EX-99.1 2 a02072023adientform8-kex991.htm EX-99.1

Exhibit 99.1

---

---

---

---

Appendix

Page 1

Adient plc

Condensed Consolidated Statements of Income

(Unaudited)

						Three Months Ended December 31,
(in millions, except per share data)						2022						2021
Net sales						$	3,699					$	3,480
Cost of sales						3,468						3,307
Gross profit						231						173
Selling, general and administrative expenses						138						162
Restructuring and impairment costs						7						4
Equity income (loss)						28						33
Earnings (loss) before interest and income taxes						114						40
Net financing charges						41						50
Other pension expense (income)						9						(1)
Income (loss) before income taxes						64						(9)
Income tax provision (benefit)						31						21
Net income (loss)						33						(30)
Income attributable to noncontrolling interests						21						24
Net income (loss) attributable to Adient						$	12					$	(54)
Diluted earnings (loss) per share						$	0.13					$	(0.57)
Shares outstanding at period end						95.4						94.8
Diluted weighted average shares						95.9						94.6

---

Appendix

Page 2

Adient plc

Condensed Consolidated Statements of Financial Position

(Unaudited)

						December 31,						September 30,
(in millions)						2022						2022
Assets
Cash and cash equivalents						$	901					$	947
Accounts receivable - net						1,755						1,852
Inventories						972						953
Other current assets						459						411
Current assets						4,087						4,163
Property, plant and equipment - net						1,419						1,377
Goodwill						2,128						2,057
Other intangible assets - net						463						467
Investments in partially-owned affiliates						306						286
Assets held for sale						5						11
Other noncurrent assets						865						797
Total assets						$	9,273					$	9,158
Liabilities and Shareholders' Equity
Short-term debt						$	13					$	14
Accounts payable and accrued expenses						2,736						2,818
Other current liabilities						669						669
Current liabilities						3,418						3,501
Long-term debt						2,627						2,564
Other noncurrent liabilities						674						673
Redeemable noncontrolling interests						45						45
Shareholders' equity attributable to Adient						2,192						2,073
Noncontrolling interests						317						302
Total liabilities and shareholders' equity						$	9,273					$	9,158

---

Appendix

Page 3

Adient plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)

						Three Months Ended December 31,
(in millions)						2022						2021
Operating Activities
Net income (loss) attributable to Adient						$	12					$	(54)
Income attributable to noncontrolling interests						21						24
Net income (loss)						33						(30)
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation						69						75
Amortization of intangibles						12						13
Pension and postretirement benefit expense (benefit)						9						1
Pension and postretirement contributions, net						(3)						(5)
Equity in earnings of partially-owned affiliates, net of dividends received						(16)						(32)
Derivative loss on the 2021 Yanfeng Transaction						—						3
Deferred income taxes						(1)						(3)
Non-cash restructuring and impairment charges						—						7
Equity-based compensation						8						10
Other						(3)						2
Changes in assets and liabilities:
Receivables						167						(175)
Inventories						22						26
Other assets						(47)						—
Restructuring reserves						(27)						(24)
Accounts payable and accrued liabilities						(191)						104
Accrued income taxes						12						14
Cash provided (used) by operating activities						44						(14)
Investing Activities
Capital expenditures						(61)						(60)
Sale of property, plant and equipment						15						11
Settlement of derivatives						—						(30)
Business acquisitions						(6)						—
Proceeds from business divestitures						3						731
Other						(1)						—
Cash provided (used) by investing activities						(50)						652
Financing Activities
Increase (decrease) in short-term debt						—						(6)
Increase (decrease) in long-term debt						2						—
Repayment of long-term debt						(2)						(2)
Debt financing costs						(7)						—
Dividends paid to noncontrolling interests						(50)						(59)
Share based compensation and other						(12)						(12)
Cash provided (used) by financing activities						(69)						(79)
Effect of exchange rate changes on cash and cash equivalents						29						—
Increase (decrease) in cash and cash equivalents						$	(46)					$	559

---

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 December 31,
(in millions)						2022						2021
Net Sales
Americas						$	1,724					$	1,498
EMEA						1,182						1,230
Asia						821						784
Eliminations						(28)						(32)
Total net sales						$	3,699					$	3,480

