Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

April 26, 2021

000161686212/312021Q1FALSEus-gaap:AccountingStandardsUpdate201613Member00016168622021-01-012021-03-31xbrli:shares00016168622021-04-20iso4217:USD00016168622020-01-012020-03-31iso4217:USDxbrli:shares00016168622021-03-3100016168622020-12-310001616862us-gaap:CommonStockMember2020-12-310001616862us-gaap:AdditionalPaidInCapitalMember2020-12-310001616862us-gaap:RetainedEarningsMember2020-12-310001616862us-gaap:TreasuryStockMember2020-12-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001616862us-gaap:NoncontrollingInterestMember2020-12-310001616862us-gaap:RetainedEarningsMember2021-01-012021-03-310001616862us-gaap:NoncontrollingInterestMember2021-01-012021-03-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001616862us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001616862us-gaap:CommonStockMember2021-01-012021-03-310001616862us-gaap:TreasuryStockMember2021-01-012021-03-310001616862us-gaap:CommonStockMember2021-03-310001616862us-gaap:AdditionalPaidInCapitalMember2021-03-310001616862us-gaap:RetainedEarningsMember2021-03-310001616862us-gaap:TreasuryStockMember2021-03-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001616862us-gaap:NoncontrollingInterestMember2021-03-310001616862us-gaap:CommonStockMember2019-12-310001616862us-gaap:AdditionalPaidInCapitalMember2019-12-310001616862us-gaap:RetainedEarningsMember2019-12-310001616862us-gaap:TreasuryStockMember2019-12-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001616862us-gaap:NoncontrollingInterestMember2019-12-3100016168622019-12-310001616862us-gaap:RetainedEarningsMember2020-01-012020-03-310001616862us-gaap:NoncontrollingInterestMember2020-01-012020-03-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-3100016168622019-01-012019-12-310001616862us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001616862srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001616862us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001616862us-gaap:CommonStockMember2020-01-012020-03-310001616862us-gaap:CommonStockMember2020-03-310001616862us-gaap:AdditionalPaidInCapitalMember2020-03-310001616862us-gaap:RetainedEarningsMember2020-03-310001616862us-gaap:TreasuryStockMember2020-03-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001616862us-gaap:NoncontrollingInterestMember2020-03-3100016168622020-03-310001616862axta:PerformanceCoatingsMember2020-12-310001616862axta:MobilityCoatingsMember2020-12-310001616862axta:PerformanceCoatingsMember2021-01-012021-03-310001616862axta:MobilityCoatingsMember2021-01-012021-03-310001616862axta:PerformanceCoatingsMember2021-03-310001616862axta:MobilityCoatingsMember2021-03-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2021-03-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-03-310001616862us-gaap:TrademarksMember2021-03-310001616862us-gaap:TrademarksMember2021-03-310001616862us-gaap:TrademarksMember2021-01-012021-03-310001616862us-gaap:CustomerRelationshipsMember2021-03-310001616862us-gaap:CustomerRelationshipsMember2021-01-012021-03-310001616862us-gaap:OtherIntangibleAssetsMember2021-03-310001616862us-gaap:OtherIntangibleAssetsMember2021-01-012021-03-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2020-12-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2020-01-012020-03-310001616862us-gaap:TrademarksMember2020-12-310001616862us-gaap:TrademarksMember2020-12-310001616862us-gaap:TrademarksMember2020-01-012020-03-310001616862us-gaap:CustomerRelationshipsMember2020-12-310001616862us-gaap:CustomerRelationshipsMember2020-01-012020-03-310001616862us-gaap:OtherIntangibleAssetsMember2020-12-310001616862us-gaap:OtherIntangibleAssetsMember2020-01-012020-03-310001616862us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001616862axta:RestrictedStockandRestrictedStockUnitsMember2020-12-310001616862axta:RestrictedStockandRestrictedStockUnitsMember2021-01-012021-03-310001616862axta:RestrictedStockandRestrictedStockUnitsMember2021-03-310001616862axta:RestrictedStockAwardsMember2021-03-310001616862us-gaap:PerformanceSharesMember2020-12-310001616862us-gaap:PerformanceSharesMember2021-01-012021-03-310001616862us-gaap:PerformanceSharesMember2021-03-310001616862axta:PerformanceStockAwardsMember2021-03-31xbrli:pure0001616862us-gaap:SettlementWithTaxingAuthorityMember2020-01-012020-03-310001616862us-gaap:SettlementWithTaxingAuthorityMember2021-03-310001616862axta:A2024DollarTermLoansMember2021-03-310001616862axta:A2024DollarTermLoansMember2020-12-310001616862axta:A2025EuroSeniorNotesMember2021-03-310001616862axta:A2025EuroSeniorNotesMember2020-12-310001616862axta:A2027DollarSeniorNotesMember2021-03-310001616862axta:A2027DollarSeniorNotesMember2020-12-310001616862axta:A2029DollarSeniorNotesMember2021-03-310001616862axta:A2029DollarSeniorNotesMember2020-12-310001616862us-gaap:RevolvingCreditFacilityMember2020-12-310001616862us-gaap:RevolvingCreditFacilityMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:OtherAssetsMemberus-gaap:FairValueInputsLevel1Member2021-03-310001616862us-gaap:OtherAssetsMemberus-gaap:FairValueInputsLevel2Member2021-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:OtherAssetsMember2021-03-310001616862us-gaap:OtherAssetsMember2021-03-310001616862us-gaap:OtherAssetsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001616862us-gaap:OtherAssetsMemberus-