Adient plc

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 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.

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 and Europe. 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 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.

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 has also been monitoring developments associated with the Supreme Court decision related to tariffs issued under IEEPA. During the third quarter of fiscal 2026, Adient recorded receivables of approximately $52 million related to refunds that it believes are probable of collection from the U.S. government stemming from the Supreme Court decision to nullify tariffs issued under IEEPA. The receivable is recorded in the Americas within other current assets and the corresponding benefit has been reflected as a reduction on cost of sales. A large portion of the refunds is expected to be passed on to Adient's customers to the extent Adient had previously collected such tariff reimbursements under separate agreements with its customers. Amounts expected to be repaid to customers have been reflected as reductions in net sales and accounts receivable. The net benefit associated with these IEEPA refunds is immaterial. 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 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.

Current wording

Adient conducts its business globally in the automotive industry, which is highly competitive and sensitive to economic, political and social factors in the various regions. During the three and nine months ended June 30, 2026, global light vehicle production increased 1.3% and 0.9%, respectively, primarily driven by higher production volumes in Asia, outside of China.

Previous wording

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

Current wording

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

Previous 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.

Current wording

•Adient recorded net sales of $3,929 million for the third quarter of fiscal 2026, representing an increase of $188 million, or 5%, when compared to the third quarter of fiscal 2025. The increase in net sales is primarily attributable to higher overall production volumes largely in Americas and Asia and the favorable impact of foreign currencies.

Previous 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.

Current wording

•Gross profit was $235 million, or 6.0% of net sales, for the third quarter of fiscal 2026 compared to $237 million, or 6.3% of net sales for the third quarter of fiscal 2025. Gross profit was impacted by the unfavorable impact of foreign currencies and unfavorable volume/mix, partially offset by favorable net operating performance including favorable material costs and the impact of recognizing IEEPA tariff refunds.

Previous wording

Cost of sales increased by $258 million, or 8%, and gross profit decreased by $4 million, or 2%, in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025. The year over year increase in cost of sales was primarily due to the unfavorable impact of foreign currencies ($143 million), the impact of higher production volumes in Americas and Asia, net of lower production volumes in EMEA as a result of softening customer demand and strategic portfolio actions ($103 million) and unfavorable net operating performance including increased program launch costs and the impact of tariffs partially offset by favorable material cost adjustments ($12 million). Gross profit for the three months ended March 31, 2026 was impacted by unfavorable volume/mix and unfavorable net operating performance mainly due to increased program launch costs, partially offset by the favorable impact of foreign currencies.

Current wording

Cost of sales increased by $190 million, or 5%, and gross profit decreased by $2 million, or 1%, in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025. The year-over-year increase in cost of sales was primarily due to 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 ($149 million) and the unfavorable impact of foreign currencies ($44 million), partially offset by favorable net operating performance mainly driven by the impact of recognizing IEEPA tariff refunds, net of higher freight and launch costs, as well as unfavorable material costs largely driven by the impact of the Middle East conflict ($3 million). Gross profit for the three months ended June 30, 2026 was impacted by the unfavorable impact of foreign currencies and unfavorable volume/mix, partially offset by favorable net operating performance including favorable material costs and the impact of recognizing IEEPA tariff refunds.

Previous 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.

Current wording

Cost of sales increased by $596 million, or 6%, and gross profit decreased by $5 million, or 1%, during the first nine months of fiscal 2026 as compared to the first nine months of fiscal 2025. The year-over-year increase in cost of sales was primarily due to 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 ($304 million), the unfavorable impact of foreign currencies ($272 million) and unfavorable net operating performance including increased program launch costs, inefficiencies related to certain customer disruptions, net of the impact of recognizing IEEPA tariff refunds and favorable material costs despite the impact of the Middle East conflict ($20 million). Gross profit for the nine months ended June 30, 2026 was impacted by unfavorable volume/mix, partially offset by the favorable impact of foreign currencies and favorable net operating performance including favorable material costs and the impact of recognizing IEEPA tariff refunds.

Previous wording

SG&A decreased by $6 million, or 4%, in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 due to lower net engineering and other administrative spending ($13 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 ($8 million) and the unfavorable impact of foreign currencies ($7 million).

Current wording

SG&A increased by $7 million, or 5%, in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025 due to lower amounts of gains on sales of facilities in the current year ($4 million), the unfavorable impact of foreign currencies ($3 million) and higher compensation expense ($2 million), partially offset by lower net engineering and other administrative spending ($2 million).

Previous 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).

