Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

July 29, 2020

P24MP18Mfalse--12-31Q2202000016168621.001.001000000000.01000000000.0250100000.0250600000.02000000002220000027000006000000400000000050000040000020000020000015200000.015200000.0 0001616862 2020-01-01 2020-06-30 0001616862 2020-07-23 0001616862 2020-04-01 2020-06-30 0001616862 2019-04-01 2019-06-30 0001616862 2019-01-01 2019-06-30 0001616862 2019-12-31 0001616862 2020-06-30 0001616862 us-gaap:CommonStockMember 2020-03-31 0001616862 us-gaap:TreasuryStockMember 2020-06-30 0001616862 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001616862 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001616862 us-gaap:CommonStockMember 2019-12-31 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001616862 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001616862 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001616862 us-gaap:RetainedEarningsMember 2019-12-31 0001616862 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001616862 2020-01-01 2020-03-31 0001616862 us-gaap:NoncontrollingInterestMember 2020-03-31 0001616862 us-gaap:TreasuryStockMember 2020-03-31 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001616862 us-gaap:TreasuryStockMember 2020-04-01 2020-06-30 0001616862 2020-03-31 0001616862 us-gaap:RetainedEarningsMember 2020-01-01 0001616862 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001616862 us-gaap:RetainedEarningsMember 2020-03-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001616862 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001616862 2020-01-01 0001616862 us-gaap:TreasuryStockMember 2019-12-31 0001616862 us-gaap:CommonStockMember 2020-06-30 0001616862 us-gaap:RetainedEarningsMember 2020-06-30 0001616862 us-gaap:NoncontrollingInterestMember 2019-12-31 0001616862 us-gaap:NoncontrollingInterestMember 2020-06-30 0001616862 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001616862 us-gaap:TreasuryStockMember 2019-03-31 0001616862 us-gaap:TreasuryStockMember 2019-06-30 0001616862 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001616862 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001616862 2019-04-01 0001616862 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001616862 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001616862 us-gaap:NoncontrollingInterestMember 2019-06-30 0001616862 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001616862 us-gaap:TreasuryStockMember 2018-12-31 0001616862 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001616862 us-gaap:CommonStockMember 2018-12-31 0001616862 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001616862 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001616862 us-gaap:RetainedEarningsMember 2019-04-01 0001616862 2019-03-31 0001616862 us-gaap:CommonStockMember 2019-06-30 0001616862 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001616862 us-gaap:RetainedEarningsMember 2019-03-31 0001616862 2019-01-01 0001616862 us-gaap:RetainedEarningsMember 2019-01-01 0001616862 us-gaap:CommonStockMember 2019-03-31 0001616862 2019-06-30 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001616862 us-gaap:RetainedEarningsMember 2018-12-31 0001616862 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001616862 us-gaap:NoncontrollingInterestMember 2018-12-31 0001616862 us-gaap:RetainedEarningsMember 2019-06-30 0001616862 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001616862 us-gaap:NoncontrollingInterestMember 2019-03-31 0001616862 2018-12-31 0001616862 us-gaap:AccountingStandardsUpdate201613Member 2020-01-01 2020-06-30 0001616862 axta:TransportationCoatingsMember 2019-12-31 0001616862 axta:PerformanceCoatingsMember 2019-12-31 0001616862 axta:PerformanceCoatingsMember 2020-06-30 0001616862 axta:TransportationCoatingsMember 2020-01-01 2020-06-30 0001616862 axta:PerformanceCoatingsMember 2020-01-01 2020-06-30 0001616862 axta:TransportationCoatingsMember 2020-06-30 0001616862 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-01-01 2019-12-31 0001616862 us-gaap:CustomerRelationshipsMember 2019-12-31 0001616862 us-gaap:TrademarksMember 2019-12-31 0001616862 us-gaap:OtherIntangibleAssetsMember 2019-12-31 0001616862 us-gaap:CustomerRelationshipsMember 2019-01-01 2019-12-31 0001616862 us-gaap:OtherIntangibleAssetsMember 2019-01-01 2019-12-31 0001616862 us-gaap:TrademarksMember 2019-12-31 0001616862 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-12-31 0001616862 us-gaap:TrademarksMember 2019-01-01 2019-12-31 0001616862 us-gaap:OtherIntangibleAssetsMember 2020-01-01 2020-06-30 0001616862 us-gaap:TechnologyBasedIntangibleAssetsMember 2020-01-01 2020-06-30 0001616862 us-gaap:TrademarksMember 2020-06-30 0001616862 us-gaap:CustomerRelationshipsMember 2020-06-30 0001616862 us-gaap:TechnologyBasedIntangibleAssetsMember 2020-06-30 0001616862 us-gaap:OtherIntangibleAssetsMember 2020-06-30 0001616862 us-gaap:CustomerRelationshipsMember 2020-01-01 2020-06-30 0001616862 us-gaap:TrademarksMember 2020-06-30 0001616862 us-gaap:TrademarksMember 2020-01-01 2020-06-30 0001616862 axta:RestrictedStockandRestrictedStockUnitsMember 2020-01-01 2020-06-30 0001616862 axta:RestrictedStockandRestrictedStockUnitsMember 2020-06-30 0001616862 axta:RestrictedStockandRestrictedStockUnitsMember 2019-12-31 0001616862 us-gaap:PerformanceSharesMember 2020-01-01 2020-06-30 