gaap:FairValueInputsLevel2Member2020-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:OtherAssetsMember2020-12-310001616862us-gaap:OtherAssetsMember2020-12-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2021-03-310001616862us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccruedLiabilitiesMember2020-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:OtherLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:OtherLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:OtherLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:CurrencySwapMemberus-gaap:OtherLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel1Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel2Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel3Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMember2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel1Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel2Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel3Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2024DollarTermLoansMember2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel1Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel3Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMember2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel3Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2025EuroSeniorNotesMember2020-12-310001616862us-gaap:LongTermDebtMemberus-gaap:FairValueInputsLevel1Memberaxta:A2027DollarSeniorNotesMember2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-03-310001616862us-gaap:LongTermDebtMemberus-gaap:FairValueInputsLevel3Memberaxta:A2027DollarSeniorNotesMember2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2027DollarSeniorNotesMember2021-03-310001616862us-gaap:LongTermDebtMemberus-gaap:FairValueInputsLevel1Memberaxta:A2027DollarSeniorNotesMember2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001616862us-gaap:LongTermDebtMemberus-gaap:FairValueInputsLevel3Memberaxta:A2027DollarSeniorNotesMember2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2027DollarSeniorNotesMember2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMemberus-gaap:FairValueInputsLevel1Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMemberus-gaap:FairValueInputsLevel3Member2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2021-03-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMemberus-gaap:FairValueInputsLevel3Member2020-12-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2020-12-310001616862us-gaap:CashFlowHedgingMemberus-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Member2020-01-012020-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2020-01-012020-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:FairValueInputsLevel2Member2020-01-012020-03-310001616862us-gaap:CurrencySwapMemberus-gaap:NetInvestmentHedgingMemberus-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:NetInvestmentHedgingMemberus-gaap:FairValueInputsLevel2Member2020-01-012020-03-310001616862us-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:FairValueInputsLevel2Member2020-01-012020-03-310001616862us-gaap:InterestRateCapMember2021-01-012021-03-310001616862us-gaap:InterestRateCapMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001616862us-gaap:InterestRateCapMember2020-01-012020-03-310001616862us-gaap:InterestRateCapMemberus-gaap:InterestExpenseMember2020-01-012020-03-310001616862us-gaap:InterestRateSwapMember2021-01-012021-03-310001616862us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001616862us-gaap:InterestRateSwapMember2020-01-012020-03-310001616862us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2020-01-012020-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:CostOfSalesMember2021-01-012021-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:CostOfSalesMember2020-01-012020-03-310001616862us-gaap:CurrencySwapMember2021-01-012021-03-310001616862us-gaap:CurrencySwapMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001616862us-gaap:CurrencySwapMember2020-01-012020-03-310001616862us-gaap:CurrencySwapMemberus-gaap:InterestExpenseMember2020-01-012020-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:InterestExpenseMember2020-01-012020-03-31axta:Segment0001616862axta:RefinishMemberaxta:PerformanceCoatingsMember2021-01-012021-03-310001616862axta:RefinishMemberaxta:PerformanceCoatingsMember2020-01-012020-03-310001616862axta:IndustrialMemberaxta:PerformanceCoatingsMember2021-01-012021-03-310001616862axta:IndustrialMemberaxta:PerformanceCoatingsMember2020-01-012020-03-310001616862axta:PerformanceCoatingsMember2020-01-012020-03-310001616862axta:LightVehicleMemberaxta:MobilityCoatingsMember2021-01-012021-03-310001616862axta:LightVehicleMemberaxta:MobilityCoatingsMember2020-01-012020-03-310001616862axta:CommercialVehicleMemberaxta:MobilityCoatingsMember2021-01-012021-03-310001616862axta:CommercialVehicleMemberaxta:MobilityCoatingsMember2020-01-012020-03-310001616862axta:MobilityCoatingsMember2020-01-012020-03-310001616862srt:MinimumMember2021-01-012021-03-310001616862srt:MaximumMember2021-01-012021-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-03-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2020-03-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-310001616862us-gaap:SubsequentEventMember2021-04-012021-04-270001616862us-gaap:SubsequentEventMember2021-04-27

