ý | 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 | New York Stock Exchange | |||
(title of class) | (Exchange on which registered) | |||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Net sales | $ | $ | ||||||
Cost of goods sold | ||||||||
Selling, general and administrative expenses | ||||||||
Loss on assets held for sale | ||||||||
Research and development expenses | ||||||||
Amortization of acquired intangibles | ||||||||
Income from operations | ||||||||
Interest expense, net | ||||||||
Other income, net | ( | ) | ( | ) | ||||
Income before income taxes | ||||||||
Provision for income taxes | ||||||||
Net income | ||||||||
Less: Net income attributable to noncontrolling interests | ||||||||
Net income attributable to controlling interests | $ | $ | ||||||
Basic earnings per share | $ | $ | ||||||
Diluted earnings per share | $ | $ | ||||||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Net income | $ | $ | ||||||
Other comprehensive (loss) income, before tax: | ||||||||
Foreign currency translation adjustments | ||||||||
Unrealized (loss) gain on derivatives | ( | ) | ||||||
Unrealized gain on pension plan obligations | ||||||||
Other comprehensive (loss) income, before tax | ( | ) | ||||||
Income tax (benefit) provision related to items of other comprehensive (loss) income | ( | ) | ||||||
Other comprehensive income, net of tax | ||||||||
Comprehensive income | ||||||||
Less: Comprehensive (loss) income attributable to noncontrolling interests | ||||||||
Comprehensive income attributable to controlling interests | $ | $ | ||||||
March 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Accounts and notes receivable, net | ||||||||
Inventories | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Property, plant and equipment, net | ||||||||
Goodwill | ||||||||
Identifiable intangibles, net | ||||||||
Other assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities, Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | $ | ||||||
Current portion of borrowings | ||||||||
Other accrued liabilities | ||||||||
Total current liabilities | ||||||||
Long-term borrowings | ||||||||
Accrued pensions | ||||||||
Deferred income taxes | ||||||||
Other liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (Note 6) | ||||||||
Shareholders’ equity | ||||||||
Common shares, $1.00 par, 1,000.0 shares authorized, 247.8 and 246.7 shares issued at March 31, 2019 and December 31, 2018, respectively | ||||||||
Capital in excess of par | ||||||||
Retained earnings | ||||||||
Treasury shares, at cost 13.6 and 11.1 shares at March 31, 2019 and December 31, 2018, respectively | ( | ) | ( | ) | ||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Total Axalta shareholders’ equity | ||||||||
Noncontrolling interests | ||||||||
Total shareholders’ equity | ||||||||
Total liabilities and shareholders’ equity | $ | $ | ||||||
Three months ended March 31, | ||||||||
2019 | 2018 | |||||||
Operating activities: | ||||||||
Net income | $ | $ | ||||||
Adjustment to reconcile net income to cash used for operating activities: | ||||||||
Depreciation and amortization | ||||||||
Amortization of deferred financing costs and original issue discount | ||||||||
Deferred income taxes | ( | ) | ||||||
Realized and unrealized foreign exchange (gains) losses, net | ( | ) | ||||||
Stock-based compensation | ||||||||
Loss on assets held for sale | ||||||||
Interest income on swaps designated as net investment hedges | ( | ) | ||||||
Other non-cash, net | ( | ) | ( | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts and notes receivable | ( | ) | ( | ) | ||||
Inventories | ( | ) | ( | ) | ||||
Prepaid expenses and other assets | ( | ) | ( | ) | ||||
Accounts payable | ||||||||
Other accrued liabilities | ( | ) | ( | ) | ||||
Other liabilities | ( | ) | ||||||
Cash used for operating activities | ( | ) | ( | ) | ||||
Investing activities: | ||||||||
Acquisitions, net of cash acquired | ( | ) | ( | ) | ||||
Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
Interest proceeds on swaps designated as net investment hedges | ||||||||
Other investing activities, net | ( | ) | ||||||
Cash used for investing activities | ( | ) | ( | ) | ||||
Financing activities: | ||||||||
Payments on short-term borrowings | ( | ) | ( | ) | ||||
Payments on long-term borrowings | ( | ) | ( | ) | ||||
Financing-related costs | ( | ) | ||||||
Purchase of treasury stock | ( | ) | ( | ) | ||||
Proceeds from option exercises | ||||||||
Dividends paid to non-controlling interests | ( | ) | ( | ) | ||||
Investment in non-controlling interest | ( | ) | ( | ) | ||||
Cash used for financing activities | ( | ) | ( | ) | ||||
Decrease in cash | ( | ) | ( | ) | ||||
Effect of exchange rate changes on cash | ||||||||
Cash at beginning of period | ||||||||
Cash at end of period | $ | $ | ||||||
Cash at end of period reconciliation: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Cash and restricted cash held for sale | ||||||||
Cash at end of period | $ | $ | ||||||
Three months ended March 31, 2018 | ||||||||
As Reported | Revised | |||||||
Cash used for investing activities | $ | ( | ) | $ | ( | ) | ||
Cash used for financing activities | $ | ( | ) | $ | ( | ) | ||
ASU | Effective Date | |||
2018-16 | Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes | January 1, 2019 | ||
March 31, 2019 | ||||
Assets | ||||
Cash and cash equivalents | $ | |||
Restricted cash | ||||
Accounts and notes receivable, net | ||||
Inventories | ||||
Property, plant and equipment, net | ||||
Goodwill | ||||
Identifiable intangibles, net | ||||
Other assets | ||||
Loss on assets held for sale | ( | ) | ||
Assets held for sale | $ | |||
Liabilities | ||||
Accounts payable | ||||
Other accrued liabilities | ||||
Other liabilities | ||||
Liabilities held for sale | $ | |||
Performance Coatings | Transportation Coatings | Total | ||||||||||
December 31, 2018 | $ | $ | $ | |||||||||
Purchase accounting adjustments | ||||||||||||
Held for sale adjustment | ( | ) | ( | ) | ||||||||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ||||||
March 31, 2019 | $ | $ | $ | |||||||||
March 31, 2019 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||||||
Technology | $ | $ | ( | ) | $ | |||||||||
Trademarks - indefinite-lived | — | Indefinite | ||||||||||||
Trademarks - definite-lived | ( | ) | ||||||||||||
Customer relationships | ( | ) | ||||||||||||
Other | ( | ) | ||||||||||||
Total | $ | $ | ( | ) | $ | |||||||||
December 31, 2018 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||||||
Technology | $ | $ | ( | ) | $ | |||||||||
Trademarks—indefinite-lived | — | Indefinite | ||||||||||||
Trademarks—definite-lived | ( | ) | ||||||||||||
Customer relationships | ( | ) | ||||||||||||
Other | ( | ) | ||||||||||||
Total | $ | $ | ( | ) | $ | |||||||||
Remainder of 2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
2019 Activity | ||||
Balance at December 31, 2018 | $ | |||
Expenses, net of changes to estimates | ||||
Payments made | ( | ) | ||
Foreign currency translation | ( | ) | ||
Balance at March 31, 2019 | $ | |||
March 31, 2019 | |||||
Assets | Classification | ||||
Operating lease assets | Other assets (1) | $ | |||
Finance lease assets | Property, plant and equipment, net (2) | ||||
Total leased assets | $ | ||||
Liabilities | |||||
Current | |||||
Operating | Other accrued liabilities | $ | |||
Finance | Current portion of borrowings | ||||
Noncurrent | |||||
Operating | Other liabilities | ||||
Finance | Long-term borrowings | ||||
Total lease liabilities | $ | ||||
Three months ended March 31 | ||||
2019 | ||||
Finance lease cost | ||||
Amortization of right-of-use assets | $ | |||
Interest on lease liabilities | ||||
Operating lease cost | ||||
Variable lease cost | ||||
Short-term lease cost | ||||
Net lease cost | $ | |||
Three months ended March 31 | ||||
2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | |||
Operating cash flows from finance leases | $ | |||
Financing cash flows from finance leases | $ | |||
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | $ | |||
Finance leases | $ | |||
March 31, 2019 | |||
Weighted-average remaining lease term (years) | |||
Operating leases | 5.5 | ||
Finance leases | 17.7 | ||
Weighted-average discount rate | |||
Operating leases | % | ||
Finance leases | % | ||
Operating Leases | Finance Leases | |||||||
Year | ||||||||
Remainder of 2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
Thereafter | ||||||||
Total lease payments | $ | $ | ||||||
Less: imputed interest | ||||||||
Present value of lease liabilities | $ | $ | ||||||
Sale-leaseback obligations | ||||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
Total minimum payments | $ | |||
Operating Leases | ||||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
Total minimum payments | $ | |||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Components of net periodic benefit cost: | ||||||||
Net periodic benefit cost: | ||||||||
Service cost | $ | $ | ||||||
Interest cost | ||||||||
Expected return on plan assets | ( | ) | ( | ) | ||||
Amortization of actuarial loss, net | ||||||||
Net periodic benefit cost | $ | $ | ||||||
Stock Options | Awards/Units (in millions) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (in millions) | Weighted Average Remaining Contractual Life (years) | |||||||||
Outstanding at January 1, 2019 | $ | ||||||||||||
Granted | |||||||||||||
Exercised | ( | ) | |||||||||||
Forfeited | ( | ) | |||||||||||
Outstanding at March 31, 2019 | $ | ||||||||||||
Vested and expected to vest at March 31, 2019 | $ | $ | |||||||||||
Exercisable at March 31, 2019 | $ | $ | |||||||||||
Restricted Stock Awards and Restricted Stock Units | Awards (millions) | Weighted-Average Fair Value | |||||
Outstanding at January 1, 2019 | $ | ||||||
Granted | |||||||
Vested | ( | ) | |||||
Forfeited | |||||||
Outstanding at March 31, 2019 | $ | ||||||
Performance Stock Awards and Performance Share Units | Awards (millions) | Weighted-Average Fair Value | |||||
Outstanding at January 1, 2019 | $ | ||||||
Granted | |||||||
Vested | |||||||
Forfeited | ( | ) | |||||
Outstanding at March 31, 2019 | $ | ||||||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Foreign exchange losses, net | $ | $ | ||||||
Other miscellaneous income, net | ( | ) | ( | ) | ||||
Total | $ | ( | ) | $ | ( | ) | ||
Three months ended March 31, | ||||||
2019 | 2018 | |||||
Effective Tax Rate | % | % | ||||
Three Months Ended March 31, | ||||||||
(In millions, except per share data) | 2019 | 2018 | ||||||
Net income to common shareholders | $ | $ | ||||||
Basic weighted average shares outstanding | ||||||||
Diluted weighted average shares outstanding | ||||||||
Earnings per common share: | ||||||||
Basic earnings per share | $ | $ | ||||||
Diluted earnings per share | $ | $ | ||||||
March 31, 2019 | December 31, 2018 | |||||||
Accounts receivable - trade, net (1) | $ | $ | ||||||
Notes receivable | ||||||||
Other | ||||||||
Total | $ | $ | ||||||
March 31, 2019 | December 31, 2018 | |||||||
Finished products | $ | $ | ||||||
Semi-finished products | ||||||||
Raw materials | ||||||||
Stores and supplies | ||||||||
Total | $ | $ | ||||||
March 31, 2019 | December 31, 2018 | |||||||
Property, plant and equipment | $ | $ | ||||||
Accumulated depreciation | ( | ) | ( | ) | ||||
Property, plant, and equipment, net | $ | $ | ||||||
March 31, 2019 | December 31, 2018 | |||||||
2024 Dollar Term Loans | $ | $ | ||||||
2024 Dollar Senior Notes | ||||||||
2024 Euro Senior Notes | ||||||||
2025 Euro Senior Notes | ||||||||
Short-term and other borrowings | ||||||||
Unamortized original issue discount | ( | ) | ( | ) | ||||
Unamortized deferred financing costs | ( | ) | ( | ) | ||||
$ | $ | |||||||
Less: | ||||||||
Short-term borrowings | $ | $ | ||||||
Current portion of long-term borrowings | ||||||||
Long-term debt | $ | $ | ||||||
Period | 2024 Dollar Senior Notes Percentage | ||
2019 | % | ||
2020 | % | ||
2021 | % | ||
2022 and thereafter | % | ||
Period | 2024 Euro Senior Notes Percentage | ||
2019 | % | ||
2020 | % | ||
2021 | % | ||
2022 and thereafter | % | ||
Period | 2025 Euro Senior Notes Percentage | ||
2019 | % | ||
2020 | % | ||
2021 | % | ||
2022 and thereafter | % | ||
Remainder of 2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
$ | ||||
March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets: | ||||||||||||||||||||||||||||||||
Interest rate caps (1) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Cross-currency swaps (2) | ||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Interest rate caps (1) | ||||||||||||||||||||||||||||||||
Cross-currency swaps (2) | ||||||||||||||||||||||||||||||||
Investment in equity securities | ||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swaps (1) | ||||||||||||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||||||
Interest rate caps (1) | ||||||||||||||||||||||||||||||||
Interest rate swaps (1) | ||||||||||||||||||||||||||||||||
Cross-currency swaps (2) | ||||||||||||||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||||
2024 Dollar Senior Notes | ||||||||||||||||||||||||||||||||
2024 Euro Senior Notes | ||||||||||||||||||||||||||||||||
2025 Euro Senior Notes | ||||||||||||||||||||||||||||||||
2024 Dollar Term Loans | ||||||||||||||||||||||||||||||||
March 31, 2019 | December 31, 2018 | |||||||
Accumulated other comprehensive (loss) income (AOCI): | ||||||||
Interest rate caps (cash flow hedges) | $ | $ | ( | ) | ||||
Interest rate swaps (cash flow hedges) | ||||||||
Cross-currency swaps (net investment hedges) | ( | ) | ( | ) | ||||
Total accumulated other comprehensive (loss) income | $ | ( | ) | $ | ( | ) | ||
For the Three Months Ended March 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Derivatives in Cash Flow and Net Investment Hedges | Location of (Gain) Loss Recognized in Income on Derivatives | Net Amount of (Gain) Loss Recognized in OCI on Derivatives | Amount of (Gain) Loss Recognized in Income | Net Amount of (Gain) Loss Recognized in OCI on Derivatives | Amount of (Gain) Loss Recognized in Income | ||||||||||||
Interest rate caps | Interest expense, net | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Interest rate swaps | Interest expense, net | ( | ) | ||||||||||||||
Cross-currency swaps | Interest expense, net | ( | ) | ( | ) | ||||||||||||
Three Months Ended March 31, | |||||||||
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of (Gain) Loss Recognized in Income on Derivatives | 2019 | 2018 | ||||||
