Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

April 26, 2022

000161686212/312022Q1FALSE00016168622022-01-012022-03-3100016168622022-04-19xbrli:sharesiso4217:USD00016168622021-01-012021-03-31iso4217:USDxbrli:shares00016168622022-03-3100016168622021-12-310001616862us-gaap:CommonStockMember2021-12-310001616862us-gaap:AdditionalPaidInCapitalMember2021-12-310001616862us-gaap:RetainedEarningsMember2021-12-310001616862us-gaap:TreasuryStockMember2021-12-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001616862us-gaap:NoncontrollingInterestMember2021-12-310001616862us-gaap:RetainedEarningsMember2022-01-012022-03-310001616862us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001616862us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001616862us-gaap:CommonStockMember2022-01-012022-03-310001616862us-gaap:TreasuryStockMember2022-01-012022-03-310001616862us-gaap:CommonStockMember2022-03-310001616862us-gaap:AdditionalPaidInCapitalMember2022-03-310001616862us-gaap:RetainedEarningsMember2022-03-310001616862us-gaap:TreasuryStockMember2022-03-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001616862us-gaap:NoncontrollingInterestMember2022-03-310001616862us-gaap:CommonStockMember2020-12-310001616862us-gaap:AdditionalPaidInCapitalMember2020-12-310001616862us-gaap:RetainedEarningsMember2020-12-310001616862us-gaap:TreasuryStockMember2020-12-310001616862us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001616862us-gaap:NoncontrollingInterestMember2020-12-3100016168622020-12-310001616862us-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:NoncontrollingInterestMember2021-03-3100016168622021-03-310001616862axta:UPOLHoldingsLimitedMember2021-09-152021-09-150001616862srt:ScenarioPreviouslyReportedMemberaxta:UPOLHoldingsLimitedMember2021-09-150001616862axta:UPOLHoldingsLimitedMembersrt:RestatementAdjustmentMember2021-09-150001616862axta:UPOLHoldingsLimitedMember2021-09-150001616862axta:PerformanceCoatingsMember2021-12-310001616862axta:MobilityCoatingsMember2021-12-310001616862axta:PerformanceCoatingsMember2022-01-012022-03-310001616862axta:MobilityCoatingsMember2022-01-012022-03-310001616862axta:PerformanceCoatingsMember2022-03-310001616862axta:MobilityCoatingsMember2022-03-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2022-03-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2022-01-012022-03-310001616862us-gaap:TrademarksMember2022-03-310001616862us-gaap:TrademarksMember2022-03-310001616862us-gaap:TrademarksMember2022-01-012022-03-310001616862us-gaap:CustomerRelationshipsMember2022-03-310001616862us-gaap:CustomerRelationshipsMember2022-01-012022-03-310001616862us-gaap:OtherIntangibleAssetsMember2022-03-310001616862us-gaap:OtherIntangibleAssetsMember2022-01-012022-03-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2021-12-310001616862us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-12-310001616862us-gaap:TrademarksMember2021-12-310001616862us-gaap:TrademarksMember2021-12-310001616862us-gaap:TrademarksMember2021-01-012021-12-310001616862us-gaap:CustomerRelationshipsMember2021-12-310001616862us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001616862us-gaap:OtherIntangibleAssetsMember2021-12-310001616862us-gaap:OtherIntangibleAssetsMember2021-01-012021-12-310001616862us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001616862axta:RestrictedStockandRestrictedStockUnitsMember2021-12-310001616862axta:RestrictedStockandRestrictedStockUnitsMember2022-01-012022-03-310001616862axta:RestrictedStockandRestrictedStockUnitsMember2022-03-310001616862us-gaap:PerformanceSharesMember2021-12-310001616862us-gaap:PerformanceSharesMember2022-01-012022-03-310001616862us-gaap:PerformanceSharesMember2022-03-31xbrli:pure0001616862us-gaap:SettlementWithTaxingAuthorityMember2022-03-310001616862axta:RussiaConflictWithUkraineMember2022-01-012022-03-310001616862axta:A2024DollarTermLoansMember2022-03-310001616862axta:A2024DollarTermLoansMember2021-12-310001616862axta:A2025EuroSeniorNotesMember2022-03-310001616862axta:A2025EuroSeniorNotesMember2021-12-310001616862axta:A2027DollarSeniorNotesMember2022-03-310001616862axta:A2027DollarSeniorNotesMember2021-12-310001616862axta:A2029DollarSeniorNotesMember2022-03-310001616862axta:A2029DollarSeniorNotesMember2021-12-310001616862us-gaap:RevolvingCreditFacilityMember2021-12-310001616862us-gaap:RevolvingCreditFacilityMember2022-03-310001616862axta:SupplierFinancingArrangementsMember2022-01-012022-03-310001616862axta:SupplierFinancingArrangementsMember2022-03-310001616862axta:SupplierFinancingArrangementsMember2021-12-310001616862axta:SupplierFinancingArrangementsMemberaxta:PropertyPlantAndEquipmentPurchasesMember2022-03-310001616862axta:SupplierFinancingArrangementsMemberaxta:PropertyPlantAndEquipmentPurchasesMember2021-12-310001616862axta:SupplierFinancingArrangementsMember2021-01-012021-12-3100016168622021-04-300001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:OtherAssetsMember2022-03-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:OtherAssetsMember2022-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:OtherAssetsMember2022-03-310001616862us-gaap:OtherAssetsMember2022-03-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:OtherAssetsMember2021-12-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:OtherAssetsMember2021-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:OtherAssetsMember2021-12-310001616862us-gaap:OtherAssetsMember2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel1Member2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Member2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-03-310001616862us-gaap:AccruedLiabilitiesMember2022-03-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001616862us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001616862us-gaap:AccruedLiabilitiesMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2022-03-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862us-gaap:OtherLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CurrencySwapMember2021-12-310001616862axta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2024DollarTermLoansMemberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2024DollarTermLoansMemberus-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2024DollarTermLoansMemberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2025EuroSeniorNotesMemberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:LongTermDebtMember2022-03-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMember2021-12-310001616862axta:A2027DollarSeniorNotesMemberus-gaap:LongTermDebtMember2021-12-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2022-03-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2022-03-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2022-03-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2022-03-310001616862us-gaap:FairValueInputsLevel1Memberus-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2021-12-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2021-12-310001616862us-gaap:FairValueInputsLevel3Memberus-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2021-12-310001616862us-gaap:LongTermDebtMemberaxta:A2029DollarSeniorNotesMember2021-12-310001616862us-gaap:CurrencySwapMember2022-03-31axta:derivative_instrument0001616862us-gaap:CurrencySwapMember2022-01-012022-03-31iso4217:EUR0001616862us-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2022-01-012022-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2021-01-012021-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel2Member2022-01-012022-03-310001616862us-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:NetInvestmentHedgingMemberus-gaap:CurrencySwapMember2022-01-012022-03-310001616862us-gaap:FairValueInputsLevel2Memberus-gaap:NetInvestmentHedgingMemberus-gaap:CurrencySwapMember2021-01-012021-03-310001616862us-gaap:FairValueInputsLevel2Member2022-01-012022-03-310001616862us-gaap:FairValueInputsLevel2Member2021-01-012021-03-310001616862us-gaap:InterestRateCapMember2022-01-012022-03-310001616862us-gaap:InterestRateCapMemberus-gaap:InterestExpenseMember2022-01-012022-03-310001616862us-gaap:InterestRateCapMember2021-01-012021-03-310001616862us-gaap:InterestRateCapMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001616862us-gaap:InterestRateSwapMember2022-01-012022-03-310001616862us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2022-01-012022-03-310001616862us-gaap:InterestRateSwapMember2021-01-012021-03-310001616862us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001616862us-gaap:ForeignExchangeForwardMember2022-01-012022-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:CostOfSalesMember2022-01-012022-03-310001616862us-gaap:ForeignExchangeForwardMember2021-01-012021-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:CostOfSalesMember2021-01-012021-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310001616862us-gaap:InterestExpenseMemberus-gaap:CurrencySwapMember2022-01-012022-03-310001616862us-gaap:CurrencySwapMember2021-01-012021-03-310001616862us-gaap:InterestExpenseMemberus-gaap:CurrencySwapMember2021-01-012021-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:InterestExpenseMember2022-01-012022-03-310001616862us-gaap:ForeignExchangeForwardMemberus-gaap:InterestExpenseMember2021-01-012021-03-31axta:Segment0001616862axta:RefinishMemberaxta:PerformanceCoatingsMember2022-01-012022-03-310001616862axta:RefinishMemberaxta:PerformanceCoatingsMember2021-01-012021-03-310001616862axta:IndustrialMemberaxta:PerformanceCoatingsMember2022-01-012022-03-310001616862axta:IndustrialMemberaxta:PerformanceCoatingsMember2021-01-012021-03-310001616862axta:PerformanceCoatingsMember2021-01-012021-03-310001616862axta:LightVehicleMemberaxta:MobilityCoatingsMember2022-01-012022-03-310001616862axta:LightVehicleMemberaxta:MobilityCoatingsMember2021-01-012021-03-310001616862axta:CommercialVehicleMemberaxta:MobilityCoatingsMember2022-01-012022-03-310001616862axta:CommercialVehicleMemberaxta:MobilityCoatingsMember2021-01-012021-03-310001616862axta:MobilityCoatingsMember2021-01-012021-03-310001616862srt:MinimumMember2022-01-012022-03-310001616862srt:MaximumMember2022-01-012022-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-03-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-03-310001616862us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001616862us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001616862us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001616862us-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:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-31


