| Segments
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Performance Coatings | Transportation Coatings | Total | |||||||
At December 31, 2015 | $ | 866.1 | $ | 62.1 | $ | 928.2 | |||
Foreign currency translation | 13.0 | 0.9 | 13.9 | ||||||
March 31, 2016 | $ | 879.1 | $ | 63.0 | $ | 942.1 |
March 31, 2016 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 413.8 | $ | (127.6 | ) | $ | 286.2 | 10.0 | ||
Trademarks - indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks - definite-lived | 45.8 | (9.3 | ) | 36.5 | 14.8 | |||||
Customer relationships | 681.5 | (112.0 | ) | 569.5 | 19.3 | |||||
Non-compete agreements | 1.9 | (1.3 | ) | 0.6 | 4.6 | |||||
Total | $ | 1,427.4 | $ | (250.2 | ) | $ | 1,177.2 |
December 31, 2015 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 413.0 | $ | (117.2 | ) | $ | 295.8 | 10.0 | ||
Trademarks—indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks—definite-lived | 45.2 | (8.5 | ) | 36.7 | 14.7 | |||||
Customer relationships | 676.1 | (102.1 | ) | 574.0 | 19.3 | |||||
Non-compete agreements | 1.9 | (1.2 | ) | 0.7 | 4.6 | |||||
Total | $ | 1,420.6 | $ | (229.0 | ) | $ | 1,191.6 |
Remainder of 2016 | $ | 60.4 | |
2017 | $ | 80.2 | |
2018 | $ | 80.1 | |
2019 | $ | 80.1 | |
2020 | $ | 80.0 |
|
2016 Activity | |||
Balance at December 31, 2015 | $ | 41.3 | |
Expense Recorded | 0.5 | ||
Payments Made | (11.7 | ) | |
Foreign Currency Changes | 0.7 | ||
Balance at March 31, 2016 | $ | 30.8 |
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Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Components of net periodic benefit cost: | ||||||
Net periodic benefit cost: | ||||||
Service cost | $ | 2.5 | $ | 3.1 | ||
Interest cost | 3.9 | 4.6 | ||||
Expected return on plan assets | (3.2 | ) | (3.7 | ) | ||
Amortization of actuarial (gain) loss, net | (0.1 | ) | 0.3 | |||
Amortization of prior service credit, net | — | (0.1 | ) | |||
Net periodic benefit cost | $ | 3.1 | $ | 4.2 |
|
2016 Grants | ||
Expected Term | 6.00 years | |
Volatility | 21.63 | % |
Dividend Yield | — | |
Discount Rate | 1.45 | % |
Awards (in millions) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (in millions) | Weighted Average Remaining Contractual Life (years) | ||||||
Outstanding at January 1, 2016 | 11.0 | $ | 12.19 | ||||||
Granted | 1.1 | $ | 23.24 | ||||||
Exercised | (0.2 | ) | $ | 9.22 | |||||
Forfeited | (0.3 | ) | $ | 7.65 | |||||
Outstanding at March 31, 2016 | 11.6 | $ | 13.36 | ||||||
Vested and expected to vest at March 31, 2016 | 11.6 | $ | 13.36 | $ | 186.7 | 7.78 | |||
Exercisable at March 31, 2016 | 9.3 | $ | 9.81 | $ | 179.9 | 7.36 |
Awards (millions) | Weighted-Average Fair Value | ||||
Outstanding at January 1, 2016 | 1.7 | $ | 32.22 | ||
Granted | 0.8 | $ | 23.24 | ||
Vested | — | $ | — | ||
Forfeited | — | $ | — | ||
Outstanding at March 31, 2016 | 2.5 | $ | 29.39 |
Awards (millions) | Weighted-Average Fair Value | ||||
Outstanding at January 1, 2016 | — | $ | — | ||
Granted | 0.3 | $ | 24.74 | ||
Vested | — | $ | — | ||
Forfeited | — | $ | — | ||
Outstanding at March 31, 2016 | 0.3 | $ | 24.74 |
|
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Exchange losses, net | $ | 7.5 | $ | 8.7 | ||