Interest rate caps | Interest expense, net | $ | $ | ||||||
Foreign currency forward contracts | Other income, net | ||||||||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Net sales (1): | ||||||||
Refinish | $ | $ | ||||||
Industrial | ||||||||
Total Net sales Performance Coatings | ||||||||
Light Vehicle | ||||||||
Commercial Vehicle | ||||||||
Total Net sales Transportation Coatings | ||||||||
Total Net sales | ||||||||
Equity in earnings (losses) in unconsolidated affiliates: | ||||||||
Performance Coatings | ||||||||
Transportation Coatings | ( | ) | ( | ) | ||||
Total | $ | ( | ) | $ | ||||
Investment in unconsolidated affiliates: | ||||||||
Performance Coatings | ||||||||
Transportation Coatings | ||||||||
Total | $ | $ | ||||||
(1) |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Segment Adjusted EBIT (1): | ||||||||
Performance Coatings | $ | $ | ||||||
Transportation Coatings | ||||||||
Total (2) | ||||||||
Interest expense, net | ||||||||
Termination benefits and other employee related costs (a) | ( | ) | ||||||
Offering and transactional costs (b) | ||||||||
Accelerated depreciation (c) | ||||||||
Loss on assets held for sale (d) | ||||||||
Change in fair value of equity investments (e) | ||||||||
Income before income taxes | $ | $ | ||||||
(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. |
(a) | Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are associated with Axalta Way initiatives. These amounts are not considered indicative of our ongoing operating performance. |
(b) | Represents acquisition and divestiture-related expenses, all of which are not considered indicative of our ongoing operating performance. |
(c) | 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. |
(d) | Represents the loss recognized on the anticipated sale of our interest in a joint venture business determined to be held for sale, which is not considered indicative of our ongoing operating performance. |
(e) | Represents mark to market impacts of our equity investments, which we do not consider to be indicative of our ongoing operating performance. |
Total Axalta | Noncontrolling Interests | Total | ||||||||||
Balance at December 31, 2018 | $ | $ | $ | |||||||||
Cumulative effect of an accounting change | ( | ) | ( | ) | ||||||||
Balance at January 1, 2019 | $ | $ | $ | |||||||||
Net income | ||||||||||||
Other comprehensive loss, net of tax | ||||||||||||
Recognition of stock-based compensation | ||||||||||||
Exercise of stock options | ||||||||||||
Treasury share repurchases | ( | ) | ( | ) | ||||||||
Non-controlling interests of acquired subsidiaries | ( | ) | ( | ) | ||||||||
Dividends paid to noncontrolling interests | ( | ) | ( | ) | ||||||||
Balance at March 31, 2019 | $ | $ | $ | |||||||||
Total Axalta | Noncontrolling Interests | Total | ||||||||||
Balance at December 31, 2017 | $ | $ | $ | |||||||||
Cumulative effect of an accounting change | ||||||||||||
Balance at January 1, 2018 | $ | $ | $ | |||||||||
Net income | ||||||||||||
Other comprehensive income, net of tax | ||||||||||||
Recognition of stock-based compensation | ||||||||||||
Exercise of stock options | ||||||||||||
Treasury share repurchases | ( | ) | ( | ) | ||||||||
Noncontrolling interests of acquired subsidiaries | ( | ) | ( | ) | ||||||||
Dividends paid to noncontrolling interests | ( | ) | ( | ) | ||||||||
Balance at March 31, 2018 | $ | $ | $ | |||||||||
Unrealized Currency Translation Adjustments | Pension Adjustments | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Balance at December 31, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Current year deferrals to AOCI | ( | ) | ||||||||||||||
Reclassifications from AOCI to Net income | ( | ) | ( | ) | ||||||||||||
Net Change | ( | ) | ||||||||||||||
Balance at March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Unrealized Currency Translation Adjustments | Pension Adjustments | Unrealized Gain (Loss) on Securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Balance at December 31, 2017 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||
Cumulative effect of an accounting change | ( | ) | ( | ) | ||||||||||||||||
Balance at January 1, 2018 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Current year deferrals to AOCI | ||||||||||||||||||||
Reclassifications from AOCI to Net income | ( | ) | ||||||||||||||||||
Net Change | ||||||||||||||||||||
Balance at March 31, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||
• | adverse developments in economic conditions and, particularly, in conditions in the automotive and transportation industries; |
• | volatility in the capital, credit and commodities markets; |
• | our inability to successfully execute on our growth strategy; |
• | increased competition; |
• | reduced demand for some of our products as a result of improved safety features on vehicles, insurance company influence, new business models or new methods of travel |
• | risks of the loss or change in purchasing levels of any of our significant customers or the consolidation of MSOs, distributors and/or body shops; |
• | our reliance on our distributor network and third-party delivery services for the distribution and export of certain of our products; |
• | credit risk exposure from our customers; |
• | price increases or business interruptions in our supply of raw materials; |
• | failure to develop and market new products and manage product life cycles; |
• | business disruptions, security threats and security breaches, including security risks to our information technology systems; |
• | risks associated with our outsourcing strategies; |
• | risks associated with our non-U.S. operations; |
• | currency-related risks; |
• | terrorist acts, conflicts, wars and natural disasters that may materially adversely affect our business, financial condition and results of operations; |
• | risks associated with the United Kingdom’s withdrawal from the European Union; |
• | failure to comply with the anti-corruption laws of the United States and various international jurisdictions; |
• | failure to comply with anti-terrorism laws and regulations and applicable trade embargoes; |
• | risks associated with protecting data privacy; |
• | significant environmental liabilities and costs as a result of our current and past operations or products, including operations or products related to our business prior to our acquisition of DuPont Performance Coatings; |
• | transporting certain materials that are inherently hazardous due to their toxic nature; |
• | litigation and other commitments and contingencies; |
• | ability to recruit and retain the experienced and skilled personnel we need to compete; |
• | unexpected liabilities under any pension plans applicable to our employees; |
• | work stoppages, union negotiations, labor disputes and other matters associated with our labor force; |
• | our ability to protect and enforce intellectual property rights; |
• | intellectual property infringement suits against us by third parties; |
• | our ability to realize the anticipated benefits of any acquisitions and divestitures; |
• | our joint ventures’ ability to operate according to our business strategy should our joint venture partners fail to fulfill their obligations; |
• | risk that the insurance we maintain may not fully cover all potential exposures; |
• | risks associated with changes in tax rates or regulations, including unexpected impacts of the new U.S. TCJA legislation, which may differ with further regulatory guidance and changes in our current interpretations and assumptions; |
• | our substantial indebtedness; |
• | our ability to obtain additional capital on commercially reasonable terms may be limited; |
• | any statements of belief and any statements of assumptions underlying any of the foregoing; |
• | other factors disclosed in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2018 and our other filings with the Securities and Exchange Commission; and |
• | other factors beyond our control. |
• | Performance Coatings: Net sales decreased 2.4% driven primarily by the impacts of unfavorable foreign currency translation of 4.8%, as well as a decline in volumes across both end-markets of 0.9%, inclusive of the positive impacts of acquisitions of 0.5%. Partially offsetting these declines were increases in average selling prices across both end-markets of 3.3%. |
• | Transportation Coatings: Net sales decreased 7.9% driven primarily by the impacts of unfavorable foreign currency translation of 4.8%, as well as a decline in volumes of 3.3%. Partially offsetting these declines were higher average selling prices of 0.2%. |
(In millions) | Three Months Ended March 31, | 2019 vs 2018 | |||||||||
2019 | 2018 | % change | |||||||||
Performance Coatings | |||||||||||
Refinish | $ | 405.5 | $ | 414.2 | (2.1 | )% | |||||
Industrial | 307.8 | 316.8 | (2.8 | )% | |||||||
Total Net sales Performance Coatings | 713.3 | 731.0 | (2.4 | )% | |||||||
Transportation Coatings | |||||||||||
Light Vehicle | 315.9 | 353.2 | (10.6 | )% | |||||||
Commercial Vehicle | 90.1 | 87.8 | 2.6 | % | |||||||
Total Net sales Transportation Coatings | 406.0 | 441.0 | (7.9 | )% | |||||||
Total Net sales | $ | 1,119.3 | $ | 1,172.0 | (4.5 | )% | |||||
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Net sales | $ | 1,119.3 | $ | 1,172.0 | $ | (52.7 | ) | (4.5 | )% | ||||||
Volume effect | (2.1 | )% | |||||||||||||
Impact of acquisitions | 0.3 | % | |||||||||||||
Price/product mix effect | 2.1 | % | |||||||||||||
Exchange rate effect | (4.8 | )% | |||||||||||||
Net sales decreased due to the following: |
n Unfavorable impacts of currency translation, due primarily to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
n Lower sales volumes across both segments, partially offset by an increase within our commercial vehicle end-market |
Partially offset by: |
n Higher average selling prices across both our segments, primarily within our Performance Coatings segment |
n Impacts of acquisitions within our Performance Coatings segment |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Cost of sales | $ | 751.3 | $ | 776.0 | $ | (24.7 | ) | (3.2 | )% | ||||||
% of net sales | 67.1 | % | 66.2 | % | |||||||||||
Cost of sales decreased due to the following: |
n Favorable impacts of currency translation of 3.7%, due primarily to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
n Lower sales volumes across both segments |
Partially offset by: |
n Increased raw material costs across both segments |
n Incremental accelerated depreciation expense of $6.1 million, for which there were no costs in the comparable period |
Cost of sales as a percentage of net sales increased due to the following: |
n Lower sales volume covering fixed costs and the incremental accelerated depreciation expense of $6.1 million, as well as increased raw material costs, partially offset by increase in price recapture in net sales |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
SG&A | $ | 217.5 | $ | 227.8 | $ | (10.3 | ) | (4.5 | )% | ||||||
Selling, general and administrative expenses decreased due to the following: |
n Favorable impacts of currency translation of 4.7% due primarily to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
Partially offset by: |
n Axalta Way cost savings initiatives and acquisition-related costs of $1.9 million and $0.3 million for the three months ended March 31, 2019 and 2018, respectively, resulting in a $1.6 million increase over the comparable period |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Loss on assets held for sale | $ | 5.2 | $ | — | $ | 5.2 | 100.0 | % | |||||||
Loss on assets held for sale increased due to the following: |
n During the three months ended March 31, 2019, we recorded a loss on the anticipated sale of our interest in a joint venture business determined to be held for sale as discussed above in "Business Highlights - Acquisitions and Divestitures" |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Research and development expenses | $ | 18.2 | $ | 19.3 | $ | (1.1 | ) | (5.7 | )% | ||||||
Research and development expenses decreased due to the following: |
n Favorable impacts of currency translation, which reduced expenses by 1.0% due primarily to the weakening of the Euro and Chinese Renminbi compared to the U.S. dollar |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Amortization of acquired intangibles | $ | 28.5 | $ | 28.9 | $ | (0.4 | ) | (1.4 | )% | ||||||
Amortization of acquired intangibles decreased due to the following: |
n Favorable impacts of foreign currency of 1.9%, primarily related to the weakening of the Euro and Chinese Renminbi compared to the U.S. dollar |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Interest expense, net | $ | 41.3 | $ | 39.4 | $ | 1.9 | 4.8 | % | |||||||
Interest expense, net increased due to the following: |
n Increases in average interest rates due to LIBOR increases on our variable rate debt over the comparable period, mostly offset by impacts of our derivative instruments |
n Increases in interest costs associated with finance leases under the new standard, of which certain leases were historically treated as sale-leaseback financing transactions |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Other income, net | $ | (1.0 | ) | $ | (2.2 | ) | $ | 1.2 | (54.5 | )% | |||||
Other income, net decreased due to the following: |
n Increase in miscellaneous expenses, including increased net foreign exchange losses |
Three months ended March 31, | ||||||||
2019 | 2018 | |||||||
Income before income taxes | $ | 58.3 | $ | 82.8 | ||||
Provision for income taxes | 14.2 | 11.8 | ||||||
Statutory U.S. Federal income tax rate | 21.0 | % | 21.0 | % | ||||
Effective tax rate | 24.3 | % | 14.3 | % | ||||
Effective tax rate vs. statutory U.S. Federal income tax rate | 3.3 | % | (6.7 | )% | ||||
(Favorable) Unfavorable Impact | ||||||||
Items impacting the effective tax rate vs. statutory U.S. federal income tax rate | 2019 | 2018 | ||||||
Earnings generated in jurisdictions where the statutory rate is lower than the U.S. Federal rate (1) | $ | (9.2 | ) | $ | (4.3 | ) | ||
Changes in valuation allowance | 2.6 | 1.3 | ||||||
Foreign exchange gain (loss), net | 5.9 | (4.0 | ) | |||||
Stock-based compensation net excess tax benefits | (3.6 | ) | (2.4 | ) | ||||
Non-deductible expenses and interest | 1.6 | 3.1 | ||||||
Increase in unrecognized tax benefits (2) | 0.8 | 6.4 | ||||||
