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What changed in Adient plc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Adient plc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+349 added−334 removedSource: 10-K (2024-11-18) vs 10-K (2023-11-17)

Top changes in Adient plc's 2024 10-K

349 paragraphs added · 334 removed · 256 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+20 added−16 removed53 unchanged
Biggest changeSome recent examples of how Adient is reducing emissions and improving sustainability in its operations include: • Replacing company pool vehicles with EVs as leases end. • Recovering waste heat from air compressors and using it to help warm buildings. • Adding occupant sensors to plant floors and other areas to automatically turn lights on and off as needed. • Optimizing how foam mold temperature machines are connected in parallel to ensure only heating the necessary number of machines. • Replacing cardboard boxes with reusable packaging and eliminating unnecessary cardboard inserts to cut waste and optimize loads. • Collecting, storing and using rainwater in sanitary applications such as toilets.
Biggest changeSome fiscal year 2024 examples of how Adient is reducing emissions and improving sustainability in its operations include: • Identifying and repairing air leaks in pneumatic plant assembly lines. • Recovering waste heat from air compressors and using it to help warm buildings. • Installing wireless communication modules to automatically shut down fans when not needed. • Optimizing how foam mold temperature machines are connected in parallel to ensure only heating the necessary number of machines. • Optimizing packaging and delivery routes to reduce waste and fuel usage. • Replacing liquefied petroleum gas (“LPG”) and diesel forklifts with electric forklifts at the end of their life cycle.
Additionally, Adient has more than 6 joint venture partnerships with key OEMs, including Guangzhou Automobile Group Co., Ltd., Beijing Automobile Group Co., Ltd. and FAW Group Corporation. Further details regarding Adient's customers is provided in Part II, Item 8 of this Form 10-K in Note 1, "Organization and Summary of Significant Accounting Policies," of the notes to consolidated financial statements.
Additionally, Adient has 6 joint venture partnerships with key OEMs, including Guangzhou Automobile Group Co., Ltd., Beijing Automobile Group Co., Ltd. and FAW Group Corporation. Further details regarding Adient's customers is provided in Part II, Item 8 of this Form 10-K in Note 1, "Organization and Summary of Significant Accounting Policies," of the notes to consolidated financial statements.
Competition Adient faces competition from other automotive suppliers and, with respect to certain products, from the automobile OEMs who produce or have the capability to produce certain products the business supplies. The automotive supply industry competes on the basis of technology, quality, reliability of supply and price. Design, engineering and product planning are increasingly important factors.
Competition Adient faces competition from other automotive suppliers and, with respect to certain products, from the automobile OEMs who produce or have the capability to produce certain products the business supplies. The automotive supply industry competes on the basis of technology, quality, reliability of supply and price. Design, engineering and product planning are also important factors.
When our employees come to work, they can know that where they work has undergone an extensive review of associated risks of injury or illness and that those risks are eliminated and/or minimized through robust controls. Adient provides regular updates on health and safety to its board of directors.
When Adient’s employees come to work, they can know that where they work has undergone an extensive review of associated risks of injury or illness and that those risks are eliminated and/or minimized through robust controls. Adient provides regular updates on health and safety to its Board of Directors.
In fiscal year 2024, Adient plans to expand the use of its proprietary Product Carbon Footprint Tool - data-based software that calculates the carbon footprint of a specific product based on its bill of materials - impacting designer, engineer and customer decisions and supporting its scope 3 emissions-reduction goal.
In fiscal year 2024, Adient continued to expand the use of its proprietary Product Carbon Footprint Tool - data-based software that calculates the carbon footprint of a specific product based on its bill of materials - impacting designer, engineer and customer decisions and supporting its scope 3 emissions-reduction goal.
As noted in Adient’s recently updated Deforestation Commitment and Policy and natural resources webpage, Adient is making progress on its commitments in procuring forest commodities from more sustainable sources to reduce the impact on deforestation and protect natural habitats globally.
As noted in Adient’s recently updated Deforestation Commitment and natural resources webpage, Adient is making progress on its commitments in procuring forest risk commodities from more sustainable sources to reduce the impact on deforestation and protect natural habitats globally.
Adient also recognizes the importance of its supply chain’s environmental risks and impacts and are working with its suppliers to reduce scope 3 (value chain) emissions 35% by 2030 (with 2019 as the base year).
Adient also recognizes the importance of its supply chain’s environmental risks and impacts and is working with its suppliers to reduce scope 3 (value chain) emissions 35% by 2030 (with 2019 as the base year).
Globally, 100% of Adient’s facilities are internally audited and compliant, and 60% are also third-party audited and certified. We work together across the globe, sharing best practice ideas, procedures, and information regarding accidents and injuries. At Adient, every new machine, operation, building or workstation change requires a safety risk assessment.
Globally, 100% of Adient’s facilities are internally audited and compliant, and 100% are also third-party audited and certified. Adient employees work together across the globe, sharing best practice ideas, procedures, and information regarding accidents and injuries. At Adient, every new machine, operation, building or workstation change requires a safety risk assessment.
Dorlack served as Executive Vice President – Global Procurement of ZF Friedrichshafen from 2015 to 2016, and Vice President, Global Purchasing, Supplier Development and Logistics of ZF Friedrichshafen from 2013 to 2015. James J. Huang. Mr. Huang is the Executive Vice President, Asia of Adient. Mr.
Dorlack served as Executive Vice President – Global Procurement of ZF Friedrichshafen from 2015 to 2016, and Vice President, Global Purchasing, Supplier Development and Logistics of ZF Friedrichshafen from 2013 to 2015. James J. Huang. Mr. Huang is the Executive Vice President, APAC of Adient. Mr.
It operates through its wholly owned entities and 6 joint ventures (nonconsolidated and consolidated) with 36 manufacturing locations in 22 cities, which are supported by additional technical centers.
It operates through its wholly owned entities and 6 joint ventures (nonconsolidated and consolidated) with 37 manufacturing locations in 22 cities, which are supported by additional technical centers.
Adient also supplies most of the growing regional OEMs such as Beijing Automotive Group CO., Ltd., Changan Automobile (Group) Co., Ltd., FAW Group Corporation, Proton Holdings Berhad, Ashok Leyland, Tata Motors Limited and Zhejiang Geely Holding Group Co., Ltd. and newer auto manufacturers such as NIO and Xpeng Motors.
Adient also supplies most of the growing regional OEMs such as Beijing Automotive Group Co., Ltd., Changan Automobile (Group) Co., Ltd., FAW Group Corporation, Proton Holdings Berhad, Ashok Leyland, Tata Motors Limited and Zhejiang Geely Holding Group Co., Ltd. and newer auto manufacturers such as NIO, Xpeng Motors, BYD Company Ltd. and Xiaomi Motors.
Refer to the Environmental, Social and Governance heading in this Item 1, “Business” for information on sustainability actions Adient is taking with its products and related materials, and refer to Item 1A, “Risk Factors” of this Form 10-K for additional information on risks associated with the supply of Adient’s raw materials.
Refer to the Sustainability heading in this Item 1, “Business” for information on sustainability actions Adient is taking with its products and related materials, and refer to Item 1A, “Risk Factors” of this Form 10-K for additional information on risks associated with the supply of Adient’s raw materials.
Available Information Adient's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are filed with the Securities and Exchange Commission (the "SEC").
Available Information Adient's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the Securities and Exchange Commission (the “SEC”).
During fiscal 2024, commodity prices and availability could fluctuate throughout the year and significantly affect Adient's results of operations.
During fiscal 2025, commodity prices and availability could fluctuate throughout the year and significantly affect Adient's results of operations.
Diversity, Equity and Inclusion Adient strives to build a culture of diversity and inclusion through our purchasing and human resource practices and policies, and we strive to eliminate discrimination and harassment in all its forms, including but not limited to discrimination against women, minorities and other protected groups.
Diversity and Inclusion Adient strives to build a culture of diversity and inclusion through purchasing, human resource practices and policies and strives to eliminate discrimination and harassment in all its forms, including but not limited to discrimination against women, minorities and other protected groups.
Adient and its engineers work closely with customers as vehicle platforms are developed, which results in close ties with key decision makers at OEM customers. Adient plc | Form 10-K | 4 Business Organization and Strategy Global Manufacturing Footprint Adient is a global leader in automotive seating.
Adient and its engineers work closely with customers as vehicle platforms are developed, which results in close ties with key decision makers at OEM customers. Business Organization and Strategy Global Manufacturing Footprint Adient is a global leader in automotive seating.
Adient plc | Form 10-K | 6 Demand for automotive parts in the OEM market is generally a function of the number of new vehicles produced, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends.
Demand for automotive parts in the OEM market is generally a function of the number of new vehicles produced, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends.
Adient President and CEO Doug Del Grosso signed the "CEO Action for Diversity & Inclusion" pledge promulgated by the CEO Action for Diversity & Inclusion initiative, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace. In addition, Adient is a member of the Center for Automotive Diversity, Inclusion and Advancement (“CADIA”).
Adient President and CEO Jerome Dorlack signed the "CEO Action for Diversity & Inclusion" pledge promulgated by the CEO Action for Diversity & Inclusion initiative, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace. In addition, Adient is a member of the Center for Automotive Diversity, Inclusion and Advancement (“CADIA”).
Adient’s workforce composition (including employees at consolidated joint ventures), as of September 30, 2023, consists of approximately: • 45% work in the Americas, 42% work in EMEA and 13% work in our Asia-Pacific region • 41% of the global workforce is female • 49% of employees in the U.S. have identified themselves as an ethnic minority Adient ensures its people are engaged and working collaboratively to achieve company goals through positive employee relations activities that focus on supporting employees and their families.
Adient’s workforce composition (including employees at consolidated joint ventures), as of September 30, 2024, consists of approximately: • 46% work in the Americas, 41% work in EMEA and 13% work in Asia • 41% of the global workforce is female • 52% of employees in the U.S. have identified themselves as an ethnic minority Adient ensures its people are engaged and working collaboratively to achieve company goals through positive employee relations activities that focus on supporting employees and their families.
We regularly communicate our ESG targets and related actions to our stakeholders through our SEC filings, media releases, quarterly earnings reports and our annual corporate sustainability report. Production Processes Adient remains committed to improving sustainability in its global operations and utilizing standardized processes to reduce energy consumption, conserve water and generate less waste and emissions at our facilities globally.
Adient regularly communicates its targets and actions related to sustainability to stakeholders through SEC filings, media releases, adient.com website, quarterly earnings reports and the annual corporate sustainability report. Production Processes Adient remains committed to improving sustainability in its global operations and utilizing standardized processes to reduce energy consumption, conserve water and generate less waste and emissions at facilities globally.
Through dedicated customer teams, Adient maintains close relationships with its global OEM customers. These relationships enable Adient to clearly understand its customers' needs so that it is positioned to meet its customers' requirements. Adient's customer teams also lead the new business acquisition process, which ensures alignment with Adient's product, process and manufacturing strategies.
These relationships enable Adient to clearly understand its customers' needs so that it is positioned to meet its customers' requirements. Adient's customer teams also lead the new business acquisition process, which ensures alignment with Adient's product, process and manufacturing strategies.
Shorter Product Development Cycles As a result of new safety and environmental regulations, as well as a trend of more rapid customer preference changes, OEMs are requiring suppliers to respond faster with new designs and product innovations.
Adient plc | Form 10-K | 6 Shorter Product Development Cycles As a result of new safety and environmental regulations, as well as a trend of more rapid customer preference changes, OEMs are requiring suppliers to respond faster with new designs and product innovations.
Since success in this area requires listening to diverse voices, Adient established DE&I Councils in each of its three business regions: 1) the Americas, which is inclusive of North America and South America; 2) Europe, the Middle East and Africa Adient plc | Form 10-K | 10 (“EMEA”) and 3) Asia Pacific/China (“Asia”).
Since success in this area requires listening to diverse voices, Adient established diversity and inclusion councils in each of its three business regions: 1) the Americas, which is inclusive of North America and South America; 2) Europe, the Middle East and Africa (“EMEA”) and 3) Asia Pacific/China (“Asia”).
While the three councils primarily work within their regions, they also communicate and collaborate across regions to ensure alignment and progress toward enterprise-wide DE&I goals. Additionally, Adient has an annual global online training to all salaried employees focused on DE&I.
While the three councils primarily work within their regions, they also communicate and collaborate across regions to ensure alignment and progress toward enterprise-wide diversity and inclusion goals. Additionally, Adient has periodic global online training for all salaried employees focused on diversity and inclusion.
Adient also provides and encourages many forms of corporate communication such as town hall meetings, open-door policy and an ethics Integrity Helpline so that employees can hear directly from Adient leadership and have the opportunity to ask questions, make suggestions and provide input.
Adient also provides and encourages many forms of two-way communication such as town hall meetings, engagement surveys, open-door policies and an ethics Integrity Helpline so that employees can hear directly from Adient leadership and have the opportunity to ask questions, make suggestions, raise concerns, and provide input.
In addition, Adient has set a goal to attribute 100% of the electricity needed worldwide to renewable sources by 2035. Several of Adient’s facilities already generate renewable electricity on-site via solar panel installations, and more than 60 Adient locations now consume electricity from a renewable source.
Adient plc | Form 10-K | 8 In addition, Adient has set a goal to attribute 100% of the electricity consumed at its sites worldwide to renewable sources by 2035. Several of Adient’s sites already generate renewable electricity on-site via solar panel installations, and more than 60 Adient sites now consume electricity from a renewable source.
Our board of directors and senior managers ensure we operate our business ethically and in accordance with applicable laws and regulations, and, as appropriate, they oversee and implement our ESG policies and strategies with input from a cross-functional team of subject matter experts across our organization.
The Board of Directors and senior managers ensures that Adient operates ethically and in accordance with applicable laws and regulations, and, as appropriate, they oversee and implement sustainability policies and strategies with input from a cross-functional team of subject matter experts across the organization.
Health and Safety We are committed to protecting the safety and well-being of our colleagues, customers, suppliers and people using our premises by providing and maintaining a safe working environment that protects both physical and mental well-being.
Adient plc | Form 10-K | 9 Health and Safety Adient is committed to protecting the safety and well-being of colleagues, customers, suppliers and people using its premises by providing and maintaining a safe working environment that protects both physical and mental well-being.
Adient plc | Form 10-K | 5 Development Centers Plymouth (USA) Trencin (Slovakia) Burscheid (Germany) Yokohama (Japan) Solingen (Germany) Chongqing (China) Kaiserslautern (Germany) Ceska Lipa (Czech Republic) Ansan (South Korea) Pune (India) Leadership Position in China Adient is a leading supplier of "just-in-time" seating in China.
Adient's product development practices also entail leveraging low cost country development centers in India, China, Czech Republic and Slovakia. Development Centers Plymouth (USA) Trencin (Slovakia) Burscheid (Germany) Yokohama (Japan) Solingen (Germany) Chongqing (China) Kaiserslautern (Germany) Ceska Lipa (Czech Republic) Ansan (South Korea) Pune (India) Leadership Position in China Adient is a leading supplier of "just-in-time" seating in China.
Adient plc | Form 10-K | 11 Information about our Executive Officers The following table sets forth certain information with respect to Adient's executive officers as of the date of this filing: Name Age Position(s) Held Year Appointed to Present Position Michel Berthelin 53 Executive Vice President, EMEA 2019 James Conklin 51 Executive Vice President, Americas 2022 Douglas G.
