What changed in this filing

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Item 1A. Risk Factors

2024-11-18 compared with 2023-11-17 · 95 added, 82 removed, 378 unchanged (32% of the section changed)

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Adient competes around the world in various geographic regions and product markets.

Global economic conditions, including supply chain disruptions, inflationary concerns and labor availability, affect Adient's business.

Global economic conditions, including global demand for new vehicles, new vehicle affordability, supply chain disruptions, inflationary concerns and labor availability, affect Adient's business.

As discussed in greater detail below, any future distress in the industries and/or markets where Adient competes could negatively affect Adient's revenues and financial performance in future periods, result in future restructuring charges, and adversely impact Adient's ability to grow or sustain its businesses.

The global automotive industry has experienced significant volatility over the past few years relative to supply chain disruptions, inflationary pressures, labor shortages, geopolitical uncertainties, higher interest rates and foreign currency fluctuations.

The global automotive industry has recently experienced uncertainties due to changing macroeconomic conditions.

Weakening consumer demand, impacted by new vehicle affordability and a high interest rate environment, among other factors, has resulted in lower automotive production volumes.

The global adoption of electric vehicles by consumers has also slowed, creating disruptions in production scheduling.

More specifically, the EMEA region is faced with overcapacity issues due to lower production volumes and resulting in pricing pressures.

The EMEA region is also faced with intensifying competition from Chinese imports and lower exports to China as domestic brands expand in China.

Adient strives to offset the impact of lower production volumes through improved operational performance, including commercial negotiations with Adient’s customers and vendors and through other operational improvements that Adient can influence, however there is no guarantee that Adient will be able to sufficiently offset the impact of lower production volumes or to avoid more significant restructuring actions.

The global automotive industry has also experienced significant volatility in the past due to supply chain disruptions, inflationary pressures, labor shortages, geopolitical uncertainties, high interest rates and foreign currency fluctuations.

Although Adient's seating products have not typically been dependent directly on the components causing the supply chain disruptions, Adient has been directly impacted by lower production levels at the OEMs as a direct result of these disruptions.

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During such lead times, price commitments are subject to change and could lead to an inability of Adient to fully recover all such price changes.

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The capital and credit markets provide Adient with liquidity to operate and grow its business beyond the liquidity that operating cash flows provide.

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If Adient's access to capital were to become constrained significantly, or if costs of capital increased significantly, due to lowered credit ratings, prevailing industry conditions, the volatility of the capital markets or other factors, Adient's financial condition, results of operations and cash flows likely would be adversely affected.

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Unfavorable changes in the condition of the global automotive industry and the condition of individual automakers may adversely affect Adient's results of operations.

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Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences.

Automakers may experience a decline in the number of new vehicle sales, whether as a result of economic decline, ongoing supply chain disruptions and labor shortages, increasing consumer borrowing rates or for various other reasons.

Automakers may experience a decline in the number of new vehicle sales, whether as a result of economic decline, supply chain disruptions and labor shortages, increasing consumer borrowing rates or for various other reasons.

Automakers may also become less cost competitive due to rising input costs, such as labor or raw materials, and thereby experience a loss of demand for their products as consumers shift to lower cost options.

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Any inaccurate forecast data received by customers could also have an adverse impact on Adient’s results of operations.

As a result of macroeconomic factors impacting Adient and the automotive industry, a heightened risk of impairment exists for the EMEA reporting unit as the difference between its fair value and carrying value is less than 10% as of September 30, 2024.

The decrease in EMEA’s fair value is driven by lower forecasted vehicle volumes from weakening consumer demand, slower consumer adoption of electric vehicles, overcapacity in the industry resulting in pricing pressure, intensifying competition from Chinese imports and lower exports to China from EMEA as domestic brands expand in China.

As a result of the heightened risk of impairment, Adient will continuously assess the changing macroeconomic conditions in EMEA including the outlook for consumer demand for vehicles and other factors impacting the region, along with the need for further restructuring actions, all of which impact Adient’s ability to achieve its projected long-term operating performance.

