Adient : News Release dated May 6, 2021

Appendix

Page 1

Adient plc

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended March 31,
(in millions, except per share data)	2021	2020
Net sales	$	3,819	$	3,511
Cost of sales	3,521	3,274
Gross profit	298	237
Selling, general and administrative expenses	148	127
Restructuring and impairment costs	5	52
Equity income (loss)	85	8
Earnings (loss) before interest and income taxes	230	66
Net financing charges	110	50
Other pension expense (income)	(2)	(2)
Income (loss) before income taxes	122	18
Income tax provision (benefit)	28	16
Net income (loss)	94	2
Income attributable to noncontrolling interests	25	21
Net income (loss) attributable to Adient	$	69	$	(19)
Diluted earnings (loss) per share	$	0.72	$	(0.20)
Shares outstanding at period end	94.2	93.9
Diluted weighted average shares	96.0	93.8

Appendix

Page 2

Adient plc

Condensed Consolidated Statements of Financial Position

(Unaudited)

March 31,	September 30,
(in millions)	2021	2020
Assets
Cash and cash equivalents	$	984	$	1,692
Accounts receivable - net	1,757	1,641
Inventories	756	685
Assets held for sale	56	43
Other current assets	537	421
Current assets	4,090	4,482
Property, plant and equipment - net	1,551	1,581
Goodwill	2,059	2,057
Other intangible assets - net	432	443
Investments in partially-owned affiliates	848	707
Assets held for sale	26	27
Other noncurrent assets	969	964
Total assets	$	9,975	$	10,261
Liabilities and Shareholders' Equity
Short-term debt	$	22	$	210
Accounts payable and accrued expenses	2,754	2,553
Liabilities held for sale	60	46
Other current liabilities	825	1,010
Current liabilities	3,661	3,819
Long-term debt	3,646	4,097
Other noncurrent liabilities	782	767
Redeemable noncontrolling interests	44	43
Shareholders' equity attributable to Adient	1,489	1,213
Noncontrolling interests	353	322
Total liabilities and shareholders' equity	$	9,975	$	10,261

Appendix

Page 3

Adient plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March 31,
(in millions)	2021	2020
Operating Activities
Net income (loss) attributable to Adient	$	69	$	(19)
Income attributable to noncontrolling interests	25	21
Net income (loss)	94	2
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation	69	72
Amortization of intangibles	9	10
Pension and postretirement contributions, net	(3)	(14)
Equity in earnings of partially-owned affiliates, net of dividends received	(43)	(1)
Gain on sale of a nonconsolidated partially-owned affiliate	(33)	-
Premium and transaction costs paid on repurchase of debt	46	-
Deferred income taxes	(1)	10
Non-cash restructuring and impairment charges	4	-
Equity-based compensation	13	(3)
Other	9	2
Changes in assets and liabilities:
Receivables	(366)	113
Inventories	(65)	(53)
Other assets	(7)	40
Restructuring reserves	(42)	(15)
Accounts payable and accrued liabilities	219	(199)
Accrued income taxes	6	(20)
Cash provided (used) by operating activities	(91)	(56)
Investing Activities
Capital expenditures	(55)	(94)
Sale of property, plant and equipment	2	4
Settlement of cross-currency interest rate swap	-	10
Receipt of deferred consideration	19	-
Cash provided (used) by investing activities	(34)	(80)
Financing Activities
Increase (decrease) in short-term debt	3	835
Repayment of long-term debt, including premium paid	(687)	(2)
Debt financing costs	(1)	(1)
Dividends paid to noncontrolling interests	(7)	(5)
Other	(2)	(1)
Cash provided (used) by financing activities	(694)	826
Effect of exchange rate changes on cash and cash equivalents	(13)	(15)
Increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale	(832)	675
Less: Change in cash classified within current assets held for sale	(4)	-
Increase (decrease) in cash and cash equivalents	$	(836)	$	675

Appendix

Page 4

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 March 31,
(in millions)	2021	2020
Net Sales
Americas	$	1,644	$	1,641
EMEA	1,636	1,488
Asia	588	444
Eliminations	(49)	(62)
Total net sales	$	3,819	$	3,511

Three Months Ended March 31,
(in millions)	2021	2020
Adjusted EBITDA
Americas	$	64	106
EMEA	141	62
Asia	121	63
Corporate-related costs (1)	(23)	(20)
Restructuring and impairment costs (2)	(5)	(52)
Purchase accounting amortization (3)	(10)	(11)
Restructuring related charges (4)	(2)	(7)
Gain on sale of interest in a nonconsolidated partially owned affiliate	33	-
Stock based compensation	(13)	3
Depreciation	(69)	(72)
Other items (5)	(7)	(6)
Earnings (loss) before interest and income taxes	230	66
Net financing charges	(110)	(50)
Other pension income (expense)	2	2
Income (loss) before income taxes	$	122	$	18

Refer to the Footnote Addendum for footnote explanations.