Other miscellaneous expense (income), net | 0.5 | (4.8 | ) | |||
Total | $ | 8.0 | $ | 3.9 |
|
Three Months Ended March 31, | ||||
2016 | 2015 | |||
Effective Tax Rate | 32.3 | % | 2.5 | % |
|
March 31, 2016 | December 31, 2015 | |||||
Accounts receivable—trade, net | $ | 681.4 | $ | 647.2 | ||
Notes receivable | 28.6 | 43.0 | ||||
Other | 82.7 | 75.6 | ||||
Total | $ | 792.7 | $ | 765.8 |
|
March 31, 2016 | December 31, 2015 | |||||
Finished products | $ | 319.8 | $ | 313.1 | ||
Semi-finished products | 90.7 | 88.5 | ||||
Raw materials and supplies | 132.9 | 129.1 | ||||
Total | $ | 543.4 | $ | 530.7 |
|
March 31, 2016 | December 31, 2015 | |||||
Property, plant and equipment | $ | 1,894.6 | $ | 1,855.3 | ||
Accumulated depreciation | (517.1 | ) | (472.4 | ) | ||
Property, plant and equipment, net | $ | 1,377.5 | $ | 1,382.9 |
|
March 31, 2016 | December 31, 2015 | |||||
Dollar Term Loan | $ | 2,036.8 | $ | 2,042.5 | ||
Euro Term Loan | 434.9 | 428.0 | ||||
Dollar Senior Notes | 750.0 | 750.0 | ||||
Euro Senior Notes | 279.5 | 274.4 | ||||
Short-term and other borrowings | 33.2 | 26.5 | ||||
Unamortized original issue discount | (13.2 | ) | (14.0 | ) | ||
Unamortized deferred financing costs, net | (62.4 | ) | (65.9 | ) | ||
$ | 3,458.8 | $ | 3,441.5 | |||
Less: | ||||||
Short term borrowings | $ | 26.2 | $ | 22.7 | ||
Current portion of long-term borrowings | 27.5 | 27.4 | ||||
Long-term debt | $ | 3,405.1 | $ | 3,391.4 |
Period | Euro Notes Percentage | |
2016 | 104.313 | % |
2017 | 102.875 | % |
2018 | 101.438 | % |
2019 and thereafter | 100.000 | % |
Period | Dollar Notes Percentage | |
2016 | 105.531 | % |
2017 | 103.688 | % |
2018 | 101.844 | % |
2019 and thereafter | 100.000 | % |
Remainder of 2016 | $ | 32.4 | |
2017 | 29.6 | ||
2018 | 28.2 | ||
2019 | 27.7 | ||
2020 | 2,368.9 | ||
Thereafter | 1,029.9 | ||
$ | 3,516.7 |
|
|
March 31, 2016 | December 31, 2015 | |||||
Other assets: | ||||||
Interest rate swaps | $ | — | $ | 0.4 | ||
Total assets | $ | — | $ | 0.4 | ||
Other liabilities: | ||||||
Interest rate swaps | $ | 6.0 | $ | 1.8 | ||
Total liabilities | $ | 6.0 | $ | 1.8 |
March 31, 2016 | December 31, 2015 | |||||
Prepaid and other assets: | ||||||
Foreign currency contracts | $ | — | $ | 0.3 | ||
Total assets | $ | — | $ | 0.3 | ||
Other accrued liabilities: | ||||||
Foreign currency contracts | $ | 2.0 | $ | — | ||
Total liabilities | $ | 2.0 | $ | — |
Derivatives in Cash Flow Hedging Relationships in three months ended March 31, 2016: | 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 | $ | 2.2 | Interest expense, net | $ | 1.6 | Interest expense, net | $ | 2.4 |
Derivatives in Cash Flow Hedging Relationships in three months ended March 31, 2015: | 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 | $ | 4.8 | Interest expense, net | $ | 1.6 | Interest expense, net | $ | 1.2 |
Three Months Ended March 31, | |||||||
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of (Gain) Loss Recognized in Income on Derivatives | 2016 | 2015 | ||||
Foreign currency forward contract | Other expense, net | $ | 2.4 | $ | (1.8 | ) |
|
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Performance Coatings | ||||||
