Adient plc 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 55 Consolidated Statements of Income (Loss) for the years ended September 30, 2025, 2024 and 2023 58 Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2025, 2024 and 2023 59 Consolidated Statements of Financial Position as of September 30, 2025 and 2024 60 Consolidated Statements of Cash Flows for the years ended September 30, 2025, 2024 and 2023 61 Consolidated Statements of Shareholders' Equity for the years ended September 30, 2025, 2024 and 2023 63 Notes to Consolidated Financial Statements 64 Schedule II - Valuation and Qualifying Accounts for the years ended September 30, 2025, 2024 and 2023 108 Adient plc | Form 10-K | 54 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Adient plc Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated statements of financial position of Adient plc and its subsidiaries (the “Company”) as of September 30, 2025 and 2024, and the related consolidated statements of income (loss), of comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended September 30, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting 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. 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; (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 Adient plc | Form 10-K | 55 company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Interim and Annual Goodwill Impairment Assessments As described in Notes 1 and 6 to the consolidated financial statements, the Company’s goodwill balance was $1,807 million as of September 30, 2025, and the goodwill associated with the Americas, Europe, the Middle East and Africa (EMEA), and Asia Pacific/China (Asia) reporting units (collectively, “the reporting units”) was $607 million, $0, and $1,200 million, respectively. 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. The estimated fair value is compared with the carrying amount of the reporting unit, including recorded goodwill. During the second quarter of fiscal 2025, management identified a triggering event requiring a quantitative impairment analysis, and as a result, a $333 million non-cash goodwill impairment was recorded in the EMEA reporting unit. In estimating the fair value, management primarily uses an income approach utilizing discounted cash flow analyses. The calculations contain uncertainties as they require management to make assumptions about future cash flows and the appropriate discount rates. The estimated future cash flows reflect management’s updated assumptions of the financial projections based on 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. The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessment of the EMEA reporting unit and the annual goodwill impairment assessments of the Americas and Asia reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) estimates of revenue, the long-term growth rate, and operating margins, as well as the discount rate for the interim goodwill impairment assessment of the EMEA reporting unit, (b) estimates of operating margins for the annual goodwill impairment assessment of the Americas reporting unit, and (c) estimates of revenue for the annual goodwill impairment assessment of the Asia reporting unit; 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 interim and annual goodwill impairment assessments, including controls over the valuation of the Company’s reporting units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the discounted cash flow analyses used by management; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow analyses; and (iv) evaluating the reasonableness of the significant assumptions used by management related to (a) estimates of revenue, the long-term growth rate, and operating margins, as well as the discount rate for the interim goodwill impairment assessment of the EMEA reporting unit, (b) estimates of operating margins for the annual goodwill impairment assessment of the Americas reporting unit, and (c) estimates of revenue for the annual goodwill impairment assessment of the Asia reporting unit. Evaluating management’s assumptions related to estimates of revenue and operating margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units; (ii) the consistency with relevant industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow analyses and (ii) the reasonableness of the estimate of the long-term growth rate and the discount rate assumptions for the interim goodwill impairment assessment of the EMEA reporting unit. Adient plc | Form 10-K | 56 /s/ PricewaterhouseCoopers LLP Detroit, Michigan November 18, 2025 We have served as the Company’s auditor since 1957. Adient plc | Form 10-K | 57 Adient plc Consolidated Statements of Income (Loss) Year Ended September 30, (in millions, except per share data) 2025 2024 2023 Net sales $ 14,535 $ 14,688 $ 15,395 Cost of sales 13,574 13,760 14,362 Gross profit 961 928 1,033 Selling, general and administrative expenses 522 507 554 Restructuring and impairment costs 392 168 40 Equity income 68 90 84 Earnings before interest and income taxes 115 343 523 Net financing charges 193 189 195 Other pension expense 10 21 33 Income (loss) before income taxes ( 88 ) 133 295 Income tax provision 103 32 — Net income (loss) ( 191 ) 101 295 Income attributable to noncontrolling interests 90 83 90 Net income (loss) attributable to Adient $ ( 281 ) $ 18 $ 205 Earnings (Loss) per share: Basic $ ( 3.39 ) $ 0.20 $ 2.17 Diluted $ ( 3.39 ) $ 0.20 $ 2.15 Shares used in computing earnings (loss) per share: Basic 83.0 89.5 94.5 Diluted 83.0 90.1 95.4 The accompanying notes are an integral part of the consolidated financial statements. Adient plc | Form 10-K | 58 Adient plc Consolidated Statements of Comprehensive Income (Loss) Year Ended September 30, (in millions) 2025 2024 2023 Net income (loss) $ ( 191 ) $ 101 $ 295 Other comprehensive income, net of tax: Foreign currency translation adjustments ( 14 ) 204 ( 17 ) Realized and unrealized gains (losses) on derivatives 37 ( 32 ) 21 Other comprehensive income 23 172 4 Total comprehensive income (loss) ( 168 ) 273 299 Comprehensive income attributable to noncontrolling interests 88 106 91 Comprehensive income (loss) attributable to Adient $ ( 256 ) $ 167 $ 208 The accompanying notes are an integral part of the consolidated financial statements. Adient plc | Form 10-K | 59 Adient plc Consolidated Statements of Financial Position September 30, (in millions, except share and per share data) 2025 2024 Assets Cash and cash equivalents $ 958 $ 945 Accounts receivable, less allowances of $ 40 and $ 24 , respectively 1,873 1,896 Inventories 695 758 Other current assets 607 487 Current assets 4,133 4,086 Property, plant and equipment - net 1,409 1,410 Goodwill 1,807 2,164 Other intangible assets - net 319 371 Investments in partially-owned affiliates 276 338 Assets held for sale 9 8 Other noncurrent assets 1,001 974 Total assets $ 8,954 $ 9,351 Liabilities and Shareholders' Equity Short-term debt $ 2 $ 1 Current portion of long-term debt 9 8 Accounts payable 2,549 2,552 Accrued compensation and benefits 393 358 Other current liabilities 734 759 Current liabilities 3,687 3,678 Long-term debt 2,386 2,396 Pension benefits 112 105 Other noncurrent liabilities 611 638 Long-term liabilities 3,109 3,139 Commitments and Contingencies (Note 19) Redeemable noncontrolling interests 95 91 Preferred shares issued, par value $ 0.001 ; 100,000,000 shares authorized zero shares issued and outstanding at September 30, 2025 — — Ordinary shares issued, par value $ 0.001 ; 500,000,000 shares authorized 79,151,497 shares issued and outstanding at September 30, 2025 — — Additional paid-in capital 3,602 3,712 Retained earnings (accumulated deficit) ( 1,166 ) ( 885 ) Accumulated other comprehensive income (loss) ( 670 ) ( 693 ) Shareholders' equity attributable to Adient 1,766 2,134 Noncontrolling interests 297 309 Total shareholders' equity 2,063 2,443 Total liabilities and shareholders' equity $ 8,954 $ 9,351 The accompanying notes are an integral part of the consolidated financial statements. Adient plc | Form 10-K | 60 Adient plc Consolidated Statements of Cash Flows Year Ended September 30, (in millions) 2025 2024 2023 Operating Activities Net income (loss) attributable to Adient $ ( 281 ) $ 18 $ 205 Income attributable to noncontrolling interests 90 83 90 Net income (loss) ( 191 ) 101 295 Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: Depreciation 279 285 290 Amortization of intangibles 46 47 50 Pension benefit expense 16 27 38 Pension contributions, net ( 18 ) ( 20 ) ( 17 ) Equity in earnings of partially-owned affiliates, net of dividends received 36 ( 17 ) ( 34 ) (Gain) on sale of / impairment of nonconsolidated partially-owned affiliates ( 4 ) ( 1 ) 6 Premium paid on repurchase of debt — — 7 Deferred income taxes ( 28 ) ( 1 ) ( 124 ) Non-cash impairment charges 341 9 — Equity-based compensation 32 31 34 Other ( 15 ) 7 ( 4 ) Changes in assets and liabilities: Receivables 31 12 16 Inventories 75 93 126 Other assets ( 121 ) ( 57 ) ( 26 ) Accounts payable and accrued liabilities ( 69 ) 90 ( 19 ) Accrued income taxes 39 ( 63 ) 29 Cash provided (used) by operating activities 449 543 667 Investing Activities Capital expenditures ( 245 ) ( 266 ) ( 252 ) Sale of property, plant and equipment 34 15 26 Acquisition of businesses, net of cash acquired — — ( 6 ) Business divestitures 27 ( 2 ) 5 Other ( 2 ) — ( 2 ) Cash provided (used) by investing activities ( 186 ) ( 253 ) ( 229 ) Continued on next page The accompanying notes are an integral part of the consolidated financial statements. Adient plc | Form 10-K | 61 Adient plc Consolidated Statements of Cash Flows (Continued) Year Ended September 30, (in millions) 2025 2024 2023 Financing Activities Increase (decrease) in short-term debt 1 ( 1 ) ( 1 ) Increase (decrease) in long-term debt 795 — 1,002 Repayment of long-term debt ( 803 ) ( 137 ) ( 1,104 ) Debt financing costs ( 13 ) ( 5 ) ( 23 ) Share repurchases ( 125 ) ( 275 ) ( 65 ) Cash paid to acquire a noncontrolling interest ( 28 ) — — Dividends paid to noncontrolling interests ( 90 ) ( 72 ) ( 67 ) Other ( 4 ) ( 12 ) ( 13 ) Cash provided (used) by financing activities ( 267 ) ( 502 ) ( 271 ) Effect of exchange rate changes on cash and cash equivalents 17 47 ( 4 ) Increase (decrease) in cash and cash equivalents 13 ( 165 ) 163 Cash and cash equivalents at beginning of period 945 1,110 947 Cash and cash equivalents at end of period $ 958 $ 945 $ 1,110 The accompanying notes are an integral part of the consolidated financial statements. Adient plc | Form 10-K | 62 Adient plc Consolidated Statements of Shareholders' Equity (in millions) Ordinary Shares, par value Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Shareholders' Equity Attributable to Adient Shareholders' Equity Attributable to Noncontrolling Interests Total Equity Balance at September 30, 2022 $ — $ 4,026 $ ( 1,108 ) $ ( 845 ) $ 2,073 $ 302 $ 2,375 Net income — — 205 — 205 63 268 Foreign currency translation adjustments — — — ( 18 ) ( 18 ) ( 2 ) ( 20 ) Realized and unrealized gains on derivatives — — — 21 21 — 21 Dividends paid to and other transactions with noncontrolling interests — — — — — ( 45 ) ( 45 ) Repurchase and retirement of ordinary shares — ( 65 ) — — ( 65 ) — ( 65 ) Share based compensation and other — 12 — — 12 — 12 Balance at September 30, 2023 $ — $ 3,973 $ ( 903 ) $ ( 842 ) $ 2,228 $ 318 $ 2,546 Net income — — 18 — 18 45 63 Foreign currency translation adjustments — — — 181 181 6 187 Realized and unrealized losses on derivatives — — — ( 32 ) ( 32 ) — ( 32 ) Dividends paid to and other transactions with noncontrolling interests — — — — — ( 60 ) ( 60 ) Repurchase and retirement of ordinary shares — ( 275 ) — — ( 275 ) — ( 275 ) Share based compensation and other — 14 — — 14 — 14 Balance at September 30, 2024 $ — $ 3,712 $ ( 885 ) $ ( 693 ) $ 2,134 $ 309 $ 2,443 Net income (loss) — — ( 281 ) — ( 281 ) 54 ( 227 ) Foreign currency translation adjustments — — — ( 12 ) ( 12 ) ( 1 ) ( 13 ) Realized and unrealized gains on derivatives — — — 37 37 — 37 Dividends paid to and other transactions with noncontrolling interests — — — — — ( 46 ) ( 46 ) Purchase of noncontrolling interest — ( 7 ) — ( 2 ) ( 9 ) ( 19 ) ( 28 ) Repurchase and retirement of ordinary shares — ( 125 ) — — ( 125 ) — ( 125 ) Share based compensation and other — 22 — — 22 — 22 Balance at September 30, 2025 $ — $ 3,602 $ ( 1,166 ) $ ( 670 ) $ 1,766 $ 297 $ 2,063 The accompanying notes are an integral part of the consolidated financial statements. Adient plc | Form 10-K | 63 Adient plc Notes to Consolidated Financial Statements 1. Organization and Summary of Significant Accounting Policies Adient is a global leader in the automotive seating supplier industry and maintains relationships with the largest global automotive original equipment manufacturers, or OEMs. Adient's proprietary technologies extend into virtually every area of automotive seating solutions, including complete seating systems, frames, mechanisms, foam, head restraints, armrests and trim covers. 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. 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. GAAP”). Principles of Consolidation Adient consolidates its wholly-owned subsidiaries and those entities in which it has a controlling interest. Investments in partially-owned affiliates are accounted for by the equity method when Adient does not have a controlling interest but is assessed to have significant influence on their operations. Certain figures for comparative periods were reclassified to conform to current period presentation. Consolidated VIEs 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, 2025 and 2024, 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. Adient funds the entities' short-term liquidity needs through revolving credit facilities and has the power to direct the activities that are considered most significant to the entities through its key customer supply relationships. 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: September 30, (in millions) 2025 2024 Current assets $ 304 $ 285 Noncurrent assets 94 98 Total assets $ 398 $ 383 Current liabilities $ 257 $ 241 Noncurrent liabilities 10 12 Total liabilities $ 267 $ 253 Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The consolidated financial statements reflect management's estimates as of the reporting date. Actual results could differ from those estimates. Adient plc | Form 10-K | 64 Fair Value of Financial Instruments The fair values of cash and cash equivalents, accounts receivable, short-term debt and accounts payable approximate their carrying values. 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. Cash and Cash Equivalents Adient considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash is managed by legal entity, with cash pooling agreements in place for all participating entities on a global basis, as applicable. Receivables Receivables consist of amounts billed and currently due from customers and revenues that have been recognized for accounting purposes but not yet billed to customers. Adient extends credit to customers in the normal course of business and maintains allowances resulting from the inability or unwillingness of customers to make required payments. The allowances are established based on historical data along with Adient’s assessment of expected credit losses that reflects current and forecasted industry and economic conditions, 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. 