8-K
Adient plc (ADNT)
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): November 8, 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<br><br>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))
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2023, Adient plc (the “Company”) issued a news release announcing its financial results for the fourth quarter and fiscal year ended September 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 November 8, 2023 |
| 104 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document). |
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: November 8, 2023 | By: | /s/ Heather M. Tiltmann |
| Name: | Heather M. Tiltmann | |
| Title: | Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary |
Document
Exhibit 99.1
Appendix
Page 1
Adient plc
Condensed Consolidated Statements of Income
(Unaudited)
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||
| Net sales | $ | 3,729 | $ | 3,650 | $ | 15,395 | $ | 14,121 |
| Cost of sales | 3,479 | 3,367 | 14,362 | 13,314 | ||||
| Gross profit | 250 | 283 | 1,033 | 807 | ||||
| Selling, general and administrative expenses | 127 | 159 | 554 | 598 | ||||
| Restructuring and impairment costs | 10 | 5 | 40 | 25 | ||||
| Equity income (loss) | 27 | 19 | 84 | 75 | ||||
| Earnings (loss) before interest and income taxes | 140 | 138 | 523 | 259 | ||||
| Net financing charges | 46 | 43 | 195 | 215 | ||||
| Other pension expense (income) | 21 | (4) | 33 | (10) | ||||
| Income (loss) before income taxes | 73 | 99 | 295 | 54 | ||||
| Income tax provision (benefit) | (84) | 29 | — | 94 | ||||
| Net income (loss) | 157 | 70 | 295 | (40) | ||||
| Income attributable to noncontrolling interests | 22 | 25 | 90 | 80 | ||||
| Net income (loss) attributable to Adient | $ | 135 | $ | 45 | $ | 205 | $ | (120) |
| Diluted earnings (loss) per share | $ | 1.42 | $ | 0.47 | $ | 2.15 | $ | (1.27) |
| Shares outstanding at period end | 93.7 | 94.9 | 93.7 | 94.9 | ||||
| Diluted weighted average shares | 94.8 | 96.0 | 95.4 | 94.8 |
Appendix
Page 2
Adient plc
Condensed Consolidated Statements of Financial Position
(Unaudited)
| September 30, | ||||
|---|---|---|---|---|
| (in millions) | 2023 | 2022 | ||
| Assets | ||||
| Cash and cash equivalents | $ | 1,110 | $ | 947 |
| Accounts receivable - net | 1,874 | 1,852 | ||
| Inventories | 841 | 953 | ||
| Other current assets | 491 | 411 | ||
| Current assets | 4,316 | 4,163 | ||
| Property, plant and equipment - net | 1,382 | 1,377 | ||
| Goodwill | 2,094 | 2,057 | ||
| Other intangible assets - net | 408 | 467 | ||
| Investments in partially-owned affiliates | 303 | 286 | ||
| Assets held for sale | 7 | 11 | ||
| Other noncurrent assets | 914 | 797 | ||
| Total assets | $ | 9,424 | $ | 9,158 |
| Liabilities and Shareholders' Equity | ||||
| Short-term debt | $ | 134 | $ | 14 |
| Accounts payable and accrued expenses | 2,926 | 2,818 | ||
| Other current liabilities | 678 | 669 | ||
| Current liabilities | 3,738 | 3,501 | ||
| Long-term debt | 2,401 | 2,564 | ||
| Other noncurrent liabilities | 682 | 673 | ||
| Redeemable noncontrolling interests | 57 | 45 | ||
| Shareholders' equity attributable to Adient | 2,228 | 2,073 | ||
| Noncontrolling interests | 318 | 302 | ||
| Total liabilities and shareholders' equity | $ | 9,424 | $ | 9,158 |
Appendix
Page 3