Information about Adient’s Executive Officers The following table sets forth certain information with respect to Adient's executive officers as of the date of this filing: Name Age Position(s) Held Year Appointed to Present Position Michel P. Berthelin 54 Executive Vice President, EMEA 2019 James Conklin 52 Executive Vice President, Americas 2022 Jerome J.
The components for these complete seat assemblies such as seating foam, metal structures, fabrics, seat covers and seat mechanisms are shipped to Adient or competitor seating assembly plants.
The components for these complete seat assemblies such as seating foam, metal structures, fabrics, seat covers and seat mechanisms are shipped to Adient or competitor seating assembly plants. Adient is a global leader in complete seat assembly and one of the largest in all major seating components including seating foam, metal structures, seat covers and seat mechanisms.
The competitive landscape for seating and components can be categorized into three segments: (1) traditional seating suppliers, (2) component specialists and (3) competitors who are partnered with an OEM through ownership or interlocking business relationships. Independent suppliers that represent the principal competitors of Adient include Lear Corporation, Toyota Boshoku Corporation, Forvia SE and Magna International Inc.
The competitive landscape for seating and components can be categorized into three segments: (1) traditional seating suppliers, (2) component specialists and (3) competitors who are partnered with an OEM through ownership or interlocking business relationships.
Dorlack will be appointed as President and Chief Executive Officer and a Director of Adient effective January 1, 2024. Mr. Dorlack served as Vice President, Americas of Adient from 2019 to 2022 and Vice President and Chief Purchasing Officer of Adient from 2018 to 2019.
Dorlack is the President and Chief Executive Officer and a Director of Adient. Mr. Dorlack served as Executive Vice President and Chief Financial Officer of Adient from 2022 to 2023, Executive Vice President, Americas of Adient from 2019 to 2022 and Vice President and Chief Purchasing Officer of Adient from 2018 to 2019.
In fiscal 2022, Adient published two documents - a Human Rights Policy Statement and a Diversity, Equity & Inclusion (“DE&I”) Commitment Statement - both of which emphasize Adient’s commitment to protecting the safety, well-being and human rights of our people while driving a diverse and inclusive work culture.
In fiscal year 2024, Adient updated its Human Rights Policy Statement; this document — as well as Adient’s Commitment to Diversity, Equity and Inclusion document — emphasize Adient’s commitment to protecting the safety, well-being and human rights of its people while driving a diverse and inclusive work culture.
Berthelin. Mr. Berthelin is the Executive Vice President, EMEA of Adient. Mr. Berthelin was the Vice President, EMEA of Delphi Technologies during 2018. He served as the Global Steering Vice President of ZF Friedrichshafen AG from 2016 to 2018 and the Vice President, North America-Braking of ZF Friedrichshafen AG during 2015.
He served as the Global Steering Vice President of ZF Friedrichshafen AG from 2016 to 2018 and the Vice President, North America-Braking of ZF Friedrichshafen AG during 2015. He was also Vice President, Europe-Braking for TRW Automotive Holdings Corp. from 2012 to 2015. James Conklin. Mr. Conklin is the Executive Vice President, Americas of Adient. Mr.
Prior to that, he served as Corporate Controller of Jason Industries, Inc. in 2015 and was with PricewaterhouseCoopers LLP from 1995 to 2015. Adient plc | Form 10-K | 12 Heather M. Tiltmann. Ms. Tiltmann is the Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary of Adient. Ms.
Smith is the Senior Vice President and Chief Accounting Officer of Adient. Mr. Smith served as Adient’s Assistant Corporate Controller from 2016 to 2019. Prior to that, he served as Corporate Controller of Jason Industries, Inc. in 2015 and was with PricewaterhouseCoopers LLP from 1995 to 2015. Heather M. Tiltmann. Ms.
In fiscal year 2021, Adient set a goal of reducing its scope 1 and 2 greenhouse gas emissions 75% by 2030 (with 2019 as our base year), and continues to make progress toward that goal.
Adient set a goal of reducing its scope 1 and 2 greenhouse gas emissions 75% by 2030 (with 2019 as the base year), and continues to make progress toward that goal. In 2023, Adient expanded its goal with a longer term target of achieving carbon neutrality at its manufacturing sites for scope 1 and 2 greenhouse gas emissions by 2040.
Longstanding Customer Relationships with Leading Global OEMs Adient works with OEMs to develop complete seating solutions to meet consumer expectations for performance, safety and comfort. Adient does business with all major global OEM customers, and in many cases, works closely with those customers to develop a seating solution integrated into the overall vehicle appearance and architecture.
Adient does business with all major global OEM customers, and in many cases, works closely with those customers to develop a seating solution integrated into the overall vehicle appearance and architecture. Through dedicated customer teams, Adient maintains close relationships with its global OEM customers.
Adient's trademarks are registered or otherwise legally protected in the United States and many non-U.S. countries where products and services of Adient are sold. Most works of authorship produced for Adient, such as computer programs, catalogs and sales literature, carry appropriate notices indicating Adient's claim to copyright protection under U.S. law and appropriate international treaties.
Adient plc | Form 10-K | 7 Most works of authorship produced for Adient, such as computer programs, catalogs and sales literature, carry appropriate notices indicating Adient's claim to copyright protection under U.S. law and appropriate international treaties.
We continue to develop and refine our diversity initiatives to achieve our DE&I vision of being a premier employer that champions an inclusive and equitable work culture enriched by our diversity, where all employees are valued and respected.
Adient continues to develop and refine its initiatives to achieve its diversity and inclusion vision of being a premier employer that champions an inclusive and equitable work culture enriched by diversity, where all employees are valued and respected. Succession and Talent Development Adient believes that attracting, developing, motivating and retaining employees is key to sustainable and profitable growth.
Adient plc | Form 10-K | 9 People Adient continues to work to protect the human rights and well-being of its employees, suppliers, customers and communities in which Adient operates globally. To those ends, Adient updated its Ethics Policy in 2023 to address evolving laws and regulations, including those regarding ESG.
People Adient continues to work to protect the human rights and well-being of its employees, suppliers, customers and communities in which Adient operates globally and released an updated Human Rights Policy Statement in 2024.
The Pure Essential seat promotes product circularity by using just two primary eco-friendly material types: green steel for the seat structure and recyclable polyester for comfort features and trim covers. Through Adient’s ES 3 approach to product design, Adient is continuously identifying and integrating materials and manufacturing methods that minimize environmental impact and promote a circular economy.
The Pure Essential seat promotes product circularity by using just two primary eco-friendly material types: green steel for the seat structure and recyclable polyester for comfort features and trim covers.
The highest levels of Adient’s management drive these practices with the alignment and support of all levels within the organization. Our Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary, reporting directly to the Chief Executive Officer (“CEO”), oversees Adient’s global talent processes to attract, develop and retain the most valuable asset - its employees.
The Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary, reporting directly to the Chief Executive Officer (“CEO”), oversees Adient’s global talent processes to attract, develop and retain the most valuable asset - its employees. Adient has more than 70,000 employees worldwide who represent a wide variety of backgrounds.
Product/Systems Adient designs and manufactures a full range of seating systems and components for passenger cars, commercial vehicles and light trucks, including vans, pick-up trucks and sport/crossover utility vehicles. Adient's technologies extend into virtually every area of automotive seating solutions including complete seating systems, frames, mechanisms, foam, head restraints, armrests and trim covers.
Adient's technologies extend into virtually every area of automotive seating solutions including complete seating systems, frames, mechanisms, foam, head restraints, armrests and trim covers.
Adient has a global performance management process through which employees provide a self-assessment and managers provide evaluation and feedback on performance. This process informs employee development goals.
Adient understands that, like customers, employees and potential employees have choices of where to work, and Adient must compete for the best talent. Adient supports employee development in multiple ways. Adient has a global performance management process through which employees provide a self-assessment and managers provide evaluation and feedback on performance. This process informs employee development goals.
Tiltmann was an attorney at Johnson Controls, Inc. with increasing levels of responsibility from 2011 to 2016, and an attorney with the law firm of Whyte Hirschboeck Dudek S.C. from 2000 to 2011. With the appointment of Mr. Dorlack as President and Chief Executive Officer, Mark A.
Tiltmann was Adient’s Vice President and General Counsel, Labor & Employment, Litigation and Compliance, and has served in other legal roles at Adient since 2016. Ms. Tiltmann was an attorney at Johnson Controls, Inc. with increasing levels of responsibility from 2011 to 2016, and an attorney with the law firm of Whyte Hirschboeck Dudek S.C. from 2000 to 2011.
Tiltmann served as Senior Vice President, General Counsel and Secretary of Adient from 2020 to 2021. Prior to that, Ms. Tiltmann was Adient’s Vice President and General Counsel, Labor & Employment, Litigation and Compliance, and has served in other legal roles at Adient since 2016. Ms.
Tiltmann is the Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary of Adient. Ms. Tiltmann served as Senior Vice President, General Counsel and Secretary of Adient from 2020 to 2021. Prior to that, Ms.
These standardized manufacturing processes allow Adient to deliver high quality levels and minimize waste. Adient achieves scale advantages through a global manufacturing footprint and an integrated supply chain. Adient fosters an environment of continuous improvement and identifies best business practices through the analysis of process and cost metrics, which are then shared globally throughout Adient's manufacturing network.
Adient fosters an environment of continuous improvement and identifies best business practices through the analysis of process and cost metrics, which are then shared globally throughout Adient's manufacturing network. To ensure appropriate service levels, minimal inventory and optimal factory utilization, Adient employs a Sales & Operational Planning, or S&OP, process.
Adient is able to leverage its position as the market leader in Europe, North America and China to grow in other markets, such as Southeast Asia. • Vertical integration. Adient's operations provide opportunities for continued vertical integration in areas that could enhance Adient's capabilities, expand profit margins and grow revenues with customers who employ component sourcing strategies.
Adient is able to leverage its position as the market leader in Europe, North America and China to grow in other markets, such as Southeast Asia. Adient plc | Form 10-K | 5 • Vertical integration.
To ensure appropriate service levels, minimal inventory and optimal factory utilization, Adient employs a Sales & Operational Planning, or S&OP, process. A well-executed S&OP process provides two strategic advantages: focused customer service and on-time delivery which result in both customer retention and the opportunity for market share gain.
A well-executed S&OP process provides two strategic advantages: focused customer service and on-time delivery which result in both customer retention and the opportunity for market share gain. Investing in Technology Adient continues to invest in technology and innovation by utilizing automation in metals, foam, trim and complete seat operations as well as expanding the use of artificial intelligence (“AI”).
Conklin had various roles with increasing responsibilities since 2000 while at Johnson Controls, Inc; such as Executive Director, Continuous Improvement and Best Business Practices, and leadership positions within Advanced Manufacturing, Lean Manufacturing, Operations and Quality. Douglas G. Del Grosso. Mr. Del Grosso is the President and Chief Executive Officer (“CEO”) and a Director of Adient.
Prior to that, he had various roles of increasing responsibility with Johnson Controls, Inc., Adient plc | Form 10-K | 11 including Vice President of Operations and Executive Director, Continuous Improvement and Best Business Practices, as well as leadership positions within Advanced Manufacturing, Lean Manufacturing, Operations and Quality. Jerome J. Dorlack. Mr.
Adient plc | Form 10-K | 8 Environmental, Social and Governance At Adient, we recognize robust and responsible environmental, social and governance (“ESG”) policies and practices are essential to the long-term success of our business and the well-being of our stakeholders, including our investors, employees, suppliers, customers and communities.
Sustainability Adient recognizes robust, responsible and sustainable policies and practices are essential to the long-term success of its business and the well-being of its stakeholders, including investors, employees, suppliers, customers and communities. Adient prioritizes environmental stewardship by integrating sustainability principles into product development initiatives, manufacturing processes, procurement practices, corporate governance activities and other key business areas.
Human Capital Resources Adient's ability to sustain and grow its business requires it to hire, retain and develop a highly skilled and diverse workforce. Adient values character and integrity as much as qualifications and fosters an empowerment culture where employees have ownership in business outcomes.
Additionally, Adient is proud to support women-, minority- and veteran-owned businesses by spending more than $1 billion with diverse suppliers every year. Human Capital Resources Adient's ability to sustain and grow its business requires it to hire, retain and develop a highly skilled and diverse workforce.
Adient's deep vertical integration, global footprint and broad product offering make it well positioned to compete against the traditional global Tier-1 suppliers and component specialists. Adient plc | Form 10-K | 7 Raw Materials Raw materials used by Adient in connection with its operations include steel, aluminum, polyurethane chemicals, fabrics, leather, vinyl and polypropylene.
Independent suppliers that represent the principal competitors of Adient include Lear Corporation, Toyota Boshoku Corporation, Forvia SE, Magna International Inc. and Yanfeng Automotive Systems Co., Ltd. Adient's deep vertical integration, global footprint and broad product offering make it well positioned to compete against the traditional global Tier-1 suppliers and component specialists.
In 2023, Adient employees launched a new BRG in the Americas region - the South Asian Community (“SAC”) BRG - in addition to growing the existing HOLA! (Hispanic Origins • Latino Ancestry) BRG, African Ancestry BRG (“AABRG”), True Colors Network (“TCN”), and Women’s Resource Network (“WRN”).
These two groups join Adient’s five other Americas BRGs: Hispanic Origins • Latino Ancestry BRG, African Ancestry BRG, South Asian Community BRG, True Colors Network, and Women’s Resource Network.
Continuing into fiscal 2023, the automotive industry has experienced a period of significant volatility in commodity prices. This price volatility may continue into the future as demand increases and/or supply remains constrained. Price volatility has resulted in an overall increase of input costs for Adient that may not be, or may only be partially, offset through customer negotiations.
Raw Materials Raw materials used by Adient in connection with its operations include steel, aluminum, polyurethane chemicals, fabrics, leather, vinyl and polypropylene. Continuing into fiscal 2024, the automotive industry has experienced volatility in commodity prices. This price volatility may continue into the future as demand increases and/or supply is constrained.
Huang served as Vice President, Complete Seat Asia of Adient from 2016 to 2018, and Vice President Complete Seat Asia of Johnson Controls, Inc. from 2014 to 2016. Gregory S. Smith. Mr. Smith is the Senior Vice President and Chief Accounting Officer of Adient. Mr. Smith served as Adient’s Assistant Corporate Controller from 2016 to 2019.
Huang served as Vice President, Complete Seat APAC of Adient from 2016 to 2018, and Vice President Complete Seat APAC of Johnson Controls, Inc. from 2014 to 2016. Prior to that, Mr. Huang held leadership positions in Asia Pacific in purchasing and sales before serving as General Manager of Shanghai Yanfeng Johnson Controls Seating Co., Ltd. Stephanie S. Marianos. Ms.
Del Grosso 62 President and Chief Executive Officer 2018 Jerome J. Dorlack 43 Executive Vice President and Chief Financial Officer 2022 James Huang 62 Executive Vice President, Asia 2019 Gregory S. Smith 55 Senior Vice President and Chief Accounting Officer 2019 Heather M. Tiltmann 51 Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary 2021 Michel P.
Dorlack 44 President and Chief Executive Officer 2024 James J. Huang 63 Executive Vice President, APAC 2019 Stephanie S. Marianos 56 Executive Vice President, Global IT & Business Services and Sustainability 2024 Mark A. Oswald 58 Executive Vice President and Chief Financial Officer 2024 Gregory S. Smith 56 Senior Vice President and Chief Accounting Officer 2019 Heather M.