Refinish | $ | 378.7 | $ | 393.2 | ||
Industrial | 164.3 | 164.0 | ||||
Total Net sales Performance Coatings | 543.0 | 557.2 | ||||
Transportation Coatings | ||||||
Light Vehicle | 329.4 | 333.2 | ||||
Commercial Vehicle | 83.2 | 98.8 | ||||
Total Net sales Transportation Coatings | 412.6 | 432.0 | ||||
Total Net sales | $ | 955.6 | $ | 989.2 |
Performance Coatings | Transportation Coatings | Total | |||||||
For the Three Months Ended March 31, 2016 | |||||||||
Net sales (1) | $ | 543.0 | $ | 412.6 | $ | 955.6 | |||
Equity in earnings in unconsolidated affiliates | 0.1 | 0.1 | 0.2 | ||||||
Adjusted EBITDA (2) | 110.1 | 84.7 | 194.8 | ||||||
Investment in unconsolidated affiliates | 4.1 | 11.5 | 15.6 |
Performance Coatings | Transportation Coatings | Total | |||||||
For the Three Months Ended March 31, 2015 | |||||||||
Net sales (1) | $ | 557.2 | $ | 432.0 | $ | 989.2 | |||
Equity in earnings in unconsolidated affiliates | 0.1 | 0.3 | 0.4 | ||||||
Adjusted EBITDA (2) | 107.1 | 74.9 | 182.0 | ||||||
Investment in unconsolidated affiliates | 4.0 | 6.5 | 10.5 |
(1) | The Company has no intercompany sales between segments. |
(2) | The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income 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 before income taxes follows: |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Income before income taxes | $ | 45.2 | $ | 47.9 | ||
Interest expense, net | 50.1 | 50.0 | ||||
Depreciation and amortization | 76.0 | 72.6 | ||||
EBITDA | 171.3 | 170.5 | ||||
Foreign exchange remeasurement losses (a) | 7.5 | 8.7 | ||||
Long-term employee benefit plan adjustments (b) | 0.6 | 0.2 | ||||
Termination benefits and other employee related costs (c) | 1.9 | 3.7 | ||||
Consulting and advisory fees (d) | 3.0 | 3.1 | ||||
Offering related costs (e) | — | 1.4 | ||||
Stock-based compensation (f) | 10.2 | 1.8 | ||||
Other adjustments (g) | 1.8 | (3.9 | ) | |||
Dividends in respect of noncontrolling interest (h) | (1.5 | ) | (3.5 | ) | ||
Adjusted EBITDA | $ | 194.8 | $ | 182.0 |
(a) | Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies. |
(b) | Eliminates the non-service cost components of long-term employee benefit costs. |
(c) | Represents expenses primarily related to employee termination benefits and other employee-related costs including our initiative to improve overall cost structure within the European region as well as costs associated with our Axalta Way initiatives. |
(d) | Represents fees paid to consultants for professional services primarily related to our Axalta Way cost-savings initiatives. |
(e) | Represents costs associated with the offering of our common shares in the Carlyle Offerings. |
(f) | Represents costs associated with stock-based compensation. |
(g) | Represents costs for certain unusual or non-operational (gains) and losses, including a $5.4 million gain recognized during the three months ended March 31, 2015 resulting from the remeasurement of our previously held interest in an equity method investee upon the acquisition of a controlling interest, equity investee dividends, indemnity losses (gains) associated with the Acquisition, losses (gains) on sale and disposal of property, plant and equipment, losses (gains) on foreign currency derivative instruments and non-cash fair value inventory adjustments associated with our 2015 acquisitions. |
