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FORM
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10-Q
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Adient plc
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(exact name of Registrant as specified in its charter)
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Ireland
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98-1328821
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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25-28 North Wall Quay, IFSC, Dublin 1, Ireland
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(Address of principal executive offices)
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Registrant's telephone number, including area code:
414-220-8900
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Securities registered pursuant to Section 12(b) of the Act:
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(Title of class)
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(Name of exchange on which registered)
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Ordinary Shares, par value $0.001
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Yes
x
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No
¨
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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Yes
x
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No
¨
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||
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||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer' and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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Yes
¨
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No
x
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PAGE
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Three Months Ended
December 31,
|
||||||
(in millions, except per share data)
|
|
2016
|
|
2015
|
||||
Net sales
|
|
$
|
4,038
|
|
|
$
|
4,233
|
|
Cost of sales
|
|
3,688
|
|
|
3,865
|
|
||
Gross profit
|
|
350
|
|
|
368
|
|
||
Selling, general and administrative expenses
|
|
217
|
|
|
253
|
|
||
Equity income
|
|
101
|
|
|
94
|
|
||
Earnings before interest and income taxes
|
|
234
|
|
|
209
|
|
||
Net financing charges
|
|
35
|
|
|
2
|
|
||
Income before income taxes
|
|
199
|
|
|
207
|
|
||
Income tax provision
|
|
28
|
|
|
53
|
|
||
Net income
|
|
171
|
|
|
154
|
|
||
Income attributable to noncontrolling interests
|
|
22
|
|
|
17
|
|
||
Net income attributable to Adient
|
|
$
|
149
|
|
|
$
|
137
|
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
Diluted
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
|
|
|
|
|
||||
Shares used in computing earnings per share:
|
|
|
|
|
||||
Basic
|
|
93.7
|
|
|
93.7
|
|
||
Diluted
|
|
93.9
|
|
|
93.8
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Net income
|
|
$
|
171
|
|
|
$
|
154
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(449
|
)
|
|
(152
|
)
|
||
Realized and unrealized gains (losses) on derivatives
|
|
(2
|
)
|
|
2
|
|
||
Other comprehensive income (loss)
|
|
(451
|
)
|
|
(150
|
)
|
||
Total comprehensive income (loss)
|
|
(280
|
)
|
|
4
|
|
||
Comprehensive income (loss) attributable to noncontrolling interests
|
|
20
|
|
|
17
|
|
||
Comprehensive income (loss) attributable to Adient
|
|
$
|
(300
|
)
|
|
$
|
(13
|
)
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
709
|
|
|
$
|
105
|
|
Restricted cash
|
|
—
|
|
|
2,034
|
|
||
Accounts receivable - net
|
|
1,823
|
|
|
2,082
|
|
||
Inventories
|
|
635
|
|
|
660
|
|
||
Other current assets
|
|
823
|
|
|
810
|
|
||
Current assets
|
|
3,990
|
|
|
5,691
|
|
||
Property, plant and equipment - net
|
|
2,138
|
|
|
2,195
|
|
||
Goodwill
|
|
2,082
|
|
|
2,179
|
|
||
Other intangible assets - net
|
|
102
|
|
|
113
|
|
||
Investments in partially-owned affiliates
|
|
1,765
|
|
|
1,748
|
|
||
Other noncurrent assets
|
|
1,180
|
|
|
1,064
|
|
||
Total assets
|
|
$
|
11,257
|
|
|
$
|
12,990
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
||||
Short-term debt
|
|
$
|
48
|
|
|
$
|
41
|
|
Current portion of long-term debt
|
|
56
|
|
|
38
|
|
||
Accounts payable
|
|
2,410
|
|
|
2,776
|
|
||
Accrued compensation and benefits
|
|
318
|
|
|
430
|
|
||
Restructuring reserve
|
|
291
|
|
|
351
|
|
||
Other current liabilities
|
|
707
|
|
|
624
|
|
||
Current liabilities
|
|
3,830
|
|
|
4,260
|
|
||
Long-term debt
|
|
3,357
|
|
|
3,442
|
|
||
Pension and postretirement benefits
|
|
170
|
|
|
188
|
|
||
Other noncurrent liabilities
|
|
471
|
|
|
725
|
|
||
Long-term liabilities
|
|
3,998
|
|
|
4,355
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
||||
Redeemable noncontrolling interests
|
|
38
|
|
|
34
|
|
||
Preferred stock issued, par value $0.001; 100,000,000 shares authorized
0 shares issued and outstanding at December 31, 2016 |
|
—
|
|
|
—
|
|
||
Ordinary shares issued, par value $0.001; 500,000,000 shares authorized
