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," "forecast," "project," "should," 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, increased competitive pressures in the EMEA and Asia regions from Chinese OEMs, 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 particularly new entrants in the China market, 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), risks associated with warranty and product recall and product liability exposures, 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 desir…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Adient designs, manufactures and markets 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 operates more than 200 wholly- and majority-owned manufacturing or assembly facilities, with operations in 29 countries, as well as having partially-owned affiliates in China, Asia, Europe and North America. Additionally, Adient continuously analyzes organic investment and/or acquisition opportunities that could enhance its portfolio of products and capabilities to meet the evolving needs of its customers. Through its global footprint and vertical integration, Adient leverages its capabilities to drive growth in the automotive seating industry.

Current wording

Adient designs, manufactures and markets 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 operates approximately 200 wholly- and majority-owned manufacturing, assembly or sequencing facilities, with operations in 29 countries. Additionally, Adient has partially-owned affiliates in China, Asia, Europe and North America. Through its global footprint and vertical integration, Adient leverages its capabilities to drive growth in the automotive seating industry.

Previous 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.

Current wording

The results presented below are not necessarily indicative of full-year results as Adient, along with the automotive industry, continues to face a dynamic environment surrounding future production volume. This dynamic environment is the result of a combination of factors experienced over the recent past including softening 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, continued disruptions caused by slower EV adoption rates, and interruptions from other suppliers due to production downtime and shortages of critical components or raw materials. Adient has also been experiencing increased levels of discussions with taxing authorities and more aggressive negotiations by the tax authorities as part of tax audits and related inquiries, resulting in higher levels of uncertainty on tax assessment outcomes. These factors may continue to negatively impact Adient’s results in the foreseeable future. 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

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.

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 months ended December 31, 2025, global light vehicle production increased 2.1% primarily driven by improved vehicle sales and stronger export activity in Asia.

Previous wording

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

Current wording

Significant aspects of Adient's financial results for the first quarter of fiscal 2026 include the following:

Previous 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.

Current wording

•Adient recorded net sales of $3,644 million for the first quarter of fiscal 2026, representing an increase of $149 million or 4.3% when compared to the first quarter of fiscal 2025. The increase in net sales is primarily attributable to the favorable impact of foreign currencies, higher overall production volumes in Asia, net of lower overall production volumes in EMEA and Americas, and a net favorable impact of commercial pricing adjustments including customer cost recoveries.

Previous 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.

Current wording

•Gross profit was $217 million, or 6.0% of net sales, for the first quarter of fiscal 2026 compared to $216 million, or 6.2% of net sales for the first quarter of fiscal 2025. Profitability was higher due primarily to the favorable impact of foreign currencies more than offsetting the unfavorable impact of production volume/mix and higher year-over-year operating costs.

Previous 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.

Current wording

Refer to the segment analysis below for a discussion of segment profitability.

Previous 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).

Current wording

Equity income was $27 million for the first quarter of fiscal 2026, compared to $25 million in the first quarter of fiscal 2025. The increase is primarily attributable to favorable operating performance and volume at partially-owned affiliates ($8 million), partially offset by a one-time gain on the sale of Setex during the first quarter of fiscal 2025 ($4 million) and restructuring-related charges related to certain of Adient's investment in non-consolidated affiliates ($2 million).

Previous 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.

Current wording

Net financing charges were higher by $3 million in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025. The increase was primarily due to higher interest expense as a result of higher average interest rates. 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 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.

Current wording

Other pension expense for the first quarter of fiscal 2026 is unchanged as compared to the first quarter of fiscal 2025. 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 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.

Current wording

The first quarter fiscal 2026 income tax expense of $42 million was higher than the Irish statutory rate of 12.5% primarily due to the establishment of uncertain tax positions associated with a foreign tax audit settlement expected to be finalized in fiscal 2026 and the inability to record a tax benefit for losses in jurisdictions with valuation allowances, partially offset by tax benefits related to audit closures and statute expirations. The first quarter fiscal 2025 income tax expense of $22 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 and $6 million tax expense related to foreign exchange remeasurements of tax balances primarily in Mexico, partially offset by tax benefits from the release of uncertain tax positions due to statute expirations.

Previous wording

The increase in income attributable to noncontrolling interests in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024 is primarily attributable to higher production volumes at certain affiliates.

Current wording

The decrease in income attributable to noncontrolling interests in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025 is primarily attributable to lower production volumes at certain affiliates in Asia.

Previous 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).