U.S. tax reform (3) | — | (12.4 | ) | |||||
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Net sales | $ | 713.3 | $ | 731.0 | $ | (17.7 | ) | (2.4 | )% | ||||||
Volume effect | (1.4 | )% | |||||||||||||
Impact of acquisitions | 0.5 | % | |||||||||||||
Price/product mix effect | 3.3 | % | |||||||||||||
Exchange rate effect | (4.8 | )% | |||||||||||||
Adjusted EBIT | $ | 78.6 | $ | 76.0 | $ | 2.6 | 3.4 | % | |||||||
Adjusted EBIT Margin | 11.0 | % | 10.4 | % | |||||||||||
Net sales decreased due to the following: |
n Unfavorable currency translation primarily related to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
n Decreases in organic volumes across both end-markets |
Partially offset by: |
n Higher average selling prices across both end-markets and all regions |
n Benefits from acquisitions in the refinish end-market |
Adjusted EBIT increased due to the following: |
n Higher average selling prices across both segments and all regions |
Partially offset by: |
n Unfavorable currency translation primarily related to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
n Higher raw material costs across both end-markets |
n Lower organic volumes, offset partially by the impacts of our recent acquisitions |
Three months ended March 31, | 2019 vs 2018 | ||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||
Net sales | $ | 406.0 | $ | 441.0 | $ | (35.0 | ) | (7.9 | )% | ||||||
Volume effect | (3.3 | )% | |||||||||||||
Price/product mix effect | 0.2 | % | |||||||||||||
Exchange rate effect | (4.8 | )% | |||||||||||||
Adjusted EBIT | $ | 34.2 | $ | 45.0 | $ | (10.8 | ) | (24.0 | )% | ||||||
Adjusted EBIT Margin | 8.4 | % | 10.2 | % | |||||||||||
Net sales decreased due to the following: |
n Unfavorable currency translation primarily related to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
n Volume decreases primarily in our light vehicle end-market |
Partially offset by: |
n Increases in average selling price in our light vehicle end-market, primarily in our North America and EMEA regions |
Adjusted EBIT decreased due to the following: |
n Higher raw materials costs across both end-markets and all regions |
n Decreases in sales volumes across all regions in our light vehicle end-market |
n Unfavorable currency translation primarily related to the weakening of the Euro, Chinese Renminbi and Brazilian Real compared to the U.S. dollar |
Partially offset by: |
n Increases in average selling price in our light vehicle end-market, primarily in our North America and EMEA regions |
n Reductions in costs due to operational efficiencies associated with our cost savings initiatives |
Three months ended March 31, | ||||||||
(In millions) | 2019 | 2018 | ||||||
Net cash provided by (used for): | ||||||||
Operating activities: | ||||||||
Net income | $ | 44.1 | $ | 71.0 | ||||
Depreciation and amortization | 91.6 | 91.9 | ||||||
Amortization of deferred financing costs and original issue discount | 2.2 | 1.9 | ||||||
Deferred income taxes | 0.4 | (4.9 | ) | |||||
Realized and unrealized foreign exchange (gains) losses, net | 0.9 | (1.3 | ) | |||||
Stock-based compensation | 6.7 | 8.4 | ||||||
Loss on assets held for sale | 5.2 | — | ||||||
Interest income on swaps designated as net investment hedges | (3.5 | ) | — | |||||
Other non-cash, net | (0.3 | ) | (5.3 | ) | ||||
Net income adjusted for non-cash items | 147.3 | 161.7 | ||||||
Changes in operating assets and liabilities | (205.2 | ) | (182.7 | ) | ||||
Operating activities | (57.9 | ) | (21.0 | ) | ||||
Investing activities | (18.8 | ) | (117.7 | ) | ||||
Financing activities | (101.8 | ) | (41.2 | ) | ||||
Effect of exchange rate changes on cash | 0.8 | 10.3 | ||||||
Net decrease in cash and cash equivalents | $ | (177.7 | ) | $ | (169.6 | ) | ||
(In millions) | March 31, 2019 | December 31, 2018 | ||||||
2024 Dollar Term Loans | $ | 2,405.7 | $ | 2,411.8 | ||||
2024 Dollar Senior Notes | 500.0 | 500.0 | ||||||
2024 Euro Senior Notes | 376.9 | 383.3 | ||||||
2025 Euro Senior Notes | 506.3 | 514.9 | ||||||
Short-term and other borrowings | 111.4 | 103.8 | ||||||
Unamortized original issue discount | (12.1 | ) | (12.6 | ) | ||||
Unamortized deferred financing costs | (35.7 | ) | (37.2 | ) | ||||
$ | 3,852.5 | $ | 3,864.0 | |||||
Less: | ||||||||
Short-term borrowings | $ | 19.2 | $ | 17.9 | ||||
Current portion of long-term borrowings | 24.3 | 24.3 | ||||||
Long-term debt | $ | 3,809.0 | $ | 3,821.8 | ||||
(in thousands, except per share data) | ||||||||||||||
Month | Total Number of Shares Purchased | Average Price Paid per Share | 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 Agreement 1 | ||||||||||
January 2019 | — | $ | — | — | $ | 366,455.5 | ||||||||
February 2019 | 1,916.3 | 26.11 | 1,916.3 | 316,417.2 | ||||||||||
March 2019 | 631.2 | 24.93 | 631.2 | 300,682.7 | ||||||||||
Total | 2,547.5 | $ | 25.82 | 2,547.5 | $ | 300,682.7 | ||||||||
EXHIBIT NO. | DESCRIPTION OF EXHIBITS |
10.58 | |
10.59 | |
31.1 | |
31.2 | |
32.1†† | |
32.2†† | |
101† | INS - 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 - XBRL Taxonomy Extension Schema Document |
101† | CAL - XBRL Taxonomy Extension Calculation Linkbase Document |
101† | DEF - XBRL Taxonomy Extension Definition Linkbase Document |
101† | LAB - XBRL Taxonomy Extension Label Linkbase Document |
101† | PRE - XBRL Taxonomy Extension Presentation Linkbase Document |
† | In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
†† | 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: | April 25, 2019 | By: /s/ Robert W. Bryant | |
Robert W. Bryant | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) | |||
Date: | April 25, 2019 | By: /s/ Sean M. Lannon | |
Sean M. Lannon | |||
Senior Vice President and Chief Financial Officer | |||
(Principal Financial Officer and Principal Accounting Officer) | |||
Participant: | |
Grant Date: | |
Target Number of PSUs (the “Target PSUs”): | [____] Notwithstanding the number of Target PSUs, the number of PSUs that are eligible to vest pursuant to this Agreement range from zero to 200% of the Target PSUs. |
Type of Shares Issuable: | Common Stock |
Vesting Schedule: | The PSUs will vest in accordance with the vesting schedule set forth in Appendix 1. |
AXALTA COATING SYSTEMS LTD. HOLDER: | PARTICIPANT | ||
By: | By: | ||
Print Name: | Print Name: | ||
Title: | |||
1. | If the Company achieves an Adjusted EPS between the “Threshold” and “Target” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 3.5% and 14% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
2. | If the Company achieves an Adjusted EPS between the “Target” and “Maximum” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 14% and 28% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
3. | If the Company achieves an Adjusted EPS greater than the “Maximum” amount in the table below for any fiscal year during the Performance Period, a number of PSUs equal to 28% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
4. | If the Company achieves an Adjusted EPS between the “Threshold” and “Target” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 7% and 28% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
5. | If the Company achieves an Adjusted EPS between the “Target” and “Maximum” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 28% and 56% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
6. | If the Company achieves an Adjusted EPS greater than the “Maximum” amount in the table below for the cumulative Performance Period, a number of PSUs equal to 56% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
ADJUSTED EPS | Fiscal Year 2019 | Fiscal Year 2020 | Fiscal Year 2021 | Performance Period (cumulative 3-year) |
Metric Target | $1.39 | $1.48 | $1.63 | $4.55 |
Threshold (% of metric target) | $1.251 (90%) | $1.258 (85%) | $1.304 (80%) | $3.8675 (85%) |
Target (% or metric target) | $1.39 (100%) | $1.48 (100%) | $1.63 (100%) | $4.55 (100%) |
Maximum (% of metric target) | $1.529 (110%) | $1.702 (115%) | $1.956 (120%) | $5.2325 (115%) |
1. | If the Company achieves an ROIC between the “Threshold” and “Target” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 1.5% and 6% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
2. | If the Company achieves an ROIC between the “Target” and “Maximum” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 6% and 12% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
3. | If the Company achieves an ROIC greater than the “Maximum” amount in the table below for any fiscal year during the Performance Period, a number of PSUs equal to 12% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
4. | If the Company achieves an ROIC between the “Threshold” and “Target” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 3% and 12% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
5. | If the Company achieves an ROIC between the “Target” and “Maximum” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 12% and 24% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
6. | If the Company achieves an ROIC greater than the “Maximum” amount in the table below for the cumulative Performance Period, a number of PSUs equal to 24% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
ROIC | Fiscal Year 2019 | Fiscal Year 2020 | Fiscal Year 2021 | Performance Period (cumulative 3-year) |
Metric Target | 13.5% | 14.2% | 15.3% | 14.4% |
Threshold (% of metric target) | 12.15% (90%) | 12.07% (85%) | 12.24% (80%) | 12.24% (85%) |
Target (% or metric target) | 13.5% (100%) | 14.2% (100%) | 15.3% (100%) | 14.4% (100%) |
Maximum (% of metric target) | 14.85% (110%) | 16.33% (115%) | 18.36% (120%) | 16.56% (115%) |
1. | If the Company achieves a TSR over the Performance Period that is at or below the 25th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of PSUs equal to 75% of the Banked PSUs shall vest. |
2. | If the Company achieves a TSR over the Performance Period that is between the 25th percentile and 75th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of PSUs equal to 100% of the Banked PSUs shall vest. |
3. | If the Company achieves a TSR over the Performance Period that is at or above the 75th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of PSUs equal to the lesser of (i) 125% of the Banked PSUs or (ii) the Maximum PSUs, shall vest. |
Participant: | |
Grant Date: | |
Target Number of PSUs (the “Target PSUs”): | [____] Notwithstanding the number of Target PSUs, the number of PSUs that are eligible to vest pursuant to this Agreement range from zero to 200% of the Target PSUs. |
Type of Shares Issuable: | Common Stock |
Vesting Schedule: | The PSUs will vest in accordance with the vesting schedule set forth in Appendix 1. |
AXALTA COATING SYSTEMS LTD. HOLDER: | PARTICIPANT | ||
By: | By: | ||
Print Name: | Print Name: | ||
Title: | |||
1. | If the Company achieves an Adjusted EPS between the “Threshold” and “Target” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 3.5% and 14% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
2. | If the Company achieves an Adjusted EPS between the “Target” and “Maximum” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 14% and 28% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
3. | If the Company achieves an Adjusted EPS greater than the “Maximum” amount in the table below for any fiscal year during the Performance Period, a number of PSUs equal to 28% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
4. | If the Company achieves an Adjusted EPS between the “Threshold” and “Target” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 7% and 28% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
5. | If the Company achieves an Adjusted EPS between the “Target” and “Maximum” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 28% and 56% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
6. | If the Company achieves an Adjusted EPS greater than the “Maximum” amount in the table below for the cumulative Performance Period, a number of PSUs equal to 56% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
ADJUSTED EPS | Fiscal Year 2019 | Fiscal Year 2020 | Fiscal Year 2021 | Performance Period (cumulative 3-year) |
Metric Target | $1.39 | $1.48 | $1.63 | $4.55 |
Threshold (% of metric target) | $1.251 (90%) | $1.258 (85%) | $1.304 (80%) | $3.8675 (85%) |
Target (% or metric target) | $1.39 (100%) | $1.48 (100%) | $1.63 (100%) | $4.55 (100%) |
Maximum (% of metric target) | $1.529 (110%) | $1.702 (115%) | $1.956 (120%) | $5.2325 (115%) |
1. | If the Company achieves an ROIC between the “Threshold” and “Target” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 1.5% and 6% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
2. | If the Company achieves an ROIC between the “Target” and “Maximum” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between 6% and 12% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
3. | If the Company achieves an ROIC greater than the “Maximum” amount in the table below for any fiscal year during the Performance Period, a number of PSUs equal to 12% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
4. | If the Company achieves an ROIC between the “Threshold” and “Target” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 3% and 12% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
5. | If the Company achieves an ROIC between the “Target” and “Maximum” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between 12% and 24% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
6. | If the Company achieves an ROIC greater than the “Maximum” amount in the table below for the cumulative Performance Period, a number of PSUs equal to 24% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.” |
ROIC | Fiscal Year 2019 | Fiscal Year 2020 | Fiscal Year 2021 | Performance Period (cumulative 3-year) |
Metric Target | 13.5% | 14.2% | 15.3% | 14.4% |
Threshold (% of metric target) | 12.15% (90%) | 12.07% (85%) | 12.24% (80%) | 12.24% (85%) |
Target (% or metric target) | 13.5% (100%) | 14.2% (100%) | 15.3% (100%) | 14.4% (100%) |
Maximum (% of metric target) | 14.85% (110%) | 16.33% (115%) | 18.36% (120%) | 16.56% (115%) |
1. | If the Company achieves a TSR over the Performance Period that is at or below the 25th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of PSUs equal to 75% of the Banked PSUs shall vest. |
2. | If the Company achieves a TSR over the Performance Period that is between the 25th percentile and 75th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of PSUs equal to 100% of the Banked PSUs shall vest. |