0001616862 us-gaap:PerformanceSharesMember 2019-12-31 0001616862 us-gaap:PerformanceSharesMember 2020-06-30 0001616862 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001616862 us-gaap:SettlementWithTaxingAuthorityMember 2020-01-01 2020-06-30 0001616862 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001616862 axta:A2027DollarSeniorNotesMember 2020-01-01 2020-06-30 0001616862 axta:A2024EuroSeniorNotesMember 2020-01-01 2020-01-31 0001616862 us-gaap:RevolvingCreditFacilityMember 2020-06-30 0001616862 axta:A2027DollarSeniorNotesMember 2020-06-30 0001616862 axta:A2027DollarSeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodFourMember 2020-01-01 2020-06-30 0001616862 axta:A2024EuroSeniorNotesMember 2020-01-31 0001616862 axta:A2027DollarSeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodOneMember 2020-01-01 2020-06-30 0001616862 axta:A2027DollarSeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodThreeMember 2020-01-01 2020-06-30 0001616862 axta:A2027DollarSeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodTwoMember 2020-01-01 2020-06-30 0001616862 axta:A2024EuroSeniorNotesMember 2019-12-31 0001616862 axta:A2027DollarSeniorNotesMember 2019-12-31 0001616862 axta:A2025EuroSeniorNotesMember 2019-12-31 0001616862 axta:A2024DollarTermLoansMember 2020-06-30 0001616862 axta:A2024EuroSeniorNotesMember 2020-06-30 0001616862 axta:A2025EuroSeniorNotesMember 2020-06-30 0001616862 axta:A2024DollarSeniorNotesMember 2019-12-31 0001616862 axta:A2024DollarSeniorNotesMember 2020-06-30 0001616862 axta:A2024DollarTermLoansMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember us-gaap:FairValueInputsLevel3Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherAssetsMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel3Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001616862 us-gaap:OtherAssetsMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2024EuroSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2025EuroSeniorNotesMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001616862 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2027DollarSeniorNotesMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:LongTermDebtMember axta:A2024DollarTermLoansMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:AccruedLiabilitiesMember us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001616862 us-gaap:OtherAssetsMember us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel3Member us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001616862 us-gaap:ForeignExchangeForwardMember 2020-04-01 2020-06-30 0001616862 us-gaap:CurrencySwapMember 2020-04-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2019-04-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:CostOfSalesMember 2020-04-01 2020-06-30 0001616862 us-gaap:CurrencySwapMember us-gaap:InterestExpenseMember 2020-04-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember 2020-04-01 2020-06-30 0001616862 us-gaap:CurrencySwapMember us-gaap:InterestExpenseMember 2019-04-01 2019-06-30 0001616862 us-gaap:InterestRateSwapMember 2019-04-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:CostOfSalesMember 2019-04-01 2019-06-30 0001616862 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2020-04-01 2020-06-30 0001616862 us-gaap:InterestRateCapMember us-gaap:InterestExpenseMember 2020-04-01 2020-06-30 0001616862 us-gaap:InterestRateCapMember 2020-04-01 2020-06-30 0001616862 us-gaap:InterestRateCapMember 2019-04-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember 2019-04-01 2019-06-30 0001616862 us-gaap:InterestRateCapMember us-gaap:InterestExpenseMember 2019-04-01 2019-06-30 0001616862 us-gaap:CurrencySwapMember 2019-04-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:InterestExpenseMember 2019-01-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:InterestExpenseMember 2019-04-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:InterestExpenseMember 2020-04-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember 2020-03-31 0001616862 us-gaap:ForeignExchangeForwardMember 2020-03-31 0001616862 axta:InterestRateSwap2Member us-gaap:InterestRateSwapMember 2020-03-31 0001616862 axta:InterestRateSwap1Member us-gaap:InterestRateSwapMember 2020-03-31 0001616862 us-gaap:CurrencySwapMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueInputsLevel2Member 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:FairValueInputsLevel2Member 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember us-gaap:FairValueInputsLevel2Member 2019-01-01 2019-12-31 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:FairValueInputsLevel2Member 2019-01-01 2019-12-31 0001616862 us-gaap:InterestRateCapMember us-gaap:CashFlowHedgingMember us-gaap:FairValueInputsLevel2Member 2020-01-01 2020-06-30 0001616862 us-gaap:FairValueInputsLevel2Member 2019-01-01 2019-12-31 0001616862 us-gaap:CurrencySwapMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueInputsLevel2Member 2019-01-01 2019-12-31 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:FairValueInputsLevel2Member 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateCapMember us-gaap:CashFlowHedgingMember us-gaap:FairValueInputsLevel2Member 2019-01-01 2019-12-31 0001616862 us-gaap:FairValueInputsLevel2Member 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateCapMember 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember 2020-01-01 2020-06-30 0001616862 us-gaap:CurrencySwapMember us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:CostOfSalesMember 2019-01-01 2019-06-30 0001616862 us-gaap:CurrencySwapMember 2019-01-01 2019-06-30 0001616862 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2019-01-01 2019-06-30 0001616862 us-gaap:ForeignExchangeForwardMember us-gaap:CostOfSalesMember 2020-01-01 2020-06-30 0001616862 us-gaap:CurrencySwapMember us-gaap:InterestExpenseMember 2019-01-01 2019-06-30 0001616862 us-gaap:CurrencySwapMember 2020-01-01 2020-06-30 0001616862 us-gaap:InterestRateSwapMember 2019-01-01 2019-06-30 0001616862 us-gaap:InterestRateCapMember 2019-01-01 2019-06-30 0001616862 us-gaap:InterestRateCapMember us-gaap:InterestExpenseMember 2019-01-01 2019-06-30 0001616862 us-gaap:InterestRateCapMember us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001616862 axta:IndustrialMember axta:PerformanceCoatingsMember 2019-04-01 2019-06-30 0001616862 axta:IndustrialMember axta:PerformanceCoatingsMember 2020-01-01 2020-06-30 0001616862 axta:LightVehicleMember axta:TransportationCoatingsMember 2019-01-01 2019-06-30 0001616862 axta:LightVehicleMember axta:TransportationCoatingsMember 2020-01-01 2020-06-30 0001616862 axta:TransportationCoatingsMember 2019-01-01 2019-06-30 0001616862 axta:IndustrialMember axta:PerformanceCoatingsMember 2019-01-01 2019-06-30 0001616862 axta:PerformanceCoatingsMember 2020-04-01 2020-06-30 0001616862 axta:RefinishMember axta:PerformanceCoatingsMember 2020-04-01 2020-06-30 0001616862 axta:PerformanceCoatingsMember 2019-04-01 2019-06-30 0001616862 axta:RefinishMember axta:PerformanceCoatingsMember 2019-04-01 2019-06-30 0001616862 axta:IndustrialMember axta:PerformanceCoatingsMember 2020-04-01 2020-06-30 0001616862 axta:RefinishMember axta:PerformanceCoatingsMember 2019-01-01 2019-06-30 0001616862 axta:PerformanceCoatingsMember 2019-01-01 2019-06-30 0001616862 axta:CommercialVehicleMember axta:TransportationCoatingsMember 2020-04-01 2020-06-30 0001616862 axta:CommercialVehicleMember axta:TransportationCoatingsMember 2019-04-01 2019-06-30 0001616862 axta:RefinishMember axta:PerformanceCoatingsMember 2020-01-01 2020-06-30 0001616862 axta:TransportationCoatingsMember 2019-04-01 2019-06-30 0001616862 axta:TransportationCoatingsMember 2020-04-01 2020-06-30 0001616862 axta:CommercialVehicleMember axta:TransportationCoatingsMember 2020-01-01 2020-06-30 0001616862 axta:CommercialVehicleMember axta:TransportationCoatingsMember 2019-01-01 2019-06-30 0001616862 axta:LightVehicleMember axta:TransportationCoatingsMember 2020-04-01 2020-06-30 0001616862 axta:LightVehicleMember axta:TransportationCoatingsMember 2019-04-01 2019-06-30 0001616862 srt:MaximumMember 2020-04-01 2020-06-30 0001616862 srt:MinimumMember 2020-04-01 2020-06-30 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2020-04-01 2020-06-30 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2020-03-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2019-12-31 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-01-01 2020-03-31 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-04-01 2020-06-30 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-04-01 2020-06-30 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-03-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2020-01-01 2020-03-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2020-06-30 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-01-01 2020-03-31 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-12-31 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-06-30 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-12-31 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-03-31 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-06-30 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2019-04-01 2019-06-30 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2019-06-30 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-04-01 2019-06-30 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-03-31 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-03-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0001616862 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-03-31 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-04-01 2019-06-30 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-06-30 0001616862 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2018-12-31 0001616862 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-06-30 0001616862 axta:GlobalRestructuringCOVID19AndSustainedGrowthMember us-gaap:SubsequentEventMember 2020-07-29 2020-07-29 0001616862 srt:MinimumMember axta:GlobalRestructuringCOVID19AndSustainedGrowthMember us-gaap:SubsequentEventMember 2020-07-29 0001616862 srt:MinimumMember axta:GlobalRestructuringCOVID19AndSustainedGrowthMember us-gaap:SubsequentEventMember 2020-07-29 2020-07-29 0001616862 srt:MaximumMember axta:GlobalRestructuringCOVID19AndSustainedGrowthMember us-gaap:SubsequentEventMember 2020-07-29 2020-07-29 0001616862 srt:MaximumMember axta:GlobalRestructuringCOVID19AndSustainedGrowthMember us-gaap:SubsequentEventMember 2020-07-29 xbrli:pure iso4217:USD xbrli:shares xbrli:shares iso4217:USD axta:Employee axta:interest_rate_swap axta:Segment
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission File Number: 001-36733
 
