TROY,
Mich., May 3, 2022 /PRNewswire/ -- Meritor, Inc.
(NYSE: MTOR) today reported financial results for its second
fiscal quarter that ended March 31,
2022.
Second-Quarter Highlights
- Sales of $1,154 million
- Net income attributable to Meritor of $62 million and net income from continuing
operations attributable to Meritor of $61
million
- Diluted earnings per share from continuing operations of
$0.85
- Adjusted income from continuing operations attributable to the
company of $70 million, or
$0.98 of adjusted diluted earnings
per share
- Adjusted EBITDA of $127 million
and adjusted EBITDA margin of 11.0 percent
- Operating cash flow was negative $17
million
- Free cash flow was negative $38
million
Second-Quarter Results
For the second quarter of fiscal year 2022, Meritor posted sales
of $1,154 million, up $171 million, or approximately 17 percent, from
the same period last year. The increase in sales was primarily
driven by higher truck production in most global markets and
pricing actions.
Net income attributable to Meritor was $62 million, or $0.86 per diluted share, compared to $63 million, or $0.86 per diluted share, in the same period last
year. Net income from continuing operations attributable to Meritor
was $61 million, or $0.85 per diluted share, compared to $63 million, or $0.86 per diluted share, in the same period last
year. Flat net income year over year was driven primarily by higher
sales volumes, pricing actions and lower tax expense, partially
offset by increased steel and freight costs, and the recognition of
value-added tax credits in Brazil
during the second quarter of fiscal year 2021.
Adjusted income from continuing operations attributable to the
company in the second quarter of fiscal year 2022 was $70 million, or $0.98 of adjusted diluted earnings per share,
compared to $50 million, or
$0.68 of adjusted diluted earnings
per share, in the same period last year.
Adjusted EBITDA was $127 million,
compared to $111 million in the
second quarter of fiscal year 2021. The increase in adjusted EBITDA
was driven primarily by higher sales volumes and pricing actions,
partially offset by higher steel and freight costs. Adjusted EBITDA
margin decreased to 11.0 percent compared to 11.3 percent in the
same period last year. The decrease in adjusted EBITDA margin was
driven primarily by higher net steel and freight costs which
unfavorably impacted the conversion on sales.
Cash used for operating activities was $17 million in the second quarter of fiscal year
2022, compared to cash provided by operating activities of
$63 million in the second quarter of
fiscal year 2021. The decrease in operating cash flow year over
year was driven primarily by an increase in working capital
requirements.
Second-Quarter Segment
Results
Commercial Truck sales for the second quarter of fiscal year
2022 were $938 million, up
$161 million, or approximately 21
percent, compared to the same period last year. The increase in
sales was primarily driven by higher truck production in most
global markets and pricing actions.
Segment adjusted EBITDA for Commercial Truck was $78 million, up $5
million, compared to the second quarter of fiscal year 2021.
The increase in segment adjusted EBITDA was driven primarily by
higher sales volumes, partially offset by higher net steel and
freight costs. Segment adjusted EBITDA margin was 8.3 percent in
the second quarter of fiscal year 2022, compared to 9.4 percent in
the same period of the prior year. The decrease in segment adjusted
EBITDA margin was primarily driven by higher net steel and freight
costs which unfavorably impacted the conversion on sales.
Aftermarket & Industrial sales for the second quarter of
fiscal year 2022 were $262 million,
up $15 million, or 6 percent, from
the same period a year ago. The increase in sales in the second
quarter of 2022 was primarily due to pricing actions.
Segment adjusted EBITDA for Aftermarket & Industrial was
$44 million, up $10 million, compared to the second quarter of
fiscal year 2021. Segment adjusted EBITDA margin was 16.8 percent
in the second quarter of fiscal year 2022, compared to 13.8 percent
in the same period of the prior year. The increase in segment
adjusted EBITDA and segment adjusted EBITDA margin was primarily
driven by pricing actions, partially offset by higher freight
costs.
In the second fiscal quarter of 2022, the company announced the
planned acquisition of Meritor by Cummins. The Hart-Scott-Rodino
(HSR) antitrust waiting period expired on April 6, 2022. A special shareholder meeting will
be held on May 26, 2022 seeking the
approval of Meritor's shareholders for the proposed
transaction.
"I am extremely proud of the team's outstanding performance in
the second quarter," said Chris
Villavarayan, CEO and president of Meritor. "Despite severe
macro headwinds, we continue to deliver strong financial results.