93,693,424 shares issued and 93,685,409 shares outstanding at December 31, 2016 |
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
3,899
|
|
|
—
|
|
||
Retained earnings
|
|
84
|
|
|
—
|
|
||
Parent's net investment
|
|
—
|
|
|
4,486
|
|
||
Accumulated other comprehensive income (loss)
|
|
(725
|
)
|
|
(276
|
)
|
||
Shareholders' equity attributable to Adient
|
|
3,258
|
|
|
4,210
|
|
||
Noncontrolling interests
|
|
133
|
|
|
131
|
|
||
Total shareholders' equity
|
|
3,391
|
|
|
4,341
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
11,257
|
|
|
$
|
12,990
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Operating Activities
|
|
|
|
|
||||
Net income attributable to Adient
|
|
$
|
149
|
|
|
$
|
137
|
|
Income attributable to noncontrolling interests
|
|
22
|
|
|
17
|
|
||
Net income
|
|
171
|
|
|
154
|
|
||
Adjustments to reconcile net income to cash provided (used) by operating activities:
|
|
|
||||||
Depreciation
|
|
83
|
|
|
82
|
|
||
Amortization of intangibles
|
|
5
|
|
|
4
|
|
||
Pension and postretirement benefit expense
|
|
1
|
|
|
1
|
|
||
Pension and postretirement contributions
|
|
(9
|
)
|
|
(7
|
)
|
||
Equity in earnings of partially-owned affiliates, net of dividends received (includes purchase accounting amortization of $5 and $5, respectively)
|
|
(79
|
)
|
|
(85
|
)
|
||
Deferred income taxes
|
|
9
|
|
|
(27
|
)
|
||
Equity-based compensation
|
|
6
|
|
|
1
|
|
||
Other
|
|
—
|
|
|
2
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Receivables
|
|
181
|
|
|
222
|
|
||
Inventories
|
|
1
|
|
|
(5
|
)
|
||
Other assets
|
|
(17
|
)
|
|
50
|
|
||
Restructuring reserves
|
|
(42
|
)
|
|
(34
|
)
|
||
Accounts payable and accrued liabilities
|
|
(323
|
)
|
|
(263
|
)
|
||
Accrued income taxes
|
|
—
|
|
|
(5
|
)
|
||
Cash provided (used) by operating activities
|
|
(13
|
)
|
|
90
|
|
||
Investing Activities
|
|
|
|
|
||||
Capital expenditures
|
|
(207
|
)
|
|
(108
|
)
|
||
Sale of property, plant and equipment
|
|
13
|
|
|
7
|
|
||
Business divestitures
|
|
—
|
|
|
18
|
|
||
Changes in long-term investments
|
|
(6
|
)
|
|
—
|
|
||
Other
|
|
(3
|
)
|
|
4
|
|
||
Cash provided (used) by investing activities
|
|
(203
|
)
|
|
(79
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Net transfers from (to) Parent prior to separation
|
|
606
|
|
|
(11
|
)
|
||
Cash transferred from former Parent post separation
|
|
228
|
|
|
—
|
|
||
Increase in short-term debt
|
|
9
|
|
|
25
|
|
||
Repayment of long-term debt
|
|
—
|
|
|
(3
|
)
|
||
Dividends paid to noncontrolling interests
|
|
(12
|
)
|
|
(7
|
)
|
||
Other
|
|
2
|
|
|
—
|
|
||
Cash provided (used) by financing activities
|
|
833
|
|
|
4
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(13
|
)
|
|
(1
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
|
604
|
|
|
14
|
|
||
Cash and cash equivalents at beginning of period
|
|
105
|
|
|
44
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
709
|
|
|
$
|
58
|
|
Note 1.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Current assets
|
|
$
|
257
|
|
|
$
|
281
|
|
Noncurrent assets
|
|
44
|
|
|
45
|
|
||
Total assets
|
|
$
|
301
|
|
|
$
|
326
|
|
|
|
|
|
|
||||
Current liabilities
|
|
$
|
192
|
|
|
$
|
219
|
|
Total liabilities
|
|
$
|
192
|
|
|
$
|
219
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions, except per share data)
|
|
2016
|
|
2015
|
||||
Numerator:
|
|
|
|
|
||||
Net income attributable to Adient
|
|
$
|
149
|
|
|
$
|
137
|
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
||||
Shares outstanding
|
|
93.7
|
|
|
93.7
|
|
||
Effect of dilutive securities
|
|
0.2
|
|
|
0.1
|
|
||
Diluted shares
|
|
93.9
|
|
|
93.8
|
|
||
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
Diluted
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
Note 2.
|
INVENTORIES
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Raw materials and supplies
|
|
$
|
476
|
|
|
$
|
502
|
|
Work-in-process
|
|
33
|
|
|
35
|
|
||
Finished goods
|
|
126
|
|
|
123
|
|
||
Inventories
|
|
$
|
635
|
|
|
$
|
660
|
|
Note 3.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
(in millions)
|
|
September 30, 2016
|
|
Business
Acquisitions
|
|
Business
Divestitures
|
|
Currency Translation
and Other
|
|
December 31, 2016
|
||||||||||
Goodwill
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Seating
|
|
$
|
2,179
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(97
|
)
|
|
$
|
2,082
|
|
|
|
December 31, 2016
|
|
September 30, 2016
|
||||||||||||||||||||
(in millions)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patented technology
|
|
$
|
27
|
|
|
$
|
(13
|
)
|
|
$
|
14
|
|
|
$
|
28
|
|
|
$
|
(13
|
)
|
|
$
|
15
|
|
Customer relationships
|
|
94
|
|
|
(48
|
)
|
|
46
|
|
|
100
|
|
|
(48
|
)
|
|
52
|
|
||||||
Trademarks
|
|
53
|
|
|
(20
|
)
|
|
33
|
|
|
56
|
|
|
(19
|
)
|
|
37
|
|
||||||
Miscellaneous
|
|
15
|
|
|
(6
|
)
|
|
9
|
|
|
15
|
|
|
(6
|
)
|
|
9
|
|
||||||
Total intangible assets
|
|
$
|
189
|
|
|
$
|
(87
|
)
|
|
$
|
102
|
|
|
$
|
199
|
|
|
$
|
(86
|
)
|
|
$
|
113
|
|
Note 4.