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. As of September 30, 2025 and 2024, $ 185 million and $ 170 million was funded under these programs, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. Pre-Production Costs Related to Long-Term Supply Arrangements Adient's policy for engineering, research and development, and other design and development costs related to products that will be sold under long-term supply arrangements requires such costs to be expensed as incurred or capitalized if reimbursement from the customer is contractually assured. Income related to recovery of these costs is recorded within selling, general and administrative expense in the consolidated statements of income (loss). At September 30, 2025 and 2024, Adient recorded within the consolidated statements of financial position $ 365 million and $ 310 million, respectively, of engineering and research and development costs for which customer reimbursement is contractually assured. 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, 2025, Adient had $ 136 million and $ 229 million of reimbursable costs recorded in current and noncurrent assets, respectively. At September 30, 2024, Adient had $ 108 million and $ 202 million of reimbursable costs recorded in current and noncurrent assets, respectively. Costs for molds, dies and other tools used to make products that will be sold under long-term supply arrangements are capitalized within property, plant and equipment if Adient has title to the assets or has the non-cancelable right to use the assets during the term of the supply arrangement. Capitalized items, if specifically designed for a supply arrangement, are amortized over the term of the arrangement; otherwise, amounts are amortized over the estimated useful lives of the assets. At September 30, 2025 and 2024, approximately $ 41 million and $ 50 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. In addition, at September 30, 2025, Adient recorded within the consolidated statements of financial position in other current and noncurrent assets $ 237 million and $ 18 million, respectively, of costs for molds, dies and other tools for which customer reimbursement is contractually assured. At September 30, 2024, Adient recorded within the consolidated statements of financial position in other current and noncurrent assets $ 156 million and $ 25 million, respectively, of costs for molds, dies and other tools for which customer reimbursement is contractually assured. Adient plc | Form 10-K | 65 Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the respective assets using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. The estimated useful lives range from 3 to 40 years for buildings and improvements and from 3 to 15 years for machinery and equipment. Leases 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. ROU assets also include payments made in advance and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that such options are to be exercised. Adient uses its incremental borrowing rate, which is the rate of interest it would pay to borrow on a collateralized basis over a similar term to the lease in a similar economic environment, for discounting lease consideration as most lease agreements do not provide an implicit rate. Refer to Note 8, “Leases” of the notes to consolidated financial statements for more information regarding Adient’s leases. Goodwill and Other Intangible Assets Goodwill reflects the cost of an acquisition in excess of the fair values assigned to identifiable net assets acquired. Adient reviews goodwill for impairment during the fourth fiscal quarter or more frequently if events or changes in circumstances indicate the asset might be impaired. Adient performs impairment reviews for its reporting units, which have been determined to be Adient's reportable segments using a fair value method based on management's judgments and assumptions or third-party valuations. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. In estimating the fair value, Adient primarily uses an income approach utilizing discounted cash flow analyses. Adient also uses a market approach utilizing published multiples of earnings of comparable entities with similar operational and economic characteristics to further support the fair value estimates. 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 estimated fair value is then compared with the carrying amount of the reporting unit, including recorded goodwill. An impairment is recorded to the extent the estimated fair value is below the carrying amount of the reporting unit. 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. Refer to Note 6, “Goodwill and Other Intangible Assets,” of the notes to the consolidated financial statements for more information regarding Adient’s goodwill and other intangible assets. Impairment of Long-Lived Assets 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. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. Impairment of Investments in Partially-Owned Affiliates Adient monitors its investments in partially-owned affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If Adient determines that an other-than-temporary decline in value has occurred, it recognizes an impairment loss, which is measured as the difference between the recorded book value and the fair value of the investment. Fair value is generally determined using an income approach based on discounted cash flows or negotiated transaction values. Refer to Note 18, “Nonconsolidated Partially-Owned Affiliates,” of the notes to consolidated financial statements for more information on Adient’s partially-owned affiliates. Adient plc | Form 10-K | 66 Revenue Recognition Adient provides production and service parts to its customers under awarded multi-year programs. The duration of a program is generally consistent with the life cycle of a vehicle, however, an awarded program does not reach the level of a performance obligation until Adient receives either a purchase order and/or a materials release from the customer for a specific number of parts at a specified price, at which point an enforceable contract exists. Sales revenue is recognized at the point in time when parts are shipped and control has transferred to the customer, at which point an enforceable right to payment exists. 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. 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. Refer to Note 2, “Revenue Recognition,” of the notes to consolidated financial statements for information on Adient's revenue recognition. Customers Essentially all of Adient’s sales are to the automotive industry. Ford Motor Company comprised 11 %, 12 % and 11 % of consolidated net sales in fiscal 2025, 2024 and 2023, respectively, across all segments. Volkswagen Group comprised 10 %, 13 % and 11 % of consolidated net sales in fiscal 2025, 2024 and 2023, respectively, primarily within the EMEA segment. Stellantis N.V. comprised 10 % of consolidated net sales in fiscal 2025 and 2023 within the Americas and EMEA segments. Research and Development Costs Expenditures for research activities relating to product development and improvement (other than those expenditures that are contractually guaranteed for reimbursement from the customer) are charged against income as incurred and included within selling, general and administrative expenses in the consolidated statements of income (loss). Such expenditures for the years ended September 30, 2025, 2024 and 2023 were $ 387 million, $ 372 million and $ 362 million, respectively. A portion of these costs associated with these activities are reimbursed by customers in the amounts of $ 288 million, $ 280 million and $ 250 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively. Government Assistance Adient periodically receives government incentives in the forms of cash grants which are based on making qualifying capital investments in property, plant and equipment. Such assistance is initially recorded as a reduction to property, plant and equipment. Once in use, the balance is systematically recognized in the statements of income (loss) as the asset is depreciated over the useful life of the underlying asset. Adient also periodically receives government assistance for creating new job opportunities and maintaining a certain number of employees. Such employment-related incentives are normally deferred as current or noncurrent liabilities as appropriate. These benefits are recognized in the statements of income (loss) as a reduction of expense when Adient has met or is expected to meet all related contractual obligations. The impact of government assistance received by Adient and related balances for all periods presented were immaterial. Foreign Currency Translation 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. The resulting translation adjustments are accumulated as a component of accumulated other comprehensive income (“AOCI”). The aggregate transaction gains (losses) included in net income (loss) for the years ended September 30, 2025, 2024 and 2023 were $( 8 ) million, $( 3 ) million and $ 4 million, respectively. Derivative Financial Instruments The fair values of all derivatives are recorded in the consolidated statements of financial position. The change in a derivative's fair value is recorded each period in current earnings or accumulated other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and if so, the type of hedge transaction. Refer to Note 10, “Derivative Instruments and Hedging Activities,” and Note 11, “Fair Value Measurements,” of the notes to consolidated financial statements for disclosure of Adient's derivative instruments and hedging activities. Adient plc | Form 10-K | 67 Restructuring Costs Adient recognizes restructuring costs that are probable and reasonably estimable related to separation programs that have been approved by and are committed to by management. In these situations, the affected employees are identified and it is unlikely that actions required to complete the separation plan will change significantly. These costs are included in restructuring and impairment costs in the consolidated statements of income (loss). Refer to Note 15, “Restructuring and Impairment Costs,” of the notes to the consolidated financial statements for more information. Costs associated with benefits that are contingent on certain employees continuing to provide services during a transition period are recorded over the required service period. All other costs associated with restructuring activities, such as costs to relocate machinery and equipment and costs to finalize the closing of a plant or dissolving a legal entity after production has ceased, are expensed as incurred. Refer to Note 17, “Segment Information,” of the notes to the consolidated financial statements for more information. Stock-Based Compensation Stock-based compensation is initially measured at the fair value of the awards on the grant date and is recognized in the financial statements over the period the employees are required to provide services in exchange for the awards. The fair value of restricted stock awards is based on the number of units granted and the stock price on the grant date. The fair value of performance-based share unit, or PSU, awards is based on the stock price at the grant date and the assessed probability of meeting future performance targets. The fair value of cash settled awards are recalculated at the end of each reporting period and the liability and expense are adjusted based on the new fair value. Refer to Note 12, “Stock-Based Compensation,” of the notes to consolidated financial statements for Adient's stock based compensation disclosures. Pension Benefits Adient utilizes a mark-to-market approach for recognizing pension benefit expenses, including measuring the market related value of plan assets at fair value and recognizing actuarial gains and losses in the fourth quarter of each fiscal year or at the date of a remeasurement event. Refer to Note 14, “Retirement Plans,” of the notes to consolidated financial statements for disclosure of Adient's pension benefit plans. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and other loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Adient records a valuation allowance that primarily represents operating and other loss carryforwards for which realization is uncertain. Management judgment is required in determining Adient's provision for income taxes, deferred tax assets and liabilities, and the valuation allowance recorded against Adient's net deferred tax assets. Adient reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or combined group recording the net deferred tax asset are considered, along with any other positive or negative evidence. Since future financial results may differ from previous estimates, periodic adjustments to Adient's valuation allowances may be necessary. Adient is subject to income taxes in Ireland, the U.S. and other non-U.S. jurisdictions. Judgment is required in determining its worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of Adient's business, there are many transactions and calculations where the ultimate tax determination is uncertain. Adient's income tax returns for various fiscal years remain under audit by the respective tax authorities. Although the outcome of tax audits is always uncertain, management believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provisions included amounts sufficient to pay assessments, if any, which may be proposed by the taxing authorities. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Adient plc | Form 10-K | 68 Adient does not generally provide for additional income taxes which would become payable upon repatriation of undistributed earnings of wholly owned foreign subsidiaries. Adient's intent is for such earnings to be reinvested by the subsidiaries or to be repatriated only when it would be tax efficient. Refer to Note 16, “Income Taxes,” of the notes to consolidated financial statements for Adient's income tax disclosures. Earnings Per Share The following table shows the computation of basic and diluted earnings (loss) per share: Year Ended September 30, (in millions, except per share data) 2025 2024 2023 Numerator: Net income (loss) attributable to Adient $ ( 281 ) $ 18 $ 205 Denominator: Shares outstanding 83.0 89.5 94.5 Effect of dilutive securities — 0.6 0.9 Diluted shares 83.0 90.1 95.4 Earnings (Loss) per share: Basic $ ( 3.39 ) $ 0.20 $ 2.17 Diluted $ ( 3.39 ) $ 0.20 $ 2.15 Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share for fiscal 2025 as the effect would have been anti-dilutive due to being in a loss position. The effect of common stock equivalents which would have been anti-dilutive was excluded from the calculation of diluted earnings (loss) per share for fiscal 2024 and 2023 and was immaterial. New Accounting Pronouncements Standards Adopted During Fiscal 2025 On October 1, 2024, Adient adopted Accounting Standards Codification (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires additional disclosures on significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”). The ASU also requires additional disclosures of an amount for other segment items by reportable segment and a description of its composition. The new guidance is applied retrospectively in Adient's fiscal 2025 annual filing on Form 10-K and in subsequent quarterly filings on Form 10-Q. The adoption of this guidance has resulted in incremental segment information disclosures within the footnotes to the consolidated financial statements but did not have an impact on Adient’s financial position and results of operations. Refer to Note 17, “Segment Information” of the notes to consolidated financial statements for additional information. Adient plc | Form 10-K | 69 Standards Effective After Fiscal 2025 Adient has considered the new standards that are summarized below, each to be effective after fiscal 2025, which are not expected to significantly impact the consolidated financial statements: Standard to be Adopted Description Date Effective ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures The ASU requires disclosure of additional details about the reporting entity's reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. The ASU also requires further disaggregation of income tax amounts paid by federal, state and foreign, as well as by material jurisdiction. October 1, 2025 ASU 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets (Financial Instruments – Credit Losses (Topic 326) The ASU provides a practical expedient and an accounting policy election under which conditions at the period-end date can be assumed to remain unchanged for an asset’s remaining life when estimating credit losses on current accounts receivable and current contract assets arising from transactions under ASC 606 Revenue from contracts with customers. The update is expected to simplify the credit loss assessment when applying Topic 326. October 1, 2026 ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense: Disaggregation Disclosures (Subtopic 220-40) The ASU requires disclosures of specified information about certain costs and expenses in the notes to financial statements at each interim and annual reporting period, including: the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. It also requires disclosures of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. October 1, 2027 ASU 2025-06 Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software The ASU amends the timing for capitalizing eligible internal use software costs. Under the new guidance, an entity is required to start capitalizing software costs when both of the following occur: 1) Management has authorized and committed to funding the software project. 2) It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). The ASU does not change the types of costs eligible for capitalization or the associated amortization and impairment guidance. October 1, 2028 2. Revenue Recognition Adient generates revenue through the sale of automotive seating solutions, including complete seating systems and the components of complete seating systems. Adient provides production and service parts to its customers under awarded multi-year programs. The duration of a program is generally consistent with the life cycle of a vehicle, however, the program can be canceled at any time without cause by the customer. Programs awarded to Adient to supply parts to its customers do not contain a firm commitment by the customer for volume or price and do not reach the level of a performance obligation until Adient receives either a purchase order and/or a materials release from the customer for a specific number of parts at a specified price, at which point an enforceable contract exists. Sales revenue is generally recognized at the point in time when parts are shipped and control has transferred to the customer, at which point an enforceable right to payment exists. 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. 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. Approximately 1 % of net sales recorded in each of the last three fiscal years were related to product sales transacted in prior fiscal years. In pursuit of new program awards, Adient at times agrees to make upfront payments to customers. Each time such a payment is made, Adient evaluates its nature, the underlying economics, legal and compliance ramifications, and other relevant factors and circumstances. These payments are deemed to be consideration payable to customers and are generally recognized as a reduction to revenue once mutually agreed. Certain upfront payments, however, are capitalized as other current and noncurrent assets if they are determined to be incremental, attributable only to the specific new program being awarded, and recoverable. Adient plc | Form 10-K | 70 As products under the new program are sold to the customer, the capitalized amount is amortized and recognized as a reduction to revenue over the term of the program, typically between three and seven years . Adient assesses recoverability of the capitalized amounts on an on-going basis. Any amounts that are concluded to be no longer recoverable are immediately recognized as a reduction to revenue. As of September 30, 2025 and 2024, Adient maintained capitalized upfront payments of $ 174 million and $ 155 million, respectively, within other noncurrent assets. 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. 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. Taxes collected from customers are excluded from revenue and credited directly to obligations to the appropriate government agencies. Payment terms with customers are established based on customary industry and regional practices and do not contain significant financing components. Contract assets primarily relate to the right to consideration for work completed but not billed at the reporting date on contracts with customers. The contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have not yet been satisfied and revenue has not been recognized. No material contract assets or liabilities exist at September 30, 2025 and 2024. As described above, the issuance of a purchase order and/or a materials release by the customer represents the point at which an enforceable contract with the customer exists. Therefore, Adient has elected to apply the practical expedient in ASC 606 and does not disclose information about the remaining performance obligations that have an original expected duration of one year or less. Refer to Note 17, “Segment Information,” of the notes to consolidated financial statements for disaggregated revenue by geographical market. 3. Acquisitions and Divestitures 2025 Transaction During the first quarter of fiscal 2025, Adient acquired all of the noncontrolling interest in Technotrim, Inc. (“Technotrim”) for a value of $ 28 million and sold all of its partially-owned interests in Setex, Inc. and Setex SRL (together as “Setex”) for a value of $ 27 million. The sale of Setex resulted in a one-time gain of $ 4 million. The acquisition of all noncontrolling interest in Technotrim was recorded to equity. The transactions are expected to provide additional synergies through optimization of Adient's manufacturing footprint and additional control over its manufacturing presence in the Americas. 2024 Transaction In November 2023, Adient finalized the sale of 51 % of its interest (previously held 100 %) in Adient (Langfang) Seating Co., Ltd. (“LFADNT”) in China for ¥ 44 million ($ 6 million), resulting in the deconsolidation of LFADNT, including $ 9 million of cash. Adient recorded an $ 8 million loss as a result of the transaction in the Asia segment, including $ 5 million of allocated goodwill. 2023 Transactions Adient completed the acquisition of Nantong Yanfeng Adient Seating Trim Co., Ltd. (“YFAT”) from KEIPER Seating Mechanisms Co., Ltd. (“KEIPER”), in April 2023 for ¥ 150 million ($ 23 million). Adient made an initial deposit of ¥ 75 million ($ 12 million) in fiscal 2022, which represents 50 % of the purchase price. During fiscal 2023, Adient paid the remaining purchase price of ¥ 75 million ($ 11 million). 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. The acquisition has provided additional synergies within the Asia segment. 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. 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. Upon acquisition, YFAT was renamed as Adient (Nantong) Automotive Seating Components Co., Ltd. Adient plc | Form 10-K | 71 4. Inventories Inventories consisted of the following: September 30, (in millions) 2025 2024 Raw materials and supplies $ 522 $ 582 Work-in-process 29 29 Finished goods 144 147 Inventories $ 695 $ 758 5. Property, Plant and Equipment Property, plant and equipment consisted of the following: September 30, (in millions) 2025 2024 Buildings and improvements $ 1,068 $ 1,031 Machinery and equipment 3,399 3,245 Construction in progress 172 152 Land 81 86 Total property, plant and equipment 4,720 4,514 Less: accumulated depreciation ( 3,311 ) ( 3,104 ) Property, plant and equipment - net $ 1,409 $ 1,410 There were no material finance leases included in net property, plant and equipment at September 30, 2025 and 2024. As of September 30, 2025, Adient is the lessor of properties included in gross building and improvements for $ 15 million and accumulated depreciation of $ 11 million. As of September 30, 2024, Adient is the lessor of properties included in gross building and improvements for $ 14 million and accumulated depreciation of $ 10 million. 6. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill are as follows: (in millions) Americas EMEA Asia Total Balance at September 30, 2023 $ 609 $ 317 $ 1,168 $ 2,094 Business acquisitions — — ( 5 ) ( 5 ) Currency translation and other ( 3 ) 24 54 75 Balance at September 30, 2024 $ 606 $ 341 $ 1,217 $ 2,164 Impairments — ( 333 ) — ( 333 ) Currency translation and other 1 ( 8 ) ( 17 ) ( 24 ) Balance at September 30, 2025 $ 607 $ — $ 1,200 $ 1,807 Refer to Note 3, “Acquisitions and Divestitures,” of the notes to consolidated financial statements for additional information. During the second quarter of fiscal 2025, Adient identified a triggering event requiring a quantitative impairment analysis primarily due to the continued and sustained decline in the market value of its ordinary shares resulting from the uncertainties surrounding future production volume within the automotive industry. These uncertainties were the result of a combination of Adient plc | Form 10-K | 72 factors including weakening consumer demand due in part to vehicle affordability, the direct and indirect impacts resulting from the imposition of U.S. and foreign tariffs, market share loss for foreign/luxury OEMs in the Asia reporting unit combined with modest expected margin declines as Adient continues to win new business with local OEMs in China, intensifying competition from Chinese imports, lower exports to China from EMEA as domestic brands expand in China and overcapacity in the EMEA reporting unit resulting in pricing pressure, along with continued disruptions caused by slower electric vehicle adoption rates. The analysis was performed using a fair value method based on management's judgments and assumptions regarding future cash flows for all three reporting units. 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 calculations contained 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 16.5 % to 21.0 %) 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 reflected management's updated assumptions of the financial projections based on 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. The financial projections considered the impact of all of the factors identified above, which contributed to a reduction in reporting unit level and overall fair value. As a result of the quantitative assessment and for the factors stated above, a $ 333 million non-cash goodwill impairment was recorded in the EMEA reporting unit during the quarter ended March 31, 2025. This amount is reflected in restructuring and impairment costs within the consolidated statements of income (loss). No amounts of goodwill remain recorded in EMEA. The difference between the fair value and carrying value of the Americas and Asia reporting units both modestly exceeded 10% at March 31, 2025. During the fourth quarter of fiscal year 2025, Adient performed its annual goodwill impairment test using a fair value method based on management's judgments and assumptions regarding future cash flows. Based on updated assumptions about market comparables, future cash flows, and the appropriate discount rates (based on weighted average cost of capital ranging from 15.5 % to 20.0 %), no goodwill impairment was recorded at September 30, 2025. The fair values of both the Americas and Asia reporting units are higher at September 30, 2025 reflecting the increase in the overall market value of Adient’s ordinary shares and generating higher levels of fair value in excess of carrying value for both reporting units. If further degradation in economic conditions occur, Adient’s reporting units may incur significant impairment of goodwill and other long-lived assets. Adient generally assumes operating margins in future years will normalize over time as the current year results are not indicative of market participant expectations primarily due to the current challenging market conditions as mentioned above. Management believes this is consistent with a market participant view. There are also expectations for enhanced profitability and cash flows driven by near-term efficiency actions, strategic review of portfolio and reduction of capital expenditures. Long-term profitability and cash flows will also be impacted by the expiration of underperforming contracts along with restructuring benefits taking full effect. Adient's other intangible assets, primarily from business acquisitions valued based on independent appraisals, consisted of: September 30, 2025 September 30, 2024 (in millions) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Intangible assets Patented technology $ 81 $ ( 45 ) $ 36 $ 81 $ ( 39 ) $ 42 Customer relationships 537 ( 265 ) 272 563 ( 246 ) 317 Trademarks and other 15 ( 4 ) 11 25 ( 13 ) 12 Total intangible assets $ 633 $ ( 314 ) $ 319 $ 669 $ ( 298 ) $ 371 Amortization of other intangible assets for the fiscal years ended September 30, 2025, 2024 and 2023 was $ 46 million, $ 47 million and $ 50 million, respectively. Adient anticipates amortization for fiscal 2026, 2027, 2028, 2029 and 2030 will be approximately $ 46 million, $ 26 million, $ 19 million, $ 19 million and $ 19 million, respectively. Adient plc | Form 10-K | 73 7. Product Warranty Adient offers warranties to its customers depending upon the specific product and terms of the customer purchase agreement. A typical warranty program requires that Adient replace defective products within a specified time period from the date of sale. Adient records an estimate for future warranty-related costs based on actual historical return rates and other known factors. Based on analysis of return rates and other factors, Adient's warranty provisions are adjusted as necessary. Adient monitors its warranty activity and adjusts its reserve estimates when it is probable that future warranty costs will be different than those estimates. Adient's product warranty liability is recorded in the consolidated statements of financial position in other current liabilities. The changes in Adient's total product warranty liability are as follows: September 30, (in millions) 2025 2024 Balance at beginning of period $ 22 $ 21 Accruals for warranties issued during the period 4 7 Settlements made (in cash or in kind) during the period ( 4 ) ( 6 ) Balance at end of period $ 22 $ 22 8. Leases Adient's lease portfolio consists of operating leases for real estate including production facilities, warehouses and administrative offices, equipment such as forklifts, computer servers, laptops and fleet vehicles. Adient has elected not to record leases with an initial term of 12 months or less on its consolidated statement of financial position. A lease liability and corresponding ROU asset are recognized based on the present value of lease payments. 