☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Bermuda | 2851 | 98-1073028 | ||||||||||||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
Common Shares, $1.00 par value | AXTA | New York Stock Exchange | ||||||||||||
(Title of class) | (Trading symbol) | (Exchange on which registered) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Net sales | $ | 1,126.8 | $ | 652.7 | $ | 2,190.4 | $ | 1,636.2 | ||||||||||||||||||
Cost of goods sold | 752.8 | 499.2 | 1,437.3 | 1,146.0 | ||||||||||||||||||||||
Selling, general and administrative expenses | 184.2 | 154.2 | 363.3 | 349.6 | ||||||||||||||||||||||
Other operating (benefits) charges | (45.7) | 24.7 | 57.1 | 56.3 | ||||||||||||||||||||||
Research and development expenses | 15.8 | 11.2 | 31.4 | 27.8 | ||||||||||||||||||||||
Amortization of acquired intangibles | 29.3 | 27.9 | 58.3 | 55.9 | ||||||||||||||||||||||
Income (loss) from operations | 190.4 | (64.5) | 243.0 | 0.6 | ||||||||||||||||||||||
Interest expense, net | 33.4 | 36.1 | 66.9 | 72.6 | ||||||||||||||||||||||
Other income, net | (8.1) | (2.2) | (8.5) | (1.4) | ||||||||||||||||||||||
Income (loss) before income taxes | 165.1 | (98.4) | 184.6 | (70.6) | ||||||||||||||||||||||
Provision (benefit) for income taxes | 38.7 | (15.2) | 42.5 | (39.8) | ||||||||||||||||||||||
Net income (loss) | 126.4 | (83.2) | 142.1 | (30.8) | ||||||||||||||||||||||
Less: Net (loss) income attributable to noncontrolling interests | 0 | (0.4) | 0.5 | (0.2) | ||||||||||||||||||||||
Net income (loss) attributable to controlling interests | $ | 126.4 | $ | (82.8) | $ | 141.6 | $ | (30.6) | ||||||||||||||||||
Basic net income (loss) per share | $ | 0.54 | $ | (0.35) | $ | 0.61 | $ | (0.13) | ||||||||||||||||||
Diluted net income (loss) per share | $ | 0.54 | $ | (0.35) | $ | 0.60 | $ | (0.13) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net sales | $ | 652.7 | $ | 1,157.5 | $ | 1,636.2 | $ | 2,276.8 | ||||||||
Cost of goods sold | 499.2 | 748.4 | 1,146.0 | 1,499.7 | ||||||||||||
Selling, general and administrative expenses | 154.2 | 202.4 | 349.6 | 418.0 | ||||||||||||
Other operating charges | 24.7 | 2.5 | 56.3 | 9.6 | ||||||||||||
Research and development expenses | 11.2 | 17.9 | 27.8 | 36.1 | ||||||||||||
Amortization of acquired intangibles | 27.9 | 28.4 | 55.9 | 56.9 | ||||||||||||
(Loss) income from operations | (64.5 | ) | 157.9 | 0.6 | 256.5 | |||||||||||
Interest expense, net | 36.1 | 41.0 | 72.6 | 82.3 | ||||||||||||
Other income, net | (2.2 | ) | (0.9 | ) | (1.4 | ) | (1.9 | ) | ||||||||
(Loss) income before income taxes | (98.4 | ) | 117.8 | (70.6 | ) | 176.1 | ||||||||||
(Benefit) provision for income taxes | (15.2 | ) | 17.9 | (39.8 | ) | 32.1 | ||||||||||
Net (loss) income | (83.2 | ) | 99.9 | (30.8 | ) | 144.0 | ||||||||||
Less: Net (loss) income attributable to noncontrolling interests | (0.4 | ) | 1.5 | (0.2 | ) | 2.2 | ||||||||||
Net (loss) income attributable to controlling interests | $ | (82.8 | ) | $ | 98.4 | $ | (30.6 | ) | $ | 141.8 | ||||||
Basic net (loss) income per share | $ | (0.35 | ) | $ | 0.42 | $ | (0.13 | ) | $ | 0.61 | ||||||
Diluted net (loss) income per share | $ | (0.35 | ) | $ | 0.42 | $ | (0.13 | ) | $ | 0.60 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Net income (loss) | $ | 126.4 | $ | (83.2) | $ | 142.1 | $ | (30.8) | ||||||||||||||||||
Other comprehensive income (loss), before tax: | ||||||||||||||||||||||||||
Foreign currency translation adjustments | 39.3 | 7.0 | 1.7 | (79.5) | ||||||||||||||||||||||
Unrealized gain (loss) on derivatives | 6.9 | (2.6) | 16.1 | (43.3) | ||||||||||||||||||||||
Unrealized gain on pension and other benefit plan obligations | 1.3 | 0.2 | 2.5 | 0 | ||||||||||||||||||||||
Other comprehensive income (loss), before tax | 47.5 | 4.6 | 20.3 | (122.8) | ||||||||||||||||||||||
Income tax provision (benefit) related to items of other comprehensive income (loss) | 1.3 | (0.6) | 3.1 | (6.4) | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 46.2 | 5.2 | 17.2 | (116.4) | ||||||||||||||||||||||
Comprehensive income (loss) | 172.6 | (78.0) | 159.3 | (147.2) | ||||||||||||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.6 | 0.5 | 0.9 | (2.5) | ||||||||||||||||||||||
Comprehensive income (loss) attributable to controlling interests | $ | 172.0 | $ | (78.5) | $ | 158.4 | $ | (144.7) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net (loss) income | $ | (83.2 | ) | $ | 99.9 | $ | (30.8 | ) | $ | 144.0 | ||||||
Other comprehensive income (loss), before tax: | ||||||||||||||||
Foreign currency translation adjustments | 7.0 | (0.9 | ) | (79.5 | ) | 12.4 | ||||||||||
Unrealized loss on derivatives | (2.6 | ) | (20.3 | ) | (43.3 | ) | (34.9 | ) | ||||||||
Unrealized gain on pension plan obligations | 0.2 | — | — | 0.5 | ||||||||||||
Other comprehensive income (loss), before tax | 4.6 | (21.2 | ) | (122.8 | ) | (22.0 | ) | |||||||||
Income tax benefit related to items of other comprehensive loss | (0.6 | ) | (3.1 | ) | (6.4 | ) | (4.8 | ) | ||||||||
Other comprehensive income (loss), net of tax | 5.2 | (18.1 | ) | (116.4 | ) | (17.2 | ) | |||||||||
Comprehensive (loss) income | (78.0 | ) | 81.8 | (147.2 | ) | 126.8 | ||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.5 | 3.7 | (2.5 | ) | 4.9 | |||||||||||
Comprehensive (loss) income attributable to controlling interests | $ | (78.5 | ) | $ | 78.1 | $ | (144.7 | ) | $ | 121.9 |
June 30, 2021 | December 31, 2020 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,230.9 | $ | 1,360.9 | ||||||||||
Restricted cash | 10.6 | 3.1 | ||||||||||||
Accounts and notes receivable, net | 1,035.7 | 869.8 | ||||||||||||
Inventories | 614.5 | 559.9 | ||||||||||||
Prepaid expenses and other current assets | 156.5 | 132.2 | ||||||||||||
Total current assets | 3,048.2 | 2,925.9 | ||||||||||||
Property, plant and equipment, net | 1,183.3 | 1,194.5 | ||||||||||||
Goodwill | 1,294.3 | 1,294.9 | ||||||||||||
Identifiable intangibles, net | 1,096.6 | 1,148.8 | ||||||||||||
Other assets | 587.0 | 593.1 | ||||||||||||
Total assets | $ | 7,209.4 | $ | 7,157.2 | ||||||||||
Liabilities, Shareholders’ Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 597.5 | $ | 564.4 | ||||||||||
Current portion of borrowings | 40.5 | 54.2 | ||||||||||||
Other accrued liabilities | 578.2 | 562.3 | ||||||||||||
Total current liabilities | 1,216.2 | 1,180.9 | ||||||||||||
Long-term borrowings | 3,813.4 | 3,838.5 | ||||||||||||
Accrued pensions | 296.0 | 309.9 | ||||||||||||
Deferred income taxes | 116.6 | 114.0 | ||||||||||||
Other liabilities | 231.9 | 234.1 | ||||||||||||
Total liabilities | 5,674.1 | 5,677.4 | ||||||||||||
Commitments and contingent liabilities (Note 5) | 0 | 0 | ||||||||||||
Shareholders’ equity: | ||||||||||||||
Common shares, $1.00 par, 1,000.0 shares authorized, 251.7 and 250.9 shares issued at June 30, 2021 and December 31, 2020, respectively | 251.7 | 250.9 | ||||||||||||
Capital in excess of par | 1,506.9 | 1,487.1 | ||||||||||||
Retained earnings | 704.9 | 563.3 | ||||||||||||
Treasury shares, at cost, 20.3 and 16.1 shares at June 30, 2021 and December 31, 2020, respectively | (567.2) | (443.5) | ||||||||||||
Accumulated other comprehensive loss | (408.0) | (424.8) | ||||||||||||
Total Axalta shareholders’ equity | 1,488.3 | 1,433.0 | ||||||||||||
Noncontrolling interests | 47.0 | 46.8 | ||||||||||||
Total shareholders’ equity | 1,535.3 | 1,479.8 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 7,209.4 | $ | 7,157.2 |
June 30, 2020 | December 31, 2019 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,123.6 | $ | 1,017.5 | ||||
Restricted cash | 2.9 | 3.0 | ||||||
Accounts and notes receivable, net | 664.0 | 830.1 | ||||||
Inventories | 539.3 | 591.6 | ||||||
Prepaid expenses and other current assets | 150.4 | 131.2 | ||||||
Total current assets | 2,480.2 | 2,573.4 | ||||||
Property, plant and equipment, net | 1,158.2 | 1,223.0 | ||||||
Goodwill | 1,209.3 | 1,208.9 | ||||||
Identifiable intangibles, net | 1,158.1 | 1,223.9 | ||||||
Other assets | 662.8 | 588.8 | ||||||
Total assets | $ | 6,668.6 | $ | 6,818.0 | ||||
Liabilities, Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 331.9 | $ | 483.7 | ||||
Current portion of borrowings | 41.3 | 43.9 | ||||||
Other accrued liabilities | 487.7 | 545.3 | ||||||
Total current liabilities | 860.9 | 1,072.9 | ||||||
Long-term borrowings | 3,980.0 | 3,790.2 | ||||||
Accrued pensions | 278.3 | 285.2 | ||||||
Deferred income taxes | 108.7 | 115.5 | ||||||
Other liabilities | 182.1 | 144.6 | ||||||
Total liabilities | 5,410.0 | 5,408.4 | ||||||
Commitments and contingencies (Note 5) | ||||||||
Shareholders’ equity: | ||||||||
Common shares, $1.00 par, 1,000.0 shares authorized, 250.6 and 250.1 shares issued at June 30, 2020 and December 31, 2019, respectively | 250.5 | 249.9 | ||||||
Capital in excess of par | 1,479.5 | 1,474.1 | ||||||
Retained earnings | 411.1 | 443.2 | ||||||
Treasury shares, at cost, 15.2 shares at June 30, 2020 and December 31, 2019 | (418.4 | ) | (417.5 | ) | ||||
Accumulated other comprehensive loss | (509.6 | ) | (395.5 | ) | ||||
Total Axalta shareholders’ equity | 1,213.1 | 1,354.2 | ||||||
Noncontrolling interests | 45.5 | 55.4 | ||||||
Total shareholders’ equity | 1,258.6 | 1,409.6 | ||||||
Total liabilities and shareholders’ equity | $ | 6,668.6 | $ | 6,818.0 |
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 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 126.4 | — | — | 0 | 126.4 | |||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain on derivatives, net of tax of $1.0 million | — | — | — | — | — | 5.9 | — | 5.9 | |||||||||||||||||||||||||||||||||||||||
Long-term employee benefit plans, net of tax of $0.3 million | — | — | — | — | — | 1.0 | — | 1.0 | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation, net of tax of $0.0 million | — | — | — | — | — | 38.7 | 0.6 | 39.3 | |||||||||||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | 126.4 | — | 45.6 | 0.6 | 172.6 | |||||||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 4.2 | — | — | — | — | 4.2 | |||||||||||||||||||||||||||||||||||||||
