Adient : Condensed Consolidated Statements of Income - Form 8-K

Adient plc

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions, except per share data)	2023	2022	2023	2022
Net sales	$	3,729	$	3,650	$	15,395	$	14,121
Cost of sales	3,479	3,367	14,362	13,314
Gross profit	250	283	1,033	807
Selling, general and administrative expenses	127	159	554	598
Restructuring and impairment costs	10	5	40	25
Equity income (loss)	27	19	84	75
Earnings (loss) before interest and income taxes	140	138	523	259
Net financing charges	46	43	195	215
Other pension expense (income)	21	(4)	33	(10)
Income (loss) before income taxes	73	99	295	54
Income tax provision (benefit)	(84)	29	-	94
Net income (loss)	157	70	295	(40)
Income attributable to noncontrolling interests	22	25	90	80
Net income (loss) attributable to Adient	$	135	$	45	$	205	$	(120)
Diluted earnings (loss) per share	$	1.42	$	0.47	$	2.15	$	(1.27)
Shares outstanding at period end	93.7	94.9	93.7	94.9
Diluted weighted average shares	94.8	96.0	95.4	94.8

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Adient plc

Condensed Consolidated Statements of Financial Position

(Unaudited)

September 30,
(in millions)	2023	2022
Assets
Cash and cash equivalents	$	1,110	$	947
Accounts receivable - net	1,874	1,852
Inventories	841	953
Other current assets	491	411
Current assets	4,316	4,163
Property, plant and equipment - net	1,382	1,377
Goodwill	2,094	2,057
Other intangible assets - net	408	467
Investments in partially-owned affiliates	303	286
Assets held for sale	7	11
Other noncurrent assets	914	797
Total assets	$	9,424	$	9,158
Liabilities and Shareholders' Equity
Short-term debt	$	134	$	14
Accounts payable and accrued expenses	2,926	2,818
Other current liabilities	678	669
Current liabilities	3,738	3,501
Long-term debt	2,401	2,564
Other noncurrent liabilities	682	673
Redeemable noncontrolling interests	57	45
Shareholders' equity attributable to Adient	2,228	2,073
Noncontrolling interests	318	302
Total liabilities and shareholders' equity	$	9,424	$	9,158

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Adient plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Operating Activities
Net income (loss) attributable to Adient	$	135	$	45	$	205	$	(120)
Income attributable to noncontrolling interests	22	25	90	80
Net income (loss)	157	70	295	(40)
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation	76	75	290	298
Amortization of intangibles	12	12	50	52
Pension and postretirement benefit expense (benefit)	22	(1)	38	(2)
Pension and postretirement contributions, net	(6)	1	(17)	(16)
Equity in earnings of partially-owned affiliates, net of dividends received	(7)	42	(34)	4
(Gain) on sale / impairment of nonconsolidated partially owned affiliate	-	2	6	10
Premium paid on repurchase of debt	-	4	7	38
Retrospective recoveries of Brazil indirect tax credits	-	(29)	-	(29)
Derivative loss on China Transactions	-	-	-	3
Deferred income taxes	(122)	-	(124)	5
Non-cash restructuring and impairment charges	-	2	-	14
Equity-based compensation	9	8	34	29
Other	(7)	3	(4)	17
Changes in assets and liabilities:
Receivables	186	(161)	16	(576)
Inventories	6	(36)	126	(62)
Other assets	58	(30)	(26)	32
Restructuring reserves	(8)	(8)	(53)	(57)
Accounts payable and accrued liabilities	(99)	259	34	542
Accrued income taxes	17	23	29	12
Cash provided (used) by operating activities	294	236	667	274
Investing Activities
Capital expenditures	(75)	(57)	(252)	(227)
Sale of property, plant and equipment	10	2	26	20
Settlement of derivatives	-	-	-	(30)
Acquisition of businesses, net of cash acquired	-	-	(6)	(19)
Business divestitures	-	-	5	740
Other	-	-	(2)	-
Cash provided (used) by investing activities	(65)	(55)	(229)	484
Financing Activities
Increase (decrease) in short-term debt	1	(6)	(1)	(14)
Increase (decrease) in long-term debt	-	-	1,002	-
Repayment of long-term debt	-	(99)	(1,104)	(987)
Debt financing costs	-	-	(23)	(1)
Share repurchases	-	-	(65)	-
Cash paid to acquire a noncontrolling interest	-	-	-	(153)
Dividends paid to noncontrolling interests	(10)	(4)	(67)	(106)
Other	(1)	-	(13)	(12)
Cash provided (used) by financing activities	(10)	(109)	(271)	(1,273)
Effect of exchange rate changes on cash and cash equivalents	(17)	(17)	(4)	(59)
Increase (decrease) in cash and cash equivalents	$	202	$	55	$	163	$	(574)

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Footnotes

1. Segment Results

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, qualified 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.