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. Adient primarily derives its IBR from its debt portfolio, adjusted for collateralization, lease term and jurisdictional factors. The components of lease costs for the years ended September 30, 2025, 2024 and 2023 were as follows: Year Ended September 30, (in millions) 2025 2024 2023 Operating lease cost $ 111 $ 108 $ 108 Short-term lease cost 26 29 29 Total lease cost $ 137 $ 137 $ 137 Adient plc | Form 10-K | 74 Operating lease right-of-use assets and lease liabilities included in the consolidated statement of financial position were as follows: September 30, (in millions) 2025 2024 Operating leases: Operating lease right-of-use assets Other noncurrent assets $ 259 $ 248 Operating lease liabilities - current Other current liabilities $ 82 $ 78 Operating lease liabilities - noncurrent Other noncurrent liabilities 176 168 $ 258 $ 246 Weighted average remaining lease term: Operating leases 5 years 5 years Weighted average discount rate: Operating leases 6.0 % 6.2 % Maturities of operating lease liabilities and minimum payments for operating leases having initial or remaining non-cancelable terms in excess of one year as of September 30, 2025 were as follows: Fiscal years (in millions) Operating Leases 2026 $ 93 2027 71 2028 48 2029 30 2030 20 Thereafter 37 Total lease payments 299 Less: imputed interest ( 41 ) Present value of lease liabilities $ 258 Supplemental cash flow information related to leases was as follows: Year Ended September 30, (in millions) 2025 2024 2023 Right-of-use assets obtained in exchange for lease obligations: Operating leases (non-cash activity) $ 96 $ 84 $ 35 Operating cash flows: Cash paid for amounts included in the measurement of lease liabilities $ 110 $ 108 $ 108 Adient’s finance leases were not significant to the consolidated financial statements during fiscal 2025, 2024 and 2023. Refer to Note 9, “Debt and Financing Arrangements,” of the notes to consolidated financial statements for additional information. Adient plc | Form 10-K | 75 9. Debt and Financing Arrangements Long-term and short-term debt consisted of the following: September 30, (in millions) 2025 2024 Long-term debt: 8.25 % Notes due 2031 $ 500 $ 500 7.00 % Secured Notes due 2028 500 500 Term Loan B due in 2031 626 632 4.875 % Notes due in 2026 — 795 7.50 % Notes due in 2033 795 — Other bank borrowings and finance lease obligations 5 5 Less: debt issuance costs ( 31 ) ( 28 ) Gross long-term debt 2,395 2,404 Less: current portion 9 8 Net long-term debt $ 2,386 $ 2,396 Short-term debt: Other bank borrowings (1) 2 1 Total short-term debt $ 2 $ 1 (1) The weighted average interest rates on short-term debts, based on levels of debt maintained in various jurisdictions, were 3.7 % and 5.4 % at September 30, 2025 and 2024, respectively. 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. The ABL Credit Facility is set to mature on November 2, 2027, subject to certain springing maturity provisions. 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. 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. Subject to certain conditions, the ABL Credit Facility may be expanded by up to $ 250 million in additional commitments. Loans under the ABL Credit Facility may be denominated, at the option of Adient, in U.S. Dollars, Euros, Pounds Sterling or Swedish Krona. It also provides flexibility for future amendments to the ABL Facility to incorporate certain sustainability-based pricing provisions. 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. Interest is payable on the ABL 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 %. As of September 30, 2025, Adient had not drawn down on the ABL Credit Facility and had availability under this facility of approximately $ 814 million (net of $ 8 million of letters of credit). In October 2025, Adient amended the ABL Credit Facility agreement, reducing the maximum facility from $ 1,250 million to $ 1,000 million (consisting of a North American subfacility of up to $ 895 million and a European subfacility of up to $ 105 million) and extending the maturity date to October 2030. Under the amended agreement, the commitment fee on the unused portion of the commitments is lowered from 0.25 % - 0.375 % to 0.20 % - 0.25 %. The range of applicable interest margin was also updated from 1.50 % - 2.00 % to 1.25 % - 1.75 %. In addition, Adient Global Holdings S.à r.l., a wholly-owned subsidiary of Adient, maintains a senior secured term loan facility (the “Term Loan B Agreement”) that had an outstanding balance of $ 625 million as of September 30, 2025. During fiscal 2024, the Term Loan B Agreement was amended to reduce the applicable margin from 3.25 % to 2.75 % and extend final maturity to January 31, 2031 (which maturity was previously April 8, 2028). Adient incurred $ 5 million of costs associated with the modification, of which $ 4 million was recorded as deferred financing costs. During fiscal 2025, the Term Loan B Agreement Adient plc | Form 10-K | 76 was further amended to reduce the applicable margin from 2.75 % to 2.25 %. Adient incurred $ 1 million of costs associated with the modification, which was recorded as deferred financing costs. 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. 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. Interest on the Term Loan B Agreement accrues at Term SOFR plus an applicable margin. 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: create certain liens and enter into sale and lease-back transactions; create, assume, incur or guarantee certain indebtedness; pay dividends or make other distributions on, or repurchase or redeem, Adient’s capital stock or certain other debt; make other restricted payments; and consolidate or merge with, or convey, transfer or lease all or substantially all of Adient’s and its restricted subsidiaries’ assets, to another person. These covenants are subject to a number of other limitations and exceptions set forth in the agreements. 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. Adient Global Holdings Ltd. (“AGH”), a wholly-owned subsidiary of Adient, maintains (i) $ 500 million in aggregate principal amount of 7 % senior secured notes due 2028 and (ii) $ 500 million in aggregate principal amount of 8.250 % senior unsecured notes due 2031. Interest on both of these notes are paid on April 15 and October 15 each year. These notes contain covenants that are usual and customary. AGH also previously maintained 4.875 % USD-denominated unsecured notes due 2026. The aggregate principal amount of these notes was $ 795 million as of September 30, 2024. In February 2025, AGH issued $ 795 million (net proceeds of $ 783 million) in aggregate principal amount of 7.50 % senior unsecured notes. Adient incurred $ 12 million of costs associated with the transaction, which was recorded as deferred financing costs. Proceeds from the sale of the notes, together with cash on hand, were used to fully redeem AGH's 4.875 % senior unsecured notes in March 2025. Upon redemption of the 4.875 % notes, Adient wrote off $ 2 million of previously deferred financing costs associated with the notes to net financing charges. The new notes mature on February 15, 2033 and bear interest at a rate of 7.50 % per annum. Interest on the notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2025. These notes also contain covenants that are usual and customary. Principal payments required on long-term debt during the next five years are as follows: Year Ended September 30, (in millions) 2026 2027 2028 2029 2030 Thereafter Principal payments $ 6 $ 6 $ 506 $ 6 $ 6 $ 1,891 Net Financing Charges Adient's net financing charges in the consolidated statements of income (loss) contained the following components: Year Ended September 30, (in millions) 2025 2024 2023 Interest expense, net of capitalized interest costs $ 201 $ 191 $ 186 Banking fees and debt issuance cost amortization 16 18 20 Interest income ( 24 ) ( 28 ) ( 22 ) Premium paid on repurchase of debt — — 7 Net foreign exchange — 8 4 Net financing charges $ 193 $ 189 $ 195 Adient plc | Form 10-K | 77 Banking fees in fiscal 2025 and 2023 includes $ 2 million and $ 4 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, 2025, 2024 and 2023 was $ 183 million, $ 187 million and $ 132 million, respectively. Other Arrangements 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. 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. As of September 30, 2025 and 2024, $ 185 million and $ 170 million was funded under these programs, respectively. Adient also has a program with an external financial institution under which Adient's suppliers can sell their receivables from Adient to the financial institution at their sole discretion. Adient is not a party to the agreements between the participating suppliers and the financial institution. Adient's obligation under the program is to pay the original amounts of supplier invoices to the financial institution on the original invoice dates. No fees are paid and no assets are pledged by Adient. The payment terms for trade payables can range from 45 days to 120 days depending on types of services and goods being purchased. The payment terms for molds, dies and other tools that are acquired as part of pre-production activities are in general longer, and are normally dependent on the terms which Adient has agreed with its customers. As of September 30, 2025, Adient's liabilities related to this program were $ 105 million which is recorded within accounts payable ($ 16 million) and other current liabilities ($ 89 million) in Adient’s consolidated statements of financial position. As of September 30, 2024, Adient's liabilities related to this program were $ 76 million which is recorded within accounts payable ($ 5 million) and other current liabilities ($ 71 million) in Adient’s consolidated statements of financial position. Cash flows related to the program are all presented within operating activities in Adient's consolidated statements of cash flows. A summary of Adient’s outstanding obligations under the supplier finance program for the year ended September 30, 2025 is as follows: (in millions) Year Ended September 30, 2025 Balance at beginning of period $ 76 Invoices confirmed 122 Confirmed invoices paid ( 96 ) Currency translations 3 Balance at end of period $ 105 10. Derivative Instruments and Hedging Activities Adient selectively uses derivative instruments to reduce Adient's market risk associated with changes in foreign currency. Under Adient's policy, the use of derivatives is restricted to those intended for hedging purposes; the use of any derivative instrument for speculative purposes is strictly prohibited. A description of each type of derivative utilized to manage Adient's risk is included in the following paragraphs. In addition, refer to Note 11, “Fair Value Measurements,” of the notes to consolidated financial statements for information related to the fair value measurements and valuation methods utilized by Adient for each derivative type. Adient has global operations and participates in the foreign exchange markets to minimize its risk of loss from fluctuations in foreign currency exchange rates. Adient primarily uses foreign currency exchange contracts to hedge certain foreign exchange rate exposures. Adient hedges 70 % to 90 % of the nominal amount of each of its known foreign exchange transactional exposures. Gains and losses on derivative contracts offset gains and losses on underlying foreign currency exposures. 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, 2025 and 2024, respectively. Adient plc | Form 10-K | 78 Adient also utilizes foreign currency exchange contracts and cross currency interest rate swap contracts to selectively hedge portions of its investments in foreign subsidiaries. Such contracts are designated as net investment hedges, with the objective of managing the impact of foreign currency exchange rate fluctuations on Adient’s net investments. The currency effects of such contracts are reflected in the AOCI account within shareholders’ equity attributable to Adient, where gains and losses recorded on Adient’s net investment are offset. During the fourth quarter of fiscal 2025, Adient entered into cross-currency interest rate swap agreements with an aggregate notional amount of $ 325 million in order to hedge the foreign currency risk associated with its net investment in European subsidiaries. The currency remeasurement impacts of the instruments 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. These agreements expire over a three-year period and have been designated as net investment hedges of Adient's Euro denominated subsidiaries. Under the terms of the agreements, Adient receives fixed-rate interest payments in U.S. dollar at a weighted average rate of 1.85 % and pays 0.00 % on the fixed-rate Euro leg. The interest rate differentials are recorded within net financing charges on the consolidated statement of income (loss). During the third quarter of fiscal 2025, Adient entered into a ¥ 559 million ($ 78 million) foreign currency exchange contract to selectively hedge portions of its net investment in China. The contract is set to mature in October 2026. During the third quarter of fiscal 2024, Adient entered into a ¥ 570 million ($ 78 million) foreign currency exchange contract to selectively hedge portions of its net investment in China. In October 2025, a portion of the contract totaling ¥ 413 million ($ 56 million) matured, the impact of which was not material. The remainder of the contract is set to mature in June 2026. During the second quarter of fiscal 2024, Adient entered into a ¥ 685 million ($ 96 million) foreign exchange forward contract to selectively hedge portions of its net investment in China. Adient de-designated the majority of the contracted amount during fourth quarter of fiscal 2024, resulting in an outstanding contract amount of ¥ 120 million ($ 17 million) as of September 30, 2024. The contract matured during the first quarter of fiscal 2025, the impact of which was not material. During the second quarter of fiscal 2023, Adient entered into a ¥ 240 million ($ 35 million) foreign exchange forward contract to selectively hedge portions of its net investment in China. During fiscal 2023, the foreign exchange forward contract matured, the impact of which was not material. The € 123 million aggregate principal amount of 3.50 % Euro-denominated unsecured notes paid off in August 2024 was previously designated as a net investment hedge to selectively hedge portions of Adient's net investment in Europe. 