0001670541FALSE00016705412023-08-022023-08-02

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): August 2, 2023

ADIENT PLC

(Exact name of registrant as specified in its charter)

Ireland			001-37757			98-1328821
(State or Other Jurisdiction of Incorporation)			(Commission File Number)			(IRS Employer Identification Number)

3 Dublin Landings, North Wall Quay Dublin 1, Ireland D01 H104
(Address of principal executive offices)

Registrant’s telephone number, including area code: 734-254-5000

Not applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of class

Trading symbol(s)

Name of exchange on which registered

Ordinary Shares, par value $0.001

ADNT

New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

☐ 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))

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Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

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Item 2.02 Results of Operations and Financial Condition.

On August 2, 2023, Adient plc (the “Company”) issued a news release announcing its financial results for the third quarter ended June 30, 2023. The news release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

EXHIBIT INDEX
Exhibit No.						Exhibit Description
99.1						Adient plc News Release dated August 2, 2023
104						Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document).

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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.

			ADIENT PLC
Date: August 2, 2023			By:			/s/ Heather M. Tiltmann
			Name:			Heather M. Tiltmann
			Title:			Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary

Exhibit 99.1

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Appendix

Page 1

Adient plc

Condensed Consolidated Statements of Income

(Unaudited)

						Three Months Ended June 30,
(in millions, except per share data)						2023						2022
Net sales						$	4,055					$	3,485
Cost of sales						3,753						3,312
Gross profit						302						173
Selling, general and administrative expenses						148						142
Restructuring and impairment costs						6						12
Equity income (loss)						25						16
Earnings (loss) before interest and income taxes						173						35
Net financing charges						49						39
Other pension expense (income)						1						(4)
Income (loss) before income taxes						123						—
Income tax provision (benefit)						28						20
Net income (loss)						95						(20)
Income attributable to noncontrolling interests						22						10
Net income (loss) attributable to Adient						$	73					$	(30)
Diluted earnings (loss) per share						$	0.77					$	(0.32)
Shares outstanding at period end						93.7						94.8
Diluted weighted average shares						94.9						94.8

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Appendix

Page 2

Adient plc

Condensed Consolidated Statements of Financial Position

(Unaudited)

						June 30,						September 30,
(in millions)						2023						2022
Assets
Cash and cash equivalents						$	908					$	947
Accounts receivable - net						2,074						1,852
Inventories						877						953
Other current assets						547						411
Current assets						4,406						4,163
Property, plant and equipment - net						1,397						1,377
Goodwill						2,115						2,057
Other intangible assets - net						421						467
Investments in partially-owned affiliates						296						286
Assets held for sale						7						11
Other noncurrent assets						840						797
Total assets						$	9,482					$	9,158
Liabilities and Shareholders' Equity
Short-term debt						$	2					$	14
Accounts payable and accrued expenses						3,029						2,818
Other current liabilities						689						669
Current liabilities						3,720						3,501
Long-term debt						2,532						2,564
Other noncurrent liabilities						688						673
Redeemable noncontrolling interests						57						45
Shareholders' equity attributable to Adient						2,174						2,073
Noncontrolling interests						311						302
Total liabilities and shareholders' equity						$	9,482					$	9,158

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Appendix

Page 3

Adient plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)

						Three Months Ended June 30,
(in millions)						2023						2022
Operating Activities
Net income (loss) attributable to Adient						$	73					$	(30)
Income attributable to noncontrolling interests						22						10
Net income (loss)						95						(20)
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation						74						72
Amortization of intangibles						13						14
Pension and postretirement benefit expense (benefit)						3						(3)
Pension and postretirement contributions, net						(2)						(7)
Equity in earnings of partially-owned affiliates, net of dividends received						(2)						10
Deferred income taxes						2						13
Non-cash restructuring and impairment charges						—						1
Equity-based compensation						7						7
Other						1						—
Changes in assets and liabilities:
Receivables						(72)						(83)
Inventories						39						8
Other assets						(13)						7
Restructuring reserves						(8)						(11)
Accounts payable and accrued liabilities						65						37
Accrued income taxes						1						(22)
Cash provided (used) by operating activities						203						23
Investing Activities
Capital expenditures						(60)						(53)
Sale of property, plant and equipment						1						6
Business acquisitions						5						(13)
Proceeds from business divestitures						2						—
Other						(1)						—
Cash provided (used) by investing activities						(53)						(60)
Financing Activities
Repayment of long-term debt						—						(144)
Share repurchases						(37)						—
Cash paid to acquire a noncontrolling interest						—						(3)
Dividends paid to noncontrolling interests						(5)						—
Share based compensation and other						(1)						—
Cash provided (used) by financing activities						(43)						(147)
Effect of exchange rate changes on cash and cash equivalents						(25)						(42)
Increase (decrease) in cash and cash equivalents						$	82					$	(226)

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Appendix

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Footnotes

1. Segment Results

Adient manages its business on a geographic basis and operates in the following three reportable segments for financial reporting purposes: 1) Americas, which is inclusive of North America and South America; 2) Europe, Middle East, and Africa ("EMEA") and 3) Asia Pacific/China ("Asia").