Shares issued under compensation plans | 0.5 | 0.5 | 12.2 | — | — | — | — | 12.7 | |||||||||||||||||||||||||||||||||||||||
Common stock purchases | (1.9) | — | — | — | (60.0) | — | — | (60.0) | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 231.4 | $ | 251.7 | $ | 1,506.9 | $ | 704.9 | $ | (567.2) | $ | (408.0) | $ | 47.0 | $ | 1,535.3 | ||||||||||||||||||||||||||||||||
Common Stock | 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 | 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 | Balance at December 31, 2019 | 234.9 | $ | 249.9 | $ | 1,474.1 | $ | 443.2 | $ | (417.5) | $ | (395.5) | $ | 55.4 | $ | 1,409.6 | ||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss): | Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 52.2 | — | — | 0.2 | 52.4 | 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 | ) | Net realized and unrealized loss on derivatives, net of tax benefit of $6.0 million | — | — | — | — | — | (34.7) | — | (34.7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term employee benefit plans, net of tax benefit of $0.2 million | — | — | — | — | — | (0.4 | ) | — | (0.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term employee benefit plans, net of tax of $0.2 million | 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 | ) | Foreign currency translation, net of tax of $0.0 million | — | — | — | — | — | (83.3) | (3.2) | (86.5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | 52.2 | — | (118.4 | ) | (3.0 | ) | (69.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive loss | Total comprehensive loss | — | — | — | 52.2 | — | (118.4) | (3.0) | (69.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of an accounting change | — | — | — | (1.5 | ) | — | — | — | (1.5 | ) | Cumulative effect of an accounting change | — | — | — | (1.5) | — | — | — | (1.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 5.1 | — | — | — | — | 5.1 | Recognition of stock-based compensation | — | — | 5.1 | — | — | — | — | 5.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under compensation plans | 0.4 | 0.5 | (1.6 | ) | — | — | — | — | (1.1 | ) | Shares issued under compensation plans | 0.4 | 0.5 | (1.6) | — | — | — | — | (1.1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership changes relating to noncontrolling interests | — | — | 0.5 | — | — | — | (2.1 | ) | (1.6 | ) | Ownership changes relating to noncontrolling interests | — | — | 0.5 | — | — | — | (2.1) | (1.6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared to noncontrolling interests | — | — | — | — | — | — | (0.5 | ) | (0.5 | ) | 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 | Balance at March 31, 2020 | 235.3 | 250.4 | 1,478.1 | 493.9 | (417.5) | (513.9) | 49.8 | 1,340.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss): | Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (82.8 | ) | — | — | (0.4 | ) | (83.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | Net income | — | — | — | (82.8) | — | — | (0.4) | (83.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized loss on derivatives, net of tax benefit of $0.4 million | — | — | — | — | — | (2.2 | ) | — | (2.2 | ) | Net realized and unrealized loss on derivatives, net of tax benefit of $0.4 million | — | — | — | — | — | (2.2) | — | (2.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term employee benefit plans, net of tax of $0.2 million | — | — | — | — | — | 0.4 | — | 0.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term employee benefit plans, net of tax benefit of $0.2 million | Long-term employee benefit plans, net of tax benefit of $0.2 million | — | — | — | — | — | 0.4 | — | 0.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation, net of tax of $0.0 million | — | — | — | — | — | 6.1 | 0.9 | 7.0 | Foreign currency translation, net of tax of $0.0 million | — | — | — | — | — | 6.1 | 0.9 | 7.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | (82.8 | ) | — | 4.3 | 0.5 | (78.0 | ) | Total comprehensive income (loss) | — | — | — | (82.8) | — | 4.3 | 0.5 | (78.0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 6.1 | — | — | — | — | 6.1 | Recognition of stock-based compensation | — | — | 6.1 | — | — | — | — | 6.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under compensation plans | 0.1 | 0.1 | 1.1 | — | — | — | — | 1.2 | Shares issued under compensation plans | 0.1 | 0.1 | 1.1 | — | — | — | — | 1.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in redeemable noncontrolling interest | — | — | (5.8 | ) | — | — | — | (4.8 | ) | (10.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in redeemable noncontrolling interests | Changes in redeemable noncontrolling interests | — | — | (5.8) | — | — | — | (4.8) | (10.6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock purchases | — | — | — | — | (0.9 | ) | — | — | (0.9 | ) | Common stock purchases | — | — | — | — | (0.9) | — | — | (0.9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 235.4 | $ | 250.5 | $ | 1,479.5 | $ | 411.1 | $ | (418.4 | ) | $ | (509.6 | ) | $ | 45.5 | $ | 1,258.6 | Balance at June 30, 2020 | 235.4 | $ | 250.5 | $ | 1,479.5 | $ | 411.1 | $ | (418.4) | $ | (509.6) | $ | 45.5 | $ | 1,258.6 |
Common Stock | ||||||||||||||||||||||||||||||
Number of Shares | Par/Stated Value | Capital In Excess Of Par | Retained earnings | Treasury Shares, at cost | Accumulated Other Comprehensive Loss | Non controlling Interests | Total | |||||||||||||||||||||||
Balance at December 31, 2018 | 235.6 | $ | 245.3 | $ | 1,409.5 | $ | 198.6 | $ | (312.2 | ) | $ | (336.1 | ) | $ | 105.4 | $ | 1,310.5 | |||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | — | — | — | 43.4 | — | — | 0.7 | 44.1 | ||||||||||||||||||||||
Net realized and unrealized loss on derivatives, net of tax benefit of $2.2 million | — | — | — | — | — | (12.4 | ) | — | (12.4 | ) | ||||||||||||||||||||
Long-term employee benefit plans, net of tax of $0.5 million | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Foreign currency translation, net of tax of $0.0 million | — | — | — | — | — | 12.8 | 0.5 | 13.3 | ||||||||||||||||||||||
Total comprehensive income | — | — | — | 43.4 | — | 0.4 | 1.2 | 45.0 | ||||||||||||||||||||||
Cumulative effect of an accounting change | — | — | — | (0.7 | ) | — | — | — | (0.7 | ) | ||||||||||||||||||||
Recognition of stock-based compensation | — | — | 6.7 | — | — | — | — | 6.7 | ||||||||||||||||||||||
Shares issued under compensation plans | 1.1 | 1.7 | 9.7 | — | — | — | — | 11.4 | ||||||||||||||||||||||
Ownership changes relating to noncontrolling interests | — | — | 5.7 | — | — | — | (32.1 | ) | (26.4 | ) | ||||||||||||||||||||
Common stock purchases | (2.5 | ) | — | — | — | (65.8 | ) | — | — | (65.8 | ) | |||||||||||||||||||
Dividends declared to noncontrolling interests | — | — | — | — | — | — | (1.1 | ) | (1.1 | ) | ||||||||||||||||||||
Balance at March 31, 2019 | 234.2 | 247.0 | 1,431.6 | 241.3 | (378.0 | ) | (335.7 | ) | 73.4 | 1,279.6 | ||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||
Net income | — | — | — | 98.4 | — | — | 1.5 | 99.9 | ||||||||||||||||||||||
Net realized and unrealized loss on derivatives, net of tax of $2.7 million | — | — | — | — | — | (17.6 | ) | — | (17.6 | ) | ||||||||||||||||||||
Long-term employee benefit plans, net of tax of $0.4 million | — | — | — | — | — | 0.4 | — | 0.4 | ||||||||||||||||||||||
Foreign currency translation, net of tax of $0.0 million | — | — | — | — | — | (3.1 | ) | 2.2 | (0.9 | ) | ||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | 98.4 | — | (20.3 | ) | 3.7 | 81.8 | |||||||||||||||||||||
Correction to previous cumulative effect upon adoption of ASU 2014-09 | — | — | — | (3.7 | ) | — | — | — | (3.7 | ) | ||||||||||||||||||||
Recognition of stock-based compensation | — | — | (1.4 | ) | — | — | — | — | (1.4 | ) | ||||||||||||||||||||
Shares issued under compensation plans | 0.7 | 1.2 | 13.3 | — | — | — | — | 14.5 | ||||||||||||||||||||||
Ownership changes relating to noncontrolling interests | — | — | (1.7 | ) | — | — | — | (22.5 | ) | (24.2 | ) | |||||||||||||||||||
Common stock purchases | (1.6 | ) | — | — | — | (39.5 | ) | — | — | (39.5 | ) | |||||||||||||||||||
Balance at June 30, 2019 | 233.3 | $ | 248.2 | $ | 1,441.8 | $ | 336.0 | $ | (417.5 | ) | $ | (356.0 | ) | $ | 54.6 | $ | 1,307.1 |
Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||||||||
Operating activities: | Operating activities: | |||||||||||||||||||||
Net (loss) income | $ | (30.8 | ) | $ | 144.0 | |||||||||||||||||
Adjustment to reconcile net income to cash (used for) provided by operating activities: | ||||||||||||||||||||||
Net income (loss) | Net income (loss) | $ | 142.1 | $ | (30.8) | |||||||||||||||||
Adjustment to reconcile net income (loss) to cash provided by operating activities: | Adjustment to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||||||||
Depreciation and amortization | 163.2 | 180.3 | Depreciation and amortization | 155.4 | 163.2 | |||||||||||||||||
Amortization of deferred financing costs and original issue discount | 4.1 | 4.4 | Amortization of deferred financing costs and original issue discount | 4.2 | 4.1 | |||||||||||||||||
Debt extinguishment and refinancing related costs | 2.4 | 0.2 | Debt extinguishment and refinancing related costs | 0.2 | 2.4 | |||||||||||||||||
Deferred income taxes | (61.2 | ) | (1.6 | ) | Deferred income taxes | 5.2 | (61.2) | |||||||||||||||
Realized and unrealized foreign exchange losses, net | 2.8 | 2.8 | Realized and unrealized foreign exchange losses, net | 9.4 | 2.8 | |||||||||||||||||
Stock-based compensation | 11.2 | 5.3 | Stock-based compensation | 7.8 | 11.2 | |||||||||||||||||
Divestitures and impairment charges | 3.2 | 3.9 | ||||||||||||||||||||
Divestiture and impairment charges | Divestiture and impairment charges | 0 | 3.2 | |||||||||||||||||||
Interest income on swaps designated as net investment hedges | (7.3 | ) | (7.2 | ) | Interest income on swaps designated as net investment hedges | (7.1) | (7.3) | |||||||||||||||