Refer to Note 6, “Goodwill and Other Intangible Assets,” of the notes to the consolidated financial statements for additional information.

Risks associated with joint venture partnerships may adversely affect Adient's business and financial results.

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Furthermore, non-consolidated joint ventures present various risks, including the risk that Adient may be slower or less able to identify or react to problems affecting its non-consolidated joint ventures than Adient would for a wholly-owned subsidiary or consolidated joint venture.

In addition, these arrangements may cause Adient to be slower to detect compliance related problems and make its design of effective internal controls more challenging.

In addition, these arrangements may cause Adient to be slower to detect compliance related

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problems and make its design of effective internal controls more challenging.

Each of these challenges may be more costly to implement, and the risk of failure potentially higher, than would be the case in a more centralized structure.

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Exchange rates can be volatile and could adversely impact Adient's financial results and the comparability of results from period to period.

Our use of financial instruments to limit this risk is guided by strict policies and processes and the success of our hedging programs depends primarily on the performance of the business in

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comparison with our forecasted sales proceeds and costs.

If we incorrectly forecast these and other related factors, the transactions we have entered into may have an adverse impact on our financial results.

No assurance can be given that our judgment in this respect will be correct.

Adient’s use of financial instruments to limit this risk is guided by strict policies and processes and the success of Adient’s hedging programs depends primarily on the performance of the business in comparison with Adient’s forecasted sales proceeds and costs.

If the forecast and other related factors are incorrect, the transactions entered into may have an adverse impact on Adient’s financial results.

No assurance can be given that judgment in this respect will be correct.

There are other risks that are inherent in Adient's non-U.S.

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and possible terrorist attacks.

On December 30, 2020, the U.K.

completed its withdrawal from the European Union and entered into an agreement regarding their future relationship, the Trade and Cooperation Agreement, which was ratified by the parties and entered into full force on May 1, 2021.

However, certain economic uncertainties remain in connection with the future of the U.K.

and its relationship with the European Union.

These uncertainties have caused and may continue to cause disruptions to capital and currency markets worldwide as well as cause disruptions on Adient’s operations.

Russia’s invasion of Ukraine in February 2022 resulted in significant uncertainty and instability in global supply chains and availability of certain commodities and raw materials.

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The conflict also led to increases in the cost of energy and the potential for energy shortages, especially in Europe.

Although the impact of this conflict has moderated in fiscal 2023, if the conflict continues or expands, it may trigger a series of additional economic and other sanctions which in turn could further disrupt the global automotive supply chains by limiting supplies of key components and increasing inflationary pressures.

If the conflict continues or expands, it may trigger a series of additional economic and other sanctions which in turn could further disrupt the global automotive supply chains by limiting supplies of key components and increasing inflationary pressures.

This ongoing conflict, along with other geopolitical uncertainties such as the current conflict in the Middle East, could have broader adverse impacts on macroeconomic factors that impact Adient's business, cash flows, financial condition and results of operations.

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If Adient is unable to maintain its position in the Chinese market, or if vehicle sales in China decrease or do not continue to increase, then Adient's business and financial results may be adversely affected.

Also, if Chinese OEMs continue to expand into other markets and regions, Adient’s business and financial results may be adversely affected if Adient does not have the same level of content on Chinese OEM vehicles.

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Changes in U.S.

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and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs.

Under the Biden administration, changes in U.S.

administrative policy could lead to changes to existing trade agreements, greater restrictions on free trade generally, and significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured in Mexico and China, among other possible changes.

Changes in U.S.

administrative policy could lead to changes to existing trade agreements, greater restrictions on free trade generally, prohibitions or restrictions on the import of certain automobiles and components into the U.S.

and significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured in Mexico and China, among other possible changes.

A trade war, other governmental action related to tariffs or international trade agreements, changes in U.S.

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as a result of such changes, likely would have an adverse effect on Adient's business, financial condition or results of operations.

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The regulation of Adient's international operations, and any failure of Adient to comply with those regulations, could adversely affect its business, results of operations and reputation.

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Adient has also experienced constrained labor availability which has resulted in wage inflationary pressures, both internally and at key vendors.