3. | If the Company achieves a TSR over the Performance Period that is at or above the 75th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of PSUs equal to the lesser of (i) 125% of the Banked PSUs or (ii) the Maximum PSUs, shall vest. |
1. | I have reviewed this quarterly report on Form 10-Q of Axalta Coating Systems Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Robert W. Bryant |
Name: | Robert W. Bryant |
Title: | Chief Executive Officer and President |
1. | I have reviewed this quarterly report on Form 10-Q of Axalta Coating Systems Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Sean M. Lannon |
Name: | Sean M. Lannon |
Title: | Senior Vice President and Chief Financial Officer |
(1) | The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2019 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Robert W. Bryant |
Name: | Robert W. Bryant |
Title: | Chief Executive Officer and President |
(1) | The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2019 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Sean M. Lannon |
Name: | Sean M. Lannon |
Title: | Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Apr. 18, 2019 |
|
| Document And Entity Information [Abstract] | ||
| Entity Registrant Name | Axalta Coating Systems Ltd. | |
| Trading Symbol | AXTA | |
| Entity Central Index Key | 0001616862 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Filer Category | Large Accelerated Filer | |
| Document Type | 10-Q | |
| Document Period End Date | Mar. 31, 2019 | |
| Document Fiscal Year Focus | 2019 | |
| Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY) | Q1 | |
| Amendment Flag | false | |
| Entity Small Business | false | |
| Entity Emerging Growth Company | false | |
| Entity Common Stock, Shares Outstanding | 234,601,688 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Income Statement [Abstract] | ||
| Net sales | $ 1,119.3 | $ 1,172.0 |
| Cost of Goods and Services Sold | 751.3 | 776.0 |
| Selling, general and administrative expenses | 217.5 | 227.8 |
| Loss on assets held for sale | 5.2 | 0.0 |
| Research and development expenses | 18.2 | 19.3 |
| Amortization of acquired intangibles | 28.5 | 28.9 |
| Income from operations | 98.6 | 120.0 |
| Interest expense, net | 41.3 | 39.4 |
| Other income, net | (1.0) | (2.2) |
| Income before income taxes | 58.3 | 82.8 |
| Provision for income taxes | 14.2 | 11.8 |
| Net income | 44.1 | 71.0 |
| Less: Net income attributable to noncontrolling interests | 0.7 | 1.1 |
| Net income attributable to controlling interests | $ 43.4 | $ 69.9 |
| Basic net income (loss) per share (dollars per share) | $ 0.19 | $ 0.29 |
| Diluted net income (loss) per share (dollars per share) | $ 0.18 | $ 0.28 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Statement of Comprehensive Income [Abstract] | ||
| Net income | $ 44.1 | $ 71.0 |
| Other comprehensive (loss) income, before tax: | ||
| Foreign currency translation adjustments | 13.3 | 43.1 |
| Unrealized (loss) gain on derivatives | (14.6) | 7.9 |
| Unrealized gain on pension plan obligations | 0.5 | 0.3 |
| Other comprehensive (loss) income, before tax | (0.8) | 51.3 |
| Income tax (benefit) provision related to items of other comprehensive (loss) income | (1.7) | 1.3 |
| Other comprehensive income, net of tax | 0.9 | 50.0 |
| Comprehensive income | 45.0 | 121.0 |
| Less: Comprehensive (loss) income attributable to noncontrolling interests | 1.2 | 2.0 |
| Comprehensive income attributable to controlling interests | $ 43.8 | $ 119.0 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
| Common shares authorized (in shares) | 1,000,000,000.0 | 1,000,000,000.0 |
| Common shares issued (in shares) | 247,800,000 | 246,700,000 |
| Treasury shares, at cost | 13,600,000 | 11,100,000 |
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies (Notes) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Accounting [Text Block] | The interim condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair statement of the financial position of Axalta Coating Systems Ltd., a Bermuda exempted company limited by shares, and its consolidated subsidiaries ("Axalta," the "Company," "we," "our" and "us") at March 31, 2019 and December 31, 2018, the results of operations and comprehensive income (loss) for the three months ended March 31, 2019 and 2018, and its cash flows for the three months then ended. All intercompany balances and transactions have been eliminated. These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The interim unaudited condensed consolidated financial statements include the accounts of Axalta and its subsidiaries, and entities in which a controlling interest is maintained. Certain of our joint ventures are accounted for on a one-month lag basis, the effect of which is not material. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for a full year. Reclassifications During the three months ended March 31, 2019, the condensed consolidated statements of operations were updated to combine "Net sales" and "Other revenue" into "Net sales". The 2018 condensed consolidated statements of operations have been updated for comparability with the current year presentation. Correction of Immaterial Errors to Prior Period Financial Statements During the three months ended March 31, 2019, the Company identified and corrected an error that affected the 2018 previously-issued consolidated and condensed financial statements. Specifically, the financial statements reflected an investment in noncontrolling interest payment of $26.9 million within investing activities as opposed to its appropriate classification within financing activities. The Company determined that these corrections were immaterial to the previously-issued financial statements. However, given the significance of the error and for comparability purposes, we have revised the condensed consolidated statements of cash flows for the three months ended March 31, 2018, and will revise annual and interim periods in future filings. This revision has no impacts on the consolidated or condensed statements of operations or balance sheets.
Recently Adopted Accounting Guidance In February 2016, the FASB issued ASU 2016-02, "Leases," which, together with amendments comprising ASC 842, requires lessees to identify arrangements that should be accounted for as leases and generally recognized, for operating and finance leases with terms exceeding twelve months, a right-of-use asset (or "ROU") and lease liability on the balance sheet. In addition to this main provision, this standard included a number of additional changes to lease accounting. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted prior to this date. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either the adoption date or the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We elected to adopt the new standard on January 1, 2019 and use the adoption date as our date of initial application. As a result, historical financial information will not be updated, and the disclosures required under the new standard will not be provided as of and for periods before January 1, 2019. See Note 7 for further information on the implementation of the standard. The new standard provides a number of optional practical expedients in transition. We have elected the package of practical expedients, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We have also elected the practical expedient pertaining to land easements which permits entities to forgo the evaluation of existing land easement arrangements in transition to determine if they contain a lease. We did not elect the use-of-hindsight practical expedient. The new standard also provides practical expedients for an entity’s ongoing accounting. We have elected the short term lease exception and we will not recognize ROU assets or lease liabilities for qualifying leases (leases with a term of less than 12 months from lease commencement). We also elected the accounting policy election to not separate lease and non-lease components for all asset classes. The Company implemented an outsourced software solution to support the ongoing accounting requirements that this standard will have on our consolidated financial statements. We have evaluated the completeness and accuracy of lease data entered into the software solution and updated our processes, policies and internal controls. Changes to our internal controls covered the identification, accounting and disclosure of leases both upon adoption and subsequent to adoption. Adoption of the new standard at January 1, 2019 resulted in a one-time loss to retained earnings of $0.7 million on our condensed consolidated balance sheets and consolidated statement of changes in shareholders’ equity related to the net difference of derecognition of existing assets and debt obligations associated with our leases currently accounted for as sale-leaseback financings, for which the ASU requires accounting for as a lease at the date of initial application. Of the accounting standards we have adopted in 2019, the below standard did not have a material impact:
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Revenue Revenue |
3 Months Ended |
|---|---|
Mar. 31, 2019 | |
| Revenue from Contract with Customer [Abstract] | |
| Revenue | REVENUE We recognize revenue at the point our contractual performance obligations with our customers are satisfied. This occurs at the point in time when control of our products transfers to the customer based on considerations of right to payment, transfer of legal title, physical possession, risks and rewards of ownership and customer acceptance. For the majority of our revenue, control transfers upon shipment of our products to our customers. Our remaining revenue is recorded upon delivery or consumption for our product sales or as incurred for services provided and royalties earned. For certain customer arrangements within our light vehicle, industrial and commercial vehicle end-markets, revenue is recognized upon shipment, as this is the point in time we have concluded that control of our product has transferred to our customer based on our considerations of the indicators of control in the contracts, including right of use and risk and reward of ownership. For consignment arrangements, revenue is recognized upon actual consumption by our customers, as this represents the point in time that control is determined to have transferred to the customer based on the contractual arrangement. In our refinish end-market, our product sales are typically supplied through a network of distributors. Control transfers and revenue is recognized when our products are delivered to our distribution customers. Variable consideration in the form of price, less discounts and rebates, are estimated and recorded, as a reduction to net sales, upon the sale of our products based on our ability to make a reasonable estimate of the amounts expected to be received or incurred. The estimates of variable consideration involve significant assumptions based on the best estimates of inventory held by distributors, applicable pricing, as well as the use of historical actuals for sales, discounts and rebates, which may result in changes in estimates in the future. Consideration for products in which control has transferred to our customers that is conditional on something other than the passage of time is recorded as a contract asset within prepaid expenses and other on the balance sheet. The contract asset balances at March 31, 2019 and December 31, 2018 were $45.2 million and $47.2 million, respectively. We provide certain customers with incremental up-front consideration, subject to clawback provisions, including Business Incentive Plan assets ("BIPs"), which is capitalized as a component of other assets and amortized over the estimated life of the contractual arrangement as a reduction of net sales. At March 31, 2019 and December 31, 2018, the total carrying value of BIPs were $190.5 million and $190.8 million, respectively, and are presented within other assets on the condensed consolidated balance sheets. For the three months ended March 31, 2019 and 2018, $17.1 million and $16.3 million, respectively, were amortized and reflected as reductions of net sales in the condensed consolidated statements of operations. The total carrying value of BIPs exclude other upfront incentives made in conjunction with long-term customer commitments of $81.9 million and $56.0 million at March 31, 2019 and December 31, 2018, respectively, which will be repaid in future periods. See Note 18 for disaggregated net sales by end-market.
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Acquisitions and Divestitures |
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| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions | ACQUISITIONS AND DIVESTITURES During the three months ended March 31, 2019, we entered into an agreement to sell our 60.0% interest in a consolidated joint venture within our Performance Coatings segment. The results of operations of the portion of the business to be sold is included in continuing operations within the condensed consolidated statements of operations. All assets and liabilities of the disposal group have been classified as held for sale on our condensed consolidated balance sheet and recorded at the lower of carrying value and fair value less cost to sell, which resulted in a loss of $5.2 million for the three months ended March 31, 2019. The carrying amounts of the major classes of assets and liabilities that were classified as held for sale at March 31, 2019, within prepaid and other current assets and other accrued liabilities, respectively, as follows:
Other Activity In addition, during the three months ended March 31, 2019, pursuant to the stock purchase agreement for a joint venture acquired during the year ended December 31, 2016, we were required to purchase the remaining interest in our consolidated entity of 24.5% for $26.9 million, increasing our total ownership percentage to 100.0%. At March 31, 2019, for any business combination completed after March 31, 2018, we have not finalized the related purchase accounting and the amounts recorded represent preliminary values. We expect to finalize our purchase accounting during the respective measurement periods which will be no later than one year following the closing dates.