(h) | Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned. |
|
Unrealized Currency Translation Adjustments | Long-term Employee Benefit Adjustments | Unrealized Gain (Loss) on Securities | Unrealized Gain (Losses) on Derivatives | Accumulated Other Comprehensive Income (loss) | |||||||||||
December 31, 2015 | $ | (232.8 | ) | $ | (33.4 | ) | $ | 0.1 | $ | (3.2 | ) | $ | (269.3 | ) | |
Current year deferrals to AOCI | 15.7 | — | (0.4 | ) | (2.4 | ) | 12.9 | ||||||||
Reclassifications from AOCI to Net income | — | (0.1 | ) | — | 1.0 | 0.9 | |||||||||
Net Change | 15.7 | (0.1 | ) | (0.4 | ) | (1.4 | ) | 13.8 | |||||||
March 31, 2016 | $ | (217.1 | ) | $ | (33.5 | ) | $ | (0.3 | ) | $ | (4.6 | ) | $ | (255.5 | ) |
Unrealized Currency Translation Adjustments | Long-term Employee Benefit Adjustments | Unrealized Loss on Securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
December 31, 2014 | $ | (72.1 | ) | $ | (31.2 | ) | $ | (0.2 | ) | $ | 0.2 | $ | (103.3 | ) | |
Current year deferrals to AOCI | (109.2 | ) | — | 0.5 | (1.4 | ) | (110.1 | ) | |||||||
Reclassifications from AOCI to Net income | — | (0.4 | ) | — | (1.6 | ) | (2.0 | ) | |||||||
Net Change | (109.2 | ) | (0.4 | ) | 0.5 | (3.0 | ) | (112.1 | ) | ||||||
March 31, 2015 | $ | (181.3 | ) | $ | (31.6 | ) | $ | 0.3 | $ | (2.8 | ) | $ | (215.4 | ) |
|
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Performance Coatings | Transportation Coatings | Total | |||||||
At December 31, 2015 | $ | 866.1 | $ | 62.1 | $ | 928.2 | |||
Foreign currency translation | 13.0 | 0.9 | 13.9 | ||||||
March 31, 2016 | $ | 879.1 | $ | 63.0 | $ | 942.1 |
March 31, 2016 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 413.8 | $ | (127.6 | ) | $ | 286.2 | 10.0 | ||
Trademarks - indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks - definite-lived | 45.8 | (9.3 | ) | 36.5 | 14.8 | |||||
Customer relationships | 681.5 | (112.0 | ) | 569.5 | 19.3 | |||||
Non-compete agreements | 1.9 | (1.3 | ) | 0.6 | 4.6 | |||||
Total | $ | 1,427.4 | $ | (250.2 | ) | $ | 1,177.2 |
December 31, 2015 | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted average amortization periods (years) | ||||||
Technology | $ | 413.0 | $ | (117.2 | ) | $ | 295.8 | 10.0 | ||
Trademarks—indefinite-lived | 284.4 | — | 284.4 | Indefinite | ||||||
Trademarks—definite-lived | 45.2 | (8.5 | ) | 36.7 | 14.7 | |||||
Customer relationships | 676.1 | (102.1 | ) | 574.0 | 19.3 | |||||
Non-compete agreements | 1.9 | (1.2 | ) | 0.7 | 4.6 | |||||
Total | $ | 1,420.6 | $ | (229.0 | ) | $ | 1,191.6 |
Remainder of 2016 | $ | 60.4 | |
2017 | $ | 80.2 | |
2018 | $ | 80.1 | |
2019 | $ | 80.1 | |
2020 | $ | 80.0 |
|
2016 Activity | |||
Balance at December 31, 2015 | $ | 41.3 | |
Expense Recorded | 0.5 | ||
Payments Made | (11.7 | ) | |
Foreign Currency Changes | 0.7 | ||
Balance at March 31, 2016 | $ | 30.8 |
|
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Components of net periodic benefit cost: | ||||||
Net periodic benefit cost: | ||||||
