17 unchanged sentences
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases on October 1, 2019.
Basis for Opinions
12 unchanged sentences
Definition and Limitations of Internal Control over Financial Reporting
−Removed: Adient plc | Form 10-K | 53
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting includes those policies and procedures
+Added: Adient plc | Form 10-K | 53
+Added: that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
6 unchanged sentences
Annual Goodwill Impairment Assessment
−Removed: As described in Notes 1 and 6 to the consolidated financial statements, the Company’s goodwill balance was $2,057 million as of September 30, 2022.
+Added: As described in Notes 1 and 6 to the consolidated financial statements, the Company’s goodwill balance, which is comprised of the Americas, EMEA and Asia reporting units (collectively, “the reporting units”), was $2,094 million as of September 30, 2023.
Management reviews goodwill for impairment during the fourth fiscal quarter or more frequently if events or changes in circumstances indicate the asset might be impaired.
−Removed: Fair value is estimated using an income approach utilizing discounted cash flow analyses.
+Added: Fair value of the reporting units is estimated using an income approach utilizing discounted cash flow analyses.
This method requires management to make assumptions about estimates of the revenue and the operating margins, as well as the discount rates.
−Removed: The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment is a critical audit matter are the significant judgment by management when developing the fair value of the reporting units, which led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimates of the revenue and the operating margins, as well as the discount rates.
−Removed: In addition, the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units;
+Added: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimates of the operating margins for the Americas reporting unit, estimates of the operating margins as well as the discount rate for the EMEA reporting unit, and estimates of the revenue for the Asia reporting unit;
+Added: and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Company’s reporting units.
−Removed: These procedures also included, among others, (i) testing management’s process for developing the fair value estimates;
−Removed: (ii) evaluating the appropriateness of the income approach;
−Removed: (iii) testing the completeness and accuracy of underlying data used in the income approach;
−Removed: and (iv) evaluating the reasonableness of significant assumptions used by management related to estimates of the revenue and the operating margins, as well as the discount rates.
+Added: These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units;
+Added: (ii) evaluating the appropriateness of the discounted cash flow analyses;
+Added: (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow analyses;
+Added: and (iv) evaluating the reasonableness of the significant assumptions used by management related to estimates of the operating margins for the Americas reporting unit, estimates of the operating margins as well as the discount rate for the EMEA reporting unit, and estimates of the revenue for the Asia reporting unit.
Evaluating management’s assumptions related to estimates of the revenue and the operating margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units;
1 unchanged sentence
and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the income approach used by the Company and the reasonableness of the discount rates.
+Added: Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow analyses and the reasonableness of the discount rate.
/s/ PricewaterhouseCoopers LLP
49 unchanged sentences
Inventories 841 953
−Removed: Assets held for sale — 49
Other current assets 491 411
12 unchanged sentences
Accrued compensation and benefits 400 340
−Removed: Liabilities held for sale — 16
Restructuring reserve 51 60
2 unchanged sentences
Long-term debt 2,401 2,564
−Removed: Pension and postretirement benefits 88 128
+Added: Pension benefits 92 88
Other noncurrent liabilities 590 585
36 unchanged sentences
Non-cash restructuring and impairment charges — 14 11
−Removed: Loss (gain) on divestitures - net — 26 13
Equity-based compensation 34 29 36
14 unchanged sentences
Business divestitures 5 740 785
−Removed: Changes in long-term investments — — ( 37 )
Loans to affiliates — — 15
+Added: Other ( 2 ) — —
Cash provided (used) by investing activities ( 229 ) 484 347
+Added: Continued on next page
Adient plc | Form 10-K | 58
7 unchanged sentences
Debt financing costs ( 23 ) ( 1 ) ( 8 )
+Added: Share repurchases ( 65 ) — —
Cash paid to acquire a noncontrolling interest — ( 153 ) —
18 unchanged sentences
Realized and unrealized gains (losses) on derivatives — — — 20 20 — 20
+Added: Employee retirement plans — — — 1 1 — 1
Dividends attributable to noncontrolling interests — — — — — ( 42 ) ( 42 )
1 unchanged sentence
Share based compensation and other — 17 — — 17 1 18
−Removed: Adjustments from adoption of a new standard — — ( 4 ) — ( 4 ) — ( 4 )
Balance at September 30, 2021 $ — $ 3,991 $ ( 988 ) $ ( 627 ) $ 2,376 $ 342 $ 2,718
1 unchanged sentence
Foreign currency translation adjustments — — — ( 219 ) ( 219 ) ( 20 ) ( 239 )
−Removed: Realized and unrealized gains (losses) on derivatives — — — 20 20 — 20
Employee retirement plans — — — 1 1 — 1
Dividends attributable to noncontrolling interests — — — — — ( 53 ) ( 53 )
−Removed: Change in noncontrolling interest share — — — — — ( 3 ) ( 3 )
+Added: Purchase of subsidiary shares from noncontrolling interest — 12 — — 12 ( 12 ) —
Share based compensation and other — 23 — — 23 — 23
3 unchanged sentences
Realized and unrealized gains (losses) on derivatives — — — 21 21 — 21
−Removed: Employee retirement plans — — — 1 1 — 1
Dividends attributable to noncontrolling interests — — — — — ( 45 ) ( 45 )
−Removed: Purchase of subsidiary shares from noncontrolling interest — 12 — — 12 ( 12 ) —
+Added: Repurchase and retirement of ordinary shares — ( 65 ) — — ( 65 ) — ( 65 )
Share based compensation and other — 12 — — 12 — 12
3 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: Basis of Presentation and Summary of Significant Accounting Policies
−Removed: On October 31, 2016, Adient plc ("Adient") became an independent company as a result of the separation of the automotive seating and interiors business (the "separation") from Johnson Controls International plc ("the former Parent").
−Removed: Adient was incorporated under the laws of Ireland in fiscal 2016 for the purpose of holding these businesses.
−Removed: Adient's ordinary shares began trading "regular-way" under the ticker symbol "ADNT" on the New York Stock Exchange on October 31, 2016.
−Removed: Upon becoming an independent company, the capital structure of Adient consisted of 500 million authorized ordinary shares and 100 million authorized preferred shares (par value of $ 0.001 per ordinary and preferred share).
−Removed: The number of Adient ordinary shares issued on October 31, 2016 was 93,671,810 .
+Added: Organization and Summary of Significant Accounting Policies
Adient is a global leader in the automotive seating supplier industry.
2 unchanged sentences
Adient is an independent seat supplier with global scale and the capability to design, develop, engineer, manufacture, and deliver complete seat systems and components in every major automotive producing region in the world.
+Added: Basis of Presentation
The consolidated financial statements of Adient have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.
−Removed: The global automotive industry has continued to experience unprecedented supply chain and other disruptions over the past year related to semiconductor chip shortages, hostilities in Ukraine and localized COVID-19 lockdowns in China.
−Removed: These disruptions have led to unplanned downtime at Adient’s production facilities, often with very little warning, which results in operating inefficiencies and limits Adient’s ability to adequately mitigate such inefficiencies.
−Removed: The automotive industry has also experienced a period of rising input costs and potential shortages related to energy (particularly in EMEA as a result of the conflict in Ukraine), freight and commodities as well as facing an environment of unfavorable foreign currency exchange and rising interest rates.
−Removed: In addition, Adient, along with the automotive industry, has experienced and continues to face wage inflationary pressures as a result of constrained labor availability, particularly in certain jurisdictions in EMEA.
−Removed: COVID-19 and related variants and sub-variants, also continues to be present throughout the world, including in all global and regional markets served by Adient.
−Removed: The elevated COVID-19 rates in China led to lockdowns at various times during fiscal 2022, negatively impacting the automotive production levels in that region, along with creating further supply chain disruptions.
−Removed: As a result of these disruptions, new vehicle sales continue to be significantly lower than historical and previously projected pre-pandemic sales levels.
−Removed: Refer to the consolidated results of operations and segment analysis discussion below for additional information on the impacts of these items on Adient's results.
−Removed: Refer to Note 3, "Acquisitions and Divestitures," of the notes to the consolidated financial statements for additional information on the impacts from the Russia/Ukraine conflict including Adient’s withdrawal from and sale of operations in Russia.
−Removed: Principles of Consolidations
Adient consolidates its wholly-owned subsidiaries and those entities in which it has a controlling interest.
1 unchanged sentence
Consolidated VIEs
−Removed: Based upon the criteria set forth in the Financial Accounting Standards Board (the FASB) Accounting Standards Codification (ASC) 810, "Consolidation," Adient has determined that it was the primary beneficiary in two variable interest entities (VIEs) for the reporting periods ended September 30, 2022 and 2021, respectively, as Adient absorbs significant economics of the entities and has the power to direct the activities that are considered most significant to the entities.
+Added: Based upon the criteria set forth in the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 810, "Consolidation," Adient has determined that it was the primary beneficiary in two variable interest entities (“VIEs”) for the reporting periods ended September 30, 2023 and 2022, respectively, as Adient absorbs significant economics of the entities and has the power to direct the activities that are considered most significant to the entities.
The two VIEs manufacture seating products in North America for the automotive industry.
1 unchanged sentence
The carrying amounts and classification of assets (none of which are restricted) and liabilities included in Adient's consolidated statements of financial position for the consolidated VIEs are as follows:
−Removed: Adient plc | Form 10-K | 61
September 30,
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See Note 10, “Derivative Instruments and Hedging Activities,” and Note 11, “Fair Value Measurements,” of the notes to consolidated financial statements for fair value of financial instruments, including derivative instruments and hedging activities.
+Added: Adient plc | Form 10-K | 61
Cash and Cash Equivalents
3 unchanged sentences
Adient extends credit to customers in the normal course of business and maintains an allowance for doubtful accounts resulting from the inability or unwillingness of customers to make required payments.
−Removed: The allowance for doubtful accounts is based on historical experience, existing economic conditions and any specific customer collection issues Adient has identified.
+Added: The allowance for doubtful accounts is established based on historical data along with Adient’s assessment of expected credit losses that reflects current and forecasted industry and economic conditions.
+Added: This methodology is in accordance with ASC Topic 326, Financial Instruments - Credit Losses.
Adient enters into supply chain financing programs in certain domestic and foreign jurisdictions to either sell or discount accounts receivable without recourse to third-party institutions.
2 unchanged sentences
Inventories are stated at the lower of cost or market.
−Removed: Cost is determined using the first-in, first-out ("FIFO") method.
+Added: Cost is determined using the first-in, first-out method.
Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs.
3 unchanged sentences
At September 30, 2023 and 2022, Adient recorded within the consolidated statements of financial position $ 274 million and $ 239 million, respectively, of engineering and research and development costs for which customer reimbursement is contractually assured.
−Removed: The reimbursable costs are recorded in other
−Removed: Adient plc | Form 10-K | 62
−Removed: current assets if reimbursement will occur in less than one year and in other noncurrent assets if reimbursement will occur beyond one year.
+Added: The reimbursable costs are recorded in other current assets if reimbursement will occur in less than one year and in other noncurrent assets if reimbursement will occur beyond one year.
At September 30, 2023, Adient had $ 104 million and $ 170 million of reimbursable costs recorded in current and noncurrent assets, respectively.
3 unchanged sentences
otherwise, amounts are amortized over the estimated useful lives of the assets.
−Removed: The carrying values of assets capitalized in accordance with the foregoing policy are periodically reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.
At September 30, 2023 and 2022, approximately $ 53 million and $ 53 million, respectively, of costs for molds, dies and other tools were capitalized within property, plant and equipment which represented assets to which Adient had title.
5 unchanged sentences
The estimated useful lives range from 3 to 40 years for buildings and improvements and from 3 to 15 years for machinery and equipment.
−Removed: On October 1, 2019, Adient adopted Accounting Standards Codification Topic 842, "Leases" ( ASC 842 ) using the modified retrospective transition approach and electing the package of practical expedients.
−Removed: This resulted in the recognition of right-of-use (ROU) assets of $ 380 million and corresponding operating lease liabilities of $ 384 million.
−Removed: The adoption date ROU asset balance was adjusted by $ 4 million, reflecting impairment of ROU assets for certain real estate leases (within the North America and Europe asset groups) of which the Company determined the carrying value of the initial operating lease ROU asset exceeded its fair value.
−Removed: The adjustment was recorded as an increase to the opening accumulated deficits.
−Removed: The adoption of ASC 842 did not have any significant impact on the consolidated statement of income or cash flows.
+Added: Adient plc | Form 10-K | 62
Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement dates.
12 unchanged sentences
An impairment is recorded to the extent the estimated fair value is below the carrying amount of the reporting unit.
−Removed: Adient plc | Form 10-K | 63
Intangible assets with definite lives are amortized over their estimated useful lives and are subject to impairment testing if events or changes in circumstances indicate that the asset might be impaired.
Impairment of Long-Lived Assets
−Removed: Adient reviews long-lived assets, including property, plant and equipment and other intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable.
+Added: Adient reviews long-lived assets, including property, plant and equipment, operating lease ROU assets and other intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable.
Adient conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires Adient to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows.