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 March 31, 2021
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 April 20, 2021, there were 232,947,186 shares of the registrant’s common shares outstanding.



Table of Contents

2

Table of Contents
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 March 31,
2021 2020
Net sales $ 1,063.6  $ 983.5 
Cost of goods sold 684.5  646.8 
Selling, general and administrative expenses 179.1  195.4 
Other operating charges 102.8  31.6 
Research and development expenses 15.6  16.6 
Amortization of acquired intangibles 29.0  28.0 
Income from operations 52.6  65.1 
Interest expense, net 33.5  36.5 
Other (income) expense, net (0.4) 0.8 
Income before income taxes 19.5  27.8 
Provision (benefit) for income taxes 3.8  (24.6)
Net income 15.7  52.4 
Less: Net income attributable to noncontrolling interests 0.5  0.2 
Net income attributable to controlling interests $ 15.2  $ 52.2 
Basic net income per share $ 0.06  $ 0.22 
Diluted net income per share $ 0.06  $ 0.22 

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

3

Table of Contents
AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(In millions)
Three Months Ended March 31,
2021 2020
Net income $ 15.7  $ 52.4 
Other comprehensive loss, before tax:
Foreign currency translation adjustments (37.6) (86.5)
Unrealized gain (loss) on derivatives 9.2  (40.7)
Unrealized gain (loss) on pension and other benefit plan obligations 1.2  (0.2)
Other comprehensive loss, before tax (27.2) (127.4)
Income tax provision (benefit) related to items of other comprehensive loss 1.8  (5.8)
Other comprehensive loss, net of tax (29.0) (121.6)
Comprehensive loss (13.3) (69.2)
Less: Comprehensive income (loss) attributable to noncontrolling interests 0.3  (3.0)
Comprehensive loss attributable to controlling interests $ (13.6) $ (66.2)

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

4

Table of Contents
AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except per share data)
March 31, 2021 December 31, 2020
Assets
Current assets:
Cash and cash equivalents $ 1,266.9  $ 1,360.9 
Restricted cash 2.9  3.1 
Accounts and notes receivable, net 902.3  869.8 
Inventories 582.2  559.9 
Prepaid expenses and other current assets 136.5  132.2 
Total current assets 2,890.8  2,925.9 
Property, plant and equipment, net 1,163.6  1,194.5 
Goodwill 1,257.2  1,294.9 
Identifiable intangibles, net 1,098.4  1,148.8 
Other assets 610.8  593.1 
Total assets $ 7,020.8  $ 7,157.2 
Liabilities, Shareholders’ Equity
Current liabilities:
Accounts payable $ 565.0  $ 564.4 
Current portion of borrowings 49.9  54.2 
Other accrued liabilities 575.2  562.3 
Total current liabilities 1,190.1  1,180.9 
Long-term borrowings 3,810.1  3,838.5 
Accrued pensions 294.2  309.9 
Deferred income taxes 108.2  114.0 
Other liabilities 212.4  234.1 
Total liabilities 5,615.0  5,677.4 
Commitments and contingent liabilities (Note 5)
Shareholders’ equity:
Common shares, $1.00 par, 1,000.0 shares authorized, 251.2 and 250.9 shares issued at March 31, 2021 and December 31, 2020, respectively
251.2  250.9 
Capital in excess of par 1,490.5  1,487.1 
Retained earnings 578.5  563.3 
Treasury shares, at cost, 18.4 and 16.1 shares at March 31, 2021 and December 31, 2020, respectively
(507.2) (443.5)
Accumulated other comprehensive loss (453.6) (424.8)
Total Axalta shareholders’ equity 1,359.4  1,433.0 
Noncontrolling interests 46.4  46.8 
Total shareholders’ equity 1,405.8  1,479.8 
Total liabilities and shareholders’ equity $ 7,020.8  $ 7,157.2 