Other non-cash, net | 8.3 | (0.6 | ) | Other non-cash, net | 9.2 | 8.3 | ||||||||||||||||
Changes in operating assets and liabilities: | Changes in operating assets and liabilities: | |||||||||||||||||||||
Trade accounts and notes receivable | 136.8 | (152.9 | ) | Trade accounts and notes receivable | (154.2) | 136.8 | ||||||||||||||||
Inventories | 32.5 | (1.4 | ) | Inventories | (59.1) | 32.5 | ||||||||||||||||
Prepaid expenses and other assets | (60.3 | ) | (81.6 | ) | Prepaid expenses and other assets | (53.4) | (60.3) | |||||||||||||||
Accounts payable | (131.0 | ) | 20.7 | Accounts payable | 60.0 | (131.0) | ||||||||||||||||
Other accrued liabilities | (87.9 | ) | (54.0 | ) | Other accrued liabilities | 24.5 | (87.9) | |||||||||||||||
Other liabilities | 11.5 | 6.5 | Other liabilities | 2.9 | 11.5 | |||||||||||||||||
Cash (used for) provided by operating activities | (2.5 | ) | 68.8 | |||||||||||||||||||
Cash provided by (used for) operating activities | Cash provided by (used for) operating activities | 147.1 | (2.5) | |||||||||||||||||||
Investing activities: | Investing activities: | |||||||||||||||||||||
Acquisitions, net of cash acquired | — | (1.9 | ) | Acquisitions, net of cash acquired | (37.6) | 0 | ||||||||||||||||
Purchase of property, plant and equipment | (42.4 | ) | (47.2 | ) | Purchase of property, plant and equipment | (60.3) | (42.4) | |||||||||||||||
Proceeds from sale of consolidated joint venture, net of cash divested | — | 8.2 | ||||||||||||||||||||
Interest proceeds on swaps designated as net investment hedges | 7.3 | 7.2 | Interest proceeds on swaps designated as net investment hedges | 7.1 | 7.3 | |||||||||||||||||
Other investing activities, net | 0.8 | — | Other investing activities, net | (0.5) | 0.8 | |||||||||||||||||
Cash used for investing activities | (34.3 | ) | (33.7 | ) | Cash used for investing activities | (91.3) | (34.3) | |||||||||||||||
Financing activities: | Financing activities: | |||||||||||||||||||||
Proceeds from long-term borrowings | 500.0 | — | Proceeds from long-term borrowings | 0 | 500.0 | |||||||||||||||||
Payments on short-term borrowings | (18.6 | ) | (20.5 | ) | Payments on short-term borrowings | (41.1) | (18.6) | |||||||||||||||
Payments on long-term borrowings | (313.1 | ) | (13.7 | ) | Payments on long-term borrowings | (14.2) | (313.1) | |||||||||||||||
Financing-related costs | (6.0 | ) | (2.1 | ) | Financing-related costs | (2.5) | (6.0) | |||||||||||||||
Purchases of common stock | (0.9 | ) | (105.3 | ) | Purchases of common stock | (123.7) | (0.9) | |||||||||||||||
Net cash flows associated with stock-based awards | 0.3 | 25.9 | Net cash flows associated with stock-based awards | 12.8 | 0.3 | |||||||||||||||||
Purchase of noncontrolling interests | (1.6 | ) | (31.1 | ) | Purchase of noncontrolling interests | 0 | (1.6) | |||||||||||||||
Other financing activities, net | (1.0 | ) | (1.1 | ) | Other financing activities, net | (1.2) | (1.0) | |||||||||||||||
Cash provided by (used for) financing activities | 159.1 | (147.9 | ) | |||||||||||||||||||
Increase (decrease) in cash | 122.3 | (112.8 | ) | |||||||||||||||||||
Cash (used for) provided by financing activities | Cash (used for) provided by financing activities | (169.9) | 159.1 | |||||||||||||||||||
(Decrease) increase in cash | (Decrease) increase in cash | (114.1) | 122.3 | |||||||||||||||||||
Effect of exchange rate changes on cash | (16.3 | ) | 1.0 | Effect of exchange rate changes on cash | (8.4) | (16.3) | ||||||||||||||||
Cash at beginning of period | 1,020.5 | 696.4 | Cash at beginning of period | 1,364.0 | 1,020.5 | |||||||||||||||||
Cash at end of period | $ | 1,126.5 | $ | 584.6 | Cash at end of period | $ | 1,241.5 | $ | 1,126.5 | |||||||||||||
Cash at end of period reconciliation: | Cash at end of period reconciliation: | |||||||||||||||||||||
Cash and cash equivalents | $ | 1,123.6 | $ | 577.3 | Cash and cash equivalents | $ | 1,230.9 | $ | 1,123.6 | |||||||||||||
Restricted cash | 2.9 | 7.3 | Restricted cash | 10.6 | 2.9 | |||||||||||||||||
Cash at end of period | $ | 1,126.5 | $ | 584.6 | Cash at end of period | $ | 1,241.5 | $ | 1,126.5 |
Note | Page | |||||||
Performance Coatings | Transportation Coatings | Total | ||||||||||
Balance at December 31, 2019 | $ | 1,130.9 | $ | 78.0 | $ | 1,208.9 | ||||||
Foreign currency translation | 0.2 | 0.2 | 0.4 | |||||||||
Balance at June 30, 2020 | $ | 1,131.1 | $ | 78.2 | $ | 1,209.3 |
Performance Coatings | Mobility Coatings | Total | ||||||||||||||||||
Balance at December 31, 2020 | $ | 1,211.3 | $ | 83.6 | $ | 1,294.9 | ||||||||||||||
Goodwill from acquisitions | 23.1 | 0 | 23.1 | |||||||||||||||||
Foreign currency translation | (22.1) | (1.6) | (23.7) | |||||||||||||||||
Balance at June 30, 2021 | $ | 1,212.3 | $ | 82.0 | $ | 1,294.3 |
June 30, 2021 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||||||||||||||||||
Technology | $ | 561.5 | $ | (404.3) | $ | 157.2 | 10.4 | |||||||||||||||||||
Trademarks—indefinite-lived | 276.8 | — | 276.8 | Indefinite | ||||||||||||||||||||||
Trademarks—definite-lived | 103.1 | (40.3) | 62.8 | 15.8 | ||||||||||||||||||||||
Customer relationships | 949.2 | (352.0) | 597.2 | 19.0 | ||||||||||||||||||||||
Other | 15.0 | (12.4) | 2.6 | 5.0 | ||||||||||||||||||||||
Total | $ | 1,905.6 | $ | (809.0) | $ | 1,096.6 |
June 30, 2020 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted Average Amortization Periods (years) | ||||||||||||||||||||||||||||||||||||
December 31, 2020 | December 31, 2020 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | |||||||||||||||||||||||||||||||||||
Technology | $ | 541.0 | $ | (338.0 | ) | $ | 203.0 | 10.4 | Technology | $ | 564.8 | $ | (383.6) | $ | 181.2 | 10.4 | ||||||||||||||||||||||||
Trademarks - indefinite-lived | 265.9 | — | 265.9 | Indefinite | ||||||||||||||||||||||||||||||||||||
Trademarks - definite-lived | 98.9 | (32.8 | ) | 66.1 | 15.8 | |||||||||||||||||||||||||||||||||||
Trademarks—indefinite-lived | Trademarks—indefinite-lived | 282.9 | — | 282.9 | Indefinite | |||||||||||||||||||||||||||||||||||
Trademarks—definite-lived | Trademarks—definite-lived | 103.6 | (37.5) | 66.1 | 16.0 | |||||||||||||||||||||||||||||||||||
Customer relationships | 908.1 | (290.7 | ) | 617.4 | 19.0 | Customer relationships | 943.6 | (329.3) | 614.3 | 19.0 | ||||||||||||||||||||||||||||||
Other | 15.2 | (9.5 | ) | 5.7 | 5.0 | Other | 15.3 | (11.0) | 4.3 | 5.0 | ||||||||||||||||||||||||||||||
Total | $ | 1,829.1 | $ | (671.0 | ) | $ | 1,158.1 | Total | $ | 1,910.2 | $ | (761.4) | $ | 1,148.8 |
December 31, 2019 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted Average Amortization Periods (years) | ||||||||||
Technology | $ | 540.2 | $ | (310.6 | ) | $ | 229.6 | 10.4 | ||||||
Trademarks—indefinite-lived | 264.9 | — | 264.9 | Indefinite | ||||||||||
Trademarks—definite-lived | 99.7 | (30.1 | ) | 69.6 | 15.8 | |||||||||
Customer relationships | 923.8 | (271.3 | ) | 652.5 | 19.1 | |||||||||
Other | 15.2 | (7.9 | ) | 7.3 | 5.0 | |||||||||
Total | $ | 1,843.8 | $ | (619.9 | ) | $ | 1,223.9 |
Remainder of 2020 | $ | 57.5 | ||
2021 | 111.7 | |||
2022 | 109.6 | |||
2023 | 70.2 | |||
2024 | 65.4 | |||
2025 | 64.7 |
2020 Activity | ||||
Balance at December 31, 2019 | $ | 78.0 | ||
Expenses, net of changes to estimates | 32.2 | |||
Payments made | (37.9 | ) | ||
Foreign currency translation | 0.1 | |||
Balance at June 30, 2020 | $ | 72.4 |
2021 Activity | ||||||||
Balance at December 31, 2020 | $ | 55.8 | ||||||
Expenses, net of changes to estimates | 27.0 | |||||||
Payments made | (24.7) | |||||||
Foreign currency translation | (1.2) | |||||||
Balance at June 30, 2021 | $ | 56.9 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||
Net periodic benefit cost: | ||||||||||||||||
Service cost | $ | 1.9 | $ | 1.7 | $ | 3.7 | $ | 3.6 | ||||||||
Interest cost | 2.3 | 3.4 | 4.6 | 6.6 | ||||||||||||
Expected return on plan assets | (3.1 | ) | (3.5 | ) | (6.3 | ) | (7.0 | ) | ||||||||
Amortization of actuarial loss, net | 0.8 | 0.4 | 1.8 | 0.9 | ||||||||||||
Plan curtailments | (0.6 | ) | — | (1.8 | ) | — | ||||||||||
Net periodic benefit cost | $ | 1.3 | $ | 2.0 | $ | 2.0 | $ | 4.1 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||||||||||||
Net periodic benefit cost: | ||||||||||||||||||||||||||
Service cost | $ | 2.0 | $ | 1.9 | $ | 3.8 | $ | 3.7 | ||||||||||||||||||
Interest cost | 1.9 | 2.3 | 3.9 | 4.6 | ||||||||||||||||||||||
Expected return on plan assets | (3.5) | (3.1) | (6.9) | (6.3) | ||||||||||||||||||||||
Amortization of actuarial loss, net | 1.3 | 0.8 | 2.5 | 1.8 | ||||||||||||||||||||||
Plan curtailments | 0 | (0.6) | 0 | (1.8) | ||||||||||||||||||||||
Net periodic benefit cost | $ | 1.7 | $ | 1.3 | $ | 3.3 | $ | 2.0 |
Stock Options | Awards (in millions) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (in millions) | Weighted Average Remaining Contractual Life (years) | |||||||||
Outstanding at January 1, 2020 | 3.0 | $ | 25.92 | ||||||||||
Granted | — | $ | — | ||||||||||
Exercised (1) | — | $ | 14.61 | ||||||||||
Forfeited (1) | — | $ | 28.24 | ||||||||||
Outstanding at June 30, 2020 | 3.0 | $ | 26.27 | ||||||||||
Vested and expected to vest at June 30, 2020 | 3.0 | $ | 26.27 | $ | 5.4 | 5.24 | |||||||
Exercisable at June 30, 2020 | 2.4 | $ | 25.94 | $ | 5.4 | 4.49 |
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 | 0 | $ | 0 | |||||||||||||||||||||||
Exercised | (0.5) | $ | 28.26 | |||||||||||||||||||||||
Forfeited / Expired | (0.4) | $ | 32.00 | |||||||||||||||||||||||
Outstanding at June 30, 2021 | 1.6 | $ | 25.77 | |||||||||||||||||||||||
Vested and expected to vest at June 30, 2021 | 1.6 | $ | 25.77 | $ | 7.8 | 5.27 | ||||||||||||||||||||
Exercisable at June 30, 2021 | 1.4 | $ | 25.64 | $ | 7.2 | 4.98 |
Restricted Stock Awards and Restricted Stock Units | Awards/Units (millions) | Weighted-Average Fair Value | |||||||||||||||||||
