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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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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol
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Name of exchange on which registered
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Ordinary Shares, par value $0.001
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ADNT
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New York Stock Exchange
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Large accelerated filer
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Three Months Ended
June 30,
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Nine Months Ended
June 30,
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||||||||||||
(in millions, except per share data)
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2019
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2018
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|
2019
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2018
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||||||||
Net sales
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$
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4,219
|
|
|
$
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4,494
|
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$
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12,605
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|
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$
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13,294
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Cost of sales
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4,008
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4,249
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12,017
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12,566
|
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||||
Gross profit
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211
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|
245
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588
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|
728
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||||
Selling, general and administrative expenses
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|
165
|
|
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186
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|
|
511
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|
|
575
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||||
Restructuring and impairment costs
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|
15
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57
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|
159
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|
|
372
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|
||||
Equity income (loss)
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64
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|
|
87
|
|
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209
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268
|
|
||||
Earnings (loss) before interest and income taxes
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95
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89
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127
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|
|
49
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||||
Net financing charges
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60
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39
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135
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|
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109
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||||
Other pension expense (income)
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5
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(10
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)
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3
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(18
|
)
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||||
Income (loss) before income taxes
|
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30
|
|
|
60
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(11
|
)
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(42
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)
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Income tax provision (benefit)
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338
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(13
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)
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412
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224
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||||
Net income (loss)
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(308
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)
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73
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(423
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)
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(266
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)
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Income (loss) attributable to noncontrolling interests
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13
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19
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64
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64
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Net income (loss) attributable to Adient
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$
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(321
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)
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$
|
54
|
|
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$
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(487
|
)
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$
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(330
|
)
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Earnings per share:
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Basic
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$
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(3.43
|
)
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$
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0.58
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$
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(5.21
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)
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$
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(3.54
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)
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Diluted
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$
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(3.43
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)
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$
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0.58
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$
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(5.21
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)
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$
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(3.54
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)
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Shares used in computing earnings per share:
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Basic
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93.6
|
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93.4
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93.5
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93.3
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Diluted
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93.6
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93.7
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93.5
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93.3
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Three Months Ended
June 30, |
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Nine Months Ended
June 30, |
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(in millions)
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2019
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2018
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2019
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2018
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||||||||
Net income (loss)
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$
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(308
|
)
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$
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73
|
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$
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(423
|
)
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$
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(266
|
)
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Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
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||||||||
Foreign currency translation adjustments
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(24
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)
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(250
|
)
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32
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|
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(32
|
)
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||||
Realized and unrealized gains (losses) on derivatives
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5
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(18
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)
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6
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(18
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)
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||||
Other comprehensive income (loss)
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(19
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)
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(268
|
)
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38
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(50
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)
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||||
Total comprehensive income (loss)
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(327
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)
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(195
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)
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(385
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)
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(316
|
)
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||||
Comprehensive income (loss) attributable to noncontrolling interests
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14
|
|
|
4
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70
|
|
|
64
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|
||||
Comprehensive income (loss) attributable to Adient
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$
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(341
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)
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$
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(199
|
)
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$
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(455
|
)
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$
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(380
|
)
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(in millions, except share and per share data)
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June 30,
2019
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September 30, 2018
|
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Assets
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Cash and cash equivalents
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$
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1,025
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$
|
687
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Accounts receivable - net
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1,853
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2,091
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Inventories
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783
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824
|
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Other current assets
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592
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707
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Current assets
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4,253
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4,309
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|
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Property, plant and equipment - net
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1,687
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1,683
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Goodwill
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2,182
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2,182
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Other intangible assets - net
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426
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|
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460
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Investments in partially-owned affiliates
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1,407
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1,407
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||
Assets held for sale
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|
—
|
|
|
37
|
|
||
Other noncurrent assets
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619
|
|
|
864
|
|
||
Total assets
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$
|
10,574
|
|
|
$
|
10,942
|
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Liabilities and Shareholders' Equity
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Short-term debt
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$
|
7
|
|
|
$
|
6
|
|
Current portion of long-term debt
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|
8
|
|
|
2
|
|
||
Accounts payable
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|
2,751
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|
|
3,101
|
|
||
Accrued compensation and benefits
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|
390
|
|
|
331
|
|
||
Restructuring reserve
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|
141
|
|
|
141
|
|
||
Other current liabilities
|
|
666
|
|
|
611
|
|
||
Current liabilities
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|
3,963
|
|
|
4,192
|
|
||
Long-term debt
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|
3,762
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|
|
3,422
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|
||
Pension and postretirement benefits
|
|
119
|
|
|
124
|
|
||
Other noncurrent liabilities
|
|
404
|
|
|
440
|
|
||
Long-term liabilities
|
|
4,285
|
|
|
3,986
|
|
||
Commitments and Contingencies (Note 16)
|
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
|
45
|
|
|
47
|
|
||
Preferred shares issued, par value $0.001; 100,000,000 shares authorized
Zero shares issued and outstanding at June 30, 2019 |
|
—
|
|
|
—
|
|
||
Ordinary shares issued, par value $0.001; 500,000,000 shares authorized
93,620,714 shares issued and outstanding at June 30, 2019 |
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
3,959
|
|
|
3,951
|
|
||
Retained earnings (accumulated deficit)
|
|
(1,541
|
)
|
|
(1,028
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(499
|
)
|
|
(531
|
)
|
||
Shareholders' equity attributable to Adient
|
|
1,919
|
|
|
2,392
|
|
||
Noncontrolling interests
|
|
362
|
|
|
325
|
|
||
Total shareholders' equity
|
|
2,281
|
|
|
2,717
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
10,574
|
|
|
$
|
10,942
|
|
|
|
Nine Months Ended
June 30, |
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Operating Activities
|
|
|
|
|
||||
Net income (loss) attributable to Adient
|
|
$
|
(487
|
)
|
|
$
|
(330
|
)
|
Income attributable to noncontrolling interests
|
|
64
|
|
|
64
|
|
||
Net income (loss)
|
|
(423
|
)
|
|
(266
|
)
|
||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
|
|
|
||||||
Depreciation
|
|
205
|
|
|
300
|
|
||
Amortization of intangibles
|
|
31
|
|
|
36
|
|
||
Pension and postretirement benefit expense (benefit)
|
|
9
|
|
|
(14
|
)
|
||
Pension and postretirement contributions, net
|
|
(17
|
)
|
|
8
|
|
||
Equity in earnings of partially-owned affiliates, net of dividends received (includes purchase accounting amortization of $0, and $16, respectively)
|
|
(11
|
)
|
|
10
|
|
||
Deferred income taxes
|
|
304
|
|
|
242
|
|
||
Non-cash impairment charges
|
|
66
|
|
|
351
|
|
||
Equity-based compensation
|
|
16
|
|
|
43
|
|
||
Other
|
|
18
|
|
|
7
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Receivables
|
|
219
|
|
|
(57
|
)
|
||
Inventories
|
|
39
|
|
|
(54
|
)
|
||
Other assets
|
|
105
|
|
|
(50
|
)
|
||
Restructuring reserves
|
|
(90
|
)
|
|
(108
|
)
|
||
Accounts payable and accrued liabilities
|
|
(185
|
)
|
|
(46
|
)
|
||
Accrued income taxes
|
|
20
|
|
|
(162
|
)
|
||
Cash provided (used) by operating activities
|
|
306
|
|
|
240
|
|
||
Investing Activities
|
|
|
|
|
||||
Capital expenditures
|
|
(350
|
)
|
|
(404
|
)
|
||
Sale of property, plant and equipment
|
|
65
|
|
|
5
|
|
||
Changes in long-term investments
|
|
3
|
|
|
(4
|
)
|
||
Loans to affiliates
|
|
—
|
|
|
(11
|
)
|
||
Other
|
|
4
|
|
|
—
|
|
||
Cash provided (used) by investing activities
|
|
(278
|
)
|
|
(414
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Increase (decrease) in short-term debt
|
|
1
|
|
|
(23
|
)
|
||
Increase (decrease) in long-term debt
|
|
1,600
|
|
|
—
|
|
||
Repayment of long-term debt
|
|
(1,202
|
)
|
|
(2
|
)
|
||
Debt financing costs
|
|
(45
|
)
|
|
—
|
|
||
Cash dividends
|
|
(26
|
)
|
|
(77
|
)
|
||
Dividends paid to noncontrolling interests
|
|
(53
|
)
|
|
(57
|
)
|
||
Formation of consolidated joint venture
|
|
28
|
|
|
—
|
|
||
Other
|
|
(3
|
)
|
|
(3
|
)
|
||
Cash provided (used) by financing activities
|
|
300
|
|
|
(162
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
10
|
|
|
5
|
|
||
Increase (decrease) in cash and cash equivalents
|
|
338
|
|
|
(331
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
687
|
|
|
709
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,025
|
|
|
$
|
378
|
|
1. Basis of Presentation and Summary of Significant Accounting Policies
|
(in millions)
|
|
June 30,
2019
|
|
September 30,
2018
|
||||
Current assets
|
|
$
|
249
|
|
|
$
|
270
|
|
Noncurrent assets
|
|
39
|
|
|
43
|
|
||
Total assets
|
|
$
|
288
|
|
|
$
|
313
|
|
|
|
|
|
|
||||
Current liabilities
|
|
$
|
240
|
|
|
$
|
252
|
|
Total liabilities
|
|
$
|
240
|
|
|
$
|
252
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Adient
|
|
$
|
(321
|
)
|
|
$
|
54
|
|
|
$
|
(487
|
)
|
|
$
|
(330
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
93.6
|
|
|
93.4
|
|
|
93.5
|
|
|
93.3
|
|
||||
Effect of dilutive securities
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Diluted shares
|
|
93.6
|
|
|
93.7
|
|
|
93.5
|
|
|
93.3
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(3.43
|
)
|
|
$
|
0.58
|
|
|
$
|
(5.21
|
)
|
|
$
|
(3.54
|
)
|
Diluted
|
|
$
|
(3.43
|
)
|
|
$
|
0.58
|
|
|
$
|
(5.21
|
)
|
|
$
|
(3.54
|
)
|
Standard Adopted
|
|
Description
|
|
Date
Effective and Adopted
|
ASU 2016-01 and ASU 2018-03, Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
ASU 2016-01 amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments.