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

5

Table of Contents
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, 2020 234.8  $ 250.9  $ 1,487.1  $ 563.3  $ (443.5) $ (424.8) $ 46.8  $ 1,479.8 
Comprehensive loss:
Net income —  —  —  15.2  —  —  0.5  15.7 
Net realized and unrealized gain on derivatives, net of tax of $1.3 million
—  —  —  —  —  7.9  —  7.9 
Long-term employee benefit plans, net of tax $0.5 million
—  —  —  —  —  0.7  —  0.7 
Foreign currency translation, net of tax of $0.0 million
—  —  —  —  —  (37.4) (0.2) (37.6)
Total comprehensive loss —  —  —  15.2  —  (28.8) 0.3  (13.3)
Recognition of stock-based compensation —  —  3.6  —  —  —  —  3.6 
Shares issued under compensation plans 0.3  0.3  (0.2) —  —  —  —  0.1 
Common stock purchases (2.3) —  —  —  (63.7) —  —  (63.7)
Dividends declared to noncontrolling interests —  —  —  —  —  —  (0.7) (0.7)
Balance at March 31, 2021 232.8  $ 251.2  $ 1,490.5  $ 578.5  $ (507.2) $ (453.6) $ 46.4  $ 1,405.8 

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 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 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 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)
Changes in ownership of 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 

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


6

Table of Contents
AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
Three Months Ended March 31,
2021 2020
Operating activities:
Net income $ 15.7  $ 52.4 
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization 76.4  86.6 
Amortization of deferred financing costs and original issue discount 2.2  2.2 
Debt extinguishment and refinancing related costs   2.4 
Deferred income taxes (18.3) (45.7)
Realized and unrealized foreign exchange losses, net 8.6  3.7 
Stock-based compensation 3.6  5.1 
Divestiture and impairment charges   0.5 
Interest income on swaps designated as net investment hedges (3.5) (3.7)
Other non-cash, net 1.4  (1.9)
Changes in operating assets and liabilities:
Trade accounts and notes receivable (52.6) 5.4 
Inventories (36.2) (27.1)
Prepaid expenses and other assets (18.0) (38.2)
Accounts payable 33.4  29.0 
Other accrued liabilities 30.7  (73.3)
Other liabilities (3.8) 1.8 
Cash provided by (used for) operating activities 39.6  (0.8)
Investing activities:
Purchase of property, plant and equipment (31.8) (22.7)
Interest proceeds on swaps designated as net investment hedges 3.5  3.7 
Other investing activities, net 0.5  0.4 
Cash used for investing activities (27.8) (18.6)
Financing activities:
Payments on short-term borrowings (20.0) (10.6)
Payments on long-term borrowings (6.7) (307.2)
Financing-related costs (1.5)  
Purchases of common stock (63.7)  
Net cash flows associated with stock-based awards 0.1  (1.1)
Purchase of noncontrolling interests   (1.6)
Other financing activities, net (0.7) (0.8)
Cash used for financing activities (92.5) (321.3)
Decrease in cash (80.7) (340.7)
Effect of exchange rate changes on cash (13.5) (19.8)
Cash at beginning of period 1,364.0  1,020.5 
Cash at end of period $ 1,269.8  $ 660.0 
Cash at end of period reconciliation:
Cash and cash equivalents $ 1,266.9  $ 657.2 
Restricted cash 2.9  2.8 
Cash at end of period $ 1,269.8  $ 660.0 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7