In addition, we expect the Cummins transaction to close by
year-end, subject to all closing conditions being met."
About Meritor
Meritor, Inc. is a leading global supplier of drivetrain,
mobility, braking, aftermarket and electric powertrain solutions
for commercial vehicle and industrial markets. With more than a
110-year legacy of providing innovative products that offer
superior performance, efficiency and reliability, the company
serves commercial truck, trailer, off-highway, defense, specialty
and aftermarket customers around the world. Meritor is based in
Troy, Michigan, United States, and is made up of approximately
9,600 diverse employees who apply their knowledge and skills in
manufacturing facilities, engineering centers, joint ventures,
distribution centers and global offices in 19 countries. Meritor
common stock is traded on the New York Stock Exchange under the
ticker symbol MTOR. For important information, visit the company's
website at www.meritor.com.
Forward-Looking
Statement
This release contains statements relating to future results
of the company (including certain outlooks, projections and
business trends) that are "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are typically identified by words or
phrases such as "believe," "expect," "anticipate," "estimate,"
"should," "are likely to be," "will" and similar expressions.
Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not
limited to the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement pursuant to which the company would become a wholly owned
subsidiary of Cummins Inc. (the "Merger"); the failure to obtain
approval for the Merger from the company's shareholders, the
failure to obtain certain required regulatory approvals or the
failure to satisfy any of the other closing conditions to the
completion of the Merger within the expected timeframes or at all;
risks related to disruption of management's attention from ongoing
business operations due to the Merger; the effect of the
announcement of the Merger on the ability to retain and hire key
personnel and maintain relationships with customers, suppliers and
others with whom the company does business, or on operating results
and business generally; the ability to meet expectations regarding
the timing and completion of the Merger; the duration and severity
of the COVID-19 pandemic and its effects on public health, the
global economy and financial markets, as well as our industry,
customers, operations, workforce, supply chains, distribution
systems and demand for our products; the ongoing conflict between
Russia and Ukraine; reliance on major OEM customers and
possible negative outcomes from contract negotiations with our
major customers, including failure to negotiate acceptable terms in
contract renewal negotiations and our ability to obtain new
customers; the outcome of actual and potential product liability,
warranty and recall claims; our ability to successfully manage
rapidly changing volumes in the commercial truck markets and work
with our customers to manage demand expectations in view of rapid
changes in production levels; global economic and market cycles and
conditions; availability and sharply rising costs of raw materials,
including steel, transportation and labor, and our ability to
manage or recover such costs; technological changes in our industry
as a result of the trends toward electrified drivetrains and the
integration of advanced electronics and their impact on the demand
for our products and services; our ability to manage possible
adverse effects on European markets or our European operations, or
financing arrangements related thereto in the event one or more
countries exit the European monetary union; risks inherent in
operating abroad (including foreign currency exchange rates,
restrictive government actions regarding trade, implications of
foreign regulations relating to pensions and potential disruption
of production and supply due to terrorist attacks or acts of
aggression); risks related to our joint ventures; the ability to
achieve the expected benefits of strategic initiatives and
restructuring actions; the demand for commercial and specialty
vehicles for which we supply products; whether our liquidity will
be affected by declining vehicle production in the future; OEM
program delays; demand for and market acceptance of new and
existing products; successful development and launch of new
products; labor relations of our company, our suppliers and
customers, including potential disruptions in supply of parts to
our facilities or demand for our products due to work stoppages;
the financial condition of our suppliers and customers, including
potential bankruptcies; possible adverse effects of any future
suspension of normal trade credit terms by our suppliers; potential
impairment of long-lived assets, including goodwill; potential
adjustment of the value of deferred tax assets; competitive product
and pricing pressures; the amount of our debt; our ability to
continue to comply with covenants in our financing agreements; our
ability to access capital markets; credit ratings of our debt; the
outcome of existing and any future legal proceedings, including any
proceedings or related liabilities with respect to environmental,
asbestos-related, or other matters; rising costs of pension
benefits; possible changes in accounting rules; and other
substantial costs, risks and uncertainties, including but not
limited to those detailed in our Annual Report on Form 10-K for the
year ended September 30, 2021 and from time to time in other
filings of the company with the SEC. These forward-looking
statements are made only as of the date hereof, and the company
undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events
or otherwise, except as otherwise required by law.