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Goodwill and Identifiable Intangible Assets |
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| Goodwill and Identifiable Intangible Assets | GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS Goodwill The following table shows changes in the carrying amount of goodwill from December 31, 2018 to March 31, 2019 by reportable segment:
Identifiable Intangible Assets The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
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Restructuring |
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| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Restructuring | RESTRUCTURING In accordance with the applicable guidance for ASC 712, Nonretirement Postemployment Benefits, we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated. We have incurred costs in connection with involuntary termination benefits associated with our corporate-related initiatives and cost-saving opportunities associated with our Fit For Growth and Axalta Way initiatives. These amounts are recorded within selling, general and administrative expenses in the condensed consolidated statements of operations. The payments associated with these actions are expected to be completed within 12 to 24 months from the balance sheet date. The following table summarizes the activities related to the restructuring reserves and expenses from December 31, 2018 to March 31, 2019: The impacts to pre-tax earnings from incremental accelerated depreciation resulting from the previously announced closure of our manufacturing facility in Mechelen, Belgium site, for the three months ended March 31, 2019 were $6.1 million, which were recorded to cost of goods sold. There was no accelerated depreciation recorded during the three months ended March 31, 2018.
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Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2019 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees We guarantee certain of our customers’ obligations to third parties, whereby any default by our customers on their obligations could force us to make payments to the applicable creditors. At March 31, 2019 and December 31, 2018, we had outstanding bank guarantees of $12.1 million and $12.7 million, respectively, which expire between 2019 and 2022. We monitor the obligations to evaluate whether we have a liability at the balance sheet date, for which none existed at March 31, 2019 and December 31, 2018. Other We are subject to various pending lawsuits, legal proceedings and other claims in the ordinary course of business, including civil, regulatory and environmental matters. These litigation matters may involve third-party indemnification obligations and/or insurance covering all or part of any potential damage against us. All of these matters are subject to many uncertainties and, accordingly, we cannot determine the ultimate outcome of the proceedings and other claims at this time, although management does not believe that such proceedings, individually or in the aggregate, will have a material adverse effect on the unaudited condensed consolidated financial statements of Axalta. The potential effects, if any, on such condensed consolidated financial statements will be recorded in the period in which these matters are probable and estimable.
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | LEASES We have operating and finance leases for certain warehouses, office spaces, land, and equipment. As described within Note 1, we adopted ASU 2016-02, "Leases," on January 1, 2019 requiring, among other changes, operating and finance leases with terms exceeding twelve months to be recognized as ROU assets and lease liabilities on the balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company used judgment to determine an appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term in a similar economic environment. Certain of our lease agreements include rental payments based on an index or adjusted periodically for inflation. The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, variable lease expense also includes elements of a contract that is based on usage during the term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to leases is summarized as follows:
(1) Operating lease assets are recorded net of accumulated amortization of $5.0 million as of March 31, 2019. (2) Finance lease assets are recorded net of accumulated amortization of $1.4 million as of March 31, 2019. Components of lease expense are summarized as follows:
Supplemental cash flow information related to leases is summarized as follows:
Lease term and discount rate information is summarized as follows:
Maturities of lease liabilities as of March 31, 2019 is as follows:
As discussed in Note 1, we have elected the transition methodology to apply the standard at the beginning of the period of adoption, January 1, 2019, through a cumulative-effect adjustment to retained earnings. Under this transition method, the application date of the new standard shall begin in the reporting period in which we have adopted the standard. For comparability purposes, the following table reflects the total remaining cash payments related to all transactions during the rental term at December 31, 2018 associated with three lease arrangements that were treated as sale-leaseback financing transactions under ASC 840 and disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2018: At December 31, 2018, future minimum payments under non-cancelable operating leases under ASC 840 were as follows:
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| Leases | LEASES We have operating and finance leases for certain warehouses, office spaces, land, and equipment. As described within Note 1, we adopted ASU 2016-02, "Leases," on January 1, 2019 requiring, among other changes, operating and finance leases with terms exceeding twelve months to be recognized as ROU assets and lease liabilities on the balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company used judgment to determine an appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term in a similar economic environment. Certain of our lease agreements include rental payments based on an index or adjusted periodically for inflation. The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, variable lease expense also includes elements of a contract that is based on usage during the term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to leases is summarized as follows:
(1) Operating lease assets are recorded net of accumulated amortization of $5.0 million as of March 31, 2019. (2) Finance lease assets are recorded net of accumulated amortization of $1.4 million as of March 31, 2019. Components of lease expense are summarized as follows:
Supplemental cash flow information related to leases is summarized as follows:
Lease term and discount rate information is summarized as follows:
Maturities of lease liabilities as of March 31, 2019 is as follows:
As discussed in Note 1, we have elected the transition methodology to apply the standard at the beginning of the period of adoption, January 1, 2019, through a cumulative-effect adjustment to retained earnings. Under this transition method, the application date of the new standard shall begin in the reporting period in which we have adopted the standard. For comparability purposes, the following table reflects the total remaining cash payments related to all transactions during the rental term at December 31, 2018 associated with three lease arrangements that were treated as sale-leaseback financing transactions under ASC 840 and disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2018: At December 31, 2018, future minimum payments under non-cancelable operating leases under ASC 840 were as follows:
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Long-term Employee Benefits |
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| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term Employee Benefits | LONG-TERM EMPLOYEE BENEFITS Components of Net Periodic Benefit Cost The following table sets forth the components of net periodic benefit cost for the three months ended March 31, 2019 and 2018:
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Stock-based Compensation |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based Compensation | STOCK-BASED COMPENSATION During the three months ended March 31, 2019 and 2018, we recognized $6.7 million and $8.4 million, respectively, in stock-based compensation expense which was allocated between costs of goods sold and selling, general and administrative expenses on the condensed consolidated statements of operations. We recognized tax benefits of $1.3 million and $1.5 million for the three months ended March 31, 2019 and 2018, respectively. Forfeitures are recorded in the period they occur. 2019 Activity In February 2019, we granted non-qualified service-based stock options, restricted stock units and performance share units to certain employees and directors. All awards were granted under the Company's Amended and Restated 2014 Incentive Award Plan. The performance share units are subject to certain performance and market conditions, in addition to the service-based vesting conditions. A summary of award activity by type for the three months ended March 31, 2019 is presented below.
Cash received by the Company upon exercise of options for the three months ended March 31, 2019 was $11.4 million. Excess tax benefits on these exercises were $3.7 million. At March 31, 2019, there is $7.6 million of unrecognized expense relating to unvested stock options that is expected to be amortized over a weighted average period of 1.7 years.
Tax shortfall expenses on the vesting of restricted stock and restricted stock units during the three months ended March 31, 2019 was $0.1 million. At March 31, 2019, there is $29.5 million of unamortized expense relating to unvested restricted stock and restricted stock units that is expected to be amortized over a weighted average period of 1.7 years. At March 31, 2019, there is $16.5 million of unamortized expense relating to unvested performance stock awards and performance share units that is expected to be amortized over a weighted average period of 2.2 years. The forfeitures include performance stock awards and performance share units that did not meet the performance target required for vesting.
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Other Income, Net |
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| Other Income and Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (Income) Expense, Net | OTHER INCOME, NET
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Income Taxes |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
| Income Taxes | INCOME TAXES Our effective income tax rates for the three months ended March 31, 2019 and 2018 are as follows:
The higher effective tax rate for the three months ended March 31, 2019 was primarily due to the unfavorable impact of net currency exchange losses in 2019 and the one-time favorable impact related to the reduction of the U.S. Tax Cuts and Jobs Act tax charge which lowered the effective tax rate in 2018. These adjustments were partially offset by an increase in net excess tax benefits related to stock-based compensation of $3.6 million compared with $2.4 million for the three months ended March 31, 2019 and 2018, respectively. The effective tax rate for the three months ended March 31, 2019 differs from the U.S. Federal statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded the unfavorable impact of pre-tax losses attributable to jurisdictions where a tax benefit is not expected to be realized, net currency exchange losses and the unfavorable impact associated with the loss on assets held for sale. These adjustments were offset by the favorable adjustments for earnings in jurisdictions where the statutory rate is lower than the U.S. Federal statutory rate, and current year net excess tax benefits related to stock-based compensation.
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Earnings (Loss) Per Common Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (Loss) Per Common Share | EARNINGS PER COMMON SHARE Basic earnings per common share excludes the dilutive impact of potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share includes the effect of potential dilution from the hypothetical exercise of outstanding stock options and vesting of restricted shares and performance shares. A reconciliation of our basic and diluted earnings per common share is as follows: The number of anti-dilutive shares that have been excluded in the computation of diluted earnings per share for the three months ended March 31, 2019 and 2018 were 2.9 million and 2.5 million, respectively.
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Accounts and Notes Receivable, Net |
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| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts and Notes Receivable, Net | ACCOUNTS AND NOTES RECEIVABLE, NET
(1) Allowance for doubtful accounts was $13.9 million and $15.4 million at March 31, 2019 and December 31, 2018, respectively. Bad debt expense of $1.0 million and $0.2 million was included within selling, general and administrative expenses for the three months ended March 31, 2019 and March 31, 2018.
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Inventories |
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| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | INVENTORIES
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Property, Plant and Equipment, Net |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment, Net | PROPERTY, PLANT AND EQUIPMENT, NET Depreciation expense amounted to $45.4 million and $46.4 million for the three months ended March 31, 2019 and March 31, 2018, respectively.
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Borrowings |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | BORROWINGS Borrowings are summarized as follows:
Senior Secured Credit Facilities, as amended On December 15, 2016, Axalta Coating Systems Dutch B B.V. (“Dutch B B.V.”) and its indirect 100% owned subsidiary, Axalta Coating Systems U.S. Holdings Inc. (“Axalta US Holdings”) executed the fourth amendment (the "Fourth Amendment") to the credit agreement (the “Credit Agreement”) governing our Senior Secured Credit Facilities (as defined below). The Fourth Amendment (i) converted all of the outstanding U.S. Dollar term loans ($1,775.3 million) into a new tranche of term loans issued at par with principal of $1,545.0 million (the "2023 Dollar Term Loans"), (ii) converted all of the outstanding Euro term loans (€199.0 million) into a new tranche of term loans issued at par with principal of €400.0 million (the "2023 Euro Term Loans" and, together with the 2023 Dollar Term Loans, the "2023 Term Loans"). On June 1, 2017, Dutch B B.V. and Axalta US Holdings executed the fifth amendment to the Credit Agreement (the "Fifth Amendment"). The Fifth Amendment converted all of the outstanding 2023 Dollar Term Loans ($1,541.1 million) into a new upsized tranche of term loans with principal of $2,000.0 million (the "2024 Dollar Term Loans"). The 2024 Dollar Term Loans were issued at 99.875% of par, or a $2.5 million discount. On April 11, 2018, Dutch B B.V. and Axalta US Holdings executed the sixth amendment to the Credit Agreement (the "Sixth Amendment"). The Sixth Amendment repriced the 2024 Dollar Term Loans and increased the aggregate principal balance by $475.0 million to $2,430.0 million. The increased principal balance of the 2024 Dollar Term Loans under the Sixth Amendment was issued at 99.750% of par or a $6.0 million discount. Proceeds from the Sixth Amendment, along with cash on the balance sheet, were used to extinguish the existing 2023 Euro Term Loans. The 2024 Dollar Term Loans together with the Revolving Credit Facility, as defined herein, are referred to as the "Senior Secured Credit Facilities." On October 31, 2018, Dutch B B.V. and Axalta US Holdings, the Company, and certain other subsidiaries of the Company as guarantors entered into the seventh amendment to the Credit Agreement (the "Seventh Amendment"). The Seventh Amendment amended the Credit Agreement to, among other things, (i) allow for the Company and certain wholly owned subsidiaries of the Company to be added as guarantors under the Credit Agreement, (ii) provide that (A) the covenants in the Credit Agreement generally apply to the Company and its restricted subsidiaries and (B) upon election at any time thereafter, a successor holdings guarantor may be designated and, upon the effectiveness of the guarantee of such successor parent guarantor, the covenants in the Credit Agreement will generally apply to such successor holdings guarantor and its restricted subsidiaries, (iii) otherwise amend the Credit Agreement in order to effect certain corporate transactions as part of a potential internal reorganization of certain of the Company's subsidiaries and certain potential future reorganizations involving the Company and (iv) update guarantee limitations for