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments
|
|
ASU 2016-clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows.
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2016-18, Statement of Cash Flows: Restricted Cash
|
|
ASU 2016-18 clarifies the classification and presentation of restricted cash on the statement of cash flows.
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2017-01, Clarifying the Definition of a Business
|
|
ASU 2017-01 clarifies the definition of a business as it relates to the acquisition or sale of assets or businesses.
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2017-05, Gains and Losses from the Derecognition of Nonfinancial Assets
|
|
ASU 2017-05 clarifies the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets and will follow the same implementation guidelines as ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606).
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2017-09, Stock Compensation - Scope of Modification Accounting
|
|
ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2018-08, Not for Profit Entities: Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made
|
|
ASU 2018-08 is intended to clarify and improve the scope and the accounting guidance for contributions received and contributions made. The amendments in ASU No. 2018-08 should assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transaction) within the scope of Topic 958, Not-for-Profit Entities, or as exchange (reciprocal) transactions subject to other guidance and (2) determining whether a contribution is conditional. This amendment applies to all entities that make or receive grants or contributions.
|
|
October 1, 2018
|
|
|
|
|
|
ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract
|
|
The amendments in ASU 2018-15 require implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance. The amendments also require an entity to disclose the nature of its hosting arrangements and adhere to certain presentation requirements in its balance sheet, income statement and statement of cash flows.
|
|
ASU No. 2018-15 is effective for Adient for the quarter ending December 31, 2019, with early adoption permitted. Adient early adopted ASU No. 2018-15 effective October 1, 2018.
|
|
|
|
|
|
ASU 2018-16, Derivatives and Hedging: Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes
|
|
The amendments in this Update permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the SIFMA Municipal Swap Rate.
|
|
October 1, 2018
|
Standard Pending Adoption
|
|
Description
|
|
Anticipated Impact
|
|
Effective Date
|
ASU 2016-02, 2018-01, 2018-10, 2018-11 and ASU 2019-01
|
|
The standard requires that a lessee recognize on its balance sheet right-of-use assets and corresponding liabilities resulting from leasing transactions, as well as additional financial statement disclosures. Currently, U.S. GAAP only requires balance sheet recognition for leases classified as capital leases. The provisions of this update apply to substantially all leased assets.
|
|
Adient is currently evaluating the impact this standard will have on its consolidated financial position, results of operations and cash flows and expects the impact to the consolidated balance sheet to be significant.
|
|
October 1, 2019
|
Adient has considered the ASUs summarized below, effective after fiscal 2019, none of which are expected to significantly impact the consolidated financial statements: (continued)
|
||||
|
|
|
|
|
Standard Adopted
|
|
Description
|
|
Date Effective
|
ASU 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606
|
|
The amendments in this Update make targeted improvements to generally accepted accounting principles (GAAP) for collaborative arrangements as follows: 1) Clarify that certain transactions between collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation, and disclosure requirements. 2) Add unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. 3) Require that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer.
|
|
October 1, 2019
|
2. Revenue Recognition
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Americas
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,649
|
|
|
$
|
1,643
|
|
|
$
|
4,894
|
|
|
$
|
4,755
|
|
Mexico
|
|
700
|
|
|
645
|
|
|
2,013
|
|
|
1,925
|
|
||||
Other Americas
|
|
106
|
|
|
127
|
|
|
330
|
|
|
407
|
|
||||
Regional elimination
|
|
(445
|
)
|
|
(469
|
)
|
|
(1,377
|
)
|
|
(1,414
|
)
|
||||
|
|
2,010
|
|
|
1,946
|
|
|
5,860
|
|
|
5,673
|
|
||||
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Germany
|
|
375
|
|
|
443
|
|
|
1,106
|
|
|
1,382
|
|
||||
Other EMEA
|
|
1,885
|
|
|
2,011
|
|
|
5,535
|
|
|
5,999
|
|
||||
Regional elimination
|
|
(508
|
)
|
|
(509
|
)
|
|
(1,471
|
)
|
|
(1,527
|
)
|
||||
|
|
1,752
|
|
|
1,945
|
|
|
5,170
|
|
|
5,854
|
|
||||
Asia
|
|
|
|
|
|
|
|
|
||||||||
China
|
|
126
|
|
|
187
|
|
|
410
|
|
|
531
|
|
||||
Other Asia
|
|
406
|
|
|
486
|
|
|
1,373
|
|
|
1,480
|
|
||||
Regional elimination
|
|
(2
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(1
|
)
|
||||
|
|
530
|
|
|
672
|
|
|
1,779
|
|
|
2,010
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Inter-segment elimination
|
|
(73
|
)
|
|
(69
|
)
|
|
(204
|
)
|
|
(243
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
4,219
|
|
|
$
|
4,494
|
|
|
$
|
12,605
|
|
|
$
|
13,294
|
|
3. Acquisitions and Divestitures
|
4. Inventories
|
(in millions)
|
|
June 30,
2019 |
|
September 30, 2018
|
||||
Raw materials and supplies
|
|
$
|
601
|
|
|
$
|
626
|
|
Work-in-process
|
|
33
|
|
|
38
|
|
||
Finished goods
|
|
149
|
|
|
160
|
|
||
Inventories
|
|
$
|
783
|
|
|
$
|
824
|
|
5. Goodwill and Other Intangible Assets
|
(in millions)
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
Total
|
||||||||
Balance at September 30, 2018
|
|
$
|
642
|
|
|
$
|
469
|
|
|
$
|
1,071
|
|
|
$
|
2,182
|
|
Currency translation and other
|
|
—
|
|
|
(21
|
)
|
|
21
|
|
|
—
|
|
||||
Balance at June 30, 2019
|
|
$
|
642
|
|
|
$
|
448
|
|
|
$
|
1,092
|
|
|
$
|
2,182
|
|
|
|
June 30, 2019
|
|
September 30, 2018
|
||||||||||||||||||||
(in millions)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patented technology
|
|
$
|
21
|
|
|
$
|
(15
|
)
|
|
$
|
6
|
|
|
$
|
21
|
|
|
$
|
(14
|
)
|
|
$
|
7
|
|
Customer relationships
|
|
508
|
|
|
(125
|
)
|
|
383
|
|
|
509
|
|
|
(101
|
)
|
|
408
|
|
||||||
Trademarks
|
|
53
|
|
|
(32
|
)
|
|
21
|
|
|
58
|
|
|
(30
|
)
|
|
28
|
|
||||||
Miscellaneous
|
|
28
|
|
|
(12
|
)
|
|
16
|
|
|
29
|
|
|
(12
|
)
|
|
17
|
|
||||||
Total intangible assets
|
|
$
|
610
|
|
|
$
|
(184
|
)
|
|
$
|
426
|
|
|
$
|
617
|
|
|
$
|
(157
|
)
|
|
$
|
460
|
|
6. Product Warranties
|
|
|
Nine Months Ended
June 30, |
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
|
$
|
11
|
|
|
$
|
19
|
|
Accruals for warranties issued during the period
|
|
9
|
|
|
2
|
|
||
Changes in accruals related to pre-existing warranties (including changes in estimates)
|
|
6
|
|
|
(6
|
)
|
||
Settlements made (in cash or in kind) during the period
|
|
(4
|
)
|
|
(4
|
)
|
||
Balance at end of period
|
|
$
|
22
|
|
|
$
|
11
|
|
7. Debt and Financing Arrangements
|
(in millions)
|
|
June 30,
2019 |
|
September 30, 2018
|
||||
Term Loan A - LIBOR plus 1.75% due in 2021
|
|
$
|
—
|
|
|
$
|
1,200
|
|
Term Loan B - LIBOR plus 4.25% due in 2024
|
|
800
|
|
|
—
|
|
||
4.875% Notes due in 2026
|
|
900
|
|
|
900
|
|
||
3.50% Notes due in 2024
|
|
1,139
|
|
|
1,162
|
|
||
7.00% Notes due in 2026
|
|
800
|
|
|
—
|
|
||
European Investment Bank Loan - EURIBOR plus 0.90% due in 2022
|
|
188
|
|
|
192
|
|
||
Capital lease obligations
|
|
—
|
|
|
2
|
|
||
Less: debt issuance costs
|
|
(57
|
)
|
|
(32
|
)
|
||
Gross long-term debt
|
|
3,770
|
|
|
3,424
|
|
||
Less: current portion
|
|
8
|
|
|
2
|
|
||