All earnings per share amounts are on a diluted basis. The
company's fiscal year ends on the Sunday nearest Sept. 30, and its fiscal quarters generally end
on the Sundays nearest Dec. 31,
March 31 and June 30. All year and quarter references relate
to the company's fiscal year and fiscal quarters, unless otherwise
stated.
Non-GAAP Financial
Measures
In addition to the results reported in accordance with
accounting principles generally accepted in the United States ("GAAP"), we have provided
information regarding non-GAAP financial measures. These non-GAAP
financial measures include adjusted income (loss) from continuing
operations attributable to the company, adjusted diluted earnings
(loss) per share from continuing operations, adjusted EBITDA,
adjusted EBITDA margin, segment adjusted EBITDA, segment adjusted
EBITDA margin, free cash flow and free cash flow conversion.
Adjusted income (loss) from continuing operations attributable
to the company and adjusted diluted earnings (loss) per share from
continuing operations are defined as reported income (loss) from
continuing operations and reported diluted earnings (loss) per
share from continuing operations before restructuring expenses,
asset impairment charges and other special items as determined by
management. 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. Free cash flow is defined as cash flows provided by
(used for) operating activities less capital expenditures. Free
cash flow conversion is defined as free cash flow over adjusted
income from continuing operations attributable to the company.
Beginning in the second quarter of fiscal year 2021, the company no
longer includes an adjustment for non-cash tax expense related to
the use of deferred tax assets in jurisdictions with net operating
loss carryforwards or tax credits in adjusted income (loss) from
continuing operations attributable to the company and adjusted
diluted earnings (loss) per share from continuing operations.
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,
segment adjusted EBITDA margin, adjusted income (loss) from
continuing operations attributable to the company, adjusted diluted
earnings (loss) per share from continuing operations and free cash
flow conversion are meaningful measures of performance to investors
as they are commonly utilized to analyze financial performance in
our industry, perform analytical comparisons, measure value
creation, benchmark performance between periods and measure our
performance against externally communicated targets.
Free cash flow is used by investors and management to analyze
our ability to service and repay debt and return value directly to
shareholders. Free cash flow conversion is a specific financial
measure of our M2022 plan used to measure the company's ability to
convert earnings to free cash flow and provides useful information
about our ability to achieve strategic goals.
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, free cash
flow, adjusted diluted earnings (loss) per share from continuing
operations and free cash flow conversion as key metrics to
determine management's performance under our performance-based
compensation plans, provided that, solely for this purpose,
adjusted diluted earnings (loss) per share from continuing
operations also includes an adjustment for the use of deferred tax
assets in jurisdictions with net operating loss carryforwards or
tax credits.
Adjusted income (loss) from continuing operations attributable
to the company, adjusted diluted earnings (loss) per share from
continuing operations, adjusted EBITDA, adjusted EBITDA margin,
segment adjusted EBITDA, segment adjusted EBITDA margin and free
cash flow conversion 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 or cash flow conversion
calculations as an indicator of our financial performance. Free
cash flow and free cash flow conversion should not be considered a
substitute for cash provided by (used for) operating activities, or
other cash flow statement data prepared in accordance with GAAP, or
as a measure of financial position or liquidity. In addition, these
non-GAAP cash flow measures do not reflect cash used to repay debt
or cash received from the divestitures of businesses or sales of
other assets and thus do not reflect funds available for investment
or other discretionary uses. 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 below are reconciliations of these non-GAAP financial
measures to the most directly comparable financial measures
calculated in accordance with GAAP.
MERITOR,
INC.
