Adient (ADNT) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Appendix

Page 1

Adient plc

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

	Three Months Ended March 31,
(in millions, except per share data)	2024		2023
Net sales	$	3,750	$	3,912
Cost of sales	3,520		3,662
Gross profit	230		250
Selling, general and administrative expenses	115		141
Restructuring and impairment costs	125		17
Equity income	18		4
Earnings before interest and income taxes	8		96
Net financing charges	47		59
Other pension expense	2		2
Income (loss) before income taxes	(41)		35
Income tax expense (benefit)	8		25
Net income (loss)	(49)		10
Income (loss) attributable to noncontrolling interests	21		25
Net income (loss) attributable to Adient	$	(70)	$	(15)
Diluted earnings (loss) per share	$	(0.77)	$	(0.16)
Shares outstanding at period end	89.8		94.7
Diluted weighted average shares	90.5		95.3

Appendix

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Adient plc

Condensed Consolidated Statements of Financial Position

(Unaudited)

	March 31,		September 30,
(in millions)	2024		2023
Assets
Cash and cash equivalents	$	905	$	1,110
Accounts receivable - net	1,896		1,874
Inventories	791		841
Other current assets	533		491
Current assets	4,125		4,316
Property, plant and equipment - net	1,371		1,382
Goodwill	2,099		2,094
Other intangible assets - net	382		408
Investments in partially-owned affiliates	330		303
Assets held for sale	8		7
Other noncurrent assets	963		914
Total assets	$	9,278	$	9,424
Liabilities and Shareholders' Equity
Short-term debt	$	134	$	134
Accounts payable and accrued expenses	2,856		2,926
Other current liabilities	668		678
Current liabilities	3,658		3,738
Long-term debt	2,401		2,401
Other noncurrent liabilities	759		682
Redeemable noncontrolling interests	58		57
Shareholders' equity attributable to Adient	2,075		2,228
Noncontrolling interests	327		318
Total liabilities and shareholders' equity	$	9,278	$	9,424

Appendix

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Adient plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
(in millions)	2024		2023
Operating Activities
Net income (loss) attributable to Adient	$	(70)	$	(15)
Income attributable to noncontrolling interests	21		25
Net income (loss)	(49)		10
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation	70		71
Amortization of intangibles	12		13
Pension and postretirement benefit expense (benefit)	3		4
Pension and postretirement contributions, net	(6)		(6)
Equity in earnings of partially-owned affiliates, net of dividends received	(14)		(10)
Impairment of interests in nonconsolidated partially-owned affiliates	—		7
Premium paid on repurchase of debt	—		7
Deferred income taxes	(1)		(3)
Equity-based compensation	10		10
Other	2		5
Changes in assets and liabilities:
Receivables	(267)		(265)
Inventories	27		59
Other assets	22		(24)
Accounts payable and accrued liabilities	292		249
Accrued income taxes	(20)		(1)
Cash provided (used) by operating activities	81		126
Investing Activities
Capital expenditures	(69)		(56)
Business acquisitions	—		(5)
Cash provided (used) by investing activities	(69)		(61)
Financing Activities
Increase (decrease) in short-term debt	(7)		(2)
Increase (decrease) in long-term debt	—		1,000
Repayment of long-term debt	(1)		(1,102)
Debt financing costs	(5)		(16)
Share repurchases	(50)		(28)
Dividends paid to noncontrolling interests	(3)		(2)
Share based compensation and other	—		1
Cash provided (used) by financing activities	(66)		(149)
Effect of exchange rate changes on cash and cash equivalents	(31)		9
Increase (decrease) in cash and cash equivalents	$	(85)	$	(75)

Appendix

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Footnotes

1. Segment Results

Adient manages its business on a geographic basis and operates in the following three reportable segments for financial reporting purposes: 1) Americas, which is inclusive of North America and South America; 2) Europe, the Middle East and Africa ("EMEA") and 3) Asia Pacific/China ("Asia").

Adient evaluates the performance of its reportable segments using an adjusted EBITDA metric defined as income before income taxes and noncontrolling interests, excluding net financing charges, restructuring and impairment costs, restructuring related-costs, net mark-to-market adjustments on pension and postretirement plans, transaction gains/losses, purchase accounting amortization, depreciation, stock-based compensation and other non-recurring items. Also, certain corporate-related costs are not allocated to the segments. The reportable segments are consistent with how management views the markets served by Adient and reflect the financial information that is reviewed by its chief operating decision maker.