Appendix

Page 5

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 March 31,
(in millions, except per share data)	2021	2020
Income available to shareholders
Net income (loss) attributable to Adient	$	69	$	(19)
Weighted average shares outstanding
Basic weighted average shares outstanding	94.2	93.8
Effect of dilutive securities:
Stock options, unvested restricted stock and unvested performance share awards	1.8	-
Diluted weighted average shares outstanding	96.0	93.8

Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share, which for the three months ended March 31, 2020 is a result of being in a loss position.

Appendix

Page 6

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 and Net debt 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 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.

Appendix

Page 7

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 March 31,
2021	2020
(in millions, except per share data)	GAAP Results	Adj.	Adjusted Results	GAAP Results	Adj.	Adjusted Results
Net sales	$	3,819	$	-	$	3,819	$	3,511	$	-	$	3,511
Cost of sales (6)	3,521	(1)	3,520	3,274	(3)	3,271
Gross profit	298	1	299	237	3	240
Selling, general and administrative expenses (7)	148	(17)	131	127	(19)	108
Restructuring and impairment costs (2)	5	(5)	-	52	(52)	-
Equity income (loss) (8)	85	(32)	53	8	2	10
Earnings (loss) before interest and income taxes (EBIT)	230	(9)	221	66	76	142
Memo accounts:
Depreciation	69	72
Equity based compensation	13	(3)
Adjusted EBITDA	$	303	$	211
Net financing charges (9)	110	(50)	60	50	-	50
Other pension expense (income)	(2)	-	(2)	(2)	-	(2)
Income (loss) before income taxes	122	41	163	18	76	94
Income tax provision (benefit) (10)	28	(2)	26	16	(3)	13
Net income (loss) attributable to Adient	69	41	110	(19)	77	58
Diluted earnings (loss) per share	0.72	0.43	1.15	(0.20)	0.82	0.62
Diluted weighted average shares	96.0	-	96.0	93.8	0.4	94.2

Appendix

Page 8

Segment Performance:

Three months ended March 31, 2021
Americas	EMEA	Asia	Corporate/Eliminations	Consolidated
Net sales	$	1,644	$	1,636	$	588	$	(49)	$	3,819
Adjusted EBITDA	$	64	$	141	$	121	$	(23)	$	303
Adjusted EBITDA margin	3.9	%	8.6	%	20.6	%	N/A	7.9	%
Three months ended March 31, 2020
Americas	EMEA	Asia	Corporate/Eliminations	Consolidated
Net sales	$	1,641	$	1,488	$	444	$	(62)	$	3,511
Adjusted EBITDA	$	106	$	62	$	63	$	(20)	$	211
Adjusted EBITDA margin	6.5	%	4.2	%	14.2	%	N/A	6.0	%

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 March 31,
2021	2020
(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	$	122	$	28	23.0%	$	18	$	16	88.9%
Adjustments	41	(2)	(4.9)%	76	(3)	(3.9)%
As adjusted	$	163	$	26	16.0%	$	94	$	13	13.8%

Appendix

Page 9

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

Three Months Ended March 31,
(in millions)	2021	2020
Net income (loss) attributable to Adient	$	69	$	(19)
Restructuring and impairment costs	5	52
Purchase accounting amortization	10	11
Restructuring related charges	2	7
Gain on sale of interest in a nonconsolidated partially owned affiliate	(33)	-
Write off of deferred financing charges upon repurchase of debt	10	-
Interest accretion on deferred consideration	(5)	-
Premium paid on repurchase of debt	45	-
Other items (5)	7	6
Impact of adjustments on noncontrolling interests (11)	(2)	(2)
Tax impact of above adjustments and other tax items (10)	2	3
Adjusted net income attributable to Adient	$	110	$	58

