Adient plc

Previous wording

This section and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "will," "would," "could," "can," "may," or similar terms. Forward-looking statements are not guarantees of future performance and Adient's actual results may differ significantly from the results discussed in the forward-looking statements. 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, uncertainties in U.S. administrative policy regarding trade agreements, tariffs and other international trade relations, 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, the ability of Adient to effectively launch new business at forecast and profitable levels, the ability of Adient to successfully identify suitable opportunities for organic investment and/or acquisitions and to integrate such investments and/or acquisitions; 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, potential adjustment of the value of deferred tax assets, global climate change and related empha…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This section and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "will," "would," "could," "can," "may," or similar terms. Forward-looking statements are not guarantees of future performance and Adient's actual results may differ significantly from the results discussed in the forward-looking statements. 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, uncertainties in U.S. administrative policy regarding trade agreements, tariffs and other international trade relations, 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, the ability of Adient to effectively launch new business at forecast and profitable levels, the ability of Adient to successfully identify suitable opportunities for organic investment and/or acquisitions and to integrate such investments and/or acquisitions; 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, potential adjustment of the value of deferred tax assets, global climate change and related empha…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The results presented below for each reporting segment were in line with internal expectations for the second quarter of fiscal 2025. However, such results are not necessarily indicative of full-year results as Adient, along with the automotive industry, faces uncertainties surrounding future production volume within the automotive industry. These uncertainties are the result of a combination of factors including weakening consumer demand due in part to vehicle affordability, the direct and indirect impacts resulting from the imposition of U.S. and foreign tariffs, market share loss for foreign/luxury OEMs in the Asia reporting unit combined with modest expected margin declines as Adient continues to win new business with local OEMs in China, intensifying competition from Chinese imports and lower exports to China from EMEA as domestic brands expand in China, overcapacity in the EMEA reporting unit resulting in pricing pressure along with continued disruptions caused by slower electric vehicle adoption rates. Refer to the consolidated results of operations and segment analysis discussion below for additional information on the impacts of these items on Adient's results.

Current wording

The results presented below for each reporting segment were in line with internal expectations for the third quarter of fiscal 2025. However, such results are not necessarily indicative of full-year results as Adient, along with the automotive industry, faces uncertainties surrounding future production volume within the automotive industry. These uncertainties are the result of a combination of factors including weakening consumer demand due in part to vehicle affordability, the direct and indirect impacts resulting from the imposition of U.S. and foreign tariffs, market share loss for foreign/luxury OEMs in the Asia reporting unit combined with modest expected margin declines as Adient continues to win new business with local OEMs in China, intensifying competition from Chinese imports and lower exports to China from EMEA as domestic brands expand in China, overcapacity in the EMEA reporting unit resulting in pricing pressure along with continued disruptions caused by slower electric vehicle adoption rates. Refer to the consolidated results of operations and segment analysis discussion below for additional information on the impacts of these items on Adient's results.

Previous wording

As a result of macroeconomic factors impacting Adient and the automotive industry as discussed above, Adient identified a triggering event and conducted a quantitative goodwill impairment assessment which resulted in a $333 million non-cash goodwill impairment in EMEA as of March 31, 2025. The Americas and Asia reporting units also showed significant declines in fair value, however, the differences between their fair values and carrying values both modestly exceeded 10% at March 31, 2025. The decrease in Americas' fair value is primarily attributable to the direct and indirect impacts stemming from the imposition of U.S. and foreign tariffs, and the decrease in Asia's fair value is primarily attributable to market share loss for foreign/luxury OEMs in the region combined with modest expected margin declines as Adient continues to win new business with local OEMs in China. Adient continuously assesses the changing macroeconomic conditions in all regions including the outlook for consumer demand for vehicles and other factors, along with the need for further restructuring actions, all of which impact Adient’s ability to achieve its projected long-term operating performance.

Current wording

As a result of macroeconomic factors impacting Adient and the automotive industry as discussed above, Adient identified a triggering event and conducted a quantitative goodwill impairment assessment which resulted in a $333 million non-cash goodwill impairment in EMEA as of March 31, 2025. The Americas and Asia reporting units also showed significant declines in fair value, however, the differences between their fair values and carrying values both modestly exceeded 10% at March 31, 2025. The decrease in Americas' fair value is primarily attributable to the direct and indirect impacts stemming from the imposition of U.S. and foreign tariffs, and the decrease in Asia's fair value is primarily attributable to market share loss for foreign/luxury OEMs in the region combined with modest expected margin declines as Adient continues to win new business with local OEMs in China. Adient continuously assesses the changing macroeconomic conditions in all regions including the outlook for consumer demand for vehicles and other factors, along with the need for further restructuring actions, all of which impact Adient’s ability to achieve its projected long-term operating performance. At June 30, 2025, after evaluating all relevant events and circumstances, including changes in the macroeconomic environment, Adient’s current and future results of operations and the trends impacting its overall market capitalization, Adient concluded there were no impairment triggering events since its recently completed quantitative impairment analysis as of March 31, 2025.

