AXALTA COATING SYSTEMS LTD., 10-Q filed on 5/6/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2015
May 1, 2015
Document And Entity Information [Abstract]
 
 
Entity Registrant Name
Axalta Coating Systems Ltd. 
 
Trading Symbol
AXTA 
 
Entity Central Index Key
0001616862 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY)
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
229,861,218 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Statement [Abstract]
 
 
Net sales
$ 989.2 
$ 1,047.4 
Other revenue
8.3 
7.0 
Total revenue
997.5 
1,054.4 
Cost of goods sold
649.8 
703.5 
Selling, general and administrative expenses
213.0 
246.7 
Research and development expenses
12.9 
11.3 
Amortization of acquired intangibles
20.0 
21.1 
Income from operations
101.8 
71.8 
Interest expense, net
50.0 
59.0 
Other expense, net
3.9 
4.5 
Income before income taxes
47.9 
8.3 
Provision for income taxes
1.2 
12.0 
Net income (loss)
46.7 
(3.7)
Less: Net income attributable to noncontrolling interests
1.6 
0.6 
Net income (loss) attributable to controlling interests
$ 45.1 
$ (4.3)
Basic net income (loss) per share (dollars per share)
$ 0.20 
$ (0.02)
Diluted net income (loss) per share (dollars per share)
$ 0.19 
$ (0.02)
Basic weighted average shares outstanding
229.8 
229.1 
Diluted weighted average shares outstanding
237.0 
229.1 
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
 
 
Net income
$ 46.7 
$ (3.7)
Other comprehensive income (loss), before tax:
 
 
Foreign currency translation adjustments
(109.6)
(7.5)
Unrealized gain (loss) on securities
0.5 
(0.2)
Unrealized gain (loss) on derivatives
(4.8)
0.5 
Unrealized gain (loss) on pension and other benefit plan obligations
(1.2)
5.5 
Other comprehensive loss, before tax
(115.1)
(1.7)
Income tax benefit (provision) related to items of other comprehensive income
2.6 
(1.3)
Other comprehensive loss, net of tax
(112.5)
(3.0)
Comprehensive loss
(65.8)
(6.7)
Less: Comprehensive income attributable to noncontrolling interests
1.2 
0.6 
Comprehensive loss attributable to controlling interests
$ (67.0)
$ (7.3)
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 222.9 
$ 382.1 
Restricted cash
2.8 
4.7 
Accounts and notes receivable, net
833.0 
820.4 
Inventories
541.3 
538.3 
Prepaid expenses and other
82.6 
62.9 
Deferred income taxes
68.2 
64.5 
Total current assets
1,750.8 
1,872.9 
Property, plant and equipment, net
1,411.7 
1,514.1 
Goodwill
916.8 
1,001.1 
Identifiable intangibles, net
1,246.8 
1,300.0 
Deferred financing costs, net
86.8 
91.0 
Other assets
485.5 
473.7 
Total assets
5,898.4 
6,252.8 
Current liabilities:
 
 
Accounts payable
458.3 
494.5 
Current portion of borrowings
41.6 
40.1 
Deferred income taxes
6.4 
7.3 
Other accrued liabilities
291.7 
404.8 
Total current liabilities
798.0 
946.7 
Long-term borrowings
3,566.7 
3,656.3 
Accrued pensions and other long-term employee benefits
272.6 
306.4 
Deferred income taxes
190.6 
208.2 
Other liabilities
22.3 
23.2 
Total liabilities
4,850.2 
5,140.8 
Commitments and contingent liabilities
   
   
Shareholders’ equity
 
 
Common shares, $1.00 par, 1,000.0 shares authorized, 229.8 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively
229.8 
229.8 
Capital in excess of par
1,145.9 
1,144.7 
Accumulated deficit
(181.4)
(226.5)
Accumulated other comprehensive loss
(215.4)
(103.3)
Total Axalta shareholders’ equity
978.9 
1,044.7 
Noncontrolling interests
69.3 
67.3 
Total shareholders’ equity
1,048.2 
1,112.0 
Total liabilities and shareholders’ equity
$ 5,898.4 
$ 6,252.8 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Common stock, par value (in dollars per share)
$ 1.00 
$ 1.00 
Common shares, shares authorized
1,000.0 
1,000.0 
Common shares, shares issued
229.8 
229.8 
Common shares, shares outstanding
229.8 
229.8 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Operating activities:
 
 
Net income
$ 46.7 
$ (3.7)
Adjustment to reconcile net income (loss) to cash provided by operating activities:
 
 
Depreciation and amortization
72.6 
81.1 
Amortization of financing costs and original issue discount
5.0 
5.2 
Debt modification costs
0 
3.1 
Deferred income taxes
(17.2)
(15.1)
Unrealized loss on derivatives
1.2 
3.1 
Realized and unrealized foreign exchange losses, net
4.8 
3.4 
Stock-based compensation
1.8 
1.8 
Other non-cash, net
(1.1)
(4.9)
Decrease (increase) in operating assets and liabilities:
 
 
Trade accounts and notes receivable
(53.5)
(65.3)
Inventories
(25.9)
(28.3)
Prepaid expenses and other assets
(36.3)
1.9 
Accounts payable
(1.0)
29.3 
Other accrued liabilities
(91.1)
(76.9)
Other liabilities
(4.7)
(1.9)
Cash used for operating activities
(98.7)
(67.2)
Investing activities:
 
 
Acquisition of controlling interest in investment affiliate (net of cash acquired)
(3.2)
0 
Purchase of property, plant and equipment
(31.5)
(50.2)
Restricted cash
1.8 
(2.0)
Purchase of intangibles
0 
(0.2)
Proceeds from Sale of Intangible Assets
0.4 
0 
Proceeds from sale of affiliate
2.3 
0 
Cash used for investing activities
(30.2)
(52.4)
Financing activities:
 
 
Proceeds from short-term borrowings
1.5 
16.7 
Payments on short-term borrowings
(10.7)
(9.6)
Payments on long-term debt
(6.8)
0 
Dividends paid to noncontrolling interests
(3.5)
(0.9)
Debt modification fees
0 
(3.0)
Other financing activities
(0.2)
0 
Cash provided by (used for) financing activities
(19.7)
3.2 
Decrease in cash and cash equivalents
(148.6)
(116.4)
Effect of exchange rate changes on cash
(10.6)
(3.3)
Cash and cash equivalents at beginning of period
382.1 
459.3 
Cash and cash equivalents at end of period
$ 222.9 
$ 339.6 
Basis of Presentation of the Condensed Consolidated Financial Statements
Basis of Presentation of the Condensed Consolidated Financial Statements
BASIS OF PRESENTATION OF THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The interim condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair statement of the financial position of Axalta Coating Systems Ltd., a Bermuda exempted company limited by shares, and its consolidated subsidiaries ("Axalta," the "Company," "we," "our" and "us") at March 31, 2015 and December 31, 2014, the results of operations and comprehensive income (loss) for the three months ended March 31, 2015 and 2014, and their cash flows for the three months then ended. All intercompany balances and transactions have been eliminated. These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.
The accompanying financial statements include the interim unaudited condensed consolidated balance sheets of Axalta at March 31, 2015 and December 31, 2014, the related interim unaudited condensed consolidated statements of operations and statements of comprehensive income (loss) for the three months ended March 31, 2015 and 2014 and of cash flows for the three months ended March 31, 2015 and 2014. The interim unaudited condensed consolidated financial statements include the accounts of Axalta and its subsidiaries, and entities in which a controlling interest is maintained.
The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for a full year.
The acquisition ("Acquisition") by Axalta and certain of its indirect subsidiaries of all the capital stock, other equity interests and assets of certain entities which, together with their subsidiaries, comprised the assets and legal entities, which together with their subsidiaries, compromised the DuPont Performance Coatings business ("DPC"), which was formerly owned by E. I. du Pont de Nemours and Company ("DuPont"), closed on February 1, 2013.
On November 11, 2014, we priced our initial public offering (the "Offering", or the "IPO"), in which certain selling shareholders affiliated with Carlyle sold 57,500,000 common shares at a price of $19.50 per share. We received no proceeds from the Offering.
Certain of our joint ventures are accounted for on a one-month lag basis, the effect of which is not material.
Reclassification and revisions
During 2014, the Company identified errors in the determination of the effective interest rate amortization for the Deferred Financing Costs and Original Issue Discounts that were incurred in 2013. The correction of these items impacted the interim unaudited condensed consolidated statements of operations and statements of comprehensive income (loss) for the three months ended March 31, 2014. Refer to Note 15 for further details.
Recent Accounting Guidance
Recent Accounting Guidance
RECENT ACCOUNTING GUIDANCE
Accounting Guidance Issued But Not Yet Adopted
In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. We intend to early adopt this new guidance beginning in the second quarter of 2015. The impacts to the balance sheets at March 31, 2015 and December 31, 2014 would have been corresponding decreases to both total assets and total liabilities of $86.8 million and $91.0 million, respectively.
In February 2015, the FASB issued ASU 2015-02 (Accounting Standard Codification 810), "Consolidation", which sets forth guidance on accounting for consolidation of certain legal entities. This ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Although early adoption is permitted, we are still in the process of assessing the impact the adoption of this ASU will have on our financial position, results of operations and cash flows.
In May 2014, the FASB issued ASU 2014-09 (Accounting Standard Codification 606), "Revenue from Contracts with Customers", which sets forth the guidance that an entity should use related to revenue recognition. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is not permitted. In April 2015 the FASB proposed a one-year delay in the effective date of the new revenue accounting standard to fiscal years beginning after December 15, 2017, and proposed that companies would be allowed to early adopt the guidance as of the original effective date. We are in the process of assessing the impact the adoption of this ASU will have on our financial position, results of operations and cash flows.
Goodwill and Identifiable Intangible Assets
Goodwill and Identifiable Intangible Assets
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
Goodwill
The following table shows changes in the carrying amount of goodwill from December 31, 2014 to March 31, 2015 by reportable segment:
 
Performance
Coatings
Transportation
Coatings
Total
At December 31, 2014
$
933.6

$
67.5

1,001.1

Goodwill from acquisition
12.5

—

12.5

Foreign currency translation
(90.3
)
(6.5
)
(96.8
)
March 31, 2015
$
855.8

$
61.0

$
916.8


In March 2015, we purchased an additional 25% interest in a previously held equity method investment. See Note 9 for additional information.
Identifiable Intangible Assets
The following table summarizes the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
March 31, 2015
Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology
$
411.8

$
(86.5
)
$
325.3

10.0
Trademarks - indefinite-lived
284.4

—

284.4

Indefinite
Trademarks - definite-lived
41.9

(6.2
)
35.7

14.8
Customer relationships
676.9

(76.5
)
600.4

19.4
Non-compete agreements
1.9

(0.9
)
1.0

4.6
Total
$
1,416.9

$
(170.1
)
$
1,246.8

 
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

 

Activity related to in process research and development projects for the three months ended March 31, 2015 was:
In Process Research and Development
Activity
Balance at December 31, 2014
$
5.2

Completed
(1.5
)
Abandoned
—

Balance at March 31, 2015
$
3.7


For the three months ended March 31, 2015 and 2014, amortization expense for acquired intangibles was $20.0 million and $21.1 million, respectively.
The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2015 and each of the succeeding four years is:
Remainder of 2015
$
59.7

2016
$
79.6

2017
$
79.2

2018
$
79.2

2019
$
79.2

Restructuring
Restructuring
RESTRUCTURING
In accordance with the applicable guidance for Nonretirement Postemployment Benefits, we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated.
We have incurred costs associated with involuntary termination benefits associated with corporate-related initiatives associated with our transition and cost-saving opportunities related to the separation from DuPont and our Axalta Way initiatives. During the three months ended March 31, 2015 and 2014 we incurred restructuring costs of $2.2 million and $0.1 million, respectively. These amounts are recorded within selling, general and administrative expenses in the interim unaudited condensed consolidated statements of operations. The payments associated with these actions are expected to be completed by December 2015.
The following table summarizes the activities related to the restructuring reserves, recorded within other accrued liabilities, and expenses from December 31, 2014 to March 31, 2015:
 