Net long-term debt
|
|
$
|
3,762
|
|
|
$
|
3,422
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense, net of capitalized interest costs
|
|
$
|
46
|
|
|
$
|
38
|
|
|
$
|
119
|
|
|
$
|
108
|
|
Banking fees and debt issuance cost amortization
|
|
18
|
|
|
4
|
|
|
25
|
|
|
8
|
|
||||
Interest income
|
|
(4
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(5
|
)
|
||||
Net foreign exchange
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Net financing charges
|
|
$
|
60
|
|
|
$
|
39
|
|
|
$
|
135
|
|
|
$
|
109
|
|
8. 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)
|
|
June 30,
2019 |
|
September 30, 2018
|
|
June 30,
2019 |
|
September 30, 2018
|
||||||||
Other current assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
4
|
|
Cross-currency interest rate swaps
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other noncurrent assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Cross-currency interest rate swaps
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
23
|
|
|
$
|
17
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other noncurrent liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Equity swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Long-term debt
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated debt
|
|
1,139
|
|
|
1,162
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
1,146
|
|
|
$
|
1,175
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||||
(in millions)
|
|
June 30,
2019
|
|
September 30, 2018
|
|
June 30,
2019
|
|
September 30, 2018
|
||||||||
Gross amount recognized
|
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
1,146
|
|
|
$
|
1,177
|
|
Gross amount eligible for offsetting
|
|
(4
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(5
|
)
|
||||
Net amount
|
|
$
|
20
|
|
|
$
|
18
|
|
|
$
|
1,142
|
|
|
$
|
1,172
|
|
(in millions)
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Foreign currency exchange derivatives
|
|
$
|
6
|
|
|
$
|
(25
|
)
|
|
$
|
5
|
|
|
$
|
(17
|
)
|
(in millions)
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||
Foreign currency exchange derivatives
|
|
Cost of sales
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
Foreign currency exchange derivatives
|
|
Net financing charges
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Equity swap
|
|
Selling, general and administrative
|
|
—
|
|
|
(7
|
)
|
|
(13
|
)
|
|
(22
|
)
|
||||
Total
|
|
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
$
|
(15
|
)
|
|
$
|
(25
|
)
|
9. Fair Value Measurements
|
|
|
Fair Value Measurements Using:
|
||||||||||||||
(in millions)
|
|
Total as of
June 30,
2019
|
|
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
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Cross-currency interest rate swaps
|
|
17
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
Other noncurrent assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Other noncurrent liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||||
(in millions)
|
|
Total as of
September 30,
2018
|
|
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
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
Other noncurrent assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Cross-currency interest rate swaps
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Total assets
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
Other noncurrent liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Equity swaps
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
10. Equity and Noncontrolling Interests
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Ordinary shares, beginning of the period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Ordinary shares, end of the period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Additional paid-in capital, beginning of the period
|
|
3,956
|
|
|
3,955
|
|
|
3,951
|
|
|
3,942
|
|
||||
Stock-based compensation
|
|
2
|
|
|
5
|
|
|
10
|
|
|
15
|
|
||||
Other
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
3
|
|
||||
Additional paid-in capital, end of the period
|
|
3,959
|
|
|
3,960
|
|
|
3,959
|
|
|
3,960
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Retained earnings (Accumulated deficit), beginning of the period
|
|
(1,220
|
)
|
|
299
|
|
|
(1,028
|
)
|
|
734
|
|
||||
Net income (loss) attributable to Adient
|
|
(321
|
)
|
|
54
|
|
|
(487
|
)
|
|
(330
|
)
|
||||
Dividends declared ($0.275 per share/quarter)
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
|
(77
|
)
|
||||
Retained earnings (Accumulated deficit), end of the period
|
|
(1,541
|
)
|
|
327
|
|
|
(1,541
|
)
|
|
327
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive income, beginning of the period
|
|
(479
|
)
|
|
(185
|
)
|
|
(531
|
)
|
|
(397
|
)
|
||||
Foreign currency translation adjustments
|
|
(25
|
)
|
|
(235
|
)
|
|
26
|
|
|
(32
|
)
|
||||
Realized and unrealized gains (losses) on derivatives
|
|
5
|
|
|
(18
|
)
|
|
6
|
|
|
(18
|
)
|
||||
Employee retirement plans
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||
Accumulated other comprehensive income, end of the period
|
|
(499
|
)
|
|
(447
|
)
|
|
(499
|
)
|
|
(447
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' equity attributable to Adient, end of the period
|
|
1,919
|
|
|
3,840
|
|
|
1,919
|
|
|
3,840
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Noncontrolling interest, beginning of the period
|
|
373
|
|
|
326
|
|
|
325
|
|
|
313
|
|
||||
Net income (loss)
|
|
7
|
|
|
16
|
|
|
40
|
|
|
45
|
|
||||
Foreign currency translation adjustments
|
|
(1
|
)
|
|
(13
|
)
|
|
4
|
|
|
—
|
|
||||
Dividends attributable to noncontrolling interests
|
|
(17
|
)
|
|
(16
|
)
|
|
(35
|
)
|
|
(46
|
)
|
||||
Change in noncontrolling interest share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Formation of consolidated joint venture
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
||||
Noncontrolling interest, end of the period
|
|
362
|
|
|
313
|
|
|
362
|
|
|
313
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total equity
|
|
$
|
2,281
|
|
|
$
|
4,153
|
|
|
$
|
2,281
|
|
|
$
|
4,153
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
(472
|
)
|
|
$
|
(195
|
)
|
|
$
|
(523
|
)
|
|
$
|
(398
|
)
|
Aggregate adjustment for the period, net of tax
|
|
(25
|
)
|
|
(235
|
)
|
|
26
|
|
|
(32
|
)
|
||||
Balance at end of period
|
|
(497
|
)
|
|
(430
|
)
|
|
(497
|
)
|
|
(430
|
)
|
||||
Realized and unrealized gains (losses) on derivatives
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
(6
|
)
|
|
3
|
|
|
(7
|
)
|
|
3
|
|
||||
Current period changes in fair value, net of tax
|
|
5
|
|
|
(20
|
)
|
|
6
|
|
|
(18
|
)
|
||||
Reclassification to income, net of tax
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
|
(1
|
)
|
|
(15
|
)
|
|
(1
|
)
|
|
(15
|
)
|
||||
Pension and postretirement plans
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
(1
|
)
|
|
7
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Net reclassifications to AOCI
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Accumulated other comprehensive income (loss), end of period
|
|
$
|
(499
|
)
|
|
$
|
(447
|
)
|
|
$
|
(499
|
)
|
|
$
|
(447
|
)
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Beginning balance
|
|
$
|
37
|
|
|
$
|
39
|
|
|
$
|
47
|
|
|
$
|
28
|
|
Net income
|
|
6
|
|
|
3
|
|
|
24
|
|
|
19
|
|
||||
Foreign currency translation adjustments
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
||||
Dividends
|
|
—
|
|
|
1
|
|
|
(28
|
)
|
|
(7
|
)
|
||||
Change in noncontrolling interest share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Ending balance
|
|
$
|
45
|
|
|
$
|
41
|
|
|
$
|
45
|
|
|
$
|
41
|
|
11. Retirement Plans
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Interest cost
|
|
3
|
|
|
3
