Adient to announce Q1FY24 financial results on Feb. 7, 2024 PLYMOUTH, Mich., Jan. 22, 2024 /PRNewswire/ -- Adient (NYSE: ADNT), a global leader in automotive seating, today reported certain unaudited preliminary financial results for the quarter ended Dec. 31, 2023.  Revenue in Q1FY24 is expected to be approximately $3.7B, or about flat vs. Q1FY23.  Q1FY24 Adjusted EBITDA is expected to be approximately $215M, versus $212M in the prior-year quarter. Additional details related to Adient's first quarter ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-37757 Adient plc (exact name of Registrant as specified in its charter) Ireland 98-1328821 (State or other jurisdiction o ...

Financial Data and Key Metrics Changes - Adient reported Q4 revenue of $3.7 billion, an increase of $79 million year-over-year, with adjusted EBITDA of $235 million, up $8 million from the previous year [6][22][24] - For the full year, sales reached $15.4 billion, a 9% increase compared to fiscal 2022, with adjusted EBITDA of $938 million, up $263 million year-over-year [23][24] - The company ended the year with total liquidity of $2.0 billion, including $1.1 billion in cash [6][30] Business Line Data and Key Metrics Changes - Adient's unconsolidated seating revenue increased by about 3% year-over-year, driven by higher production volumes at joint ventures, primarily in China [25] - The Americas' sales were generally in line with production, while EMEA was modestly lower due to planned exits from low-profit platforms [25] Market Data and Key Metrics Changes - Asia demonstrated strong growth, with consolidated sales up 8% versus production in the region, which was up approximately 2% [25] - The company expects growth over market in China to continue, driven by added seating content and favorable customer mix [25][33] Company Strategy and Development Direction - Adient's strategy focuses on operational excellence, innovation, and adapting to industry dynamics, particularly in the context of electric vehicles (EVs) and traditional platforms [13][14] - The company is fine-tuning its strategy to leverage shifts in the automotive industry, including the growth of Chinese domestic manufacturers and the importance of cost competitiveness [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as labor availability, elevated interest rates, and geopolitical concerns but expressed confidence in navigating these obstacles [19][33] - The company anticipates earnings and margin growth in 2024, despite the impact of the UAW strike and foreign exchange headwinds [33][34] Other Important Information - Adient's cash conservation efforts during the UAW strike resulted in a strong cash position, with plans to resume capital allocation as conditions stabilize [30] - The company has received approximately 60 awards in fiscal 2023, highlighting its commitment to excellence and operational performance [8] Q&A Session Summary Question: Why is the CEO leaving by the end of the year? - The CEO indicated personal and professional reasons for the departure, emphasizing the successful execution of the company's operational focus over the past five years [42][44] Question: What is offsetting the margin performance guidance? - Management noted that foreign exchange impacts, particularly from the Mexican peso, are muting margin performance despite achieving 130 basis points of margin expansion in 2023 [45][46] Question: Can you elaborate on the FX impact on EBITDA? - The CFO explained that the company’s hedging strategies protected against FX impacts in 2023, but as those hedges roll off, the company is now exposed to market movements, particularly with the peso [48][49] Question: How does the company view cash conversion moving forward? - Management indicated that while 2023 saw strong cash conversion due to conservation efforts, normalization in CapEx and other factors may lead to a swing in cash conversion in 2024 [59][60] Question: What is the outlook for the mix of Chinese domestic vehicles? - The CEO projected a shift in the customer mix towards Chinese domestic manufacturers over a three to five-year period, with confidence in the company's positioning [62][63]

