SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2025

Schedule of Segment Reporting Information, by Segment

The following tables present relevant information of our reportable segments.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net sales (1):
Refinish	$	514	$	546	$	1,025	$	1,065
Industrial	322		341		633		670
Total Net sales Performance Coatings	836		887		1,658		1,735
Light Vehicle	362		354		702		696
Commercial Vehicle	107		110		207		214
Total Net sales Mobility Coatings	469		464		909		910
Total Net sales	$	1,305	$	1,351	$	2,567	$	2,645
Segment Adjusted EBITDA:
Performance Coatings	200		223		397		419
Mobility Coatings	92		68		165		131
Total	$	292	$	291	$	562	$	550

					June 30, 2025		December 31, 2024
Investment in unconsolidated affiliates:
Performance Coatings					$	2	$	2
Mobility Coatings					10		9
Total					$	12	$	11

(1)The Company has no intercompany sales between segments.

The following tables reconcile net sales to Segment Adjusted EBITDA for the periods presented:


	Three Months Ended June 30, 2025						Six Months Ended June 30, 2025
	Performance Coatings		Mobility Coatings		Total		Performance Coatings		Mobility Coatings		Total
Net sales	$	836	$	469	$	1,305	$	1,658	$	909	$	2,567
Segment cost of goods sold (1)	451		296		747		891		584		1,475
Other segment items (2)	185		81		266		370		160		530

Segment Adjusted EBITDA	$	200	$	92	$	292	$	397	$	165	$	562


	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
	Performance Coatings		Mobility Coatings		Total		Performance Coatings		Mobility Coatings		Total
Net sales	$	887	$	464	$	1,351	$	1,735	$	910	$	2,645
Segment cost of goods sold (1)	480		312		792		939		613		1,552
Other segment items (2)	184		84		268		377		166		543

Segment Adjusted EBITDA	$	223	$	68	$	291	$	419	$	131	$	550

(1) Certain amounts included in cost of goods sold on the consolidated statements of operations are excluded from Segment cost of goods sold regularly provided to the CODM.

(2) Other segment items for both segments include certain cost of goods sold not regularly provided to the CODM, selling, general and administrative expenses, other operating charges, research and development expenses, and other expense (income), net. Certain amounts included in Segment cost of goods sold, including depreciation, are excluded from Segment Adjusted EBITDA and are adjusted for in other segment items.

Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table reconciles Segment Adjusted EBITDA to income before income taxes for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Segment Adjusted EBITDA (1):
Performance Coatings	$	200	$	223	$	397	$	419
Mobility Coatings	92		68		165		131
Total	292		291		562		550
Interest expense, net	45		50		89		104
Depreciation and amortization	74		68		144		136
Debt extinguishment and refinancing-related costs (a)	—		—		—		3
Termination benefits and other employee-related costs (b)	9		1		20		56
Acquisition and divestiture-related costs (c)	4		2		6		4
Site closure costs (d)	2		—		5		1

Foreign exchange remeasurement losses (e)	4		3		7		8
Long-term employee benefit plan adjustments (f)	3		2		6		5
Stock-based compensation (g)	8		8		13		14






Environmental charge (h)	—		—		—		4
Other adjustments (i)	—		1		—		—
Income before income taxes	$	143	$	156	$	272	$	215


(1)			The primary measure of segment operating performance is Segment 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 (i) non-cash items included within net income, (ii) items the Company does not believe are indicative of ongoing operating performance or (iii) 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. Segment 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 Segment 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-related diligence expenses associated with both consummated and unconsummated transactions, 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 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.

(f)			Represents the non-cash, non-service cost components of long-term employee benefit costs.



(g)			Represents non-cash impacts associated with stock-based compensation.











(h)			Represents costs related to certain environmental remediation activities, which are not considered indicative of our ongoing operating performance.

(i)			Represents costs for certain non-operational or non-cash losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance.

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

The following tables provide disaggregated information related to our net sales and long-lived assets.

Net sales by region were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
North America	$	461	$	524	$	919	$	1,009
EMEA	469		456		915		921
Asia Pacific	219		211		434		409
Latin America (1)	156		160		299		306

Total (2)	$	1,305	$	1,351	$	2,567	$	2,645

Net long-lived assets by region were as follows:


	June 30, 2025		December 31, 2024

North America	$	552	$	539
EMEA	404		362
Asia Pacific	185		185
Latin America (1)	114		95
Total (3)	$	1,255	$	1,181

(1)Includes Mexico.

(2)Net sales are attributed to countries based on the customer's location. Sales to customers in China represented approximately 11%, 12%, 11% and 10% of the total net sales for the three and six months ended June 30, 2025 and 2024, respectively. Sales to customers in Germany represented approximately 7% of the total for the three and six months ended June 30, 2025 and 2024. Sales to customers in Mexico represented approximately 6% of the total for the three and six months ended June 30, 2025 and 7% of the total for the three and six months ended June 30, 2024. Sales to customers in Canada, which is included in the North America region, represented approximately 3% of the total for the three and six months ended June 30, 2025 and 2024.

(3)Long-lived assets consist of property, plant and equipment, net. Germany long-lived assets amounted to approximately $228 million and $204 million at June 30, 2025 and December 31, 2024, respectively. China long-lived assets amounted to approximately $155 million and $156 million at June 30, 2025 and December 31, 2024, respectively. Mexico long-lived assets amounted to approximately $76 million and $63 million at June 30, 2025 and December 31, 2024, respectively. Canada long-lived assets, which are included in the North America region, amounted to approximately $6 million at June 30, 2025 and December 31, 2024.

Axalta Coating Systems Ltd. 10-Q