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Adient's product development practices also entail leveraging low cost country development centers in India, China, Czech Republic and Slovakia.
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These standardized manufacturing processes allow Adient to deliver high quality levels and minimize waste. Adient achieves scale advantages through a global manufacturing footprint and an integrated supply chain. Adient also creates efficiencies and optimizes inventory, reduces freight and direct labor costs through its integrated modular assembly process.
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Adient is a global leader in complete seat assembly and one of the largest in all major seating components, operating manufacturing plants that produce seating foam, metal structures, seat covers and seat mechanisms.
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AI technology is being pursued to reduce direct labor costs, improve accuracy and to ensure repeatable and reproducible results. Adient plc | Form 10-K | 4 Longstanding Customer Relationships with Leading Global OEMs Adient works with OEMs to develop complete seating solutions to meet consumer expectations for performance, safety and comfort.
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We embed sustainability into our company by integrating ESG principles into our product development initiatives, manufacturing processes, procurement practices, corporate governance activities and other key business areas.
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Adient's operations provide opportunities for continued vertical integration in areas that could enhance Adient's capabilities, expand profit margins and grow revenues with customers who employ component sourcing strategies. Product/Systems Adient designs and manufactures a full range of seating systems and components for passenger cars, commercial vehicles and light trucks, including vans, pick-up trucks and sport/crossover utility vehicles.
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In 2023, Adient expanded its goal with a longer term target of achieving carbon neutrality at its manufacturing locations for scope 1 and 2 greenhouse gas emissions by 2040.
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Adient's trademarks are registered or otherwise legally protected in the United States and many non-U.S. countries where products and services of Adient are sold.
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Employees reviewed the updated Ethics Policy as part of the annual ethics certification campaign. In 2023, Adient also initiated ESG-related due diligence questionnaires for top suppliers to promote transparency in supply chain human rights policies and practices. Additionally, Adient is proud to support women-, minority- and veteran-owned businesses by spending more than $1 billion with diverse suppliers every year.
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Through Adient’s ES 3 (Evolution of Seating Systems Sustainability) approach to product design, Adient is continuously identifying and integrating materials and manufacturing methods that minimize environmental impact and promote a circular economy.
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Adient has more than 70,000 employees worldwide who represent a wide variety of backgrounds.
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Adient updated its Ethics Policy in 2023 to address evolving laws and regulations, including those regarding sustainability, and in fiscal year 2024, 99% of Adient’s salaried workforce completed Adient’s annual Ethics Policy certification.
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Adient developed and tracks human capital metrics relating to diversity and inclusion, which the Chief Legal and Human Resources Officer reviews semi-annually with the board of directors.
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Adient also established in 2024 a new global Center of Excellence (“COE”) centrally addressing global supplier compliance and risk management; this COE is dedicated to continuously improving Adient’s processes, procedures and systems for vetting and performing supplier due diligence.
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Succession and Talent Development At Adient, we believe that attracting, developing, motivating and retaining employees is key to our sustainable and profitable growth. We understand that, like customers, our employees and potential employees have choices of where to work, and we must compete for the best talent. Adient supports employee development in multiple ways.
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Adient values character and integrity as much as qualifications and fosters an empowerment culture where employees have ownership in business outcomes. The highest levels of Adient’s management drive these practices with the alignment and support of all levels within the organization.
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He was also Vice President, Europe-Braking for TRW Automotive Holdings Corp. from 2012 to 2015. James Conklin. Mr. Conklin is the Executive Vice President, Americas of Adient. Mr. Conklin served as Adient’s Vice President, Americas Operations from 2016 to 2022. He previously served as Vice President of Operations of Johnson Controls, Inc. Mr.
Added
Guided by its diversity and inclusion vision and mission, Adient developed global focus areas, including developing, engaging, and attracting diverse talent at all levels of the organization, including the leadership level, over the next three years, ensuring there is equity in people and pay practices, and continuing to develop and refine our people metrics.
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In November 2023, Adient announced that Mr. Del Grosso will be retiring from Adient effective December 31, 2023. Mr. Del Grosso joined Adient in October 2018 from automotive supplier Chassix, where he served as president and CEO. From 2012 to 2015, he served as president and CEO at Henniges Automotive. Mr.
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Adient provides updates to the Board of Directors on diversity initiatives and shares information on initiatives and metrics in its annual sustainability report.
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Del Grosso held leadership roles at TRW Automotive from 2007 to 2012, where he last served as vice president and general manager for Adient’s global braking and suspension operations. Prior to joining TRW Automotive, Mr.
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In addition to frequent workshops and panel discussions, in fiscal year 2024 Adient launched a four-part manager training series facilitated by CADIA. In 2024, Adient employees launched one new BRG in the Americas region, the Mission*Integrity*Leadership BRG, as well as one new affinity group, the Technology Professionals Society.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

66 edited+16 added−8 removed159 unchanged
Biggest changeIrish law provides that a board of directors may allot shares (or rights to subscribe for or convertible into shares) only with the prior authorization of shareholders. At our most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).
Biggest changeAt Adient’s most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked). This authorization will need to be further renewed by ordinary resolution, being a resolution passed by a simple majority of votes cast, prior to expiration.
Such proposals, if made retroactively effective to transactions completed during the period in which the separation from the Former Parent occurred, could cause Adient and/or its affiliates to be treated as U.S. corporations for U.S federal tax purposes. If enacted, these proposals could cause the Adient group to be subject to substantially greater U.S. tax liability than currently contemplated.
Such proposals, if made retroactively effective to transactions completed during the period in which the separation from the Former Parent occurred, could cause Adient and/or its affiliates to be treated as U.S. corporations for U.S federal tax purposes. If enacted, such proposals could cause the Adient group to be subject to substantially greater U.S. tax liability than currently contemplated.
Similarly, certain vehicles or vehicle segments Adient supplies may be disproportionately impacted by overall industry disruptions such that Adient’s sales may be adversely effected relative to the industry in general or our competitors, which could have a negative effect on Adient’s business.
Similarly, certain vehicles or vehicle segments Adient supplies may be disproportionately impacted by overall industry disruptions such that Adient’s sales may be adversely effected relative to the industry in general or Adient’s competitors, which could have a negative effect on Adient’s business.
As of the date of this filing, Adient has made several public commitments regarding our intended reduction of carbon emissions, including commitments to science-based targets to reduce carbon emissions from its operations and the operations of its customers.
As of the date of this filing, Adient has made several public commitments regarding the intended reduction of carbon emissions, including commitments to science-based targets to reduce carbon emissions from its operations and the operations of its customers.
Global climate change and related emphasis on ESG matters by various stakeholders could negatively affect Adient's business. Increased public awareness and concern regarding global climate change may result in more regional and/or federal requirements to reduce or mitigate the effects of greenhouse gas emissions. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty.
Global climate change and related emphasis on sustainability matters by various stakeholders could negatively affect Adient's business. Increased public awareness and concern regarding global climate change may result in more regional and/or federal requirements to reduce or mitigate the effects of greenhouse gas emissions. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty.
Adient could also face indirect financial risks passed through the supply chain, and process disruptions due to physical climate changes could result in price modifications for Adient's products and the resources needed to produce them. Furthermore, customer, investor, regulatory and employee expectations in areas such as ESG have been rapidly evolving and increasing.
Adient could also face indirect financial risks passed through the supply chain, and process disruptions due to physical climate changes could result in price modifications for Adient's products and the resources needed to produce them. Furthermore, customer, investor, regulatory and employee expectations in areas such as sustainability have been rapidly evolving and increasing.
While some of these input cost increases have moderated in fiscal 2023, other exposures will likely continue into fiscal 2024 and perhaps further into the future. This environment of significant price volatility has resulted in, and may continue to result in, increased costs for Adient that may not be, or may only be partially, offset.
While some of these input cost increases have moderated in fiscal 2024, other exposures will likely continue into fiscal 2025 and perhaps further into the future. This environment of significant price volatility has resulted in, and may continue to result in, increased costs for Adient that may not be, or may only be partially, offset.
Irish law also generally provides shareholders with preemptive rights when new shares are issued for cash; however, it is possible for shareholders to vote to exclude preemptive rights in a general meeting. At our most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).
Irish law also generally provides shareholders with preemptive rights when new shares are issued for cash; however, it is possible for shareholders to vote to exclude preemptive rights in a general meeting. At the most recent Annual General Meeting, Adient's shareholders renewed this authorization for a period of 18 months (unless previously renewed, varied or revoked).
Moreover, Adient may determine that it is in the best interest of Adient and its shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current commitments based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders.
Moreover, Adient may determine that it is in the best interest of Adient and its shareholders to prioritize other business, social, governance or sustainable investments over the achievement of Adient’s current commitments based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders.
Specifically, regulatory bodies around the globe continue to develop ESG reporting requirements, many of which will be subject to independent audits. Emerging European legislation is requiring detailed emissions data reporting for imported carbon intensive commodities, subject to financial payment mechanisms after a transition period.
Specifically, regulatory bodies around the globe continue to develop sustainability reporting requirements, many of which will be subject to independent audits. Emerging European legislation is requiring detailed emissions data reporting for imported carbon intensive commodities, subject to financial payment mechanisms after a transition period.
These provisions include, among others: (i) the power for the board of directors to issue and allot preferred shares or implement a shareholder rights plan without shareholder approval in certain circumstances; (ii) a provision similar to Section 203 of the Delaware General Corporation Law, which provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15 percent of the outstanding ordinary shares of Adient shall not engage in any business combination with Adient, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliates becomes the holder of more than 15 percent of Adient's outstanding ordinary shares; (iii) rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings; and (iv) the ability of the Adient board of directors to fill vacancies on the board of directors in certain circumstances.
These provisions include, among others: (i) the power for the Board of Directors to issue and allot preferred shares or implement a shareholder rights plan without shareholder approval in certain circumstances; (ii) a provision similar to Section 203 of the Delaware General Corporation Law, which provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15 percent of the outstanding ordinary shares of Adient shall not engage in any business combination with Adient, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliates becomes the holder of more than 15 percent of Adient's outstanding ordinary shares; (iii) rules Adient plc | Form 10-K | 25 regarding how shareholders may present proposals or nominate directors for election at shareholder meetings; and (iv) the ability of the Adient Board of Directors to fill vacancies on the Board of Directors in certain circumstances.
These disruptions have moderated in fiscal 2023, but supply chains remain fragile and in the past have led to unplanned downtime at Adient's production facilities, often with very little warning, which created operating inefficiencies and limited Adient's ability to adequately mitigate such inefficiencies.
These disruptions have moderated in fiscal 2024, but supply chains remain fragile and, in the past have led to unplanned downtime at Adient's production facilities, often with very little warning, which created operating inefficiencies and limited Adient's ability to adequately mitigate such inefficiencies.
Product design activities for lower carbon emission products must keep pace with customer carbon emission reduction and pricing expectations. The enhanced stakeholder focus on ESG issues relating to Adient requires the continuous monitoring of various and evolving standards and the associated reporting requirements.
Product design activities for lower carbon emission products must keep pace with customer carbon emission reduction and pricing expectations. The enhanced stakeholder focus on sustainability issues relating to Adient requires the continuous monitoring of various and evolving standards and the associated reporting requirements.
There can be no assurance that Adient would be able to obtain additional financing or refinancing and failure to obtain such additional financing or refinancing could have a material adverse impact on our operations. Adient may incur or assume significantly more debt in the future.
There can be no assurance that Adient would be able to obtain additional financing or refinancing and failure to obtain such additional financing or refinancing could have a material adverse impact on Adient’s operations. Adient may incur or assume significantly more debt in the future.
A failure to adequately meet regulatory requirements and stakeholder expectations or achieve its ESG-related goals may result in the loss of business, diluted market valuation, an inability to attract customers or an inability to attract and retain top talent.
A failure to adequately meet regulatory requirements and stakeholder expectations or achieve its sustainability-related goals may result in the loss of business, diluted market valuation, an inability to attract customers or an inability to attract and retain top talent.
In addition, recent legislative and other proposals have aimed to expand the scope of Section 7874, or otherwise address certain perceived issues arising in connection with so-called inversion transactions.
In addition, prior legislative and other proposals have aimed to expand the scope of Section 7874, or otherwise address certain perceived issues arising in connection with so-called inversion transactions.
Under current law, Adient is expected to be treated as a foreign corporation for U.S. federal tax purposes and Section 7874 is not otherwise expected to apply to Adient or its affiliates as a result of the separation from Johnson Controls International plc (“the Former Parent”) in 2016.
Under current law, Adient is expected to be treated as a foreign corporation for U.S. federal tax purposes and Section 7874 is not otherwise expected to apply to Adient or its affiliates as a result of the separation from Johnson Controls International plc (the “Former Parent”) in 2016.
If Adient incurs more debt in the future and does not retire existing debt, the risks described above could increase. Adient's debt obligations could adversely affect Adient's business, profitability and the ability to meet its obligations. As of September 30, 2023, Adient's total consolidated indebtedness approximated $2.5 billion.
If Adient incurs more debt in the future and does not retire existing debt, the risks described above could increase. Adient's debt obligations could adversely affect Adient's business, profitability and the ability to meet its obligations. As of September 30, 2024, Adient's total consolidated indebtedness approximated $2.4 billion.
Also, Irish companies, including Adient, may only alter their memorandum of Adient plc | Form 10-K | 26 association and articles of association with the approval of the holders of at least 75% of Adient's shares present and voting in person or by proxy at a general meeting of Adient (and certain provisions of Adient's memorandum of association and articles of association may only be amended with the approval of the holders of at least 80% in nominal value of Adient's issued ordinary shares).
Also, Irish companies, including Adient, may only alter their memorandum of association and articles of association with the approval of the holders of at least 75% of Adient's shares present and voting in person or by proxy at a general meeting of Adient (and certain provisions of Adient's memorandum of association and articles of association may only be amended with the approval of the holders of at least 80% in nominal value of Adient's issued ordinary shares).
If the costs of raw materials, energy, commodities, freight costs, labor costs and product components increase or the availability thereof is restricted, it could adversely affect Adient's financial condition, operating results and cash flows. Adient operates in the highly competitive automotive supply industry. The global automotive component supply industry is highly competitive.
If the costs of raw materials, energy, commodities, freight costs, labor costs and product components increase or the availability thereof is restricted, it could adversely affect Adient's financial condition, operating results and cash flows. Adient plc | Form 10-K | 16 Adient operates in the highly competitive automotive supply industry. The global automotive component supply industry is highly competitive.
In addition, these arrangements may cause Adient to be slower to detect compliance related problems and make its design of effective internal controls more challenging. Each of these challenges may be more costly to implement, and the risk of failure potentially higher, than would be the case in a more centralized structure.
In addition, these arrangements may cause Adient to be slower to detect compliance related Adient plc | Form 10-K | 14 problems and make its design of effective internal controls more challenging. Each of these challenges may be more costly to implement, and the risk of failure potentially higher, than would be the case in a more centralized structure.
Depending on the terms under which Adient supplies products to an auto manufacturer, an auto manufacturer may attempt to hold Adient responsible for some or all of the repair or replacement costs of defective products under new vehicle warranties, when the vehicle manufacturer asserts that the product supplied did not perform as warranted.
Depending on the terms under which Adient supplies products to an auto manufacturer, an auto manufacturer may attempt to hold Adient responsible for some or all of the repair or Adient plc | Form 10-K | 19 replacement costs of defective products under new vehicle warranties, when the vehicle manufacturer asserts that the product supplied did not perform as warranted.