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, 2022
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.)
50 Applied Bank Blvd
Suite 300
Glen Mills, Pennsylvania 19342
(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 19, 2022, there were 221,467,603 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,
2022 2021
Net sales $ 1,174.1  $ 1,063.6 
Cost of goods sold 837.4  684.5 
Selling, general and administrative expenses 193.5  179.1 
Other operating charges 7.7  102.8 
Research and development expenses 16.4  15.6 
Amortization of acquired intangibles 32.8  29.0 
Income from operations 86.3  52.6 
Interest expense, net 32.6  33.5 
Other expense (income), net 1.8  (0.4)
Income before income taxes 51.9  19.5 
Provision for income taxes 11.0  3.8 
Net income 40.9  15.7 
Less: Net (loss) income attributable to noncontrolling interests (0.6) 0.5 
Net income attributable to controlling interests $ 41.5  $ 15.2 
Basic net income per share $ 0.18  $ 0.06 
Diluted net income per share $ 0.18  $ 0.06 

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 Income (Loss) (Unaudited)
(In millions)
Three Months Ended March 31,
2022 2021
Net income $ 40.9  $ 15.7 
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments (3.9) (37.6)
Unrealized gain on derivatives 19.5  9.2 
Unrealized gain on pension and other benefit plan obligations 0.9  1.2 
Other comprehensive income (loss), before tax 16.5  (27.2)
Income tax provision related to items of other comprehensive income (loss) 3.0  1.8 
Other comprehensive income (loss), net of tax 13.5  (29.0)
Comprehensive income (loss) 54.4  (13.3)
Less: Comprehensive (loss) income attributable to noncontrolling interests (0.1) 0.3 
Comprehensive income (loss) attributable to controlling interests $ 54.5  $ (13.6)