Current wording

Comprehensive loss attributable to Adient was $8 million for the first quarter of fiscal 2026 compared to $225 million of comprehensive loss for the first quarter of fiscal 2025. The gain of $217 million is due primarily to the favorable impact of foreign currency translation adjustments ($250 million) and realized and unrealized gains on derivatives in the first quarter of fiscal 2026 compared to losses in the first quarter of fiscal 2025 ($14 million), partially offset by a net loss in the first quarter of fiscal 2026 compared to a net income in the first quarter of fiscal 2025 ($26 million) and higher comprehensive income attributable to noncontrolling interests ($21 million).

Previous wording

The results presented below 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 Factors Affecting Adient’s Operating Environment section in this Form 10-Q and within our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, for additional information on factors that have impacted Adient. Adient continues to monitor the financial results of its reporting units for implications on the recoverability of long-lived assets, including goodwill.

Current wording

The results presented below are not necessarily indicative of full-year results as Adient, along with the automotive industry, continues to face a dynamic environment surrounding future production volume. This dynamic environment is the result of a combination of factors experienced over the recent past including softening 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, and interruptions from other suppliers due to production downtime and shortages of critical components or raw materials. Adient has also been experiencing increased levels of discussions with taxing authorities and more aggressive negotiations by the tax authorities as part of tax audits and related inquiries, resulting in higher levels of uncertainty on tax assessment outcomes. These factors may continue to negatively impact Adient’s results in the foreseeable future. Refer to the Factors Affecting Adient’s Operating Environment section in this Form 10-Q and within our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, for additional information on factors that have impacted Adient.

Previous wording

The following is a reconciliation of Adient's reportable segments' adjusted EBITDA to income (loss) before income taxes:

Current wording

The following is a reconciliation of Adient's reportable segments' adjusted EBITDA to income before income taxes:

Previous 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.

Current wording

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments, including restructuring charges of $24 million and $13 million for the three months ended December 31, 2025 and 2024, respectively. During the first quarter of fiscal 2025, an impairment charge of $10 million related to Adient’s investment in Adient Aerospace was recorded. Refer to 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 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.

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 December 31, 2025 includes $5 million of restructuring-related charges primarily recorded in cost of sales and $2 million restructuring charge at partially-owned affiliates recorded within equity income. The three months ended December 31, 2024 includes $6 million in restructuring-related charges primarily recorded in cost of sales, partially offset by a $5 million gain on sale of a restructured facility in Americas recorded in SG&A.

Previous 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.

Current wording

(5) The three months ended December 31, 2024 includes a $4 million gain on sale of its partially-owned investment in Setex recorded within equity income. Refer to Note 3, "Acquisitions and Divestitures," of the notes to the consolidated financial statements for additional information.

Previous 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.

Current wording

(6) The three months ended December 31, 2025 and 2024 both include a $2 million gain on a non-recurring contract related settlement recorded in SG&A.

Previous 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).

Current wording

Net sales increased during the first quarter of fiscal 2026 by $31 million primarily due to net favorable commercial pricing adjustments including customer cost recoveries ($29 million) and the favorable impact of foreign currencies ($3 million), partially offset by lower production volumes ($1 million).

Previous 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).

Current wording

Net sales increased during the first quarter of fiscal 2026 by $76 million primarily as a result of the favorable impact of foreign currencies ($94 million), partially offset by lower production volumes resulting from weakening consumer demand for new vehicles ($14 million) and an unfavorable impact of net commercial pricing adjustments including customer cost recoveries ($4 million).

Previous wording

Adient's primary liquidity needs are to fund general business requirements, including working capital, capital expenditures, restructuring costs, debt service requirements and discretionary spending to repurchase Adient's shares. Adient's principal sources of liquidity are cash flows from operating activities, the revolving credit facility and other debt issuances, and existing cash balances. Adient actively manages its working capital and associated cash requirements and continually seeks more effective uses of cash. Working capital is highly influenced by the timing of cash flows associated with sales and purchases, and therefore can be difficult to manage at times. See below for discussion of Adient's financing arrangements. Adient believes that its current financial resources will be sufficient to fund its liquidity requirements for at least the next twelve months.