Given the recent United Auto Workers (“UAW”) strike beginning in September 2023, and UAW’s ongoing strategy of targeted strikes, Adient may see increased pressure for wage and benefit increases in the U.S.

Given the United Auto Workers’ (“UAW”) strategy of targeted strikes, Adient may see increased pressure for wage and benefit increases in the U.S.

These increases may continue into the future as demand increases and as supply may remain constrained, which has resulted in, and may continue to result in, increased costs for Adient.

If the costs of raw materials, energy, commodities, freight costs, labor costs and product components increase or the availability thereof is restricted, it could adversely affect Adient's financial condition, operating results and cash flows.

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Adient operates in the highly competitive automotive supply industry.

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Developments or assertions by or against Adient relating to intellectual property rights, or any inability to protect Adient's rights, could have an adverse impact on its business and competitive position.

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lower cost than Adient, or adapt more quickly than Adient to new technologies or evolving customer requirements.

In addition, any of Adient's competitors may foresee the course of market development more accurately than Adient, develop products that are superior to Adient's products, produce similar products at a lower cost than Adient, or adapt more quickly than Adient to new technologies or evolving customer requirements.

Adient cannot provide assurances that certain of Adient’s products will not become obsolete or that Adient will be able to achieve the technological advances that may be necessary to remain competitive.

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The inability of Adient to negotiate these contract or program changes in a manner favorable to Adient could also adversely affect Adient’s results of operations.

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Work stoppages, including those at Adient’s customers, and similar events could significantly disrupt Adient's business.

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Similarly, if one or more of Adient's customers were to experience a work stoppage, such as what occurred during the UAW strike in the U.S.

beginning in September 2023 resulting in an estimated $155 million of lost revenue to Adient (through November 3, 2023), ongoing supply chain disruptions, or otherwise, that customer would likely halt or limit purchases of Adient's products, which could result in the shutdown of the related Adient manufacturing facilities and or other cost-reduction initiatives.

In addition in certain instances we may be unable to adjust our staffing levels to correspond to a customer’s work stoppage such that we incur increased labor costs along with a decrease in production.

in late 2023, resulting in ongoing supply chain disruptions, or otherwise, that customer would likely halt or limit purchases of Adient's products, which could result in the shutdown of the related Adient manufacturing facilities and or other cost-reduction initiatives.

In certain instances, Adient may be unable to adjust its staffing levels to correspond to a customer’s work stoppage such that Adient incurs increased labor costs along with a decrease in production.

A significant disruption in the supply of a key component due to a work stoppage at one of Adient's suppliers or any other supplier could have the same consequences, and accordingly, have an adverse effect on Adient's financial results.

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Adient may be unable to realize the expected benefits of its restructuring actions, which could adversely affect its profitability and operations.

In order to align Adient's resources with its strategies, operate more efficiently and control costs and to realign its businesses, with customer and market needs and operating conditions, Adient has periodically announced, and in the future may continue to announce, restructuring plans, which may include workforce reductions, global plant closures and consolidations, asset impairments and other cost reduction initiatives.

In each of the last five fiscal years, Adient announced restructurings related to cost reduction initiatives, which included workforce reductions, plant closures and asset impairments.

Adient may undertake additional restructuring actions, including plant closures and workforce reductions in the future.

In each of the last six fiscal years, Adient announced restructurings related to cost reduction initiatives, which included workforce reductions, plant closures and asset impairments.

Adient may undertake additional restructuring actions, including plant closures and workforce reductions in the future, particularly in EMEA where Adient is closely monitoring macroeconomic conditions and customer production plans.

As these plans and actions are complex, unforeseen factors could result in expected savings and benefits to be delayed or not realized to the full extent planned (if at all), and Adient's operations and business may be disrupted, which likely would adversely affect Adient's financial condition, operating results and cash flow.

Furthermore, to the extent such initiatives involve workforce changes, such changes may temporarily reduce workforce productivity, which could be disruptive to our business and adversely affect our results of operations.

A failure of Adient's information technology (IT) and data security infrastructure could adversely impact Adient's business, operations and reputation.