FY 2023 Fourth Quarter Earnings Call November 8, 2023 ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Adient's unaudited consolidated financial statements for Q3 and nine months ended June 30, 2023, detail income, position, cash flows, and notes [Consolidated Statements of Income (Loss)](index=3&type=section&id=Consolidated%20Statements%20of%20Income%20%28Loss%29) Adient reported a significant turnaround in Q3 2023, with **net income of $95 million** and **16.4% net sales growth** Consolidated Statements of Income (Loss) Summary | Financial Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Nine Months Ended June 30, 2023 | Nine Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $4,055 million | $3,485 million | $11,666 million | $10,471 million | | **Gross Profit** | $302 million | $173 million | $783 million | $524 million | | **Net Income (Loss)** | $95 million | $(20) million | $138 million | $(110) million | | **Net Income (Loss) Attributable to Adient** | $73 million | $(30) million | $70 million | $(165) million | | **Diluted EPS** | $0.77 | $(0.32) | $0.73 | $(1.74) | [Consolidated Statements of Financial Position](index=5&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) Total assets increased to **$9.482 billion** as of June 30, 2023, with liabilities and shareholders' equity also rising Consolidated Statements of Financial Position Summary | Balance Sheet Item | June 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $4,406 million | $4,163 million | | **Total Assets** | $9,482 million | $9,158 million | | **Total Current Liabilities** | $3,720 million | $3,501 million | | **Long-term Debt** | $2,532 million | $2,564 million | | **Total Liabilities** | $6,940 million | $6,738 million | | **Total Shareholders' Equity** | $2,485 million | $2,375 million | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to **$373 million** for the nine months ended June 30, 2023, with shifts in investing and financing Consolidated Statements of Cash Flows Summary | Cash Flow Activity (Nine Months Ended June 30) | 2023 | 2022 | | :--- | :--- | :--- | | **Cash provided (used) by operating activities** | $373 million | $38 million | | **Cash provided (used) by investing activities** | $(164) million | $539 million | | **Cash provided (used) by financing activities** | $(261) million | $(1,164) million | | **Increase (decrease) in cash and cash equivalents** | $(39) million | $(629) million | | **Cash and cash equivalents at end of period** | $908 million | $892 million | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, revenue recognition, acquisitions, debt refinancing, and restructuring plans - Adient generates revenue from the sale of automotive seating systems and components, with **revenue recognized at the point in time when parts are shipped** and control has transferred to the customer[26](index=26&type=chunk) - In April 2023, Adient **acquired the remaining interest in Nantong Yanfeng Adient Seating Trim Co., Ltd. (YFAT) for $23 million**, resulting in **$13 million of goodwill**[29](index=29&type=chunk) - During Q2 2023, Adient **issued $500 million of 7% senior secured notes due 2028** and **$500 million of 8.25% senior unsecured notes due 2031**, using proceeds to **prepay $350 million of its Term Loan B** and **repurchase €700 million of its 3.50% notes due 2024**[50](index=50&type=chunk) - In fiscal 2023, Adient initiated a **new restructuring plan totaling $26 million**, primarily for **workforce reductions in the EMEA region**, expected to be completed by fiscal 2026[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q3 financial results, highlighting **16.4% net sales growth**, segment performance, liquidity, and debt refinancing [Consolidated Results of Operations](index=31&type=section&id=Consolidated%20Results%20of%20Operations) Q3 2023 net sales rose **16% to $4.055 billion**, gross profit surged **75%**, and net income reached **$73 million** Consolidated Results of Operations Summary | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $4,055M | $3,485M | +16% | | **Gross Profit** | $302M | $173M | +75% | | **Gross Margin** | 7.4% | 5.0% | +240 bps | | **Net Income Attributable to Adient** | $73M | $(30)M | >100% | - The increase in Q3 net sales was primarily due to **higher overall production volumes across all operating segments**, contributing **$628 million**[133](index=133&type=chunk) - **Equity income increased to $25 million in Q3 2023 from $16 million in Q3 2022**, mainly due to higher production volumes and favorable operating performance at partially-owned affiliates[141](index=141&type=chunk) [Segment Analysis](index=35&type=section&id=Segment%20Analysis) All segments reported strong Q3 2023 growth, with Americas, EMEA, and Asia net sales increasing **14%**, **18%**, and **18%** respectively Segment Performance Summary | Segment | Q3 2023 Net Sales | YoY Change | Q3 2023 Adjusted EBITDA | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Americas** | $1,900 million | +14% | $95 million | +36% | | **EMEA** | $1,438 million | +18% | $103 million | >100% | | **Asia** | $742 