10 unchanged sentences
Contracts may provide for annual price reductions over the production life of the awarded program, and prices are adjusted on an ongoing basis to reflect changes in product content/cost and other commercial factors.
−Removed: The amount of revenue recognized reflects the consideration that Adient expects to be entitled to in exchange for such products based on purchase orders, annual price reductions and ongoing price adjustments.
+Added: The amount of revenue recognized reflects the consideration that Adient expects to be entitled to in exchange for such products based on purchase orders, annual price
+Added: Adient plc | Form 10-K | 63
+Added: reductions and ongoing price adjustments.
Refer to Note 2, “Revenue Recognition,” of the notes to consolidated financial statements for information on Adient's revenue recognition.
Essentially all of Adient's sales are to the automotive industry.
−Removed: Adient's most significant customers include Stellantis N.V.
−Removed: which comprised 12 % of consolidated net sales in fiscal 2022, Stellantis N.V.
−Removed: and Volkswagen Group which comprised 13 % and 11 % of consolidated net sales, respectively, in fiscal 2021, and Stellantis N.V.
−Removed: and Volkswagen Group which comprised 10 % and 10 % of consolidated net sales in fiscal 2020.
+Added: Adient's most significant customers, Volkswagen Group and Stellantis N.V., comprised 11 % and 10 %, respectively, of consolidated net sales in fiscal 2023.
+Added: Stellantis N.V.
+Added: comprised 12 % of consolidated net sales in fiscal 2022, and Stellantis N.V.
+Added: and Volkswagen Group comprised 13 % and 11 %, respectively, of consolidated net sales in fiscal 2021.
Research and Development Costs
2 unchanged sentences
A portion of these costs associated with these activities are reimbursed by customers and, for the fiscal years ended September 30, 2023, 2022 and 2021 were $ 250 million, $ 194 million and $ 210 million, respectively.
+Added: Government Assistance
+Added: Adient periodically receives government incentives in the forms of cash grants which are based on making qualifying capital investments in property, plant and equipment.
+Added: Such assistance is initially recorded as a reduction to property, plant and equipment.
+Added: Once in use, the balance is systematically recognized in the statements of income as the asset is depreciated over the useful life of the underlying asset.
+Added: Adient also periodically receives government assistance for creating new job opportunities and maintaining a certain number of employees.
+Added: Such employment-related incentives are normally deferred as current or noncurrent liabilities as appropriate.
+Added: These benefits are recognized in the statements of income as a reduction of expense when Adient has met or is expected to meet all related contractual obligations.
+Added: The impact of government assistance received by Adient during fiscal 2023 and related balances as of September 30, 2023 were immaterial.
Foreign Currency Translation
−Removed: Substantially all of Adient's international operations use the respective local currency as the functional currency.
+Added: Adient's international operations, in general, use the respective local currency as the functional currency.
Assets and liabilities of international entities have been translated at period-end exchange rates, and income and expenses have been translated using average exchange rates for the period.
Monetary assets and liabilities denominated in non-functional currencies are adjusted to reflect period-end exchange rates.
−Removed: The resulting translation adjustments are accumulated as a component of
−Removed: Adient plc | Form 10-K | 64
−Removed: accumulated other comprehensive income (AOCI).
+Added: The resulting translation adjustments are accumulated as a component of AOCI.
The aggregate transaction gains (losses) included in net income for the years ended September 30, 2023, 2022 and 2021 were $ 4 million, $ 6 million and $( 8 ) million, respectively.
9 unchanged sentences
Refer to Note 12, “Stock-Based Compensation,” of the notes to consolidated financial statements for Adient's stock based compensation disclosures.
+Added: Adient plc | Form 10-K | 64
Pension and Postretirement Benefits
31 unchanged sentences
Diluted $ 2.15 $ ( 1.27 ) $ 11.58
−Removed: The effect of common stock equivalents which would have been anti-dilutive was excluded from the calculation of diluted earnings per share for fiscal 2021 and was immaterial.
−Removed: Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share which for fiscal 2022 and 2020 is a result of being in a loss position.
+Added: The effect of common stock equivalents which would have been anti-dilutive was excluded from the calculation of diluted earnings per share for fiscal 2023 and 2021 and was immaterial.
+Added: Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share for fiscal 2022 which is a result of being in a loss position.
New Accounting Pronouncements
Standards Adopted During Fiscal 2023
−Removed: On October 1, 2021, Adient adopted Accounting Standards Codification (ASU) 2018-14 Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20).
−Removed: ASU 2018-14 eliminates, adds, and modifies certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.
−Removed: The guidance is to be applied on a retrospective basis.
−Removed: The adoption of this guidance on October 1, 2021 did not significantly impact Adient's consolidated financial statements for fiscal 2022.
−Removed: On October 1, 2021, Adient adopted ASU 2019-12, Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes.
−Removed: ASU 2019-12 modifies ASC 740, Income Taxes, by simplifying accounting for income taxes.
−Removed: As part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements, the FASB’s amendments may impact both interim and annual reporting periods.
+Added: On October 1, 2022, Adient adopted Accounting Standards Codification (“ASU”) 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40).
+Added: ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity by reducing the number of accounting models for convertible debt and convertible preferred stock.
The adoption of this guidance on October 1, 2022 did not significantly impact Adient's consolidated financial statements for fiscal 2023.
+Added: On October 1, 2022, Adient adopted ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance.
+Added: The ASU requires annual disclosures of:
+Added: (i) information about the nature of government assistance transactions and the related accounting policy used to account for the transactions;
+Added: (ii) the balance sheet and income statement line items affected by the transactions, and the amounts for each financial statement line item;
+Added: and (iii) significant transaction terms and conditions.
+Added: The adoption of this guidance on October 1, 2022 resulted in new disclosures but did not significantly impact Adient's consolidated financial statements for fiscal 2023.
Standards Effective After Fiscal 2023
−Removed: Adient has considered the ASUs summarized below, effective after fiscal 2022, none of which are expected to significantly impact the consolidated financial statements:
−Removed: Adient plc | Form 10-K | 66
+Added: Adient has considered the ASU summarized below, effective after fiscal 2023, which is not expected to significantly impact the consolidated financial statements but will result in new disclosures:
Standard Pending Adoption Description Date Effective
−Removed: ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity by reducing the number of accounting models for convertible debt and convertible preferred stock.
−Removed: October 1, 2022
−Removed: ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance The ASU requires annual disclosures of:
−Removed: i) information about the nature of government assistance transactions and the related accounting policy used to account for the transactions, ii) the balance sheet and income statement line items affected by the transactions, and the amounts for each financial statement line item, and iii) significant transaction terms and conditions.
−Removed: October 1, 2022
ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50):
2 unchanged sentences
October 1, 2023
+Added: Adient plc | Form 10-K | 66
Revenue Recognition
6 unchanged sentences
The amount of revenue recognized reflects the consideration that Adient expects to be entitled to in exchange for such products based on purchase orders, annual price reductions and ongoing price adjustments (some of which are accounted for as variable consideration and subject to being constrained), net of the impact, if any, of consideration paid to the customer.
+Added: Approximately 1 % of net sales recorded in fiscal 2023 were related to product sales transacted in prior fiscal years.
In a typical arrangement with the customer, purchase orders are issued for pre-production activities which consist of engineering, design and development, tooling and prototypes for the manufacture and delivery of component parts.
−Removed: Adient has concluded that these activities are not in the scope of ASC 606, “Revenue from Contracts with Customers,” and for that reason, there have been no changes to how Adient accounts for reimbursable pre-production costs.
+Added: Adient has concluded that these activities are not in the scope of ASC 606, “Revenue from Contracts with Customers.”
Adient includes shipping and handling fees billed to customers in revenue, while including costs of shipping and handling in cost of sales.
9 unchanged sentences
Refer to Note 17, “Segment Information,” of the notes to consolidated financial statements for disaggregated revenue by geographical market.
−Removed: Adient plc | Form 10-K | 67
Acquisitions and Divestitures
+Added: 2023 Transactions
+Added: Adient completed the acquisition of Nantong Yanfeng Adient Seating Trim Co., Ltd.
+Added: (“YFAT”) from KEIPER Seating Mechanisms Co., Ltd.
+Added: (“KEIPER”), in April 2023 for ¥ 150 million ($ 23 million).
+Added: Adient made an initial deposit of ¥ 75 million ($ 12 million) in fiscal 2022, which represents 50 % of the purchase price (reflected within other current assets as of September 30, 2022).
+Added: During fiscal 2023, Adient paid the remaining purchase price of ¥ 75 million ($ 11 million).
+Added: The acquisition was accounted for using the acquisition method, and the operating results and cash flows of YFAT are included in Adient's consolidated financial statements starting from May 2023.
+Added: The acquisition is expected to provide additional synergies within the Asia segment.
+Added: Adient recorded a purchase price allocation for the assets acquired and liabilities assumed based on their fair values as of the April 2023 acquisition date, which included $ 13 million of goodwill and $ 5 million of acquired cash.
+Added: The allocation of the purchase price is based on the valuations performed to determine the fair value of the net assets as of the acquisition date.
+Added: If the acquisition of YFAT had occurred on October 1, 2021, its impact on Adient's net sales and net income attributable to Adient for fiscal 2022 and fiscal 2023 would have been immaterial.
+Added: Upon acquisition, YFAT was renamed as Adient (Nantong) Automotive Seating Components Co., Ltd.
+Added: Adient also completed in fiscal 2023 the transfer of all of the issued and outstanding equity interests in two joint ventures in China held directly by Adient, each of which represents 25 % of their total issued and outstanding equity interests, to Yanfeng Automotive Trim Systems Company Ltd.
+Added: (“Yanfeng”) for $ 3 million.
+Added: Adient concluded that indicators of other-than-temporary impairment were present related to the investments in these joint ventures during fiscal 2022, and recorded a non-cash impairment charge of $ 3 million.
+Added: Adient plc | Form 10-K | 67
2021 Yanfeng Transaction
−Removed: On March 12, 2021, Adient, Yanfeng Automotive Trim Systems Company Ltd.
−Removed: (“Yanfeng”), Yanfeng Adient Seating Co., Ltd.
−Removed: (“YFAS”), a joint venture owned, directly or indirectly, by Yanfeng ( 50.01 %) and Adient ( 49.99 %), and KEIPER Seating Mechanisms Co., Ltd.
−Removed: (f/k/a Adient Yanfeng Seating Mechanisms Co., Ltd.
−Removed: (“AYM” or “KEIPER”), a joint venture owned, directly or indirectly, by Yanfeng ( 50 %) and Adient ( 50 %), entered into a Master Agreement (the “2021 Agreement”), pursuant to which the parties agreed to, among other things, transactions that resulted in the sale of Adient’s 49.99 % interest in YFAS to Yanfeng, the sale of Adient’s ownership interests in 3 other related joint ventures (ranging from 10 % to 25 %) to YFAS/KEIPER, and the purchase of YFAS’s 50 % interest in Chongqing Adient Automotive Components Co., Ltd.
+Added: On March 12, 2021, Adient, Yanfeng, Yanfeng Adient Seating Co., Ltd.
+Added: (“YFAS”), a joint venture owned, directly or indirectly, by Yanfeng ( 50.01 %) and Adient ( 49.99 %), and KEIPER, a joint venture owned, directly or indirectly, by Yanfeng ( 50 %) and Adient ( 50 %), entered into a Master Agreement (the “2021 Agreement”), pursuant to which the parties agreed to, among other things, transactions that resulted in the sale of Adient’s 49.99 % interest in YFAS to Yanfeng, the sale of Adient’s ownership interests in 3 other related joint ventures (ranging from 10 % to 25 %) to YFAS/KEIPER, and the purchase of YFAS’s 50 % interest in Chongqing Adient Automotive Components Co., Ltd.
(“CQADNT”) and YFAS’s 100 % interest in Adient (Langfang) Seating Co., Ltd.
9 unchanged sentences
With the acquisitions of Boxun’s 25 % and YFAS’s 50 % interest of CQADNT, Adient owns 100 % of CQADNT effective January 2022.
−Removed: As a result of the 2021 Agreement, Adient received $ 41 million during fiscal 2022 representing the remaining balance of proceeds from the sale of its interest in Yanfeng Global Automotive Interior Systems Co.
+Added: As a result of the 2021 Agreement, Adient also received $ 41 million during fiscal 2022 ($ 19 million had been receiving in fiscal 2021) representing the remaining balance of proceeds from the sale of its interest in Yanfeng Global Automotive Interior Systems Co.
(“YFAI”), a joint venture previously owned, directly or indirectly, by Yanfeng ( 70 %) and Adient ( 30 %), which was part of the 2020 Yanfeng Transaction (as defined and described in Form 10-K for the fiscal year ended September 30, 2021).
−Removed: The acquisition of CQADNT and LFADNT was accounted for using the acquisition method, and the operating results and cash flows of CQADNT and LFADNT have been included in Adient's consolidated financial statements since October 1, 2021.
−Removed: The acquisitions are expected to provide substantial synergies through vertical integration, purchasing and logistics improvements.
−Removed: The acquisitions also provide for an immediate controlled manufacturing presence in strategic locations in China.
