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• | raw materials, |
• | direct labor, and |
• | manufacturing overhead |
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February 1, 2013 (As Initially Reported) | Measurement Period Adjustments | February 1, 2013 (As Adjusted) | |||||||
Cash and cash equivalents | $ | 79.7 | $ | — | $ | 79.7 | |||
Accounts and notes receivable—trade | 855.8 | 22.7 | 878.5 | ||||||
Inventories | 673.0 | 3.0 | 676.0 | ||||||
Prepaid expenses and other | 8.2 | (1.3 | ) | 6.9 | |||||
Property, plant and equipment | 1,707.7 | (1.8 | ) | 1,705.9 | |||||
Identifiable intangibles | 1,539.3 | (19.0 | ) | 1,520.3 | |||||
Other assets—noncurrent | 98.8 | 19.1 | 117.9 | ||||||
Accounts payable | (409.1 | ) | (6.9 | ) | (416.0 | ) | |||
Other accrued liabilities | (232.0 | ) | 7.5 | (224.5 | ) | ||||
Other liabilities | (331.1 | ) | (35.3 | ) | (366.4 | ) | |||
Deferred income taxes | (312.9 | ) | 223.2 | (89.7 | ) | ||||
Noncontrolling interests | (66.7 | ) | — | (66.7 | ) | ||||
Net assets acquired before goodwill on acquisition | 3,610.7 | 211.2 | 3,821.9 | ||||||
Goodwill on acquisition | 1,315.2 | (229.8 | ) | 1,085.4 | |||||
Net assets acquired | $ | 4,925.9 | $ | (18.6 | ) | $ | 4,907.3 |
Year Ended December 31, | ||||||
(in millions, except per share data) | 2013 | 2012 | ||||
Net sales | $ | 4,277.3 | $ | 4,219.4 | ||
Net loss | $ | (87.1 | ) | $ | (270.1 | ) |
Net loss attributable to controlling interests | $ | (93.7 | ) | $ | (274.6 | ) |
Earnings per share (Basic and Diluted) | $ | (0.41 | ) | $ | — |
|
Performance Coatings | Transportation Coatings | Total | |||||||
At January 1, 2013 | $ | — | $ | — | $ | — | |||
Goodwill resulting from Acquisition | 1,012.5 | 72.9 | 1,085.4 | ||||||
Foreign currency translation | 26.3 | 1.9 | 28.2 | ||||||
At December 31, 2013 | $ | 1,038.8 | $ | 74.8 | $ | 1,113.6 | |||
Purchase accounting adjustments | 5.7 | 0.4 | 6.1 | ||||||
Divestitures | (4.7 | ) | — | (4.7 | ) | ||||
Foreign currency translation | (106.2 | ) | (7.7 | ) | (113.9 | ) | |||
December 31, 2014 | $ | 933.6 | $ | 67.5 | $ | 1,001.1 |
Performance Coatings | Transportation Coatings | Total | |||||||
At January 1, 2012 | $ | 517.9 | $ | 70.9 | $ | 588.8 | |||
Foreign currency translation | — | — | — | ||||||
December 31, 2012 | $ | 517.9 | $ | 70.9 | $ | 588.8 | |||
Foreign currency translation | — | — | — | ||||||
January 31, 2013 | $ | 517.9 | $ | 70.9 | $ | 588.8 |
December 31, 2014 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 411.8 | $ | (76.3 | ) | $ | 335.5 | 10.0 | ||
Trademarks - indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks - definite-lived | 41.8 | (5.5 | ) | 36.3 | 14.8 | |||||
Customer relationships | 713.9 | (71.3 | ) | 642.6 | 19.4 | |||||
Non-compete agreements | 2.0 | (0.8 | ) | 1.2 | 4.6 | |||||
Total | $ | 1,453.9 | $ | (153.9 | ) | $ | 1,300.0 |
December 31, 2013 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 425.2 | $ | (37.3 | ) | $ | 387.9 | 10.0 | ||
Trademarks—indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks—definite-lived | 41.7 | (2.6 | ) | 39.1 | 14.8 | |||||
Customer relationships | 761.9 | (34.9 | ) | 727.0 | 19.4 | |||||
Non-compete agreements | 1.5 | (0.3 | ) | 1.2 | 4.0 | |||||
Total | $ | 1,514.7 | $ | (75.1 | ) | $ | 1,439.6 |
In Process Research and Development | Activity | ||
Balance at February 1, 2013 | $ | 25.4 | |
Completed | (6.5 | ) | |
Abandoned | (3.2 | ) | |
Balance at December 31, 2013 | $ | 15.7 | |
Completed | (10.4 | ) | |
Abandoned | (0.1 | ) | |
Balance at December 31, 2014 | $ | 5.2 |
2015 | $ | 81.6 | |
2016 | $ | 81.6 | |
2017 | $ | 81.1 | |
2018 | $ | 81.0 | |
2019 | $ | 81.0 |
|
2013 Activity | |||
Balance at February 1, 2013 (At acquisition date) | $ | 0.5 | |
Expense recorded | 120.7 | ||
Payments | (23.7 | ) | |
Foreign currency translation | 0.9 | ||
Balance at December 31, 2013 | $ | 98.4 | |
2014 Activity | |||
Balance at December 31, 2013 | $ | 98.4 | |
Expense Recorded | 8.5 | ||
Payments Made | (51.6 | ) | |
Foreign Currency Changes | (6.8 | ) | |
Balance at December 31, 2014 | $ | 48.5 |
|
Predecessor | ||||||
Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||
Cost of goods sold | $ | 14.2 | $ | 224.7 | ||
Selling, general, and administrative expenses | 1.4 | 21.6 | ||||
Research and development expenses | 0.1 | 2.2 | ||||
Total | $ | 15.7 | $ | 248.5 |
Predecessor | ||||||
Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||
Leveraged functional services | $ | 14.2 | $ | 226.4 | ||
General corporate expenses | 1.5 | 22.1 | ||||
Total | $ | 15.7 | $ | 248.5 |
Predecessor | ||||||
Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||
DPC purchases of products from other DuPont businesses | $ | 7.9 | $ | 91.7 |
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Operating Leases | |||
2015 | $ | 50.6 | |
2016 | 35.5 | ||
2017 | 27.6 | ||
2018 | 24.5 | ||
2019 | 22.7 | ||
Thereafter | 47.7 | ||
Total minimum payments | $ | 208.6 |
|
Predecessor | |||||||
Plan Name | EIN/Pension Number | January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | ||||
DuPont Pension and Retirement Plan | 51-0014090/001 | $ | 4.2 | $ | 40.6 | ||
All Other Plans | $ | 0.7 | $ | 16.7 |
Defined Benefits | Other Long-Term Employee Benefits | |||||||||||
Successor | Successor | |||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||
Obligations and Funded Status | 2014 | 2013 | 2014 | 2013 | ||||||||
Change in benefit obligation: | ||||||||||||
Projected benefit obligation at beginning of year | $ | 603.0 | $ | — | $ | 4.6 | $ | — | ||||
Fair value of assumed obligation at Acquisition date | — | 579.5 | — | 5.2 | ||||||||
Service cost | 15.4 | 17.0 | 0.1 | 0.2 | ||||||||
Interest cost | 22.9 | 21.2 | 0.1 | 0.2 | ||||||||
Participant contributions | 1.0 | 1.0 | — | — | ||||||||
Actuarial losses (gains)—net | 85.8 | (5.8 | ) | 1.1 | (0.7 | ) | ||||||
Plan curtailments and settlements | (16.3 | ) | (1.4 | ) | — | — | ||||||
Benefits paid | (30.1 | ) | (20.7 | ) | — | — | ||||||
Amendments | (4.3 | ) | (0.4 | ) | (5.7 | ) | — | |||||
Currency translation adjustment | (64.3 | ) | 12.6 | (0.1 | ) | (0.3 | ) | |||||
Projected benefit obligation at end of year | 613.1 | 603.0 | 0.1 | 4.6 | ||||||||
Change in plan assets: | ||||||||||||
Fair value of plan assets at beginning of year | 281.3 | — | — | — | ||||||||
Fair value of plan assets at Acquisition date | — | 250.7 | — | — | ||||||||
Actual return on plan assets | 26.5 | 16.0 | — | — | ||||||||
Employer contributions | 40.9 | 28.6 | — | — | ||||||||
Participant contributions | 1.0 | 1.0 | — | — | ||||||||
Benefits paid | (30.1 | ) | (20.7 | ) | — | — | ||||||
Settlements | (2.7 | ) | (0.6 | ) | — | — | ||||||
Currency translation adjustment | (22.4 | ) | 6.3 | — | — | |||||||
Fair value of plan assets at end of year | 294.5 | 281.3 | — | — | ||||||||
Funded status, net | $ | (318.6 | ) | $ | (321.7 | ) | $ | (0.1 | ) | $ | (4.6 | ) |
Amounts recognized in the consolidated balance sheets consist of: | ||||||||||||
Other assets | $ | 0.1 | $ | 0.2 | $ | — | $ | — | ||||
Other accrued liabilities | (12.4 | ) | (13.3 | ) | — | — | ||||||
Accrued pension and other long-term employee benefits | (306.3 | ) | (308.6 | ) | (0.1 | ) | (4.6 | ) | ||||
Net amount recognized | $ | (318.6 | ) | $ | (321.7 | ) | $ | (0.1 | ) | $ | (4.6 | ) |
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
ABO | $ | 559.4 | $ | 541.5 | ||
Plans with PBO in excess of plan assets: | ||||||
PBO | $ | 606.2 | $ | 595.7 | ||
ABO | $ | 553.2 | $ | 534.9 | ||
Fair value plan assets | $ | 287.5 | $ | 273.8 | ||
Plans with ABO in excess of plan assets: | ||||||
PBO | $ | 602.0 | $ | 537.8 | ||
ABO | $ | 550.9 | $ | 488.9 | ||
Fair value plan assets | $ | 285.1 | $ | 227.2 |
Defined Benefits: | Successor | |||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Accumulated net actuarial gains (losses) | $ | (52.6 | ) | $ | 10.0 | |
Accumulated prior service (cost) credit | 4.3 | 0.4 | ||||
Total | $ | (48.3 | ) | $ | 10.4 |
Other Long-Term Employee Benefits: | Successor | |||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Accumulated net actuarial gains (losses) | $ | (0.4 | ) | $ | 0.6 | |
Accumulated prior service (cost) credit | 4.1 | — | ||||
Total | $ | 3.7 | $ | 0.6 |
2015 | ||||||
Defined Benefits | Other Long-Term Employee Benefits | |||||
Amortization of net actuarial gains (losses) | $ | (1.1 | ) | $ | — | |
Amortization of prior service (cost) credit | 0.3 | 4.1 | ||||
Total | $ | (0.8 | ) | $ | 4.1 |
Pension Benefits | |||||||||||||||
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Components of net periodic benefit cost and amounts recognized in other comprehensive (income) loss: | |||||||||||||||
Net periodic benefit (credit) cost: | |||||||||||||||
Service cost | $ | 15.4 | $ | 17.0 | $ | — | $ | 1.6 | $ | 14.8 | |||||
Interest cost | 22.9 | 21.2 | — | 1.8 | 22.0 | ||||||||||
Expected return on plan assets | (14.8 | ) | (11.9 | ) | — | (1.9 | ) | (18.4 | ) | ||||||
Amortization of actuarial (gain) loss, net | (0.3 | ) | — | — | 1.1 | 5.2 | |||||||||
Amortization of prior service cost | — | — | — | — | 0.2 | ||||||||||
Curtailment gain | (7.3 | ) | — | — | — | — | |||||||||
Settlement loss | 0.1 | — | — | — | 3.9 | ||||||||||
Net periodic benefit cost | 16.0 | 26.3 | — | 2.6 | 27.7 | ||||||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss: | |||||||||||||||
Net actuarial (gain) loss, net | 60.6 | (10.6 | ) | — | — | 112.7 | |||||||||
Amortization of actuarial gain (loss), net | 0.3 | — | — | (1.1 | ) | (5.2 | ) | ||||||||
Prior service benefit | (4.3 | ) | (0.4 | ) | — | — | (0.3 | ) | |||||||
Amortization of prior service cost | — | — | — | — | (0.2 | ) | |||||||||
Curtailment gain | 7.3 | — | — | — | — | ||||||||||
Settlement loss | (0.1 | ) | — | — | — | (3.9 | ) | ||||||||
Net translation adjustment | (4.9 | ) | 0.6 | — | — | — | |||||||||
Total (gain) loss recognized in other comprehensive income | 58.9 | (10.4 | ) | — | (1.1 | ) | 103.1 | ||||||||
Total recognized in net periodic benefit cost and other comprehensive (income) loss | $ | 74.9 | $ | 15.9 | $ | — | $ | 1.5 | $ | 130.8 |
Other Long-Term Employee Benefits | |||||||||||||||