Current wording

Adient's primary liquidity needs are to fund general business requirements, including working capital, capital expenditures, restructuring costs, debt service requirements and discretionary spending to repurchase Adient's shares. Adient's principal sources of liquidity are cash flows from operating activities, the revolving credit facility and other debt issuances, and existing cash balances. Adient actively manages its working capital and associated cash requirements and continually seeks more effective uses of cash. Working capital is highly influenced by the timing of cash flows associated with sales and purchases, and therefore can be difficult to manage at times. See below for discussion of Adient's financing arrangements. Adient believes that its current financial resources will be sufficient to fund its liquidity requirements for at least the next twelve months. Fiscal 2026 cash flows are expected to be lower than fiscal 2025 cash flows due primarily to reduced profitability resulting from lower production volumes, higher capital spending to fund growth initiatives, non-recurring tax settlements and an acceleration in the timing of commercial settlements in fiscal 2025.

Previous wording

Adient US LLC ("Adient US"), a wholly owned subsidiary of Adient, together with certain of Adient's other subsidiaries, maintains an asset-based revolving credit facility (the "ABL Credit Facility"), which provides for a revolving line of credit up to $1,250 million, including a North American subfacility of up to $950 million and a European subfacility of up to $300 million, subject to borrowing base capacity and certain other restrictions, including a minimum fixed charge coverage ratio. The ABL Credit Facility is set to mature on November 2, 2027, subject to certain springing maturity provisions. Adient will pay a commitment fee of 0.25% to 0.375% on the unused portion of the commitments under the asset-based revolving credit facility based on average global availability. Letters of credit are limited to the lesser of (x) $150 million and (y) the aggregate unused amount of commitments under the ABL Credit Facility then in effect. Subject to certain conditions, the ABL Credit Facility may be expanded by up to $250 million in additional commitments. Loans under the ABL Credit Facility may be denominated, at the option of Adient, in U.S. Dollars, Euros, Pounds Sterling or Swedish Krona. It also provides flexibility for future amendments to the ABL Facility to incorporate certain sustainability-based pricing provisions. The ABL Credit Agreement is secured on a first-priority lien on all accounts receivable, inventory and bank accounts (and funds on deposit therein) and a second-priority lien on all of the tangible and intangible assets of certain Adient subsidiaries. Interest is payable on the ABL Credit Facility at a fluctuating rate of interest determined by reference to Term 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%. As of June 30, 2025, Adient had not drawn down on the ABL Credit Facility and had availability under this facility of $872 million (net of $8 million of letters of credit).

Current wording

As of September 30, 2025, Adient US LLC ("Adient US"), a wholly owned subsidiary of Adient, together with certain of Adient's other subsidiaries, maintained an asset-based revolving credit facility (the "ABL Credit Facility"), which provided for a revolving line of credit up to $1,250 million, including a North American subfacility of up to $950 million and a European subfacility of up to $300 million, subject to borrowing base capacity and certain other restrictions, including a minimum fixed charge coverage ratio. During the first quarter of fiscal 2026, Adient amended the ABL Credit Facility, reducing the maximum facility from $1,250 million to $1,000 million (consisting of a North American subfacility of up to $895 million and a European subfacility of up to $105 million). Under the amended agreement, Adient will pay a commitment fee of 0.20% - 0.25% (previously 0.25% to 0.375%) on the unused portion of the commitments under the asset-based revolving credit facility based on average global availability. Adient incurred $6 million of costs associated with this amendment, which was recorded as deferred financing costs. The amended ABL Credit Facility is set to mature in October 2030 (previously November 2027), subject to certain springing maturity provisions. Letters of credit are limited to the lesser of (x) $150 million and (y) the aggregate unused amount of commitments under the amended ABL Credit Facility then in effect. Subject to certain conditions, the amended ABL Credit Facility may be expanded by up to $500 million in additional commitments. Loans under the amended 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 amended ABL Credit Facility to incorporate certain sustainability-based pricing provisions. The amended ABL Credit Facility is secured on a first-priority lien on all accounts receivable, inventory and bank accounts (and funds on deposit therein) and a second-priority lien on all of the tangible and intangible assets of certain Adient subsidiaries. Interest is payable on the amended 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 1.25% - 1.75% (previously 1.50% to 2.00%). As of December 31, 2025, Adient had not drawn down on the amended ABL Credit Facility and had availability under this facility of $823 million (net of $8 million of letters of credit).