−Removed: Adient recorded a purchase price allocation for the assets acquired and liabilities assumed based on their estimated fair values as of the September 30, 2021 acquisition date.
−Removed: The purchase price adjustments and allocation is as follows:
−Removed: Adient plc | Form 10-K | 68
−Removed: Fair value allocation
−Removed: (in millions) CQADNT LFADNT
−Removed: Cash $ 55 $ 5
−Removed: Accounts receivable 296 2
−Removed: Inventory 37 5
−Removed: Property, plant and equipment 86 8
−Removed: Other assets 39 2
−Removed: Goodwill 181 8
−Removed: Intangible assets 234 6
−Removed: Accounts payable ( 252 ) ( 19 )
−Removed: Other liabilities ( 121 ) ( 4 )
−Removed: Subtotal 555 13
−Removed: Interest already owned 103 —
−Removed: Redeemable noncontrolling interest 194 —
−Removed: Total purchase consideration 258 13
−Removed: cash acquired 55 5
−Removed: Net cash paid $ 203 $ 8
−Removed: The values allocated to CQADNT and LFADNT’s intangible assets of $ 234 million and $ 6 million, respectively, primarily consisted of customer relationships and patented technologies which are being amortized on a straight line basis over estimated useful lives of 3 to 12 years.
−Removed: The assets were valued using a combination of an income approach and a relief from royalty approach.
−Removed: These values were considered level 3 measurements under the U.S.
−Removed: GAAP fair value hierarchy.
−Removed: Key assumptions used in the valuation of customer relationships included a rate of return of 13.5 % and the life of the relationship of approximately 12 years.
−Removed: Key assumptions used in the valuation of patented technologies included a rate of return of 13.5 % and the life of the technologies of approximately 3 years.
−Removed: The allocation of the purchase price to goodwill and intangible assets was based on the valuations performed to determine the fair value of the net assets as of the acquisition date.
−Removed: Adient expensed $ 14 million of acquisition costs related to the 2021 Yanfeng Transaction during the year ended September 30, 2021.
−Removed: If the acquisitions of CQADNT and LFADNT had occurred on October 1, 2019, Adient’s net sales and net income attributable to Adient for fiscal 2021 would have been $ 14,529 million and $ 1,142 million, respectively, and Adient’s net sales and net loss attributable to Adient for fiscal 2020 would have been $ 13,250 million and $( 527 ) million, respectively.
−Removed: This unaudited pro forma information includes actual results of the entities and adjustments to amortization expense that would have been recognized due to acquired intangible assets, and related income tax effects.
−Removed: The unaudited pro forma financial information is not indicative of the operational results that would have been obtained had the transactions actually occurred as of that date, nor is it necessarily indicative of Adient’s future operational results.
−Removed: In fiscal 2022, Adient entered into an agreement whereby Adient would purchase all of the issued and outstanding equity interest in Nantong Yanfeng Adient Seating Trim Co., Ltd.
−Removed: (“YFAT”) held by KEIPER for ¥ 150 million ($ 24 million).
−Removed: Adient made an initial deposit of ¥ 75 million ($ 12 million) in fiscal 2022, which represents 50 % of the estimated purchase price (reflected within other current assets as of September 30, 2022).
−Removed: The transaction is subject to a public bidding process and other customary regulatory approvals, and is expected to be completed during the first half of fiscal 2023.
−Removed: The remaining 50 % of the estimated purchase price will be paid at the time of completion of the transaction.
−Removed: Also in fiscal 2022, Adient has entered into agreements whereby Adient would transfer all of the issued and outstanding equity interests in two joint ventures in China held directly by Adient, each of which represents 25 % of their total issued and outstanding equity interests, to Yanfeng for $ 3 million.
−Removed: As a result, Adient concluded that indicators of other-than-temporary impairment were present related to the investments in these joint ventures, and recorded a non-cash impairment charge of $ 3 million during the second quarter of fiscal 2022.
−Removed: The transactions are expected to be completed during the first half of fiscal 2023.
Russia/Ukraine conflict
−Removed: Adient plc | Form 10-K | 69
Following Russia's invasion of Ukraine in February 2022, Adient determined to withdraw from the Russian market.
1 unchanged sentence
On March 31, 2021, Adient sold its 50 % equity interest in Shenyang Jinbei Adient Automotive Components Co., Ltd.
−Removed: ("SJA") to the joint venture partner for $ 58 million, which resulted in a $ 33 million one-time gain recognized during the second quarter of fiscal 2021.
−Removed: On September 30, 2020, Adient closed on the sale of its automotive fabrics manufacturing business including the lamination business to Sage Automotive Interiors for net proceeds of approximately $ 170 million, net of $ 4 million of cash divested within the business.
−Removed: Proceeds from the transaction were used by Adient for general corporate purposes and to pay down a portion of Adient’s debt.
−Removed: A minimal gain was recorded as a result of the transaction after allocating $ 80 million of goodwill to the disposed business.
−Removed: The sale transaction included 11 facilities globally and approximately 1,300 employees.
−Removed: For fiscal year 2020, the fabrics manufacturing business recorded $ 99 million of third party sales and a nominal amount of pre-tax income.
−Removed: 2020 Yanfeng Transaction
−Removed: On January 31, 2020 (as amended on June 24, 2020), Adient, Yanfeng, KEIPER, YFAS and YFAI entered into a Master Agreement (the “2020 Agreement”, collectively referred to as “2020 Yanfeng Transaction”), pursuant to which the parties have agreed, among other things, that Adient would transfer all of the issued and outstanding equity interest in YFAI held, directly or indirectly, by Adient, which represents 30 % of YFAI’s total issued and outstanding equity interest, to Yanfeng for $ 369 million, of which $ 309 million was paid in fiscal 2020, $ 19 million in fiscal 2021, and $ 41 million in fiscal 2022.
−Removed: Upon the closing of the transaction, an intangible asset of $ 92 million was recorded associated with the YFAS joint venture extension to be amortized over the 18 -year term of the extension.
−Removed: The intangible asset was subsequently written off in fiscal 2021 as a result of the 2021 Yanfeng Transaction.
−Removed: As a result of the January 31, 2020 agreement, Adient concluded that indicators of other-than-temporary impairment were present related to the investment in YFAI and recorded a non-cash impairment of $ 231 million in fiscal 2020.
−Removed: The impairment was determined based on combining the fair value of consideration received for all transactions contemplated within the 2020 Agreement, including an estimated fair value of the YFAS joint venture extension, and allocating the total consideration received to the individual transactions based on relative fair values.
−Removed: Adient estimated the fair value of the individual transactions using both an income approach and market approach.
−Removed: The inputs utilized in the fair value analyses of the transactions are classified as level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement" and primarily consisted of expected future operating margins and cash flows of YFAI, estimated production volumes, estimated dividend payments from YFAS over the extension period, estimated terminal values of YFAS, market comparables, weighted-average costs of capital (YFAI - 15.0 %, YFAS - 10.5 %), and noncontrolling interest discounts.
−Removed: As a result of the pending divestiture of the YFAI investment and the corresponding impairment, Adient ceased recognizing equity income from YFAI.
−Removed: During fiscal 2020, Adient sold the RECARO automotive high performance seating systems business (“RECARO”) to a group of investors for de minimis proceeds.
−Removed: As a result of the sale, Adient recorded a loss of $ 21 million.
−Removed: Adient Aerospace
−Removed: Adient Aerospace, LLC ("Adient Aerospace") became operational on October 11, 2018 with Adient’s initial ownership position in Adient Aerospace being 50.01 %.
−Removed: Initial contributions of $ 28 million were made by each partner.
−Removed: During fiscal 2020, Adient reached an agreement with Boeing in which Adient’s ownership position was reduced to 19.99 %, resulting in the deconsolidation of Adient Aerospace on that date, including $ 37 million of cash.
−Removed: Adient recorded a $ 4 million loss as a result of the transaction in the Americas segment, including $ 21 million of allocated goodwill.
−Removed: Adient Aerospace develops, manufactures, and sells a portfolio of seating products to airlines and aircraft leasing companies for installation on Boeing and other OEM commercial airplanes, for both production line-fit and retrofit configurations.
−Removed: All of the acquisitions and divestiture transactions described above align with Adient's strategy of focusing on its core, high-volume seating business.
+Added: (“SJA”) to the joint venture partner for $ 58 million, which resulted in a $ 33 million one-time gain recognized during fiscal 2021.
Assets held for sale
−Removed: Adient plc | Form 10-K | 70
During fiscal 2022, Adient committed to sell certain assets in EMEA.
8 unchanged sentences
The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The sale of the assets in France was completed in fiscal 2021 for minimal proceeds while the sale of the assets in Turkey was completed in fiscal 2022 for total proceeds of $ 46 million, of which $ 36 million was collected at closing, and $ 10 million was collected later in fiscal 2022.
−Removed: During fiscal 2020, Adient committed to a plan to sell certain entities in China and certain properties in the U.S.
−Removed: As a result, these assets were classified as assets held for sale and were required to be adjusted to the lower of fair value less cost to sell or carrying value.
−Removed: This resulted in an impairment charge of $ 21 million which was recorded within restructuring and impairment costs on the consolidated statement of income (loss) during fiscal 2020, of which $ 12 million related to America’s assets and $ 9 million related to China’s assets.
−Removed: The impairment was measured using third party sales pricing to determine fair values of the assets.
−Removed: The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." These sales transactions were completed during fiscal 2021 for a total of $ 5 million of proceeds.
+Added: Adient plc | Form 10-K | 68
Inventories consisted of the following:
16 unchanged sentences
There were no material finance leases included in net property, plant and equipment at September 30, 2023 and 2022.
−Removed: Adient plc | Form 10-K | 71
As of September 30, 2023, Adient is the lessor of properties included in gross building and improvements for $ 13 million and accumulated depreciation of $ 9 million.
As of September 30, 2022, Adient is the lessor of properties included in gross building and improvements for $ 12 million and accumulated depreciation of $ 8 million.
−Removed: A correction of approximately $ 1.4 billion to reduce the carrying value of buildings and improvements, machinery and equipment and accumulated depreciation as of September 30, 2021 was recorded related to previously disposed assets.
Goodwill and Other Intangible Assets
2 unchanged sentences
Balance at September 30, 2021 $ 607 $ 354 $ 1,251 $ 2,212
−Removed: Business acquisitions — — 188 188
−Removed: Business divestitures — ( 11 ) — ( 11 )
Currency translation and other — ( 59 ) ( 96 ) ( 155 )
Balance at September 30, 2022 $ 607 $ 295 $ 1,155 $ 2,057
+Added: Business acquisitions — — 13 13
Currency translation and other 2 22 — 24
1 unchanged sentence
Refer to Note 3, “Acquisitions and Divestitures,” of the notes to consolidated financial statements for additional information.
−Removed: Adient performed its annual goodwill impairment test during the fourth quarter of fiscal 2022 using a fair value method based on management's judgments and assumptions regarding future cash flows.
−Removed: These calculations contain uncertainties as they require management to make assumptions about market comparables, future cash flows, and the appropriate discount rates (based on weighted average cost of capital ranging from 17.5 % to 21.0 %) to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value and related premium.
+Added: Adient performed its annual goodwill impairment test during the fourth quarter of fiscal year 2023 using a fair value method based on management's judgments and assumptions regarding future cash flows.
+Added: These calculations contain uncertainties as they require management to make assumptions about market comparables, future cash flows, and the appropriate discount rates
+Added: Adient plc | Form 10-K | 69
+Added: (based on weighted average cost of capital ranging from 17.0 % to 20.5 %) to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value and related premium.
The estimated future cash flows reflect management's latest assumptions of the financial projections based on current and anticipated competitive landscape, including estimates of revenue based on production volumes over the foreseeable future and long-term growth rates, and operating margins based on historical trends and future cost containment activities.
−Removed: The financial projections considered the impact that the COVID-19 pandemic, supply-chain disruptions, higher commodity, shipping and energy costs, and the Russia/Ukraine conflict are having on Adient’s current and future operations as well as the impact to new vehicle sales in future years.
+Added: The financial projections considered the impact of the various issues causing the volatility in the automotive industry such as wage inflationary pressures and higher interest rates.
As a result of the test, there was no goodwill impairment recorded for fiscal year 2023.
−Removed: A change in any of these estimates and assumptions, especially as it relates to the extent of the COVID-19 pandemic’s, supply-chain disruptions’ impacts on vehicle production volumes within the automotive industry, the impact of commodity, shipping and energy costs, the impact of the Russia/Ukraine conflict as well as the demand for new vehicle sales once the current operational disruptions are over, could produce significantly lower fair values of Adient's reporting units, which could have a material impact on its results of operations.
−Removed: Adient performed its annual goodwill test during the fourth quarter of fiscal 2021 using the same method and assumptions as described above (based on weighted average cost of capital ranging from 15.0 % to 17.5 %).
−Removed: As a result of the tests, there was no goodwill impairment recorded in fiscal 2021.
−Removed: Adient plc | Form 10-K | 72
+Added: A change in any of these estimates and assumptions could produce significantly lower fair values of Adient’s reporting units, which could have a material impact on its results of operations.