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, 2022 December 31, 2021
Assets
Current assets:
Cash and cash equivalents $ 576.2  $ 840.6 
Restricted cash 10.6  10.6 
Accounts and notes receivable, net 1,029.8  937.5 
Inventories 764.0  669.7 
Prepaid expenses and other current assets 135.7  117.2 
Total current assets 2,516.3  2,575.6 
Property, plant and equipment, net 1,184.4  1,186.2 
Goodwill 1,574.4  1,592.7 
Identifiable intangibles, net 1,237.5  1,278.2 
Other assets 568.9  584.5 
Total assets $ 7,081.5  $ 7,217.2 
Liabilities, Shareholders’ Equity
Current liabilities:
Accounts payable $ 748.0  $ 657.4 
Current portion of borrowings 76.1  79.7 
Other accrued liabilities 520.9  597.8 
Total current liabilities 1,345.0  1,334.9 
Long-term borrowings 3,739.2  3,749.9 
Accrued pensions 261.4  269.3 
Deferred income taxes 165.5  174.7 
Other liabilities 149.2  149.7 
Total liabilities 5,660.3  5,678.5 
Commitments and contingent liabilities (Note 6)
Shareholders’ equity:
Common shares, $1.00 par, 1,000.0 shares authorized, 252.2 and 251.8 shares issued at March 31, 2022 and December 31, 2021, respectively
252.2  251.8 
Capital in excess of par 1,518.2  1,515.5 
Retained earnings 868.7  827.2 
Treasury shares, at cost, 30.8 and 24.4 shares at March 31, 2022 and December 31, 2021, respectively
(862.3) (687.2)
Accumulated other comprehensive loss (401.4) (414.4)
Total Axalta shareholders’ equity 1,375.4  1,492.9 
Noncontrolling interests 45.8  45.8 
Total shareholders’ equity 1,421.2  1,538.7 
Total liabilities and shareholders’ equity $ 7,081.5  $ 7,217.2 

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, 2021 227.4  $ 251.8  $ 1,515.5  $ 827.2  $ (687.2) $ (414.4) $ 45.8  $ 1,538.7 
Comprehensive income:
Net income —  —  —  41.5  —  —  (0.6) 40.9 
Net realized and unrealized gain on derivatives, net of tax of $2.6 million
—  —  —  —  —  16.9  —  16.9 
Long-term employee benefit plans, net of tax of $0.4 million
—  —  —  —  —  0.5  —  0.5 
Foreign currency translation, net of tax of $0.0 million
—  —  —  —  —  (4.4) 0.5  (3.9)
Total comprehensive income —  —  —  41.5  —  13.0  (0.1) 54.4 
Recognition of stock-based compensation —  —  5.3  —  —  —  —  5.3 
Shares issued under compensation plans 0.4  0.4  (2.3) —  —  —  —  (1.9)
Changes in ownership of noncontrolling interests —  —  (0.3) —  —  —  0.2  (0.1)
Common stock purchases (6.4) —  —  —  (175.1) —  —  (175.1)
Dividends declared to noncontrolling interests —  —  —  —  —  —  (0.1) (0.1)
Balance at March 31, 2022 221.4  252.2  $ 1,518.2  $ 868.7  $ (862.3) $ (401.4) $ 45.8  $ 1,421.2 

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 of $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 

