FY 2018 Fourth Quarter Earnings Call
Non-GAAP reconciliations
EBIT, Adjusted EBIT, Adjusted EBITDA
FY17 Actual
FY18 Actual
(in $ millions)
Net income attributable to Adient
Q1 FY17
Q2 FY17
Q3 FY17
Q4 FY17
Full FY17
Q1 FY18
Q2 FY18
Q3 FY18
Q4 FY18
Full FY18
$
142
$
190
$ 201
$ 344
$
877
$
(216)
$
(168)
$
54
$ (1,355)
$ (1,685)
Income attributable to noncontrolling interests
Income Tax Provision (11)
22
24
22
17
85
20
25
19
20
$
84
28
37
39
(5)
99
265
(28)
(13)
256
$
480
Financing Charges
35
33
31
33
132
33
37
39
35
$
144
Earnings before interest and income taxes
$
227
$ 284
$ 293 $ 389
$ 1,193
$
102
$ (134) $
99 $ (1,044)
$
(977)
Separation costs
(1)
10
.
10
10
Becoming Adient
(1)
15
(2)
Purchase accounting amortization
10
Restructuring related charges
Other items (4)
(3)
Restructuring and impariment costs
(6)
8
13
(5)
6
50 %
23
20
37
95
19
19
9
10
14
43
17
18
10
10
3
36
6
37
11
16
14
22
12
222
12
12
62
17
17
69
20
18
61
22
1
3
40
40
5
315
557
57
809
1,181
(45)
(45)
(151)
(151)
(24)
(24)
Pension mark-to-market
Gain on previously held interest (7)
Impairment on YFAI investment
Adjusted EBIT
(8)
358
358
$
283
$
332
$
333
$
296
$ 1,244
$
163 $ 252
$
206
$ 149 $
770
Stock based compensation
Depreciation
Adjusted EBITDA
(9)
4
11
8
6
29
10
12
12
3
37
(10)
83
78
83
88
332
94
99
101
99
99
393
$ 370 $ 421 $
424
$
390
$ 1,605
$
267
$
363
$
319
$ 251
$ 1,200
1. Reflects incremental expenses associated with becoming an independent company and expenses associated with the separation from JCI.
2. Reflects amortization of intangible assets including those related to partially owned affiliates recorded within equity income.
ADIENT
3. 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 restructuring costs at partially owned affiliates recorded within equity income.
4. Fourth quarter of 2018 reflects $3 million of integration costs associated with the acquisition of Futuris, Third quarter of 2018 reflects $6 million of integration costs associated with the acquisition of Futuris, $9 million of OPEB income related to the termination of a retiree medical plan, and $4 million of
non-recurring consulting fees related to SS&M. Second quarter of 2018 reflects $7 million of integration costs associated with the acquisition of Futuris, $8 million of prior period adjustments, and $7 million of non-recurring consulting fees related to SS&M. First quarter of 2018 reflects $6 million of
integration costs associated with the acquisition of Futuris and $8 million related to the impact of the U.S. tax reform legislation at YFAI. First quarter 2017 primarily consists of $12M of initial funding of the Adient foundation. Fourth quarter of 2017 reflects $3 million of integration costs associated with the
acquisition of Futuris.
5. Reflects qualified restructuring charges for costs that are directly attributable to restructuring activities and meet the definition of restructuring under ASC 420. Also incudes a non-cash pre-tax impairment charge of $787 million (post-tax charge of $718 million) during the three months ended September
30, 2018 related to SS&M long-lived assets that were in use as of September 30, 2018 in support of current programs. On-going performance issues on the current programs within the North American and European regions led to an impairment assessment of each region and resulted in the recognition
of such impairment charge. The twelve months ended September 30, 2018 also includes a non-cash goodwill impairment charge of $299 million associated with SS&M and a $49 million non-cash impairment charge
6. Reflects net mark-to-market adjustments on pension and postretirement plans.
7. In 2017, an amendment to the rights agreement with a Seating affiliate in China was finalized, giving Adient control of the previously non-consolidated JV. Adient began consolidating the affiliate in July 2017 and was required to apply purchase accounting, including recognizing a gain on our previously
held interest, which has been recorded in equity income.
8. During the three months ended September 30, 2018, the Company recorded a non-cash pre-tax impairment charge related to its YFAI investment balance of $358 million (post-tax charge of $322 million). On-going performance issues within the YFAI business led Adient to perform an impairment
analysis of its YFAI investment and resulted in the recognition of such impairment charge, which has been recorded within equity income
9. Stock based compensation excludes $6 million, $2 million, $1 million and $1 million of expense in the first, second, third and fourth quarters of 2018, respectively, and $2 million, $5 million, $3 million and $6 million of expense in the first, second, third and fourth quarters of 2017, respectively. These costs
are included in Becoming Adient costs discussed above.
10. Depreciation excludes $2 million, $2 million, $2 million and $1 million of expense in the first, second, third and fourth quarters of 2018, respectively, which is included in restructuring related charges discussed above. Depreciation excludes $3 million, $1 million and $1 million of expense in the second,
third and fourth quarters of 2017, respectively. These costs are included in Becoming Adient costs discussed above.
11. The income tax provision for the three and twelve months ended September 30, 2018 includes a non-cash tax charge of $439 million to establish valuation allowances against net deferred tax assets in certain jurisdictions because of the on-going performance issues and the associated decline in profits
in those jurisdictions. Also included in the income tax provision for the three months ended September 30, 2018 is a non-cash tax benefit of $48 million related to the impact of US tax reform. The impact of US tax reform on the income tax provision for the twelve months ended September 30, 2018 is a
non-cash tax charge of $210 millionView entire presentation