Furthermore, to the extent such initiatives involve workforce changes, such changes may temporarily reduce workforce productivity, which could be disruptive to Adient’s business and adversely affect results of operations.

A failure of Adient's information technology (“IT”) and data security infrastructure or the unsuccessful adoption of new technology such as artificial intelligence could adversely impact Adient's business, operations and reputation.

Adient relies upon the capacity, reliability and security of its IT and data security infrastructure, as well as its ability to expand and continually update this infrastructure in response to the changing needs of its business.

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Violations of such laws and regulations may result in penalties, sanctions and/or fines, and may also result in costly and time-consuming governmental investigations, any or all of which could have an adverse effect on Adient's business, financial condition and results of operations and reputation.

Adient is increasingly incorporating automation and artificial intelligence capabilities into the development of technologies and business operations, and into products and services.

Artificial intelligence technology is complex and rapidly evolving, and may subject Adient to significant competitive, legal, regulatory, operational and other risks.

The implementation of artificial intelligence can be costly and there is no guarantee that Adient’s use of artificial intelligence will enhance its technologies,

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benefit its business operations, or produce products and services that are preferred by its customers.

Adient’s competitors may be more successful in their artificial intelligence strategy and develop superior products and services with the aid of artificial intelligence technology.

Additionally, artificial intelligence algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs.

This may give rise to legal liability, reputational damage, and materially harm Adient’s business.

The use of artificial intelligence in the development of Adient’s products and services could also cause loss of intellectual property, as well as subject it to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity.

Additionally, market adoption of artificial intelligence technology could be impaired by ethical and other issues inherent in the technology, which could impair demand for Adient’s products and services.

Furthermore, the U.S.

and other countries may adopt laws and regulations related to artificial intelligence.

Such laws and regulations could cause Adient to incur greater compliance costs and limit the use of artificial intelligence in the development of its products and services.

Any failure or perceived failure by Adient to comply with such regulatory requirements could subject Adient to legal liabilities, reputational damage, or otherwise have a material and adverse impact on Adient’s business.

Negative or unexpected tax consequences could adversely affect Adient's results of operations.

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Negative unexpected results from one or more such tax audits could adversely affect Adient's results of operations.

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If Adient does not respond appropriately, the evolution of the automotive industry towards autonomous vehicles and mobility on demand services could adversely affect Adient’s business.

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Adient faces an inherent business risk of exposure to warranty claims and product liability in the event that its products fail to perform as expected and, in the case of product liability, such failure of its products results, or is alleged to result, in bodily injury and/or property damage.

While Adient will maintain reasonable limits of insurance coverage to appropriately respond to such exposures, large product liability claims, if made, could exceed Adient's insurance coverage limits and insurance may not continue to be available on commercially acceptable terms, if at all Adient may incur significant costs to defend these claims or experience product liability losses in the future.

Adient may incur significant costs to defend these claims or experience product liability losses in the future.

If any of Adient's products are or are alleged to be defective, Adient may be required to participate in a recall involving such products.

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Auto manufacturers are also increasingly requiring their suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties.

Depending on the terms under which Adient supplies products to an auto manufacturer, an auto manufacturer may attempt to hold Adient responsible for some or all of the repair or replacement costs of defective products under new vehicle warranties, when the vehicle manufacturer asserts that the product supplied did not perform as warranted.

Depending on the terms under which Adient supplies products to an auto manufacturer, an auto manufacturer may attempt to hold Adient responsible for some or all of the repair or

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replacement costs of defective products under new vehicle warranties, when the vehicle manufacturer asserts that the product supplied did not perform as warranted.

Although Adient cannot assure that the future costs of warranty claims by its customers and product liability claims will not be material, Adient believes its established reserves are adequate to cover potential settlements.

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Substantial declines in automotive sales and production by Adient's customers likely would have an adverse effect on Adient's business, results of operations and financial condition.

Global climate change and related emphasis on ESG matters by various stakeholders could negatively affect Adient's business.

Global climate change and related emphasis on sustainability matters by various stakeholders could negatively affect Adient's business.

