Segment Information

9 Months Ended

Jun. 30, 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 June 30,				Nine Months Ended June 30,
(in millions)	2022		2021		2022		2021
Net Sales
Americas	$	1,673	$	1,440	$	4,767	$	4,821
EMEA	1,215		1,328		3,663		4,568
Asia	627		516		2,134		1,658
Eliminations	(30)		(42)		(93)		(138)
Total net sales	$	3,485	$	3,242	$	10,471	$	10,909

	Three Months Ended June 30,				Nine Months Ended June 30,
(in millions)	2022		2021		2022		2021
Adjusted EBITDA
Americas	$	70	$	23	$	125	$	219
EMEA	31		22		104		277
Asia	64		92		283		364
Corporate-related costs (1)	(22)		(19)		(64)		(61)
Restructuring and impairment costs (2)	(12)		(8)		(20)		(20)
Purchase accounting amortization (3)	(14)		(11)		(41)		(32)
Restructuring related charges (4)	(1)		—		(5)		(6)
Gain on sale / (impairment) of nonconsolidated partially-owned affiliates (5)	—		—		(9)		33
Depreciation	(72)		(71)		(223)		(210)
Stock based compensation	(7)		(10)		(21)		(36)
Other items (6)	(2)		26		(8)		28
Earnings (loss) before interest and income taxes	35		44		121		556
Net financing charges	(39)		(87)		(172)		(256)
Other pension income (expense)	4		4		6		8
Income (loss) before income taxes	$	—	$	(39)	$	(45)	$	308

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 nine months ended June 30, 2022, an impairment charge of $2 million related to net assets in Russia, and a held-for-sale impairment charge of $6 million were recorded in EMEA. During the nine months ended June 30, 2021, a held-for-sale impairment charge of $8 million 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 nine months ended June 30, 2022 reflects $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 nine months ended June 30, 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 June 30, 2022 primarily reflects $2 million of transaction costs. The nine months ended June 30, 2022 reflects $7 million of transaction costs and $2 million of loss on finalization of asset sale in Turkey. The three months ended June 30, 2021 reflects $2 million of transaction costs and a one-time gain of $30 million associated with retrospective recoveries of Brazil indirect tax credits resulting from a favorable court ruling (of which $28 million relates to recoveries covering the past 20 years and is adjusted out of Americas' segment results). The nine months ended June 30, 2021 reflects a one-time gain of $38 million associated with the retrospective recoveries of Brazil indirect tax credits resulting from a favorable court ruling (of which $36 million relates to recoveries covering the past 20 years and is adjusted out of Americas' segment results), a $5 million gain on previously held interest at YFAS in an affiliate, and $13 million of transaction costs.

Geographic Information

Revenue by geographic area is as follows:

Net Sales
	Three Months Ended June 30,				Nine Months Ended June 30,
(in millions)	2022		2021		2022		2021
Americas
United States	$	1,501	$	1,298	$	4,276	$	4,332
Mexico	628		558		1,756		1,783
Other Americas	106		64		284		238
Regional elimination	(562)		(480)		(1,549)		(1,532)
	1,673		1,440		4,767		4,821
EMEA
Germany	258		261		737		891
Czech Republic	257		276		757		964
Other EMEA	1,030		1,144		3,170		3,918
Regional elimination	(330)		(353)		(1,001)		(1,205)
	1,215		1,328		3,663		4,568
Asia
Thailand	101		113		370		357
China	274		171		1,004		525
Japan	59		60		183		253
Other Asia	200		177		597		539
Regional elimination	(7)		(5)		(20)		(16)
	627		516		2,134		1,658
Inter-segment elimination	(30)		(42)		(93)		(138)
Total	$	3,485	$	3,242	$	10,471	$	10,909

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.