Adient plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended <br>September 30, | Twelve Months Ended <br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Operating Activities | ||||||||
| Net income (loss) attributable to Adient | $ | 135 | $ | 45 | $ | 205 | $ | (120) |
| Income attributable to noncontrolling interests | 22 | 25 | 90 | 80 | ||||
| Net income (loss) | 157 | 70 | 295 | (40) | ||||
| Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: | ||||||||
| Depreciation | 76 | 75 | 290 | 298 | ||||
| Amortization of intangibles | 12 | 12 | 50 | 52 | ||||
| Pension and postretirement benefit expense (benefit) | 22 | (1) | 38 | (2) | ||||
| Pension and postretirement contributions, net | (6) | 1 | (17) | (16) | ||||
| Equity in earnings of partially-owned affiliates, net of dividends received | (7) | 42 | (34) | 4 | ||||
| (Gain) on sale / impairment of nonconsolidated partially owned affiliate | — | 2 | 6 | 10 | ||||
| Premium paid on repurchase of debt | — | 4 | 7 | 38 | ||||
| Retrospective recoveries of Brazil indirect tax credits | — | (29) | — | (29) | ||||
| Derivative loss on China Transactions | — | — | — | 3 | ||||
| Deferred income taxes | (122) | — | (124) | 5 | ||||
| Non-cash restructuring and impairment charges | — | 2 | — | 14 | ||||
| Equity-based compensation | 9 | 8 | 34 | 29 | ||||
| Other | (7) | 3 | (4) | 17 | ||||
| Changes in assets and liabilities: | ||||||||
| Receivables | 186 | (161) | 16 | (576) | ||||
| Inventories | 6 | (36) | 126 | (62) | ||||
| Other assets | 58 | (30) | (26) | 32 | ||||
| Restructuring reserves | (8) | (8) | (53) | (57) | ||||
| Accounts payable and accrued liabilities | (99) | 259 | 34 | 542 | ||||
| Accrued income taxes | 17 | 23 | 29 | 12 | ||||
| Cash provided (used) by operating activities | 294 | 236 | 667 | 274 | ||||
| Investing Activities | ||||||||
| Capital expenditures | (75) | (57) | (252) | (227) | ||||
| Sale of property, plant and equipment | 10 | 2 | 26 | 20 | ||||
| Settlement of derivatives | — | — | — | (30) | ||||
| Acquisition of businesses, net of cash acquired | — | — | (6) | (19) | ||||
| Business divestitures | — | — | 5 | 740 | ||||
| Other | — | — | (2) | — | ||||
| Cash provided (used) by investing activities | (65) | (55) | (229) | 484 | ||||
| Financing Activities | ||||||||
| Increase (decrease) in short-term debt | 1 | (6) | (1) | (14) | ||||
| Increase (decrease) in long-term debt | — | — | 1,002 | — | ||||
| Repayment of long-term debt | — | (99) | (1,104) | (987) | ||||
| Debt financing costs | — | — | (23) | (1) | ||||
| Share repurchases | — | — | (65) | — | ||||
| Cash paid to acquire a noncontrolling interest | — | — | — | (153) | ||||
| Dividends paid to noncontrolling interests | (10) | (4) | (67) | (106) | ||||
| Other | (1) | — | (13) | (12) | ||||
| Cash provided (used) by financing activities | (10) | (109) | (271) | (1,273) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (17) | (17) | (4) | (59) | ||||
| Increase (decrease) in cash and cash equivalents | $ | 202 | $ | 55 | $ | 163 | $ | (574) |
Appendix
Page 4
Footnotes
- 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 September 30, | Twelve Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Net Sales | ||||||||
| Americas | $ | 1,835 | $ | 1,790 | $ | 7,220 | $ | 6,557 |
| EMEA | 1,174 | 1,101 | 5,195 | 4,764 | ||||