Financial information relating to Adient's reportable segments is as follows:

(in millions)	Three months ended March 31, 2024
	Americas			EMEA			Asia			Corporate/Eliminations		Consolidated
Net sales	$	1,660		$	1,370		$	742		$	(22)	$	3,750
Adjusted EBITDA	$	80		$	57		$	112		$	(22)	$	227
Adjusted EBITDA margin	4.8		%	4.2		%	15.1		%	N/A		6.1		%
	Three months ended March 31, 2023
	Americas			EMEA			Asia			Corporate/Eliminations		Consolidated
Net sales	$	1,761		$	1,401		$	774		$	(24)	$	3,912
Adjusted EBITDA	$	72		$	53		$	113		$	(23)	$	215
Adjusted EBITDA margin	4.1		%	3.8		%	14.6		%	N/A		5.5		%

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

	Three Months Ended March 31,
(in millions)	2024		2023
Adjusted EBITDA
Americas	$	80	$	72
EMEA	57		53
Asia	112		113
Subtotal	249		238
Corporate-related costs (1)	(22)		(23)
Restructuring and impairment costs (2)	(125)		(17)
Purchase accounting amortization (3)	(13)		(14)
Restructuring related activities (4)	(2)		—
Impairment of interests in nonconsolidated partially-owned affiliates (6)	—		(7)
Equity based compensation	(10)		(10)
Depreciation	(70)		(71)
Other items (5)	1		—
Earnings before interest and income taxes	$	8	$	96
Net financing charges	(47)		(59)
Other pension income (expense)	(2)		(2)
Income (loss) before income taxes	$	(41)	$	35

Refer to the Footnote Addendum for footnote explanations.

2. Earnings Per Share

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share:

	Three Months Ended March 31,
(in millions, except per share data)	2024		2023
Income available to shareholders
Net income (loss) attributable to Adient	$	(70)	$	(15)
Weighted average shares outstanding
Basic weighted average shares outstanding	90.5		95.3
Effect of dilutive securities:
Unvested restricted stock and unvested performance share awards	—		—
Diluted weighted average shares outstanding	90.5		95.3
Earnings (loss) per share:
Basic	$	(0.77)	$	(0.16)
Diluted	$	(0.77)	$	(0.16)

Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings (loss) per share, which for the three months ended March 31, 2024 and 2023 is a result of being in a loss position.

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3. Non-GAAP Measures

Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income attributable to Adient, Adjusted effective tax rate, Adjusted earnings per share, Adjusted equity income, Adjusted interest expense, Free cash flow, Net debt, and Net leverage ratio as well as other measures presented on an adjusted basis are not recognized terms under U.S. GAAP and do not purport to be alternatives to the most comparable U.S. GAAP amounts. Since all companies do not use identical calculations, our definition and presentation of these measures may not be comparable to similarly titled measures reported by other companies. Management uses the identified non-GAAP measures to evaluate the operating performance of the Company and its business segments and to forecast future periods. Management believes these non-GAAP measures assist investors and other interested parties in evaluating Adient's on-going operations and provide important supplemental information to management and investors regarding financial and business trends relating to Adient's financial condition and results of operations. Investors should not consider these non-GAAP measures as alternatives to the related GAAP measures. Reconciliations of non-GAAP measures to their closest U.S. GAAP equivalent are presented in the corresponding tables that follow the definitions below. Reconciliations of non-GAAP measures related to guidance for any future period have not been provided due to the unreasonable efforts it would take to provide such reconciliations.

Table

(a)	Adjusted EBIT is defined as income (loss) before income taxes and noncontrolling interests excluding net financing charges, restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, other significant non-recurring items, and net mark-to-market adjustments on pension and postretirement plans. Adjusted EBIT margin is adjusted EBIT as a percentage of net sales.
(b)	Adjusted EBITDA is defined as adjusted EBIT excluding depreciation and equity based compensation. Certain corporate-related costs are not allocated to the business segments in determining Adjusted EBITDA. Adjusted EBITDA margin is adjusted EBITDA as a percentage of net sales.
(c)	Adjusted net income attributable to Adient is defined as net income (loss) attributable to Adient excluding restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, expenses associated with becoming an independent company, other significant non-recurring items, net mark-to-market adjustments on pension and postretirement plans, the tax impact of these items and other discrete tax charges/benefits.
(d)	Adjusted income tax expense is defined as income tax expense (benefit) adjusted for the tax effect of the adjustments to income (loss) before income taxes and other discrete tax changes/benefits. Adjusted effective tax rate is defined as adjusted income tax provision as a percentage of adjusted income (loss) before income taxes.
(e)	Adjusted diluted earnings per share is defined as adjusted net income attributable to Adient divided by diluted weighted average shares.
(f)	Adjusted equity income is defined as equity income excluding amortization of Adient's intangible assets related to its non-consolidated joint ventures and other unusual or non-recurring items impacting equity income.
(g)	Adjusted interest expense is defined as net financing charges excluding unusual or one-time items impacting interest expense.
(h)	Free cash flow is defined as cash provided by operating activities less capital expenditures.
(i)	Net debt is calculated as total debt (short-term and long-term) less cash and cash equivalents.
(j)	Net leverage ratio is calculated as net debt divided by adjusted EBITDA for the last four quarters.