|
PRODUCT WARRANTIES
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
|
$
|
13
|
|
|
$
|
12
|
|
Accruals for warranties issued during the period
|
|
1
|
|
|
2
|
|
||
Changes in accruals related to pre-existing warranties (including changes in estimates)
|
|
4
|
|
|
(2
|
)
|
||
Settlements made (in cash or in kind) during the period
|
|
(3
|
)
|
|
(1
|
)
|
||
Balance at end of period
|
|
$
|
15
|
|
|
$
|
11
|
|
Note 5.
|
DEBT AND FINANCING ARRANGEMENTS
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Term Loan A - LIBOR plus 1.75% due in 2021
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
4.875% Notes due in 2026
|
|
900
|
|
|
900
|
|
||
3.50% Notes due in 2024
|
|
1,052
|
|
|
1,119
|
|
||
Capital lease obligations
|
|
2
|
|
|
2
|
|
||
Other
|
|
1
|
|
|
2
|
|
||
Less: debt issuance costs
|
|
(42
|
)
|
|
(43
|
)
|
||
Gross long-term debt
|
|
3,413
|
|
|
3,480
|
|
||
Less: current portion
|
|
56
|
|
|
38
|
|
||
Net long-term debt
|
|
$
|
3,357
|
|
|
$
|
3,442
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Interest expense, net of capitalized interest costs
|
|
$
|
33
|
|
|
$
|
1
|
|
Banking fees and debt issuance cost amortization
|
|
2
|
|
|
1
|
|
||
Interest income
|
|
(1
|
)
|
|
—
|
|
||
Net foreign exchange
|
|
1
|
|
|
—
|
|
||
Net financing charges
|
|
$
|
35
|
|
|
$
|
2
|
|
Note 6.
|
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
|
|
Derivatives and Hedging
Activities Designated as
Hedging Instruments
under ASC 815
|
|
Derivatives and Hedging
Activities Not Designated as
Hedging Instruments
under ASC 815
|
||||||||||||
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
|
September 30,
2016 |
||||||||
Other current assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
16
|
|
|
$
|
40
|
|
Other noncurrent assets
|
|
|
|
|
|
|
|
|
||||||||
Equity swaps
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total assets
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
19
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
4
|
|
|
$
|
8
|
|
Equity swaps
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Long-term debt
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated debt
|
|
1,052
|
|
|
1,119
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
1,083
|
|
|
$
|
1,150
|
|
|
$
|
6
|
|
|
$
|
8
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||||
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
|
September 30,
2016 |
||||||||
Gross amount recognized
|
|
$
|
26
|
|
|
$
|
49
|
|
|
$
|
1,089
|
|
|
$
|
1,158
|
|
Gross amount eligible for offsetting
|
|
(5
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(1
|
)
|
||||
Net amount
|
|
$
|
21
|
|
|
$
|
48
|
|
|
$
|
1,084
|
|
|
$
|
1,157
|
|
(in millions)
|
|
Three Months Ended
December 31, |
||||||
|
2016
|
|
2015
|
|||||
Foreign currency exchange derivatives
|
|
$
|
(7
|
)
|
|
$
|
(4
|
)
|
(in millions)
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2016
|
|
2015
|
||||||
Foreign currency exchange derivatives
|
|
Cost of sales
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
(in millions)
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2016
|
|
2015
|
||||||
Foreign currency exchange derivatives
|
|
Cost of sales
|
|
$
|
(14
|
)
|
|
$
|
(4
|
)
|
Foreign currency exchange derivatives
|
|
Net financing charges
|
|
31
|
|
|
7
|
|
||
Equity swap
|
|
Selling, general and administrative
|
|
(1
|
)
|
|
—
|
|
||
Total
|
|
|
|
$
|
16
|
|
|
$
|
3
|
|
Note 7.
|
FAIR VALUE MEASUREMENTS
|
|
|
Fair Value Measurements Using:
|
||||||||||||||
(in millions)
|
|
Total as of
December 31,
2016
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Other current assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
Other noncurrent assets
|
|
|
|
|
|
|
|
|
||||||||
Equity swaps
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total assets
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
—
|
|
Equity swaps
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||||
(in millions)
|
|
Total as of
September 30, 2016
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Other current assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
—
|
|
Total assets
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Total liabilities
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Note 8.