| Asia | 748 | 792 | 3,085 | 2,926 | ||||
| Eliminations | (28) | (33) | (105) | (126) | ||||
| Total net sales | $ | 3,729 | $ | 3,650 | $ | 15,395 | $ | 14,121 |
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Adjusted EBITDA | ||||||||
| Americas | $ | 100 | $ | 117 | $ | 336 | $ | 242 |
| EMEA | 48 | 34 | 232 | 138 | ||||
| Asia | 113 | 100 | 464 | 383 | ||||
| Corporate-related costs (1) | (26) | (24) | (94) | (88) | ||||
| Restructuring and impairment costs (2) | (10) | (5) | (40) | (25) | ||||
| Purchase accounting amortization (3) | (13) | (13) | (52) | (54) | ||||
| Restructuring related activities (4) | 8 | (1) | 2 | (6) | ||||
| Stock based compensation | (9) | (8) | (34) | (29) | ||||
| Depreciation | (76) | (75) | (290) | (298) | ||||
| Other items (5) | 5 | 13 | (1) | (4) | ||||
| Earnings (loss) before interest and income taxes | 140 | 138 | 523 | 259 | ||||
| Net financing charges | (46) | (43) | (195) | (215) | ||||
| Other pension income (expense) | (21) | 4 | (33) | 10 | ||||
| Income (loss) before income taxes | $ | 73 | $ | 99 | $ | 295 | $ | 54 |
Refer to the Footnote Addendum for footnote explanations.
Appendix
Page 5
- Earnings Per Share
The following table reconciles the numerators and denominators used to calculate basic and diluted earnings (loss) per share:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||
| Income available to shareholders | ||||||||
| Net income (loss) attributable to Adient | $ | 135 | $ | 45 | $ | 205 | $ | (120) |
| Weighted average shares outstanding | ||||||||
| Basic weighted average shares outstanding | 93.7 | 94.8 | 94.5 | 94.8 | ||||
| Effect of dilutive securities: | ||||||||
| Stock options, unvested restricted stock and unvested performance share awards | 1.1 | 1.2 | 0.9 | — | ||||
| Diluted weighted average shares outstanding | 94.8 | 96.0 | 95.4 | 94.8 |
Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share, which for the twelve months ended September 30, 2022 is a result of being in a loss position.
Appendix
Page 6
- 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, Net debt, and Net leverage ratio 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. |
| • | Net leverage ratio is calculated as net debt divided by LTM Adjusted EBITDA |
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 September 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||||||||
| (in millions, except per share data) | GAAP Results | Adj. | Adjusted Results | GAAP Results | Adj. | Adjusted Results | ||||||
| Net sales | $ | 3,729 | $ | — | $ | 3,729 | $ | 3,650 | $ | — | $ | 3,650 |
| Cost of sales (6) | 3,479 | — | 3,479 | 3,367 | 29 | 3,396 | ||||||
| Gross profit | 250 | — | 250 | 283 | (29) | 254 | ||||||
| Selling, general and administrative expenses (7) | 127 | (3) | 124 | 159 | (28) | 131 | ||||||
| Restructuring and impairment costs (2) | 10 | (10) | — | 5 | (5) | — | ||||||
| Equity income (loss) (8) | 27 | (3) | 24 | 19 | 2 | 21 | ||||||
| Earnings (loss) before interest and income taxes (EBIT) | 140 | 10 | 150 | 138 | 6 | 144 | ||||||
| Memo accounts: | ||||||||||||
| Depreciation | 76 | 75 | ||||||||||
| Equity based compensation costs | 9 | 8 | ||||||||||
| Adjusted EBITDA | $ | 235 | $ | 227 | ||||||||
| Net financing charges (9) | 46 | — | 46 | 43 | (5) | 38 | ||||||
