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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission File Number: 001-36733
AXALTA COATING SYSTEMS LTD.
(Exact name of registrant as specified in its charter)
Bermuda285198-1073028
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
1050 Constitution Avenue
Philadelphia, Pennsylvania 19112
(855) 547-1461
(Address, including zip code, and telephone number, including area code, of the registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Common Shares, $1.00 par valueAXTANew York Stock Exchange
(Title of class)(Trading symbol)(Exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Non-accelerated filer Accelerated filer
Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of July 25, 2024, there were 219,304,924 shares of the registrant’s common shares outstanding.



Table of Contents

2

PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net sales$1,351 $1,294 $2,645 $2,578 
Cost of goods sold891 904 1,756 1,806 
Selling, general and administrative expenses213 210 420 416 
Other operating charges2 2 63 9 
Research and development expenses18 19 36 38 
Amortization of acquired intangibles22 21 44 46 
Income from operations205 138 326 263 
Interest expense, net50 55 104 103 
Other (income) expense, net(1)9 7 10 
Income before income taxes156 74 215 150 
Provision for income taxes43 13 63 28 
Net income113 61 152 122 
Less: Net income (loss) attributable to noncontrolling interests1  (1) 
Net income attributable to common shareholders$112 $61 $153 $122 
Basic net income per share$0.51 $0.27 $0.70 $0.55 
Diluted net income per share$0.51 $0.27 $0.69 $0.55 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In millions)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net income$113 $61 $152 $122 
Other comprehensive income, before tax:
Foreign currency translation adjustments(29)1 (73)46 
Unrealized gain (loss) on derivatives 1  (1)
Unrealized gain on pension and other benefit plan obligations1 1 2 1 
Other comprehensive (loss) income, before tax(28)3 (71)46 
Income tax provision related to items of other comprehensive income1  2  
Other comprehensive (loss) income, net of tax(29)3 (73)46 
Comprehensive income84 64 79 168 
Less: Comprehensive income (loss) attributable to noncontrolling interests1  (1)(1)
Comprehensive income attributable to common shareholders$83 $64 $80 $169 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except per share data)
June 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$840 $700 
Restricted cash3 3 
Accounts and notes receivable, net1,268 1,260 
Inventories745 741 
Prepaid expenses and other current assets158 117 
Total current assets3,014 2,821 
Property, plant and equipment, net1,158 1,204 
Goodwill1,549 1,591 
Identifiable intangibles, net1,061 1,130 
Other assets524 526 
Total assets$7,306 $7,272 
Liabilities, Shareholders’ Equity
Current liabilities:
Accounts payable$715 $725 
Current portion of borrowings20 26 
Other accrued liabilities600 677 
Total current liabilities1,335 1,428 
Long-term borrowings3,588 3,478 
Accrued pensions236 252 
Deferred income taxes152 162 
Other liabilities177 179 
Total liabilities5,488 5,499 
Commitments and contingent liabilities (Note 5)
Shareholders’ equity:
Common shares, $1.00 par, 1,000.0 shares authorized, 254.3 and 253.7 shares issued at June 30, 2024 and December 31, 2023, respectively
254 254 
Capital in excess of par1,584 1,568 
Retained earnings1,439 1,286 
Treasury shares, at cost, 35.0 and 33.6 shares at June 30, 2024 and December 31, 2023, respectively
(987)(937)
Accumulated other comprehensive loss(517)(444)
Total Axalta shareholders’ equity1,773 1,727 
Noncontrolling interests45 46 
Total shareholders’ equity1,818 1,773 
Total liabilities and shareholders’ equity$7,306 $7,272 


The accompanying notes are an integral part of these condensed consolidated financial statements.

5

AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
(In millions)
Common Stock
Number of SharesPar/Stated ValueCapital In Excess Of ParRetained EarningsTreasury Shares, at costAccumulated Other Comprehensive LossNon controlling InterestsTotal
Balance at December 31, 2023220.1 $254 $1,568 $1,286 $(937)$(444)$46 $1,773 
Comprehensive income:
Net income— — — 41 — — (2)39 
Long-term employee benefit plans, net of tax of $0 million
— — — — — 1 — 1 
Foreign currency translation, net of tax of $1 million
— — — — — (45)— (45)
Total comprehensive income (loss)— — — 41 — (44)(2)(5)
Recognition of stock-based compensation— — 6 — — — — 6 
Shares issued under compensation plans0.5 — 1 — — — — 1 
Balance at March 31, 2024220.6 $254 $1,575 $1,327 $(937)$(488)$44 $1,775 
Comprehensive income:
Net income— — — 112 — — 1 113 
Long-term employee benefit plans, net of tax of $0 million
— — — — — 1 — 1 
Foreign currency translation, net of tax of $1 million
— — — — — (30)— (30)
Total comprehensive income (loss)— — — 112 — (29)1 84 
Recognition of stock-based compensation— — 8 — — — 8 
Shares issued under compensation plans0.1 — 1 — — — — 1 
Common stock purchases(1.4)— — — (50)— — (50)
Balance at June 30, 2024219.3 $254 $1,584 $1,439 $(987)$(517)$45 $1,818 

Common Stock
Number of SharesPar/Stated ValueCapital In Excess Of ParRetained EarningsTreasury Shares, at costAccumulated Other Comprehensive LossNon controlling InterestsTotal
Balance at December 31, 2022220.6 $252 $1,537 $1,019 $(887)$(467)$46 $1,500 
Comprehensive income:
Net income— — — 61 — — — 61 
Net realized and unrealized loss on derivatives, net of tax of $0 million
— — — — — (2)— (2)
Foreign currency translation, net of tax of $0 million
— — — — — 46 (1)45 
Total comprehensive income— — — 61 — 44 (1)104 
Recognition of stock-based compensation— — 6 — — — — 6 
Shares issued under compensation plans0.9 1 4 — — — — 5 
Balance at March 31, 2023221.5 $253 $1,547 $1,080 $(887)$(423)$45 $1,615 
Comprehensive income:
Net income— — — 61 — — — 61 
Net realized and unrealized gain on derivatives, net of tax of $1 million
— — — — —  —  
Long-term employee benefit plans, net of tax of $0 million
— — — — — 1 — 1 
Foreign currency translation, net of tax benefit of $0 million
— — — — — 2 — 2 
Total comprehensive income— — — 61 — 3  64 
Recognition of stock-based compensation— — 8 — — — — 8 
Shares issued under compensation plans0.2  2 — — — — 2 
Balance at June 30, 2023221.7 $253 $1,557 $1,141 $(887)$(420)$45 $1,689 

The accompanying notes are an integral part of these condensed consolidated financial statements.


6

AXALTA COATING SYSTEMS LTD.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
Six Months Ended
June 30,
20242023
Operating activities:
Net income$152 $122 
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization136 136 
Amortization of deferred financing costs and original issue discount4 4 
Debt extinguishment and refinancing-related costs3 3 
Deferred income taxes8 1 
Realized and unrealized foreign exchange losses, net12 19 
Stock-based compensation14 14 
Impairment charges 15 
Interest income on swaps designated as net investment hedges(7)(6)
Other non-cash, net5  
Changes in operating assets and liabilities:
Trade accounts and notes receivable(35)(194)
Inventories(22)70 
Prepaid expenses and other assets(91)(52)
Accounts payable7 (12)
Other accrued liabilities(62)(40)
Other liabilities24 (1)
Cash provided by operating activities148 79 
Investing activities:
Purchase of property, plant and equipment(45)(74)
Interest proceeds on swaps designated as net investment hedges7 6 
Settlement proceeds on swaps designated as net investment hedges 29 
Other investing activities, net2 2 
Cash used for investing activities(36)(37)
Financing activities:
Proceeds from short-term borrowings 9 
Proceeds from long-term borrowings292  
Payments on short-term borrowings(5)(26)
Payments on long-term borrowings(188)(157)
Financing-related costs(4)(6)
Purchases of common stock (50) 
Net cash flows associated with stock-based awards2 9 
Deferred acquisition-related consideration (8)
Other financing activities, net1  
Cash provided by (used for) financing activities48 (179)
Increase (decrease) in cash160 (137)
Effect of exchange rate changes on cash(20)2 
Cash at beginning of period703 655 
Cash at end of period$843 $520 
Cash at end of period reconciliation:
Cash and cash equivalents$840 $518 
Restricted cash3 2 
Cash at end of period$843 $520 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Index

8

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(1)    BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 and shareholders' equity of Axalta Coating Systems Ltd., a Bermuda exempted company limited by shares, and its consolidated subsidiaries ("Axalta," the "Company," "we," "our" and "us") at June 30, 2024, the results of operations, comprehensive income and changes in shareholders' equity for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months then ended. All intercompany balances and transactions have been eliminated.
These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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 ("GAAP").
The interim unaudited condensed consolidated financial statements include the accounts of Axalta and its subsidiaries, and entities in which a controlling interest is maintained. Certain of our entities are accounted for on a one-month lag basis, the effect of which is not material.
In the current year, we changed the presentation in our condensed consolidated financial statements to whole millions from our historical presentation of tenths of millions and, as a result, any necessary rounding adjustments have been made to prior year disclosed amounts.
The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year ended December 31, 2024 or any future period(s).
Summary of Significant Accounting Policies Updates
Recently Adopted Accounting Guidance
In January 2023, we adopted Accounting Standards Update ("ASU") 2022-04, Liabilities – Supplier Finance Programs, which codifies disclosure requirements for supplier financing programs. This ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. Upon adoption of this ASU, we incorporated the required disclosures in Note 14. In addition to the disclosures included in Note 14, ASU 2022-04 requires a rollforward of activity for each supplier financing program beginning with annual reporting for the year ended December 31, 2024, at which time we will incorporate the required rollforward disclosure.
Accounting Guidance and Disclosure Rules Issued But Not Yet Adopted
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280), to expand the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-07 on our financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid disclosures. The new standard is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-09 on our financial statements.
In March 2024, the Securities and Exchange Commission ("SEC") adopted final rules under SEC Release No. 34-99678 and No. 33-11275 (the "Final Rules"), The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require registrants to provide certain climate-related information in their registration statements and annual reports. The Final Rules require, among other things, disclosures in the notes to the audited financial statements relating to the effects of severe weather events and other natural conditions, subject to certain thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates in certain circumstances. The financial statement disclosure requirements of the Final Rules are effective for fiscal years beginning in 2025. In April 2024, the SEC stayed the effectiveness of the Final Rules. We are currently evaluating the impact of the Final Rules.
(2)    REVENUE
Consideration for products in which control has transferred to our customers that is conditional on something other than the passage of time is recorded as a contract asset within prepaid expenses and other current assets on the condensed consolidated balance sheets. The contract asset balances at June 30, 2024 and December 31, 2023 were $37 million and $39 million, respectively.

9

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
We provide certain customers with incremental up-front consideration, subject to clawback provisions, including Business Incentive Plan assets ("BIPs"), which is capitalized as a component of other assets and amortized over the estimated life of the contractual arrangement as a reduction of net sales. We do not receive a distinct service or good in return for these BIPs, but rather receive volume commitments and/or sole supplier status from our customers over the life of the contractual arrangements, which approximates a five-year weighted average useful life. Substantially all of the termination clauses in these contractual arrangements include standard clawback provisions that are designed to enable us to collect monetary damages in the event of a customer's failure to meet its commitments under the relevant contract. BIPs are assessed for recoverability annually or more frequently when certain circumstances arise. At June 30, 2024 and December 31, 2023, the total carrying value of BIPs were $170 million and $149 million, respectively, and are presented within other assets in the condensed consolidated balance sheets. For the three and six months ended June 30, 2024 and 2023, $14 million, $28 million, $15 million and $31 million, respectively, was amortized and reflected as reductions of net sales in the condensed consolidated statements of operations.
See Note 17 for disaggregated net sales by end-market.
(3)    GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
Goodwill
The following table shows changes in the carrying amount of goodwill from December 31, 2023 to June 30, 2024 by reportable segment:
Performance
Coatings
Mobility
Coatings
Total
Balance at December 31, 2023$1,513 $78 $1,591 
Foreign currency translation(40)(2)(42)
Balance at June 30, 2024$1,473 $76 $1,549 
Identifiable Intangible Assets
The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
June 30, 2024Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology$161 $(94)$67 11.2
Trademarks—indefinite-lived256 — 256 Indefinite
Trademarks—definite-lived139 (64)75 14.5
Customer relationships1,169 (506)663 19.0
Total$1,725 $(664)$1,061 
December 31, 2023Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology$162 $(88)$74 11.2
Trademarks—indefinite-lived264 — 264 Indefinite
Trademarks—definite-lived142 (60)82 14.5
Customer relationships1,194 (484)710 19.0
Total$1,762 $(632)$1,130 

10

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2024 and each of the succeeding five years is:
Remainder of 2024$44 
202587 
202687 
202786 
202872 
202967 
(4)    RESTRUCTURING
During February 2024, we announced a global transformation initiative intended to simplify the Company’s organizational structure and enable us to be more proactive, responsive, and agile and to better serve our customers and to lower our cost base and improve financial performance and cash flow generation (the "2024 Transformation Initiative"). The 2024 Transformation Initiative actions, certain of which are subject to the satisfaction of local law requirements in various jurisdictions, commenced in the first quarter of 2024 and we expect them to be completed by 2026. The 2024 Transformation Initiative is expected to result in a net reduction to our workforce of approximately 600 employees globally and total pre-tax charges of $75-110 million in the aggregate, of which $65-90 million represents severance and other exit-related costs and $10-20 million represents non-cash accelerated depreciation charges. Future cash expenditures related to the 2024 Transformation Initiative are expected to be approximately $95-135 million, inclusive of $30-45 million for capital expenditures to, among other things, shift manufacturing capacity or capabilities. The 2024 Transformation Initiative resulted in pre-tax charges of $55 million for the six months ended June 30, 2024, which primarily relates to employee severance and other exit costs associated with a net reduction to our workforce globally.
In accordance with the applicable guidance for Accounting Standards Codification ("ASC") 712, Nonretirement Postemployment Benefits, we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated.
During the three and six months ended June 30, 2024 and 2023, we incurred costs of $0 million, $55 million, $2 million and $3 million, respectively, for termination benefits, net of changes in estimates. The majority of our termination benefits are recorded within other operating charges in the condensed consolidated statements of operations. The remaining payments associated with these actions are expected to be substantially completed within 24 months.
The following table summarizes the activity related to the termination benefit reserves and expenses from December 31, 2023 to June 30, 2024:
2024 Activity
Balance at December 31, 2023$16 
Expenses, net of changes to estimates55 
Payments made(17)
Foreign currency translation(1)
Balance at June 30, 2024$53 
(5)    COMMITMENTS AND CONTINGENCIES
Guarantees
We guarantee certain of our customers’ obligations to third parties, whereby any default by our customers on their obligations could force us to make payments to the applicable creditors ("Customer Obligation Guarantees"). At June 30, 2024 and December 31, 2023, we had outstanding Customer Obligation Guarantees of $21 million and $10 million, respectively, excluding certain outstanding Customer Obligation Guarantees secured by letters of credit under the Revolving Credit Facility discussed further in Note 15. Excluding Customer Obligation Guarantees secured by letters of credit under the Revolving Credit Facility, substantially all of our Customer Obligation Guarantees do not have specified expiration dates. We monitor the Customer Obligation Guarantees to evaluate whether we have a liability at the balance sheet date. We did not have any liabilities related to our outstanding Customer Obligation Guarantees recorded at either June 30, 2024 or December 31, 2023.

11

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Operational Matter
In January 2021, we became aware of an operational matter affecting certain North America Mobility Coatings customer manufacturing sites. The matter involves the use and application of certain of our products in combination with and incorporated within third-party products. The matter occurred over a discrete period during the fourth quarter of 2020. We concluded that losses from this matter were probable and that a majority of losses would be covered under our insurance policies, subject to deductible and policy limits as defined in our policies.
During each of the three and six months ended June 30, 2024 and 2023, expenses recorded relating to the operational matter were immaterial. At June 30, 2024 and December 31, 2023, we had $30 million and $36 million, respectively, recorded for estimated insurance receivables within accounts and notes receivable, net in the condensed consolidated balance sheets. Liabilities of $29 million and $31 million are recorded as other accrued liabilities in the condensed consolidated balance sheets at June 30, 2024 and December 31, 2023, respectively. The recorded probable losses remain an estimate, and actual costs arising from this matter could be materially lower or higher depending on the actual costs incurred to repair the impacted products as well as the availability of additional insurance coverage.
Other
We are subject to various pending lawsuits, legal proceedings and other claims in the ordinary course of business, including civil, regulatory and environmental matters. These matters may involve third-party indemnification obligations and/or insurance covering all or part of any potential damage incurred by us. All of these matters are subject to many uncertainties and, accordingly, we cannot determine the ultimate outcome of the proceedings and other claims at this time. The potential effects, if any, on our condensed consolidated financial statements will be recorded in the period in which these matters are probable and estimable. Except as set forth in the "Operational Matter" section above, we believe that any sum we may be required to pay in connection with proceedings or claims in excess of the amounts recorded would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.
We are involved in environmental remediation and ongoing compliance activities at several sites. The timing and duration of remediation and ongoing compliance activities are determined on a site by site basis depending on local regulations. The liabilities recorded represent our estimable future remediation costs and other anticipated environmental liabilities. We have not recorded liabilities at sites where a liability is probable but a range of loss is not reasonably estimable. We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.
(6)    LONG-TERM EMPLOYEE BENEFITS
Components of Net Periodic Benefit Cost
The following table sets forth the pre-tax components of net periodic benefit costs for our defined benefit plans for the three and six months ended June 30, 2024 and 2023:
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Components of net periodic benefit cost:
Net periodic benefit cost:
Service cost$3 $1 $4 $3 
Interest cost4 5 9 10 
Expected return on plan assets(3)(3)(6)(6)
Amortization of actuarial loss, net1  2  
Net periodic benefit cost$5 $3 $9 $7 
All non-service components of net periodic benefit cost are recorded in other (income) expense, net within the accompanying condensed consolidated statements of operations.

12

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(7)    STOCK-BASED COMPENSATION
During each of the three and six months ended June 30, 2024 and 2023, we recognized $8 million, $14 million, $8 million, and $14 million in stock-based compensation expense, which was allocated between cost of goods sold and selling, general and administrative expenses in the condensed consolidated statements of operations. We recognized tax benefits on stock-based compensation of $0 million, $1 million, $1 million and $2 million for the three and six months ended June 30, 2024 and 2023.
2024 Activity
A summary of stock option award activity as of and for the six months ended June 30, 2024 is presented below.
Stock OptionsAwards
(in millions)
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
 (in millions)
Weighted
Average
Remaining
Contractual
Life (years)
Outstanding at January 1, 20240.5 $28.33 
Exercised(0.2)$26.91 
Forfeited / Expired (1)
 $32.50 
Outstanding at June 30, 2024
0.3 $28.88 
Vested and expected to vest at June 30, 2024
0.3 $28.88 $2 3.02
Exercisable at June 30, 2024
0.3 $28.88 $2 3.02
(1)    Activity during the six months ended June 30, 2024 rounds to zero.
Cash received by the Company upon exercise of options for the six months ended June 30, 2024 was $4 million. No excess tax benefits or shortfall expenses were recorded related to these exercises.
At June 30, 2024, there was no unrecognized expense relating to unvested stock options.
Restricted Stock UnitsUnits
(in millions)
Weighted Average
Fair Value
Outstanding at January 1, 20241.3 $28.71 
Granted0.5 $32.50 
Vested(0.4)$29.06 
Forfeited(0.1)$29.80 
Outstanding at June 30, 20241.3 $30.10 
Tax benefits on the vesting of restricted stock units during the six months ended June 30, 2024 were immaterial.
At June 30, 2024, there was $20 million of unamortized expense relating to unvested restricted stock units that is expected to be amortized over a weighted average period of 1.5 years.
Performance Share UnitsUnits
(in millions)
Weighted Average
Fair Value
Outstanding at January 1, 20240.8 $33.20 
Granted0.3 $38.52 
Vested (1)
 $29.53 
Forfeited(0.2)$30.89 
Outstanding at June 30, 20240.9 $35.82 
(1)    Activity during the six months ended June 30, 2024 rounds to zero.
Our performance share units allow for participants to vest in zero to 200% of the targeted number of shares granted. At June 30, 2024, there was $22 million of unamortized expense relating to unvested performance share units that is expected to be amortized over a weighted average period of 2.1 years. The forfeitures include portions of performance share unit grants that were determined to not have vested during the period as a result of not meeting established financial performance thresholds.

13

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(8)    OTHER (INCOME) EXPENSE, NET
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Foreign exchange losses, net$3 $10 $8 $12 
Debt extinguishment and refinancing-related costs (1)
 1 3 3 
Other miscellaneous income, net (4)(2)(4)(5)
Total$(1)$9 $7 $10 
(1)    Debt extinguishment and refinancing-related costs include third-party fees incurred and the loss on extinguishment associated with the write-off of unamortized deferred financing costs and original issue discounts in conjunction with the restructuring and refinancing of our long-term borrowings, as discussed further in Note 15.
(9)    INCOME TAXES
Our effective income tax rates for the six months ended June 30, 2024 and 2023 are as follows:
Six Months Ended
June 30,
20242023
Effective Tax Rate29.1 %19.1 %
The higher effective tax rate for the six months ended June 30, 2024 was primarily due to the tax impacts of the 2024 Transformation Initiative pre-tax charges, as well as the 2023 favorable impact of changes in unrecognized tax benefits, which did not repeat in 2024.
The effective tax rate for the six months ended June 30, 2024 differs from the U.S. Federal statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded unfavorable impacts for changes in the valuation allowance and for increases in unrecognized tax benefits. These adjustments were primarily offset by the favorable adjustments for earnings in jurisdictions where the statutory rate is lower than the U.S. Federal statutory rate.
The Organization for Economic Cooperation and Development’s (“OECD”) Pillar Two framework that imposes, among other items, a minimum tax rate of 15% has been implemented by several jurisdictions in which we operate, with effect from January 1, 2024. The effect of enacted Pillar Two taxes did not have a significant impact on our condensed consolidated financial statements. We will continue to monitor the implementation of Pillar Two by additional jurisdictions and will evaluate the potential impact on our consolidated financial statements.
We anticipate that it is reasonably possible our unrecognized tax benefits will decrease by $46 million, exclusive of interest and penalties, within the next 12 months mainly due to the expiration of statutes of limitations in various countries and the expected final assessment from the 2010-2013 German income tax audit which concluded in 2021.

14

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(10)    NET INCOME PER COMMON SHARE
Basic net income 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 net income per common share includes the effect of potential dilution from the hypothetical exercise of outstanding stock options and vesting of restricted stock units and performance share units. A reconciliation of our basic and diluted net income per common share is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions, except per share data)2024202320242023
Net income to common shareholders$112 $61 $153 $122 
Basic weighted average shares outstanding219.9 221.6 220.2 221.4 
Diluted weighted average shares outstanding220.9 222.5 221.2 222.3 
Net income per common share (1):
Basic net income per share$0.51 $0.27 $0.70 $0.55 
Diluted net income per share$0.51 $0.27 $0.69 $0.55 
(1)    Basic earnings per share and diluted earnings per share are calculated based on full precision. Figures in the table may not recalculate due to rounding.
The number of anti-dilutive shares that have been excluded in the computation of diluted net income per share for the three and six months ended June 30, 2024 and 2023 were 0.2 million, 0.1 million, 0.1 million and 0.5 million, respectively.
(11)    ACCOUNTS AND NOTES RECEIVABLE, NET
Trade accounts receivable are stated at the amount we expect to collect. We maintain allowances for doubtful accounts for estimated losses by applying historical loss percentages, combined with reasonable and supportable forecasts of future losses, to respective aging categories. Management considers the following factors in developing its current estimate of expected credit losses: customer credit-worthiness; past transaction history with the customer; current economic industry trends; changes in market or regulatory matters; changes in geopolitical matters; and changes in customer payment terms, as well as other macroeconomic factors.
June 30, 2024December 31, 2023
Accounts receivable - trade, net (1)
$1,054 $1,043 
Notes receivable74 79 
Other (2)
140 138 
Total$1,268 $1,260 
(1)    Allowance for doubtful accounts was $24 million and $25 million at June 30, 2024 and December 31, 2023, respectively.
(2)    Includes $30 million and $36 million at June 30, 2024 and December 31, 2023, respectively, of insurance recoveries related to an operational matter discussed further in Note 5.
Bad debt expense of $4 million, $5 million, $1 million, and $5 million was included within selling, general and administrative expenses for the three and six months ended June 30, 2024 and 2023, respectively, and benefits of $1 million, $1 million, $0 million, and $1 million related to sanctions imposed on Russia in response to the conflict with Ukraine was included in other operating charges for the three and six months ended June 30, 2024 and 2023.
(12)    INVENTORIES
June 30, 2024December 31, 2023
Finished products$407 $405 
Semi-finished products127 126 
Raw materials182 182 
Stores and supplies29 28 
Total$745 $741 
Inventory reserves were $25 million and $27 million at June 30, 2024 and December 31, 2023, respectively.

15

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(13)    PROPERTY, PLANT AND EQUIPMENT, NET
June 30, 2024December 31, 2023
Property, plant and equipment$2,428 $2,454 
Accumulated depreciation(1,270)(1,250)
Property, plant and equipment, net$1,158 $1,204 
Depreciation expense amounted to $31 million, $62 million, $30 million and $59 million for the three and six months ended June 30, 2024 and 2023, respectively.
(14)    SUPPLIER FINANCE PROGRAMS
We have a supplier financing program in China that is utilized to finance the purchases of goods and services from our suppliers through local banking institutions. The payment terms under the program vary, but the program has a weighted average maturity date that is approximately 90 days from each respective financing inception. These financing arrangements are included in the current portion of borrowings within the condensed consolidated balance sheets and at the time of issuance each transaction is treated as a non-cash financing activity within the condensed consolidated statements of cash flows. Upon settlement of the financing, the cash outflow is classified as a financing activity within the condensed consolidated statements of cash flows. Amounts outstanding under this program were $10 million at June 30, 2023, including $3 million related to purchases of property, plant and equipment. There were no balances outstanding under this program at June 30, 2024. Cash outflows under this program were $4 million and $23 million for the six months ended June 30, 2024 and 2023, respectively.
We maintain a voluntary supply chain financing ("SCF") program with a global financial institution that allows a select group of suppliers to sell their receivables to the participating financial institution at the discretion of both parties on terms that are negotiated between the supplier and the financial institution. The supplier invoices that have been confirmed as valid under the program are paid by us to the financial institution according to the terms we have with the supplier. Amounts outstanding under the SCF program were $27 million and $28 million at June 30, 2024 and December 31, 2023.
We also participate in a virtual card program with a global financial institution, in which we pay supplier invoices on the due date using a Virtual Card Account ("VCA") and subsequently pay the balance in full 25 days after the billing statement date of the VCA. The program allows for suppliers to receive accelerated payments for a fee at each supplier's discretion. Fees paid by our suppliers are negotiated directly with the financial institution without our involvement. Amounts outstanding under the VCA program were $7 million and $8 million at June 30, 2024 and December 31, 2023, respectively.
The payment terms we have with our suppliers who participate in the SCF and VCA programs are consistent with the typical terms we have with our suppliers who do not participate. These financing arrangements are included in accounts payable within the condensed consolidated balance sheets and the associated payments are included in operating activities within the condensed consolidated statements of cash flows.

16

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(15)    BORROWINGS
Borrowings are summarized as follows:
June 30, 2024December 31, 2023
2029 Dollar Term Loans$1,707 $1,786 
Revolving Credit Facility185  
2027 Dollar Senior Notes500 500 
2029 Dollar Senior Notes700 700 
2031 Dollar Senior Notes500 500 
Short-term and other borrowings55 62 
Unamortized original issue discount(15)(17)
Unamortized deferred financing costs(24)(27)
Total borrowings, net3,608 3,504 
Less:
Short-term borrowings3 7 
Current portion of long-term borrowings17 19 
Long-term debt$3,588 $3,478 
Our senior secured credit facilities (the "Senior Secured Credit Facilities") consist of a term loan due 2029 (the "2029 Dollar Term Loans") and a revolving credit facility (the "Revolving Credit Facility") that is governed by a credit agreement (as amended, the "Credit Agreement").
Revolving Credit Facility
During June 2024, in connection with the acquisition discussed in Note 19, we borrowed $185 million against the Revolving Credit Facility, which bears interest at a rate based on the Secured Overnight Financing Rate ("SOFR") plus a margin of 1.50% and is due June 2029. At both June 30, 2024 and December 31, 2023, letters of credit issued under the Revolving Credit Facility totaled $22 million which reduced the availability under the Revolving Credit Facility as of such dates. Availability under the Revolving Credit Facility was $593 million and $528 million at June 30, 2024 and December 31, 2023, respectively. The letters of credit issued under the Revolving Credit Facility include $14 million that secures Customer Obligation Guarantees at both June 30, 2024 and December 31, 2023.
Significant Transactions
During the six months ended June 30, 2024, we prepaid $75 million of the outstanding principal amount of the 2029 Dollar Term Loans. As a result of these prepayments, we recorded a loss on extinguishment of debt of $1 million for the six months ended June 30, 2024, which comprised the proportionate write-off of unamortized deferred financing costs and original issue discounts.
During March 2024, we entered into the Fourteenth Amendment to the Credit Agreement to lower the interest rate spread applicable to the 2029 Dollar Term Loans, which continues to be based on SOFR from 2.50% to 2.00% and to make related changes to effect such repricing. The other material terms of the Credit Agreement, including the outstanding principal amount and maturity date of the 2029 Dollar Term Loans, remained unchanged. As a result of the repricing, we recorded a $2 million loss on financing-related costs during the six months ended June 30, 2024 related to the write-off of unamortized deferred financing costs and original issue discount and fees incurred to complete the repricing.
During June 2024, we entered into the Fifteenth Amendment to the Credit Agreement (the "Fifteenth Amendment"), to among other things, increase commitments available pursuant to the Revolving Credit Facility from $550 million to $800 million and extend the maturity of the Revolving Credit Facility from May 2026 to June 2029, provided that such date would be accelerated in certain circumstances as set forth in the Credit Agreement and the Fifteenth Amendment. As a result, we recorded $4 million of incremental deferred financing costs to other assets within the condensed consolidated balance sheets during the six months ended June 30, 2024.

17

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Future repayments
Below is a schedule of required future repayments of all borrowings outstanding at June 30, 2024.
Remainder of 2024$10 
202521 
202621 
2027521 
202822 
Thereafter3,052 
Total borrowings3,647 
Unamortized original issue discount(15)
Unamortized deferred financing costs(24)
Total borrowings, net$3,608 
(16)    FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS
Fair value of financial instruments
Equity securities with readily determinable fair values - Balances of equity securities are recorded within other assets, with any changes in fair value recorded within other (income) expense, net. The fair values of equity securities are based upon quoted market prices, which are considered Level 1 inputs.
Long-term borrowings - The estimated fair values of these borrowings are based on recent trades, as reported by a third-party pricing service. Due to the infrequency of trades, these inputs are considered to be Level 2 inputs.
Derivative instruments - The Company’s interest rate swaps, cross-currency swaps and foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are included in the Level 2 hierarchy.
Fair value of contingent consideration
Contingent consideration is valued using a probability-weighted expected payment method that considers the timing of expected future cash flows and the probability of whether key elements of the contingent event are completed. The fair value of contingent consideration is valued at each balance sheet date, until amounts become payable, with adjustments recorded within other (income) expense, net in the condensed consolidated statements of operations. Due to the significant unobservable inputs used in the valuations, these liabilities are categorized within Level 3 of the fair value hierarchy.

18

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at June 30, 2024 and December 31, 2023.
June 30, 2024December 31, 2023
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Prepaid expenses and other current assets:
Cross-currency swaps (1)
$ $12 $ $12 $ $8 $ $8 
Other assets:
Cross-currency swaps (1)
 2  2     
Investments in equity securities
1   1 1   1 
Liabilities:
Other accrued liabilities:
Cross-currency swaps (1)
     8  8 
Contingent consideration  10 10   8 8 
Other liabilities:
Cross-currency swaps (1)
 11  11  38  38 
Long-term borrowings:
2029 Dollar Term Loans 1,712  1,712  1,794  1,794 
2027 Dollar Senior Notes 486  486  487  487 
2029 Dollar Senior Notes 626  626  633  633 
2031 Dollar Senior Notes 519  519  527  527 
(1)    Net investment hedge

The table below presents a roll forward of activity for the Level 3 liabilities for the six months ended June 30, 2024.
Fair Value Using Significant Unobservable Inputs
(Level 3)
Beginning balance at December 31, 2023
$8 
Change in fair value3 
Foreign currency translation(1)
Ending balance at June 30, 2024
$10 
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.
Derivative Instruments Qualifying and Designated as Net Investment and Cash Flow Hedges
Cross-Currency Swaps Designated as Net Investment Hedges
One fixed-for-fixed cross-currency swap with a notional amount of $150 million, previously executed in 2023, was set to mature on March 31, 2024. We extended the maturity on this cross-currency swap to September 30, 2025 and reset the terms. Under the terms of this reset cross-currency swap agreement, we notionally exchanged $150 million at an interest rate of 6.692% for €142 million at an interest rate of 4.899%. The cross-currency swap is designated as a net investment hedge. This cross-currency swap is marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within accumulated other comprehensive loss ("AOCI").

19

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
Interest Rate Swaps Designated as Cash Flow Hedges
An interest rate swap with a notional amount of $150 million, which was previously executed in 2023 and set to expire on March 31, 2024, was terminated early on March 27, 2024. Concurrently, we entered into an interest rate swap with a notional amount of $150 million to hedge interest rate exposures associated with the 2029 Dollar Term Loans. Under the terms of the interest rate swap agreement, the Company is required to pay the counter-party a stream of fixed interest payments at a rate of 4.692% on $150 million of notional value, and in turn, receives variable interest payments based on 3-month SOFR from the counter-party subject to a floor of 0.5%. The interest rate swap is designated as a cash flow hedge and expires on September 30, 2025. This interest rate swap is marked to market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings.
Gains and losses for hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis.
The following table sets forth the locations and amounts recognized during the three and six months ended June 30, 2024 and 2023 for the Company's cash flow and net investment hedges.
Three Months Ended
June 30,
20242023
Derivatives in Cash Flow and Net Investment HedgesLocation of (Gain) Loss Recognized in Income on DerivativesNet Amount of Gain Recognized in OCI on DerivativesAmount of Gain Recognized in IncomeNet Amount of (Gain) Loss Recognized in OCI on DerivativesAmount of Gain Recognized in Income
Interest rate swapsInterest expense, net$(1)$ $(1)$(1)
Cross-currency swaps
Interest expense, net(15)(4)7 (2)
Six Months Ended
June 30,
20242023
Derivatives in Cash Flow and Net Investment HedgesLocation of (Gain) Loss Recognized in Income on DerivativesNet Amount of Gain Recognized in OCI on DerivativesAmount of Gain Recognized in IncomeNet Amount of (Gain) Loss Recognized in OCI on DerivativesAmount of Gain Recognized in Income
Interest rate swapsInterest expense, net$(1)$ $(2)$(3)
Cross-currency swaps
Interest expense, net(48)(8)14 (6)
Derivative Instruments Not Designated as Cash Flow Hedges
We periodically enter into foreign currency forward and option contracts to reduce market risk and hedge our balance sheet exposures and cash flows for subsidiaries with exposures denominated in currencies different from the functional currency of the relevant subsidiary. These contracts have not been designated as hedges and all gains and losses are marked to market through other (income) expense, net in the condensed consolidated statements of operations.
Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment under ASC 815, Derivatives and hedging, are recorded in earnings as follows:
Derivatives Not Designated as Hedging
Instruments under ASC 815
Location of Gain Recognized in Income on DerivativesThree Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Foreign currency forward contractsOther (income) expense, net$ $(4)$(4)$(7)
(17)    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.

20

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
We have two operating segments, which are also our reportable segments: Performance Coatings and Mobility 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 both large regional and global original equipment manufacturers ("OEMs") and to a fragmented and local customer base. These customers comprise independent or multi-shop operator body shops as well as a wide variety of industrial manufacturers. 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 Mobility Coatings segment, we provide coatings technologies for light vehicle and commercial vehicle OEMs. These global customers are faced with evolving megatrends in electrification, sustainability, personalization and autonomous driving that require a high level of technical expertise. The OEMs require efficient, 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.
Adjusted EBITDA is the primary measure used by our CODM to evaluate financial performance of the operating segments and allocate resources and is therefore our measure of segment profitability in accordance with GAAP under ASC 280, Segment Reporting. Asset information is not reviewed or included with our internal management reporting. Therefore, we have not disclosed asset information for each reportable segment. The following table presents relevant information of our reportable segments.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net sales (1):
Refinish$546 $520 $1,065 $1,018 
Industrial341 336 670 685 
Total Net sales Performance Coatings887 856 1,735 1,703 
Light Vehicle354 330 696 659 
Commercial Vehicle110 108 214 216 
Total Net sales Mobility Coatings464 438 910 875 
Total Net sales$1,351 $1,294 $2,645 $2,578 
(1)The Company has no intercompany sales between segments.

21

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
The following table reconciles our segment operating performance to income before income taxes for the periods presented:
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Segment Adjusted EBITDA (1):
Performance Coatings$223 $181 $419 $350 
Mobility Coatings68 46 131 90 
Total291 227 550 440 
Interest expense, net50 55 104 103 
Depreciation and amortization68 66 136 136 
Debt extinguishment and refinancing-related costs (a)
 1 3 3 
Termination benefits and other employee-related costs (b)
1 2 56 2 
Acquisition and divestiture-related costs (c)
2 (1)4  
Site closure costs (d)
 1 1 2 
Impairment charges (e)
 8  15 
Foreign exchange remeasurement losses (f)
3 10 8 12 
Long-term employee benefit plan adjustments (g)
2 2 5 4 
Stock-based compensation (h)
8 8 14 14 
Environmental charge (i)
  4  
Other adjustments (j)
1 1  (1)
Income before income taxes$156 $74 $215 $150 
(1)The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation, amortization and select other items impacting operating results. These other items impacting operating results are items that management has concluded are (1) non-cash items included within net income, (2) items the Company does not believe are indicative of ongoing operating performance or (3) non-recurring, unusual or infrequent items that have not occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Adjusted 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, which represents Adjusted EBITDA adjusted for the select items referred to above.
(a)Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance.
(b)Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance.
(c)Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance.
(d)Represents costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance.
(e)Represents impairment charges, which are not considered indicative of our ongoing operating performance. The losses recorded during the three and six months ended June 30, 2023 were due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023.
(f)Represents foreign exchange losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of the impacts of our foreign currency instruments used to hedge our balance sheet exposures.
(g)Represents the non-cash, non-service cost components of long-term employee benefit costs.
(h)Represents non-cash impacts associated with stock-based compensation.
(i)Represents costs related to certain environmental remediation activities, which are not considered indicative of our ongoing operating performance.
(j)Represents costs for certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance.


22

Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions, unless otherwise noted)
(18)    ACCUMULATED OTHER COMPREHENSIVE LOSS
Unrealized
Currency
Translation
Adjustments
Pension
Adjustments
Unrealized
Gain (Loss) on
Derivatives
Accumulated
Other
Comprehensive
 (Loss) Income
Balance, December 31, 2023
$(374)$(70)$ $(444)
Current year deferrals to AOCI(41)  (41)
Reclassifications from AOCI to Net income(4)1  (3)
Net Change(45)1  (44)
Balance, March 31, 2024
(419)(69) (488)
Current year deferrals to AOCI(26)  (26)
Reclassifications from AOCI to Net income(4)1  (3)
Net Change(30)1  (29)
Balance, June 30, 2024
$(449)$(68)$ $(517)
The cumulative income tax expense related to the adjustments for foreign exchange at June 30, 2024 was $1 million. The cumulative income tax benefit related to the adjustments for pension benefits at June 30, 2024 was $29 million. The cumulative income tax expense related to the adjustments for the unrealized gain on derivatives at June 30, 2024 was immaterial. See Note 16 for classification within the condensed consolidated statements of operations of the gains and losses on derivatives reclassified from AOCI.
Unrealized
Currency
Translation
Adjustments
Pension
Adjustments
Unrealized
(Loss) Gain on
Derivatives
Accumulated
Other
Comprehensive
(Loss) Income
Balance, December 31, 2022
$(434)$(36)$3 $(467)
Current year deferrals to AOCI50  1 51 
Reclassifications from AOCI to Net income(4) (3)(7)
Net Change46  (2)44 
Balance, March 31, 2023
(388)(36)1 (423)
Current year deferrals to AOCI4 1 1 6 
Reclassifications from AOCI to Net income(2) (1)(3)
Net Change2 1  3 
Balance, June 30, 2023
$(386)$(35)$1 $(420)
The cumulative income tax benefit related to the adjustments for foreign exchange at June 30, 2023 was $1 million. The cumulative income tax benefit related to the adjustments for pension benefits at June 30, 2023 was $14 million. The cumulative income tax expense related to the adjustments for the unrealized gain on derivatives at June 30, 2023 was immaterial. See Note 16 for classification within the condensed consolidated statements of operations of the gains and losses on derivatives reclassified from AOCI.
(19)    SUBSEQUENT EVENTS
Acquisition of The CoverFlexx Group
As disclosed in our Current Report on Form 8-K furnished on May 13, 2024, we entered into a definitive agreement to acquire The CoverFlexx Group ("CoverFlexx") from Transtar Holding Company for an initial cash consideration of $285 million, plus an additional $10 million earnout contingent on CoverFlexx's 2024 performance. As disclosed in our Current Report on Form 8-K furnished on July 2, 2024, we completed the acquisition in July 2024.

23

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the interim unaudited condensed consolidated financial statements and the condensed notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
FORWARD-LOOKING STATEMENTS
Many statements made in the following discussion and analysis of our financial condition and results of operations and elsewhere in this Quarterly Report on Form 10-Q that are not statements of historical fact, including statements about our beliefs and expectations, are "forward-looking statements" within the meaning of federal securities laws and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan, strategies and capital structure. These statements often include words such as "anticipated," "expect," "believe," "intended," "estimated," "projections," "could," "would," "may," "will," "future," "can," "assumptions," "potential," "possible," and "forecasts" and the negative of these words or other comparable or similar terminology. We base these forward-looking statements or projections on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks and uncertainties, including, but not limited to, economic, competitive, governmental, geopolitical and technological factors outside of our control, as well as risks related to the execution of the 2024 Transformation Initiative, our acquisition of The CoverFlexx Group, and our previously-announced three-year 2024-2026 strategy, that may cause our business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect our financial results is available in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 as well as "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and in other documents that we have filed with, or furnished to, the SEC, and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors, including, but not limited to, those described in "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections.
These forward-looking statements should not be construed by you to be exhaustive and are made only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise.
We intend to use our investor relations page at ir.axalta.com as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (or Reg. FD). Investors should routinely monitor that site, in addition to our press releases, SEC filings and public conference calls and webcasts, as information posted on that page could be deemed to be material information.
OVERVIEW
We are a leading global manufacturer, marketer and distributor of high-performance coatings systems and products. We have over a 150-year heritage in the coatings industry and are known for manufacturing high-quality products with well-recognized brands supported by market-leading technology and customer service. Our diverse global footprint of 43 manufacturing facilities, four technology centers, 49 customer training centers and approximately 12,000 team members allows us to meet the needs of customers in over 140 countries. We serve our customer base through an extensive sales force and technical support organization, as well as through approximately 4,000 independent, locally based distributors.
We operate our business in two operating segments, Performance Coatings and Mobility Coatings. 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 sustainable liquid and powder coating solutions to both large regional and global customers and to a fragmented and local customer base. These customers comprise, among others, independent or multi-shop operator body shops as well as a wide variety of industrial manufacturers. 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 Mobility Coatings segment, we provide coatings technologies for light vehicle and commercial vehicle OEMs. These global customers are faced with evolving megatrends in electrification, sustainability, personalization and autonomous driving that require a high level of technical expertise. The OEMs require efficient, 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.

24

BUSINESS HIGHLIGHTS
General Business Highlights
Our net sales increased 2.6% for the six months ended June 30, 2024 compared with the six months ended June 30, 2023. The increased net sales were driven by higher volumes of 2.4%, including the contribution from the André Koch acquisition completed in October 2023, and higher average selling price and product mix of 0.2%. There was an immaterial impact from foreign currency translation as favorable fluctuations from currencies such as the Mexican Peso offset unfavorable fluctuations from currencies such as the Chinese Yuan compared to the U.S. Dollar. The following trends impacted our segment net sales performance for the six months ended June 30, 2024:
Performance Coatings: Net sales increased 1.9% for the six months ended June 30, 2024 compared with the six months ended June 30, 2023. The increased net sales were driven by higher sales volumes of 1.2% including the contribution from the André Koch acquisition and higher average selling price and product mix of 0.7%. There was an immaterial impact from foreign currency translation as favorable fluctuations from currencies such as the Mexican Peso offset unfavorable fluctuations from currencies such as the Chinese Yuan compared to the U.S. Dollar.
Mobility Coatings: Net sales increased 4.0% for the six months ended June 30, 2024 compared with the six months ended June 30, 2023. The increased net sales were driven by higher sales volumes of 4.7%. This gain was partially offset by lower average selling price and product mix of 0.6% and a headwind from unfavorable foreign currency translation of 0.1% driven by fluctuations from currencies such as the Chinese Yuan largely offset by favorable fluctuations from currencies such as the Mexican Peso compared to the U.S. Dollar.
Our business serves four end-markets globally with net sales for the three and six months ended June 30, 2024 and 2023, as follows:
(In millions)Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023% change20242023% change
Performance Coatings
Refinish$546 $520 4.7 %$1,065 $1,018 4.6 %
Industrial341 336 1.8 %670 685 (2.1)%
Total Net sales Performance Coatings887 856 3.6 %1,735 1,703 1.9 %
Mobility Coatings
Light Vehicle354 330 7.1 %696 659 5.6 %
Commercial Vehicle110 108 3.0 %214 216 (0.7)%
Total Net sales Mobility Coatings464 438 6.1 %910 875 4.0 %
Total Net sales$1,351 $1,294 4.4 %$2,645 $2,578 2.6 %
2024 Transformation Initiative
During February 2024, we announced the 2024 Transformation Initiative intended to simplify the Company’s organizational structure and enable us to be more proactive, responsive, and agile and to better serve our customers and to lower our cost base, improve financial performance and cash flow generation. See Liquidity and Capital Resources included elsewhere in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 4 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
CoverFlexx Acquisition
During July 2024, we completed the acquisition of CoverFlexx. See Note 19 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
Capital and Liquidity Highlights
During the six months ended June 30, 2024, we prepaid $75 million of the outstanding principal amount of the 2029 Dollar Term Loans. See Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
During the three months ended June 30, 2024, we repurchased 1.4 million shares of our common stock for total consideration of $50 million as we executed against the share repurchase program approved by the Board of Directors in April 2024. See Part II, Item 2 of this Quarterly report on Form 10-Q for additional information.

25

During March 2024, we entered into the Fourteenth Amendment to the Credit Agreement to lower the interest rate spread applicable to the 2029 Dollar Term Loans, which continues to be based on SOFR, from 2.50% to 2.00% and to make related changes to effect such repricing. The other material terms of the Credit Agreement, including the outstanding principal amount and maturity date of the 2029 Dollar Term Loans, remained unchanged. See Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
During June 2024, we entered into the Fifteenth Amendment to the Credit Agreement, to among other things, increase commitments available pursuant to the Revolving Credit Facility from $550 million to $800 million and extend the maturity of the Revolving Credit Facility from May 2026 to June 2029, provided that such date would be accelerated in certain circumstances as set forth in the Credit Agreement and the Fifteenth Amendment. See Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
During June 2024, in connection with the acquisition discussed in Note 19 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we borrowed $185 million against the Revolving Credit Facility.
FACTORS AFFECTING OUR OPERATING RESULTS
There have been no changes in the factors affecting our operating results previously disclosed under such heading in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the information contained in the accompanying unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Our historical results of operations summarized and analyzed below may not necessarily reflect what will occur in the future.
Net sales
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Net sales
$1,351 $1,294 $57 4.4 %$2,645 $2,578 $67 2.6 %
Volume effect5.1 %2.4 %
Price/Mix effect0.1 %0.2 %
Exchange rate effect(0.8)%— %
Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Net sales primarily increased due to the following:
n Higher sales volumes including the contribution from the André Koch acquisition and partially driven by lower volumes in the prior year period in connection with production constraints associated with our multi-year enterprise resource planning ("ERP") system implementation in North America
n Higher average selling prices and product mix driven by Performance Coatings
Partially offset by:
n Unfavorable impacts of currency translation due primarily to the fluctuations of the Euro, Chinese Yuan and Brazilian Real, partially offset by the Mexican Peso, compared to the U.S. Dollar
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Net sales increased primarily due to the following:
n Higher sales volumes including the contribution from the André Koch acquisition and partially driven by lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Higher average selling prices and product mix driven by Performance Coatings, partially offset by Mobility Coatings
n Impacts of currency translation were immaterial when compared to the prior year period as favorable fluctuations from currencies such as the Mexican Peso, offset unfavorable fluctuations from currencies such as the Chinese Yuan compared to the U.S. Dollar

26

Cost of sales
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Cost of sales$891 $904 $(13)(1.4)%$1,756 $1,806 $(50)(2.8)%
% of net sales66.0 %69.9 %66.4 %70.1 %

Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Cost of sales decreased primarily due to the following:
n Lower variable input costs as a result of deflationary benefits
n Decreased costs of $11 million related to our multi-year ERP system implementation and productivity programs
n Favorable impacts of currency translation of 0.7% due primarily to the fluctuations of the Chinese Yuan, Euro and Brazilian Real, partially offset by the Mexican Peso, compared to the U.S. Dollar
n $8 million impairment charge in the prior year due to the decision to demolish assets at a previously closed manufacturing site
n Decreased expense of $2 million associated with utilization at certain manufacturing sites
Partially offset by:
n Higher sales volumes including the contribution from the André Koch acquisition
n Higher operating expenses due primarily to increased labor costs
n Increase of $3 million in inventory charges related to obsolescence, quality and yield loss in manufacturing
Cost of sales as a percentage of net sales decreased primarily due to the following:
n Lower variable input costs as a result of deflationary benefits
n Decreased costs of $11 million related to our multi-year ERP system implementation and productivity programs
n $8 million impairment charge in the prior year due to the decision to demolish assets at a previously closed manufacturing site
n Decreased expense of $2 million associated with utilization at certain manufacturing sites
Partially offset by:
n Higher operating expenses due primarily to increased labor costs
n Increase of $3 million in inventory charges related to obsolescence, quality and yield loss in manufacturing
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Cost of sales decreased primarily due to the following:
n Lower variable input costs as a result of deflationary benefits
n Decreased costs of $10 million related to our multi-year ERP system implementation and productivity programs
n $8 million impairment charge in the prior year due to the decision to demolish assets at a previously closed manufacturing site
n Decreased expense of $3 million associated with utilization at certain manufacturing sites
Partially offset by:
n Higher sales volumes including the contribution from the André Koch acquisition
n Higher operating expenses due primarily to increased labor costs
n Increase of $4 million in inventory charges related to obsolescence, quality and yield loss in manufacturing
n Impacts of currency translation were immaterial when compared to the prior year period
Cost of sales as a percentage of net sales decreased primarily due to the following:
n Lower variable input costs as a result of deflationary benefits
n Decreased costs of $10 million related to our multi-year ERP system implementation and productivity programs
n $8 million impairment charge in the prior year due to the decision to demolish assets at a previously closed manufacturing site
n Decreased expense of $3 million associated with utilization at certain manufacturing sites
Partially offset by:
n Higher operating expenses due primarily to increased labor costs
n Increase of $4 million in inventory charges related to obsolescence, quality and yield loss in manufacturing

27

Selling, general and administrative expenses
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Selling, general and administrative expenses$213 $210 $1.4 %$420 $416 $1.0 %

Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Selling, general and administrative expenses increased primarily due to the following:
n Higher operating expenses due primarily to increased labor costs
n Increase of $3 million in bad debt expense
Partially offset by:
n Decrease of $6 million in commissions resulting from changes to contractual arrangements
n Favorable impacts of currency translation of 0.9% due primarily to the weakening of the Euro and Chinese Yuan compared to the U.S. Dollar
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Selling, general and administrative expenses increased primarily due to the following:
n Higher operating expenses due primarily to increased labor costs
Partially offset by:
n Decrease of $11 million in commissions resulting from changes to contractual arrangements
n Favorable impacts of currency translation of 0.2% due primarily to fluctuations of the Chinese Yuan, partially offset by the Mexican Peso, compared to the U.S. Dollar
Other operating charges
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Other operating charges$$$— — %$63 $$54 600.0 %

Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Other operating charges remained consistent primarily due to the following:
n Increase of $3 million in acquisition-related costs
Offset by:
n Decrease of $1 million in termination benefits and other employee-related costs
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Other operating charges increased primarily due to the following:
n Increase of $54 million in termination benefits and other employee-related costs associated with the 2024 Transformation Initiative
n $4 million in environmental remediation costs recognized in the current year period
n Increase of $4 million in acquisition-related costs
Partially offset by:
n $7 million impairment charge recognized in the prior year period related to the then anticipated exit of a non-core business category in the Mobility Coatings segment

28

Research and development expenses
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Research and development expenses$18 $19 $(1)(5.3)%$36 $38 $(2)(5.3)%
Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Research and development expenses remained generally consistent:
n Impacts of currency translation were immaterial when compared to the prior year period
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Research and development expenses remained generally consistent:
n Impacts of currency translation were immaterial when compared to the prior year period
Amortization of acquired intangibles
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Amortization of acquired intangibles$22 $21 $4.8 %$44 $46 $(2)(4.3)%
Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Amortization of acquired intangibles increased due to the following:
n Increased amortization of $2 million associated with assets acquired in the prior year
n Impacts of currency translation were immaterial when compared to the prior year period
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Amortization of acquired intangibles decreased primarily due to the following:
n Reduced amortization of $4 million from certain intangible assets reaching the end of their useful lives during February 2023, primarily relating to intangibles from the 2013 DuPont Performance Coatings acquisition
Partially offset by:
n Increased amortization of $3 million associated with assets acquired in the prior year
n Impacts of currency translation were immaterial when compared to the prior year period

29

Interest expense, net
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Interest expense, net$50 $55 $(5)(9.1)%$104 $103 $1.0 %
Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Interest expense, net decreased primarily due to the following:
n Favorable impact of $7 million attributable to lower principal on our 2029 Dollar Term Loans, primarily as a result of $125 million of prepayments during the twelve months ended June 30, 2024, partially offset by the increased variable interest rate
Favorable impact of $5 million attributable to the redemption in November 2023 of our Euro-denominated Senior Notes due in 2025
n Increased benefit of $3 million from derivative instruments used to hedge the variable interest rate exposure on certain debt arrangements
Partially offset by:
Unfavorable impact of $10 million attributable to our 2031 Dollar Senior Notes which were issued in November 2023
n Impacts of currency translation were immaterial when compared to the prior year period
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Interest expense, net nominally increased primarily due to the following:
Unfavorable impact of $19 million attributable to our 2031 Dollar Senior Notes which were issued in November 2023
Partially offset by:
Favorable impact of $10 million attributable to the redemption in November 2023 of our Euro-denominated Senior Notes due in 2025
n Favorable impact of $9 million attributable to lower principal on our 2029 Dollar Term Loans, primarily as a result of $125 million of prepayments during the twelve months ended June 30, 2024, partially offset by the increased variable interest rate
n Impacts of currency translation were immaterial when compared to the prior year period
Other (income) expense, net
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Other (income) expense, net$(1)$$(10)111.1 %$$10 $(3)30.0 %
Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Other (income) expense, net decreased due to the following:
n Favorable impact of foreign exchange gains and losses of $7 million when compared with the prior year period, primarily driven by expenses from the remeasurement of net monetary assets denominated in the Argentinian Peso due to a significant devaluation in the prior year period
n $1 million debt extinguishment and refinancing-related costs recognized in the prior year period as part of the write-offs related to $75 million of prepayments on our 2029 Dollar Term Loans
n Increased miscellaneous income, net of $2 million
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Other expense, net decreased due to the following:
n Favorable impact of foreign exchange gains and losses of $4 million when compared with the prior year period, primarily driven by expenses from the remeasurement of net monetary assets denominated in the Argentinian Peso due to a significant devaluation in the prior year period.

30

Provision for income taxes
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Income before income taxes$156 $74 $215 $150 
Provision for income taxes43 13 63 28 
Statutory U.S. Federal income tax rate
21.0 %21.0 %21.0 %21.0 %
Effective tax rate
27.3 %18.0 %29.1 %19.1 %
Effective tax rate vs. statutory U.S. Federal income tax rate 6.3 %(3.0)%8.1 %(1.9)%
(Favorable) Unfavorable Impact
Three Months Ended
June 30,
Six Months Ended
June 30,
Items impacting the effective tax rate vs. statutory U.S. federal income tax rate
2024202320242023
Earnings generated in jurisdictions where the statutory rate is different from the U.S. Federal rate (1)
$(9)$(8)$(15)$(15)
Changes in valuation allowance (2)
14 30 13 
Foreign exchange losses (gains), net(2)— (8)— 
Non-deductible expenses and interest
Changes in unrecognized tax benefits(3)(5)
(1) Primarily related to earnings in Bermuda, Germany, Luxembourg, and Switzerland.
(2) Changes in valuation allowance primarily relates to operations in Luxembourg, the Netherlands, and the United Kingdom, including tax impacts of foreign exchange losses.
SEGMENT RESULTS
The Company's products and operations are managed and reported in two operating segments: Performance Coatings and Mobility Coatings. See Note 17 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
Performance Coatings Segment
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Net sales
$887 $856 $31 3.6 %$1,735 $1,703 $32 1.9 %
Volume effect4.0 %1.2 %
Price/Mix effect0.3 %0.7 %
Exchange rate effect(0.7)%— %
Adjusted EBITDA$223 $181 $42 22.4 %$419 $350 $69 19.4 %
Adjusted EBITDA Margin25.0 %21.2 %24.1 %20.6 %

31

Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Net sales increased primarily due to the following:
n Higher sales volumes including the contribution from the André Koch acquisition, new body shop wins and lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Higher average selling prices and product mix driven by the refinish end-market
Partially offset by:
n Unfavorable impacts of currency translation due primarily to fluctuations of the Euro and Chinese Yuan compared to the U.S. Dollar
Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:
n Decreased variable input costs due to deflationary benefits
n Higher sales volumes including the contribution from the André Koch acquisition, new body shop wins and lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Decreased costs of $7 million related to our multi-year ERP system implementation and productivity programs
n Higher average selling prices and product mix driven by the refinish end-market
Partially offset by:
n Unfavorable impacts of currency translation due primarily to fluctuations of the Euro compared to the U.S. Dollar
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Net sales increased primarily due to the following:
n Higher sales volumes including the contribution from the André Koch acquisition, new body shop wins and lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Higher average selling prices and product mix driven by the refinish end-market
Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:
n Decreased variable input costs due to deflationary benefits
n Higher sales volumes including the contribution from the André Koch acquisition, new body shop wins and lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Higher average selling prices and product mix driven by the refinish end-market
n Decreased costs of $7 million related to our multi-year ERP system implementation and productivity programs
Partially offset by:
n Higher operating expenses due primarily to increased labor costs

32

Mobility Coatings Segment
Three Months Ended
June 30,
2024 vs 2023Six Months Ended
June 30,
2024 vs 2023
20242023$ Change% Change20242023$ Change% Change
Net sales$464 $438 $26 6.1 %$910 $875 $35 4.0 %
Volume effect7.2 %4.7 %
Exchange rate effect(1.0)%(0.1)%
Price/Mix effect(0.1)%(0.6)%
Adjusted EBITDA$68 $46 $22 50.4 %$131 $90 $41 46.8 %
Adjusted EBITDA Margin14.8 %10.4 %14.5 %10.3 %
Three months ended June 30, 2024 compared to the three months ended June 30, 2023
Net sales increased primarily due to the following:
n Higher sales volumes in both end-markets partially driven by lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
Partially offset by:
n Lower average selling prices and product mix driven by the commercial vehicle end-market
n Unfavorable impacts of currency translation due primarily to fluctuations of the Chinese Yuan, Brazilian Real and Euro compared to the U.S. Dollar
Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:
n Decreased variable input costs due to deflationary benefits
n Higher sales volumes in both end-markets partially driven by lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Decreased costs of $4 million related to our multi-year ERP system implementation and productivity programs
n Decreased expense of $1 million associated with utilization at certain manufacturing sites
Partially offset by:
n Higher operating expenses due primarily to increased labor costs
n Increase of $2 million in inventory charges related to obsolescence, quality and yield loss in manufacturing
n Lower average selling prices and product mix driven by the commercial vehicle end-market
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Net sales increased primarily due to the following:
n Higher sales volumes in both end-markets partially driven by lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
Partially offset by:
n Lower average selling prices and product mix driven by the commercial vehicle end-market
Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:
n Decreased variable input costs due to deflationary benefits
n Higher sales volumes in both end-markets partially driven by lower volumes in the prior year period in connection with production constraints associated with our multi-year ERP system implementation in North America
n Decreased costs of $3 million driven by our multi-year ERP system implementation and productivity programs
n Decreased expense of $2 million associated with utilization at certain manufacturing sites
Partially offset by:
n Higher operating expenses due primarily to increased labor costs
n Lower average selling prices and product mix driven by the commercial vehicle end-market
n Increase of $3 million in inventory charges related to obsolescence, quality and yield loss in manufacturing
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash on hand, net cash provided by operating activities and available borrowing capacity under our Senior Secured Credit Facilities.

33

At June 30, 2024, availability under the Revolving Credit Facility was $593 million, net of $22 million of letters of credit outstanding and $185 million of loans outstanding. All such availability may be utilized without violating any covenants under the Credit Agreement or the indentures governing our senior notes (the "Senior Notes"). At June 30, 2024, we had no outstanding borrowings under other lines of credit. Our remaining available borrowing capacity under other lines of credit in certain non-U.S. jurisdictions totaled $58 million.
We, or our affiliates, at any time and from time to time, may purchase shares of our common stock or the Senior Notes, and may prepay our 2029 Dollar Term Loans or other indebtedness. Any such purchases of our common stock or Senior Notes may be made through the open market or privately negotiated transactions with third parties or pursuant to one or more redemptions, tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we, or any of our affiliates, may determine.
We have various supplier finance programs in place around the world. We partner with large banking institutions and utilize these programs to enhance our liquidity profile. Depending on the program, the liabilities under the program are classified either as accounts payable or current portion of borrowings on our unaudited condensed consolidated balance sheets. Our supplier financing programs are more fully described in Note 14 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
During February 2024, we announced a global transformation initiative intended to simplify the Company’s organizational structure and enable us to be more proactive, responsive, and agile and to better serve our customers and to lower our cost base, improve financial performance and cash flow generation. Future cash expenditures related to the 2024 Transformation Initiative are expected to be approximately $95-135 million. We estimate that, once fully executed, the 2024 Transformation Initiative will yield net savings, inclusive of non-labor savings and costs for backfilling certain roles, of approximately $75 million on an annualized basis. We expect $10 million of the run-rate savings from the 2024 Transformation Initiative to be realized in 2024 with the full run-rate expected to be realized during 2026. See Note 4 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
Cash Flows
Six Months Ended
June 30,
(In millions)20242023
Net cash provided by (used for):
Operating activities:
Net income$152 $122 
Depreciation and amortization136 136 
Amortization of deferred financing costs and original issue discount
Debt extinguishment and refinancing-related costs
Deferred income taxes
Realized and unrealized foreign exchange losses, net12 19 
Stock-based compensation14 14 
Impairment charges— 15 
Interest income on swaps designated as net investment hedges(7)(6)
Other non-cash, net— 
Net income adjusted for non-cash items327 308 
Changes in operating assets and liabilities(179)(229)
Operating activities148 79 
Investing activities(36)(37)
Financing activities48 (179)
Effect of exchange rate changes on cash(20)
Net increase (decrease) in cash$140 $(135)

34

Six months ended June 30, 2024
Net Cash Provided by Operating Activities
Net cash provided by operating activities for the six months ended June 30, 2024 was $148 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $327 million. This was partially offset by net uses of working capital of $179 million, for which the most significant drivers were increases in prepaid expenses and other assets, accounts and notes receivable and inventories of $91 million, $35 million and $22 million, respectively, as well as decreases in other accrued liabilities of $62 million. These outflows were driven primarily by payments of BIPs, timing of collections from and payments to customers and vendors, increased production and seasonal cash payments for employee-related benefits. These outflows were partially offset by increases in other liabilities of $24 million largely driven by accruals related to the 2024 Transformation Initiative and timing of payments and accounts payable of $7 million.
Net Cash Used for Investing Activities
Net cash used for investing activities for the six months ended June 30, 2024 was $36 million. The primary use was for purchases of property, plant and equipment of $45 million, partially offset by proceeds of $7 million from interest proceeds from swaps designated as net investment hedges, which are discussed further in Note 16 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2024 was $48 million. The primary financing inflow was from borrowing $185 million against our Revolving Credit Facility in connection with the acquisition discussed in Note 19 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. The primary uses were prepayments of $75 million of the outstanding principal amount of the 2029 Dollar Term Loans, purchases of our common stock of $50 million, contractual debt repayments of $11 million and payments of $4 million for fees associated with repricing our 2029 Dollar Term Loans in March 2024 and increasing borrowing capacity and extending the maturity date of our Revolving Credit Facility in June 2024. The 2029 Dollar Term Loans repricing resulted in $107 million of constructive financing cash inflows and corresponding constructive financing cash outflows.
Other Impacts on Cash
Currency exchange impacts on cash for the six months ended June 30, 2024 were unfavorable by $20 million, which was driven primarily by the fluctuations of the Euro, Mexican Peso and Brazilian Real compared to the U.S. Dollar.
Six months ended June 30, 2023
Net Cash Provided by Operating Activities
Net cash provided by operating activities for the six months ended June 30, 2023 was $79 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $308 million. This was partially offset by net uses of working capital of $229 million, for which the most significant drivers were increases in accounts and notes receivable and prepaid expenses and other assets of $194 million and $52 million, respectively, as well as decreases in other accrued liabilities and accounts payable of $40 million and $12 million, respectively. These outflows were driven primarily by timing of collections and payments, payments of BIPs and largely seasonal cash payments for employee-related benefits and were partially offset by decreases in inventories driving $70 million of inflows as a result of lower production levels as we intentionally managed inventory levels.
Net Cash Used for Investing Activities
Net cash used for investing activities for the six months ended June 30, 2023 was $37 million. The primary use was for purchases of property, plant and equipment of $74 million, partially offset by proceeds of $35 million from settlements and interest from swaps designated as net investment hedges.
Net Cash Used for Financing Activities
Net cash used for financing activities for the six months ended June 30, 2023 was $179 million. The primary uses were voluntary prepayments of $150 million of the outstanding principal amount of the 2029 Dollar Term Loans, contractual repayments of $33 million on borrowings, payments totaling $8 million for acquisition-related consideration and payments of $6 million for fees associated with refinancing our 2024 Dollar Term Loans, partially offset by proceeds of $9 million from a short-term borrowing and $9 million net cash received from our stock-based compensation program.
Other Impacts on Cash
Currency exchange impacts on cash for the six months ended June 30, 2023 were favorable by $2 million, which was driven primarily by the fluctuations of the Mexican Peso compared to the U.S. Dollar, partially offset by fluctuations of the Euro compared to the U.S. Dollar.

35

Financial Condition
We had cash and cash equivalents at June 30, 2024 and December 31, 2023 of $840 million and $700 million, respectively. The June 30, 2024 cash balance includes $185 million borrowed against Axalta’s revolving credit facility in connection with the acquisition discussed in Note 19 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Of these balances, $472 million and $462 million were maintained in non-U.S. jurisdictions at June 30, 2024 and December 31, 2023, respectively. We believe at this time our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational and working capital needs.
Our business may not generate sufficient net cash provided by operating activities and future borrowings may not be available under our Senior Secured Credit Facilities in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs, including planned capital expenditures. In such circumstances, we may need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, selling additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. Our primary sources of liquidity are cash on hand, net cash provided by operating activities and available borrowing capacity under our Senior Secured Credit Facilities. Based on our forecasts, we believe that net cash provided by operating activities, available cash on hand and available borrowing capacity under our Senior Secured Credit Facilities and other existing lines of credit will be adequate to service debt, fund our cost saving initiatives, meet liquidity needs and fund necessary capital expenditures for the next twelve months.
Our ability to make scheduled payments of principal or interest on, or to refinance, our indebtedness or to fund working capital requirements, capital expenditures and other current obligations will depend on our ability to generate cash from operations. Such cash generation is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
If required, our ability to raise additional financing and our borrowing costs may be impacted by short and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios. Our highly leveraged nature may limit our ability to procure additional financing in the future and elevated interest rates, as experienced during 2022 and 2023 and continuing in 2024, may further increase our interest expense and weaken our financial condition.
The following table details our borrowings outstanding at the dates indicated:
(In millions)June 30, 2024December 31, 2023
2029 Dollar Term Loans$1,707 $1,786 
Revolving Credit Facility185 — 
2027 Dollar Senior Notes500 500 
2029 Dollar Senior Notes700 700 
2031 Dollar Senior Notes500 500 
Short-term and other borrowings55 62 
Unamortized original issue discount(15)(17)
Unamortized deferred financing costs(24)(27)
Total borrowings, net3,608 3,504 
Less:
Short-term borrowings
Current portion of long-term borrowings17 19 
Long-term debt$3,588 $3,478 
Our indebtedness, including the Senior Secured Credit Facilities, Senior Notes and short-term borrowings, is more fully described in Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and in Note 18 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023.
We believe that we continue to maintain sufficient liquidity to meet our cash requirements, including our debt service obligations as well as our working capital needs. Availability under the Revolving Credit Facility was $593 million and $528 million at June 30, 2024 and December 31, 2023, respectively, all of which may be borrowed by us without violating any covenants under the Credit Agreement or the indentures governing the Senior Notes.

36

During March 2024, we entered into the Fourteenth Amendment to the Credit Agreement to lower the interest rate spread applicable to the 2029 Dollar Term Loans, which continues to be based on SOFR, from 2.50% to 2.00% and to make related changes to affect such repricing. The other material terms of the Credit Agreement, including the outstanding principal amount and maturity date of the 2029 Dollar Term Loans, remained unchanged. See Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
During June 2024, we entered into the Fifteenth Amendment to the Credit Agreement (the "Fifteenth Amendment"), to among other things, increase commitments available pursuant to the Revolving Credit Facility from $550 million to $800 million and extend the maturity of the Revolving Credit Facility from May 2026 to June 2029, provided that such date would be accelerated in certain circumstances as set forth in the Fifteenth Amendment. As a result, we recorded $4 million of incremental deferred financing costs.
During June 2024, in connection with the acquisition discussed in Note 19 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we borrowed $185 million against the Revolving Credit Facility.
Contractual Obligations
Information related to our material contractual obligations and cash requirements can be found in Note 6 and Note 18 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As noted above and within Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we have made prepayments during the six months ended June 30, 2024 of $75 million of the outstanding principal amount of the 2029 Dollar Term Loans. During June 2024, we borrowed $185 million against the Revolving Credit Facility. There have been no other material changes in the Company's contractual obligations and cash requirements as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Off-Balance Sheet Arrangements
See Note 5 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for disclosure of our guarantees of certain customers’ obligations to third parties.
Recent Accounting Guidance
See Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a summary of recent accounting guidance.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. The preparation of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q requires us to make estimates and judgments that affect the amounts reported in the financial statements. We base our estimates and judgments on historical experiences and assumptions believed to be reasonable under the circumstances and re-evaluate them on an ongoing basis. Actual results could differ from our estimates under different assumptions or conditions. There have been no material changes to our critical accounting policies and estimates previously disclosed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.

37

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the market risks previously disclosed in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
As required by Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. No matter how well designed and operated, disclosure controls and procedures can provide only reasonable, rather than absolute, assurance of achieving the desired control objectives. Based on the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2024.
Changes in internal control over financial reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

38

PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are from time to time party to legal proceedings that arise in the ordinary course of business. We are not involved in any litigation other than that which has arisen in the ordinary course of business. We do not expect that any currently pending lawsuits will have a material adverse effect on us as discussed in Note 5 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed a specified threshold. Consistent with SEC rules, we will be using a threshold of $1 million for such proceedings. At this time, the Company is not aware of any matters that exceed this threshold and that meet the other conditions for disclosure pursuant to this requirement.
ITEM 1A. RISK FACTORS
There have been no material changes in our risk factors from those previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following table summarizes the Company's share repurchase activity through its publicly announced share repurchase program for the three months ended June 30, 2024:
(in millions, except per share data)
Period
Total Number of Shares Purchased(1)
Average Price Paid per Share(1)
Total Number of Shares Purchased as Part of Publicly Announced Programs(1)
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans of Programs(1)
April 1 - April 30, 2024$— $700.0 
May 1 - May 31, 20241.435.04 1.4650.0 
June 1 - June 30, 2024— 650.0 
Total1.4$35.04 1.4$650.0 
(1) On May 1, 2024, the Company announced that its Board of Directors had authorized a common share repurchase program (the "Program") replacing the previous program, which had $367 million in authorization remaining. The total size of the Program is $700 million, of which we have purchased $50 million as of and during the three months ended June 30, 2024. At June 30, 2024, the Company had $650 million in authorization remaining under the Program. The Program has no expiration date.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) None.
(b) None.
(c) During the three months ended June 30, 2024, no director or “officer” of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

39

ITEM 6. EXHIBITS
EXHIBIT NO.
DESCRIPTION OF EXHIBITS
10.1*
31.1
31.2
32.1†
32.2†
101INS - Inline XBRL Instance Document. The document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101SCH - Inline XBRL Taxonomy Extension Schema Document
101CAL - Inline XBRL Taxonomy Extension Calculation Linkbase Document
101DEF - Inline XBRL Taxonomy Extension Definition Linkbase Document
101LAB - Inline XBRL Taxonomy Extension Label Linkbase Document
101PRE - Inline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
Previously filed.
This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

40


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

AXALTA COATING SYSTEMS LTD.
Date:August 1, 2024By: /s/ Chris Villavarayan
Chris Villavarayan
Chief Executive Officer and President
(Principal Executive Officer)
Date:August 1, 2024By: /s/ Carl D. Anderson II
Carl D. Anderson II
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Date:August 1, 2024By: /s/ Anthony Massey
Anthony Massey
Vice President and Global Controller
(Principal Accounting Officer)

41

Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Chris Villavarayan, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Axalta Coating Systems Ltd.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 1, 2024
 
By:/s/ Chris Villavarayan
Name:Chris Villavarayan
Title:Chief Executive Officer and President


Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Carl D. Anderson II, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Axalta Coating Systems Ltd.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 1, 2024
 
By:/s/ Carl D. Anderson II
Name:Carl D. Anderson II
Title:Senior Vice President and Chief Financial Officer


Exhibit 32.1
Certification of CEO Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Chris Villavarayan, Chief Executive Officer and President of Axalta Coating Systems Ltd. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:

(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2024 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 1, 2024
 
By:/s/ Chris Villavarayan
Name:Chris Villavarayan
Title:Chief Executive Officer and President
This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


Exhibit 32.2
Certification of CFO Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Carl D. Anderson II, Senior Vice President and Chief Financial Officer of Axalta Coating Systems Ltd. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:

(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2024 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 1, 2024
 
By:/s/ Carl D. Anderson II
Name:Carl D. Anderson II
Title:Senior Vice President and Chief Financial Officer
This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

v3.24.2.u1
Cover Page - shares
6 Months Ended
Jun. 30, 2024
Jul. 25, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Document Transition Report false  
Entity File Number 001-36733  
Entity Registrant Name AXALTA COATING SYSTEMS LTD.  
Entity Incorporation, State or Country Code D0  
Entity Tax Identification Number 98-1073028  
Entity Address, Address Line One 1050 Constitution Avenue  
Entity Address, City or Town Philadelphia  
Entity Address, State or Province PA  
Entity Address, Postal Zip Code 19112  
City Area Code 855  
Local Phone Number 547-1461  
Title of 12(b) Security Common Shares, $1.00 par value  
Trading Symbol AXTA  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   219,304,924
Entity Central Index Key 0001616862  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.24.2.u1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Net sales $ 1,351 $ 1,294 $ 2,645 $ 2,578
Cost of goods sold 891 904 1,756 1,806
Selling, general and administrative expenses 213 210 420 416
Other operating charges 2 2 63 9
Research and development expenses 18 19 36 38
Amortization of acquired intangibles 22 21 44 46
Income from operations 205 138 326 263
Interest expense, net 50 55 104 103
Other (income) expense, net (1) 9 7 10
Income before income taxes 156 74 215 150
Provision for income taxes 43 13 63 28
Net income 113 61 152 122
Less: Net income (loss) attributable to noncontrolling interests 1 0 (1) 0
Net income attributable to common shareholders $ 112 $ 61 $ 153 $ 122
Basic net income per share (in dollars per share) $ 0.51 $ 0.27 $ 0.70 $ 0.55
Diluted net income per share (in dollars per share) $ 0.51 $ 0.27 $ 0.69 $ 0.55
v3.24.2.u1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net income $ 113 $ 61 $ 152 $ 122
Other comprehensive income, before tax:        
Foreign currency translation adjustments (29) 1 (73) 46
Unrealized gain (loss) on derivatives 0 1 0 (1)
Unrealized gain on pension and other benefit plan obligations 1 1 2 1
Other comprehensive (loss) income, before tax (28) 3 (71) 46
Income tax provision related to items of other comprehensive income 1 0 2 0
Other comprehensive (loss) income, net of tax (29) 3 (73) 46
Comprehensive income 84 64 79 168
Less: Comprehensive income (loss) attributable to noncontrolling interests 1 0 (1) (1)
Comprehensive income attributable to common shareholders $ 83 $ 64 $ 80 $ 169
v3.24.2.u1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 840 $ 700
Restricted cash 3 3
Accounts and notes receivable, net 1,268 1,260
Inventories 745 741
Prepaid expenses and other current assets 158 117
Total current assets 3,014 2,821
Property, plant and equipment, net 1,158 1,204
Goodwill 1,549 1,591
Identifiable intangibles, net 1,061 1,130
Other assets 524 526
Total assets 7,306 7,272
Current liabilities:    
Accounts payable 715 725
Current portion of borrowings 20 26
Other accrued liabilities 600 677
Total current liabilities 1,335 1,428
Long-term borrowings 3,588 3,478
Accrued pensions 236 252
Deferred income taxes 152 162
Other liabilities 177 179
Total liabilities 5,488 5,499
Commitments and contingent liabilities (Note 5)
Shareholders’ equity:    
Common shares, $1.00 par, 1,000.0 shares authorized, 254.3 and 253.7 shares issued at June 30, 2024 and December 31, 2023, respectively 254 254
Capital in excess of par 1,584 1,568
Retained earnings 1,439 1,286
Treasury shares, at cost, 35.0 and 33.6 shares at June 30, 2024 and December 31, 2023, respectively (987) (937)
Accumulated other comprehensive loss (517) (444)
Total Axalta shareholders’ equity 1,773 1,727
Noncontrolling interests 45 46
Total shareholders’ equity 1,818 1,773
Total liabilities and shareholders’ equity $ 7,306 $ 7,272
v3.24.2.u1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
shares in Millions
Jun. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Common stock, par value (in dollars per share) $ 1.00 $ 1.00
Common shares authorized (in shares) 1,000.0 1,000.0
Common shares issued (in shares) 254.3 253.7
Treasury shares, at cost (in shares) 35.0 33.6
v3.24.2.u1
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Capital In Excess Of Par
Retained Earnings
Treasury Shares, at cost
Accumulated Other Comprehensive Loss
Non controlling Interests
Beginning balance (in shares) at Dec. 31, 2022   220.6          
Beginning balance at Dec. 31, 2022 $ 1,500.0 $ 252.0 $ 1,537.0 $ 1,019.0 $ (887.0) $ (467.0) $ 46.0
Comprehensive income:              
Net income 61.0     61.0      
Net realized and unrealized gain (loss) on derivatives, net of tax (2.0)         (2.0)  
Foreign currency translation, net of tax 45.0         46.0 (1.0)
Comprehensive income 104.0     61.0   44.0 (1.0)
Recognition of stock-based compensation 6.0   6.0        
Shares issued under compensation plans (in shares)   0.9          
Shares issued under compensation plans 5.0 $ 1.0 4.0        
Ending balance (in shares) at Mar. 31, 2023   221.5          
Ending balance at Mar. 31, 2023 1,615.0 $ 253.0 1,547.0 1,080.0 (887.0) (423.0) 45.0
Beginning balance (in shares) at Dec. 31, 2022   220.6          
Beginning balance at Dec. 31, 2022 1,500.0 $ 252.0 1,537.0 1,019.0 (887.0) (467.0) 46.0
Comprehensive income:              
Net income 122.0            
Comprehensive income 168.0            
Ending balance (in shares) at Jun. 30, 2023   221.7          
Ending balance at Jun. 30, 2023 1,689.0 $ 253.0 1,557.0 1,141.0 (887.0) (420.0) 45.0
Beginning balance (in shares) at Mar. 31, 2023   221.5          
Beginning balance at Mar. 31, 2023 1,615.0 $ 253.0 1,547.0 1,080.0 (887.0) (423.0) 45.0
Comprehensive income:              
Net income 61.0     61.0      
Net realized and unrealized gain (loss) on derivatives, net of tax 0.0         0.0  
Long-term employee benefit plans, net of tax 1.0         1.0  
Foreign currency translation, net of tax 2.0         2.0  
Comprehensive income 64.0     61.0   3.0 0.0
Recognition of stock-based compensation 8.0   8.0        
Shares issued under compensation plans (in shares)   0.2          
Shares issued under compensation plans 2.0 $ 0.0 2.0        
Ending balance (in shares) at Jun. 30, 2023   221.7          
Ending balance at Jun. 30, 2023 1,689.0 $ 253.0 1,557.0 1,141.0 (887.0) (420.0) 45.0
Beginning balance (in shares) at Dec. 31, 2023   220.1          
Beginning balance at Dec. 31, 2023 1,773.0 $ 254.0 1,568.0 1,286.0 (937.0) (444.0) 46.0
Comprehensive income:              
Net income 39.0     41.0     (2.0)
Long-term employee benefit plans, net of tax 1.0         1.0  
Foreign currency translation, net of tax (45.0)         (45.0)  
Comprehensive income (5.0)     41.0   (44.0) (2.0)
Recognition of stock-based compensation 6.0   6.0        
Shares issued under compensation plans (in shares)   0.5          
Shares issued under compensation plans 1.0   1.0        
Ending balance (in shares) at Mar. 31, 2024   220.6          
Ending balance at Mar. 31, 2024 1,775.0 $ 254.0 1,575.0 1,327.0 (937.0) (488.0) 44.0
Beginning balance (in shares) at Dec. 31, 2023   220.1          
Beginning balance at Dec. 31, 2023 1,773.0 $ 254.0 1,568.0 1,286.0 (937.0) (444.0) 46.0
Comprehensive income:              
Net income 152.0            
Comprehensive income $ 79.0            
Shares issued under compensation plans (in shares) 0.2            
Ending balance (in shares) at Jun. 30, 2024   219.3          
Ending balance at Jun. 30, 2024 $ 1,818.0 $ 254.0 1,584.0 1,439.0 (987.0) (517.0) 45.0
Beginning balance (in shares) at Mar. 31, 2024   220.6          
Beginning balance at Mar. 31, 2024 1,775.0 $ 254.0 1,575.0 1,327.0 (937.0) (488.0) 44.0
Comprehensive income:              
Net income 113.0     112.0     1.0
Long-term employee benefit plans, net of tax 1.0         1.0  
Foreign currency translation, net of tax (30.0)         (30.0)  
Comprehensive income 84.0     112.0   (29.0) 1.0
Recognition of stock-based compensation 8.0   8.0        
Shares issued under compensation plans (in shares)   0.1          
Shares issued under compensation plans 1.0   1.0        
Common stock purchases (in shares)   (1.4)          
Common stock purchases (50.0)       (50.0)    
Ending balance (in shares) at Jun. 30, 2024   219.3          
Ending balance at Jun. 30, 2024 $ 1,818.0 $ 254.0 $ 1,584.0 $ 1,439.0 $ (987.0) $ (517.0) $ 45.0
v3.24.2.u1
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (Parenthetical) - USD ($)
$ in Millions
3 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]        
Long-term employee benefit plans, net of tax expense (benefit) $ 0 $ 0 $ 0  
Foreign currency translation, tax expense (benefit) $ 1 $ 1 0 $ 0
Gain on derivatives, tax expense (benefit)     $ 1 $ 0
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Operating activities:    
Net income $ 152 $ 122
Adjustment to reconcile net income to cash provided by operating activities:    
Depreciation and amortization 136 136
Amortization of deferred financing costs and original issue discount 4 4
Debt extinguishment and refinancing-related costs 3 3
Deferred income taxes 8 1
Realized and unrealized foreign exchange losses, net 12 19
Stock-based compensation 14 14
Impairment charges 0 15
Interest income on swaps designated as net investment hedges (7) (6)
Other non-cash, net 5 0
Changes in operating assets and liabilities:    
Trade accounts and notes receivable (35) (194)
Inventories (22) 70
Prepaid expenses and other assets (91) (52)
Accounts payable 7 (12)
Other accrued liabilities (62) (40)
Other liabilities 24 (1)
Cash provided by operating activities 148 79
Investing activities:    
Purchase of property, plant and equipment (45) (74)
Interest proceeds on swaps designated as net investment hedges 7 6
Settlement proceeds on swaps designated as net investment hedges 0 29
Other investing activities, net 2 2
Cash used for investing activities (36) (37)
Financing activities:    
Proceeds from short-term borrowings 0 9
Proceeds from long-term borrowings 292 0
Payments on short-term borrowings (5) (26)
Payments on long-term borrowings (188) (157)
Financing-related costs (4) (6)
Purchases of common stock (50) 0
Net cash flows associated with stock-based awards 2 9
Deferred acquisition-related consideration 0 (8)
Other financing activities, net 1 0
Cash provided by (used for) financing activities 48 (179)
Increase (decrease) in cash 160 (137)
Effect of exchange rate changes on cash (20) 2
Cash at beginning of period 703 655
Cash at end of period 843 520
Cash at end of period reconciliation:    
Cash and cash equivalents 840 518
Restricted cash 3 2
Cash at end of period $ 843 $ 520
v3.24.2.u1
Basis of Presentation and Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 and shareholders' equity of Axalta Coating Systems Ltd., a Bermuda exempted company limited by shares, and its consolidated subsidiaries ("Axalta," the "Company," "we," "our" and "us") at June 30, 2024, the results of operations, comprehensive income and changes in shareholders' equity for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months then ended. All intercompany balances and transactions have been eliminated.
These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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 ("GAAP").
The interim unaudited condensed consolidated financial statements include the accounts of Axalta and its subsidiaries, and entities in which a controlling interest is maintained. Certain of our entities are accounted for on a one-month lag basis, the effect of which is not material.
In the current year, we changed the presentation in our condensed consolidated financial statements to whole millions from our historical presentation of tenths of millions and, as a result, any necessary rounding adjustments have been made to prior year disclosed amounts.
The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year ended December 31, 2024 or any future period(s).
Summary of Significant Accounting Policies Updates
Recently Adopted Accounting Guidance
In January 2023, we adopted Accounting Standards Update ("ASU") 2022-04, Liabilities – Supplier Finance Programs, which codifies disclosure requirements for supplier financing programs. This ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. Upon adoption of this ASU, we incorporated the required disclosures in Note 14. In addition to the disclosures included in Note 14, ASU 2022-04 requires a rollforward of activity for each supplier financing program beginning with annual reporting for the year ended December 31, 2024, at which time we will incorporate the required rollforward disclosure.
Accounting Guidance and Disclosure Rules Issued But Not Yet Adopted
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280), to expand the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-07 on our financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid disclosures. The new standard is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-09 on our financial statements.
In March 2024, the Securities and Exchange Commission ("SEC") adopted final rules under SEC Release No. 34-99678 and No. 33-11275 (the "Final Rules"), The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require registrants to provide certain climate-related information in their registration statements and annual reports. The Final Rules require, among other things, disclosures in the notes to the audited financial statements relating to the effects of severe weather events and other natural conditions, subject to certain thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates in certain circumstances. The financial statement disclosure requirements of the Final Rules are effective for fiscal years beginning in 2025. In April 2024, the SEC stayed the effectiveness of the Final Rules. We are currently evaluating the impact of the Final Rules.
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Revenue
6 Months Ended
Jun. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue REVENUE
Consideration for products in which control has transferred to our customers that is conditional on something other than the passage of time is recorded as a contract asset within prepaid expenses and other current assets on the condensed consolidated balance sheets. The contract asset balances at June 30, 2024 and December 31, 2023 were $37 million and $39 million, respectively.
We provide certain customers with incremental up-front consideration, subject to clawback provisions, including Business Incentive Plan assets ("BIPs"), which is capitalized as a component of other assets and amortized over the estimated life of the contractual arrangement as a reduction of net sales. We do not receive a distinct service or good in return for these BIPs, but rather receive volume commitments and/or sole supplier status from our customers over the life of the contractual arrangements, which approximates a five-year weighted average useful life. Substantially all of the termination clauses in these contractual arrangements include standard clawback provisions that are designed to enable us to collect monetary damages in the event of a customer's failure to meet its commitments under the relevant contract. BIPs are assessed for recoverability annually or more frequently when certain circumstances arise. At June 30, 2024 and December 31, 2023, the total carrying value of BIPs were $170 million and $149 million, respectively, and are presented within other assets in the condensed consolidated balance sheets. For the three and six months ended June 30, 2024 and 2023, $14 million, $28 million, $15 million and $31 million, respectively, was amortized and reflected as reductions of net sales in the condensed consolidated statements of operations.
See Note 17 for disaggregated net sales by end-market.
v3.24.2.u1
Goodwill and Identifiable Intangible Assets
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
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, 2023 to June 30, 2024 by reportable segment:
Performance
Coatings
Mobility
Coatings
Total
Balance at December 31, 2023$1,513 $78 $1,591 
Foreign currency translation(40)(2)(42)
Balance at June 30, 2024$1,473 $76 $1,549 
Identifiable Intangible Assets
The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
June 30, 2024Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology$161 $(94)$67 11.2
Trademarks—indefinite-lived256 — 256 Indefinite
Trademarks—definite-lived139 (64)75 14.5
Customer relationships1,169 (506)663 19.0
Total$1,725 $(664)$1,061 
December 31, 2023Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology$162 $(88)$74 11.2
Trademarks—indefinite-lived264 — 264 Indefinite
Trademarks—definite-lived142 (60)82 14.5
Customer relationships1,194 (484)710 19.0
Total$1,762 $(632)$1,130 
The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2024 and each of the succeeding five years is:
Remainder of 2024$44 
202587 
202687 
202786 
202872 
202967 
v3.24.2.u1
Restructuring
6 Months Ended
Jun. 30, 2024
Restructuring and Related Activities [Abstract]  
Restructuring RESTRUCTURING
During February 2024, we announced a global transformation initiative intended to simplify the Company’s organizational structure and enable us to be more proactive, responsive, and agile and to better serve our customers and to lower our cost base and improve financial performance and cash flow generation (the "2024 Transformation Initiative"). The 2024 Transformation Initiative actions, certain of which are subject to the satisfaction of local law requirements in various jurisdictions, commenced in the first quarter of 2024 and we expect them to be completed by 2026. The 2024 Transformation Initiative is expected to result in a net reduction to our workforce of approximately 600 employees globally and total pre-tax charges of $75-110 million in the aggregate, of which $65-90 million represents severance and other exit-related costs and $10-20 million represents non-cash accelerated depreciation charges. Future cash expenditures related to the 2024 Transformation Initiative are expected to be approximately $95-135 million, inclusive of $30-45 million for capital expenditures to, among other things, shift manufacturing capacity or capabilities. The 2024 Transformation Initiative resulted in pre-tax charges of $55 million for the six months ended June 30, 2024, which primarily relates to employee severance and other exit costs associated with a net reduction to our workforce globally.
In accordance with the applicable guidance for Accounting Standards Codification ("ASC") 712, Nonretirement Postemployment Benefits, we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated.
During the three and six months ended June 30, 2024 and 2023, we incurred costs of $0 million, $55 million, $2 million and $3 million, respectively, for termination benefits, net of changes in estimates. The majority of our termination benefits are recorded within other operating charges in the condensed consolidated statements of operations. The remaining payments associated with these actions are expected to be substantially completed within 24 months.
The following table summarizes the activity related to the termination benefit reserves and expenses from December 31, 2023 to June 30, 2024:
2024 Activity
Balance at December 31, 2023$16 
Expenses, net of changes to estimates55 
Payments made(17)
Foreign currency translation(1)
Balance at June 30, 2024$53 
v3.24.2.u1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIES
Guarantees
We guarantee certain of our customers’ obligations to third parties, whereby any default by our customers on their obligations could force us to make payments to the applicable creditors ("Customer Obligation Guarantees"). At June 30, 2024 and December 31, 2023, we had outstanding Customer Obligation Guarantees of $21 million and $10 million, respectively, excluding certain outstanding Customer Obligation Guarantees secured by letters of credit under the Revolving Credit Facility discussed further in Note 15. Excluding Customer Obligation Guarantees secured by letters of credit under the Revolving Credit Facility, substantially all of our Customer Obligation Guarantees do not have specified expiration dates. We monitor the Customer Obligation Guarantees to evaluate whether we have a liability at the balance sheet date. We did not have any liabilities related to our outstanding Customer Obligation Guarantees recorded at either June 30, 2024 or December 31, 2023.
Operational Matter
In January 2021, we became aware of an operational matter affecting certain North America Mobility Coatings customer manufacturing sites. The matter involves the use and application of certain of our products in combination with and incorporated within third-party products. The matter occurred over a discrete period during the fourth quarter of 2020. We concluded that losses from this matter were probable and that a majority of losses would be covered under our insurance policies, subject to deductible and policy limits as defined in our policies.
During each of the three and six months ended June 30, 2024 and 2023, expenses recorded relating to the operational matter were immaterial. At June 30, 2024 and December 31, 2023, we had $30 million and $36 million, respectively, recorded for estimated insurance receivables within accounts and notes receivable, net in the condensed consolidated balance sheets. Liabilities of $29 million and $31 million are recorded as other accrued liabilities in the condensed consolidated balance sheets at June 30, 2024 and December 31, 2023, respectively. The recorded probable losses remain an estimate, and actual costs arising from this matter could be materially lower or higher depending on the actual costs incurred to repair the impacted products as well as the availability of additional insurance coverage.
Other
We are subject to various pending lawsuits, legal proceedings and other claims in the ordinary course of business, including civil, regulatory and environmental matters. These matters may involve third-party indemnification obligations and/or insurance covering all or part of any potential damage incurred by us. All of these matters are subject to many uncertainties and, accordingly, we cannot determine the ultimate outcome of the proceedings and other claims at this time. The potential effects, if any, on our condensed consolidated financial statements will be recorded in the period in which these matters are probable and estimable. Except as set forth in the "Operational Matter" section above, we believe that any sum we may be required to pay in connection with proceedings or claims in excess of the amounts recorded would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.
We are involved in environmental remediation and ongoing compliance activities at several sites. The timing and duration of remediation and ongoing compliance activities are determined on a site by site basis depending on local regulations. The liabilities recorded represent our estimable future remediation costs and other anticipated environmental liabilities. We have not recorded liabilities at sites where a liability is probable but a range of loss is not reasonably estimable. We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.
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Long-term Employee Benefits
6 Months Ended
Jun. 30, 2024
Retirement Benefits [Abstract]  
Long-term Employee Benefits LONG-TERM EMPLOYEE BENEFITS
Components of Net Periodic Benefit Cost
The following table sets forth the pre-tax components of net periodic benefit costs for our defined benefit plans for the three and six months ended June 30, 2024 and 2023:
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Components of net periodic benefit cost:
Net periodic benefit cost:
Service cost$$$$
Interest cost10 
Expected return on plan assets(3)(3)(6)(6)
Amortization of actuarial loss, net— — 
Net periodic benefit cost$$$$
All non-service components of net periodic benefit cost are recorded in other (income) expense, net within the accompanying condensed consolidated statements of operations.
v3.24.2.u1
Stock-based Compensation
6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation STOCK-BASED COMPENSATION
During each of the three and six months ended June 30, 2024 and 2023, we recognized $8 million, $14 million, $8 million, and $14 million in stock-based compensation expense, which was allocated between cost of goods sold and selling, general and administrative expenses in the condensed consolidated statements of operations. We recognized tax benefits on stock-based compensation of $0 million, $1 million, $1 million and $2 million for the three and six months ended June 30, 2024 and 2023.
2024 Activity
A summary of stock option award activity as of and for the six months ended June 30, 2024 is presented below.
Stock OptionsAwards
(in millions)
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
 (in millions)
Weighted
Average
Remaining
Contractual
Life (years)
Outstanding at January 1, 20240.5 $28.33 
Exercised(0.2)$26.91 
Forfeited / Expired (1)
— $32.50 
Outstanding at June 30, 2024
0.3 $28.88 
Vested and expected to vest at June 30, 2024
0.3 $28.88 $3.02
Exercisable at June 30, 2024
0.3 $28.88 $3.02
(1)    Activity during the six months ended June 30, 2024 rounds to zero.
Cash received by the Company upon exercise of options for the six months ended June 30, 2024 was $4 million. No excess tax benefits or shortfall expenses were recorded related to these exercises.
At June 30, 2024, there was no unrecognized expense relating to unvested stock options.
Restricted Stock UnitsUnits
(in millions)
Weighted Average
Fair Value
Outstanding at January 1, 20241.3 $28.71 
Granted0.5 $32.50 
Vested(0.4)$29.06 
Forfeited(0.1)$29.80 
Outstanding at June 30, 20241.3 $30.10 
Tax benefits on the vesting of restricted stock units during the six months ended June 30, 2024 were immaterial.
At June 30, 2024, there was $20 million of unamortized expense relating to unvested restricted stock units that is expected to be amortized over a weighted average period of 1.5 years.
Performance Share UnitsUnits
(in millions)
Weighted Average
Fair Value
Outstanding at January 1, 20240.8 $33.20 
Granted0.3 $38.52 
Vested (1)
— $29.53 
Forfeited(0.2)$30.89 
Outstanding at June 30, 20240.9 $35.82 
(1)    Activity during the six months ended June 30, 2024 rounds to zero.
Our performance share units allow for participants to vest in zero to 200% of the targeted number of shares granted. At June 30, 2024, there was $22 million of unamortized expense relating to unvested performance share units that is expected to be amortized over a weighted average period of 2.1 years. The forfeitures include portions of performance share unit grants that were determined to not have vested during the period as a result of not meeting established financial performance thresholds.
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Other (Income) Expense, Net
6 Months Ended
Jun. 30, 2024
Other Income and Expenses [Abstract]  
Other (Income) Expense, Net OTHER (INCOME) EXPENSE, NET
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Foreign exchange losses, net$$10 $$12 
Debt extinguishment and refinancing-related costs (1)
— 
Other miscellaneous income, net (4)(2)(4)(5)
Total$(1)$$$10 
(1)    Debt extinguishment and refinancing-related costs include third-party fees incurred and the loss on extinguishment associated with the write-off of unamortized deferred financing costs and original issue discounts in conjunction with the restructuring and refinancing of our long-term borrowings, as discussed further in Note 15.
v3.24.2.u1
Income Taxes
6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Our effective income tax rates for the six months ended June 30, 2024 and 2023 are as follows:
Six Months Ended
June 30,
20242023
Effective Tax Rate29.1 %19.1 %
The higher effective tax rate for the six months ended June 30, 2024 was primarily due to the tax impacts of the 2024 Transformation Initiative pre-tax charges, as well as the 2023 favorable impact of changes in unrecognized tax benefits, which did not repeat in 2024.
The effective tax rate for the six months ended June 30, 2024 differs from the U.S. Federal statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded unfavorable impacts for changes in the valuation allowance and for increases in unrecognized tax benefits. These adjustments were primarily offset by the favorable adjustments for earnings in jurisdictions where the statutory rate is lower than the U.S. Federal statutory rate.
The Organization for Economic Cooperation and Development’s (“OECD”) Pillar Two framework that imposes, among other items, a minimum tax rate of 15% has been implemented by several jurisdictions in which we operate, with effect from January 1, 2024. The effect of enacted Pillar Two taxes did not have a significant impact on our condensed consolidated financial statements. We will continue to monitor the implementation of Pillar Two by additional jurisdictions and will evaluate the potential impact on our consolidated financial statements.
We anticipate that it is reasonably possible our unrecognized tax benefits will decrease by $46 million, exclusive of interest and penalties, within the next 12 months mainly due to the expiration of statutes of limitations in various countries and the expected final assessment from the 2010-2013 German income tax audit which concluded in 2021.
v3.24.2.u1
Net Income Per Common Share
6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Net Income Per Common Share NET INCOME PER COMMON SHARE
Basic net income 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 net income per common share includes the effect of potential dilution from the hypothetical exercise of outstanding stock options and vesting of restricted stock units and performance share units. A reconciliation of our basic and diluted net income per common share is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions, except per share data)2024202320242023
Net income to common shareholders$112 $61 $153 $122 
Basic weighted average shares outstanding219.9 221.6 220.2 221.4 
Diluted weighted average shares outstanding220.9 222.5 221.2 222.3 
Net income per common share (1):
Basic net income per share$0.51 $0.27 $0.70 $0.55 
Diluted net income per share$0.51 $0.27 $0.69 $0.55 
(1)    Basic earnings per share and diluted earnings per share are calculated based on full precision. Figures in the table may not recalculate due to rounding.
The number of anti-dilutive shares that have been excluded in the computation of diluted net income per share for the three and six months ended June 30, 2024 and 2023 were 0.2 million, 0.1 million, 0.1 million and 0.5 million, respectively.
v3.24.2.u1
Accounts and Notes Receivable, Net
6 Months Ended
Jun. 30, 2024
Receivables [Abstract]  
Accounts and Notes Receivable, Net ACCOUNTS AND NOTES RECEIVABLE, NET
Trade accounts receivable are stated at the amount we expect to collect. We maintain allowances for doubtful accounts for estimated losses by applying historical loss percentages, combined with reasonable and supportable forecasts of future losses, to respective aging categories. Management considers the following factors in developing its current estimate of expected credit losses: customer credit-worthiness; past transaction history with the customer; current economic industry trends; changes in market or regulatory matters; changes in geopolitical matters; and changes in customer payment terms, as well as other macroeconomic factors.
June 30, 2024December 31, 2023
Accounts receivable - trade, net (1)
$1,054 $1,043 
Notes receivable74 79 
Other (2)
140 138 
Total$1,268 $1,260 
(1)    Allowance for doubtful accounts was $24 million and $25 million at June 30, 2024 and December 31, 2023, respectively.
(2)    Includes $30 million and $36 million at June 30, 2024 and December 31, 2023, respectively, of insurance recoveries related to an operational matter discussed further in Note 5.
Bad debt expense of $4 million, $5 million, $1 million, and $5 million was included within selling, general and administrative expenses for the three and six months ended June 30, 2024 and 2023, respectively, and benefits of $1 million, $1 million, $0 million, and $1 million related to sanctions imposed on Russia in response to the conflict with Ukraine was included in other operating charges for the three and six months ended June 30, 2024 and 2023.
v3.24.2.u1
Inventories
6 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
Inventories INVENTORIES
June 30, 2024December 31, 2023
Finished products$407 $405 
Semi-finished products127 126 
Raw materials182 182 
Stores and supplies29 28 
Total$745 $741 
Inventory reserves were $25 million and $27 million at June 30, 2024 and December 31, 2023, respectively.
v3.24.2.u1
Property, Plant and Equipment, Net
6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment, Net PROPERTY, PLANT AND EQUIPMENT, NET
June 30, 2024December 31, 2023
Property, plant and equipment$2,428 $2,454 
Accumulated depreciation(1,270)(1,250)
Property, plant and equipment, net$1,158 $1,204 
Depreciation expense amounted to $31 million, $62 million, $30 million and $59 million for the three and six months ended June 30, 2024 and 2023, respectively.
v3.24.2.u1
Supplier Finance Programs
6 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
Supplier Finance Programs SUPPLIER FINANCE PROGRAMS
We have a supplier financing program in China that is utilized to finance the purchases of goods and services from our suppliers through local banking institutions. The payment terms under the program vary, but the program has a weighted average maturity date that is approximately 90 days from each respective financing inception. These financing arrangements are included in the current portion of borrowings within the condensed consolidated balance sheets and at the time of issuance each transaction is treated as a non-cash financing activity within the condensed consolidated statements of cash flows. Upon settlement of the financing, the cash outflow is classified as a financing activity within the condensed consolidated statements of cash flows. Amounts outstanding under this program were $10 million at June 30, 2023, including $3 million related to purchases of property, plant and equipment. There were no balances outstanding under this program at June 30, 2024. Cash outflows under this program were $4 million and $23 million for the six months ended June 30, 2024 and 2023, respectively.
We maintain a voluntary supply chain financing ("SCF") program with a global financial institution that allows a select group of suppliers to sell their receivables to the participating financial institution at the discretion of both parties on terms that are negotiated between the supplier and the financial institution. The supplier invoices that have been confirmed as valid under the program are paid by us to the financial institution according to the terms we have with the supplier. Amounts outstanding under the SCF program were $27 million and $28 million at June 30, 2024 and December 31, 2023.
We also participate in a virtual card program with a global financial institution, in which we pay supplier invoices on the due date using a Virtual Card Account ("VCA") and subsequently pay the balance in full 25 days after the billing statement date of the VCA. The program allows for suppliers to receive accelerated payments for a fee at each supplier's discretion. Fees paid by our suppliers are negotiated directly with the financial institution without our involvement. Amounts outstanding under the VCA program were $7 million and $8 million at June 30, 2024 and December 31, 2023, respectively.
The payment terms we have with our suppliers who participate in the SCF and VCA programs are consistent with the typical terms we have with our suppliers who do not participate. These financing arrangements are included in accounts payable within the condensed consolidated balance sheets and the associated payments are included in operating activities within the condensed consolidated statements of cash flows.
v3.24.2.u1
Borrowings
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Borrowings BORROWINGS
Borrowings are summarized as follows:
June 30, 2024December 31, 2023
2029 Dollar Term Loans$1,707 $1,786 
Revolving Credit Facility185 — 
2027 Dollar Senior Notes500 500 
2029 Dollar Senior Notes700 700 
2031 Dollar Senior Notes500 500 
Short-term and other borrowings55 62 
Unamortized original issue discount(15)(17)
Unamortized deferred financing costs(24)(27)
Total borrowings, net3,608 3,504 
Less:
Short-term borrowings
Current portion of long-term borrowings17 19 
Long-term debt$3,588 $3,478 
Our senior secured credit facilities (the "Senior Secured Credit Facilities") consist of a term loan due 2029 (the "2029 Dollar Term Loans") and a revolving credit facility (the "Revolving Credit Facility") that is governed by a credit agreement (as amended, the "Credit Agreement").
Revolving Credit Facility
During June 2024, in connection with the acquisition discussed in Note 19, we borrowed $185 million against the Revolving Credit Facility, which bears interest at a rate based on the Secured Overnight Financing Rate ("SOFR") plus a margin of 1.50% and is due June 2029. At both June 30, 2024 and December 31, 2023, letters of credit issued under the Revolving Credit Facility totaled $22 million which reduced the availability under the Revolving Credit Facility as of such dates. Availability under the Revolving Credit Facility was $593 million and $528 million at June 30, 2024 and December 31, 2023, respectively. The letters of credit issued under the Revolving Credit Facility include $14 million that secures Customer Obligation Guarantees at both June 30, 2024 and December 31, 2023.
Significant Transactions
During the six months ended June 30, 2024, we prepaid $75 million of the outstanding principal amount of the 2029 Dollar Term Loans. As a result of these prepayments, we recorded a loss on extinguishment of debt of $1 million for the six months ended June 30, 2024, which comprised the proportionate write-off of unamortized deferred financing costs and original issue discounts.
During March 2024, we entered into the Fourteenth Amendment to the Credit Agreement to lower the interest rate spread applicable to the 2029 Dollar Term Loans, which continues to be based on SOFR from 2.50% to 2.00% and to make related changes to effect such repricing. The other material terms of the Credit Agreement, including the outstanding principal amount and maturity date of the 2029 Dollar Term Loans, remained unchanged. As a result of the repricing, we recorded a $2 million loss on financing-related costs during the six months ended June 30, 2024 related to the write-off of unamortized deferred financing costs and original issue discount and fees incurred to complete the repricing.
During June 2024, we entered into the Fifteenth Amendment to the Credit Agreement (the "Fifteenth Amendment"), to among other things, increase commitments available pursuant to the Revolving Credit Facility from $550 million to $800 million and extend the maturity of the Revolving Credit Facility from May 2026 to June 2029, provided that such date would be accelerated in certain circumstances as set forth in the Credit Agreement and the Fifteenth Amendment. As a result, we recorded $4 million of incremental deferred financing costs to other assets within the condensed consolidated balance sheets during the six months ended June 30, 2024.
Future repayments
Below is a schedule of required future repayments of all borrowings outstanding at June 30, 2024.
Remainder of 2024$10 
202521 
202621 
2027521 
202822 
Thereafter3,052 
Total borrowings3,647 
Unamortized original issue discount(15)
Unamortized deferred financing costs(24)
Total borrowings, net$3,608 
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements
6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Financial Instruments, Hedging Activities and Fair Value Measurements FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS
Fair value of financial instruments
Equity securities with readily determinable fair values - Balances of equity securities are recorded within other assets, with any changes in fair value recorded within other (income) expense, net. The fair values of equity securities are based upon quoted market prices, which are considered Level 1 inputs.
Long-term borrowings - The estimated fair values of these borrowings are based on recent trades, as reported by a third-party pricing service. Due to the infrequency of trades, these inputs are considered to be Level 2 inputs.
Derivative instruments - The Company’s interest rate swaps, cross-currency swaps and foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are included in the Level 2 hierarchy.
Fair value of contingent consideration
Contingent consideration is valued using a probability-weighted expected payment method that considers the timing of expected future cash flows and the probability of whether key elements of the contingent event are completed. The fair value of contingent consideration is valued at each balance sheet date, until amounts become payable, with adjustments recorded within other (income) expense, net in the condensed consolidated statements of operations. Due to the significant unobservable inputs used in the valuations, these liabilities are categorized within Level 3 of the fair value hierarchy.
The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at June 30, 2024 and December 31, 2023.
June 30, 2024December 31, 2023
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Prepaid expenses and other current assets:
Cross-currency swaps (1)
$— $12 $— $12 $— $$— $
Other assets:
Cross-currency swaps (1)
— — — — — — 
Investments in equity securities
— — — — 
Liabilities:
Other accrued liabilities:
Cross-currency swaps (1)
— — — — — — 
Contingent consideration— — 10 10 — — 
Other liabilities:
Cross-currency swaps (1)
— 11 — 11 — 38 — 38 
Long-term borrowings:
2029 Dollar Term Loans— 1,712 — 1,712 — 1,794 — 1,794 
2027 Dollar Senior Notes— 486 — 486 — 487 — 487 
2029 Dollar Senior Notes— 626 — 626 — 633 — 633 
2031 Dollar Senior Notes— 519 — 519 — 527 — 527 
(1)    Net investment hedge

The table below presents a roll forward of activity for the Level 3 liabilities for the six months ended June 30, 2024.
Fair Value Using Significant Unobservable Inputs
(Level 3)
Beginning balance at December 31, 2023
$
Change in fair value
Foreign currency translation(1)
Ending balance at June 30, 2024
$10 
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.
Derivative Instruments Qualifying and Designated as Net Investment and Cash Flow Hedges
Cross-Currency Swaps Designated as Net Investment Hedges
One fixed-for-fixed cross-currency swap with a notional amount of $150 million, previously executed in 2023, was set to mature on March 31, 2024. We extended the maturity on this cross-currency swap to September 30, 2025 and reset the terms. Under the terms of this reset cross-currency swap agreement, we notionally exchanged $150 million at an interest rate of 6.692% for €142 million at an interest rate of 4.899%. The cross-currency swap is designated as a net investment hedge. This cross-currency swap is marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within accumulated other comprehensive loss ("AOCI").
Interest Rate Swaps Designated as Cash Flow Hedges
An interest rate swap with a notional amount of $150 million, which was previously executed in 2023 and set to expire on March 31, 2024, was terminated early on March 27, 2024. Concurrently, we entered into an interest rate swap with a notional amount of $150 million to hedge interest rate exposures associated with the 2029 Dollar Term Loans. Under the terms of the interest rate swap agreement, the Company is required to pay the counter-party a stream of fixed interest payments at a rate of 4.692% on $150 million of notional value, and in turn, receives variable interest payments based on 3-month SOFR from the counter-party subject to a floor of 0.5%. The interest rate swap is designated as a cash flow hedge and expires on September 30, 2025. This interest rate swap is marked to market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings.
Gains and losses for hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis.
The following table sets forth the locations and amounts recognized during the three and six months ended June 30, 2024 and 2023 for the Company's cash flow and net investment hedges.
Three Months Ended
June 30,
20242023
Derivatives in Cash Flow and Net Investment HedgesLocation of (Gain) Loss Recognized in Income on DerivativesNet Amount of Gain Recognized in OCI on DerivativesAmount of Gain Recognized in IncomeNet Amount of (Gain) Loss Recognized in OCI on DerivativesAmount of Gain Recognized in Income
Interest rate swapsInterest expense, net$(1)$— $(1)$(1)
Cross-currency swaps
Interest expense, net(15)(4)(2)
Six Months Ended
June 30,
20242023
Derivatives in Cash Flow and Net Investment HedgesLocation of (Gain) Loss Recognized in Income on DerivativesNet Amount of Gain Recognized in OCI on DerivativesAmount of Gain Recognized in IncomeNet Amount of (Gain) Loss Recognized in OCI on DerivativesAmount of Gain Recognized in Income
Interest rate swapsInterest expense, net$(1)$— $(2)$(3)
Cross-currency swaps
Interest expense, net(48)(8)14 (6)
Derivative Instruments Not Designated as Cash Flow Hedges
We periodically enter into foreign currency forward and option contracts to reduce market risk and hedge our balance sheet exposures and cash flows for subsidiaries with exposures denominated in currencies different from the functional currency of the relevant subsidiary. These contracts have not been designated as hedges and all gains and losses are marked to market through other (income) expense, net in the condensed consolidated statements of operations.
Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment under ASC 815, Derivatives and hedging, are recorded in earnings as follows:
Derivatives Not Designated as Hedging
Instruments under ASC 815
Location of Gain Recognized in Income on DerivativesThree Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Foreign currency forward contractsOther (income) expense, net$— $(4)$(4)$(7)
v3.24.2.u1
Segments
6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Segments SEGMENTS
The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker ("CODM") to make decisions about resources to be allocated to the segment and assess its performance; and (iii) that has available discrete financial information.
We have two operating segments, which are also our reportable segments: Performance Coatings and Mobility 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 both large regional and global original equipment manufacturers ("OEMs") and to a fragmented and local customer base. These customers comprise independent or multi-shop operator body shops as well as a wide variety of industrial manufacturers. 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 Mobility Coatings segment, we provide coatings technologies for light vehicle and commercial vehicle OEMs. These global customers are faced with evolving megatrends in electrification, sustainability, personalization and autonomous driving that require a high level of technical expertise. The OEMs require efficient, 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.
Adjusted EBITDA is the primary measure used by our CODM to evaluate financial performance of the operating segments and allocate resources and is therefore our measure of segment profitability in accordance with GAAP under ASC 280, Segment Reporting. Asset information is not reviewed or included with our internal management reporting. Therefore, we have not disclosed asset information for each reportable segment. The following table presents relevant information of our reportable segments.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net sales (1):
Refinish$546 $520 $1,065 $1,018 
Industrial341 336 670 685 
Total Net sales Performance Coatings887 856 1,735 1,703 
Light Vehicle354 330 696 659 
Commercial Vehicle110 108 214 216 
Total Net sales Mobility Coatings464 438 910 875 
Total Net sales$1,351 $1,294 $2,645 $2,578 
(1)The Company has no intercompany sales between segments.
The following table reconciles our segment operating performance to income before income taxes for the periods presented:
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Segment Adjusted EBITDA (1):
Performance Coatings$223 $181 $419 $350 
Mobility Coatings68 46 131 90 
Total291 227 550 440 
Interest expense, net50 55 104 103 
Depreciation and amortization68 66 136 136 
Debt extinguishment and refinancing-related costs (a)
— 
Termination benefits and other employee-related costs (b)
56 
Acquisition and divestiture-related costs (c)
(1)— 
Site closure costs (d)
— 
Impairment charges (e)
— — 15 
Foreign exchange remeasurement losses (f)
10 12 
Long-term employee benefit plan adjustments (g)
Stock-based compensation (h)
14 14 
Environmental charge (i)
— — — 
Other adjustments (j)
— (1)
Income before income taxes$156 $74 $215 $150 
(1)The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation, amortization and select other items impacting operating results. These other items impacting operating results are items that management has concluded are (1) non-cash items included within net income, (2) items the Company does not believe are indicative of ongoing operating performance or (3) non-recurring, unusual or infrequent items that have not occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Adjusted 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, which represents Adjusted EBITDA adjusted for the select items referred to above.
(a)Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance.
(b)Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance.
(c)Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance.
(d)Represents costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance.
(e)Represents impairment charges, which are not considered indicative of our ongoing operating performance. The losses recorded during the three and six months ended June 30, 2023 were due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023.
(f)Represents foreign exchange losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of the impacts of our foreign currency instruments used to hedge our balance sheet exposures.
(g)Represents the non-cash, non-service cost components of long-term employee benefit costs.
(h)Represents non-cash impacts associated with stock-based compensation.
(i)Represents costs related to certain environmental remediation activities, which are not considered indicative of our ongoing operating performance.
(j)Represents costs for certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance.
v3.24.2.u1
Accumulated Other Comprehensive Loss
6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Accumulated Other Comprehensive Loss ACCUMULATED OTHER COMPREHENSIVE LOSS
Unrealized
Currency
Translation
Adjustments
Pension
Adjustments
Unrealized
Gain (Loss) on
Derivatives
Accumulated
Other
Comprehensive
 (Loss) Income
Balance, December 31, 2023
$(374)$(70)$— $(444)
Current year deferrals to AOCI(41)— — (41)
Reclassifications from AOCI to Net income(4)— (3)
Net Change(45)— (44)
Balance, March 31, 2024
(419)(69)— (488)
Current year deferrals to AOCI(26)— — (26)
Reclassifications from AOCI to Net income(4)— (3)
Net Change(30)— (29)
Balance, June 30, 2024
$(449)$(68)$— $(517)
The cumulative income tax expense related to the adjustments for foreign exchange at June 30, 2024 was $1 million. The cumulative income tax benefit related to the adjustments for pension benefits at June 30, 2024 was $29 million. The cumulative income tax expense related to the adjustments for the unrealized gain on derivatives at June 30, 2024 was immaterial. See Note 16 for classification within the condensed consolidated statements of operations of the gains and losses on derivatives reclassified from AOCI.
Unrealized
Currency
Translation
Adjustments
Pension
Adjustments
Unrealized
(Loss) Gain on
Derivatives
Accumulated
Other
Comprehensive
(Loss) Income
Balance, December 31, 2022
$(434)$(36)$$(467)
Current year deferrals to AOCI50 — 51 
Reclassifications from AOCI to Net income(4)— (3)(7)
Net Change46 — (2)44 
Balance, March 31, 2023
(388)(36)(423)
Current year deferrals to AOCI
Reclassifications from AOCI to Net income(2)— (1)(3)
Net Change— 
Balance, June 30, 2023
$(386)$(35)$$(420)
The cumulative income tax benefit related to the adjustments for foreign exchange at June 30, 2023 was $1 million. The cumulative income tax benefit related to the adjustments for pension benefits at June 30, 2023 was $14 million. The cumulative income tax expense related to the adjustments for the unrealized gain on derivatives at June 30, 2023 was immaterial. See Note 16 for classification within the condensed consolidated statements of operations of the gains and losses on derivatives reclassified from AOCI.
v3.24.2.u1
SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
Acquisition of The CoverFlexx Group
As disclosed in our Current Report on Form 8-K furnished on May 13, 2024, we entered into a definitive agreement to acquire The CoverFlexx Group ("CoverFlexx") from Transtar Holding Company for an initial cash consideration of $285 million, plus an additional $10 million earnout contingent on CoverFlexx's 2024 performance. As disclosed in our Current Report on Form 8-K furnished on July 2, 2024, we completed the acquisition in July 2024.
v3.24.2.u1
Pay vs Performance Disclosure - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure        
Net income to common shareholders $ 112 $ 61 $ 153 $ 122
v3.24.2.u1
Insider Trading Arrangements
3 Months Ended
Jun. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2.u1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Recently Adopted Accounting Guidance and Accounting Guidance and Disclosure Rules Issued But Not Yet Adopted
Recently Adopted Accounting Guidance
In January 2023, we adopted Accounting Standards Update ("ASU") 2022-04, Liabilities – Supplier Finance Programs, which codifies disclosure requirements for supplier financing programs. This ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. Upon adoption of this ASU, we incorporated the required disclosures in Note 14. In addition to the disclosures included in Note 14, ASU 2022-04 requires a rollforward of activity for each supplier financing program beginning with annual reporting for the year ended December 31, 2024, at which time we will incorporate the required rollforward disclosure.
Accounting Guidance and Disclosure Rules Issued But Not Yet Adopted
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280), to expand the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-07 on our financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid disclosures. The new standard is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-09 on our financial statements.
In March 2024, the Securities and Exchange Commission ("SEC") adopted final rules under SEC Release No. 34-99678 and No. 33-11275 (the "Final Rules"), The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require registrants to provide certain climate-related information in their registration statements and annual reports. The Final Rules require, among other things, disclosures in the notes to the audited financial statements relating to the effects of severe weather events and other natural conditions, subject to certain thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates in certain circumstances. The financial statement disclosure requirements of the Final Rules are effective for fiscal years beginning in 2025. In April 2024, the SEC stayed the effectiveness of the Final Rules. We are currently evaluating the impact of the Final Rules.
v3.24.2.u1
Goodwill and Identifiable Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
The following table shows changes in the carrying amount of goodwill from December 31, 2023 to June 30, 2024 by reportable segment:
Performance
Coatings
Mobility
Coatings
Total
Balance at December 31, 2023$1,513 $78 $1,591 
Foreign currency translation(40)(2)(42)
Balance at June 30, 2024$1,473 $76 $1,549 
Schedule of Finite-lived and Indefinite-lived Intangible Assets by Major Class
The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:
June 30, 2024Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology$161 $(94)$67 11.2
Trademarks—indefinite-lived256 — 256 Indefinite
Trademarks—definite-lived139 (64)75 14.5
Customer relationships1,169 (506)663 19.0
Total$1,725 $(664)$1,061 
December 31, 2023Gross Carrying
Amount
Accumulated
Amortization
Net Book
Value
Weighted average
amortization periods (years)
Technology$162 $(88)$74 11.2
Trademarks—indefinite-lived264 — 264 Indefinite
Trademarks—definite-lived142 (60)82 14.5
Customer relationships1,194 (484)710 19.0
Total$1,762 $(632)$1,130 
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 2024 and each of the succeeding five years is:
Remainder of 2024$44 
202587 
202687 
202786 
202872 
202967 
v3.24.2.u1
Restructuring (Tables)
6 Months Ended
Jun. 30, 2024
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring and Related Costs
The following table summarizes the activity related to the termination benefit reserves and expenses from December 31, 2023 to June 30, 2024:
2024 Activity
Balance at December 31, 2023$16 
Expenses, net of changes to estimates55 
Payments made(17)
Foreign currency translation(1)
Balance at June 30, 2024$53 
v3.24.2.u1
Long-term Employee Benefits (Tables)
6 Months Ended
Jun. 30, 2024
Retirement Benefits [Abstract]  
Schedule of Net Benefit Costs
The following table sets forth the pre-tax components of net periodic benefit costs for our defined benefit plans for the three and six months ended June 30, 2024 and 2023:
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Components of net periodic benefit cost:
Net periodic benefit cost:
Service cost$$$$
Interest cost10 
Expected return on plan assets(3)(3)(6)(6)
Amortization of actuarial loss, net— — 
Net periodic benefit cost$$$$
v3.24.2.u1
Stock-based Compensation (Tables)
6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock Options Roll Forward
A summary of stock option award activity as of and for the six months ended June 30, 2024 is presented below.
Stock OptionsAwards
(in millions)
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
 (in millions)
Weighted
Average
Remaining
Contractual
Life (years)
Outstanding at January 1, 20240.5 $28.33 
Exercised(0.2)$26.91 
Forfeited / Expired (1)
— $32.50 
Outstanding at June 30, 2024
0.3 $28.88 
Vested and expected to vest at June 30, 2024
0.3 $28.88 $3.02
Exercisable at June 30, 2024
0.3 $28.88 $3.02
(1)    Activity during the six months ended June 30, 2024 rounds to zero.
Schedule of Restricted Stock Units and Restricted Stock Awards Roll Forward
Restricted Stock UnitsUnits
(in millions)
Weighted Average
Fair Value
Outstanding at January 1, 20241.3 $28.71 
Granted0.5 $32.50 
Vested(0.4)$29.06 
Forfeited(0.1)$29.80 
Outstanding at June 30, 20241.3 $30.10 
Schedule of Performance Stock Roll Forward
Performance Share UnitsUnits
(in millions)
Weighted Average
Fair Value
Outstanding at January 1, 20240.8 $33.20 
Granted0.3 $38.52 
Vested (1)
— $29.53 
Forfeited(0.2)$30.89 
Outstanding at June 30, 20240.9 $35.82 
(1)    Activity during the six months ended June 30, 2024 rounds to zero.
v3.24.2.u1
Other (Income) Expense, Net (Tables)
6 Months Ended
Jun. 30, 2024
Other Income and Expenses [Abstract]  
Schedule of Other (Income) Expense, Net
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Foreign exchange losses, net$$10 $$12 
Debt extinguishment and refinancing-related costs (1)
— 
Other miscellaneous income, net (4)(2)(4)(5)
Total$(1)$$$10 
(1)    Debt extinguishment and refinancing-related costs include third-party fees incurred and the loss on extinguishment associated with the write-off of unamortized deferred financing costs and original issue discounts in conjunction with the restructuring and refinancing of our long-term borrowings, as discussed further in Note 15.
v3.24.2.u1
Income Taxes (Tables)
6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Schedule of Effective Income Tax Rate Reconciliation
Our effective income tax rates for the six months ended June 30, 2024 and 2023 are as follows:
Six Months Ended
June 30,
20242023
Effective Tax Rate29.1 %19.1 %
v3.24.2.u1
Net Income Per Common Share (Tables)
6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Net Income Per Common Share A reconciliation of our basic and diluted net income per common share is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions, except per share data)2024202320242023
Net income to common shareholders$112 $61 $153 $122 
Basic weighted average shares outstanding219.9 221.6 220.2 221.4 
Diluted weighted average shares outstanding220.9 222.5 221.2 222.3 
Net income per common share (1):
Basic net income per share$0.51 $0.27 $0.70 $0.55 
Diluted net income per share$0.51 $0.27 $0.69 $0.55 
(1)    Basic earnings per share and diluted earnings per share are calculated based on full precision. Figures in the table may not recalculate due to rounding.
v3.24.2.u1
Accounts and Notes Receivable, Net (Tables)
6 Months Ended
Jun. 30, 2024
Receivables [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
June 30, 2024December 31, 2023
Accounts receivable - trade, net (1)
$1,054 $1,043 
Notes receivable74 79 
Other (2)
140 138 
Total$1,268 $1,260 
(1)    Allowance for doubtful accounts was $24 million and $25 million at June 30, 2024 and December 31, 2023, respectively.
(2)    Includes $30 million and $36 million at June 30, 2024 and December 31, 2023, respectively, of insurance recoveries related to an operational matter discussed further in Note 5.
v3.24.2.u1
Inventories (Tables)
6 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventory, Current
June 30, 2024December 31, 2023
Finished products$407 $405 
Semi-finished products127 126 
Raw materials182 182 
Stores and supplies29 28 
Total$745 $741 
v3.24.2.u1
Property, Plant and Equipment, Net (Tables)
6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property, Plant and Equipment
June 30, 2024December 31, 2023
Property, plant and equipment$2,428 $2,454 
Accumulated depreciation(1,270)(1,250)
Property, plant and equipment, net$1,158 $1,204 
v3.24.2.u1
Borrowings (Tables)
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Debt
Borrowings are summarized as follows:
June 30, 2024December 31, 2023
2029 Dollar Term Loans$1,707 $1,786 
Revolving Credit Facility185 — 
2027 Dollar Senior Notes500 500 
2029 Dollar Senior Notes700 700 
2031 Dollar Senior Notes500 500 
Short-term and other borrowings55 62 
Unamortized original issue discount(15)(17)
Unamortized deferred financing costs(24)(27)
Total borrowings, net3,608 3,504 
Less:
Short-term borrowings
Current portion of long-term borrowings17 19 
Long-term debt$3,588 $3,478 
Schedule of Maturities of Long-term Debt
Below is a schedule of required future repayments of all borrowings outstanding at June 30, 2024.
Remainder of 2024$10 
202521 
202621 
2027521 
202822 
Thereafter3,052 
Total borrowings3,647 
Unamortized original issue discount(15)
Unamortized deferred financing costs(24)
Total borrowings, net$3,608 
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at June 30, 2024 and December 31, 2023.
June 30, 2024December 31, 2023
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Prepaid expenses and other current assets:
Cross-currency swaps (1)
$— $12 $— $12 $— $$— $
Other assets:
Cross-currency swaps (1)
— — — — — — 
Investments in equity securities
— — — — 
Liabilities:
Other accrued liabilities:
Cross-currency swaps (1)
— — — — — — 
Contingent consideration— — 10 10 — — 
Other liabilities:
Cross-currency swaps (1)
— 11 — 11 — 38 — 38 
Long-term borrowings:
2029 Dollar Term Loans— 1,712 — 1,712 — 1,794 — 1,794 
2027 Dollar Senior Notes— 486 — 486 — 487 — 487 
2029 Dollar Senior Notes— 626 — 626 — 633 — 633 
2031 Dollar Senior Notes— 519 — 519 — 527 — 527 
(1)    Net investment hedge
Schedule of Fair Value, Liability Activity
The table below presents a roll forward of activity for the Level 3 liabilities for the six months ended June 30, 2024.
Fair Value Using Significant Unobservable Inputs
(Level 3)
Beginning balance at December 31, 2023
$
Change in fair value
Foreign currency translation(1)
Ending balance at June 30, 2024
$10 
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table sets forth the locations and amounts recognized during the three and six months ended June 30, 2024 and 2023 for the Company's cash flow and net investment hedges.
Three Months Ended
June 30,
20242023
Derivatives in Cash Flow and Net Investment HedgesLocation of (Gain) Loss Recognized in Income on DerivativesNet Amount of Gain Recognized in OCI on DerivativesAmount of Gain Recognized in IncomeNet Amount of (Gain) Loss Recognized in OCI on DerivativesAmount of Gain Recognized in Income
Interest rate swapsInterest expense, net$(1)$— $(1)$(1)
Cross-currency swaps
Interest expense, net(15)(4)(2)
Six Months Ended
June 30,
20242023
Derivatives in Cash Flow and Net Investment HedgesLocation of (Gain) Loss Recognized in Income on DerivativesNet Amount of Gain Recognized in OCI on DerivativesAmount of Gain Recognized in IncomeNet Amount of (Gain) Loss Recognized in OCI on DerivativesAmount of Gain Recognized in Income
Interest rate swapsInterest expense, net$(1)$— $(2)$(3)
Cross-currency swaps
Interest expense, net(48)(8)14 (6)
Schedule of Derivatives Not Designated as Hedging Instruments
Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment under ASC 815, Derivatives and hedging, are recorded in earnings as follows:
Derivatives Not Designated as Hedging
Instruments under ASC 815
Location of Gain Recognized in Income on DerivativesThree Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Foreign currency forward contractsOther (income) expense, net$— $(4)$(4)$(7)
v3.24.2.u1
Segments (Tables)
6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment
Adjusted EBITDA is the primary measure used by our CODM to evaluate financial performance of the operating segments and allocate resources and is therefore our measure of segment profitability in accordance with GAAP under ASC 280, Segment Reporting. Asset information is not reviewed or included with our internal management reporting. Therefore, we have not disclosed asset information for each reportable segment. The following table presents relevant information of our reportable segments.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net sales (1):
Refinish$546 $520 $1,065 $1,018 
Industrial341 336 670 685 
Total Net sales Performance Coatings887 856 1,735 1,703 
Light Vehicle354 330 696 659 
Commercial Vehicle110 108 214 216 
Total Net sales Mobility Coatings464 438 910 875 
Total Net sales$1,351 $1,294 $2,645 $2,578 
(1)The Company has no intercompany sales between segments.
Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated
The following table reconciles our segment operating performance to income before income taxes for the periods presented:
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Segment Adjusted EBITDA (1):
Performance Coatings$223 $181 $419 $350 
Mobility Coatings68 46 131 90 
Total291 227 550 440 
Interest expense, net50 55 104 103 
Depreciation and amortization68 66 136 136 
Debt extinguishment and refinancing-related costs (a)
— 
Termination benefits and other employee-related costs (b)
56 
Acquisition and divestiture-related costs (c)
(1)— 
Site closure costs (d)
— 
Impairment charges (e)
— — 15 
Foreign exchange remeasurement losses (f)
10 12 
Long-term employee benefit plan adjustments (g)
Stock-based compensation (h)
14 14 
Environmental charge (i)
— — — 
Other adjustments (j)
— (1)
Income before income taxes$156 $74 $215 $150 
(1)The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation, amortization and select other items impacting operating results. These other items impacting operating results are items that management has concluded are (1) non-cash items included within net income, (2) items the Company does not believe are indicative of ongoing operating performance or (3) non-recurring, unusual or infrequent items that have not occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Adjusted 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, which represents Adjusted EBITDA adjusted for the select items referred to above.
(a)Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance.
(b)Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance.
(c)Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance.
(d)Represents costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance.
(e)Represents impairment charges, which are not considered indicative of our ongoing operating performance. The losses recorded during the three and six months ended June 30, 2023 were due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023.
(f)Represents foreign exchange losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of the impacts of our foreign currency instruments used to hedge our balance sheet exposures.
(g)Represents the non-cash, non-service cost components of long-term employee benefit costs.
(h)Represents non-cash impacts associated with stock-based compensation.
(i)Represents costs related to certain environmental remediation activities, which are not considered indicative of our ongoing operating performance.
(j)Represents costs for certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance.
v3.24.2.u1
Accumulated Other Comprehensive Loss (Tables)
6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Unrealized
Currency
Translation
Adjustments
Pension
Adjustments
Unrealized
Gain (Loss) on
Derivatives
Accumulated
Other
Comprehensive
 (Loss) Income
Balance, December 31, 2023
$(374)$(70)$— $(444)
Current year deferrals to AOCI(41)— — (41)
Reclassifications from AOCI to Net income(4)— (3)
Net Change(45)— (44)
Balance, March 31, 2024
(419)(69)— (488)
Current year deferrals to AOCI(26)— — (26)
Reclassifications from AOCI to Net income(4)— (3)
Net Change(30)— (29)
Balance, June 30, 2024
$(449)$(68)$— $(517)
Unrealized
Currency
Translation
Adjustments
Pension
Adjustments
Unrealized
(Loss) Gain on
Derivatives
Accumulated
Other
Comprehensive
(Loss) Income
Balance, December 31, 2022
$(434)$(36)$$(467)
Current year deferrals to AOCI50 — 51 
Reclassifications from AOCI to Net income(4)— (3)(7)
Net Change46 — (2)44 
Balance, March 31, 2023
(388)(36)(423)
Current year deferrals to AOCI
Reclassifications from AOCI to Net income(2)— (1)(3)
Net Change— 
Balance, June 30, 2023
$(386)$(35)$$(420)
v3.24.2.u1
Revenue (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]          
Contract with customer, asset $ 37   $ 37   $ 39
Capitalized contract cost, net 170   170   $ 149
Capitalized contract cost, amortization $ 14 $ 15 $ 28 $ 31  
v3.24.2.u1
Goodwill and Identifiable Intangible Assets - Schedule of Goodwill (Details)
$ in Millions
6 Months Ended
Jun. 30, 2024
USD ($)
Goodwill [Roll Forward]  
Goodwill, beginning balance $ 1,591
Foreign currency translation (42)
Goodwill, ending balance 1,549
Performance Coatings  
Goodwill [Roll Forward]  
Goodwill, beginning balance 1,513
Foreign currency translation (40)
Goodwill, ending balance 1,473
Mobility Coatings  
Goodwill [Roll Forward]  
Goodwill, beginning balance 78
Foreign currency translation (2)
Goodwill, ending balance $ 76
v3.24.2.u1
Goodwill and Identifiable Intangible Assets - Gross Carrying Amounts and Accumulated Amortization of Identifiable Intangible Assets by Major Class (Details) - USD ($)
$ in Millions
6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]    
Gross Carrying Amount $ 1,725 $ 1,762
Accumulated Amortization (664) (632)
Net Book Value, definite-lived 1,061 1,130
Trademarks    
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]    
Net Book Value, indefinite-lived 256 264
Technology    
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]    
Gross Carrying Amount 161 162
Accumulated Amortization (94) (88)
Net Book Value, definite-lived $ 67 $ 74
Weighted average amortization periods (years) 11 years 2 months 12 days 11 years 2 months 12 days
Trademarks    
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]    
Gross Carrying Amount $ 139 $ 142
Accumulated Amortization (64) (60)
Net Book Value, definite-lived $ 75 $ 82
Weighted average amortization periods (years) 14 years 6 months 14 years 6 months
Customer relationships    
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items]    
Gross Carrying Amount $ 1,169 $ 1,194
Accumulated Amortization (506) (484)
Net Book Value, definite-lived $ 663 $ 710
Weighted average amortization periods (years) 19 years 19 years
v3.24.2.u1
Goodwill and Identifiable Intangible Assets - Schedule of Expected Amortization Expense (Details)
$ in Millions
Jun. 30, 2024
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Remainder of 2024 $ 44
2025 87
2026 87
2027 86
2028 72
2029 $ 67
v3.24.2.u1
Restructuring - Additional Information (Details)
$ in Millions
3 Months Ended 6 Months Ended 36 Months Ended
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
employee
Jun. 30, 2023
USD ($)
Dec. 31, 2026
USD ($)
Restructuring Cost and Reserve [Line Items]          
Number of employees in workforce reduction | employee     600    
Payments for restructuring     $ 17    
Restructuring charges $ 0 $ 2 $ 55 $ 3  
Payment term (in months)     24 months    
Minimum          
Restructuring Cost and Reserve [Line Items]          
Expected pretax restructuring charges 75   $ 75    
Approximate employee severance and other cash costs     65    
Accelerated depreciation and site closure costs     10    
Minimum | Forecast          
Restructuring Cost and Reserve [Line Items]          
Payments for restructuring         $ 95
Minimum | Capital Expenditures | Forecast          
Restructuring Cost and Reserve [Line Items]          
Payments for restructuring         30
Maximum          
Restructuring Cost and Reserve [Line Items]          
Expected pretax restructuring charges $ 110   110    
Approximate employee severance and other cash costs     90    
Accelerated depreciation and site closure costs     $ 20    
Maximum | Forecast          
Restructuring Cost and Reserve [Line Items]          
Payments for restructuring         135
Maximum | Capital Expenditures | Forecast          
Restructuring Cost and Reserve [Line Items]          
Payments for restructuring         $ 45
v3.24.2.u1
Restructuring - Restructuring Reserve (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Restructuring Reserve [Roll Forward]        
Beginning balance     $ 16  
Expenses, net of changes to estimates $ 0 $ 2 55 $ 3
Payments made     (17)  
Foreign currency translation     (1)  
Ending balance $ 53   $ 53  
v3.24.2.u1
Commitments and Contingencies (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]          
Maximum exposure $ 21   $ 21   $ 10
Current carrying value 0   0   0
Operational matter 0 $ 0 0 $ 0  
Insurance receivable 30   30   36
Loss recorded as a liability $ 29   $ 29   $ 31
v3.24.2.u1
Long-term Employee Benefits (Details) - Pension Plan - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net periodic benefit cost:        
Service cost $ 3 $ 1 $ 4 $ 3
Interest cost 4 5 9 10
Expected return on plan assets (3) (3) (6) (6)
Amortization of actuarial loss, net 1 0 2 0
Net periodic benefit cost $ 5 $ 3 $ 9 $ 7
v3.24.2.u1
Stock-based Compensation - Additional Information (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense $ 8,000,000 $ 8,000,000 $ 14,000,000 $ 14,000,000
Stock based compensation tax benefit 0 $ 1,000,000 1,000,000 $ 2,000,000
Proceeds from stock options exercised     4,000,000  
Unrecognized expense 0   0  
Restricted Stock Units (RSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Tax benefit realized on the vesting of restricted stock     0  
Compensation not yet recognized, share-based awards other than options 20,000,000   $ 20,000,000  
Period for recognition of compensation not yet recognized     1 year 6 months  
Performance Shares        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation not yet recognized, share-based awards other than options $ 22,000,000   $ 22,000,000  
Period for recognition of compensation not yet recognized     2 years 1 month 6 days  
Performance Shares | Minimum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Percent of vested shares granted     0.00%  
Performance Shares | Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Percent of vested shares granted     200.00%  
v3.24.2.u1
Stock-based Compensation - Schedule of Stock Option Activity (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
6 Months Ended
Jun. 30, 2024
Awards (in millions)  
Beginning balance (in shares) 0.5
Exercised (in shares) (0.2)
Forfeited/Expired (in shares) 0.0
Ending balance (in shares) 0.3
Weighted Average Exercise Price  
Beginning balance (in dollars per share) $ 28.33
Exercised (in dollars per share) 26.91
Forfeited/Expired (in dollars per share) 32.50
Ending balance (in dollars per share) $ 28.88
Vested and Expected to Vest  
Vested and expected to vest, awards (in shares) 0.3
Vested and expected to vest, weighted average exercise price (in dollars per share) $ 28.88
Vested and expected to vest, aggregate intrinsic value $ 2
Vested and expected to vest, weighted average remaining contractual life (in years) 3 years 7 days
Exercisable  
Exercisable, awards (in shares) 0.3
Exercisable, weighted average exercise price (in dollars per share) $ 28.88
Exercisable, aggregate intrinsic value $ 2
Exercisable, weighted average remaining contractual life (in years) 3 years 7 days
v3.24.2.u1
Stock-based Compensation - Schedule of Restricted Stock Units (Details) - Restricted Stock Units (RSUs)
shares in Millions
6 Months Ended
Jun. 30, 2024
$ / shares
shares
Units (in millions)  
Beginning balance (in shares) | shares 1.3
Granted (in shares) | shares 0.5
Vested (in shares) | shares (0.4)
Forfeited (in shares) | shares (0.1)
Ending balance (in shares) | shares 1.3
Weighted Average Fair Value  
Beginning balance (in dollars per share) | $ / shares $ 28.71
Granted (in dollars per share) | $ / shares 32.50
Vested (in dollars per share) | $ / shares 29.06
Forfeited (in dollars per share) | $ / shares 29.80
Ending balance (in dollars per share) | $ / shares $ 30.10
v3.24.2.u1
Stock-based Compensation - Schedule of Performance Shares Award Outstanding Activity (Details) - Performance Shares
shares in Millions
6 Months Ended
Jun. 30, 2024
$ / shares
shares
Units (in millions)  
Beginning balance (in shares) | shares 0.8
Granted (in shares) | shares 0.3
Vested (in shares) | shares 0.0
Forfeited (in shares) | shares (0.2)
Ending balance (in shares) | shares 0.9
Weighted Average Fair Value  
Beginning balance (in dollars per share) | $ / shares $ 33.20
Granted (in dollars per share) | $ / shares 38.52
Vested (in dollars per share) | $ / shares 29.53
Forfeited (in dollars per share) | $ / shares 30.89
Ending balance (in dollars per share) | $ / shares $ 35.82
v3.24.2.u1
Other (Income) Expense, Net (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Other Income and Expenses [Abstract]        
Foreign exchange losses, net $ 3 $ 10 $ 8 $ 12
Debt extinguishment and refinancing-related costs 0 1 3 3
Other miscellaneous income, net (4) (2) (4) (5)
Total $ (1) $ 9 $ 7 $ 10
v3.24.2.u1
Income Taxes (Details) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Income Tax Disclosure [Abstract]    
Effective Tax Rate 29.10% 19.10%
Settlement with Taxing Authority    
Operating Loss Carryforwards [Line Items]    
Amount reasonable possible to settle of unrecognized tax benefits $ 46  
v3.24.2.u1
Net Income Per Common Share - Schedule of Basic and Diluted Net Income Per Common Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Earnings Per Share [Abstract]        
Net income to common shareholders $ 112 $ 61 $ 153 $ 122
Basic weighted average shares outstanding (in shares) 219.9 221.6 220.2 221.4
Diluted weighted average shares outstanding (in shares) 220.9 222.5 221.2 222.3
Net income per common share        
Basic net income per share (in dollars per share) $ 0.51 $ 0.27 $ 0.70 $ 0.55
Diluted net income per share (in dollars per share) $ 0.51 $ 0.27 $ 0.69 $ 0.55
v3.24.2.u1
Net Income Per Common Share - Additional Information (Details) - shares
shares in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Earnings Per Share [Abstract]        
Antidilutive securities excluded from computation of earnings per share (in shares) 0.2 0.1 0.1 0.5
v3.24.2.u1
Accounts and Notes Receivable, Net - Schedule of Accounts, Notes, Loans, and Financing Receivable (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Receivables [Abstract]    
Accounts receivable - trade, net $ 1,054 $ 1,043
Notes receivable 74 79
Other 140 138
Total 1,268 1,260
Allowance for doubtful accounts 24 25
Insurance receivable $ 30 $ 36
v3.24.2.u1
Accounts and Notes Receivable, Net - Additional Information (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Financing Receivable, Allowance for Credit Loss [Line Items]        
Bad debt expense net of recoveries $ 4 $ 1 $ 5 $ 5
Russia Conflict with Ukraine        
Financing Receivable, Allowance for Credit Loss [Line Items]        
Bad debt expense net of recoveries $ 1 $ 0 $ 1 $ 1
v3.24.2.u1
Inventories - Schedule of Inventory (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Finished products $ 407 $ 405
Semi-finished products 127 126
Raw materials 182 182
Stores and supplies 29 28
Total Inventories $ 745 $ 741
v3.24.2.u1
Inventories - Additional Information (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Inventory reserves $ 25 $ 27
v3.24.2.u1
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Abstract]    
Property, plant and equipment $ 2,428 $ 2,454
Accumulated depreciation (1,270) (1,250)
Property, plant and equipment, net $ 1,158 $ 1,204
v3.24.2.u1
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Property, Plant and Equipment [Abstract]        
Depreciation expense $ 31 $ 30 $ 62 $ 59
v3.24.2.u1
Supplier Finance Programs (Details) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Supplier Finance Program [Line Items]      
Short-term borrowings $ 3   $ 7
Cash outflows $ 5 $ 26  
Supplier Financing Arrangements      
Supplier Finance Program [Line Items]      
Debt term 90 days    
Short-term borrowings $ 0 10  
Cash outflows 4 23  
SCF Program      
Supplier Finance Program [Line Items]      
Supplier finance program, obligation 27   28
VCA Program      
Supplier Finance Program [Line Items]      
Supplier finance program, obligation $ 7   $ 8
Supplier financing program obligation, payment term 25 days    
Property, Plant and Equipment Purchases | Supplier Financing Arrangements      
Supplier Finance Program [Line Items]      
Short-term borrowings   $ 3  
v3.24.2.u1
Borrowings - Schedule of Debt (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Short-term and other borrowings $ 55 $ 62
Unamortized original issue discount (15) (17)
Unamortized deferred financing costs (24) (27)
Total borrowings, net 3,608 3,504
Short-term borrowings 3 7
Current portion of long-term borrowings 17 19
Long-term debt 3,588 3,478
Revolving Credit Facility    
Debt Instrument [Line Items]    
Revolving Credit Facility 185 0
2029 Dollar Term Loans    
Debt Instrument [Line Items]    
Term loan 1,707 1,786
2027 Dollar Senior Notes    
Debt Instrument [Line Items]    
Senior notes 500 500
2029 Dollar Senior Notes    
Debt Instrument [Line Items]    
Senior notes 700 700
2031 Dollar Senior Notes    
Debt Instrument [Line Items]    
Senior notes $ 500 $ 500
v3.24.2.u1
Borrowings - Additional Information (Details) - USD ($)
$ in Millions
1 Months Ended 6 Months Ended
Feb. 29, 2024
Mar. 31, 2024
Jun. 30, 2024
May 31, 2024
Dec. 31, 2023
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate     1.50%    
2029 Dollar Term Loans          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 2.50% 2.00%      
Prepayment of debt     $ 75    
Loss on extinguishment of debt     1    
Loss on financing-related costs     2    
Revolving Credit Facility          
Debt Instrument [Line Items]          
Revolving credit facility     185   $ 0
Letters of credit outstanding, amount     22   22
Line of credit facility, remaining borrowing capacity     593   528
Line of credit facility, maximum borrowing capacity     800 $ 550  
Incremental deferred financing costs     4    
Revolving Credit Facility | Customer Obligation Guarantees          
Debt Instrument [Line Items]          
Letters of credit outstanding, amount     $ 14   $ 14
v3.24.2.u1
Borrowings - Schedule of Maturities of Long-term Debt (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
Remainder of 2024 $ 10  
2025 21  
2026 21  
2027 521  
2028 22  
Thereafter 3,052  
Total borrowings 3,647  
Unamortized original issue discount (15) $ (17)
Unamortized deferred financing costs (24) (27)
Total borrowings, net $ 3,608 $ 3,504
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements - Schedule of Fair Value of Financial Instruments (Details) - Fair Value, Recurring - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments in equity securities $ 1 $ 1
Contingent consideration 10 8
2029 Dollar Term Loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans payable 1,712 1,794
2027 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 486 487
2029 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 626 633
2031 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 519 527
Cross-currency swaps | Prepaid Expenses and Other Current Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 12 8
Cross-currency swaps | Other Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 2 0
Cross-currency swaps | Other Current Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 8
Cross-currency swaps | Other Noncurrent Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 11 38
Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments in equity securities 1 1
Contingent consideration 0 0
Level 1 | 2029 Dollar Term Loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans payable 0 0
Level 1 | 2027 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 0 0
Level 1 | 2029 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 0 0
Level 1 | 2031 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 0 0
Level 1 | Cross-currency swaps | Prepaid Expenses and Other Current Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 0 0
Level 1 | Cross-currency swaps | Other Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 0 0
Level 1 | Cross-currency swaps | Other Current Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 0
Level 1 | Cross-currency swaps | Other Noncurrent Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 0
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments in equity securities 0 0
Contingent consideration 0 0
Level 2 | 2029 Dollar Term Loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans payable 1,712 1,794
Level 2 | 2027 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 486 487
Level 2 | 2029 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 626 633
Level 2 | 2031 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 519 527
Level 2 | Cross-currency swaps | Prepaid Expenses and Other Current Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 12 8
Level 2 | Cross-currency swaps | Other Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 2 0
Level 2 | Cross-currency swaps | Other Current Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 8
Level 2 | Cross-currency swaps | Other Noncurrent Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 11 38
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments in equity securities 0 0
Contingent consideration 10 8
Level 3 | 2029 Dollar Term Loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans payable 0 0
Level 3 | 2027 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 0 0
Level 3 | 2029 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 0 0
Level 3 | 2031 Dollar Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes payable 0 0
Level 3 | Cross-currency swaps | Prepaid Expenses and Other Current Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 0 0
Level 3 | Cross-currency swaps | Other Assets | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset 0 0
Level 3 | Cross-currency swaps | Other Current Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 0
Level 3 | Cross-currency swaps | Other Noncurrent Liabilities | Designated as Hedging Instrument    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability $ 0 $ 0
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements - Schedule of Liability Activity (Details)
$ in Millions
6 Months Ended
Jun. 30, 2024
USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Beginning balance $ 8
Change in fair value 3
Foreign currency translation (1)
Ending balance $ 10
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements - Additional Information (Details)
€ in Millions, $ in Millions
3 Months Ended
Mar. 31, 2024
USD ($)
Mar. 31, 2024
EUR (€)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative, notional amount terminated $ 150  
Cross-currency swaps    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notional amount, extended during period 150  
Derivative, notional amount $ 150 € 142
Derivative interest rate of hedged item 6.692% 6.692%
Derivative, fixed interest rate 4.899% 4.899%
2029 Dollar Term Loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative, notional amount $ 150  
Interest Rate Swap 4.692%    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative, notional amount $ 150  
Derivative, fixed interest rate 4.692% 4.692%
Interest Rate Swap 0.5%    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative, notional amount $ 150  
Derivative, floor interest rate 0.50% 0.50%
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements - Derivative Locations and Amounts Recognized (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Net Amount of (Gain) Loss Recognized in OCI on Derivatives $ 0 $ (1) $ 0 $ 1
Interest rate swaps        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Net Amount of (Gain) Loss Recognized in OCI on Derivatives (1) (1) (1) (2)
Cross-currency swaps        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Net Amount of (Gain) Loss Recognized in OCI on Derivatives (15) 7 (48) 14
Interest expense, net | Interest rate swaps        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Amount of Gain Recognized in Income 0 (1) 0 (3)
Interest expense, net | Cross-currency swaps        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Amount of Gain Recognized in Income $ (4) $ (2) $ (8) $ (6)
v3.24.2.u1
Financial Instruments, Hedging Activities and Fair Value Measurements - Instruments Not Designated as Hedge (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Foreign currency forward contracts | Other (income) expense, net        
Derivative [Line Items]        
Derivatives not designated as hedging $ 0 $ (4) $ (4) $ (7)
v3.24.2.u1
Segments - Additional Information (Details)
6 Months Ended
Jun. 30, 2024
segment
Segment Reporting [Abstract]  
Number of operating segments 2
Number of reportable segments 2
v3.24.2.u1
Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Segment Reporting Information [Line Items]        
Net sales $ 1,351 $ 1,294 $ 2,645 $ 2,578
Intercompany sales between segments 0 0 0 0
Performance Coatings        
Segment Reporting Information [Line Items]        
Net sales 887 856 1,735 1,703
Mobility Coatings        
Segment Reporting Information [Line Items]        
Net sales 464 438 910 875
Refinish | Performance Coatings        
Segment Reporting Information [Line Items]        
Net sales 546 520 1,065 1,018
Industrial | Performance Coatings        
Segment Reporting Information [Line Items]        
Net sales 341 336 670 685
Light Vehicle | Mobility Coatings        
Segment Reporting Information [Line Items]        
Net sales 354 330 696 659
Commercial Vehicle | Mobility Coatings        
Segment Reporting Information [Line Items]        
Net sales $ 110 $ 108 $ 214 $ 216
v3.24.2.u1
Segments - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]        
Adjusted EBITDA $ 291 $ 227 $ 550 $ 440
Interest expense, net 50 55 104 103
Depreciation and amortization 68 66 136 136
Debt extinguishment and refinancing-related costs 0 1 3 3
Termination benefits and other employee-related costs 1 2 56 2
Acquisition and divestiture-related costs 2 (1) 4 0
Site closure costs 0 1 1 2
Impairment charges 0 8 0 15
Foreign exchange remeasurement losses 3 10 8 12
Long-term employee benefit plan adjustments 2 2 5 4
Stock-based compensation 8 8 14 14
Environmental charge 0 0 4 0
Other adjustments 1 1 0 (1)
Income before income taxes 156 74 215 150
Performance Coatings        
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]        
Adjusted EBITDA 223 181 419 350
Mobility Coatings        
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]        
Adjusted EBITDA $ 68 $ 46 $ 131 $ 90
v3.24.2.u1
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]            
Beginning balance $ 1,775 $ 1,773 $ 1,615 $ 1,500 $ 1,773 $ 1,500
Other comprehensive (loss) income, net of tax (29)   3   (73) 46
Ending balance 1,818 1,775 1,689 1,615 1,818 1,689
Accumulated Other Comprehensive Loss            
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]            
Beginning balance (488) (444) (423) (467) (444) (467)
Current year deferrals to AOCI (26) (41) 6 51    
Reclassifications from AOCI to Net income (3) (3) (3) (7)    
Other comprehensive (loss) income, net of tax (29) (44) 3 44    
Ending balance (517) (488) (420) (423) (517) (420)
Unrealized Currency Translation Adjustments            
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]            
Beginning balance (419) (374) (388) (434) (374) (434)
Current year deferrals to AOCI (26) (41) 4 50    
Reclassifications from AOCI to Net income (4) (4) (2) (4)    
Other comprehensive (loss) income, net of tax (30) (45) 2 46    
Ending balance (449) (419) (386) (388) (449) (386)
Pension Adjustments            
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]            
Beginning balance (69) (70) (36) (36) (70) (36)
Current year deferrals to AOCI 0 0 1 0    
Reclassifications from AOCI to Net income 1 1 0 0    
Other comprehensive (loss) income, net of tax 1 1 1 0    
Ending balance (68) (69) (35) (36) (68) (35)
Unrealized Gain (Loss) on Derivatives            
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]            
Beginning balance 0 0 1 3 0 3
Current year deferrals to AOCI 0 0 1 1    
Reclassifications from AOCI to Net income 0 0 (1) (3)    
Other comprehensive (loss) income, net of tax 0 0 0 (2)    
Ending balance $ 0 $ 0 $ 1 $ 1 $ 0 $ 1
v3.24.2.u1
Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Jun. 30, 2023
Equity [Abstract]    
Cumulative income tax expense (benefit) on foreign exchange adjustments $ 1 $ (1)
Cumulative income tax benefit on pension and postretirement benefit plans 29 14
Cumulative income tax expense on derivatives $ 0 $ 0
v3.24.2.u1
SUBSEQUENT EVENTS (Details) - CoverFlexx Group
$ in Millions
May 13, 2024
USD ($)
Subsequent Event [Line Items]  
Cash consideration $ 285
Business combination, additional earnout $ 10

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