Adient's other intangible assets, primarily from business acquisitions valued based on independent appraisals, consisted of:
11 unchanged sentences
Total intangible assets $ 670 $ ( 262 ) $ 408 $ 684 $ ( 217 ) $ 467
−Removed: On September 30, 2021, Adient acquired CQADNT and LFADNT as part of the 2021 Yanfeng Transaction and recorded $ 176 million of customer relationships and $ 60 million of patented technology intangibles.
−Removed: The values of the intangible assets were determined based on independent appraisals.
−Removed: Adient evaluates its other intangible assets for impairment as facts and circumstances warrant.
−Removed: As part of the 2020 Yanfeng Transaction, Adient recorded an intangible asset of $ 92 million associated with the YFAS joint venture extension to 2038 (reflected in the Miscellaneous line in the table above), to be amortized over the 18 -year term of the extension.
−Removed: During fiscal 2021, Adient wrote off the remaining balance of the intangible asset ($ 86 million) as a result of the 2021 Yanfeng Transaction.
−Removed: Refer to Note 3, "Acquisitions and Divestitures," of the notes to the consolidated financial statements for additional information.
Amortization of other intangible assets for the fiscal years ended September 30, 2023, 2022 and 2021 was $ 50 million, $ 52 million and $ 45 million, respectively.
Adient anticipates amortization for fiscal 2024, 2025, 2026, 2027 and 2028 will be approximately $ 48 million, $ 47 million, $ 45 million, $ 39 million and $ 31 million, respectively.
−Removed: Product Warranties
+Added: Product Warranty
Adient offers warranties to its customers depending upon the specific product and terms of the customer purchase agreement.
9 unchanged sentences
Accruals for warranties issued during the period 8 8
−Removed: Changes in accruals related to pre-existing warranties (including changes in estimates) — ( 2 )
−Removed: Changes in accruals related to business acquisitions — 1
−Removed: Changes in accruals related to business divestitures — ( 1 )
Settlements made (in cash or in kind) during the period ( 8 ) ( 9 )
1 unchanged sentence
Balance at end of period $ 21 $ 21
−Removed: Adient plc | Form 10-K | 73
Adient's lease portfolio consists of operating leases for real estate including production facilities, warehouses and administrative offices, equipment such as forklifts and computer servers and laptops, and fleet vehicles.
−Removed: The Company has elected not to record leases with an initial term of 12 months or less on its consolidated statement of financial position.
+Added: Adient has elected not to record leases with an initial term of 12 months or less on its consolidated statement of financial position.
+Added: Adient plc | Form 10-K | 70
A lease liability and corresponding ROU asset are recognized based on the present value of lease payments.
−Removed: To determine the present value of lease payments, the Company uses its incremental borrowing rate as of lease commencement.
+Added: To determine the present value of lease payments, Adient uses its incremental borrowing rate as of lease commencement.
The incremental borrowing rate (IBR) is defined as the rate Adient would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
23 unchanged sentences
Present value of lease liabilities $ 240
−Removed: Adient plc | Form 10-K | 74
Supplemental cash flow information related to leases was as follows:
+Added: Adient plc | Form 10-K | 71
Year Ended September 30,
11 unchanged sentences
Long-term debt:
−Removed: Term Loan B - LIBOR plus 3.25 % due in 2028
−Removed: 4.875 % Notes due in 2026
+Added: 8.25 % Notes due 2031
+Added: 7.00 % Secured Notes due 2028
+Added: Term Loan B due in 2028 635 988
4.875 % Notes due in 2026
3.50 % Notes due in 2024
−Removed: European Investment Bank Loan - EURIBOR plus 1.58 % due in 2022
−Removed: Finance lease obligation 1 1
+Added: Other bank borrowings and finance lease obligations 4 1
debt issuance costs ( 31 ) ( 18 )
7 unchanged sentences
Adient US LLC (“Adient US”), a wholly owned subsidiary of Adient, together with certain of Adient's other subsidiaries, maintains an asset-based revolving credit facility (the “ABL Credit Facility”), which provides for a revolving line of credit up to $ 1,250 million, including a North American subfacility of up to $ 950 million and a European subfacility of up to $ 300 million, subject to borrowing base capacity and certain other restrictions, including a minimum fixed charge coverage ratio.
−Removed: The ABL Credit Facility was set to mature on May 6, 2024, subject to a springing maturity date 91 days earlier if certain amounts remain outstanding at that time under the Term Loan B Agreement (defined below).
−Removed: Adient will pay a commitment fee of 0.25 % to 0.375 % on the unused portion of the commitments under the asset-based revolving credit facility based on average global availability.
+Added: The ABL Credit Facility, as amended in November 2022, is set to mature on November 2, 2027, subject to certain springing maturity provisions.
+Added: Adient paid $ 7 million in debt issuance costs for the amended ABL Credit Facility and will pay a commitment fee of 0.25 % to 0.375 % on the unused portion of the commitments under the asset-based revolving credit facility based on average global availability.
Letters of credit are limited to the lesser of (x) $ 150 million and (y) the aggregate unused amount of commitments under the ABL Credit Facility then in effect.
2 unchanged sentences
dollars, Euros, Pounds Sterling or Swedish Kroner.
−Removed: The ABL Credit Agreement is secured on a first-
+Added: It also provides flexibility for future amendments to the ABL Facility to incorporate certain sustainability-based pricing provisions.
+Added: The ABL Credit Agreement is secured on a first-priority lien on all accounts receivable, inventory and bank accounts (and funds on deposit therein) and a second-priority lien on all of the tangible and intangible assets of certain Adient subsidiaries.
+Added: Interest is payable on the ABL
Adient plc | Form 10-K | 72
−Removed: priority lien on all accounts receivable, inventory and bank accounts (and funds on deposit therein) and a second-priority lien on all of the tangible and intangible assets of certain Adient subsidiaries.
−Removed: On November 24, 2021, Adient entered into an amendment to its ABL Credit Facility (the “2021 ABL Amendment”) to amend certain terms and provisions, including to (i) change the interest rate benchmark rates applicable under the ABL Credit Facility for borrowings denominated in euro, Swedish krona and pounds sterling to EURIBOR, STIBOR, and SONIA, in each case subject to certain adjustments, and (ii) update the provisions in our ABL Credit Facility by which U.S.
−Removed: dollar LIBOR will eventually be replaced with SOFR or another interest rate benchmark, in each case, to reflect the most recent standards and practices used in the industry.
−Removed: Interest is payable on the ABL Credit Facility at a fluctuating rate of interest determined by reference to LIBOR, in the case of amounts outstanding in dollars, EURIBOR, in the case of amounts outstanding in euros, STIBOR, in the case of amounts outstanding in Swedish krona and SONIA, in the case of amounts outstanding in pounds sterling, in each case, plus an applicable margin of 1.50 % to 2.00 %.
−Removed: On November 2, 2022, Adient entered into an amendment to its ABL Credit Facility (the “2022 ABL Amendment”) to amend certain terms and provisions, including to (i) extend its maturity date to November 2, 2027 (subject to certain springing maturity provisions), (ii) replace LIBOR with Term SOFR as the benchmark rate of interest for U.S.
−Removed: dollar borrowings thereunder and (iii) provide flexibility for future amendments to the ABL Credit Facility to incorporate certain sustainability-based pricing provisions.
−Removed: Other key terms and conditions of the facility remain unchanged.
−Removed: As of September 30, 2022, Adient had not drawn down on the ABL Credit Facility and had availability under this facility of $ 899 million (net of $ 13 million of letters of credit).
−Removed: In addition, Adient US and Adient Global Holdings S.à r.l., a wholly-owned subsidiary of Adient, maintain a term loan credit agreement, as amended in fiscal 2021, (the “Term Loan B Agreement”) that provides for a $ 1.0 billion senior secured term loan facility.
−Removed: The Term Loan B Agreement amortizes in equal quarterly installments at a rate of 1.00 % per annum of the original principal amount thereof, with the remaining balance due at final maturity on April 8, 2028.
+Added: Credit Facility at a fluctuating rate of interest determined by reference to Term SOFR, in the case of amounts outstanding in dollars, EURIBOR, in the case of amounts outstanding in euros, STIBOR, in the case of amounts outstanding in Swedish krona and SONIA, in the case of amounts outstanding in pounds sterling, in each case, plus an applicable margin of 1.50 % to 2.00 %.
+Added: As of September 30, 2023, Adient had not drawn down on the ABL Credit Facility and had availability under this facility of approximately $ 900 million (net of $ 12 million of letters of credit).
+Added: In addition, Adient US and Adient Global Holdings S.à r.l., a wholly-owned subsidiary of Adient, maintain a senior secured term loan facility (the “Term Loan B Agreement”) that had an outstanding balance of $ 988 million as of September 30, 2022.
+Added: During fiscal 2023, Adient prepaid $ 350 million of the Term Loan B Agreement principal, and wrote off $ 2 million of previously deferred financing costs to net financing charges.
+Added: As of September 30, 2023, the remaining balance of this debt was $ 635 million, maintained fully at Adient Global Holdings S.à r.l., which is due at final maturity on April 8, 2028.
Interest on the Term Loan B Agreement accrues at the Eurodollar rate plus an applicable margin equal to 3.25 %.
The Term Loan B Agreement also permits Adient to incur incremental term loans in an aggregate amount not to exceed the greater of $ 750 million and an unlimited amount subject to a pro forma first lien secured net leverage ratio of not greater than 1.75 to 1.00 and certain other conditions.
−Removed: Adient paid $ 7 million related to the fiscal 2021 amendment along with expensing $ 8 million of previously deferred financing costs to net financing charges.
−Removed: Adient US was also a party to an indenture relating to the issuance of $ 800 million aggregate principal amount of Senior First Lien Notes.
−Removed: The notes were set to mature on May 15, 2026 and bore interest at a rate of 7.00 % per annum.
−Removed: Interest on these notes was payable semi-annually in arrears on November 15 and May 15 of each year.
−Removed: During fiscal 2021, Adient repurchased the full amount of the outstanding balance of the Senior First Lien Notes at a premium of $ 50 million plus $ 21 million of accrued and unpaid interest.
−Removed: As a result, $ 12 million of previously deferred financing costs were expensed to net financing charges.
+Added: In April 2023, the Term Loan B Agreement was amended to replace the LIBOR base rate with Term SOFR.
The ABL Credit Facility and Term Loan B Agreement contain covenants that are usual and customary for facilities and debt instruments of this type and that, among other things, restrict the ability of Adient and its restricted subsidiaries to:
6 unchanged sentences
The agreements also provide for customary events of default, including, but not limited to, cross-default clauses with other debt arrangements, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving Adient and its significant subsidiaries.
−Removed: Adient Global Holdings Ltd.
−Removed: (“AGH”), a wholly-owned subsidiary of Adient, previously maintained $ 900 million aggregate principal amount of 4.875 % USD-denominated unsecured notes due 2026.
−Removed: During the fourth quarter of fiscal 2020, Adient redeemed $ 103 million of face value of these notes, resulting in a remaining balance of $ 797 million as of September 30, 2020.
−Removed: Adient further redeemed $ 2 million of the notes during fiscal 2021, resulting in a remaining balance of $ 795 million as of September 30, 2022 and 2021.
−Removed: AGH also previously maintained € 1.0 billion aggregate principal amount of 3.50 % unsecured notes due 2024.
−Removed: In fiscal 2022, Adient repurchased € 177 million ($ 198 million) of the 3.50 % unsecured notes due 2024 at a premium of € 3 million ($ 4 million) plus € 3 million ($ 3 million) of accrued and unpaid interest, and expensed € 1 million ($ 1 million) of previously deferred financing costs to net financing charges.
−Removed: As of September 30, 2022, the remaining balance of this debt was € 823 million ($ 809 million).
+Added: During fiscal 2023, Adient Global Holdings Ltd.
+Added: (“AGH”), a wholly-owned subsidiary of Adient, issued (i) $ 500 million (net proceeds of $ 494 million) in aggregate principal amount of 7 % senior secured notes due 2028 and (ii) $ 500 million (net proceeds of $ 494 million) in aggregate principal amount of 8.250 % senior unsecured notes due 2031.
+Added: Interest on both of these notes will be paid on April 15 and October 15 each year, beginning on October 15, 2023.
+Added: These notes contain covenants that are usual and customary.
+Added: The total net proceeds of $ 988 million along with cash on hand were used primarily to redeem $ 350 million of the senior secured term loan facility under the Term Loan B Agreement as described above, and repurchase € 700 million ($ 743 million) of the 3.50 % unsecured notes due 2024 as described below.
+Added: Adient paid $ 16 million in debt issuance costs for these new debt issuances.
+Added: AGH previously maintained $ 900 million aggregate principal amount of 4.875 % USD-denominated unsecured notes due 2026.
+Added: Adient redeemed $ 103 million and $ 2 million during fiscal 2020 and 2021, respectively, resulting in a remaining balance of $ 795 million as of September 30, 2023 and 2022.
+Added: AGH also previously maintained € 1.0 billion aggregate principal amount of 3.50 % unsecured notes due in August 2024.