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

Index
Note Page


8

Table of Contents
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 March 31, 2021 and December 31, 2020, the results of operations, comprehensive loss, changes in shareholders' equity and cash flows for the three months ended March 31, 2021 and 2020. 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, 2020. 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 months ended March 31, 2021 are not necessarily indicative of the results to be expected for a full year.
Summary of Significant Accounting Policies
Recently Adopted Accounting Guidance
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.      In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” which clarified the scope and application of the original guidance. As of March 31, 2021, the expedients provided in this standard do not impact the Company. We will continue to monitor for potential impacts on our financial statements.
In December 2020, we adopted ASU 2019-12, "Simplifying the Accounting for Income Taxes", which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and updating provisions related to accounting for franchise (or similar) tax partially based on income and interim recognition of enactment of tax law changes. The adoption of this standard did not have a material impact 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 a negative impact on the global economy. The Company's results of operations, financial condition and cash flows were significantly impacted during 2020 as a result of the pandemic and we continue to see impacts to our business given the continued significant presence, and actual or potential spread, of the virus globally, as well as preventative measures enacted in certain regions of the world. We are currently unable to fully determine the future impact of COVID-19 on our business, though we believe the pandemic will continue to have a negative effect on our business during 2021, and potentially longer. We are monitoring the progression of the pandemic and its ongoing and potential effect on our financial position, results of operations, and cash flows, which effects could be materially adverse in a particular quarterly reporting period as well as on an annual basis for 2021, and potentially longer.
(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 March 31, 2021 and December 31, 2020 were $38.1 million and $37.2 million, respectively.

9

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

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 March 31, 2021 and December 31, 2020, the total carrying value of BIPs were $161.0 million and $165.4 million, respectively, and are presented within other assets on the condensed consolidated balance sheets. For the three months ended March 31, 2021 and 2020, $15.3 million, and $16.9 million, respectively, was 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 $74.2 million and $79.8 million at March 31, 2021 and December 31, 2020, 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, 2020 to March 31, 2021 by reportable segment:
Performance
Coatings
Mobility
Coatings
Total
Balance at December 31, 2020 $ 1,211.3  $ 83.6  $ 1,294.9 
Foreign currency translation (35.2) (2.5) (37.7)
Balance at March 31, 2021 $ 1,176.1  $ 81.1  $ 1,257.2 
Identifiable Intangible Assets
The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
March 31, 2021 Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology $ 552.5  $ (387.5) $ 165.0  10.4
Trademarks—indefinite-lived 274.1  —  274.1  Indefinite
Trademarks—definite-lived 101.6  (38.3) 63.3  16.0
Customer relationships 928.3  (335.8) 592.5  19.0
Other 15.3  (11.8) 3.5  5.0
Total $ 1,871.8  $ (773.4) $ 1,098.4 
December 31, 2020 Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology $ 564.8  $ (383.6) $ 181.2  10.4
Trademarks—indefinite-lived 282.9  —  282.9  Indefinite
Trademarks—definite-lived 103.6  (37.5) 66.1  16.0
Customer relationships 943.6  (329.3) 614.3  19.0
Other 15.3  (11.0) 4.3  5.0
Total $ 1,910.2  $ (761.4) $ 1,148.8 

10

Table of Contents
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 2021 and each of the succeeding five years is:
Remainder of 2021 $ 85.6 
2022 112.1 
2023 71.8 
2024 66.8 
2025 66.2 
2026 65.6 
(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.
During the three months ended March 31, 2021 and 2020, we incurred costs for termination benefits of $4.5 million, and $18.5 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 24 months.
The following table summarizes the activity related to termination benefit reserves and expenses from December 31, 2020 to March 31, 2021:
2021 Activity
Balance at December 31, 2020 $ 55.8 
Expenses, net of changes to estimates 4.5 
Payments made (19.2)
Foreign currency translation (1.5)
Balance at March 31, 2021 $ 39.6 
(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 March 31, 2021 and December 31, 2020, we had outstanding bank guarantees of $8.2 million and $8.5 million, respectively. A portion of our bank guarantees expire between 2021 and 2026, while others do not have specified expiration dates. We monitor the customer obligations and bank guarantees to evaluate whether we have a liability at the balance sheet date. During the three months ended March 31, 2020, we incurred a $1.0 million charge related to our outstanding bank guarantees. We did not have any liabilities related to our outstanding bank guarantees recorded at March 31, 2021 and December 31, 2020.
Operational Matter
In January 2021, we became aware of an operational matter affecting certain North America Mobility Coatings customer manufacturing sites. The matter involves the use and application of certain of our products in combination with and incorporated within third party products. The matter occurred over a discrete period during the fourth quarter of 2020.
When we filed, and as disclosed in, our Annual Report on Form 10-K for the year ended December 31, 2020, we estimated that it was reasonably possible that losses associated with the matter could have been up to $250 million. Based on further developments since the filing of our Annual Report on Form 10-K, we have concluded that losses from this matter are probable and, therefore, recorded a charge of $94.4 million for such probable losses during the three months ended March 31, 2021. The recorded probable losses are an estimate and actual costs arising from this matter could be materially lower or higher depending on the actual costs incurred to repair the impacted products.
Based on the information currently available surrounding the full scope and associated responsibilities among relevant parties, we believe it is reasonably possible that we could incur losses in addition to the recorded probable losses of up to $65 million. We maintain insurance, with significant policy limits, that could provide coverage for the liabilities or other

