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," "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.

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 Middle East and Ukraine conflicts and the impact on the regional and global economies and additional pressure on commodities, 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 achi…

Excerpt shortened here; the source contains the full paragraph.

Previous 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.

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 the impact of higher energy, freight and other costs resulting from the conflicts in the Middle East and other parts of the world, 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. Adient is also monitoring developments associated with the Supreme Court decision related to tariffs issued under the International Emergency Economic Powers Act ("IEEPA"). No amounts have been recorded as of March 31, 2026 for recoveries from the government due to various legal, regulatory and administrative uncertainties that remain unresolved. The impact of potential recoveries is not expected to be material to Adient's results of operations and operating cash flows. 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 months ended December 31, 2025, global light vehicle production increased 2.1% primarily driven by improved vehicle sales and stronger export activity in Asia.

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 six months ended March 31, 2026, global light vehicle production decreased 0.9% and increased 0.7%, respectively, primarily driven by reduced production volumes in North America and China, partially offset by higher production volumes in Asia.

Previous wording

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

Current wording

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

Previous 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.

Current wording

•Adient recorded net sales of $3,865 million for the second quarter of fiscal 2026, representing an increase of $254 million, or 7%, when compared to the second quarter of fiscal 2025. The increase in net sales is primarily attributable to the favorable impact of foreign currencies, higher overall production volumes in Americas and Asia, net of lower overall production volumes in EMEA, and a net favorable impact of commercial pricing adjustments including customer cost recoveries.

Previous 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.

Current wording

•Gross profit was $257 million, or 6.6% of net sales, for the second quarter of fiscal 2026 compared to $261 million, or 7.2% of net sales for the second quarter of fiscal 2025. Profitability was lower due primarily to lower production volume/mix and unfavorable operating performance, partially offset by the favorable impact of foreign currencies.

Previous wording

Cost of sales increased by $148 million, or 5%, and gross profit increased by $1 million, or 0.5%, in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025. The year over year increase in cost of sales was primarily due to the unfavorable impact of foreign currencies ($85 million), the net impact of higher production volumes in Asia partially offset by lower production volumes in EMEA and Americas ($52 million) and unfavorable net operating performance including increased program launch costs, inefficiencies related to certain customer disruptions and the impact of tariffs partially offset by favorable material cost adjustments ($11 million). Gross profit for the three months ended December 31, 2025 was impacted by the favorable impact of foreign currencies, partially offset by lower production volume/mix and unfavorable net operating performance including increased program launch costs, inefficiencies related to certain customer disruptions and the net impact of tariffs partially offset by favorable material cost adjustments.

Current wording

Cost of sales increased by $406 million, or 6%, and gross profit decreased by $3 million, or 1%, during the first six months of fiscal 2026 as compared to the first six months of fiscal 2025. The year over year increase in cost of sales was primarily due to the unfavorable impact of foreign currencies ($228 million), the impact of higher production volumes in Americas and Asia, partially offset by lower production volumes in EMEA as a result of softening customer demand and strategic portfolio actions ($155 million) and unfavorable net operating performance including increased program launch costs, inefficiencies related to certain customer disruptions and the impact of tariffs partially offset by favorable material cost adjustments ($23 million). Gross profit for the six months ended March 31, 2026 was impacted by unfavorable volume/mix and unfavorable net operating performance including increased program launch costs and the impact of tariffs, partially offset by the favorable impact of foreign currencies and favorable material cost adjustments.

Previous wording

SG&A increased by $5 million, or 4%, year over year primarily due to higher compensation expense including equity and performance-based incentive compensation costs ($9 million), a non-recurring gain on the sale of an asset in the prior year ($5 million) and the unfavorable impact of foreign currencies ($4 million), partially offset by lower net engineering and other administrative spending ($13 million).

Current wording

SG&A decreased by $1 million during the first six months of fiscal 2026 as compared to the first six months of fiscal 2025 due to lower net engineering and other administrative spending ($26 million), third-party consulting costs associated with strategic planning in the previous year ($8 million), partially offset by higher compensation expense including equity and performance- based incentive compensation costs ($17 million), the unfavorable impact of foreign currencies ($11 million) and a non-recurring gain on the sale of an asset in the prior year ($5 million).

Previous wording

Restructuring and impairment costs increased by $1 million, or 4%, in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025. Refer to Note 13, "Restructuring and Impairment Costs" of the notes to the consolidated financial statements for information related to Adient's restructuring plans.