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Components of net periodic benefit cost and amounts recognized in other comprehensive (income) loss: | |||||||||||||||
Net periodic benefit credit cost: | |||||||||||||||
Service cost | $ | 0.1 | $ | 0.2 | $ | — | $ | — | $ | 0.3 | |||||
Interest cost | 0.1 | 0.2 | — | — | 0.5 | ||||||||||
Amortization of actuarial loss, net | 0.1 | — | — | — | — | ||||||||||
Amortization of prior service cost (benefit) | (1.4 | ) | — | — | — | 0.2 | |||||||||
Net periodic benefit cost | (1.1 | ) | 0.4 | — | — | 1.0 | |||||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss: | |||||||||||||||
Net actuarial (gain) loss | (4.6 | ) | (0.7 | ) | — | — | 2.7 | ||||||||
Amortization of actuarial gain (loss) | (0.1 | ) | — | — | — | — | |||||||||
Prior service benefit | — | — | — | — | (5.9 | ) | |||||||||
Amortization of prior service benefit (cost) | 1.4 | — | — | — | (0.2 | ) | |||||||||
Net translation adjustment | — | 0.1 | — | — | — | ||||||||||
Total (gain) loss recognized in other comprehensive income | (3.3 | ) | (0.6 | ) | — | — | (3.4 | ) | |||||||
Total recognized in net periodic benefit cost and other comprehensive income | $ | (4.4 | ) | $ | (0.2 | ) | $ | — | $ | — | $ | (2.4 | ) |
Successor | Predecessor | |||||
2014 | 2013 | 2012 | ||||
Defined benefits | ||||||
Weighted-average assumptions: | ||||||
Discount rate to determine benefit obligations | 3.23 | % | 4.11 | % | 3.38 | % |
Discount rate to determine net cost | 4.11 | % | 4.15 | % | 4.73 | % |
Rate of future compensation increases to determine benefit obligation | 3.57 | % | 3.52 | % | 3.16 | % |
Rate of future compensation increases to determine net cost | 3.52 | % | 3.69 | % | 3.33 | % |
Rate of return on plan assets to determine net cost | 5.23 | % | 5.22 | % | 7.71 | % |
Successor | Predecessor | |||||
2014 | 2013 | 2012 | ||||
Other Long-Term Employee benefits | ||||||
Weighted-average assumptions: | ||||||
Discount rate to determine benefit obligations | 1.50 | % | 4.80 | % | 4.86 | % |
Discount rate to determine net cost | 4.80 | % | 4.20 | % | 7.28 | % |
Rate of future compensation increases to determine benefit obligations | — | — | 3.00 | % | ||
Rate of future compensation increases to determine net cost | — | — | 4.00 | % |
Year ended December 31, | Benefits | ||
2015 | $ | 34.8 | |
2016 | $ | 27.1 | |
2017 | $ | 29.8 | |
2018 | $ | 31.0 | |
2019 | $ | 37.6 | |
2020—2024 | $ | 180.3 |
Year ended December 31, | Benefits | ||
2015 | $ | — | |
2016 | $ | 0.1 | |
2017 | $ | — | |
2018 | $ | — | |
2019 | $ | — | |
2020—2024 | $ | — |
Asset Category | 2014 | 2013 | Target Allocation |
Equity securities | 35-40% | 35-40% | 35-40% |
Debt securities | 35-40% | 35-40% | 35-40% |
Real estate | 0-1% | 0-1% | 0-1% |
Other | 20-25% | 20-25% | 20-25% |
Fair value measurements at December 31, 2014 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Asset Category: | ||||||||||||
Cash and cash equivalents | $ | 4.4 | $ | 4.4 | $ | — | $ | — | ||||
U.S. equity securities | 16.1 | 16.1 | — | — | ||||||||
Non-U.S. equity securities | 79.2 | 78.7 | 0.4 | 0.1 | ||||||||
Debt—government issued | 36.9 | 36.3 | 0.6 | — | ||||||||
Debt—corporate issued | 55.3 | 53.0 | — | 2.3 | ||||||||
Hedge Funds | 0.2 | 0.1 | 0.1 | — | ||||||||
Private market securities | 63.2 | 0.1 | 0.1 | 63.0 | ||||||||
Real estate | 0.4 | — | — | 0.4 | ||||||||
255.7 | $ | 188.7 | $ | 1.2 | $ | 65.8 | ||||||
Pension trust receivables | 38.8 | |||||||||||
Total | $ | 294.5 |
Fair value measurements at December 31, 2013 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Asset Category: | ||||||||||||
Cash and cash equivalents | $ | 6.7 | $ | 6.7 | $ | — | $ | — | ||||
U.S. equity securities | 13.6 | 13.2 | 0.4 | — | ||||||||
Non-U.S. equity securities | 71.3 | 70.8 | 0.5 | — | ||||||||
Debt—government issued | 34.4 | 34.4 | — | — | ||||||||
Debt—corporate issued | 52.2 | 49.3 | 2.9 | — | ||||||||
Hedge Funds | 0.4 | 0.2 | 0.2 | — | ||||||||
Private market securities | 59.5 | — | 0.2 | 59.3 | ||||||||
Real estate | 0.3 | — | — | 0.3 | ||||||||
238.4 | $ | 174.6 | $ | 4.2 | $ | 59.6 | ||||||
Pension trust receivables | 42.9 | |||||||||||
Total | $ | 281.3 |
Level 3 assets | ||||||||||||
Total | Private market securities | Debt and Equity | Real estate | |||||||||
Ending balance at December 31, 2012 | $ | 12.2 | $ | 10.5 | $ | — | $ | 1.7 | ||||
Realized (loss) | (0.1 | ) | — | — | (0.1 | ) | ||||||
Change in unrealized gain | 0.2 | 0.2 | — | — | ||||||||
Purchases, sales, issues and settlements | 45.6 | 46.9 | — | (1.3 | ) | |||||||
Transfers in/(out) of Level 3 | 1.7 | 1.7 | — | — | ||||||||
Ending balance at December 31, 2013 | $ | 59.6 | $ | 59.3 | $ | — | $ | 0.3 | ||||
Realized (loss) | — | — | — | — | ||||||||
Change in unrealized gain | 0.2 | — | — | 0.2 | ||||||||
Purchases, sales, issues and settlements | 6.0 | 3.7 | 2.4 | (0.1 | ) | |||||||
Transfers in/(out) of Level 3 | — | — | — | — | ||||||||
Ending balance at December 31, 2014 | $ | 65.8 | $ | 63.0 | $ | 2.4 | $ | 0.4 |
|
2014 Grants | 2013 Grants | |||
Expected Term | 7.81 years | 7.81 years | ||
Volatility | 28.28 | % | 28.61 | % |
Dividend Yield | — | — | ||
Discount Rate | 2.21 | % | 2.13 | % |
• | the fact that we were a private company with illiquid securities; |
• | our historical operating results; |
• | our discounted future cash flows, based on our projected operating results; |
• | valuations of comparable public companies; and |
• | the risk involved in the investment, as related to earnings stability, capital structure, competition and market potential. |
Awards (millions) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (millions) | Weighted Average Remaining Contractual Life (years) | ||||||
Outstanding at January 1, 2014 | 16.2 | $ | 9.32 | ||||||
Granted | 1.6 | $ | 9.62 | ||||||
Exercised | (0.4 | ) | $ | 8.03 | |||||
Forfeited | (0.3 | ) | $ | 9.32 | |||||
Outstanding at December 31, 2014 | 17.1 | $ | 9.38 | ||||||
Vested and expected to vest at December 31, 2014 | 17.1 | $ | 9.38 | $ | 284.5 | 8.58 | |||
Exercisable at December 31, 2014 | 2.9 | $ | 9.49 | $ | 47.6 | 8.44 |
|
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Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Exchange losses, net | $ | 81.2 | $ | 48.9 | $ | — | $ | 4.5 | $ | 17.7 | |||||
Management fees and expenses | 16.6 | 3.1 | — | — | — | ||||||||||
Other | 17.2 | (3.5 | ) | — | 0.5 | (1.4 | ) | ||||||||
Total | $ | 115.0 | $ | 48.5 | $ | — | $ | 5.0 | $ | 16.3 |
|
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Domestic | $ | (8.8 | ) | $ | (153.8 | ) | $ | — | $ | (1.5 | ) | $ | 82.8 | ||
Foreign | 45.6 | (109.9 | ) | (29.0 | ) | 17.1 | 310.2 | ||||||||
Total | $ | 36.8 | $ | (263.7 | ) | $ | (29.0 | ) | $ | 15.6 | $ | 393.0 |
Successor | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from August 24, 2012 through December 31, 2012 | |||||||||||||||||||||||||
Current | Deferred | Total | Current | Deferred | Total | Current | Deferred | Total | |||||||||||||||||||
U.S. Federal | $ | — | $ | (2.1 | ) | $ | (2.1 | ) | $ | — | $ | (43.7 | ) | $ | (43.7 | ) | $ | — | $ | — | $ | — | |||||
State | 2.0 | (2.9 | ) | (0.9 | ) | 2.3 | (2.5 | ) | (0.2 | ) | — | — | — | ||||||||||||||
Foreign | 38.3 | (33.2 | ) | 5.1 | 73.7 | (74.6 | ) | (0.9 | ) | — | — | — | |||||||||||||||
Total | $ | 40.3 | $ | (38.2 | ) | $ | 2.1 | $ | 76.0 | $ | (120.8 | ) | $ | (44.8 | ) | $ | — | $ | — | $ | — |
Predecessor | ||||||||||||||||||
Period from January 1,2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||
Current | Deferred | Total | Current | Deferred | Total | |||||||||||||
U.S. Federal | $ | (8.8 | ) | $ | 7.0 | $ | (1.8 | ) | $ | 30.9 | $ | (4.5 | ) | $ | 26.4 | |||
State | 0.1 | (0.2 | ) | (0.1 | ) | 6.6 | (0.4 | ) | 6.2 | |||||||||
Foreign | 6.7 | 2.3 | 9.0 | 98.6 | 14.0 | 112.6 | ||||||||||||
Total | $ | (2.0 | ) | $ | 9.1 | $ | 7.1 | $ | 136.1 | $ | 9.1 | $ | 145.2 |
Successor | Predecessor | ||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from August 24, 2012 through December 31, 2012 | Period from January 1 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||||||
Statutory U.S. federal income tax / rate(1) | $ | 12.9 | 35.0 | % | $ | (92.3 | ) | 35.0 | % | $ | (10.1 | ) | 35.0 | % | $ | 5.5 | 35.0 | % | $ | 137.6 | 35.0 | % | |||
Foreign income taxed at rates other than 35% | (46.7 | ) | (127.0 | ) | (36.6 | ) | 13.9 | 10.1 | (35.0 | ) | 1.0 | 6.6 | (10.9 | ) | (2.8 | ) | |||||||||
Changes in valuation allowances | 44.4 | 120.9 | 55.0 | (20.9 | ) | — | — | 1.4 | 8.9 | 9.8 | 2.5 | ||||||||||||||
Foreign exchange (gain) loss | 8.7 | 23.7 | 8.7 | (3.3 | ) | — | — | 0.5 | 3.1 | 4.7 | 1.2 | ||||||||||||||
Unrecognized tax benefits(2) | (44.0 | ) | (119.7 | ) | 35.1 | (13.2 | ) | — | — | — | — | — | — | ||||||||||||
Withholding taxes, net | (0.3 | ) | (0.8 | ) | 8.3 | (3.2 | ) | — | — | — | — | — | — | ||||||||||||
Non-deductible interest | 15.4 | 41.9 | 6.4 | (2.4 | ) | — | — | — | — | — | — | ||||||||||||||
Non-deductible expenses | 14.2 | 38.6 | 19.4 | (7.4 | ) | — | — | — | — | — | — | ||||||||||||||
Tax credits | (3.6 | ) | (9.8 | ) | (1.0 | ) | 0.4 | — | — | — | — | — | — | ||||||||||||
Capital loss(3) | — | — | (46.7 | ) | 17.7 | — | — | — | — | — | — | ||||||||||||||
Other - net | 1.1 | 2.9 | (1.1 | ) | 0.4 | — | — | (1.3 | ) | (8.0 | ) | 4.0 | 1.1 | ||||||||||||
Total income tax (benefit)/ effective tax rate | $ | 2.1 | 5.7 | % | $ | (44.8 | ) | 17.0 | % | $ | — | — | $ | 7.1 | 45.6 | % | $ | 145.2 | 37.0 | % |
(1) | The U.S. statutory rate has been used as management believes it is more meaningful to the Company. |
(2) | Within this amount, the Company released and recorded an unrecognized tax benefit of $21.1 million related to non-deductible interest and debt acquisition costs in 2014 and 2013. These adjustments were fully offset by changes in the valuation allowance. |
(3) | In 2013, the Company recognized a tax benefit of $46.7 million related to a capital loss, which is fully offset by a $46.7 million increase to the valuation allowance. |
Deferred Tax Balances | Successor | |||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Deferred tax asset | ||||||
Tax loss and credit carryforwards | $ | 185.6 | $ | 111.7 | ||