|
|
|
9
|
|
|
10
|
|
||||
Expected return on plan assets
|
|
(4
|
)
|
|
(4
|
)
|
|
(12
|
)
|
|
(13
|
)
|
||||
Net actuarial (gain) loss
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Settlement (gain) loss
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Net periodic benefit cost
|
|
$
|
7
|
|
|
$
|
(8
|
)
|
|
$
|
9
|
|
|
$
|
(12
|
)
|
12. Restructuring and Impairment Costs
|
(in millions)
|
|
Employee Severance and Termination Benefits
|
|
Currency
Translation |
|
Total
|
||||||
Original Reserve
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
96
|
|
Utilized—cash
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||
Utilized—noncash
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
Noncash adjustment - underspend
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance at June 30, 2019
|
|
$
|
75
|
|
|
$
|
1
|
|
|
$
|
76
|
|
(in millions)
|
|
Employee Severance and Termination Benefits
|
|
Other
|
|
Currency
Translation |
|
Total
|
||||||||
Balance at September 30, 2018
|
|
$
|
49
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
48
|
|
Reserve adjustment
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Utilized—cash
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Utilized—noncash
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Noncash adjustment—underspend
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||
Balance at June 30, 2019
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
24
|
|
(in millions)
|
|
Employee Severance and Termination Benefits
|
||
Balance at September 30, 2018
|
|
$
|
12
|
|
Utilized—cash
|
|
(3
|
)
|
|
Noncash adjustment—underspend
|
|
(2
|
)
|
|
Balance at June 30, 2019
|
|
$
|
7
|
|
(in millions)
|
|
Employee Severance and Termination Benefits
|
|
Currency
Translation |
|
Total
|
||||||
Balance at September 30, 2018
|
|
$
|
71
|
|
|
$
|
4
|
|
|
$
|
75
|
|
Utilized—cash
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||
Utilized—noncash
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Balance at June 30, 2019
|
|
$
|
28
|
|
|
$
|
3
|
|
|
$
|
31
|
|
13. Income Taxes
|
14. Segment Information
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
||||||||||||
(in millions)
|
|
2019
|
|
2018 (1)
|
|
2019
|
|
2018 (1)
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
2,010
|
|
|
$
|
1,946
|
|
|
$
|
5,860
|
|
|
$
|
5,673
|
|
EMEA
|
|
1,752
|
|
|
1,945
|
|
|
5,170
|
|
|
5,854
|
|
||||
Asia
|
|
530
|
|
|
672
|
|
|
1,779
|
|
|
2,010
|
|
||||
Eliminations
|
|
(73
|
)
|
|
(69
|
)
|
|
(204
|
)
|
|
(243
|
)
|
||||
Total net sales
|
|
$
|
4,219
|
|
|
$
|
4,494
|
|
|
$
|
12,605
|
|
|
$
|
13,294
|
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
||||||||||||
(in millions)
|
|
2019
|
|
2018 (1)
|
|
2019
|
|
2018 (1)
|
||||||||
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
69
|
|
|
$
|
99
|
|
|
$
|
146
|
|
|
$
|
232
|
|
EMEA
|
|
53
|
|
|
97
|
|
|
114
|
|
|
309
|
|
||||
Asia
|
|
110
|
|
|
146
|
|
|
387
|
|
|
479
|
|
||||
Corporate-related costs (2)
|
|
(27
|
)
|
|
(24
|
)
|
|
(75
|
)
|
|
(74
|
)
|
||||
Becoming Adient costs (3)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(50
|
)
|
||||
Restructuring and impairment costs (4)
|
|
(15
|
)
|
|
(57
|
)
|
|
(159
|
)
|
|
(372
|
)
|
||||
Purchase accounting amortization (5)
|
|
(11
|
)
|
|
(17
|
)
|
|
(32
|
)
|
|
(52
|
)
|
||||
Restructuring related charges (6)
|
|
(5
|
)
|
|
(20
|
)
|
|
(27
|
)
|
|
(43
|
)
|
||||
Stock based compensation (7)
|
|
(8
|
)
|
|
(12
|
)
|
|
(16
|
)
|
|
(34
|
)
|
||||
Depreciation (8)
|
|
(68
|
)
|
|
(101
|
)
|
|
(205
|
)
|
|
(294
|
)
|
||||
Other items (9)
|
|
(3
|
)
|
|
(10
|
)
|
|
(6
|
)
|
|
(52
|
)
|
||||
Earnings (loss) before interest and income taxes
|
|
95
|
|
|
89
|
|
|
127
|
|
|
49
|
|
||||
Net financing charges
|
|
(60
|
)
|
|
(39
|
)
|
|
(135
|
)
|
|
(109
|
)
|
||||
Other pension income
|
|
(5
|
)
|
|
10
|
|
|
(3
|
)
|
|
18
|
|
||||
Income (loss) before income taxes
|
|
$
|
30
|
|
|
$
|
60
|
|
|
$
|
(11
|
)
|
|
$
|
(42
|
)
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||
|
|
Reportable Segments
|
|
Reconciling Items(1)
|
|
Consolidated
|
||||||||||||||
(in millions)
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
|
||||||||||||
Equity Income
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
61
|
|
|
$
|
(2
|
)
|
|
$
|
64
|
|
Depreciation
|
|
27
|
|
|
31
|
|
|
10
|
|
|
—
|
|
|
68
|
|
|||||
Capital Expenditures
|
|
39
|
|
|
51
|
|
|
8
|
|
|
—
|
|
|
98
|
|
|||||
Total Assets
|
|
3,216
|
|
|
2,760
|
|
|
3,488
|
|
|
1,110
|
|
|
10,574
|
|
|
|
Nine Months Ended June 30, 2019
|
||||||||||||||||||
|
|
Reportable Segments
|
|
Reconciling Items(1)
|
|
Consolidated
|
||||||||||||||
(in millions)
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
|
||||||||||||
Equity Income
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
200
|
|
|
$
|
(2
|
)
|
|
$
|
209
|
|
Depreciation
|
|
78
|
|
|
94
|
|
|
33
|
|
|
$
|
—
|
|
|
205
|
|
||||
Capital Expenditures
|
|
139
|
|
|
181
|
|
|
30
|
|
|
—
|
|
|
350
|
|
|||||
Total Assets
|
|
3,216
|
|
|
2,760
|
|
|
3,488
|
|
|
1,110
|
|
|
10,574
|
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Reportable Segments
|
|
Reconciling Items(1)
|
|
Consolidated
|
||||||||||||||
(in millions)
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
|
||||||||||||
Equity Income
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
84
|
|
|
$
|
(7
|
)
|
|
$
|
87
|
|
Depreciation
|
|
35
|
|
|
52
|
|
|
12
|
|
|
4
|
|
|
103
|
|
|||||
Capital Expenditures
|
|
60
|
|
|
69
|
|
|
9
|
|
|
—
|
|
|
138
|
|
|
|
Nine Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Reportable Segments
|
|
Reconciling Items(1)
|
|
Consolidated
|
||||||||||||||
(in millions)
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
|
||||||||||||
Equity Income
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
277
|
|
|
$
|
(28
|
)
|
|
$
|
268
|
|
Depreciation
|
|
105
|
|
|
151
|
|
|
34
|
|
|
$
|
10
|
|
|
300
|
|
||||
Capital Expenditures
|
|
164
|
|
|
216
|
|
|
24
|
|
|
—
|
|
|
404
|
|
15. Nonconsolidated Partially-Owned Affiliates
|
|
|
Nine Months Ended
June 30,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Income statement data:
|
|
|
|
|
||||
Net sales
|
|
$
|
11,736
|
|
|
$
|
14,038
|
|
Gross profit
|
|
$
|
1,358
|
|
|
$
|
1,689
|
|
Net income
|
|
$
|
494
|
|
|
$
|
624
|
|
Net income attributable to the entity
|
|
$
|
480
|
|
|
$
|
609
|
|
16. Commitments and Contingencies
|
17. Related Party Transactions
|
|
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
||||||||||||
(in millions)
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales to related parties
|
|
Net sales
|
|
$
|
97
|
|
|
$
|
94
|
|
|
$
|
277
|
|
|
$
|
303
|
|
Purchases from related parties
|
|
Cost of sales
|
|
205
|
|
|
157
|
|
|
555
|
|
|
467
|
|
(in millions)
|
|
|
|
June 30,
2019
|
|
September 30, 2018
|
||||
Accounts receivable due from related parties
|
|
Accounts receivable
|
|
$
|
77
|
|
|
$
|
91
|
|
Accounts payable due to related parties
|
|
Accounts payable
|
|
115
|
|
|
102
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Adient recorded net sales of $4,219 million for the third quarter of fiscal 2019, representing a decrease of $275 million when compared to the third quarter of fiscal 2018. The decrease in net sales is primarily due to the unfavorable foreign currency impact and lower volumes primarily in EMEA and Asia, partially offset by higher volumes in the Americas. Adient recorded net sales of $12,605 million for the first nine months of fiscal 2019, representing a decrease of $689 million when compared to the first nine months of fiscal 2018. The decrease in net sales is primarily due to the unfavorable foreign currency impact and lower volumes in EMEA and Asia, partially offset by higher volumes in the Americas.