						Three Months Ended December 31,
(in millions)						2022						2021
Adjusted EBITDA
Americas						$	69					$	9
EMEA						28						43
Asia						138						114
Corporate-related costs (1)						(23)						(20)
Restructuring and impairment costs (2)						(7)						(4)
Purchase accounting amortization (3)						(12)						(14)
Restructuring related charges (4)						(3)						(1)
Adjustment to nonconsolidated partially-owned affiliates (8)						1						—
Stock based compensation						(8)						(10)
Depreciation						(69)						(75)
Other items (5)						—						(2)
Earnings (loss) before interest and income taxes						114						40
Net financing charges						(41)						(50)
Other pension income (expense)						(9)						1
Income (loss) before income taxes						$	64					$	(9)

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 December 31,
(in millions, except per share data)						2022						2021
Income available to shareholders
Net income (loss) attributable to Adient						$	12					$	(54)
Weighted average shares outstanding
Basic weighted average shares outstanding						95.1						94.6
Effect of dilutive securities:
Stock options, unvested restricted stock and unvested performance share awards						0.8						—
Diluted weighted average shares outstanding						95.9						94.6

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 December 31, 2021 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 December 31,
						2022																		2021
(in millions, except per share data)						GAAP Results						Adj.						Adjusted Results						GAAP Results						Adj.						Adjusted Results
Net sales						$	3,699					$	—					$	3,699					$	3,480					$	—					$	3,480
Cost of sales (6)						3,468						(1)						3,467						3,307						(1)						3,306
Gross profit						231						1						232						173						1						174
Selling, general and administrative expenses (7)						138						(14)						124						162						(15)						147
Restructuring and impairment costs (2)						7						(7)						—						4						(4)						—
Equity income (loss) (8)						28						(1)						27						33						1						34
Earnings (loss) before interest and income taxes (EBIT)						114						21						135						40						21						61
Memo accounts:
Depreciation																		69																		75
Equity based compensation																		8																		10
Adjusted EBITDA																		$	212																	$	146
Net financing charges (9)						41						—						41						50						(3)						47
Other pension expense (income) (12)						9						(8)						1						(1)						—						(1)
Income (loss) before income taxes						64						29						93						(9)						24						15
Income tax provision (benefit) (10)						31						6						37						21						4						25
Net income (loss) attributable to Adient						12						21						33						(54)						18						(36)
Diluted earnings (loss) per share						0.13						0.21						0.34						(0.57)						0.19						(0.38)
Diluted weighted average shares						95.9						—						95.9						94.6						—						94.6

---

Appendix

Page 8

Segment Performance:

						Three months ended December 31, 2022
						Americas						EMEA						Asia						Corporate/Eliminations						Consolidated
Net sales						$	1,724					$	1,182					$	821					$	(28)					$	3,699
Adjusted EBITDA						$	69					$	28					$	138					$	(23)					$	212
Adjusted EBITDA margin						4.0		%				2.4		%				16.8		%				N/A						5.7		%
						Three months ended December 31, 2021
						Americas						EMEA						Asia						Corporate/Eliminations						Consolidated
Net sales						$	1,498					$	1,230					$	784					$	(32)					$	3,480
Adjusted EBITDA						$	9					$	43					$	114					$	(20)					$	146
Adjusted EBITDA margin						0.6		%				3.5		%				14.5		%				N/A						4.2		%

The following table presents adjusted EBITDA excluding adjusted equity income:

						Three Months Ended December 31,
(in millions)						2022						2021
Adjusted EBITDA						$	212					$	146
Adjusted Equity Income						27						34
Adjusted EBITDA Excluding Adjusted Equity Income						$	185					$	112
% of Sales						5.0		%				3.2		%

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 December 31,
						2022																		2021
(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						$	64					$	31					48.4%						$	(9)					$	21					nm
Adjustments (10)						29						6						20.7%						24						4						16.7%
As adjusted						$	93					$	37					39.8%						$	15					$	25					nm