During such lead times, price commitments are subject to change and could lead to an inability of Adient to fully recover all such price changes. The capital and credit markets provide Adient with liquidity to operate and grow its business beyond the liquidity that operating cash flows provide.
During such lead times, price commitments are subject to change and could lead to an inability of Adient to fully recover all such price changes. Adient plc | Form 10-K | 13 The capital and credit markets provide Adient with liquidity to operate and grow its business beyond the liquidity that operating cash flows provide.
In addition, any of Adient's competitors may foresee the course of market development more accurately than Adient, develop products that are superior to Adient's products, produce similar products at a Adient plc | Form 10-K | 17 lower cost than Adient, or adapt more quickly than Adient to new technologies or evolving customer requirements.
In addition, any of Adient's competitors may foresee the course of market development more accurately than Adient, develop products that are superior to Adient's products, produce similar products at a lower cost than Adient, or adapt more quickly than Adient to new technologies or evolving customer requirements.
The framework provides for two primary “Pillars”; however, only Pillar Two, which provides for a global minimum corporate tax rate of 15%, is expected to be applicable to Adient (Pillar One is not expected to be applicable as Adient does not currently meet the turnover threshold – EUR 20 billion).
The framework provides for two primary “Pillars”; however, only Pillar Two, which provides for a global minimum corporate tax rate of 15% in each jurisdiction in which the group operates, is expected to be applicable to Adient (Pillar One is not expected to be applicable as Adient does not currently meet the turnover threshold – EUR 20 billion).
Negative unexpected results from one or more such tax audits could adversely affect Adient's results of operations. Adient plc | Form 10-K | 19 If Adient does not respond appropriately, the evolution of the automotive industry towards autonomous vehicles and mobility on demand services could adversely affect Adient’s business.
Negative unexpected results from one or more such tax audits could adversely affect Adient's results of operations. If Adient does not respond appropriately, the evolution of the automotive industry towards autonomous vehicles and mobility on demand services could adversely affect Adient’s business.
Adient may be subject to substantial liabilities under these indemnifications. Transfers of Adient ordinary shares, other than by means of the transfer of book-entry interests in the Depository Trust Company, may be subject to Irish stamp duty. It is expected that, for the majority of transfers of Adient ordinary shares, there will not be any Irish stamp duty.
Transfers of Adient ordinary shares, other than by means of the transfer of book-entry interests in the Depository Trust Company, may be subject to Irish stamp duty. It is expected that, for the majority of transfers of Adient ordinary shares, there will not be any Irish stamp duty.
Climate changes could also disrupt Adient's operations by impacting the availability and cost of materials needed for manufacturing and could increase insurance and other operating costs. These factors may impact Adient's decisions to construct new facilities or maintain existing Adient plc | Form 10-K | 20 facilities in areas most prone to physical climate risks.
Climate changes could also disrupt Adient's operations by impacting the availability and cost of materials needed for manufacturing and could increase insurance and other operating costs. These factors may impact Adient's decisions to construct new facilities or maintain existing facilities in areas most prone to physical climate risks.
The inability of Adient to negotiate these contract or program changes in a manner favorable to Adient could also adversely affect Adient’s results of operations. Work stoppages, including those at Adient’s customers, and similar events could significantly disrupt Adient's business.
The inability of Adient to negotiate these contract or program changes in a manner favorable to Adient could also adversely affect Adient’s results of operations. Adient plc | Form 10-K | 17 Work stoppages, including those at Adient’s customers, and similar events could significantly disrupt Adient's business.
In addition, with fewer sources of supply for certain components, each supplier may perceive that it has greater leverage and, therefore, some ability to seek higher prices from us at a time that we face substantial pressure from OEMs to reduce the prices of our products. This could adversely affect our customer relations and business.
In addition, with fewer sources of supply for certain components, each supplier may perceive that it has greater leverage and, therefore, some ability to seek higher prices at a time that Adient faces substantial pressure from OEMs to reduce the prices of Adient’s products. This could adversely affect customer relations and business.
This authorization will need to be renewed by special resolution, being a resolution passed by not less than 75% of votes cast, upon expiration. We anticipate seeking another authorization at our next Annual General Meeting and annually thereafter. Should this authorization not be approved, our ability to issue equity could be limited which could adversely affect our securities holders.
This authorization will need to be renewed by special resolution, being a resolution passed by not less than 75% of votes cast, upon expiration. Adient anticipates seeking another authorization at the next Annual General Meeting and annually thereafter. Should this authorization not be approved, the ability to issue equity could be limited which could adversely affect Adient’s securities holders.
Violations of such laws and regulations may result in penalties, sanctions and/or fines, and may also result in costly and time-consuming governmental investigations, any or all of which could have an adverse effect on Adient's business, financial condition and results of operations and reputation. Negative or unexpected tax consequences could adversely affect Adient's results of operations.
Violations of such laws and regulations may result in penalties, sanctions and/or fines, and may also result in costly and time-consuming governmental investigations, any or all of which could have an adverse effect on Adient's business, financial condition and results of operations and reputation.
Adient is operating under a “hybrid” working environment, meaning that the majority of its non-plant employees have the flexibility to work remotely at least some of the time, for the foreseeable future.
Adient plc | Form 10-K | 21 Adient is operating under a “hybrid” working environment, meaning that the majority of its non-plant employees have the flexibility to work remotely at least some of the time, for the foreseeable future.
Adient plc | Form 10-K | 22 The loss of business with respect to, or the lack of commercial success of, a vehicle model for which Adient is a significant supplier could adversely affect Adient's financial performance.
The loss of business with respect to, or the lack of commercial success of, a vehicle model for which Adient is a significant supplier could adversely affect Adient's financial performance.
Risks related to Adient's defined benefit retirement plans may adversely impact Adient's results of operations and cash flow. Significant changes in actual investment return on defined benefit plan assets, discount rates, mortality assumptions and other factors could adversely affect Adient's results of operations and the amounts of contributions Adient must make to its defined benefit plans in future periods.
Significant changes in actual investment return on defined benefit plan assets, discount rates, mortality assumptions and other factors could adversely affect Adient's results of operations and the amounts of contributions Adient must make to its defined benefit plans in future periods.
Adient's business success depends on attracting and retaining qualified personnel and our attempts to fully reopen our offices and operate under a hybrid working environment may not be successful. Adient's ability to sustain and grow its business requires it to hire, retain and develop a highly skilled and diverse management team and workforce.
Adient's business success depends on attracting and retaining qualified personnel and the attempt to operate under a hybrid working environment may not be successful. Adient's ability to sustain and grow its business requires it to hire, retain and develop a highly skilled and diverse management team and workforce.
However, Adient will continue to monitor and evaluate new legislation and guidance, which could change our current assessment. Currently, Adient incurs losses in certain countries where it does not receive a financial statement benefit, and Adient operates in countries which have different statutory rates.
However, Adient will continue to monitor and evaluate new legislation and guidance, which could change the current assessment. Adient plc | Form 10-K | 24 Currently, Adient incurs losses in certain countries where it does not receive a financial statement benefit, and Adient operates in countries which have different statutory rates.
Although the impact of this conflict has moderated in fiscal 2023, if the conflict continues or expands, it may trigger a series of additional economic and other sanctions which in turn could further disrupt the global automotive supply chains by limiting supplies of key components and increasing inflationary pressures.
If the conflict continues or expands, it may trigger a series of additional economic and other sanctions which in turn could further disrupt the global automotive supply chains by limiting supplies of key components and increasing inflationary pressures.
Adient plc | Form 10-K | 25 Recent legislative and other proposals have aimed to expand the scope of U.S. corporate tax residence. Under such proposals, Adient and/or its affiliates could be treated as U.S. corporations if the management and control of Adient or such affiliates were determined to be located primarily in the U.S.
Prior legislative and other proposals have aimed to expand the scope of U.S. corporate tax residence. Under such proposals, Adient and/or its affiliates could be treated as U.S. corporations if the management and control of Adient or such affiliates were determined to be located primarily in the U.S.
Adient plc | Form 10-K | 24 Adient’s effective tax rate could be volatile and materially change as a result of changes in tax laws, mix of earnings and other factors. A change in tax laws is one of many factors that impact Adient’s effective tax rate. The U.S.
Adient’s effective tax rate could be volatile and materially change as a result of changes in tax laws, mix of earnings and other factors. A change in tax laws is one of many factors that impact Adient’s effective tax rate. The U.S.
A downgrade in Adient's ratings or volatility in the financial markets causing limitations to the debt capital markets could have an adverse effect on Adient's business or Adient plc | Form 10-K | 21 Adient's ability to meet its liquidity needs.
A downgrade in Adient's ratings or volatility in the financial markets causing limitations to the debt capital markets could have an adverse effect on Adient's business or Adient's ability to meet its liquidity needs.
Similarly, if one or more of Adient's customers were to experience a work stoppage, such as what occurred during the UAW strike in the U.S. beginning in September 2023 resulting in an estimated $155 million of lost revenue to Adient (through November 3, 2023), ongoing supply chain disruptions, or otherwise, that customer would likely halt or limit purchases of Adient's products, which could result in the shutdown of the related Adient manufacturing facilities and or other cost-reduction initiatives.
Similarly, if one or more of Adient's customers were to experience a work stoppage, such as what occurred during the UAW strike in the U.S. in late 2023, resulting in ongoing supply chain disruptions, or otherwise, that customer would likely halt or limit purchases of Adient's products, which could result in the shutdown of the related Adient manufacturing facilities and or other cost-reduction initiatives.
Adient plc | Form 10-K | 16 The regulation of Adient's international operations, and any failure of Adient to comply with those regulations, could adversely affect its business, results of operations and reputation.
The regulation of Adient's international operations, and any failure of Adient to comply with those regulations, could adversely affect its business, results of operations and reputation.
If we incorrectly forecast these and other related factors, the transactions we have entered into may have an adverse impact on our financial results. No assurance can be given that our judgment in this respect will be correct.
If the forecast and other related factors are incorrect, the transactions entered into may have an adverse impact on Adient’s financial results. No assurance can be given that judgment in this respect will be correct.
Adverse changes in the underlying profitability and financial outlook of Adient's operations in several jurisdictions could lead to additional changes in Adient's valuation allowances against deferred tax assets and other tax reserves on Adient's statements of financial position.
Negative or unexpected tax consequences could adversely affect Adient's results of operations. Adverse changes in the underlying profitability and financial outlook of Adient's operations in several jurisdictions could lead to additional changes in Adient's valuation allowances against deferred tax assets and other tax reserves on Adient's statements of financial position.
Transfers of Adient ordinary shares effected by means of the transfer of book-entry interests in the Depository Trust Company, which we refer to as DTC, are not subject to Irish stamp duty.
Transfers of Adient ordinary shares effected by means of the transfer of book-entry interests in the Depository Trust Company (“DTC”) are not subject to Irish stamp duty.
Our use of financial instruments to limit this risk is guided by strict policies and processes and the success of our hedging programs depends primarily on the performance of the business in Adient plc | Form 10-K | 15 comparison with our forecasted sales proceeds and costs.
Adient’s use of financial instruments to limit this risk is guided by strict policies and processes and the success of Adient’s hedging programs depends primarily on the performance of the business in comparison with Adient’s forecasted sales proceeds and costs.
In December 2022, Pillar Two was adopted by the Council of the European Union for implementation by European Union member states by December 31, 2023, with effect for tax years beginning in calendar year 2024 (Adient’s 2025 fiscal year).
In December 2022, Pillar Two was adopted by the Council of the European Union for implementation by European Union member states by December 31, 2023, with effect for tax years beginning in calendar year 2024 (Adient’s 2025 fiscal year) and Ireland has enacted national legislation to implement Pillar Two.
In addition in certain instances we may be unable to adjust our staffing levels to correspond to a customer’s work stoppage such that we incur increased labor costs along with a decrease in production.
In certain instances, Adient may be unable to adjust its staffing levels to correspond to a customer’s work stoppage such that Adient incurs increased labor costs along with a decrease in production.
Furthermore, to the extent such initiatives involve workforce changes, such changes may temporarily reduce workforce productivity, which could be disruptive to our business and adversely affect our results of operations. A failure of Adient's information technology (IT) and data security infrastructure could adversely impact Adient's business, operations and reputation.
Furthermore, to the extent such initiatives involve workforce changes, such changes may temporarily reduce workforce productivity, which could be disruptive to Adient’s business and adversely affect results of operations. A failure of Adient's information technology (“IT”) and data security infrastructure or the unsuccessful adoption of new technology such as artificial intelligence could adversely impact Adient's business, operations and reputation.
Under the Biden administration, changes in U.S. administrative policy could lead to changes to existing trade agreements, greater restrictions on free trade generally, and significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured in Mexico and China, among other possible changes.
Changes in U.S. administrative policy could lead to changes to existing trade agreements, greater restrictions on free trade generally, prohibitions or restrictions on the import of certain automobiles and components into the U.S. and significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured in Mexico and China, among other possible changes.
The global automotive industry has experienced significant volatility over the past few years relative to supply chain disruptions, inflationary pressures, labor shortages, geopolitical uncertainties, higher interest rates and foreign currency fluctuations.
The global automotive industry has also experienced significant volatility in the past due to supply chain disruptions, inflationary pressures, labor shortages, geopolitical uncertainties, high interest rates and foreign currency fluctuations.
It remains to be determined whether final judgment given in default of appearance is final and conclusive.
It remains to Adient plc | Form 10-K | 23 be determined whether final judgment given in default of appearance is final and conclusive.
In each of the last five fiscal years, Adient announced restructurings related to cost reduction initiatives, which included workforce reductions, plant closures and asset impairments. Adient may undertake additional restructuring actions, including plant closures and workforce reductions in the future.
In each of the last six fiscal years, Adient announced restructurings related to cost reduction initiatives, which included workforce reductions, plant closures and asset impairments. Adient may undertake additional restructuring actions, including plant closures and workforce reductions in the future, particularly in EMEA where Adient is closely monitoring macroeconomic conditions and customer production plans.
Based upon current IRS guidance and Adient income levels, Adient does not expect to be subject to either provision. However, Adient will continue to monitor and reassess the impact, if any, as the IRS and U.S. Treasury issue additional guidance on the IRA provisions.
Based upon current IRS guidance and Adient income levels, Adient is not subject to either provision. However, Adient will continue to monitor and reassess the impact, if any, as the IRS and U.S. Treasury issue additional guidance on the IRA provisions. Given the current political environment, it is uncertain whether additional U.S. corporate tax reform could be expected.
Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences. Automakers may experience a decline in the number of new vehicle sales, whether as a result of economic decline, ongoing supply chain disruptions and labor shortages, increasing consumer borrowing rates or for various other reasons.
Automakers may experience a decline in the number of new vehicle sales, whether as a result of economic decline, supply chain disruptions and labor shortages, increasing consumer borrowing rates or for various other reasons.
A significant disruption in the supply of a key component due to a work stoppage at one of Adient's suppliers or any other supplier could have the same consequences, and accordingly, have an adverse effect on Adient's financial results.
A significant disruption in the supply of a key component due to a work stoppage at one of Adient's suppliers or any other supplier could have the same consequences, and accordingly, have an adverse effect on Adient's financial results. Adient may be unable to realize the expected benefits of its restructuring actions, which could adversely affect its profitability and operations.
