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
October 6, 1998 (October 5, 1998)
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Date of Report (Date of earliest event reported)
MERITOR AUTOMOTIVE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-13093 38-3354643
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
2135 West Maple Road
Troy, Michigan
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(Address of principal executive offices)
48084-7186
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(Zip code)
Registrant's telephone number, including area code: (248) 435-1000
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Item 5. Other Events.
As discussed in its Quarterly Reports on Form 10-Q for the Quarterly
Periods Ended March 31, 1998 and June 30, 1998 (File No. 1-13093), on April 9,
1998, Meritor Automotive, Inc. ("Meritor") entered into two forward treasury
interest rate lock agreements with financial institutions. Under these
agreements, Meritor would make or receive payments in respect of an aggregate
notional principal amount of $200 million, depending upon whether certain
interest rates fall or rise during the term of the agreements. The purpose of
the agreements was to secure interest rates in connection with the anticipated
issuance under Meritor's shelf registration statement of both intermediate and
long-term bonds, each in an aggregate principal amount of $100 million, as part
of the company's overall corporate capital strategy to balance fixed rate and
floating rate debt.
The issuance of the bonds was delayed, initially due to the
consideration of a major acquisition and most recently, the instability of
financial markets. In light of current market conditions, it now appears
unlikely that the long-term bonds will be issued in the near future, while there
is a somewhat higher probability that the intermediate-term bonds may be issued
in the near future.
Due to the uncertainty of the financial markets and the potential for
further declines in treasury yields, on October 5, 1998, Meritor settled the
agreements, resulting in a one-time payment of $31 million. The accounting
treatment of the one-time settlement payment is expected to result in a
non-recurring charge in the fourth quarter of fiscal year 1998 of between $0.16
and $0.27 per share. The earnings per share impact could be at the low end of
this range if the intermediate-term bond offering is completed in the near
future, since the accounting treatment would then permit the settlement payment
to be amortized over the life of the bonds.
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SIGNATURE
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 AUTOMOTIVE, INC.
By: /s/ Thomas J. Joyce
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Thomas J. Joyce
Vice President and Treasurer
Date: October 6, 1998