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. During the first quarter of fiscal 2024, 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 principal balance on the 3.50 % notes. The impact of foreign currency changes on the notes and the contract were recorded in net financing charges until payment of the notes and maturity of the foreign exchange forward contract in August 2024. Adient plc | Form 10-K | 79 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: Derivatives and Hedging Activities Designated as Hedging Instruments under ASC 815 Derivatives and Hedging Activities Not Designated as Hedging Instruments under ASC 815 September 30, (in millions) 2025 2024 2025 2024 Other current assets Foreign currency exchange derivatives $ 32 $ 9 $ 4 $ 6 Other noncurrent assets Foreign currency exchange derivatives 1 1 — 2 Total assets $ 33 $ 10 $ 4 $ 8 Other current liabilities Foreign currency exchange derivatives $ 7 $ 32 $ — $ — Cross-currency interest rate swaps 1 — — — Other noncurrent liabilities Foreign currency exchange derivatives 2 9 1 — Cross-currency interest rate swaps 3 — — — Total liabilities $ 13 $ 41 $ 1 $ — 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. Adient has not elected to offset the fair value positions of the derivative contracts recorded in the consolidated statements of financial position. Collateral is generally not required of Adient or the counterparties under the master netting agreements. As of September 30, 2025 and 2024, no cash collateral was received or pledged under the master netting agreements. The gross and net amounts of derivative instruments and other amounts used in hedging activities are as follows: Assets Liabilities September 30, (in millions) 2025 2024 2025 2024 Gross amount recognized $ 37 $ 18 $ 14 $ 41 Gross amount eligible for offsetting ( 10 ) ( 9 ) ( 10 ) ( 9 ) Net amount $ 27 $ 9 $ 4 $ 32 The following table presents the effective portion of pretax gains (losses) recorded in other comprehensive income related to cash flow hedges: Year Ended September 30, (in millions) 2025 2024 2023 Foreign currency exchange derivatives $ 46 $ ( 2 ) $ 89 Adient plc | Form 10-K | 80 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 (loss): (in millions) Year Ended September 30, 2025 2024 2023 Foreign currency exchange derivatives Cost of sales $ ( 8 ) $ 46 $ 66 During the next twelve months, $ 28 million of pretax gain on cash flow hedges are expected to be reclassified from AOCI into Adient's consolidated statements of income (loss). The following table presents the location and amount of pretax gains (losses) on fair value hedge activity in Adient's consolidated statements of income (loss): (in millions) Year Ended September 30, 2025 2024 2023 Foreign currency exchange derivatives Net financing charges $ — $ 1 $ — 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): (in millions) Year Ended September 30, 2025 2024 2023 Foreign currency exchange derivatives Cost of sales $ 4 $ ( 8 ) $ 8 Foreign currency exchange derivatives Net financing charges ( 12 ) 22 ( 10 ) Total $ ( 8 ) $ 14 $ ( 2 ) The effective portion of pretax gains (losses) recorded in currency translation adjustment (“CTA”) within other comprehensive income (loss) related to net investment hedges was $( 5 ) million, $( 5 ) million and $( 67 ) million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively. For the years ended September 30, 2025, 2024 and 2023, 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, 2025, 2024 and 2023, no gains or losses were recognized in income for the ineffective portion of cash flow hedges. 11. Fair Value Measurements ASC 820, “Fair Value Measurement,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions. ASC 820 requires the use of observable market data, when available, in making fair value measurements. 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. Adient plc | Form 10-K | 81 Recurring Fair Value Measurements The following tables present Adient's fair value hierarchy for those assets and liabilities measured at fair value. Refer to Note 14, “Retirement Plans,” of the notes to consolidated financial statements for fair value tables of pension assets. Fair Value Measurements Using: (in millions) Total as of September 30, 2025 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Other current assets Foreign currency exchange derivatives $ 36 $ — $ 36 $ — Other noncurrent assets Foreign currency exchange derivatives 1 — 1 — Total assets $ 37 $ — $ 37 $ — Other current liabilities Foreign currency exchange derivatives $ 7 $ — $ 7 $ — Cross currency interest rate swaps 1 — 1 — Other noncurrent liabilities Foreign currency exchange derivatives 3 — 3 — Cross currency interest rate swaps 3 — 3 — Total liabilities $ 14 $ — $ 14 $ — Fair Value Measurements Using: (in millions) Total as of September 30, 2024 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Other current assets Foreign currency exchange derivatives $ 15 $ — $ 15 $ — Other noncurrent assets Foreign currency exchange derivatives 3 — 3 — Total assets $ 18 $ — $ 18 $ — Other current liabilities Foreign currency exchange derivatives $ 32 $ — $ 32 $ — Other noncurrent liabilities Foreign currency exchange derivatives 9 — 9 — Total liabilities $ 41 $ — $ 41 $ — Valuation Methods Foreign currency exchange derivatives Adient selectively hedges anticipated transactions and net investments that are subject to foreign exchange rate risk primarily using foreign currency exchange hedge contracts. The foreign currency exchange derivatives are valued under a market approach using publicized spot and forward prices. Changes in fair value on foreign exchange derivatives accounted for as hedging instruments under ASC 815 are initially recorded as a component of AOCI and are subsequently reclassified into earnings when the hedged transactions occur and affect earnings. These contracts were highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates at September 30, 2025 and 2024, respectively. 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 (loss). Adient plc | Form 10-K | 82 The fair value of long-term debt, which was $ 2.5 billion and $ 2.4 billion at both September 30, 2025 and 2024, respectively, was determined primarily using market quotes classified as Level 1 inputs within the ASC 820 fair value hierarchy. 12. Stock-Based Compensation Adient provides certain key employees equity awards in the form of restricted stock units (“RSU”) and performance share units (“PSUs”) under the Adient plc 2016 Omnibus Incentive Plan and the Adient plc 2021 Omnibus Incentive Plan (collectively, the “Plan”). Adient also provides directors with share awards under the Adient plc 2016 Director Share Plan and the Adient plc 2021 Omnibus Incentive Plan. Total stock-based compensation cost included in the consolidated statements of income (loss) was $ 32 million, $ 31 million and $ 34 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively. No material income tax benefits were recognized in the consolidated statements of income (loss) for the share-based compensation arrangements in any of these years due to tax valuation allowances in those years. The following tables present activity related to the granting of awards during the year ended September 30, 2025 along with the composition of outstanding and exercisable awards at September 30, 2025. Restricted Stock The Plan provides for the award of restricted stock or restricted stock units to certain employees. These awards are typically share settled except for certain non-U.S. 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. Restricted stock awards typically vest over a three year period following the grant date. The Plan allows for different vesting terms on specific grants with approval by Adient's Board of Directors. A summary of the status of nonvested restricted stock awards at September 30, 2025, and changes for the fiscal year then ended, is presented below: Weighted Average Price Restricted Shares/Units Nonvested, September 30, 2024 $ 35.36 1,190,664 Granted 20.33 1,383,034 Vested 37.00 ( 520,290 ) Forfeited 25.96 ( 77,806 ) Nonvested, September 30, 2025 $ 24.78 1,975,602 At September 30, 2025, Adient had approximately $ 24 million of total unrecognized compensation cost related to nonvested restricted stock arrangements granted. That cost is expected to be recognized over a weighted-average period of 1.8 years. Performance Share Awards The Plan permits the grant of PSU awards. The number of PSUs granted is equal to the PSU award value divided by the closing price of a Adient ordinary share at the grant date. The PSUs are generally contingent on the achievement of predetermined performance goals over a three-year performance period as well as on the award holder's continuous employment until the vesting date. 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. 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. Adient plc | Form 10-K | 83 A summary of the status of Adient's nonvested PSUs at September 30, 2025, and changes for the fiscal year then ended is presented below: Weighted Average Price Performance Shares/Units Nonvested, September 30, 2024 $ 38.39 807,629 Granted 20.40 759,815 Vested 46.79 ( 119,367 ) Forfeited 44.28 ( 117,072 ) Nonvested, September 30, 2025 $ 26.85 1,331,005 At September 30, 2025, Adient had approximately $ 11 million of total unrecognized compensation cost related to nonvested performance share units granted. That cost is expected to be recognized over a weighted-average period of 1.9 years. 13. Equity and Noncontrolling Interests The following table presents changes in AOCI attributable to Adient: Year Ended September 30, (in millions) 2025 2024 2023 Foreign currency translation adjustments Balance at beginning of period $ ( 673 ) $ ( 854 ) $ ( 836 ) Aggregate adjustment for the period, net of tax ( 14 ) 181 ( 18 ) Balance at end of period (1) ( 687 ) ( 673 ) ( 854 ) Realized and unrealized gains (losses) on derivatives Balance at beginning of period ( 19 ) 13 ( 8 ) Current period changes in fair value, net of tax 30 ( 1 ) 79 Reclassification to income, net of tax 7 ( 31 ) ( 58 ) Balance at end of period 18 ( 19 ) 13 Pension plans Balance at beginning of period ( 1 ) ( 1 ) ( 1 ) Net reclassifications to AOCI — — — Balance at end of period ( 1 ) ( 1 ) ( 1 ) Accumulated other comprehensive income (loss), end of period $ ( 670 ) $ ( 693 ) $ ( 842 ) (1) Foreign currency translation adjustments as of September 30, 2025 and 2024 include gains (losses) on designated net investment hedge instruments of $( 7 ) million and $( 4 ) million, respectively. During the next twelve months, no significant gains or losses are expected to be reclassified from AOCI into Adient's consolidated statements of income (loss). 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. These redeemable noncontrolling interests are reported at their estimated redemption value. Any adjustment to the redemption value impacts retained earnings but does not impact net income. Redeemable noncontrolling interests which are redeemable only upon future events, the occurrence of which is not currently probable, are recorded at carrying value. The following table presents changes in the redeemable noncontrolling interests: Adient plc | Form 10-K | 84 Year Ended September 30, (in millions) 2025 2024 2023 Beginning balance $ 91 $ 57 $ 45 Net income (1) 36 38 27 Dividends ( 31 ) ( 21 ) ( 18 ) Foreign currency translation adjustments ( 1 ) 17 3 Ending balance $ 95 $ 91 $ 57 (1) During fiscal 2024, a $ 5 million adjustment was recorded to increase income attributable to noncontrolling interest related to fiscal 2023. Repurchases of Equity Securities 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. 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. 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. During fiscal 2024, Adient repurchased and immediately retired 9,424,668 of its ordinary shares at an average purchase price per share of $ 29.18 . The aggregate amount of cash paid to repurchase the shares was $ 275 million. During fiscal 2025, Adient repurchased and immediately retired 6,115,932 of its ordinary shares at an average purchase price per share of $ 20.44 . The aggregate amount of cash paid to repurchase the shares was $ 125 million. As of September 30, 2025, the remaining aggregate amount of authorized repurchases was $ 135 million. 14. Retirement Plans Pension Benefits Adient maintains non-contributory defined benefit pension plans covering primarily non-U.S. employees and a limited number of U.S. employees. The benefits provided are primarily based on years of service and average compensation or a monthly retirement benefit amount. Funding for non-U.S. plans observes the local legal and regulatory limits. Funding for U.S. pension plans equals or exceeds the minimum requirements of the Employee Retirement Income Security Act of 1974. For pension plans with accumulated benefit obligations (“ABO”) that exceed plan assets and for pension plans with a PBO that exceed plan assets, the projected benefit obligation (“PBO”), ABO and fair value of plan assets of those plans were $ 155 million, $ 135 million and $ 38 million, respectively, as of September 30, 2025, and $ 162 million, $ 144 million and $ 52 million, respectively, as of September 30, 2024. In fiscal 2025, Adient paid contributions to the defined benefit pension plans of $ 18 million. Contributions of at least $ 8 million in cash to its defined benefit pension plans are expected in fiscal 2026. Projected benefit payments from the plans as of September 30, 2025 are estimated as follows (in millions): 2026 $ 25 2027 25 2028 24 2029 25 2030 26 2031-2034 154 Adient plc | Form 10-K | 85 Savings and Investment Plans Adient sponsors various defined contribution savings plans that allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with plan specified guidelines. 