Increased public awareness and concern regarding global climate change may result in more regional and/or federal requirements to reduce or mitigate the effects of greenhouse gas emissions.

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Climate changes could also disrupt Adient's operations by impacting the availability and cost of materials needed for manufacturing and could increase insurance and other operating costs.

These factors may impact Adient's decisions to construct new facilities or maintain existing

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facilities in areas most prone to physical climate risks.

These factors may impact Adient's decisions to construct new facilities or maintain existing facilities in areas most prone to physical climate risks.

Adient could also face indirect financial risks passed through the supply chain, and process disruptions due to physical climate changes could result in price modifications for Adient's products and the resources needed to produce them.

Furthermore, customer, investor, regulatory and employee expectations in areas such as ESG have been rapidly evolving and increasing.

Specifically, regulatory bodies around the globe continue to develop ESG reporting requirements, many of which will be subject to independent audits.

Furthermore, customer, investor, regulatory and employee expectations in areas such as sustainability have been rapidly evolving and increasing.

Specifically, regulatory bodies around the globe continue to develop sustainability reporting requirements, many of which will be subject to independent audits.

Emerging European legislation is requiring detailed emissions data reporting for imported carbon intensive commodities, subject to financial payment mechanisms after a transition period.

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Product design activities for lower carbon emission products must keep pace with customer carbon emission reduction and pricing expectations.

The enhanced stakeholder focus on ESG issues relating to Adient requires the continuous monitoring of various and evolving standards and the associated reporting requirements.

A failure to adequately meet regulatory requirements and stakeholder expectations or achieve its ESG-related goals may result in the loss of business, diluted market valuation, an inability to attract customers or an inability to attract and retain top talent.

As of the date of this filing, Adient has made several public commitments regarding our intended reduction of carbon emissions, including commitments to science-based targets to reduce carbon emissions from its operations and the operations of its customers.

The enhanced stakeholder focus on sustainability issues relating to Adient requires the continuous monitoring of various and evolving standards and the associated reporting requirements.

A failure to adequately meet regulatory requirements and stakeholder expectations or achieve its sustainability-related goals may result in the loss of business, diluted market valuation, an inability to attract customers or an inability to attract and retain top talent.

As of the date of this filing, Adient has made several public commitments regarding the intended reduction of carbon emissions, including commitments to science-based targets to reduce carbon emissions from its operations and the operations of its customers.

Although Adient intends to meet these commitments, it may be required to expend significant resources to do so, which could increase its operational costs.

Further, there can be no assurance that any of Adient’s commitments will be achieved, or that any future investments it makes to achieve such targets and goals will meet investor expectations or any binding or non-binding legal standards regarding sustainability performance.

Moreover, Adient may determine that it is in the best interest of Adient and its shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current commitments based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders.

Moreover, Adient may determine that it is in the best interest of Adient and its shareholders to prioritize other business, social, governance or sustainable investments over the achievement of Adient’s current commitments based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders.

If Adient is unable to meet these commitments, then it could incur adverse publicity and reactions from investors, activist groups and other stakeholders, which could adversely impact the perception of Adient and its products and services by current and potential customers, as well as investors, which could in turn adversely impact its results of operations.

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Risks related to Adient's defined benefit retirement plans may adversely impact Adient's results of operations and cash flow.

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Future tightening in the credit markets and a reduced level of liquidity in many financial markets due to turmoil in the financial and banking industries could adversely affect Adient's access to the debt capital markets or the price Adient pays to issue debt.

A downgrade in Adient's ratings or volatility in the financial markets causing limitations to the debt capital markets could have an adverse effect on Adient's business or

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Adient's ability to meet its liquidity needs.

There can be no assurance that Adient would be able to obtain additional financing or refinancing and failure to obtain such additional financing or refinancing could have a material adverse impact on our operations.

A downgrade in Adient's ratings or volatility in the financial markets causing limitations to the debt capital markets could have an adverse effect on Adient's business or Adient's ability to meet its liquidity needs.

Adient may incur or assume significantly more debt in the future.