Financial information relating to Adient's reportable segments is as follows:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Net Sales
Americas	$	1,835	$	1,790	$	7,220	$	6,557
EMEA	1,174	1,101	5,195	4,764
Asia	748	792	3,085	2,926
Eliminations	(28)	(33)	(105)	(126)
Total net sales	$	3,729	$	3,650	$	15,395	$	14,121

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Adjusted EBITDA
Americas	$	100	$	117	$	336	$	242
EMEA	48	34	232	138
Asia	113	100	464	383
Corporate-related costs (1)	(26)	(24)	(94)	(88)
Restructuring and impairment costs (2)	(10)	(5)	(40)	(25)
Purchase accounting amortization (3)	(13)	(13)	(52)	(54)
Restructuring related activities (4)	8	(1)	2	(6)
Stock based compensation	(9)	(8)	(34)	(29)
Depreciation	(76)	(75)	(290)	(298)
Other items (5)	5	13	(1)	(4)
Earnings (loss) before interest and income taxes	140	138	523	259
Net financing charges	(46)	(43)	(195)	(215)
Other pension income (expense)	(21)	4	(33)	10
Income (loss) before income taxes	$	73	$	99	$	295	$	54

Refer to the Footnote Addendum for footnote explanations.

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2. Earnings Per Share

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings (loss) per share:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions, except per share data)	2023	2022	2023	2022
Income available to shareholders
Net income (loss) attributable to Adient	$	135	$	45	$	205	$	(120)
Weighted average shares outstanding
Basic weighted average shares outstanding	93.7	94.8	94.5	94.8
Effect of dilutive securities:
Stock options, unvested restricted stock and unvested performance share awards	1.1	1.2	0.9	-
Diluted weighted average shares outstanding	94.8	96.0	95.4	94.8

Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share, which for the twelve months ended September 30, 2022 is a result of being in a loss position.

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3. Non-GAAP Measures

Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income attributable to Adient, Adjusted effective tax rate, Adjusted earnings per share, Adjusted equity income, Adjusted interest expense, Free cash flow, Net debt, and Net leverage ratio as well as other measures presented on an adjusted basis are not recognized terms under U.S. GAAP and do not purport to be alternatives to the most comparable U.S. GAAP amounts. Since all companies do not use identical calculations, our definition and presentation of these measures may not be comparable to similarly titled measures reported by other companies. Management uses the identified non-GAAP measures to evaluate the operating performance of the Company and its business segments and to forecast future periods. Management believes these non-GAAP measures assist investors and other interested parties in evaluating Adient's on-going operations and provide important supplemental information to management and investors regarding financial and business trends relating to Adient's financial condition and results of operations. Investors should not consider these non-GAAP measures as alternatives to the related GAAP measures. Reconciliations of non-GAAP measures to their closest U.S. GAAP equivalent are presented below. Reconciliations of non-GAAP measures related to guidance for any future period have not been provided due to the unreasonable efforts it would take to provide such reconciliations.

•	Adjusted EBIT is defined as income before income taxes and noncontrolling interests excluding net financing charges, restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, other significant non-recurring items, and net mark-to-market adjustments on pension and postretirement plans. Adjusted EBIT margin is adjusted EBIT as a percentage of net sales.
•	Adjusted EBITDA is defined as adjusted EBIT excluding depreciation and stock based compensation. Certain corporate-related costs are not allocated to the business segments in determining Adjusted EBITDA. Adjusted EBITDA margin is adjusted EBITDA as a percentage of net sales. Adjusted EBITDA excluding adjusted equity income, each as defined herein, is also presented.
•	Adjusted net income attributable to Adient is defined as net income attributable to Adient excluding restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, expenses associated with becoming an independent company, other significant non-recurring items, net mark-to-market adjustments on pension and postretirement plans, the tax impact of these items and other discrete tax charges/benefits.
•	Adjusted effective tax rate is defined as adjusted income tax provision as a percentage of adjusted income before income taxes.
•	Adjusted earnings per share is defined as Adjusted net income attributable to Adient divided by diluted weighted average shares.
•	Adjusted equity income is defined as equity income excluding amortization of Adient's intangible assets related to its non-consolidated joint ventures and other unusual or one-time items impacting equity income.
•	Adjusted interest expense is defined as net financing charges excluding unusual or one-time items impacting interest expense.
•	Free cash flow is defined as cash provided by operating activities less capital expenditures.
•	Net debt is calculated as gross debt (short-term and long-term) less cash and cash equivalents.
•	Net leverage ratio is calculated as net debt divided by LTM Adjusted EBITDA