Previous wording

Adient conducts its business globally in the automotive industry, which is highly competitive and sensitive to economic, political and social factors in the various regions. During the three and six months ended March 31, 2025, global light vehicle production increased 2.4% and 1.8%, respectively, primarily driven by improved production volumes by local OEMs in China, partially offset by reduced production volumes in the North America and EMEA.

Current wording

Adient conducts its business globally in the automotive industry, which is highly competitive and sensitive to economic, political and social factors in the various regions. During the three and nine months ended June 30, 2025, global light vehicle production increased 2.3% and 2.4%, respectively, primarily driven by improved vehicle sales and stronger export activity in China, partially offset by reduced production volumes in North America and EMEA.

Previous wording

Significant aspects of Adient's financial results for the second quarter of fiscal 2025 include the following:

Current wording

Significant aspects of Adient's financial results for the third quarter of fiscal 2025 include the following:

Previous wording

•Adient recorded net sales of $3,611 million for the second quarter of fiscal 2025, representing a decrease of $139 million or 3.7% when compared to the second quarter of fiscal 2024. The decrease in net sales is primarily attributable to Adient's lower overall production volumes in EMEA and China, which is partially offset by higher production volumes in Americas and other countries in Asia, the unfavorable impact of foreign currencies, and unfavorable material economics recoveries, partially offset by favorable pricing adjustments.

Current wording

•Adient recorded net sales of $3,741 million for the third quarter of fiscal 2025, representing an increase of $25 million or 0.7% when compared to the third quarter of fiscal 2024. The increase in net sales is primarily attributable to the favorable impact of foreign currencies and favorable pricing adjustments, partially offset by Adient's lower overall production volumes in EMEA and Asia, net of higher production volumes in Americas and unfavorable material economics recoveries.

Previous wording

•Gross profit was $261 million, or 7.2% of net sales, for the second quarter of fiscal 2025 compared to $230 million, or 6.1% of net sales for the second quarter of fiscal 2024. Profitability, including gross profit as a percentage of net sales, was higher due primarily to favorable pricing adjustments and operating performance, more than offsetting lower production volumes.

Current wording

•Gross profit was $237 million, or 6.3% of net sales, for the third quarter of fiscal 2025 compared to $207 million, or 5.6% of net sales for the third quarter of fiscal 2024. Profitability, including gross profit as a percentage of net sales, was higher due primarily to favorable pricing adjustments and operating performance, more than offsetting lower overall production volumes.

Previous wording

Net sales decreased by $139 million, or 4%, in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024 due to lower overall production volumes in EMEA and China as a result of softening consumer demand in EMEA and adverse product mix in Asia, which is partially offset by production volume increases in Americas and Asia (excluding China) ($105 million), the unfavorable impact of foreign currencies ($49 million) and unfavorable material economics recoveries ($19 million), partially offset by favorable pricing adjustments ($34 million).

Current wording

Net sales increased by $25 million, or 1%, in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024 due to the favorable impact of foreign currencies ($84 million) and favorable pricing adjustments ($10 million), partially offset by lower overall production volumes in EMEA and Asia as a result of softening consumer demand in EMEA and adverse product mix in Asia, net of higher production volumes in Americas ($54 million) and unfavorable material economics recoveries ($15 million).

Previous wording

Net sales decreased by $304 million, or 4%, during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024 due to lower overall production volumes in EMEA and Asia as a result of softening consumer demand in EMEA and adverse product mix in China, which is partially offset by production volume increases in Americas ($252 million), the unfavorable impact of foreign currencies ($54 million) and unfavorable material economics recoveries ($34 million), partially offset by favorable pricing adjustments ($36 million). Refer to the segment analysis below for a discussion of segment net sales.

Current wording

Net sales decreased by $279 million, or 3%, during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024 due to lower overall production volumes in EMEA and Asia as a result of softening consumer demand in EMEA and adverse product mix in Asia, net of higher production volumes in Americas ($306 million) and unfavorable material economics recoveries ($49 million), partially offset by favorable pricing adjustments ($46 million) and the favorable impact of foreign currencies ($30 million).

Previous wording

Cost of sales decreased by $170 million, or 5%, and gross profit increased by $31 million, or 13%, in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024. The year over year decrease in cost of sales was primarily due to lower production volumes ($100 million), the favorable impact of foreign currencies ($38 million), favorable pricing adjustments including KEIPER supply agreement modifications ($20 million), favorable operating performance, net of a $9 million unfavorable tariff impact ($8 million), favorable material economics ($5 million) and lower depreciation expense ($3 million), partially offset by higher restructuring related charges ($4 million). Gross profit for the three months ended March 31, 2025 was favorably impacted by favorable pricing adjustments and favorable operating performance, partially offset by unfavorable material economics, net of recoveries, the net unfavorable impact of foreign currencies and lower production volumes.

