What Axalta Coating Systems (AXTA) said on its Q3 earnings call. Posted by Scott Moore on Nov 2nd, 2026 Axalta Coating Systems (NYSE:AXTA) reported third-quarter 2026 net sales of $1.31 billion, up 2% from a year earlier, as strong Commercial Vehicle performance and favorable foreign exchange helped offset softer Refinish volumes in Europe. Adjusted EBITDA totaled $282 million, down 4% year over year, while adjusted EBITDA margin was 21.5%, extending the company's streak of margins above 20% to 11 consecutive quarters. Chief Executive Officer Chris Villavarayan said the company recorded volume growth in three of its four end markets and three of its four regions. Mobility Coatings delivered record quarterly sales and record third-quarter adjusted EBITDA, led by a 24% increase in Commercial Vehicle sales. However, the quarter came in below management's expectations because European Refinish distributors became more cautious with inventory orders amid a weaker macroeconomic and political environment. European Refinish weighs on performance coatings. Performance Coatings sales declined 1% year over year to $818 million. Refinish sales fell 2% to $504 million, with lower European volumes more than offsetting favorable price mix and contributions from acquisitions. Chief Financial Officer Carl Anderson said Refinish volumes in Europe declined by a double-digit percentage year over year, while consolidated Refinish volumes declined by a mid-single-digit percentage. Villavarayan said the company's European Refinish business had posted five consecutive quarters of record performance before the third quarter. He attributed the downturn primarily to an indirect distribution channel that paused inventory replenishment late in August and September, rather than a broad demand collapse. Axalta expects European Refinish sales to be roughly flat year over year in the fourth quarter. Despite the quarter's setback, management said European Refinish sales were up about 5% year to date. The company has made nearly 20 distribution acquisitions in Europe during the past three years and expects those investments, along with body shop wins and pricing, to support future growth. Industrial sales rose approximately 1% to $314 million, supported by volume growth in Asia-Pacific. Villavarayan said Asia growth was concentrated in electrical applications, including impregnating resins for motors and coatings for battery enclosures. Industrial sales in Asia-Pacific have now grown for seven straight quarters. By contrast, North American demand remained subdued because of weakness in residential and construction-related markets, while Europe was described as resilient but broadly flat in the third quarter. Performance Coatings adjusted EBITDA fell 11% to $188 million, and its adjusted EBITDA margin was 23%. Axalta cited lower volumes, higher raw-material and freight costs, and investments associated with converting newly won multi-shop operator, or MSO, business. The company expects those conversion activities to accelerate in the fourth quarter and create near-term margin pressure. Commercial Vehicle strength supports Mobility results. Mobility Coatings sales increased 7% to a quarterly record of $493 million. Light Vehicle sales rose 2% to $374 million, primarily reflecting favorable currency translation. Global auto production declined by almost 2% in the quarter, while Axalta's Light Vehicle volumes were roughly flat, aided by performance in Asia and Latin America. Commercial Vehicle sales increased 24% to $119 million, with volume growth across all four regions. Management said the business benefited from stronger North American Class 8 production and growth in Commercial Transportation Solutions, which includes applications beyond Class 8 trucks such as ambulances, off-highway equipment and defense-related vehicles. Mobility Coatings adjusted EBITDA rose 13% to $94 million, while margin expanded 100 basis points to 19%. Anderson credited operational execution, volume leverage and cost management. He said raw-material pass-throughs in Mobility Coatings are expected to improve further in the first quarter of 2027. Cash flow, debt reduction and updated outlook. Net income was $95 million, while adjusted diluted earnings per share was $0.63, down 6% year over year. Cash from operating activities was $135 million, and free cash flow rose 3% to $92 million despite approximately $21 million of merger-related cash costs during the quarter. Through the first nine months of 2026, free cash flow increased 25% to $220 million, including more than $40 million of merger-related payments. Gross debt fell by $211 million year to date to below $3 billion for the first time in company history. Total net leverage ended the quarter at a record low 2.1 times. Axalta lowered its fourth-quarter sales outlook to approximately flat year over year, compared with its prior expectation for 3% growth. The company now expects fourth-quarter adjusted EBITDA of $254 million to $264 million and adjusted diluted EPS of approximately $0.55. For the full year, Axalta forecast adjusted EBITDA of $1.10 billion to $1.11 billion, adjusted diluted EPS of approximately $2.45, and free cash flow of about $450 million. Management said higher raw-material costs and freight rates remain a concern. Freight costs rose more than 15% year over year in the third quarter, while raw-material inflation is expected to run at high-single-digit rates in the fourth quarter. Axalta said it is pursuing additional pricing actions and diesel-related