Current wording

Restructuring and impairment costs were lower by $346 million during the second quarter of fiscal 2026 and lower by $345 million during the first six months of fiscal 2026 due to a prior-year $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. Refer to Note 13, "Restructuring and Impairment Costs" of the notes to the consolidated financial statements for information related to Adient's restructuring plans.

Previous 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).

Current wording

Equity income was $40 million during the first six months of fiscal 2026, compared to $43 million during the first six months of fiscal 2025. The decrease is primarily attributable to 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), partially offset by favorable operating performance at partially-owned affiliates ($2 million) and favorable production volumes at partially-owned affiliates ($1 million).

Previous 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.

Current wording

Net financing charges in the second quarter of fiscal 2026 were comparable to the second quarter of fiscal 2025, and higher by $3 million during the first six months of fiscal 2026 as compared to the first six months 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 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.

Current wording

Other pension expense was higher by $2 million in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025, and higher by $2 million during the first six months of fiscal 2026 as compared to the first six months of fiscal 2025 due to a curtailment loss of $2 million recorded in the Asia segment. 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 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.

Current wording

The first six months of fiscal 2026 income tax expense of $74 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 the establishment of uncertain tax positions as a result of initiating a foreign tax audit settlement, partially offset by tax benefits related to audit closures and statute expirations. 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 expirations.

Previous 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.

Current wording

The decrease in income attributable to noncontrolling interests in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 is primarily attributable to lower production volumes and unfavorable operating performance at certain consolidated joint ventures in Asia.

Previous wording

•Net loss attributable to Adient was $22 million for the first quarter of fiscal 2026, compared to net income attributable to Adient of zero for the first quarter of fiscal 2025. The net loss in the first quarter of fiscal 2026 is primarily attributable to higher income tax expense, unfavorable production volume/mix and higher SG&A expenses, partially offset by the favorable impact of foreign currencies and a decrease in income attributable to noncontrolling interests.

Current wording

Net income attributable to Adient was $5 million during the first six months of fiscal 2026, compared to net loss attributable to Adient of $335 million during the first six months of fiscal 2025. The higher net income during the first six months of fiscal 2026 is primarily attributable to a $333 million non-cash goodwill impairment charge relating to the EMEA reporting unit in the previous year, the favorable impact of foreign currencies and a decrease in income attributable to noncontrolling interests, partially offset by unfavorable production volume/mix and lower equity income.

Previous 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).

Current wording

Comprehensive loss attributable to Adient was $29 million for the second quarter of fiscal 2026 compared to $229 million of comprehensive loss for the second quarter of fiscal 2025. The lower comprehensive loss attributable to Adient is due primarily to a higher net income in the second quarter of fiscal 2026 compared to a net loss in the second quarter of fiscal 2025 ($357 million) and lower comprehensive income attributable to noncontrolling interests ($13 million), partially offset by the unfavorable impact of foreign currency translation adjustments ($131 million), realized and unrealized losses on derivatives in the second quarter of fiscal 2026 compared to a gains in the second quarter of fiscal 2025 ($39 million).

Previous 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.

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 the impact of higher energy, freight and other costs resulting from the conflicts in the Middle East and other parts of the world, 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. Adient is also monitoring developments associated with the Supreme Court decision related to tariffs issued under the International Emergency Economic Powers Act ("IEEPA"). No amounts have been recorded as of March 31, 2026 for recoveries from the government due to various legal, regulatory and administrative uncertainties that remain unresolved. The impact of potential recoveries is not expected to be material to Adient's results of operations and operating cash flows. 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 before income taxes:

Current wording

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

Previous 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.

Current wording

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments. The three and six months ended March 31, 2026 reflects restructuring charges of $5 million and $29 million, respectively. 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 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 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.

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 March 31, 2026 includes $5 million of restructuring-related charges primarily recorded in cost of sales and $1 million of restructuring charges at partially-owned affiliates recorded within equity income. The six months ended March 31, 2026 includes $10 million of restructuring-related charges primarily recorded in cost of sales and $3 million of restructuring charges at partially-owned affiliates recorded within equity income. The three months ended March 31, 2025 includes $5 million in restructuring-related charges primarily recorded in cost of sales. The six months ended March 31, 2025 includes $11 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 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.

Current wording

(5) The six months ended March 31, 2025 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

(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.