|
•
|
Gross profit was $211 million, or 5.0% of net sales, for the third quarter of fiscal 2019 compared to $245 million, or 5.5% of net sales, for the third quarter of fiscal 2018. Gross profit was $588 million, or 4.7%, of net sales for the first nine months of fiscal 2019 compared to $728 million, or 5.5%, of net sales for the first nine months of fiscal 2018. Profitability, including gross profit as a percentage of net sales, was lower primarily due to ongoing business performance issues related to launch inefficiencies in the Americas and EMEA aong with unfavorable foreign currency impact and overall lower volumes.
|
•
|
Equity income was $64 million for the third quarter of fiscal 2019, which compared to equity income of $87 million for the third quarter of fiscal 2018. Equity income was $209 million for the first nine months of fiscal 2019, compared to equity income of $268 million for the first nine months of fiscal 2018. These decreases were primarily attributable to overall lower sales within certain China affiliates along with ongoing operating performance issues at YFAI.
|
•
|
Net loss attributable to Adient was $321 million for the third quarter of fiscal 2019, compared to $54 million of net income attributable to Adient for the third quarter of fiscal 2018. The net loss in the third quarter of fiscal 2019 was primarily attributable to an income tax charge of $254 million to record valuation allowances on the net deferred tax assets in Luxembourg and the United Kingdom and an income tax charge of $48 million to recognize the year-to-date impact of Adient's updated annualized effective tax rate, driven by the valuation allowances recorded in the third quarter of fiscal 2019. Net loss attributable to Adient was $487 million for the first nine months of fiscal 2019, compared to $330 million of net loss attributable to Adient for the first nine months of fiscal 2018. The year over year increase in net loss attributable to Adient was primarily attributable to the income tax charges recorded in fiscal 2019, the fixed asset impairment charges recorded in the second quarter of fiscal 2019 and the lower levels of operating profitability in fiscal 2019 as discussed above, partially offset by one-time charges in the prior year related to goodwill impairment ($279 million, net of tax) and the impact of the 2018 U.S. tax reform legislation ($258 million).
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net sales
|
|
$
|
4,219
|
|
|
-6%
|
|
$
|
4,494
|
|
|
$
|
12,605
|
|
|
-5%
|
|
$
|
13,294
|
|
Cost of sales
|
|
4,008
|
|
|
-6%
|
|
4,249
|
|
|
12,017
|
|
|
-4%
|
|
12,566
|
|
||||
Gross profit
|
|
211
|
|
|
-14%
|
|
245
|
|
|
588
|
|
|
-19%
|
|
728
|
|
||||
Selling, general and administrative expenses
|
|
165
|
|
|
-11%
|
|
186
|
|
|
511
|
|
|
-11%
|
|
575
|
|
||||
Restructuring and impairment costs
|
|
15
|
|
|
-74%
|
|
57
|
|
|
159
|
|
|
-57%
|
|
372
|
|
||||
Equity income (loss)
|
|
64
|
|
|
-26%
|
|
87
|
|
|
209
|
|
|
-22%
|
|
268
|
|
||||
Earnings (loss) before interest and income taxes
|
|
95
|
|
|
7%
|
|
89
|
|
|
127
|
|
|
*
|
|
49
|
|
||||
Net financing charges
|
|
60
|
|
|
54%
|
|
39
|
|
|
135
|
|
|
24%
|
|
109
|
|
||||
Other pension expense (income)
|
|
5
|
|
|
*
|
|
(10
|
)
|
|
3
|
|
|
*
|
|
(18
|
)
|
||||
Income (loss) before income taxes
|
|
30
|
|
|
-50%
|
|
60
|
|
|
(11
|
)
|
|
-74%
|
|
(42
|
)
|
||||
Income tax provision (benefit)
|
|
338
|
|
|
*
|
|
(13
|
)
|
|
412
|
|
|
84%
|
|
224
|
|
||||
Net income (loss)
|
|
(308
|
)
|
|
*
|
|
73
|
|
|
(423
|
)
|
|
59%
|
|
(266
|
)
|
||||
Income (loss) attributable to noncontrolling interests
|
|
13
|
|
|
-32%
|
|
19
|
|
|
64
|
|
|
—%
|
|
64
|
|
||||
Net income (loss) attributable to Adient
|
|
$
|
(321
|
)
|
|
*
|
|
$
|
54
|
|
|
$
|
(487
|
)
|
|
48%
|
|
$
|
(330
|
)
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net sales
|
|
$
|
4,219
|
|
|
-6%
|
|
$
|
4,494
|
|
|
$
|
12,605
|
|
|
-5%
|
|
$
|
13,294
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Cost of sales
|
|
$
|
4,008
|
|
|
-6%
|
|
$
|
4,249
|
|
|
$
|
12,017
|
|
|
-4%
|
|
$
|
12,566
|
|
Gross profit
|
|
211
|
|
|
-14%
|
|
245
|
|
|
588
|
|
|
-19%
|
|
728
|
|
||||
% of sales
|
|
5.0
|
%
|
|
|
|
5.5
|
%
|
|
4.7
|
%
|
|
|
|
5.5
|
%
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Selling, general and administrative expenses
|
|
$
|
165
|
|
|
-11%
|
|
$
|
186
|
|
|
$
|
511
|
|
|
-11%
|
|
$
|
575
|
|
% of sales
|
|
3.9
|
%
|
|
|
|
4.1
|
%
|
|
4.1
|
%
|
|
|
|
4.3
|
%
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Restructuring and impairment costs
|
|
$
|
15
|
|
|
-74%
|
|
$
|
57
|
|
|
$
|
159
|
|
|
-57%
|
|
$
|
372
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Equity income (loss)
|
|
$
|
64
|
|
|
-26%
|
|
$
|
87
|
|
|
$
|
209
|
|
|
-22%
|
|
$
|
268
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net financing charges
|
|
$
|
60
|
|
|
54%
|
|
$
|
39
|
|
|
$
|
135
|
|
|
24%
|
|
$
|
109
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Other pension expense (income)
|
|
$
|
5
|
|
|
*
|
|
$
|
(10
|
)
|
|
$
|
3
|
|
|
*
|
|
$
|
(18
|
)
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Income tax provision (benefit)
|
|
$
|
338
|
|
|
*
|
|
$
|
(13
|
)
|
|
$
|
412
|
|
|
84%
|
|
$
|
224
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Income (loss) attributable to noncontrolling interests
|
|
$
|
13
|
|
|
-32%
|
|
$
|
19
|
|
|
$
|
64
|
|
|
—%
|
|
$
|
64
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net income (loss) attributable to Adient
|
|
$
|
(321
|
)
|
|
*
|
|
$
|
54
|
|
|
$
|
(487
|
)
|
|
48%
|
|
$
|
(330
|
)
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Comprehensive income (loss) attributable to Adient
|
|
$
|
(341
|
)
|
|
71%
|
|
$
|
(199
|
)
|
|
$
|
(455
|
)
|
|
20%
|
|
$
|
(380
|
)
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
2,010
|
|
|
$
|
1,946
|
|
|
$
|
5,860
|
|
|
$
|
5,673
|
|
EMEA
|
|
1,752
|
|
|
1,945
|
|
|
5,170
|
|
|
5,854
|
|
||||
Asia
|
|
530
|
|
|
672
|
|
|
1,779
|
|
|
2,010
|
|
||||
Eliminations
|
|
(73
|
)
|
|
(69
|
)
|
|
(204
|
)
|
|
(243
|
)
|
||||
Total net sales
|
|
$
|
4,219
|
|
|
$
|
4,494
|
|
|
$
|
12,605
|
|
|
$
|
13,294
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018 (1)
|
|
2019
|
|
2018 (1)
|
||||||||
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
69
|
|
|
$
|
99
|
|
|
$
|
146
|
|
|
$
|
232
|
|
EMEA
|
|
53
|
|
|
97
|
|
|
114
|
|
|
309
|
|
||||
Asia
|
|
110
|
|
|
146
|
|
|
387
|
|
|
479
|
|
||||
Corporate-related costs (2)
|
|
(27
|
)
|
|
(24
|
)
|
|
(75
|
)
|
|
(74
|
)
|
||||
Becoming Adient costs (3)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(50
|
)
|
||||
Restructuring and impairment costs (4)
|
|
(15
|
)
|
|
(57
|
)
|
|
(159
|
)
|
|
(372
|
)
|
||||