Adient cannot guarantee that it will pay dividends in the future which may impact Adient’s investor base. A variety of other factors could adversely affect Adient's results of operations.
Adient's ability to pay dividends will depend on its ongoing ability to generate cash from operations and access capital markets. Adient cannot guarantee that it will pay dividends in the future which may impact Adient’s investor base. A variety of other factors could adversely affect Adient's results of operations.
The board's decisions regarding the payment of dividends will depend on many factors, such as Adient's financial condition, earnings, sufficiency of distributable reserves, capital requirements, debt service obligations, legal requirements, regulatory constraints and other factors that the board deems relevant. Adient's ability to pay dividends will depend on its ongoing ability to generate cash from operations and access capital markets.
The Board's decisions regarding the payment of dividends will depend on many factors, such as Adient's financial condition, earnings, sufficiency of Adient plc | Form 10-K | 22 distributable reserves, capital requirements, debt service obligations, legal requirements, regulatory constraints and other factors that the board deems relevant.
Global economic conditions, including supply chain disruptions, inflationary concerns and labor availability, affect Adient's business. As discussed in greater detail below, any future distress in the industries and/or markets where Adient competes could negatively affect Adient's revenues and financial performance in future periods, result in future restructuring charges, and adversely impact Adient's ability to grow or sustain its businesses.
As discussed in greater detail below, any future distress in the industries and/or markets where Adient competes could negatively affect Adient's revenues and financial performance in future periods, result in future restructuring charges, and adversely impact Adient's ability to grow or sustain its businesses. The global automotive industry has recently experienced uncertainties due to changing macroeconomic conditions.
Risks associated with joint venture partnerships may adversely affect Adient's business and financial results. Adient has several joint ventures worldwide and may enter into additional joint ventures in the future.
Refer to Note 6, “Goodwill and Other Intangible Assets,” of the notes to the consolidated financial statements for additional information. Risks associated with joint venture partnerships may adversely affect Adient's business and financial results. Adient has several joint ventures worldwide and may enter into additional joint ventures in the future.
These increases may continue into the future as demand increases and as supply may remain constrained, which has resulted in, and may continue to result in, increased costs for Adient.
Given the United Auto Workers’ (“UAW”) strategy of targeted strikes, Adient may see increased pressure for wage and benefit increases in the U.S. These increases may continue into the future as demand increases and as supply may remain constrained, which has resulted in, and may continue to result in, increased costs for Adient.
Changes in U.S. administrative policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have an adverse effect on Adient. There is continued uncertainty about the future relationship between the U.S. and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs.
There is continued uncertainty about the future relationship between the U.S. and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs.
Adient plc | Form 10-K | 14 Unfavorable changes in the condition of the global automotive industry and the condition of individual automakers may adversely affect Adient's results of operations. Adient's financial performance depends, in part, on conditions in the automotive industry.
Unfavorable changes in the condition of the global automotive industry and the condition of individual automakers may adversely affect Adient's results of operations. Adient's financial performance depends, in part, on conditions in the automotive industry. Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences.
This authorization will need to be further renewed by ordinary resolution, being a resolution passed by a simple majority of votes cast, prior to expiration. We anticipate seeking another authorization at our next Annual General Meeting and annually thereafter. Should this authorization not be approved, our ability to issue equity could be limited which could adversely affect our securities holders.
Adient anticipates seeking another authorization at the next Annual General Meeting and annually thereafter. Should this authorization not be approved, the ability to issue equity could be limited which could adversely affect Adient’s securities holders.
Adient plc | Form 10-K | 23 Risks Related to Adient’s Jurisdiction of Incorporation As an Irish public limited company, certain capital structure decisions require shareholder approval, which may limit Adient's flexibility to manage its capital structure.
Risks Related to Adient’s Jurisdiction of Incorporation As an Irish public limited company, certain capital structure decisions require shareholder approval, which may limit Adient's flexibility to manage its capital structure. Irish law provides that a Board of Directors may allot shares (or rights to subscribe for or convertible into shares) only with the prior authorization of shareholders.
Removed
On December 30, 2020, the U.K. completed its withdrawal from the European Union and entered into an agreement regarding their future relationship, the Trade and Cooperation Agreement, which was ratified by the parties and entered into full force on May 1, 2021.
Added
Global economic conditions, including global demand for new vehicles, new vehicle affordability, supply chain disruptions, inflationary concerns and labor availability, affect Adient's business.
Removed
However, certain economic uncertainties remain in connection with the future of the U.K. and its relationship with the European Union. These uncertainties have caused and may continue to cause disruptions to capital and currency markets worldwide as well as cause disruptions on Adient’s operations.
Added
Weakening consumer demand, impacted by new vehicle affordability and a high interest rate environment, among other factors, has resulted in lower automotive production volumes. The global adoption of electric vehicles by consumers has also slowed, creating disruptions in production scheduling. More specifically, the EMEA region is faced with overcapacity issues due to lower production volumes and resulting in pricing pressures.
Removed
Given the recent United Auto Workers (“UAW”) strike beginning in September 2023, and UAW’s ongoing strategy of targeted strikes, Adient may see increased pressure for wage and benefit increases in the U.S.
Added
The EMEA region is also faced with intensifying competition from Chinese imports and lower exports to China as domestic brands expand in China.
Removed
Adient plc | Form 10-K | 18 Adient may be unable to realize the expected benefits of its restructuring actions, which could adversely affect its profitability and operations.
Added
Adient strives to offset the impact of lower production volumes through improved operational performance, including commercial negotiations with Adient’s customers and vendors and through other operational improvements that Adient can influence, however there is no guarantee that Adient will be able to sufficiently offset the impact of lower production volumes or to avoid more significant restructuring actions.
Removed
Given the current political environment, it is uncertain whether additional U.S. corporate tax reform could be expected.
Added
As a result of macroeconomic factors impacting Adient and the automotive industry, a heightened risk of impairment exists for the EMEA reporting unit as the difference between its fair value and carrying value is less than 10% as of September 30, 2024.
Removed
Potential indemnification liabilities to Adient’s former parent company pursuant to the separation agreement could adversely affect Adient.
Added
The decrease in EMEA’s fair value is driven by lower forecasted vehicle volumes from weakening consumer demand, slower consumer adoption of electric vehicles, overcapacity in the industry resulting in pricing pressure, intensifying competition from Chinese imports and lower exports to China from EMEA as domestic brands expand in China.
Removed
The separation arrangements with the Former Parent company provide for, among other things, the principal corporate transactions required to effect the separation, certain conditions to the separation and provisions governing the relationship between Adient and the Former Parent company with respect to and resulting from the separation, including ongoing relationships.
Added
As a result of the heightened risk of impairment, Adient will continuously assess the changing macroeconomic conditions in EMEA including the outlook for consumer demand for vehicles and other factors impacting the region, along with the need for further restructuring actions, all of which impact Adient’s ability to achieve its projected long-term operating performance.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeNumber of Locations Operations Administrative Owned Leased Total Owned Leased Total United States 20 10 30 2 2 4 Mexico 9 9 18 — 2 2 Germany 4 8 12 2 6 8 Thailand 3 14 17 — — — China 5 18 23 — 3 3 Czech Republic 3 5 8 — 1 1 Japan 5 2 7 1 1 2 Other EMEA 24 27 51 — 9 9 Other Asia 6 22 28 — 4 4 Other Americas 7 3 10 — — — 86 118 204 5 28 33 Adient considers its facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
Biggest changeNumber of Locations Operations Administrative Owned Leased Total Owned Leased Total United States 20 10 30 2 1 3 Mexico 8 10 18 — 1 1 Germany 3 9 12 2 6 8 Thailand 3 11 14 — — — China 5 25 30 — 3 3 Czech Republic 3 4 7 — 1 1 Japan 5 3 8 1 1 2 Other EMEA 25 28 53 — 9 9 Other Asia 6 20 26 — 4 4 Other Americas 7 2 9 — — — 85 122 207 5 26 31 Adient considers its facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
Item 2. Properties The following table sets forth Adient's principal owned and leased facilities as of September 30, 2023.
Item 2. Properties The following table sets forth Adient's principal owned and leased facilities as of September 30, 2024.
See Part II, Item 8 of this Annual Report on Form 10-K in Note 8, "Leases," of the notes to consolidated financial statements for information regarding lease commitments. Adient plc | Form 10-K | 27
See Part II, Item 8 of this Annual Report on Form 10-K in Note 8, "Leases," of the notes to consolidated financial statements for information regarding lease commitments.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeAdient accrues for potential liabilities in a manner consistent with accounting principles generally accepted in the United States, that is, when it is probable a liability has been incurred and the amount of the liability is reasonably estimable.
Biggest changeAdient accrues for potential liabilities in a manner consistent with accounting principles generally accepted in the U.S., that is, when it is probable a liability has been incurred and the amount of the liability is reasonably estimable.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed6 unchanged
Biggest changeStock Performance Graph The following information in this Item 5 is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Adient specifically incorporates it by reference into such a filing.
Biggest changeShare repurchase activity during the three months ended September 30, 2024 was as follows: Periods Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares (or Units) that may yet be Purchased Under the Plans or Programs (in millions) (1) July 1 to July 31, 2024 — $ — — $ 310 August 1 to August 31, 2024 2,326,616 21.49 2,326,616 260 September 1 to September 30, 2024 — — — 260 2,326,616 $ 21.49 2,326,616 $ 260 Stock Performance Graph The following information in this Item 5 is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Adient plc | Form 10-K | 29 Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Adient specifically incorporates it by reference into such a filing.
The graph assumes the value of the investment in Adient's ordinary shares and each index was $100 on September 30, 2018, and that all dividends were reinvested. Historic stock price performance is not necessarily indicative of future stock price performance. Adient selected a peer group comprised of representative independent automotive suppliers whose common stock is publicly traded.
The graph assumes the value of the investment in Adient's ordinary shares and each index was $100 on September 30, 2019, and that all dividends were reinvested. Historic stock price performance is not necessarily indicative of future stock price performance. Adient selected a peer group comprised of representative independent automotive suppliers whose common stock is publicly traded.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market Adient's ordinary shares are traded on the New York Stock Exchange (“NYSE”) under the symbol “ADNT.” Holders As of September 30, 2023, there were 23,057 shareholders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market Adient's ordinary shares are traded on the New York Stock Exchange (“NYSE”) under the symbol “ADNT.” Holders As of September 30, 2024, there were 22,289 shareholders of record.
The following graph shows a comparison of cumulative total shareholder return, calculated on a dividend reinvested basis, for Adient’s ordinary shares, the Standard & Poor’s 500 Index, and a peer group for September 30, 2018 through September 30, 2023.
The following graph shows a comparison of cumulative total shareholder return, calculated on a dividend reinvested basis, for Adient’s ordinary shares, the Standard & Poor’s 500 Index, the Dow Jones US Auto Parts Index and a peer group for September 30, 2019 through September 30, 2024.
During fiscal 2023, Adient repurchased $65 million of its ordinary shares at an average price of $37.00 a share under the program. As of September 30, 2023, Adient has a remaining repurchase authorization of $535 million. There was no share repurchase activity during the three months ended September 30, 2023.
During fiscal 2023, Adient repurchased $65 million of its ordinary shares at an average price of $37.00 a share under the program. During fiscal 2024, Adient repurchased $275 million of its ordinary shares at an average price of $29.18 a share under the program. As of September 30, 2024, Adient has a remaining repurchase authorization of $260 million.
The peer group referenced in the graph below consists of Autoliv, Inc., BorgWarner, Inc., Cooper-Standard Holding, Inc., Forvia SE, Goodyear Tire & Rubber, Huayu Automotive Systems Co. Ltd., Lear Corp, Magna International Inc., and Toyota Boshoku Corp. Tenneco Inc. has been removed from the peer group for all periods due to it no longer being a listed company.
The peer group referenced in the graph below consists of Autoliv, Inc., BorgWarner, Inc., Cooper-Standard Holding, Inc., Forvia SE, The Goodyear Tire & Rubber Company, Huayu Automotive Systems Co. Ltd., Lear Corporation, Magna International Inc., and Toyota Boshoku Corporation. *$100 invested on 9/30/19 in stock or index, including reinvestment of dividends. Fiscal year ending September 30.
Sep/2018 Sep/2019 Sep/2020 Sep/2021 Sep/2022 Sep/2023 Adient plc $ 100 $ 59 $ 44 $ 106 $ 71 $ 94 S&P 500 $ 100 $ 104 $ 120 $ 156 $ 132 $ 160 Dow Jones US Auto Parts $ 100 $ 91 $ 92 $ 127 $ 90 $ 109 Peer Group $ 100 $ 110 $ 118 $ 150 $ 128 $ 186
Sep/2019 Sep/2020 Sep/2021 Sep/2022 Sep/2023 Sep/2024 Adient plc $ 100 $ 75 $ 181 $ 121 $ 160 $ 98 S&P 500 $ 100 $ 115 $ 150 $ 127 $ 154 $ 210 Dow Jones US Auto Parts $ 100 $ 101 $ 140 $ 99 $ 119 $ 99 Peer Group $ 100 $ 101 $ 131 $ 113 $ 170 $ 127
Adient plc | Form 10-K | 29 *$100 invested on 9/30/18 in stock or index, including reinvestment of dividends. Fiscal year ending September 30. Copyright© 2023 Standard & Poor’s, a division of S&P Global. All rights reserved. Copyright© 2023 Russell Investment Group. All rights reserved.
Copyright© 2024 Standard & Poor’s, a division of S&P Global. All rights reserved. Copyright© 2024 Russell Investment Group. All rights reserved.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+57 added−51 removed59 unchanged
Biggest changeYear Ended September 30, (in millions) 2023 2022 2021 Net Sales Americas $ 7,220 $ 6,557 $ 6,164 EMEA 5,195 4,764 5,564 Asia 3,085 2,926 2,123 Eliminations (105) (126) (171) Total net sales $ 15,395 $ 14,121 $ 13,680 Year Ended September 30, (in millions) 2023 2022 2021 Adjusted EBITDA Americas $ 336 $ 242 $ 232 EMEA 232 138 277 Asia 464 383 486 Corporate-related costs (1) (94) (88) (78) Restructuring and impairment costs (2) (40) (25) (21) Purchase accounting amortization (3) (52) (54) (50) Restructuring related activities (4) 2 (6) (9) Gain on business divestitures, primarily related to the Yanfeng transaction (5) — — 1,188 Depreciation (290) (298) (285) Stock based compensation (34) (29) (36) Other items (6) (1) (4) 22 Earnings (loss) before interest and income taxes 523 259 1,726 Net financing charges (195) (215) (311) Other pension income (expense) (33) 10 24 Income (loss) before income taxes $ 295 $ 54 $ 1,439 Notes: (1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance.