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In millions, except
per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Sales
|
$
1,154
|
|
$
983
|
|
$
2,138
|
|
$
1,872
|
Cost of sales
|
(1,017)
|
|
(835)
|
|
(1,874)
|
|
(1,609)
|
GROSS PROFIT
|
137
|
|
148
|
|
264
|
|
263
|
Selling, general and
administrative
|
(70)
|
|
(69)
|
|
(132)
|
|
(134)
|
Other operating expense,
net
|
(1)
|
|
(2)
|
|
(4)
|
|
(9)
|
OPERATING INCOME
|
66
|
|
77
|
|
128
|
|
120
|
Other income,
net
|
14
|
|
23
|
|
28
|
|
37
|
Equity in earnings of
affiliates
|
11
|
|
5
|
|
18
|
|
16
|
Interest expense,
net
|
(12)
|
|
(17)
|
|
(25)
|
|
(45)
|
INCOME BEFORE INCOME TAXES
|
79
|
|
88
|
|
149
|
|
128
|
Provision for income
taxes
|
(15)
|
|
(22)
|
|
(27)
|
|
(29)
|
INCOME FROM CONTINUING
OPERATIONS
|
64
|
|
66
|
|
122
|
|
99
|
INCOME FROM DISCONTINUED OPERATIONS, net of
tax
|
1
|
|
—
|
|
1
|
|
—
|
NET INCOME
|
65
|
|
66
|
|
123
|
|
99
|
Less: Net income attributable to noncontrolling
interests
|
(3)
|
|
(3)
|
|
(7)
|
|
(4)
|
NET INCOME ATTRIBUTABLE TO MERITOR,
INC.
|
$
62
|
|
$
63
|
|
$
116
|
|
$
95
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO MERITOR,
INC.
|
|
|
|
|
|
|
|
Net income from continuing
operations
|
$
61
|
|
$
63
|
|
$
115
|
|
$
95
|
Income from discontinued
operations
|
1
|
|
—
|
|
1
|
|
—
|
Net income
|
$
62
|
|
$
63
|
|
$
116
|
|
$
95
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.85
|
|
$
0.86
|
|
$
1.61
|
|
$
1.30
|
Discontinued
operations
|
0.01
|
|
—
|
|
0.02
|
|
—
|
Diluted earnings per
share
|
$
0.86
|
|
$
0.86
|
|
$
1.63
|
|
$
1.30
|
|
|
|
|
|
|
|
|
Diluted average common shares
outstanding
|
71.4
|
|
73.4
|
|
71.3
|
|
73.3
|
MERITOR,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in
millions)
|
|
|
March 31,
2022
|
|
September 30,
2021
|
ASSETS
|
|
|
|
CURRENT ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
115
|
|
$
101
|
Receivables, trade and other,
net
|
769
|
|
534
|
Inventories
|
719
|
|
601
|
Other current
assets
|
60
|
|
50
|
TOTAL CURRENT
ASSETS
|
1,663
|
|
1,286
|
NET PROPERTY
|
511
|
|
517
|
GOODWILL
|
504
|
|
507
|
OTHER ASSETS
|
644
|
|
628
|
TOTAL
ASSETS
|
$
3,322
|
|
$
2,938
|
LIABILITIES AND EQUITY
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
Short-term
debt
|
$
114
|
|
$
19
|
Accounts and notes
payable
|
779
|
|
573
|
Other current
liabilities
|
297
|
|
308
|
TOTAL CURRENT
LIABILITIES
|
1,190
|
|
900
|
LONG-TERM DEBT
|
1,025
|
|
1,008
|
RETIREMENT BENEFITS
|
171
|
|
191
|
OTHER LIABILITIES
|
216
|
|
224
|
TOTAL
LIABILITIES
|
2,602
|
|
2,323
|
|
|
|
|
EQUITY:
|
|
|
|
Common stock (March 31, 2022 and
September 30, 2021, 104.7 and 104.0 shares issued and
70.8 and 70.1 shares outstanding,
respectively)
|
106
|
|
105
|
Additional paid-in
capital
|
765
|
|
798
|
Retained
earnings
|
1,068
|
|
935
|
Treasury stock, at cost (March
31, 2022 and September 30, 2021, 33.9 and 33.9 shares,
respectively)
|
(632)
|
|
(632)
|
Accumulated other comprehensive
loss
|
(628)
|
|
(632)
|
Total equity attributable to
Meritor, Inc.
|
679
|
|
574
|
Noncontrolling
interests
|
41
|
|
41
|
TOTAL
EQUITY
|
720
|
|
615
|
TOTAL LIABILITIES AND
EQUITY
|
$
3,322
|
|
$
2,938
|
MERITOR,
INC.
