Three Months Ended March 31,
(in millions, except per share data)						2026						2025
Net sales						$	3,865					$	3,611
Cost of sales						3,608						3,350
Gross profit						257						261
Selling, general and administrative expenses						138						144
Restructuring and impairment costs						5						351
Equity income						13						18
Earnings (loss) before interest and income taxes						127						(216)
Net financing charges						48						48
Other pension expense						3						1
Income (loss) before income taxes						76						(265)
Income tax provision						32						48
Net income (loss)						44						(313)
Income attributable to noncontrolling interests						17						22
Net income (loss) attributable to Adient						$	27					$	(335)
Diluted earnings (loss) per share						$	0.34					$	(3.99)
Shares outstanding at period end						78.4						84.0
Diluted weighted average shares						79.3						84.0

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, the 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 (loss) 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. 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:

The following is a reconciliation of Adient's reportable segments' adjusted EBITDA to income (loss) before income taxes:

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

The effect of common stock equivalents which would have been anti-dilutive was excluded, and immaterial, from the calculation of diluted earnings per share for the three months ended March 31, 2026. Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for the three months ended March 31, 2025 as a result of being in a loss position.

Adjusted EBIT, adjusted EBIT margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) 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 Adient 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 in the corresponding tables that follow the definitions 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.

Table

The following table reconciles net income (loss) to EBIT, adjusted EBIT and adjusted EBITDA:

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

The following table reconciles income before income taxes to adjusted income before income taxes, reconciles income tax expense to adjusted income tax expense and presents the related effective tax rate and adjusted effective tax rate:

nm - not meaningful

The following table shows the calculation of diluted earnings per share on an adjusted basis:

The following table reconciles diluted earnings (loss) per share as reported to adjusted diluted earnings per share (see table (c) for corresponding dollar amounts):

The following table reconciles equity income to adjusted equity income:

The following table reconciles net financing charges to adjusted net financing charges:

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

The following table reconciles adjusted EBITDA to free cash flow:

During the second quarter of fiscal 2026, Adient experienced higher operating cash flows resulting from certain commercial and derivative transactions approximating $90 million, which are expected to be settled and paid in the third quarter of fiscal 2026.

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

(1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance.

(2) Reflects restructuring charges for costs that are probable and reasonably estimable and one-time asset impairments related

to restructuring activities. During the three months ended March 31, 2025 a goodwill impairment charge of $333 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 recorded as incurred or as earned and other non-recurring impacts that are directly attributable to restructuring activities:

(5) Other items include:

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