11

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

losses that may arise from this matter. We have submitted an insurance claim, and discussions with our insurers are ongoing. No agreement or resolution has been reached.
Other
We are subject to various pending lawsuits, legal proceedings and other claims in the ordinary course of business, including civil, regulatory and environmental matters. These matters may involve third-party indemnification obligations and/or insurance covering all or part of any potential damage incurred by us. All of these matters are subject to many uncertainties and, accordingly, we cannot determine the ultimate outcome of the proceedings and other claims at this time. The potential effects, if any, on our consolidated financial statements will be recorded in the period in which these matters are probable and estimable. Except as set forth in the "Operational Matter" section above, we believe that any sum we may be required to pay in connection with proceedings or claims in excess of the amounts recorded would likely not have a material adverse effect upon our results of operations, financial conditions or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.
We are involved in environmental remediation and ongoing compliance activities at several sites. The timing and duration of remediation and ongoing compliance activities are determined on a site by site basis depending on local regulations. The liabilities recorded represent our estimable future remediation costs and other anticipated environmental liabilities. We have not recorded liabilities at sites where a liability is probable, but that a range of loss is not reasonably estimable. We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.
(6)    LONG-TERM EMPLOYEE BENEFITS
Components of Net Periodic Benefit Cost
The following table sets forth the components of net periodic benefit costs for the three months ended March 31, 2021 and 2020:
Three Months Ended March 31,
2021 2020
Components of net periodic benefit cost:
Net periodic benefit cost:
Service cost $ 1.8  $ 1.8 
Interest cost 2.0  2.3 
Expected return on plan assets (3.4) (3.2)
Amortization of actuarial loss, net 1.2  1.0 
Plan curtailments   (1.2)
Net periodic benefit cost $ 1.6  $ 0.7 
All non-service components of net periodic benefit cost are recorded in other (income) expense, net within the accompanying condensed consolidated statements of operations.
(7)    STOCK-BASED COMPENSATION
During the three months ended March 31, 2021 and 2020, we recognized expenses of $3.6 million and $5.1 million, respectively, in stock-based compensation, which was allocated between costs of goods sold and selling, general and administrative expenses on the condensed consolidated statements of operations. We recognized tax benefits on stock-based compensation of $0.3 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively.

12

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

2021 Activity
A summary of award activity by type for the three months ended March 31, 2021 is presented below.
Stock Options Awards
(in millions)
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value
 (in millions)
Weighted
Average
Remaining
Contractual
Life (years)
Outstanding at January 1, 2021 2.5  $ 27.34 
Granted   $  
Exercised (0.1) $ 22.76 
Forfeited / Expired (1)
  $ 29.88 
Outstanding at March 31, 2021 2.4  $ 27.40 
Vested and expected to vest at March 31, 2021 2.4  $ 27.40  $ 7.1  4.17
Exercisable at March 31, 2021 2.2  $ 27.46  $ 6.5  3.80
(1)    Activity during the three months ended March 31, 2021 rounds to zero.
Cash received by the Company upon exercise of options for the three months ended March 31, 2021 was $1.3 million. No excess tax benefits or shortfall expenses were recorded related to these exercises.
At March 31, 2021, there was $0.4 million of unrecognized expense relating to unvested stock options that is expected to be amortized over the weighted average period of 0.9 year.
Restricted Stock Awards and Restricted Stock Units (1)
Awards/Units
(millions)
Weighted-Average
Fair Value
Outstanding at January 1, 2021 1.0  $ 28.84 
Granted 0.5  $ 28.54 
Vested (0.4) $ 28.84 
Forfeited (2)
  $ 29.35 
Outstanding at March 31, 2021 1.1  $ 28.69 
(1)    As of March 31, 2021, there are no restricted stock awards outstanding and only restricted stock units remain.
(2)    Activity during the three months ended March 31, 2021 rounds to zero.
Tax shortfall expenses on the vesting of restricted stock awards and restricted stock units during the three months ended March 31, 2021 was $0.1 million.
At March 31, 2021, there was $22.2 million of unamortized expense relating to unvested restricted stock units that is expected to be amortized over a weighted average period of 1.8 years.
Performance Stock Awards and Performance Share Units (1)
Awards/Units
(millions)
Weighted-Average
Fair Value
Outstanding at January 1, 2021 0.5  $ 31.07 
Granted 0.4  $ 29.53 
Vested   $  
Forfeited (0.1) $ 32.93 
Outstanding at March 31, 2021 0.8  $ 30.21 
(1)    As of March 31, 2021, there are no performance stock awards outstanding and only performance share units remain.
Our performance stock awards and performance share units allow for participants to vest in more or less than the targeted number of shares granted. All of our performance awards are currently performing below the applicable targets. We currently expect a total of 0.6 million shares with a weighted average fair value per share of $29.91 to vest. At March 31, 2021, there is $13.5 million of unamortized expense relating to unvested performance share units that is expected to be amortized over a weighted average period of 2.6 years. The forfeitures include performance stock awards and performance share units that vested below threshold payout.

