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Adient Plc (ADNT) SEC Filing 8-K Material Event for the period ending Wednesday, May 3, 2023

Adient Plc

CIK: 1670541 Ticker: ADNT
Exhibit 99.1
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Appendix
Page 1

Adient plc
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31,
(in millions, except per share data)20232022
Net sales$3,912 $3,506 
Cost of sales3,662 3,328 
Gross profit250 178 
Selling, general and administrative expenses141 135 
Restructuring and impairment costs17 
Equity income (loss)
Earnings (loss) before interest and income taxes96 46 
Net financing charges59 83 
Other pension expense (income)(1)
Income (loss) before income taxes35 (36)
Income tax provision (benefit)25 24 
Net income (loss)10 (60)
Income attributable to noncontrolling interests25 21 
Net income (loss) attributable to Adient$(15)$(81)
Diluted earnings (loss) per share$(0.16)$(0.85)
Shares outstanding at period end94.7 94.8 
Diluted weighted average shares95.3 94.8 



Appendix
Page 2

Adient plc
Condensed Consolidated Statements of Financial Position
(Unaudited)

March 31,September 30,
(in millions)20232022
Assets
Cash and cash equivalents$826 $947 
Accounts receivable - net
2,031 1,852 
Inventories919 953 
Other current assets493 411 
Current assets4,269 4,163 
Property, plant and equipment - net1,416 1,377 
Goodwill2,135 2,057 
Other intangible assets - net455 467 
Investments in partially-owned affiliates311 286 
Assets held for sale11 
Other noncurrent assets888 797 
Total assets$9,479 $9,158 
Liabilities and Shareholders' Equity
Short-term debt$$14 
Accounts payable and accrued expenses3,027 2,818 
Other current liabilities642 669 
Current liabilities3,671 3,501 
Long-term debt2,531 2,564 
Other noncurrent liabilities690 673 
Redeemable noncontrolling interests55 45 
Shareholders' equity attributable to Adient2,197 2,073 
Noncontrolling interests335 302 
Total liabilities and shareholders' equity$9,479 $9,158 




Appendix
Page 3

Adient plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
(in millions)20232022
Operating Activities
Net income (loss) attributable to Adient$(15)$(81)
Income attributable to noncontrolling interests25 21 
Net income (loss)10 (60)
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation71 76 
Amortization of intangibles13 13 
Pension and postretirement benefit expense (benefit)
Pension and postretirement contributions, net(6)(5)
Equity in earnings of partially-owned affiliates, net of dividends received(10)(16)
Impairment of interests in nonconsolidated partially-owned affiliates
Premium paid on repurchase of debt34 
Deferred income taxes(3)(5)
Non-cash restructuring and impairment charges— 
Equity-based compensation10 
Other12 
Changes in assets and liabilities:
Receivables(265)(157)
Inventories59 (60)
Other assets(24)55 
Restructuring reserves(10)(14)
Accounts payable and accrued liabilities259 142 
Accrued income taxes(1)(3)
Cash provided (used) by operating activities126 29 
Investing Activities
Capital expenditures(56)(57)
Sale of property, plant and equipment— 
Business acquisitions(5)(6)
Proceeds from business divestitures— 
Cash provided (used) by investing activities(61)(53)
Financing Activities
Increase (decrease) in short-term debt(2)(2)
Increase (decrease) in long-term debt1,000 — 
Repayment of long-term debt(1,102)(742)
Debt financing costs(16)(1)
Share repurchases(28)— 
Cash paid to acquire a noncontrolling interest— (153)
Dividends paid to noncontrolling interests(2)(40)
Share based compensation and other— 
Cash provided (used) by financing activities(149)(938)
Effect of exchange rate changes on cash and cash equivalents— 
Increase (decrease) in cash and cash equivalents$(75)$(962)


Appendix
Page 4

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
March 31,
(in millions)20232022
Net Sales
Americas$1,761 $1,596 
EMEA1,401 1,218 
Asia774 723 
Eliminations(24)(31)
Total net sales$3,912 $3,506 


Three Months Ended
March 31,
(in millions)20232022
Adjusted EBITDA
Americas$72 $46 
EMEA53 30 
Asia113 105 
Corporate-related costs (1)
(23)(22)
Restructuring and impairment costs (2)
(17)(4)
Purchase accounting amortization (3)
(14)(13)
Restructuring related charges (4)
— (3)
Impairment of interests in nonconsolidated partially-owned affiliates (8)
(7)(9)
Stock based compensation(10)(4)
Depreciation(71)(76)
Other items (5)
— (4)
Earnings (loss) before interest and income taxes96 $46 
Net financing charges(59)(83)
Other pension income (expense)(2)
Income (loss) before income taxes$35 $(36)

Refer to the Footnote Addendum for footnote explanations.