million | +18% | $100 million | +56% | - **EMEA's Adjusted EBITDA surged** due to **higher production volumes**, **net material margin improvements**, and **non-recurring insurance recoveries**[166](index=166&type=chunk) - **Asia's Adjusted EBITDA growth** was driven by **favorable volume and mix ($33 million)** and **higher equity income ($17 million)**[169](index=169&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Adient maintains solid liquidity with **$1.008 billion** available from ABL facility and **$373 million** in nine-month operating cash flow - As of June 30, 2023, Adient had **not drawn on its $1.25 billion ABL Credit Facility** and had **availability of $1.008 billion**[172](index=172&type=chunk) Cash Flow Summary | Cash Flow (Nine Months Ended June 30) | 2023 | 2022 | | :--- | :--- | :--- | | **Operating Cash Flow** | $373 million | $38 million | | **Investing Cash Flow** | $(164) million | $539 million | | **Financing Cash Flow** | $(261) million | $(1,164) million | - In November 2022, the board **authorized a $600 million share repurchase program**; during Q3 2023, Adient **repurchased 997,176 shares for approximately $37 million**, with **$535 million remaining authorization**[87](index=87&type=chunk)[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material adverse changes in market risk exposures were reported as of June 30, 2023, compared to the prior 10-K filing - The company states that there were **no material changes in its market risk exposures**, such as interest rate risk, foreign currency exchange risk, and commodity price risk, during the quarter[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls - Management concluded that **disclosure controls and procedures were effective** as of the end of the period[191](index=191&type=chunk) - **No material changes to internal control over financial reporting** were identified during the third quarter of fiscal 2023[192](index=192&type=chunk) [PART II - OTHER INFORMATION](index=43&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Adient is involved in routine legal proceedings, none expected to materially impact financial position or results - The company is involved in various legal proceedings related to product liability, environmental, employment, and commercial matters, but **management does not expect them to have a material adverse impact**[193](index=193&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported compared to the prior 10-K filing - **No material changes from the risk factors disclosed in the last Annual Report on Form 10-K** were reported[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details of share repurchase activity, including 997,176 shares bought for $37 million, with $535 million remaining Share Repurchase Activity | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | May 1 to May 31, 2023 | 997,176 | $35.10 | $535 million | - The **share repurchase program, authorized in November 2022 for up to $600 million**, has **no expiration date**[197](index=197&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) An index of exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL data files - The filing includes **CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act**[200](index=200&type=chunk) - **Interactive data files (XBRL documents) are included as exhibits** to the report[200](index=200&type=chunk)

Financial Data and Key Metrics Changes - Adient reported Q3 2023 revenue of $4.1 billion, an increase of $570 million year-over-year, with adjusted EBITDA of $276 million, up $133 million from the previous year [7][19][30] - The company ended the quarter with a cash balance of $908 million and total liquidity of $1.9 billion, enabling $37 million in share repurchases during the quarter [8][29] Business Line Data and Key Metrics Changes - The Americas region's performance was in line with the broader market, while EMEA outperformed due to favorable customer and program mix [21][27] - In Asia, particularly China, the year-over-year improvement was driven by higher volumes and increased equity income [21][27] Market Data and Key Metrics Changes - Adient's unconsolidated seating revenue was up about 5% year-over-year, primarily due to increased production volume at joint ventures in China [21] - The company expects its volume growth in China to exceed market growth by 2x over the next five years, with a shift in customer mix towards local manufacturers [12][49] Company Strategy and Development Direction - Adient's strategy focuses on operational excellence, cost control, and winning new business across various regions and