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Note 5,Debt and Financing Arrangements | 9 Months Ended
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Jun. 30, 2017
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] |
Note 5. | DEBT AND FINANCING ARRANGEMENTS
Long-term debt consisted of the following:
(in millions) |  | June 30, 2017 |  | September 30, 2016
Term Loan A - LIBOR plus 1.75% due in 2021 |  | $ | 1,200 |  |  | $ | 1,500 |
4.875% Notes due in 2026 |  | 900 |  |  | 900 |
3.50% Notes due in 2024 |  | 1,140 |  |  | 1,119 |
European Investment Bank Loan - EURIBOR plus 0.90% due in 2022 |  | 188 |  |  | — |
Capital lease obligations |  | 1 |  |  | 2 |
Other |  | 4 |  |  | 2 |
Less: debt issuance costs |  | (40 | ) |  | (43 | )
Gross long-term debt |  | 3,393 |  |  | 3,480 |
Less: current portion |  | — |  |  | 38 |
Net long-term debt |  | $ | 3,393 |  |  | $ | 3,442 |
On July 27, 2016, Adient Global Holdings Ltd ("AGH"), a wholly owned subsidiary of Adient, entered into credit facilities providing for commitments with respect to a $1.5 billion revolving credit facility and a $1.5 billion Term Loan A facility ("Credit Facilities"). The Credit Facilities mature on July 2021. Commencing March 31, 2017 until the Term Loan A maturity date, amortization of the funded Term Loan A is required in an amount per quarter equal to 0.625% of the original principal amount in the first year following the closing date of the credit facilities on July 27, 2016 ("Closing Date"), 1.25% in each quarter of the second and third years following the Closing Date, and 2.5% in each quarter thereafter prior to final maturity. The Credit Facilities contain covenants that include, among other things and subject to certain significant exceptions, restrictions on Adient's ability to declare or pay dividends, make certain payments in respect of the notes, create liens, incur additional indebtedness, make investments, engage in transactions with affiliates, enter into agreements restricting Adient's subsidiaries' ability to pay dividends, dispose of assets and merge or consolidate with any other person. In addition, the Credit Facilities contain a financial maintenance covenant requiring Adient to maintain a total net leverage ratio equal to or less than 3.5x adjusted EBITDA, calculated on a quarterly basis. The Term Loan A facility also requires mandatory prepayments in connection with certain non-ordinary course asset sales and insurance recovery and condemnation events, among other things, and subject in each case to certain significant exceptions. The full amount of the Term Loan A facility was drawn down in the fourth quarter of fiscal 2016. These funds were transferred to the former Parent at the time of the draw down and were reflected within net transfers to the former Parent in the consolidated statement of cash flow during the fourth quarter of fiscal 2016. The drawn portion of the Credit Facilities bear interest based on LIBOR plus a margin between 1.25% - 2.25%, based on Adient's total net leverage ratio. In February 2017, Adient repaid $100 million of the Term Loan A facility. In May 2017, Adient repaid another $200 million of the Term Loan A facility. The total amount repaid was treated as a prepayment of the quarterly mandatory principle amortization for the period between March 2017 and June 2020 resulting in no required principal payment until June 2020. AGH will pay a commitment fee on the unused portion of the commitments under the revolving credit facility based on the total net leverage ratio of Adient, ranging from 0.15% to 0.35%. No amounts were outstanding or drawn under the revolving credit facility at or for the three or nine months ended June 30, 2017. On August 19, 2016, AGH issued $0.9 billion aggregate principal amount of 4.875% USD-denominated unsecured notes due 2026 and €1.0 billion aggregate principal amount of 3.50% unsecured notes due 2024, in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The proceeds of the notes were used, together with the Term Loan A facility, to pay a distribution to JCI, with the remaining proceeds used for working capital and general corporate purposes. On May 29, 2017, Adient Germany Ltd. & Co. KG, a wholly owned subsidiary of Adient, borrowed €165 million in an unsecured term loan from the European Investment Bank due in 2022. The loan bears interest at the 6-month EURIBOR rate plus 90 basis points. Loan proceeds were used to repay $200 million of the Term Loan A. Net Financing Charges Adient's net financing charges line item in the consolidated statements of income contained the following components:
|  | Three Months Ended June 30, |  | Nine Months Ended June 30,
(in millions) |  | 2017 |  | 2016 |  | 2017 |  | 2016
Interest expense, net of capitalized interest costs |  | $ | 31 |  |  | $ | 1 |  |  | $ | 96 |  |  | $ | 4 |
Banking fees and debt issuance cost amortization |  | 2 |  |  | 1 |  |  | 6 |  |  | 3 |
Interest income |  | (2 | ) |  | — |  |  | (3 | ) |  | — |
Net foreign exchange |  | — |  |  | — |  |  | — |  |  | 1 |
Net financing charges |  | $ | 31 |  |  | $ | 2 |  |  | $ | 99 |  |  | $ | 8 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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