Previous wording

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 $627 million and $632 million as of June 30, 2025 and September 30, 2024, respectively. During fiscal 2024, the Term Loan B Agreement was amended to reduce the applicable margin from 3.25% to 2.75% and extend final maturity to January 31, 2031. Adient incurred $5 million of costs associated with the modification, of which $4 million was recorded as deferred financing costs. During the first quarter of fiscal 2025, the Term Loan B Agreement was further amended to reduce the applicable margin from 2.75% to 2.25%. Adient incurred $1 million of costs associated with the modification, which was recorded as deferred financing costs. The Term Loan B Agreement amortizes in equal quarterly installments at a rate of 1.00% per annum of the original principal amount thereof, with the remaining balance due at final maturity. The Term Loan B Agreement permits Adient to incur incremental term loans in an aggregate amount not to exceed the greater of $750 million and an unlimited amount subject to a pro forma first lien secured net leverage ratio of not greater than 1.75 to 1.00 and certain other conditions. Interest on the Term Loan B Agreement accrues at Term SOFR plus an applicable margin.

Current wording

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 $624 million and $626 million as of December 31, 2025 and September 30, 2025, respectively. During the first quarter of fiscal 2025, the Term Loan B Agreement was amended to reduce the applicable margin from 2.75% to 2.25%. Adient incurred $1 million of costs associated with the modification, which was recorded as deferred financing costs. The maturity date was also extended from April 2028 to January 2031. The amended Term Loan B Agreement amortizes in equal quarterly installments at a rate of 1.00% per annum of the original principal amount thereof, with the remaining balance due at final maturity. The amended Term Loan B Agreement permits Adient to incur incremental term loans in an aggregate amount not to exceed the greater of $750 million and an unlimited amount subject to a pro forma first lien secured net leverage ratio of not greater than 1.75 to 1.00 and certain other conditions. Interest on the amended Term Loan B Agreement accrues at Term SOFR plus an applicable margin. During the second quarter of fiscal 2026, Adient further amended the Term Loan B Agreement to reduce the applicable margin from 2.25% to 2.00%. Adient incurred $1 million of costs associated with this amendment, which was recorded as deferred financing costs.

Previous wording

The ABL Credit Facility and Term Loan B Agreement contain covenants that are usual and customary for facilities and debt instruments of this type and that, among other things, restrict the ability of Adient and its restricted subsidiaries to: create certain liens and enter into sale and lease-back transactions; create, assume, incur or guarantee certain indebtedness; pay dividends or make other distributions on, or repurchase or redeem, Adient’s capital stock or certain other debt; make other restricted payments; and consolidate or merge with, or convey, transfer or lease all or substantially all of Adient’s and its restricted subsidiaries’ assets, to another person. These covenants are subject to a number of other limitations and exceptions set forth in the agreements. The agreements also provide for customary events of default, including, but not limited to, cross-default clauses with other debt arrangements, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving Adient and its significant subsidiaries.

Current wording

The amended ABL Credit Facility and amended Term Loan B Agreement contain covenants that are usual and customary for facilities and debt instruments of this type and that, among other things, restrict the ability of Adient and its restricted subsidiaries to: create certain liens and enter into sale and lease-back transactions; create, assume, incur or guarantee certain indebtedness; pay dividends or make other distributions on, or repurchase or redeem, Adient’s capital stock or certain other debt; make other restricted payments; and consolidate or merge with, or convey, transfer or lease all or substantially all of Adient’s and its restricted subsidiaries’ assets, to another person. These covenants are subject to a number of other limitations and exceptions set forth in the agreements. The agreements also provide for customary events of default, including, but not limited to, cross-default clauses with other debt arrangements, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving Adient and its significant subsidiaries.

Previous wording

Adient Global Holdings Ltd. ("AGH"), a wholly-owned subsidiary of Adient, maintains (i) $500 million in aggregate principal amount of 7.00% senior secured notes due 2028 and (ii) $500 million in aggregate principal amount of 8.250% senior unsecured notes due 2031. Interest on both of these notes is paid on April 15 and October 15 each year. These notes contain covenants that are usual and customary. AGH also maintained $795 million in aggregate principal amount of 4.875% USD-denominated unsecured notes due 2026 as of September 30, 2024. In February 2025, AGH issued $795 million (net proceeds of $783 million) in aggregate principal amount of 7.50% senior unsecured notes. Adient incurred $12 million of costs associated with the transaction, which was recorded as deferred financing costs. Proceeds from the sale of the notes, together with cash on hand, were used to fully redeem AGH's 4.875% senior unsecured notes in March 2025. Upon redemption of the 4.875% notes, Adient wrote off $2 million of previously deferred financing costs associated with the notes to net financing charges. The new notes mature on February 15, 2033 and bear interest at a rate of 7.50% per annum. Interest on the notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2025. These notes also contain covenants that are usual and customary.

