MERITOR, INC. - 10-Q filing on 2015-04-30

Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Mar. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Statement Of Income



	Three Months Ended March 31, 2015
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	418		$	446		$	—		$	864
Subsidiaries	—			31			17			(48		)	—
Total sales	—			449			463			(48		)	864
Cost of sales	(10		)	(380		)	(407		)	48			(749		)
GROSS MARGIN	(10		)	69			56			—			115
Selling, general and administrative	(16		)	(26		)	(15		)	—			(57		)
Restructuring costs	(1		)	—			(2		)	—			(3		)
Other operating income	—			—			—			—			—
OPERATING INCOME (LOSS)	(27		)	43			39			—			55
Other income, net	37			(9		)	(26		)	—			2
Equity in earnings of affiliates	—			8			1			—			9
Interest income (expense), net	(29		)	6			2			—			(21		)
INCOME (LOSS) BEFORE INCOME TAXES	(19		)	48			16			—			45
Provision for income taxes	(1		)	—			(5		)	—			(6		)
Equity income from continuing operations of subsidiaries	59			8			—			(67		)	—
INCOME FROM CONTINUING OPERATIONS	39			56			11			(67		)	39
INCOME FROM DISCONTINUED OPERATIONS, net of tax	4			5			3			(8		)	4
NET INCOME	43			61			14			(75		)	43
Less: Net income attributable to noncontrolling interests	—			—			—			—			—
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	43		$	61		$	14		$	(75	)	$	43



	Three Months Ended March 31, 2014
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	348		$	606		$	—		$	954
Subsidiaries	—			33			15			(48		)	—
Total sales	—			381			621			(48		)	954
Cost of sales	(13		)	(326		)	(545		)	48			(836		)
GROSS MARGIN	(13		)	55			76			—			118
Selling, general and administrative	(23		)	(22		)	(21		)	—			(66		)
Restructuring costs	(1		)	—			(1		)	—			(2		)
OPERATING INCOME (LOSS)	(37		)	33			54			—			50
Other income (loss), net	39			(8		)	(31		)	—			—
Equity in earnings of affiliates	—			6			3			—			9
Interest income (expense), net	(54		)	8			(2		)	—			(48		)
INCOME (LOSS) BEFORE INCOME TAXES	(52		)	39			24			—			11
Provision for income taxes	—			1			(9		)	—			(8		)
Equity income from continuing operations of subsidiaries	53			10			—			(63		)	—
INCOME FROM CONTINUING OPERATIONS	1			50			15			(63		)	3
INCOME FROM DISCONTINUED OPERATIONS, net of tax	—			—			—			—			—
NET INCOME	1			50			15			(63		)	3
Less: Net income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	1		$	50		$	13		$	(63	)	$	1



	Six Months Ended March 31, 2015
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	821		$	922		$	—		$	1,743
Subsidiaries	—			61			33			(94		)	—
Total sales	—			882			955			(94		)	1,743
Cost of sales	(24		)	(751		)	(832		)	94			(1,513		)
GROSS MARGIN	(24		)	131			123			—			230
Selling, general and administrative	(34		)	(54		)	(34		)	—			(122		)
Restructuring costs	(1		)	(3		)	(2		)	—			(6		)
Other operating income	—			—			1			—			1
OPERATING INCOME (LOSS)	(59		)	74			88			—			103
Other income, net	37			(9		)	(24		)	—			4
Equity in earnings of affiliates	—			15			3			—			18
Interest income (expense), net	(58		)	13			5			—			(40		)
INCOME (LOSS) BEFORE INCOME TAXES	(80		)	93			72			—			85
Provision for income taxes	(1		)	—			(12		)	—			(13		)
Equity income from continuing operations of subsidiaries	152			53			—			(205		)	—
INCOME FROM CONTINUING OPERATIONS	71			146			60			(205		)	72
INCOME FROM DISCONTINUED OPERATIONS, net of tax	1			2			—			(2		)	1
NET INCOME	72			148			60			(207		)	73
Less: Net income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	72		$	148		$	59		$	(207	)	$	72