+Added: During fiscal 2022, Adient repurchased € 177 million ($ 198 million) of the 3.50 % unsecured notes due 2024 at a premium of € 3 million ($ 4 million) plus € 3 million ($ 3 million) of accrued and unpaid interest, and expensed € 1 million ($ 1 million) of previously deferred financing costs to net financing charges, resulting in a remaining balance of € 823 million ($ 809 million) as of September 30, 2022.
+Added: During fiscal 2023, Adient repurchased an additional € 700 million ($ 743 million) of the 3.50 % unsecured notes due 2024 at a premium of € 7 million ($ 7 million) plus € 3 million ($ 3 million) of accrued and unpaid interest, and expensed € 2 million ($ 2 million) of previously deferred financing costs to net financing charges.
+Added: As of September 30, 2023, the remaining balance of this debt was € 123 million ($ 130 million) and is classified as current portion of long-term debt on the consolidated statement of financial position.
Adient Germany Ltd.
1 unchanged sentence
The loan bore interest at the 6-month EURIBOR rate plus 158 basis points.
−Removed: During fiscal 2021, Adient repaid $ 36 million of the EIB loan, triggered in part by the
−Removed: Adient plc | Form 10-K | 76
−Removed: redemption of debt and the sale of the fabrics business in the prior year.
+Added: During fiscal 2021, Adient repaid $ 36 million of the EIB loan, triggered in part by the redemption of debt and the sale of the fabrics business in the prior year.
Adient fully repaid the remaining balance of the EIB loan in May 2022 upon its maturity.
−Removed: On April 20, 2020, Adient US issued $ 600 million (net proceeds of $ 591 million) aggregate principal amount of 9.00 % Senior First Lien Notes due 2025.
−Removed: These notes were set to mature on April 15, 2025, provided that if AGH has not refinanced (or otherwise redeemed) in whole its outstanding 3.50 % unsecured notes due 2024 or any refinancing indebtedness thereof that matures earlier than 91 days prior to the maturity date of the Senior First Lien Notes due 2025 on or prior to May 15, 2024, these notes will mature on May 15, 2024.
−Removed: Interest on these notes was due on April 15 and October 15 each year, beginning on October 15, 2020.
−Removed: These notes contained covenants that were usual and customary, similar to the covenants as described above.
−Removed: Adient incurred $ 10 million of debt issuance cost associated with this new debt in fiscal 2020.
−Removed: In fiscal 2022, Adient repurchased the full $ 600 million of 9.00 % Senior First Lien Notes due 2025 at a premium of $ 34 million plus $ 19 million of accrued and unpaid interest, and expensed $ 7 million of previously deferred financing costs to net financing charges.
+Added: In April 2020, Adient US issued $ 600 million (net proceeds of $ 591 million) aggregate principal amount of 9.00 % Senior First Lien Notes due 2025.
+Added: In fiscal 2022, Adient repurchased the full $ 600 million of 9.00 % Senior First Lien Notes due 2025 at a
+Added: Adient plc | Form 10-K | 73
+Added: premium of $ 34 million plus $ 19 million of accrued and unpaid interest, and expensed $ 7 million of previously deferred financing costs to net financing charges.
Principal payments required on long-term debt during the next five years are as follows:
September 30,
−Removed: (in millions) 2023 2024 2025 2026 2027
+Added: (in millions) 2024 2025 2026 2027 2028 Thereafter
Principal payments $ 132 $ — $ 797 $ — $ 1,135 $ 500
8 unchanged sentences
Derivative loss on Yanfeng transaction — 3 30
−Removed: (Gain) on extinguishment of debt — — ( 3 )
+Added: Net foreign exchange 4 — —
Net financing charges $ 195 $ 215 $ 311
−Removed: Banking fees in fiscal 2022 and 2021 includes $ 8 million and $ 20 million, respectively, of one-time accelerated-deferred financing fee charges associated with voluntary repayments of debt and the amendment and extension of Adient's Term Loan B agreement.
+Added: Banking fees in fiscal 2023 and 2022 includes $ 4 million and $ 8 million, respectively, of one-time accelerated-deferred financing fee charges associated with voluntary repayments of debt.
Total interest paid on both short and long-term debt for the fiscal years ended September 30, 2023, 2022 and 2021 was $ 132 million, $ 192 million and $ 229 million, respectively.
+Added: Adient enters into supply chain financing programs in certain domestic and foreign jurisdictions to either sell or discount accounts receivable without recourse to third-party institutions.
+Added: Sales or discounts of accounts receivable are reflected as a reduction of accounts receivable on the consolidated statements of financial position and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows.
+Added: As of September 30, 2023, $ 170 million was funded under these programs compared to $ 269 million as of September 30, 2022.
Derivative Instruments and Hedging Activities
8 unchanged sentences
Gains and losses on derivative contracts offset gains and losses on underlying foreign currency exposures.
−Removed: These contracts have been designated as cash flow hedges under ASC 815, "Derivatives and Hedging," and the hedge gains or losses due to changes in fair value are initially recorded as a component of accumulated other comprehensive income (AOCI) and are
−Removed: Adient plc | Form 10-K | 77
−Removed: subsequently reclassified into earnings when the hedged transactions occur and affect earnings.
−Removed: During the second quarter of fiscal 2020, as a result of the COVID-19 impacts and the resulting interruptions to Adient's operations, a loss of $ 2 million related to ineffective hedges was reclassified to the consolidated statement of income.
+Added: These contracts have been designated as cash flow hedges under ASC 815, "Derivatives and Hedging," and the hedge gains or losses due to changes in fair value are initially recorded as a component of AOCI and are subsequently reclassified into earnings when the hedged transactions occur and affect earnings.
All contracts were highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates at September 30, 2023 and 2022, respectively.
−Removed: As of September 30, 2022, the € 823 million ($ 809 million) aggregate principal amount of 3.50 % euro-denominated unsecured notes due 2024 was designated as a net investment hedge to selectively hedge portions of Adient's net investment in Europe.
−Removed: The currency effects of Adient's euro-denominated bonds are reflected in the AOCI account within shareholders' equity attributable to Adient where they offset gains and losses recorded on Adient's net investment in Europe.
−Removed: Adient entered into a cross-currency interest rate swap during fiscal 2019 to selectively hedge portions of its net investment in Japan.
−Removed: The currency effects of the cross-currency interest rate swap was reflected in the AOCI account within shareholders' equity attributable to Adient, where they offset gains and losses recorded on Adient's net investment in Japan.
−Removed: The contract matured during fiscal 2021.
−Removed: There was no outstanding Japanese yen denominated cross-currency interest rate swap outstanding as of September 30, 2022.
−Removed: Adient purchased interest rate caps during fiscal 2019 to selectively limit the impact of USD LIBOR increases on its interest payments related to Adient's Term Loan B Agreement.
−Removed: The interest rate caps are designated as cash flow hedges under ASC 815.
−Removed: During fiscal 2021, in conjunction with the Term Loan B Amendment as discussed in Note 9, "Debt and Financing Arrangements," Adient de-designated these zero contracts, the impact of which was not material.
−Removed: The contracts matured in fiscal 2022.
−Removed: As of September 30, 2022, Adient had no outstanding interest rate caps.
−Removed: In conjunction with the 2021 Yanfeng Transaction as described in Note 3, "Acquisitions and Divestitures," Adient entered into two forward foreign currency exchange contracts in fiscal 2021 with total notional amount of approximately ¥ 7,482 million ($ 1,123 million) in order to economically hedge the expected proceeds.
−Removed: One contract matured at the end of fiscal 2021 which resulted in a net cash payment of $ 14 million, and the other contract matured in fiscal 2022.
−Removed: These contracts were treated as freestanding financial instruments with fair value changes recorded in earnings.
−Removed: These contracts resulted in realized and unrealized losses of $ 14 million and $ 16 million, respectively, during fiscal 2021, and realized losses of $ 3 million during fiscal 2022.
−Removed: Refer to Note 9, "Debt and Financing Arrangements," of the notes to consolidated financial statements for more information.
−Removed: Adient entered into a ¥ 150 million ($ 23 million) foreign exchange forward contract during the second quarter of fiscal 2022 to selectively hedge portions of its net investment in China.
−Removed: The currency effects of the forward contract are reflected in the AOCI account within shareholder’s equity attributable to Adient, where they offset gains and losses recorded on Adient’s net investment in China.
−Removed: The forward contract matured in early fiscal 2023.
+Added: As of September 30, 2023, the € 123 million ($ 130 million) aggregate principal amount of 3.50 % euro-denominated unsecured notes due August 2024 was designated as a net investment hedge to selectively hedge portions of Adient's net investment in
Adient plc | Form 10-K | 74
+Added: The currency effects of Adient's euro-denominated notes are reflected in the AOCI account within shareholders' equity attributable to Adient where they offset gains and losses recorded on Adient's net investment in Europe.
+Added: In October 2023, Adient de-designated these notes as a net investment hedge concurrent with entering into a foreign exchange forward contract designated as a fair value hedge of the remaining principal balance on the 3.50 % notes.
+Added: The impact of foreign currency changes on the notes and the contract will be recorded in net financing charges until payment of the notes and maturity of the foreign exchange forward contract in August 2024.
+Added: Adient entered into a ¥ 240 million ($ 35 million) foreign exchange forward contract during the second quarter of fiscal 2023 to selectively hedge portions of its net investment in China.
+Added: The currency effects of the forward contract were reflected in the AOCI account within shareholders’ equity attributable to Adient, where they offset gains and losses recorded on Adient’s net investment in China.
+Added: During fiscal 2023, the foreign exchange forward contract matured, the impact of which was not material.
+Added: Adient entered into a ¥ 150 million ($ 23 million) foreign exchange forward contract during fiscal 2022 to selectively hedge portions of its net investment in China.
+Added: The currency effects of the forward contract are reflected in the AOCI account within shareholders’ equity attributable to Adient, where they offset gains and losses recorded on Adient’s net investment in China.
+Added: The forward contract matured in early fiscal 2023, the impact of which was not material.
The following table presents the location and fair values of derivative instruments and other amounts used in hedging activities included in Adient's consolidated statements of financial position:
10 unchanged sentences
Foreign currency exchange derivatives $ 30 $ 17 $ 4 $ 3
−Removed: Other noncurrent assets
−Removed: Foreign currency exchange derivatives — — — 1
Total assets $ 30 $ 17 $ 4 $ 3
6 unchanged sentences
Total liabilities $ 144 $ 831 $ — $ 1
−Removed: Adient enters into International Swaps and Derivatives Associations (ISDA) master netting agreements with counterparties that permit the net settlement of amounts owed under the derivative contracts.
+Added: Adient enters into International Swaps and Derivatives Associations master netting agreements with counterparties that permit the net settlement of amounts owed under the derivative contracts.
The master netting agreements generally provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.
9 unchanged sentences
Net amount $ 22 $ 1 $ 132 $ 813
+Added: Adient plc | Form 10-K | 75
The following table presents the effective portion of pretax gains (losses) recorded in other comprehensive income related to cash flow hedges:
3 unchanged sentences
The following table presents the location and amount of the effective portion of pretax gains (losses) on cash flow hedges reclassified from AOCI into Adient's consolidated statements of income:
−Removed: Adient plc | Form 10-K | 79
(in millions) Year Ended
2 unchanged sentences
Foreign currency exchange derivatives Cost of sales $ 66 $ 6 $ 2
+Added: During the next twelve months, $ 23 million of pretax gains on cash flow hedges are expected to be reclassified from AOCI into Adient's consolidated statements of income.
The following table presents the location and amount of pretax gains (losses) on derivatives not designated as hedging instruments recognized in Adient's consolidated statements of income (loss):
6 unchanged sentences
The effective portion of pretax gains (losses) recorded in currency translation adjustment (“CTA”) within other comprehensive income (loss) related to net investment hedges was $( 67 ) million, $ 151 million and $ 17 million for the fiscal years ended September 30, 2023, 2022 and 2021, respectively.
−Removed: For the years ended September 30, 2022, 2021 and 2020, respectively, no gains or losses were reclassified from CTA into income for Adient's outstanding net investment hedges.
−Removed: For the year ended September 30, 2020, a loss of $ 2 million was recognized in the consolidated statement of income (loss) for the ineffective portion of cash flow hedges.
+Added: For the years ended September 30, 2023, 2022 and 2021, respectively, no significant gains or losses were reclassified from CTA into income for Adient's outstanding net investment hedges.
For the years ended September 30, 2023 and 2022, no gains or losses were recognized in income for the ineffective portion of cash flow hedges.
7 unchanged sentences
When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.
+Added: Adient plc | Form 10-K | 76
Recurring Fair Value Measurements
1 unchanged sentence
Refer to Note 14, “Retirement Plans,” of the notes to consolidated financial statements for fair value tables of pension assets.
−Removed: Adient plc | Form 10-K | 80
Fair Value Measurements Using:
20 unchanged sentences
Foreign currency exchange derivatives $ 20 $ — $ 20 $ —
−Removed: Other noncurrent assets
−Removed: Foreign currency exchange derivatives 1 — 1 —
Total assets $ 20 $ — $ 20 $ —
10 unchanged sentences
The changes in fair value of foreign currency exchange derivatives not designated as hedging instruments under ASC 815 are recorded in the consolidated statements of income.