Current wording

Adient Global Holdings Ltd. ("AGH"), a wholly-owned subsidiary of Adient, maintains (i) $500 million in aggregate principal amount of 7.00% senior secured notes due 2028, (ii) $500 million in aggregate principal amount of 8.250% senior unsecured notes due 2031 and (iii) $795 million in aggregate principal amount of 7.50% senior unsecured notes due 2033. Interest on notes (i) and (ii) are paid on April 15 and October 15 each year. Interest on note (iii) is paid on February 15 and August 15 each year. These notes contain covenants that are usual and customary.

Previous wording

Investing Cash Flows: The decrease in cash used by investing activities is primarily attributable to current-year proceeds received from the sale of Adient's interest in Setex and lower capital expenditures.

Current wording

Investing Cash Flows: The increase in cash used by investing activities is primarily attributable to proceeds received from the sale of Adient's interest in Setex during the first quarter of fiscal 2025.

Previous wording

Financing Cash Flows: The decrease in cash used by financing activities is primarily attributable to a lower level of share repurchase activities in the first nine months of fiscal 2025 ($75 million) compared to the first nine months of fiscal 2024 ($225 million), partially offset by the acquisition of the noncontrolling interest in Technotrim ($28 million) and a higher level of dividends paid to noncontrolling interests ($17 million). Refer to Note 11, "Equity and Noncontrolling Interests," of the notes to the consolidated financial statements for additional information.

Current wording

Financing Cash Flows: The increase in cash used by financing activities is primarily attributable to higher amounts of non-controlling interest dividends paid, partially offset by the acquisition of the noncontrolling interest in Technotrim during the first quarter of fiscal 2025. Refer to Note 11, "Equity and Noncontrolling Interests," of the notes to the consolidated financial statements for additional information.

Previous wording

Capital expenditures: Lower capital expenditures during the first nine months of fiscal 2025 were due primarily to timing of program spend on product launches.

Current wording

Capital expenditures: Higher capital expenditures during the first three months of fiscal 2026 were due primarily to timing of program spend on product launches.

Previous wording

During the first nine months of fiscal 2025, Adient committed to restructuring actions ("2025 Plan") resulting in charges of $42 million, which was offset by $4 million of prior-year underspend. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions in EMEA. The 2025 Plan is being implemented in response to manufacturing footprint and structural changes occurring in the global automotive industry and to ensure Adient maintains a competitive cost structure by reducing operating, administrative and engineering costs, and increasing efficiencies. Restructuring actions associated with the 2025 Plan will primarily occur in fiscal years 2025 and 2026 and are expected to be substantially complete by fiscal year 2027. Adient currently estimates that upon completion of the restructuring actions, the 2025 Plan will reduce annual operating costs by approximately $53 million, which is primarily the result of lower costs of sales and SG&A due to reduced employee-related costs, of which approximately 45% will result in net savings.

Current wording

During the first three months of fiscal 2026, Adient committed to restructuring actions ("2026 Plan") resulting in charges of $23 million. Additional charges totaling $1 million related to prior year plans were also recorded during the three months ended December 31, 2025. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions in EMEA. The 2026 Plan is being implemented in response to manufacturing footprint and structural changes occurring in the global automotive industry and to ensure Adient maintains a competitive cost structure by reducing operating, administrative and engineering costs, and increasing efficiencies. Restructuring actions associated with the 2026 Plan will primarily occur in fiscal years 2026 and 2027 and are expected to be substantially complete by fiscal year 2027. Adient currently estimates that upon completion of the restructuring actions, the 2026 Plan will reduce annual operating costs by approximately $15 million, which is primarily the result of lower costs of sales and SG&A due to reduced employee-related costs; however, minimal impact to net earnings is expected.

Previous wording

In November 2022, Adient’s board of directors authorized the repurchase of Adient's ordinary shares up to an aggregate purchase price of $600 million with no expiration date. Under the share repurchase authorization, Adient’s ordinary shares may be purchased either through discretionary purchases on the open market, by block trades or privately negotiated transactions. The number of ordinary shares repurchased, if any, and the timing of repurchases will depend on a number of factors, including share price, trading volume and general market conditions, as well as on working capital requirements, general business conditions and other factors. During fiscal 2024, Adient repurchased and immediately retired 9,424,668 of its ordinary shares at an average purchase price per share of $29.18. The aggregate amount of cash paid to repurchase the shares was $275 million, of which $225 million had been spent through June 30, 2024. During the third quarter of fiscal 2025, Adient repurchased and immediately retired 2,787,081 of its ordinary shares at an average purchase price per share of $17.94. The aggregate amount of cash paid to repurchase shares during the third quarter of fiscal 2025 was $50 million. During the first nine months ended June 30, 2025, Adient repurchased and immediately retired 4,014,410 of its ordinary shares at an average purchase price per share of $18.68. The aggregate amount of cash paid to repurchase shares was $75 million, all of which had been spent as of June 30, 2025. As of June 30, 2025, the remaining aggregate amount of authorization remaining under the share repurchase authorization was $185 million.