Goodwill and intangibles | 90.8 | 89.4 | ||||
Compensation & employee benefits | 92.4 | 79.1 | ||||
Accruals & other reserves | 58.0 | 40.5 | ||||
Interest expense | 13.4 | 8.6 | ||||
Total deferred tax assets | 440.2 | 329.3 | ||||
Less: Valuation allowance | (101.9 | ) | (63.4 | ) | ||
Net, deferred tax assets | 338.3 | 265.9 | ||||
Deferred tax liabilities | ||||||
Inventory | (3.0 | ) | (1.3 | ) | ||
Property, Plant & Equipment | (215.0 | ) | (218.5 | ) | ||
Accounts Receivable & Other Assets | (2.5 | ) | (8.4 | ) | ||
Equity Investment & Other Securities | (2.2 | ) | (5.8 | ) | ||
Unremitted earnings | (8.5 | ) | (15.9 | ) | ||
Long-Term Debt | (8.1 | ) | — | |||
Total deferred tax liabilities | (239.3 | ) | (249.9 | ) | ||
Net deferred tax asset/(liability) | $ | 99.0 | $ | 16.0 | ||
Current asset | $ | 64.5 | $ | 30.0 | ||
Current liability | (7.3 | ) | (5.5 | ) | ||
Non-current assets | 250.0 | 271.9 | ||||
Non-current liability | (208.2 | ) | (280.4 | ) | ||
Net deferred tax asset | $ | 99.0 | $ | 16.0 |
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from January 1 2013 through January 31, | Period from January 1 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2013 | 2013 | 2012 | |||||||||||
Balance at January 1 | $ | 38.9 | $ | — | $ | — | $ | — | $ | — | |||||
Increases related to acquisition | — | 11.3 | — | — | — | ||||||||||
Increases related to positions taken on items from prior years | — | — | — | — | — | ||||||||||
Decreases related to positions taken on items from prior years | (33.6 | ) | — | — | — | — | |||||||||
Increases related to positions taken in the current year | — | 27.6 | — | — | — | ||||||||||
Settlement of uncertain tax positions with tax authorities | — | — | — | — | — | ||||||||||
Decreases due to expiration of statutes of limitations | — | — | — | — | — | ||||||||||
Balance at December 31 | $ | 5.3 | $ | 38.9 | $ | — | $ | — | $ | — |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Accounts receivable—trade, net | $ | 638.3 | $ | 637.5 | ||
Notes receivable | 45.5 | 44.7 | ||||
Other | 136.6 | 183.7 | ||||
Total | $ | 820.4 | $ | 865.9 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Finished products | $ | 323.7 | $ | 329.3 | ||
Semi-finished products | 81.3 | 90.2 | ||||
Raw materials and supplies | 133.3 | 130.7 | ||||
Total | $ | 538.3 | $ | 550.2 |
|
Successor | |||||||||
Year Ended December 31, | |||||||||
Useful Lives (years) | 2014 | 2013 | |||||||
Land | $ | 90.5 | $ | 99.9 | |||||
Buildings and improvements | 5 | - | 25 | 418.4 | 430.7 | ||||
Machinery and equipment | 3 | - | 25 | 1,060.1 | 1,087.0 | ||||
Software | 5 | - | 7 | 122.1 | 42.4 | ||||
Other | 3 | - | 20 | 29.1 | 26.3 | ||||
Construction in progress | 138.0 | 119.9 | |||||||
Total | 1,858.2 | 1,806.2 | |||||||
Accumulated depreciation | (344.1 | ) | (183.6 | ) | |||||
Property, plant, and equipment, net | $ | 1,514.1 | $ | 1,622.6 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Available for sale securities | $ | 4.5 | $ | 4.9 | ||
Deferred income taxes—non-current | 250.0 | 271.9 | ||||
Other | 219.2 | 218.3 | ||||
Total | $ | 473.7 | $ | 495.1 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Trade payables | $ | 463.6 | $ | 428.8 | ||
Non-income taxes | 21.4 | 40.5 | ||||
Other | 9.5 | 9.2 | ||||
Total | $ | 494.5 | $ | 478.5 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Compensation and other employee-related costs | $ | 153.0 | $ | 168.0 | ||
Current portion of long-term employee benefit plans | 12.4 | 13.3 | ||||
Restructuring | 48.5 | 98.4 | ||||
Discounts, rebates, and warranties | 68.6 | 65.0 | ||||
Income taxes payable | 20.8 | 25.1 | ||||
Derivative liabilities | 1.5 | 1.2 | ||||
Other | 100.0 | 101.7 | ||||
Total | $ | 404.8 | $ | 472.7 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Dollar Term Loan | $ | 2,165.5 | $ | 2,282.8 | ||
Euro Term Loan | 481.0 | 547.7 | ||||
Dollar Senior Notes | 750.0 | 750.0 | ||||
Euro Senior Notes | 305.3 | 344.9 | ||||
Short-term borrowings | 12.2 | 18.2 | ||||
Other borrowings | 0.7 | — | ||||
Unamortized original issue discount | (18.3 | ) | (22.7 | ) | ||
$ | 3,696.4 | $ | 3,920.9 | |||
Less: | ||||||
Short term borrowings | $ | 12.2 | $ | 18.2 | ||
Current portion of long-term borrowings | 27.9 | 28.5 | ||||
Long-term debt | $ | 3,656.3 | $ | 3,874.2 |
(a) | Senior Secured Credit Facilities, as amended |
(b) | Significant Terms of the Senior Notes |
Period | Euro Notes Percentage | |
2016 | 104.313 | % |
2017 | 102.875 | % |
2018 | 101.438 | % |
2019 | 100.000 | % |
2020 and thereafter | 100.000 | % |
Period | Dollar Notes Percentage | |
2016 | 105.531 | % |
2017 | 103.688 | % |
2018 | 101.844 | % |
2019 | 100.000 | % |
2020 and thereafter | 100.000 | % |
(c) | Short-term borrowings |
(d) | Bridge financing commitment fees |
(e) | Future repayments |
2015 | $ | 40.1 | |
2016 | 27.9 | ||
2017 | 27.9 | ||
2018 | 28.6 | ||
2019 | 27.9 | ||
Thereafter | 3,562.3 | ||
$ | 3,714.7 |
|
(a) | Assets measured at fair value on a nonrecurring basis |
(b) | Fair value of financial instruments |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Foreign currency contracts | $ | — | $ | — | ||
Other assets: | ||||||
Interest rate swaps | 5.9 | 10.5 | ||||
Total assets | $ | 5.9 | $ | 10.5 | ||
Other liabilities: | ||||||
Interest rate swaps | $ | 1.5 | $ | 1.2 | ||
Total liabilities | $ | 1.5 | $ | 1.2 |
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Foreign currency contracts | $ | — | $ | — | ||
Other assets: | ||||||
Interest rate cap | 0.1 | 3.4 | ||||
Total assets | $ | 0.1 | $ | 3.4 | ||
Other liabilities: | ||||||
Foreign currency contracts | $ | — | $ | — | ||
Total liabilities | $ | — | $ | — |
Derivatives in Cash Flow Hedging Relationships in 2014: | Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion) | Location of (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion) | Location of (Gains) Losses Recognized in Income on Derivatives (Ineffective Portion) | Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion) | ||||||
Interest rate contracts | $ | 4.6 | Interest expense, net | $ | 6.5 | Interest expense, net | $ | 0.3 |
Derivatives in Cash Flow Hedging Relationships in 2013: | Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion) | Location of (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion) | Location of (Gains) Losses Recognized in Income on Derivatives (Ineffective Portion) | Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion) | ||||||
Interest rate contracts | $ | (5.0 | ) | Interest expense, net | $ | 4.4 | Interest expense, net | $ | (4.3 | ) |
Successor | Predecessor | ||||||||||||
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of (Gain) Loss Recognized in Income on Derivatives | Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | ||||||||
Foreign currency forward contract | Other expense, net as a component of Exchange (gains) losses | $ | 1.4 | $ | 20.9 | $ | 2.0 | $ | 3.9 | ||||
Interest rate cap | Interest expense, net | 3.4 | (0.3 | ) | — | — | |||||||
$ | 4.8 | $ | 20.6 | $ | 2.0 | $ | 3.9 |
|
Successor | Predecessor | |||||||||||
Year Ended December 31, | January 1 through January 31, | Year Ended December 31, | ||||||||||
2014 | 2013 | 2013 | 2012 | |||||||||
Performance Coatings | ||||||||||||
Refinish | $ | 1,850.8 | $ | 1,670.0 | $ | 129.4 | $ | 1,759.3 | ||||
Industrial | 734.2 | 655.3 | 57.4 | 720.2 | ||||||||
Total Net sales Performance Coatings | 2,585.0 | 2,325.3 | 186.8 | 2,479.5 | ||||||||
Transportation Coatings | ||||||||||||
Light Vehicle | 1,384.5 | 1,291.5 | 111.6 | 1,390.6 | ||||||||
Commercial Vehicle | 392.2 | 334.3 | 27.8 | 349.3 | ||||||||
Total Net sales Transportation Coatings | 1,776.7 | 1,625.8 | 139.4 | 1,739.9 | ||||||||
Total Net sales | $ | 4,361.7 | $ | 3,951.1 | $ | 326.2 | $ | 4,219.4 |
Successor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
For the Year ended December 31, 2014 | |||||||||
Net sales (1) | $ | 2,585.0 | $ | 1,776.7 | $ | 4,361.7 | |||
Equity in earnings in unconsolidated affiliates | (1.2 | ) | (0.2 | ) | (1.4 | ) | |||
Adjusted EBITDA (2) | 547.6 | 292.9 | 840.5 | ||||||
Investment in unconsolidated affiliates | 7.2 | 7.1 | 14.3 |
Successor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
For the Year ended December 31, 2013 | |||||||||
Net sales (1) | $ | 2,325.3 | $ | 1,625.8 | $ | 3,951.1 | |||
Equity in earnings in unconsolidated affiliates | 1.8 | 0.3 | 2.1 | ||||||
Adjusted EBITDA (2) | 500.2 | 198.8 | 699.0 | ||||||
Investment in unconsolidated affiliates | 7.7 | 8.1 | 15.8 |
Predecessor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
January 1 through January 31, 2013 | |||||||||
Net sales (1) | $ | 186.8 | $ | 139.4 | $ | 326.2 | |||
Equity in earnings (losses) in unconsolidated affiliates | — | (0.3 | ) | (0.3 | ) | ||||
Adjusted EBITDA (2) | 15.0 | 17.7 | 32.7 | ||||||
Investment in unconsolidated affiliates | 2.0 | 6.7 | 8.7 |
Predecessor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
For the Year ended December 31, 2012 | |||||||||
Net sales (1) | $ | 2,479.5 | $ | 1,739.9 | $ | 4,219.4 | |||
Equity in earnings in unconsolidated affiliates | — | 0.6 | 0.6 | ||||||
Adjusted EBITDA (2) | 426.0 | 151.6 | 577.6 | ||||||
Investment in unconsolidated affiliates | 0.8 | 7.1 | 7.9 |
(1) | The Company has no intercompany sales. |
(2) | The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income (loss) before interest, taxes, depreciation and amortization and other unusual items impacting operating results. Adjusted EBITDA 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. Reconciliation of Adjusted EBITDA to income (loss) before income taxes follows: |
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | August 24 through December 31, | January 1 through January 31, | Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Adjusted EBITDA | $ | 840.5 | $ | 699.0 | $ | — | $ | 32.7 | $ | 577.6 | |||||
Inventory step-up (a) | — | (103.7 | ) | — | — | — | |||||||||
Merger and acquisition related costs (b) | — | (28.1 | ) | (29.0 | ) | — | — | ||||||||
Financing fees (c) | (6.1 | ) | (25.0 | ) | — | — | — | ||||||||
Foreign exchange remeasurement losses (d) | (81.2 | ) | (48.9 | ) | — | (4.5 | ) | (17.7 | ) | ||||||