platforms [9][15] - The company is positioning itself for sustained success, particularly in China, which is viewed as a growth engine despite geopolitical risks [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges and maintain positive business performance into 2024, with expectations for continued earnings margin and free cash flow growth [16][30] - The company is currently developing its 2024 plan, with a focus on global production forecasts and market conditions [16][30] Other Important Information - Adient's updated FY2023 guidance forecasts consolidated sales of approximately $15.4 billion and adjusted EBITDA of about $920 million, reflecting strong business performance and increased production volumes [30][31] - The company highlighted the importance of partnerships with alternative suppliers rather than pursuing vertical integration, which can be risky and capital-intensive [44][45] Q&A Session Summary Question: Impact of inflation recovery on commodity costs - Management confirmed that the $55 million commodity impact is a net figure and attributed performance slowdowns to timing and volume drops, particularly in Europe [36][39][41] Question: Market share growth in China - Management indicated that market share growth in China is expected to come from a shift towards domestic manufacturers, with a focus on agility and local customer needs [49][50] Question: UAW strike potential impact - Management clarified that there are no assumptions regarding a UAW strike in their guidance, emphasizing their diversified customer base mitigates potential impacts [51][53] Question: Commodity costs and sticky costs - Management noted that commodity costs are expected to exceed $135 million, with sticky costs being offset by positive business performance [66][68] Question: European margins sustainability - Management expressed optimism about the sustainability of high European margins, attributing performance to volume increases and structural changes made in the business [73]

FY 2023 Third Quarter Earnings Call August 2, 2023 ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents Adient's unaudited consolidated financial statements, including income, financial position, and cash flows, with detailed notes on accounting policies and segment information [Consolidated Statements of Income (Loss)](index=3&type=section&id=Consolidated%20Statements%20of%20Income%20(Loss)) Consolidated Statements of Income (Loss) (unaudited) | (in millions, except per share data) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Six Months Ended March 31, 2023 | Six Months Ended March 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | **$3,912** | **$3,506** | **$7,611** | **$6,986** | | Gross profit | $250 | $178 | $481 | $351 | | Earnings (loss) before interest and income taxes | $96 | $46 | $210 | $86 | | **Net income (loss)** | **$10** | **$(60)** | **$43** | **$(90)** | | **Net income (loss) attributable to Adient** | **$(15)** | **$(81)** | **$(3)** | **$(135)** | | **Diluted Earnings (loss) per share** | **$(0.16)** | **$(0.85)** | **$(0.03)** | **$(1.43)** | [Consolidated Statements of Financial Position](index=5&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) Consolidated Statements of Financial Position (unaudited) | (in millions) | March 31, 2023 | September 30, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $826 | $947 | | Current assets | $4,269 | $4,163 | | Total assets | $9,479 | $9,158 | | **Liabilities and Shareholders' Equity** | | | | Current liabilities | $3,671 | $3,501 | | Long-term debt | $2,531 | $2,564 | | Total liabilities | $6,892 | $6,738 | | Total shareholders' equity | $2,532 | $2,375 | | **Total liabilities and shareholders' equity** | **$9,479** | **$9,158** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (unaudited) | (in millions) | Six Months Ended March 31, 2023 | Six Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Cash provided (used) by operating activities** | **$170** | **$15** | | **Cash provided (used) by investing activities** | **$(111)** | **$599** | | **Cash provided (used) by financing activities** | **$(218)** | **$(1,017)** | | Increase (decrease) in cash and cash equivalents | $(121) | $(403) | | Cash and cash equivalents at beginning of period | $947 | $1,521 | | **Cash and cash equivalents at end of period** | **$826** | **$1,118** | [Note 8. Debt and Financing Arrangements](index=13&type=section&id=Note%208.