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• limiting Adient's ability to borrow additional funds as needed.

Adient's business success depends on attracting and retaining qualified personnel and our attempts to fully reopen our offices and operate under a hybrid working environment may not be successful.

Adient's business success depends on attracting and retaining qualified personnel and the attempt to operate under a hybrid working environment may not be successful.

Adient's ability to sustain and grow its business requires it to hire, retain and develop a highly skilled and diverse management team and workforce.

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Further, certain of the recent austerity measures related to employee compensation, along with the on-going unpredictability of production schedules, could result in employees pursuing other employment opportunities outside of Adient.

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Adient is operating under a “hybrid” working environment, meaning that the majority of its non-plant employees have the flexibility to work remotely at least some of the time, for the foreseeable future.

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Adient is responsible for managing its supply chain, including suppliers that may be the sole sources of products that Adient requires, which Adient's customers direct Adient to use or which have unique capabilities that would make it difficult and/or expensive to re-source.

In addition, with fewer sources of supply for certain components, each supplier may perceive that it has greater leverage and, therefore, some ability to seek higher prices from us at a time that we face substantial pressure from OEMs to reduce the prices of our products.

This could adversely affect our customer relations and business.

In addition, with fewer sources of supply for certain components, each supplier may perceive that it has greater leverage and, therefore, some ability to seek higher prices at a time that Adient faces substantial pressure from OEMs to reduce the prices of Adient’s products.

This could adversely affect customer relations and business.

In certain instances entire industries may experience short-term capacity constraints.

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Although market conditions generally have improved in recent years, uncertainty remains and another economic downturn or other unfavorable industry conditions in one or more of the regions in which Adient operates could cause a supply disruption or loss of customer orders and thereby adversely affect Adient's financial condition, operating results and cash flows.

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The loss of business with respect to, or the lack of commercial success of, a vehicle model for which Adient is a significant supplier could adversely affect Adient's financial performance.

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Shifts in market shares among vehicles or vehicle segments, including as a result of the autonomous vehicle market, particularly shifts away from vehicles on which Adient has significant content and shifts away from vehicle segments in which Adient's sales may be more heavily concentrated, could have an adverse effect on Adient's profitability.

Similarly, certain vehicles or vehicle segments Adient supplies may be disproportionately impacted by overall industry disruptions such that Adient’s sales may be adversely effected relative to the industry in general or our competitors, which could have a negative effect on Adient’s business.

Similarly, certain vehicles or vehicle segments Adient supplies may be disproportionately impacted by overall industry disruptions such that Adient’s sales may be adversely effected relative to the industry in general or Adient’s competitors, which could have a negative effect on Adient’s business.

Increases in energy costs or other factors (e.g., climate change concerns) may also shift consumer demand away from motor vehicles that typically have higher interior content that Adient supplies, such as light trucks, crossover vehicles, minivans and sports utility vehicles, to smaller vehicles having less interior content.

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The timing, declaration, amount and payment of future dividends to shareholders will fall within the discretion of Adient's Board of Directors.

The board's decisions regarding the payment of dividends will depend on many factors, such as Adient's financial condition, earnings, sufficiency of distributable reserves, capital requirements, debt service obligations, legal requirements, regulatory constraints and other factors that the board deems relevant.

The Board's decisions regarding the payment of dividends will depend on many factors, such as Adient's financial condition, earnings, sufficiency of

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distributable reserves, capital requirements, debt service obligations, legal requirements, regulatory constraints and other factors that the board deems relevant.

Adient's ability to pay dividends will depend on its ongoing ability to generate cash from operations and access capital markets.

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and the implementation of new internal control systems and procedures that fail to achieve accurate financial reporting or that fail to prevent fraudulent activity (such as vendor payments to fraudulent bank accounts).

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Risks Related to Adient’s Jurisdiction of Incorporation

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Irish law provides that a Board of Directors may allot shares (or rights to subscribe for or convertible into shares) only with the prior authorization of shareholders.

At our most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).

At Adient’s most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).

This authorization will need to be further renewed by ordinary resolution, being a resolution passed by a simple majority of votes cast, prior to expiration.