Long-term employee benefit plan adjustments (e) | 0.6 | (9.5 | ) | — | (2.3 | ) | (36.9 | ) | |||||||
Termination benefits and other employee related costs (f) | (18.4 | ) | (147.5 | ) | — | (0.3 | ) | (8.6 | ) | ||||||
Consulting and advisory fees (g) | (36.3 | ) | (54.7 | ) | — | — | — | ||||||||
Transition-related costs (h) | (101.8 | ) | (29.3 | ) | — | — | — | ||||||||
IPO-related costs (i) | (22.3 | ) | — | — | — | — | |||||||||
Other adjustments (j) | (10.8 | ) | (2.3 | ) | — | (0.1 | ) | (12.6 | ) | ||||||
Dividends in respect of noncontrolling interest (k) | 2.2 | 5.2 | — | — | 1.9 | ||||||||||
Management fee expense (l) | (3.2 | ) | (3.1 | ) | — | — | — | ||||||||
EBITDA | 563.2 | 252.1 | (29.0 | ) | 25.5 | 503.7 | |||||||||
Interest expense, net | 217.7 | 215.1 | — | — | — | ||||||||||
Depreciation and amortization | 308.7 | 300.7 | — | 9.9 | 110.7 | ||||||||||
Income before income taxes | $ | 36.8 | $ | (263.7 | ) | $ | (29.0 | ) | $ | 15.6 | $ | 393.0 |
(a) | During the Successor year ended December 31, 2013, we recorded a non-cash fair value adjustment associated with our acquisition accounting for inventories. These amounts increased cost of goods sold by $103.7 million. |
(b) | In connection with the Acquisition, we incurred $28.1 million and $29.0 million of merger and acquisition costs during the Successor years ended December 31, 2013 and December 31, 2012, respectively. These costs consisted primarily of investment banking, legal and other professional advisory services costs. |
(c) | On August 30, 2012, we signed a debt commitment letter, which included the Bridge Facility. Upon the issuance of the Senior Notes and the entry into the Senior Secured Credit Facilities, the commitments under the Bridge Facility terminated. Commitment fees related to the Bridge Facility of $21.0 million and associated fees of $4.0 million were expensed upon the payment and termination of the Bridge Facility. In connection with the amendment to the Senior Secured Credit Facilities in February 2014, we recognized $3.1 million of costs during the Successor year ended December 31, 2014. In addition to the credit facility amendment, we also incurred a $3.0 million loss on extinguishment of debt recognized during the Successor year ended December 31, 2014, which resulted directly from the pro-rata write off of unamortized deferred financing costs and original issue discounts associated with the pay-down of $100.0 million of principal on the New Dollar Term Loan (discussed further at Note 22 to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K). |
(d) | Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, including a $19.4 million loss related to the acquisition date settlement of a foreign currency contract used to hedge the variability of Euro-based financing. |
(e) | For the Successor years ended December 31, 2014 and 2013, eliminates the non-service cost components of employee benefit costs. Additionally, we deducted a pension curtailment gain of $7.3 million recorded during the Successor year ended December 31, 2014. For the Predecessor period January 1, 2013 through January 31, 2013 and the Predecessor year ended December 31, 2012 eliminates (1) all U.S. pension and other long-term employee benefit costs that were not assumed as part of the Acquisition and (2) the non-service cost component of the pension and other long-term employee benefit costs for the foreign pension plans that were assumed as part of the Acquisition. |
(f) | Represents expenses primarily related to employee termination benefits, including our initiative to improve the overall cost structure within the European region, and other employee-related costs. Termination benefits include the costs associated with our headcount initiatives for establishment of new roles and elimination of old roles and other costs associated with cost saving opportunities that were related to our transition to a standalone entity. |
(g) | Represents fees paid to consultants, advisors, and other third-party professional organizations for professional services rendered in conjunction with the transition from DuPont to a standalone entity. |
(h) | Represents charges associated with the transition from DuPont to a standalone entity, including branding and marketing, information technology related costs, and facility transition costs. |
(i) | Represents costs associated with the IPO, including a $13.4 million pre-tax charge associated with the termination of the management agreement with Carlyle Investment Management, L.L.C., an affiliate of Carlyle, upon the completion of the IPO. |
(j) | Represent costs for certain unusual or non-operational losses and the non-cash impact of natural gas and currency hedge losses allocated to DPC by DuPont, stock-based compensation, asset impairments, equity investee dividends, indemnity income associated with the Transaction, and loss (gain) on sale and disposal of property, plant and equipment. |
(k) | Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned. |
(l) | Pursuant to Axalta’s management agreement with Carlyle Investment Management, L.L.C., for management and financial advisory services and oversight provided to Axalta and its subsidiaries, Axalta was required to pay an annual management fee of $3.0 million and out-of-pocket expenses. |
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | Period from August 24 through December 31, | Period from January 1 through January 31, | Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
North America | $ | 1,307.8 | $ | 1,165.4 | $ | — | $ | 81.6 | $ | 1,238.6 | |||||
EMEA | 1,672.0 | 1,540.4 | — | 141.0 | 1,675.4 | ||||||||||
Asia Pacific | 715.0 | 593.7 | — | 51.7 | 595.0 | ||||||||||
Latin America | 666.9 | 651.6 | — | 51.9 | 710.4 | ||||||||||
Total (a) | $ | 4,361.7 | $ | 3,951.1 | $ | — | $ | 326.2 | $ | 4,219.4 |
Successor | ||||||
December 31, 2014 | December 31, 2013 | |||||
North America | $ | 481.4 | $ | 483.8 | ||
EMEA | 542.0 | 623.5 | ||||
Asia Pacific | 234.3 | 218.1 | ||||
Latin America | 256.4 | 297.2 | ||||
Total (b) | $ | 1,514.1 | $ | 1,622.6 |
(a) | Net Sales are attributed to countries based on location of the customer. Sales to external customers in China represented approximately 11% and 10% of the total for the Successor years ended December 31, 2014 and 2013, respectively, as well as 11% for the Predecessor period ended January 31, 2013 and 8% in the Predecessor year ended December 31, 2012. Sales to external customers in Germany represented approximately 10% and 10% of the total for the Successor years ended December 31, 2014 and 2013, respectively, as well as 11% for the Predecessor period ended January 31, 2013 and 16% in the Predecessor year ended December 31, 2012. Canada, which is included in the North America region, represents approximately 3% of total sales in all periods. |
(b) | Long-lived assets consist of property, plant and equipment, net. Germany long-lived assets amounted to approximately $302.8 million and $348.1 million in the years ended December 31, 2014 and 2013, respectively. China long-lived assets amounted to $189.4 million and $167.5 million in the years ended December 31, 2014 and 2013, respectively. |
|
Unrealized Currency Translation Adjustments | Pension and Other Long-term Employee Benefit Adjustments | Unrealized Gain (Loss) on Securities | Unrealized Gain (Losses) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
Successor Balance, December 31, 2013 | $ | 24.3 | $ | 7.5 | $ | (0.9 | ) | $ | 3.1 | $ | 34.0 | ||||
Current year deferrals to AOCI | (96.4 | ) | (29.7 | ) | 0.7 | 3.6 | (121.8 | ) | |||||||
Reclassifications from AOCI to Net income | — | (9.0 | ) | — | (6.5 | ) | (15.5 | ) | |||||||
Net Change | (96.4 | ) | (38.7 | ) | 0.7 | (2.9 | ) | (137.3 | ) | ||||||
Successor Balance, December 31, 2014 | $ | (72.1 | ) | $ | (31.2 | ) | $ | (0.2 | ) | $ | 0.2 | $ | (103.3 | ) |
Unrealized Currency Translation Adjustments | Pension and Other Long-term Employee Benefit Adjustments | Unrealized Loss on Securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
Successor Balance, December 31, 2012 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Current year deferrals to AOCI | 24.3 | 7.5 | (0.9 | ) | 7.5 | 38.4 | |||||||||
Reclassifications from AOCI to Net income | — | — | — | (4.4 | ) | (4.4 | ) | ||||||||
Net Change | 24.3 | 7.5 | (0.9 | ) | 3.1 | 34.0 | |||||||||
Successor Balance, December 31, 2013 | $ | 24.3 | $ | 7.5 | $ | (0.9 | ) | $ | 3.1 | $ | 34.0 |
Unrealized Currency Translation Adjustments | Pension and Other Long-term Employee Benefit Adjustments | Unrealized loss on securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
Predecessor Balance, December 31, 2012 | $ | — | $ | (142.3 | ) | $ | 1.4 | $ | — | $ | (140.9 | ) | |||
Current year deferrals to AOCI | — | 0.7 | 0.2 | — | 0.9 | ||||||||||
Reclassifications from AOCI to Net income | — | — | — | — | — | ||||||||||
Net Change | — | 0.7 | 0.2 | — | 0.9 | ||||||||||
Predecessor Balance, January 31, 2013 | $ | — | $ | (141.6 | ) | $ | 1.6 | $ | — | $ | (140.0 | ) |
|
2014 | March 31 | June 30(b) | September 30(b) | December 31(c) | Full Year | ||||||||||
Total revenue | $ | 1,054.4 | $ | 1,134.3 | $ | 1,115.8 | $ | 1,087.0 | $ | 4,391.5 | |||||
Cost of goods sold | 703.5 | 742.5 | 728.1 | 723.1 | 2,897.2 | ||||||||||
Net income (loss) | (3.7 | ) | 55.8 | (18.3 | ) | 0.9 | 34.7 | ||||||||
Net income (loss) attributable to controlling interests | (4.3 | ) | 53.8 | (19.9 | ) | (2.2 | ) | 27.4 | |||||||
Basic net income (loss) per share | (0.02 | ) | 0.23 | (0.09 | ) | (0.01 | ) | 0.12 | |||||||
Diluted net income (loss) per share | (0.02 | ) | 0.23 | (0.09 | ) | (0.01 | ) | 0.12 | |||||||
2013 | March 31(a) | June 30(a) | September 30 | December 31 | Full Year | ||||||||||
Total revenue | $ | 675.1 | $ | 1,122.2 | $ | 1,082.8 | $ | 1,106.7 | $ | 3,986.8 | |||||
Cost of goods sold | 539.1 | 788.5 | 739.1 | 706.1 | 2,772.8 | ||||||||||
Net income (loss) | (156.5 | ) | (21.8 | ) | 6.4 | (47.0 | ) | (218.9 | ) | ||||||
Net income (loss) attributable to controlling interests | (157.8 | ) | (22.8 | ) | 5.0 | (49.3 | ) | (224.9 | ) | ||||||