| Other pension expense (income) (10) | 21 | (19) | 2 | (4) | 3 | (1) | ||||||
| Income (loss) before income taxes | 73 | 29 | 102 | 99 | 8 | 107 | ||||||
| Income tax provision (benefit) (11) | (84) | 115 | 31 | 29 | — | 29 | ||||||
| Net income (loss) attributable to Adient | 135 | (87) | 48 | 45 | 6 | 51 | ||||||
| Diluted earnings (loss) per share | 1.42 | (0.91) | 0.51 | 0.47 | 0.06 | 0.53 | ||||||
| Diluted weighted average shares | 94.8 | — | 94.8 | 96.0 | — | 96.0 |
Appendix
Page 8
Summarized Income Statement Information
(Refer to the Footnote Addendum for footnote explanations and details
of reconciling items between GAAP results and Adjusted results)
| Twelve Months Ended September 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||||||||
| (in millions, except per share data) | GAAP Results | Adj. | Adjusted Results | GAAP Results | Adj. | Adjusted Results | ||||||
| Net sales | $ | 15,395 | $ | — | $ | 15,395 | $ | 14,121 | $ | — | $ | 14,121 |
| Cost of sales (6) | 14,362 | (2) | 14,360 | 13,314 | 26 | 13,340 | ||||||
| Gross profit | 1,033 | 2 | 1,035 | 807 | (26) | 781 | ||||||
| Selling, general and administrative expenses (7) | 554 | (43) | 511 | 598 | (77) | 521 | ||||||
| Restructuring and impairment costs (2) | 40 | (40) | — | 25 | (25) | — | ||||||
| Equity income (loss) (8) | 84 | 6 | 90 | 75 | 13 | 88 | ||||||
| Earnings (loss) before interest and income taxes (EBIT) | 523 | 91 | 614 | 259 | 89 | 348 | ||||||
| Memo accounts: | ||||||||||||
| Depreciation | 290 | 298 | ||||||||||
| Equity based compensation costs | 34 | 29 | ||||||||||
| Adjusted EBITDA | $ | 938 | $ | 675 | ||||||||
| Net financing charges (9) | 195 | (11) | 184 | 215 | (52) | 163 | ||||||
| Other pension expense (income) (10) | 33 | (27) | 6 | (10) | 6 | (4) | ||||||
| Income (loss) before income taxes | 295 | 129 | 424 | 54 | 135 | 189 | ||||||
| Income tax provision (benefit) (11) | — | 123 | 123 | 94 | (3) | 91 | ||||||
| Net income (loss) attributable to Adient | 205 | — | 205 | (120) | 131 | 11 | ||||||
| Diluted earnings (loss) per share | 2.15 | — | 2.15 | (1.27) | 1.38 | 0.11 | ||||||
| Diluted weighted average shares | 95.4 | — | 95.4 | 94.8 | 1.0 | 95.8 |
Appendix
Page 9
| Segment Performance: | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended September 30, 2023 | ||||||||||||||
| Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||||||
| Net sales | $ | 1,835 | $ | 1,174 | $ | 748 | $ | (28) | $ | 3,729 | ||||
| Adjusted EBITDA | $ | 100 | $ | 48 | $ | 113 | $ | (26) | $ | 235 | ||||
| Adjusted EBITDA margin | 5.4 | % | 4.1 | % | 15.1 | % | N/A | 6.3 | % | |||||
| Three months ended September 30, 2022 | ||||||||||||||
| Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||||||
| Net sales | $ | 1,790 | $ | 1,101 | $ | 792 | $ | (33) | $ | 3,650 | ||||
| Adjusted EBITDA | $ | 117 | $ | 34 | $ | 100 | $ | (24) | $ | 227 | ||||
| Adjusted EBITDA margin | 6.5 | % | 3.1 | % | 12.6 | % | N/A | 6.2 | % | |||||
| Twelve months ended September 30, 2023 | ||||||||||||||
| Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||||||
| Net sales | $ | 7,220 | $ | 5,195 | $ | 3,085 | $ | (105) | $ | 15,395 | ||||
| Adjusted EBITDA | $ | 336 | $ | 232 | $ | 464 | $ | (94) | $ | 938 | ||||
| Adjusted EBITDA margin | 4.7 | % | 4.5 | % | 15.0 | % | N/A | 6.1 | % | |||||