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. Matching contributions expense in connection with these plans amounted to $ 43 million, $ 38 million and $ 46 million for fiscal years 2025, 2024 and 2023, respectively. Plan Assets 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. The investment portfolio primarily contains a diversified blend of equity and fixed income investments. Equity investments are diversified across domestic and non-domestic stocks, as well as growth, value and small to large capitalizations. Fixed income investments include corporate and government issues, with short-, mid- and long-term maturities, with a focus on investment grade when purchased and a target duration close to that of the plan liability. Investment and market risks are measured and monitored on an ongoing basis through regular investment portfolio reviews, annual liability measurements and periodic asset/liability studies. The majority of the real estate component of the portfolio is invested in a diversified portfolio of high-quality, operating properties with cash yields greater than the targeted appreciation. Investments in other alternative asset classes, including hedge funds and commodities, diversify the expected investment returns relative to the equity and fixed income investments. As a result of Adient's diversification strategies, there are no significant concentrations of risk within the portfolio of investments. Adient's actual asset allocations are in line with target allocations. Adient rebalances asset allocations as appropriate, in order to stay within a range of allocation for each asset category. The expected return on plan assets is based on Adient's expectation of the long-term average rate of return of the capital markets in which the plans invest. The average market returns are adjusted, where appropriate, for active asset management returns. The expected return reflects the investment policy target asset mix and considers the historical returns earned for each asset category. Adient's plan assets by asset category, are as follows: Fair Value Measurements Using: (in millions) Total as of September 30, 2025 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value (NAV) Pension Cash $ 3 $ 3 $ — $ — $ — Equity Securities Domestic 2 2 — — — International - Developed 23 23 — — — Fixed Income Securities Government 134 32 76 — 26 Corporate/Other 71 31 29 — 11 Hedge Fund 37 — 37 — — Real Estate 3 — — — 3 Total $ 273 $ 91 $ 142 $ — $ 40 Adient plc | Form 10-K | 86 Fair Value Measurements Using: (in millions) Total as of September 30, 2024 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value (NAV) Pension Cash $ 5 $ 5 $ — $ — $ — Equity Securities Domestic 2 2 — — — International - Developed 19 19 — — — Fixed Income Securities Government 150 33 90 — 27 Corporate/Other 70 29 29 — 12 Hedge Fund 38 — 38 — — Real Estate 9 — — — 9 Total $ 293 $ 88 $ 157 $ — $ 48 The following is a description of the valuation methodologies used for assets measured at fair value. Cash: The fair value of cash is valued at cost. Equity Securities: The fair value of equity securities is determined by direct quoted market prices. The underlying holdings are direct quoted market prices on regulated financial exchanges. Fixed Income Securities: The fair value of fixed income securities is determined by direct or indirect quoted market prices. If indirect quoted market prices are utilized, the value of assets held in separate accounts is not published, but the investment managers report daily the underlying holdings. The underlying holdings are direct quoted market prices on regulated financial exchanges. Hedge Funds: The fair value of hedge funds is determined by the custodian. 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. Adient believes this is an appropriate methodology to obtain the fair value of these assets. Real Estate: The fair value of certain investments in real estate is deemed Level 3 since these investments do not have a readily determinable fair value and requires the fund managers independently to arrive at fair value by calculating NAV per share. In order to calculate NAV per share, the fund managers value the real estate investments using any one, or a combination of, the following methods: independent third-party appraisals, discounted cash flow analysis of net cash flows projected to be generated by the investment and recent sales of comparable investments. Assumptions used to revalue the properties are updated every quarter. Adient believes this is an appropriate methodology to obtain the fair value of these assets. Investments at NAV : For mutual or collective funds where a NAV is not publicly quoted, the NAV per share is used as a practical expedient and is based on the quoted market prices of the underlying net assets of the fund as reported daily by the fund managers. Funds valued based on NAV per share as a practical expedient are not categorized within the fair value hierarchy. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. 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. Adient plc | Form 10-K | 87 The following sets forth a summary of changes in the fair value of pension assets measured using significant unobservable inputs (Level 3): (in millions) Real Estate Pension Asset value as of September 30, 2023 $ 4 Redemptions ( 4 ) Asset value as of September 30, 2024 $ — Redemptions — Asset value as of September 30, 2025 $ — Funded Status The table that follows contains the ABO and reconciliations of the changes in the PBO, the changes in plan assets and the funded status: Pension Benefits (in millions) 2025 2024 Accumulated Benefit Obligation $ 346 $ 366 Change in Projected Benefit Obligation: Projected benefit obligation at beginning of year $ 384 $ 349 Service cost 6 5 Interest cost 16 19 Actuarial loss (gain) ( 14 ) 28 Benefits paid ( 21 ) ( 28 ) Curtailments, settlements and other ( 12 ) ( 6 ) Currency translation adjustment 7 17 Projected benefit obligation at end of year $ 366 $ 384 Change in Plan Assets: Fair value of plan assets at beginning of year $ 293 $ 263 Actual return on plan assets ( 6 ) 26 Employer contributions, net 18 20 Benefits paid ( 21 ) ( 28 ) Curtailments, settlements and other ( 12 ) ( 6 ) Currency translation adjustment 1 18 Fair value of plan assets at end of year $ 273 $ 293 Funded status $ ( 93 ) $ ( 91 ) Amounts recognized in the statement of financial position consist of: Pension plan assets (other noncurrent assets) $ 25 $ 19 Pension benefits (of which $ 6 million and $ 5 million are included in accrued compensation and benefits, respectively) ( 118 ) ( 110 ) Net amount recognized $ ( 93 ) $ ( 91 ) Adient plc | Form 10-K | 88 Pension Benefits U.S. Plans Non-U.S. Plans 2025 2024 2025 2024 Weighted Average Assumptions (1) : Discount rate (2) 5.60 % 4.99 % 5.29 % 4.75 % Rate of compensation increase N/A N/A 4.68 % 4.82 % (1) Plan assets and obligations are determined based on a September 30 measurement date. (2) Adient considers the expected benefit payments on a plan-by-plan basis when setting assumed discount rates. As a result, Adient uses different discount rates for each plan depending on the plan jurisdiction, the demographics of participants and the expected timing of benefit payments. For the U.S. pension plan, Adient uses a discount rate provided by an independent third-party calculated based on an appropriate mix of high quality bonds. For the non-U.S. pension plans, Adient consistently uses the relevant country specific benchmark indices for determining the various discount rates. Accumulated Other Comprehensive Income The amounts in AOCI on the consolidated statements of financial position, exclusive of tax impacts, that have not yet been recognized as components of net periodic benefit cost related to pension benefits were $ 2 million at both September 30, 2025 and 2024. The amounts in AOCI expected to be recognized as components of net periodic benefit cost over the next fiscal year for pension benefits are not significant. Net Periodic Benefit Cost The tables that follow contain the components and key assumptions of net periodic benefit cost related to Adient’s pension plans: Pension Benefits (in millions) 2025 2024 2023 Components of Net Periodic Benefit Cost (Credit): Service cost $ 6 $ 6 $ 5 Interest cost 16 19 18 Expected return on plan assets ( 13 ) ( 12 ) ( 12 ) Net actuarial loss 3 13 19 Settlement loss 4 1 8 Net periodic benefit cost $ 16 $ 27 $ 38 Pension Benefits U.S. Plans Non-U.S. Plans 2025 2024 2023 2025 2024 2023 Expense Assumptions: Discount rate 4.99 % 5.87 % 5.51 % 4.75 % 5.60 % 4.98 % Expected return on plan assets 6.75 % 6.75 % 6.75 % 5.14 % 4.95 % 4.53 % Rate of compensation increase N/A N/A NA 4.38 % 4.53 % 4.43 % The interest cost, expected return on plan assets, and net actuarial and settlement/curtailment (gain) loss components of net periodic benefit cost are included in other pension expense in the consolidated statements of income (loss). Adient plc | Form 10-K | 89 15. Restructuring and Impairment Costs Restructuring 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. Adient, in general, records costs associated with separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period. All other costs associated with restructuring activities are expensed as incurred. During fiscal 2025, Adient committed to a restructuring plan (“2025 Plan”) resulting in charges of $ 58 million that was offset by $ 7 million of prior-period underspend. The 2025 Plan, which is primarily related to termination benefits in Europe, is being implemented in response to manufacturing footprint and structural changes occurring in the global automotive industry and to ensure Adient maintains a competitive cost structure by reducing operating, administrative and engineering costs, and increasing efficiencies. Restructuring actions associated with the 2025 Plan will primarily occur in fiscal years 2026 and 2027, and are expected to be substantially complete by fiscal year 2027. Restructuring costs are included in restructuring and impairment costs in the consolidated statements of income (loss). During fiscal 2024, Adient committed to a restructuring plan (“2024 Plan”) of $ 169 million that was offset by prior period underspend of $ 1 million and $ 9 million of cost reimbursement committed by a customer. The fiscal 2024 charges were mostly related to termination benefits in Europe. The 2024 Plan was implemented in response to the macroeconomic factors occurring in the European automotive market causing reduced production volumes and to ensure Adient maintains a competitive cost structure by reducing operating, administrative and engineering costs, and increasing efficiencies. Restructuring actions associated with these specific plans primarily occurring in fiscal years 2025 and 2026 are expected to be substantially complete by fiscal year 2027. The following tables summarize the changes in Adient's restructuring reserve. (in millions) Employee Severance and Termination Benefits Currency Translation and Other Total Balance at September 30, 2022 $ 69 $ ( 9 ) $ 60 2023 Plan charges 39 — 39 Utilized - cash ( 53 ) — ( 53 ) Noncash adjustment - (under) overspend and other 1 4 5 Balance at September 30, 2023 $ 56 $ ( 5 ) $ 51 2024 Plan charges 169 — 169 Utilized - cash ( 43 ) — ( 43 ) Noncash adjustment - (under) overspend and other ( 1 ) 6 5 Balance at September 30, 2024 $ 181 $ 1 $ 182 2025 Plan charges 58 — 58 Utilized - cash ( 104 ) — ( 104 ) Noncash adjustment - (under) overspend and other ( 7 ) 5 ( 2 ) Balance at September 30, 2025 $ 128 $ 6 $ 134 Current restructuring reserve - other current liabilities $ 69 Noncurrent restructuring reserve - other noncurrent liabilities 65 Balance at September 30, 2025 $ 134 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. This ongoing analysis includes a review of its manufacturing, engineering, purchasing and administrative functions, as well as the overall global footprint for all its businesses. Because of the importance of new vehicle sales by automotive manufacturers, Adient is affected by the general business conditions in the automotive industry. Future adverse developments in Adient plc | Form 10-K | 90 the automotive industry could impact Adient's liquidity position, lead to impairment charges and/or require additional restructuring of its operations. Impairment During fiscal 2025 and 2024, Adient recorded a non-cash impairment loss of $ 8 million and $ 9 million on its investment in Adient Aerospace, respectively. The impairment is included in restructuring and impairment costs in the consolidated statements of income (loss). No remaining investment is recorded as of September 30, 2025. Refer also to Note 6, “Goodwill and Other Intangible Assets” of the notes to the consolidated financial statements for information about the EMEA goodwill impairment recorded during fiscal 2025. 16. Income Taxes Consolidated income (loss) before income taxes and noncontrolling interests for the years ended September 30, 2025, 2024, and 2023 is as follows: Year Ended September 30, (in millions) 2025 2024 2023 Ireland $ ( 24 ) $ ( 13 ) $ ( 1 ) United States ( 98 ) ( 361 ) ( 178 ) Other Foreign 34 507 474 Income before income taxes and noncontrolling interests $ ( 88 ) $ 133 $ 295 The components of the provision (benefit) for income taxes are as follows: Year Ended September 30, (in millions) 2025 2024 2023 Current Ireland $ 1 $ — $ — US - Federal and State 14 5 4 Other Foreign 116 28 120 131 33 124 Deferred Ireland — — — US - Federal and State — — 1 Other Foreign ( 28 ) ( 1 ) ( 125 ) ( 28 ) ( 1 ) ( 124 ) Income tax provision $ 103 $ 32 $ — The significant components of Adient's income tax provision are summarized in the following tables. These amounts do not include the impact of income tax expense related to Adient’s nonconsolidated partially-owned affiliates, which is netted against equity income on the consolidated statements of income (loss). Adient plc | Form 10-K | 91 The reconciliation between the Irish statutory income tax rate, and Adient’s effective tax rate is as follows: Year Ended September 30, (in millions) 2025 2024 2023 Tax expense at Ireland statutory rate $ ( 11 ) $ 17 $ 37 State and local income taxes, net of federal benefit 7 ( 15 ) ( 5 ) Foreign tax rate differential 29 9 22 Deemed interest — ( 6 ) ( 6 ) Credits and incentives ( 14 ) ( 12 ) ( 7 ) Nondeductible goodwill impairment 29 — — Repatriation of foreign earnings 23 18 24 Foreign exchange ( 2 ) 17 ( 7 ) Impact of tax rate changes 69 ( 1 ) — Audit settlements and change in uncertain tax positions ( 26 ) ( 43 ) ( 8 ) Change in valuation allowance 828 90 ( 61 ) Tax adjustments to value of investments ( 873 ) ( 38 ) — Net operating loss expirations and write-offs 38 5 10 Other 6 ( 9 ) 1 Income tax provision $ 103 $ 32 $ — The income tax expense was higher than the Irish statutory rate of 12.5% for fiscal 2025 primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, the repatriation of foreign earnings, tax expense related to adjustments to net operating loss deferred tax assets, tax expense related to the establishment of uncertain tax positions, foreign tax rate differentials, and the impact of the impairment of the non-tax-deductible portion of the EMEA goodwill balance for which there is no corresponding income tax benefit, partially offset by tax benefits from audit closures and statute expirations. 