AXALTA COATING SYSTEMS LTD.
(Exact name of registrant as specified in its charter)
 
Bermuda
 
2851
 
98-1073028
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification No.)
Two Commerce Square
2001 Market Street
Suite 3600
Philadelphia, Pennsylvania 19103
(855) 547-1461
(Address, including zip code, and telephone number, including area code, of the registrant’s principal executive offices)
 
Securities registered pursuant to Section 12(b) of the Act:
Common Shares, $1.00 par value
 
AXTA
 
New York Stock Exchange
(Title of class)
 
(Trading symbol)
 
(Exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Non-accelerated filer Accelerated filer
Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of July 23, 2020, there were 235,359,947 shares of the registrant’s common shares outstanding.
 
 
 
 
 




Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2


PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share data)

 
Three Months Ended June 30,
 
Six Months Ended June 30,

 
2020
 
2019
 
2020
 
2019
Net sales
 
$
652.7

 
$
1,157.5

 
$
1,636.2

 
$
2,276.8

Cost of goods sold
 
499.2

 
748.4

 
1,146.0

 
1,499.7

Selling, general and administrative expenses
 
154.2

 
202.4

 
349.6

 
418.0

Other operating charges
 
24.7

 
2.5

 
56.3

 
9.6

Research and development expenses
 
11.2

 
17.9

 
27.8

 
36.1

Amortization of acquired intangibles
 
27.9

 
28.4

 
55.9

 
56.9

(Loss) income from operations
 
(64.5
)
 
157.9

 
0.6

 
256.5

Interest expense, net
 
36.1

 
41.0

 
72.6

 
82.3

Other income, net
 
(2.2
)
 
(0.9
)
 
(1.4
)
 
(1.9
)
(Loss) income before income taxes
 
(98.4
)
 
117.8

 
(70.6
)
 
176.1

(Benefit) provision for income taxes
 
(15.2
)
 
17.9

 
(39.8
)
 
32.1

Net (loss) income
 
(83.2
)
 
99.9

 
(30.8
)
 
144.0

Less: Net (loss) income attributable to noncontrolling interests
 
(0.4
)
 
1.5

 
(0.2
)
 
2.2

Net (loss) income attributable to controlling interests
 
$
(82.8
)
 
$
98.4

 
$
(30.6
)
 
$
141.8

Basic net (loss) income per share
 
$
(0.35
)
 
$
0.42

 
$
(0.13
)
 
$
0.61

Diluted net (loss) income per share
 
$
(0.35
)
 
$
0.42

 
$
(0.13
)
 
$
0.60


The accompanying notes are an integral part of these condensed consolidated financial statements.

3


AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)
(In millions)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Net (loss) income
 
$
(83.2
)
 
$
99.9

 
$
(30.8
)
 
$
144.0

Other comprehensive income (loss), before tax:
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
7.0

 
(0.9
)
 
(79.5
)
 
12.4

Unrealized loss on derivatives
 
(2.6
)
 
(20.3
)
 
(43.3
)
 
(34.9
)
Unrealized gain on pension plan obligations
 
0.2

 

 

 
0.5

Other comprehensive income (loss), before tax
 
4.6

 
(21.2
)
 
(122.8
)
 
(22.0
)
Income tax benefit related to items of other comprehensive loss
 
(0.6
)
 
(3.1
)
 
(6.4
)
 
(4.8
)
Other comprehensive income (loss), net of tax
 
5.2

 
(18.1
)
 
(116.4
)
 
(17.2
)
Comprehensive (loss) income
 
(78.0
)
 
81.8

 
(147.2
)
 
126.8

Less: Comprehensive income (loss) attributable to noncontrolling interests
 
0.5

 
3.7

 
(2.5
)
 
4.9

Comprehensive (loss) income attributable to controlling interests
 
$
(78.5
)
 
$
78.1

 
$
(144.7
)
 
$
121.9


The accompanying notes are an integral part of these condensed consolidated financial statements.