| Twelve months ended September 30, 2022 | ||||||||||||||
| Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||||||
| Net sales | $ | 6,557 | $ | 4,764 | $ | 2,926 | $ | (126) | $ | 14,121 | ||||
| Adjusted EBITDA | $ | 242 | $ | 138 | $ | 383 | $ | (88) | $ | 675 | ||||
| Adjusted EBITDA margin | 3.7 | % | 2.9 | % | 13.1 | % | N/A | 4.8 | % |
The following table presents adjusted EBITDA excluding adjusted equity income:
| Three Months Ended<br>September 30, | Twelve Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Adjusted EBITDA | $ | 235 | $ | 227 | $ | 938 | $ | 675 | ||||
| Less: Adjusted equity income | 24 | 21 | 90 | 88 | ||||||||
| Adjusted EBITDA excluding adjusted equity income | $ | 211 | $ | 206 | $ | 848 | $ | 587 | ||||
| % of Sales | 5.8 | % | 5.6 | % | 6.0 | % | 4.2 | % |
Appendix
Page 10
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 September 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 | $ | 73 | $ | (84) | * nm | $ | 99 | $ | 29 | 29.3% |
| Adjustments (11) | 29 | 115 | * nm | 8 | — | —% | ||||
| As adjusted | $ | 102 | $ | 31 | 30.4% | $ | 107 | $ | 29 | 27.1% |
| Twelve Months Ended September 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 | 295 | $ | — | —% | $ | 54 | $ | 94 | * nm | |
| Adjustments (11) | 129 | 123 | 95.3% | 135 | (3) | (2.2)% | ||||
| As adjusted | $ | 424 | $ | 123 | 29.0% | $ | 189 | $ | 91 | 48.1% |
* Measure not meaningful.
The following table reconciles net income (loss) attributable to Adient to adjusted net income (loss) attributable to Adient:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Net income (loss) attributable to Adient | $ | 135 | $ | 45 | $ | 205 | $ | (120) |
| Restructuring and impairment costs (2) | 10 | 5 | 40 | 25 | ||||
| Purchase accounting amortization (3) | 13 | 13 | 52 | 54 | ||||
| Restructuring related activities (4) | (8) | 1 | (2) | 6 | ||||
| Pension mark-to-market and settlement (gain) loss (10) | 19 | (3) | 27 | (6) | ||||
| Write off of deferred financing charges upon repurchase of debt (9) | — | 1 | 4 | 8 | ||||
| Derivative loss on China transactions (9) | — | — | — | 3 | ||||
| Foreign exchange loss on intercompany loan in Russia (9) | — | — | — | 3 | ||||
| Premium paid on repurchase of debt (9) | — | 4 | 7 | 38 | ||||
| Other items (5) | (5) | (13) | 1 | 4 | ||||
| Impact of adjustments on noncontrolling interests (12) | (1) | (2) | (6) | (7) | ||||
| Tax impact of above adjustments and other tax items (11) | (115) | — | (123) | 3 | ||||
| Adjusted net income (loss) attributable to Adient | $ | 48 | $ | 51 | $ | 205 | $ | 11 |
Refer to the Footnote Addendum for footnote explanations
Appendix
Page 11
The following table reconciles diluted earnings (loss) per share as reported to adjusted diluted earnings per share:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| Diluted earnings (loss) per share as reported | $ | 1.42 | $ | 0.47 | $ | 2.15 | $ | (1.27) |
| Restructuring and impairment costs (2) | 0.11 | 0.05 | 0.42 | 0.26 | ||||
| Purchase accounting amortization (3) | 0.14 | 0.14 | 0.55 | 0.58 | ||||
| Restructuring related activities (4) | (0.08) | 0.01 | (0.02) | 0.06 | ||||
| Pension mark-to-market and settlement gain/loss (10) | 0.20 | (0.03) | 0.28 | (0.06) | ||||
| Write off of deferred financing charges upon repurchase of debt (9) | — | 0.01 | 0.04 | 0.08 | ||||
