Segments (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Segment Reporting Information, by Segment

The following table presents relevant information of our reportable segments.


	Year Ended December 31,
	2021		2020		2019
Net sales (1):
Refinish	$	1,776.4	$	1,449.0	$	1,760.4
Industrial	1,319.9		1,067.4		1,163.0
Total Net sales Performance Coatings	3,096.3		2,516.4		2,923.4
Light Vehicle	1,013.1		960.5		1,208.4
Commercial Vehicle	306.8		260.7		350.4
Total Net sales Mobility Coatings	1,319.9		1,221.2		1,558.8
Total Net sales	$	4,416.2	$	3,737.6	$	4,482.2
Depreciation and amortization expense (2):
Performance Coatings	$	228.6	$	228.7	$	250.3
Mobility Coatings	87.9		91.6		102.7
Total Depreciation and amortization expense	$	316.5	$	320.3	$	353.0






	December 31, 2021		December 31, 2020		December 31, 2019
Investment in unconsolidated affiliates:
Performance Coatings	$	2.1	$	2.0	$	2.4
Mobility Coatings	7.8		8.7		12.7
Total	$	9.9	$	10.7	$	15.1

(1)The Company has no intercompany sales between segments.

(2)Depreciation and amortization expenses relating to assets used within the operations of a specifically identifiable segment are recorded to the appropriate segment, while depreciation and amortization expenses relating to assets shared in our integrated supply chain are allocated to the appropriate segments on a consistent basis reflecting their use.

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:


	Year Ended December 31,
	2021		2020		2019
Segment Adjusted EBIT (1):
Performance Coatings	$	479.4	$	344.3	$	449.1
Mobility Coatings	38.7		82.9		137.4
Total (2)	518.1		427.2		586.5
Interest expense, net	134.2		149.9		162.6
Debt extinguishment and refinancing related costs (a)	0.2		34.4		0.2
Termination benefits and other employee related costs (b)	36.9		74.9		35.2
Strategic review and retention costs (c)	9.7		30.7		13.4
Acquisition and divestiture-related costs (d)	16.9		0.3		4.4
Impairment charges (e)	0.8		5.7		17.7
Pension special events (f)	0.4		(0.4)		(0.9)
Accelerated depreciation (g)	2.5		9.2		24.3
Indemnity (income) loss (h)	(0.4)		0.3		(0.4)

Operational matter (i)	4.4		—		—
Brazil indirect tax (j)	(8.3)		—		—
Gains on sales of facilities (k)	(19.7)		—		—
Income before income taxes	$	340.5	$	122.2	$	330.0


(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 Adjusted EBIT referenced elsewhere by the Company as there are additional adjustments that are not allocated to the segments.

(a)			Represents expenses and associated changes to estimates related to the prepayment, restructuring and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance.

(b)			Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indicative of our ongoing operating performance.

(c)			Represents costs for legal, tax and other advisory fees pertaining to our review of strategic alternatives that was concluded in March 2020, as well as retention awards for certain employees, which were earned over a period of 18-24 months ending in September 2021. These amounts are not considered indicative of our ongoing performance.

(d)			Represents acquisition and divestiture-related expenses and non-cash fair value inventory adjustments associated with our business combinations, all of which are not considered indicative of our ongoing operating performance. The amount for the year ended December 31, 2021 includes $1.0 million of due diligence costs associated with an unconsummated M&A transaction.

(e)			Represents impairment charges, which are not considered indicative of our ongoing performance. The amount for the year ended December 31, 2021 includes a recovered gain on a previously impaired asset.

(f)			Represents certain defined benefit pension costs associated with special events, including pension curtailments, settlements and special termination benefits, which we do not consider indicative of our ongoing operating performance.

(g)			Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments, which we do not consider indicative of our ongoing operating performance.

(h)			Represents indemnity (income) loss associated with acquisitions, which we do not consider indicative of our ongoing operating performance.

(i)			Represents expenses, changes in estimates and insurance recoveries for probable liabilities related to an operational matter in the Mobility Coatings segment discussed further in Note 6, which is not indicative of our ongoing operating performance.

(j)			Represents non-recurring income related to a law change with respect to certain Brazilian indirect taxes which was recorded within other (income) expense, net.

(k)			Represents non-recurring income related to the sales of previously closed manufacturing facilities and a customer training facility.

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

Net sales by region were as follows:


	Year Ended December 31,
	2021		2020		2019
North America	$	1,722.9	$	1,480.5	$	1,795.1
EMEA	1,618.7		1,375.7		1,577.2
Asia Pacific	671.1		546.3		653.5
Latin America (1)	403.5		335.1		456.4
Total (2)	$	4,416.2	$	3,737.6	$	4,482.2

Net long-lived assets by region were as follows:


	Year Ended December 31,
	2021		2020
North America	$	498.2	$	485.5
EMEA	376.6		406.4
Asia Pacific	220.9		202.6
Latin America (1)	90.5		100.0
Total (3)	$	1,186.2	$	1,194.5

(1)Includes Mexico

(2)Net Sales are attributed to countries based on the customer's location. Sales to external customers in China represented approximately 10%, 9% and 9% of the total for the years ended December 31, 2021, 2020 and 2019, respectively. Sales to external customers in Germany represented approximately 7%, 8%, and 8% of the total for the years ended December 31, 2021, 2020 and 2019, respectively. Mexico represented 5%, 5%, and 6% of the total for the years ended December 31, 2021, 2020 and 2019, respectively. Canada, which is included in the North America region, represents approximately 3%, 4%, and 4% of total net sales for the years ended December 31, 2021, 2020 and 2019, respectively.

(3)Long-lived assets consist of property, plant and equipment, net. Germany long-lived assets amounted to approximately $214.9 million and $243.3 million at December 31, 2021 and 2020, respectively. China long-lived assets amounted to $188.4 million and $167.3 million at December 31, 2021 and 2020, respectively. Brazil long-lived assets amounted to approximately $30.7 million and $36.2 million at December 31, 2021 and 2020, respectively. Canada long-lived assets, which are included in the North America region, amounted to approximately $17.9 million and $21.7 million at December 31, 2021 and 2020, respectively.