13

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

(8)    OTHER (INCOME) EXPENSE, NET
Three Months Ended March 31,
2021 2020
Foreign exchange losses, net $ 1.8  $ 2.3 
Debt extinguishment and refinancing related costs   2.4 
Other miscellaneous income, net (2.2) (3.9)
Total $ (0.4) $ 0.8 
(9)    INCOME TAXES
Our effective income tax rates for the three months ended March 31, 2021 and 2020 are as follows:
Three Months Ended March 31,
2021 2020
Effective Tax Rate 19.5  % (88.5) %
The Company's effective tax rate for the periods reflected in the condensed consolidated financial statements are not directly comparable primarily due to the intra-entity asset transfers of certain of its intellectual property and the impacts of certain ongoing tax audits, which occurred during the three months ended March 31, 2020 and are discussed below.
On January 1, 2020, we completed an intra-entity transfer of certain intellectual property rights (the “IP”) to our Swiss subsidiary, where our EMEA regional headquarters is located. The transfer of the IP did not result in a taxable gain; however, it did result in step-up of the Swiss tax-deductible basis in the transferred assets and, accordingly, created a temporary difference between the book basis and the tax basis of the IP, which was transferred at fair value. We applied significant judgment when determining the fair value of the IP, which serves as the tax basis of the deferred tax asset. Consequently, this transaction resulted in the recognition of a deferred tax asset at the applicable Swiss tax rate, resulting in a one-time tax benefit of $50.5 million during the three months ended March 31, 2020. The Company expects to be able to realize the deferred tax assets resulting from these intra-entity asset transfers.
In connection with the income tax audit in Germany for the tax period 2010-2013, the Germany Tax Authority (“GTA”) indicated that it believed that certain positions taken on the 2010-2013 corporate income tax returns were not in compliance with German tax law. While the Company disagrees with the conclusions of the GTA based on the technical merits of our positions, after extensive discussions with the GTA and to avoid a potentially long and costly litigation process, in March 2020 the Company expressed a willingness to settle with the GTA on certain matters and expects to reach a formal agreement in the coming months. As a result of these changes, the Company recorded a charge to income tax expense of $14.3 million during the three months ended March 31, 2020. The Company is also currently under audit in Germany for tax years 2014-2017 and is prepared to vigorously defend itself on these matters.
The Company anticipates that it is reasonably possible it will settle up to $11.8 million, exclusive of interest and penalties, of its current unrecognized tax benefits within 2021 due to the conclusion of the 2010-2013 German income tax audit.