|
STOCK-BASED COMPENSATION
|
|
|
Weighted
Average
Option Price
|
|
Shares
Subject to
Option
|
|
Weighted
Average
Remaining
Contractual
Life (years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||
Outstanding, September 30, 2016
|
|
$
|
32.42
|
|
|
2,336,028
|
|
|
|
|
|
||
Exercised
|
|
27.22
|
|
|
(6,280
|
)
|
|
|
|
|
|||
Forfeited or expired
|
|
31.71
|
|
|
(3,330
|
)
|
|
|
|
|
|||
Converted
|
|
33.28
|
|
|
169,125
|
|
|
|
|
|
|||
Converted and outstanding on October 31, 2016
|
|
32.49
|
|
|
2,495,543
|
|
|
|
|
|
|||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
27.19
|
|
|
(6,737
|
)
|
|
|
|
|
|||
Forfeited or expired
|
|
25.88
|
|
|
(2,861
|
)
|
|
|
|
|
|||
Outstanding, December 31, 2016
|
|
$
|
32.51
|
|
|
2,485,945
|
|
|
4.6
|
|
$
|
33
|
|
Exercisable, December 31, 2016
|
|
$
|
28.62
|
|
|
2,215,004
|
|
|
4.1
|
|
$
|
32
|
|
|
|
|
|
|
|
|
|
|
|||||
JCI outstanding, December 31, 2016
|
|
$
|
32.40
|
|
|
2,261,192
|
|
|
4.6
|
|
$
|
27
|
|
Adient outstanding, December 31, 2016
|
|
33.64
|
|
|
224,753
|
|
|
4.6
|
|
6
|
|
||
Total outstanding, December 31, 2016
|
|
$
|
32.51
|
|
|
2,485,945
|
|
|
4.6
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
|||||
JCI exercisable, December 31, 2016
|
|
$
|
28.29
|
|
|
2,014,880
|
|
|
4.1
|
|
$
|
27
|
|
Adient exercisable, December 31, 2016
|
|
31.95
|
|
|
200,124
|
|
|
4.6
|
|
5
|
|
||
Total exercisable, December 31, 2016
|
|
$
|
28.62
|
|
|
2,215,004
|
|
|
4.1
|
|
$
|
32
|
|
|
|
Weighted
Average
SAR Price
|
|
Shares
Subject to
SAR
|
|
Weighted
Average
Remaining
Contractual
Life (years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||
Outstanding, September 30, 2016
|
|
$
|
31.26
|
|
|
654,694
|
|
|
|
|
|
||
Exercised
|
|
29.68
|
|
|
(9,470
|
)
|
|
|
|
|
|||
Converted
|
|
33.16
|
|
|
41,713
|
|
|
|
|
|
|||
Converted and outstanding on October 31, 2016
|
|
31.40
|
|
|
686,937
|
|
|
|
|
|
|||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
29.28
|
|
|
(13,380
|
)
|
|
|
|
|
|||
Forfeited or expired
|
|
46.62
|
|
|
(3,354
|
)
|
|
|
|
|
|||
Outstanding, December 31, 2016
|
|
$
|
31.37
|
|
|
670,203
|
|
|
4.3
|
|
$
|
9
|
|
Exercisable, December 31, 2016
|
|
$
|
28.20
|
|
|
632,055
|
|
|
4.0
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|||||
JCI outstanding, December 31, 2016
|
|
$
|
31.25
|
|
|
607,446
|
|
|
4.3
|
|
$
|
8
|
|
Adient outstanding, December 31, 2016
|
|
32.53
|
|
|
62,757
|
|
|
4.3
|
|
1
|
|
||
Total outstanding, December 31, 2016
|
|
$
|
31.37
|
|
|
670,203
|
|
|
4.3
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|||||
JCI exercisable, December 31, 2016
|
|
$
|
27.87
|
|
|
573,533
|
|
|
4.0
|
|
$
|
8
|
|
Adient exercisable, December 31, 2016
|
|
31.47
|
|
|
58,522
|
|
|
4.0
|
|
1
|
|
||
Total exercisable, December 31, 2016
|
|
$
|
28.20
|
|
|
632,055
|
|
|
4.0
|
|
$
|
9
|
|
|
|
Weighted
Average
Price
|
|
Shares/Units
Subject to
Restriction
|
|||
Nonvested, September 30, 2016
|
|
$
|
46.42
|
|
|
1,320,448
|
|
Converted
|
|
48.06
|
|
|
135,026
|
|
|
Converted and nonvested on October 31, 2016
|
|
46.57
|
|
|
1,455,474
|
|
|
Granted
|
|
45.19
|
|
|
1,162,213
|
|
|
Vested
|
|
50.31
|
|
|
(280,694
|
)
|
|
Forfeited
|
|
45.93
|
|
|
(15,152
|
)
|
|
Nonvested, December 31, 2016
|
|
$
|
45.44
|
|
|
2,321,841
|
|
|
|
|
|
|
|||
JCI nonvested, December 31, 2016
|
|
$
|
45.59
|
|
|
1,052,227
|
|
Adient nonvested, December 31, 2016
|
|
45.40
|
|
|
1,269,614
|
|
|
Total nonvested, December 31, 2016
|
|
$
|
45.44
|
|
|
2,321,841
|
|
|
|
Weighted
Average Price |
|
Shares/Units
Subject to PSU |
|||
Nonvested, September 30, 2016
|
|
$
|
—
|
|
|
—
|
|
Converted and nonvested on October 31, 2016
|
|
—
|
|
|
—
|
|
|
Granted
|
|
44.60
|
|
|
236,034
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Nonvested, December 31, 2016
|
|
$
|
44.60
|
|
|
236,034
|
|
Note 9.
