MERITOR, INC. (NYSE:MTOR) Files An 8-K Other Events
Item 8.01 Other Events.

On September 6, 2017, to a mandate from the United States Court of Appeals for the Sixth Circuit in the case of Cole et al., v. Meritor, Inc. et al., the District Court for the Eastern District of Michigan dissolved its 2006 injunction barring the modification of the benefits provided by Meritor, Inc. (the “Company”) to the class of United Auto Workers employee retirees.

On September 8, 2017, the Company determined to modify the benefits provided to certain former union employee retirees. Under the plan, which may be modified at the Company’s discretion at any time, the Company expects 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. In fiscal year 2017, the Company expects these benefit modifications will reduce its retiree medical liability by approximately $315 million. In future periods, these benefit modifications are expected to result in a reduction in annual cash benefit payments from $32 million in fiscal year 2017 to approximately $15 million in each of fiscal years 2018 and 2019. Additionally, these benefit modifications are expected to generate a prior service credit, which will be amortized over the retirees’ average life expectancy, which is currently estimated to be 10 years. The amortization of this gain is expected to positively impact the Company’s retiree medical expense going forward. We expect that the impact will improve our retiree medical expense by approximately $40 million annually over the next two fiscal years, going from an expense of approximately $25 million in fiscal year 2017 to income of approximately $15 million in each of fiscal years 2018 and 2019.

This Current Report on Form 8-K contains “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. Such risks and uncertainties include, but are not limited to, the actual impacts of the benefit modifications on the Company’s balance sheet, earnings and amount of cash payments, whether the injunction barring the modification of benefits to certain employee retirees will remain dissolved or will not otherwise be reinstated and whether the Cole plaintiffs are granted a petition for certiorari with the U.S. Supreme Court, as well as those discussed in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2017 as filed with the Securities and Exchange Commission (“SEC”) on August 3, 2017, in the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2016 as filed with the SEC on December 1, 2016 and in other documents the Company has filed 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.

About MERITOR, INC. (NYSE:MTOR)

Meritor, Inc. is a supplier of a 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’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.