Current wording

In November 2022, Adient’s board of directors authorized the repurchase of Adient's ordinary shares up to an aggregate purchase price of $600 million with no expiration date. Under the share repurchase authorization, Adient’s ordinary shares may be purchased either through discretionary purchases on the open market, by block trades or privately negotiated transactions. The number of ordinary shares repurchased, if any, and the timing of repurchases will depend on a number of factors, including share price, trading volume and general market conditions, as well as on working capital requirements, general business conditions and other factors. From fiscal 2023 through fiscal 2025, Adient repurchased and immediately retired a total of 17,297,377 ordinary shares. The aggregate amount of cash paid to repurchase the shares was $465 million, all of which had been spent through September 30, 2025. During the first quarter of fiscal 2026, Adient repurchased and immediately retired 1,232,932 of its ordinary shares at an average purchase price per share of $20.27, for an aggregate amount of cash paid of $25 million. As of December 31, 2025, the remaining aggregate amount of authorization remaining under the share repurchase authorization was $110 million.

Previous wording

Adient enters into supply chain financing programs in certain domestic and foreign jurisdictions to either sell or discount accounts receivable without recourse to third-party institutions. Sales or discounts of accounts receivable are reflected as a reduction of accounts receivable on the consolidated statements of financial position and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. As of June 30, 2025, $168 million was funded under these programs compared to $170 million as of September 30, 2024.

Current wording

Adient enters into supply chain financing programs in certain domestic and foreign jurisdictions to either sell or discount accounts receivable without recourse to third-party institutions. Sales or discounts of accounts receivable are reflected as a reduction of accounts receivable on the consolidated statements of financial position and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. As of December 31, 2025, $169 million was funded under these programs compared to $185 million as of September 30, 2025.

Previous wording

Adient also has a program with an external financial institution under which Adient's suppliers can sell their receivables from Adient to the financial institution at their sole discretion. Adient is not a party to the agreements between the participating suppliers and the financial institution. Adient's obligation under the program is to pay the original amounts of supplier invoices to the financial institution on the original invoice dates. No fees are paid and no assets are pledged by Adient. The payment terms for trade payables can range from 45 days to 120 days depending on types of services and goods being purchased. The payment terms for molds, dies and other tools that are acquired as part of pre-production activities are in general longer, and are normally dependent on the terms which Adient has agreed with its customers. As of June 30, 2025, and September 30, 2024, Adient's liabilities related to this program were $95 million and $76 million, respectively. Cash flows related to the program are all presented within operating activities in Adient's consolidated statements of cash flows.

Current wording

Adient also has a program with an external financial institution under which Adient's suppliers can sell their receivables from Adient to the financial institution at their sole discretion. Adient is not a party to the agreements between the participating suppliers and the financial institution. Adient's obligation under the program is to pay the original amounts of supplier invoices to the financial institution on the original invoice dates. No fees are paid and no assets are pledged by Adient. The payment terms for trade payables can range from 45 days to 120 days depending on types of services and goods being purchased. The payment terms for molds, dies and other tools that are acquired as part of pre-production activities are in general longer, and are normally dependent on the terms which Adient has agreed with its customers. As of December 31, 2025, and September 30, 2025, Adient's liabilities related to this program were $109 million and $105 million, respectively. Cash flows related to the program are all presented within operating activities in Adient's consolidated statements of cash flows.

Previous wording

See "Critical Accounting Estimates and Policies" under the heading "Item 7" of Adient's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, for a discussion of critical accounting estimates and policies. There have been no material changes to Adient's critical accounting estimates and policies during the nine months ended June 30, 2025 except for the following update:

Current wording

See "Critical Accounting Estimates and Policies" under the heading "Item 7" of Adient's Annual Report on Form 10-K for the fiscal year ended September 30, 2025, for a discussion of critical accounting estimates and policies. There have been no material changes to Adient's critical accounting estimates and policies during the three months ended December 31, 2025.