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
March 31,
(in millions, except per share data)20232022
Income available to shareholders
Net income (loss) attributable to Adient$(15)$(81)
Weighted average shares outstanding
Basic weighted average shares outstanding95.3 94.8 
Effect of dilutive securities:
Stock options, unvested restricted stock and unvested performance share awards— — 
Diluted weighted average shares outstanding95.3 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 March 31, 2023 and 2022 is a result of being in a loss position.



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.




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 March 31,
20232022
(in millions, except per share data)GAAP ResultsAdj.Adjusted ResultsGAAP ResultsAdj.Adjusted Results
Net sales$3,912 $— $3,912 $3,506 $— $3,506 
Cost of sales (6)
3,662 — 3,662 3,328 — 3,328 
Gross profit250 — 250 178 — 178 
Selling, general and administrative expenses (7)
141 (13)128 135 (19)116 
Restructuring and impairment costs (2)
17 (17)— (4)— 
Equity income (loss) (8)
12 10 17 
Earnings (loss) before interest and income taxes (EBIT)96 38 134 46 33 79 
Memo accounts:
Depreciation71 76 
Equity based compensation10 
Adjusted EBITDA$215 $159 
Net financing charges (9)
59 (11)48 83 (42)41 
Other pension expense (income)— (1)— (1)
Income (loss) before income taxes35 49 84 (36)75 39 
Income tax provision (benefit) (10)
25 27 24 28 
Net income (loss) attributable to Adient(15)46 31 (81)69 (12)
Diluted earnings (loss) per share(0.16)0.48 0.32 (0.85)0.72 (0.13)
Diluted weighted average shares95.3 0.8 96.1 94.8 — 94.8 



Appendix
Page 8

Segment Performance:
Three months ended March 31, 2023
AmericasEMEAAsiaCorporate/EliminationsConsolidated
Net sales$1,761 $1,401 $774 $(24)$3,912 
Adjusted EBITDA$72 $53 $113 $(23)$215 
Adjusted EBITDA margin4.1 %3.8 %14.6 %N/A5.5 %
Three months ended March 31, 2022
AmericasEMEAAsiaCorporate/EliminationsConsolidated
Net sales$1,596 $1,218 $723 $(31)$3,506 
Adjusted EBITDA$46 $30 $105 $(22)$159 
Adjusted EBITDA margin2.9 %2.5 %14.5 %N/A4.5 %

The following table presents adjusted EBITDA excluding adjusted equity income:

Three Months Ended
March 31,
(in millions)20232022
Adjusted EBITDA$215 $159 
Less: Adjusted Equity Income12 17 
Adjusted EBITDA Excluding Adjusted Equity Income$203 $142 
% of Sales5.2 %4.1 %

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 March 31,
20232022
(in millions, except effective tax rate)Income (loss) before income taxesTax impactEffective tax rateIncome (loss) before income taxesTax impactEffective tax rate
As reported$35 $25 71.4%$(36)$24 NM
Adjustments (10)
49 4.1%75 5.3%
As adjusted$84 $27 32.1%$39 $28 71.8%



Appendix
Page 9

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

Three Months Ended
March 31,
(in millions)20232022
Net income (loss) attributable to Adient(15)(81)
Restructuring and impairment costs
17 
Purchase accounting amortization (3)
14 13 
Restructuring related charges
— 
Impairment of interests in nonconsolidated partially-owned affiliates (8)
Write off of deferred financing costs upon repurchase of debt (9)
Foreign exchange loss on intercompany loan in Russia (9)
— 
Premium paid on repurchase of debt (9)
34 
Other items (5)
— 
Impact of adjustments on noncontrolling interests (11)
(1)(2)
Tax impact of above adjustments and other tax items (10)
(2)(4)
Adjusted net income (loss) attributable to Adient$31 $(12)

