
Loss Contingencies [Line Items] | ||||||
Environmental costs reasonably possible | 10 | |||||
Environmental contingencies accrued | 4 | 5 | ||||
Environmental remediation costs | $ 0 | $ 2 | $ 2 |
CONTINGENCIES - Environmental L
CONTINGENCIES - Environmental Loss Contingencies by Site (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Environmental Contingencies, beginning balance | $ 16 |
Payments and other | (4) |
Accruals | 1 |
Environmental Contingencies, ending balance | 13 |
Super Fund | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Environmental Contingencies, beginning balance | 11 |
Payments and other | (3) |
Accruals | 1 |
Environmental Contingencies, ending balance | 9 |
Non-Super Fund | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Environmental Contingencies, beginning balance | 5 |
Payments and other | (1) |
Accruals | 0 |
Environmental Contingencies, ending balance | $ 4 |
CONTINGENCIES - Asbestos Relate
CONTINGENCIES - Asbestos Related Reserves and Recoveries (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Loss Contingencies [Line Items] | ||
Asbestos-related liabilities | $ 13 | $ 16 |
Rockwell Asbestos | ||
Loss Contingencies [Line Items] | ||
Pending and future claims | 60 | 78 |
Billed but unpaid claims | 1 | 1 |
Asbestos-related liabilities | 61 | 79 |
Asbestos-related insurance recoveries | $ 51 | $ 62 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Additional Information (Details) - segment | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of reportable segments | 2 | ||
AB Volvo | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 24.00% | 21.00% | 22.00% |
Daimler AG | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 16.00% | 17.00% | 19.00% |
PACCAR | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 13.00% | 12.00% | 13.00% |
Navistar | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of sales to major customers | 7.00% | 8.00% | 10.00% |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Summary of Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Total sales | $ 3,833 | $ 3,044 | $ 4,388 |
External Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 3,833 | 3,044 | 4,388 |
Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 0 | 0 | 0 |
Commercial Truck | |||
Segment Reporting Information [Line Items] | |||
Total sales | 2,866 | 2,080 | |
Aftermarket & Industrial | |||
Segment Reporting Information [Line Items] | |||
Total sales | 967 | 964 | |
Operating Segments | Commercial Truck | |||
Segment Reporting Information [Line Items] | |||
Total sales | 3,008 | 2,190 | 3,456 |
Operating Segments | Commercial Truck | External Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 2,866 | 2,080 | 3,307 |
Operating Segments | Commercial Truck | Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 142 | 110 | 149 |
Operating Segments | Aftermarket & Industrial | |||
Segment Reporting Information [Line Items] | |||
Total sales | 989 | 981 | 1,100 |
Operating Segments | Aftermarket & Industrial | External Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 967 | 964 | 1,081 |
Operating Segments | Aftermarket & Industrial | Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 22 | 17 | 19 |
Elims | |||
Segment Reporting Information [Line Items] | |||
Total sales | (164) | (127) | (168) |
Elims | External Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | 0 | 0 | 0 |
Elims | Intersegment Sales | |||
Segment Reporting Information [Line Items] | |||
Total sales | $ (164) | $ (127) | $ (168) |
BUSINESS SEGMENT INFORMATION _3
BUSINESS SEGMENT INFORMATION - Segment Income Attributable to Parent (Details) - USD ($) $ in Millions | Jan. 22, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Segment Reporting Information [Line Items] | ||||
Interest expense, net | $ (79) | $ (66) | $ (57) | |
Provision for income taxes | (24) | (78) | (82) | |
Depreciation and amortization | (103) | (101) | (87) | |
Restructuring costs | (13) | (27) | (8) | |
Asset impairment charges | 0 | (8) | (10) | |
Income from WABCO distribution termination | 0 | 265 | 0 | |
Noncontrolling interests | (10) | (4) | (5) | |
Income from continuing operations attributable to Meritor, Inc. | 200 | 244 | 290 | |
Asbestos related liability remeasurement | 0 | 0 | 31 | |
Maremont Asbestos | ||||
Segment Reporting Information [Line Items] | ||||
Asbestos related liability remeasurement | $ 31 | |||
Commercial Truck | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | (80) | (76) | (73) | |
Aftermarket & Industrial | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | (23) | (25) | (14) | |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment adjusted EBITDA | 398 | 266 | 517 | |
Operating Segments | Commercial Truck | ||||
Segment Reporting Information [Line Items] | ||||
Segment adjusted EBITDA | 259 | 116 | 342 | |
Restructuring costs | (3) | (19) | (5) | |
Operating Segments | Aftermarket & Industrial | ||||
Segment Reporting Information [Line Items] | ||||
Segment adjusted EBITDA | 139 | 150 | 175 | |
Restructuring costs | (10) | (8) | (3) | |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated legacy and corporate income, net | 13 | 6 | 3 | |
Interest expense, net | (79) | (66) | (57) | |
Provision for income taxes | (24) | (78) | (82) | |
Depreciation and amortization | (103) | (101) | (87) | |
Loss on sale of receivables | (4) | (4) | (6) | |
Restructuring costs | (13) | (27) | (8) | |
Brazilian VAT Credit | 22 | 0 | 0 | |
Transaction costs | 0 | (5) | (6) | |
Asbestos related items | 0 | 0 | 31 | |
Asset impairment charges | 0 | (8) | (10) | |
Income from WABCO distribution termination | 0 | 265 | 0 | |
Noncontrolling interests | $ (10) | $ (4) | (5) | |
