Slide 1: Fiscal Year 2020 Second Quarter Earnings Presentation
FISCAL YEAR 2020 SECOND QUARTER EARNINGS PRESENTATION Jay Craig – CEO & President Carl Anderson – Senior Vice President & CFO Chris Villavarayan – Executive Vice President & COO April 30, 2020
Slide 2: Forward-Looking Statements
FORWARD-LOOKING Statements This presentation 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 statement
Slide 3: Second Quarter FY2020 Financial Results
SECOND QUARTER FY2020 Financial Results COVID-19 Operations Impact Q2 FY2020 Highlights Liquidity ▪ Commercial Truck operations ($M as of 3/31/20) ▪ Total liquidity of were impacted as follows: Sales $871M $829M ▪ Production suspended at ▪ Liquidity most global locations represents Net income from (
Slide 4: SAFE START Protocol in Place
SAFE START Protocol in Place Site Entry and Common Areas Operational Heat Maps Health and Safety Audit ▪ Reduce possibility of infected ▪ Addressed working conditions ▪ Preventative health and safety individuals being admitted to where 6’ social distancing is measures audited prior to restart Merito
Slide 5: Business Update
BUSINESS Update Operational Status Cost Actions Taken Due to COVID-19 ▪ Supported critical infrastructure throughout crisis: ▪ Pay reductions initiated for salaried employees and ▪ Aftermarket operations continued to run board members in April ▪ Maintained supply of critical components for fire ▪ Te
Slide 6: Second Quarter FY2020 Financial Results
SECOND QUARTER FY2020 Financial Results Company Results Segment Results (in millions, except per share amounts) Three Months Ended March 31, Aftermarket, Industrial Commercial Truck GAAP MEASURES FY20 Q2 vs. FY19 Q2 & Trailer 2020 2019 3 Months Ended March 31 (in millions) 2020 2019 2020 2019 Sales
Slide 7: Debt Covenant and Compliance
DEBT COVENANT and Compliance ▪ Priority Debt Ratio is sole financial debt covenant in revolving credit facility ▪ Priority Debt Ratio cannot exceed more than 2.25 times trailing 12-month Compliance EBITDA ▪ Compliance EBITDA includes income on termination of WABCO distribution arrangement Priority D
Slide 8: Debt Maturity Profile and Retirement Obligations
DEBT MATURITY PROFILE and Retirement Obligations Debt Maturity Profile(1) Net Pension Liability ($ millions) Total OPEB Liability ($ millions) As of 03/31/20 ($ millions) ($38) ($380) $160 $447 $122 $67 2016 2019 2016 2019 ▪ Combined liabilities significantly reduced since 2016 ▪ Limited near-term p
Slide 9: Third Quarter FY2020 Financial Outlook
THIRD QUARTER FY2020 Financial Outlook Operating Environment Assumptions(1) Outlook ▪ Approximately 50%-60% of revenue included in outlook is Q3 Outlook (in millions) from China which restarted production in February, and business which continued to operate throughout COVID-19 including: Sales $400-
Slide 10: Looking Ahead
LOOKING Ahead ▪ Health and safety of employees remain a top priority ▪ Meet global customer demand ▪ Manage company for expected lower volumes ▪ Evaluate and implement additional cost reduction actions Expect to provide a longer-term outlook on Q3 earnings call if market conditions stabilize 10
Slide 11: Appendix
MERITOR RUN WITH THE BULL APPENDIX fr’
Slide 12: Non-GAAP Financial Information
NON-GAAP Financial Information 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 cont
Slide 13: Non-GAAP Financial Information
NON-GAAP Financial Information Adjusted Income from Continuing Operations Reconciliation (in millions, except per share amounts) Three Months Ended March 31, 2020 2019 Income from Continuing Operations Attributable to the Company $ 240 $ 73 Adjustments: Restructuring 10 (1) Non-cash tax expense(1) 8
Slide 14: Non-GAAP Financial Information
NON-GAAP Financial Information Adjusted EBITDA and Segment Adjusted EBITDA Reconciliations (in millions) Three Months Ended March 31, 2020 2019 Net Income Attributable to Meritor, Inc. $241 $72 Loss (Income) from Discontinued Operations, net of tax, attributable to Meritor, Inc. (1) 1 Income From Co
Slide 15: Non-GAAP Financial Information
NON-GAAP Financial Information Free Cash Flow Reconciliation (in millions) Three Months Ended March 31, 2020 2019 Cash Provided by Operating Activities $ 309 $ 40 Capital Expenditures (17) (21) Free Cash Flow $ 292 $ 19 15
Slide 16: Meritor - Run with the Bull
2) MERITOR RUN WITH THE BULL