Outstanding at January 1, 2020 | 1.2 | $ | 28.45 | ||||||||||||||||||
Restricted Stock Awards and Restricted Stock Units (1) | Restricted Stock Awards and Restricted Stock Units (1) | Awards/Units (millions) | Weighted-Average Fair Value | ||||||||||||||||||
Outstanding at January 1, 2021 | Outstanding at January 1, 2021 | 1.0 | $ | 28.84 | |||||||||||||||||
Granted | 0.4 | $ | 29.73 | Granted | 0.6 | $ | 28.75 | ||||||||||||||
Vested | (0.4 | ) | $ | 28.35 | Vested | (0.4) | $ | 29.06 | |||||||||||||
Forfeited | (0.1 | ) | $ | 28.13 | Forfeited | (0.1) | $ | 29.05 | |||||||||||||
Outstanding at June 30, 2020 | 1.1 | $ | 29.03 | ||||||||||||||||||
Outstanding at June 30, 2021 | Outstanding at June 30, 2021 | 1.1 | $ | 28.69 |
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 | 0 | $ | 0 | |||||||||||
Forfeited | (0.2) | $ | 31.85 | |||||||||||
Outstanding at June 30, 2021 | 0.7 | $ | 30.11 |
Performance Stock Awards and Performance Share Units | Awards/Units (millions) | Weighted-Average Fair Value | |||||
Outstanding at January 1, 2020 | 0.5 | $ | 32.11 | ||||
Granted | 0.4 | $ | 31.88 | ||||
Vested | (0.1 | ) | $ | 38.11 | |||
Forfeited | (0.1 | ) | $ | 32.95 | |||
Outstanding at June 30, 2020 | 0.7 | $ | 31.14 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Foreign exchange (gains) losses, net | $ | (0.3 | ) | $ | 2.2 | $ | 2.0 | $ | 4.6 | |||||||
Debt extinguishment and refinancing related costs | — | 0.2 | 2.4 | 0.2 | ||||||||||||
Other miscellaneous income, net | (1.9 | ) | (3.3 | ) | (5.8 | ) | (6.7 | ) | ||||||||
Total | $ | (2.2 | ) | $ | (0.9 | ) | $ | (1.4 | ) | $ | (1.9 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Foreign exchange losses (gains), net | $ | 1.8 | $ | (0.3) | $ | 3.6 | $ | 2.0 | ||||||||||||||||||
Debt extinguishment and refinancing related costs | 0.2 | 0 | 0.2 | 2.4 | ||||||||||||||||||||||
Other miscellaneous income, net (1) | (10.1) | (1.9) | (12.3) | (5.8) | ||||||||||||||||||||||
Total | $ | (8.1) | $ | (2.2) | $ | (8.5) | $ | (1.4) |
Six Months Ended June 30, | ||||||
2020 | 2019 | |||||
Effective Tax Rate | 56.4 | % | 18.2 | % |
Six Months Ended June 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
Effective Tax Rate | 23.0 | % | 56.4 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Net (loss) income to common shareholders | $ | (82.8 | ) | $ | 98.4 | $ | (30.6 | ) | $ | 141.8 | ||||||
Basic weighted average shares outstanding | 235.2 | 233.3 | 235.1 | 233.7 | ||||||||||||
Diluted weighted average shares outstanding | 235.2 | 235.4 | 235.1 | 236.0 | ||||||||||||
Net income (loss) per common share: | ||||||||||||||||
Basic net (loss) income per share | $ | (0.35 | ) | $ | 0.42 | $ | (0.13 | ) | $ | 0.61 | ||||||
Diluted net (loss) income per share | $ | (0.35 | ) | $ | 0.42 | $ | (0.13 | ) | $ | 0.60 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(In millions, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Net income (loss) to common shareholders | $ | 126.4 | $ | (82.8) | $ | 141.6 | $ | (30.6) | ||||||||||||||||||
Basic weighted average shares outstanding | 232.5 | 235.2 | 233.2 | 235.1 | ||||||||||||||||||||||
Diluted weighted average shares outstanding | 233.5 | 235.2 | 234.1 | 235.1 | ||||||||||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||||||||
Basic net income (loss) per share | $ | 0.54 | $ | (0.35) | $ | 0.61 | $ | (0.13) | ||||||||||||||||||
Diluted net income (loss) per share | $ | 0.54 | $ | (0.35) | $ | 0.60 | $ | (0.13) |
June 30, 2021 | December 31, 2020 | |||||||||||||
Accounts receivable - trade, net (1) | $ | 864.4 | $ | 738.3 | ||||||||||
Notes receivable | 26.4 | 30.3 | ||||||||||||
Other (2) | 144.9 | 101.2 | ||||||||||||
Total | $ | 1,035.7 | $ | 869.8 |
June 30, 2020 | December 31, 2019 | |||||||
Accounts receivable - trade, net (1) | $ | 548.7 | $ | 718.4 | ||||
Notes receivable | 25.0 | 24.7 | ||||||
Other | 90.3 | 87.0 | ||||||
Total | $ | 664.0 | $ | 830.1 |
June 30, 2020 | December 31, 2019 | |||||||
Finished products | $ | 294.8 | $ | 327.4 | ||||
Semi-finished products | 93.4 | 109.9 | ||||||
Raw materials | 131.1 | 133.7 | ||||||
Stores and supplies | 20.0 | 20.6 | ||||||
Total | $ | 539.3 | $ | 591.6 |
June 30, 2021 | December 31, 2020 | |||||||||||||
Finished products | $ | 324.1 | $ | 319.3 | ||||||||||
Semi-finished products | 106.2 | 92.2 | ||||||||||||
Raw materials | 161.0 | 127.2 | ||||||||||||
Stores and supplies | 23.2 | 21.2 | ||||||||||||
Total | $ | 614.5 | $ | 559.9 |
June 30, 2020 | December 31, 2019 | |||||||
Property, plant and equipment | $ | 2,198.2 | $ | 2,231.9 | ||||
Accumulated depreciation | (1,040.0 | ) | (1,008.9 | ) | ||||
Property, plant, and equipment, net | $ | 1,158.2 | $ | 1,223.0 |
June 30, 2021 | December 31, 2020 | |||||||||||||
Property, plant and equipment | $ | 2,350.3 | $ | 2,317.9 | ||||||||||
Accumulated depreciation | (1,167.0) | (1,123.4) | ||||||||||||
Property, plant, and equipment, net | $ | 1,183.3 | $ | 1,194.5 |
June 30, 2020 | December 31, 2019 | |||||||
2024 Dollar Term Loans | $ | 2,075.3 | $ | 2,387.5 | ||||
2024 Dollar Senior Notes | 500.0 | 500.0 | ||||||
2024 Euro Senior Notes | 377.0 | 375.2 | ||||||
2025 Euro Senior Notes | 506.5 | 504.0 | ||||||
2027 Dollar Senior Notes | 500.0 | — | ||||||
Short-term and other borrowings | 105.6 | 109.0 | ||||||
Unamortized original issue discount | (8.3 | ) | (10.5 | ) | ||||
Unamortized deferred financing costs | (34.8 | ) | (31.1 | ) | ||||
Total borrowings, net | 4,021.3 | 3,834.1 | ||||||
Less: | ||||||||
Short-term borrowings | 17.0 | 19.6 | ||||||
Current portion of long-term borrowings | 24.3 | 24.3 | ||||||
Long-term debt | $ | 3,980.0 | $ | 3,790.2 |
June 30, 2021 | December 31, 2020 | |||||||||||||
2024 Dollar Term Loans | $ | 2,051.0 | $ | 2,063.2 | ||||||||||
2025 Euro Senior Notes | 535.8 | 552.1 | ||||||||||||
2027 Dollar Senior Notes | 500.0 | 500.0 | ||||||||||||
2029 Dollar Senior Notes | 700.0 | 700.0 | ||||||||||||
Short-term and other borrowings | 103.0 | 118.0 | ||||||||||||
Unamortized original issue discount | (5.5) | (6.3) | ||||||||||||
Unamortized deferred financing costs | (30.4) | (34.3) | ||||||||||||
Total borrowings, net | 3,853.9 | 3,892.7 | ||||||||||||
Less: | ||||||||||||||
Short-term borrowings | 16.2 | 29.9 | ||||||||||||
Current portion of long-term borrowings | 24.3 | 24.3 | ||||||||||||
Long-term debt | $ | 3,813.4 | $ | 3,838.5 |
Period | 2027 Senior Notes Percentage | ||
2023 | 102.375 | % | |
2024 | 101.188 | % | |
2025 and thereafter | 100.000 | % |
Remainder of 2020 | $ | 23.5 | ||
2021 | 30.4 | |||
2022 | 54.2 | |||
2023 | 27.1 | |||
2024 | 2,870.3 | |||
Thereafter | 1,058.9 | |||
Total borrowings | 4,064.4 | |||
Unamortized original issue discount | (8.3 | ) | ||
Unamortized deferred financing costs | (34.8 | ) | ||
Total borrowings, net | $ | 4,021.3 |
Remainder of 2021 | $ | 26.1 | ||||||
2022 | 54.4 | |||||||
2023 | 27.3 | |||||||
2024 | 1,993.3 | |||||||
2025 | 539.1 | |||||||
Thereafter | 1,249.6 | |||||||
Total borrowings | 3,889.8 | |||||||
Unamortized original issue discount | (5.5) | |||||||
Unamortized deferred financing costs | (30.4) | |||||||
Total borrowings, net | $ | 3,853.9 |
June 30, 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) | $ | 0 | $ | 17.1 | $ | 0 | $ | 17.1 | $ | 0 | $ | 16.7 | $ | 0 | $ | 16.7 | ||||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in equity securities | 0.7 | 0 | 0 | 0.7 | 0.8 | 0 | 0 | 0.8 | ||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate caps (1) | 0 | 1.0 | 0 | 1.0 | 0 | 2.0 | 0 | 2.0 | ||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps (1) | 0 | 29.2 | 0 | 29.2 | 0 | 28.9 | 0 | 28.9 | ||||||||||||||||||||||||||||||||||||||||||
Contingent consideration | 0 | 0 | 4.4 | 4.4 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps (1) | 0 | 16.0 | 0 | 16.0 | 0 | 31.1 | 0 | 31.1 | ||||||||||||||||||||||||||||||||||||||||||
Cross-currency swaps (2) | 0 | 31.9 | 0 | 31.9 | 0 | 52.0 | 0 | 52.0 | ||||||||||||||||||||||||||||||||||||||||||
Contingent consideration | 0 | 0 | 2.9 | 2.9 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||||||||||||||||||||||
2024 Dollar Term Loans | 0 | 2,045.0 | 0 | 2,045.0 | 0 | 2,043.0 | 0 | 2,043.0 | ||||||||||||||||||||||||||||||||||||||||||
2025 Euro Senior Notes | 0 | 546.2 | 0 | 546.2 | 0 | 564.3 | 0 | 564.3 | ||||||||||||||||||||||||||||||||||||||||||
2027 Dollar Senior Notes | 0 | 524.6 | 0 | 524.6 | 0 | 533.1 | 0 | 533.1 | ||||||||||||||||||||||||||||||||||||||||||
2029 Dollar Senior Notes | 0 | 685.0 | 0 | 685.0 | 0 | 704.6 | 0 | 704.6 | ||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||
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) | $ | — | $ | 14.5 | $ | — | $ | 14.5 | $ | — | $ | 14.4 | $ | — | $ | 14.4 | ||||||||||||||||
Foreign currency forward contracts (1) (3) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Cross-currency swaps (2) | — | 19.9 | — | 19.9 | — | 8.0 | — | 8.0 | ||||||||||||||||||||||||
Investments in equity securities | 0.7 | — | — | 0.7 | 0.6 | — | — | 0.6 | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||
Interest rate caps (1) | — | 2.0 | — | 2.0 | — | 1.3 | — | 1.3 | ||||||||||||||||||||||||
Interest rate swaps (1) | — | 28.0 | — | 28.0 | — | 8.9 | — | 8.9 | ||||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||||||
Interest rate caps (1) | — | 1.0 | — | 1.0 | — | 1.2 | — | 1.2 | ||||||||||||||||||||||||
Interest rate swaps (1) | — | 44.5 | — | 44.5 | — | 20.5 | — | 20.5 | ||||||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||||
2024 Dollar Term Loans | — | 2,007.4 | — | 2,007.4 | — | 2,396.5 | — | 2,396.5 | ||||||||||||||||||||||||
2024 Dollar Senior Notes | — | 507.0 | — | 507.0 | — | 520.2 | — | 520.2 | ||||||||||||||||||||||||
2024 Euro Senior Notes | — | 375.6 | — | 375.6 | — | 388.2 | — | 388.2 | ||||||||||||||||||||||||
2025 Euro Senior Notes | — | 501.7 | — | 501.7 | — | 520.7 | — | 520.7 | ||||||||||||||||||||||||
2027 Dollar Senior Notes | — | 503.6 | — | 503.6 | — | — | — | — |