Current wording

Cost of sales decreased by $5 million, or less than 1%, and gross profit increased by $30 million, or 14%, in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. The year over year decrease in cost of sales was primarily due to lower production volumes ($46 million), favorable pricing adjustments including KEIPER supply agreement modifications ($23 million), favorable operating performance ($9 million) and favorable material economics ($8 million), partially offset by the unfavorable impact of foreign currencies ($78 million) and higher restructuring related charges ($2 million). Gross profit for the three months ended June 30, 2025 was favorably impacted by favorable pricing adjustments, favorable operating performance which includes a $4 million net unfavorable tariff impact and the net favorable impact of foreign currencies, partially offset by unfavorable material economics, net of recoveries and lower production volumes.

Previous wording

Cost of sales decreased by $305 million, or 4%, and gross profit increased by $1 million, less than 1%, during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024. The year over year decrease in cost of sales was primarily due to lower production volumes ($207 million), the favorable impact of foreign currencies ($45 million), favorable pricing adjustments including KEIPER supply agreement modifications ($26 million), favorable operating performance, net of a $9 million unfavorable tariff impact ($17 million), favorable material economics ($12 million) and lower depreciation expense ($6 million), partially offset by higher restructuring related charges ($8 million). Gross profit for the six months ended March 31, 2025 was impacted by favorable pricing adjustments, favorable operating performance and lower depreciation expense, partially offset by lower production volumes, unfavorable material economics, net of recoveries, the net unfavorable impact of foreign currencies and higher restructuring related charges. Refer to the segment analysis below for a discussion of segment profitability.

Current wording

Cost of sales decreased by $310 million, or 3%, and gross profit increased by $31 million, or 5%, during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024. The year over year decrease in cost of sales was primarily due to lower production volumes ($253 million), favorable pricing adjustments including KEIPER supply agreement modifications ($49 million), favorable operating performance ($26 million), favorable material economics ($20 million) and lower depreciation expense ($6 million), partially offset by the unfavorable impact of foreign currencies ($33 million) and higher restructuring related charges ($10 million). Gross profit for the nine months ended June 30, 2025 was impacted by favorable pricing adjustments, favorable operating performance which includes a $13 million net unfavorable tariff impact and lower depreciation expense, partially offset by lower production volumes, unfavorable material economics, net of recoveries, higher restructuring related charges and the unfavorable impact of foreign currencies. Refer to the segment analysis below for a discussion of segment profitability.

Previous wording

SG&A expenses increased by $29 million, or 25%, in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024. The year over year increase in SG&A was primarily due to higher net engineering and other administrative spending ($15 million), higher compensation expense including the impact of prior-year compensation related austerity measures ($8 million) and third-party consulting costs associated with strategic planning ($8 million), partially offset by the favorable impact of foreign currencies ($1 million) and lower restructuring related charges ($1 million).

Current wording

SG&A expenses increased by $8 million, or 7%, in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. The year over year increase in SG&A was primarily due to higher compensation expense including the impact of prior year austerity measures ($7 million), higher net engineering and other administrative spending ($5 million) and the unfavorable impact of foreign currencies ($2 million), partially offset by gain on sale of a restructured facility ($6 million).

Previous wording

SG&A expenses increased by $7 million, or 3%, during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024. The year over year increase in SG&A was primarily due to third-party consulting costs associated with strategic planning ($8 million), higher net engineering and other administrative spending ($6 million), partially offset by lower compensation expense including lower performance-based incentive compensation costs and other compensation related austerity measures ($3 million), the favorable impact of foreign currencies ($2 million) and other non-recurring items ($2 million).

Current wording

SG&A expenses increased by $15 million, or 4%, during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024. The year over year increase in SG&A was primarily due to higher net engineering and other administrative spending ($11 million), third-party consulting costs associated with strategic planning ($8 million) and higher compensation expense including the impact of prior year austerity measures ($4 million), partially offset by a gain on the sale of a restructured facility ($6 million) and other non-recurring items ($2 million).

Previous wording

Restructuring and impairment costs were higher by $226 million during the second quarter of fiscal 2025 and higher by $238 million during the first six months of fiscal 2025 mainly due to a $333 million impairment charge relating to EMEA's goodwill during the three months ended March 31, 2025 and a $10 million impairment loss recorded on the Adient Aerospace investment during the first six months of fiscal 2025, partially offset by higher levels of restructuring charges recorded primarily in EMEA in the prior year in response to structural changes occurring in the European automotive market and to ensure Adient maintains a competitive cost structure by reducing labor costs and increasing efficiencies. Refer to Note 5, "Goodwill and Other Intangible Assets" and Note 13, "Restructuring and Impairment Costs" of the notes to the consolidated financial statements and the discussion under Liquidity and Capital Resources below for additional information related to the goodwill impairment recorded during the three months ended March 31, 2025 and Adient's restructuring plans.