4


AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except per share data)

 
June 30, 2020
 
December 31, 2019
Assets
 

 

Current assets:
 

 

Cash and cash equivalents
 
$
1,123.6

 
$
1,017.5

Restricted cash
 
2.9

 
3.0

Accounts and notes receivable, net
 
664.0

 
830.1

Inventories
 
539.3

 
591.6

Prepaid expenses and other current assets
 
150.4

 
131.2

Total current assets
 
2,480.2

 
2,573.4

Property, plant and equipment, net
 
1,158.2

 
1,223.0

Goodwill
 
1,209.3

 
1,208.9

Identifiable intangibles, net
 
1,158.1

 
1,223.9

Other assets
 
662.8

 
588.8

Total assets
 
$
6,668.6

 
$
6,818.0

Liabilities, Shareholders’ Equity
 

 

Current liabilities:
 

 

Accounts payable
 
$
331.9

 
$
483.7

Current portion of borrowings
 
41.3

 
43.9

Other accrued liabilities
 
487.7

 
545.3

Total current liabilities
 
860.9

 
1,072.9

Long-term borrowings
 
3,980.0

 
3,790.2

Accrued pensions
 
278.3

 
285.2

Deferred income taxes
 
108.7

 
115.5

Other liabilities
 
182.1

 
144.6

Total liabilities
 
5,410.0

 
5,408.4

Commitments and contingencies (Note 5)
 

 

Shareholders’ equity:
 

 

Common shares, $1.00 par, 1,000.0 shares authorized, 250.6 and 250.1 shares issued at June 30, 2020 and December 31, 2019, respectively
 
250.5

 
249.9

Capital in excess of par
 
1,479.5

 
1,474.1

Retained earnings
 
411.1

 
443.2

Treasury shares, at cost, 15.2 shares at June 30, 2020 and December 31, 2019
 
(418.4
)
 
(417.5
)
Accumulated other comprehensive loss
 
(509.6
)
 
(395.5
)
Total Axalta shareholders’ equity
 
1,213.1

 
1,354.2

Noncontrolling interests
 
45.5

 
55.4

Total shareholders’ equity
 
1,258.6

 
1,409.6

Total liabilities and shareholders’ equity
 
$
6,668.6

 
$
6,818.0


The accompanying notes are an integral part of these condensed consolidated financial statements.

5


AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
(In millions)
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Shares
 
Par/Stated Value
 
Capital In Excess Of Par
 
Retained Earnings
 
Treasury Shares, at cost
 
Accumulated Other Comprehensive Loss
 
Non controlling Interests
 
Total
Balance at December 31, 2019
234.9

 
$
249.9

 
$
1,474.1

 
$
443.2

 
$
(417.5
)
 
$
(395.5
)
 
$
55.4

 
$
1,409.6

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income

 

 

 
52.2

 

 

 
0.2

 
52.4

Net realized and unrealized loss on derivatives, net of tax benefit of $6.0 million

 

 

 

 

 
(34.7
)
 

 
(34.7
)
Long-term employee benefit plans, net of tax benefit of $0.2 million

 

 

 

 

 
(0.4
)
 

 
(0.4
)
Foreign currency translation, net of tax of $0.0 million

 

 

 

 

 
(83.3
)
 
(3.2
)
 
(86.5
)
Total comprehensive income (loss)

 

 

 
52.2

 

 
(118.4
)
 
(3.0
)
 
(69.2
)
Cumulative effect of an accounting change

 

 

 
(1.5
)
 

 

 

 
(1.5
)
Recognition of stock-based compensation

 

 
5.1

 

 

 

 

 
5.1

Shares issued under compensation plans
0.4

 
0.5

 
(1.6
)
 

 

 

 

 
(1.1
)
Ownership changes relating to noncontrolling interests

 

 
0.5

 

 

 

 
(2.1
)
 
(1.6
)
Dividends declared to noncontrolling interests

 

 

 

 

 

 
(0.5
)
 
(0.5
)
Balance at March 31, 2020
235.3

 
250.4

 
1,478.1

 
493.9

 
(417.5
)
 
(513.9
)
 
49.8

 
1,340.8

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss

 

 

 
(82.8
)
 

 

 
(0.4
)
 
(83.2
)
Net realized and unrealized loss on derivatives, net of tax benefit of $0.4 million

 

 

 

 

 
(2.2
)
 

 
(2.2
)
Long-term employee benefit plans, net of tax of $0.2 million

 

 

 

 

 
0.4

 

 
0.4

Foreign currency translation, net of tax of $0.0 million

 

 

 

 

 
6.1

 
0.9

 
7.0

Total comprehensive income (loss)

 

 

 
(82.8
)
 

 
4.3

 
0.5

 
(78.0
)
Recognition of stock-based compensation

 

 
6.1

 

 

 

 

 
6.1

Shares issued under compensation plans
0.1

 
0.1

 
1.1

 

 

 

 

 
1.2

Changes in redeemable noncontrolling interest

 

 
(5.8
)
 

 

 

 
(4.8
)
 
(10.6
)
Common stock purchases

 

 

 

 
(0.9
)
 

 

 
(0.9
)
Balance at June 30, 2020
235.4

 
$
250.5

 
$
1,479.5

 
$
411.1

 
$
(418.4
)
 
$
(509.6
)
 
$
45.5

 
$
1,258.6


The accompanying notes are an integral part of these condensed consolidated financial statements.