Adient evaluates the performance of its reportable segments using an adjusted EBITDA metric defined as income before income taxes and noncontrolling interests, excluding net financing charges, qualified restructuring and impairment costs, restructuring related-costs, net mark-to-market adjustments on pension and postretirement plans, transaction gains/losses, purchase accounting amortization, depreciation, stock-based compensation and other non-recurring items ("Adjusted EBITDA"). Also, certain corporate-related costs are not allocated to the segments. The reportable segments are consistent with how management views the markets served by Adient and reflect the financial information that is reviewed by its chief operating decision maker.

Financial information relating to Adient's reportable segments is as follows:

						Three Months Ended June 30,
(in millions)						2023						2022
Net Sales
Americas						$	1,900					$	1,673
EMEA						1,438						1,215
Asia						742						627
Eliminations						(25)						(30)
Total net sales						$	4,055					$	3,485

						Three Months Ended June 30,
(in millions)						2023						2022
Adjusted EBITDA
Americas						$	95					$	70
EMEA						103						31
Asia						100						64
Corporate-related costs (1)						(22)						(22)
Restructuring and impairment costs (2)						(6)						(12)
Purchase accounting amortization (3)						(13)						(14)
Restructuring related charges (4)						(3)						(1)
Stock based compensation						(7)						(7)
Depreciation						(74)						(72)
Other items (5)						—						(2)
Earnings (loss) before interest and income taxes						$	173					$	35
Net financing charges						(49)						(39)
Other pension income (expense)						(1)						4
Income (loss) before income taxes						$	123					$	—

Refer to the Footnote Addendum for footnote explanations.

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Appendix

Page 5

2. Earnings Per Share

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings (loss) per share:

						Three Months Ended June 30,
(in millions, except per share data)						2023						2022
Income available to shareholders
Net income (loss) attributable to Adient						$	73					$	(30)
Weighted average shares outstanding
Basic weighted average shares outstanding						94.1						94.8
Effect of dilutive securities:
Stock options, unvested restricted stock and unvested performance share awards						0.8						—
Diluted weighted average shares outstanding						94.9						94.8

Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share, which for the three months ended June 30, 2022 is a result of being in a loss position.

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Appendix

Page 6

3. Non-GAAP Measures

Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income attributable to Adient, Adjusted effective tax rate, Adjusted earnings per share, Adjusted equity income, Adjusted interest expense, Free cash flow and Net debt as well as other measures presented on an adjusted basis are not recognized terms under U.S. GAAP and do not purport to be alternatives to the most comparable U.S. GAAP amounts. Since all companies do not use identical calculations, our definition and presentation of these measures may not be comparable to similarly titled measures reported by other companies. Management uses the identified non-GAAP measures to evaluate the operating performance of the Company and its business segments and to forecast future periods. Management believes these non-GAAP measures assist investors and other interested parties in evaluating Adient's on-going operations and provide important supplemental information to management and investors regarding financial and business trends relating to Adient's financial condition and results of operations. Investors should not consider these non-GAAP measures as alternatives to the related GAAP measures. Reconciliations of non-GAAP measures to their closest U.S. GAAP equivalent are presented below. Reconciliations of non-GAAP measures related to guidance for any future period have not been provided due to the unreasonable efforts it would take to provide such reconciliations.

•			Adjusted EBIT is defined as income before income taxes and noncontrolling interests excluding net financing charges, restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, other significant non-recurring items, and net mark-to-market adjustments on pension and postretirement plans. Adjusted EBIT margin is adjusted EBIT as a percentage of net sales.
•			Adjusted EBITDA is defined as adjusted EBIT excluding depreciation and stock based compensation. Certain corporate-related costs are not allocated to the business segments in determining Adjusted EBITDA. Adjusted EBITDA margin is adjusted EBITDA as a percentage of net sales. Adjusted EBITDA excluding adjusted equity income, each as defined herein, is also presented.
•			Adjusted net income attributable to Adient is defined as net income attributable to Adient excluding restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, expenses associated with becoming an independent company, other significant non-recurring items, net mark-to-market adjustments on pension and postretirement plans, the tax impact of these items and other discrete tax charges/benefits.
•			Adjusted effective tax rate is defined as adjusted income tax provision as a percentage of adjusted income before income taxes.
•			Adjusted earnings per share is defined as Adjusted net income attributable to Adient divided by diluted weighted average shares.
•			Adjusted equity income is defined as equity income excluding amortization of Adient's intangible assets related to its non-consolidated joint ventures and other unusual or one-time items impacting equity income.
•			Adjusted interest expense is defined as net financing charges excluding unusual or one-time items impacting interest expense.
•			Free cash flow is defined as cash provided by operating activities less capital expenditures.
•			Net debt is calculated as gross debt (short-term and long-term) less cash and cash equivalents.