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,
2022 2021
Operating activities:
Net income $ 40.9  $ 15.7 
Adjustment to reconcile net income to cash (used for) provided by operating activities:
Depreciation and amortization 77.7  76.4 
Amortization of deferred financing costs and original issue discount 2.4  2.2 
Deferred income taxes (2.7) (18.3)
Realized and unrealized foreign exchange losses, net 2.4  8.6 
Stock-based compensation 5.3  3.6 
Interest income on swaps designated as net investment hedges (6.2) (3.5)
Other non-cash, net (1.6) 1.4 
Changes in operating assets and liabilities:
Trade accounts and notes receivable (86.2) (52.6)
Inventories (91.5) (36.2)
Prepaid expenses and other assets (32.9) (18.0)
Accounts payable 120.4  33.4 
Other accrued liabilities (66.7) 30.7 
Other liabilities (5.2) (3.8)
Cash (used for) provided by operating activities (43.9) 39.6 
Investing activities:
Purchase of property, plant and equipment (42.5) (31.8)
Interest proceeds on swaps designated as net investment hedges 6.2  3.5 
Settlement proceeds on swaps designated as net investment hedges 25.0   
Other investing activities, net 1.0  0.5 
Cash used for investing activities (10.3) (27.8)
Financing activities:
Payments on short-term borrowings (24.1) (20.0)
Payments on long-term borrowings (6.8) (6.7)
Financing-related costs   (1.5)
Purchases of common stock (175.1) (63.7)
Net cash flows associated with stock-based awards (1.9) 0.1 
Other financing activities, net (0.2) (0.7)
Cash used for financing activities (208.1) (92.5)
Decrease in cash (262.3) (80.7)
Effect of exchange rate changes on cash (2.1) (13.5)
Cash at beginning of period 851.2  1,364.0 
Cash at end of period $ 586.8  $ 1,269.8 
Cash at end of period reconciliation:
Cash and cash equivalents $ 576.2  $ 1,266.9 
Restricted cash 10.6  2.9 
Cash at end of period $ 586.8  $ 1,269.8 
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 and shareholders' equity 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, 2022, the results of operations, comprehensive income (loss), changes in shareholders' equity and cash flows for the three months ended March 31, 2022 and 2021. 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, 2021. 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 entities 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, 2022 are not necessarily indicative of the results to be expected for a full year.
Risks and Uncertainties
After experiencing significant impacts to our results of operations, financial condition and cash flows in 2020 from the coronavirus ("COVID-19") pandemic, we have seen a return to more stable quarter-over-quarter demand for our products and services during 2021 and into 2022, though 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 2022, 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.
(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, 2022 and December 31, 2021 were $37.7 million and $36.1 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 March 31, 2022 and December 31, 2021, the total carrying value of BIPs were $149.3 million and $151.2 million, respectively, and are presented within other assets in the condensed consolidated balance sheets. For the three months ended March 31, 2022 and 2021, $14.5 million and $15.3 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 up-front incentives with repayment features made in conjunction with long-term customer commitments of $69.7 million and $72.7 million at March 31, 2022 and December 31, 2021, respectively. These up-front incentives with repayment features are subject to the credit risk of our customers and depending on the financial condition of our customers, it is possible that some or all of the amounts may become uncollectible. We have no reserve for this risk at March 31, 2022 or December 31, 2021.
See Note 17 for disaggregated net sales by end-market.

9

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(3)    ACQUISITIONS
Acquisition of U-POL Holdings Limited
On September 15, 2021, we completed the acquisition of U-POL Holdings Limited ("U-POL") for an aggregate purchase price of $619.8 million. The acquisition of U-POL, a leading supplier of paint, protective coatings and accessories primarily for the automotive aftermarket, strengthens Axalta's global refinish leadership position and supports its broader growth strategy. The results of the business are reported within our Performance Coatings segment. The U-POL acquisition was recorded as a business combination under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, Business Combinations, with identifiable assets acquired and liabilities assumed recorded at their estimated fair values as of the acquisition date.
At March 31, 2022, we have not finalized the purchase accounting related to the U-POL acquisition and these amounts represent preliminary values. The allocation of the purchase price may be modified up to one year from the closing date of the acquisition as more information is obtained about the fair value of assets acquired and liabilities assumed. The purchase price was allocated as follows:
September 15, 2021 (As initially reported) Measurement Period Adjustments September 15, 2021 (Adjusted)
Cash $ 23.7  $   $ 23.7 
Accounts and notes receivable, net 22.5    22.5 
Inventories 23.3    23.3 
Prepaid expenses and other current assets, net 3.2    3.2 
Property, plant and equipment, net 16.5  (1.5) 15.0 
Identifiable intangible assets 273.0  1.0  274.0 
Other assets 2.0  0.1  2.1 
Accounts payable (20.9)   (20.9)
Other accrued liabilities (3.9) (0.3) (4.2)
Other liabilities (0.9)   (0.9)
Deferred income taxes (68.4) (0.9) (69.3)
Net assets before goodwill from acquisition 270.1  (1.6) 268.5 
Goodwill from acquisition 349.7  1.6  351.3 
Net assets acquired $ 619.8  $   $ 619.8 
(4)    GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
As of March 31, 2022, we have not yet finalized the purchase accounting related to acquisitions completed after March 31, 2021 and the amounts recorded represent preliminary values. During the three months ended March 31, 2022, we made purchase accounting adjustments impacting goodwill, deferred income taxes and property, plant and equipment. We expect to finalize our purchase accounting during the measurement period which will be no later than one year following the acquisition date.
Goodwill
The following table shows changes in the carrying amount of goodwill from December 31, 2021 to March 31, 2022 by reportable segment:
Performance
Coatings
Mobility
Coatings
Total
Balance at December 31, 2021 $ 1,513.4  $ 79.3  $ 1,592.7 
Purchase accounting adjustments 1.8    1.8 
Foreign currency translation (19.4) (0.7) (20.1)
Balance at March 31, 2022 $ 1,495.8  $ 78.6  $ 1,574.4 