Purchase accounting amortization (5)
|
|
(11
|
)
|
|
(17
|
)
|
|
(32
|
)
|
|
(52
|
)
|
||||
Restructuring related charges (6)
|
|
(5
|
)
|
|
(20
|
)
|
|
(27
|
)
|
|
(43
|
)
|
||||
Stock based compensation (7)
|
|
(8
|
)
|
|
(12
|
)
|
|
(16
|
)
|
|
(34
|
)
|
||||
Depreciation (8)
|
|
(68
|
)
|
|
(101
|
)
|
|
(205
|
)
|
|
(294
|
)
|
||||
Other items (9)
|
|
(3
|
)
|
|
(10
|
)
|
|
(6
|
)
|
|
(52
|
)
|
||||
Earnings (loss) before interest and income taxes
|
|
95
|
|
|
89
|
|
|
127
|
|
|
49
|
|
||||
Net financing charges
|
|
(60
|
)
|
|
(39
|
)
|
|
(135
|
)
|
|
(109
|
)
|
||||
Other pension income
|
|
(5
|
)
|
|
10
|
|
|
(3
|
)
|
|
18
|
|
||||
Income (loss) before income taxes
|
|
$
|
30
|
|
|
$
|
60
|
|
|
$
|
(11
|
)
|
|
$
|
(42
|
)
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net sales
|
|
$
|
2,010
|
|
|
3%
|
|
$
|
1,946
|
|
|
$
|
5,860
|
|
|
3%
|
|
$
|
5,673
|
|
Adjusted EBITDA
|
|
$
|
69
|
|
|
-30%
|
|
$
|
99
|
|
|
$
|
146
|
|
|
-37%
|
|
$
|
232
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net sales
|
|
$
|
1,752
|
|
|
-10%
|
|
$
|
1,945
|
|
|
$
|
5,170
|
|
|
-12%
|
|
$
|
5,854
|
|
Adjusted EBITDA
|
|
$
|
53
|
|
|
-45%
|
|
$
|
97
|
|
|
$
|
114
|
|
|
-63%
|
|
$
|
309
|
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||||||
(in millions)
|
|
2019
|
|
Change
|
|
2018
|
|
2019
|
|
Change
|
|
2018
|
||||||||
Net sales
|
|
$
|
530
|
|
|
-21%
|
|
$
|
672
|
|
|
$
|
1,779
|
|
|
-11%
|
|
$
|
2,010
|
|
Adjusted EBITDA
|
|
$
|
110
|
|
|
-25%
|
|
$
|
146
|
|
|
$
|
387
|
|
|
-19%
|
|
$
|
479
|
|
|
|
Nine Months Ended
June 30, |
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Cash provided (used) by operating activities
|
|
$
|
306
|
|
|
$
|
240
|
|
Cash provided (used) by investing activities
|
|
(278
|
)
|
|
(414
|
)
|
||
Cash provided (used) by financing activities
|
|
300
|
|
|
(162
|
)
|
||
Capital expenditures
|
|
(350
|
)
|
|
(404
|
)
|
(in millions)
|
|
June 30,
2019 |
|
September 30, 2018
|
||||
Current assets
|
|
$
|
4,253
|
|
|
$
|
4,309
|
|
Current liabilities
|
|
3,963
|
|
|
4,192
|
|
||
Working capital
|
|
$
|
290
|
|
|
$
|
117
|
|
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
|
(a) Unregistered Sale of Equity Securities
|
|
None.
|
|
(b) Use of Proceeds
|
|
Not applicable.
|
|
(c) Repurchase of Equity Securities
|
|
There was no share repurchase activity during the three months ended June 30, 2019.
|
Item 3.
|
Defaults Upon Senior Securities
|
|
|
|
None.
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
Not applicable.
|
Item 5.
|
Other Information
|
|
|
|
None.
|
Item 6.
|
Exhibit Index
|
|
|
|
Exhibit No.
|
|
Exhibit Title
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.
|
|
Adient plc
|
|
|
By:
|
/s/ Douglas G. Del Grosso
|
|
|
Douglas G. Del Grosso
|
|
|
President and Chief Executive Officer
|
|
Date:
|
August 7, 2019
|
|
|
|
|
By:
|
/s/ Jeffrey M. Stafeil
|
|
|
Jeffrey M. Stafeil
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Date:
|
August 7, 2019
|
1
|
|
Commencement of the Employment Relationship
|
|
|
|
1.1
|
|
Your employment with Adient begins on December 1, 2018. Should you commence your employment with Adient on an earlier date, the employment relationship will begin on this date.
|
|
|
|
1.2
|
|
The employment relationship cannot be ended by ordinary termination before it commences.
|
|
|
|
2
|
|
Contractual Penalty Clause
If you fail to take up your employment or fail to do so on time, unjustifiably terminate the employment relationship without complying with the relevant termination notice period, or cause Adient to terminate without notice due to conduct in breach of contract you undertake to pay Adient a contractual penalty.
It is agreed the contractual penalty consists of one day's gross pay for each day of the infraction, calculated based on one month's gross remuneration in accordance with Section 6, below, but in total not more than the remuneration otherwise payable during the statutory minimum termination notice period. In addition, the amount of the contractual penalty is limited to a maximum of one month's gross compensation pursuant to Section 6.
Moreover, Adient may lodge a claim against you for more extensive damages that are actually suffered. The contractual penalty is to be set off against the total damages suffered.
|
|
|
|
3
|
|
Employment Activities/Duties
|
|
|
|
3.1
|
|
You are employed as Vice President EMEA Seating. Within the framework of your activities, you declare that you are willing to make the necessary business trips within Germany and abroad, including trips of several days' duration, in order to carry out your duties.
|
|
|
|
3.2
|
|
You undertake to carry out all tasks entrusted to you in a diligent manner. You will exercise your employment activities in compliance with all statutory and internal provisions and in observance of accident prevention provisions in order to ensure safety at the workplace.
|
3.3
|
|
We expect you to use your initiative in the pursuit of the goals of Adient in a responsible manner and, in particular, to accept the binding nature of the Ethics Policy attached to this Employment Contract as Annex. You acknowledge that compliance with the principles of the Ethics Policy and adherence to the rules of conduct stipulated therein constitute a particularly important contractual obligation.
|
|
|
|
3.4
|
|
Within the framework of the company's Ethics Policy, you are obliged to participate in the 'Legal Compliance and Education Program'. We make you aware that your constant participation in the 'Legal Compliance and Education Program' is a particularly important part of your employment relationship with Adient..
|
|
|
|
3.5
|
|
A declaration to the effect that you are to assume entrepreneurial duties to prevent accidents at the workplace in accordance with your duties as a member of the management, etc. is an integral part of this Agreement and is attached to this Agreement as Annex.
|
|
|
|
4
|
|
Assignment of other Activities/Place of Employment/Relocation
|
|
|
|
4.1
|
|
Adient is entitled to assign you other, equivalent activities corresponding to your knowledge and abilities.
|
|
|
|
4.2
|
|
Your place of employment is Burscheid. However, Adient reserves the right to relocate you within the company, including to another location within the framework of clauses 3.1 and 4.1, to the extent this can be reasonably expected of you. Except in cases of urgent operational demands, Adient will give you a reasonable notice period for such relocation.
|
|
|
|
5
|
|
Working Hours
|
|
|
|
5.1
|
|
Your regular working hours per week are 40 hours.
|
|
|
|
5.2
|
|
The start and end of your working hours is determined by the scope of your duties, operational demands and the regulations of your specific department.