Refer to the Footnote Addendum for footnote explanations

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

Three Months Ended March 31,
2021	2020
Diluted earnings (loss) per share as reported	$	0.72	$	(0.20)
Restructuring and impairment costs	0.05	0.55
Purchase accounting amortization	0.10	0.12
Restructuring related charges	0.02	0.08
Gain on sale of interest in a nonconsolidated partially owned affiliate	(0.33)	-
Write off of deferred financing charges upon repurchase of debt	0.10	-
Interest accretion on deferred consideration	(0.05)	-
Premium paid on repurchase of debt	0.47	-
Other items (5)	0.07	0.06
Impact of adjustments on noncontrolling interests (11)	(0.02)	(0.02)
Tax impact of above adjustments and other tax items (10)	0.02	0.03
Adjusted net income attributable to Adient	$	1.15	$	0.62

The following table presents calculations of net debt:

March 31,	September 30,
(in millions)	2021	2020
Cash and cash equivalents	$	984	$	1,692
Total short-term and long-term debt	3,668	4,307
Net debt	$	2,684	$	2,615

Appendix

Page 10

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

Three Months Ended March 31,
(in millions)	2021	2020
Cash provided by operating activities	$	(91)	$	(56)
Capital expenditures	(55)	$	(94)
Free cash flow	$	(146)	$	(150)

The following table reconciles adjusted EBITDA to free cash flow:

FY21	FY20
(in millions)	Q2	YTD	Q2	YTD
Adjusted EBITDA	$	303	$	681	$	211	$	508
(+/-) Net equity in earnings	(45)	(138)	(3)	(110)
(-) Restructuring (cash)	(45)	(100)	(20)	(40)
(+/-) Net customer tooling	8	-	(8)	(2)
(+/-) Trade working capital (Net AR/AP + Inventory)	(153)	97	(103)	99
(+/-) Accrued compensation	27	8	(23)	(84)
(-) Interest paid	(70)	(136)	(56)	(105)
(+/-) Tax refund/taxes paid	(20)	(32)	(26)	(55)
(+/-) Non-income related taxes (VAT)	(11)	(78)	1	-
(+/-) Commercial settlements	(70)	(79)	(21)	(2)
(+/-) Other	(15)	(83)	(8)	(26)
Operating cash flow	(91)	140	(56)	183
Capital expenditures	(55)	(126)	(94)	(185)
Free cash flow	$	(146)	$	14	$	(150)	$	(2)

Appendix

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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 along with one-time asset impairment charges, as follows:

Three Months Ended March 31,
(in millions)	2021	2020
Restructuring charges	$	(3)	$	(52)
Held for sale asset adjustments	(2)	-
$	(5)	$	(52)

(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 including restructuring costs at partially owned affiliates recorded within equity income.

(5) Other items include:

Three Months Ended March 31,
(in millions)	2021	2020
Transaction costs	$	(7)	$	(6)

(6) The adjustments to cost of sales include:

Three Months Ended March 31,
(in millions)	2021	2020
Restructuring related charges	$	(1)	$	(3)

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

Three Months Ended March 31,
(in millions)	2021	2020
Purchase accounting amortization	$	(9)	$	(10)
Transaction costs	(7)	(6)
Restructuring related charges	(1)	(3)
$	(17)	$	(19)

(8) The adjustments to equity income include:

Appendix

Page 12

Three Months Ended March 31,
(in millions)	2021	2020
Gain on sale of interest in a nonconsolidated partially owned affiliate	$	(33)	$	-
Restructuring related charges	-	1
Purchase accounting amortization	1	1
$	(32)	$	2

(9) The adjustments to net financing charges to calculate adjusted interest expense include:

Three Months Ended March 31,
(in millions)	2021	2020
Premium paid on repurchase of debt	$	(45)	$	-
Write off of deferred financing charges upon repurchase of debt	(10)	-
Interest accretion on deferred consideration	5	-
$	(50)	$	-

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

Three Months Ended March 31,
(in millions)	2021	2020
Benefits associated with restructuring and impairment charges	$	(1)	$	-
Gain on sale of interest in a nonconsolidated partially owned affiliate	5	-
Tax rate change	-	(1)
Other reconciling items	(2)	4
$	2	$	3

(11) Reflects the impact of adjustments, primarily purchase accounting amortization on noncontrolling interests.