Segment Information

6 Months Ended

Mar. 31, 2022

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)	2022		2021		2022		2021
Net Sales
Americas	$	1,596	$	1,644	$	3,094	$	3,381
EMEA	1,218		1,636		2,448		3,240
Asia	723		588		1,507		1,142
Eliminations	(31)		(49)		(63)		(96)
Total net sales	$	3,506	$	3,819	$	6,986	$	7,667

	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2022		2021		2022		2021
Adjusted EBITDA
Americas	$	46	$	64	$	55	$	196
EMEA	30		141		73		255
Asia	105		121		219		272
Corporate-related costs (1)	(22)		(23)		(42)		(42)
Restructuring and impairment costs (2)	(4)		(5)		(8)		(12)
Purchase accounting amortization (3)	(13)		(10)		(27)		(21)
Restructuring related charges (4)	(3)		(2)		(4)		(6)
Gain on sale / (impairment) of nonconsolidated partially-owned affiliates (5)	(9)		33		(9)		33
Depreciation	(76)		(69)		(151)		(139)
Stock based compensation	(4)		(13)		(14)		(26)
Other items (6)	(4)		(7)		(6)		2
Earnings (loss) before interest and income taxes	46		230		86		512
Net financing charges	(83)		(110)		(133)		(169)
Other pension income (expense)	1		2		2		4
Income (loss) before income taxes	$	(36)	$	122	$	(45)	$	347

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. Also, during the three months ended March 31, 2022, an impairment charge of $2 million was recorded related to net assets in Russia, and during the six months ended March 31, 2022 and 2021, a held-for-sale impairment charge of $7 million and $8 million, respectively, was recorded in EMEA.

(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 three and six months ended March 31, 2022 both reflect $3 million and $6 million of non-cash impairments of certain of Adient's investments in nonconsolidated partially-owned affiliates in China and South Africa, respectively. 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. Refer to Note 3, "Acquisitions and Divestitures," of the notes to consolidated financial statements for additional information.

(6) The three months ended March 31, 2022 reflects $3 million of transaction costs, $2 million of loss on finalization of asset sale in Turkey, and $1 million of write off of accounts receivable associated with Russia, partially offset by $1 million of indirect tax recoveries in Brazil and $1 million of insurance recoveries for Malaysia flooding. The six months ended March 31, 2022 reflects an incremental $2 million of transaction costs. 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 retrospective recoveries of Brazil indirect tax credits 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.

Geographic Information

Revenue by geographic area is as follows:

Net Sales
	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2022		2021		2022		2021
Americas
United States	$	1,444	$	1,486	$	2,775	$	3,034
Mexico	587		584		1,128		1,225
Other Americas	87		82		178		174
Regional elimination	(522)		(508)		(987)		(1,052)
	1,596		1,644		3,094		3,381
EMEA
Germany	246		315		479		629
Czech Republic	233		350		500		688
Other EMEA	1,101		1,389		2,140		2,774
Regional elimination	(362)		(418)		(671)		(851)
	1,218		1,636		2,448		3,240
Asia
Thailand	134		139		269		244
China	316		165		730		354
Japan	89		103		124		192
Other Asia	191		186		397		363
Regional elimination	(7)		(5)		(13)		(11)
	723		588		1,507		1,142
Inter-segment elimination	(31)		(49)		(63)		(96)
Total	$	3,506	$	3,819	$	6,986	$	7,667

The increase in net sales in China is attributable to the consolidation of CQADNT beginning October 1, 2021. Refer to Note 3, "Acquisitions and Divestitures," of the notes to consolidated financial statements for additional information.