| Derivative loss on China transactions (9) | — | — | — | 0.03 | ||||
| Foreign exchange (gain) loss on intercompany loan in Russia (9) | — | — | — | 0.03 | ||||
| Premium paid on repurchase of debt (9) | — | 0.04 | 0.07 | 0.40 | ||||
| Other items (5) | (0.05) | (0.14) | 0.01 | 0.04 | ||||
| Impact of adjustments on noncontrolling interests (12) | (0.01) | (0.02) | (0.06) | (0.07) | ||||
| Tax impact of above adjustments and other tax items (11) | (1.22) | — | (1.29) | 0.03 | ||||
| Adjusted diluted earnings (loss) per share | $ | 0.51 | $ | 0.53 | $ | 2.15 | $ | 0.11 |
The following table presents calculations of net debt and net leverage ratio:
| September 30, | ||||
|---|---|---|---|---|
| (in millions) | 2023 | 2022 | ||
| Cash | $ | 1,110 | $ | 947 |
| Total debt | 2,535 | 2,578 | ||
| Net debt | $ | 1,425 | $ | 1,631 |
| LTM Adjusted EBITDA | $ | 938 | $ | 675 |
| Net leverage ratio | 1.52 | 2.42 |
The following table reconciles cash from operating activities to free cash flow:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Operating cash flow | $ | 294 | $ | 236 | $ | 667 | $ | 274 |
| Capital expenditures | (75) | (57) | (252) | (227) | ||||
| Free cash flow | $ | 219 | $ | 179 | $ | 415 | $ | 47 |
Appendix
Page 12
The following table reconciles adjusted EBITDA to Free cash flow:
| FY23 | FY22 | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | Q4 | YTD | Q4 | YTD | ||||
| Adjusted EBITDA excluding adjusted equity income | $ | 211 | $ | 848 | $ | 206 | $ | 587 |
| Dividends received from nonconsolidated partially-owned affiliates | 20 | 56 | 62 | 89 | ||||
| Restructuring (cash) | (11) | (60) | (9) | (57) | ||||
| Net Customer Tooling | (7) | (47) | 32 | (4) | ||||
| Trade Working Capital (Net AR/AP + Inventory) | 58 | 37 | (15) | (21) | ||||
| Accrued Compensation | 16 | 57 | 2 | (43) | ||||
| Interest paid | (38) | (145) | (58) | (192) | ||||
| Tax refund/taxes paid | (20) | (94) | (14) | (77) | ||||
| Non-income related taxes (VAT) | 9 | 4 | — | 33 | ||||
| Commercial settlements | 51 | 87 | 31 | (35) | ||||
| Capitalized engineering | (8) | (33) | (4) | 29 | ||||
| Prepaids | 32 | (9) | 22 | 15 | ||||
| Other | (19) | (34) | (19) | (50) | ||||
| Operating cash flow | 294 | 667 | 236 | 274 | ||||
| Capital expenditures | (75) | (252) | (57) | (227) | ||||
| Free cash flow | $ | 219 | $ | 415 | $ | 179 | $ | 47 |
Appendix
Page 13
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 and one-time asset impairments, as follows:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Restructuring charges | $ | (10) | $ | (3) | $ | (40) | $ | (15) |
| Held for sale and other asset adjustments | — | — | — | (6) | ||||
| Impairment charge associated with Russian operations | — | (2) | — | (4) | ||||
| $ | (10) | $ | (5) | $ | (40) | $ | (25) |
(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 along with a gain on sale of a restructured facility in the America's segment for three and twelve month ended September 30, 2023, as follows:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Restructuring related charges | $ | (2) | $ | (1) | $ | (8) | $ | (6) |
| Gain on sale of restructured facility | 10 | — | 10 | — | ||||
| $ | 8 | $ | (1) | $ | 2 | $ | (6) |
(5) Other items include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Transaction costs | $ | — | $ | (1) | $ | (3) | $ | (8) |