10

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Identifiable Intangible Assets
The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
March 31, 2022 Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology $ 570.7  $ (431.9) $ 138.8  10.2
Trademarks—indefinite-lived 264.1  —  264.1  Indefinite
Trademarks—definite-lived 132.8  (46.0) 86.8  14.4
Customer relationships 1,129.2  (381.9) 747.3  19.2
Other 14.1  (13.6) 0.5  5.0
Total $ 2,110.9  $ (873.4) $ 1,237.5 
December 31, 2021 Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology $ 575.3  $ (420.9) $ 154.4  10.2
Trademarks—indefinite-lived 266.7  —  266.7  Indefinite
Trademarks—definite-lived 134.5  (43.8) 90.7  14.4
Customer relationships 1,131.8  (366.6) 765.2  19.2
Other 14.5  (13.3) 1.2  5.0
Total $ 2,122.8  $ (844.6) $ 1,278.2 
The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2022 and each of the succeeding five years is:
Remainder of 2022 $ 96.2 
2023 89.6 
2024 84.8 
2025 84.2 
2026 83.7 
2027 82.6 
(5)    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, 2022 and 2021, we incurred costs for termination benefits of $2.4 million and $4.5 million, respectively. The majority of our termination benefits 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, 2021 to March 31, 2022:
2022 Activity
Balance at December 31, 2021 $ 57.5 
Expenses, net of changes to estimates 2.4 
Payments made (15.0)
Foreign currency translation (0.5)
Balance at March 31, 2022 $ 44.4 

11

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(6)    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, 2022 and December 31, 2021, we had outstanding bank guarantees of $5.1 million and $5.7 million, respectively. A portion of our bank guarantees expire between 2022 and 2036, 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. We did not have any liabilities related to our outstanding bank guarantees recorded at March 31, 2022 and December 31, 2021.
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. We have concluded that losses from this matter are probable and that a majority of losses would be covered under our insurance policies, subject to deductible and policy limits as defined in our policies.
For the three months ended March 31, 2022 and March 31, 2021, we recorded expenses of $0.1 million and $94.4 million, respectively, within other operating charges in the condensed consolidated statements of operations. At March 31, 2022 and December 31, 2021, we had $38.2 million and $52.7 million, respectively, recorded for estimated insurance receivables within accounts and notes receivable, net in the condensed consolidated balance sheets. Liabilities of $48.6 million and $49.7 million are recorded as other accrued liabilities in the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively. The recorded probable losses remain 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 as well as the availability of additional insurance coverage.
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 condensed 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.