|
|
|
|
5.3
|
|
You undertake to exert your entire work efforts on behalf of Adient and, to the extent necessary, to also work more than the regular working hours.
|
|
|
|
5.4
|
|
Adient may order short-time work if the preconditions for granting compensation for workers on short-time work have been fulfilled. In this regard, we must give you advance notice of two calendar weeks. If we introduce short-time work, you agree that working hours may be temporarily curtailed accordingly and that remuneration pursuant to Section 6 may be reduced accordingly for the duration of the curtailment of working hours.
|
|
|
|
6
|
|
Remuneration
|
|
|
|
6.1
|
|
Your employment activities are remunerated with a gross yearly salary of € 320,000.00 (in words: Euro three hundred twenty thousand 00/100), which shall be paid in twelve equal monthly instalments.
|
|
|
|
6.2
|
|
After deduction of the statutory duties and taxes, your remuneration will be paid in accordance with the operational modalities by non-cash transfer onto an account in Germany to be specified by you.
|
|
|
|
6.3
|
|
If operational demands necessitate an extension of the regular weekly working hours, this overtime is deemed to be settled by the remuneration stipulated in clause 6.1.
|
|
|
|
6.4
|
|
The assignment and pledge of salary claims and other claims to remuneration is excluded. Adient reserves the right to give its subsequent approval to assignments undertaken or pledges made in breach of contract. You must bear costs incurred by Adient in connection with the processing of levies of execution, pledges and assignments of your remuneration claims. The costs are charged at a flat rate of € 10.00 per levy of execution, assignment or pledge. Adient is entitled to charge higher costs if actual higher costs can be proven.
|
|
|
|
6.5
|
|
To the extent you receive excess remuneration or other monetary benefits from Adient, you cannot plead the loss of the enrichment if the unfounded overpayment was so obvious that you should have recognised it as such, or if the overpayment was based on circumstances for which you are responsible. Adient reserves the right to retrieve, respectively offset, excess paid amounts from the employee's account. As an employee, you are obliged to check your monthly salary statement and notify any discrepancies to the competent personnel department without undue delay.
|
|
|
|
6.6
|
|
Your salary will be reviewed annually in accordance with our company regulations. The next review is on October 1, 2019.
|
12
|
|
Continued Payment of Salary in case of Death
|
|
|
|
12.1
|
|
In the event of your death, your partner or another defined person ( please fill in a name) will receive death benefit for the month of your death as well as for the three subsequent months in the amount of your last gross monthly salary as a one-off payment. This benefit must be taxed by the recipient pursuant to the applicable law. Insofar as no partner is named above, or if this person is already deceased at the time of your death, your dependents, as joint creditors, shall receive the aforementioned payments. The death benefit claim must be asserted by the beneficiaries directly vis-a-vis Adient by provision of proof in the form of appropriate documentation.
|
|
|
|
13
|
|
Holiday
|
|
|
|
13.1
|
|
You have a holiday claim in the amount of 30 work days per calendar year. This comprises the statutory holiday claim of 20 days together with a further additional contractual holiday claim of 10 days.
|
|
|
|
13.2
|
|
The entire holiday must fundamentally be taken during the current calendar year. Holiday shall initially be taken against the statutory holiday claim. You must coordinate your holiday with your superior in good time and must obtain prior approval.
|
|
|
|
13.3
|
|
A transfer of the holiday to the next calendar year is only possible if urgent operational reasons or personal reasons justify this. Holiday transferred in this way expires if not taken within the first three months of the following year (transfer period). Should you be prevented from taking the transferred holiday by 31 March of the following year as a result of an inability to work on grounds of an illness verified by a doctor, your holiday claim shall also be carried over beyond the transfer period, albeit in the maximum amount of your remaining statutory holiday claim.
|
|
|
|
13.4
|
|
With respect to any holiday claim carried over to the following year pursuant to para. 13.3 sentence 3, the provision of the above paras. 13.2 and 13.3 apply accordingly.
|
|
|
|
13.5
|
|
At the end of the employment contract the settlement of contractual holiday claims by way of payment in lieu of holiday is excluded; the holiday claim can only be settled by payment in lieu of holiday up to the amount of the remaining statutory holiday claim. This also applies insofar as payment in lieu of holiday is owed because you were unable to take the holiday on grounds of the situation regulated in para. 13.3 sentence 3.
|
|
|
|
14
|
|
Sideline Employment Activities
|
|
|
|
14.1
|
|
Any sideline activities, irrespective of whether they are exercised on a payment or nonpayment basis, require our prior consent. Consent shall be granted if the sideline activity does not, or at most only insignificantly, interferes time wise with your fulfilment of your employment duties and if they do not impair other legitimate interests of Adient.
|
|
|
|
14.2
|
|
You declare that you are willing, at the request of Adient, to assume an office or mandate in corporations that carry out activities concerning the interests of Adient, as well as in other enterprises of the Adient Group, to the extent this can reasonably be expected of you. No special remuneration shall be paid herefor. At Adient's request, you will be available to assume such office or mandate at any time.
|
|
|
|
14.3
|
|
You will inform us without undue delay and without written demand on our part of any honorary offices to be held by you on the basis of a statutory obligation.
|
|
|
|
14.4
|
|
Your direct or indirect participation in competitors beyond any mere financial participation is impermissible. The possession of shares or stock in companies that does not allow you to exert any influence on the corporate organs of the company is not deemed to be participation.
|
|
|
|
15
|
|
Secrecy
|
|
|
|
15.1
|
|
You undertake to keep secret all business secrets, in particular manufacturing processes, distribution channels and the like, both during the term of your employment relationship and after it comes to an end. The secrecy obligation does not cover knowledge accessible to everyone or knowledge that, if passed on, evidently does not entail any disadvantage for Adient. In case of doubt, however, technical, commercial and personal occurrences and situations becoming known to you in connection with your activities are to be treated as business secrets. In such cases, before disclosure you are obliged to obtain directions from the management as to whether or not a specific fact must be treated confidentially.
|
|
|
|
15.2
|
|
The obligation to maintain secrecy also includes matters relating to other enterprises that are economically or organisationally associated with Adient.
|
|
|
|
15.3
|
|
The operational safety provisions must be observed. Confidential and secret documents, drawing, models etc. are to be kept under lock and key. All publications and/or lectures, the contents of which are materially linked to your activities for Adient, require our prior consent. Thus, the fact that you work for Adient may only be disclosed in publications and/or lectures with our express consent.
|
16
|
|
Data Protection
|
|
|
|
16.1
|
|
You are aware that your personal data are processed in connection with this employment relationship. Details about this, as well as about your rights associated with processing, can be found in the "Data Protection Policy for Personal Data of Employees and Applicants", as amended, which can be viewed at www.adient.com/dataprivacy. The current version is attached to this Employment Contract as an annex.
|
|
|
|
16.2
|
|
If you are given access to personal data in connection with your employment activities, you undertake to comply with the applicable provisions of data protection law. The declaration concerning the "Obligation to Maintain Confidentiality, which is to be signed separately by you, is attached to this Employment Contract as an annex.
|
|
|
|
17
|
|
Employee Inventions/Rights to Works Produced
The provisions of the Act on Employee Inventions (ArbErfG) apply in full to inventions and technical suggestions for improvement which are capable of being protected.
|
|
|
|
18
|
|
Probationary Period, End of the Employment Relationship
|
|
|
|
18.1
|
|
The first six months of the term of employment shall be deemed a probationary period. During this period the employment can be terminated by either party with a notice period of two weeks.
|
|
|
|
18.2
|
|
After expiry of the probationary period the mutual notice period shall amount to three months to the end of the month. If the mutual period extents due to German labor law for the employer, the mutual period will also extent for the employee.
|
|
|
|
18.3
|
|
Notice of termination requires the written form.
|
|
|
|
18.4
|
|
We take this opportunity to inform you that in the event of a termination you are to register personally with the competent employment office as soon as the termination date becomes known.
|
|
|
|
18.5
|
|
This employment relationship terminates without notice of termination at the latest upon expiry of the month in which you reach the statutory regular age pension (at present, upon completion of 67 years of age).
|
|
|
|
18.6
|
|
In addition, this employment relationship terminates without notice of termination upon expiry of the month in which you receive a notice from a pension insurance institution about the granting of a permanent pension due to full reduction in earning capacity. If the pension first starts after receipt of the pension notice, the employment relationship terminates upon expiry of the day preceding the start of the pension. However, if you are severely disabled or considered equivalent thereto within the meaning of the Book IX of the German Social Code (SGB), the employment relationship does not terminate until receipt of the approval notice from the integration office (lntegrationsamt). In such case, you must disclose the severe disability to us without delay.