Basic net income (loss) per share | (0.67 | ) | (0.10 | ) | 0.02 | (0.22 | ) | (0.97 | ) | ||||||
Diluted net income (loss) per share | (0.67 | ) | (0.10 | ) | 0.02 | (0.22 | ) | (0.97 | ) |
|
(in millions) | Balance at Beginning of Year | Charged to Expenses | Deductions(1) | Balance at End of Year | ||||||||
Successor | ||||||||||||
2014 | $ | 6.5 | $ | 5.1 | $ | 1.7 | $ | 9.9 | ||||
2013 | — | 5.4 | (1.1 | ) | 6.5 | |||||||
Predecessor | ||||||||||||
January 1 through January 31, 2013 | $ | 29.6 | $ | 0.2 | $ | (1.1 | ) | $ | 30.9 | |||
2012 | 31.4 | 5.0 | 6.8 | 29.6 |
(1) | Deductions include uncollectible accounts written off and foreign currency translation impact. |
|
• | raw materials, |
• | direct labor, and |
• | manufacturing overhead |
|
February 1, 2013 (As Initially Reported) | Measurement Period Adjustments | February 1, 2013 (As Adjusted) | |||||||
Cash and cash equivalents | $ | 79.7 | $ | — | $ | 79.7 | |||
Accounts and notes receivable—trade | 855.8 | 22.7 | 878.5 | ||||||
Inventories | 673.0 | 3.0 | 676.0 | ||||||
Prepaid expenses and other | 8.2 | (1.3 | ) | 6.9 | |||||
Property, plant and equipment | 1,707.7 | (1.8 | ) | 1,705.9 | |||||
Identifiable intangibles | 1,539.3 | (19.0 | ) | 1,520.3 | |||||
Other assets—noncurrent | 98.8 | 19.1 | 117.9 | ||||||
Accounts payable | (409.1 | ) | (6.9 | ) | (416.0 | ) | |||
Other accrued liabilities | (232.0 | ) | 7.5 | (224.5 | ) | ||||
Other liabilities | (331.1 | ) | (35.3 | ) | (366.4 | ) | |||
Deferred income taxes | (312.9 | ) | 223.2 | (89.7 | ) | ||||
Noncontrolling interests | (66.7 | ) | — | (66.7 | ) | ||||
Net assets acquired before goodwill on acquisition | 3,610.7 | 211.2 | 3,821.9 | ||||||
Goodwill on acquisition | 1,315.2 | (229.8 | ) | 1,085.4 | |||||
Net assets acquired | $ | 4,925.9 | $ | (18.6 | ) | $ | 4,907.3 |
Year Ended December 31, | ||||||
(in millions, except per share data) | 2013 | 2012 | ||||
Net sales | $ | 4,277.3 | $ | 4,219.4 | ||
Net loss | $ | (87.1 | ) | $ | (270.1 | ) |
Net loss attributable to controlling interests | $ | (93.7 | ) | $ | (274.6 | ) |
Earnings per share (Basic and Diluted) | $ | (0.41 | ) | $ | — |
|
December 31, 2014 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 411.8 | $ | (76.3 | ) | $ | 335.5 | 10.0 | ||
Trademarks - indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks - definite-lived | 41.8 | (5.5 | ) | 36.3 | 14.8 | |||||
Customer relationships | 713.9 | (71.3 | ) | 642.6 | 19.4 | |||||
Non-compete agreements | 2.0 | (0.8 | ) | 1.2 | 4.6 | |||||
Total | $ | 1,453.9 | $ | (153.9 | ) | $ | 1,300.0 |
December 31, 2013 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 425.2 | $ | (37.3 | ) | $ | 387.9 | 10.0 | ||
Trademarks—indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks—definite-lived | 41.7 | (2.6 | ) | 39.1 | 14.8 | |||||
Customer relationships | 761.9 | (34.9 | ) | 727.0 | 19.4 | |||||
Non-compete agreements | 1.5 | (0.3 | ) | 1.2 | 4.0 | |||||
Total | $ | 1,514.7 | $ | (75.1 | ) | $ | 1,439.6 |
2015 | $ | 81.6 | |
2016 | $ | 81.6 | |
2017 | $ | 81.1 | |
2018 | $ | 81.0 | |
2019 | $ | 81.0 |
In Process Research and Development | Activity | ||
Balance at February 1, 2013 | $ | 25.4 | |
Completed | (6.5 | ) | |
Abandoned | (3.2 | ) | |
Balance at December 31, 2013 | $ | 15.7 | |
Completed | (10.4 | ) | |
Abandoned | (0.1 | ) | |
Balance at December 31, 2014 | $ | 5.2 |
Performance Coatings | Transportation Coatings | Total | |||||||
At January 1, 2013 | $ | — | $ | — | $ | — | |||
Goodwill resulting from Acquisition | 1,012.5 | 72.9 | 1,085.4 | ||||||
Foreign currency translation | 26.3 | 1.9 | 28.2 | ||||||
At December 31, 2013 | $ | 1,038.8 | $ | 74.8 | $ | 1,113.6 | |||
Purchase accounting adjustments | 5.7 | 0.4 | 6.1 | ||||||
Divestitures | (4.7 | ) | — | (4.7 | ) | ||||
Foreign currency translation | (106.2 | ) | (7.7 | ) | (113.9 | ) | |||
December 31, 2014 | $ | 933.6 | $ | 67.5 | $ | 1,001.1 |
Performance Coatings | Transportation Coatings | Total | |||||||
At January 1, 2012 | $ | 517.9 | $ | 70.9 | $ | 588.8 | |||
Foreign currency translation | — | — | — | ||||||
December 31, 2012 | $ | 517.9 | $ | 70.9 | $ | 588.8 | |||
Foreign currency translation | — | — | — | ||||||
January 31, 2013 | $ | 517.9 | $ | 70.9 | $ | 588.8 |
|
2013 Activity | |||
Balance at February 1, 2013 (At acquisition date) | $ | 0.5 | |
Expense recorded | 120.7 | ||
Payments | (23.7 | ) | |
Foreign currency translation | 0.9 | ||
Balance at December 31, 2013 | $ | 98.4 | |
2014 Activity | |||
Balance at December 31, 2013 | $ | 98.4 | |
Expense Recorded | 8.5 | ||
Payments Made | (51.6 | ) | |
Foreign Currency Changes | (6.8 | ) | |
Balance at December 31, 2014 | $ | 48.5 |
|
Predecessor | ||||||
Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||
Cost of goods sold | $ | 14.2 | $ | 224.7 | ||
Selling, general, and administrative expenses | 1.4 | 21.6 | ||||
Research and development expenses | 0.1 | 2.2 | ||||
Total | $ | 15.7 | $ | 248.5 |
Predecessor | ||||||
Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||
Leveraged functional services | $ | 14.2 | $ | 226.4 | ||
General corporate expenses | 1.5 | 22.1 | ||||
Total | $ | 15.7 | $ | 248.5 |
Predecessor | ||||||
Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||
DPC purchases of products from other DuPont businesses | $ | 7.9 | $ | 91.7 |
|
Operating Leases | |||
2015 | $ | 50.6 | |
2016 | 35.5 | ||
2017 | 27.6 | ||
2018 | 24.5 | ||
2019 | 22.7 | ||
Thereafter | 47.7 | ||
Total minimum payments | $ | 208.6 |
|
Predecessor | |||||||
Plan Name | EIN/Pension Number | January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | ||||
DuPont Pension and Retirement Plan | 51-0014090/001 | $ | 4.2 | $ | 40.6 | ||
All Other Plans | $ | 0.7 | $ | 16.7 |
Defined Benefits | Other Long-Term Employee Benefits | |||||||||||
Successor | Successor | |||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||
Obligations and Funded Status | 2014 | 2013 | 2014 | 2013 | ||||||||
Change in benefit obligation: | ||||||||||||
Projected benefit obligation at beginning of year | $ | 603.0 | $ | — | $ | 4.6 | $ | — | ||||
Fair value of assumed obligation at Acquisition date | — | 579.5 | — | 5.2 | ||||||||
Service cost | 15.4 | 17.0 | 0.1 | 0.2 | ||||||||
Interest cost | 22.9 | 21.2 | 0.1 | 0.2 | ||||||||
Participant contributions | 1.0 | 1.0 | — | — | ||||||||
Actuarial losses (gains)—net | 85.8 | (5.8 | ) | 1.1 | (0.7 | ) | ||||||
Plan curtailments and settlements | (16.3 | ) | (1.4 | ) | — | — | ||||||
Benefits paid | (30.1 | ) | (20.7 | ) | — | — | ||||||
Amendments | (4.3 | ) | (0.4 | ) | (5.7 | ) | — | |||||
Currency translation adjustment | (64.3 | ) | 12.6 | (0.1 | ) | (0.3 | ) | |||||
Projected benefit obligation at end of year | 613.1 | 603.0 | 0.1 | 4.6 | ||||||||
Change in plan assets: | ||||||||||||
Fair value of plan assets at beginning of year | 281.3 | — | — | — | ||||||||
Fair value of plan assets at Acquisition date | — | 250.7 | — | — | ||||||||
Actual return on plan assets | 26.5 | 16.0 | — | — | ||||||||
Employer contributions | 40.9 | 28.6 | — | — | ||||||||
Participant contributions | 1.0 | 1.0 | — | — | ||||||||
Benefits paid | (30.1 | ) | (20.7 | ) | — | — | ||||||
Settlements | (2.7 | ) | (0.6 | ) | — | — | ||||||
Currency translation adjustment | (22.4 | ) | 6.3 | — | — | |||||||
Fair value of plan assets at end of year | 294.5 | 281.3 | — | — | ||||||||
Funded status, net | $ | (318.6 | ) | $ | (321.7 | ) | $ | (0.1 | ) | $ | (4.6 | ) |
Amounts recognized in the consolidated balance sheets consist of: | ||||||||||||
Other assets | $ | 0.1 | $ | 0.2 | $ | — | $ | — | ||||
Other accrued liabilities | (12.4 | ) | (13.3 | ) | — | — | ||||||
Accrued pension and other long-term employee benefits | (306.3 | ) | (308.6 | ) | (0.1 | ) | (4.6 | ) | ||||
Net amount recognized | $ | (318.6 | ) | $ | (321.7 | ) | $ | (0.1 | ) | $ | (4.6 | ) |
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
ABO | $ | 559.4 | $ | 541.5 | ||
Plans with PBO in excess of plan assets: | ||||||
PBO | $ | 606.2 | $ | 595.7 | ||
ABO | $ | 553.2 | $ | 534.9 | ||
Fair value plan assets | $ | 287.5 | $ | 273.8 | ||
Plans with ABO in excess of plan assets: | ||||||
PBO | $ | 602.0 | $ | 537.8 | ||
ABO | $ | 550.9 | $ | 488.9 | ||
Fair value plan assets | $ | 285.1 | $ | 227.2 |
Defined Benefits: | Successor | |||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Accumulated net actuarial gains (losses) | $ | (52.6 | ) | $ | 10.0 | |
Accumulated prior service (cost) credit | 4.3 | 0.4 | ||||
Total | $ | (48.3 | ) | $ | 10.4 |
Other Long-Term Employee Benefits: | Successor | |||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Accumulated net actuarial gains (losses) | $ | (0.4 | ) | $ | 0.6 | |
Accumulated prior service (cost) credit | 4.1 | — | ||||
Total | $ | 3.7 | $ | 0.6 |
2015 | ||||||
Defined Benefits | Other Long-Term Employee Benefits | |||||
Amortization of net actuarial gains (losses) | $ | (1.1 | ) | $ | — | |
Amortization of prior service (cost) credit | 0.3 | 4.1 | ||||
Total | $ | (0.8 | ) | $ | 4.1 |
Pension Benefits | |||||||||||||||
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Components of net periodic benefit cost and amounts recognized in other comprehensive (income) loss: | |||||||||||||||
Net periodic benefit (credit) cost: | |||||||||||||||
Service cost | $ | 15.4 | $ | 17.0 | $ | — | $ | 1.6 | $ | 14.8 | |||||
Interest cost | 22.9 | 21.2 | — | 1.8 | 22.0 | ||||||||||
Expected return on plan assets | (14.8 | ) | (11.9 | ) | — | (1.9 | ) | (18.4 | ) | ||||||
Amortization of actuarial (gain) loss, net | (0.3 | ) | — | — | 1.1 | 5.2 | |||||||||
Amortization of prior service cost | — | — | — | — | 0.2 | ||||||||||
Curtailment gain | (7.3 | ) | — | — | — | — | |||||||||
Settlement loss | 0.1 | — | — | — | 3.9 | ||||||||||
Net periodic benefit cost | 16.0 | 26.3 | — | 2.6 | 27.7 | ||||||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss: | |||||||||||||||
Net actuarial (gain) loss, net | 60.6 | (10.6 | ) | — | — | 112.7 | |||||||||
Amortization of actuarial gain (loss), net | 0.3 | — | — | (1.1 | ) | (5.2 | ) | ||||||||
Prior service benefit | (4.3 | ) | (0.4 | ) | — | — | (0.3 | ) | |||||||
Amortization of prior service cost | — | — | — | — | (0.2 | ) | |||||||||