Current wording

SG&A increased by $6 million during the first nine months of fiscal 2026 as compared to the first nine months of fiscal 2025 due to higher compensation expense including equity and performance-based incentive compensation costs ($19 million), the unfavorable impact of foreign currencies ($14 million) and lower amounts of gains on sales of facilities in the current year ($9 million), partially offset by lower net engineering and other administrative spending ($28 million) and third-party consulting costs associated with strategic planning in the previous year ($8 million).

Previous 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.

Current wording

Restructuring and impairment costs was $5 million for the third quarter of fiscal 2026, compared to $7 million the third quarter of fiscal 2025 and were lower by $347 million during the first nine months of fiscal 2026 due to a prior-year $333 million impairment charge relating to EMEA's goodwill and a prior-year $10 million impairment loss recorded on the Adient Aerospace investment. 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 $13 million for the second quarter of fiscal 2026, compared to $18 million in the second quarter of fiscal 2025. The decrease is primarily attributable to unfavorable production volumes at partially-owned affiliates ($4 million) and unfavorable operating performance at partially-owned affiliates ($1 million).

Current wording

Equity income was $20 million for the third quarter of fiscal 2026, compared to $17 million in the third quarter of fiscal 2025. The increase is primarily attributable to higher levels of prior-year restructuring charges related to certain of Adient's investment in non-consolidated affiliates ($6 million) and the favorable impact of foreign currencies ($1 million), partially offset by unfavorable production volumes at partially-owned affiliates ($4 million).

Previous 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).

Current wording

Equity income of $60 million during the first nine months of fiscal 2026 was comparable to the first nine months of fiscal 2025. The results include restructuring charges related to certain of Adient's investment in non-consolidated affiliates in the prior year ($6 million), favorable operating performance at partially-owned affiliates ($2 million) and the favorable impact of foreign currencies ($1 million), offset by a one-time gain on the sale of Setex during the first quarter of fiscal 2025 ($4 million), unfavorable production volumes at partially-owned affiliates ($3 million) and restructuring-related charges related to certain of Adient's investment in non-consolidated affiliates ($2 million).

Previous 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.

Current wording

Net financing charges for the third quarter of fiscal 2026 were lower by $3 million compared to the third quarter of fiscal 2025 as a result of lower average interest rates. Net financing charges for the first nine months of fiscal 2026 were comparable to the first nine months of fiscal 2025. Refer to Note 8, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for further information related to Adient's debt transactions and components of net financing charges.

Previous wording

Other pension expense was 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.

Current wording

Other pension expense for the third quarter of fiscal 2026 was comparable to the third quarter of fiscal 2025 and higher by $2 million during the first nine months of fiscal 2026 as compared to the first nine 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 second quarter fiscal 2026 income tax expense of $32 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, partially offset by tax benefits related to statute expirations. The second quarter fiscal 2025 income tax expense of $48 million was higher than the Irish statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, $19 million of tax expense related to adjustments to net operating loss deferred tax assets, $9 million of tax expense related to the establishment of an uncertain tax position, and the impact of the impairment of the non-tax-deductible portion of the EMEA goodwill balance for which there is no corresponding income tax benefit.

Current wording

The third quarter fiscal 2026 income tax expense of $23 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, partially offset by tax benefits related to a transfer of intellectual property rights between subsidiaries in different tax jurisdictions. 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.

Previous 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.

Current wording

The first nine months of fiscal 2026 income tax expense of $97 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, statute expirations, and a transfer of intellectual property rights between subsidiaries in different tax jurisdictions. The first nine months of fiscal 2025 income tax expense of $77 million was higher than the Irish statutory rate of 12.5% primarily due to the inability to record a tax benefit for losses in jurisdictions with valuation allowances, $19 million of tax expense related to adjustments to net operating loss deferred tax assets, $9 million of tax expense related to the establishment of an uncertain tax position, and the impact of the impairment of the non-tax-deductible portion of the EMEA goodwill balance for which there is no corresponding income tax benefit, partially offset by $23 million of tax benefits from audit closures and statute expirations.

Previous 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.

Current wording

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

Previous wording

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

Current wording

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

Previous 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.

Current wording

Net income attributable to Adient was $30 million during the first nine months of fiscal 2026, compared to net loss attributable to Adient of $299 million during the first nine months of fiscal 2025. The higher net income during the first nine 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, a decrease in income attributable to noncontrolling interest and favorable net operating performance including favorable material costs and the impact of recognizing IEEPA tariff refunds, partially offset by unfavorable production volume/mix.

Previous 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).