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Summarized Income Statement Information

(Refer to the Footnote Addendum for footnote explanations and details

of reconciling items between GAAP results and Adjusted results)

Three Months Ended September 30,
2023	2022
(in millions, except per share data)	GAAP Results	Adj.	Adjusted Results	GAAP Results	Adj.	Adjusted Results
Net sales	$	3,729	$	-	$	3,729	$	3,650	$	-	$	3,650
Cost of sales (6)	3,479	-	3,479	3,367	29	3,396
Gross profit	250	-	250	283	(29)	254
Selling, general and administrative expenses (7)	127	(3)	124	159	(28)	131
Restructuring and impairment costs (2)	10	(10)	-	5	(5)	-
Equity income (loss) (8)	27	(3)	24	19	2	21
Earnings (loss) before interest and income taxes (EBIT)	140	10	150	138	6	144
Memo accounts:
Depreciation	76	75
Equity based compensation costs	9	8
Adjusted EBITDA	$	235	$	227
Net financing charges (9)	46	-	46	43	(5)	38
Other pension expense (income) (10)	21	(19)	2	(4)	3	(1)
Income (loss) before income taxes	73	29	102	99	8	107
Income tax provision (benefit) (11)	(84)	115	31	29	-	29
Net income (loss) attributable to Adient	135	(87)	48	45	6	51
Diluted earnings (loss) per share	1.42	(0.91)	0.51	0.47	0.06	0.53
Diluted weighted average shares	94.8	-	94.8	96.0	-	96.0

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Summarized Income Statement Information

(Refer to the Footnote Addendum for footnote explanations and details

of reconciling items between GAAP results and Adjusted results)

Twelve Months Ended September 30,
2023	2022
(in millions, except per share data)	GAAP Results	Adj.	Adjusted Results	GAAP Results	Adj.	Adjusted Results
Net sales	$	15,395	$	-	$	15,395	$	14,121	$	-	$	14,121
Cost of sales (6)	14,362	(2)	14,360	13,314	26	13,340
Gross profit	1,033	2	1,035	807	(26)	781
Selling, general and administrative expenses (7)	554	(43)	511	598	(77)	521
Restructuring and impairment costs (2)	40	(40)	-	25	(25)	-
Equity income (loss) (8)	84	6	90	75	13	88
Earnings (loss) before interest and income taxes (EBIT)	523	91	614	259	89	348
Memo accounts:
Depreciation	290	298
Equity based compensation costs	34	29
Adjusted EBITDA	$	938	$	675
Net financing charges (9)	195	(11)	184	215	(52)	163
Other pension expense (income) (10)	33	(27)	6	(10)	6	(4)
Income (loss) before income taxes	295	129	424	54	135	189
Income tax provision (benefit) (11)	-	123	123	94	(3)	91
Net income (loss) attributable to Adient	205	-	205	(120)	131	11
Diluted earnings (loss) per share	2.15	-	2.15	(1.27)	1.38	0.11
Diluted weighted average shares	95.4	-	95.4	94.8	1.0	95.8

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Segment Performance:
Three months ended September 30, 2023
Americas	EMEA	Asia	Corporate/Eliminations	Consolidated
Net sales	$	1,835	$	1,174	$	748	$	(28)	$	3,729
Adjusted EBITDA	$	100	$	48	$	113	$	(26)	$	235
Adjusted EBITDA margin	5.4	%	4.1	%	15.1	%	N/A	6.3	%
Three months ended September 30, 2022
Americas	EMEA	Asia	Corporate/Eliminations	Consolidated
Net sales	$	1,790	$	1,101	$	792	$	(33)	$	3,650
Adjusted EBITDA	$	117	$	34	$	100	$	(24)	$	227
Adjusted EBITDA margin	6.5	%	3.1	%	12.6	%	N/A	6.2	%
Twelve months ended September 30, 2023
Americas	EMEA	Asia	Corporate/Eliminations	Consolidated
Net sales	$	7,220	$	5,195	$	3,085	$	(105)	$	15,395
Adjusted EBITDA	$	336	$	232	$	464	$	(94)	$	938
Adjusted EBITDA margin	4.7	%	4.5	%	15.0	%	N/A	6.1	%
Twelve months ended September 30, 2022
Americas	EMEA	Asia	Corporate/Eliminations	Consolidated
Net sales	$	6,557	$	4,764	$	2,926	$	(126)	$	14,121
Adjusted EBITDA	$	242	$	138	$	383	$	(88)	$	675
Adjusted EBITDA margin	3.7	%	2.9	%	13.1	%	N/A	4.8	%