Curtailment gain | 7.3 | — | — | — | — | ||||||||||
Settlement loss | (0.1 | ) | — | — | — | (3.9 | ) | ||||||||
Net translation adjustment | (4.9 | ) | 0.6 | — | — | — | |||||||||
Total (gain) loss recognized in other comprehensive income | 58.9 | (10.4 | ) | — | (1.1 | ) | 103.1 | ||||||||
Total recognized in net periodic benefit cost and other comprehensive (income) loss | $ | 74.9 | $ | 15.9 | $ | — | $ | 1.5 | $ | 130.8 |
Other Long-Term Employee Benefits | |||||||||||||||
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Components of net periodic benefit cost and amounts recognized in other comprehensive (income) loss: | |||||||||||||||
Net periodic benefit credit cost: | |||||||||||||||
Service cost | $ | 0.1 | $ | 0.2 | $ | — | $ | — | $ | 0.3 | |||||
Interest cost | 0.1 | 0.2 | — | — | 0.5 | ||||||||||
Amortization of actuarial loss, net | 0.1 | — | — | — | — | ||||||||||
Amortization of prior service cost (benefit) | (1.4 | ) | — | — | — | 0.2 | |||||||||
Net periodic benefit cost | (1.1 | ) | 0.4 | — | — | 1.0 | |||||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss: | |||||||||||||||
Net actuarial (gain) loss | (4.6 | ) | (0.7 | ) | — | — | 2.7 | ||||||||
Amortization of actuarial gain (loss) | (0.1 | ) | — | — | — | — | |||||||||
Prior service benefit | — | — | — | — | (5.9 | ) | |||||||||
Amortization of prior service benefit (cost) | 1.4 | — | — | — | (0.2 | ) | |||||||||
Net translation adjustment | — | 0.1 | — | — | — | ||||||||||
Total (gain) loss recognized in other comprehensive income | (3.3 | ) | (0.6 | ) | — | — | (3.4 | ) | |||||||
Total recognized in net periodic benefit cost and other comprehensive income | $ | (4.4 | ) | $ | (0.2 | ) | $ | — | $ | — | $ | (2.4 | ) |
Successor | Predecessor | |||||
2014 | 2013 | 2012 | ||||
Defined benefits | ||||||
Weighted-average assumptions: | ||||||
Discount rate to determine benefit obligations | 3.23 | % | 4.11 | % | 3.38 | % |
Discount rate to determine net cost | 4.11 | % | 4.15 | % | 4.73 | % |
Rate of future compensation increases to determine benefit obligation | 3.57 | % | 3.52 | % | 3.16 | % |
Rate of future compensation increases to determine net cost | 3.52 | % | 3.69 | % | 3.33 | % |
Rate of return on plan assets to determine net cost | 5.23 | % | 5.22 | % | 7.71 | % |
Successor | Predecessor | |||||
2014 | 2013 | 2012 | ||||
Other Long-Term Employee benefits | ||||||
Weighted-average assumptions: | ||||||
Discount rate to determine benefit obligations | 1.50 | % | 4.80 | % | 4.86 | % |
Discount rate to determine net cost | 4.80 | % | 4.20 | % | 7.28 | % |
Rate of future compensation increases to determine benefit obligations | — | — | 3.00 | % | ||
Rate of future compensation increases to determine net cost | — | — | 4.00 | % |
Year ended December 31, | Benefits | ||
2015 | $ | 34.8 | |
2016 | $ | 27.1 | |
2017 | $ | 29.8 | |
2018 | $ | 31.0 | |
2019 | $ | 37.6 | |
2020—2024 | $ | 180.3 |
Year ended December 31, | Benefits | ||
2015 | $ | — | |
2016 | $ | 0.1 | |
2017 | $ | — | |
2018 | $ | — | |
2019 | $ | — | |
2020—2024 | $ | — |
Asset Category | 2014 | 2013 | Target Allocation |
Equity securities | 35-40% | 35-40% | 35-40% |
Debt securities | 35-40% | 35-40% | 35-40% |
Real estate | 0-1% | 0-1% | 0-1% |
Other | 20-25% | 20-25% | 20-25% |
Fair value measurements at December 31, 2014 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Asset Category: | ||||||||||||
Cash and cash equivalents | $ | 4.4 | $ | 4.4 | $ | — | $ | — | ||||
U.S. equity securities | 16.1 | 16.1 | — | — | ||||||||
Non-U.S. equity securities | 79.2 | 78.7 | 0.4 | 0.1 | ||||||||
Debt—government issued | 36.9 | 36.3 | 0.6 | — | ||||||||
Debt—corporate issued | 55.3 | 53.0 | — | 2.3 | ||||||||
Hedge Funds | 0.2 | 0.1 | 0.1 | — | ||||||||
Private market securities | 63.2 | 0.1 | 0.1 | 63.0 | ||||||||
Real estate | 0.4 | — | — | 0.4 | ||||||||
255.7 | $ | 188.7 | $ | 1.2 | $ | 65.8 | ||||||
Pension trust receivables | 38.8 | |||||||||||
Total | $ | 294.5 |
Fair value measurements at December 31, 2013 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Asset Category: | ||||||||||||
Cash and cash equivalents | $ | 6.7 | $ | 6.7 | $ | — | $ | — | ||||
U.S. equity securities | 13.6 | 13.2 | 0.4 | — | ||||||||
Non-U.S. equity securities | 71.3 | 70.8 | 0.5 | — | ||||||||
Debt—government issued | 34.4 | 34.4 | — | — | ||||||||
Debt—corporate issued | 52.2 | 49.3 | 2.9 | — | ||||||||
Hedge Funds | 0.4 | 0.2 | 0.2 | — | ||||||||
Private market securities | 59.5 | — | 0.2 | 59.3 | ||||||||
Real estate | 0.3 | — | — | 0.3 | ||||||||
238.4 | $ | 174.6 | $ | 4.2 | $ | 59.6 | ||||||
Pension trust receivables | 42.9 | |||||||||||
Total | $ | 281.3 |
Level 3 assets | ||||||||||||
Total | Private market securities | Debt and Equity | Real estate | |||||||||
Ending balance at December 31, 2012 | $ | 12.2 | $ | 10.5 | $ | — | $ | 1.7 | ||||
Realized (loss) | (0.1 | ) | — | — | (0.1 | ) | ||||||
Change in unrealized gain | 0.2 | 0.2 | — | — | ||||||||
Purchases, sales, issues and settlements | 45.6 | 46.9 | — | (1.3 | ) | |||||||
Transfers in/(out) of Level 3 | 1.7 | 1.7 | — | — | ||||||||
Ending balance at December 31, 2013 | $ | 59.6 | $ | 59.3 | $ | — | $ | 0.3 | ||||
Realized (loss) | — | — | — | — | ||||||||
Change in unrealized gain | 0.2 | — | — | 0.2 | ||||||||
Purchases, sales, issues and settlements | 6.0 | 3.7 | 2.4 | (0.1 | ) | |||||||
Transfers in/(out) of Level 3 | — | — | — | — | ||||||||
Ending balance at December 31, 2014 | $ | 65.8 | $ | 63.0 | $ | 2.4 | $ | 0.4 |
|
2014 Grants | 2013 Grants | |||
Expected Term | 7.81 years | 7.81 years | ||
Volatility | 28.28 | % | 28.61 | % |
Dividend Yield | — | — | ||
Discount Rate | 2.21 | % | 2.13 | % |
Awards (millions) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (millions) | Weighted Average Remaining Contractual Life (years) | ||||||
Outstanding at January 1, 2014 | 16.2 | $ | 9.32 | ||||||
Granted | 1.6 | $ | 9.62 | ||||||
Exercised | (0.4 | ) | $ | 8.03 | |||||
Forfeited | (0.3 | ) | $ | 9.32 | |||||
Outstanding at December 31, 2014 | 17.1 | $ | 9.38 | ||||||
Vested and expected to vest at December 31, 2014 | 17.1 | $ | 9.38 | $ | 284.5 | 8.58 | |||
Exercisable at December 31, 2014 | 2.9 | $ | 9.49 | $ | 47.6 | 8.44 |
|
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Exchange losses, net | $ | 81.2 | $ | 48.9 | $ | — | $ | 4.5 | $ | 17.7 | |||||
Management fees and expenses | 16.6 | 3.1 | — | — | — | ||||||||||
Other | 17.2 | (3.5 | ) | — | 0.5 | (1.4 | ) | ||||||||
Total | $ | 115.0 | $ | 48.5 | $ | — | $ | 5.0 | $ | 16.3 |
|
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from August 24, 2012 through December 31, | Period from January 1, 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Domestic | $ | (8.8 | ) | $ | (153.8 | ) | $ | — | $ | (1.5 | ) | $ | 82.8 | ||
Foreign | 45.6 | (109.9 | ) | (29.0 | ) | 17.1 | 310.2 | ||||||||
Total | $ | 36.8 | $ | (263.7 | ) | $ | (29.0 | ) | $ | 15.6 | $ | 393.0 |
Successor | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from August 24, 2012 through December 31, 2012 | |||||||||||||||||||||||||
Current | Deferred | Total | Current | Deferred | Total | Current | Deferred | Total | |||||||||||||||||||
U.S. Federal | $ | — | $ | (2.1 | ) | $ | (2.1 | ) | $ | — | $ | (43.7 | ) | $ | (43.7 | ) | $ | — | $ | — | $ | — | |||||
State | 2.0 | (2.9 | ) | (0.9 | ) | 2.3 | (2.5 | ) | (0.2 | ) | — | — | — | ||||||||||||||
Foreign | 38.3 | (33.2 | ) | 5.1 | 73.7 | (74.6 | ) | (0.9 | ) | — | — | — | |||||||||||||||
Total | $ | 40.3 | $ | (38.2 | ) | $ | 2.1 | $ | 76.0 | $ | (120.8 | ) | $ | (44.8 | ) | $ | — | $ | — | $ | — |
Predecessor | ||||||||||||||||||
Period from January 1,2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||
Current | Deferred | Total | Current | Deferred | Total | |||||||||||||
U.S. Federal | $ | (8.8 | ) | $ | 7.0 | $ | (1.8 | ) | $ | 30.9 | $ | (4.5 | ) | $ | 26.4 | |||
State | 0.1 | (0.2 | ) | (0.1 | ) | 6.6 | (0.4 | ) | 6.2 | |||||||||
Foreign | 6.7 | 2.3 | 9.0 | 98.6 | 14.0 | 112.6 | ||||||||||||
Total | $ | (2.0 | ) | $ | 9.1 | $ | 7.1 | $ | 136.1 | $ | 9.1 | $ | 145.2 |
Successor | Predecessor | ||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from August 24, 2012 through December 31, 2012 | Period from January 1 2013 through January 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||||||
Statutory U.S. federal income tax / rate(1) | $ | 12.9 | 35.0 | % | $ | (92.3 | ) | 35.0 | % | $ | (10.1 | ) | 35.0 | % | $ | 5.5 | 35.0 | % | $ | 137.6 | 35.0 | % | |||
Foreign income taxed at rates other than 35% | (46.7 | ) | (127.0 | ) | (36.6 | ) | 13.9 | 10.1 | (35.0 | ) | 1.0 | 6.6 | (10.9 | ) | (2.8 | ) | |||||||||
Changes in valuation allowances | 44.4 | 120.9 | 55.0 | (20.9 | ) | — | — | 1.4 | 8.9 | 9.8 | 2.5 | ||||||||||||||
Foreign exchange (gain) loss | 8.7 | 23.7 | 8.7 | (3.3 | ) | — | — | 0.5 | 3.1 | 4.7 | 1.2 | ||||||||||||||
Unrecognized tax benefits(2) | (44.0 | ) | (119.7 | ) | 35.1 | (13.2 | ) | — | — | — | — | — | — | ||||||||||||
Withholding taxes, net | (0.3 | ) | (0.8 | ) | 8.3 | (3.2 | ) | — | — | — | — | — | — | ||||||||||||
Non-deductible interest | 15.4 | 41.9 | 6.4 | (2.4 | ) | — | — | — | — | — | — | ||||||||||||||
Non-deductible expenses | 14.2 | 38.6 | 19.4 | (7.4 | ) | — | — | — | — | — | — | ||||||||||||||
Tax credits | (3.6 | ) | (9.8 | ) | (1.0 | ) | 0.4 | — | — | — | — | — | — | ||||||||||||
Capital loss(3) | — | — | (46.7 | ) | 17.7 | — | — | — | — | — | — | ||||||||||||||
Other - net | 1.1 | 2.9 | (1.1 | ) | 0.4 | — | — | (1.3 | ) | (8.0 | ) | 4.0 | 1.1 | ||||||||||||
Total income tax (benefit)/ effective tax rate | $ | 2.1 | 5.7 | % | $ | (44.8 | ) | 17.0 | % | $ | — | — | $ | 7.1 | 45.6 | % | $ | 145.2 | 37.0 | % |
(1) | The U.S. statutory rate has been used as management believes it is more meaningful to the Company. |
(2) | Within this amount, the Company released and recorded an unrecognized tax benefit of $21.1 million related to non-deductible interest and debt acquisition costs in 2014 and 2013. These adjustments were fully offset by changes in the valuation allowance. |
(3) | In 2013, the Company recognized a tax benefit of $46.7 million related to a capital loss, which is fully offset by a $46.7 million increase to the valuation allowance. |