|
|
|
|
18.7
|
|
You are obligated to notify us within two weeks if you meet the statutory requirements for drawing an uncurtailed statutory retirement pension of if you receive a notice about the determination of full reduction in earning capacity. You also undertake to notify us at all times upon request about the status of applications that you have filed for a retirement pension or a pension due to reduction in earning capacity.
|
|
|
|
18.8
|
|
Upon your employment coming to an end, you are required to return, without having to be specifically asked, all objects, keys, company car, including petrol card, credit cards, computer, laptop, mobile phone, access cards, working documents, identity cards, diagrams, notes, books, models, tools, material etc. provided to you by Adient for the purpose of carrying out your activities. Rights of retention are excluded.
|
|
|
|
19
|
|
Garden Leave
|
|
|
|
19.1
|
|
In the event of an objective reason, in particular a gross breach of contract which impairs the basis of trust between the parties, e.g. a betrayal of business secrets, competitive activity etc., Adient is entitled to temporarily release you from your duties with continued payment of your salary.
|
|
|
|
19.2
|
|
Irrespective of the foregoing, Adient is entitled to release you from your duties with continued payment of your salary upon notice of termination being declared - irrespective of which party declares this termination - whilst setting off any outstanding vacation claims.
|
20
|
|
Miscellaneous
|
|
|
|
20.1
|
|
As from the start of the 7th calendar month of uninterrupted company service, Adient shall pay you a monthly contribution towards a capital-forming scheme, upon your providing it with evidence of having concluded a corresponding capital-forming contract (in accordance with the provisions of the 5th Act on Employee Capital Formation - VermBG), in the gross amount of € 26.59 or, in the event of part-time employment, in the gross amount of € 13.29. Precondition of this contribution is that the payments under the contract have at least the amount of the contribution, otherwise the payment is reduced accordingly. Furthermore, the contribution shall only be paid in the calendar months in which you have a claim to wages or salary.
|
|
|
|
20.2
|
|
You shall notify the personnel department without undue delay of any changes in your personal situation (e.g. address, family status, social insurance and tax details etc.) without having to be specifically asked, and if requested you shall provide corresponding evidence.
|
|
|
|
20.3
|
|
The general terms and conditions of work of Adient shall apply in the version in effect from time to time, unless anything to the contrary is specified in this Employment Contract. In particular, the Internet and Email Usage Policy, which is attached to this Employment Contract as an annex, is also applicable.
|
|
|
|
20.4
|
|
The possible invalidity of individual provisions of this Agreement does not affect the validity of the remaining contractual provisions. The invalid regulation must be replaced by a valid regulation that comes closest to the economic and legal intent of the parties.
|
|
|
|
21
|
|
Exclusion Periods
|
|
|
|
21.1
|
|
All mutual claims from the employment relationship and such connected to the employment relationship must be asserted in textual form within three months of their becoming due. With the expiration of the term the claim forfeits.
|
|
|
|
21.2
|
|
If the other party refuses the claim or does not issue any declaration within one month of the assertion of the claim, this claim shall be forfeited if it is not asserted in court within three months of the refusal or the expiry of the one-month term.
|
|
|
|
21.3
|
|
These preclusive periods do not apply to liability on grounds of willful or grossly negligent conduct or claims in tort. They also do not apply in cases of injury to life, physical wellbeing and health. Furthermore claims or the employee to the minimum wage pursuant to the Minimum Wage Act (Mindestlohngesetz) are excluded.
|
|
|
|
22
|
|
Clause requiring written form
There are no side agreements to this Contract. Amendments, supplementations, and the termination of this Contract must be made in writing in order to be effective. The same applies to the amendment of this written-form clause itself. Thus, in particular, contract amendments as a result of company practice are excluded. Therefore, repeated benefits or perquisites that are granted without an express contractual understanding also do not establish any entitlement for the future. The foregoing written-form requirement does not apply to verbal understandings made directly between the parties after conclusion of contract.
|
1
|
|
Relocation/Housing
|
|
|
|
1.1
|
|
In order to ensure an efficient work relationship you will move your main seat of residency to the area of Burscheid within the first 3 months.
|
|
|
|
1.2
|
|
Adient commits itself to reimburse you for your expenses for transportation related to your relocation to the area of Burscheid up to a maximum of € 5,000.00 (in words: Euro five thousand) incl. tax if documented by an original invoice made out to your name. By presentation of three comparable cost estimations the order of a carrier must be discussed with the Human Resources Department. Relocation Assistance to support housing search for permanent housing and registration I immigration in Germany will be provided at the cost of Adient and is included in the maximum of € 5,000.00.
|
|
|
|
1.3
|
|
Adient will pay the costs of an apartment in the area of Burscheid of up to a maximum of € 1,000.00 (in words: Euro one thousand) incl. tax per month during the first three months of your employment if documented by an original invoice made out to your name.
|
|
|
|
1.4
|
|
You are obliged to repay the relocation fees if you leave the firm within two years of the move of residency due to your own notice without cogent reason, or due to self-induced dismissal. The extent of your repayment commitment decreases by 1/24 per month during the afore-mentioned period of time.
|
|
|
|
1.5
|
|
Relocation Assistance to support housing search for permanent housing and registration / immigration in Germany will be provided at the cost of Adient.
|
|
|
|
2
|
|
Tax Assistance
|
|
|
|
2.1
|
|
Tax Assistance will be provided through Adient with regard to an initial briefing and the tax filling (German tax declaration) for the calendar years 2019 and 2020.
|
|
|
|
3
|
|
Sign-on Bonus
|
|
|
|
3.1
|
|
By signing the employment contract dated October 29, 2018 Adient will pay you a Sign-On Bonus of gross € 150,000.00 (in words: Euro one hundred fifty thousand 00/100).
|
|
|
|
3.2
|
|
The Sign-On bonus will be paid with your first regular salary payment for December 2018.
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3.3
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The Sign-On bonus does not form part of the basic salary but is considered taxable income. You are obliged to repay the Sign-On Bonus during the first two years of employment if
•
you do not commence the employment on December 1, 2018, or
•
the employment relationship ends within the period of two years upon commencement of the employment relationship by your notice of termination as regulated in section 18 of the employment contract for reasons Adient is not responsible for, or
•
Adient terminates the employment relationship within the aforementioned two-year period for important cause (sec. 626 of the German Civil Code).
The Sign-On Bonus has to be reimbursed by you based on the aforementioned provision is pro-rated based on the length of service rendered by you, i.e., the Sign-On Bonus to reimbursed by you shall be reduced by 1/24 for each full month of service you have rendered up to the end of the employment relationship.
You understand that the Sign-On Bonus is not taken into consideration for salary calculations for any other payments as the annual company bonus.
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Mr.
Michel Pierre Berthelin
Cite op Hudelen 21B
3863 Schifflange
Luxembourg
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Contact Person: Petra Savaris
Phone: +49 2174 65 - 0
Fax: +49 2174 65 - 3259
E-Mail: Petra.Savaris@adient.com
Date: October 29, 2018
Our Reference: HR/Sa - 1026
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•
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to give instructions for safe work, to undertake work controls and to forward notices of safety failures.
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•
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To implement and maintain means for prevention and safety at work.
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•
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To give instructions for and take other measures related safety at work.
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•
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To order medical examinations of employees when appropriate.
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Company Car Agreement of Transfer
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Form
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Proprietary and Confidential
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HRDE-LOS-FR-01-01-01-G
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Rev 01
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Page 1 of 1
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1.
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I have reviewed this quarterly report on Form 10-Q of Adient plc;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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August 7, 2019
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By:
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/s/ Douglas G. Del Grosso
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|
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Douglas G. Del Grosso
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President and Chief Executive Officer
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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:
|
August 7, 2019
|
|
|
|
|
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By:
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/s/ Jeffrey M. Stafeil
|
|
|
|
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Jeffrey M. Stafeil
|
|
|
|
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Executive Vice President and Chief Financial Officer
|
Date:
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August 7, 2019
|
|
|
|
|
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By:
|
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/s/ Douglas G. Del Grosso
|
|
|
|
|
Douglas G. Del Grosso
|
|
|
|
|
President and Chief Executive Officer
|
Date:
|
August 7, 2019
|
|
|
|
|
|
By:
|
|
/s/ Jeffrey M. Stafeil
|
|
|
|
|
Jeffrey M. Stafeil
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|