Current wording

Comprehensive income attributable to Adient was $38 million for the third quarter of fiscal 2026 compared to $176 million of comprehensive income for the third quarter of fiscal 2025. The lower comprehensive income attributable to Adient is due primarily to the unfavorable impact of foreign currency translation adjustments ($126 million), a lower net income in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 ($17 million) and lower realized and unrealized gains on derivatives in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 ($11 million), partially offset by lower comprehensive income attributable to noncontrolling interests ($16 million).

Previous wording

Comprehensive loss attributable to Adient was $37 million for the first six months of fiscal 2026 compared to $454 million of comprehensive loss for the first six months of fiscal 2025. The lower comprehensive loss attributable to Adient is due primarily to a higher net income in the first six months of fiscal 2026 compared to a net loss in the first six months of fiscal 2025 ($331 million) and lower realized and unrealized losses on derivatives ($119 million), partially offset by the unfavorable impact of foreign currency translation adjustments ($25 million) and higher comprehensive income attributable to noncontrolling interests ($8 million).

Current wording

Comprehensive income attributable to Adient was $1 million for the first nine months of fiscal 2026 compared to $278 million of comprehensive loss for the first nine months of fiscal 2025. The higher comprehensive income attributable to Adient is due primarily to net income in the first nine months of fiscal 2026 compared to a net loss in the first nine months of fiscal 2025 ($314 million) and lower comprehensive income attributable to noncontrolling interests ($8 million), partially offset by realized and unrealized losses on derivatives in the third quarter of fiscal 2026 compared to realized and realized gains on derivatives in the third quarter of fiscal 2025 ($36 million) and the unfavorable impact of foreign currency translation adjustments ($7 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 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.

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 has also been monitoring developments associated with the Supreme Court decision related to tariffs issued under IEEPA. During the third quarter of fiscal 2026, Adient recorded receivables of approximately $52 million related to refunds that it believes are probable of collection from the U.S. government stemming from the Supreme Court decision to nullify tariffs issued under IEEPA. The receivable is recorded in the Americas within other current assets and the corresponding benefit has been reflected as a reduction on cost of sales. A large portion of the refunds is expected to be passed on to Adient's customers to the extent Adient had previously collected such tariff reimbursements under separate agreements with its customers. Amounts expected to be repaid to customers have been reflected as reductions in net sales and accounts receivable. The net benefit associated with these IEEPA refunds is immaterial. 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

(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.

Current wording

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and non-recurring asset impairments. The three and nine months ended June 30, 2026 reflects restructuring charges of $5 million and $34 million, respectively. 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 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 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.

Current wording

(4) Reflects restructuring-related charges for costs that are recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities. The three months ended June 30, 2026 includes $8 million of restructuring-related charges primarily recorded in cost of sales. The nine months ended June 30, 2026 includes $16 million of restructuring-related charges primarily recorded in cost of sales, $2 million recorded in SG&A and $3 million of restructuring charges at partially-owned affiliates recorded within equity income. The three months ended June 30, 2025 includes $7 million in restructuring-related charges primarily recorded in cost of sales and $6 million of restructuring charges at partially-owned affiliates recorded within equity income, partially offset by a $6 million gain on sale of a restructured facility recorded in SG&A. The nine months ended June 30, 2025 includes $18 million in restructuring-related charges primarily recorded in cost of sales and $6 million of restructuring charges at partially-owned affiliates recorded within equity income, partially offset by $11 million gain on sales of a restructured facilities recorded in SG&A.

Previous 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.

Current wording

(5) The nine months ended June 30, 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 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.

Current wording

(6) The three months ended June 30, 2026 includes $3 million of transaction costs recorded in SG&A. The nine months ended June 30, 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 $4 million of transaction costs recorded in SG&A. The three months ended June 30, 2025 includes $1 million of third-party consulting costs associated with strategic planning recorded in SG&A. The nine months ended June 30, 2025 includes $9 million of third-party consulting costs associated with strategic planning recorded in SG&A and a $1 million non-recurring loss at affiliates recorded within equity income, 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 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).

Current wording

Net sales increased during the third quarter of fiscal 2026 by $168 million primarily due to higher production volumes ($162 million) and the favorable impact of foreign currencies ($7 million), partially offset by the reduction in net sales resulting from amounts expected to be passed on to Adient's customers related to IEEPA tariff refunds, which is almost completely offset by net favorable commercial pricing adjustments ($1 million).

Previous wording

Net sales increased during the first six months of fiscal 2026 by $216 million primarily due to higher production volumes ($130 million), net favorable commercial pricing adjustments including customer cost and tariff recoveries ($77 million) and the favorable impact of foreign currencies ($9 million).