The following table presents adjusted EBITDA excluding adjusted equity income:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Adjusted EBITDA	$	235	$	227	$	938	$	675
Less: Adjusted equity income	24	21	90	88
Adjusted EBITDA excluding adjusted equity income	$	211	$	206	$	848	$	587
% of Sales	5.8	%	5.6	%	6.0	%	4.2	%

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The following table reconciles income (loss) before income taxes to adjusted income before income taxes and presents the related effective tax rate and adjusted effective tax rate:

Three Months Ended September 30,
2023	2022
(in millions, except effective tax rate)	Income (loss) before income taxes	Tax impact	Effective tax rate	Income (loss) before income taxes	Tax impact	Effective tax rate
As reported	$	73	$	(84)	* nm	$	99	$	29	29.3%
Adjustments (11)	29	115	* nm	8	-	-%
As adjusted	$	102	$	31	30.4%	$	107	$	29	27.1%

Twelve Months Ended September 30,
2023	2022
(in millions, except effective tax rate)	Income (loss) before income taxes	Tax impact	Effective tax rate	Income (loss) before income taxes	Tax impact	Effective tax rate
As reported	295	$	-	-%	$	54	$	94	* nm
Adjustments (11)	129	123	95.3%	135	(3)	(2.2)%
As adjusted	$	424	$	123	29.0%	$	189	$	91	48.1%

* Measure not meaningful.

The following table reconciles net income (loss) attributable to Adient to adjusted net income (loss) attributable to Adient:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Net income (loss) attributable to Adient	$	135	$	45	$	205	$	(120)
Restructuring and impairment costs (2)	10	5	40	25
Purchase accounting amortization (3)	13	13	52	54
Restructuring related activities (4)	(8)	1	(2)	6
Pension mark-to-market and settlement (gain) loss (10)	19	(3)	27	(6)
Write off of deferred financing charges upon repurchase of debt (9)	-	1	4	8
Derivative loss on China transactions (9)	-	-	-	3
Foreign exchange loss on intercompany loan in Russia (9)	-	-	-	3
Premium paid on repurchase of debt (9)	-	4	7	38
Other items (5)	(5)	(13)	1	4
Impact of adjustments on noncontrolling interests (12)	(1)	(2)	(6)	(7)
Tax impact of above adjustments and other tax items (11)	(115)	-	(123)	3
Adjusted net income (loss) attributable to Adient	$	48	$	51	$	205	$	11

Refer to the Footnote Addendum for footnote explanations

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The following table reconciles diluted earnings (loss) per share as reported to adjusted diluted earnings per share:

Three Months Ended September 30,	Twelve Months Ended September 30,
2023	2022	2023	2022
Diluted earnings (loss) per share as reported	$	1.42	$	0.47	$	2.15	$	(1.27)
Restructuring and impairment costs (2)	0.11	0.05	0.42	0.26
Purchase accounting amortization (3)	0.14	0.14	0.55	0.58
Restructuring related activities (4)	(0.08)	0.01	(0.02)	0.06
Pension mark-to-market and settlement gain/loss (10)	0.20	(0.03)	0.28	(0.06)
Write off of deferred financing charges upon repurchase of debt (9)	-	0.01	0.04	0.08
Derivative loss on China transactions (9)	-	-	-	0.03
Foreign exchange (gain) loss on intercompany loan in Russia (9)	-	-	-	0.03
Premium paid on repurchase of debt (9)	-	0.04	0.07	0.40
Other items (5)	(0.05)	(0.14)	0.01	0.04
Impact of adjustments on noncontrolling interests (12)	(0.01)	(0.02)	(0.06)	(0.07)
Tax impact of above adjustments and other tax items (11)	(1.22)	-	(1.29)	0.03
Adjusted diluted earnings (loss) per share	$	0.51	$	0.53	$	2.15	$	0.11

The following table presents calculations of net debt and net leverage ratio:

September 30,
(in millions)	2023	2022
Cash	$	1,110	$	947
Total debt	2,535	2,578
Net debt	$	1,425	$	1,631
LTM Adjusted EBITDA	$	938	$	675
Net leverage ratio	1.52	2.42

The following table reconciles cash from operating activities to free cash flow:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Operating cash flow	$	294	$	236	$	667	$	274
Capital expenditures	(75)	(57)	(252)	(227)
Free cash flow	$	219	$	179	$	415	$	47

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The following table reconciles adjusted EBITDA to Free cash flow:

FY23	FY22
(in millions)	Q4	YTD	Q4	YTD
Adjusted EBITDA excluding adjusted equity income	$	211	$	848	$	206	$	587
Dividends received from nonconsolidated partially-owned affiliates	20	56	62	89
Restructuring (cash)	(11)	(60)	(9)	(57)
Net Customer Tooling	(7)	(47)	32	(4)
Trade Working Capital (Net AR/AP + Inventory)	58	37	(15)	(21)
Accrued Compensation	16	57	2	(43)
Interest paid	(38)	(145)	(58)	(192)
Tax refund/taxes paid	(20)	(94)	(14)	(77)
Non-income related taxes (VAT)	9	4	-	33
Commercial settlements	51	87	31	(35)
Capitalized engineering	(8)	(33)	(4)	29
Prepaids	32	(9)	22	15
Other	(19)	(34)	(19)	(50)
Operating cash flow	294	667	236	274
Capital expenditures	(75)	(252)	(57)	(227)
Free cash flow	$	219	$	415	$	179	$	47

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Footnote Addendum

(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 one-time asset impairments, as follows:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Restructuring charges	$	(10)	$	(3)	$	(40)	$	(15)
Held for sale and other asset adjustments	-	-	-	(6)
Impairment charge associated with Russian operations	-	(2)	-	(4)
$	(10)	$	(5)	$	(40)	$	(25)

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

(4) Reflects non-qualified restructuring charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420 along with a gain on sale of a restructured facility in the America's segment for three and twelve month ended September 30, 2023, as follows:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Restructuring related charges	$	(2)	$	(1)	$	(8)	$	(6)
Gain on sale of restructured facility	10	-	10	-
$	8	$	(1)	$	2	$	(6)

(5) Other items include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Transaction costs	$	-	$	(1)	$	(3)	$	(8)
Brazil indirect tax recoveries	1	29	4	32
Non-recurring contract related settlement	-	(14)	-	(14)
One-time divestiture gain at an affiliate	4	-	4	-
Loss on sale / impairment of nonconsolidated partially-owned affiliates	-	(1)	(6)	(10)
Other	-	-	-	(4)
$	5	$	13	$	(1)	$	(4)

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(6) The adjustments to cost of sales include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Purchase accounting amortization	$	-	$	-	$	(1)	$	(1)
Restructuring related charges	(1)	-	(5)	(4)
Brazil indirect tax recoveries	1	29	4	32
Other	-	-	-	(1)
$	-	$	29	$	(2)	$	26

(7) The adjustments to selling, general and administrative costs include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Purchase accounting amortization	$	(12)	$	(12)	$	(49)	$	(51)
Gain on sale of restructured facility	10	-	10	-
Restructuring related charges	(1)	(1)	(1)	(1)
Transaction costs	-	(1)	(3)	(8)
Non-recurring contract related settlement	-	(14)	-	(14)
Other	-	-	-	(3)
$	(3)	$	(28)	$	(43)	$	(77)

(8) The adjustments to equity income include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Purchase accounting amortization	$	1	$	1	$	2	$	2
Gain on sale of certain assets at affiliates in China	(4)	(7)	(4)	(7)
Restructuring related charges	-	-	2	1
(Gain) loss on sale / impairment of nonconsolidated partially-owned affiliates	-	1	6	10
Customer termination charge	-	7	-	7
$	(3)	$	2	$	6	$	13

(9) The adjustments to net financing charges include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Premium paid on repurchase of debt	$	-	$	(4)	$	(7)	$	(38)
Write off of deferred financing charges upon repurchase of debt	-	(1)	(4)	(8)
Derivative loss on China transactions	-	-	-	(3)
Foreign exchange loss on intercompany loan in Russia	-	-	-	(3)
$	-	$	(5)	$	(11)	$	(52)

Appendix

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(10) The adjustments to other pension expense (income) include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Mark-to-market adjustment gain (loss)	$	(19)	$	3	$	(19)	$	7
One-time settlement and curtailment gain (loss)	-	-	(8)	(1)
$	(19)	$	3	$	(27)	$	6

(11) The adjustments to income tax provision (benefit) include:

Three Months Ended September 30,	Twelve Months Ended September 30,
(in millions)	2023	2022	2023	2022
Tax rate change	$	-	$	-	$	-	$	4
Brazil indirect tax recoveries	-	(7)	-	(4)
Valuation allowances	112	8	111	(4)
Amortization	1	1	6	7
Pension mark-to-market and settlement loss	1	-	3	-
Other reconciling items	1	(2)	3	(6)
$	115	$	-	$	123	$	(3)

(12) Reflects the impacts of adjustments, primarily purchase accounting amortization and changes in income tax rates, on noncontrolling interests.