certain of the guarantors. Interest was and is payable quarterly on both the 2023 Term Loans and 2024 Dollar Term Loans. The 2024 Dollar Term Loans are subject to a floor of zero plus an applicable rate of 1.75% per annum for Eurocurrency Rate Loans as defined in the Credit Agreement and 0.75% per annum for Base Rate Loans as defined in the Credit Agreement. Prior to the Sixth Amendment, interest on the 2024 Dollar Term Loans was subject to a floor of zero, plus an applicable rate. The applicable rate for such 2024 Dollar Term Loans was 2.00% per annum for Eurocurrency Rate Loans as defined in the Credit Agreement and 1.00% per annum for Base Rate Loans as defined in the Credit Agreement. Prior to the Fifth Amendment, interest on the 2023 Dollar Term Loans was subject to a floor of 0.75%, plus an applicable rate. The applicable rate for such 2023 Dollar Term Loans was 2.50% per annum for Eurocurrency Rate Loans as defined in the Credit Agreement and 1.50% per annum for Base Rate Loans as defined in the Credit Agreement. The 2023 Euro Term Loans were also subject to a floor of 0.75%, plus an applicable rate of 2.25% per annum for Eurocurrency Rate Loans. The 2023 Euro Term Loans may not be Base Rate Loans. Any indebtedness under the Senior Secured Credit Facilities may be voluntarily prepaid in whole or in part, in minimum amounts, subject to the provisions set forth in the Credit Agreement. Such indebtedness is subject to mandatory prepayments amounting to the proceeds of asset sales over $75.0 million annually, proceeds from certain debt issuances not otherwise permitted under the Credit Agreement and 50% (subject to a step-down to 25.0% or 0% if the First Lien Leverage Ratio falls below 4.25:1.00 or 3.50:1.00, respectively) of Excess Cash Flow. The Senior Secured Credit Facilities are secured by substantially all assets of the Company and the other guarantors. The 2024 Dollar Term Loans mature on June 1, 2024. Principal is paid quarterly based on 1% per annum of the original principal amount outstanding on the most recent amendment date with the unpaid balance due at maturity. We are subject to customary negative covenants in addition to the First Lien Leverage Ratio financial covenant for purposes of determining any Excess Cash Flow mandatory payment. Further, the Senior Secured Credit Facilities, among other things, include customary restrictions (subject to certain exceptions) on the Company's ability to incur certain indebtedness, grant certain liens, make certain investments, declare or pay certain dividends, or repurchase shares of the Company's common stock. As of March 31, 2019, the Company is in compliance with all covenants under the Senior Secured Credit Facilities. Revolving Credit Facility On August 1, 2016 (the "Third Amendment Effective Date"), Dutch B B.V. and Axalta US Holdings executed the third amendment to the Credit Agreement (the "Third Amendment"). The Third Amendment impacted the revolving credit facility under the Senior Secured Credit Facilities (the "Revolving Credit Facility") by (i) extending the maturity of the Revolving Credit Facility to five years from the Third Amendment Effective Date, or August 1, 2021, provided that such date will be accelerated to the date that is 91 days prior to the maturity of the term loans borrowed under the Credit Agreement if the maturity of such term loans precedes the maturity of the Revolving Credit Facility, (ii) decreasing the applicable interest margins, and (iii) amending the financial covenant applicable to the Revolving Credit Facility to be applicable only when greater than 30% (previously 25%) of the Revolving Credit Facility (including letters of credit not cash collateralized to at least 103%) is outstanding at the end of the fiscal quarter. If such conditions are met, the First Lien Net Leverage Ratio (as defined by the Credit Agreement) at the end of the quarter is required to be greater than 5.50:1.00. At March 31, 2019, the financial covenant is not applicable as there were no borrowings. Under the Third Amendment, interest on any outstanding borrowings under the Revolving Credit Facility is subject to a floor of zero for Adjusted Eurocurrency Rate Loans (as defined in the Credit Agreement) plus an applicable rate of 2.75% (previously 3.50%) subject to an additional step-down to 2.50% or 2.25%, if the First Lien Net Leverage Ratio falls below 3.00:1.00 or 2.50:1.00, respectively. For Base Rate Loans, the interest is subject to a floor of the greater of the federal funds rate plus 0.50%, the Prime Lending Rate or an Adjusted Eurocurrency Rate plus 1%, plus an applicable rate of 1.75% (previously 2.50%), subject to an additional step-down to 1.50% or 1.25%, if the First Lien Net Leverage Ratio falls below 3.00:1.00 and 2.50:1.00, respectively. Under circumstances described in the Credit Agreement, we may increase available revolving or term facility borrowings by up to $700.0 million plus an additional amount subject to the Company not exceeding a maximum first lien leverage ratio described in the Credit Agreement. There have been no borrowings on the Revolving Credit Facility since the issuance of the Senior Secured Credit Facilities. At March 31, 2019 and December 31, 2018, letters of credit issued under the Revolving Credit Facility totaled $43.9 million and $44.8 million, respectively, which reduced the availability under the Revolving Credit Facility. Availability under the Revolving Credit Facility was $356.1 million and $355.2 million at March 31, 2019 and December 31, 2018, respectively. Significant Terms of the Senior Notes On August 16, 2016, Axalta Coating Systems, LLC (the "U.S. Issuer") issued $500.0 million in aggregate principal amount of 4.875% senior unsecured notes (the “2024 Dollar Senior Notes”) and €335.0 million in aggregate principal amount of 4.250% senior unsecured notes (the “2024 Euro Senior Notes”), each due August 2024 (collectively the “2024 Senior Notes”). On September 27, 2016, Dutch B B.V. (the "Dutch Issuer" and together with the U.S. Issuer, the "Issuers"), issued €450.0 million in aggregate principal amount of 3.750% Euro Senior Unsecured Notes due January 2025 (the “2025 Euro Senior Notes” and together with the 2024 Senior Notes, the "Senior Notes"). The indentures governing the Senior Notes contain covenants that restrict the ability of the Issuers and their subsidiaries to, among other things, incur additional debt, make certain payments including payment of dividends or repurchase equity interest of the Issuers, make loans or acquisitions or capital contributions and certain investments, incur certain liens, sell assets, merge or consolidate or liquidate other entities, and enter into transactions with affiliates. On October 26, 2018, the U.S. Issuer and the party thereto entered into a seventh supplemental indenture (the “2024 Seventh Supplemental Indenture”) to the 2024 Senior Notes. In addition, on October 26, 2018, the Dutch Issuer and the new guarantors party thereto entered into a seventh supplemental indenture (the “2025 Seventh Supplemental Indenture” and, together with the 2024 Seventh Supplemental Indenture, the “October 2018 Supplemental Indentures”) to the 2025 Euro Senior Notes. The October 2018 Supplemental Indentures permit the Company and its subsidiaries to effect certain corporate transactions as part of a potential internal reorganization of certain of the Company's subsidiaries (the "Proposed Restructuring") and certain potential future reorganizations involving the Company. Each of the October 2018 Supplemental Indentures amended the applicable indenture in order to, among other things, (i) add the Company and certain wholly owned subsidiaries of the Company as guarantors of the applicable Senior Notes, (ii) provide that (A) the covenants of the applicable Indenture generally apply to the Company and its restricted subsidiaries and (B) upon an election by the relevant Issuer at any time thereafter, a successor parent guarantor may be designated and, upon the effectiveness of the guarantee of such successor parent guarantor, the covenants of the applicable Indenture will generally apply to such successor parent guarantor and its restricted subsidiaries, (iii) otherwise amend the applicable Indenture in order to effect the Proposed Restructuring (as defined below) and (iv) update guarantee limitations for certain of the guarantors. In connection with the October 2018 Supplemental Indentures above, the Company became the parent guarantor of the Senior Notes. (i) 2024 Dollar Senior Notes The 2024 Dollar Senior Notes were issued at 99.951% of par, or $2.0 million discount, and are due August 15, 2024. The 2024 Dollar Senior Notes bear interest at 4.875% which is payable semi-annually on February 15 and August 15. We have the option to redeem all or part of the 2024 Dollar Senior Notes at the following redemption prices (expressed as percentages of principal amount) on or after August 15 of the years indicated:
Notwithstanding the foregoing, at any time and from time to time prior to August 15, 2019, we may at our option redeem in the aggregate up to 40% of the original aggregate principal amount of the 2024 Dollar Senior Notes with the net cash proceeds of one or more Equity Offerings (as defined in the indenture governing the 2024 Dollar Senior Notes) at a redemption price of 104.875% plus accrued and unpaid interest, if any, to the redemption date. At least 50% of the original aggregate principal of the notes must remain outstanding after each such redemption. Upon the occurrence of certain events constituting a change of control, holders of the 2024 Dollar Senior Notes have the right to require us to repurchase all or any part of the 2024 Dollar Senior Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the repurchase date. The 2024 Dollar Senior Notes, subject to local law limitations, are jointly and severally guaranteed on a senior unsecured basis by the Company and each of its existing and future direct and indirect subsidiaries that is a borrower under or that guarantees the Senior Secured Credit Facilities. Under certain circumstances, the guarantors may be released from their guarantees without the consent of the holders of the applicable series of notes. The indebtedness issued through the 2024 Dollar Senior Notes is senior unsecured indebtedness of the U.S. Issuer, is senior in right of payment to all future subordinated indebtedness of the U.S. Issuer and guarantors and is equal in right of payment to all existing and future senior indebtedness of the U.S. Issuer and guarantors. The 2024 Dollar Senior Notes are effectively subordinated to any secured indebtedness of the U.S. Issuer and guarantors (including indebtedness outstanding under the Senior Secured Credit Facilities) to the extent of the value of the assets securing such indebtedness. (ii) 2024 Euro Senior Notes The 2024 Euro Senior Notes were issued at par and are due August 15, 2024. The 2024 Euro Senior Notes bear interest at 4.250% which is payable semi-annually on February 15 and August 15. We have the option to redeem all or part of the 2024 Euro Senior Notes at the following redemption prices (expressed as percentages of principal amount) on or after August 15 of the years indicated:
Notwithstanding the foregoing, at any time and from time to time prior to August 15, 2019, we may at our option redeem in the aggregate up to 40% of the original aggregate principal amount of the 2024 Euro Senior Notes with the net cash proceeds of one or more Equity Offerings (as defined in the indenture governing the 2024 Euro Senior Notes) at a redemption price of 104.250% plus accrued and unpaid interest, if any, to the redemption date. At least 50% of the original aggregate principal of the notes must remain outstanding after each such redemption. Upon the occurrence of certain events constituting a change of control, holders of the 2024 Euro Senior Notes have the right to require us to repurchase all or any part of the 2024 Euro Senior Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the repurchase date. The 2024 Euro Senior Notes, subject to local law limitations, are jointly and severally guaranteed on a senior unsecured basis by the Company and each of its existing and future direct and indirect subsidiaries that is a borrower under or that guarantees the Senior Secured Credit Facilities. Under certain circumstances, the guarantors may be released from their guarantees without the consent of the holders of the applicable series of notes. The indebtedness issued through the 2024 Euro Senior Notes is senior unsecured indebtedness of the U.S. Issuer, is senior in right of payment to all future subordinated indebtedness of the U.S. Issuer and guarantors and is equal in right of payment to all existing and future senior indebtedness of the U.S. Issuer and guarantors. The 2024 Euro Senior Notes are effectively subordinated to any secured indebtedness of the U.S. Issuer and guarantors (including indebtedness outstanding under the Senior Secured Credit Facilities) to the extent of the value of the assets securing such indebtedness. (iii) 2025 Euro Senior Notes The 2025 Euro Senior Notes were issued at par and are due January 15, 2025. The 2025 Euro Senior Notes bear interest at 3.750% which is payable semi-annually on January 15 and July 15. We have the option to redeem all or part of the 2025 Euro Senior Notes at the following redemption prices (expressed as percentages of principal amount) on or after January 15 of the years indicated:
Notwithstanding the foregoing, at any time and from time to time prior to January 15, 2020, we may at our option redeem in the aggregate up to 40% of the original aggregate principal amount of the 2025 Euro Senior Notes with the net cash proceeds of one or more Equity Offerings (as defined in the indenture governing the 2025 Euro Senior Notes) at a redemption price of 103.750% plus accrued and unpaid interest, if any, to the redemption date. At least 50% of the original aggregate principal of the notes must remain outstanding after each such redemption. Upon the occurrence of certain events constituting a change of control, holders of the 2025 Euro Senior Notes have the right to require us to repurchase all or any part of the 2025 Euro Senior Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the repurchase date. The 2025 Euro Senior Notes, subject to local law limitations, are jointly and severally guaranteed on a senior unsecured basis by the Company and each of its existing and future direct and indirect subsidiaries that is a borrower under or that guarantees the Senior Secured Credit Facilities (other than the Dutch Issuer). Under certain circumstances, the guarantors may be released from their guarantees without the consent of the holders of the applicable series of notes. The indebtedness issued through the 2025 Euro Senior Notes is senior unsecured indebtedness of the Dutch Issuer, is senior in right of payment to all future subordinated indebtedness of the Dutch Issuer and guarantors and is equal in right of payment to all existing and future senior indebtedness of the Dutch Issuer and guarantors. The 2025 Euro Senior Notes are effectively subordinated to any secured indebtedness of the Dutch Issuer and guarantors (including indebtedness outstanding under the Senior Secured Credit Facilities) to the extent of the value of the assets securing such indebtedness. Future repayments Below is a schedule of required future repayments of all borrowings outstanding at March 31, 2019.
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments, Hedging Activities and Fair Value Measurements | FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS Fair value of financial instruments Equity securities with readily determinable fair values - Balances of equity securities are recorded within other assets, with any changes in fair value recorded within other expense, net. The fair values of available for sale securities are based upon Level 1 inputs when the securities are actively traded with quoted market prices. Long-term borrowings - The estimated fair values of these notes are based on recent trades, as reported by a third-party pricing service. Due to the infrequency of trades, these inputs are considered to be Level 2 inputs. Derivative instruments - The Company’s interest rate caps, interest rate swaps and cross-currency swaps are valued using broker quotations, or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are considered to be Level 2 inputs. Fair value of contingent consideration The fair value of contingent consideration associated with acquisitions completed in prior years are valued at each balance sheet date, until amounts become payable, with adjustments recorded within selling, general and administrative expenses on the condensed consolidated statement of operations. Due to the significant unobservable inputs used in the valuations, these liabilities are categorized within Level 3 of the fair value hierarchy. Adjustments made to fair value were immaterial for both the three months ended March 31, 2019 and March 31, 2018. The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at March 31, 2019 and December 31, 2018.