Biggest changeAdient plc | Form 10-K | 38 The following table summarizes net sales and adjusted EBITDA by reportable segment for fiscal 2024, 2023 and 2022: (in millions) Americas EMEA Asia Corporate/Eliminations Consolidated Fiscal 2024 Net sales $ 6,763 $ 5,029 $ 2,989 $ (93) $ 14,688 Adjusted EBITDA $ 375 $ 155 $ 439 $ (89) $ 880 Fiscal 2023 Net sales $ 7,220 $ 5,195 $ 3,085 $ (105) $ 15,395 Adjusted EBITDA $ 336 $ 232 $ 464 $ (94) $ 938 Fiscal 2022 Net sales $ 6,557 $ 4,764 $ 2,926 $ (126) $ 14,121 Adjusted EBITDA $ 242 $ 138 $ 383 $ (88) $ 675 The following is a reconciliation of Adient's reportable segments' adjusted EBITDA to income before income taxes: Year Ended September 30, (in millions) 2024 2023 2022 Adjusted EBITDA Americas $ 375 $ 336 $ 242 EMEA 155 232 138 Asia 439 464 383 Subtotal 969 1,032 763 Corporate-related costs (1) (89) (94) (88) Restructuring and impairment costs (2) (168) (40) (25) Purchase accounting amortization (3) (48) (52) (54) Restructuring related activities (4) — 2 (6) Loss on disposal transactions (5) (7) (6) — Depreciation (285) (290) (298) Equity based compensation (31) (34) (29) Other items (6) 2 5 (4) Earnings before interest and income taxes 343 523 259 Net financing charges (189) (195) (215) Other pension income (expense) (21) (33) 10 Income before income taxes $ 133 $ 295 $ 54 Notes: (1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance.
Capital expenditures Fiscal 2023 compared to Fiscal 2022: A $25 million increase in capital expenditures is primarily associated with new program launches particularly in EMEA and Asia, and additional investments in continuous improvement initiatives in all regions.
Fiscal 2023 compared to Fiscal 2022: A $25 million increase in capital expenditures is primarily associated with new program launches particularly in EMEA and Asia, and additional investments in continuous improvement initiatives in all regions.
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.
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 does not generally provide for additional income taxes which would become payable upon repatriation of undistributed earnings of wholly owned foreign subsidiaries.
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 does not generally provide for additional income taxes which would become payable upon repatriation of undistributed earnings of wholly owned foreign subsidiaries.
Given current earnings and anticipated future earnings at certain subsidiaries, Adient believes that there is a reasonable possibility that sufficient positive evidence may become available that would allow the release of all, or a portion of, valuation allowances at certain subsidiaries within the next twelve months.
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.
Adjusted EBITDA increased in fiscal 2023 by $94 million due primarily to net material margin improvements ($117 million), higher current year production volumes ($81 million), non-recurring net benefits associated with insurance recoveries ($17 million), the favorable impact of foreign currencies ($22 million), higher equity income ($4 million), and lower administrative and engineering expense ($6 million), partially offset by unfavorable material economics, net of recoveries ($111 million) and higher input costs including freight, labor and utilities ($42 million).
Adjusted EBITDA increased in fiscal 2023 by $94 million due primarily to net material margin improvements ($117 million), higher production volumes ($81 million), non-recurring net benefits associated with insurance recoveries ($17 million), the favorable impact of foreign currencies ($22 million), higher equity income ($4 million), and lower administrative and engineering expense ($6 million), partially offset by unfavorable material economics, net of recoveries ($111 million) and higher input costs including freight, labor and utilities ($42 million).
The higher net income in fiscal 2023 is primarily attributable to higher overall production volumes, favorable pricing and business performance, one-time insurance recoveries, one-time income tax benefit related to the release of certain tax valuation allowances, lower SG&A expenses, lower net financing charges, and higher equity income, partially offset by unfavorable material economics, higher other pension expense, higher restructuring cost, higher income attributable to noncontrolling interests, and the unfavorable impact of foreign currencies.
The higher net income in fiscal 2023 is primarily attributable to higher overall production volumes, favorable pricing and operating performance, one-time insurance recoveries, one-time income tax benefit related to the release of certain tax valuation allowances, lower SG&A expenses, lower net financing charges, and higher equity income, partially offset by unfavorable material economics, higher other pension expense, higher restructuring cost, higher income attributable to noncontrolling interests, and the unfavorable impact of foreign currencies.
The following table illustrates estimated increases (decreases) in projected benefit obligation (“PBO”) and net periodic benefit cost excluding changes in mark-to-market adjustments and settlement charges (“NPBC”) as of September 30, 2023 and for fiscal 2023 assuming a decrease of 100 basis points in the discount rate and expected return on plan assets. Pension Benefits U.S. Plans Non-U.S.
The following table illustrates estimated increases (decreases) in projected benefit obligation (“PBO”) and net periodic benefit cost excluding changes in mark-to-market adjustments and settlement charges (“NPBC”) as of September 30, 2024 and for fiscal 2024 assuming a decrease of 100 basis points in the discount rate and expected return on plan assets. Pension Benefits U.S. Plans Non-U.S.
For fiscal 2024, Adient estimates the long-term rate of return will approximate 6.75% and 4.95% for U.S. pension and non-U.S. pension plans, respectively. Any differences between actual investment results and the expected long-term asset returns will be reflected in net periodic benefit costs in the fourth quarter of each fiscal year.
For fiscal 2025, Adient estimates the long-term rate of return will approximate 6.75% and 4.95% for U.S. pension and non-U.S. pension plans, respectively. Any differences between actual investment results and the expected long-term asset returns will be reflected in net periodic benefit costs in the fourth quarter of each fiscal year.
The restructuring actions are expected to be substantially completed by fiscal 2025. During fiscal 2022, Adient committed to a restructuring plan (“2022 Plan”) of $25 million that was offset by $10 million of prior year underspend. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions in EMEA and Americas.
The restructuring actions are expected to be substantially completed by fiscal 2025. During fiscal 2022, Adient committed to a restructuring plan (“2022 Plan”) of $25 million that was offset by $10 million of prior year underspend. The restructuring actions related to cost reduction initiatives and consist primarily of workforce reductions in EMEA and Americas.
Price volatility has resulted in an overall increase of input costs for Adient that may not be, or may only be partially, offset through customer negotiations. During fiscal 2024, commodity prices and availability could fluctuate throughout the year and significantly affect Adient's results of operations.
Price volatility has resulted in an overall increase of input costs for Adient that may not be, or may only be partially, offset through customer negotiations. During fiscal 2025, commodity prices and availability could fluctuate throughout the year and significantly affect Adient's results of operations.
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. Restructuring Costs Adient accrues costs in connection with its restructuring actions.
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. Restructuring Costs Adient accrues costs in connection with its restructuring actions.
Loans under the ABL Credit Facility may be denominated, at the option of Adient, in U.S. dollars, Euros, Pounds Sterling or Swedish Kroner. It also provides flexibility for future amendments to the ABL Facility to incorporate certain sustainability-based pricing provisions.
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.
During fiscal 2023, Adient repurchased an additional €700 million ($743 million) of the 3.50% unsecured notes due 2024 at a premium of €7 million ($7 million) plus €3 million ($3 million) of accrued and unpaid interest, and expensed €2 million ($2 million) of previously deferred financing costs to net financing charges.
During fiscal 2023, Adient repurchased €700 million ($743 million) of the 3.50% unsecured notes due 2024 at a premium of €7 million ($7 million) plus €3 million ($3 million) of accrued and unpaid interest, and expensed €2 million ($2 million) of previously deferred financing costs to net financing charges.
During fiscal 2023, Adient concluded that indicators of other-than-temporary impairment were present related to two nonconsolidated partially-owned affiliates, and recorded a $6 million ($3 million in Asia and $3 million in EMEA) non-cash impairment as a result.
No other-than-temporary impairment indicators were present in fiscal 2024. During fiscal 2023, Adient concluded that indicators of other-than-temporary impairment were present related to two nonconsolidated partially-owned affiliates, and recorded a $6 million ($3 million in Asia and $3 million in EMEA) non-cash impairment as a result.
Adjusted EBITDA increased in fiscal 2023 by $94 million due to higher current year production volumes ($93 million), net material margin improvements including the impact of the KEIPER supply agreement modifications ($79 million), non-recurring net benefits associated with insurance recoveries ($13 million), and higher equity income ($1 million), partially offset by higher labor, utility and launch costs ($58 million), unfavorable material economics, net of recoveries ($17 million), higher administrative and engineering expense due in part to the non-recurrence of prior year austerity measures ($8 million), and the unfavorable impact of foreign currencies ($9 million).
Adjusted EBITDA increased in fiscal 2023 by $94 million due to higher production volumes ($93 million), net material margin improvements including the impact of the KEIPER supply agreement modifications ($79 million), non-recurring net benefits associated with insurance recoveries ($13 million), and higher equity income ($1 million), partially offset by higher labor, utility and launch costs ($58 million), unfavorable material economics, net of recoveries ($17 million), higher administrative and engineering expense due in part to the non-recurrence of fiscal 2022 austerity measures ($8 million), and the unfavorable impact of foreign currencies ($9 million).
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.
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 Adient plc | Form 10-K | 42 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.
The year-over-year increase in cost of sales was due to higher production volumes ($1,312 million), increased utilities and labor costs along with operating inefficiencies associated with supply chain issues ($104 million), and the impact of prior year gains associated with retrospective recoveries of Brazil indirect tax credits ($29 million), partially offset by the favorable impact of foreign currencies ($282 million), favorable supplier pricing ($69 million), non-recurring current year net benefits largely associated with insurance recoveries ($29 million), the favorable impact of the KEIPER supply agreement modifications ($11 million), and lower depreciation expense ($6 million).
The year-over-year increase in cost of sales was due to higher production volumes ($1,312 million), increased utilities and labor costs along with operating inefficiencies associated with supply chain issues ($104 million), and the impact of fiscal 2022 gains associated with retrospective recoveries of Brazil indirect tax credits ($29 million), partially offset by the favorable impact of foreign currencies ($282 million), favorable supplier pricing ($69 million), non-recurring fiscal 2023 net benefits largely associated with insurance recoveries ($29 million), the favorable impact of the KEIPER supply agreement modifications ($11 million), and lower depreciation expense ($6 million).
Fiscal 2022 includes $3 million and $7 million of non-cash impairments of certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively, $8 million of transaction costs, a $14 million charge related to a non-recurring contract related settlement, $1 million of allowance for doubtful accounts resulting from the withdrawal from and sale of operations in Russia, and $2 million of loss on finalization of asset sale in Turkey, partially offset by a gain of $32 million associated with the retrospective recovery of indirect tax credits in Brazil.
Fiscal 2022 includes $3 million and $7 million of non-cash impairments of certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively, $8 million of transaction costs, a $14 million charge related to a non-recurring contract related settlement, $1 million of accounts receivable allowances resulting from the withdrawal from and sale of operations in Russia, and $2 million of loss on finalization of asset sale in Turkey, partially offset by a gain of $32 million associated with the retrospective recovery of indirect tax credits in Brazil.
For fiscal years 2023 and 2022, Adient's expected long-term return on U.S. pension plan assets used to determine net periodic benefit cost was 6.75% and 6.75% respectively. The actual rate of return on U.S. pension plans was above 6.75% in fiscal 2023 and was below 6.75% in fiscal 2022.
For fiscal years 2024 and 2023, Adient's expected long-term return on U.S. pension plan assets used to determine net periodic benefit cost was 6.75% and 6.75% respectively. The actual rate of return on U.S. pension plans was above 6.75% in fiscal 2024 and was above 6.75% in fiscal 2023.
Adient evaluates the performance of its reportable segments using an adjusted EBITDA metric defined as income before income taxes and noncontrolling interests, excluding net financing charges, restructuring and impairment costs, restructuring related-costs, net mark-to-market adjustments on pension and postretirement plans, transaction gains/losses, purchase accounting amortization, depreciation, stock-based compensation and other non-recurring items (“Adjusted EBITDA”).
Adient evaluates the performance of its reportable segments using an adjusted EBITDA metric defined as income before income taxes and noncontrolling interests, excluding net financing charges, restructuring and impairment costs, restructuring related-costs, net mark-to-market adjustments on pension and postretirement plans, transaction gains/losses, purchase Adient plc | Form 10-K | 31 accounting amortization, depreciation, stock-based compensation and other non-recurring items (“Adjusted EBITDA”).
Interest on both of these notes will be paid on April 15 and October 15 each year, beginning on October 15, 2023. These notes contain covenants that are usual and customary.
Interest on both of these notes are paid on April 15 and October 15 each year, beginning on October 15, 2023. These notes contain covenants that are usual and customary.
Adient plc | Form 10-K | 36 As a result of Adient's fiscal 2022 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that certain deferred tax assets in Canada, Japan, and other jurisdictions would not be realized and recorded income tax expense of $12 million, $3 million and $3 million, respectively, to establish valuation allowances.
As a result of Adient's fiscal 2022 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that certain deferred tax assets in Canada, Japan, and other jurisdictions would not be realized and recorded income tax expense of $12 million, $3 million and $3 million, respectively, to establish valuation allowances.
Adjusted EBITDA increased in 2023 by $81 million due primarily to favorable volume and mix ($72 million), net material margin improvements including the impact of the KEIPER supply agreement modifications and including certain favorable pricing adjustments in China that are non-recurring ($25 million), higher equity income at partially-owned affiliates ($13 million), favorable operating performance ($17 million), and favorable impact of material economics, net of recoveries ($4 million), partially offset by the unfavorable impact of foreign currencies ($26 million), the impact of the KEIPER supply agreement modifications on equity income ($18 million), and higher administrative and engineering expense ($6 million).
Adient plc | Form 10-K | 41 Adjusted EBITDA increased in 2023 by $81 million due primarily to favorable volume and mix ($72 million), net material margin improvements including the impact of the KEIPER supply agreement modifications and including certain favorable pricing adjustments in China that are non-recurring ($25 million), higher equity income at partially-owned affiliates ($13 million), favorable operating performance ($17 million), and favorable impact of material economics, net of recoveries ($4 million), partially offset by the unfavorable impact of foreign currencies ($26 million), the impact of the KEIPER supply agreement modifications on equity income ($18 million), and higher administrative and engineering expense ($6 million).
Adient cautions that Adient plc | Form 10-K | 30 these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Adient’s control, that could cause Adient’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the effects of local and national economic, credit and capital market conditions (including the persistence of high interest rates and volatile currency exchange rates) on the global economy, work stoppages, including due to strikes (such as the UAW strike in the U.S. that commenced in September 2023), supply chain disruptions and similar events, wage inflationary pressures due to labor shortages and new labor negotiations, volatile energy markets, Adient’s ability and timing of customer recoveries for increased input costs, the availability of raw materials and component products (including components required by our customers for the manufacture of vehicles), geopolitical uncertainties such as the Ukraine and Middle East conflicts and the impact on the regional and global economies and additional pressure on supply chain and vehicle production, the ability of Adient to execute its restructuring plans and achieve the desired benefit, automotive vehicle production levels, mix and schedules, as well as our concentration of exposure to certain automotive manufacturers, the ability of Adient to effectively launch new business at forecast and profitable levels, the ability of Adient to meet debt service requirements and, terms of future financing, the impact of global tax reform legislation, uncertainties in U.S. administrative policy regarding trade agreements, tariffs and other international trade relations, shifts in market shares among vehicles, vehicle segments or away from vehicles on which Adient has significant content, changes in consumer demand, global climate change and related emphasis on ESG matters by various stakeholders, and the ability of Adient to achieve its ESG-related goals, cancellation of or changes to commercial arrangements, and the ability of Adient to identify, recruit and retain key leadership.