Current wording

Restructuring and impairment costs were lower by $9 million during the third quarter of fiscal 2025 due primarily to a lower amount of restructuring charges in EMEA. Restructuring and impairment costs during the first nine months of fiscal 2025 were higher by $229 million due primarily to a $333 million impairment charge recorded for the EMEA segment's goodwill and a $10 million impairment loss recorded on the Adient Aerospace investment, partially offset by higher levels of restructuring charges recorded primarily in EMEA in the prior year in response to structural changes occurring in the European automotive market and to ensure Adient maintains a competitive cost structure by reducing labor costs and increasing efficiencies. Refer to Note 5, "Goodwill and Other Intangible Assets" and Note 13, "Restructuring and Impairment Costs" of the notes to the consolidated financial statements and the discussion under Liquidity and Capital Resources below for additional information related to the goodwill impairment recorded during the nine months ended June 30, 2025 and Adient's restructuring plans.

Previous wording

Equity income of $18 million for the second quarter of fiscal 2025 remained consistent compared to the second quarter of fiscal 2024. During the second quarter of fiscal 2025, Adient's equity income was impacted by favorable operating performance at partially-owned affiliates ($6 million), offset by the unfavorable impact of the KEIPER supply agreement modifications ($6 million).

Current wording

Equity income was $17 million for the third quarter of fiscal 2025, compared to $24 million in the third quarter of fiscal 2024. The decrease is primarily attributable to the unfavorable impact of the KEIPER supply agreement modifications ($6 million) and restructuring charges related to certain of Adient's investment in non-consolidated affiliates ($6 million), partially offset by favorable operating performance at partially-owned affiliates ($7 million).

Previous wording

Equity income was $43 million during the first six months of fiscal 2025, compared to $41 million during the first six months of fiscal 2024. The increase is primarily attributable to favorable operating performance at partially-owned affiliates ($15 million), a one-time gain on the sale of Setex during the first quarter of fiscal 2025 ($4 million) and a prior year unfavorable one-time divestiture related tax impact at an affiliate ($2 million), partially offset by the unfavorable impact of the KEIPER supply agreement modifications ($18 million).

Current wording

Equity income was $60 million during the first nine months of fiscal 2025, compared to $65 million during the first nine months of fiscal 2024. The decrease is primarily attributable to the unfavorable impact of the KEIPER supply agreement modifications ($24 million), restructuring charges related to certain of Adient's investment in non-consolidated affiliates ($6 million) and the unfavorable impact of foreign currencies ($2 million), partially offset by favorable operating performance at partially-owned affiliates ($22 million), a one-time gain on the sale of Setex during the first quarter of fiscal 2025 ($4 million) and a prior year unfavorable one-time divestiture related tax impact at an affiliate ($2 million).

Previous wording

Net financing charges were higher by $1 million in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024, and by $2 million during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024. The increase was due to one-time accelerated-deferred financing fee charges associated with early redemption of the 4.875% notes. Refer to Note 8, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for further information related to Adient's debt transactions and components of net financing charges.

Current wording

Net financing charges were higher by $3 million in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024 and by $5 million during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024. The increase was primarily due to one-time accelerated-deferred financing fee charges associated with early redemption of the 4.875% notes during the second quarter of fiscal 2025. Refer to Note 8, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for further information related to Adient's debt transactions and components of net financing charges.

Previous wording

Other pension expense was lower by $1 million in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024, and lower by $2 million during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024 due primarily to higher expected return on assets. Refer to Note 12, "Retirement Plans," of the notes to the consolidated financial statements for information related to the non-service components of Adient's net periodic pension costs.

Current wording

Other pension expense for the third quarter of fiscal 2025 is unchanged as compared to the third quarter of fiscal 2024, and lower by $2 million during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024 due primarily to higher expected return on assets. Refer to Note 12, "Retirement Plans," of the notes to the consolidated financial statements for information related to the non-service components of Adient's net periodic pension costs.

Previous wording

The second quarter fiscal 2025 income tax expense of $48 million was higher than the Irish statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, $19 million of tax expense related to adjustments to net operating loss deferred tax assets, $9 million of tax expense related to the establishment of an uncertain tax position, and the impact of the impairment of the non-tax-deductible portion of the EMEA goodwill balance for which there is no corresponding income tax benefit. The second quarter fiscal 2024 income tax expense of $8 million was higher than the statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, partially offset by $14 million of tax benefits from the release of uncertain tax positions due to audit closures.