6



AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
(In millions)

 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Shares
 
Par/Stated Value
 
Capital In Excess Of Par
 
Retained earnings
 
Treasury Shares, at cost
 
Accumulated Other Comprehensive Loss
 
Non controlling Interests
 
Total
Balance at December 31, 2018
235.6

 
$
245.3

 
$
1,409.5

 
$
198.6

 
$
(312.2
)
 
$
(336.1
)
 
$
105.4

 
$
1,310.5

Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income

 

 

 
43.4

 

 

 
0.7

 
44.1

Net realized and unrealized loss on derivatives, net of tax benefit of $2.2 million

 

 

 

 

 
(12.4
)
 

 
(12.4
)
Long-term employee benefit plans, net of tax of $0.5 million

 

 

 

 

 

 

 

Foreign currency translation, net of tax of $0.0 million

 

 

 

 

 
12.8

 
0.5

 
13.3

Total comprehensive income

 

 

 
43.4

 

 
0.4

 
1.2

 
45.0

Cumulative effect of an accounting change

 

 

 
(0.7
)
 

 

 

 
(0.7
)
Recognition of stock-based compensation

 

 
6.7

 

 

 

 

 
6.7

Shares issued under compensation plans
1.1

 
1.7

 
9.7

 

 

 

 

 
11.4

Ownership changes relating to noncontrolling interests

 

 
5.7

 

 

 

 
(32.1
)
 
(26.4
)
Common stock purchases
(2.5
)
 

 

 

 
(65.8
)
 

 

 
(65.8
)
Dividends declared to noncontrolling interests

 

 

 

 

 

 
(1.1
)
 
(1.1
)
Balance at March 31, 2019
234.2

 
247.0

 
1,431.6

 
241.3

 
(378.0
)
 
(335.7
)
 
73.4

 
1,279.6

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income

 

 

 
98.4

 

 

 
1.5

 
99.9

Net realized and unrealized loss on derivatives, net of tax of $2.7 million

 

 

 

 

 
(17.6
)
 

 
(17.6
)
Long-term employee benefit plans, net of tax of $0.4 million

 

 

 

 

 
0.4

 

 
0.4

Foreign currency translation, net of tax of $0.0 million

 

 

 

 

 
(3.1
)
 
2.2

 
(0.9
)
Total comprehensive income (loss)

 

 

 
98.4

 

 
(20.3
)
 
3.7

 
81.8

Correction to previous cumulative effect upon adoption of ASU 2014-09

 

 

 
(3.7
)
 

 

 

 
(3.7
)
Recognition of stock-based compensation

 

 
(1.4
)
 

 

 

 

 
(1.4
)
Shares issued under compensation plans
0.7

 
1.2

 
13.3

 

 

 

 

 
14.5

Ownership changes relating to noncontrolling interests

 

 
(1.7
)
 

 

 

 
(22.5
)
 
(24.2
)
Common stock purchases
(1.6
)
 

 

 

 
(39.5
)
 

 

 
(39.5
)
Balance at June 30, 2019
233.3

 
$
248.2

 
$
1,441.8

 
$
336.0

 
$
(417.5
)
 
$
(356.0
)
 
$
54.6

 
$
1,307.1


The accompanying notes are an integral part of these condensed consolidated financial statements.


7


AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)

 
Six Months Ended June 30,

 
2020
 
2019
Operating activities:
 

 

Net (loss) income
 
$
(30.8
)

$
144.0

Adjustment to reconcile net income to cash (used for) provided by operating activities:
 

 

Depreciation and amortization
 
163.2

 
180.3

Amortization of deferred financing costs and original issue discount
 
4.1

 
4.4

Debt extinguishment and refinancing related costs
 
2.4

 
0.2

Deferred income taxes
 
(61.2
)
 
(1.6
)
Realized and unrealized foreign exchange losses, net
 
2.8

 
2.8

Stock-based compensation
 
11.2

 
5.3

Divestitures and impairment charges
 
3.2

 
3.9

Interest income on swaps designated as net investment hedges
 
(7.3
)
 
(7.2
)
Other non-cash, net
 
8.3

 
(0.6
)
Changes in operating assets and liabilities:
 

 

Trade accounts and notes receivable
 
136.8

 
(152.9
)
Inventories
 
32.5

 
(1.4
)
Prepaid expenses and other assets
 
(60.3
)
 
(81.6
)
Accounts payable
 
(131.0
)
 
20.7

Other accrued liabilities
 
(87.9
)
 
(54.0
)
Other liabilities
 
11.5

 
6.5

Cash (used for) provided by operating activities
 
(2.5
)
 