Service cost | $ | 2.5 | $ | 3.1 | ||
Interest cost | 3.9 | 4.6 | ||||
Expected return on plan assets | (3.2 | ) | (3.7 | ) | ||
Amortization of actuarial (gain) loss, net | (0.1 | ) | 0.3 | |||
Amortization of prior service credit, net | — | (0.1 | ) | |||
Net periodic benefit cost | $ | 3.1 | $ | 4.2 |
|
2016 Grants | ||
Expected Term | 6.00 years | |
Volatility | 21.63 | % |
Dividend Yield | — | |
Discount Rate | 1.45 | % |
Awards (in millions) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (in millions) | Weighted Average Remaining Contractual Life (years) | ||||||
Outstanding at January 1, 2016 | 11.0 | $ | 12.19 | ||||||
Granted | 1.1 | $ | 23.24 | ||||||
Exercised | (0.2 | ) | $ | 9.22 | |||||
Forfeited | (0.3 | ) | $ | 7.65 | |||||
Outstanding at March 31, 2016 | 11.6 | $ | 13.36 | ||||||
Vested and expected to vest at March 31, 2016 | 11.6 | $ | 13.36 | $ | 186.7 | 7.78 | |||
Exercisable at March 31, 2016 | 9.3 | $ | 9.81 | $ | 179.9 | 7.36 |
Awards (millions) | Weighted-Average Fair Value | ||||
Outstanding at January 1, 2016 | 1.7 | $ | 32.22 | ||
Granted | 0.8 | $ | 23.24 | ||
Vested | — | $ | — | ||
Forfeited | — | $ | — | ||
Outstanding at March 31, 2016 | 2.5 | $ | 29.39 |
Awards (millions) | Weighted-Average Fair Value | ||||
Outstanding at January 1, 2016 | — | $ | — | ||
Granted | 0.3 | $ | 24.74 | ||
Vested | — | $ | — | ||
Forfeited | — | $ | — | ||
Outstanding at March 31, 2016 | 0.3 | $ | 24.74 |
|
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Exchange losses, net | $ | 7.5 | $ | 8.7 | ||
Other miscellaneous expense (income), net | 0.5 | (4.8 | ) | |||
Total | $ | 8.0 | $ | 3.9 |
|
Three Months Ended March 31, | ||||
2016 | 2015 | |||
Effective Tax Rate | 32.3 | % | 2.5 | % |
|
March 31, 2016 | December 31, 2015 | |||||
Accounts receivable—trade, net | $ | 681.4 | $ | 647.2 | ||
Notes receivable | 28.6 | 43.0 | ||||
Other | 82.7 | 75.6 | ||||
Total | $ | 792.7 | $ | 765.8 |
|
March 31, 2016 | December 31, 2015 | |||||
Finished products | $ | 319.8 | $ | 313.1 | ||
Semi-finished products | 90.7 | 88.5 | ||||
Raw materials and supplies | 132.9 | 129.1 | ||||
Total | $ | 543.4 | $ | 530.7 |
|
March 31, 2016 | December 31, 2015 | |||||
Property, plant and equipment | $ | 1,894.6 | $ | 1,855.3 | ||
Accumulated depreciation | (517.1 | ) | (472.4 | ) | ||
Property, plant and equipment, net | $ | 1,377.5 | $ | 1,382.9 |
|
March 31, 2016 | December 31, 2015 | |||||
Dollar Term Loan | $ | 2,036.8 | $ | 2,042.5 | ||
Euro Term Loan | 434.9 | 428.0 | ||||
Dollar Senior Notes | 750.0 | 750.0 | ||||
Euro Senior Notes | 279.5 | 274.4 | ||||
Short-term and other borrowings | 33.2 | 26.5 | ||||
Unamortized original issue discount | (13.2 | ) | (14.0 | ) | ||
Unamortized deferred financing costs, net | (62.4 | ) | (65.9 | ) | ||
$ | 3,458.8 | $ | 3,441.5 | |||
Less: | ||||||
Short term borrowings | $ | 26.2 | $ | 22.7 | ||
Current portion of long-term borrowings | 27.5 | 27.4 | ||||
Long-term debt | $ | 3,405.1 | $ | 3,391.4 |
Remainder of 2016 | $ | 32.4 | |
2017 | 29.6 | ||
2018 | 28.2 | ||
2019 | 27.7 | ||
2020 | 2,368.9 | ||
Thereafter | 1,029.9 | ||
$ | 3,516.7 |
Period | Euro Notes Percentage | |
2016 | 104.313 | % |