|
EQUITY AND NONCONTROLLING INTERESTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity Attributable to Noncontrolling Interests
|
|
|
||||||||||||||||
(in millions)
|
|
Ordinary Shares
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Parent's Net Investment
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Shareholders' Equity Attributable
to Adient
|
|
|
Total Equity
|
|||||||||||||||||
Balance at September 30, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,873
|
|
|
$
|
(247
|
)
|
|
$
|
5,626
|
|
|
$
|
141
|
|
|
$
|
5,767
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
137
|
|
|
11
|
|
|
148
|
|
||||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(152
|
)
|
|
(152
|
)
|
|
—
|
|
|
(152
|
)
|
||||||||
Realized and unrealized gains (losses) on derivatives
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Change in Parent's net investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
||||||||
Dividends attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||||
Balance at December 31, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,001
|
|
|
$
|
(397
|
)
|
|
$
|
5,604
|
|
|
$
|
145
|
|
|
$
|
5,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at September 30, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,486
|
|
|
$
|
(276
|
)
|
|
$
|
4,210
|
|
|
$
|
131
|
|
|
$
|
4,341
|
|
Net income
|
|
—
|
|
|
—
|
|
|
84
|
|
|
65
|
|
|
—
|
|
|
149
|
|
|
17
|
|
|
166
|
|
||||||||
Change in Parent's net investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(880
|
)
|
|
—
|
|
|
(880
|
)
|
|
—
|
|
|
(880
|
)
|
||||||||
Cash transferred from former Parent
|
|
—
|
|
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|
—
|
|
|
228
|
|
||||||||
Reclassification of Parent's net investment and issuance of ordinary shares in connection with separation
|
|
—
|
|
|
3,671
|
|
|
—
|
|
|
(3,671
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(447
|
)
|
|
(447
|
)
|
|
(1
|
)
|
|
(448
|
)
|
||||||||
Realized and unrealized gains (losses) on derivatives
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||
Dividends attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
||||||||
Change in noncontrolling interest share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||
Balance at December 31, 2016
|
|
$
|
—
|
|
|
$
|
3,899
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
(725
|
)
|
|
$
|
3,258
|
|
|
$
|
133
|
|
|
$
|
3,391
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Beginning balance
|
|
$
|
34
|
|
|
$
|
31
|
|
Net income
|
|
5
|
|
|
6
|
|
||
Foreign currency translation adjustments
|
|
(1
|
)
|
|
—
|
|
||
Dividends
|
|
—
|
|
|
(2
|
)
|
||
Ending balance
|
|
$
|
38
|
|
|
$
|
35
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions, net of tax)
|
|
2016
|
|
2015
|
||||
Foreign currency translation adjustments
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(260
|
)
|
|
$
|
(229
|
)
|
Aggregate adjustment for the period (net of tax effect of $0 and $8)
|
|
(447
|
)
|
|
(152
|
)
|
||
Balance at end of period
|
|
(707
|
)
|
|
(381
|
)
|
||
Realized and unrealized gains (losses) on derivatives
|
|
|
|
|
||||
Balance at beginning of period
|
|
(14
|
)
|
|
(17
|
)
|
||
Current period changes in fair value (net of tax effect of $(2) and $0)
|
|
(4
|
)
|
|
(1
|
)
|
||
Reclassification to income (net of tax effect of $1 and $2) *
|
|
2
|
|
|
3
|
|
||
Balance at end of period
|
|
(16
|
)
|
|
(15
|
)
|
||
Pension and postretirement plans
|
|
|
|
|
||||
Balance at beginning of period
|
|
(2
|
)
|
|
(1
|
)
|
||
Balance at end of period
|
|
(2
|
)
|
|
(1
|
)
|
||
Accumulated other comprehensive income (loss), end of period
|
|
$
|
(725
|
)
|
|
$
|
(397
|
)
|
Note 10.
|
SIGNIFICANT RESTRUCTURING AND IMPAIRMENT COSTS
|
(in millions)
|
|
Employee Severance and Termination Benefits
|
|
Long-Lived Asset Impairments
|
|
Other
|
|
Currency
Translation |
|
Total
|
||||||||||
Original Reserve
|
|
$
|
223
|
|
|
$
|
87
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Utilized—cash
|
|
(29
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(30
|
)
|
|||||
Utilized—noncash
|
|
—
|
|
|
(87
|
)
|
|
—
|
|
|
(2
|
)
|
|
(89
|
)
|
|||||
Balance at September 30, 2016
|
|
194
|
|
|
—
|
|
|
21
|
|
|
(2
|
)
|
|
213
|
|
|||||
Utilized—cash
|
|
(4
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Utilized—noncash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||||
Balance at December 31, 2016
|
|
$
|
190
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
(12
|
)
|
|
$
|
187
|
|
(in millions)
|
|
Employee Severance and Termination Benefits
|
|
Long-Lived Asset Impairments
|
|
Currency
Translation |
|
Total
|
||||||||
Original Reserve
|
|
$
|
155
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
182
|
|
Utilized—cash
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Utilized—noncash
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
||||
Balance at September 30, 2015
|
|
154
|
|
|
—
|
|
|
—
|
|
|
154
|
|
||||
Utilized—cash
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||
Utilized—noncash
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Balance at September 30, 2016
|
|
113
|
|
|
—
|
|
|
(1
|
)
|
|
112
|
|
||||
Utilized—cash
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Utilized—noncash
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||
Balance at December 31, 2016
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
83
|
|
Note 11.
|
INCOME TAXES
|
Note 12.
|
SEGMENT INFORMATION
|
•
|
The Seating segment produces automotive seat metal structures and mechanisms, foam, trim, fabric and complete seat systems.
|
|
|
•
|
The Interiors segment, derived from its global automotive interiors joint ventures, produces instrument panels, floor consoles, door panels, overhead consoles, cockpit systems, decorative trim and other products.