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 2024 due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, the repatriation of foreign earnings, tax expense related to foreign exchange remeasurements of tax balances primarily in Mexico, and tax expense from the establishment of valuation allowances at certain subsidiaries, partially offset by tax benefits from the release of uncertain tax positions due to audit closures and from the release of valuation allowances at certain subsidiaries. No items included in the other category are individually, or when appropriately aggregated, significant. 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. No items included in the other category are individually, or when appropriately aggregated, significant. Adient’s foreign tax rate differential primarily comprises two components. First is the difference in foreign tax rates from the Irish statutory tax rate that will fluctuate with the mix of income and losses in multiple jurisdictions with higher or lower statutory tax rates. Second is the elimination of the effects, at the Irish statutory tax rate, on the amount of income reported for nonconsolidated partially-owned affiliates whose corresponding income tax expense is already netted against equity income on the consolidated statements of income and reflected in income (loss) before income taxes. During fiscal 2025, 2024 and 2023, significant income and loss jurisdictions include Brazil, China, Germany, India, Luxembourg, Mexico, Thailand, the United Kingdom, and the United States, with federal statutory tax rates ranging between 16% and 34%, which are all above the Irish statutory rate of 12.5%. Due to the significant jurisdictions in which it operates having statutory tax rates higher than the Irish statutory rate of 12.5%, Adient generally expects that foreign tax rate differentials will continue to result in net expense when its consolidated subsidiaries generate net pretax income, adjusted for permanent book to tax differences, and overall pretax income, adjusted for permanent book to tax differences, does not consist primarily of equity income from nonconsolidated partially-owned affiliates. In periods in which Adient’s consolidated subsidiaries generate net losses, adjusted for permanent book to tax differences, or overall pretax income, adjusted for permanent book to tax differences, consists primarily of equity income reported from Adient plc | Form 10-K | 92 nonconsolidated partially-owned affiliates, Adient generally expects that foreign tax rate differentials will result in a net benefit. During fiscal 2025, 2024 and 2023, Adient’s pretax income, adjusted for permanent book to tax differences, was primarily generated by Adient’s consolidated subsidiaries, resulting in a net foreign tax rate differential expense. For fiscal 2025, the foreign tax differential expense of $ 29 million includes $ 37 million related to the higher tax expense resulting from the tax rate differential primarily from the mix of income and losses in the significant jurisdictions listed above with higher statutory tax rates than Ireland, which was partially offset by $ 8 million related to the elimination of the tax effects of the equity income from nonconsolidated partially-owned affiliates whose corresponding income tax expense is already netted in income before income taxes. For fiscal 2024, the foreign tax differential expense of $ 9 million includes $ 20 million related to the higher tax expense resulting from the tax rate differential primarily from the mix of income and losses in the significant jurisdictions listed above with higher statutory tax rates than Ireland, which was partially offset by $ 11 million related to the elimination of the tax effects of the equity income from nonconsolidated partially-owned affiliates whose corresponding income tax expense is already netted in income before income taxes. For fiscal 2023, the foreign tax differential expense of $ 22 million includes $ 33 million related to the higher tax expense resulting from the tax rate differential primarily from the mix of income and losses in the significant jurisdictions listed above with higher statutory tax rates than Ireland, which was partially offset by $ 11 million related to the elimination of the tax effects of the equity income from nonconsolidated partially-owned affiliates whose corresponding income tax expense is already netted in income before income taxes. Deferred taxes are classified in the consolidated statements of financial position as follows: September 30, (in millions) 2025 2024 Other noncurrent assets $ 229 $ 245 Other noncurrent liabilities ( 155 ) ( 191 ) Net deferred tax asset $ 74 $ 54 Temporary differences and carryforwards which gave rise to deferred tax assets and liabilities included: September 30, (in millions) 2025 2024 Deferred tax assets: Accrued expenses and reserves $ 137 $ 123 Employee and retiree benefits 31 24 Net operating loss and other carryforwards 2,227 1,400 Property, plant and equipment 106 114 Intangible assets 97 112 Operating lease liabilities 60 57 Research and development 129 102 2,787 1,932 Valuation allowances ( 2,614 ) ( 1,769 ) 173 163 Deferred tax liabilities: Unremitted earnings of foreign subsidiaries 33 39 Operating lease right-of-use assets 60 57 Other 6 13 99 109 Net deferred tax asset $ 74 $ 54 Adient plc | Form 10-K | 93 At September 30, 2025, Adient had available net operating loss carryforwards of approximately $ 8.2 billion which are available to reduce future tax liabilities. Net operating loss carryforwards of $ 5.9 billion will expire at various dates between 2026 and 2045, with the remainder having an indefinite carryforward period. Net operating loss carryforwards of $ 7.0 billion are offset by a valuation allowance. During fiscal 2025, the net operating loss carryforward in Luxembourg increased by $ 3.7 billion ($ 873 million tax-effected) related to tax adjustments to the value of certain investments, arising from certain EMEA impairments, with an offsetting increase to the valuation allowance and no net impact to tax expense. Adient reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or combined group recording the net deferred tax asset are considered, along with any other positive or negative evidence. All of the factors that Adient considers in evaluating whether and when to establish or release all or a portion of the deferred tax asset valuation allowance involve significant judgment. Since future financial results may differ from previous estimates, periodic adjustments to Adient's valuation allowances may be necessary. Given current earnings and anticipated future earnings at certain subsidiaries, Adient believes that there is a 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, in addition to those discussed below. The release of additional 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. As a result of Adient's fiscal 2025 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient established and released valuation allowances on certain deferred tax assets at various subsidiaries, which did not have a material impact on Adient’s financial statements either individually or in the aggregate. Adient continues to record valuation allowances on certain deferred tax assets in Germany, Hungary, Luxembourg, Mexico, Poland, Spain, the United Kingdom, the U.S. and other jurisdictions as it remains more likely than not that they will not be realized. As a result of Adient's fiscal 2024 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 would be realizable and recorded an income tax benefit of $ 14 million in China, $ 8 million in Mexico, $ 7 million in France, and $ 6 million in Japan to release valuation allowances. In addition, Adient determined it was necessary to establish valuation allowances on certain deferred tax assets in Poland and Mexico, recording tax expense of $ 14 million and $ 5 million, respectively. During fiscal 2024, the valuation allowance in Luxembourg increased by $ 38 million related to tax adjustments to the value of certain investments, with an offsetting increase in net operating loss carryforwards and no net impact to tax expense. 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. 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. Adient is subject to income taxes in Ireland, the U.S. and other foreign jurisdictions. With few exceptions, Adient is no longer subject to income tax examination by U.S. federal, state or local tax authorities or by non-U.S. tax authorities for years before 2015. Adient regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. For the year ended September 30, 2025, Adient believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial statements. However, the final determination with respect to tax audits and any related litigation could be materially different from Adient’s estimates given the increased levels of discussions and more aggressive negotiations by the tax authorities as part of the tax audit process. Subsequent to September 30, 2025, Adient initiated a foreign tax audit settlement proposal which, although still under negotiation with the foreign tax authorities, is expected to require a non-recurring recognition and payment of approximately $ 20 million in fiscal 2026. For the years ended September 30, 2025, 2024 and 2023, Adient had gross tax effected unrecognized tax benefits of $ 404 million, $ 422 million, and $ 527 million, respectively. If recognized, $ 114 million of Adient's unrecognized tax benefits Adient plc | Form 10-K | 94 would impact the effective tax rate. Total net accrued interest for the years ended September 30, 2025, 2024 and 2023, was approximately $ 21 million, $ 21 million and $ 31 million, respectively (net of tax benefit). Adient recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. During fiscal 2025, Adient recognized tax expense of $ 10 million related to the establishment of uncertain tax positions. During fiscal 2024, Adient settled audits in various jurisdictions that resulted in a $ 115 million reduction to its unrecognized tax benefits, of which $ 63 million was recorded as a tax benefit. The remaining difference primarily offset other changes in deferred tax balances. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended September 30, (in millions) 2025 2024 2023 Beginning balance $ 422 $ 527 $ 499 Additions for tax positions related to the current year 3 6 2 Additions for tax positions of prior years 22 18 50 Reductions for tax positions of prior years ( 28 ) ( 9 ) ( 5 ) Settlements with taxing authorities ( 6 ) ( 115 ) ( 11 ) Statute closings ( 9 ) ( 5 ) ( 8 ) Ending balance $ 404 $ 422 $ 527 During the next twelve months, it is possible that tax audit resolutions or applicable statute of limitation lapses could result in a significant change in the balance of gross unrecognized tax benefits. Given the number of years, jurisdictions and positions subject to examination, Adient is unable to estimate the full range of possible adjustments to the balance of unrecognized tax benefits. Adient has recorded a deferred tax liability of approximately $ 33 million as of September 30, 2025 on the undistributed earnings of certain consolidated and unconsolidated foreign affiliates for which Adient does not have an indefinite reinvestment assertion. Adient has not provided for deferred taxes on the remainder of undistributed earnings from consolidated foreign affiliates because such earnings should not give rise to additional tax liabilities upon repatriation or are considered to be indefinitely reinvested. 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. Income taxes paid for the fiscal years ended September 30, 2025, 2024 and 2023 were $ 92 million, $ 96 million and $ 94 million, respectively. Other During fiscal 2025, Adient recognized net tax benefits of $ 25 million related to audit closures and statute expirations, inclusive of the release of unrecognized tax benefits. Additionally, Adient recognized tax expense of $ 19 million related to adjustments to net operating loss deferred tax assets, net of related valuation allowance benefits, as well as a net tax benefit of $ 13 million related to the impairment of tax-deductible goodwill in Europe. The Organization for Economic Cooperation and Development’s Pillar Two initiative, which introduced a 15% global minimum tax applied on a country by country basis, is applicable for Adient’s fiscal 2025. The annual effect of these new rules and the impact on Adient’s effective tax rate was not material in fiscal 2025. Adient will continue to monitor and evaluate new legislation and guidance related to Pillar Two. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740 requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted. The OBBBA did not have a material impact on Adient’s consolidated financial statements. Adient will continue to evaluate the OBBBA and related guidance. Adient plc | Form 10-K | 95 The $ 69 million impact of tax rate changes for fiscal 2025 is primarily related to legislation that was enacted in Germany on July 18, 2025, under which Germany’s corporate tax rate will ratably decrease by five percent over five years, beginning in 2028. Net of related valuation allowance offsets, the tax rate changes did not have a material impact on Adient’s consolidated financial statements. During fiscal years 2025, 2024 and 2023, other tax legislation was adopted in various jurisdictions. These law changes did not have a material impact on the consolidated financial statements. 