Segment Information

6 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information

15. Segment Information

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

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

	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2021		2020		2021		2020
Net Sales
Americas	$	1,644	$	1,641	$	3,381	$	3,500
EMEA	1,636		1,488		3,240		3,052
Asia	588		444		1,142		1,016
Eliminations	(49)		(62)		(96)		(121)
Total net sales	$	3,819	$	3,511	$	7,667	$	7,447

	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2021		2020		2021		2020
Adjusted EBITDA
Americas	$	64	$	106	$	196	$	200
EMEA	141		62		255		111
Asia	121		63		272		240
Corporate-related costs (1)	(23)		(20)		(42)		(43)
Restructuring and impairment costs (2)	(5)		(52)		(12)		(54)
Purchase accounting amortization (3)	(10)		(11)		(21)		(21)
Restructuring related charges (4)	(2)		(7)		(6)		(12)
Loss on business divestitures - net (5)	—		—		—		(25)
Gain on sale / (impairment) of nonconsolidated partially-owned affiliates (6)	33		—		33		(216)
Depreciation	(69)		(72)		(139)		(147)
Stock based compensation	(13)		3		(26)		(1)
Other items (7)	(7)		(6)		2		(8)
Earnings (loss) before interest and income taxes	230		66		512		24
Net financing charges	(110)		(50)		(169)		(98)
Other pension income (expense)	2		2		4		4
Income (loss) before income taxes	$	122	$	18	$	347	$	(70)

Notes:

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

(2) Reflects qualified restructuring charges for costs that are directly attributable to restructuring activities and meet the definition of restructuring under ASC 420 and non-recurring impairment charges. During the three and six months ended March 31, 2021, a held-for-sale impairment charge of $2 million and $8 million, respectively, was recorded in EMEA. Restructuring charges during the three months and six months ended March 31, 2020 primarily consist of workforce reductions.

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

(4) Reflects restructuring related charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420.

(5) The six months ended March 31, 2020 reflects losses on business divestitures, of which $4 million is related to the deconsolidation of Adient Aerospace, and $21 million is the result of the sale of the RECARO automotive high performance seating systems.

(6) The three and six months ended March 31, 2021 reflects a pre-tax gain of $33 million on the sale of Adient's interest in SJA. The six months ended March 31, 2020 reflects the non-cash impairment of Adient's YFAI investment. Refer to Note 3, "Acquisitions and Divestitures," of the notes to consolidated financial statements.

(7) The three months ended March 31, 2021 reflects $7 million of transaction costs. The six months ended March 31, 2021 reflects a one-time gain of $8 million associated with the retrospective recovery of indirect tax credits in Brazil resulting from a favorable court ruling, a $5 million gain on previously held interest at YFAS in an affiliate, and $11 million of transaction costs. The three months ended March 31, 2020 reflects $6 million of transaction costs. The six months ended March 31, 2020 reflects $7 million of transaction costs and $1 million of tax adjustments at YFAI.

Geographic Information

Revenue by geographic area is as follows:

Net Sales
	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2021		2020		2021		2020
Americas
United States	$	1,486	$	1,383	$	3,034	$	2,950
Mexico	584		574		1,225		1,187
Other Americas	82		96		174		219
Regional elimination	(508)		(412)		(1,052)		(856)
	1,644		1,641		3,381		3,500
EMEA
Germany	315		294		629		615
Czech Republic	350		303		688		639
Other EMEA	1,389		1,310		2,774		2,647
Regional elimination	(418)		(419)		(851)		(849)
	1,636		1,488		3,240		3,052
Asia
Thailand	139		130		244		263
China	165		82		354		242
Japan	103		106		192		228
Other Asia	186		127		363		286
Regional elimination	(5)		(1)		(11)		(3)
	588		444		1,142		1,016
Inter-segment elimination	(49)		(62)		(96)		(121)
Total	$	3,819	$	3,511	$	7,667	$	7,447