Segment Reconciling Items | Maremont Asbestos | ||||
Segment Reporting Information [Line Items] | ||||
Asbestos related liability remeasurement | $ 31 |
BUSINESS SEGMENT INFORMATION _4
BUSINESS SEGMENT INFORMATION - Schedule of Segment Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | $ 103 | $ 101 | $ 87 |
Total capital expenditures | 90 | 85 | 103 |
Total assets | 2,938 | 2,884 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,615 | 2,324 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Total assets | 496 | 714 | |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 103 | 101 | 87 |
Less: Accounts receivable sold under off-balance sheet factoring programs | (173) | (154) | |
Commercial Truck | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 80 | 76 | 73 |
Total capital expenditures | 76 | 68 | 88 |
Commercial Truck | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,961 | 1,666 | |
Aftermarket & Industrial | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization | 23 | 25 | 14 |
Total capital expenditures | 14 | 17 | $ 15 |
Aftermarket & Industrial | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 654 | $ 658 |
BUSINESS SEGMENT INFORMATION _5
BUSINESS SEGMENT INFORMATION - Schedule of Revenues and Assets by Geographical Areas (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | $ 3,833 | $ 3,044 | $ 4,388 |
Total assets excluding discontinued operations | 2,938 | 2,884 | |
U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 2,057 | 1,783 | 2,622 |
Total assets excluding discontinued operations | 1,424 | 1,458 | |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 55 | 54 | 69 |
Total assets excluding discontinued operations | 36 | 35 | |
Mexico | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 197 | 147 | 249 |
Total assets excluding discontinued operations | 212 | 190 | |
Total North America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 2,309 | 1,984 | 2,940 |
Total assets excluding discontinued operations | 1,672 | 1,683 | |
Sweden | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 276 | 202 | 276 |
Total assets excluding discontinued operations | 137 | 136 | |
Italy | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 240 | 166 | 234 |
Total assets excluding discontinued operations | 94 | 111 | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 153 | 114 | 165 |
Total assets excluding discontinued operations | 290 | 270 | |
Other Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 151 | 139 | 91 |
Total assets excluding discontinued operations | 205 | 269 | |
Total Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 820 | 621 | 766 |
Total assets excluding discontinued operations | 726 | 786 | |
Brazil | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 317 | 172 | 248 |
Total assets excluding discontinued operations | 214 | 132 | |
China | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 130 | 135 | 153 |
Total assets excluding discontinued operations | 145 | 130 | |
India | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 146 | 72 | 197 |
Total assets excluding discontinued operations | 92 | 76 | |
Other Asia-Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sales | 111 | 60 | $ 84 |
Total assets excluding discontinued operations | $ 89 | $ 77 |
OPERATING CASH FLOWS AND OTHE_3
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Operating Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES | |||
NET INCOME | $ 209 | $ 249 | $ 296 |
Less: Income (loss) from discontinued operations, net of tax | (1) | 1 | 1 |
Income from continuing operations | 210 | 248 | 295 |
Adjustments to income from continuing operations to arrive at cash provided by operating activities: | |||
Depreciation and amortization | 103 | 101 | 87 |
Deferred income tax expense (income) | (13) | 38 | 40 |
Restructuring costs | 13 | 27 | 8 |
Loss on debt extinguishment, net | 11 | 0 | 0 |
Asset impairment charges | 0 | 8 | 10 |
Equity in earnings of affiliates | (34) | (14) | (31) |
Stock compensation expense | 20 | 7 | 18 |
Pension and retiree medical income | (53) | (42) | (37) |
Asbestos related liability remeasurement | 0 | 0 | (31) |
Contribution to Maremont trust | 0 | 0 | (48) |
Dividends received from equity method investments | 7 | 10 | 23 |
Pension and retiree medical contributions | (10) | (15) | (16) |
Restructuring payments | (13) | (25) | (5) |
Changes in off-balance sheet receivable securitization and factoring programs | 13 | (77) | (18) |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations: | |||
Receivables | (61) | 147 | 80 |
Inventories | (164) | 100 | 9 |
Accounts payable | 139 | (186) | (103) |
Other current assets and liabilities | 52 | (64) | (3) |
Other assets and liabilities | (22) | 2 | (22) |
Operating cash flows provided by continuing operations | 198 | 265 | 256 |
Operating cash flows used for discontinued operations | (1) | 0 | 0 |
CASH PROVIDED BY OPERATING ACTIVITIES | $ 197 | $ 265 | $ 256 |
OPERATING CASH FLOWS AND OTHE_4
OPERATING CASH FLOWS AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Supplemental Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Balance sheet data: | |||
Allowance for doubtful accounts | $ 3 | $ 3 | $ 3 |
Statement of operations data: | |||
Maintenance and repairs expense | 55 | 47 | 55 |
Research, development and engineering expense | 76 | 74 | 75 |
Depreciation expense | 87 | 87 | 76 |
Rental expense | 19 | 19 | 19 |
Interest income | 2 | 4 | 4 |
Interest expense | (81) | (70) | (61) |
Statement of cash flows data: | |||
Interest payments, net of receipts | 57 | 48 | 41 |
Income tax payments, net of refunds | 22 | 55 | 64 |
Non-cash investing activities - capital asset additions from finance leases | $ 3 | $ 0 | $ 0 |