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 |
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 |
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 |
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 |
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 |
• | 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. | ||||
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 |
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 | % | |||||||||||||||||||||||
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% | ||||||||||||||||||||||||||||
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 |
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 | ||||||||||
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 | ||||||||||
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) |
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) |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2021 | 2020 | ||||||||||||
Restructuring charges | $ | (3) | $ | (52) | ||||||||||
Held for sale asset adjustments | (2) | — | ||||||||||||
$ | (5) | $ | (52) |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2021 | 2020 | ||||||||||||
Transaction costs | $ | (7) | $ | (6) | ||||||||||
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2021 | 2020 | ||||||||||||
Restructuring related charges | $ | (1) | $ | (3) | ||||||||||
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) |
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 |
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) | $ | — |
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 |