−Removed: Cross-currency interest rate swaps Adient determines the fair value of a cross-currency interest rate swap contract using a market approach which is based on quoted market price for similar instruments in markets.
−Removed: All significant inputs are corroborated by observable market data for the term of such a contract.
−Removed: Adient selectively uses cross-currency interest rate swaps to hedge portions of its net investments.
−Removed: Interest rate caps Adient determines the fair value of an interest rate cap contract using a market approach which is based on quoted market price for identical or similar instruments in markets.
−Removed: All significant inputs are corroborated by observable market data for the term of such a contract.
−Removed: Adient selectively used interest rate caps to limit the impact of floating rate interest payment increases on its Term Loan B Agreement.
−Removed: The interest rate caps were designated as cash flow hedges under ASC 815.
−Removed: As of September 30, 2022, Adient had no interest rate caps outstanding.
−Removed: Adient plc | Form 10-K | 81
+Added: The fair value of cash and cash equivalents, accounts receivable, short-term debt and accounts payable approximate their carrying values.
The fair value of long-term debt, which was $ 2.5 billion and $ 2.4 billion at September 30, 2023 and 2022, respectively, was determined primarily using market quotes classified as Level 1 inputs within the ASC 820 fair value hierarchy.
+Added: Adient plc | Form 10-K | 77
Stock-Based Compensation
5 unchanged sentences
No material income tax benefits were recognized in the consolidated statements of income for the share-based compensation arrangements in any of these years due to tax valuation allowances in those years.
−Removed: In conjunction with the separation, previously outstanding stock-based compensation awards granted under the former Parent's equity compensation programs prior to the separation and held by certain executives and employees of Adient were adjusted and converted into new Adient equity awards using a formula designated to preserve the intrinsic value of the awards.
−Removed: Upon the separation on October 31, 2016, holders of former Parent stock options, RSUs, and SARs generally received one ordinary share of Adient for every ten ordinary shares of the former parent held at the close of business on October 19, 2016, the record date of the distribution, and cash in lieu of fractional shares (if any) of Adient.
−Removed: Accordingly, certain executives and employees of Adient hold converted awards in both the former Parent and Adient shares subsequent to the separation.
−Removed: Converted awards retained the vesting schedule and expiration date of the original awards.
−Removed: Outstanding stock awards related to the former Parent stock are not included in Adient's dilutive share calculation.
−Removed: The following tables present activity related to the granting of awards during the year ended September 30, 2022 along with the composition of outstanding and exercisable awards at September 30, 2022 for remaining former Parent and Adient awards.
+Added: The following tables present activity related to the granting of awards during the year ended September 30, 2023 along with the composition of outstanding and exercisable awards at September 30, 2023.
Restricted Stock
1 unchanged sentence
These awards are typically share settled except for certain non-U.S.
−Removed: employees or those who elected to defer past awards settlement until retirement at which point the award would be settled in cash.
+Added: employees which are settled in cash.
Cash settled awards are recorded in Adient's consolidated statements of financial position as a liability and adjusted each reporting period for changes in share value until the settlement of the award.
12 unchanged sentences
That cost is expected to be recognized over a weighted-average period of 1.9 years.
−Removed: Adient plc | Form 10-K | 82
Performance Share Awards
3 unchanged sentences
Each PSU that is earned will be settled with an ordinary share of Adient following the completion of the performance period except for certain non-U.S.
−Removed: employees or those who elected to defer a portion or all of past awards until retirement, which would then be settled in cash.
+Added: employees which are settled in cash.
Cash settled awards are recorded in Adient's consolidated statements of financial position as a liability and adjusted each reporting period for changes in share value until the settlement of the award.
+Added: Adient plc | Form 10-K | 78
A summary of the status of Adient's nonvested PSUs at September 30, 2023, and changes for the fiscal year then ended is presented below:
11 unchanged sentences
No new stock options have been granted under the Plan.
−Removed: Stock options were previously granted to eligible employees prior to the separation from the former Parent.
Stock option awards typically vest between two and three years after the grant date and expire ten years from the grant date.
5 unchanged sentences
(in millions)
−Removed: Outstanding, September 30, 2021
+Added: Outstanding and exercisable, September 30, 2022
$ 38.32 49,939
1 unchanged sentence
Forfeited or expired 27.54 ( 2,444 )
−Removed: Outstanding, September 30, 2022
−Removed: $ 38.32 49,939 1.2 $ —
−Removed: Exercisable, September 30, 2022
−Removed: $ 38.32 49,939 1.2 $ —
−Removed: Former Parent outstanding and exercisable, September 30, 2022
−Removed: $ 25.67 20,971 0 $ —
−Removed: Adient outstanding and exercisable, September 30, 2022
−Removed: $ 47.48 28,968 2.1 $ —
−Removed: Total outstanding and exercisable, September 30, 2022
+Added: Outstanding and exercisable, September 30, 2023
48.93 26,857 1.3 $ —
There were no stock options granted in fiscal years 2023, 2022 and 2021, respectively.
−Removed: The total intrinsic value of options exercised by Adient employees during the fiscal years ended September 30, 2022, 2021 and 2020 was approximately $ 1 million, $ 7 million and $ 1 million, respectively, primarily consisting of former Parent awards.
−Removed: Adient plc | Form 10-K | 83
+Added: The total intrinsic value of options exercised by Adient employees during the fiscal years ended September 30, 2023, 2022 and 2021 was approximately $ 1 million, $ 1 million and $ 7 million, respectively.
Stock Appreciation Rights
5 unchanged sentences
The fair value of each SAR award is recalculated at the end of each reporting period and the liability and expense are adjusted based on the new fair value.
+Added: Adient plc | Form 10-K | 79
A summary of SAR activity at September 30, 2023, and changes for the year then ended, is presented below:
7 unchanged sentences
Outstanding, September 30, 2023
−Removed: $ 43.87 42,454 2.0 $ —
−Removed: Exercisable, September 30, 2022
−Removed: $ 43.87 42,454 2.0 $ —
−Removed: Former Parent outstanding and exercisable, September 30, 2022
−Removed: $ 43.94 37,705 2.0 $ —
−Removed: Adient outstanding and exercisable, September 30, 2022
−Removed: $ 43.25 4,749 1.6 $ —
−Removed: Total outstanding and exercisable, September 30, 2022
−Removed: $ 43.87 42,454 2.0 $ —
In conjunction with the exercise of SARs, Adient made payments of $ 1 million, $ 2 million and $ 2 million during the fiscal years ended September 30, 2023, 2022 and 2021, respectively.
−Removed: Adient plc | Form 10-K | 84
Equity and Noncontrolling Interests
6 unchanged sentences
Balance at end of period (1)
+Added: ( 854 ) ( 836 ) ( 617 )
Realized and unrealized gains (losses) on derivatives
8 unchanged sentences
Accumulated other comprehensive income (loss), end of period $ ( 842 ) $ ( 845 ) $ ( 627 )
+Added: (1) Foreign currency translation adjustments as of September 30, 2023 and 2022 include derivative net investment hedge gains of $ 76 million and $ 143 million, respectively.
+Added: During the next twelve months, no significant gains or losses are expected to be reclassified from AOCI into Adient's consolidated statements of income.
Adient consolidates certain subsidiaries in which the noncontrolling interest party has within their control the right to require Adient to redeem all or a portion of its interest in the subsidiary.
3 unchanged sentences
The following table presents changes in the redeemable noncontrolling interests:
+Added: Adient plc | Form 10-K | 80
Year Ended September 30,
7 unchanged sentences
Ending balance $ 57 $ 45 $ 240
−Removed: Refer to Note 3, “Acquisitions and Divestitures,” of the notes to the consolidated financial statements for more information on the business acquisition addition of redeemable noncontrolling interest and change in noncontrolling interest share.
+Added: Refer to Note 3, “Acquisitions and Divestitures,” of the notes to the consolidated financial statements for additional information on the change in redeemable noncontrolling interests during fiscal 2022 and 2021.
+Added: Repurchases of Equity Securities
+Added: In November 2022, Adient’s board of directors authorized the repurchase of Adient’s ordinary shares up to an aggregate purchase price of $ 600 million with no expiration date.
+Added: Under the share repurchase authorization, Adient’s ordinary shares may be purchased either through discretionary purchases on the open market, by block trades or privately negotiated transactions.
+Added: The number of ordinary shares repurchased, if any, and the timing of repurchases will depend on a number of factors, including share price, trading volume and general market conditions, as well as on working capital requirements, general business conditions and other factors.
+Added: During fiscal 2023, Adient repurchased and immediately retired 1,756,777 shares of its ordinary shares at an average purchase price per share of $ 37.00 .
+Added: The aggregate amount of cash paid to repurchase the shares was $ 65 million.
+Added: As of September 30, 2023, the remaining aggregate amount of authorized repurchases was $ 535 million.
Retirement Plans
7 unchanged sentences
pension plans equals or exceeds the minimum requirements of the Employee Retirement Income Security Act of 1974.
−Removed: Adient plc | Form 10-K | 85
For pension plans with accumulated benefit obligations (“ABO”) that exceed plan assets, the projected benefit obligation (“PBO”), ABO and fair value of plan assets of those plans were $ 155 million, $ 137 million and $ 48 million, respectively, as of September 30, 2023, and $ 129 million, $ 112 million and $ 37 million, respectively, as of September 30, 2022.
−Removed: For pension plans with PBO that exceed plan assets, PBO, ABO and fair value of plan assets of those plans were $ 129 million, $ 112 million and $ 37 million, respectively, as of September 30, 2022 and $ 204 million, $ 182 million and $ 72 million, respectively, as of September 30, 2021.
+Added: For pension plans with a PBO that exceed plan assets, the PBO, ABO and fair value of plan assets of those plans were $ 155 million, $ 137 million and $ 48 million, respectively, as of September 30, 2023 and $ 129 million, $ 112 million and $ 37 million, respectively, as of September 30, 2022.
In fiscal 2023, Adient paid contributions to the defined benefit pension plans of $ 17 million.
2 unchanged sentences
2029-2032 135
+Added: Adient plc | Form 10-K | 81
Savings and Investment Plans
1 unchanged sentence
Under specified conditions, Adient will contribute to certain savings plans based on the employees' eligible pay and/or will match a percentage of the employee contributions up to certain limits.
−Removed: Matching contributions expense in connection with these plans amounted to $ 23 million and $ 44 million for fiscal years 2022 and 2021, respectively.
+Added: Matching contributions expense in connection with these plans amounted to $ 46 million, $ 23 million and $ 44 million for fiscal years 2023, 2022 and 2021, respectively.
Adient's investment policies employ an approach whereby a mix of equities, fixed income and alternative investments are used to maximize the long-term return of plan assets for a prudent level of risk.
12 unchanged sentences
Adient's plan assets by asset category, are as follows:
−Removed: Adient plc | Form 10-K | 86
Fair Value Measurements Using:
9 unchanged sentences
International - Developed 17 17 — — —
−Removed: International - Emerging 1 — — — 1
Fixed Income Securities
4 unchanged sentences
Total $ 263 $ 78 $ 134 $ 4 $ 47
+Added: Adient plc | Form 10-K | 82
Fair Value Measurements Using:
26 unchanged sentences
The fair value of hedge funds is determined by the custodian.
−Removed: The custodian obtains valuations from underlying managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading
−Removed: Adient plc | Form 10-K | 87
−Removed: activity to derive prices.
+Added: The custodian obtains valuations from underlying managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading activity to derive prices.
Adient and custodian review the methods used by the underlying managers to value the assets.
10 unchanged sentences
Furthermore, while Adient believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
+Added: Adient plc | Form 10-K | 83
The following sets forth a summary of changes in the fair value of pension assets measured using significant unobservable inputs (Level 3):
5 unchanged sentences
Redemptions ( 2 )
−Removed: Unrealized gain —
+Added: Unrealized (loss) ( 1 )
Asset value as of September 30, 2023 $ 4
1 unchanged sentence
The table that follows contains the ABO and reconciliations of the changes in the PBO, the changes in plan assets and the funded status:
−Removed: Adient plc | Form 10-K | 88
Pension Benefits
5 unchanged sentences
Interest cost 18 11
−Removed: Plan participant contributions — —
Actuarial (gain) loss ( 15 ) ( 169 )
Benefits paid ( 20 ) ( 20 )
−Removed: Settlements and curtailments — ( 16 )
−Removed: Divestitures — ( 2 )
+Added: Curtailments, settlements and other ( 6 ) —
Currency translation adjustment 27 ( 63 )
3 unchanged sentences
Actual return on plan assets ( 23 ) ( 149 )
−Removed: Employer contributions/(distributions) 16 23
+Added: Employer contributions, net 17 16
Benefits paid ( 20 ) ( 20 )
−Removed: Settlements and curtailments ( 1 ) ( 16 )
+Added: Curtailments, settlements and other ( 14 ) ( 1 )
Currency translation adjustment 20 ( 56 )
2 unchanged sentences
Amounts recognized in the statement of financial position consist of:
−Removed: Prepaid benefit cost $ 35 $ 51
−Removed: Accrued benefit liability ( 92 ) ( 132 )
+Added: Pension plan assets (other noncurrent assets) $ 22 $ 35
+Added: Pension benefits ($ 16 million in accrued compensation and benefits)
+Added: ( 108 ) ( 92 )
Net amount recognized $ ( 86 ) $ ( 57 )
+Added: Adient plc | Form 10-K | 84
Pension Benefits
11 unchanged sentences
pension plans, Adient consistently uses the relevant country specific benchmark indices for determining the various discount rates.