68.8

Investing activities:
 

 

Acquisitions, net of cash acquired
 

 
(1.9
)
Purchase of property, plant and equipment
 
(42.4
)
 
(47.2
)
Proceeds from sale of consolidated joint venture, net of cash divested
 

 
8.2

Interest proceeds on swaps designated as net investment hedges
 
7.3

 
7.2

Other investing activities, net
 
0.8

 

Cash used for investing activities
 
(34.3
)
 
(33.7
)
Financing activities:
 


 


Proceeds from long-term borrowings
 
500.0

 

Payments on short-term borrowings
 
(18.6
)
 
(20.5
)
Payments on long-term borrowings
 
(313.1
)
 
(13.7
)
Financing-related costs
 
(6.0
)
 
(2.1
)
Purchases of common stock
 
(0.9
)
 
(105.3
)
Net cash flows associated with stock-based awards
 
0.3

 
25.9

Purchase of noncontrolling interests
 
(1.6
)
 
(31.1
)
Other financing activities, net
 
(1.0
)
 
(1.1
)
Cash provided by (used for) financing activities
 
159.1

 
(147.9
)
Increase (decrease) in cash
 
122.3

 
(112.8
)
Effect of exchange rate changes on cash
 
(16.3
)
 
1.0

Cash at beginning of period
 
1,020.5

 
696.4

Cash at end of period
 
$
1,126.5

 
$
584.6


 


 


Cash at end of period reconciliation:
 


 


Cash and cash equivalents
 
$
1,123.6

 
$
577.3

Restricted cash
 
2.9

 
7.3

Cash at end of period
 
$
1,126.5

 
$
584.6

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)


Index


9

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)


(1)     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The interim condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair statement of the financial position of Axalta Coating Systems Ltd., a Bermuda exempted company limited by shares, and its consolidated subsidiaries ("Axalta," the "Company," "we," "our" and "us") at June 30, 2020 and December 31, 2019, the results of operations, comprehensive income (loss) and changes in shareholders' equity for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months then ended. All intercompany balances and transactions have been eliminated.
These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.
The interim unaudited condensed consolidated financial statements include the accounts of Axalta and its subsidiaries, and entities in which a controlling interest is maintained. Certain of our joint ventures are accounted for on a one-month lag basis, the effect of which is not material.
The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for a full year.
Summary of Significant Accounting Policies Updates
Reclassifications
The condensed consolidated statements of operations for the three and six months ended June 30, 2019 have been updated for comparability with the current year presentation to separately present other operating charges as detailed in our annual report on Form 10-K for the year ended December 31, 2019.
Recently Adopted Accounting Guidance
On January 1, 2020, we adopted Accounting Standards Update ("ASU") 2016-13, “Financial Instruments - Credit Losses” under a modified retrospective approach for all financial assets. ASU 2016-13 replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires considerations of a broader range of reasonable and supportable information to inform credit loss estimates. The provisions of this standard primarily impact the allowance for doubtful accounts on our trade receivables, in which we have applied historical loss percentages, combined with reasonable and supportable forecasts of future losses to the respective aging categories. Adoption of ASU 2016-13 at January 1, 2020 resulted in a one-time loss to retained earnings of $1.5 million on our condensed consolidated balance sheets and statements of shareholders' equity for the six months ended June 30, 2020.
In March 2020, we adopted ASU 2020-04, "Reference Rate Reform" which provides optional expedients exercisable through December 31, 2022 to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. As of June 30, 2020, the expedients provided in this standard do not impact the Company. We will continue to monitor for potential impacts on our financial statements.
Accounting Guidance Issued But Not Yet Adopted
In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" as part of its initiative to reduce complexity in accounting standards. The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The new standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of ASU 2019-12 on our financial statements.
Risks and Uncertainties
In March 2020, the World Health Organization characterized the coronavirus ("COVID-19") a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. In view of the rapidly changing business environment, unprecedented market volatility and heightened degree of uncertainty resulting from COVID-19, we are currently unable to fully determine its future impact on our business. However, we are monitoring the progression of the pandemic and its potential effect on our financial position, results of operations and cash flows. The pandemic had a significant adverse impact on the Company's results of operations, financial condition and cash flows during 2020 and, over time, the effects could have a material adverse impact.