ADJUSTED EBITDA AND
SEGMENT ADJUSTED EBITDA-RECONCILIATION
Non-GAAP
AND
CONSOLIDATED
BUSINESS SEGMENT SALES INFORMATION
(Unaudited)
(in
millions)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income attributable to Meritor,
Inc.
|
$
62
|
|
$
63
|
|
$
116
|
|
$
95
|
Income from discontinued operations, net of tax,
attributable to
Meritor, Inc.
|
(1)
|
|
—
|
|
(1)
|
|
—
|
Income from continuing
operations, net of tax, attributable to
Meritor, Inc.
|
$
61
|
|
$
63
|
|
$
115
|
|
$
95
|
|
|
|
|
|
|
|
|
Interest expense, net
|
12
|
|
17
|
|
25
|
|
45
|
Provision for income taxes
|
15
|
|
22
|
|
27
|
|
29
|
Depreciation and amortization
|
25
|
|
25
|
|
50
|
|
52
|
Noncontrolling interests
|
3
|
|
3
|
|
7
|
|
4
|
Loss on sale of receivables
|
2
|
|
1
|
|
3
|
|
2
|
Transaction costs
(1)
|
9
|
|
—
|
|
9
|
|
—
|
Restructuring
|
—
|
|
2
|
|
4
|
|
8
|
Brazil VAT Credit
(2)
|
—
|
|
(22)
|
|
—
|
|
(22)
|
Adjusted
EBITDA
|
$
127
|
|
$
111
|
|
$
240
|
|
$
213
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
(3)
|
11.0%
|
|
11.3%
|
|
11.2%
|
|
11.4%
|
|
|
|
|
|
|
|
|
Unallocated legacy and corporate
income, net (4)
|
(5)
|
|
(4)
|
|
(11)
|
|
(8)
|
Segment adjusted
EBITDA
|
$
122
|
|
$
107
|
|
$
229
|
|
$
205
|
|
|
|
|
|
|
|
|
Commercial Truck
|
|
|
|
|
|
|
|
Segment adjusted
EBITDA
|
$
78
|
|
$
73
|
|
$
147
|
|
$
136
|
Segment adjusted EBITDA margin
(5)
|
8.3%
|
|
9.4%
|
|
8.5%
|
|
9.3%
|
|
|
|
|
|
|
|
|
Aftermarket & Industrial
|
|
|
|
|
|
|
|
Segment adjusted
EBITDA
|
$
44
|
|
$
34
|
|
$
82
|
|
$
69
|
Segment adjusted EBITDA margin
(5)
|
16.8%
|
|
13.8%
|
|
16.3%
|
|
14.3%
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
Commercial
Truck
|
$
938
|
|
$
777
|
|
$
1,723
|
|
$
1,468
|
Aftermarket &
Industrial
|
262
|
|
247
|
|
503
|
|
481
|
Intersegment
Sales
|
(46)
|
|
(41)
|
|
(88)
|
|
(77)
|
Total
Sales
|
$
1,154
|
|
$
983
|
|
$
2,138
|
|
$
1,872
|
|
|
(1)
|
Represents
transaction expenses primarily related to the
Merger.
|
(2)
|
Amount relates to a
pre-tax loss recovery, net of legal expenses, on the overpayment of
VAT in Brazil.
|
(3)
|
Adjusted EBITDA
margin equals adjusted EBITDA divided by consolidated sales from
continuing operations.
|
(4)
|
Unallocated legacy
and corporate income, net represents items that are not directly
related to the company's business segments.
These items primarily include pension and retiree medical costs
associated with sold businesses and other legacy costs for
environmental.
|
(5)
|
Segment adjusted
EBITDA margin equals segment adjusted EBITDA divided by
consolidated sales from continuing operations,
either in the aggregate or by segment as applicable.
|
MERITOR,
INC.
