Note 20. Related Party Transactions

12 Months Ended

Sep. 30, 2017



20. Related Party Transactions

In the ordinary course of business, Adient enters into transactions with related parties, such as equity affiliates. Such transactions consist of facility management services, the sale or purchase of goods and other arrangements. Subsequent to the separation, transactions with the former Parent and its businesses represent third-party transactions.

The following table sets forth the net sales to and purchases from related parties included in the consolidated statements of income:



	Year Ended September 30,
(in millions)	2017		2016		2015
Net sales to related parties	$	409	$	438	$	392
Purchases from related parties	511		443		393

The following table sets forth the amount of accounts receivable due from and payable to related parties in the consolidated statements of financial position:



	September 30,
(in millions)	2017		2016
Receivable from related parties	$	129	$	172
Payable to related parties	104		96

Average receivable and payable balances with related parties remained consistent with the period end balances shown above.

Allocations from Former Parent

Prior to the separation, the consolidated statements of income included allocations for certain support functions that were provided on a centralized basis by the former Parent and subsequently recorded at the business unit level, such as expenses related to employee benefits, finance, human resources, risk management, information technology, facilities, and legal, among others. Included in cost of sales and selling, general and administrative expense during the years ended September 30, 2016 and 2015 were $294 million and $361 million, respectively, of corporate expenses incurred by the former Parent. In addition to these allocations, approximately $458 million and $16 million, respectively, of costs related to the separation of Adient were incurred by the former Parent for the years ended September 30, 2016 and 2015, respectively. Of these amounts, $369 million was deemed to directly benefit Adient as a stand-alone company, for the year ended September 30, 2016. Accordingly, these costs were allocated to Adient and are reflected within selling, general and administrative expenses in the consolidated statements of income. None of the separation costs for the year ended September 30, 2015 were deemed to directly benefit Adient as a stand-alone company. Additionally, certain intercompany transactions prior to the separation between Adient and the former Parent have not been recorded as related party transactions. These transactions were considered to be effectively settled for cash at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions was reflected in the consolidated statements of cash flows as a financing activity and in the consolidated statements of financial position as Parent's net investment.

During fiscal 2017, the allocations from the former Parent were insignificant. During fiscal 2017, Adient and the former Parent finalized the reconciliation of working capital and other accounts and the net amount due from the former Parent of $87 million was settled in accordance with the separation agreement. The impact of the settlement is reflected within additional paid-in capital.