Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill are as follows:


(in millions)	Americas		EMEA		Asia		Total
Balance at September 30, 2022	$	607	$	295	$	1,155	$	2,057
Business acquisitions	—		—		13		13
Currency translation and other	2		22		—		24
Balance at September 30, 2023	$	609	$	317	$	1,168	$	2,094
Business divestiture	—		—		(5)		(5)
Currency translation and other	(3)		24		54		75
Balance at September 30, 2024	$	606	$	341	$	1,217	$	2,164

Refer to Note 3, “Acquisitions and Divestitures,” of the notes to consolidated financial statements for additional information.

Adient performed its annual goodwill impairment test during the fourth quarter of fiscal year 2024 using a fair value method based on management's judgments and assumptions regarding future cash flows. These calculations contain uncertainties as they require management to make assumptions about market comparables, future cash flows, and the appropriate discount rates

(based on weighted average cost of capital ranging from 15.5% to 18.5%) to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value and related premium. The estimated future cash flows reflect management's latest assumptions of the financial projections based on current and anticipated competitive landscape, including estimates of revenue based on production volumes over the foreseeable future and long-term growth rates, and operating margins based on historical trends and future cost containment activities. The financial projections considered the impact of the various issues causing uncertainty in the automotive industry such as weaker vehicle demand impacted by new vehicle affordability and a high interest rate environment, slower global adoption of electric vehicles by consumers, volatile commodity pricing, and persistent inflationary pressures. Specifically in the EMEA region, where Adient recorded significant restructuring charges during fiscal 2024, a heightened risk of impairment exists as the difference between its fair value and carrying value is less than 10%. The EMEA reporting unit maintains $341 million of goodwill at September 30, 2024. The decrease in EMEA’s fair value is driven by lower forecasted vehicle volumes from weakening consumer demand, slower consumer adoption of electric vehicles, overcapacity in the industry resulting in pricing pressure, intensifying competition from Chinese imports and lower exports to China from EMEA as domestic brands expand in China. No goodwill impairment was recorded in fiscal 2024; however, if further degradation in the economic conditions in the EMEA region occur or if significantly higher levels of restructuring actions are needed in the region, the EMEA reporting unit may incur significant impairment of goodwill and other long-lived assets. Adient generally assumes operating margins in future years will normalize over time as it is believed that this is consistent with a market participant view. The current year results are not indicative of future market participant expectations primarily due to the current challenging market conditions as mentioned above. While revenue is not expected to return to historical levels, there are expectations for enhanced profitability and cash flows driven by near-term efficiency actions, strategic review of portfolio and reduction of capital expenditures. Long-term profitability and cash flows will also be impacted by the expiration of underperforming contracts and more profitable business starting in fiscal 2026 along with restructuring benefits taking full effect. Further, the high levels of recent restructurings and the associated significant costs of such actions in the EMEA region are not expected to persist for the long-term at comparable levels.

Adient's other intangible assets, primarily from business acquisitions valued based on independent appraisals, consisted of:


	September 30, 2024						September 30, 2023
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Intangible assets
Patented technology	$	81	$	(39)	$	42	$	79	$	(32)	$	47
Customer relationships	563		(246)		317		550		(201)		349

Trademarks and other	25		(13)		12		41		(29)		12
Total intangible assets	$	669	$	(298)	$	371	$	670	$	(262)	$	408

Amortization of other intangible assets for the fiscal years ended September 30, 2024, 2023 and 2022 was $47 million, $50 million and $52 million, respectively. Adient anticipates amortization for fiscal 2025, 2026, 2027, 2028 and 2029 will be approximately $47 million, $46 million, $40 million, $32 million and $32 million, respectively.