2015 Activity
Balance at December 31, 2014
$
48.5

Expense Recorded
2.2

Payments Made
(14.0
)
Foreign Currency Changes
(5.0
)
Balance at March 31, 2015
$
31.7

Commitments and Contingencies
Commitments and Contingencies
COMMITMENTS AND CONTINGENCIES
Guarantees
We directly guarantee certain obligations under agreements with third parties. At March 31, 2015 and December 31, 2014, we had directly guaranteed $2.1 million and $2.2 million of such obligations, respectively. These guarantees represent the maximum potential amount of future (undiscounted) payments that we could be required to make under the guarantees in the event of default by the guaranteed parties. No amounts were accrued at March 31, 2015 and December 31, 2014.
Other
We are subject to various pending lawsuits and other claims including civil, regulatory, and environmental matters. Certain of these lawsuits and other claims may have an impact on us. These litigation matters may involve indemnification obligations by third parties and/or insurance coverage covering all or part of any potential damage awards against DuPont and/or us. All of the above matters are subject to many uncertainties and, accordingly, we cannot determine the ultimate outcome of the lawsuits at this time.
The potential effects, if any, on the unaudited condensed consolidated financial statements of Axalta will be recorded in the period in which these matters are probable and estimable, and such effects, could be material.
In addition to the aforementioned matters, we are party to various legal proceedings in the ordinary course of business. Although the ultimate resolution of these various proceedings cannot be determined at this time, management does not believe that such proceedings, individually or in the aggregate, will have a material adverse effect on the unaudited condensed consolidated financial statements of Axalta.
Long-term Employee Benefits
Long-term Employee Benefits
LONG-TERM EMPLOYEE BENEFITS
Components of Net Periodic Benefit Cost
The following table sets forth the components of net periodic benefit (gain) cost for the three months ended March 31, 2015 and 2014.
 
Pension Benefits
 
Three Months Ended March 31,
 
2015
2014
Components of net periodic benefit cost:
 
 
Net periodic benefit cost:
 
 
Service cost
$
3.1

$
4.6

Interest cost
4.6

6.0

Expected return on plan assets
(3.7
)
(3.7
)
Amortization of actuarial (gain) loss, net
0.3

(0.1
)
Amortization of prior service credit, net
(0.1
)
—

Net periodic benefit cost
$
4.2

$
6.8

 
 
Other Long-Term Employee Benefits
 
Three Months Ended March 31,
 
2015
2014
Components of net periodic benefit (gain) cost:
 
 
Net periodic benefit (gain) cost:
 
 
Service cost
$
—

$
—

Interest cost
—

0.1

Amortization of prior service credit
(0.9
)
—

Net periodic benefit (gain) cost
$
(0.9
)
$
0.1


Significant Events
During the three months ended March 31, 2014, the Company amended one of our Non-U.S. defined benefit pension plans. The amendment effectively eliminated the accrual of future benefits for all participants as of March 31, 2014, resulting in a curtailment gain of $5.6 million. As the plan had unrealized losses in excess of the reduction of the projected benefit obligation at the date of amendment, the gain was recorded as a reduction of the projected benefit obligation and a corresponding reduction of unrealized losses within Accumulated other comprehensive loss.
Stock-based Compensation
Stock-based Compensation
STOCK-BASED COMPENSATION
During both the three months ended March 31, 2015 and 2014, we recognized $1.8 million, in stock-based compensation expense which was allocated to costs of goods sold, selling, general and administrative expenses, and research and development expenses.
At March 31, 2015, there was $8.6 million of unrecognized compensation cost relating to outstanding unvested stock options expected to be recognized over the weighted average period of 3.1 years. Compensation expense is recognized for the fair values of the stock options over the requisite service period of the awards using the graded-vesting attribution method.
During the three months ended March 31, 2015, we granted 100,945 stock options at an exercise price of $25.49 and a fair value of $6.88 per option. These options have a ten year life and vest serially over three years. We also granted 41,430 shares of restricted stock at a fair value of $25.49. The shares vest serially over three years.
Related Party Transactions
Related Party Transactions
RELATED PARTY TRANSACTIONS
Carlyle Group L.P. and its affiliates ("Carlyle")
We entered into a consulting agreement with Carlyle Investment Management L.L.C. ("Carlyle Investment"), an affiliate of Carlyle pursuant to which Carlyle Investment provides certain consulting services to Axalta. Under this agreement, subject to certain conditions, we were required to pay an annual consulting fee to Carlyle Investment of $3.0 million payable in equal quarterly installments and reimburse Carlyle Investment for out-pocket expenses incurred in providing the consulting services. During the three months ended March 31, 2014, we recorded expense of $0.8 million related to this consulting agreement. During the three months ended March 31, 2015, we recorded no expense as a result of the termination of the consulting agreement upon completion of the IPO in November 2014.
Service King Collision Repair
Service King Collision Repair, a portfolio company of Carlyle, has purchased products from our distributors in the past and may continue to do so in the future. During the third quarter of 2014, Carlyle sold their majority interest in Service King Collision Repair, thus making the entity no longer a related party. Related party sales prior to this transaction were $2.0 million for the three months ended March 31, 2014.
Other Expense, Net
Other Expense, Net
OTHER EXPENSE, NET
 
Three Months Ended March 31,
 
2015
2014
Exchange losses, net
$
8.7

$
0.1

Management fees and expenses
—

0.8

Other (income) expense
(4.8
)
3.6

Total
$
3.9

$
4.5


Our net exchange losses for the three months ended March 31, 2015 and 2014 consisted of remeasurement losses primarily related to intercompany transactions denominated in currencies different from the functional currency of the relevant subsidiary partially offset by gains on our Euro borrowings and our Venezuela operations, as discussed below.
Based on our participation in Venezuela’s Complementary System of Foreign Currency Administration (SICAD I) auction process during the year ended December 31, 2014, we changed the exchange rate we used to remeasure our Venezuelan subsidiary’s financial statements into U.S. dollars to an exchange rate of 12.0 to 1 at December 31, 2014. We determined that the exchange rate of 12.0 to 1 remained the appropriate rate at March 31, 2015 given that we believe the equity of our Venezuelan subsidiary would be realized through a dividend utilizing the auction process through SICAD I.
In February 2015, the Venezuelan government enacted additional changes to its foreign exchange regime. The changes maintain a three-tiered system, including the Official Rate determined by CENCOEX, which remains at 6.3 to 1, and the SICAD I auction market which continued to trade at 12.0 to 1. There was a third market, SICAD II, which has been eliminated and a new, alternative currency market, the Marginal Foreign Exchange System ("SIMADI"), has been created with a floating exchange rate generally based on supply and demand. At March 31, 2015 the exchange rate for the SIMADI market was approximately 180.0 to 1.
At March 31, 2015, our Venezuelan subsidiary was in a net monetary asset position of $13.7 million and had non-U.S. dollar denominated net non-monetary assets of $155.7 million. We continue to assess the impact, if any, of the SIMADI exchange rate as the government of Venezuela issues regulations to implement it, but at this time it is unclear based on the current governmental policies, when considered with the foreign exchange process and other circumstances in Venezuela, whether these events will have any financial impact on the operations of our Venezuelan subsidiary. A change of our exchange rate to the SIMADI exchange rate would potentially have a material impact on our unaudited condensed consolidated financial statements.
In March 2015, we acquired an additional 25% interest in an equity method investee for a purchase price of $4.3 million, which was previously accounted for as an equity method investment. As a result of the acquisition, we obtained a controlling interest and recognized a gain of $5.4 million on the remeasurement of our previously held equity interest as of the acquisition date. As a result of the acquisition, we consolidated the fair value of the net assets of the joint venture in our interim unaudited condensed consolidated balance sheet at March 31, 2015, with the excess of the purchase price over the net assets acquired resulting in preliminary goodwill of $12.5 million.
Income Taxes
Income Taxes
INCOME TAXES
Our effective income tax rates for the three months ended March 31, 2015 and March 31, 2014 are as follows:
 
Three Months Ended March 31,
 
2015
2014
Effective Tax Rate
2.5
%
144.6
%

The lower effective tax rate for the three months ended March 31, 2015 was primarily due to the favorable impact of the tax benefits associated with currency exchange losses, which had no impact to income before taxes, and the impact of earnings in jurisdictions where the statutory rate is lower than the U.S. Federal statutory rate of 35%.
Earnings (Loss) Per Common Share
Earnings (Loss) Per Common Share
EARNINGS (LOSS) PER COMMON SHARE
Basic earnings (loss) per common share excludes the dilutive impact of potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share includes the effect of potential dilution from the exercise of outstanding stock options and restricted shares. Potentially dilutive securities have been excluded in the weighted average number of common shares used for the calculation of earnings (loss) per share in periods of net loss because the effect of such securities would be anti-dilutive. A reconciliation of the Company’s basic and diluted earnings (loss) per common share is as follows (in millions, except earnings (loss) per share):
 
Three Months Ended March 31,
(In millions, except per share data)
2015
2014
Net income (loss) to common shareholders
$
45.1

$
(4.3
)
Basic weighted average shares outstanding
229.8

229.1

Diluted weighted average shares outstanding
237.0

229.1

Earnings per Common Share:
 
 
Basic net income (loss) per share
$
0.20

$
(0.02
)
Diluted net income (loss) per share
$
0.19

$
(0.02
)
The number of anti-dilutive shares that have been excluded in the computation of diluted earnings (loss) per share for the three months ended March 31, 2015 and 2014 were 0.0 million and 16.2 million, respectively.
Accounts and Notes Receivable, Net
Accounts and Notes Receivable, Net
ACCOUNTS AND NOTES RECEIVABLE, NET
 
March 31, 2015
December 31, 2014
Accounts receivable—trade, net
$
664.1

$
638.3

Notes receivable
42.9

45.5

Other
126.0

136.6

Total
$
833.0

$
820.4


Accounts and notes receivable are carried at amounts that approximate fair value. Accounts receivable—trade, net are net of allowances of $9.5 million and $9.9 million at March 31, 2015 and December 31, 2014, respectively. Bad debt expense, within selling, general, and administration expenses, was $0.7 million and $1.2 million for the three months ended March 31, 2015 and 2014, respectively.
Inventories
Inventories
INVENTORIES
 
March 31, 2015
December 31, 2014
Finished products
$
316.3

$
323.7

Semi-finished products
87.9

81.3

Raw materials and supplies
137.1

133.3

Total
$
541.3

$
538.3


Stores and supplies inventories of $20.8 million and $20.9 million at March 31, 2015 and December 31, 2014, respectively, were valued under the weighted average cost method.
Property, Plant and Equipment, Net
Property, Plant and Equipment, Net
PROPERTY, PLANT AND EQUIPMENT, NET
Depreciation expense amounted to $41.3 million and $48.4 million for the three months ended March 31, 2015 and 2014, respectively.
 