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in
millions)
|
|
|
Six Months Ended March 31,
|
|
2022
|
|
2021
|
OPERATING ACTIVITIES
|
|
|
|
Income from continuing
operations
|
$
122
|
|
$
99
|
Adjustments to income from continuing operations to
arrive at cash provided by (used for) operating
activities:
|
|
|
|
Depreciation and
amortization
|
50
|
|
52
|
Deferred income tax
expense
|
—
|
|
2
|
Restructuring
costs
|
4
|
|
8
|
Equity in earnings
of affiliates
|
(18)
|
|
(16)
|
Stock compensation
expense
|
8
|
|
10
|
Pension and
retiree medical income
|
(27)
|
|
(26)
|
Loss on debt
extinguishment
|
—
|
|
8
|
Dividends received from equity
method investments
|
5
|
|
2
|
Pension and retiree medical
contributions
|
(4)
|
|
(6)
|
Restructuring
payments
|
(8)
|
|
(8)
|
Changes in off-balance sheet
accounts receivable securitization and factoring
programs
|
88
|
|
35
|
Changes in receivables,
inventories and accounts payable
|
(225)
|
|
(63)
|
Changes in other current assets
and liabilities
|
(20)
|
|
5
|
Changes in other assets and
liabilities
|
(10)
|
|
5
|
Operating cash flows provided by
(used for) continuing operations
|
(35)
|
|
107
|
Operating cash flows used for
discontinued operations
|
(3)
|
|
—
|
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
|
(38)
|
|
107
|
INVESTING ACTIVITIES
|
|
|
|
Capital
expenditures
|
(39)
|
|
(26)
|
Other investing
activities
|
5
|
|
(3)
|
CASH USED FOR INVESTING
ACTIVITIES
|
(34)
|
|
(29)
|
FINANCING ACTIVITIES
|
|
|
|
Borrowing and
securitization
|
95
|
|
—
|
Proceeds from debt
issuances
|
—
|
|
275
|
Redemption of
notes
|
—
|
|
(281)
|
Redemption of convertible
notes
|
—
|
|
(53)
|
Debt issuance
costs
|
—
|
|
(5)
|
Term loan
payments
|
(9)
|
|
(7)
|
Other financing
activities
|
—
|
|
(1)
|
Net
change in debt
|
86
|
|
(72)
|
Repurchase of common
stock
|
—
|
|
—
|
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES
|
86
|
|
(72)
|
EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGE RATES
ON CASH AND CASH
EQUIVALENTS
|
—
|
|
—
|
CHANGE IN CASH AND CASH
EQUIVALENTS
|
14
|
|
6
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD
|
101
|
|
315
|
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
|
$
115
|
|
$
321
|
MERITOR,
INC.
FREE CASH FLOW —
RECONCILIATION
Non-GAAP
(Unaudited, in
millions)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash provided by (used for) operating
activities
|
$
(17)
|
|
$
63
|
|
$
(38)
|
|
$
107
|
Capital expenditures
|
(21)
|
|
(16)
|
|
(39)
|
|
(26)
|
Free cash
flow
|
$
(38)
|
|
$
47
|
|
$
(77)
|
|
$
81
|
MERITOR,
INC.
ADJUSTED INCOME AND
EARNINGS PER SHARE — RECONCILIATION
Non-GAAP
(Unaudited)
(in millions, except
per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Income from continuing operations attributable to the
company
|
$
61
|
|
$
63
|
|
$
115
|
|
$
95
|
Adjustments:
|
|
|
|
|
|
|
|
Restructuring
|
—
|
|
2
|
|
4
|
|
8
|
Loss on debt
extinguishment
|
—
|
|
—
|
|
—
|
|
8
|
Brazil VAT Credit
(1)
|
—
|
|
(22)
|
|
—
|
|
(22)
|
Transaction costs
(2)
|
9
|
|
—
|
|
9
|
|
—
|
Tax effect of adjustments
(3)
|
—
|
|
7
|
|
(1)
|
|
4
|
Adjusted income from continuing operations
attributable to the
company
|
$
70
|
|
$
50
|
|
$
127
|
|
$
93
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing
operations
|
$
0.85
|
|
$
0.86
|
|
$
1.61
|
|
$
1.30
|
Impact of adjustments on diluted
earnings per share
|
0.13
|
|
(0.18)
|
|
0.17
|
|
(0.03)
|
Adjusted diluted earnings per share from continuing
operations
|
$
0.98
|
|
$
0.68
|
|
$
1.78
|
|
$
1.27
|
|
|
|
|
|
|
|
|
Diluted average common shares
outstanding
|
71.4
|
|
73.4
|
|
71.3
|
|
73.3
|
|
|
(1)
|
Amount relates to a
pre-tax loss recovery, net of legal expenses, on the overpayment of
VAT in Brazil.
|
(2)
|
Represents
transaction expenses primarily related to the
Merger.
|
(3)
|
Amount for the six
months ended March 31, 2022 includes $1 million of income tax
benefits related to restructuring. The three
months ended March 31, 2021 includes $7 million of income tax
expense related to the Brazilian VAT Credit. The six months
ended
March 31, 2021 includes $7 million of income tax expense related to
the Brazilian VAT Credit, $2 million of income tax benefits for
the loss on debt extinguishment and $1 million of income tax
benefits related to restructuring.
|
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SOURCE Meritor, Inc.