Adient cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Adient’s control, that could cause Adient’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to the effects of local and national economic, credit and capital market conditions (including the persistence of high interest rates, vehicle affordability and volatile currency exchange rates) on the global economy, automotive vehicle production levels, mix and schedules, as well as the concentration of exposure to certain automotive manufacturers, shifts in market shares among vehicles, vehicle segments or away from vehicles on which Adient has significant content, changes in consumer demand, risks associated with Adient’s joint ventures, volatile energy markets, Adient’s ability and timing of customer recoveries for increased input costs, the availability of raw materials and component products (including components required by Adient’s customers for the manufacture of vehicles), geopolitical uncertainties such as the Ukraine and Middle East conflicts and the impact on the regional and global economies and additional pressure on supply chain and vehicle production, uncertainties in U.S. administrative policy regarding trade agreements, tariffs and other international trade relations, the ability of Adient to effectively launch new business at forecast and profitable levels, work stoppages, including due to strikes, supply chain disruptions and similar events, wage inflationary pressures due to labor shortages and new labor negotiations, the ability of Adient to execute its restructuring plans and achieve the desired benefit, the ability of Adient to meet debt service requirements and, terms of future financing, the impact of global tax reform legislation, global climate change and related emphasis on sustainability matters by various stakeholders, and the ability of Adient to achieve its sustainability-related goals, cancellation of or changes to commercial arrangements, and the ability of Adient to identify, recruit and retain key leadership.
The increase is primarily attributable to higher production volumes and favorable operating performance at Adient's partially-owned affiliates ($28 million), one-time gain on divestiture of investment at an affiliate ($4 million), and lower non-cash impairment charges recorded on certain of Adient's investments in non-consolidated affiliates ($2 million), partially offset by the impact of the KEIPER supply agreement modifications executed over the past two fiscal years ($17 million), the unfavorable impact of foreign currencies ($7 million), and restructuring-related activities at certain affiliates ($1 million).
The increase is primarily attributable to higher production volumes and favorable operating performance at Adient's partially-owned affiliates ($28 million), one-time gain on divestiture of investment at an affiliate ($4 million), and lower non-cash impairment charges recorded on certain of Adient's investments in non-consolidated affiliates ($2 million), partially offset by the impact of the KEIPER supply agreement modifications ($17 million), the unfavorable impact of foreign currencies ($7 million), and restructuring-related activities at certain affiliates ($1 million).
Based on information provided by its independent actuaries and other relevant sources, Adient believes that the assumptions used are reasonable; however, changes in these assumptions could impact Adient's financial position, results of operations or cash flows.
Based on information provided by its independent actuaries and other relevant sources, Adient believes that the assumptions used to measure Adient’s pension obligations are reasonable; however, changes in these assumptions could impact Adient's financial position, results of operations or cash flows.
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 contain uncertainties as they require management to make assumptions about market comparables, future cash flows and appropriate discount rates (based on weighted average cost of capital ranging from 17.0% to 20.5% at September 30, 2023) to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value and related premium.
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 contain uncertainties as they require management to make assumptions about market comparables, future cash flows and appropriate discount rates (based on weighted average cost of capital ranging from 15.5% to 18.5% at September 30, 2024) to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value and related premium.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Presentation of Information Unless the context requires otherwise, references to "Adient plc" or "Adient" refer to Adient plc and its consolidated subsidiaries. The information presented herein are based on management’s perspective of Adient’s results of operations.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Presentation of Information Adient plc | Form 10-K | 30 Unless the context requires otherwise, references to "Adient plc" or "Adient" refer to Adient plc and its consolidated subsidiaries. The information presented herein are based on management’s perspective of Adient’s results of operations.
The-year-over year decrease in SG&A is attributable to the favorable impact of foreign currencies ($12 million), one-time gain on sale of a restructured facility ($10 million), lower transaction costs ($5 million), non-recurring unfavorable prior year costs ($17 million), lower overall engineering and other administrative spending ($15 million), and lower depreciation and amortization expense ($4 million), partially offset by higher compensation expense including stock-based and performance-based incentive compensation costs due in part to the non-recurrence of prior year austerity measures ($19 million).
The-year-over year decrease in SG&A is attributable to the favorable impact of foreign currencies ($12 million), one-time gain on sale of a restructured facility ($10 million), lower transaction costs ($5 million), non-recurring unfavorable fiscal 2022 costs ($17 million), lower overall Adient plc | Form 10-K | 34 engineering and other administrative spending ($15 million), and lower depreciation and amortization expense ($4 million), partially offset by higher compensation expense including stock-based and performance-based incentive compensation costs due in part to the non-recurrence of fiscal 2022 austerity measures ($19 million).
Plan assets and obligations are measured annually, or more frequently if there is a remeasurement event, based on Adient's measurement date utilizing various actuarial assumptions such as discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend Adient plc | Form 10-K | 46 rates as of that date.
Plan assets and obligations are measured annually, or more frequently if there is a remeasurement event, based on Adient's measurement date utilizing various actuarial assumptions such as discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates as of that date.
Also, certain corporate-related Adient plc | Form 10-K | 38 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.
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.
For fiscal years 2023 and 2022, Adient's weighted average expected long-term return on non-U.S. pension plan assets was 4.53% and 3.20%, respectively. The actual rate of return on non-U.S. pension plans was below 4.53% in fiscal 2023 and was above 3.20% in fiscal 2022.
For fiscal years 2024 and 2023, Adient's weighted average expected long-term return on non-U.S. pension plan assets was 4.95% and 4.53%, respectively. The actual rate of return on non-U.S. pension plans was above 4.95% in fiscal 2024 and was below 4.53% in fiscal 2023.
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.
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. During fiscal 2023, Adient Global Holdings Ltd.
Adient plc | Form 10-K | 41 Liquidity and Capital Resources Adient's primary liquidity needs are to fund general business requirements, including working capital, capital expenditures, restructuring costs and debt service requirements. Adient's principal sources of liquidity are cash flows from operating activities, the revolving credit facility and other debt issuances, and existing cash balances.
Liquidity and Capital Resources Adient's primary liquidity needs are to fund general business requirements, including working capital, capital expenditures, restructuring costs and debt service requirements. Adient's principal sources of liquidity are cash flows from operating activities, the revolving credit facility and other debt issuances, and existing cash balances.
Reflecting the relatively long-term nature of the plans' obligations, approximately 60% of the plans' assets are invested in fixed income securities and 15% in equity securities, with the remainder primarily invested in alternative investments.
Reflecting the relatively long-term nature of the plans' obligations, approximately 70% of the plans' assets are invested in fixed income securities and 10% in equity securities, with the remainder primarily invested in alternative investments.
Plans (in millions) Change in PBO Change in NPBC Change in PBO Change in NPBC 100 basis point decrease in discount rate $ 1 $ — $ 40 $ (2) 100 basis point decrease in expected return on plan assets N/A — N/A 3 Refer to Note 14, "Retirement Plans," of the notes to consolidated financial statements for more information on Adient's pension plans.
Plans (in millions) Change in PBO Change in NPBC Change in PBO Change in NPBC 100 basis point decrease in discount rate $ — $ — $ 42 $ (1) 100 basis point decrease in expected return on plan assets N/A — N/A 2 Refer to Note 14, “Retirement Plans,” of the notes to consolidated financial statements for more information on Adient's pension plans.
During fiscal 2023, Adient also announced a share repurchase authorization (up to $600 million) with no expiration date, wherein Adient expects to take a measured approach as to the timing and amount of share repurchases as part of its assessment of the most effective use of cash.
During fiscal 2023, Adient announced a share repurchase authorization (up to $600 million) with no expiration date, wherein Adient has taken and will continue to take a measured approach as to the timing and amount of share repurchases as part of its assessment of the most effective use of cash.
For the non-U.S. pension, Adient consistently uses the relevant country specific benchmark indices for determining the various discount rates. Adient's discount rate on U.S. pension plans was 5.87% and 5.51% at September 30, 2023 and 2022, respectively. Adient's weighted average discount rate on non-U.S. plans was 5.60% and 4.98% at September 30, 2023 and 2022, respectively.
For the non-U.S. pension, Adient consistently uses the relevant country specific benchmark indices for determining the various discount rates. Adient's discount rate on U.S. pension plans was 4.99% and 5.87% at September 30, 2024 and 2023, respectively. Adient's weighted average discount rate on non-U.S. plans was 4.75% and 5.60% at September 30, 2024 and 2023, respectively.
Overview Adient is a global leader in the automotive seating supply industry with relationships with the largest global auto manufacturers. Adient's technologies extend into virtually every area of automotive seating solutions, including complete seating systems, frames, mechanisms, foam, head restraints, armrests and trim covers.
Overview Adient is a global leader in the automotive seating supply 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.
Additionally, Adient determined it was more likely than not that deferred tax assets in the Czech Republic and other jurisdictions would be realizable and recorded income tax benefit of $11 million and $2 million, respectively, to release valuation allowances.
Additionally, Adient determined it was more likely than not that deferred tax assets in the Czech Republic and other jurisdictions would be realizable and recorded income tax benefit of $11 million and $2 million, respectively, to release valuation allowances. Adient is subject to income taxes in Ireland, the U.S. and other non-U.S. jurisdictions.
Adient plc | Form 10-K | 47 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.
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.
If Adient's actual returns on plan assets are less than Adient's expectations, additional contributions may be required. In fiscal 2023, total Adient contributions to the defined benefit pension plans were $17 million. Adient expects to contribute at least $20 million in cash to its defined benefit pension plans in fiscal 2024.
If Adient's actual returns on plan assets are less than Adient's expectations, additional contributions may be required. Adient plc | Form 10-K | 47 In fiscal 2024, total Adient contributions to the defined benefit pension plans were $20 million. Adient expects to contribute at least $10 million in cash to its defined benefit pension plans in fiscal 2025.
During fiscal 2023, Adient committed to a restructuring plan (“2023 Plan”) of $39 million. Adient also recorded additional charges totaling $1 million related to prior year plans. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions in EMEA.
Restructuring costs are included in restructuring and impairment costs in the consolidated statements of income. During fiscal 2023, Adient committed to a restructuring plan (“2023 Plan”) of $39 million. Adient also recorded additional charges totaling $1 million related to prior year plans. The restructuring actions related to cost reduction initiatives and consist primarily of workforce reductions in EMEA.
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, 2023 and 2022, $170 million and $269 million have been funded under these programs, respectively.
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 both September 30, 2024 and September 30, 2023, $170 million was funded under these programs.
Other Pension Expense (Income) Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Other pension expense (income) $ 33 >100% $ (10) 58% $ (24) Other pension expense (income) consists of mark-to-market adjustments of Adient's retirement plans and non-service components of Adient's net periodic pension costs.
Other Pension Expense (Income) Year Ended September 30, (in millions) 2024 Change 2023 Change 2022 Other pension expense (income) $ 21 (36)% $ 33 >100% $ (10) Other pension expense (income) consists of mark-to-market, curtailment and settlement adjustments, and non-service components of net periodic pension costs of Adient's retirement plans.
Other pension expense was higher by $43 million in fiscal 2023 as compared to fiscal 2022 due primarily to a $19 million current year mark-to-market loss (compared to a $8 million gain in fiscal 2022), an $8 million curtailment loss primarily associated with employee termination benefit plans in the Americas segment, and higher pension interest expense.
The higher fiscal 2023 expense compared to fiscal 2022 is due primarily to a $19 million fiscal 2023 mark-to-market loss (compared to a $8 million gain in fiscal 2022), an $8 million curtailment loss primarily associated with employee termination benefit plans in the Americas segment, and higher pension interest expense.
In addition, Adient US and Adient Global Holdings S.à r.l., a wholly-owned subsidiary of Adient, maintain a senior secured term loan facility (the “Term Loan B Agreement”) that had an outstanding balance of $988 million as of September 30, 2022.
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 $632 million as of September 30, 2024.
Comprehensive Income Attributable to Adient Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Comprehensive income (loss) attributable to Adient $ 208 >100% $ (338) >(100%) $ 1,146 Comprehensive income attributable to Adient was $208 million in fiscal 2023 compared to $338 million of comprehensive loss in fiscal 2022.
Comprehensive Income (Loss) Attributable to Adient Year Ended September 30, (in millions) 2024 Change 2023 Change 2022 Comprehensive income (loss) attributable to Adient $ 167 (20)% $ 208 >100% $ (338) Comprehensive income attributable to Adient was $167 million in fiscal 2024 compared to $208 million of comprehensive income in fiscal 2023.
As of September 30, 2023, Adient had not drawn down on the ABL Credit Facility and had availability under this facility of approximately $900 million (net of $12 million of letters of credit).
As of September 30, 2024, Adient had not drawn down on the ABL Credit Facility and had availability under this facility of approximately $779 million (net of $11 million of letters of credit).
Adient plc | Form 10-K | 35 Refer to Note 9, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for information related to the components of Adient's net financing charges.
Refer to Note 9, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for information related to the components of Adient's net financing charges.
Net Income (Loss) Attributable to Adient Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Net income (loss) attributable to Adient $ 205 >100% $ (120) >(100%) $ 1,108 Adient plc | Form 10-K | 37 Net income attributable to Adient was $205 million in fiscal 2023, compared to $120 million of net loss attributable to Adient in fiscal 2022.
Adient plc | Form 10-K | 37 Net Income (Loss) Attributable to Adient Year Ended September 30, (in millions) 2024 Change 2023 Change 2022 Net income (loss) attributable to Adient $ 18 (91)% $ 205 >100% $ (120) Net income attributable to Adient was $18 million for fiscal 2024, compared to an income of $205 million for fiscal 2023.
This includes repayment of long-term debt of $744 million (including $34 million of premiums), amounts paid to acquire the noncontrolling interest of CQADNT ($153 million), and higher dividend payments to noncontrolling interests. These are partially offset by current year debt refinancing activities totaling $102 million and common stock repurchases of $65 million.
This includes repayment of long-term debt of $744 million (including $34 million of premiums), amounts paid to acquire the noncontrolling interest of Chongqing Adient Automotive Components Co., Ltd. ($153 million), and higher dividend payments to noncontrolling interests. These are partially offset by fiscal 2023 debt refinancing activities totaling $102 million and common stock repurchases of $65 million.
Refer to Note 18, "Nonconsolidated Partially-Owned Affiliates," of the notes to the consolidated financial statements for additional information. Employee Benefit Plans Adient provides a range of pension benefits to its employees and retired employees. These benefits are Adient's direct obligation and have been recorded within Adient's consolidated financial statements.
Refer to Note 15, “Restructuring and Impairment Costs,” of the notes to the consolidated financial statements for additional information. Employee Benefit Plans Adient provides a range of pension benefits to its employees and retired employees. These benefits are Adient's direct obligation and have been recorded within Adient's consolidated financial statements.
Income Tax Provision Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Income tax provision (benefit) $ — n/a $ 94 (62)% $ 249 The fiscal 2023 income tax expense of $0 million was lower than the Irish statutory rate of 12.5% 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.
The fiscal 2023 income tax expense of $0 million was lower than the Irish statutory rate of 12.5% 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.
Adient plc | Form 10-K | 43 Cash flows from investing activities Fiscal 2023 compared to Fiscal 2022: The increase in cash used by investing activities is primarily related to the non-recurrence of the prior year cash inflows associated with business divestitures including the $651 million of proceeds received related to the 2021 Yanfeng Transaction, $46 million in proceeds received from the sale of the assets in Turkey, and the collection of $41 million of deferred proceeds from the sale of Adient's interest in YFAI as part of the 2020 Yanfeng Transaction.
Fiscal 2023 compared to Fiscal 2022: The increase in cash used by investing activities is primarily related to the non-recurrence of the fiscal 2022 cash inflows associated with business divestitures including the $651 million of proceeds received related to the 2021 Yanfeng Transaction (as defined and described in Form 10-K for the fiscal year ended September 30, 2021), $46 million in proceeds received from the sale of the assets in Turkey, and the collection of $41 million of deferred proceeds related to the 2020 Yanfeng Transaction (as defined and described in Form 10-K for the fiscal year ended September 30, 2021).