Fair Value Using Significant Unobservable Inputs (Level 3) |
Beginning balance January 1, 2021 | $ | 0 | ||||||
Activity | 0 | |||||||
Ending balance at March 31, 2021 | 0 | |||||||
Business acquisition | 7.3 | |||||||
Ending balance at June 30, | $ | 7.3 |
June 30, 2020 | December 31, 2019 | June 30, 2021 | December 31, 2020 | |||||||||||||||||||
AOCI: | AOCI: | |||||||||||||||||||||
Interest rate caps (cash flow hedges) | $ | 3.7 | $ | 3.5 | Interest rate caps (cash flow hedges) | $ | 1.4 | $ | 2.6 | |||||||||||||
Interest rate swaps (cash flow hedges) | 72.5 | 29.4 | Interest rate swaps (cash flow hedges) | 45.2 | 60.0 | |||||||||||||||||
Foreign currency forward contracts (cash flow hedges) (1) | — | — | ||||||||||||||||||||
Foreign currency forward contracts (cash flow hedges) | Foreign currency forward contracts (cash flow hedges) | 0.2 | 0.3 | |||||||||||||||||||
Cross-currency swaps (net investment hedges) | (34.4 | ) | (22.4 | ) | Cross-currency swaps (net investment hedges) | 14.8 | 35.2 | |||||||||||||||
Total AOCI | $ | 41.8 | $ | 10.5 | Total AOCI | $ | 61.6 | $ | 98.1 |
For the Three Months Ended June 30, | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||
Derivatives in Cash Flow and Net Investment Hedges | Location of Loss Recognized in Income on Derivatives | Net Amount of Loss Recognized in OCI on Derivatives | Amount of Loss (Gain) Recognized in Income | Net Amount of Loss (Gain) Recognized in OCI on Derivatives | Amount of (Gain) Loss Recognized in Income | |||||||||||||
Interest rate caps | Interest expense, net | $ | — | $ | 0.6 | $ | 3.4 | $ | (0.5 | ) | ||||||||
Interest rate swaps | Interest expense, net | 6.1 | 2.9 | 16.6 | 0.2 | |||||||||||||
Foreign currency forward contracts (1) | Cost of goods sold | — | — | — | — | |||||||||||||
Cross-currency swaps | Interest expense, net | 3.1 | (3.7 | ) | (1.6 | ) | (3.6 | ) |
For the Three Months Ended June 30, | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
Derivatives in Cash Flow and Net Investment Hedges | Location of Loss (Gain) Recognized in Income on Derivatives | Net Amount of Loss (Gain) Recognized in OCI on Derivatives | Amount of Loss (Gain) Recognized in Income | Net Amount of Loss (Gain) Recognized in OCI on Derivatives | Amount of Loss (Gain) Recognized in Income | |||||||||||||||||||||||||||
Interest rate caps | Interest expense, net | $ | 0 | $ | 0.6 | $ | 0 | $ | 0.6 | |||||||||||||||||||||||
Interest rate swaps | Interest expense, net | 0.9 | 7.2 | 6.1 | 2.9 | |||||||||||||||||||||||||||
Foreign currency forward contracts (1) | Cost of goods sold | 0.1 | 0.1 | 0 | 0 | |||||||||||||||||||||||||||
Cross-currency swaps | Interest expense, net | (0.3) | (4.7) | 3.1 | (3.7) |
For the Six Months Ended June 30, | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||
Derivatives in Cash Flow and Net Investment Hedges | Location of Loss (Gain) Recognized in Income on Derivatives | Net Amount of Loss (Gain) Recognized in OCI on Derivatives | Amount of Loss (Gain) Recognized in Income | Net Amount of Loss (Gain) Recognized in OCI on Derivatives | Amount of (Gain) Loss Recognized in Income | |||||||||||||
Interest rate caps | Interest expense, net | $ | 1.1 | $ | 0.9 | $ | 5.9 | $ | (1.6 | ) | ||||||||
Interest rate swaps | Interest expense, net | 47.6 | 4.5 | 27.6 | 0.1 | |||||||||||||
Foreign currency forward contracts (1) | Cost of goods sold | — | — | — | — | |||||||||||||
Cross-currency swaps | Interest expense, net | (19.4 | ) | (7.4 | ) | (14.9 | ) | (7.2 | ) |
For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
Derivatives in Cash Flow and Net Investment Hedges | Location of Loss (Gain) Recognized in Income on Derivatives | Net Amount of (Gain) Recognized in OCI on Derivatives | Amount of Loss (Gain) Recognized in Income | Net Amount of Loss (Gain) Recognized in OCI on Derivatives | Amount of Loss (Gain) Recognized in Income | |||||||||||||||||||||||||||
Interest rate caps | Interest expense, net | $ | 0 | $ | 1.2 | $ | 1.1 | $ | 0.9 | |||||||||||||||||||||||
Interest rate swaps | Interest expense, net | (0.6) | 14.2 | 47.6 | 4.5 | |||||||||||||||||||||||||||
Foreign currency forward contracts (1) | Cost of goods sold | 0 | 0.1 | 0 | 0 | |||||||||||||||||||||||||||
Cross-currency swaps | Interest expense, net | (29.9) | (9.5) | (19.4) | (7.4) |
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of Loss (Gain) Recognized in Income on Derivatives | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Foreign currency forward contracts | Other income, net | $ | 0.8 | $ | 0.3 | $ | (0.9 | ) | $ | 1.8 |
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of Gain (Loss) Recognized in Income (Loss) on Derivatives | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income, net | $ | 0.9 | $ | 0.8 | $ | (5.9) | $ | (0.9) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Net sales (1): | ||||||||||||||||||||||||||
Refinish | $ | 463.1 | $ | 261.9 | $ | 862.1 | $ | 629.7 | ||||||||||||||||||
Industrial | 342.7 | 220.2 | 651.0 | 500.1 | ||||||||||||||||||||||
Total Net sales Performance Coatings | 805.8 | 482.1 | 1,513.1 | 1,129.8 | ||||||||||||||||||||||
Light Vehicle | 243.9 | 126.3 | 522.8 | 386.4 | ||||||||||||||||||||||
Commercial Vehicle | 77.1 | 44.3 | 154.5 | 120.0 | ||||||||||||||||||||||
Total Net sales Mobility Coatings | 321.0 | 170.6 | 677.3 | 506.4 | ||||||||||||||||||||||
Total Net sales | $ | 1,126.8 | $ | 652.7 | $ | 2,190.4 | $ | 1,636.2 | ||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net sales (1): | ||||||||||||||||
Refinish | $ | 261.9 | $ | 447.3 | $ | 629.7 | $ | 852.8 | ||||||||
Industrial | 220.2 | 309.4 | 500.1 | 617.2 | ||||||||||||
Total Net sales Performance Coatings | 482.1 | 756.7 | 1,129.8 | 1,470.0 | ||||||||||||
Light Vehicle | 126.3 | 306.1 | 386.4 | 622.0 | ||||||||||||
Commercial Vehicle | 44.3 | 94.7 | 120.0 | 184.8 | ||||||||||||
Total Net sales Transportation Coatings | 170.6 | 400.8 | 506.4 | 806.8 | ||||||||||||
Total Net sales | $ | 652.7 | $ | 1,157.5 | $ | 1,636.2 | $ | 2,276.8 | ||||||||
Equity in earnings in unconsolidated affiliates: | ||||||||||||||||
Performance Coatings | $ | — | $ | 0.1 | $ | — | $ | 0.2 | ||||||||
Transportation Coatings | (0.2 | ) | 0.4 | (0.1 | ) | — | ||||||||||
Total | $ | (0.2 | ) | $ | 0.5 | $ | (0.1 | ) | $ | 0.2 | ||||||
June 30, 2020 | December 31, 2019 | |||||||||||||||
Investment in unconsolidated affiliates: | ||||||||||||||||
Performance Coatings | $ | 2.0 | $ | 2.4 | ||||||||||||
Transportation Coatings | 12.6 | 12.7 | ||||||||||||||
Total | $ | 14.6 | $ | 15.1 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Segment Adjusted EBIT (1): | ||||||||||||||||||||||||||
Performance Coatings | $ | 139.7 | $ | 1.5 | $ | 256.9 | $ | 80.9 | ||||||||||||||||||
Mobility Coatings | 5.7 | (39.3) | 44.9 | (13.5) | ||||||||||||||||||||||
Total (2) | 145.4 | (37.8) | 301.8 | 67.4 | ||||||||||||||||||||||
Interest expense, net | 33.4 | 36.1 | 66.9 | 72.6 | ||||||||||||||||||||||
Debt extinguishment and refinancing related costs (a) | 0.2 | 0 | 0.2 | 2.4 | ||||||||||||||||||||||
Termination benefits and other employee related costs (b) | 22.7 | 15.2 | 25.5 | 34.7 | ||||||||||||||||||||||
Strategic review and retention costs (c) | 2.2 | 6.7 | 7.6 | 18.2 | ||||||||||||||||||||||
Offering and transactional costs (d) | 1.4 | 0.1 | 1.6 | 0.2 | ||||||||||||||||||||||
Impairment charges(e) | 0 | 2.7 | 0 | 3.2 | ||||||||||||||||||||||
Pension special events (f) | 0 | (0.6) | 0 | (1.8) | ||||||||||||||||||||||
Accelerated depreciation (g) | 0.6 | 0.4 | 1.2 | 8.5 | ||||||||||||||||||||||
Indemnity income (h) | (0.1) | 0 | (0.1) | 0 | ||||||||||||||||||||||
Operational matter (i) | (71.8) | 0 | 22.6 | 0 | ||||||||||||||||||||||
Brazil indirect tax (j) | (8.3) | 0 | (8.3) | 0 | ||||||||||||||||||||||
Income (loss) before income taxes | $ | 165.1 | $ | (98.4) | $ | 184.6 | $ | (70.6) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Segment Adjusted EBIT (1): | ||||||||||||||||
Performance Coatings | $ | 1.5 | $ | 127.6 | $ | 80.9 | $ | 206.2 | ||||||||
Transportation Coatings | (39.3 | ) | 40.4 | (13.5 | ) | 74.6 | ||||||||||
Total (2) | (37.8 | ) | 168.0 | 67.4 | 280.8 | |||||||||||
Interest expense, net | 36.1 | 41.0 | 72.6 | 82.3 | ||||||||||||
Debt extinguishment and refinancing related costs (a) | — | 0.2 | 2.4 | 0.2 | ||||||||||||
Termination benefits and other employee related costs (b) | 15.2 | 2.8 | 34.7 | 4.1 | ||||||||||||
Strategic review and retention costs (c) | 6.7 | 0.8 | 18.2 | 0.8 | ||||||||||||
Offering and transactional costs (d) | 0.1 | 0.2 | 0.2 | 0.8 | ||||||||||||
Loss (gain) on divestiture and impairments (e) | 2.7 | (1.3 | ) | 3.2 | 3.9 | |||||||||||
Pension special event (f) | (0.6 | ) | — | (1.8 | ) | — | ||||||||||
Accelerated depreciation (g) | 0.4 | 6.7 | 8.5 | 12.8 | ||||||||||||
Indemnity income (h) | — | (0.2 | ) | — | (0.2 | ) | ||||||||||
(Loss) income before income taxes | $ | (98.4 | ) | $ | 117.8 | $ | (70.6 | ) | $ | 176.1 |
(1) | The primary measure of segment operating performance is Adjusted EBIT, which is defined as net income before interest, taxes and select other items impacting operating results. These other items impacting operating results are items that management has concluded are (1) non-cash items included within net income, (2) items the Company does not believe are indicative of ongoing operating performance or (3) non-recurring, unusual or infrequent items that have not occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Adjusted EBIT is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts and prior year financial results, providing a measure that management believes reflects the Company’s core operating performance, which represents Adjusted EBIT adjusted for the select items referred to above. | ||||
(2) | Does not represent Axalta’s Adjusted EBIT referenced elsewhere by the Company as there are additional adjustments that are not allocated to the segments. | ||||
(a) | Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. | ||||