---

Appendix

Page 9

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

						Three Months Ended December 31,
(in millions)						2022						2021
Net income (loss) attributable to Adient						12						(54)
Restructuring and impairment costs						7						4
Purchase accounting amortization (3)						12						14
Restructuring related charges						3						1
Pension mark-to-market and curtailment/settlement (gain)/loss (12)						8						—
Adjustment to nonconsolidated partially-owned affiliates (8)						(1)						—
Derivative loss on Yanfeng transaction (9)						—						3
Other items (5)						—						2
Impact of adjustments on noncontrolling interests (11)						(2)						(2)
Tax impact of above adjustments and other tax items (10)						(6)						(4)
Adjusted net income (loss) attributable to Adient						$	33					$	(36)

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 December 31,
						2022						2021
Diluted earnings (loss) per share as reported						$	0.13					$	(0.57)
Restructuring and impairment costs						0.07						0.04
Purchase accounting amortization (3)						0.12						0.15
Restructuring related charges						0.03						0.01
Pension mark-to-market and curtailment/settlement (gain)/loss (12)						0.08						—
Adjustment to nonconsolidated partially-owned affiliates (8)						(0.01)						—
Derivative loss on Yanfeng transaction (9)						—						0.03
Other items (5)						—						0.02
Impact of adjustments on noncontrolling interests (11)						(0.02)						(0.02)
Tax impact of above adjustments and other tax items (10)						(0.06)						(0.04)
Adjusted diluted earnings (loss) per share						$	0.34					$	(0.38)

---

Appendix

Page 10

The following table presents calculations of net debt:

						June 30,						September 30,
(in millions)						2022						2022
Cash and cash equivalents						$	901					$	947
Total short-term and long-term debt						2,640						2,578
Net debt						$	1,739					$	1,631

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

						Three Months Ended December 31,
(in millions)						2022						2021
Cash provided (used) by operating activities						$	44					$	(14)
Capital expenditures						(61)						(60)
Free cash flow						$	(17)					$	(74)

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

						Three Months Ended December 31,
(in millions)						2022												2021
Adjusted EBITDA excluding adjusted equity income						$	185											$	112
(+) Dividend						12												2
(-) Restructuring (cash)						(30)												(24)
(+/-) Net customer tooling						(14)												2
(+/-) Trade working capital (Net AR/AP + Inventory)						46												75
(+/-) Accrued compensation						(28)												(61)
(-) Interest paid						(24)												(41)
(+/-) Tax refund/taxes paid						(20)												(8)
(+/-) Non-income related taxes (VAT)						(19)												36
(+/-) Commercial settlements						(17)												(54)
(+/-) Capitalized engineering						(25)												(5)
(+/-) Prepaids						(24)												(23)
(+/-) Other						2												(25)
Operating cash flow						44												(14)
Capital expenditures						(61)												(60)
Free cash flow						$	(17)											$	(74)

---

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 December 31,
(in millions)						2022						2021
Restructuring charges						$	(7)					$	3
Held for sale asset adjustments						—						(7)
						$	(7)					$	(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 December 31,
(in millions)						2022						2021
Transaction costs						$	(1)					$	(2)
Brazil indirect tax recoveries						1						1
Other						—						(1)
						$	—					$	(2)

(6) The adjustments to cost of sales include:

						Three Months Ended December 31,
(in millions)						2022						2021
Restructuring related charges						$	(2)					$	(1)
Brazil indirect tax recoveries						1						1
Other						—						(1)
						$	(1)					$	(1)

---

Appendix

Page 12

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

						Three Months Ended December 31,
(in millions)						2022						2021
Purchase accounting amortization						$	(12)					$	(13)
Transaction costs						(1)						(2)
Restructuring related charges						(1)						—
						$	(14)					$	(15)

(8) The adjustments to equity income include:

						Three Months Ended December 31,
(in millions)						2022						2021
Adjustment to nonconsolidated partially-owned affiliates						$	(1)					$	—
Purchase accounting amortization						—						1
						$	(1)					$	1

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

						Three Months Ended December 31,
(in millions)						2022						2021
Derivative loss on Yanfeng transaction						$	—					$	(3)
						$	—					$	(3)

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

						Three Months Ended December 31,
(in millions)						2022						2021
Pension curtailment loss						$	(2)					$	—
Brazil indirect tax recoveries						—						(3)
Amortization						(2)						(2)
Other reconciling items						(2)						1
						$	(6)					$	(4)

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

(12) During the three months ended December 31, 2022, Adient recorded an $8 million curtailment loss associated with employee termination benefit plans in the Americas segment.