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Appendix

Page 7

Summarized Income Statement Information

(Refer to the Footnote Addendum for footnote explanations and details

of reconciling items between GAAP results and Adjusted results)

						Three Months Ended June 30,
						2023																		2022
(in millions, except per share data)						GAAP Results						Adj.						Adjusted Results						GAAP Results						Adj.						Adjusted Results
Net sales						$	4,055					$	—					$	4,055					$	3,485					$	—					$	3,485
Cost of sales (6)						3,753						(1)						3,752						3,312						(2)						3,310
Gross profit						302						1						303						173						2						175
Selling, general and administrative expenses (7)						148						(13)						135						142						(15)						127
Restructuring and impairment costs (2)						6						(6)						—						12						(12)						—
Equity income (loss) (8)						25						2						27						16						—						16
Earnings (loss) before interest and income taxes (EBIT)						173						22						195						35						29						64
Memo accounts:
Depreciation																		74																		72
Equity based compensation																		7																		7
Adjusted EBITDA																		$	276																	$	143
Net financing charges (9)						49						—						49						39						(2)						37
Other pension expense (income)						1						—						1						(4)						3						(1)
Income (loss) before income taxes						123						22						145						—						28						28
Income tax provision (benefit) (10)						28						—						28						20						(11)						9
Net income (loss) attributable to Adient						73						20						93						(30)						38						8
Diluted earnings (loss) per share						0.77						0.21						0.98						(0.32)						0.40						0.08
Diluted weighted average shares						94.9						—						94.9						94.8						0.9						95.7

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Appendix

Page 8

Segment Performance:

						Three months ended June 30, 2023
						Americas						EMEA						Asia						Corporate/Eliminations						Consolidated
Net sales						$	1,900					$	1,438					$	742					$	(25)					$	4,055
Adjusted EBITDA						$	95					$	103					$	100					$	(22)					$	276
Adjusted EBITDA margin						5.0		%				7.2		%				13.5		%				N/A						6.8		%
						Three months ended June 30, 2022
						Americas						EMEA						Asia						Corporate/Eliminations						Consolidated
Net sales						$	1,673					$	1,215					$	627					$	(30)					$	3,485
Adjusted EBITDA						$	70					$	31					$	64					$	(22)					$	143
Adjusted EBITDA margin						4.2		%				2.6		%				10.2		%				N/A						4.1		%

The following table presents adjusted EBITDA excluding adjusted equity income:

						Three Months Ended June 30,
(in millions)						2023						2022
Adjusted EBITDA						$	276					$	143
Less: Adjusted Equity Income						27						16
Adjusted EBITDA Excluding Adjusted Equity Income						$	249					$	127
% of Sales						6.1		%				3.6		%

The following table reconciles income (loss) before income taxes to adjusted income before income taxes and presents the related effective tax rate and adjusted effective tax rate:

						Three months ended June 30,
						2023																		2022
(in millions, except effective tax rate)						Income (loss) before income taxes						Tax impact						Effective tax rate						Income (loss) before income taxes						Tax impact						Effective tax rate
As reported						$	123					$	28					22.8%						$	—					$	20					nm
Adjustments (10)						22						—						—%						28						(11)						(39.3)%
As adjusted						$	145					$	28					19.3%						$	28					$	9					32.1%

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Appendix

Page 9

The following table reconciles net income (loss) attributable to Adient to adjusted net income (loss) attributable to Adient:

						Three Months Ended June 30,
(in millions)						2023						2022
Net income (loss) attributable to Adient						$	73					$	(30)
Restructuring and impairment costs (2)						6						12
Purchase accounting amortization (3)						13						14
Restructuring related charges						3						1
Pension mark-to-market and curtailment/settlement (gain)/loss (12)						—						(3)
Foreign exchange loss on intercompany loan in Russia (9)						—						2
Other items (5)						—						2
Impact of adjustments on noncontrolling interests (11)						(2)						(1)
Tax impact of above adjustments and other tax items (10)						—						11
Adjusted net income (loss) attributable to Adient						$	93					$	8

Refer to the Footnote Addendum for footnote explanations

The following table reconciles diluted earnings (loss) per share as reported to adjusted diluted earnings (loss) per share.