freight surcharges. AkzoNobel combination remains on track. Axalta said it has received regulatory clearance in two-thirds of the required jurisdictions for its proposed merger of equals with AkzoNobel. The companies are pursuing divestitures of AkzoNobel's European Refinish business and Axalta's North America Building Products business, with closing still expected in early 2027. The combined company will be named Axanzo and is expected to trade on the New York Stock Exchange under the ticker AXZ after closing. Management reaffirmed its expectation for approximately $600 million in annual run-rate cost synergies, with roughly 90% expected to be captured within the first three years following the transaction's completion. About Axalta Coating Systems (NYSE:AXTA). Axalta Coating Systems Ltd. (NYSE: AXTA) develops, manufactures and sells coatings and coating technologies designed to protect, enhance and improve the appearance of vehicles, equipment and industrial products. Its offerings include liquid, powder and electrocoat products, along with related color-management tools, application technologies and technical services. The company serves several markets, including automotive original equipment manufacturers, automotive refinish businesses, commercial transportation, industrial equipment, architecture and general manufacturing.

Axalta Coating Systems shares have risen 19.7% over the past year, and the stock now trades at about 21.8 times earnings. That is below the chemicals sector average of 23.1x and the peer group average of 28.6x. The valuation follows a mixed third-quarter update, with an earnings miss and lower full-year earnings per share guidance. Record Mobility Coatings sales and a planned merger with AkzoNobel have added investor interest. A tailored model puts fair value only slightly above the current multiple, which suggests the shares are priced close to fair. Opinion is split. The bull case sees the stock 13% undervalued, citing cost cuts and adjusted EBITDA margins of around 22%. The bear case sees it as roughly fairly valued, as collision claims in North America and Europe remain below expectations.

Axalta releases Third Quarter 2026 results. PHILADELPHIA, Oct. 29, 2026 (GLOBE NEWSWIRE) - Axalta Coating Systems Ltd. (NYSE:AXTA) ("Axalta"), a leading global coatings company, announced its financial results for the third quarter ended September 30, 2026. Third Quarter 2026 Highlights: * Net sales of $1.3 billion, an increase of 2% year over year * Record quarter for Mobility net sales * Net income of $95 million and net income margin of 7.2% * Adjusted EBITDA of $282 million with an Adjusted EBITDA margin of 21.5% * Diluted EPS of $0.44 * Adjusted Diluted EPS of $0.63 * Cash provided by operating activities of $135 million, in line with prior year * Free cash flow of $92 million, up 3% year over year * Total net leverage of 2.1x, the lowest in Axalta's history "Axalta delivered another quarter of revenue growth, strong cash generation and robust profitability despite a more challenging operating environment," said Chris Villavarayan, Chief Executive Officer and President of Axalta. "We maintained Adjusted EBITDA margin above 20%, further strengthened our balance sheet and achieved record quarterly net sales in Mobility Coatings. As we look ahead, we remain focused on disciplined execution and are confident in the significant value creation opportunity associated with our proposed combination with AkzoNobel." Third Quarter 2026 Consolidated Financial Results Third quarter 2026 net sales increased 2% to $1.3 billion driven by volume growth in three out of four regions, favorable foreign currency translation, contributions from acquisitions and positive price mix, partially offset by volume declines primarily in Europe. Net income decreased by $15 million year over year to $95 million resulting in a net income margin of 7.2%. The decrease was primarily driven by an incremental $14 million in merger and acquisition-related expenses in the current-year period. Adjusted net income, which excludes merger and acquisition-related expenses, decreased 6% year over year to $136 million driven by lower volumes in Performance Coatings and higher raw material and freight costs, partially offset by reduced operating expenses, favorable price mix and lower interest expense. Adjusted EBITDA was $282 million, a decrease of 4% compared to the prior-year period, resulting in an Adjusted EBITDA margin of 21.5%. Diluted EPS was $0.44 compared to $0.51 in the prior-year period, reflecting lower volumes in Performance Coatings and higher merger and acquisition-related expenses. Adjusted Diluted EPS was $0.63, down 6% year over year, as lower volumes and higher variable costs were partially offset by lower interest expense resulting from the Company's continued deleveraging efforts. Cash provided by operating activities was $135 million, in line with the prior-year period, and free cash flow increased 3% year over year to $92 million, inclusive of approximately $21 million of incremental merger and acquisition-related cash costs incurred during the quarter. Discussion of Segment Results Performance Coatings net sales were $818 million in the third quarter, down $10 million year over year, as lower Refinish volumes in Europe more than offset favorable foreign currency translation, contributions from acquisitions and positive price mix. Outside of Europe, demand trends across Performance Coatings remained generally stable, with net sales down low single digits in North America