−Removed: Adient plc | Form 10-K | 89
Accumulated Other Comprehensive Income
19 unchanged sentences
Expected return on plan assets 6.75 % 6.75 % 5.75 % 4.53 % 3.20 % 3.68 %
−Removed: Rate of compensation increase N/A NA NA 4.05 % 4.15 % 3.66 %
+Added: Rate of compensation increase N/A N/A NA 4.43 % 4.05 % 4.15 %
Restructuring and Impairment Costs
To better align its resources with its overall strategies and reduce the cost structure of its global operations to address the softness in certain underlying markets, Adient commits to restructuring plans as necessary.
−Removed: During fiscal 2022, Adient committed to a restructuring plan ("2022 Plan") of $ 25 million that was offset by $ 10 million of prior year underspend.
−Removed: The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions in EMEA and Americas.
−Removed: The restructuring actions are expected to be substantially completed by fiscal 2024.
−Removed: (in millions) Employee Severance and Termination Benefits Currency
−Removed: Translation Total
−Removed: Original reserve $ 25 $ — $ 25
−Removed: Utilized - cash ( 6 ) — ( 6 )
−Removed: Noncash adjustment - other — ( 1 ) ( 1 )
−Removed: Balance at September 30, 2022 $ 19 $ ( 1 ) $ 18
Adient plc | Form 10-K | 85
−Removed: During fiscal 2021, Adient committed to a restructuring plan ("2021 Plan") of $ 27 million that was offset by $ 16 million of prior year underspend.
−Removed: Of the restructuring costs recorded, $ 23 million related to the EMEA segment, $ 3 million related to the Americas segment, and $ 1 million relates to the Asia segment.
−Removed: The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions and lease contract terminations.
−Removed: The restructuring actions are expected to be substantially completed in fiscal 2023.
+Added: During fiscal 2023, Adient committed to a restructuring plan of $ 39 million.
+Added: Adient also recorded additional charges totaling $ 1 million related to prior year plans.
+Added: The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions in EMEA.
+Added: The restructuring actions are expected to be substantially completed by fiscal 2025.
+Added: Restructuring costs are included in restructuring and impairment costs in the consolidated statements of income (loss).
+Added: The following tables summarize the changes in Adient's restructuring reserve.
(in millions) Employee Severance and Termination Benefits Currency
−Removed: Translation Total
−Removed: Original reserve $ 27 $ — $ 27
−Removed: Utilized - cash ( 5 ) — ( 5 )
+Added: Translation and Other Total
Balance at September 30, 2020 $ 233 $ 4 $ 237
+Added: 2021 Plan charges 27 — 27
Utilized - cash ( 136 ) — ( 136 )
−Removed: Noncash adjustment - other ( 1 ) ( 2 ) ( 3 )
−Removed: Balance at September 30, 2022 $ 5 $ ( 2 ) $ 3
−Removed: During fiscal 2020, Adient committed to a restructuring plan ("2020 Plan") of $ 205 million.
−Removed: Of the restructuring costs recorded, $ 20 million relates to the Americas segment, $ 175 million relates to the EMEA segment and $ 10 million relates to the Asia segment.
−Removed: The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions.
−Removed: Also recorded in fiscal 2020 is $ 20 million of underspend related to prior year plan reserves.
−Removed: The restructuring actions are expected to be substantially completed by fiscal 2024.
−Removed: The following table summarizes the changes in Adient's 2020 Plan reserve:
−Removed: (in millions) Employee Severance and Termination Benefits Currency Translation Total
+Added: Noncash adjustment - (under) overspend and other ( 12 ) ( 1 ) ( 13 )
Balance at September 30, 2021 $ 112 $ 3 $ 115
+Added: 2022 Plan charges 25 — 25
Utilized - cash ( 57 ) — ( 57 )
−Removed: Noncash adjustment - underspend/other ( 6 ) 1 ( 5 )
+Added: Noncash adjustment - (under) overspend and other ( 11 ) ( 12 ) ( 23 )
Balance at September 30, 2022 $ 69 $ ( 9 ) $ 60
+Added: 2023 Plan charges 39 — 39
Utilized - cash ( 53 ) — ( 53 )
−Removed: Noncash adjustment - underspend/other ( 7 ) ( 8 ) ( 15 )
+Added: Noncash adjustment - (under) overspend and other 1 4 5
Balance at September 30, 2023 $ 56 $ ( 5 ) $ 51
−Removed: During fiscal 2022, there was $ 7 million of cash utilized against the 2019, 2018, and 2017 Plan's reserve balances.
−Removed: The majority of the cash utilized during the period was related to the 2019 Plan's reserve balance.
−Removed: The 2019, 2018, and 2017 Plan's reserve balances at September 30, 2022 were $ 2 million, $ 1 million, and $ 2 million, respectively.
Adient's restructuring plans have included workforce reductions of approximately 14,000 .
1 unchanged sentence
As of September 30, 2023, approximately 12,000 of the employees have been separated from Adient pursuant to the restructuring plans.
−Removed: In addition, the restructuring plans included twenty-five plant closures.
−Removed: As of September 30, 2022, eighteen of the twenty-five plants have been closed.
+Added: In addition, the restructuring plans included twenty-eight plant closures.
+Added: As of September 30, 2023, twenty-three of the twenty-eight plants have been closed.
Adient's management closely monitors its overall cost structure and continually analyzes each of its businesses for opportunities to consolidate current operations, improve operating efficiencies and locate facilities in low cost countries in close proximity to customers.
1 unchanged sentence
Because of the importance of new vehicle sales by major automotive manufacturers to operations, Adient is affected by the general business conditions in the automotive industry.
−Removed: Future adverse developments in the automotive industry, particularly related to the COVID-19 pandemic and supply chain disruptions, could impact Adient's liquidity position, lead to impairment charges and/or require additional restructuring of its operations.
−Removed: Adient plc | Form 10-K | 91
+Added: Future adverse developments in the automotive industry could impact Adient's liquidity position, lead to impairment charges and/or require additional restructuring of its operations.
Consolidated income (loss) before income taxes and noncontrolling interests for the years ended September 30, 2023, 2022, and 2021 is as follows:
6 unchanged sentences
Income before income taxes and noncontrolling interests $ 295 $ 54 $ 1,439
+Added: Adient plc | Form 10-K | 86
The components of the provision (benefit) for income taxes are as follows:
11 unchanged sentences
The reconciliation between the Irish statutory income tax rate, and Adient’s effective tax rate is as follows:
−Removed: Adient plc | Form 10-K | 92
September 30,
6 unchanged sentences
Credits and incentives ( 7 ) ( 15 ) ( 11 )
−Removed: Goodwill impairment — — 9
Repatriation of foreign earnings 24 24 18
5 unchanged sentences
Tax impact of corporate equity and business restructuring transactions 1 30 133
+Added: Other 10 6 12
Income tax provision $ — $ 94 $ 249
+Added: Adient plc | Form 10-K | 87
+Added: The income tax expense was lower than the Irish statutory rate of 12.5% for fiscal 2023 primarily due to the release of valuation allowances in Mexico, partially offset by the inability to recognize a tax benefit for losses in jurisdictions with valuation allowances, the repatriation of foreign earnings, and foreign tax rate differentials.
+Added: No items included in the other category are individually, or when appropriately aggregated, significant.
The income tax expense was higher than the Irish statutory rate of 12.5% for fiscal 2022 primarily due to the inability to recognize a tax benefit for losses in jurisdictions with valuation allowances, the establishment of valuation allowances in certain jurisdictions, and the repatriation of foreign earnings, partially offset by tax benefits related to the release of valuation allowances in certain jurisdictions.
2 unchanged sentences
No items included in the other category are individually, or when appropriately aggregated, significant.
−Removed: The income tax expense was higher than the Irish statutory rate of 12.5% for fiscal 2020 primarily due to the inability to recognize a tax benefit for losses in jurisdictions with valuation allowances, the repatriation of foreign earnings, and changes in uncertain tax positions, partially offset by the tax benefits related to the impairment and sale of Adient’s YFAI investment, sale of Adient’s automotive fabrics manufacturing business, and impairment charges recorded in the Asia segment.
−Removed: No items included in the other category are individually, or when appropriately aggregated, significant.
−Removed: The foreign tax rate differential benefits for fiscal 2020 through fiscal 2022 are primarily driven by losses earned in jurisdictions where the statutory rate is greater than 12.5% and by the pretax book income of nonconsolidated partially-owned affiliates whose corresponding income tax expense is netted against equity income on the consolidated statements of income.
+Added: The foreign tax rate differential expense for fiscal 2023 is primarily driven by income earned in jurisdictions where the statutory rate is greater than 12.5%, partially offset by jurisdictions with losses where the statutory rate is greater than 12.5% and by the pretax book income of nonconsolidated partially-owned affiliates whose corresponding income tax expense is netted against equity income on the consolidated statements of income.
+Added: The foreign tax rate differential benefits for fiscal 2021 and fiscal 2022 are primarily driven by losses earned in jurisdictions where the statutory rate is greater than 12.5% and by the pretax book income of nonconsolidated partially-owned affiliates whose corresponding income tax expense is netted against equity income on the consolidated statements of income, partially offset by income earned in jurisdictions where the statutory rate is greater than 12.5%.
Deferred taxes are classified in the consolidated statements of financial position as follows:
31 unchanged sentences
Since future financial results may differ from previous estimates, periodic adjustments to Adient's valuation allowances may be necessary.
+Added: Given current earnings and anticipated future earnings at certain subsidiaries, Adient believes that there is a reasonable possibility that sufficient positive evidence may become available that would allow the release of all, or a portion of, valuation allowances at certain subsidiaries within the next twelve months.
+Added: A release of valuation allowances, if any, would result in the recognition of certain deferred tax assets which could generate a material income tax benefit for the period in which such release is recorded.
+Added: As a result of Adient's fiscal 2023 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that certain deferred tax assets in Mexico would be realizable and recorded an income tax benefit of $ 114 million to release valuation allowances.
+Added: In addition, Adient determined it was necessary to release valuation allowances and establish valuation allowances in other jurisdictions that did not have a material impact on Adient’s financial statements.
+Added: Adient continues to record valuation allowances on certain deferred tax assets in Germany, Hungary, Luxembourg, Mexico, Poland, Spain, the United Kingdom, the U.S.
+Added: and other jurisdictions as it remains more likely than not that they will not be realized.
+Added: Adient plc | Form 10-K | 89
As a result of Adient's fiscal 2022 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that certain deferred tax assets in Canada, Japan, and other jurisdictions would not be realized and recorded income tax expense of $ 12 million, $ 3 million and $ 3 million, respectively, to establish valuation allowances.
1 unchanged sentence
Additionally, Adient determined it was more likely than not that deferred tax assets in the Czech Republic and other jurisdictions would be realizable and recorded income tax benefit of $ 11 million and $ 2 million, respectively, to release valuation allowances.
−Removed: Adient continues to record valuation allowances on certain deferred tax assets in Germany, Hungary, Luxembourg, Mexico, Poland, Spain, the United Kingdom, the U.S.
−Removed: and other jurisdictions as it remains more likely than not that they will not be realized.
As a result of Adient’s fiscal 2021 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that certain deferred tax assets in the Czech Republic, Korea, Mexico, and other jurisdictions would not be realized and recorded income tax expense of $ 5 million, $ 5 million, $ 8 million, and $ 4 million, respectively, to establish valuation allowances.
−Removed: Adient plc | Form 10-K | 94
−Removed: As a result of Adient's fiscal 2020 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that deferred tax assets in certain jurisdictions would not be realized.
−Removed: These valuation allowances did not have a material impact on the consolidated financial statements.
Adient is subject to income taxes in Ireland, the U.S.
25 unchanged sentences
It is not practicable to determine the unrecognized deferred tax liability on these earnings because the actual tax liability, if any, is dependent on circumstances existing when remittance occurs.
+Added: Adient plc | Form 10-K | 90
Income taxes paid for the fiscal year ended September 30, 2023 were $ 94 million.
−Removed: Income taxes paid for the fiscal year ended September 30, 2021 were $ 78 million excluding $ 134 million of withholding taxes on the 2021 Yanfeng Transaction.
Income taxes paid for the fiscal year ended September 30, 2022 were $ 77 million.
−Removed: Adient plc | Form 10-K | 95
+Added: Income taxes paid for the fiscal year ended September 30, 2021 were $ 78 million excluding $ 134 million of withholding taxes on the 2021 Yanfeng Transaction.