(1) Cash flow hedge (2) Net investment hedge Derivative Financial Instruments We selectively use derivative instruments to reduce market risk associated with changes in foreign currency exchange rates and interest rates. The use of derivatives is intended for hedging purposes only, and we do not enter into derivative instruments for speculative purposes. A description of each type of derivative used to manage risk is included in the following paragraphs. Derivative Instruments Qualifying and Designated as Cash Flow and Net Investment Hedges Interest Rate Caps Designated as Cash Flow Hedges During the year ended December 31, 2017, we entered into four 1.5% interest rate caps with aggregate notional amounts totaling $850.0 million to hedge the variable interest rate exposures on our 2024 Dollar Term Loans. Three of these interest rate caps, comprising $600.0 million of the notional value, expire December 31, 2019 and had a deferred premium of $8.6 million at inception. The fourth interest rate cap, comprising the remaining $250.0 million of the notional value, expires December 31, 2021 and had a deferred premium of $8.1 million at inception. All deferred premiums are paid quarterly over the term of the respective interest rate caps. These interest rate caps are marked to market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive (loss) income ("AOCI") and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. Interest Rate Swaps Designated as Cash Flow Hedges During the three months ended June 30, 2018, we entered into three interest rate swaps with aggregate notional amounts totaling $475.0 million to hedge interest rate exposures related to variable rate borrowings under the Senior Secured Credit Facilities. Under the terms of the interest rate swap agreements, the Company is required to pay the counter-parties a stream of fixed interest payments at a rate of 2.72% and in turn, receives variable interest payments based on 3-month LIBOR from the counter-parties. The interest rate swaps are designated as cash flow hedges and expire on March 31, 2023. These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. During the three months ended March 31, 2019, we entered into two interest rate swaps with aggregate notional amounts totaling $500.0 million, effective December 31, 2019, to hedge interest rate exposure associated with the 2024 Dollar Term Loans. Under the terms of the interest rate swap agreements, the Company is required to pay the counter-parties a stream of fixed interest payments at a rate of 2.59% and in turn, receives variable interest payments based on 3-month LIBOR from the counter-parties. The interest rate swaps are designated as cash flow hedges and expire on December 31, 2022. These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. Cross-Currency Swaps Designated as Net Investment Hedges During the three months ended June 30, 2018, we entered into three fixed-for-fixed cross-currency swaps with aggregate notional amounts totaling $475.0 million to hedge the variability of exchange rate impacts between the U.S. Dollar and Euro. Under the terms of the cross-currency swap agreements, the Company has notionally exchanged $475.0 million at a weighted average interest rate of 4.47% for €387.2 million at a weighted average interest rate of 1.95%. The cross-currency swaps are designated as net investment hedges and expire on March 31, 2023. These cross-currency swaps are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI. During the three months ended December 31, 2018, we settled three fixed-for-fixed cross-currency swaps previously executed in 2018 resulting in cash proceeds of $22.5 million. Concurrently, we notionally exchanged $475.0 million at a weighted average interest rate of 4.47% for €416.6 million at a weighted average interest rate of 1.44%. The cross-currency swaps are designated as net investment hedges and expire on March 31, 2023. These cross-currency swaps are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI. The following table presents the location and fair values using Level 2 inputs of derivative instruments that qualify and have been designated as cash flow and net investment hedges included in accumulated other comprehensive (loss) income:
Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis. The following tables set forth the locations and amounts recognized during the three months ended March 31, 2019 and 2018 for these cash flow and net investment hedges.
Over the next 12 months, we expect gains of $0.6 million pertaining to cash flow hedges to be reclassified from accumulated other comprehensive income into earnings, related to our interest rate caps and interest rate swaps. Derivative Instruments Not Designated as Cash Flow Hedges We periodically enter into foreign currency forward and option contracts to reduce market risk and hedge our balance sheet exposures and cash flows for subsidiaries with exposures denominated in currencies different from the functional currency of the relevant subsidiary. These contracts have not been designated as hedges and all gains and losses are marked to market through other income, net in the consolidated statement of operations. During the year ended December 31, 2017, we purchased a 1.25% interest rate cap with a notional amount of €388.0 million to hedge the variable interest rate exposures on our 2023 Euro Term Loans. We paid a premium equal to $0.6 million for the interest rate cap which is effective through December 31, 2019. Changes in the fair value of the derivative instrument are recorded in current period earnings and are included in interest expense. The fair value of this interest rate cap at March 31, 2019 was zero. Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment are recorded in earnings as follows:
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Segments |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segments | SEGMENTS The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker ("CODM") to make decisions about resources to be allocated to the segment and assess its performance; and (iii) that has available discrete financial information. We have two operating segments, which are also our reportable segments: Performance Coatings and Transportation Coatings. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Our CODM is identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Our segments are based on the type and concentration of customers served, service requirements, methods of distribution and major product lines. Through our Performance Coatings segment, we provide high-quality liquid and powder coatings solutions to a fragmented and local customer base. We are one of only a few suppliers with the technology to provide precise color matching and highly durable coatings systems. The end-markets within this segment are refinish and industrial. Through our Transportation Coatings segment, we provide advanced coating technologies to OEMs of light and commercial vehicles. These increasingly global customers require a high level of technical support coupled with cost-effective, environmentally responsible coatings systems that can be applied with a high degree of precision, consistency and speed. The end-markets within this segment are light vehicle and commercial vehicle. During the three months ended March 31, 2019, Axalta transitioned to using Adjusted EBIT as the primary measure to evaluate financial performance of the operating segments and allocate resources. Asset information is not reviewed or included with our internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. The following table presents relevant information of our reportable segments.
The following table reconciles our segment operating performance to income before income taxes for the periods presented:
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Shareholders' Equity |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity | SHAREHOLDERS' EQUITY The following tables present the change in total shareholders’ equity for the three months ended March 31, 2019 and 2018, respectively.
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Accumulated Other Comprehensive Income (Loss) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE LOSS
The income tax provision related to the changes in pension benefits for the three months ended March 31, 2019 was $0.5 million. The cumulative income tax benefit related to the adjustments for pension benefits at March 31, 2019 was $13.9 million. The income tax benefit related to the change in the unrealized loss on derivatives for the three months ended March 31, 2019 was $2.2 million. The cumulative income tax benefit related to the adjustments for unrealized loss on derivatives at March 31, 2019 was $1.7 million. The income tax benefit related to the changes in pension benefits for the three months ended March 31, 2018 was $0.3 million. The cumulative income tax benefit related to the adjustments for pension benefits at March 31, 2018 was $13.3 million. The income tax expense related to the change in the unrealized loss on derivatives for the three months ended March 31, 2018 was $1.6 million. The cumulative income tax expense related to the adjustments for unrealized loss on derivatives at March 31, 2018 was $1.0 million.
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Basis of Presentation and Summary of Significant Accounting Policies Recent Accounting Guidance (Policies) |
3 Months Ended | ||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||
| Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Of the accounting standards we have adopted in 2019, the below standard did not have a material impact:
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Basis of Presentation and Summary of Significant Accounting Policies Recent Accounting Guidance (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | This revision has no impacts on the consolidated or condensed statements of operations or balance sheets.
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Acquisitions and Divestitures (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disposal Groups, Including Discontinued Operations [Table Text Block] | The carrying amounts of the major classes of assets and liabilities that were classified as held for sale at March 31, 2019, within prepaid and other current assets and other accrued liabilities, respectively, as follows:
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Goodwill and Identifiable Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill | The following table shows changes in the carrying amount of goodwill from December 31, 2018 to March 31, 2019 by reportable segment:
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| Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class | The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
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| Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2019 and each of the succeeding five years is:
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Costs | The following table summarizes the activities related to the restructuring reserves and expenses from December 31, 2018 to March 31, 2019:
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets And Liabilities, Lessee | Supplemental balance sheet information related to leases is summarized as follows:
(1) Operating lease assets are recorded net of accumulated amortization of $5.0 million as of March 31, 2019. (2) Finance lease assets are recorded net of accumulated amortization of $1.4 million as of March 31, 2019.
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| Lease, Cost | Components of lease expense are summarized as follows:
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| Schedule of Lease Terms | Lease term and discount rate information is summarized as follows:
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| Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities as of March 31, 2019 is as follows:
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| Finance Lease, Liability, Maturity | Maturities of lease liabilities as of March 31, 2019 is as follows:
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| Sale Leaseback Transactions | For comparability purposes, the following table reflects the total remaining cash payments related to all transactions during the rental term at December 31, 2018 associated with three lease arrangements that were treated as sale-leaseback financing transactions under ASC 840 and disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2018:
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| Schedule of Future Minimum Rental Payments for Operating Leases | At December 31, 2018, future minimum payments under non-cancelable operating leases under ASC 840 were as follows:
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Long-term Employee Benefits (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Net Benefit Costs | The following table sets forth the components of net periodic benefit cost for the three months ended March 31, 2019 and 2018:
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Stock-based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stock Options Roll Forward | A summary of award activity by type for the three months ended March 31, 2019 is presented below.
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| Schedule of Restricted Stock Units and Restricted Stock Awards Roll Forward |
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| Schedule of Performance Stock Roll Forward |
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Other Income, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Income and Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Nonoperating Income (Expense) |
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Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
| Schedule of Effective Income Tax Rate Reconciliation | Our effective income tax rates for the three months ended March 31, 2019 and 2018 are as follows:
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Earnings (Loss) Per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of our basic and diluted earnings per common share is as follows:
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Accounts and Notes Receivable, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accounts, Notes, Loans and Financing Receivable |
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventory, Current |
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Property, Plant and Equipment, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment |
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Borrowings (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Debt | Borrowings are summarized as follows:
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| Schedule of Maturities of Long-term Debt | Below is a schedule of required future repayments of all borrowings outstanding at March 31, 2019.
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| 2024 Dollar Senior Notes [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument Redemption | We have the option to redeem all or part of the 2024 Dollar Senior Notes at the following redemption prices (expressed as percentages of principal amount) on or after August 15 of the years indicated:
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| 2024 Euro Senior Notes [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument Redemption | We have the option to redeem all or part of the 2024 Euro Senior Notes at the following redemption prices (expressed as percentages of principal amount) on or after August 15 of the years indicated:
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| 2025 Euro Senior Notes [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Instrument Redemption | We have the option to redeem all or part of the 2025 Euro Senior Notes at the following redemption prices (expressed as percentages of principal amount) on or after January 15 of the years indicated:
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Financial Instruments, Hedging Activities and Fair Value Measurements Financial Instruments, Hedging Activities and Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at March 31, 2019 and December 31, 2018.
(1) Cash flow hedge (2) Net investment hedge
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| Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table presents the location and fair values using Level 2 inputs of derivative instruments that qualify and have been designated as cash flow and net investment hedges included in accumulated other comprehensive (loss) income:
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| Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following tables set forth the locations and amounts recognized during the three months ended March 31, 2019 and 2018 for these cash flow and net investment hedges.
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| Derivatives Not Designated as Hedging Instruments [Table Text Block] | Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment are recorded in earnings as follows:
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Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information, by Segment | The following table presents relevant information of our reportable segments.
(1) The Company has no intercompany sales between segments.