2017 | 102.875 | % |
2018 | 101.438 | % |
2019 and thereafter | 100.000 | % |
Period | Dollar Notes Percentage | |
2016 | 105.531 | % |
2017 | 103.688 | % |
2018 | 101.844 | % |
2019 and thereafter | 100.000 | % |
|
Derivatives in Cash Flow Hedging Relationships in three months ended March 31, 2016: | 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 | $ | 2.2 | Interest expense, net | $ | 1.6 | Interest expense, net | $ | 2.4 |
Derivatives in Cash Flow Hedging Relationships in three months ended March 31, 2015: | 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 | $ | 4.8 | Interest expense, net | $ | 1.6 | Interest expense, net | $ | 1.2 |
Three Months Ended March 31, | |||||||
Derivatives Not Designated as Hedging Instruments under ASC 815 | Location of (Gain) Loss Recognized in Income on Derivatives | 2016 | 2015 | ||||
Foreign currency forward contract | Other expense, net | $ | 2.4 | $ | (1.8 | ) |
March 31, 2016 | December 31, 2015 | |||||
Other assets: | ||||||
Interest rate swaps | $ | — | $ | 0.4 | ||
Total assets | $ | — | $ | 0.4 | ||
Other liabilities: | ||||||
Interest rate swaps | $ | 6.0 | $ | 1.8 | ||
Total liabilities | $ | 6.0 | $ | 1.8 |
March 31, 2016 | December 31, 2015 | |||||
Prepaid and other assets: | ||||||
Foreign currency contracts | $ | — | $ | 0.3 | ||
Total assets | $ | — | $ | 0.3 | ||
Other accrued liabilities: | ||||||
Foreign currency contracts | $ | 2.0 | $ | — | ||
Total liabilities | $ | 2.0 | $ | — |
|
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Performance Coatings | ||||||
Refinish | $ | 378.7 | $ | 393.2 | ||
Industrial | 164.3 | 164.0 | ||||
Total Net sales Performance Coatings | 543.0 | 557.2 | ||||
Transportation Coatings | ||||||
Light Vehicle | 329.4 | 333.2 | ||||
Commercial Vehicle | 83.2 | 98.8 | ||||
Total Net sales Transportation Coatings | 412.6 | 432.0 | ||||
Total Net sales | $ | 955.6 | $ | 989.2 |
Performance Coatings | Transportation Coatings | Total | |||||||
For the Three Months Ended March 31, 2016 | |||||||||
Net sales (1) | $ | 543.0 | $ | 412.6 | $ | 955.6 | |||
Equity in earnings in unconsolidated affiliates | 0.1 | 0.1 | 0.2 | ||||||
Adjusted EBITDA (2) | 110.1 | 84.7 | 194.8 | ||||||
Investment in unconsolidated affiliates | 4.1 | 11.5 | 15.6 |
Performance Coatings | Transportation Coatings | Total | |||||||
For the Three Months Ended March 31, 2015 | |||||||||
Net sales (1) | $ | 557.2 | $ | 432.0 | $ | 989.2 | |||
Equity in earnings in unconsolidated affiliates | 0.1 | 0.3 | 0.4 | ||||||
Adjusted EBITDA (2) | 107.1 | 74.9 | 182.0 | ||||||
Investment in unconsolidated affiliates | 4.0 | 6.5 | 10.5 |
(1) | The Company has no intercompany sales between segments. |
(2) | The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income 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. |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Income before income taxes | $ | 45.2 | $ | 47.9 | ||
Interest expense, net | 50.1 | 50.0 | ||||
Depreciation and amortization | 76.0 | 72.6 | ||||
EBITDA | 171.3 | 170.5 | ||||
Foreign exchange remeasurement losses (a) | 7.5 | 8.7 | ||||
Long-term employee benefit plan adjustments (b) | 0.6 | 0.2 | ||||
Termination benefits and other employee related costs (c) | 1.9 | 3.7 | ||||
Consulting and advisory fees (d) | 3.0 | 3.1 | ||||
Offering related costs (e) | — | 1.4 | ||||
Stock-based compensation (f) | 10.2 | 1.8 | ||||
Other adjustments (g) | 1.8 | (3.9 | ) | |||
Dividends in respect of noncontrolling interest (h) | (1.5 | ) | (3.5 | ) | ||
Adjusted EBITDA | $ | 194.8 | $ | 182.0 |
(a) | Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies. |
(b) | Eliminates the non-service cost components of long-term employee benefit costs. |
(c) | Represents expenses primarily related to employee termination benefits and other employee-related costs including our initiative to improve overall cost structure within the European region as well as costs associated with our Axalta Way initiatives. |
(d) | Represents fees paid to consultants for professional services primarily related to our Axalta Way cost-savings initiatives. |
(e) | Represents costs associated with the offering of our common shares in the Carlyle Offerings. |
(f) | Represents costs associated with stock-based compensation. |
(g) | Represents costs for certain unusual or non-operational (gains) and losses, including a $5.4 million gain recognized during the three months ended March 31, 2015 resulting from the remeasurement of our previously held interest in an equity method investee upon the acquisition of a controlling interest, equity investee dividends, indemnity losses (gains) associated with the Acquisition, losses (gains) on sale and disposal of property, plant and equipment, losses (gains) on foreign currency derivative instruments and non-cash fair value inventory adjustments associated with our 2015 acquisitions. |
(h) | Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned. |
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Unrealized Currency Translation Adjustments | Long-term Employee Benefit Adjustments | Unrealized Gain (Loss) on Securities | Unrealized Gain (Losses) on Derivatives | Accumulated Other Comprehensive Income (loss) | |||||||||||
December 31, 2015 | $ | (232.8 | ) | $ | (33.4 | ) | $ | 0.1 | $ | (3.2 | ) | $ | (269.3 | ) | |
Current year deferrals to AOCI | 15.7 | — | (0.4 | ) | (2.4 | ) | 12.9 | ||||||||
Reclassifications from AOCI to Net income | — | (0.1 | ) | — | 1.0 | 0.9 | |||||||||
Net Change | 15.7 | (0.1 | ) | (0.4 | ) | (1.4 | ) | 13.8 | |||||||
March 31, 2016 | $ | (217.1 | ) | $ | (33.5 | ) | $ | (0.3 | ) | $ | (4.6 | ) | $ | (255.5 | ) |
Unrealized Currency Translation Adjustments | Long-term Employee Benefit Adjustments | Unrealized Loss on Securities | Unrealized Gain (Loss) on Derivatives | Accumulated Other Comprehensive Income | |||||||||||
December 31, 2014 | $ | (72.1 | ) | $ | (31.2 | ) | $ | (0.2 | ) | $ | 0.2 | $ | (103.3 | ) | |
Current year deferrals to AOCI | (109.2 | ) | — | 0.5 | (1.4 | ) | (110.1 | ) | |||||||
Reclassifications from AOCI to Net income | — | (0.4 | ) | — | (1.6 | ) | (2.0 | ) | |||||||
Net Change | (109.2 | ) | (0.4 | ) | 0.5 | (3.0 | ) | (112.1 | ) | ||||||
March 31, 2015 | $ | (181.3 | ) | $ | (31.6 | ) | $ | 0.3 | $ | (2.8 | ) | $ | (215.4 | ) |
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