Current wording

The third quarter fiscal 2025 income tax expense of $7 million was lower than the Irish statutory rate of 12.5% primarily due to $16 million of tax benefits related to audit closures and $7 million of tax benefit related to foreign exchange remeasurements of tax balances primarily in Mexico, partially offset by the inability to record a tax benefit for losses in jurisdictions with valuation allowances. The third quarter fiscal 2024 income tax expense of $40 million was higher than the statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances and $15 million of tax expense related to foreign exchange remeasurements of tax balances primarily in Mexico.

Previous wording

The first six months of fiscal 2025 income tax expense of $70 million was higher than the Irish statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, $19 million of tax expense related to adjustments to net operating loss deferred tax assets, $9 million of tax expense related to the establishment of an uncertain tax position, and the impact of the impairment of the non-tax-deductible portion of the EMEA goodwill balance for which there is no corresponding income tax benefit, partially offset by $7 million of tax benefits from the release of uncertain tax positions due to statute lapses. The first six months of fiscal 2024 income tax expense of $28 million was higher than the statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, partially offset by $17 million of tax benefits from the release of uncertain tax positions due to audit closures.

Current wording

The first nine months of fiscal 2025 income tax expense of $77 million was higher than the Irish statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, $19 million of tax expense related to adjustments to net operating loss deferred tax assets, $9 million of tax expense related to the establishment of an uncertain tax position, and the impact of the impairment of the non-tax-deductible portion of the EMEA goodwill balance for which there is no corresponding income tax benefit, partially offset by $23 million of tax benefits from audit closures and statute expirations. The first nine months of fiscal 2024 income tax expense of $68 million was higher than the statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances and $8 million of tax expense related to foreign exchange remeasurements of tax balances primarily in Mexico, partially offset by $17 million of tax benefits from the release of uncertain tax positions due to audit closures.

Previous wording

Income attributable to noncontrolling interests in the second quarter of fiscal 2025 was comparable to the second quarter of fiscal 2024. Income attributable to noncontrolling interests during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024 was impacted by higher production volumes at certain affiliates, partially offset by a $5 million adjustment to increase income attributable to noncontrolling interests recorded in fiscal 2024 related to a prior period.

Current wording

The increase in income attributable to noncontrolling interests in the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024 is primarily attributable to higher production volumes at certain affiliates, partially offset by a $5 million adjustment to increase income attributable to noncontrolling interest recorded in fiscal 2024 related to a prior period.

Previous wording

Net loss attributable to Adient was $335 million during the first six months of fiscal 2025, compared to net loss attributable to Adient of $50 million during the first six months of fiscal 2024. The increase in net loss in the first six months of fiscal 2025 is primarily attributable to the $333 million non-cash goodwill impairment charge relating to the EMEA reporting unit and the $10 million non-cash impairment on its investment in Adient Aerospace, a higher income tax provision, lower overall production volumes, unfavorable material economics, net of recoveries, the unfavorable impact of foreign currencies, and higher SG&A expenses mainly driven by third-party consulting costs associated with strategic planning and higher engineering and other administrative spending, higher equity and performance-based compensation expense, partially offset by favorable pricing adjustments, favorable operating performance and higher restructuring costs in the prior year.

Current wording

Net loss attributable to Adient was $299 million during the first nine months of fiscal 2025, compared to net loss attributable to Adient of $61 million during the first nine months of fiscal 2024. The increase in net loss in the first nine months of fiscal 2025 is primarily attributable to the $333 million non-cash goodwill impairment charge relating to the EMEA reporting unit and the $10 million non-cash impairment on its investment in Adient Aerospace, lower overall production volumes, unfavorable material economics, net of recoveries and higher SG&A expenses mainly driven by third-party consulting costs associated with strategic planning and higher engineering and other administrative spending, partially offset by favorable pricing adjustments and favorable operating performance.

Previous wording

Comprehensive loss attributable to Adient was $229 million for the second quarter of fiscal 2025 compared to $168 million of comprehensive loss for the second quarter of fiscal 2024. The increase of $61 million is due primarily to a higher net loss primarily resulting from the non-cash goodwill impairment in the EMEA reporting unit ($264 million), higher comprehensive income attributable to noncontrolling interests ($16 million), partially offset by the favorable impact of foreign currency translation adjustments ($196 million) and realized and unrealized gains on derivatives in the second quarter of fiscal 2025 compared to losses in the second quarter of fiscal 2024 ($23 million).

Current wording

Comprehensive income attributable to Adient was $176 million for the third quarter of fiscal 2025 compared to $78 million of comprehensive loss for the third quarter of fiscal 2024. The increase of $254 million is due primarily to the favorable impact of foreign currency translation adjustments ($178 million), higher net income ($54 million) and realized and unrealized gains on derivatives in the third quarter of fiscal 2025 compared to losses in the third quarter of fiscal 2024 ($45 million), partially offset by higher comprehensive income attributable to noncontrolling interests ($23 million).