and up high single digits in both Latin America and Asia Pacific, continuing the growth momentum established over the last four quarters in such regions. Refinish net sales declined 2% year over year to $504 million, primarily driven by lower volumes in Europe, partially offset by contributions from acquisitions and favorable price mix. Industrial net sales increased by 1% year over year to $314 million, primarily driven by volume growth in Asia Pacific. Performance Coatings Adjusted EBITDA was $188 million compared with $211 million in the prior-year period. The decrease was driven by lower volumes, variable cost inflation and investments supporting recently awarded business wins, partially offset by lower operating expenses, pricing actions and contributions from acquisitions. Adjusted EBITDA margin was 23.0%, compared to 25.5% in the prior-year period. Mobility Coatings achieved record quarterly net sales of $493 million, up 7% year over year. Light Vehicle net sales were up 2%, driven primarily by favorable foreign currency translation. Commercial Vehicle net sales increased 24% year over year to $119 million, driven by volume growth resulting from an increase in Class 8 production in North America. Mobility Coatings delivered Adjusted EBITDA of $94 million, a third quarter record, with Adjusted EBITDA margin of 19.0% reflecting 100 basis points of margin expansion year over year. Stronger volumes and lower operating expenses more than offset variable cost inflation and unfavorable price mix. Fourth Quarter and Full Year 2026 Outlook | (in millions, except %'s and per share data) | / | Projection | | Item | / | Q4 2026 | FY 2026 | | Net Sales (YoY % growth) | / | ~FLAT | LSD% | | Adjusted EBITDA | / | $254 - $264 | $1,100 - $1,110 | | Adjusted Diluted EPS | / | ~$0.55 | ~$2.45 | | Free Cash Flow[(1)] | / | / | ~$450 | | Depreciation and Amortization | / | / | $310 | | Tax Rate, As Adjusted | / | / | ~24% | | Diluted Shares Outstanding | / | / | ~215 | | Interest Expense | / | / | ~$150 | | Capital Expenditures | / | / | ~$200 | | / | / | / | / | LSD = low single digit percentage (1) Includes ~$80M of merger and acquisition-related cash costs Axalta does not provide a reconciliation for non-GAAP estimates for Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow or tax rate, as adjusted, on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. See "Non-GAAP Financial Measures" for more information. Conference Call Information As previously announced, Axalta will hold a conference call to discuss its third quarter 2026 financial results on Thursday, October 29, 2026, at 8:00 a.m. ET. A live webcast of the conference call will be available online at www.axalta.com/investorcall. A replay of the webcast will be posted shortly after the call and will remain accessible through October 29, 2027. The dial-in phone number for the conference call is 1-800-445-7795 and the conference ID is AXALTA. For those unable to participate, a replay will be available through November 5, 2026. The replay dial-in number is +1-844-512-2921. The replay passcode is 11162641. Cautionary Statement Concerning Forward-Looking Statements This release may contain certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding Axalta and its subsidiaries including, but not limited to, our outlook and/or guidance, which includes net sales growth, Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow, depreciation and amortization, tax rate, as adjusted, diluted shares outstanding, interest expense and capital expenditures and statements regarding the proposed merger of equals (the "Proposed Merger") with Akzo Nobel N.V. ("AkzoNobel") (including our ability to consummate the Proposed Merger and realize the anticipated benefits thereof). Axalta has identified some of these forward-looking statements with words such as "outlook," "proposed," "opportunity," "confident," "anticipated," "momentum," and "projection," and the negative of these words or other comparable or similar terminology. All of these statements are based on management's expectations as well as estimates and assumptions prepared by management that, although they believe to be reasonable, are inherently uncertain. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental (including related to any new or existing tariffs imposed by the U.S. and any retaliatory actions from other countries), geopolitical (including the current conflict in the Middle East and related effects on raw material and freight prices, as well as mitigation strategies developed in response thereto) and technological factors outside of Axalta's control, as well as risks related to the execution of, and assumptions underlying, our tariff mitigation strategies, our capital allocation strategy and future share repurchases, our previously-announced global transformation initiative, our previously-announced three-year 2024-2026 strategy, the Proposed Merger (including our ability to consummate the Proposed Merger and realize the anticipated benefits thereof) and our planned divestiture of our North America Building Products business that may cause its business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect Axalta's financial results is available in "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" within Axalta's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and in other documents that we have filed with, or furnished to, the U.S. Securities and Exchange Commission (the "SEC"). More information on these risks, as well as other risks associated