We anticipate seeking another authorization at our next Annual General Meeting and annually thereafter.

Should this authorization not be approved, our ability to issue equity could be limited which could adversely affect our securities holders.

Adient anticipates seeking another authorization at the next Annual General Meeting and annually thereafter.

Should this authorization not be approved, the ability to issue equity could be limited which could adversely affect Adient’s securities holders.

Irish law also generally provides shareholders with preemptive rights when new shares are issued for cash;

however, it is possible for shareholders to vote to exclude preemptive rights in a general meeting.

At our most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).

At the most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).

This authorization will need to be renewed by special resolution, being a resolution passed by not less than 75% of votes cast, upon expiration.

We anticipate seeking another authorization at our next Annual General Meeting and annually thereafter.

Should this authorization not be approved, our ability to issue equity could be limited which could adversely affect our securities holders.

Adient anticipates seeking another authorization at the next Annual General Meeting and annually thereafter.

Should this authorization not be approved, the ability to issue equity could be limited which could adversely affect Adient’s securities holders.

The laws of Ireland differ from the laws in effect in the U.S.

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Where however the effect of lodging an appeal under the applicable law is to stay execution of the judgment, it is possible that in the meantime the judgment may not be actionable in Ireland.

It remains to be determined whether final judgment given in default of appearance is final and conclusive.

It remains to

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be determined whether final judgment given in default of appearance is final and conclusive.

However, Irish courts may refuse to enforce a judgment of the U.S.

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Irish law permits a shareholder to initiate a lawsuit on behalf of a company such as Adient only in limited circumstances, and requires court permission to do so.

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Adient’s effective tax rate could be volatile and materially change as a result of changes in tax laws, mix of earnings and other factors.

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The corporate tax provisions include (a) the creation of a 15% corporate minimum tax, effective for Adient’s fiscal year 2024, and (b) a nondeductible 1% excise tax on share buy-backs of covered corporations, effective for stock repurchases that occur after December 31, 2022.

Based upon current IRS guidance and Adient income levels, Adient does not expect to be subject to either provision.

Based upon current IRS guidance and Adient income levels, Adient is not subject to either provision.

However, Adient will continue to monitor and reassess the impact, if any, as the IRS and U.S.

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The framework provides for two primary “Pillars”;

however, only Pillar Two, which provides for a global minimum corporate tax rate of 15%, is expected to be applicable to Adient (Pillar One is not expected to be applicable as Adient does not currently meet the turnover threshold – EUR 20 billion).

In December 2022, Pillar Two was adopted by the Council of the European Union for implementation by European Union member states by December 31, 2023, with effect for tax years beginning in calendar year 2024 (Adient’s 2025 fiscal year).

however, only Pillar Two, which provides for a global minimum corporate tax rate of 15% in each jurisdiction in which the group operates, is expected to be applicable to Adient (Pillar One is not expected to be applicable as Adient does not currently meet the turnover threshold – EUR 20 billion).

Similar directives under Pillar Two are already adopted or expected to be adopted by taxing authorities in other countries where Adient does business, with widespread implementation of the global minimum tax in calendar years 2024 and 2025.

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Currently, the global enactment of Pillar Two is not expected to materially impact Adient’s effective tax rate or cash flows.

However, Adient will continue to monitor and evaluate new legislation and guidance, which could change our current assessment.

However, Adient will continue to monitor and evaluate new legislation and guidance, which could change the current assessment.

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Currently, Adient incurs losses in certain countries where it does not receive a financial statement benefit, and Adient operates in countries which have different statutory rates.

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affiliates to use certain attributes or deductions, the Adient group's effective tax rate and/or future tax planning for the Adient group, and any such changes could have prospective or retroactive application to Adient, its shareholders and affiliates, and/or the separation and distribution from the Former Parent.

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Recent legislative and other proposals have aimed to expand the scope of U.S.

Prior legislative and other proposals have aimed to expand the scope of U.S.

corporate tax residence.

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corporations if the management and control of Adient or such affiliates were determined to be located primarily in the U.S.