Previous wording

Comprehensive loss attributable to Adient was $454 million during the first six months of fiscal 2025, compared to $10 million of comprehensive loss during the first six months of fiscal 2024. The increase of $444 million is due primarily to a higher net loss primarily resulting from the non-cash goodwill impairment in the EMEA reporting unit ($284 million), the unfavorable impact of foreign currency translation adjustments ($182 million), partially offset by higher realized and unrealized gains on derivatives ($6 million) and lower comprehensive income attributable to noncontrolling interests ($16 million).

Current wording

Comprehensive loss attributable to Adient was $278 million during the first nine months of fiscal 2025, compared to $88 million of comprehensive loss during the first nine months of fiscal 2024. The increase of $190 million is due primarily to a net loss during the first nine months of fiscal 2025 primarily resulting from the non-cash goodwill impairment in the EMEA reporting unit compared to a net income during the first nine months in fiscal 2024 ($230 million), higher comprehensive income attributable to noncontrolling interests ($7 million) and the unfavorable impact of foreign currency translation adjustments ($4 million), partially offset by unrealized gains on derivatives for the nine months ended June 30, 2025 compared to losses for the nine months ended June 30, 2024 ($51 million).

Previous wording

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments. The three months ended March 31, 2025 reflects restructuring charges of $18 million, and a non-recurring, non-cash goodwill impairment charge of $333 million in the EMEA reporting unit. The six months ended March 31, 2025 reflects restructuring charges of $31 million, a non-recurring, non-cash goodwill impairment charge of $333 million in the EMEA reporting unit, and an impairment charge of $10 million related to Adient’s investment in Adient Aerospace. Refer to Note 5, "Goodwill and Other Intangible Assets" and Note 13, "Restructuring and Impairment Costs" of the notes to the consolidated financial statements for additional information.

Current wording

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments. The three months ended June 30, 2025 reflects restructuring charges of $7 million. The nine months ended June 30, 2025 reflects restructuring charges of $38 million, a non-recurring, non-cash goodwill impairment charge of $333 million in the EMEA reporting unit, and an impairment charge of $10 million related to Adient’s investment in Adient Aerospace. Refer to Note 5, "Goodwill and Other Intangible Assets" and Note 13, "Restructuring and Impairment Costs" of the notes to the consolidated financial statements for additional information.

Previous wording

(4) Reflects restructuring-related charges for costs that are recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities. The six months ended March 31, 2025 and 2024 include a $5 million and a $10 million gain on sale of restructured facilities, respectively.

Current wording

(4) Reflects restructuring-related charges for costs that are recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities. The three months ended June 30, 2025 also includes $6 million of restructuring charges at a nonconsolidated affiliate and a $6 million gain on sale of a restructured facility. The nine months ended June 30, 2025 also includes $6 million of restructuring charges at a nonconsolidated affiliate and a $11 million gain on sale of restructured facilities. The nine months ended June 30, 2024 also includes a $10 million gain on sale of restructured facilities.

Previous wording

(5) The six months ended March 31, 2025 reflects a $4 million gain on sale of Adient's partially-owned investment in Setex. The six months ended March 31, 2024 reflects an $8 million loss on sale of 51% of Adient's interest in LFADNT. Refer to Note 3, "Acquisitions and Divestitures," of the notes to the consolidated financial statements for additional information.

Current wording

(5) The nine months ended June 30, 2025 reflects a $4 million gain on sale of Adient's partially-owned investment in Setex. The nine months ended June 30, 2024 reflects an $8 million loss on sale of 51% of Adient's interest in LFADNT. Refer to Note 3, "Acquisitions and Divestitures," of the notes to the consolidated financial statements for additional information.

Previous wording

(6) During the six months ended March 31, 2024, a $5 million adjustment was recorded to increase equity-based compensation expense related to a retired executive's equity awards that should have been recognized in periods prior to fiscal 2023.

Current wording

(6) During the nine months ended June 30, 2024, a $5 million adjustment was recorded to increase equity-based compensation expense related to a retired executive's equity awards that should have been recognized in periods prior to fiscal 2024.

Previous wording

(7) The three months ended March 31, 2025 includes $8 million of third-party consulting costs associated with strategic planning and a $1 million non-recurring loss at affiliates. The six months ended March 31, 2025 includes $8 million of third-party consulting costs associated with strategic planning and a $1 million non-recurring loss at affiliates, partially offset by a $2 million gain on a non-recurring contract related settlement. The three months ended March 31, 2024 reflects $1 million of indirect tax recoveries in Brazil. The six months ended March 31, 2024 includes a $3 million non-recurring gain on a contract related settlement and $1 million of indirect tax recoveries in Brazil, partially offset by $2 million one-time divestiture related tax impact at an affiliate.