17. Segment Information Adient manages its business on a geographic basis and operates in the following three reportable segments for financial reporting purposes: 1) Americas, which is inclusive of North America and South America; 2) Europe, the Middle East and Africa (“EMEA”) and 3) Asia Pacific/China (“Asia”). Adient evaluates the performance of its reportable segments using an adjusted EBITDA metric defined as income before income taxes and noncontrolling interests, excluding net financing charges, restructuring and impairment costs, restructuring-related costs, net mark-to-market adjustments on pension plans, transaction gains/losses, purchase accounting amortization, depreciation, stock-based compensation and other non-recurring items (“Adjusted EBITDA”). Also, certain corporate-related costs are not allocated to the segments. The reportable segments are consistent with how management views the markets served by Adient and reflect the financial information that is reviewed by its chief operating decision maker. During the fourth quarter of fiscal 2025, Adient adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. Prior period disclosures have been reclassified to conform to the current period presentation. The President and Chief Executive Officer is Adient’s chief operating decision maker (“CODM”). The CODM evaluates the performance of the reportable segments using Adjusted EBITDA. Adjusted EBITDA is used for forecasting and to measure periodic performance and cash flow generation of the reportable segments and to make capital allocation decisions within the operations that ultimately provide shareholder returns. The following tables summarize Adient's reportable segments' sales and Adjusted EBITDA which includes significant expenses that align with the segment-level information that is regularly provided to the CODM. The reportable segments’ Adjusted EBITDA is reconciled to income (loss) before income taxes for fiscal 2025, 2024 and 2023: Adient plc | Form 10-K | 96 Year Ended September 30, 2025 (in millions) Americas EMEA Asia Consolidated Segment net sales $ 6,856 $ 4,773 $ 2,983 $ 14,612 Eliminations ( 77 ) Consolidated net sales $ 14,535 Material costs 4,444 2,958 2,056 Labor and overhead 1,819 1,495 419 Administrative, engineering and allocated costs 191 213 122 Equity income — 17 54 Adjusted EBITDA $ 402 $ 124 $ 440 $ 966 Reconciliation to income (loss) before income taxes Corporate-related costs (1) ( 85 ) Restructuring and impairment costs (2) ( 392 ) Purchase accounting amortization (3) ( 47 ) Restructuring-related activities (4) ( 11 ) Gain on disposal transactions (5) 4 Depreciation expense ( 279 ) Equity based compensation ( 32 ) Other items (6) ( 9 ) Net financing charges ( 193 ) Other pension expense ( 10 ) Income (loss) before income taxes ( 88 ) Notes: (1) Certain corporate-related costs are not allocated to the segments including executive office, communications, corporate development, legal and corporate finance. (2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments, including a non-recurring, non-cash goodwill impairment charge of $ 333 million in the EMEA reporting unit, restructuring charges of $ 51 million, and an impairment charge of $ 8 million related to Adient’s investment in Adient Aerospace. Refer to Note 6, “Goodwill and Other Intangible Assets” and Note 15, “Restructuring and Impairment Costs” of the notes to the consolidated financial statements for additional information. (3) Reflects amortization of intangible assets including those related to partially-owned affiliates recorded within equity income. (4) Reflects restructuring-related charges for costs that are recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities, including $ 29 million of restructuring-related charges primarily recorded in cost of sales and $ 5 million of restructuring-related charges at a partially-owned affiliate recorded in equity income, partially offset by a $ 23 million gain on the sales of restructured facilities across all segments recorded in SG&A. (5) Reflects a $ 4 million gain on sale of Adient's partially-owned affiliate investment in Setex recorded within equity income. (6) Includes $ 10 million of third-party consulting costs associated with strategic planning and a $ 1 million non-recurring loss at a partially-owned affiliate recorded within equity income, partially offset by a $ 2 million gain on a non-recurring contract related settlement. Adient plc | Form 10-K | 97 Year Ended September 30, 2024 (in millions) Americas EMEA Asia Consolidated Segment net sales $ 6,763 $ 5,029 $ 2,989 $ 14,781 Eliminations ( 93 ) Consolidated net sales $ 14,688 Material costs 4,394 3,123 2,061 Labor and overhead 1,841 1,568 426 Administrative, engineering and allocated costs 156 198 136 Equity income 3 15 73 Adjusted EBITDA $ 375 $ 155 $ 439 $ 969 Reconciliation to income (loss) before income taxes Corporate-related costs (1) ( 89 ) Restructuring and impairment costs (2) ( 168 ) Purchase accounting amortization (3) ( 48 ) Restructuring-related activities (4) — Loss on disposal transactions (5) ( 7 ) Depreciation expense ( 285 ) Equity based compensation ( 31 ) Other items (6) 2 Net financing charges ( 189 ) Other pension expense ( 21 ) Income (loss) before income taxes 133 Notes: (1) Certain corporate-related costs are not allocated to the segments including executive office, communications, corporate development, legal and corporate finance. (2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments, including restructuring charges of $ 159 million and an impairment charge of $ 9 million related to Adient’s investment in Adient Aerospace. Refer to Note 15, “Restructuring and Impairment Costs” of the notes to the consolidated financial statements for additional information. (3) Reflects amortization of intangible assets including those related to partially-owned affiliates recorded within equity income. (4) Reflects restructuring-related charges for costs that are recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities, including a $ 10 million gain on sale of a restructured facility in Americas recorded in SG&A, offset by $ 10 million in restructuring-related charges primarily recorded in cost of sales. (5) Includes an $ 8 million loss on sale of 51 % of Adient's interest in LFADNT, partially offset by a $ 1 million gain on sale of a partially-owned affiliate recorded within equity income. Refer to Note 3, “Acquisitions and Divestitures,” of the notes to the consolidated financial statements for additional information. (6) Includes a $ 3 million non-recurring gain on a contract related settlement and $ 1 million of indirect tax recoveries in Brazil, partially offset by $ 1 million one-time divestiture related tax impact at a partially-owned affiliate recorded within equity income and $ 1 million of transaction costs. Adient plc | Form 10-K | 98 Year Ended September 30, 2023 (in millions) Americas EMEA Asia Consolidated Segment net sales $ 7,220 $ 5,195 $ 3,085 $ 15,500 Eliminations ( 105 ) Consolidated net sales $ 15,395 Material costs 4,755 3,268 2,096 Labor and overhead 1,926 1,517 463 Administrative, engineering and allocated costs 206 193 134 Equity income 3 15 72 Adjusted EBITDA $ 336 $ 232 $ 464 $ 1,032 Reconciliation to income (loss) before income taxes Corporate-related costs (1) ( 94 ) Restructuring and impairment costs (2) ( 40 ) Purchase accounting amortization (3) ( 52 ) Restructuring-related activities (4) 2 Loss on disposal transactions (5) ( 6 ) Depreciation expense ( 290 ) Equity based compensation ( 34 ) Other items (6) 5 Net financing charges ( 195 ) Other pension expense ( 33 ) Income (loss) before income taxes 295 Notes: (1) Certain corporate-related costs are not allocated to the segments including executive office, communications, corporate development, legal and corporate finance. (2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments. Fiscal 2023 reflects restructuring charges of $ 40 million. Refer to Note 15, “Restructuring and Impairment Costs” of the notes to the consolidated financial statements for additional information. (3) Reflects amortization of intangible assets including those related to partially-owned affiliates recorded within equity income. (4) Reflects restructuring-related charges for costs that are recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities, including a $ 10 million gain on sale of a restructured facility in Americas recorded in SG&A, partially offset by $ 6 million of restructuring-related charges primarily recorded in cost of sales and $ 2 million of restructuring-related charges at a partially-owned affiliate recorded in equity income. (5) Reflects $ 3 million and $ 3 million of non-cash impairment related to certain of Adient's investments in partially-owned affiliates in Asia and EMEA, respectively, recorded within equity income. (6) Reflects $ 4 million of one-time divestiture gain at a partially-owned affiliate recorded within equity income and $ 4 million of a gain associated with the retrospective recovery of indirect tax credits in Brazil, partially offset by $ 3 million of transaction costs. Adient plc | Form 10-K | 99 Additional Segment Information Year Ended September 30, 2025 Reportable Segments Reconciling Items (1) Consolidated (in millions) Americas EMEA Asia Total Assets 2,850 2,085 3,042 977 8,954 Investment in partially-owned affiliates 3 37 236 — 276 Equity income — 17 54 ( 3 ) 68 Depreciation 126 106 47 — 279 Amortization 11 — 35 — 46 Capital Expenditures 94 105 46 — 245 (1) Corporate-related assets primarily include cash and assets held for sale. Specific reconciling items for equity income represents $ 2 million of purchase accounting amortization, a $ 5 million restructuring charges at an affiliate, partially offset by a $ 4 million gain on a disposal transaction. Year Ended September 30, 2024 Reportable Segments Reconciling Items (1) Consolidated (in millions) Americas EMEA Asia Total Assets 2,863 2,349 3,185 954 9,351 Investment in partially-owned affiliates 28 37 273 — 338 Equity income 3 15 73 ( 1 ) 90 Depreciation 127 112 46 — 285 Amortization 12 2 33 — 47 Capital Expenditures 100 107 59 — 266 (1) Corporate-related assets primarily include cash and assets held for sale. Specific reconciling items for equity income represents $ 2 million of purchase accounting amortization, partially offset by a $ 1 million gain on a disposal transaction. Year Ended September 30, 2023 Reportable Segments Reconciling Items (1) Consolidated (in millions) Americas EMEA Asia Total Assets 3,122 2,252 2,930 1,120 9,424 Investment in partially-owned affiliates 27 38 238 — 303 Equity income 3 15 72 ( 6 ) 84 Depreciation 133 107 50 — 290 Amortization 12 3 35 — 50 Capital Expenditures 114 81 57 — 252 (1) Corporate-related assets primarily include cash and assets held for sale. 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. Adient plc | Form 10-K | 100 Geographic Information Financial information relating to Adient's operations by geographic area is as follows: Net Sales Year Ended September 30, (in millions) 2025 2024 2023 Americas United States $ 6,140 $ 5,893 $ 6,530 Mexico 2,543 2,634 2,661 Other Americas 299 314 338 Regional Elimination ( 2,126 ) ( 2,078 ) ( 2,309 ) 6,856 6,763 7,220 EMEA Germany 903 942 1,046 Poland 846 939 963 Spain 718 744 725 Czech Republic 694 756 900 Sweden 545 567 517 Romania 500 474 481 Other EMEA 1,711 1,951 1,991 Regional Elimination ( 1,144 ) ( 1,344 ) ( 1,428 ) 4,773 5,029 5,195 Asia China 1,286 1,420 1,385 Korea 535 488 534 Thailand 515 496 564 Japan 415 344 373 Other Asia 300 294 284 Regional Elimination ( 68 ) ( 53 ) ( 55 ) 2,983 2,989 3,085 Inter-segment elimination ( 77 ) ( 93 ) ( 105 ) Total $ 14,535 $ 14,688 $ 15,395 Adient plc | Form 10-K | 101 Long-Lived Assets (consisting of net property, plant and equipment) Year Ended September 30, (in millions) 2025 2024 Americas United States $ 416 $ 420 Mexico 143 151 Other Americas 20 17 579 588 EMEA Poland 155 155 Germany 122 127 Spain 52 39 Hungary 38 31 Czech Republic 28 35 Other EMEA 177 163 572 550 Asia China 107 115 Japan 64 62 Thailand 50 52 Korea 21 23 Other Asia 16 20 258 272 Total $ 1,409 $ 1,410 18. Nonconsolidated Partially-Owned Affiliates Investments in the net assets of nonconsolidated partially-owned affiliates are reported in the “Investments in partially-owned affiliates” line in the consolidated statements of financial position. Equity in the net income of nonconsolidated partially-owned affiliates are reported in the “Equity income” line in the consolidated statements of income (loss). Adient maintains total investments in partially-owned affiliates of $ 276 million and $ 338 million at September 30, 2025 and 2024, respectively. Operating information for nonconsolidated partially-owned affiliates is as follows: % ownership at September 30, Name of key partially-owned affiliate 2025 2024 KEIPER Seating Mechanisms Co., Ltd. (“KEIPER”) 50.0 % 50.0 % Changchun FAWAY Adient Automotive Systems Co. Ltd. (“CFAA”) 49.0 % 49.0 % Year Ended September 30, (in millions) 2025 2024 2023 Income statement data: Net sales $ 3,513 $ 3,783 $ 3,791 Gross profit $ 306 $ 368 $ 346 Net income $ 138 $ 184 $ 173 Net income attributable to the entity $ 136 $ 182 $ 171 Adient plc | Form 10-K | 102 September 30, (in millions) 2025 2024 Balance sheet data: Current assets $ 2,044 $ 2,072 Noncurrent assets $ 652 $ 730 Current liabilities $ 2,000 $ 1,875 Noncurrent liabilities $ 203 $ 269 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. Since fiscal 2023, Adient and KEIPER have continued to strategically modify their supply agreement, including the addition of a performance-based rebate in fiscal 2025, resulting in lower levels of equity income from KEIPER, partially offset by lower cost of sales within Adient. 19. Commitments and Contingencies Adient is involved in various lawsuits, claims and proceedings incident to the operation of its businesses, including those pertaining to product recall, product liability, casualty, environmental, safety and health, intellectual property, employment, trade compliance, commercial and contractual matters, and various other matters. Although the outcome of any such lawsuit, claim or proceeding cannot be predicted with certainty and some may be disposed of unfavorably to Adient, it is management's opinion that none of these will have a material adverse effect on Adient's financial position, results of operations or cash flows. Costs related to such matters were not material to the periods presented. Adient accrues for potential environmental liabilities when it is probable a liability has been incurred and the amount of the liability is reasonably estimable. Reserves for environmental liabilities totaled $ 3 million and $ 3 million at September 30, 2025 and 2024, respectively. Adient reviews the status of its environmental sites on a quarterly basis and adjusts its reserves accordingly. Such potential liabilities accrued by Adient do not take into consideration possible recoveries of future insurance proceeds. They do, however, take into account the likely share other parties will bear at remediation sites. It is difficult to estimate Adient's ultimate level of liability at many remediation sites due to the large number of other parties that may be involved, the complexity of determining the relative liability among those parties, the uncertainty as to the nature and scope of the investigations and remediation to be conducted, the uncertainty in the application of law and risk assessment, the various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, the often quite lengthy periods over which eventual remediation may occur, and changing environmental laws. Nevertheless, Adient does not currently believe that any claims, penalties or costs in connection with known environmental matters will have a material adverse effect on Adient's financial position, results of operations or cash flows. 20. Related Party Transactions In the ordinary course of business, Adient enters into transactions with related parties, such as equity affiliates. Such transactions consist of the sale or purchase of goods and other arrangements. 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): Year Ended September 30, (in millions) 2025 2024 2023 Net sales to related parties Net sales $ 148 $ 251 $ 253 Purchases from related parties Cost of sales 311 399 397 Adient plc | Form 10-K | 103 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: September 30, (in millions) 2025 2024 Accounts receivable due from related parties Accounts receivable $ 16 $ 28 Accounts payable due to related parties Accounts payable 58 114 Refer to Note 3, “Acquisitions and Divestitures,” of the notes to the consolidated financial statements for transactions involving Adient's investments in nonconsolidated partially-owned affiliates which have impacted Adient's related party transactions. Adient plc | Form 10-K | 104 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.