(b) | Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indicative of our ongoing operating performance. | ||||
(c) | Represents costs for legal, tax and other advisory fees pertaining to our review of strategic alternatives that was concluded in March 2020, as well as retention awards for certain employees which will be earned over a period of 18-24 | ||||
(d) | Represents acquisition and divestiture-related expenses, all of which are not considered indicative of our ongoing operating performance. | ||||
(e) | Represents | ||||
(f) | Represents certain defined benefit pension costs associated with special events, including pension curtailments, settlements and special termination benefits, which we do not consider indicative of our ongoing operating performance. | ||||
(g) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments, which we do not consider indicative of our ongoing operating performance. | ||||
(h) | Represents indemnity income associated with | ||||
(i) | Represents expenses, changes in estimates and insurance recoveries for probable liabilities related to an operational matter in the Mobility Coatings segment discussed further in Note 5, which is not indicative of our ongoing operating performance. | ||||
(j) | Represents non-recurring income related to a law change with respect to certain Brazilian indirect taxes which was recorded within other income, net. | ||||
Unrealized Currency Translation Adjustments | Pension Adjustments | Unrealized (Loss) Gain on Derivatives | Accumulated Other Comprehensive (Loss) Income | |||||||||||||
Balance at December 31, 2019 | $ | (297.0 | ) | $ | (69.9 | ) | $ | (28.6 | ) | $ | (395.5 | ) | ||||
Current year deferrals to AOCI | (83.3 | ) | — | (36.3 | ) | (119.6 | ) | |||||||||
Reclassifications from AOCI to Net income | — | (0.4 | ) | 1.6 | 1.2 | |||||||||||
Net Change | (83.3 | ) | (0.4 | ) | (34.7 | ) | (118.4 | ) | ||||||||
Balance at March 31, 2020 | (380.3 | ) | (70.3 | ) | (63.3 | ) | (513.9 | ) | ||||||||
Current year deferrals to AOCI | 6.1 | — | (5.2 | ) | 0.9 | |||||||||||
Reclassifications from AOCI to Net income | — | 0.4 | 3.0 | 3.4 | ||||||||||||
Net Change | 6.1 | 0.4 | (2.2 | ) | 4.3 | |||||||||||
Balance at June 30, 2020 | $ | (374.2 | ) | $ | (69.9 | ) | $ | (65.5 | ) | $ | (509.6 | ) |
Unrealized Currency Translation Adjustments | Pension Adjustments | Unrealized (Loss) Gain on Derivatives | Accumulated Other Comprehensive (Loss) Income | |||||||||||||||||||||||
Balance at December 31, 2020 | $ | (282.0) | $ | (88.7) | $ | (54.1) | $ | (424.8) | ||||||||||||||||||
Current year deferrals to AOCI | (37.4) | 0 | 1.3 | (36.1) | ||||||||||||||||||||||
Reclassifications from AOCI to Net income | 0 | 0.7 | 6.6 | 7.3 | ||||||||||||||||||||||
Net Change | (37.4) | 0.7 | 7.9 | (28.8) | ||||||||||||||||||||||
Balance at March 31, 2021 | (319.4) | (88.0) | (46.2) | (453.6) | ||||||||||||||||||||||
Current year deferrals to AOCI | 38.7 | 0 | (0.8) | 37.9 | ||||||||||||||||||||||
Reclassifications from AOCI to Net income | 0 | 1.0 | 6.7 | 7.7 | ||||||||||||||||||||||
Net Change | 38.7 | 1.0 | 5.9 | 45.6 | ||||||||||||||||||||||
Balance at June 30, 2021 | $ | (280.7) | $ | (87.0) | $ | (40.3) | $ | (408.0) | ||||||||||||||||||
Unrealized Currency Translation Adjustments | Pension Adjustments | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Balance at December 31, 2019 | $ | (297.0) | $ | (69.9) | $ | (28.6) | $ | (395.5) | ||||||||||||||||||
Current year deferrals to AOCI | (83.3) | 0 | (36.3) | (119.6) | ||||||||||||||||||||||
Reclassifications from AOCI to Net loss | 0 | (0.4) | 1.6 | 1.2 | ||||||||||||||||||||||
Net Change | (83.3) | (0.4) | (34.7) | (118.4) | ||||||||||||||||||||||
Balance at March 31, 2020 | (380.3) | (70.3) | (63.3) | (513.9) | ||||||||||||||||||||||
Current year deferrals to AOCI | 6.1 | 0 | (5.2) | 0.9 | ||||||||||||||||||||||
Reclassifications from AOCI to Net loss | 0 | 0.4 | 3.0 | 3.4 | ||||||||||||||||||||||
Net Change | 6.1 | 0.4 | (2.2) | 4.3 | ||||||||||||||||||||||
Balance at June 30, 2020 | $ | (374.2) | $ | (69.9) | $ | (65.5) | $ | (509.6) | ||||||||||||||||||
Unrealized Currency Translation Adjustments | Pension Adjustments | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Balance at December 31, 2018 | $ | (299.4 | ) | $ | (36.4 | ) | $ | (0.3 | ) | $ | (336.1 | ) | ||||
Current year deferrals to AOCI | 12.8 | — | (11.4 | ) | 1.4 | |||||||||||
Reclassifications from AOCI to Net income | — | — | (1.0 | ) | (1.0 | ) | ||||||||||
Net Change | 12.8 | — | (12.4 | ) | 0.4 | |||||||||||
Balance at March 31, 2019 | (286.6 | ) | (36.4 | ) | (12.7 | ) | (335.7 | ) | ||||||||
Current year deferrals to AOCI | (5.7 | ) | (0.1 | ) | (17.3 | ) | (23.1 | ) | ||||||||
Reclassifications from AOCI to Net income | 2.6 | 0.5 | (0.3 | ) | 2.8 | |||||||||||
Net Change | (3.1 | ) | 0.4 | (17.6 | ) | (20.3 | ) | |||||||||
Balance at June 30, 2019 | $ | (289.7 | ) | $ | (36.0 | ) | $ | (30.3 | ) | $ | (356.0 | ) |
•Performance Coatings:Net sales increased 33.9%, including a 4.7% benefit from foreign currency translation, for the six months ended June 30, 2021 compared with the six months ended June 30, 2020. The increased sales were primarily driven by higher volumes of 23.9% as a result of demand recovery from the impacts of COVID-19 and higher average selling prices and product mix of 5.3%. The favorable foreign currency translation is driven primarily by fluctuations of the Euro and Chinese Renminbi compared to the U.S. Dollar. •Mobility Coatings: Net sales increased 33.7%, including a 2.5% benefit from foreign currency translation, for the six months ended June 30, 2021 compared with the six months ended June 30, 2020. The increased sales were primarily due to higher volumes of 30.5% as a result of demand recovery from the impacts of COVID-19. The favorable foreign currency translation is driven primarily by fluctuations of the Euro and Chinese Renminbi compared to the U.S. Dollar. |
(In millions) | Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | (In millions) | Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | % change | 2020 | 2019 | % change | 2021 | 2020 | % change | 2021 | 2020 | % change | |||||||||||||||||||||||||||||||||||||||||||||||||
Performance Coatings | Performance Coatings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Refinish | $ | 261.9 | $ | 447.3 | (41.4 | )% | $ | 629.7 | $ | 852.8 | (26.2 | )% | Refinish | $ | 463.1 | $ | 261.9 | 76.8 | % | $ | 862.1 | $ | 629.7 | 36.9 | % | |||||||||||||||||||||||||||||||||||
Industrial | 220.2 | 309.4 | (28.8 | )% | 500.1 | 617.2 | (19.0 | )% | Industrial | 342.7 | 220.2 | 55.6 | % | 651.0 | 500.1 | 30.2 | % | |||||||||||||||||||||||||||||||||||||||||||
Total Net sales Performance Coatings | 482.1 | 756.7 | (36.3 | )% | 1,129.8 | 1,470.0 | (23.1 | )% | Total Net sales Performance Coatings | 805.8 | 482.1 | 67.1 | % | 1,513.1 | 1,129.8 | 33.9 | % | |||||||||||||||||||||||||||||||||||||||||||
Transportation Coatings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mobility Coatings | Mobility Coatings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Light Vehicle | 126.3 | 306.1 | (58.7 | )% | 386.4 | 622.0 | (37.9 | )% | Light Vehicle | 243.9 | 126.3 | 93.1 | % | 522.8 | 386.4 | 35.3 | % | |||||||||||||||||||||||||||||||||||||||||||
Commercial Vehicle | 44.3 | 94.7 | (53.2 | )% | 120.0 | 184.8 | (35.1 | )% | Commercial Vehicle | 77.1 | 44.3 | 74.0 | % | 154.5 | 120.0 | 28.8 | % | |||||||||||||||||||||||||||||||||||||||||||
Total Net sales Transportation Coatings | 170.6 | 400.8 | (57.4 | )% | 506.4 | 806.8 | (37.2 | )% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Net sales Mobility Coatings | Total Net sales Mobility Coatings | 321.0 | 170.6 | 88.2 | % | 677.3 | 506.4 | 33.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total Net sales | $ | 652.7 | $ | 1,157.5 | (43.6 | )% | $ | 1,636.2 | $ | 2,276.8 | (28.1 | )% | Total Net sales | $ | 1,126.8 | $ | 652.7 | 72.6 | % | $ | 2,190.4 | $ | 1,636.2 | 33.9 | % |
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 652.7 | $ | 1,157.5 | $ | (504.8 | ) | (43.6 | )% | $ | 1,636.2 | $ | 2,276.8 | $ | (640.6 | ) | (28.1 | )% | Net sales | $ | 1,126.8 | $ | 652.7 | $ | 474.1 | 72.6 | % | $ | 2,190.4 | $ | 1,636.2 | $ | 554.2 | 33.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
Volume effect | (39.2 | )% | (25.0 | )% | Volume effect | 56.4 | % | 25.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of portfolio changes | (1.1 | )% | (1.3 | )% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price/product mix effect | (0.5 | )% | 0.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of acquisitions | Impact of acquisitions | 1.6 | % | 0.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price/Mix effect | Price/Mix effect | 9.3 | % | 3.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange rate effect | (2.8 | )% | (2.4 | )% | Exchange rate effect | 5.3 | % | 4.1 | % |
Net sales | ||
n | ||
n | ||
n Favorable impacts of currency translation, due primarily to the |
Net sales increased due to the following: | ||
n Higher sales volumes across both segments as a result of demand recovery from the impacts of COVID-19 | ||
n Favorable impacts of currency translation, due primarily to the fluctuations of the Euro and Chinese Renminbi compared to the U.S. dollar | ||
n | ||
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Cost of sales | $ | 752.8 | $ | 499.2 | $ | 253.6 | 50.8 | % | $ | 1,437.3 | $ | 1,146.0 | $ | 291.3 | 25.4 | % | ||||||||||||||||||||||||||||||||||
% of net sales | 66.8 | % | 76.5 | % | 65.6 | % | 70.0 | % |
n | ||
n Higher variable input costs due to raw material inflation | ||
n Increased compensation related expenses compared to prior year which were lower due to COVID-19 related cost reduction actions | ||
n Unfavorable impacts of currency translation, due primarily to the | ||
Partially offset by: | ||
n |