	Six Months Ended March 31, 2014
	Parent			Guarantors			Non- Guarantors			Elims			Consolidated
Sales
External	$	—		$	657		$	1,197		$	—		$	1,854
Subsidiaries	—			66			29			(95		)	—
Total sales	—			723			1,226			(95		)	1,854
Cost of sales	(26		)	(623		)	(1,077		)	95			(1,631		)
GROSS MARGIN	(26		)	100			149			—			223
Selling, general and administrative	(40		)	(45		)	(40		)	—			(125		)
Restructuring costs	(1		)	—			(2		)	—			(3		)
Other operating expense	—			(1		)	—			—			(1		)
OPERATING INCOME (LOSS)	(67		)	54			107			—			94
Other income (loss), net	39			(8		)	(31		)	—			—
Equity in earnings of affiliates	—			12			5			—			17
Interest income (expense), net	(88		)	17			(4		)	—			(75		)
INCOME (LOSS) BEFORE INCOME TAXES	(116		)	75			77			—			36
Provision for income taxes	—			(1		)	(18		)	—			(19		)
Equity income from continuing operations of subsidiaries	129			48			—			(177		)	—
INCOME FROM CONTINUING OPERATIONS	13			122			59			(177		)	17
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(1		)	(1		)	(1		)	2			(1		)
NET INCOME	12			121			58			(175		)	16
Less: Net income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
NET INCOME ATTRIBUTABLE TO MERITOR, INC.	$	12		$	121		$	54		$	(175	)	$	12

Consolidating Statement of Comprehensive Income



	Three Months Ended March 31, 2015
	Parent			Guarantors			Non- Guarantors		Elims			Consolidated
Net income	$	43		$	61		$	14	$	(75	)	$	43
Other comprehensive income (loss)	(22		)	(65		)	27		38			(22		)
Total comprehensive income (loss)	21			(4		)	41		(37		)	21
Less: Comprehensive income attributable to noncontrolling interests	—			—			—		—			—
Comprehensive income (loss) attributable to Meritor, Inc.	$	21		$	(4	)	$	41	$	(37	)	$	21



	Three Months Ended March 31, 2014
	Parent		Guarantors		Non- Guarantors			Elims			Consolidated
Net income	$	1	$	50	$	15		$	(63	)	$	3
Other comprehensive income	22		5		11			(16		)	22
Total comprehensive income	23		55		26			(79		)	25
Less: Comprehensive income attributable to noncontrolling interests	—		—		(2		)	—			(2		)
Comprehensive income attributable to Meritor, Inc.	$	23	$	55	$	24		$	(79	)	$	23



	Six Months Ended March 31, 2015
	Parent			Guarantors			Non- Guarantors		Elims			Consolidated
Net income	$	72		$	148		$	60	$	(207	)	$	73
Other comprehensive income (loss)	(44		)	(92		)	18		73			(45		)
Total comprehensive income	28			56			78		(134		)	28
Less: Comprehensive income attributable to noncontrolling interests	—			—			—		—			—
Comprehensive income attributable to Meritor, Inc.	$	28		$	56		$	78	$	(134	)	$	28



	Six Months Ended March 31, 2014
	Parent		Guarantors		Non- Guarantors			Elims			Consolidated
Net income	$	12	$	121	$	58		$	(175	)	$	16
Other comprehensive income	22		10		—			(10		)	22
Total comprehensive income	34		131		58			(185		)	38
Less: Comprehensive income attributable to noncontrolling interests	—		—		(4		)	—			(4		)
Comprehensive income attributable to Meritor, Inc.	$	34	$	131	$	54		$	(185	)	$	34

Guarantor Consolidating Balance Sheet



	March 31, 2015
	Parent			Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	99		$	4		$	104	$	—		$	207
Receivables trade and other, net	1			43			501		—			545
Inventories	—			164			201		—			365
Other current assets	9			18			28		—			55
TOTAL CURRENT ASSETS	109			229			834		—			1,172
NET PROPERTY	13			153			221		—			387
GOODWILL	—			278			136		—			414
OTHER ASSETS	76			125			143		—			344
INVESTMENTS IN SUBSIDIARIES	2,230			341			—		(2,571		)	—
TOTAL ASSETS	$	2,428		$	1,126		$	1,334	$	(2,571	)	$	2,317
CURRENT LIABILITIES:
Short-term debt	$	1		$	3		$	1	$	—		$	5
Accounts and notes payable	48			227			343		—			618
Other current liabilities	98			65			118		—			281
TOTAL CURRENT LIABILITIES	147			295			462		—			904
LONG-TERM DEBT	907			9			29		—			945
RETIREMENT BENEFITS	636			—			101		—			737
INTERCOMPANY PAYABLE (RECEIVABLE)	1,287			(1,705		)	418					—
OTHER LIABILITIES	47			211			43		—			301
EQUITY (DEFICIT) ATTRIBUTABLE TO MERITOR, INC.	(596		)	2,316			255		(2,571		)	(596		)
NONCONTROLLING INTERESTS	—			—			26		—			26
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	2,428		$	1,126		$	1,334	$	(2,571	)	$	2,317