Appendix

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Reconciliations of non-GAAP measures to their closest US GAAP equivalent:

(a) & (b) Adjusted EBIT and Adjusted EBITDA

The following table reconciles net income (loss) to EBIT, adjusted EBIT and adjusted EBITDA:

	Three Months Ended March 31,
(in millions)	2024			2023
Net income (loss)	$	(49)		$	10
Net financing charges	47			59
Other pension expense	2			2
Income tax expense (benefit)	8			25
Earnings before interest and income taxes (EBIT)	$	8		$	96
EBIT adjustments:
Restructuring charges (2)	125			17
Purchase accounting amortization (3)	13			14
Restructuring related activities (4)	2			—
Impairment of interests in nonconsolidated partially-owned affiliates (6)	—			7
Transaction costs	—			1
Brazil indirect tax recoveries	(1)			(1)
EBIT adjustments total	139			38
Adjusted EBIT	$	147		$	134
EBITDA adjustments:
Depreciation	70			71
Equity based compensation	10			10
Adjusted EBITDA	$	227		$	215
Net sales	$	3,750		$	3,912
Net income (loss) as % of net sales	(1.3)		%	0.3		%
EBIT as % of net sales	0.2		%	2.5		%
Adjusted EBIT as % of net sales	3.9		%	3.4		%
Adjusted EBITDA as % of net sales	6.1		%	5.5		%

Refer to the Footnote Addendum for footnote explanations.

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(c) Adjusted net income attributable to Adient

The following table reconciles net income (loss) attributable to Adient to adjusted net income attributable to Adient:

	Three Months Ended March 31,
(in millions)	2024		2023
Net income (loss) attributable to Adient	$	(70)	$	(15)
Net income adjustments:
EBIT adjustments total - see table (a) & (b)	139		38
Tax impact of EBIT adjustments and other tax items - see table (d)	(20)		(2)
Fees paid on Term Loan B modifications	1		—
Premium paid on repurchase of debt	—		7
Write off of deferred financing costs upon repurchase of debt	—		4
Impact of adjustments on noncontrolling interests (7)	(1)		(1)
Net income adjustments total	119		46
Adjusted net income attributable to Adient	$	49	$	31

Refer to the Footnote Addendum for footnote explanations.

(d) Adjusted income tax expense and effective tax rate

The following table reconciles income (loss) before income taxes to adjusted income before income taxes, reconciles income tax expense (benefit) to adjusted income tax expense (benefit) and presents the related effective tax rate and adjusted effective tax rate:

	Three months ended March 31,
	2024						2023
(in millions, except effective tax rate)	Income (loss) before income taxes		Income tax expense (benefit)		Effective tax rate		Income (loss) before income taxes		Income tax expense (benefit)		Effective tax rate
As reported	$	(41)	$	8	(19.5)	%	$	35	$	25	71.4	%
Adjustments
EBIT adjustments - see table (a) & (b)	139		3		2.2	%	38		1		2.6	%
Tax audit closures and statute expirations	—		14		nm		—		1		nm
Net financing charges	1		—		—	%	11		—		—	%
FX remeasurements of tax balances	—		3		nm		—		2		nm
Other	—		—		nm		—		(2)		nm
Subtotal of adjustments	140		20		14.3	%	49		2		4.1	%
As adjusted	$	99	$	28	28.3	%	$	84	$	27	32.1	%

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(e) Adjusted diluted earnings per share

The following table shows the calculation of diluted earnings per share on an adjusted basis:

	Three Months Ended March 31,
(in millions, except per share data)	2024		2023
Numerator:
Adjusted net income attributable to Adient - see table (c)	$	49	$	31
Denominator:
Basic weighted average shares outstanding	90.5		95.3
Effect of dilutive securities:
Unvested restricted stock and unvested performance share awards	0.7		0.8
Diluted weighted average shares outstanding	91.2		96.1
Adjusted diluted earnings per share	$	0.54	$	0.32