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Cost of sales | $ | 499.2 | $ | 748.4 | $ | (249.2 | ) | (33.3 | )% | $ | 1,146.0 | $ | 1,499.7 | $ | (353.7 | ) | (23.6 | )% | ||||||||||||
% of net sales | 76.5 | % | 64.7 | % | 70.0 | % | 65.9 | % |
n Decreased expenses of $31.1 million associated with improved utilization at manufacturing sites in the current year as manufacturing utilization was negatively impacted in the 2020 period due to COVID-19 | ||
n | ||
Cost of sales as a percentage of net sales | ||
n | ||
n Decreases | ||
Partially offset by: | ||
n Higher variable input costs due to raw material inflation |
Cost of sales | ||
n | ||
n | ||
n | ||
n Unfavorable impacts of currency translation, | ||
n | ||
n Decreased expenses of $35.2 million associated with improved utilization at manufacturing sites in the current year as manufacturing utilization was negatively impacted in the 2020 period due to COVID-19 | ||
n | ||
Cost of sales as a percentage of net sales decreased due to the following: | ||
n Higher sales volume covering fixed costs | ||
n Decreases in costs due to operational efficiencies associated with cost savings initiatives | ||
Partially offset by: | ||
n Higher variable input costs due to raw material inflation |
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
SG&A | $ | 184.2 | $ | 154.2 | $ | 30.0 | 19.5 | % | $ | 363.3 | $ | 349.6 | $ | 13.7 | 3.9 | % | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses increased due to the following: | ||
n | ||
n Increased expenses as a result of acquisitions | ||
n Increased compensation related expenses compared to prior year which were lower due to COVID-19 related cost reduction actions | ||
n Unfavorable impacts of | ||
Partially offset by: | ||
n |
Selling, general and | ||
n Increase in commissions and sales incentive compensation driven by increased sales | ||
n Increased expenses as | ||
n Increased compensation related expenses | ||
n |
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
SG&A | $ | 154.2 | $ | 202.4 | $ | (48.2 | ) | (23.8 | )% | $ | 349.6 | $ | 418.0 | $ | (68.4 | ) | (16.4 | )% |
n Reduction in costs due to operational efficiencies associated with our cost savings initiatives | ||
n | ||
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Other operating (benefits) charges | $ | (45.7) | $ | 24.7 | $ | (70.4) | (285.0) | % | $ | 57.1 | $ | 56.3 | $ | 0.8 | 1.4 | % | ||||||||||||||||||||||||||||||||||
n | ||
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Other operating charges | $ | 24.7 | $ | 2.5 | $ | 22.2 | 888.0 | % | $ | 56.3 | $ | 9.6 | $ | 46.7 | 486.5 | % |
n | ||
n Impairment charges of $2.7 million in the prior year | ||
n Increase of $7.5 million in termination benefits and other employee related costs associated with our cost saving initiatives |
Other operating (benefits) charges increased due to the following: | ||
n | ||
Partially offset by: | ||
n Expenses of $10.6 million associated with the review of strategic alternatives that was concluded in March 2020, | ||
n Decrease of $9.2 million in termination benefits and | ||
n Impairment charges of $3.2 million in the prior year primarily related to impairments and associated write-downs resulting from our decision to exit the Performance Coatings segment business in Argentina, compared with no such expenses in 2021 |
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Research and development expenses | $ | 11.2 | $ | 17.9 | $ | (6.7 | ) | (37.4 | )% | $ | 27.8 | $ | 36.1 | $ | (8.3 | ) | (23.0 | )% |
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Research and development expenses | $ | 15.8 | $ | 11.2 | $ | 4.6 | 41.1 | % | $ | 31.4 | $ | 27.8 | $ | 3.6 | 12.9 | % |
Research and development expenses | ||
n | ||
Research and development expenses increased due to the following: | ||
n Increase in compensation related expenses and other spending as a result of temporary cost savings initiatives during 2020 | ||
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | $ | 29.3 | $ | 27.9 | $ | 1.4 | 5.0 | % | $ | 58.3 | $ | 55.9 | $ | 2.4 | 4.3 | % |
Amortization of acquired intangibles increased due to the following: | ||
n |
n | ||
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Amortization of acquired intangibles | $ | 27.9 | $ | 28.4 | $ | (0.5 | ) | (1.8 | )% | $ | 55.9 | $ | 56.9 | $ | (1.0 | ) | (1.8 | )% |
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 33.4 | $ | 36.1 | $ | (2.7) | (7.5) | % | $ | 66.9 | $ | 72.6 | $ | (5.7) | (7.9) | % | ||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Interest expense, net | $ | 36.1 | $ | 41.0 | $ | (4.9 | ) | (12.0 | )% | $ | 72.6 | $ | 82.3 | $ | (9.7 | ) | (11.8 | )% |
Interest expense, net decreased primarily due to the following: | ||
n Decrease in | ||
Partially offset by: | ||
n | ||
Interest expense, net decreased primarily due to the following: | ||
n Decrease in | ||
Partially offset by: | ||
n | ||
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Other income, net | $ | (2.2 | ) | $ | (0.9 | ) | $ | (1.3 | ) | 144.4 | % | $ | (1.4 | ) | $ | (1.9 | ) | $ | 0.5 | (26.3 | )% |
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Other income, net | $ | (8.1) | $ | (2.2) | $ | (5.9) | 268.2 | % | $ | (8.5) | $ | (1.4) | $ | (7.1) | 507.1 | % |
Other income, net increased due to the following: | ||
n | ||
Partially offset by: | ||
n Unfavorable impact |
Other income, net changed due to | ||
n Income of $8.3 million | ||
n | ||
Partially offset by: | ||
n |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 165.1 | $ | (98.4) | $ | 184.6 | $ | (70.6) | ||||||||||||||||||
Provision (benefit) for income taxes | 38.7 | (15.2) | 42.5 | (39.8) | ||||||||||||||||||||||
Statutory U.S. Federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||||||||||||
Effective tax rate | 23.4 | % | 15.4 | % | 23.0 | % | 56.4 | % | ||||||||||||||||||
Effective tax rate vs. statutory U.S. Federal income tax rate | 2.4 | % | (5.6) | % | 2.0 | % | 35.4 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Loss) income before income taxes | $ | (98.4 | ) | $ | 117.8 | $ | (70.6 | ) | $ | 176.1 | ||||||
(Benefit) provision for income taxes | (15.2 | ) | 17.9 | (39.8 | ) | 32.1 | ||||||||||
Statutory U.S. Federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||
Effective tax rate | 15.4 | % | 15.2 | % | 56.4 | % | 18.2 | % | ||||||||
Effective tax rate vs. statutory U.S. Federal income tax rate | (5.6 | )% | (5.8 | )% | 35.4 | % | (2.8 | )% |
(Favorable) Unfavorable Impact | (Favorable) Unfavorable Impact | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
Items impacting the effective tax rate vs. statutory U.S. federal income tax rate | 2020 | 2019 | 2020 | 2019 | Items impacting the effective tax rate vs. statutory U.S. federal income tax rate | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Earnings generated in jurisdictions where the statutory rate is different from the U.S. Federal rate (1) | $ | (1.6 | ) | $ | (8.3 | ) | $ | (5.9 | ) | $ | (10.9 | ) | Earnings generated in jurisdictions where the statutory rate is different from the U.S. Federal rate (1) | $ | (2.3) | $ | (1.6) | $ | (7.0) | $ | (5.9) | |||||||||||||||||||||
Changes in valuation allowance | 1.8 | (21.8 | ) | 7.4 | (19.2 | ) | Changes in valuation allowance | 5.4 | 2.1 | 12.4 | (2.4) | |||||||||||||||||||||||||||||||
Foreign exchange gain (loss), net | 0.3 | 1.5 | (1.3 | ) | 0.9 | Foreign exchange gain (loss), net | 1.0 | — | (0.6) | 8.5 | ||||||||||||||||||||||||||||||||
Stock-based compensation excess tax benefits, net | — | (3.2 | ) | — | (6.8 | ) | ||||||||||||||||||||||||||||||||||||
Non-deductible expenses and interest | 1.7 | 0.6 | 3.1 | 2.2 | Non-deductible expenses and interest | 1.3 | 1.8 | 2.1 | 3.1 | |||||||||||||||||||||||||||||||||
Increase in unrecognized tax benefits(2) | 1.4 | 6.4 | 19.3 | 7.2 | Increase in unrecognized tax benefits(2) | 1.4 | 1.4 | 3.7 | 19.3 | |||||||||||||||||||||||||||||||||
Intra-entity asset transfer (3) | — | — | (50.5 | ) | — | Intra-entity asset transfer (3) | — | — | — | (50.5) | ||||||||||||||||||||||||||||||||
Foreign taxes (4) | 1.9 | 16.8 | 3.5 | 18.4 | ||||||||||||||||||||||||||||||||||||||
Foreign taxes | Foreign taxes | 1.9 | 1.9 | 3.3 | 3.5 |
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 482.1 | $ | 756.7 | $ | (274.6 | ) | (36.3 | )% | $ | 1,129.8 | $ | 1,470.0 | $ | (340.2 | ) | (23.1 | )% | Net sales | $ | 805.8 | $ | 482.1 | $ | 323.7 | 67.1 | % | $ | 1,513.1 | $ | 1,129.8 | $ | 383.3 | 33.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
Volume effect | (29.7 | )% | (18.9 | )% | Volume effect | 45.5 | % | 23.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of portfolio changes | (1.6 | )% | (1.9 | )% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price/product mix effect | (2.6 | )% | (0.1 | )% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of acquisitions | Impact of acquisitions | 2.1 | % | 0.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price/Mix effect | Price/Mix effect | 14.0 | % | 5.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange rate effect | (2.4 | )% | (2.2 | )% | Exchange rate effect | 5.5 | % | 4.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBIT | $ | 1.5 | $ | 127.6 | $ | (126.1 | ) | (98.8 | )% | $ | 80.9 | $ | 206.2 | $ | (125.3 | ) | (60.8 | )% | Adjusted EBIT | $ | 139.7 | $ | 1.5 | $ | 138.2 | 9,213.3 | % | $ | 256.9 | $ | 80.9 | $ | 176.0 | 217.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBIT Margin | 0.3 | % | 16.9 | % | 7.2 | % | 14.0 | % | Adjusted EBIT Margin | 17.3 | % | 0.3 | % | 17.0 | % | 7.2 | % |
Net sales | ||
n | ||
n | ||
n | ||
Adjusted EBIT | ||
n | ||
n Lower manufacturing expenses compared to the prior year as a result of underutilized manufacturing assets in the prior year quarter due to COVID-19 demand impacts | ||
n | ||
Partially offset | ||
n Higher variable input costs across both end-markets and | ||
n | ||