						Three Months Ended June 30,
						2023						2022
Diluted earnings (loss) per share as reported						$	0.77					$	(0.32)
Restructuring and impairment costs (2)						0.06						0.13
Purchase accounting amortization (3)						0.14						0.15
Restructuring related charges						0.03						0.01
Pension mark-to-market and curtailment/settlement (gain)/loss (12)						—						(0.03)
Foreign exchange loss on intercompany loan in Russia (9)						—						0.02
Other items (5)						—						0.02
Impact of adjustments on noncontrolling interests (11)						(0.02)						(0.01)
Tax impact of above adjustments and other tax items (10)						—						0.11
Adjusted diluted earnings (loss) per share						$	0.98					$	0.08

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Appendix

Page 10

The following table presents calculations of net debt:

						June 30,						September 30,
(in millions)						2023						2022
Cash and cash equivalents						$	908					$	947
Total short-term and long-term debt						2,534						2,578
Net debt						$	1,626					$	1,631

The following table reconciles cash from operating activities to free cash flow:

						Three Months Ended June 30,												Nine Months Ended June 30,
(in millions)						2023						2022						2023						2022
Cash provided (used) by operating activities						$	203					$	23					$	373					$	38
Capital expenditures						(60)						(53)						(177)						(170)
Free cash flow						$	143					$	(30)					$	196					$	(132)

The following table reconciles adjusted EBITDA excluding adjusted equity income to free cash flow:

						FY2023												FY2022
(in millions)						Q3						YTD						Q3						YTD
Adjusted EBITDA excluding adjusted equity income						$	249					$	637					$	127					$	381
Dividend						23						36						26						27
Restructuring (cash)						(9)						(49)						(11)						(49)
Net customer tooling						(3)						(40)						(15)						(36)
Trade working capital (Net AR/AP + Inventory)						(53)						(21)						(57)						(6)
Accrued compensation						31						41						2						(45)
Interest paid						(19)						(107)						(23)						(134)
Tax refund/taxes paid						(25)						(74)						(25)						(63)
Non-income related taxes (VAT)						(13)						(5)						(20)						33
Commercial settlements						8						36						(22)						(66)
Capitalized engineering						9						(25)						31						33
Prepaids						(16)						(41)						15						(8)
Other						21						(15)						(5)						(29)
Operating cash flow						203						373						23						38
Capital expenditures						(60)						(177)						(53)						(170)
Free cash flow						$	143					$	196					$	(30)					$	(132)

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Appendix

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Footnote Addendum

(1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance.

(2) Reflects qualified restructuring charges for costs that are directly attributable to restructuring activities and meet the definition of restructuring under ASC 420 along with one-time asset impairment charges, as follows:

						Three Months Ended June 30,
(in millions)						2023						2022
Restructuring charges						$	(6)					$	(13)
Held for sale asset adjustments						—						1
						$	(6)					$	(12)

(3) Reflects amortization of intangible assets including those related to partially owned affiliates recorded within equity income.

(4) Reflects non-qualified restructuring charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420 including restructuring costs at partially owned affiliates recorded within equity income.

(5) Other items include:

						Three Months Ended June 30,
(in millions)						2023						2022
Transaction costs						$	(1)					$	(2)
Brazil indirect tax recoveries						1						1
Disposal of non-core assets						—						(1)
						$	—					$	(2)

(6) The adjustments to cost of sales include:

						Three Months Ended June 30,
(in millions)						2023						2022
Restructuring related charges						$	(1)					$	(1)
Brazil indirect tax recoveries						1						1
Purchase accounting amortization						(1)						(1)
Disposal of non-core assets						—						(1)
						$	(1)					$	(2)

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Appendix

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(7) The adjustments to selling, general and administrative costs include:

						Three Months Ended June 30,
(in millions)						2023						2022
Purchase accounting amortization						$	(12)					$	(13)
Transaction costs						(1)						(2)
						$	(13)					$	(15)

(8) The adjustments to equity income include:

						Three Months Ended June 30,
(in millions)						2023						2022
Restructuring related charges						$	2					$	—

(9) The adjustments to net financing charges to calculate adjusted interest expense include:

						Three Months Ended June 30,
(in millions)						2023						2022
Foreign exchange loss on intercompany loan in Russia						$	—					(2)

(10) The adjustments to income tax provision (benefit) include:

						Three Months Ended June 30,
(in millions)						2023						2022
Valuation allowances						$	1					$	12
Other reconciling items						(1)						(1)
						$	—					$	11

(11) Reflects the impact of adjustments, primarily purchase accounting amortization on noncontrolling interests.

(12) During the three months ended June 30, 2022, Adient remeasured pension plans in the Americas and recorded a mark-to-market gain of $4 million and a curtailment loss of $1 million.