with the Proposed Merger, are also discussed in the definitive proxy statement/prospectus relating to the Proposed Merger, which was filed with the SEC on June 24, 2026. Axalta undertakes 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. Non-GAAP Financial Measures This release includes financial information that is not presented in accordance with generally accepted accounting principles in the United States ("GAAP"), including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, Free Cash Flow, total net leverage ratio (or "total net leverage"), tax rate, as adjusted, and Adjusted EBIT. Management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, tax rate, as adjusted, and Adjusted EBIT in the analysis of our financial and operating performance because they assist in the evaluation of underlying trends in our business. Management uses Free Cash Flow and total net leverage ratio in the analysis of (1) our liquidity, (2) our ability to incur and service our debt and (3) strategic capital allocation decisions. Adjusted EBITDA, Adjusted Diluted EPS, adjusted net income and Adjusted EBIT consist of EBITDA, Diluted EPS, net income attributable to common shareholders and EBIT, respectively, adjusted for (i) certain non-cash items included within net income, (ii) certain items Axalta does not believe are indicative of ongoing operating performance or (iii) certain nonrecurring, unusual or infrequent items that have not otherwise occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Free Cash Flow consists of cash provided by (used for) operating activities less purchase of property, plant and equipment plus interest proceeds on swaps designated as net investment hedges. Total net leverage ratio consists of net debt divided by Adjusted EBITDA, with net debt defined as total debt less cash and cash equivalents. We believe that making the foregoing adjustments provides investors meaningful information to understand our operating results and ability to analyze financial and business trends on a period-to-period basis. The non-GAAP financial measures used by Axalta may differ from similarly titled measures reported by other companies. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, Free Cash Flow, total net leverage ratio, tax rate, as adjusted, and Adjusted EBIT should not be considered as alternatives to net sales, net income (loss), income (loss) from operations or any other financial measures derived in accordance with GAAP. These non-GAAP financial measures have important limitations as analytical tools and should be considered in conjunction with, and not as substitutes for, our results as reported under GAAP. This release includes a reconciliation of certain non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP. Axalta does not provide a reconciliation for Adjusted EBITDA, Adjusted Diluted EPS, tax rate, as adjusted, or Free Cash Flow on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. For example, such reconciling items include the impact of foreign currency exchange gains or losses, gains or losses that are unusual or nonrecurring in nature, as well as discrete taxable events. These items are uncertain, depend on various factors and may have a substantial and unpredictable impact on our GAAP results. Segment Financial Measures The primary measure of segment operating performance is Adjusted EBITDA, which is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts and prior year financial results and that management believes reflects Axalta's core operating performance. As we do not measure segment operating performance based on net income, a reconciliation of this non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP is not available. Defined Terms All capitalized terms contained within this release that are not otherwise defined herein have been previously defined in our filings with the SEC. Certain amounts may not foot or crossfoot due to rounding. Additionally, certain percentages may not recalculate due to rounding. General Restrictions This communication is not for release, publication, or distribution, in whole or in part, in or into, directly or indirectly, any jurisdiction in which such release, publication, or distribution would be unlawful. This communication is not a prospectus and the information in this communication is not intended to be complete. This communication is for informational purposes only and is not intended to be and shall not constitute a solicitation of any vote or approval, or an offer to buy or sell, or the solicitation of an offer to buy or sell, any securities, or an invitation or recommendation to subscribe for, acquire or buy securities of Axalta or AkzoNobel or any other financial products or securities, in any place or jurisdiction, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended (the "Securities Act"). Any decision to purchase, subscribe for, otherwise acquire, sell or otherwise dispose of any securities must be made only on the basis of the information contained in and incorporated by reference into the prospectus with respect to the shares to be allotted by AkzoNobel in the Proposed Merger, which was published on June 24, 2026 and supplemented on July 22, 2026. The distribution of this communication may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions. To the fullest extent permitted by applicable law, Axalta and AkzoNobel disclaim any responsibility or liability for the violation of any such restrictions by any person. Neither Axalta, nor AkzoNobel, nor any of their advisors assume any responsibility for any violation by any person of any of these restrictions. Shareholders of Axalta and AkzoNobel, respectively, with any doubt as to their position should consult an appropriate professional advisor without delay. This communication is addressed to and directed only at (i) persons who are outside the United Kingdom, (ii) persons having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Order"), (iii) persons falling within Article 49(2)(a) to (d) of the Order, or (iv) persons to whom it may otherwise lawfully be communicated pursuant to the Order (all such persons together being referred to as, "Relevant Persons"). This communication is directed only at Relevant Persons. Other persons should not act or rely on this communication or any of its contents. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with such persons. Solicitations resulting from this communication will only be responded to if the person concerned is a Relevant Person. Additional Information and Where to Find It In connection with the Proposed Merger between Axalta and AkzoNobel, AkzoNobel filed with the SEC a registration statement on Form F-4 on May 27, 2026, as amended on June 18, 2026, which included a proxy statement of Axalta that also constitutes a prospectus with respect to the shares to be offered by AkzoNobel in the Proposed Merger. The registration statement was declared effective by the SEC on June 23, 2026. In connection with the proposed transaction, on June 24, 2026, Axalta filed with the SEC a definitive proxy statement and, on or about June 24, 2026, Axalta commenced mailing the definitive proxy statement to its holders of record as of June 11, 2026. On August 5, 2026, shareholders at the Extraordinary General Meeting of AkzoNobel and the Special General Meeting of Axalta, respectively, voted in favor of all resolutions related to the Proposed Merger. Each of Axalta and AkzoNobel will also file other relevant documents in connection with the Proposed Merger. This communication is not a substitute for any registration statement, proxy statement/prospectus or other documents Axalta and/or AkzoNobel may file with the SEC or any other competent regulator in connection with the Proposed Merger. This communication does not contain all the information that should be considered concerning the Proposed Merger and is not intended to form the basis of any investment decision or any other decision in respect of the Proposed Merger. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS, STOCKHOLDERS AND SHAREHOLDERS OF AXALTA AND AKZONOBEL ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT/PROSPECTUS, AS APPLICABLE, AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, IN CONNECTION WITH THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE, AS THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT AXALTA, AKZONOBEL, THE PROPOSED TRANSACTION AND RELATED MATTERS. The registration statement and proxy statement/prospectus and other relevant documents filed by Axalta and AkzoNobel with the SEC are available free of charge at the SEC's website at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC from Axalta's investor relations webpage at https://ir.axalta.com/sec-filings/all-sec-filings or from AkzoNobel's investor relations webpage at https://www.akzonobel.com/en/investors/all-sec-filings. The contents of this communication should not be construed as financial, legal, business, investment, tax or other professional advice. Each recipient should consult with its own professional advisors for any such matter and advice About Axalta Coating Systems Axalta is a global leader in the coatings industry, providing customers with innovative, colorful, beautiful and sustainable coatings solutions. From light vehicles, commercial vehicles and refinish applications to electric motors, building facades and other industrial applications, our coatings are designed to prevent corrosion, increase productivity and enhance durability. With more than 150 years of experience in the coatings industry, the global team at Axalta continues to find ways to serve our more than 100,000 customers in over 140 countries better every day with the finest coatings, application systems and technology. For more information visit axalta.com and follow us @axalta on X. | Financial Statement Tables | | AXALTA COATING SYSTEMS LTD. | | Condensed Consolidated Statements of Operations (Unaudited) | | (In millions, except per share data) | | / | Three Months Ended September 30, | / | Nine Months Ended September 30, | | / | 2026 | / | 2025 | / | 2026 | / | 2025 | | Net sales | $ | 1,311 | / | / | $ | 1,288 | / | / | $ | 3,911 | / | / | $ | 3,855 | / | | Cost of goods sold | / | 877 | / | / | / | 838 | / | / | / | 2,596 | / | / | / | 2,515 | / | | Selling, general and administrative expenses | / | 201 | / | / | / | 197 | / | / | / | 614 | / | / | / | 607 | / | | Other operating charges | / | 24 | / | / | / | 6 | / | / | / | 92 | / | / | / | 32 | / | | Research and development expenses | / | 18 | / | / | / | 18 | / | / | / | 54 | / | / | / | 55 | / | | Amortization of acquired intangibles | / | 26 | / | / | / | 25 | / | / | / | 77 | / | / | / | 73 | / | | Income from operations | / | 165 | / | / | / | 204 | / | / | / | 478 | / | / | / | 573 | / | | Interest expense, net | / | 37 | / | / | / | 45 | / | / | / | 112 | / | / | / | 134 | / | | Other expense (income), net | / | - | / | / | / | 4 | / | / | / | (1 |) | / | / | 12 | / | | Income before income taxes | / | 128 | / | / | / | 155 | / | / | / | 367 | / | / | / | 427 | / | | Provision for income taxes | / | 33 | / | / | / | 45 | / | / | / | 92 | / | / | / | 108 | / | | Net income | / | 95 | / | / | / | 110 | / | / | / | 275 | / | / | / | 319 | / | | Less: Net income attributable to noncontrolling interests | / | - | / | / | / | - | / | / | / | 1 | / | / | / | 1 | / | | Net income attributable to common shareholders | $ | 95 | / | / | $ | 110 | / | / | $ | 274 | / | / | $ | 318 | / | | Basic net income per share | $ | 0.44 | / | / | $ | 0.51 | / | / | $ | 1.28 | / | / | $ | 1.47 | / | | Diluted net income per share | $ | 0.44 | / | / | $ | 0.51 | / | / | $ | 1.28 | / | / | $ | 1.46 | / | | Basic weighted average shares outstanding | / | 214.0 | / | / | / | 215.0 | / | / | / | 213.9 | / | / | / | 216.9 | / | | Diluted weighted average shares outstanding | / | 215.1 | / | / | / | 215.9 | / | / | / | 214.8 | / | / | / | 217.9 | / | | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | | AXALTA COATING SYSTEMS LTD. | | Condensed Consolidated Balance Sheets (Unaudited) | | (In millions, except per share data) | | / | September 30, 2026 | / | December 31, 2025 | | Assets | / | / | / | | Current assets: | / | / | / | | Cash and cash equivalents | $ | 650 | / | / | $ | 657 | / | | Restricted cash | / | 6 | / | / | / | 3 | / | | Accounts and notes receivable, net | / | 1,366 | / | / | / | 1,229 | / | | Inventories | / | 849 | / | / | / | 756 | / | | Prepaid expenses and other current assets | / | 192 | / | / | / | 170 | / | | Total current assets | / | 3,063 | / | / | / | 2,815 | / | | Property, plant and equipment, net | / | 1,319 | / | / | / | 1,299 | / | | Goodwill | / | 1,762 | / | / | / | 1,795 | / | | Identifiable intangibles, net | / | 1,056 | / | / | / | 1,147 | / | | Other assets | / | 547 | / | / | / | 543 | / | | Total assets | $ | 7,747 | / | / | $ | 7,599 | / | | Liabilities, Shareholders' Equity | / | / | / | | Current liabilities: | / | / | / | | Accounts payable | $ | 780 | / | / | $ | 637 | / | | Current portion of borrowings | / | 519 | / | / | / | 20 | / | | Other accrued liabilities | / | 701 | / | / | / | 712 | / | | Total current liabilities | / | 2,000 | / | / | / | 1,369 | / | | Long-term borrowings | / | 2,476 | / | / | / | 3,179 | / | | Accrued pensions | / | 225 | / | / | / | 238 | / | | Deferred income taxes | / | 182 | / | / | / | 171 | / | | Other liabilities | / | 198 | / | / | / | 249 | / | | Total liabilities | / | 5,081 | / | / | / | 5,206 | / | | Shareholders' equity: | / | / | / | | Common shares, $1.00 par, 1,000.0 shares authorized, 255.7 and 255.1 shares issued at September 30, 2026 and December 31, 2025, respectively | / | 256 | / | / | / | 255 | / | | Capital in excess of par | / | 1,637 | / | / | / | 1,621 | / | | Retained earnings | / | 2,329 | / | / | / | 2,055 | / | | Treasury shares, at cost, 41.7 shares at both September 30, 2026 and December 31, 2025 | / | (1,202 |) | / | / | (1,202 |) | | Accumulated other comprehensive loss | / | (400 |) | / | / | (383 |) | | Total Axalta shareholders' equity | / | 2,620 | / | / | / | 2,346 | / | | Noncontrolling interests | / | 46 | / | / | / | 47 | / | | Total shareholders' equity | / | 2,666 | / | / | / | 2,393 | / | | Total liabilities and shareholders' equity | $ | 7,747 | / | / | $ | 7,599 | / | | / | / | / | / | / | / | / | / | | AXALTA COATING SYSTEMS LTD. | | Condensed Consolidated Statements of Cash Flows (Unaudited) | | (In millions) | | / | / | Nine Months Ended September 30, | | / | / | 2026 | / | 2025 | | / | Operating activities: | / | / | / | | / | Net income | $ | 275 | / | / | $ | 319 | / | | / | Adjustment to reconcile net income to cash provided by operating activities: | / | / | / | | / | Depreciation and amortization | / | 233 | / | / | / | 218 | / | | / | Amortization of deferred financing costs and original issue discount | / | 6 | / | / | / | 6 | / | | / | Deferred income taxes | / | 24 | / | / | / | 28 | / | | / | Realized and unrealized foreign exchange (gains) losses, net | / | (8 |) | / | / | 31 | / | | / | Stock-based compensation | / | 23 | / | / | / | 19 | / | | / | Interest income on swaps designated as net investment hedges | / | (9 |) | / | / | (9 |) | | / | Other non-cash, net | / | (2 |) | / | / | 8 | / | | / | Changes in operating assets and liabilities: | / | / | / | | / | Trade accounts and notes receivable | / | (132 |) | / | / | (48 |) | | / | Inventories | / | (99 |) | / | / | (53 |) | | / | Prepaid expenses and other assets | / | (75 |) | / | / | (132 |) | | / | Accounts payable | / | 146 | / | / | / | (15 |) | | / | Other accrued liabilities | / | 2 | / | / | / | (71 |) | | / | Other liabilities | / | (29 |) | / | / | 4 | / | | / | Cash provided by operating activities | / | 355 | / | / | / | 305 | / | | / | Investing activities: | / | / | / | | / | Acquisitions, net of cash acquired | / | (8 |) | / | / | (6 |) | | / | Purchase of property, plant and equipment | / | (144 |) | / | / | (138 |) | | / | Interest proceeds on swaps designated as net investment hedges | / | 9 | / | / | / | 9 | / | | / | Proceeds received on loans to customers | / | 8 | / | / | / | 6 | / | | / | Other investing activities, net | / | (3 |) | / | / | 7 | / | | / | Cash used for investing activities | / | (138 |) | / | / | (122 |) | | / | Financing activities: | / | / | / | | / | Payments on long-term borrowings | / | (211 |) | / | / | (25 |) | | / | Purchases of common stock | / | - | / | / | / | (165 |) | | / | Net cash flows associated with stock-based awards | / | (7 |) | / | / | (3 |) | | / | Other financing