Current wording

(7) The three months ended June 30, 2025 includes $1 million of third-party consulting costs associated with strategic planning. The nine months ended June 30, 2025 includes $9 million of third-party consulting costs associated with strategic planning and a $1 million non-recurring loss at affiliates, partially offset by a $2 million gain on a non-recurring contract related settlement. The nine months ended June 30, 2024 includes a $3 million non-recurring gain on a contract related settlement and $1 million of indirect tax recoveries in Brazil, partially offset by $1 million one-time divestiture related tax impact at an affiliate and $1 million of transaction costs.

Previous wording

Net sales increased during the second quarter of fiscal 2025 by $39 million primarily due to net favorable pricing adjustments ($31 million) and higher current quarter production volumes ($26 million), partially offset by unfavorable material economics recoveries ($10 million) and the unfavorable impact of foreign currencies ($8 million).

Current wording

Net sales increased during the third quarter of fiscal 2025 by $23 million primarily due to net favorable pricing adjustments ($21 million) and higher current quarter production volumes and mix due in part to achieving run rate production levels on prior-year program launches ($14 million), partially offset by unfavorable material economics recoveries ($7 million) and the unfavorable impact of foreign currencies ($5 million).

Previous wording

Net sales increased during the first six months of fiscal 2025 by $3 million primarily due to net favorable pricing adjustments ($30 million) and higher current year production volumes ($14 million), partially offset by unfavorable material economics recoveries ($22 million) and the unfavorable impact of foreign currencies ($19 million).

Current wording

Net sales increased during the first nine months of fiscal 2025 by $26 million primarily due to net favorable pricing adjustments ($51 million) and higher current year production volumes and mix due in part to achieving run rate production levels on prior-year program launches ($28 million), partially offset by unfavorable material economics recoveries ($29 million) and the unfavorable impact of foreign currencies ($24 million).

Previous wording

Adjusted EBITDA increased during the second quarter of fiscal 2025 by $14 million due to net favorable pricing adjustments ($34 million) and higher current quarter production volumes ($13 million), partially offset by higher SG&A expenses driven by higher engineering spending and higher administrative expenses primarily driven by prior-year compensation austerity measures ($19 million), unfavorable material economics, net of recoveries ($9 million), the unfavorable impact of foreign currencies ($4 million), and lower equity income ($1 million). A $9 million unfavorable tariff impact was offset by favorable operating performance during the current quarter.

Current wording

Adjusted EBITDA increased during the third quarter of fiscal 2025 by $13 million due to net favorable pricing adjustments ($22 million), favorable operating performance driven by lower launch costs, partially reduced by a $4 million net unfavorable tariff impact ($6 million) and higher current quarter production volumes ($2 million), partially offset by higher SG&A expenses driven by lower engineering recoveries ($8 million), the unfavorable impact of foreign currencies ($4 million), unfavorable material economics, net of recoveries ($4 million) and lower equity income ($1 million).

Previous wording

Adjusted EBITDA increased during the first six months of fiscal 2025 by $19 million due to net favorable pricing adjustments ($31 million), higher current year production volumes ($18 million) and favorable operating performance, net of a $9 million unfavorable tariff impact ($11 million), partially offset by higher SG&A expenses driven by higher engineering spending and higher administrative expenses primarily driven by prior-year compensation austerity measures ($19 million), unfavorable material economics, net of recoveries ($18 million), the unfavorable impact of foreign currencies ($3 million), and lower equity income ($1 million).

Current wording

Adjusted EBITDA increased during the first nine months of fiscal 2025 by $32 million due to net favorable pricing adjustments ($53 million), higher current year production volumes ($20 million) and favorable operating performance driven by lower launch costs, partially reduced by a $13 million net unfavorable tariff impact ($17 million), partially offset by higher SG&A expenses driven by lower engineering recoveries and higher administrative expenses primarily driven by prior-year compensation austerity measures ($27 million), unfavorable material economics, net of recoveries ($22 million), the unfavorable impact of foreign currencies ($7 million), and lower equity income ($2 million).

Previous wording

Net sales decreased during the second quarter of fiscal 2025 by $139 million primarily as a result of lower production volumes resulting from weakening consumer demand for new vehicles and product mix ($108 million), the unfavorable impact of foreign currencies ($34 million) and unfavorable material economics recoveries ($8 million), partially offset by net favorable pricing adjustments ($11 million).

Current wording

Net sales decreased during the third quarter of fiscal 2025 by $20 million primarily as a result of lower production volumes resulting from weakening consumer demand for new vehicles and product mix and from other intentional portfolio reductions ($85 million) and unfavorable material economics recoveries ($7 million), partially offset by the favorable impact of foreign currencies ($72 million).