The following table reconciles diluted earnings (loss) per share as reported to adjusted diluted earnings per share (see table (c) for corresponding dollar amounts):

	Three Months Ended March 31,
	2024		2023
Diluted earnings (loss) per share as reported	$	(0.77)	$	(0.16)
EBIT adjustments total	1.53		0.40
Tax impact of EBIT adjustments and other tax items	(0.22)		(0.02)
Fees paid on Term Loan B modifications	0.01		—
Premium paid on repurchase of debt	—		0.07
Write off of deferred financing costs upon repurchase of debt	—		0.04
Impact of adjustments on noncontrolling interests	(0.01)		(0.01)
Adjusted diluted earnings per share	$	0.54	$	0.32

(f) Adjusted equity income

The following table reconciles equity income to adjusted equity income:

	Three Months Ended March 31,
(in millions)	2024		2023
Equity income	$	18	$	4
Equity income adjustments:
Impairment of interests in nonconsolidated partially owned affiliates	—		7
Purchase accounting amortization	1		1
Equity income adjustments total	1		8
Adjusted equity income	$	19	$	12

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(g) Adjusted interest expense

The following table reconciles net financing charges to adjusted net financing charges:

	Three Months Ended March 31,
(in millions)	2024		2023
Net financing charges	$	47	$	59
Interest expense adjustments:
Premium paid on repurchase of debt	—		(7)
Write off of deferred financing costs upon repurchase of debt	—		(4)
Fees paid on Term Loan B modifications	(1)		—
Interest expense adjustments total	(1)		(11)
Adjusted net financing charges	$	46	$	48

(h) Free cash flow

The following table reconciles cash from operating activities to free cash flow:

	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2024		2023		2024		2023
Operating cash flow	$	81	$	126	$	122	$	170
Capital expenditures	(69)		(56)		(124)		(117)
Free cash flow	$	12	$	70	$	(2)	$	53

The following table reconciles adjusted EBITDA to free cash flow:

	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2024		2023		2024		2023
Adjusted EBITDA	$	227	$	215	$	443	$	427
Adjusted equity income	(19)		(12)		(44)		(39)
Dividend	5		1		21		13
Restructuring (cash)	(11)		(10)		(21)		(40)
Net customer tooling	19		(23)		2		(37)
Trade working capital (Net AR/AP + Inventory)	(76)		(14)		35		32
Accrued compensation	14		38		(50)		10
Interest paid	(37)		(64)		(97)		(88)
Tax refund/taxes paid	(28)		(29)		(52)		(49)
Non-income related taxes (VAT)	7		27		(21)		8
Commercial settlements	(24)		45		(8)		28
Capitalized engineering	6		(9)		(11)		(34)
Prepaids	(2)		(1)		(21)		(25)
Other	—		(38)		(54)		(36)
Operating cash flow	81		126		122		170
Capital expenditures	(69)		(56)		(124)		(117)
Free cash flow	$	12	$	70	$	(2)	$	53

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(i) & (j) Net debt and net leverage ratio

The following table presents calculations of net debt and net leverage ratio:

	March 31,		September 30,
(in millions)	2024		2023
Numerator:
Short-term debt	$	—	$	2
Current portion of long-term debt	134		132
Long-term debt	2,401		2,401
Total debt	2,535		2,535
Less: cash and cash equivalents	(905)		(1,110)
Net debt	$	1,630	$	1,425
Denominator:
Adjusted EBITDA - last four quarters
Q1 2023	na		212
Q2 2023	na		215
Q3 2023	276		276
Q4 2023	235		235
Q1 2024	216		na
Q2 2024 - see table (a) & (b)	227		na
Last four quarters	$	954	$	938
Net leverage ratio	1.71		1.52

Appendix

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Footnote Addendum

(1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance.

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and one-time asset impairments related

to restructuring activities.

(3) Reflects amortization of intangible assets including those related to partially owned affiliates recorded within equity income.

(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.

(5) Other items include:

	Three Months Ended March 31,
(in millions)	2024		2023
Transaction costs	$	—	$	(1)
Brazil indirect tax recoveries	1		1
	$	1	$	—

(6) The three months ended March 31, 2023 reflects $4 million and $3 million of non-recurring impairment to certain of Adient's investments in nonconsolidated partially-owned affiliates in Asia and EMEA, respectively.

(7) Reflects the impact of adjustments, primarily purchase accounting amortization on noncontrolling interests.