%20Debt%20and%20Financing%20Arrangements) - In Q2 2023, Adient issued **$500 million** of 7.000% senior secured notes due 2028 and **$500 million** of 8.250% senior unsecured notes due 2031[53](index=53&type=chunk) - Proceeds from the new notes, along with cash on hand, were used to prepay **$350 million** of the Term Loan B and repurchase **€700 million ($743 million)** of the 3.50% unsecured notes due 2024[53](index=53&type=chunk)[55](index=55&type=chunk) Long-Term Debt Composition (in millions) | Debt Instrument | March 31, 2023 | September 30, 2022 | | :--- | :--- | :--- | | 8.250% Notes due 2031 | $500 | — | | 7.000% Secured Notes due 2028 | $500 | — | | Term Loan B due in 2026 | $635 | $988 | | 4.875% Notes due in 2026 | $795 | $795 | | 3.50% Notes due in 2024 | $134 | $809 | | **Gross long-term debt** | **$2,532** | **$2,575** | [Note 11. Equity and Noncontrolling Interests](index=19&type=section&id=Note%2011.%20Equity%20and%20Noncontrolling%20Interests) - In November 2022, the board authorized a **$600 million** share repurchase program with no expiration date[91](index=91&type=chunk) - During the three months ended March 31, 2023, Adient repurchased **759,601** ordinary shares for an aggregate price of **$30 million**. As of March 31, 2023, **$570 million** remained available for repurchase under the program[91](index=91&type=chunk) [Note 13. Restructuring and Impairment Costs](index=21&type=section&id=Note%2013.%20Restructuring%20and%20Impairment%20Costs) - In fiscal 2023, Adient initiated a new restructuring plan ('2023 Plan') with expected costs of **$24 million**, primarily for workforce reductions in EMEA, to be completed by fiscal 2026[95](index=95&type=chunk) Restructuring Reserve Changes (Six Months Ended March 31, 2023) | (in millions) | Amount | | :--- | :--- | | Balance at September 30, 2022 | $60 | | 2023 Plan charges | $24 | | Utilized - cash | $(37) | | Noncash and other adjustments | $6 | | **Balance at March 31, 2023** | **$53** | [Note 15. Segment Information](index=24&type=section&id=Note%2015.%20Segment%20Information) Segment Net Sales (in millions) | Segment | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Americas | $1,761 | $1,596 | $3,485 | $3,094 | | EMEA | $1,401 | $1,218 | $2,583 | $2,448 | | Asia | $774 | $723 | $1,595 | $1,507 | | **Total net sales** | **$3,912** | **$3,506** | **$7,611** | **$6,986** | Segment Adjusted EBITDA (in millions) | Segment | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Americas | $72 | $46 | $141 | $55 | | EMEA | $53 | $30 | $81 | $73 | | Asia | $113 | $105 | $251 | $219 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 fiscal 2023 financial results, highlighting increased net sales driven by higher production volumes [Factors Affecting Adient's Operating Environment](index=30&type=section&id=Factors%20Affecting%20Adient%27s%20Operating%20Environment) - The operating environment is expected to remain challenging due to supply chain disruptions, inflationary pressures, volatile commodity pricing, higher interest rates, and volatile consumer demand[132](index=132&type=chunk) Light Vehicle Production (units in millions) | Region | Six Months Ended March 31, 2023 | Six Months Ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Global | 42.9 | 40.9 | 4.9% | | North America | 7.5 | 6.8 | 10.3% | | EMEA | 8.9 | 7.9 | 12.7% | | China | 13.0 | 13.9 | (6.5)% | [Consolidated Results of Operations](index=31&type=section&id=Consolidated%20Results%20of%20Operations) Q2 Fiscal 2023 vs Q2 Fiscal 2022 (in millions) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $3,912 | $3,506 | 12% | | Gross Profit | $250 | $178 | 40% | | Net Loss Attributable to Adient | $(15) | $(81) | 81% | - The increase in Q2 net sales was driven by higher production volumes (**$504 million**) and commercial settlements (**$34 million**), partially offset by unfavorable foreign currency impact (**$113 million**)[138](index=138&type=chunk) - Q2 gross profit improved due to higher volumes and commercial settlements, but was partially offset by increased utilities, labor, freight, and commodity costs[141](index=141&type=chunk) - Net financing charges decreased significantly in Q2 and H1 2023 compared to the prior year, primarily due to lower premiums paid on debt repurchases and lower write-offs of deferred financing costs in the current period[149](index=149&type=chunk) [Segment Analysis](index=36&type=section&id=Segment%20Analysis) Americas Segment Performance (in millions) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,761 | $1,596 | 10% | | Adjusted EBITDA | $72 | $46 | 57% | - Americas' Q2 Adjusted EBITDA increased by **$26 million**, driven by higher volumes (**$15 million**) and favorable commercial settlements (**$22 million**), partially offset by higher operational costs (**$8 million**)[169](index=169&type=chunk) EMEA