Current wording

(6) The three months ended March 31, 2026 includes a $5 million one-time, non-recurring reversal of contingent liabilities with a customer recorded in cost of sales, partially offset by $1 million of transaction costs recorded in SG&A. The six months ended March 31, 2026 includes a $5 million one-time, non-recurring reversal of contingent liabilities with a customer recorded in cost of sales and a $2 million gain on a non-recurring contract related settlement recorded in SG&A, partially offset by $1 million of transaction costs recorded in SG&A. The three months ended March 31, 2025 includes $8 million of third-party consulting costs associated with strategic planning recorded in SG&A and a $1 million non-recurring loss at affiliates recorded in equity income. 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 recorded in SG&A.

Previous 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).

Current wording

Net sales increased during the second quarter of fiscal 2026 by $185 million primarily due to higher production volumes ($131 million), net favorable commercial pricing adjustments including customer cost and tariff recoveries ($48 million) and the favorable impact of foreign currencies ($6 million).

Previous wording

Adjusted EBITDA decreased during the first quarter of fiscal 2025 by $5 million due to unfavorable operating performance driven by operating inefficiencies due to production disruption costs related to certain customers, higher program launch costs and the net impact of tariffs ($21 million), unfavorable production volume/mix ($15 million) and lower equity income ($1 million), partially offset by favorable customer pricing actions including customer cost recoveries ($19 million), lower engineering expenses ($11 million) and the favorable impact of foreign currencies ($2 million).

Current wording

Adjusted EBITDA increased during the first six months of fiscal 2026 by $10 million due to lower SG&A and engineering expenses ($11 million), the favorable impact of foreign currencies ($6 million) and favorable net operating performance reflecting favorable customer pricing, partially offset by operating inefficiencies due to production disruption costs related to certain customers, unfavorable material cost, higher program launch costs and the net impact of tariffs ($8 million), partially offset by unfavorable production volumes/mix ($14 million) and lower equity income ($1 million).

Previous 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).

Current wording

Net sales increased during the first six months of fiscal 2026 by $117 million primarily as a result of the favorable impact of foreign currencies ($228 million), partially offset by lower production volumes as a result of softening customer demand and strategic portfolio actions ($97 million) and an unfavorable impact of net commercial pricing adjustments including customer cost recoveries ($14 million).

Previous wording

Net sales increased during the first quarter of fiscal 2026 by $47 million due to higher production volumes ($59 million) and the favorable impact of foreign currencies ($3 million), partially offset by net unfavorable commercial pricing adjustments including customer cost recoveries ($15 million).

Current wording

Net sales increased during the second quarter of fiscal 2026 by $27 million due to higher production volumes ($33 million) and the favorable impact of foreign currencies ($19 million), partially offset by net unfavorable commercial pricing adjustments including customer cost recoveries ($25 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. 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.

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. During the second quarter of fiscal 2026, Adient experienced higher operating cash flows resulting from certain commercial and derivative transactions approximating $90 million, which are expected to be settled and paid in the third quarter of fiscal 2026.

Previous 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).

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%). During the second quarter of fiscal 2026, Adient drew down and fully repaid an aggregate of $150 million on the amended ABL Credit Facility. No amounts were outstanding as of March 31, 2026 under this facility, and total availability on that date was $957 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 $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.

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 $622 million and $626 million as of March 31, 2026 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,

Previous 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.

Current wording

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

Previous 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.

Current wording

Financing Cash Flows: The decrease in cash used by financing activities is primarily attributable to the acquisition of the noncontrolling interest in Technotrim during the first six months of fiscal 2025. Refer to Note 11, "Equity and Noncontrolling Interests," of the notes to the consolidated financial statements for additional information.

Previous wording

Working capital decreased by $122 million primarily due to decreases in net accounts receivable, cash and cash equivalents, partially offset by an increase in inventory and a decrease in VAT payable and accrued compensation.

Current wording

Working capital decreased by $69 million primarily due to an increase in accounts payable and a decrease in cash and cash equivalents, partially offset by decreases in accrued compensation and benefits and other noncurrent liabilities, as well as increases in net accounts receivable, inventories and other current assets.

Previous 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.

Current wording

During the first six months of fiscal 2026, Adient committed to restructuring actions ("2026 Plan") resulting in charges of $28 million. Additional charges totaling $1 million related to prior year plans were also recorded during the six months ended March 31, 2026. 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. 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.

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. No shares were repurchased during the second quarter of fiscal 2026. As of March 31, 2026, 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 December 31, 2025, $169 million was funded under these programs compared to $185 million as of September 30, 2025.

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 March 31, 2026, $176 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 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.

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 March 31, 2026, and September 30, 2025, Adient's liabilities related to this program were $107 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.