Document
false0001113256 0001113256 2020-07-27 2020-07-27 0001113256 2020-01-30 2020-01-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 27, 2020
MERITOR, INC.
(Exact name of registrant as specified in its charter)
Indiana
     
1-15983
     
38-3354643
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File No.)
 
Identification No.)

2135 West Maple Road
Troy, Michigan
(Address of principal executive offices)
48084-7186
(Zip code)
Registrant’s telephone number, including area code: (248) 435-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[☐] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[☐] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[☐] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[☐] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $1 Par Value
MTOR
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [☐]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]




Item 2.02. Results of Operations and Financial Condition
In May 2020, Meritor, Inc. (the "Company") realigned its operations. As part of this realignment, the company's reportable segments are changing to: (1) Commercial Truck and (2) Aftermarket and Industrial. Historical quarterly and annual segment information will be recast to conform to the new reporting structure, which will be effective as of the third quarter of fiscal year 2020. For informational purposes, included in Exhibit 99-a to this Current Report on Form 8-K is historical unaudited segment financial information recast to reflect the aforementioned changes for the fiscal years ended September 30, 2018 and 2019, each of the four quarters of fiscal year 2019 and the first and second quarter of fiscal year 2020.
    
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99-a – Segment Information, as Recast
104 – Cover Page Interactive Data File (embedded within the Inline XBRL document)





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MERITOR, INC.
 
 
 
 
 
 
 
By:  
/s/  Scott M. Confer
 
              Scott M. Confer
 
Interim Chief Legal Officer and Corporate Secretary
 



Date: July 27, 2020


 Exhibit


MERITOR, INC.
ADJUSTED EBITDA AND SEGMENT ADJUSTED EBITDA-RECONCILIATION
Non-GAAP
AND
CONSOLIDATED BUSINESS SEGMENT SALES INFORMATION
(Unaudited)
(dollars in millions)
 
2018
 
2019
 
2020
 
Full Year
 
Q1
 
Q2
 
Q3
 
Q4
 
Full Year
 
Q1
 
Q2
Net income attributable to Meritor, Inc.
$
117

 
$
90

 
$
72

 
$
86

 
$
43

 
$
291

 
$
39

 
$
241

Loss (income) from discontinued operations, net of tax, attributable to Meritor, Inc.
3

 
—

 
1

 
(1
)
 
(1
)
 
(1
)
 
—

 
(1
)
Income from continuing operations, net of tax, attributable to Meritor, Inc.
$
120


$
90


$
73


$
85


$
42


$
290


$
39

 
$
240

Interest expense, net
67

 
14

 
15

 
14

 
14

 
57

 
14

 
16

Provision for income taxes
149

 
21

 
27

 
21

 
13

 
82

 
13

 
73

Depreciation and amortization
84

 
22

 
21

 
21

 
23

 
87

 
24

 
26

Noncontrolling interests
9

 
2

 
2

 
3

 
(2
)
 
5

 
2

 
1

Loss on sale of receivables
5

 
1

 
2

 
2

 
1

 
6

 
1

 
1

Asset impairment charges, net of noncontrolling interests
3

 
—

 
—

 
1

 
9

 
10

 
—

 
—

Pension settlement loss
6

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Restructuring costs
6

 
—

 
(1
)
 
(1
)
 
10

 
8

 
5

 
10

Income from WABCO distribution termination
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(265
)
Transaction costs
—

 
—

 
—

 
—

 
6

 
6

 
—

 
5

Asbestos related items
25

 
(31
)
 
—

 
—

 
—

 
(31
)
 
—

 
—

Adjusted EBITDA
$
474


$
119


$
139


$
146


$
116


$
520


$
98

 
$
107

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Adjusted EBITDA margin (1)
11.3
%
 
11.5
%
 
12.0
%
 
12.5
%
 
11.3
%
 
11.9
%
 
10.9
%
 
12.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated legacy and corporate expense (income), net (2)
13

 
(2
)
 
1

 
1

 
(3
)
 
(3
)
 
(2
)
 
(3
)
Segment adjusted EBITDA
$
487


$
117


$
140


$
147


$
113


$
517


$
96

 
$
104

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Truck
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment adjusted EBITDA
$
345