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Adjusted EBIT
|
|
|
|
|
||||
Seating
|
|
$
|
260
|
|
|
$
|
237
|
|
Interiors
|
|
30
|
|
|
24
|
|
||
Becoming Adient/separation costs
(1)
|
|
(41
|
)
|
|
(60
|
)
|
||
Purchase accounting amortization
(2)
|
|
(10
|
)
|
|
(9
|
)
|
||
Restructuring related charges
(3)
|
|
(5
|
)
|
|
(4
|
)
|
||
Other items
(4)
|
|
—
|
|
|
21
|
|
||
Earnings before interest and income taxes
|
|
234
|
|
|
209
|
|
||
Net financing charges
|
|
(35
|
)
|
|
(2
|
)
|
||
Income before income taxes
|
|
$
|
199
|
|
|
$
|
207
|
|
(1)
|
|
Reflects incremental/non-recurring expenses associated with becoming an independent company and expenses associated with the separation from the former Parent.
|
(2)
|
|
Reflects amortization of intangible assets including those related to the YFAI joint venture recorded within equity income.
|
(3)
|
|
Reflects restructuring related charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420.
|
(4)
|
|
Reflects a $13 million favorable commercial settlement and an $8 million multi-employer pension credit associated with the removal of costs for pension plans that remained with the former Parent.
|
Note 13.
|
NONCONSOLIDATED PARTIALLY-OWNED AFFILIATES
|
|
|
December 31, 2016
|
||||||||||
(in millions)
|
|
YFJC
|
|
All Other
|
|
Total
|
||||||
Current assets
|
|
$
|
2,542
|
|
|
$
|
4,284
|
|
|
$
|
6,826
|
|
Noncurrent assets
|
|
613
|
|
|
2,037
|
|
|
2,650
|
|
|||
Total assets
|
|
$
|
3,155
|
|
|
$
|
6,321
|
|
|
$
|
9,476
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
$
|
2,185
|
|
|
$
|
4,067
|
|
|
$
|
6,252
|
|
Noncurrent liabilities
|
|
41
|
|
|
114
|
|
|
155
|
|
|||
Noncontrolling interests
|
|
126
|
|
|
27
|
|
|
153
|
|
|||
Shareholders' equity
|
|
803
|
|
|
2,113
|
|
|
2,916
|
|
|||
Total liabilities and shareholders' equity
|
|
$
|
3,155
|
|
|
$
|
6,321
|
|
|
$
|
9,476
|
|
|
|
September 30, 2016
|
||||||||||
(in millions)
|
|
YFJC
|
|
All Other
|
|
Total
|
||||||
Current assets
|
|
$
|
2,306
|
|
|
$
|
3,829
|
|
|
$
|
6,135
|
|
Noncurrent assets
|
|
609
|
|
|
2,120
|
|
|
2,729
|
|
|||
Total assets
|
|
$
|
2,915
|
|
|
$
|
5,949
|
|
|
$
|
8,864
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
$
|
2,004
|
|
|
$
|
3,851
|
|
|
$
|
5,855
|
|
Noncurrent liabilities
|
|
44
|
|
|
151
|
|
|
195
|
|
|||
Noncontrolling interests
|
|
113
|
|
|
27
|
|
|
140
|
|
|||
Shareholders' equity
|
|
754
|
|
|
1,920
|
|
|
2,674
|
|
|||
Total liabilities and shareholders' equity
|
|
$
|
2,915
|
|
|
$
|
5,949
|
|
|
$
|
8,864
|
|
|
|
Three Months Ended
December 31, 2016
|
||||||||||
(in millions)
|
|
YFJC
|
|
All Other
|
|
Total
|
||||||
Net sales
|
|
$
|
1,180
|
|
|
$
|
3,144
|
|
|
$
|
4,324
|
|
Gross profit
|
|
154
|
|
|
385
|
|
|
539
|
|
|||
Operating income
|
|
115
|
|
|
143
|
|
|
258
|
|
|||
Net income
|
|
93
|
|
|
201
|
|
|
294
|
|
|||
Income attributable to noncontrolling interests
|
|
14
|
|
|
7
|
|
|
21
|
|
|||
Net income attributable to the entity
|
|
79
|
|
|
194
|
|
|
273
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in net income, before basis adjustments
|
|
39
|
|
|
67
|
|
|
106
|
|
|||
Basis adjustments
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||
Equity in net income
|
|
39
|
|
|
62
|
|
|
101
|
|
|
|
Three Months Ended
December 31, 2015
|
||||||||||
(in millions)
|
|
YFJC
|
|
All Other
|
|
Total
|
||||||
Net sales
|
|
$
|
1,180
|
|
|
$
|
3,395
|
|
|
$
|
4,575
|
|
Gross profit
|
|
159
|
|
|
363
|
|
|
522
|
|
|||
Operating income
|
|
120
|
|
|
215
|
|
|
335
|
|
|||
Net income
|
|
97
|
|
|
176
|
|
|
273
|
|
|||
Income attributable to noncontrolling interests
|
|
12
|
|
|
11
|
|
|
23
|
|
|||
Net income attributable to the entity
|
|
85
|
|
|
165
|
|
|
250
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in net income, before basis adjustments
|
|
42
|
|
|
58
|
|
|
100
|
|
|||
Basis adjustments
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|||
Equity in net income
|
|
42
|
|
|
52
|
|
|
94
|
|
Note 14.
|
COMMITMENTS AND CONTINGENCIES
|
Note 15.
|
RELATED PARTY TRANSACTIONS
|
|
|
Three Months Ended
December 31, |
|||||||
(in millions)
|
|
2016
|
|
2015
|
|||||
Net sales to related parties
|
|
$
|
98
|
|
|
$
|
113
|
|
(1)
|
Purchases from related parties
|
|
100
|
|
|
106
|
|
(1)
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Receivable from related parties
|
|
$
|
151
|
|
|
$
|
172
|
|
Payable to related parties
|
|
95
|
|
|
96
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
*
|
Based on production volumes. Source: IHS Automotive
|
|
•
|
Adient recorded net sales of
$4,038 million
for the
three months ended
December 31, 2016
, representing a decrease of
$195 million
when compared to the same period in the prior year. Foreign currency had an unfavorable impact of
$39 million
, with the remaining decrease resulting from lower volumes.