March 31, 2015
December 31, 2014
Property, plant and equipment
$
1,776.3

$
1,858.2

Accumulated depreciation
(364.6
)
(344.1
)
Property, plant, and equipment, net
$
1,411.7

$
1,514.1

Borrowings
Borrowings
BORROWINGS
Borrowings are summarized as follows:
 
March 31, 2015
December 31, 2014
Dollar Term Loan
$
2,159.8

$
2,165.5

Euro Term Loan
425.0

481.0

Dollar Senior Notes
750.0

750.0

Euro Senior Notes
270.4

305.3

Short-term borrowings
14.3

12.2

Other borrowings
6.1

0.7

Unamortized original issue discount
(17.3
)
(18.3
)
 
$
3,608.3

$
3,696.4

Less:
 
 
Short term borrowings
$
14.3

$
12.2

Current portion of long-term borrowings
27.3

27.9

Long-term debt
$
3,566.7

$
3,656.3


Senior Secured Credit Facilities, as amended
On February 3, 2014, Axalta Coating Systems Dutch B B.V. ("Dutch B B.V."), as "Dutch Borrower", and its indirect wholly-owned subsidiary, Axalta Coating Systems U.S. Holdings Inc. ("Axalta US Holdings"), as "US Borrower", executed the second amendment to the Senior Secured Credit Facilities (the "Amendment" or the "Refinancing"). The Amendment (i) converted all of the outstanding Dollar Term Loans ($2,282.8 million) into a new class of term loans (the "New Dollar Term Loans"), and (ii) converted all of the outstanding Euro Term Loans (€397.0 million) into a new class of term loans (the "New Euro Term Loans" and, together with the New Dollar Term Loans and the Revolving Credit Facility (as defined herein), the "Senior Secured Credit Facilities"). The New Dollar Term Loans are subject to a floor of 1.00%, plus an applicable rate after the Amendment Effective Date. The applicable rate for such New Dollar Term Loans is 3.00% per annum for Eurocurrency Rate Loans as defined in the credit agreement governing the Senior Secured Credit Facilities (the "Credit Agreement") and 2.00% per annum for Base Rate Loans as defined in the Credit Agreement. The applicable rate for both Eurocurrency Rate Loans as well as Base Rate Loans is subject to a further 25 basis point reduction if the Total Net Leverage Ratio as defined in the credit agreement governing the Senior Secured Credit Facilities is less than or equal to 4.50:1.00. The New Euro Term Loans are also subject to a floor of 1.00%, plus an applicable rate after the Amendment Effective Date. The applicable rate for such New Euro Term Loans is 3.25% per annum for Eurocurrency Rate Loans. New Euro Term Loans may not be Base Rate Loans. The applicable rate is subject to a further 25 basis point reduction if the Total Net Leverage Ratio is less than or equal to 4.50:1.00. During the third quarter of 2014, our Total Net Leverage Ratio was confirmed to be less than 4.50:1.00. Consequently, the applicable rates were changed to 2.75% for the New Dollar Term Loans and 3.00% for the New Euro Term Loans through March 31, 2015. 
The Senior Secured Credit Facilities are secured by substantially all assets of Axalta Coating Systems Dutch A B. V. ("Dutch A B.V.") and the guarantors. The Dollar Term Loan and Euro Term Loan mature on February 1, 2020 and the Revolving Credit Facility matures on February 1, 2018. Principal is paid quarterly on both the Dollar Term Loan and the Euro Term Loan based on 1% per annum of the original principal amount with the unpaid balance due at maturity.
Interest is payable quarterly on both the New Dollar Term Loan and the New Euro Term Loan. Prior to the Amendment, interest on the Dollar Term Loan was subject to a floor of 1.25% for Eurocurrency Rate Loans plus an applicable rate of 3.50%. For Base Rate Loans, the interest was subject to a floor of the greater of the federal funds rate plus 0.50%, the Prime Lending Rate, an Adjusted Eurocurrency Rate, or 2.25% plus an applicable rate of 2.50%. Interest on the Euro Term Loan, a Eurocurrency Loan, was subject to a floor of 1.25% plus an applicable rate of 4.00%.
Under the Senior Secured Credit Facilities, interest on any outstanding borrowings under the Revolving Credit Facility is subject to a floor of 1.00% for Eurocurrency Rate Loans plus an applicable rate of 3.50% (subject to an additional step-down to 3.25%). For Base Rate Loans, the interest is subject to a floor of the greater of the federal funds rate plus 0.50%, the Prime Lending Rate, an Adjusted Eurocurrency Rate, or 2.00% plus an applicable rate of 2.50% (subject to an additional step-down to 2.25%).
Under circumstances described in the Credit Agreement, we may increase available revolving or term facility borrowings by up to $400.0 million plus an additional amount subject to the Company not exceeding a maximum first lien leverage ratio described in the Credit Agreement.
Any indebtedness under the Senior Secured Credit Facilities may be voluntarily prepaid in whole or in part, in minimum amounts, subject to the make-whole provisions set forth in the Credit Agreement. Such indebtedness is subject to mandatory prepayments amounting to the proceeds of asset sales over $25.0 million annually, proceeds from certain debt issuances not otherwise permitted under the Credit Agreement and 50% (subject to a step-down to 25.0% or 0% if the First Lien Leverage Ratio falls below 4.25:1.00 or 3.50:1.00, respectively) of Excess Cash Flow.
We are subject to customary negative covenants as well as a financial covenant which is a maximum First Lien Leverage Ratio. This financial covenant is applicable only when greater than 25% of the Revolving Credit Facility (including letters of credit not cash collateralized to at least 103%) is outstanding at the end of the fiscal quarter.
Deferred financing costs of $92.9 million and original issue discounts of $25.7 million were incurred at the inception of the Senior Secured Credit Facilities. These amounts are amortized as interest expense over the life of the Senior Secured Credit Facilities.
Amortization expense related to deferred financing costs, net for the three months ended March 31, 2015 and 2014 was $3.2 million and $3.3 million, respectively.
Amortization expense related to original issue discounts for the three months ended March 31, 2015 and 2014 were $0.8 million and $0.9 million, respectively.
At March 31, 2015 and December 31, 2014 there were no borrowings under the Revolving Credit Facility. At March 31, 2015 and December 31, 2014, letters of credit issued under the Revolving Credit Facility totaled $21.3 million and $15.5 million, respectively, which reduced the availability under the Revolving Credit Facility. Availability under the Revolving Credit Facility was $378.7 million and $384.5 million at March 31, 2015 and December 31, 2014, respectively.
Senior Notes
On February 1, 2013, Dutch B B.V., as "Dutch Issuer", and Axalta US Holdings, as "US Issuer" (collectively the "Issuers") issued $750.0 million aggregate principal amount of 7.375% senior unsecured notes due 2021 (the "Dollar Senior Notes") and related guarantees thereof. Additionally, the Issuers issued €250.0 million aggregate principal amount of 5.750% senior secured notes due 2021 (the "Euro Senior Notes" and, together with the Dollar Senior Notes, the "Senior Notes") and related guarantees thereof. Cash fees related to the issuance of the Senior Notes were $33.1 million, are recorded within deferred financing costs, net and are amortized as interest expense over the life of the Senior Notes. At March 31, 2015 and December 31, 2014, the remaining unamortized balance was $24.3 million and $25.3 million, respectively. The expense related to the amortization of the deferred financing costs was $1.0 million for both of the three months ended March 31, 2015 and 2014.
The Senior Notes are unconditionally guaranteed on a senior basis by Dutch A B.V. and certain of the Issuers’ subsidiaries.
The indentures governing the Senior Notes contain covenants that restrict the ability of the Issuers and their subsidiaries to, among other things, incur additional debt, make certain payments including payment of dividends or repurchase equity interest of the Issuers, make loans or acquisitions or capital contributions and certain investments, incur certain liens, sell assets, merge or consolidate or liquidate other entities, and enter into transactions with affiliates.
(i) Euro Senior Notes
The Euro Senior Notes were sold at par and are due February 1, 2021. The Euro Senior Notes bear interest at 5.750% and are payable semi-annually on February 1 and August 1. Cash fees related to the issuance of the Euro Senior Notes were $10.2 million, are recorded within "Deferred financing costs, net" and are amortized into interest expense over the life of the Euro Senior Notes. At March 31, 2015 and December 31, 2014, the remaining unamortized balances was $7.4 million and $7.7 million, respectively.
On or after February 1, 2016, we have the option to redeem all or part of the Euro Senior Notes at the following redemption prices (expressed as percentages of principal amount):
Period
Euro Notes Percentage
2016
104.313
%
2017
102.875
%
2018
101.438
%
2019 and thereafter
100.000
%

Notwithstanding the foregoing, at any time and from time to time prior to February 1, 2016, we may at our option redeem in the aggregate up to 40% of the original aggregate principal amount of the Euro Senior Notes with the net cash proceeds of one or more Equity Offerings (as defined in the indenture governing the Euro Senior Notes), at a redemption price of 105.750% plus accrued and unpaid interest, if any, to the redemption date.
In addition, we have the option to redeem up to 10% of the Euro Senior Notes during any 12-month period from issue date until February 1, 2016 at a redemption price of 103.0%, plus accrued and unpaid interest, if any, to the redemption date.
Upon the occurrence of certain events constituting a change of control, holders of the Euro Senior Notes have the right to require us to repurchase all or any part of the Euro Senior Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the repurchase date.
The indebtedness evidenced by the Euro Senior Notes and related guarantees is secured on a first-lien basis by the same assets that secure the obligations under the Senior Secured Credit Facilities, subject to permitted liens and applicable local law limitations, is senior in right of payment to all future subordinated indebtedness of the Issuers, is equal in right of payment to all existing and future senior indebtedness of the Issuers and is effectively senior to any unsecured indebtedness of the Issuers, including the Dollar Senior Notes, to the extent of the value securing the Euro Senior Notes.
(ii) Dollar Senior Notes
The Dollar Senior Notes were sold at par and are due May 1, 2021. The Dollar Senior Notes bear interest at 7.375% and are payable semi-annually on February 1 and August 1. Cash fees related to the issuance of the Dollar Senior Notes were $22.9 million, are recorded within "Deferred financing costs, net" and are amortized as interest expense over the life of the Dollar Senior Notes. At March 31, 2015 and December 31, 2014, the remaining unamortized balances was $16.9 million and $17.6 million, respectively.
On or after February 1, 2016, we have the option to redeem all or part of the Dollar Senior Notes at the following redemption prices (expressed as percentages of principal amount)
Period
Dollar Notes Percentage
2016
105.531
%
2017
103.688
%
2018
101.844
%
2019 and thereafter
100.000
%

Notwithstanding the foregoing, at any time and from time to time prior to February 1, 2016, we may at our option redeem in the aggregate up to 40% of the original aggregate principal amount of the Dollar Senior Notes with the net cash proceeds of one or more Equity Offerings (as defined in the indenture governing the Dollar Senior Notes), at a redemption price of 107.375% plus accrued and unpaid interest, if any, to the redemption date.
Upon the occurrence of certain events constituting a change of control, holders of the Dollar Senior Notes have the right to require us to repurchase all or any part of the Dollar Senior Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the repurchase date.
The indebtedness evidenced by the Dollar Senior Notes is senior unsecured indebtedness of the Issuers, is senior in right of payment to all future subordinated indebtedness of the Issuers and is equal in right of payment to all existing and future senior indebtedness of the Issuers. The Dollar Senior Notes are effectively subordinated to any secured indebtedness of the Issuers (including indebtedness of the Issuers outstanding under the Senior Secured Credit Facilities and the Euro Senior Notes) to the extent of the value of the assets securing such indebtedness.
Future repayments
Below is a schedule of required future repayments of all borrowings outstanding at March 31, 2015.
Remainder of 2015
$
34.2

2016
29.7

2017
29.2

2018
28.1

2019
27.3

Thereafter
3,477.1

 
$
3,625.6


Reclassifications and revisions
During 2014, the Company identified errors in the determination of the effective interest rate amortization for the Deferred Financing Costs and Original Issue Discounts that were incurred in 2013. The correction of these items impacted the condensed consolidated statement of operations and statements of comprehensive income (loss) for the three months ended March 31, 2014. The Company assessed the applicable guidance and concluded that these errors were not material to the Company’s consolidated financial statements for the aforementioned prior periods; however, the Company did conclude that correcting these prior misstatements would be significant to the three and nine-month periods ended September 30, 2014 condensed consolidated statement of operations. As a result of this analysis, the unaudited condensed consolidated financial statements at March 31, 2014 presented herein have been revised to reflect the correction of the aforementioned errors. The correction had an impact of $2.8 million on Net income (loss) and Net income (loss) attributable to controlling interests for the three months ended March 31, 2014 through a reduction in interest expense of $3.1 million (net of a tax provision of $0.3 million).
Fair Value Accounting
Fair Value Accounting
FAIR VALUE ACCOUNTING
Fair value of financial instruments
Available for sale securities - The fair value of available for sale securities was $4.5 million at both March 31, 2015 and December 31, 2014. The fair value was based upon either Level 1 inputs when the securities are actively traded with quoted market prices or Level 2 when the securities are not frequently traded.
Long-term borrowings - The fair values of the Dollar Senior Notes and Euro Senior Notes at March 31, 2015 were $813.8 million and $284.6 million, respectively. The fair values at December 31, 2014 were $795.0 million and $320.5 million, respectively. The estimated fair values of these notes are based on recent trades, as reported by a third party pricing service. Due to the infrequency of trades of the Dollar Senior Notes and the Euro Senior Notes, these inputs are considered to be Level 2 inputs.
The fair values of the New Dollar Term Loan and the New Euro Term Loan at March 31, 2015 were $2,149.0 million and $428.2 million, respectively. The fair values at December 31, 2014 were $2,100.5 million and $478.0 million, respectively. The estimated fair values of the Dollar Term Loan and the Euro Term Loan are based on recent trades, as reported by a third party pricing service. Due to the infrequency of trades of the Dollar Term Loan and the Euro Term Loan, these inputs are considered to be Level 2 inputs.
Derivative Financial Instruments
Derivative Financial Instruments
DERIVATIVE FINANCIAL INSTRUMENTS
We selectively use derivative instruments to reduce market risk associated with changes in foreign currency exchange rates and interest rates. The use of derivatives is intended for hedging purposes only and we do not enter into derivative instruments for speculative purposes. A description of each type of derivative used to manage risk is included in the following paragraphs.
During the year ended December 31, 2013, we entered into five interest rate swaps with notional amounts totaling $1,173.0 million to hedge interest rate exposures related to variable rate borrowings under the Senior Secured Credit Facilities. The interest rate swaps are in place until September 29, 2017. The interest rate swaps qualify and are designated as effective cash flow hedges.
The following table presents the location and fair values using Level 2 inputs of derivative instruments that qualify and have been designated as cash flow hedges included in our condensed consolidated balance sheet:
 
March 31, 2015
December 31, 2014
Other assets:
 
 
Interest rate swaps
$
0.8

$
5.9

Total assets
$
0.8

$
5.9

Other liabilities:
 
 
Interest rate swaps
$
2.5

$
1.5

Total liabilities
$
2.5

$
1.5


The following table presents the location and fair values using Level 2 inputs of derivative instruments that have not been designated as hedges included in our condensed consolidated balance sheet:
 
March 31, 2015
December 31, 2014
Other assets:
 
 
Interest rate cap
$
0.1

$
0.1

Total assets
$
0.1

$
0.1


For derivative instruments that qualify and are designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.
The following tables set forth the locations and amounts recognized during the three months ended March 31, 2015 and 2014 for these cash flow hedges.
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

Derivatives in Cash Flow Hedging
Relationships in three months ended March 31, 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
$
(0.5
)
Interest expense, net
$
1.6

Interest expense, net
$
1.3


Also during the year ended December 31, 2013, we purchased a €300.0 million 1.5% interest rate cap on our Euro Term Loan that is in place until September 29, 2017. We paid a premium of $3.1 million for the interest rate cap. The interest rate cap was not designated as a hedge and the changes in the fair value of the derivative instrument are recorded in current period earnings and are included in interest expense.
Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that do not qualify for hedge accounting treatment are recorded in income as follows:
 
 
Three Months Ended March 31,
Derivatives Not Designated as Hedging
Instruments under ASC 815
Location of (Gain) Loss Recognized in
Income on Derivatives
2015
2014
Foreign currency forward contract
Other expense, net as a component of Exchange (gains) losses
$
(1.8
)
$
1.2

Interest rate cap
Interest expense, net
—

1.8

 
 
$
(1.8
)
$
3.0

Segments
Segments
SEGMENTS
The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker ("CODM") to make decisions about resources to be allocated to the segment and assess its performance; and (iii) that has available discrete financial information.
We have two operating segments, which are also our reportable segments: Performance Coatings and Transportation Coatings. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Our CODM is identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Our segments are based on the type and concentration of customers served, service requirements, methods of distribution and major product lines.
Through our Performance Coatings segment, we provide high-quality liquid and powder coatings solutions to a fragmented and local customer base. We are one of only a few suppliers with the technology to provide precise color matching and highly durable coatings systems. The end-markets within this segment are refinish and industrial.
Through our Transportation Coatings segment, we provide advanced coating technologies to OEMs of light and commercial vehicles. These increasingly global customers require a high level of technical support coupled with cost-effective, environmentally responsible coatings systems that can be applied with a high degree of precision, consistency and speed. The end-markets within this segment are light vehicle and commercial vehicle.
Our business serves four end-markets globally as follows: 
 
Three Months Ended March 31,
 
2015
2014
Performance Coatings
 
 
Refinish
$
393.2

$
435.2

Industrial
164.0

180.9

Total Net sales Performance Coatings
557.2

616.1

Transportation Coatings
 
 
Light Vehicle
333.2

339.6

Commercial Vehicle
98.8

91.7

Total Net sales Transportation Coatings
432.0

431.3

Total Net sales
$
989.2

$
1,047.4


Asset information is not reviewed or included with our internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment.
 
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

 
Performance
Coatings
Transportation
Coatings
Total
For the Three Months Ended March 31, 2014
 
 
 
Net sales (1)
$
616.1

$
431.3

$
1,047.4

Equity in earnings in unconsolidated affiliates
0.3

0.3

0.6

Adjusted EBITDA (2)
124.5

62.2

186.7

Investment in unconsolidated affiliates
8.0

8.4

16.4

(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 (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:
 
Three Months Ended March 31,
 
2015
2014
Income before income taxes
$
47.9

$
8.3

Interest expense, net
50.0

59.0

Depreciation and amortization
72.6

81.1

EBITDA
170.5

148.4

Financing costs (a)
—

3.1

Foreign exchange remeasurement losses (b)
8.7

0.1

Long-term employee benefit plan adjustments (c)
0.2

2.3

Termination benefits and other employee related costs (d)
3.7

3.2

Consulting and advisory fees (e)
3.1

13.0

Transition-related costs (f)
—

13.9

Secondary offering costs (g)
1.4

—

Other adjustments (h)
(2.1
)
2.8

Dividends in respect of noncontrolling interest (i)
(3.5
)
(0.9
)
Management fee expense (j)
—

0.8

Adjusted EBITDA
$
182.0

$
186.7

(a)
In connection with an amendment to the Senior Secured Credit Facilities in February 2014, we recognized $3.1 million of costs during the three months ended March 31, 2014.
(b)
Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies.
(c)
Eliminates the non-service cost components of long-term employee benefit costs.
(d)
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 associated with cost saving opportunities that were related to our transition to a standalone entity and our Axalta Way cost savings initiatives in 2015.
(e)
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 during 2014. Amounts incurred for the three months ended March 31, 2015 primarily relate to our Axalta Way cost savings initiatives.
(f)
Represents charges associated with the transition from DuPont to a standalone entity, including branding and marketing, information technology related costs, and facility transition costs.
(g)
Represents costs associated with the secondary offering of our common shares by Carlyle that closed in April 2015 (the "Secondary Offering").
(h)
Represents costs for certain unusual or non-operational (gains) and losses, including a $5.4 million gain recognized in 2015 resulting from the remeasurement of our previously held interest in an equity method investee upon the acquisition of a controlling interest, stock-based compensation, equity investee dividends, indemnity losses associated with the Acquisition, and loss (gain) on sale and disposal of property, plant and equipment.
(i)
Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned.
(j)
Pursuant to Axalta’s management agreement with Carlyle Investment 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. This agreement terminated upon completion of the IPO in November 2014.
Shareholders' Equity
Shareholders' Equity
SHAREHOLDERS' EQUITY
The following tables present the change in total shareholders’ equity for the three months ended March 31, 2015 and 2014, respectively.
 
Total Axalta
Noncontrolling
Interests
Total
Balance January 1, 2015
$
1,044.7

$
67.3

$
1,112.0

Net income
45.1

1.6

46.7

Other comprehensive (loss), net of tax
(112.1
)
(0.4
)
(112.5
)
Exercise of stock options
(0.6
)
—

(0.6
)
Recognition of stock-based compensation
1.8

—

1.8

Noncontrolling interests of acquired subsidiaries
—

4.3

4.3

Dividends declared to noncontrolling interests
—

(3.5
)
(3.5
)
Balance March 31, 2015
$
978.9

$
69.3

$
1,048.2

 
Total Axalta
Noncontrolling
Interests
Total
Balance January 1, 2014
$
1,142.9

$
68.9

$
1,211.8

Net income (loss)
(4.3
)
0.6

(3.7
)
Other comprehensive (loss), net of tax
(3.0
)
—

(3.0
)
Recognition of stock-based compensation
1.8

—

1.8

Dividends declared to noncontrolling interests
—

(0.9
)
(0.9
)
Balance March 31, 2014
$
1,137.4

$
68.6

$
1,206.0

Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
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 (loss)
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
)

The income tax benefit related to the changes in pension and other long-term employee benefits for the three months ended March 31, 2015 was $0.8 million. The cumulative income tax benefit related to the adjustments for pension and other long-term employee benefits at March 31, 2015 was $14.1 million. The income tax benefit related to the change in the unrealized loss on derivatives for the three months ended March 31, 2015 was $1.8 million. The cumulative income tax benefit related to the adjustments for unrealized loss on derivatives at March 31, 2015 was $1.6 million.
 
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
December 31, 2013
$
24.3

$
7.5

$
(0.9
)
$
3.1

$
34.0

Current year deferrals to AOCI
(7.5
)
4.5

(0.2
)
1.9

(1.3
)
Reclassifications from AOCI to Net income
—

(0.1
)
—

(1.6
)
(1.7
)
Net Change
(7.5
)
4.4

(0.2
)
0.3

(3.0
)
March 31, 2014
$
16.8

$
11.9

$
(1.1
)
$
3.4

$
31.0


Included within reclassifications from AOCI to Net income for the three months ended March 31, 2014 was $5.6 million of curtailment gains related to an amendment to one of our pension plans.
The income tax expense related to the changes in pension and other long-term employee benefits for the three months ended March 31, 2014 was $1.1 million. The cumulative income tax expense related to the adjustment for pension and other long-term employee benefits at March 31, 2014 was $4.6 million. The income tax expense related to the change in the unrealized gain on derivatives for the three months ended March 31, 2014 was $0.2 million. The cumulative income tax expense related to the adjustment for unrealized gain on derivatives at March 31, 2014 was $2.1 million.
Subsequent Events
Subsequent Events
SUBSEQUENT EVENTS
On April 8, 2015, we completed a Secondary Offering in which Carlyle sold an aggregate of 40,000,000 common shares at a price of $28.00 per share. The underwriters also exercised their over-allotment option and purchased an additional 6,000,000 common shares. We did not receive any proceeds from the sale of common shares in the Secondary Offering.
On April 8, 2015, Carlyle sold 20,000,000 common shares in a private placement offering to an affiliate of Berkshire Hathaway Inc. for $28.00 per share. We did not receive any proceeds from the sale of common shares in the private placement offering.
As a result of the transactions above, Carlyle's interest in Axalta decreased below 50% and triggered a liquidity event, as defined in the Axalta Coating Systems Bermuda Co., Ltd. 2013 Equity Incentive Plan (the "2013 Plan"). Upon the liquidity event, all issued and outstanding stock options issued under the 2013 Plan became fully vested. As a result of these shares becoming fully vested, the remaining unrecognized stock-based compensation expense of $8.0 million will be recognized for the three months ended June 30, 2015.
Recent Accounting Guidance (Policies)
New Accounting Pronouncements, Policy
Accounting Guidance Issued But Not Yet Adopted
In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. We intend to early adopt this new guidance beginning in the second quarter of 2015. The impacts to the balance sheets at March 31, 2015 and December 31, 2014 would have been corresponding decreases to both total assets and total liabilities of $86.8 million and $91.0 million, respectively.
In February 2015, the FASB issued ASU 2015-02 (Accounting Standard Codification 810), "Consolidation", which sets forth guidance on accounting for consolidation of certain legal entities. This ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Although early adoption is permitted, we are still in the process of assessing the impact the adoption of this ASU will have on our financial position, results of operations and cash flows.
In May 2014, the FASB issued ASU 2014-09 (Accounting Standard Codification 606), "Revenue from Contracts with Customers", which sets forth the guidance that an entity should use related to revenue recognition. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is not permitted. In April 2015 the FASB proposed a one-year delay in the effective date of the new revenue accounting standard to fiscal years beginning after December 15, 2017, and proposed that companies would be allowed to early adopt the guidance as of the original effective date. We are in the process of assessing the impact the adoption of this ASU will have on our financial position, results of operations and cash flows.
Goodwill and Identifiable Intangible Assets (Tables)
Schedule of Goodwill 
The following table shows changes in the carrying amount of goodwill from December 31, 2014 to March 31, 2015 by reportable segment:
 
Performance
Coatings
Transportation
Coatings
Total
At December 31, 2014
$
933.6

$
67.5

1,001.1

Goodwill from acquisition
12.5

—

12.5

Foreign currency translation
(90.3
)
(6.5
)
(96.8
)
March 31, 2015
$
855.8

$
61.0

$
916.8

Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class 
The following table summarizes the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
March 31, 2015
Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology
$
411.8

$
(86.5
)
$
325.3

10.0
Trademarks - indefinite-lived
284.4

—

284.4

Indefinite
Trademarks - definite-lived
41.9

(6.2
)
35.7

14.8
Customer relationships
676.9

(76.5
)
600.4

19.4
Non-compete agreements
1.9

(0.9
)
1.0

4.6
Total
$
1,416.9

$
(170.1
)
$
1,246.8

 
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

 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2015 and each of the succeeding four years is:
Remainder of 2015
$
59.7

2016
$
79.6

2017
$
79.2

2018
$
79.2

2019
$
79.2

Schedule of Finite-Lived Intangible Assets 
Activity related to in process research and development projects for the three months ended March 31, 2015 was:
In Process Research and Development
Activity
Balance at December 31, 2014
$
5.2

Completed
(1.5
)
Abandoned
—

Balance at March 31, 2015
$
3.7

Restructuring (Tables)
Restructuring and Related Costs
The following table summarizes the activities related to the restructuring reserves, recorded within other accrued liabilities, and expenses from December 31, 2014 to March 31, 2015:
 
2015 Activity
Balance at December 31, 2014
$
48.5

Expense Recorded
2.2

Payments Made
(14.0
)
Foreign Currency Changes
(5.0
)
Balance at March 31, 2015
$
31.7

Long-term Employee Benefits (Tables)
Schedule of Net Benefit Costs
The following table sets forth the components of net periodic benefit (gain) cost for the three months ended March 31, 2015 and 2014.
 
Pension Benefits
 
Three Months Ended March 31,
 
2015
2014
Components of net periodic benefit cost:
 
 
Net periodic benefit cost:
 
 
Service cost
$
3.1

$
4.6

Interest cost
4.6

6.0

Expected return on plan assets
(3.7
)
(3.7
)
Amortization of actuarial (gain) loss, net
0.3

(0.1
)
Amortization of prior service credit, net
(0.1
)
—

Net periodic benefit cost
$
4.2

$
6.8

 
 
Other Long-Term Employee Benefits
 
Three Months Ended March 31,
 
2015
2014
Components of net periodic benefit (gain) cost:
 
 
Net periodic benefit (gain) cost:
 
 
Service cost
$
—

$
—

Interest cost
—

0.1

Amortization of prior service credit
(0.9
)
—

Net periodic benefit (gain) cost
$
(0.9
)
$
0.1

Other Expense, Net (Tables)
Schedule of Other Nonoperating Income (Expense)
 
Three Months Ended March 31,
 
2015
2014
Exchange losses, net
$
8.7

$
0.1

Management fees and expenses
—

0.8

Other (income) expense
(4.8
)
3.6

Total
$
3.9

$
4.5

Income Taxes Income Taxes (Tables)
Schedule of Effective Income Tax Rate Reconciliation
Our effective income tax rates for the three months ended March 31, 2015 and March 31, 2014 are as follows:
 
Three Months Ended March 31,
 
2015
2014
Effective Tax Rate
2.5
%
144.6
%
Earnings (Loss) Per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
A reconciliation of the Company’s basic and diluted earnings (loss) per common share is as follows (in millions, except earnings (loss) per share):
 
Three Months Ended March 31,
(In millions, except per share data)
2015
2014
Net income (loss) to common shareholders
$
45.1

$
(4.3
)
Basic weighted average shares outstanding
229.8

229.1

Diluted weighted average shares outstanding
237.0

229.1

Earnings per Common Share:
 
 
Basic net income (loss) per share
$
0.20

$
(0.02
)
Diluted net income (loss) per share
$
0.19

$
(0.02
)
Accounts and Notes Receivable, Net (Tables)
Schedule of Accounts, Notes, Loans and Financing Receivable
 
March 31, 2015
December 31, 2014
Accounts receivable—trade, net
$
664.1

$
638.3

Notes receivable
42.9

45.5

Other
126.0

136.6

Total
$
833.0

$
820.4

Inventories (Tables)
Schedule of Inventory, Current
 
March 31, 2015
December 31, 2014
Finished products
$
316.3

$
323.7

Semi-finished products
87.9

81.3

Raw materials and supplies
137.1

133.3

Total
$
541.3

$
538.3

Property, Plant and Equipment, Net (Tables)
Property, Plant and Equipment
 
March 31, 2015
December 31, 2014
Property, plant and equipment
$
1,776.3

$
1,858.2

Accumulated depreciation
(364.6
)
(344.1
)
Property, plant, and equipment, net
$
1,411.7

$
1,514.1

Borrowings (Tables)
Schedule of Debt 
Borrowings are summarized as follows:
 
March 31, 2015
December 31, 2014
Dollar Term Loan
$
2,159.8

$
2,165.5

Euro Term Loan
425.0

481.0

Dollar Senior Notes
750.0

750.0

Euro Senior Notes
270.4

305.3

Short-term borrowings
14.3

12.2

Other borrowings
6.1

0.7

Unamortized original issue discount
(17.3
)
(18.3
)
 
$
3,608.3

$
3,696.4

Less:
 
 
Short term borrowings
$
14.3

$
12.2

Current portion of long-term borrowings
27.3

27.9

Long-term debt
$
3,566.7

$
3,656.3

Schedule of Maturities of Long-term Debt 
Below is a schedule of required future repayments of all borrowings outstanding at March 31, 2015.
Remainder of 2015
$
34.2

2016
29.7

2017
29.2

2018
28.1

2019
27.3

Thereafter
3,477.1

 
$
3,625.6

Debt Instrument Redemption 
On or after February 1, 2016, we have the option to redeem all or part of the Euro Senior Notes at the following redemption prices (expressed as percentages of principal amount):
Period
Euro Notes Percentage
2016
104.313
%
2017
102.875
%
2018
101.438
%
2019 and thereafter
100.000
%
Debt Instrument Redemption 
On or after February 1, 2016, we have the option to redeem all or part of the Dollar Senior Notes at the following redemption prices (expressed as percentages of principal amount)
Period
Dollar Notes Percentage
2016
105.531
%
2017
103.688
%
2018
101.844
%
2019 and thereafter
100.000
%
Derivative Financial Instruments (Tables)
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location 
The following tables set forth the locations and amounts recognized during the three months ended March 31, 2015 and 2014 for these cash flow hedges.
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

Derivatives in Cash Flow Hedging
Relationships in three months ended March 31, 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
$
(0.5
)
Interest expense, net
$
1.6

Interest expense, net
$
1.3

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location 
Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that do not qualify for hedge accounting treatment are recorded in income as follows:
 
 
Three Months Ended March 31,
Derivatives Not Designated as Hedging
Instruments under ASC 815
Location of (Gain) Loss Recognized in
Income on Derivatives
2015
2014
Foreign currency forward contract
Other expense, net as a component of Exchange (gains) losses
$
(1.8
)
$
1.2

Interest rate cap
Interest expense, net
—

1.8

 
 
$
(1.8
)
$
3.0

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value 
The following table presents the location and fair values using Level 2 inputs of derivative instruments that qualify and have been designated as cash flow hedges included in our condensed consolidated balance sheet:
 
March 31, 2015
December 31, 2014
Other assets:
 
 
Interest rate swaps
$
0.8

$
5.9

Total assets
$
0.8

$
5.9

Other liabilities:
 
 
Interest rate swaps
$
2.5

$
1.5

Total liabilities
$
2.5

$
1.5

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value 
The following table presents the location and fair values using Level 2 inputs of derivative instruments that have not been designated as hedges included in our condensed consolidated balance sheet:
 
March 31, 2015
December 31, 2014
Other assets:
 
 
Interest rate cap
$
0.1

$
0.1

Total assets
$
0.1

$
0.1

Segments (Tables)
Reconciliation of Revenue from Segments to Consolidated 
Our business serves four end-markets globally as follows: 
 
Three Months Ended March 31,
 
2015
2014
Performance Coatings
 
 
Refinish
$
393.2

$
435.2

Industrial
164.0

180.9

Total Net sales Performance Coatings
557.2

616.1

Transportation Coatings
 
 
Light Vehicle
333.2

339.6

Commercial Vehicle
98.8

91.7

Total Net sales Transportation Coatings
432.0

431.3

Total Net sales
$
989.2

$
1,047.4

Schedule of Segment Reporting Information, by Segment 
 
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

 
Performance
Coatings
Transportation
Coatings
Total
For the Three Months Ended March 31, 2014
 
 
 
Net sales (1)
$
616.1

$
431.3

$
1,047.4

Equity in earnings in unconsolidated affiliates
0.3

0.3

0.6

Adjusted EBITDA (2)
124.5

62.2

186.7

Investment in unconsolidated affiliates
8.0

8.4

16.4

(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 (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 Operating Profit (Loss) from Segments to Consolidated 
Reconciliation of Adjusted EBITDA to income (loss) before income taxes follows:
 
Three Months Ended March 31,
 
2015
2014
Income before income taxes
$
47.9

$
8.3

Interest expense, net
50.0

59.0

Depreciation and amortization
72.6

81.1

EBITDA
170.5

148.4

Financing costs (a)
—

3.1

Foreign exchange remeasurement losses (b)
8.7

0.1

Long-term employee benefit plan adjustments (c)
0.2

2.3

Termination benefits and other employee related costs (d)
3.7

3.2

Consulting and advisory fees (e)
3.1

13.0

Transition-related costs (f)
—

13.9

Secondary offering costs (g)
1.4

—

Other adjustments (h)
(2.1
)
2.8

Dividends in respect of noncontrolling interest (i)
(3.5
)
(0.9
)
Management fee expense (j)
—

0.8

Adjusted EBITDA
$
182.0

$
186.7

(a)
In connection with an amendment to the Senior Secured Credit Facilities in February 2014, we recognized $3.1 million of costs during the three months ended March 31, 2014.
(b)
Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies.
(c)
Eliminates the non-service cost components of long-term employee benefit costs.
(d)
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 associated with cost saving opportunities that were related to our transition to a standalone entity and our Axalta Way cost savings initiatives in 2015.
(e)
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 during 2014. Amounts incurred for the three months ended March 31, 2015 primarily relate to our Axalta Way cost savings initiatives.
(f)
Represents charges associated with the transition from DuPont to a standalone entity, including branding and marketing, information technology related costs, and facility transition costs.
(g)
Represents costs associated with the secondary offering of our common shares by Carlyle that closed in April 2015 (the "Secondary Offering").
(h)
Represents costs for certain unusual or non-operational (gains) and losses, including a $5.4 million gain recognized in 2015 resulting from the remeasurement of our previously held interest in an equity method investee upon the acquisition of a controlling interest, stock-based compensation, equity investee dividends, indemnity losses associated with the Acquisition, and loss (gain) on sale and disposal of property, plant and equipment.
(i)
Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned.
(j)
Pursuant to Axalta’s management agreement with Carlyle Investment 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. This agreement terminated upon completion of the IPO in November 2014.
Shareholders' Equity (Tables)
Schedule of Stockholders Equity
The following tables present the change in total shareholders’ equity for the three months ended March 31, 2015 and 2014, respectively.
 
Total Axalta
Noncontrolling
Interests
Total
Balance January 1, 2015
$
1,044.7

$
67.3

$
1,112.0

Net income
45.1

1.6

46.7

Other comprehensive (loss), net of tax
(112.1
)
(0.4
)
(112.5
)
Exercise of stock options
(0.6
)
—

(0.6
)
Recognition of stock-based compensation
1.8

—

1.8

Noncontrolling interests of acquired subsidiaries
—

4.3

4.3

Dividends declared to noncontrolling interests
—

(3.5
)
(3.5
)
Balance March 31, 2015
$
978.9

$
69.3

$
1,048.2

 
Total Axalta
Noncontrolling
Interests
Total
Balance January 1, 2014
$
1,142.9

$
68.9

$
1,211.8

Net income (loss)
(4.3
)
0.6

(3.7
)
Other comprehensive (loss), net of tax
(3.0
)
—

(3.0
)
Recognition of stock-based compensation
1.8

—

1.8

Dividends declared to noncontrolling interests
—

(0.9
)
(0.9
)
Balance March 31, 2014
$
1,137.4

$
68.6

$
1,206.0

Accumulated Other Comprehensive Income (Loss) (Tables)
Schedule of Accumulated Other Comprehensive Income
 
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 (loss)
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
)
 
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
December 31, 2013
$
24.3

$
7.5

$
(0.9
)
$
3.1

$
34.0

Current year deferrals to AOCI
(7.5
)
4.5

(0.2
)
1.9

(1.3
)
Reclassifications from AOCI to Net income
—

(0.1
)
—

(1.6
)
(1.7
)
Net Change
(7.5
)
4.4

(0.2
)
0.3

(3.0
)
March 31, 2014
$
16.8

$
11.9

$
(1.1
)
$
3.4

$
31.0

Basis of Presentation of the Condensed Consolidated Financial Statements Basis of Presentation of the Condensed Consolidated Financial Statements (Details) (IPO [Member], Common Stock [Member], USD $)
0 Months Ended
Nov. 11, 2014
Nov. 11, 2014
IPO [Member] |
Common Stock [Member]
 
 
Subsidiary, Sale of Stock [Line Items]
 
 
Number of shares issued in transaction
57,500,000 
 
Sale of stock, price per share (dollars per share)
 
$ 19.50 
Recent Accounting Guidance (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
Decrease in total assets from early adoption
$ (5,898.4)
$ (6,252.8)
Decrease in total liabilities from early adoption
(4,850.2)
(5,140.8)
New Accounting Pronouncement, Early Adoption, Effect [Member]
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
Decrease in total assets from early adoption
86.8 
91.0 
Decrease in total liabilities from early adoption
$ 86.8 
$ 91.0 
Goodwill and Identifiable Intangible Assets - Schedule of Goodwill (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Goodwill [Roll Forward]
 
Goodwill, beginning balance
$ 1,001.1 
Goodwill, acquired during period
12.5 
Foreign currency translation
(96.8)
Goodwill, ending balance
916.8 
Performance Coatings [Member]
 
Goodwill [Roll Forward]
 
Goodwill, beginning balance
933.6 
Goodwill, acquired during period
12.5 
Foreign currency translation
(90.3)
Goodwill, ending balance
855.8 
Transportation Coatings [Member]
 
Goodwill [Roll Forward]
 
Goodwill, beginning balance
67.5 
Goodwill, acquired during period
0 
Foreign currency translation
(6.5)
Goodwill, ending balance
$ 61.0 
Goodwill and Identifiable Intangible Assets - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Goodwill [Line Items]
 
 
Amortization of acquired intangibles
$ 20.0 
$ 21.1 
Equity Method Investee [Member]
 
 
Goodwill [Line Items]
 
 
Additional interest purchased
25.00% 
 
Goodwill and Identifiable Intangible Assets - Gross Carrying Amounts and Accumulated Amortization of Identifiable Intangible Assets by Major Class (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]
 
 
Gross Carrying Amount
$ 1,416.9 
$ 1,453.9 
Accumulated Amortization
(170.1)
(153.9)
Net Book Value, definite-lived
1,246.8 
1,300.0 
Trademarks [Member]
 
 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]
 
 
Net Book Value, indefinite-lived
284.4 
284.4 
Technology-Based Intangible Assets [Member]
 
 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]
 
 
Gross Carrying Amount
411.8 
411.8 
Accumulated Amortization
(86.5)
(76.3)
Net Book Value, definite-lived
325.3 
335.5 
Weighted average amortization periods (years)
10 years 
10 years 
Trademarks [Member]
 
 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]
 
 
Gross Carrying Amount
41.9 
41.8 
Accumulated Amortization
(6.2)
(5.5)
Net Book Value, definite-lived
35.7 
36.3 
Weighted average amortization periods (years)
14 years 9 months 18 days 
14 years 9 months 18 days 
Customer Relationships [Member]
 
 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]
 
 
Gross Carrying Amount
676.9 
713.9 
Accumulated Amortization
(76.5)
(71.3)
Net Book Value, definite-lived
600.4 
642.6 
Weighted average amortization periods (years)
19 years 4 months 24 days 
19 years 4 months 24 days 
Noncompete Agreements [Member]
 
 
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]
 
 
Gross Carrying Amount
1.9 
2.0 
Accumulated Amortization
(0.9)
(0.8)
Net Book Value, definite-lived
$ 1.0 
$ 1.2 
Weighted average amortization periods (years)
4 years 6 months 22 days 
4 years 7 months 6 days 
Goodwill and Identifiable Intangible Assets - Schedule of Activity Related to In Process Research and Development Projects (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2015
In Process Research and Development [Member]
Finite-lived Intangible Assets [Roll Forward]
 
 
 
Beginning balance
$ 1,246.8 
$ 1,300.0 
$ 5.2 
Completed
 
 
(1.5)
Abandoned
 
 
0 
Ending balance
$ 1,246.8 
$ 1,300.0 
$ 3.7 
Goodwill and Identifiable Intangible Assets - Schedule of Expected Amortization Expense (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
Remainder of 2015
$ 59.7 
2016
79.6 
2017
79.2 
2018
79.2 
2019
$ 79.2 
Restructuring - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Restructuring and Related Activities [Abstract]
 
 
Restructuring costs
$ 2.2 
$ 0.1 
Restructuring - Restructuring Reserve (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Restructuring Reserve [Roll Forward]
 
 
Beginning balance
$ 48.5 
 
Expense Recorded
2.2 
0.1 
Payments Made
(14.0)
 
Foreign Currency Changes
(5.0)
 
Ending balance
$ 31.7 
 
Commitments and Contingencies (Details) (USD $)
Mar. 31, 2015
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
 
 
Maximum exposure, undiscounted
$ 2,100,000 
$ 2,200,000 
Accrued in period
$ 0 
$ 0 
Long-term Employee Benefits - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Compensation and Retirement Disclosure [Abstract]
 
Recognized gain (loss) due to curtailments
$ 5.6 
Long-term Employee Benefits - Schedule of Net Benefit Cost (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Pension Plan [Member]
 
 
Net periodic benefit cost:
 
 
Service cost
$ 3.1 
$ 4.6 
Interest cost
4.6 
6.0 
Expected return on plan assets
(3.7)
(3.7)
Amortization of actuarial (gain) loss, net
0.3 
(0.1)
Amortization of prior service credit, net
(0.1)
0 
Net periodic benefit (gain) cost
4.2 
6.8 
Other Postretirement Benefit Plan [Member]
 
 
Net periodic benefit cost:
 
 
Service cost
0 
0 
Interest cost
0 
0.1 
Amortization of prior service credit, net
(0.9)
0 
Net periodic benefit (gain) cost
$ (0.9)
$ 0.1 
Stock-based Compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation expense
$ 1.8 
$ 1.8 
Compensation not yet recognized
$ 8.6 
 
Grants in period
100,945 
 
Weighted average exercise price
$ 25.49 
 
Grant date fair value (dollars per share)
$ 6.88 
 
Employee Stock Option [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Period for recognition of compensation not yet recognized
3 years 1 month 2 days 
 
Expiration period
10 years 
 
Award vesting period
3 years 
 
Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Award vesting period
3 years 
 
Grants in period
41,430 
 
Weighted average grant date fair value (dollars per share)
$ 25.49 
 
Related Party Transactions (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Related Party Transaction [Line Items]
 
 
Management fee expense
$ 0 
$ 800,000 
Carlyle Investment Management Llc [Member]
 
 
Related Party Transaction [Line Items]
 
 
Fees and commissions
3,000,000 
 
Management fee expense
0 
800,000 
Service King Collision Repair [Member]
 
 
Related Party Transaction [Line Items]
 
 
Related parties sales
 
$ 2,000,000 
Other Expense, Net - Schedule of Other Non-operating Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Other Income and Expenses [Abstract]
 
 
Exchange losses, net
$ 8.7 
$ 0.1 
Management fees and expenses
0 
0.8 
Other (income) expense
(4.8)
3.6 
Total
$ 3.9 
$ 4.5 
Other Expense, Net - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 1 Months Ended
Mar. 31, 2015
Mar. 31, 2015
Equity Method Investee [Member]
Mar. 31, 2015
Venezuelan Subsidiary [Member]
Other Income Expense [Line Items]
 
 
 
Asset, reporting currency denominated, value
 
 
$ 13.7 
Asset, reporting currency-denominated, non-monetary value
 
 
155.7 
Additional interest purchased
 
25.00% 
 
Business combination, consideration transferred
 
4.3 
 
Equity method investments, remeasurement gain
 
5.4 
 
Goodwill, acquired during period
$ 12.5 
$ 12.5 
 
Income Taxes (Details)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Tax Disclosure [Abstract]
 
 
Effective income tax rate, percent
2.50% 
144.60% 
Federal statutory income tax rate, percent
35.00% 
 
Earnings (Loss) Per Common Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Earnings Per Share [Abstract]
 
 
Net income (loss) to common shareholders
$ 45.1 
$ (4.3)
Basic weighted average shares outstanding
229.8 
229.1 
Diluted weighted average shares outstanding
237.0 
229.1 
Earnings per Common Share:
 
 
Basic net income (loss) per share (dollars per share)
$ 0.20 
$ (0.02)
Diluted net income (loss) per share (dollars per share)
$ 0.19 
$ (0.02)
Antidilutive securities excluded from computation of earnings per share (in shares)
0 
16.2 
Accounts and Notes Receivable, Net - Schedule of Accounts, Notes, Loans, and Financing Receivable (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Receivables [Abstract]
 
 
Accounts receivable—trade, net
$ 664.1 
$ 638.3 
Notes receivable
42.9 
45.5 
Other
126.0 
136.6 
Total
$ 833.0 
$ 820.4 
Accounts and Notes Receivable, Net - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2014
Receivables [Abstract]
 
 
 
Allowance for doubtful accounts
$ 9.5 
 
$ 9.9 
Provision for Doubtful Accounts
$ 0.7 
$ 1.2 
 
Inventories - Schedule of Inventory (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Inventory Disclosure [Abstract]
 
 
Finished products
$ 316.3 
$ 323.7 
Semi-finished products
87.9 
81.3 
Raw materials and supplies
137.1 
133.3 
Inventories
$ 541.3 
$ 538.3 
Inventories - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Inventory Disclosure [Abstract]
 
 
Stores and supplies inventories
$ 20.8 
$ 20.9 
Property, Plant and Equipment, Net - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Property, Plant and Equipment [Abstract]
 
 
Depreciation
$ 41.3 
$ 48.4 
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Abstract]
 
 
Property, plant and equipment
$ 1,776.3 
$ 1,858.2 
Accumulated depreciation
(364.6)
(344.1)
Property, plant, and equipment, net
$ 1,411.7 
$ 1,514.1 
Borrowings - Schedule of Debt (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
Short-term borrowings
$ 14.3 
$ 12.2 
Other borrowings
6.1 
0.7 
Unamortized original issue discount
(17.3)
(18.3)
Debt and Capital Lease Obligations
3,608.3 
3,696.4 
Current portion of long-term borrowings
27.3 
27.9 
Long-term borrowings
3,566.7 
3,656.3 
Dollar Term Loan Due 2020 [Member]
 
 
Debt Instrument [Line Items]
 
 
Term loan
2,159.8 
2,165.5 
Euro Term Loan Due 2020 [Member]
 
 
Debt Instrument [Line Items]
 
 
Term loan
425.0 
481.0 
Dollar Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Senior Notes
750.0 
750.0 
Euro Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Senior Notes
$ 270.4 
$ 305.3 
Borrowings - Senior Secured Credit Facilities (Details)
0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended
Feb. 3, 2014
USD ($)
Sep. 30, 2014
Mar. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Feb. 3, 2014
USD ($)
Feb. 3, 2014
Revolving Credit Facility [Member]
Mar. 31, 2015
Revolving Credit Facility [Member]
USD ($)
Dec. 31, 2014
Revolving Credit Facility [Member]
USD ($)
Mar. 31, 2015
Senior Secured Credit Facilities [Member]
USD ($)
Mar. 31, 2014
Senior Secured Credit Facilities [Member]
USD ($)
Feb. 3, 2014
Senior Secured Credit Facilities [Member]
USD ($)
Feb. 3, 2014
Interest Rate Floor [Member]
Senior Secured Credit Facilities [Member]
Feb. 3, 2014
Interest Rate Floor [Member]
Senior Secured Credit Facilities [Member]
Feb. 3, 2014
Interest Rate Floor [Member]
Eurocurrency Rate Loans [Member]
Senior Secured Credit Facilities [Member]
Feb. 3, 2014
Base Rate [Member]
Prior To Amendment [Member]
Feb. 3, 2014
Base Rate [Member]
Senior Secured Credit Facilities [Member]
Feb. 3, 2014
Prime Rate [Member]
Adjusted Euro Currency Rate [Member]
Feb. 3, 2014
Prime Rate [Member]
Adjusted Euro Currency Rate [Member]
Senior Secured Credit Facilities [Member]
Feb. 3, 2014
Prime Rate [Member]
Adjusted Euro Currency Rate [Member]
Senior Secured Credit Facilities [Member]
Mar. 31, 2015
Dollar Term Loan Due 2020 [Member]
Feb. 3, 2014
Dollar Term Loan Due 2020 [Member]
USD ($)
Feb. 3, 2014
Dollar Term Loan Due 2020 [Member]
Interest Rate Floor [Member]
Prior To Amendment [Member]
Feb. 3, 2014
Dollar Term Loan Due 2020 [Member]
Interest Rate Floor [Member]
Eurocurrency Rate Loans [Member]
Prior To Amendment [Member]
Feb. 3, 2014
Euro Term Loan Due 2020 [Member]
Feb. 3, 2014
Euro Term Loan Due 2020 [Member]
EUR (€)
Feb. 3, 2014
Euro Term Loan Due 2020 [Member]
Interest Rate Floor [Member]
Prior To Amendment [Member]
Feb. 3, 2014
Euro Term Loan Due 2020 [Member]
Interest Rate Floor [Member]
Prior To Amendment [Member]
Feb. 3, 2014
New Dollar Term Loan [Member]
Mar. 31, 2015
New Dollar Term Loan [Member]
Feb. 3, 2014
New Dollar Term Loan [Member]
Eurocurrency Rate Loans [Member]
Mar. 31, 2015
New Dollar Term Loan [Member]
Eurocurrency Rate Loans [Member]
Feb. 3, 2014
New Dollar Term Loan [Member]
Interest Rate Floor [Member]
Feb. 3, 2014
New Dollar Term Loan [Member]
Base Rate [Member]
Mar. 31, 2015
New Dollar Term Loan [Member]
Base Rate [Member]
Feb. 3, 2014
New Euro Term Loan [Member]
Mar. 31, 2015
New Euro Term Loan [Member]
Feb. 3, 2014
New Euro Term Loan [Member]
Eurocurrency Rate Loans [Member]
Mar. 31, 2015
New Euro Term Loan [Member]
Eurocurrency Rate Loans [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt, long-term and short-term, combined amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,282,800,000 
 
 
 
€ 397,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
3.50% 
 
1.00% 
0.50% 
0.50% 
 
2.00% 
 
 
 
3.50% 
1.25% 
 
 
2.50% 
 
 
2.75% 
3.00% 
 
1.00% 
2.00% 
 
 
3.00% 
3.25% 
 
Debt instrument covenant maximum consolidated leverage ratio
 
4.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.50 
 
 
 
 
 
 
4.50 
 
 
 
Debt instrument, interest rate, effective percentage rate range, minimum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.00% 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
Debt instrument periodic payment principal percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument basis spread reduced on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
3.25% 
 
 
 
2.25% 
 
2.25% 
 
 
 
 
 
 
 
 
 
 
 
0.25% 
 
 
0.25% 
 
 
 
0.25% 
Debt instrument, interest rate, stated percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.25% 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, basis spread on additional variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maximum borrowing capacity
 
 
 
 
400,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from maturities, prepayments and calls of other investments (more than)
25,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage on excess cash flow for mandatory prepayments of debt
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Decrease in percentage on excess cash flow for mandatory prepayments of debt
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage on first lien leverage ratio for mandatory prepayments of debt
0.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First lien leverage ratio upper limit
4.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First lien leverage ratio lower limit
3.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, percent of credit facility outstanding for financial covenant to be applicable
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, percent of letters of credit not cash collateralized for financial covenant to be applicable
103.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred finance costs, net
 
 
 
 
 
 
 
 
 
 
92,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized original issue discount
 
 
17,300,000 
18,300,000 
 
 
 
 
 
 
25,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of financing costs
 
 
 
 
 
 
 
 
3,200,000 
3,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of debt discount (premium)
 
 
 
 
 
 
 
 
800,000 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maximum amount outstanding during period
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of credit outstanding, amount
 
 
 
 
 
 
21,300,000 
15,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, remaining borrowing capacity
 
 
 
 
 
 
$ 378,700,000 
$ 384,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, maturity date
 
 
 
 
 
Feb. 01, 2018 
 
 
 
 
 
 
 
 
 
 
 
 
 
Feb. 01, 2020 
 
 
 
Feb. 01, 2020 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings - Senior Notes (Details)
0 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Feb. 1, 2013
7.375% Senior Unsecured Notes Due 2021 [Member]
Feb. 1, 2013
7.375% Senior Unsecured Notes Due 2021 [Member]
USD ($)
Feb. 1, 2013
5.750% Senior Secured Notes Due 2021 [Member]
Feb. 1, 2013
5.750% Senior Secured Notes Due 2021 [Member]
EUR (€)
Feb. 1, 2013
Senior Notes [Member]
USD ($)
Mar. 31, 2015
Senior Notes [Member]
USD ($)
Mar. 31, 2014
Senior Notes [Member]
USD ($)
Dec. 31, 2014
Senior Notes [Member]
USD ($)
Feb. 1, 2013
Euro Senior Notes [Member]
USD ($)
Mar. 31, 2015
Euro Senior Notes [Member]
USD ($)
Dec. 31, 2014
Euro Senior Notes [Member]
USD ($)
Feb. 1, 2013
Euro Senior Notes [Member]
Feb. 1, 2013
Euro Senior Notes [Member]
Any Time Prior to February 1, 2016 [Member]
Feb. 1, 2013
Euro Senior Notes [Member]
Debt Instrument Redemption Period [Member]
Feb. 1, 2013
Euro Senior Notes [Member]
12 Month Period Prior to February 1, 2016 [Member]
Feb. 1, 2013
Dollar Senior Notes [Member]
USD ($)
Mar. 31, 2015
Dollar Senior Notes [Member]
USD ($)
Dec. 31, 2014
Dollar Senior Notes [Member]
USD ($)
Feb. 1, 2013
Dollar Senior Notes [Member]
Feb. 1, 2013
Dollar Senior Notes [Member]
Any Time Prior to February 1, 2016 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, face amount
 
$ 750,000,000.0 
 
€ 250,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, interest rate, stated percentage
 
7.375% 
 
5.75% 
 
 
 
 
 
 
 
5.75% 
 
 
 
 
 
 
7.375% 
 
Debt instrument maturity year
2021 
 
2021 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt issuance cost
 
 
 
 
33,100,000 
 
 
 
10,200,000 
 
 
 
 
 
 
22,900,000 
 
 
 
 
Unamortized debt issuance expense
 
 
 
 
 
24,300,000 
 
25,300,000 
 
7,400,000 
7,700,000 
 
 
 
 
 
16,900,000 
17,600,000 
 
 
Debt instrument, redemption price, percentage of principal amount redeemed
 
 
 
 
 
 
 
 
 
 
 
 
40.00% 
10.00% 
 
 
 
 
 
40.00% 
Debt instrument, redemption price, percentage
 
 
 
 
 
 
 
 
101.00% 
 
 
 
105.75% 
 
103.00% 
101.00% 
 
 
 
107.375% 
Debt instrument, maturity date
 
 
 
 
 
 
 
 
Feb. 01, 2021 
 
 
 
 
 
 
May 01, 2021 
 
 
 
 
Amortization of financing costs
 
 
 
 
 
$ 1,000,000 
$ 1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings - Debt Instrument Redemption (Details)
0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended
Feb. 1, 2013
Euro Senior Notes [Member]
Mar. 31, 2015
Euro Senior Notes [Member]
2016 [Member]
Mar. 31, 2015
Euro Senior Notes [Member]
2017 [Member]
Mar. 31, 2015
Euro Senior Notes [Member]
2018 [Member]
Mar. 31, 2015
Euro Senior Notes [Member]
2019 and thereafter [Member]
Feb. 1, 2013
Dollar Senior Notes [Member]
Mar. 31, 2015
Dollar Senior Notes [Member]
2016 [Member]
Mar. 31, 2015
Dollar Senior Notes [Member]
2017 [Member]
Mar. 31, 2015
Dollar Senior Notes [Member]
2018 [Member]
Mar. 31, 2015
Dollar Senior Notes [Member]
2019 and thereafter [Member]
Debt Instrument, Redemption [Line Items]
 
 
 
 
 
 
 
 
 
 
Debt instrument, redemption price, percentage
101.00% 
104.313% 
102.875% 
101.438% 
100.00% 
101.00% 
105.531% 
103.688% 
101.844% 
100.00% 
Borrowings - Schedule of Maturities of Long-term Debt (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Debt Disclosure [Abstract]
 
Remainder of 2015
$ 34.2 
2016
29.7 
2017
29.2 
2018
28.1 
2019
27.3 
Thereafter
3,477.1 
Long-term debt
$ 3,625.6 
Borrowings - Reclassifications and Revisions (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Debt Instrument [Line Items]
 
 
Net income
$ 46.7 
$ (3.7)
Provision for income taxes
1.2 
12.0 
Restatement Adjustment [Member] |
Determination of Effective Interest Rate Amortization [Member]
 
 
Debt Instrument [Line Items]
 
 
Net income
 
2.8 
Interest expense, debt
 
3.1 
Provision for income taxes
 
$ 0.3 
Fair Value Accounting (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities
$ 4.5 
$ 4.5 
Dollar Senior Notes [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-term debt, fair value
813.8 
795.0 
Euro Senior Notes [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-term debt, fair value
284.6 
320.5 
Dollar Term Loan Due 2020 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-term debt, fair value
2,149.0 
2,100.5 
Euro Term Loan Due 2020 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-term debt, fair value
$ 428.2 
$ 478.0 
Derivative Financial Instruments - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) (Fair Value, Inputs, Level 2 [Member], USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Designated as Hedging Instrument [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative asset
$ 0.8 
$ 5.9 
Derivative liability
2.5 
1.5 
Designated as Hedging Instrument [Member] |
Interest Rate Swap [Member] |
Other Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative asset
0.8 
5.9 
Designated as Hedging Instrument [Member] |
Interest Rate Swap [Member] |
Other Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative liability
2.5 
1.5 
Not Designated as Hedging Instrument [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative asset
0.1 
0.1 
Not Designated as Hedging Instrument [Member] |
Interest Rate Cap [Member] |
Other Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative asset
$ 0.1 
$ 0.1 
Derivative Financial Instruments - Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location (Details) (Interest Rate Contract [Member], Cash Flow Hedging [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion)
$ 4.8 
$ (0.5)
Interest Expense [Member]
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion)
1.6 
1.6 
Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion)
$ 1.2 
$ 1.3 
Derivative Financial Instruments - Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
(Gain) loss on non-derivative instruments, net
$ (1.8)
$ 3.0 
Other Nonoperating Income (Expense) [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
(Gain) loss on non-derivative instruments, net
(1.8)
1.2 
Interest Expense [Member] |
Interest Rate Cap [Member]
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
(Gain) loss on non-derivative instruments, net
$ 0 
$ 1.8 
Derivative Financial Instruments - Additional Information (Details)
In Millions, unless otherwise specified
3 Months Ended
Dec. 31, 2013
Interest_Rate_Swaps
Dec. 31, 2013
Euro Term Loan Due 2020 [Member]
EUR (€)
Mar. 31, 2015
Interest Rate Swap [Member]
Dec. 31, 2013
Interest Rate Swap [Member]
USD ($)
Dec. 31, 2013
Interest Rate Cap [Member]
Euro Term Loan Due 2020 [Member]
USD ($)
Derivatives, Fair Value [Line Items]
 
 
 
 
 
Number Of interest rate swaps
5 
 
 
 
 
Derivative, notional amount
 
 
 
$ 1,173.0 
 
Derivative, maturity date
 
 
Sep. 29, 2017 
 
 
Long-term debt, gross
 
300.0 
 
 
 
Derivative, cap interest rate
 
1.50% 
 
 
 
Derivative instrument, premium
 
 
 
 
$ 3.1 
Segments - Reconciliation of Revenue from Segments to Consolidated (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Segment
Mar. 31, 2014
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Number of operating segments
2 
 
Net sales
$ 989.2 
$ 1,047.4 
Performance Coatings [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Net sales
557.2 
616.1 
Performance Coatings [Member] |
Refinish [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Net sales
393.2 
435.2 
Performance Coatings [Member] |
Industrial [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Net sales
164.0 
180.9 
Transportation Coatings [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Net sales
432.0 
431.3 
Transportation Coatings [Member] |
Light Vehicle [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Net sales
333.2 
339.6 
Transportation Coatings [Member] |
Commercial Vehicle [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Net sales
$ 98.8 
$ 91.7 
Segments - Schedule of Segment Reporting Information, by Segment (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Segment Reporting Information [Line Items]
 
 
Net sales
$ 989.2 
$ 1,047.4 
Equity in earnings in unconsolidated affiliates
0.4 
0.6 
Adjusted EBITDA
182.0 
186.7 
Investment in unconsolidated affiliates
10.5 
16.4 
Performance Coatings [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
557.2 
616.1 
Equity in earnings in unconsolidated affiliates
0.1 
0.3 
Adjusted EBITDA
107.1 
124.5 
Investment in unconsolidated affiliates
4.0 
8.0 
Transportation Coatings [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
432.0 
431.3 
Equity in earnings in unconsolidated affiliates
0.3 
0.3 
Adjusted EBITDA
74.9 
62.2 
Investment in unconsolidated affiliates
$ 6.5 
$ 8.4 
Segments - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) (USD $)
3 Months Ended 1 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Mar. 31, 2015
Carlyle Investment Management Llc [Member]
Mar. 31, 2014
Carlyle Investment Management Llc [Member]
Mar. 31, 2014
Senior Secured Credit Facilities [Member]
Mar. 31, 2015
Equity Method Investee [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
 
 
 
 
 
 
Income before income taxes
$ 47,900,000 
$ 8,300,000 
 
 
 
 
Interest expense, net
50,000,000 
59,000,000 
 
 
 
 
Depreciation and amortization
72,600,000 
81,100,000 
 
 
 
 
EBITDA
170,500,000 
148,400,000 
 
 
 
 
Debt modification costs
0 
3,100,000 
 
 
 
 
Exchange losses, net
8,700,000 
100,000 
 
 
 
 
Long-term employee benefit plan adjustments
200,000 
2,300,000 
 
 
 
 
Termination benefits and other employee related costs
3,700,000 
3,200,000 
 
 
 
 
Consulting and advisory fees
3,100,000 
13,000,000 
 
3,000,000 
 
 
Transition-related costs
0 
13,900,000 
 
 
 
 
Secondary offering costs
1,400,000 
0 
 
 
 
 
Other adjustments
(2,100,000)
2,800,000 
 
 
 
 
Dividends paid to noncontrolling interests
(3,500,000)
(900,000)
 
 
 
 
Management fee expense
0 
800,000 
0 
800,000 
 
 
Adjusted EBITDA
182,000,000 
186,700,000 
 
 
 
 
Refinancing costs
 
 
 
 
3,100,000 
 
Equity method investments, remeasurement gain
 
 
 
 
 
$ 5,400,000 
Shareholders' Equity (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Total stockholders’ equity, beginning balance
$ 1,112.0 
$ 1,211.8 
Net income
46.7 
(3.7)
Other comprehensive (loss), net of tax
(112.5)
(3.0)
Exercise of stock options
(0.6)
 
Recognition of stock-based compensation
1.8 
1.8 
Noncontrolling interests of acquired subsidiaries
4.3 
 
Dividends declared to noncontrolling interests
(3.5)
(0.9)
Total stockholders’ equity, ending balance
1,048.2 
1,206.0 
Parent [Member]
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Total stockholders’ equity, beginning balance
1,044.7 
1,142.9 
Net income
45.1 
(4.3)
Other comprehensive (loss), net of tax
(112.1)
(3.0)
Exercise of stock options
(0.6)
 
Recognition of stock-based compensation
1.8 
1.8 
Noncontrolling interests of acquired subsidiaries
0 
 
Dividends declared to noncontrolling interests
0 
0 
Total stockholders’ equity, ending balance
978.9 
1,137.4 
Noncontrolling Interest [Member]
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Total stockholders’ equity, beginning balance
67.3 
68.9 
Net income
1.6 
0.6 
Other comprehensive (loss), net of tax
(0.4)
0 
Exercise of stock options
0 
 
Recognition of stock-based compensation
0 
0 
Noncontrolling interests of acquired subsidiaries
4.3 
 
Dividends declared to noncontrolling interests
(3.5)
(0.9)
Total stockholders’ equity, ending balance
$ 69.3 
$ 68.6 
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Accumulated other comprehensive income (loss), beginning balance
$ (103.3)
 
Other comprehensive loss, net of tax
(112.5)
(3.0)
Accumulated other comprehensive income (loss), ending balance
(215.4)
 
Unrealized Currency Translation Adjustments
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Accumulated other comprehensive income (loss), beginning balance
(72.1)
24.3 
Current year deferrals to AOCI
(109.2)
(7.5)
Reclassifications from AOCI to Net income
0 
0 
Other comprehensive loss, net of tax
(109.2)
(7.5)
Accumulated other comprehensive income (loss), ending balance
(181.3)
16.8 
Pension and Other Long-term Employee Benefit Adjustments
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Accumulated other comprehensive income (loss), beginning balance
(31.2)
7.5 
Current year deferrals to AOCI
0 
4.5 
Reclassifications from AOCI to Net income
(0.4)
(0.1)
Other comprehensive loss, net of tax
(0.4)
4.4 
Accumulated other comprehensive income (loss), ending balance
(31.6)
11.9 
Unrealized Gain (Loss) on Securities
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Accumulated other comprehensive income (loss), beginning balance
(0.2)
(0.9)
Current year deferrals to AOCI
0.5 
(0.2)
Reclassifications from AOCI to Net income
0 
0 
Other comprehensive loss, net of tax
0.5 
(0.2)
Accumulated other comprehensive income (loss), ending balance
0.3 
(1.1)
Unrealized Gain (Losses) on Derivatives
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Accumulated other comprehensive income (loss), beginning balance
0.2 
3.1 
Current year deferrals to AOCI
(1.4)
1.9 
Reclassifications from AOCI to Net income
(1.6)
(1.6)
Other comprehensive loss, net of tax
(3.0)
0.3 
Accumulated other comprehensive income (loss), ending balance
(2.8)
3.4 
Accumulated Other Comprehensive Income (loss)
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Accumulated other comprehensive income (loss), beginning balance
(103.3)
34.0 
Current year deferrals to AOCI
(110.1)
(1.3)
Reclassifications from AOCI to Net income
(2.0)
(1.7)
Other comprehensive loss, net of tax
(112.1)
(3.0)
Accumulated other comprehensive income (loss), ending balance
$ (215.4)
$ 31.0 
Accumulated Other Comprehensive Income (Loss) - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Equity [Abstract]
 
 
Pension and other postretirement benefit plans, tax benefit (expense)
$ (0.8)
$ 1.1 
Cumulative pension and other postretirement benefit plans, tax (benefits) expense
(14.1)
4.6 
Unrealized gain (loss) on derivatives, tax
(1.8)
0.2 
Cumulative unrealized gain (loss) on derivatives, tax
(1.6)
2.1 
Recognized gain (loss) due to curtailments
 
$ 5.6 
Subsequent Events (Details) (USD $)
0 Months Ended 0 Months Ended
Mar. 31, 2015
Apr. 8, 2015
Subsequent Event [Member]
2013 Plan [Member]
Apr. 8, 2015
The Carlyle Group L.P. [Member]
Subsequent Event [Member]
Apr. 8, 2015
The Carlyle Group L.P. [Member]
Secondary Offering [Member]
Subsequent Event [Member]
Apr. 8, 2015
The Carlyle Group L.P. [Member]
Secondary Offering [Member]
Subsequent Event [Member]
Apr. 8, 2015
The Carlyle Group L.P. [Member]
Over-Allotment Option [Member]
Subsequent Event [Member]
Apr. 8, 2015
The Carlyle Group L.P. [Member]
Private Placement [Member]
Subsequent Event [Member]
Apr. 8, 2015
The Carlyle Group L.P. [Member]
Private Placement [Member]
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
Number of shares issued in transaction
 
 
 
40,000,000 
 
6,000,000 
20,000,000 
 
Sale of stock, price per share (dollars per share)
 
 
 
 
$ 28.00 
 
 
$ 28.00 
Proceeds from issuance of common stock
 
 
 
$ 0 
 
 
$ 0 
 
Percentage of ownership after transaction (below 50%)
 
 
50.00% 
 
 
 
 
 
Share-based compensation expense
$ 8,600,000 
$ 8,000,000