Impacts of Tax Legislation and Change in Statutory Tax Rates
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 into law.
−Removed: Adient does not expect the provisions of the legislation to have a significant impact on the effective tax rate or the income tax payable and deferred income tax positions of the Company.
−Removed: On March 27, 2020, the House passed the Coronavirus Aid, Relief, and Economic Security Act (The CARES Act), also known as the Third COVID-19 Supplemental Relief bill, and the president signed the legislation into law.
−Removed: Adient does not expect the provisions of the legislation to have a significant impact on the effective tax rate or the income tax payable and deferred income tax positions of the Company.
+Added: Adient does not expect the provisions of the legislation to have a significant impact on the effective tax rate or the income tax payable and deferred income tax positions of Adient.
During fiscal years 2023, 2022, and 2021, other tax legislation was adopted in various jurisdictions.
1 unchanged sentence
Tax Impact of One-Time Items
−Removed: During fiscal 2022, Adient recognized a one-time gain of $ 32 million associated with the retrospective recovery of indirect tax credits in Brazil resulting from the Company’s prioritization of those credits, resulting in net tax expense of $ 4 million.
+Added: During fiscal 2022, Adient recognized a one-time gain of $ 32 million associated with the retrospective recovery of indirect tax credits in Brazil resulting from Adient’s prioritization of those credits, resulting in net tax expense of $ 4 million.
During fiscal 2021, Adient recognized $ 134 million of withholding tax expense associated with the 2021 Yanfeng Transaction.
1 unchanged sentence
In addition, Adient recognized an additional $ 38 million pre-tax gain related to Brazil indirect tax credits as a result of a favorable supreme court ruling resulting in tax expense of $ 13 million.
−Removed: In fiscal 2020, Adient committed to a restructuring plan generating a $ 6 million tax benefit.
−Removed: Adient also sold its investment in YFAI and its automotive fabrics manufacturing business, generating tax benefits of $ 16 million and $ 3 million, respectively.
Segment Information
1 unchanged sentence
1) Americas, which is inclusive of North America and South America;
−Removed: 2) Europe, Middle East, and Africa ("EMEA") and 3) Asia Pacific/China ("Asia").
−Removed: 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, 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").
+Added: 2) Europe, the Middle East and Africa (“EMEA”) and 3) Asia Pacific/China (“Asia”).
+Added: 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, 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.
Also, certain corporate-related costs are not allocated to the segments.
20 unchanged sentences
( 52 ) ( 54 ) ( 50 )
−Removed: Restructuring related charges (4)
−Removed: ( 6 ) ( 9 ) ( 20 )
−Removed: Gain (loss) on business divestitures - net (5)
−Removed: — ( 26 ) ( 13 )
−Removed: Gain on sale / (impairment) of nonconsolidated partially-owned affiliates (6)
+Added: Restructuring related activities (4)
2 ( 6 ) ( 9 )
+Added: Gain on business divestitures, primarily related to the Yanfeng transaction (5)
( 290 ) ( 298 ) ( 285 )
2 unchanged sentences
Other items (6)
+Added: ( 1 ) ( 4 ) 22
Earnings (loss) before interest and income taxes 523 259 1,726
6 unchanged sentences
Included in restructuring charges in fiscal 2021 is $ 10 million of held for sale and other non-cash impairment charges in EMEA.
−Removed: Included in restructuring charges in fiscal 2020 is a non-cash pre-tax impairment related to intangible assets of $ 24 million, held for sale asset impairments of $ 21 million, $ 8 million of other long-lived asset impairments, all within Asia, and $ 175 million of charges in EMEA which primarily related to workforce reductions.
Refer to Note 15, “Restructuring and Impairment Costs,” of the notes to the consolidated financial statements for more information.
1 unchanged sentence
(4) Reflects restructuring related charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420 along with restructuring costs at partially owned affiliates recorded within equity income.
−Removed: Adient plc | Form 10-K | 97
−Removed: (5) Fiscal 2021 includes a $ 21 million loss associated with certain aspects of the 2021 Yanfeng Transaction and a $ 5 million loss on sale of non-core assets in Asia.
−Removed: Fiscal 2020 includes a $ 21 million loss of sale of RECARO and $ 4 million loss on deconsolidation of Aerospace, partially offset by a $ 12 million gain on completion of the 2020 Yanfeng Transaction.
−Removed: (6) Fiscal 2022 includes $ 3 million and $ 7 million of non-cash impairments of certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively.
−Removed: Fiscal 2021 includes a gain associated with the 2021 Yanfeng Transaction of $ 1,181 million and a gain of $ 33 million on the sale of Adient's interest in SJA.
−Removed: Fiscal 2020 includes non-cash impairment charges related to Adient's YFAI investment balance recorded in conjunction with the 2020 Yanfeng Transaction.
+Added: Fiscal 2023 includes a $ 10 million gain on the sale of a restructured facility in Americas.
+Added: (5) Fiscal 2021 includes a $ 5 million loss on sale of non-core assets in Asia, a gain associated with the 2021 Yanfeng Transaction of $ 1,160 million, and a gain of $ 33 million on the sale of Adient's interest in SJA.
All of these impacts have been recorded within the equity income line in the consolidated statements of income.
−Removed: (7) Fiscal 2022 reflects $ 8 million of transaction costs, a one-time gain of $ 32 million associated with the retrospective recovery of indirect tax credits in Brazil, a $ 14 million charge related to a non-recurring contract related settlement, $ 1 million of allowance for doubtful accounts resulting from the withdrawal from and sale of operations in Russia, and $ 2 million of loss on finalization of asset sale in Turkey.
−Removed: Fiscal 2021 reflects a one-time gain of $ 38 million associated with the retrospective recovery of indirect tax credits in Brazil (of which $ 36 million relates to recoveries covering the past 20 years and is adjusted out of Americas' segment results), a $ 5 million gain on previously held interest at YFAS in an affiliate, and $ 19 million of transaction costs.
−Removed: Fiscal 2020 includes $ 15 million of transaction costs and $ 1 million of tax adjustments at YFAI.
+Added: Adient plc | Form 10-K | 92
+Added: (6) Fiscal 2023 reflects $ 3 million and $ 3 million of non-cash impairment related to certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively, and $ 3 million of transaction costs, partially offset by $ 4 million of one-time divestiture gain at an affiliate, and $ 4 million of a gain associated with the retrospective recovery of indirect tax credits in Brazil.
+Added: Fiscal 2022 includes $ 3 million and $ 7 million of non-cash impairments of certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively, $ 8 million of transaction costs, a $ 14 million charge related to a non-recurring contract related settlement, $ 1 million of allowance for doubtful accounts resulting from the withdrawal from and sale of operations in Russia, and $ 2 million of loss on finalization of asset sale in Turkey, partially offset by a gain of $ 32 million associated with the retrospective recovery of indirect tax credits in Brazil.
+Added: Fiscal 2021 reflects a gain of $ 38 million associated with the retrospective recovery of indirect tax credits in Brazil (of which $ 36 million relates to recoveries covering the past 20 years and is adjusted out of Americas' segment results), and a $ 5 million gain on previously held interest at YFAS in an affiliate, partially offset by $ 19 million of transaction costs.
Additional Segment Information
9 unchanged sentences
(1) Reconciling items include the elimination of intercompany transactions, corporate-related assets and other amounts to reconcile to consolidated totals.
−Removed: Specific reconciling items for equity income represents $ 10 million of non-cash impairments of Adient's investments in partially-owned affiliates, $ 1 million of restructuring related charges, $ 2 million of purchase accounting amortization, $ 7 million of a non-recurring customer termination charge at an affiliate in Asia, partially offset by a $ 7 million non-recurring gain on sale of land use rights at an affiliate in China.
+Added: Specific reconciling items for equity income represents $ 6 million of non-cash impairments of Adient's investments in partially-owned affiliates, $ 2 million of restructuring related charges, and $ 2 million of purchase accounting amortization, partially offset by a $ 4 million gain on sale of certain assets at affiliates in China.
Corporate-related assets primarily include cash and deferred income tax assets.
9 unchanged sentences
(1) Reconciling items include the elimination of intercompany transactions, corporate-related assets and other amounts to reconcile to consolidated totals.
−Removed: Specific reconciling items for equity income represents a gain associated with the 2021 Yanfeng Transaction of $ 1,181 million, a gain of $ 33 million on the sale of Adient's interest in SJA, a $ 5 million gain on previously held interest at YFAS, offset by $ 5 million of purchase accounting amortization and $ 1 million of restructuring
+Added: Specific reconciling items for equity income represents $ 10 million of non-cash impairments of Adient's investments in partially-owned affiliates, $ 1 million of restructuring related charges, $ 2 million of purchase accounting amortization, $ 7 million of a non-recurring customer termination charge at an affiliate in Asia, partially offset by a $ 7 million non-recurring gain on sale of land use rights at an affiliate in China.
+Added: Corporate-related assets primarily include cash and deferred income tax assets.
Adient plc | Form 10-K | 93
−Removed: related charges.
−Removed: Corporate-related assets primarily include cash, deferred income tax assets, and receivables related to the 2021 Yanfeng Transaction.
Year Ended September 30, 2021
8 unchanged sentences
(1) Reconciling items include the elimination of intercompany transactions, corporate-related assets and other amounts to reconcile to consolidated totals.
−Removed: Specific reconciling items for equity income represents a $ 231 million non-cash impairment of Adient's YFAI investment, $ 8 million of restructuring related charges, $ 3 million of purchase accounting amortization and a $ 1 million charge for tax adjustments associated with YFAI.
−Removed: Corporate-related assets primarily include cash and deferred income tax assets.
+Added: Specific reconciling items for equity income represents a gain associated with the 2021 Yanfeng Transaction of $ 1,181 million, a gain of $ 33 million on the sale of Adient's interest in SJA, a $ 5 million gain on previously held interest at YFAS, offset by $ 5 million of purchase accounting amortization and $ 1 million of restructuring related charges.
+Added: Corporate-related assets primarily include cash, deferred income tax assets, and receivables related to the 2021 Yanfeng Transaction.
Adient plc | Form 10-K | 94
9 unchanged sentences
Germany 1,046 862 1,101
+Added: Poland 963 770 816
Czech Republic 900 962 1,155
+Added: Spain 725 674 701
Other EMEA 2,989 2,788 3,244
3 unchanged sentences
Thailand 564 508 469
+Added: Korea 534 534 485
Japan 373 264 331
13 unchanged sentences
Other Americas 18 19
−Removed: Germany 126 180
Poland 131 118
+Added: Germany 127 126
Czech Republic 30 29
12 unchanged sentences
KEIPER Seating Mechanisms Co., Ltd.
−Removed: (KEIPER, previously AYM)
50.0 % 50.0 %
17 unchanged sentences
Noncontrolling interests $ — $ 6
−Removed: On March 31, 2021, Adient sold its 50 % equity interest in SJA to the joint venture partner for $ 58 million.
−Removed: The income statement data above includes SJA’s results for the first six months of fiscal 2021.
−Removed: On September 30, 2021, Adient sold all of the issued and outstanding equity interest in YFAS held, directly or indirectly, by Adient, which represented 49.99 % of YFAS’s total issued and outstanding equity interest to Yanfeng, the joint venture partner, for ¥ 8,064 million ($ 1,257 million) as part of the 2021 Yanfeng Transaction.
−Removed: As a result, the balance sheet data as of September 30, 2021 above excludes those of SJA and YFAS.
−Removed: It also excludes that of CQADNT as Adient started consolidating CQADNT after completing the acquisition of additional interest on September 30, 2021.
−Removed: Refer to Note 3, “Acquisitions and Divestitures,” of the notes to the consolidated financial statements for additional information.
−Removed: During the fourth quarter of fiscal 2022, Adient and KEIPER modified an existing supply agreement, resulting in reductions in Adient’s purchase prices on certain products.
+Added: During fiscal 2023, Adient concluded that indicators of other-than-temporary impairment were present related to nonconsolidated partially-owned affiliates in Asia and EMEA, and recorded non-cash impairment charges of $ 3 million and $ 3 million as a result, respectively.
+Added: Over the past two fiscal years, Adient and KEIPER have modified existing supply agreements, resulting in reductions in Adient’s purchase prices on certain products.
Such modifications resulted in reductions of $ 25 million and $ 34 million in Adient’s cost of sales and equity income, respectively, during fiscal 2023.
+Added: The modifications resulted in reductions of $ 14 million and $ 17 million in Adient’s cost of sales and equity income, respectively, during fiscal 2022.
Commitments and Contingencies
12 unchanged sentences
Such transactions consist of the sale or purchase of goods and other arrangements.
−Removed: Subsequent to the separation, transactions with the former Parent and its businesses represent third-party transactions.
The following table sets forth the location and amounts of net sales to and purchases from related parties included in Adient's consolidated statements of income (loss):
−Removed: Adient plc | Form 10-K | 102
Year Ended September 30,
2 unchanged sentences
Purchases from related parties Cost of sales 397 434 558
+Added: Adient plc | Form 10-K | 97
The following table sets forth the location and amount of accounts receivable due from and payable to related parties in Adient's consolidated statements of financial position:
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.