12

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(7)    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, 2022 and 2021:
Three Months Ended March 31,
2022 2021
Components of net periodic benefit cost:
Net periodic benefit cost:
Service cost $ 1.7  $ 1.8 
Interest cost 2.4  2.0 
Expected return on plan assets (3.2) (3.4)
Amortization of actuarial losses, net 0.9  1.2 
Net periodic benefit cost $ 1.8  $ 1.6 
All non-service components of net periodic benefit cost are recorded in other expense (income), net within the accompanying condensed consolidated statements of operations.
(8)    STOCK-BASED COMPENSATION
During the three months ended March 31, 2022 and 2021, we recognized expenses of $5.3 million and $3.6 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 $0.6 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.
2022 Activity
A summary of award activity by type for the three months ended March 31, 2022 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, 2022 1.4  $ 26.30 
Granted   $  
Exercised   $  
Forfeited / Expired   $  
Outstanding at March 31, 2022 1.4  $ 26.30 
Vested and expected to vest at March 31, 2022 1.4  $ 26.30  $ 2.5  4.36
Exercisable at March 31, 2022 1.4  $ 26.30  $ 2.5  4.30
At March 31, 2022, there was an immaterial amount of unrecognized expense relating to unvested stock options that is expected to be amortized over the weighted average period of 0.2 years.
Restricted Stock Units Units
(millions)
Weighted-Average
Fair Value
Outstanding at January 1, 2022 1.1  $ 28.85 
Granted 0.6  $ 28.87 
Vested (0.4) $ 28.43 
Forfeited (1)
  $ 28.78 
Outstanding at March 31, 2022 1.3  $ 29.00 
(1)    Activity during the three months ended March 31, 2022 rounds to zero.

13

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Tax shortfall expenses on the vesting of restricted stock awards and restricted stock units during the three months ended March 31, 2022 was $0.1 million.
At March 31, 2022, there was $25.7 million of unamortized expense relating to unvested restricted stock units that is expected to be amortized over a weighted average period of 1.7 years.
Performance Share Units Units
(millions)
Weighted-Average
Fair Value
Outstanding at January 1, 2022 0.8  $ 30.10 
Granted 0.4  $ 30.61 
Vested (0.1) $ 29.12 
Forfeited (0.2) $ 29.61 
Outstanding at March 31, 2022 0.9  $ 30.46 
Our performance share units allow for participants to vest in more or less than the targeted number of shares granted. Some of our performance share units are performing at the applicable target while others are currently performing below the applicable targets. We currently expect a total of 0.5 million shares with a weighted average fair value per share of $30.30 to vest at the respective vesting dates for such awards. At March 31, 2022, there is $14.4 million of unamortized expense relating to unvested performance share units that is expected to be amortized over a weighted average period of 2.7 years. The forfeitures include performance share units that vested below threshold payout.
(9)    OTHER EXPENSE (INCOME), NET
Three Months Ended March 31,
2022 2021
Foreign exchange losses, net $ 2.6  $ 1.8 
Other miscellaneous income, net (0.8) (2.2)
Total $ 1.8  $ (0.4)
(10)    INCOME TAXES
Our effective income tax rates for the three months ended March 31, 2022 and 2021 are as follows:
Three Months Ended March 31,
2022 2021
Effective Tax Rate 21.2  % 19.5  %
The higher effective tax rate for the three months ended March 31, 2022 was primarily due to the unfavorable impact of net currency exchange losses in 2022. These adjustments are partially offset by the favorable impact of changes in valuation allowance and unrecognized tax benefits.

The effective tax rate for the three months ended March 31, 2022 differs from the U.S. Federal statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded the unfavorable impact of net currency exchange losses, increase in valuation allowance and foreign taxes. These adjustments were offset by the favorable adjustments for earnings in jurisdictions where the statutory rate is lower than the U.S. Federal statutory rate and decrease in unrecognized tax benefits.

The Company anticipates that it is reasonably possible it will settle up to $11.2 million, exclusive of interest and penalties, of its current unrecognized tax benefits within the next 12 months due to the expected conclusion of ongoing tax audits.