Current wording

Net sales increased during the first nine months of fiscal 2026 by $384 million primarily due to higher production volumes ($292 million), net favorable commercial pricing adjustments despite the reduction in net sales resulting from amounts expected to be passed on to Adient's customers related to IEEPA tariff refunds ($76 million) and the favorable impact of foreign currencies ($16 million).

Previous wording

Adjusted EBITDA increased during the second quarter of fiscal 2026 by $15 million due to favorable net operating performance reflecting favorable customer pricing and the net impact of tariffs, partially offset by unfavorable material cost adjustments, higher overhead and program launch costs ($9 million), the favorable impact of foreign currencies ($4 million), lower SG&A and engineering expenses ($1 million) and favorable production volumes/mix ($1 million).

Current wording

Adjusted EBITDA increased during the third quarter of fiscal 2026 by $13 million due to favorable production volumes/mix ($21 million) and favorable net operating performance reflecting favorable customer pricing and the impact of recognizing IEEPA tariff refunds, net of unfavorable material costs largely driven by the impact of the Middle East conflict and higher overhead and program launch costs driven by inefficiencies related to certain customer disruptions ($2 million), partially offset by higher SG&A and engineering expenses ($9 million) and the unfavorable impact of foreign currencies ($1 million).

Previous wording

Net sales increased during the second quarter of fiscal 2026 by $41 million primarily as a result of the favorable impact of foreign currencies ($134 million), partially offset by lower production volumes as a result of softening customer demand and strategic portfolio actions ($83 million) and an unfavorable impact of net commercial pricing adjustments including customer cost recoveries ($10 million).

Current wording

Net sales decreased during the third quarter of fiscal 2026 by $57 million primarily as a result of lower production volumes as a result of softening customer demand ($82 million) and the unfavorable impact of net commercial pricing adjustments ($8 million), partially offset by the favorable impact of foreign currencies ($33 million).

Previous 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).

Current wording

Net sales increased during the first nine months of fiscal 2026 by $60 million primarily as a result of the favorable impact of foreign currencies ($261 million), partially offset by lower production volumes as a result of softening customer demand ($179 million) and the unfavorable impact of net commercial pricing adjustments ($22 million).

Previous wording

Adjusted EBITDA decreased during the second quarter of fiscal 2026 by $18 million due to unfavorable net operating performance reflecting unfavorable customer pricing adjustments and higher overhead and product launch costs, partially offset by favorable material costs ($18 million), lower equity income ($7 million) and unfavorable production volumes/mix ($6 million), partially offset by lower SG&A and engineering expenses ($9 million) and the favorable impact of foreign currencies ($4 million).

Current wording

Adjusted EBITDA decreased during the first nine months of fiscal 2026 by $20 million due to unfavorable net operating performance reflecting unfavorable customer pricing and higher overhead and product launch costs, net of favorable material costs despite the unfavorable impact of the Middle East conflict ($17 million), unfavorable production mix ($14 million) and lower equity income ($2 million), partially offset by the favorable impact of foreign currencies ($7 million) and lower SG&A and engineering expenses ($6 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. 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.

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 higher capital spending to fund growth initiatives, non-recurring tax settlements and an acceleration in the timing of commercial settlements in fiscal 2025. Adient anticipates settling approximately $45 million of certain commercial transactions in the fourth quarter of fiscal 2026 which were originally anticipated to be settled 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%). 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).

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 June 30, 2026 under this facility, and total availability on that date was $834 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 $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,

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 $621 million and $626 million as of June 30, 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, 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

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.

Current wording

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

Previous 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.

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 prior year and a lower level of share repurchases. Refer to Note 11, "Equity and Noncontrolling Interests," of the notes to the consolidated financial statements for additional information.

Previous wording

Capital expenditures: Capital expenditures during the first six months of fiscal 2026 were driven by higher levels of investments in artificial intelligence ("AI"), automation and innovation as well as expenditures related to new and replacement programs.

Current wording

Capital expenditures: Capital expenditures during the first nine months of fiscal 2026 were driven by higher levels of investments in artificial intelligence ("AI"), automation and innovation as well as expenditures related to new and replacement programs.

Previous 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.

Current wording

Working capital decreased by $76 million primarily due to an increase in accounts payable resulting from higher levels of production activities and a decrease in cash and cash equivalents, partially offset by a decrease in accrued liabilities resulting from the payment of indirect taxes, as well as increases in other current assets and inventories.