Adjusted EBIT margins increased during the three months ended June 30, 2021 due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n Lower manufacturing expenses compared to the prior year as a result of underutilized manufacturing assets in the prior year quarter due to COVID-19 demand impacts | ||
n Higher average selling prices and product mix across both end-markets and most regions | ||
Partially offset by: | ||
n Higher variable input costs across both end-markets and all regions due to raw material inflation |
Net sales increased due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n Higher average selling prices and product mix across both end-markets, driven by price actions within both end-markets and improved product mix in Refinish North America | ||
n Favorable impacts of currency translation, due primarily to the | ||
Adjusted EBIT increased due to the following: | ||
n | ||
n Lower manufacturing expenses compared to the prior year as a result of underutilized manufacturing assets in the prior year quarter due to COVID-19 demand impacts | ||
n Higher average selling prices and product mix across both end-markets and most regions | ||
n Lower operating expenses across | ||
n | ||
Adjusted EBIT margins increased during the six months ended June 30, 2021 due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n | ||
n | ||
n | ||
Three Months Ended June 30, | 2021 vs 2020 | Six Months Ended June 30, | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 321.0 | $ | 170.6 | $ | 150.4 | 88.2 | % | $ | 677.3 | $ | 506.4 | $ | 170.9 | 33.7 | % | ||||||||||||||||||||||||||||||||||
Volume effect | 87.4 | % | 30.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Price/Mix effect | (4.1) | % | 0.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Exchange rate effect | 4.9 | % | 2.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBIT | $ | 5.7 | $ | (39.3) | $ | 45.0 | 114.5 | % | $ | 44.9 | $ | (13.5) | $ | 58.4 | 432.6 | % | ||||||||||||||||||||||||||||||||||
Adjusted EBIT Margin | 1.8 | % | (23.0) | % | 6.6 | % | (2.7) | % |
Net sales increased due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n | ||
Three Months Ended June 30, | 2020 vs 2019 | Six Months Ended June 30, | 2020 vs 2019 | |||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | |||||||||||||||||||||||
Net sales | $ | 170.6 | $ | 400.8 | $ | (230.2 | ) | (57.4 | )% | $ | 506.4 | $ | 806.8 | $ | (300.4 | ) | (37.2 | )% | ||||||||||||
Volume effect | (57.2 | )% | (36.1 | )% | ||||||||||||||||||||||||||
Price/product mix effect | 3.5 | % | 2.0 | % | ||||||||||||||||||||||||||
Exchange rate effect | (3.7 | )% | (3.1 | )% | ||||||||||||||||||||||||||
Adjusted EBIT | $ | (39.3 | ) | $ | 40.4 | $ | (79.7 | ) | (197.3 | )% | $ | (13.5 | ) | $ | 74.6 | $ | (88.1 | ) | (118.1 | )% | ||||||||||
Adjusted EBIT Margin | (23.0 | )% | 10.1 | % | (2.7 | )% | 9.2 | % |
Partially offset by: | ||
n |
Adjusted EBIT | ||
n | ||
n | ||
n | ||
Partially offset by: | ||
n Higher variable input costs due to raw material inflation | ||
n Lower average selling prices |
Adjusted EBIT | ||
n | ||
n | ||
n | ||
Partially offset by: | ||
n Higher |
Net sales increased due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n |
Adjusted EBIT increased due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n Lower manufacturing expenses compared to the prior year as a result of underutilized manufacturing assets in the prior year quarter due to COVID-19 demand impacts | ||
n Lower operating expenses across all regions resulting from operational efficiencies associated with our cost savings initiatives | ||
Partially offset by: | ||
n Higher variable input costs due to raw material inflation | ||
Adjusted EBIT margins increased during the six months ended June 30, 2021 due to the following: | ||
n Higher volumes across both end-markets and all regions as a result of demand recovery from the impacts of COVID-19 | ||
n Lower manufacturing expenses compared to the prior year as a result of underutilized manufacturing assets in the prior year quarter due to COVID-19 demand impacts | ||
n Lower operating expenses across all regions resulting from operational efficiencies associated with our cost savings initiatives | ||
Partially offset by: | ||
n Higher variable input costs due to raw material inflation |
Six Months Ended June 30, | ||||||||||||||
(In millions) | 2021 | 2020 | ||||||||||||
Net cash provided by (used for): | ||||||||||||||
Operating activities: | ||||||||||||||
Net income (loss) | $ | 142.1 | $ | (30.8) | ||||||||||
Depreciation and amortization | 155.4 | 163.2 | ||||||||||||
Amortization of deferred financing costs and original issue discount | 4.2 | 4.1 | ||||||||||||
Debt extinguishment and refinancing related costs | 0.2 | 2.4 | ||||||||||||
Deferred income taxes | 5.2 | (61.2) | ||||||||||||
Realized and unrealized foreign exchange losses, net | 9.4 | 2.8 | ||||||||||||
Stock-based compensation | 7.8 | 11.2 | ||||||||||||
Divestiture and impairment charges | — | 3.2 | ||||||||||||
Interest income on swaps designated as net investment hedges | (7.1) | (7.3) | ||||||||||||
Other non-cash, net | 9.2 | 8.3 | ||||||||||||
Net income adjusted for non-cash items | 326.4 | 95.9 | ||||||||||||
Changes in operating assets and liabilities | (179.3) | (98.4) | ||||||||||||
Operating activities | 147.1 | (2.5) | ||||||||||||
Investing activities | (91.3) | (34.3) | ||||||||||||
Financing activities | (169.9) | 159.1 | ||||||||||||
Effect of exchange rate changes on cash | (8.4) | (16.3) | ||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (122.5) | $ | 106.0 |
Six Months Ended June 30, | ||||||||
(In millions) | 2020 | 2019 | ||||||
Net cash provided by (used for): | ||||||||
Operating activities: | ||||||||
Net (loss) income | $ | (30.8 | ) | $ | 144.0 | |||
Depreciation and amortization | 163.2 | 180.3 | ||||||
Amortization of deferred financing costs and original issue discount | 4.1 | 4.4 | ||||||
Debt extinguishment and refinancing related costs | 2.4 | 0.2 | ||||||
Deferred income taxes | (61.2 | ) | (1.6 | ) | ||||
Realized and unrealized foreign exchange losses, net | 2.8 | 2.8 | ||||||
Stock-based compensation | 11.2 | 5.3 | ||||||
Divestitures and impairment charges | 3.2 | 3.9 | ||||||
Interest income on swaps designated as net investment hedges | (7.3 | ) | (7.2 | ) | ||||
Other non-cash, net | 8.3 | (0.6 | ) | |||||
Net income adjusted for non-cash items | 95.9 | 331.5 | ||||||
Changes in operating assets and liabilities | (98.4 | ) | (262.7 | ) | ||||
Operating activities | (2.5 | ) | 68.8 | |||||
Investing activities | (34.3 | ) | (33.7 | ) | ||||
Financing activities | 159.1 | (147.9 | ) | |||||
Effect of exchange rate changes on cash | (16.3 | ) | 1.0 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 106.0 | $ | (111.8 | ) |
(In millions) | June 30, 2020 | December 31, 2019 | (In millions) | June 30, 2021 | December 31, 2020 | |||||||||||||||||
2024 Dollar Term Loans | $ | 2,075.3 | $ | 2,387.5 | 2024 Dollar Term Loans | $ | 2,051.0 | $ | 2,063.2 | |||||||||||||
2024 Dollar Senior Notes | 500.0 | 500.0 | ||||||||||||||||||||
2024 Euro Senior Notes | 377.0 | 375.2 | ||||||||||||||||||||
2025 Euro Senior Notes | 506.5 | 504.0 | 2025 Euro Senior Notes | 535.8 | 552.1 | |||||||||||||||||
2027 Dollar Senior Notes | 500.0 | — | 2027 Dollar Senior Notes | 500.0 | 500.0 | |||||||||||||||||
2029 Dollar Senior Notes | 2029 Dollar Senior Notes | 700.0 | 700.0 | |||||||||||||||||||
Short-term and other borrowings | 105.6 | 109.0 | Short-term and other borrowings | 103.0 | 118.0 | |||||||||||||||||
Unamortized original issue discount | (8.3 | ) | (10.5 | ) | Unamortized original issue discount | (5.5) | (6.3) | |||||||||||||||
Unamortized deferred financing costs | (34.8 | ) | (31.1 | ) | Unamortized deferred financing costs | (30.4) | (34.3) | |||||||||||||||
Total borrowings, net | 4,021.3 | 3,834.1 | Total borrowings, net | 3,853.9 | 3,892.7 | |||||||||||||||||
Less: | Less: | |||||||||||||||||||||
Short-term borrowings | 17.0 | 19.6 | Short-term borrowings | 16.2 | 29.9 | |||||||||||||||||
Current portion of long-term borrowings | 24.3 | 24.3 | Current portion of long-term borrowings | 24.3 | 24.3 | |||||||||||||||||
Long-term debt | $ | 3,980.0 | $ | 3,790.2 | Long-term debt | $ | 3,813.4 | $ | 3,838.5 |
(in millions, except per share data) | ||||||||||||||||||||||||||
Month | Total Number of Shares Purchased(1) | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Programs(1) | Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Share Repurchase Program(1)(2) | ||||||||||||||||||||||
April 2021 | — | $ | — | — | $ | 797.5 | ||||||||||||||||||||
May 2021 | 0.5 | 32.32 | 0.5 | 782.5 | ||||||||||||||||||||||
June 2021 | 1.4 | 31.54 | 1.4 | 737.5 | ||||||||||||||||||||||
Total | 1.9 | $ | 31.73 | 1.9 | $ | 737.5 |
EXHIBIT NO. | DESCRIPTION OF EXHIBITS | ||||
31.1 | |||||
31.2 | |||||
32.1† | |||||
32.2† | |||||
101 | INS - Inline XBRL Instance Document. The document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document | ||||
101 | SCH - Inline XBRL Taxonomy Extension Schema Document | ||||
101 | CAL - Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101 | DEF - Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
101 | LAB - Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101 | PRE - Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
* | Previously filed. | ||||
† | This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
AXALTA COATING SYSTEMS LTD. | |||||||||||
Date: | July 26, 2021 | ||||||||||
By: /s/ Robert W. Bryant | |||||||||||
Robert W. Bryant | |||||||||||
Chief Executive Officer and President | |||||||||||
(Principal Executive Officer) | |||||||||||
Date: | July | By: /s/ Sean M. Lannon | |||||||||
Sean M. Lannon | |||||||||||
Senior Vice President and Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
Date: | July | By: /s/ Anthony Massey | |||||||||
Anthony Massey | |||||||||||
Vice President and Global Controller | |||||||||||
(Principal Accounting Officer) |