Segment Performance (in millions) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,401 | $1,218 | 15% | | Adjusted EBITDA | $53 | $30 | 77% | - EMEA's Q2 Adjusted EBITDA increased by **$23 million**, primarily due to higher production volumes (**$52 million**) and favorable commercial settlements (**$27 million**), which were significantly offset by unfavorable material economics (**$46 million**) and higher input costs (**$13 million**)[172](index=172&type=chunk) Asia Segment Performance (in millions) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $774 | $723 | 7% | | Adjusted EBITDA | $113 | $105 | 8% | - Asia's Q2 Adjusted EBITDA increased by **$8 million**, driven by favorable volume/mix (**$17 million**) and commercial settlements (**$7 million**), partially offset by unfavorable foreign currency (**$7 million**) and lower equity income (**$6 million**)[175](index=175&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources are cash from operations, an asset-based revolving credit facility (ABL), and other debt. As of March 31, 2023, Adient had **$973 million** available under its **$1.25 billion** ABL Credit Facility[177](index=177&type=chunk)[178](index=178&type=chunk) Cash Flow Summary (Six Months Ended March 31, in millions) | Cash Flow Source | 2023 | 2022 | | :--- | :--- | :--- | | Operating Activities | $170 | $15 | | Investing Activities | $(111) | $599 | | Financing Activities | $(218) | $(1,017) | - The decrease in cash from investing activities is primarily due to prior year proceeds from the Yanfeng Transaction (**$651 million**) and other asset sales[186](index=186&type=chunk) - The decrease in cash used for financing is due to significant prior year debt repayments (**$744 million**) and acquisition of noncontrolling interest (**$153 million**), partially offset by current year debt refinancing activities and share repurchases[187](index=187&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures were reported as of March 31, 2023, compared to the prior fiscal year's 10-K - Adient has not experienced any adverse changes in market risk exposures that would materially affect the quantitative and qualitative disclosures presented in its most recent Annual Report on Form 10-K[199](index=199&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2023, disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of the end of the period[200](index=200&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[201](index=201&type=chunk) [PART II - OTHER INFORMATION](index=43&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Adient is involved in routine legal proceedings, none of which are expected to materially affect its financial position or results - Management opines that none of the various lawsuits, claims, and proceedings incident to its business operations will have a material adverse effect on Adient's financial position, results of operations, or cash flows[203](index=203&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported from the risk factors previously disclosed in the Annual Report on Form 10-K for fiscal year 2022 - No material changes from the risk factors as previously disclosed in the Annual Report on Form 10-K for the fiscal year ended September 30, 2022[205](index=205&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales were reported; **759,601** shares were repurchased for **$30 million**, with **$570 million** remaining for future repurchases Repurchase of Equity Securities (Q2 FY2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining for Repurchase (in millions) | | :--- | :--- | :--- | :--- | | Jan 2023 | — | $— | $600 | | Feb 2023 | 96,350 | $42.67 | $596 | | Mar 2023 | 663,251 | $39.03 | $570 | | **Total** | **759,601** | **$39.49** | **$570** | [Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[210](index=210&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Adient - Not applicable[210](index=210&type=chunk) [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this period - None[210](index=210&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including indentures for new notes, credit agreement amendments, and CEO/CFO certifications - Key exhibits filed include: - Indenture for **$500.0 million** 7.000% senior secured notes due 2028 - Indenture for **$500.0 million** 8.250% senior unsecured notes due 2031 - Amendments to the Amended and Restated Revolving Credit Agreement and Term Loan Credit Agreement - CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[211](index=211&type=chunk)