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| Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table reconciles our segment operating performance to income before income taxes for the periods presented:
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Shareholders' Equity (Tables) |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stockholders Equity | The following tables present the change in total shareholders’ equity for the three months ended March 31, 2019 and 2018, respectively.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accumulated Other Comprehensive Income |
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Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Jan. 01, 2019 |
Jan. 01, 2018 |
|
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
| Payments to Noncontrolling Interests | $ 26.9 | $ 26.9 | ||
| Cumulative effect of an accounting change | $ (0.7) | $ 12.2 | ||
| Parent [Member] | ||||
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
| Cumulative effect of an accounting change | $ (0.7) | $ 12.1 | ||
Basis of Presentation and Summary of Significant Accounting Policies - Correction of Immaterial Errors (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
| Cash used for investing activities | $ (18.8) | $ (117.7) |
| Cash used for financing activities | $ (101.8) | (41.2) |
| Previously Reported [Member] | ||
| Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
| Cash used for investing activities | (144.6) | |
| Cash used for financing activities | $ (14.3) | |
Revenue - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
| Revenue from Contract with Customer [Abstract] | |||
| Contract with customer, asset | $ 45.2 | $ 47.2 | |
| Capitalized contract cost, net | 190.5 | 190.8 | |
| Capitalized contract cost, amortization | 17.1 | $ 16.3 | |
| Upfront Incentive Payments | $ 81.9 | $ 56.0 | |
Acquisitions and Divestitures - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Increase (Decrease) in Assets Held-for-sale | $ (5.2) | $ 0.0 |
| Percentage of voting interests acquired | 24.50% | |
| Payments to acquire other investments | $ 26.9 | |
| Ownership percentage by parent | 100.00% | |
| Asia Pacific [Member] | ||
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Percent of joint venture sold | 60.00% | |
Acquisitions and Divestitures - Assets and Liabilities Classified as Held for Sale (Details) - China Powder JV Held for Sale Disposal Group [Domain] $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Assets | |
| Cash and cash equivalents | $ 7.3 |
| Restricted cash | 7.5 |
| Accounts and notes receivable, net | 30.4 |
| Inventories | 7.3 |
| Property, plant and equipment, net | 8.4 |
| Goodwill | 5.6 |
| Identifiable intangibles, net | 1.8 |
| Other assets | 5.2 |
| Loss on assets held for sale | (5.2) |
| Assets held for sale | 68.3 |
| Liabilities | |
| Accounts payable | 16.5 |
| Other accrued liabilities | 6.5 |
| Other liabilities | 4.4 |
| Liabilities held for sale | $ 27.4 |
Goodwill and Identifiable Intangible Assets - Schedule of Goodwill (Details) $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
USD ($)
| |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | $ 1,230.8 |
| Purchase Accounting Adjustments | 0.7 |
| Goodwill, Held for Sale Adjustment | (5.6) |
| Foreign currency translation | (9.8) |
| Goodwill, ending balance | 1,216.1 |
| Performance Coatings [Member] | |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | 1,151.5 |
| Purchase Accounting Adjustments | 0.7 |
| Goodwill, Held for Sale Adjustment | (5.6) |
| Foreign currency translation | (9.1) |
| Goodwill, ending balance | 1,137.5 |
| Transportation Coatings [Member] | |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | 79.3 |
| Purchase Accounting Adjustments | 0.0 |
| Goodwill, Held for Sale Adjustment | 0.0 |
| Foreign currency translation | (0.7) |
| Goodwill, ending balance | $ 78.6 |
Goodwill and Identifiable Intangible Assets - Schedule of Expected Amortization Expense (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Remainder of 2019 | $ 87.5 |
| 2020 | 113.5 |
| 2021 | 112.9 |
| 2022 | 110.7 |
| 2023 | 71.5 |
| 2024 | $ 66.6 |
Restructuring - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Restructuring Cost and Reserve [Line Items] | ||
| Accelerated depreciation | $ 6.1 | $ 0.0 |
| Minimum [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Payment term (in months) | 12 months | |
| Maximum [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Payment term (in months) | 24 months | |
Restructuring - Restructuring Reserve (Details) $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
USD ($)
| |
| Restructuring Reserve [Roll Forward] | |
| Beginning balance | $ 102.7 |
| Expenses, net of changes to estimates | 1.3 |
| Payments made | (14.0) |
| Foreign currency translation | (1.5) |
| Ending balance | $ 88.5 |
Commitments and Contingencies - Additional Information (Details) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Maximum exposure | $ 12,100,000 | $ 12,700,000 |
| Current carrying value | $ 0 | $ 0 |
Leases - Supplemental Balance Sheet (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Leases [Abstract] | |
| Operating lease assets | $ 95.5 |
| Finance lease assets | 70.3 |
| Total leased assets | 165.8 |
| Operating | 28.1 |
| Finance | 2.9 |
| Operating | 71.8 |
| Finance | 64.0 |
| Total lease liabilities | 166.8 |
| Operating lease, accumulated amortization | 5.0 |
| Finance lease, accumulated amortization | $ 1.4 |
Leases - Lease Expense (Details) $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
USD ($)
| |
| Leases [Abstract] | |
| Amortization of right-of-use assets | $ 1.0 |
| Interest on lease liabilities | 0.9 |
| Operating lease cost | 8.9 |
| Variable lease cost | 0.8 |
| Short-term lease cost | 0.3 |
| Net lease cost | $ 11.9 |
Leases - Supplemental Cash Flow Information (Details) $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
USD ($)
| |
| Leases [Abstract] | |
| Operating cash flows from operating leases | $ 9.1 |
| Operating cash flows from finance leases | 0.9 |
| Financing cash flows from finance leases | 1.2 |
| Operating leases | 5.9 |
| Finance leases | $ 0.0 |
Leases - Lease Information (Details) |
Mar. 31, 2019 |
|---|---|
| Leases [Abstract] | |
| Weighted-average remaining lease term, Operating leases | 5 years 6 months |
| Weighted-average remaining lease term, Finance leases | 17 years 8 months 12 days |
| Weighted-average discount rate, Operating leases | 3.60% |
| Weighted-average discount rate, Finance leases | 5.30% |
Leases - Maturities of Lease Liabilities (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Operating Leases | |
| Remainder of 2019 | $ 23.8 |
| 2020 | 25.9 |
| 2021 | 19.2 |
| 2022 | 13.0 |
| 2023 | 10.9 |
| Thereafter | 22.0 |
| Total lease payments | 114.8 |
| Less: imputed interest | 14.9 |
| Present value of lease liabilities | 99.9 |
| Finance Leases | |
| Remainder of 2019 | 3.4 |
| 2020 | 5.5 |
| 2021 | 5.6 |
| 2022 | 5.7 |
| 2023 | 5.8 |
| Thereafter | 79.3 |
| Total lease payments | 105.3 |
| Less: imputed interest | 38.4 |
| Present value of lease liabilities | $ 66.9 |
Leases - Sale-leaseback Obligations (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
|---|---|
| Leases [Abstract] | |
| 2019 | $ 5.3 |
| 2020 | 5.4 |
| 2021 | 5.4 |
| 2022 | 5.7 |
| 2023 | 5.7 |
| Thereafter | 77.1 |
| Total minimum payments | $ 104.6 |
Leases - Operating Lease Maturity ASC 840 (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
|---|---|
| Leases [Abstract] | |
| 2019 | $ 34.6 |
| 2020 | 23.5 |
| 2021 | 17.1 |
| 2022 | 13.2 |
| 2023 | 11.5 |
| Thereafter | 16.6 |
| Total minimum payments | $ 116.5 |
Long-term Employee Benefits - Schedule of Net Benefit Cost (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Net periodic benefit cost: | ||
| Service cost | $ 1.9 | $ 2.3 |
| Interest cost | 3.2 | 3.4 |
| Expected return on plan assets | (3.5) | (4.2) |
| Amortization of actuarial loss, net | 0.5 | 0.3 |
| Net periodic benefit (gain) cost | $ 2.1 | $ 1.8 |
Stock-based Compensation - Schedule of Restricted Stock Awards and Restricted Stock Units (Details) - Restricted Stock and Restricted Stock Units [Member] shares in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
$ / shares
shares
| |
| Awards (in millions) | |
| Beginning Balance | shares | 1.6 |
| Granted (in shares) | shares | 0.6 |
| Vested (in shares) | shares | (0.6) |
| Forfeited (in shares) | shares | 0.0 |
| Ending Balance | shares | 1.6 |
| Weighted Average Exercise Price (usd per share) | |
| Beginning Balance (usd per share) | $ / shares | $ 29.12 |
| Granted (usd per share) | $ / shares | 27.01 |
| Vested (usd per share) | $ / shares | 27.99 |
| Forfeited (usd per share) | $ / shares | 26.89 |
| Ending Balance (usd per share) | $ / shares | $ 28.76 |
Stock-based Compensation - Schedule of Performance Shares Award Outstanding Activity (Details) - Performance Shares [Member] shares in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
$ / shares
shares
| |
| Awards (in millions) | |
| Beginning Balance | shares | 0.8 |
| Granted (in shares) | shares | 0.3 |
| Vested (in shares) | shares | 0.0 |
| Forfeited (in shares) | shares | (0.3) |
| Ending Balance | shares | 0.8 |
| Weighted Average Exercise Price (usd per share) | |
| Beginning Balance (usd per share) | $ / shares | $ 31.82 |
| Granted (usd per share) | $ / shares | 29.28 |
| Vested (usd per share) | $ / shares | 0 |
| Forfeited (usd per share) | $ / shares | 25.66 |
| Ending Balance (usd per share) | $ / shares | $ 33.47 |
Other Income, Net - Schedule of Other Non-operating Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Other Income and Expenses [Abstract] | ||
| Foreign exchange losses, net | $ 2.4 | $ 0.0 |
| Other miscellaneous income, net | (3.4) | (2.2) |
| Total | $ (1.0) | $ (2.2) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Income Tax Disclosure [Abstract] | ||
| Effective income tax rate, percent | 24.30% | 14.30% |
| Tax benefit on share-based compensation | $ 3.6 | $ 2.4 |
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Earnings Per Share [Abstract] | ||
| Net income to common shareholders | $ 43.4 | $ 69.9 |
| Basic weighted average shares outstanding (in shares) | 234.1 | 240.9 |
| Diluted weighted average shares outstanding (in shares) | 236.6 | 245.8 |
| Earnings per common share: | ||
| Basic net income (loss) per share (dollars per share) | $ 0.19 | $ 0.29 |
| Diluted net income (loss) per share (dollars per share) | $ 0.18 | $ 0.28 |
| Antidilutive securities excluded from computation of earnings per share (in shares) | 2.9 | 2.5 |
Accounts and Notes Receivable, Net - Schedule of Accounts, Notes, Loans, and Financing Receivable (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Receivables [Abstract] | ||
| Accounts receivable - trade, net (1) | $ 809.9 | $ 739.9 |
| Notes receivable | 26.2 | 36.1 |
| Other | 84.4 | 84.8 |
| Total | 920.5 | 860.8 |
| Allowance for Doubtful Accounts Receivable, Current | $ 13.9 | $ 15.4 |
Accounts and Notes Receivable, Net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Receivables [Abstract] | ||
| Bad Debt Expense Net Of Recoveries | $ 1.0 | $ 0.2 |
Inventories - Schedule of Inventory (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Finished products | $ 349.3 | $ 334.0 |
| Semi-finished products | 110.0 | 108.0 |
| Raw materials | 146.4 | 149.9 |
| Inventory, Supplies, Net of Reserves | 21.1 | 21.1 |
| Inventories | $ 626.8 | $ 613.0 |
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation | $ 45.4 | $ 46.4 |
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Property, Plant and Equipment [Abstract] | ||
| Property, plant and equipment | $ 2,224.8 | $ 2,218.8 |
| Accumulated depreciation | (950.4) | (920.6) |
| Property, plant, and equipment, net | $ 1,274.4 | $ 1,298.2 |
Borrowings - Schedule of Debt (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
Apr. 11, 2018 |
Jun. 01, 2017 |
Aug. 16, 2016 |
|---|---|---|---|---|---|
| Debt Instrument [Line Items] | |||||
| Short-term and other borrowings | $ 111.4 | $ 103.8 | |||
| Unamortized original issue discount | (12.1) | (12.6) | |||
| Unamortized deferred financing costs | (35.7) | (37.2) | |||
| Debt and Capital Lease Obligations | 3,852.5 | 3,864.0 | |||
| Short-term borrowings | 19.2 | 17.9 | |||
| Current portion of long-term borrowings | 24.3 | 24.3 | |||
| Long-term debt | 3,809.0 | 3,821.8 | |||
| 2024 Dollar Term Loans [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Term loan | 2,405.7 | 2,411.8 | |||
| Unamortized original issue discount | $ (6.0) | $ (2.5) | |||
| 2024 Dollar Senior Notes [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Senior Notes | 500.0 | 500.0 | |||
| Unamortized original issue discount | $ (2.0) | ||||
| 2024 Euro Senior Notes [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Senior Notes | 376.9 | 383.3 | |||
| 2025 Euro Senior Notes [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Senior Notes | $ 506.3 | $ 514.9 |
Borrowings - Schedule of Maturities of Long-term Debt (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Debt Disclosure [Abstract] | |
| Remainder of 2019 | $ 35.8 |
| 2020 | 26.9 |
| 2021 | 26.8 |
| 2022 | 54.3 |
| 2023 | 27.1 |
| Thereafter | 3,729.4 |
| Long-term debt | $ 3,900.3 |
Segments - Additional Information (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
Segment
| |
| Segment Reporting [Abstract] | |
| Number of operating segments | 2 |
Segments - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
| Adjusted EBIT | $ 112.8 | $ 121.0 |
| Interest expense, net | 41.3 | 39.4 |
| Termination benefits and other employee related costs | 1.3 | (1.3) |
| Offering and transactional costs | 0.6 | 0.0 |
| Accelerated depreciation | 6.1 | 0.0 |
| Loss on assets held for sale | 5.2 | 0.0 |
| Change in fair value of equity instruments | 0.0 | 0.1 |
| Income before income taxes | 58.3 | 82.8 |
| Performance Coatings [Member] | ||
| Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
| Adjusted EBIT | 78.6 | 76.0 |
| Transportation Coatings [Member] | ||
| Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
| Adjusted EBIT | $ 34.2 | $ 45.0 |
Accumulated Other Comprehensive Income (Loss) - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Equity [Abstract] | ||
| Pension and other postretirement benefit plans, tax benefit (expense) | $ (0.5) | $ (0.3) |
| Cumulative income tax expense (benefit) on pension and postretirement benefit plans | (13.9) | (13.3) |
| Unrealized gain (loss) on derivatives, income tax expense (benefit) | (2.2) | (1.6) |
| Cumulative income tax expense (benefit) on derivatives | $ (1.7) | $ (1.0) |
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