|
•
|
Gross profit was
$350 million
or
8.7%
of net sales for the
three months ended
December 31, 2016
compared to
$368 million
or
8.7%
of net sales for the same period in the prior year.
|
•
|
Equity income was
$101 million
for the
three months ended
December 31, 2016
which is
$7 million
higher than the same period in the prior year. The increase is primarily due to higher income at YFAI and at certain other Seating affiliates, partially offset by unfavorable foreign currency.
|
•
|
Net income attributable to Adient was
$149 million
for the
three months ended
December 31, 2016
which is
$12 million
higher than the same period in the prior year. The increase is primarily due to lower selling, general and administrative expenses and lower income tax expense, partially offset by higher interest costs and an overall unfavorable impact of foreign currency.
|
|
|
Three Months Ended
December 31,
|
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Net sales
|
|
$
|
4,038
|
|
|
-5%
|
|
$
|
4,233
|
|
Cost of sales
|
|
3,688
|
|
|
-5%
|
|
3,865
|
|
||
Gross profit
|
|
350
|
|
|
-5%
|
|
368
|
|
||
Selling, general and administrative expenses
|
|
217
|
|
|
-14%
|
|
253
|
|
||
Equity income
|
|
101
|
|
|
7%
|
|
94
|
|
||
Earnings before interest and income taxes
|
|
234
|
|
|
12%
|
|
209
|
|
||
Net financing charges
|
|
35
|
|
|
*
|
|
2
|
|
||
Income before income taxes
|
|
199
|
|
|
-4%
|
|
207
|
|
||
Income tax provision
|
|
28
|
|
|
-47%
|
|
53
|
|
||
Net income
|
|
171
|
|
|
11%
|
|
154
|
|
||
Income attributable to noncontrolling interests
|
|
22
|
|
|
29%
|
|
17
|
|
||
Net income attributable to Adient
|
|
$
|
149
|
|
|
9%
|
|
$
|
137
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Net sales
|
|
$
|
4,038
|
|
|
-5%
|
|
$
|
4,233
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Cost of sales
|
|
$
|
3,688
|
|
|
-5%
|
|
$
|
3,865
|
|
Gross profit
|
|
350
|
|
|
-5%
|
|
368
|
|
||
% of sales
|
|
8.7
|
%
|
|
|
|
8.7
|
%
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Selling, general and administrative expenses
|
|
$
|
217
|
|
|
-14%
|
|
$
|
253
|
|
% of sales
|
|
-5.4
|
%
|
|
|
|
-6.0
|
%
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Net financing charges
|
|
$
|
35
|
|
|
*
|
|
$
|
2
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Equity income
|
|
$
|
101
|
|
|
7%
|
|
$
|
94
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Income tax provision
|
|
$
|
28
|
|
|
-47%
|
|
$
|
53
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Income attributable to noncontrolling interests
|
|
$
|
22
|
|
|
29%
|
|
$
|
17
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Net income attributable to Adient
|
|
$
|
149
|
|
|
9%
|
|
$
|
137
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Comprehensive income (loss) attributable to Adient
|
|
$
|
(300
|
)
|
|
*
|
|
$
|
(13
|
)
|
|
|
|
|
|
•
|
The Seating segment produces automotive seat metal structures and mechanisms, foam, trim, fabric and complete seat systems.
|
|
|
•
|
The Interiors segment, derived from its global automotive interiors joint ventures, produces instrument panels, floor consoles, door panels, overhead consoles, cockpit systems, decorative trim and other products.
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Net Sales
|
|
|
|
|
|
|
||||
Seating
|
|
$
|
4,038
|
|
|
-5%
|
|
$
|
4,233
|
|
Total net sales
|
|
$
|
4,038
|
|
|
|
|
$
|
4,233
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Adjusted EBIT
|
|
|
|
|
|
|
||||
Seating
|
|
$
|
260
|
|
|
10%
|
|
$
|
237
|
|
Interiors
|
|
30
|
|
|
25%
|
|
24
|
|
||
Becoming Adient/separation costs
(1)
|
|
(41
|
)
|
|
-32%
|
|
(60
|
)
|
||
Purchase accounting amortization
(2)
|
|
(10
|
)
|
|
11%
|
|
(9
|
)
|
||
Restructuring related charges
(3)
|
|
(5
|
)
|
|
25%
|
|
(4
|
)
|
||
Other items
(4)
|
|
—
|
|
|
*
|
|
21
|
|
||
Earnings before interest and income taxes
|
|
234
|
|
|
|
|
209
|
|
||
Net financing charges
|
|
(35
|
)
|
|
*
|
|
(2
|
)
|
||
Income before income taxes
|
|
$
|
199
|
|
|
-4%
|
|
$
|
207
|
|
|
|
|
|
|
(1)
|
|
Reflects incremental/non-recurring expenses associated with becoming an independent company and expenses associated with the separation from the former Parent.
|
(2)
|
|
Reflects amortization of intangible assets including those related to the YFAI joint venture recorded within equity income.
|
(3)
|
|
Reflects restructuring related charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420.
|
(4)
|
|
Reflects a $13 million favorable commercial settlement and an $8 million multi-employer pension credit associated with the removal of costs for pension plans that remained with the former Parent.