activities, net | / | (3 |) | / | / | (2 |) | | / | Cash used for financing activities | / | (221 |) | / | / | (195 |) | | / | Decrease in cash | / | (4 |) | / | / | (12 |) | | / | Effect of exchange rate changes on cash | / | - | / | / | / | 26 | / | | / | Cash at beginning of period | / | 660 | / | / | / | 596 | / | | / | Cash at end of period | $ | 656 | / | / | $ | 610 | / | | / | Cash at end of period reconciliation: | / | / | / | | / | Cash and cash equivalents | $ | 650 | / | / | $ | 606 | / | | / | Restricted cash | / | 6 | / | / | / | 4 | / | | / | Cash at end of period | $ | 656 | / | / | $ | 610 | / | | / | / | / | / | / | / | / | / | / | The following table reconciles net income to EBITDA, Adjusted EBITDA and segment Adjusted EBITDA for the periods presented (in millions): | / | Three Months Ended September 30, | / | Twelve | / | Nine Months Ended September 30, | / | / | / | / | | / | 2026 | / | 2025 | / | Months Ended September 30, 2026 | / | 2026 | / | 2025 | / | Year Ended December 31, 2025 | | Net income | $ | 95 | / | / | $ | 110 | / | / | $ | 335 | / | / | $ | 275 | / | / | $ | 319 | / | / | $ | 379 | / | | Interest expense, net | / | 37 | / | / | / | 45 | / | / | / | 154 | / | / | / | 112 | / | / | / | 134 | / | / | / | 176 | / | | Provision for income taxes | / | 33 | / | / | / | 45 | / | / | / | 151 | / | / | / | 92 | / | / | / | 108 | / | / | / | 167 | / | | Depreciation and amortization | / | 81 | / | / | / | 74 | / | / | / | 310 | / | / | / | 233 | / | / | / | 218 | / | / | / | 295 | / | | EBITDA | / | 246 | / | / | / | 274 | / | / | / | 950 | / | / | / | 712 | / | / | / | 779 | / | / | / | 1,017 | / | | Termination benefits and other employee-related costs[(a)] | / | 5 | / | / | / | 2 | / | / | / | 12 | / | / | / | 11 | / | / | / | 22 | / | / | / | 23 | / | | Merger and acquisition-related costs [(b)] | / | 19 | / | / | / | 5 | / | / | / | 97 | / | / | / | 76 | / | / | / | 11 | / | / | / | 32 | / | | Site closure costs [(c)] | / | 1 | / | / | / | 1 | / | / | / | 5 | / | / | / | 5 | / | / | / | 6 | / | / | / | 6 | / | | Foreign exchange remeasurement losses [(d)] | / | 2 | / | / | / | 4 | / | / | / | 11 | / | / | / | 7 | / | / | / | 11 | / | / | / | 15 | / | | Long-term employee benefit plan adjustments [(e)] | / | 3 | / | / | / | 3 | / | / | / | 14 | / | / | / | 11 | / | / | / | 9 | / | / | / | 12 | / | | Stock-based compensation [(f)] | / | 8 | / | / | / | 6 | / | / | / | 29 | / | / | / | 23 | / | / | / | 19 | / | / | / | 25 | / | | Gains on sales of assets [(g)] | / | - | / | / | / | (5 |) | / | / | (1 |) | / | / | - | / | / | / | (5 |) | / | / | (6 |) | | Other adjustments [(h)] | / | (2 |) | / | / | 4 | / | / | / | 1 | / | / | / | 1 | / | / | / | 4 | / | / | / | 4 | / | | Adjusted EBITDA | $ | 282 | / | / | $ | 294 | / | / | $ | 1,118 | / | / | $ | 846 | / | / | $ | 856 | / | / | $ | 1,128 | / | | Net sales | $ | 1,311 | / | / | $ | 1,288 | / | / | $ | 5,173 | / | / | $ | 3,911 | / | / | $ | 3,855 | / | / | $ | 5,117 | / | | Net income margin | / | 7.2 | % | / | / | 8.5 | % | / | / | 6.5 | % | / | / | 7.0 | % | / | / | 8.3 | % | / | / | 7.4 | % | | Adjusted EBITDA margin | / | 21.5 | % | / | / | 22.8 | % | / | / | 21.6 | % | / | / | 21.6 | % | / | / | 22.2 | % | / | / | 22.0 | % | | Segment Adjusted EBITDA: | / | / | / | / | / | / | / | / | / | / | / | | Performance Coatings | $ | 188 | / | / | $ | 211 | / | / | $ | 766 | / | / | $ | 586 | / | / | $ | 608 | / | / | $ | 788 | / | | Mobility Coatings | / | 94 | / | / | / | 83 | / | / | / | 352 | / | / | / | 260 | / | / | / | 248 | / | / | / | 340 | / | | Total | $ | 282 | / | / | $ | 294 | / | / | $ | 1,118 | / | / | $ | 846 | / | / | $ | 856 | / | / | $ | 1,128 | / | | (a) | 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. We do not consider these amounts indicative of our ongoing operating performance. | | (b) | Represents merger and acquisition-related expenses, including costs related to financial, tax and legal advisory services, associated with both consummated and unconsummated transactions, all of which we do not consider indicative of our ongoing operating performance. | | (c) | Represents costs related to the closure of certain manufacturing sites, including impairment charges, which we do not consider indicative of our ongoing operating performance. | | (d) | 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. | | (e) | Represents the non-cash, non-service cost components of long-term employee benefit costs. | | (f) | Represents non-cash impacts associated with stock-based compensation. | | (g) | Represents non-recurring income related to the sales of certain fixed assets, which are not considered indicative of our ongoing performance. | | (h) | Represents (benefits) costs for certain non-operational or non-cash (gains) losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. | | / | / | The following table reconciles net income to adjusted net income for the periods presented (in millions, except per share data): | / | Three Months Ended September 30, | / | Nine Months Ended September 30, | | / | 2026 | / | 2025 | / | 2026 | / | 2025 | | Net income | $ | 95 | / | / | $ | 110 | / | / | $ | 275 | / | / | $ | 319 | / | | Less: Net income attributable to noncontrolling interests | / | - | / | / | / | - | / | / | / | 1 | / | / | / | 1 | / | | Net income attributable to common shareholders | / | 95 | / | / | / | 110 | / | / | / | 274 | / | / | / | 318 | / | | Termination benefits and other employee-related costs[(a)] | / | 5 | / | / | / | 2 | / | / | / | 11 | / | / | / | 22 | / | | Merger and acquisition-related costs [(b)] | / | 19 | / | / | / | 5 | / | / | / | 76 | / | / | / | 11 | / | | Accelerated depreciation and site closure costs [(c)] | / | 1 | / | / | / | 1 | / | / | / | 5 | / | / | / | 8 | / | | Other adjustments [(d)] | / | (2 |) | / | / | (2 |) | / | / | 2 | / | / | / | (1 |) | | Amortization of acquired intangibles [(e)] | / | 26 | / | / | / | 25 | / | / | / | 77 | / | / | / | 73 | / | | Total adjustments | / | 49 | / | / | / | 31 | / | / | / | 171 | / | / | / | 113 | / | | Income tax provision impacts [(f)] | / | 8 | / | / | / | (3 |) | / | / | 36 | / | / | / | 19 | / | | Adjusted net income | $ | 136 | / | / | $ | 144 | / | / | $ | 409 | / | / | $ | 412 | / | | Adjusted diluted net income per share | $ | 0.63 | / | / | $ | 0.67 | / | / | $ | 1.91 | / | / | $ | 1.89 | / | | Diluted weighted average shares outstanding | / | 215.1 | / | / | / | 215.9 | / | / | / | 214.8 | / | / | / | 217.9 | / | | (a) | 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. We do not consider these amounts indicative of our ongoing operating performance. | | (b) | Represents merger and acquisition-related expenses, including costs related to financial, tax and legal advisory services, associated with both consummated and unconsummated transactions, all of which we do not consider indicative of our ongoing operating performance. | | (c) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, including impairment charges, which we do not consider indicative of our ongoing operating performance. | | (d) | Represents (benefits) costs for certain non-operational or non-cash (gains) losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. | | (e) | Represents non-cash amortization expense for intangible assets acquired through business combinations or asset acquisitions. | | (f) | The income tax impacts are determined using the applicable rates in the taxing jurisdictions in which expense or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure. Additionally, the income tax impact includes the removal of discrete income tax impacts within our effective tax rate which were benefits of $0 million and $12 million and expenses of $10 million and $6 million for the three and nine months ended September 30, 2026 and 2025, respectively. | | / | / | The following table reconciles cash provided by operating activities to free cash flow for the periods presented (in millions): | / | Three Months Ended March 31, | / | Three Months Ended June 30, | / | Three Months Ended September 30, | / | Nine Months Ended September 30, | | / | 2026 | / | 2025 | / | 2026 | / | 2025 | / | 2026 | / | 2025 | / | 2026 | / | 2025 | | Cash provided by operating activities | $ | 68 | / | / | $ | 26 | / | / | $ | 152 | / | / | $ | 142 | / | / | $ | 135 | / | / | $ | 137 | / | / | $ | 355 | / | / | $ | 305 | / | | Purchase of property, plant and equipment | / | (50 |) | / | / | (43 |) | / | / | (48 |) | / | / | (45 |) | / | / | (46 |) | / | / | (50 |) | / | / | (144 |) | / | / | (138 |) | | Interest proceeds on swaps designated as net investment hedges | / | 3 | / | / | / | 3 | / | / | / | 3 | / | / | / | 4 | / | / | / | 3 | / | / | / | 2 | / | / | / | 9 | / | / | / | 9 | / | | Free cash flow | $ | 21 | / | / | $ | (14 |) | / | $ | 107 | / | / | $ | 101 | / | / | $ | 92 | / | / | $ | 89 | / | / | $ | 220 | / | / | $ | 176 | / | | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | / | The following table reconciles income from operations to adjusted EBIT for the periods presented (in millions): | / | Three Months Ended September 30, | / | Nine Months Ended September 30, | | / | 2026 | / | 2025 | / | 2026 | / | 2025 | | Income from operations | $ | 165 | / | / | $ | 204 | / | / | $ | 478 | / | / | $ | 573 | / | | Other expense (income), net | / | - | / | / | / | 4 | / | / | / | (1 |) | / | / | 12 | / | | Total | / | 165 | / | / | / | 200 | / | / | / | 479 | / | / | / | 561 | / | | Termination benefits and other employee-related costs[(a)] | / | 5 | / | / | / | 2 | / | / | / | 11 | / | / | / | 22 | / | | Merger and acquisition-related costs [(b)] | / | 19 | / | / | / | 5 | / | / | / | 76 | / | / | / | 11 | / | | Accelerated depreciation and site closure costs [(c)] | / | 1 | / | / | / | 1 | / | / | / | 5 | / | / | / | 8 | / | | Other adjustments [(d)] | / | (2 |) | / | / | (2 |) | / | / | 2 | / | / | / | (1 |) | | Amortization of acquired intangibles [(e)] | / | 26 | / | / | / | 25 | / | / | / | 77 | / | / | / | 73 | / | | Adjusted EBIT | $ | 214 | / | / | $ | 231 | / | / | $ | 650 | / | / | $ | 674 | / | | (a) | 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. We do not consider these amounts indicative of our ongoing operating performance. | | (b) | Represents merger and acquisition-related expenses, including costs related to financial, tax and legal advisory services, associated with both consummated and unconsummated transactions, all of which we do not consider indicative of our ongoing operating performance. | | (c) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, including impairment charges, which we do not consider indicative of our ongoing operating performance. | | (d) | Represents (benefits) costs for certain non-operational or non-cash (gains) losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. | | (e) | Represents non-cash amortization expense for intangible assets acquired through business combinations or asset acquisitions. | | / | / | | Investor Contact Colleen Lubic D +1 610-999-9407 [email protected] | Media Contact [email protected] | | / | / |