 
$
79

 
$
94

 
$
97

 
$
72

 
$
342

 
$
57

 
$
58

Segment adjusted EBITDA margin (3)
10.4
%
 
9.6
%
 
10.1
%
 
10.5
%
 
9.3
%
 
9.9
%
 
8.6
%
 
9.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aftermarket and Industrial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment adjusted EBITDA
$
142

 
$
38

 
$
46

 
$
50

 
$
41

 
$
175

 
$
39

 
$
46

Segment adjusted EBITDA margin (3)
13.9
%
 
14.8
%
 
16.9
%
 
17.7
%
 
14.2
%
 
15.9
%
 
14.2
%
 
16.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Truck
$
3,325

 
$
824

 
$
929

 
$
925

 
$
778

 
$
3,456

 
$
663

 
$
631

Aftermarket and Industrial
1,024

 
257

 
272

 
282

 
289

 
1,100

 
275

 
277

Intersegment Sales
(171
)
 
(43
)
 
(45
)
 
(41
)
 
(39
)
 
(168
)
 
(37
)
 
(37
)
Total Sales
$
4,178


$
1,038


$
1,156


$
1,166


$
1,028


$
4,388


$
901

 
$
871

(1) Adjusted EBITDA margin equals adjusted EBITDA divided by consolidated sales from continuing operations.
(2) Unallocated legacy and corporate expense (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.




(3) Segment adjusted EBITDA margin equals segment adjusted EBITDA divided by consolidated sales from continuing operations, either in the aggregate or by segment as applicable.
NON-GAAP FINANCIAL MEASURES
In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) for the fiscal years ended September 30, 2018 and 2019, each of the four quarters of fiscal year 2019 and the first and second quarter of fiscal year 2020 we have provided information regarding non-GAAP financial measures. These non-GAAP financial measures include adjusted EBITDA, adjusted EBITDA margin, segment adjusted EBITDA and segment adjusted EBITDA margin.
Adjusted EBITDA is defined as income (loss) from continuing operations before interest, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expenses, asset impairment charges and other special items as determined by management. Adjusted EBITDA margin is defined as adjusted EBITDA divided by consolidated sales from continuing operations. Segment adjusted EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, noncontrolling 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 expense (income), net. Segment adjusted EBITDA margin is defined as segment adjusted EBITDA divided by consolidated sales from continuing operations, either in the aggregate or by segment as applicable.
Management believes these non-GAAP financial measures are useful to both management and investors in their analysis of the company's financial position and results of operations. In particular, adjusted EBITDA, adjusted EBITDA margin, segment adjusted EBITDA and segment adjusted EBITDA margin are meaningful measures of performance to investors as they are commonly utilized to analyze financial performance in our industry, perform analytical comparisons, benchmark performance between periods and measure our performance against externally communicated targets.
Management uses the aforementioned non-GAAP financial measures for planning and forecasting purposes, and segment adjusted EBITDA is also used as the primary basis for the Chief Operating Decision Maker (“CODM”) to evaluate the performance of each of our reportable segments.
Our Board of Directors uses adjusted EBITDA margin as a key metric to determine management’s performance under our performance-based compensation plans.
Adjusted EBITDA, adjusted EBITDA margin, segment adjusted EBITDA and segment adjusted EBITDA margin should not be considered a substitute for the reported results prepared in accordance with GAAP and should not be considered as an alternative to net income as an indicator of our financial performance. These non-GAAP financial measures, as determined and presented by the company, may not be comparable to related or similarly titled measures reported by other companies. Set forth above are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.




v3.20.2
COVER PAGE
Jul. 27, 2020
Jan. 30, 2020
Cover [Abstract]    
Document type 8-K  
Document period end date Jul. 27, 2020  
Entity registrant name MERITOR, INC.  
Entity incorporation, state or country code IN  
Commission file no. 1-15983  
I.R.S. employer identification no. 38-3354643  
Address of principal executive offices, line 1 2135 West Maple Road  
Address of principal executive offices, city or town Troy  
Address of principal executive offices, state MI  
Zip code 48084-7186  
City area code 248  
Local phone number 435-1000  
Written communications false  
Soliciting material false  
Pre-commencement tender offer false  
Pre-commencement issuer tender offer false  
Title of 12(b) security Common Stock, $1 Par Value  
Trading symbol MTOR  
Security exchange name NYSE  
Entity emerging growth company false  
Amendment flag   false
Entity central index key   0001113256