Previous wording

Net sales decreased during the first six months of fiscal 2025 by $278 million primarily as a result of lower production volumes resulting from weakening consumer demand for new vehicles and product mix ($256 million), the unfavorable impact of foreign currencies ($28 million) and unfavorable material economics recoveries ($11 million), partially offset by net favorable pricing adjustments ($17 million).

Current wording

Net sales decreased during the first nine months of fiscal 2025 by $298 million primarily as a result of lower production volumes resulting from weakening consumer demand for new vehicles and product mix and from other intentional portfolio reductions ($341 million) and unfavorable material economics recoveries ($18 million), partially offset by the favorable impact of foreign currencies ($44 million) and net favorable pricing adjustments ($17 million).

Previous wording

Adjusted EBITDA decreased during the first six months of fiscal 2025 by $30 million due to lower production volumes and unfavorable product mix ($35 million), the unfavorable impact of foreign currencies ($9 million), unfavorable operating performance associated with net inefficiencies related to lower levels of customer orders ($8 million) and unfavorable material economics, net of recoveries ($5 million), partially offset by net favorable pricing adjustments ($22 million), lower administrative and engineering expense ($4 million) and higher equity income ($1 million).

Current wording

Adjusted EBITDA decreased during the first nine months of fiscal 2025 by $34 million due to lower production volumes and unfavorable product mix ($40 million), the unfavorable impact of foreign currencies ($11 million), unfavorable material economics, net of recoveries ($8 million), higher administrative and engineering expense ($7 million) and unfavorable operating performance associated with net inefficiencies related to lower levels of customer orders ($5 million), partially offset by net favorable pricing adjustments ($36 million) and higher equity income ($1 million).

Previous wording

Net sales decreased during the first six months of fiscal 2025 by $33 million due to lower production volumes within China resulting from lower levels of premium vehicle production volume ($12 million), net unfavorable pricing adjustments ($11 million), the unfavorable impact of foreign currencies ($9 million), and unfavorable material economics recoveries ($1 million).

Current wording

Net sales increased during the third quarter of fiscal 2025 by $9 million due to the favorable impact of foreign currencies ($18 million) and overall higher production volumes as a segment, due in part to achieving run rate production levels on prior-year program launches and despite lower production volumes within China resulting from lower levels of premium vehicle production volume ($3 million), partially offset by net unfavorable pricing adjustments ($11 million) and unfavorable material economics recoveries ($1 million).

Previous wording

Net sales decreased during the second quarter of fiscal 2025 by $35 million due to lower production volumes within China resulting from lower levels of premium vehicle production volume, partially offset by increased volumes in other Asia countries ($17 million), the unfavorable impact of foreign currencies ($9 million), net unfavorable pricing adjustments ($8 million), and unfavorable material economics recoveries ($1 million).

Current wording

Net sales decreased during the first nine months of fiscal 2025 by $24 million due to net unfavorable pricing adjustments ($22 million), lower overall production volumes driven by lower levels of premium vehicle production volume in China, net of higher production volumes in other countries in Asia ($9 million) and unfavorable material economics recoveries ($2 million), partially offset by the favorable impact of foreign currencies ($9 million).

Previous wording

Adjusted EBITDA decreased during the second quarter of fiscal 2025 by $2 million due to unfavorable production volumes and mix ($10 million) and higher administrative and engineering expense ($3 million), partially offset by favorable operating performance ($6 million), net favorable pricing adjustments ($2 million), higher equity income despite an unfavorable $6 million impact from KEIPER supply agreement modifications ($2 million) and the favorable impact of foreign currencies ($1 million).

Current wording

Adjusted EBITDA increased during the third quarter of fiscal 2025 by $12 million due to favorable operating performance and lower administrative and engineering costs ($10 million) and the favorable impact of foreign currencies ($6 million), partially offset by net unfavorable pricing adjustments ($3 million) and unfavorable production volume and mix ($1 million). Equity income was neutral in the third quarter of fiscal 2025 including an unfavorable $6 million impact from KEIPER supply agreement modifications.

Previous wording

Adjusted EBITDA decreased during the first six months of fiscal 2025 by $5 million due to unfavorable volumes and mix ($28 million), lower equity income including an unfavorable $18 million impact from KEIPER supply agreement modifications ($3 million), and higher administrative and engineering expense ($1 million), partially offset by operational improvements including improved freight costs ($11 million), net favorable pricing adjustments ($9 million) and the favorable impact of foreign currencies ($7 million).

Current wording

Adjusted EBITDA increased during the first nine months of fiscal 2025 by $7 million due to the favorable impact of foreign currencies ($13 million), operational improvements including improved freight costs ($13 million), lower administrative and engineering expense ($7 million) and net favorable pricing adjustments ($6 million), partially offset by unfavorable volumes and mix ($29 million) and lower equity income including an unfavorable $24 million impact from KEIPER supply agreement modifications ($3 million).