The increase of $546 million is due primarily to higher net income ($335 million), the favorable impact of foreign currency translation adjustments resulting from the overall weakening of U.S. dollar against certain other major currencies ($233 million) and the impact of realized and unrealized gains on derivatives ($21 million), partially offset by higher comprehensive income attributable to noncontrolling interests ($42 million).
The increase of $546 million is due primarily to higher net income ($335 million), the favorable impact of foreign currency translation adjustments ($233 million) and the impact of realized and unrealized gains on derivatives ($21 million), partially offset by higher comprehensive income attributable to noncontrolling interests ($42 million).
Adient reviews long-lived assets, including property, plant and equipment and other intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable.
Refer to Note 6, "Goodwill and Other Intangible Assets," of the notes to the consolidated financial statements for additional information. Adient reviews long-lived assets, including property, plant and equipment and other intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable.
Adient plc | Form 10-K | 42 During fiscal 2023, Adient Global Holdings Ltd. (“AGH”), a wholly-owned subsidiary of Adient, issued (i) $500 million (net proceeds of $494 million) in aggregate principal amount of 7% senior secured notes due 2028 and (ii) $500 million (net proceeds of $494 million) in aggregate principal amount of 8.250% senior unsecured notes due 2031.
(“AGH”), a wholly-owned subsidiary of Adient, issued (i) $500 million (net proceeds of $494 million) in aggregate principal amount of 7% senior secured notes due 2028 and (ii) $500 million (net proceeds of $494 million) in aggregate principal amount of 8.250% senior unsecured notes due 2031.
Adient estimated that upon completion of the restructuring actions, the fiscal 2021 restructuring plan would reduce annual operating costs by approximately $23 million, which was primarily the result of lower costs of sales and selling, general and administrative expenses due to reduced Adient plc | Form 10-K | 48 employee-related costs, of which approximately 20%-30% would result in net savings.
Adient estimates that upon completion of the restructuring actions, the fiscal 2024 restructuring plan would reduce annual operating costs by approximately $110 million, which was primarily the result of lower costs of sales and selling, general and administrative expenses due to reduced employee-related costs, of which approximately 60% would result in net savings.
(6) Fiscal 2023 reflects $3 million and $3 million of non-cash impairment related to certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively, and $3 million of transaction costs, partially offset by $4 million of one-time divestiture gain at an affiliate, and $4 million of a gain associated with the retrospective recovery of indirect tax credits in Brazil.
Fiscal 2023 reflects $3 million and $3 million of non-cash impairment related to certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively, (6) Fiscal 2024 reflects 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 of transaction costs and a $1 million one-time divestiture related impact at an affiliate.
The increase in net sales is attributable to higher overall production volumes in all operating segments and favorable pricing, partially offset by the unfavorable impact of foreign currencies and unfavorable material economics recoveries. • Gross profit was $1,033 million, or 6.7% of net sales for fiscal 2023 compared to $807 million, or 5.7% of net sales for fiscal 2022.
The decrease in net sales is attributable to Adient's lower overall production volumes in all regions, the unfavorable impact of foreign currencies, and unfavorable material economics recoveries, partially offset by favorable net pricing adjustments. • Gross profit was $928 million, or 6.3% of net sales for fiscal 2024 compared to $1,033 million, or 6.7% of net sales for fiscal 2023.
Intangible assets with definite lives continue to be amortized over their estimated useful lives and are subject to impairment testing as part of their asset group if events or changes in circumstances indicate that the asset might be impaired. A considerable amount of management judgment and assumptions are required in performing the impairment tests.
Intangible assets with definite lives continue to be amortized over Adient plc | Form 10-K | 46 their estimated useful lives and are subject to impairment testing as part of their asset group if events or changes in circumstances indicate that the asset might be impaired.
The following policies are considered by management to be the most critical in understanding the judgments that are involved in the preparation of Adient's consolidated financial statements and the uncertainties that could impact results of operations, financial position and cash flows.
The following policies are considered by management to be the most critical in understanding the judgments that are involved in the preparation of Adient's consolidated financial statements and the uncertainties that could impact results of operations, financial position and cash flows. Revenue Recognition Adient provides production and service parts to its customers under awarded multi-year programs.
Equity Income Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Equity income (loss) $ 84 12% $ 75 (95)% $ 1,484 Equity income was $84 million in fiscal 2023 compared to $75 million in fiscal 2022.
Equity Income Year Ended September 30, (in millions) 2024 Change 2023 Change 2022 Equity income $ 90 7% $ 84 12% $ 75 Equity income was $90 million for fiscal 2024, compared to $84 million for fiscal 2023.
No triggering events were identified during fiscal 2023 and 2022. Adient monitors its investments in partially-owned affiliates for indicators of other-than-temporary declines in value on an ongoing basis.
A considerable amount of management judgment and assumptions are required in performing the impairment tests. No triggering events were identified during fiscal 2024 and 2023. Adient monitors its investments in partially-owned affiliates for indicators of other-than-temporary declines in value on an ongoing basis.
Selling, General and Administrative Expenses Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Selling, general and administrative expenses $ 554 (7)% $ 598 11% $ 537 % of sales 3.6 % 4.2 % 3.9 % Selling, general and administrative expenses (“SG&A”) in fiscal 2023 decreased by $44 million, or 7%, as compared to fiscal 2022.
Selling, General and Administrative Expenses Year Ended September 30, (in millions) 2024 Change 2023 Change 2022 Selling, general and administrative expenses $ 507 (8)% $ 554 (7)% $ 598 % of sales 3.5 % 3.6 % 4.2 % SG&A for fiscal 2024 decreased by $47 million, or 8%, as compared to fiscal 2023.
Equity income was $75 million in fiscal 2022 compared to $1,484 million in fiscal 2021.
Equity income was $84 million in fiscal 2023 compared to $75 million in fiscal 2022.
Income Attributable to Noncontrolling Interests Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Income attributable to noncontrolling interests $ 90 13% $ 80 (2)% $ 82 The $10 million increase in income attributable to noncontrolling interests in fiscal 2023 as compared to fiscal 2022 is primarily attributable to higher production volumes at affiliates in various jurisdictions.
The $10 million increase in income attributable to noncontrolling interests in fiscal 2023 as compared to fiscal 2022 is primarily attributable to higher production volumes at affiliates in various jurisdictions.
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%.
Interest is payable on the ABL Credit Facility at a fluctuating rate of interest determined by reference to Term Secured Overnight Financing Rate (“SOFR”), in the case of amounts outstanding in Dollars, Euro Interbank Offered Rate (“EURIBOR”), in the case of amounts outstanding in Euros, Stockholm Interbank Offered Rate (“STIBOR”), in the case of amounts outstanding in Swedish Krona and Sterling Over Night Indexed Average (“SONIA”), in the case of amounts outstanding in Pounds Sterling, in each case, plus an applicable margin of 1.50% to 2.00%.
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.
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.
Adient plc | Form 10-K | 32 • Net income attributable to Adient was $205 million for fiscal 2023, compared to a loss of $120 million for fiscal 2022.
Net income attributable to Adient was $205 million in fiscal 2023, compared to $120 million of net loss attributable to Adient in fiscal 2022.
Comprehensive loss attributable to Adient was $338 million for fiscal 2022 compared to comprehensive income attributable to Adient for fiscal 2021 of $1,146 million.
Comprehensive income attributable to Adient was $208 million in fiscal 2023 compared to $338 million of comprehensive loss in fiscal 2022.
Net Financing Charges Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Net financing charges $ 195 (9)% $ 215 (31)% $ 311 Net financing charges decreased by $20 million in fiscal 2023 as compared to fiscal 2022 due to higher premiums paid to tender outstanding debt in the prior year and higher accelerated expensing of deferred financing costs in the prior year.
Net financing charges decreased by $20 million in fiscal 2023 as compared to fiscal 2022 due to higher premiums paid to tender outstanding debt and higher accelerated expensing of deferred financing costs during fiscal 2022.
Light vehicle production levels by geographic region are provided below: Light Vehicle Production (units in millions) 2023 Change 2022 Change 2021 Global 87.8 7.6 % 81.6 2.6 % 79.5 North America 15.5 9.9 % 14.1 3.7 % 13.6 South America 3.0 7.1 % 2.8 3.7 % 2.7 Europe 17.5 12.2 % 15.6 -9.8 % 17.3 China 27.3 2.2 % 26.7 7.2 % 24.9 Asia, excluding China, and Other 24.5 9.4 % 22.4 6.7 % 21.0 Source: S&P Global, October 2023 Financial Results Summary Significant aspects of Adient's financial results for fiscal 2023 are summarized below.
Light vehicle production levels by geographic region are provided below: Light Vehicle Production (units in millions) 2024 Change 2023 Change 2022 Global 89.4 1.5 % 88.1 8.0 % 81.6 North America 15.6 0.6 % 15.5 9.9 % 14.1 South America 2.8 -6.7 % 3.0 7.1 % 2.8 Europe 16.2 -2.4 % 16.6 15.3 % 14.4 Other EMEA 1.3 18.2 % 1.1 -8.3 % 1.2 China 29.5 7.7 % 27.4 2.6 % 26.7 Asia, excluding China 24.0 -2.0 % 24.5 9.4 % 22.4 Source: S&P Global, October 2024 Financial Results Summary Significant aspects of Adient's financial results for fiscal 2024 include the following: • Adient recorded net sales of $14,688 million for fiscal 2024, representing a decrease of $707 million when compared to fiscal 2023.
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.
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.
Adient plc | Form 10-K | 33 Cost of Sales / Gross Profit Year Ended September 30, (in millions) 2023 Change 2022 Change 2021 Cost of sales $ 14,362 8% $ 13,314 4% $ 12,854 Gross profit 1,033 28% 807 (2)% 826 % of sales 6.7 % 5.7 % 6.0 % Cost of sales increased by $1,048 million, or 8%, and gross profit increased by $226 million in fiscal 2023 as compared to fiscal 2022.
Cost of Sales / Gross Profit Year Ended September 30, (in millions) 2024 Change 2023 Change 2022 Cost of sales $ 13,760 (4)% $ 14,362 8% $ 13,314 Gross profit 928 (10)% 1,033 28% 807 % of sales 6.3 % 6.7 % 5.7 % Cost of sales decreased by $602 million, or 4%, and gross profit decreased by $105 million, or 10%, during fiscal 2024 as compared to fiscal 2023.
As a result of Adient's fiscal 2021 analysis of the realizability of its worldwide deferred tax assets, and after considering tax planning initiatives and other positive and negative evidence, Adient determined it was more likely than not that certain deferred tax assets in the Czech Republic, Korea, Mexico, and other jurisdictions would not be realized and recorded income tax expense of $5 million, $5 million, $8 million, and $4 million, respectively, to establish valuation allowances.
Adient plc | Form 10-K | 36 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.
These accruals include estimates primarily related to employee headcount, local statutory benefits, and other employee termination costs. Actual costs may vary from these estimates. These accruals are reviewed on a quarterly basis and changes to restructuring actions are appropriately recognized when identified. Refer to Note 15, “Restructuring and Impairment Costs,” of the notes to consolidated financial statements for more information.
These accruals include estimates primarily related to employee headcount, local statutory benefits, and other employee termination costs. Actual costs may vary from these estimates. These Adient plc | Form 10-K | 48 accruals are reviewed on a quarterly basis and changes to restructuring actions are appropriately recognized when identified.
Adient believes that its current financials resources will be sufficient to fund its liquidity requirements for at least the next twelve months.
Following the first quarter of fiscal 2019 dividend payout, Adient suspended future dividends. Adient believes that its current financial resources will be sufficient to fund its liquidity requirements for at least the next twelve months.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe hedge is deemed as highly effective if the ratio is between 80% and 125%. For all designated net investment hedges, Adient assessed its net investment position in non-U.S. operations and compared it with the outstanding net investment hedge principal on a quarterly basis.
Biggest changeThe hedges are not expected to incur any ineffectiveness, however, a quarterly qualitative assessment of effectiveness is done to determine if the critical terms match method remains appropriate to use. For all designated net investment hedges, Adient assesses its net investment position in non-U.S. operations and compares it with the outstanding net investment hedge principal on a quarterly basis.
During fiscal 2023, Adient had hedge contracts outstanding with the aim of hedging balance sheet items, or with the aim of hedging forecasted commitments. Foreign exchange contracts hedging balance sheet items are marked-to-market through the income statement, while foreign exchange contracts to hedge forecasted commitments are designated in a hedge relationship as a cash flow hedge.
During fiscal 2024, Adient had hedge contracts outstanding with the aim of hedging balance sheet items, or with the aim of hedging forecasted commitments. Foreign exchange contracts hedging balance sheet items are marked-to-market through the income statement, while foreign exchange contracts to hedge forecasted commitments are designated in a hedge relationship as a cash flow hedge.
At September 30, 2023 and 2022, Adient estimates that the fair value of outstanding foreign exchange contracts would have been adversely impacted by approximately $47 million and $31 million, respectively, from an unfavorable 10% change in all applicable foreign currency exchange rates versus the U.S. Dollar.
At September 30, 2024 and 2023, Adient estimates that the fair value of outstanding foreign exchange contracts would have been adversely impacted by approximately $72 million and $47 million, respectively, from an unfavorable 10% change in all applicable foreign currency exchange rates versus the U.S. Dollar.
The currency effects of its euro-denominated bond and foreign currency forward contracts are reflected in the accumulated other comprehensive income account (“AOCI”) within shareholders' equity attributable to Adient where they offset gains and losses recorded on Adient's net investments in Europe and China.
The currency effects of the foreign currency forward contracts are reflected in the accumulated other comprehensive income account (“AOCI”) within shareholders' equity attributable to Adient where they offset gains and losses recorded on Adient's net investments in China.
These are marked-to-market through other comprehensive income when effective. Adient's euro-denominated bond and certain foreign currency forward contracts have been designated to selectively hedge portions of Adient's net investments in Europe and China.
These are marked-to-market through other comprehensive income when effective. As of September 30, 2024, certain foreign currency forward contracts have been designated to selectively hedge portions of Adient's net investments in China.
Adient performs hedge effectiveness testing on an ongoing basis depending on the type of hedging instrument used. All other derivatives not designated as hedging instruments under ASC 815, “Derivatives and Hedging,” are revalued in the consolidated statements of income.
Adient performs hedge effectiveness testing on an ongoing basis depending on the type of hedging instrument used. All other derivatives not designated as hedging instruments under ASC 815, “Derivatives and Hedging,” are revalued in the consolidated statements of income. Adient evaluates cash flow hedges for effectiveness at inception based on the critical terms match method.
Removed
For all foreign currency derivative instruments designated as cash flow hedges, Adient tests their effectiveness at the cash flow hedge’s inception and on an on-going basis.
Removed
The fair value of the hedged exposures and the fair value of the hedge instruments are revalued, and the ratio of the cumulative sum of the periodic changes in the value of the hedge instruments to the cumulative sum of the periodic changes in the value of the hedge is calculated.
Removed
As of September 30, 2023, the €123 million ($130 million) aggregate principal amount of 3.50% euro-denominated unsecured notes due August 2024 was designated as a net investment hedge to selectively hedge portions of Adient's net investment in Europe.

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