14

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

(10)    NET INCOME PER COMMON SHARE
Basic net income per common share excludes the dilutive impact of potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per common share includes the effect of potential dilution from the hypothetical exercise of outstanding stock options and vesting of restricted shares and performance shares. A reconciliation of our basic and diluted net income per common share is as follows:
Three Months Ended March 31,
(In millions, except per share data) 2021 2020
Net income to common shareholders $ 15.2  $ 52.2 
Basic weighted average shares outstanding 233.9  234.9 
Diluted weighted average shares outstanding 234.7  235.9 
Net income per common share:
Basic net income per share $ 0.06  $ 0.22 
Diluted net income per share $ 0.06  $ 0.22 
The number of anti-dilutive shares that have been excluded in the computation of diluted net income per share for the three months ended March 31, 2021 and 2020 were 1.5 million and 2.6 million, respectively.
(11)    ACCOUNTS AND NOTES RECEIVABLE, NET
Trade accounts receivable are stated at the amount we expect to collect. We maintain allowances for doubtful accounts for estimated losses by applying historical loss percentages, combined with reasonable and supportable forecasts of future losses, to respective aging categories. Management considers the following factors in developing its current estimate of expected credit losses: customer credit-worthiness, past transaction history with the customer, current economic industry trends, changes in market or regulatory matters, and changes in customer payment terms, including the ongoing impacts from COVID-19.
March 31, 2021 December 31, 2020
Accounts receivable - trade, net (1)
$ 778.4  $ 738.3 
Notes receivable 22.1  30.3 
Other 101.8  101.2 
Total $ 902.3  $ 869.8 
(1)    Allowance for doubtful accounts was $25.2 million and $26.5 million at March 31, 2021 and December 31, 2020, respectively.
Bad debt expense of $0.7 million, and $3.4 million was included within selling, general and administrative expenses for the three months ended March 31, 2021 and 2020, respectively.
(12)    INVENTORIES
  March 31, 2021 December 31, 2020
Finished products $ 324.5  $ 319.3 
Semi-finished products 97.1  92.2 
Raw materials 138.6  127.2 
Stores and supplies 22.0  21.2 
Total $ 582.2  $ 559.9 
Inventory reserves were $14.9 million and $17.0 million at March 31, 2021 and December 31, 2020, respectively.

15

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

(13)    PROPERTY, PLANT AND EQUIPMENT, NET
  March 31, 2021 December 31, 2020
Property, plant and equipment $ 2,290.0  $ 2,317.9 
Accumulated depreciation (1,126.4) (1,123.4)
Property, plant, and equipment, net $ 1,163.6  $ 1,194.5 
Depreciation expense amounted to $31.9 million, and $41.6 million for the three months ended March 31, 2021 and 2020, respectively.
(14)    BORROWINGS
Borrowings are summarized as follows:
March 31, 2021 December 31, 2020
2024 Dollar Term Loans $ 2,057.1  $ 2,063.2 
2025 Euro Senior Notes 528.6  552.1 
2027 Dollar Senior Notes 500.0  500.0 
2029 Dollar Senior Notes 700.0  700.0 
Short-term and other borrowings 112.9  118.0 
Unamortized original issue discount (6.0) (6.3)
Unamortized deferred financing costs (32.6) (34.3)
Total borrowings, net 3,860.0  3,892.7 
Less:
Short-term borrowings 25.6  29.9 
Current portion of long-term borrowings 24.3  24.3 
Long-term debt $ 3,810.1  $ 3,838.5 
Revolving Credit Facility
At March 31, 2021 and December 31, 2020, letters of credit issued under the Revolving Credit Facility totaled $34.0 million which reduced the availability under the Revolving Credit Facility. Availability under the Revolving Credit Facility was $366.0 million at March 31, 2021 and December 31, 2020.
Future repayments
Below is a schedule of required future repayments of all borrowings outstanding at March 31, 2021.
Remainder of 2021 $ 42.4 
2022 54.4 
2023 27.3 
2024 1,993.3 
2025 531.9 
Thereafter 1,249.3 
Total borrowings 3,898.6 
Unamortized original issue discount (6.0)
Unamortized deferred financing costs (32.6)
Total borrowings, net $ 3,860.0 
(15)    FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS
Fair value of financial instruments
Equity securities with readily determinable fair values - Balances of equity securities are recorded within other assets, with any changes in fair value recorded within other income, net. The fair values of equity securities are based upon quoted market prices, which are considered Level 1 inputs.

16

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

Long-term borrowings - The estimated fair values of these borrowings are based on recent trades, as reported by a third-party pricing service. Due to the infrequency of trades, these inputs are considered to be Level 2 inputs.
Derivative instruments - The Company’s interest rate caps, interest rate swaps, cross-currency swaps, and foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are included in the Level 2 hierarchy.
The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at March 31, 2021 and December 31, 2020.
March 31, 2021 December 31, 2020
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets:
Prepaid expenses and other current assets:
Cross-currency swaps (2)
$   $ 18.5  $   $ 18.5  $   $ 16.7  $   $ 16.7 
Other assets:
Investments in equity securities
0.7      0.7  0.8      0.8 
Liabilities:
Other accrued liabilities:
Interest rate caps (1)
  1.5    1.5    2.0    2.0 
Interest rate swaps (1)
  28.7    28.7    28.9    28.9 
Foreign currency forward contracts (1)