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
March 31,
20232022
Diluted earnings (loss) per share as reported$(0.16)$(0.85)
Restructuring and impairment costs0.18 0.04 
Purchase accounting amortization (3)
0.15 0.14 
Restructuring related charges— 0.03 
Impairment of interests in nonconsolidated partially-owned affiliates (8)
0.07 0.09 
Write off of deferred financing costs upon repurchase of debt (9)
0.04 0.07 
Foreign exchange loss on intercompany loan in Russia (9)
— 0.01 
Premium paid on repurchase of debt (9)
0.07 0.36 
Other items (5)
— 0.04 
Impact of adjustments on noncontrolling interests (11)
(0.01)(0.02)
Tax impact of above adjustments and other tax items (10)
(0.02)(0.04)
Adjusted diluted earnings (loss) per share$0.32 $(0.13)




Appendix
Page 10


The following table presents calculations of net debt:

March 31,September 30,
(in millions)20232022
Cash and cash equivalents$826 $947 
Total short-term and long-term debt2,533 2,578 
Net debt$1,707 $1,631 

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

Three Months Ended
March 31,
Six Months Ended
March 31,
(in millions)2023202220232022
Cash provided (used) by operating activities$126 $29 $170 $15 
Capital expenditures(56)(57)(117)(117)
Free cash flow$70 $(28)$53 $(102)


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

FY2023FY2022
(in millions)Q2YTDQ2YTD
Adjusted EBITDA excluding adjusted equity income$203 $388 $142 $254 
Dividend13 — 
Restructuring (cash)(10)(40)(13)(37)
Net customer tooling(23)(37)(23)(21)
Trade working capital (Net AR/AP + Inventory)(14)32 (24)51 
Accrued compensation38 10 14 (47)
Interest paid(64)(88)(70)(111)
Tax refund/taxes paid(29)(49)(30)(38)
Non-income related taxes (VAT)27 17 53 
Commercial settlements45 28 10 (44)
Capitalized engineering(9)(34)
Prepaids(1)(25)— (23)
Other(38)(36)(1)(25)
Operating cash flow126 170 29 15 
Capital expenditures(56)(117)(57)(117)
Free cash flow$70 $53 $(28)$(102)



Appendix
Page 11

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
March 31,
(in millions)20232022
Restructuring charges$(17)$(2)
Impairment charge associated with Russian operations — (2)
$(17)$(4)

(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
March 31,
(in millions)20232022
Transaction costs$(1)$(3)
Brazil indirect tax recoveries
Loss on finalization of asset sale in Turkey— (2)
Insurance recoveries for Malaysia flooding— 
Allowance for doubtful accounts receivable associated with Russia— (1)
$— $(4)

(6) The adjustments to cost of sales include:

Three Months Ended
March 31,
(in millions)20232022
Restructuring related charges$(1)$(2)
Brazil indirect tax recoveries
Insurance recoveries for Malaysia flooding— 
$— $— 


Appendix
Page 12


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

Three Months Ended
March 31,
(in millions)20232022
Purchase accounting amortization$(13)$(13)
Transaction costs(1)(3)
Restructuring related charges— 
Write off of accounts receivable associated with Russia— (1)
Loss on finalization of asset sale in Turkey— (2)
$(13)$(19)

(8) The adjustments to equity income include:

Three Months Ended
March 31,
(in millions)20232022
Impairment of interests in nonconsolidated partially owned affiliates$$
Restructuring related charges— 
Purchase accounting amortization— 
$$10 

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

Three Months Ended
March 31,
(in millions)20232022
Premium paid on repurchase of debt(7)(34)
Write off of deferred financing costs upon repurchase of debt(4)(7)
Foreign exchange loss on intercompany loan in Russia— (1)
$(11)$(42)

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

Three Months Ended
March 31,
(in millions)20232022
Amortization
$(2)$(2)
Tax audit settlements(1)— 
Tax rate change— (4)
Other reconciling items
$(2)$(4)

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


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Adient Plc provided additional information to their SEC Filing as exhibits

Ticker: ADNT
CIK: 1670541
Form Type: 8-K Corporate News
Accession Number: 0001670541-23-000101
Submitted to the SEC: Wed May 03 2023 6:48:57 AM EST
Accepted by the SEC: Wed May 03 2023
Period: Wednesday, May 3, 2023
Industry: Motor Vehicle Parts And Accessories
Events:
  1. Earnings Release
  2. Financial Exhibit

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