Financial Performance - Adient recorded net sales of $3,699 million for Q1 fiscal 2023, an increase of $219 million or 6.3% compared to Q1 fiscal 2022, driven by higher production volumes and favorable material economics recoveries [113]. - Gross profit for Q1 fiscal 2023 was $231 million, or 6.2% of net sales, up from $173 million or 5.0% in Q1 fiscal 2022, reflecting improved production volumes and commercial settlements [114]. - Net income attributable to Adient was $12 million for Q1 fiscal 2023, a significant recovery from a net loss of $54 million in Q1 fiscal 2022, primarily due to higher production volumes and lower SG&A expenses [116]. - Total net sales increased to $3,699 million in Q1 fiscal 2023, up 6% from $3,480 million in Q1 fiscal 2022, with notable growth in the Americas segment [135]. - Comprehensive loss attributable to Adient was $127 million in Q1 fiscal 2023, compared to a loss of $39 million in Q1 fiscal 2022, driven by various factors including foreign currency adjustments [131]. Segment Performance - Adient operates in three reportable segments: Americas, EMEA, and Asia Pacific/China, leveraging its global footprint to drive growth in the automotive seating industry [110]. - Adjusted EBITDA for the Americas segment surged to $69 million in Q1 fiscal 2023, compared to $9 million in Q1 fiscal 2022, reflecting a more than 100% increase [137]. - EMEA segment net sales decreased by 4% to $1,182 million in Q1 fiscal 2023, primarily due to unfavorable foreign currency impacts [143]. - Asia segment net sales increased by 5% to $821 million in Q1 fiscal 2023, supported by higher production volumes despite foreign currency headwinds [145]. Costs and Expenses - Selling, general and administrative expenses decreased by $24 million, or 15%, in Q1 fiscal 2023 compared to Q1 fiscal 2022, attributed to lower engineering and administrative spending [122]. - Cost of sales increased by $161 million, or 5%, in Q1 fiscal 2023, driven by higher production volumes and increased utility, labor, and freight costs [120]. - Restructuring and impairment costs rose to $7 million in Q1 fiscal 2023, a 75% increase from $4 million in Q1 fiscal 2022 [123]. - Other pension expense rose by $10 million in Q1 fiscal 2023, primarily due to an $8 million curtailment loss related to employee termination benefits [126]. - Income tax provision increased by 48% to $31 million in Q1 fiscal 2023, influenced by valuation allowances and foreign tax rate differentials [127]. Operational Challenges - The automotive industry is expected to face challenges in fiscal 2023 due to supply chain disruptions, inflationary pressures, and softening consumer demand [111]. - Adient expects higher overall operating costs to persist for the remainder of fiscal 2023, influenced by inflationary pressures on input costs [144]. - The company experienced input cost increases due to price volatility in commodities, which may not be fully offset through customer negotiations [162]. Financing and Capital Structure - Adient maintains an asset-based revolving credit facility (ABL Credit Facility) with a revolving line of credit up to $1,250 million, including $950 million for North America and $300 million for Europe [148]. - As of December 31, 2022, Adient had not drawn down on the ABL Credit Facility and had availability of $971 million, net of $13 million in letters of credit [148]. - Adient's Term Loan B Agreement provides for a $985 million senior secured term loan facility, amortizing at 1.00% per annum, with a final maturity on April 8, 2028 [149]. - Net financing charges decreased to $41 million in Q1 fiscal 2023, down 18% from $50 million in Q1 fiscal 2022, due to lower outstanding debt levels [125]. Restructuring and Workforce - The company committed to a restructuring plan of $7 million in fiscal 2023, expected to reduce annual operating costs by approximately $4 million [156]. - Approximately 12,000 employees have been separated from Adient as part of the restructuring plans, which also included twenty-seven plant closures [157]. - Adient's board authorized a share repurchase program of up to $600 million, with no shares repurchased during the three months ended December 31, 2022 [160]. Cash Flow and Working Capital - The company reported cash provided by operating activities of $44 million for the three months ended December 31, 2022, compared to cash used of $14 million in the same period of 2021 [152]. - Adient's working capital as of December 31, 2022, was $669 million, slightly up from $662 million as of September 30, 2022 [155]. - As of December 31, 2022, Adient had $181 million funded under supply chain financing programs, down from $269 million as of September 30, 2022 [161].