14

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(11)    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 stock units and performance share units. 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) 2022 2021
Net income to common shareholders $ 41.5  $ 15.2 
Basic weighted average shares outstanding 224.7  233.9 
Diluted weighted average shares outstanding 225.2  234.7 
Net income per common share:
Basic net income per share $ 0.18  $ 0.06 
Diluted net income per share $ 0.18  $ 0.06 
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, 2022 and 2021 were 1.0 million and 1.5 million, respectively.
(12)    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, changes in geopolitical matters, and changes in customer payment terms, including the ongoing impacts from COVID-19.
March 31, 2022 December 31, 2021
Accounts receivable - trade, net (1)
$ 854.0  $ 760.4 
Notes receivable 25.3  24.7 
Other (2)
150.5  152.4 
Total $ 1,029.8  $ 937.5 
(1)    Allowance for doubtful accounts was $25.5 million and $22.0 million at March 31, 2022 and December 31, 2021, respectively.
(2)    Includes $38.2 million and $52.7 million at March 31, 2022 and December 31, 2021, respectively, of insurance recoveries related to the operational matter as discussed further in Note 6.
Bad debt expense of $(0.5) million and $0.7 million was included within selling, general and administrative expenses for the three months ended March 31, 2022 and 2021, respectively, and an additional $4.1 million related to sanctions imposed on Russia in response to the conflict with Ukraine was included in other operating charges for the three months ended March 31, 2022.
(13)    INVENTORIES
March 31, 2022 December 31, 2021
Finished products $ 416.9  $ 355.9 
Semi-finished products 100.9  109.7 
Raw materials 220.1  180.8 
Stores and supplies 26.1  23.3 
Total $ 764.0  $ 669.7 
Inventory reserves were $17.1 million and $15.6 million at March 31, 2022 and December 31, 2021, respectively.

15

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(14)    PROPERTY, PLANT AND EQUIPMENT, NET
  March 31, 2022 December 31, 2021
Property, plant and equipment $ 2,333.1  $ 2,299.4 
Accumulated depreciation (1,148.7) (1,113.2)
Property, plant, and equipment, net $ 1,184.4  $ 1,186.2 
Depreciation expense amounted to $30.1 million and $31.9 million for the three months ended March 31, 2022 and 2021, respectively.
(15)    BORROWINGS
Borrowings are summarized as follows:
March 31, 2022 December 31, 2021
2024 Dollar Term Loans $ 2,032.8  $ 2,038.9 
2025 Euro Senior Notes 501.8  508.8 
2027 Dollar Senior Notes 500.0  500.0 
2029 Dollar Senior Notes 700.0  700.0 
Short-term and other borrowings 110.6  113.8 
Unamortized original issue discount (4.1) (4.6)
Unamortized deferred financing costs (25.8) (27.3)
Total borrowings, net 3,815.3  3,829.6 
Less:
Short-term borrowings 51.8  55.4 
Current portion of long-term borrowings 24.3  24.3 
Long-term debt $ 3,739.2  $ 3,749.9 
Revolving Credit Facility
At March 31, 2022 and December 31, 2021, letters of credit issued under the Revolving Credit Facility totaled $22.1 million, which reduced the availability under the Revolving Credit Facility. Availability under the Revolving Credit Facility was $527.9 million at March 31, 2022 and December 31, 2021.

16

Table of Contents
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Supplier financing arrangements
We have a financing program in China which is utilized to finance the purchases of goods and services from our suppliers through local banking institutions. The payment terms under the financing program vary, but the program has a weighted average maturity date that approximates 90 days. These financing arrangements are included in current portion of borrowings within the consolidated balance sheets and at the time of issuance each transaction is treated as a non-cash financing activity within the consolidated statements of cash flows. Upon settlement of the financing, the cash outflow is classified as a financing activity within the consolidated statements of cash flows. Amounts outstanding under this program were $21.2 million and $18.4 million at March 31, 2022 and March 31, 2021, respectively, including $4.2 million and $2.6 million, respectively, related to purchases of property, plant and equipment. Cash outflows under this program were $24.1 million and $13.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively.