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Segments (Tables) | 12 Months Ended
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Dec. 31, 2018
Segment Reporting [Abstract] |
Reconciliation of Revenue from Segments to Consolidated | Our business serves four end-markets globally as follows:
|  | Year Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Performance Coatings |  |  |  |  |  |
Refinish |  | $ | 1,754.2 |  |  | $ | 1,645.2 |  |  | $ | 1,679.7 |
Industrial |  | 1,271.5 |  |  | 1,029.9 |  |  | 718.8 |
Total Net sales Performance Coatings |  | $ | 3,025.7 |  |  | $ | 2,675.1 |  |  | $ | 2,398.5 |
Transportation Coatings |  |  |  |  |  |
Light Vehicle |  | $ | 1,290.2 |  |  | $ | 1,322.8 |  |  | $ | 1,337.7 |
Commercial Vehicle |  | 353.8 |  |  | 355.0 |  |  | 332.6 |
Total Net sales Transportation Coatings |  | $ | 1,644.0 |  |  | $ | 1,677.8 |  |  | $ | 1,670.3 |
Total Net sales |  | $ | 4,669.7 |  |  | $ | 4,352.9 |  |  | $ | 4,068.8 |
Schedule of Segment Reporting Information, by Segment |
|  | Performance Coatings |  | Transportation Coatings |  | Total
For the Year ended December 31, 2018 |  |  |  |  |  |
Net sales (1) |  | $ | 3,025.7 |  |  | $ | 1,644.0 |  |  | $ | 4,669.7 |
Equity in earnings in unconsolidated affiliates |  | 0.4 |  |  | (0.1 | ) |  | 0.3 |
Adjusted EBITDA (2) |  | 668.3 |  |  | 268.9 |  |  | 937.2 |
Investment in unconsolidated affiliates |  | 2.7 |  |  | 12.7 |  |  | 15.4 |
|  | Performance Coatings |  | Transportation Coatings |  | Total
For the Year ended December 31, 2017 |  |  |  |  |  |
Net sales (1) |  | $ | 2,675.1 |  |  | $ | 1,677.8 |  |  | $ | 4,352.9 |
Equity in earnings (losses) in unconsolidated affiliates |  | 0.3 |  |  | 0.7 |  |  | 1.0 |
Adjusted EBITDA (2) |  | 564.2 |  |  | 321.0 |  |  | 885.2 |
Investment in unconsolidated affiliates |  | 2.9 |  |  | 12.6 |  |  | 15.5 |
|  | Performance Coatings |  | Transportation Coatings |  | Total
For the Year ended December 31, 2016 |  |  |  |  |  |
Net sales (1) |  | $ | 2,398.5 |  |  | $ | 1,670.3 |  |  | $ | 4,068.8 |
Equity in earnings in unconsolidated affiliates |  | (0.2 | ) |  | 0.4 |  |  | 0.2 |
Adjusted EBITDA (2) |  | 549.7 |  |  | 352.7 |  |  | 902.4 |
Investment in unconsolidated affiliates |  | 2.5 |  |  | 11.1 |  |  | 13.6 |
(1) | The Company has no intercompany sales between segments.
(2) The primary measure of segment operating performance is Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization and select other items impacting operating results. These other items impacting operating results are items that management has concluded are (i) non-cash items included within net income, (ii) items the Company does not believe are indicative of ongoing operating performance or (iii) nonrecurring, 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 EBITDA adjusted for the select items referred to above. Reconciliation of Adjusted EBITDA to income before income taxes follows:
Reconciliation of Operating Profit (Loss) from Segments to Consolidated |
|  | Year Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Income before income taxes |  | $ | 267.5 |  |  | $ | 189.6 |  |  | $ | 82.7 |
Interest expense, net |  | 159.6 |  |  | 147.0 |  |  | 178.2 |
Depreciation and amortization |  | 369.1 |  |  | 347.5 |  |  | 322.1 |
EBITDA |  | $ | 796.2 |  |  | $ | 684.1 |  |  | $ | 583.0 |
Debt extinguishment and refinancing related costs (a) |  | 9.5 |  |  | 13.4 |  |  | 97.6 |
Foreign exchange remeasurement losses (b) |  | 9.2 |  |  | 7.4 |  |  | 30.6 |
Long-term employee benefit plan adjustments (c) |  | (1.9 | ) |  | 1.4 |  |  | 1.5 |
Termination benefits and other employee related costs (d) |  | 81.7 |  |  | 35.3 |  |  | 61.8 |
Consulting and advisory fees (e) |  | — |  |  | (0.1 | ) |  | 10.4 |
Transition-related costs (f) |  | (0.2 | ) |  | 7.7 |  |  | — |
Offering and transactional costs (g) |  | 1.2 |  |  | 18.4 |  |  | 6.0 |
Stock-based compensation (h) |  | 37.3 |  |  | 38.5 |  |  | 41.1 |
Other adjustments (i) |  | 5.2 |  |  | 3.6 |  |  | 5.0 |
Dividends in respect of noncontrolling interest (j) |  | (1.0 | ) |  | (3.0 | ) |  | (3.0 | )
Deconsolidation and site closure related impacts (k) |  | — |  |  | 78.5 |  |  | 68.4 |
Adjusted EBITDA |  | $ | 937.2 |  |  | $ | 885.2 |  |  | $ | 902.4 |
(a) | During the years ended December 31, 2018, 2017 and 2016 we refinanced and restructured our term loans and senior notes, which resulted in losses of $9.5 million, $13.0 million and $88.0 million, respectively. In addition, during the years ended December 31, 2017 and 2016 we prepaid outstanding principal on our term loans, resulting in non-cash losses on extinguishment of $0.4 million and $9.6 million, respectively. We do not consider these items to be indicative of our ongoing operating performance.
(b) | Eliminates foreign exchange gains and 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. Exchange effects attributable to the remeasurement of our Venezuelan subsidiary represented losses of $1.8 million and $23.5 million for the years ended December 31, 2017 and 2016, respectively.
(c) | Eliminates the non-cash, non-service components of long-term employee benefit plans.
(d) | Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs, which includes Axalta CEO recruitment fees. Employee termination benefits are associated with Axalta Way initiatives. These amounts are not considered indicative of our ongoing operating performance.
(e) | Represents fees paid to consultants, and associated true-ups to estimates, for professional services primarily related to our Axalta Way initiatives, which are not considered indicative of our ongoing operating performance.
(f) | Represents integration costs and associated changes to estimates related to the 2017 acquisition of the Industrial Wood business that was a carve-out business from Valspar. We do not consider these items to be indicative of our ongoing operating performance.
(g) | Represents acquisition-related expenses, including changes in the fair value of contingent consideration, as well as $10.0 million of costs associated with contemplated merger activities during the three months ended December 31, 2017 and costs associated with the 2016 secondary offerings of our common shares by Carlyle, all of which are not considered indicative of our ongoing operating performance.
(h) | Represents non-cash costs associated with stock-based compensation.
(i) | Represents certain non-operational or non-cash gains and losses unrelated to our core business and which we do not consider indicative of ongoing operations, including indemnity losses associated with the Acquisition, gains and losses from the sale and disposal of property, plant and equipment, gains and losses from the remaining foreign currency derivative instruments and from non-cash fair value inventory adjustments associated with our business combinations.
(j) | Represents the payment of dividends to our joint venture partners by our consolidated entities that are not 100% owned, which are reflected to show the cash operating performance of these entities on Axalta's financial statements.
(k) | During the year ended December 31, 2017, we recorded a loss in conjunction with the deconsolidation of our Venezuelan subsidiary of $70.9 million. During the year ended December 31, 2016 we recorded non-cash impairments at our Venezuelan subsidiary of $68.4 million associated with our operational long-lived assets and a real estate investment (See Note 21). Additionally, during the year ended December 31, 2017, we recorded non-cash impairment charges related to certain manufacturing facilities previously announced for closure of $7.6 million. We do not consider these to be indicative of our ongoing operating performance.
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Net sales by region were as follows:
|  | Year Ended December 31,
|  | 2018 |  | 2017 |  | 2016
North America |  | $ | 1,783.6 |  |  | $ | 1,607.7 |  |  | $ | 1,426.7 |
EMEA |  | 1,658.1 |  |  | 1,538.3 |  |  | 1,455.3 |
Asia Pacific |  | 758.2 |  |  | 748.1 |  |  | 723.9 |
Latin America (a) |  | 469.8 |  |  | 458.8 |  |  | 462.9 |
Total (b) |  | $ | 4,669.7 |  |  | $ | 4,352.9 |  |  | $ | 4,068.8 |
Net long-lived assets by region were as follows:
|  | Year Ended December 31,
|  | 2018 |  | 2017
North America |  | $ | 477.4 |  |  | $ | 457.9 |
EMEA |  | 439.1 |  |  | 507.4 |
Asia Pacific |  | 246.1 |  |  | 258.9 |
Latin America (a) |  | 135.6 |  |  | 164.4 |
Total (c) |  | $ | 1,298.2 |  |  | $ | 1,388.6 |
(a) | Includes Mexico
(b) | Net Sales are attributed to countries based on location of the customer. Sales to external customers in China represented approximately 11%, 12% and 13% of the total for the years ended December 31, 2018, 2017 and 2016, respectively. Sales to external customers in Germany represented approximately 8%, 8% and 9% of the total for the years ended December 31, 2018, 2017 and 2016, respectively. Mexico represented 6% of the total for the years ended December 31, 2018, 2017 and 2016. Canada, which is included in the North America region, represents approximately 4% of total net sales for the years ended December 31, 2018, 2017 and 2016, respectively.
(c) Long-lived assets consist of property, plant and equipment, net. Germany long-lived assets amounted to approximately $243.6 million and $279.0 million in the years ended December 31, 2018 and 2017, respectively. China long-lived assets amounted to $203.8 million and $217.2 million in the years ended December 31, 2018 and 2017, respectively. Brazil long-lived assets amounted to approximately $58.0 million and $78.6 million in the years ended December 31, 2018 and 2017, respectively. Canada long-lived assets, which are included in the North America region, amounted to approximately $25.1 million and 25.8 million in the years ended December 31, 2018 and 2017, respectively.

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- Definition Tabular disclosure of the reconciliation of profit (loss) from reportable segments to the consolidated income (loss) before income tax expense (benefit) and discontinued operations. Includes, but is not limited to, reconciliation after income tax if income tax is allocated to the reportable segment. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8924-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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- Definition Tabular disclosure of information concerning material long-lived assets (excluding financial instruments, customer relationships with financial institutions, mortgage and other servicing rights, deferred policy acquisition costs, and deferred taxes assets) located in identified geographic areas and/or the amount of revenue from external customers attributed to that country from which revenue is material. An entity may also provide subtotals of geographic information about groups of countries. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e9038-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 220 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SX 210.5-03.1) -URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227 + Details
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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8813-108599 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=108376223&loc=d3e13816-109267 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8721-108599 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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