Deferred Tax Balances | Successor | |||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Deferred tax asset | ||||||
Tax loss and credit carryforwards | $ | 185.6 | $ | 111.7 | ||
Goodwill and intangibles | 90.8 | 89.4 | ||||
Compensation & employee benefits | 92.4 | 79.1 | ||||
Accruals & other reserves | 58.0 | 40.5 | ||||
Interest expense | 13.4 | 8.6 | ||||
Total deferred tax assets | 440.2 | 329.3 | ||||
Less: Valuation allowance | (101.9 | ) | (63.4 | ) | ||
Net, deferred tax assets | 338.3 | 265.9 | ||||
Deferred tax liabilities | ||||||
Inventory | (3.0 | ) | (1.3 | ) | ||
Property, Plant & Equipment | (215.0 | ) | (218.5 | ) | ||
Accounts Receivable & Other Assets | (2.5 | ) | (8.4 | ) | ||
Equity Investment & Other Securities | (2.2 | ) | (5.8 | ) | ||
Unremitted earnings | (8.5 | ) | (15.9 | ) | ||
Long-Term Debt | (8.1 | ) | — | |||
Total deferred tax liabilities | (239.3 | ) | (249.9 | ) | ||
Net deferred tax asset/(liability) | $ | 99.0 | $ | 16.0 | ||
Current asset | $ | 64.5 | $ | 30.0 | ||
Current liability | (7.3 | ) | (5.5 | ) | ||
Non-current assets | 250.0 | 271.9 | ||||
Non-current liability | (208.2 | ) | (280.4 | ) | ||
Net deferred tax asset | $ | 99.0 | $ | 16.0 |
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Period from January 1 2013 through January 31, | Period from January 1 2013 through January 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2013 | 2013 | 2012 | |||||||||||
Balance at January 1 | $ | 38.9 | $ | — | $ | — | $ | — | $ | — | |||||
Increases related to acquisition | — | 11.3 | — | — | — | ||||||||||
Increases related to positions taken on items from prior years | — | — | — | — | — | ||||||||||
Decreases related to positions taken on items from prior years | (33.6 | ) | — | — | — | — | |||||||||
Increases related to positions taken in the current year | — | 27.6 | — | — | — | ||||||||||
Settlement of uncertain tax positions with tax authorities | — | — | — | — | — | ||||||||||
Decreases due to expiration of statutes of limitations | — | — | — | — | — | ||||||||||
Balance at December 31 | $ | 5.3 | $ | 38.9 | $ | — | $ | — | $ | — |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Accounts receivable—trade, net | $ | 638.3 | $ | 637.5 | ||
Notes receivable | 45.5 | 44.7 | ||||
Other | 136.6 | 183.7 | ||||
Total | $ | 820.4 | $ | 865.9 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Finished products | $ | 323.7 | $ | 329.3 | ||
Semi-finished products | 81.3 | 90.2 | ||||
Raw materials and supplies | 133.3 | 130.7 | ||||
Total | $ | 538.3 | $ | 550.2 |
|
Successor | |||||||||
Year Ended December 31, | |||||||||
Useful Lives (years) | 2014 | 2013 | |||||||
Land | $ | 90.5 | $ | 99.9 | |||||
Buildings and improvements | 5 | - | 25 | 418.4 | 430.7 | ||||
Machinery and equipment | 3 | - | 25 | 1,060.1 | 1,087.0 | ||||
Software | 5 | - | 7 | 122.1 | 42.4 | ||||
Other | 3 | - | 20 | 29.1 | 26.3 | ||||
Construction in progress | 138.0 | 119.9 | |||||||
Total | 1,858.2 | 1,806.2 | |||||||
Accumulated depreciation | (344.1 | ) | (183.6 | ) | |||||
Property, plant, and equipment, net | $ | 1,514.1 | $ | 1,622.6 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Available for sale securities | $ | 4.5 | $ | 4.9 | ||
Deferred income taxes—non-current | 250.0 | 271.9 | ||||
Other | 219.2 | 218.3 | ||||
Total | $ | 473.7 | $ | 495.1 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Trade payables | $ | 463.6 | $ | 428.8 | ||
Non-income taxes | 21.4 | 40.5 | ||||
Other | 9.5 | 9.2 | ||||
Total | $ | 494.5 | $ | 478.5 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Compensation and other employee-related costs | $ | 153.0 | $ | 168.0 | ||
Current portion of long-term employee benefit plans | 12.4 | 13.3 | ||||
Restructuring | 48.5 | 98.4 | ||||
Discounts, rebates, and warranties | 68.6 | 65.0 | ||||
Income taxes payable | 20.8 | 25.1 | ||||
Derivative liabilities | 1.5 | 1.2 | ||||
Other | 100.0 | 101.7 | ||||
Total | $ | 404.8 | $ | 472.7 |
|
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Dollar Term Loan | $ | 2,165.5 | $ | 2,282.8 | ||
Euro Term Loan | 481.0 | 547.7 | ||||
Dollar Senior Notes | 750.0 | 750.0 | ||||
Euro Senior Notes | 305.3 | 344.9 | ||||
Short-term borrowings | 12.2 | 18.2 | ||||
Other borrowings | 0.7 | — | ||||
Unamortized original issue discount | (18.3 | ) | (22.7 | ) | ||
$ | 3,696.4 | $ | 3,920.9 | |||
Less: | ||||||
Short term borrowings | $ | 12.2 | $ | 18.2 | ||
Current portion of long-term borrowings | 27.9 | 28.5 | ||||
Long-term debt | $ | 3,656.3 | $ | 3,874.2 |
2015 | $ | 40.1 | |
2016 | 27.9 | ||
2017 | 27.9 | ||
2018 | 28.6 | ||
2019 | 27.9 | ||
Thereafter | 3,562.3 | ||
$ | 3,714.7 |
Period | Euro Notes Percentage | |
2016 | 104.313 | % |
2017 | 102.875 | % |
2018 | 101.438 | % |
2019 | 100.000 | % |
2020 and thereafter | 100.000 | % |
Period | Dollar Notes Percentage | |
2016 | 105.531 | % |
2017 | 103.688 | % |
2018 | 101.844 | % |
2019 | 100.000 | % |
2020 and thereafter | 100.000 | % |
|
Derivatives in Cash Flow Hedging Relationships in 2014: | Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion) | Location of (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion) | Location of (Gains) Losses Recognized in Income on Derivatives (Ineffective Portion) | Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion) | ||||||
Interest rate contracts | $ | 4.6 | Interest expense, net | $ | 6.5 | Interest expense, net | $ | 0.3 |
Derivatives in Cash Flow Hedging Relationships in 2013: | Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion) | Location of (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion) | Location of (Gains) Losses Recognized in Income on Derivatives (Ineffective Portion) | Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion) | ||||||
Interest rate contracts | $ | (5.0 | ) | Interest expense, net | $ | 4.4 | Interest expense, net | $ | (4.3 | ) |
Successor | Predecessor | ||||||||||||
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of (Gain) Loss Recognized in Income on Derivatives | Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from January 1, 2013 through January 31, 2013 | Year Ended December 31, 2012 | ||||||||
Foreign currency forward contract | Other expense, net as a component of Exchange (gains) losses | $ | 1.4 | $ | 20.9 | $ | 2.0 | $ | 3.9 | ||||
Interest rate cap | Interest expense, net | 3.4 | (0.3 | ) | — | — | |||||||
$ | 4.8 | $ | 20.6 | $ | 2.0 | $ | 3.9 |
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Foreign currency contracts | $ | — | $ | — | ||
Other assets: | ||||||
Interest rate swaps | 5.9 | 10.5 | ||||
Total assets | $ | 5.9 | $ | 10.5 | ||
Other liabilities: | ||||||
Interest rate swaps | $ | 1.5 | $ | 1.2 | ||
Total liabilities | $ | 1.5 | $ | 1.2 |
Successor | ||||||
Year Ended December 31, | ||||||
2014 | 2013 | |||||
Foreign currency contracts | $ | — | $ | — | ||
Other assets: | ||||||
Interest rate cap | 0.1 | 3.4 | ||||
Total assets | $ | 0.1 | $ | 3.4 | ||
Other liabilities: | ||||||
Foreign currency contracts | $ | — | $ | — | ||
Total liabilities | $ | — | $ | — |
|
Successor | Predecessor | |||||||||||
Year Ended December 31, | January 1 through January 31, | Year Ended December 31, | ||||||||||
2014 | 2013 | 2013 | 2012 | |||||||||
Performance Coatings | ||||||||||||
Refinish | $ | 1,850.8 | $ | 1,670.0 | $ | 129.4 | $ | 1,759.3 | ||||
Industrial | 734.2 | 655.3 | 57.4 | 720.2 | ||||||||
Total Net sales Performance Coatings | 2,585.0 | 2,325.3 | 186.8 | 2,479.5 | ||||||||
Transportation Coatings | ||||||||||||
Light Vehicle | 1,384.5 | 1,291.5 | 111.6 | 1,390.6 | ||||||||
Commercial Vehicle | 392.2 | 334.3 | 27.8 | 349.3 | ||||||||
Total Net sales Transportation Coatings | 1,776.7 | 1,625.8 | 139.4 | 1,739.9 | ||||||||
Total Net sales | $ | 4,361.7 | $ | 3,951.1 | $ | 326.2 | $ | 4,219.4 |
Successor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
For the Year ended December 31, 2014 | |||||||||
Net sales (1) | $ | 2,585.0 | $ | 1,776.7 | $ | 4,361.7 | |||
Equity in earnings in unconsolidated affiliates | (1.2 | ) | (0.2 | ) | (1.4 | ) | |||
Adjusted EBITDA (2) | 547.6 | 292.9 | 840.5 | ||||||
Investment in unconsolidated affiliates | 7.2 | 7.1 | 14.3 |
Successor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
For the Year ended December 31, 2013 | |||||||||
Net sales (1) | $ | 2,325.3 | $ | 1,625.8 | $ | 3,951.1 | |||
Equity in earnings in unconsolidated affiliates | 1.8 | 0.3 | 2.1 | ||||||
Adjusted EBITDA (2) | 500.2 | 198.8 | 699.0 | ||||||
Investment in unconsolidated affiliates | 7.7 | 8.1 | 15.8 |
Predecessor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
January 1 through January 31, 2013 | |||||||||
Net sales (1) | $ | 186.8 | $ | 139.4 | $ | 326.2 | |||
Equity in earnings (losses) in unconsolidated affiliates | — | (0.3 | ) | (0.3 | ) | ||||
Adjusted EBITDA (2) | 15.0 | 17.7 | 32.7 | ||||||
Investment in unconsolidated affiliates | 2.0 | 6.7 | 8.7 |
Predecessor | |||||||||
Performance Coatings | Transportation Coatings | Total | |||||||
For the Year ended December 31, 2012 | |||||||||
Net sales (1) | $ | 2,479.5 | $ | 1,739.9 | $ | 4,219.4 | |||
Equity in earnings in unconsolidated affiliates | — | 0.6 | 0.6 | ||||||
Adjusted EBITDA (2) | 426.0 | 151.6 | 577.6 | ||||||
Investment in unconsolidated affiliates | 0.8 | 7.1 | 7.9 |
(1) | The Company has no intercompany sales. |
(2) | The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income (loss) before interest, taxes, depreciation and amortization and other unusual items impacting operating results. Adjusted EBITDA 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. |
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | August 24 through December 31, | January 1 through January 31, | Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Adjusted EBITDA | $ | 840.5 | $ | 699.0 | $ | — | $ | 32.7 | $ | 577.6 | |||||
Inventory step-up (a) | — | (103.7 | ) | — | — | — | |||||||||
Merger and acquisition related costs (b) | — | (28.1 | ) | (29.0 | ) | — | — | ||||||||
Financing fees (c) | (6.1 | ) | (25.0 | ) | — | — | — | ||||||||
Foreign exchange remeasurement losses (d) | (81.2 | ) | (48.9 | ) | — | (4.5 | ) | (17.7 | ) | ||||||