10

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)


(2)    REVENUE
Consideration for products in which control has transferred to our customers that is conditional on something other than the passage of time is recorded as a contract asset within prepaid expenses and other current assets on the balance sheet. The contract asset balances at June 30, 2020 and December 31, 2019 were $36.2 million and $37.5 million, respectively.
We provide certain customers with incremental up-front consideration, subject to clawback provisions, including Business Incentive Plan assets ("BIPs"), which is capitalized as a component of other assets and amortized over the estimated life of the contractual arrangement as a reduction of net sales. At June 30, 2020 and December 31, 2019, the total carrying value of BIPs were $178.8 million and $191.2 million, respectively, and are presented within other assets on the condensed consolidated balance sheets. For the three and six months ended June 30, 2020 and 2019, $16.4 million, $33.3 million, $16.0 million and $33.1 million, respectively, were amortized and reflected as reductions of net sales in the condensed consolidated statements of operations. The total carrying value of BIPs exclude other upfront incentives made in conjunction with long-term customer commitments of $92.3 million and $79.0 million at June 30, 2020 and December 31, 2019, respectively, which will be repaid in future periods.
See Note 16 for disaggregated net sales by end-market.
(3)    GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
Goodwill
The following table shows changes in the carrying amount of goodwill from December 31, 2019 to June 30, 2020 by reportable segment:
 
 
Performance
Coatings
 
Transportation
Coatings
 
Total
Balance at December 31, 2019
 
$
1,130.9

 
$
78.0

 
$
1,208.9

Foreign currency translation
 
0.2

 
0.2

 
0.4

Balance at June 30, 2020
 
$
1,131.1

 
$
78.2

 
$
1,209.3


Identifiable Intangible Assets
The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
June 30, 2020
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Book
Value
 
Weighted Average
Amortization Periods (years)
Technology
 
$
541.0

 
$
(338.0
)
 
$
203.0

 
10.4
Trademarks - indefinite-lived
 
265.9

 

 
265.9

 
Indefinite
Trademarks - definite-lived
 
98.9

 
(32.8
)
 
66.1

 
15.8
Customer relationships
 
908.1

 
(290.7
)
 
617.4

 
19.0
Other
 
15.2

 
(9.5
)
 
5.7

 
5.0
Total
 
$
1,829.1

 
$
(671.0
)
 
$
1,158.1

 
 
December 31, 2019
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Book
Value
 
Weighted Average
Amortization Periods (years)
Technology
 
$
540.2

 
$
(310.6
)
 
$
229.6

 
10.4
Trademarks—indefinite-lived
 
264.9

 

 
264.9

 
Indefinite
Trademarks—definite-lived
 
99.7

 
(30.1
)
 
69.6

 
15.8
Customer relationships
 
923.8

 
(271.3
)
 
652.5

 
19.1
Other
 
15.2

 
(7.9
)
 
7.3

 
5.0
Total
 
$
1,843.8

 
$
(619.9
)
 
$
1,223.9

 
 


11

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)


The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2020 and each of the succeeding five years is:
Remainder of 2020
 
$
57.5

2021
 
111.7

2022
 
109.6

2023
 
70.2

2024
 
65.4

2025
 
64.7


(4)    RESTRUCTURING
In accordance with the applicable guidance for ASC 712, Nonretirement Postemployment Benefits, we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated.
We have incurred costs in connection with involuntary termination benefits associated with our corporate-related initiatives and cost-saving opportunities associated with our Axalta Way initiatives. During the three and six months ended June 30, 2020 and 2019, we incurred restructuring costs, net of changes to estimates, of $13.7 million, $32.2 million, $2.9 million and $4.2 million, respectively. These amounts are recorded within other operating charges in the condensed consolidated statements of operations. The remaining payments associated with these actions are expected to be substantially completed within 18 months.
The following table summarizes the activities related to the restructuring reserves and expenses from December 31, 2019 to June 30, 2020:
 
 
2020 Activity
Balance at December 31, 2019
 
$
78.0

Expenses, net of changes to estimates
 
32.2

Payments made
 
(37.9
)
Foreign currency translation
 
0.1

Balance at June 30, 2020
 
$
72.4


We recognized impairments of $2.7 million and $3.2 million during the three and six months ended June 30, 2020, respectively, primarily attributable to impairments and associated write-downs resulting from our recent decision to exit the Performance Coatings segment business in Argentina. The impairments are included in the condensed consolidated statements of operations within other operating charges.
The impacts to pre-tax earnings from incremental accelerated depreciation resulting from the previously announced closure of our manufacturing facility in Mechelen, Belgium for the three and six months ended June 30, 2020 and 2019 were $0.4 million, $8.5 million, $6.7 million and $12.8 million, respectively, which were recorded to cost of goods sold on the condensed consolidated statements of operations.
(5)    COMMITMENTS AND CONTINGENCIES
Guarantees
We guarantee certain of our customers’ obligations to third parties, whereby any default by our customers on their obligations could force us to make payments to the applicable creditors. At June 30, 2020 and December 31, 2019, we had outstanding bank guarantees of $10.9 million and $11.6 million, respectively. Most of our bank guarantees expire between 2020 and 2026, while others do not have specified expiration dates. We monitor the obligations to evaluate whether we have a liability at the balance sheet date. At June 30, 2020, we recorded a liability related to our outstanding bank guarantees of $1.0 million. We did not have any liabilities related to our outstanding bank guarantees recorded at December 31, 2019.

12