| Brazil indirect tax recoveries | 1 | 29 | 4 | 32 | ||||
| Non-recurring contract related settlement | — | (14) | — | (14) | ||||
| One-time divestiture gain at an affiliate | 4 | — | 4 | — | ||||
| Loss on sale / impairment of nonconsolidated partially-owned affiliates | — | (1) | (6) | (10) | ||||
| Other | — | — | — | (4) | ||||
| $ | 5 | $ | 13 | $ | (1) | $ | (4) |
Appendix
Page 14
(6) The adjustments to cost of sales include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Purchase accounting amortization | $ | — | $ | — | $ | (1) | $ | (1) |
| Restructuring related charges | (1) | — | (5) | (4) | ||||
| Brazil indirect tax recoveries | 1 | 29 | 4 | 32 | ||||
| Other | — | — | — | (1) | ||||
| $ | — | $ | 29 | $ | (2) | $ | 26 |
(7) The adjustments to selling, general and administrative costs include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Purchase accounting amortization | $ | (12) | $ | (12) | $ | (49) | $ | (51) |
| Gain on sale of restructured facility | 10 | — | 10 | — | ||||
| Restructuring related charges | (1) | (1) | (1) | (1) | ||||
| Transaction costs | — | (1) | (3) | (8) | ||||
| Non-recurring contract related settlement | — | (14) | — | (14) | ||||
| Other | — | — | — | (3) | ||||
| $ | (3) | $ | (28) | $ | (43) | $ | (77) |
(8) The adjustments to equity income include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Purchase accounting amortization | $ | 1 | $ | 1 | $ | 2 | $ | 2 |
| Gain on sale of certain assets at affiliates in China | (4) | (7) | (4) | (7) | ||||
| Restructuring related charges | — | — | 2 | 1 | ||||
| (Gain) loss on sale / impairment of nonconsolidated partially-owned affiliates | — | 1 | 6 | 10 | ||||
| Customer termination charge | — | 7 | — | 7 | ||||
| $ | (3) | $ | 2 | $ | 6 | $ | 13 |
(9) The adjustments to net financing charges include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Premium paid on repurchase of debt | $ | — | $ | (4) | $ | (7) | $ | (38) |
| Write off of deferred financing charges upon repurchase of debt | — | (1) | (4) | (8) | ||||
| Derivative loss on China transactions | — | — | — | (3) | ||||
| Foreign exchange loss on intercompany loan in Russia | — | — | — | (3) | ||||
| $ | — | $ | (5) | $ | (11) | $ | (52) |
Appendix
Page 15
(10) The adjustments to other pension expense (income) include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Mark-to-market adjustment gain (loss) | $ | (19) | $ | 3 | $ | (19) | $ | 7 |
| One-time settlement and curtailment gain (loss) | — | — | (8) | (1) | ||||
| $ | (19) | $ | 3 | $ | (27) | $ | 6 |
(11) The adjustments to income tax provision (benefit) include:
| Three Months Ended<br>September 30, | Twelve Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2023 | 2022 | 2023 | 2022 | ||||
| Tax rate change | $ | — | $ | — | $ | — | $ | 4 |
| Brazil indirect tax recoveries | — | (7) | — | (4) | ||||
| Valuation allowances | 112 | 8 | 111 | (4) | ||||
| Amortization | 1 | 1 | 6 | 7 | ||||
| Pension mark-to-market and settlement loss | 1 | — | 3 | — | ||||
| Other reconciling items | 1 | (2) | 3 | (6) | ||||
| $ | 115 | $ | — | $ | 123 | $ | (3) |
(12) Reflects the impacts of adjustments, primarily purchase accounting amortization and changes in income tax rates, on noncontrolling interests.