Long-term employee benefit plan adjustments (e) | 0.6 | (9.5 | ) | — | (2.3 | ) | (36.9 | ) | |||||||
Termination benefits and other employee related costs (f) | (18.4 | ) | (147.5 | ) | — | (0.3 | ) | (8.6 | ) | ||||||
Consulting and advisory fees (g) | (36.3 | ) | (54.7 | ) | — | — | — | ||||||||
Transition-related costs (h) | (101.8 | ) | (29.3 | ) | — | — | — | ||||||||
IPO-related costs (i) | (22.3 | ) | — | — | — | — | |||||||||
Other adjustments (j) | (10.8 | ) | (2.3 | ) | — | (0.1 | ) | (12.6 | ) | ||||||
Dividends in respect of noncontrolling interest (k) | 2.2 | 5.2 | — | — | 1.9 | ||||||||||
Management fee expense (l) | (3.2 | ) | (3.1 | ) | — | — | — | ||||||||
EBITDA | 563.2 | 252.1 | (29.0 | ) | 25.5 | 503.7 | |||||||||
Interest expense, net | 217.7 | 215.1 | — | — | — | ||||||||||
Depreciation and amortization | 308.7 | 300.7 | — | 9.9 | 110.7 | ||||||||||
Income before income taxes | $ | 36.8 | $ | (263.7 | ) | $ | (29.0 | ) | $ | 15.6 | $ | 393.0 |
(a) | During the Successor year ended December 31, 2013, we recorded a non-cash fair value adjustment associated with our acquisition accounting for inventories. These amounts increased cost of goods sold by $103.7 million. |
(b) | In connection with the Acquisition, we incurred $28.1 million and $29.0 million of merger and acquisition costs during the Successor years ended December 31, 2013 and December 31, 2012, respectively. These costs consisted primarily of investment banking, legal and other professional advisory services costs. |
(c) | On August 30, 2012, we signed a debt commitment letter, which included the Bridge Facility. Upon the issuance of the Senior Notes and the entry into the Senior Secured Credit Facilities, the commitments under the Bridge Facility terminated. Commitment fees related to the Bridge Facility of $21.0 million and associated fees of $4.0 million were expensed upon the payment and termination of the Bridge Facility. In connection with the amendment to the Senior Secured Credit Facilities in February 2014, we recognized $3.1 million of costs during the Successor year ended December 31, 2014. In addition to the credit facility amendment, we also incurred a $3.0 million loss on extinguishment of debt recognized during the Successor year ended December 31, 2014, which resulted directly from the pro-rata write off of unamortized deferred financing costs and original issue discounts associated with the pay-down of $100.0 million of principal on the New Dollar Term Loan (discussed further at Note 22 to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K). |
(d) | Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, including a $19.4 million loss related to the acquisition date settlement of a foreign currency contract used to hedge the variability of Euro-based financing. |
(e) | For the Successor years ended December 31, 2014 and 2013, eliminates the non-service cost components of employee benefit costs. Additionally, we deducted a pension curtailment gain of $7.3 million recorded during the Successor year ended December 31, 2014. For the Predecessor period January 1, 2013 through January 31, 2013 and the Predecessor year ended December 31, 2012 eliminates (1) all U.S. pension and other long-term employee benefit costs that were not assumed as part of the Acquisition and (2) the non-service cost component of the pension and other long-term employee benefit costs for the foreign pension plans that were assumed as part of the Acquisition. |
(f) | Represents expenses primarily related to employee termination benefits, including our initiative to improve the overall cost structure within the European region, and other employee-related costs. Termination benefits include the costs associated with our headcount initiatives for establishment of new roles and elimination of old roles and other costs associated with cost saving opportunities that were related to our transition to a standalone entity. |
(g) | Represents fees paid to consultants, advisors, and other third-party professional organizations for professional services rendered in conjunction with the transition from DuPont to a standalone entity. |
(h) | Represents charges associated with the transition from DuPont to a standalone entity, including branding and marketing, information technology related costs, and facility transition costs. |
(i) | Represents costs associated with the IPO, including a $13.4 million pre-tax charge associated with the termination of the management agreement with Carlyle Investment Management, L.L.C., an affiliate of Carlyle, upon the completion of the IPO. |
(j) | Represent costs for certain unusual or non-operational losses and the non-cash impact of natural gas and currency hedge losses allocated to DPC by DuPont, stock-based compensation, asset impairments, equity investee dividends, indemnity income associated with the Transaction, and loss (gain) on sale and disposal of property, plant and equipment. |
(k) | Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned. |
(l) | Pursuant to Axalta’s management agreement with Carlyle Investment Management, L.L.C., for management and financial advisory services and oversight provided to Axalta and its subsidiaries, Axalta was required to pay an annual management fee of $3.0 million and out-of-pocket expenses. |
Successor | Predecessor | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | Period from August 24 through December 31, | Period from January 1 through January 31, | Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | 2013 | 2012 | |||||||||||
North America | $ | 1,307.8 | $ | 1,165.4 | $ | — | $ | 81.6 | $ | 1,238.6 | |||||
EMEA | 1,672.0 | 1,540.4 | — | 141.0 | 1,675.4 | ||||||||||
Asia Pacific | 715.0 | 593.7 | — | 51.7 | 595.0 | ||||||||||
Latin America | 666.9 | 651.6 | — | 51.9 | 710.4 | ||||||||||
Total (a) | $ | 4,361.7 | $ | 3,951.1 | $ | — | $ | 326.2 | $ | 4,219.4 |
Successor | ||||||
December 31, 2014 | December 31, 2013 | |||||
North America | $ | 481.4 | $ | 483.8 | ||
EMEA | 542.0 | 623.5 | ||||
Asia Pacific | 234.3 | 218.1 | ||||
Latin America | 256.4 | 297.2 | ||||
Total (b) | $ | 1,514.1 | $ | 1,622.6 |
(a) | Net Sales are attributed to countries based on location of the customer. Sales to external customers in China represented approximately 11% and 10% of the total for the Successor years ended December 31, 2014 and 2013, respectively, as well as 11% for the Predecessor period ended January 31, 2013 and 8% in the Predecessor year ended December 31, 2012. Sales to external customers in Germany represented approximately 10% and 10% of the total for the Successor years ended December 31, 2014 and 2013, respectively, as well as 11% for the Predecessor period ended January 31, 2013 and 16% in the Predecessor year ended December 31, 2012. Canada, which is included in the North America region, represents approximately 3% of total sales in all periods. |
(b) | Long-lived assets consist of property, plant and equipment, net. |
|
Unrealized Currency Translation Adjustments | Pension and Other Long-term Employee Benefit Adjustments | Unrealized loss on securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
Predecessor Balance, December 31, 2012 | $ | — | $ | (142.3 | ) | $ | 1.4 | $ | — | $ | (140.9 | ) | |||
Current year deferrals to AOCI | — | 0.7 | 0.2 | — | 0.9 | ||||||||||
Reclassifications from AOCI to Net income | — | — | — | — | — | ||||||||||
Net Change | — | 0.7 | 0.2 | — | 0.9 | ||||||||||
Predecessor Balance, January 31, 2013 | $ | — | $ | (141.6 | ) | $ | 1.6 | $ | — | $ | (140.0 | ) |
Unrealized Currency Translation Adjustments | Pension and Other Long-term Employee Benefit Adjustments | Unrealized Loss on Securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
Successor Balance, December 31, 2012 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Current year deferrals to AOCI | 24.3 | 7.5 | (0.9 | ) | 7.5 | 38.4 | |||||||||
Reclassifications from AOCI to Net income | — | — | — | (4.4 | ) | (4.4 | ) | ||||||||
Net Change | 24.3 | 7.5 | (0.9 | ) | 3.1 | 34.0 | |||||||||
Successor Balance, December 31, 2013 | $ | 24.3 | $ | 7.5 | $ | (0.9 | ) | $ | 3.1 | $ | 34.0 |
Unrealized Currency Translation Adjustments | Pension and Other Long-term Employee Benefit Adjustments | Unrealized Gain (Loss) on Securities | Unrealized Gain (Losses) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
Successor Balance, December 31, 2013 | $ | 24.3 | $ | 7.5 | $ | (0.9 | ) | $ | 3.1 | $ | 34.0 | ||||
Current year deferrals to AOCI | (96.4 | ) | (29.7 | ) | 0.7 | 3.6 | (121.8 | ) | |||||||
Reclassifications from AOCI to Net income | — | (9.0 | ) | — | (6.5 | ) | (15.5 | ) | |||||||
Net Change | (96.4 | ) | (38.7 | ) | 0.7 | (2.9 | ) | (137.3 | ) | ||||||
Successor Balance, December 31, 2014 | $ | (72.1 | ) | $ | (31.2 | ) | $ | (0.2 | ) | $ | 0.2 | $ | (103.3 | ) |
|
2014 | March 31 | June 30(b) | September 30(b) | December 31(c) | Full Year | ||||||||||
Total revenue | $ | 1,054.4 | $ | 1,134.3 | $ | 1,115.8 | $ | 1,087.0 | $ | 4,391.5 | |||||
Cost of goods sold | 703.5 | 742.5 | 728.1 | 723.1 | 2,897.2 | ||||||||||
Net income (loss) | (3.7 | ) | 55.8 | (18.3 | ) | 0.9 | 34.7 | ||||||||
Net income (loss) attributable to controlling interests | (4.3 | ) | 53.8 | (19.9 | ) | (2.2 | ) | 27.4 | |||||||
Basic net income (loss) per share | (0.02 | ) | 0.23 | (0.09 | ) | (0.01 | ) | 0.12 | |||||||
Diluted net income (loss) per share | (0.02 | ) | 0.23 | (0.09 | ) | (0.01 | ) | 0.12 | |||||||
2013 | March 31(a) | June 30(a) | September 30 | December 31 | Full Year | ||||||||||
Total revenue | $ | 675.1 | $ | 1,122.2 | $ | 1,082.8 | $ | 1,106.7 | $ | 3,986.8 | |||||
Cost of goods sold | 539.1 | 788.5 | 739.1 | 706.1 | 2,772.8 | ||||||||||
Net income (loss) | (156.5 | ) | (21.8 | ) | 6.4 | (47.0 | ) | (218.9 | ) | ||||||
Net income (loss) attributable to controlling interests | (157.8 | ) | (22.8 | ) | 5.0 | (49.3 | ) | (224.9 | ) | ||||||
Basic net income (loss) per share | (0.67 | ) | (0.10 | ) | 0.02 | (0.22 | ) | (0.97 | ) | ||||||
Diluted net income (loss) per share | (0.67 | ) | (0.10 | ) | 0.02 | (0.22 | ) | (0.97 | ) |
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