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Net sales
|
|
$
|
4,038
|
|
|
-5%
|
|
$
|
4,233
|
|
Adjusted EBIT
|
|
260
|
|
|
10%
|
|
237
|
|
|
|
Three Months Ended
December 31, |
||||||||
(in millions)
|
|
2016
|
|
Change
|
|
2015
|
||||
Adjusted EBIT
|
|
$
|
30
|
|
|
25%
|
|
$
|
24
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Cash provided (used) by operating activities
|
|
$
|
(13
|
)
|
|
$
|
90
|
|
Cash provided (used) by investing activities
|
|
(203
|
)
|
|
(79
|
)
|
||
Cash provided (used) by financing activities
|
|
833
|
|
|
4
|
|
||
Capital expenditures
|
|
(207
|
)
|
|
(108
|
)
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Current assets
|
|
$
|
3,990
|
|
|
$
|
5,691
|
|
Current liabilities
|
|
3,830
|
|
|
4,260
|
|
||
Working capital
|
|
$
|
160
|
|
|
$
|
1,431
|
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
|
|
|
None.
|
|
Other Information
|
|
|
|
Not applicable.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
PART II - OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
|
|
|
Item 1A.
|
Risk Factors
|
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
|
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
Item 5.
|
Other Information
|
|
|
|
Item 6.
|
Exhibit Index
|
|
|
|
|
Adient plc
|
|
|
By:
|
/s/ R. Bruce McDonald
|
|
|
R. Bruce McDonald
|
|
|
Chairman and Chief Executive Officer
|
|
Date:
|
February 8, 2017
|
|
|
|
|
By:
|
/s/ Jeffrey M. Stafeil
|
|
|
Jeffrey M. Stafeil
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Date:
|
February 8, 2017
|
Exhibit No.
|
|
Exhibit Title
|
10.1
|
|
Offer Letter, dated October 29, 2016, entered into between Johnson Controls, Inc. and Neil E. Marchuk.
|
|
|
|
10.2
|
|
Adient US LLC Retirement Restoration Plan, as amended and restated effective January 1, 2017 (incorporated by reference to Exhibit 10.1 to Adient’s Current Report on Form 8-K filed January 13, 2017 (File No. 1-37757)).
|
|
|
|
10.3
|
|
Form of Key Executive Severance and Change of Control Agreement by and among Adient plc, Adient US LLC and the following executive officers: R. Bruce McDonald, Jeffrey M. Stafeil, Neil E. Marchuk, Byron S. Foster, Eric S. Mitchell and Cathleen A. Ebacher (incorporated by reference to Exhibit 10.1 to Adient’s Current Report on Form 8-K filed January 20, 2017 (File No. 1-37757)).
|
|
|
|
31.1
|
|
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Johnson Controls, Inc.
5757 North Green Bay Avenue
Post Office Box 591
Milwaukee, WI 53201-0591
Tel. 414/524-3422
|
|
||
|
||
|
||
|
•
|
One-time cash payment of $1,500,000 during your first month of employment ($600,000 sign-on incentive, $400,000 FY2015 AIPP, and 500,000 FY2015 LTIPP)
|
•
|
One-time cash payment of $400,000 in December 2016 (FY2015 LTIPP) provided you remain employed with the Company, or the Automotive Company after its separation from JCI, to such date
|
•
|
One-time cash payment of $400,000 in December 2017 (FY2015 LTIPP) provided you remain employed with the Company, or the Automotive Company after its separation from JCI, to such date
|
•
|
A $3,0000,000 cash lump sum in lieu of the equity grant described in the “Additional One-Time Recognition” paragraph above;
|
•
|
If your restricted stock units described in the “Restricted Stock Units” paragraph above have not yet been granted, a $1,400,000 cash lump sum in lieu of such unit award;
|
•
|
To the extent one or both of the $400,000 payments described in the “Additional One-Time Recognition” paragraph above have not yet been paid, a cash lump sum of such unpaid amount(s); and
|
•
|
A lump sum payment of an amount equal to one times your then-current annual base salary.
|
Sincerely,
|
|
|
|||
/s/ R. Bruce McDonald
|
|
Accepted:
|
/s/ Neil Marchuk
|
||
|
|
|
Neil Marchuk
|
||
R. Bruce McDonald
|
|
|
|||
Executive Vice President and
|
|
Date:
|
October 11, 2015
|
||
Vice Chairman
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Adient plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date:
|
2/8/2017
|
|
|
|
|
|
By:
|
|
/s/ R. Bruce McDonald
|
|
|
|
|
R. Bruce McDonald
Chief Executive Officer |
1.
|
I have reviewed this quarterly report on Form 10-Q of Adient plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date:
|
2/8/2017
|
|
|
|
|
|
By:
|
|
/s/ Jeffrey M. Stafeil
|
|
|
|
|
Jeffrey M. Stafeil
Executive Vice President and Chief Financial Officer |
Date:
|
2/8/2017
|
|
|
|
|
|
By:
|
|
/s/ R. Bruce McDonald
|
|
|
|
|
R. Bruce McDonald
Chief Executive Officer |
Date:
|
2/8/2017
|
|
|
|
|
|
By:
|
|
/s/ Jeffrey M. Stafeil
|
|
|
|
|
Jeffrey M. Stafeil
Executive Vice President and Chief Financial Officer |