	September 30, 2014
	Parent			Guarantors			Non- Guarantors		Elims			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	71		$	5		$	171	$	—		$	247
Receivables trade and other, net	1			45			564		—			610
Inventories	—			151			228		—			379
Other current assets	9			18			29		—			56
TOTAL CURRENT ASSETS	81			219			992		—			1,292
NET PROPERTY	13			158			253		—			424
GOODWILL	—			277			154		—			431
OTHER ASSETS	75			128			152		—			355
INVESTMENTS IN SUBSIDIARIES	2,185			267			—		(2,452		)	—
TOTAL ASSETS	$	2,354		$	1,049		$	1,551	$	(2,452	)	$	2,502
CURRENT LIABILITIES:
Short-term debt	$	1		$	3		$	3	$	—		$	7
Accounts and notes payable	46			230			404		—			680
Other current liabilities	97			87			167		—			351
TOTAL CURRENT LIABILITIES	144			320			574		—			1,038
LONG-TERM DEBT	916			10			39		—			965
RETIREMENT BENEFITS	656			—			119		—			775
INTERCOMPANY PAYABLE (RECEIVABLE)	1,198			(1,736		)	538		—			—
OTHER LIABILITIES	52			208			49		—			309
EQUITY (DEFICIT) ATTRIBUTABLE TO MERITOR, INC.	(612		)	2,247			205		(2,452		)	(612		)
NONCONTROLLING INTERESTS	—			—			27		—			27
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	2,354		$	1,049		$	1,551	$	(2,452	)	$	2,502

Guarantor Consolidating Statement Of Cash Flows



	Six Months Ended March 31, 2015
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	7		$	10		$	12		$	—	$	29
INVESTING ACTIVITIES
Capital expenditures	(1		)	(10		)	(12		)	—		(23		)
Net investing cash flows provided by discontinued operations	—			1			3			—		4
CASH USED FOR INVESTING ACTIVITIES	(1		)	(9		)	(9		)	—		(19		)
FINANCING ACTIVITIES
Repayment of notes and term loan	(16		)	—			—			—		(16		)
Repurchase of common stock	(16		)									(16		)
Intercompany advances	54			—			(54		)	—		—
Other financing activities	—			(2		)	(4		)	—		(6		)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	22			(2		)	(58		)	—		(38		)
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			(12		)	—		(12		)
CHANGE IN CASH AND CASH EQUIVALENTS	28			(1		)	(67		)	—		(40		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	71			5			171			—		247
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	99		$	4		$	104		$	—	$	207



	Six Months Ended March 31, 2014
	Parent			Guarantors			Non- Guarantors			Elims		Consolidated
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES	$	(30	)	$	8		$	40		$	—	$	18
INVESTING ACTIVITIES
Capital expenditures	(2		)	(11		)	(12		)	—		(25		)
Net investing cash flows provided by discontinued operations	—			—			3			—		3
CASH USED FOR INVESTING ACTIVITIES	(2		)	(11		)	(9		)	—		(22		)
FINANCING ACTIVITIES
Repayment term loan	(308		)	—			—			—		(308		)
Proceeds from debt issuance	225			—			—			—		225
Debt issuance costs	(9		)	—			—			—		(9		)
Intercompany advances	92			—			(92		)	—		—
Other financing activities	—			—			13			—		13
CASH USED FOR FINANCING ACTIVITIES	—			—			(79		)	—		(79		)
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	—			—			(2		)	—		(2		)
CHANGE IN CASH AND CASH EQUIVALENTS	(32		)	(3		)	(50		)	—		(85		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	144			6			168			—		318
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	112		$	3		$	118		$	—	$	233