In addition, recent legislative and other proposals have aimed to expand the scope of Section 7874, or otherwise address certain perceived issues arising in connection with so-called inversion transactions.

In addition, prior legislative and other proposals have aimed to expand the scope of Section 7874, or otherwise address certain perceived issues arising in connection with so-called inversion transactions.

Such proposals, if made retroactively effective to transactions completed during the period in which the separation from the Former Parent occurred, could cause Adient and/or its affiliates to be treated as U.S.

corporations for U.S federal tax purposes.

If enacted, these proposals could cause the Adient group to be subject to substantially greater U.S.

If enacted, such proposals could cause the Adient group to be subject to substantially greater U.S.

tax liability than currently contemplated.

Potential indemnification liabilities to Adient’s former parent company pursuant to the separation agreement could adversely affect Adient.

The separation arrangements with the Former Parent company provide for, among other things, the principal corporate transactions required to effect the separation, certain conditions to the separation and provisions governing the relationship between Adient and the Former Parent company with respect to and resulting from the separation, including ongoing relationships.

Among other things, the separation arrangements provide for indemnification obligations designed to make Adient financially responsible for substantially all liabilities that may exist relating to its business activities, whether incurred prior to or after the separation, as well as those obligations of the Former Parent assumed by Adient pursuant to the separation arrangements and in respect of the conduct of the parties post-separation.

Adient may be subject to substantial liabilities under these indemnifications.

Transfers of Adient ordinary shares, other than by means of the transfer of book-entry interests in the Depository Trust Company, may be subject to Irish stamp duty.

It is expected that, for the majority of transfers of Adient ordinary shares, there will not be any Irish stamp duty.

Transfers of Adient ordinary shares effected by means of the transfer of book-entry interests in the Depository Trust Company, which we refer to as DTC, are not subject to Irish stamp duty.

Transfers of Adient ordinary shares effected by means of the transfer of book-entry interests in the Depository Trust Company (“DTC”) are not subject to Irish stamp duty.

But if Adient ordinary shares are held directly rather than beneficially through DTC, any transfer of Adient ordinary shares could be subject to Irish stamp duty (currently at the rate of 1% of the higher of the price paid or the market value of the shares acquired).

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(ii) a provision similar to Section 203 of the Delaware General Corporation Law, which provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15 percent of the outstanding ordinary shares of Adient shall not engage in any business combination with Adient, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliates becomes the holder of more than 15 percent of Adient's outstanding ordinary shares;

(iii) rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;

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regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;

and (iv) the ability of the Adient Board of Directors to fill vacancies on the Board of Directors in certain circumstances.

2 unchanged sentences

For example, Adient will be subject to various provisions of Irish law relating to mandatory bids, voluntary bids, requirements to make a cash offer and minimum price requirements, as well as substantial acquisition rules and rules requiring the disclosure of interests in Adient ordinary shares in certain circumstances.

Also, Irish companies, including Adient, may only alter their memorandum of

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association and articles of association with the approval of the holders of at least 75% of Adient's shares present and voting in person or by proxy at a general meeting of Adient (and certain provisions of Adient's memorandum of association and articles of association may only be amended with the approval of the holders of at least 80% in nominal value of Adient's issued ordinary shares).

Also, Irish companies, including Adient, may only alter their memorandum of association and articles of association with the approval of the holders of at least 75% of Adient's shares present and voting in person or by proxy at a general meeting of Adient (and certain provisions of Adient's memorandum of association and articles of association may only be amended with the approval of the holders of at least 80% in nominal value of Adient's issued ordinary shares).

Irish law requires that Adient meet certain additional financial requirements before it declares dividends.

2 unchanged sentences

Non-distributable reserves include the share premium account, the capital redemption reserve fund and the amount by which Adient's accumulated unrealized profits that have not been previously utilized by any capitalization exceed Adient's accumulated unrealized losses that have not previously been written off in a reduction or reorganization of capital.

Unresolved Staff Comments

Cybersecurity

Not applicable.

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.

What changed 10-K

Item 1A. Risk Factors