# Axalta Coating Systems Ltd.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Axalta Coating Systems Ltd.](/companies/axta.md) (CIK 1616862)
- Form: 10-Q
- Filed: 2024-10-30
- Accepted by EDGAR: Oct 30, 2024, 13:41 ET
- Period: 2024-09-30
- Accession: 0001616862-24-000065
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1616862/000161686224000065/axta-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1616862/000161686224000065/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $1.32bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $3.96bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $858.0m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $2.61bn | us-gaap:CostOfGoodsAndServicesSold |
| Research and development | 3 months, 2024-07-01 to 2024-09-30 | $19.0m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-01-01 to 2024-09-30 | $55.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $211.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $631.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | $193.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | $519.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $54.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $158.0m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $40.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $103.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $101.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $254.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.46 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $1.15 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.46 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $1.15 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 219,900,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 220,800,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $342.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $78.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $100.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-09-30 | $567.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $2.84bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $7.50bn | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $1.42bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $5.55bn | us-gaap:Liabilities |
| Current portion of debt | at 2024-09-30 | $20.0m | us-gaap:DebtCurrent |
| Short-term borrowings | at 2024-09-30 | $3.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2024-09-30 | $1.91bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 52,544 characters.

*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," "strategy," 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, and assumptions underlying, the 2024 Transformation Initiative, our acquisition of CoverFlexx, 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 45 manufacturing facilities, four technology centers, 46 customer training centers and approximately 12,700 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. These 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.

### BUSINESS HIGHLIGHTS

#### General Business Highlights

Our net sales increased 2.0%, including an offsetting impact from currency fluctuations, for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023. The increased net sales were driven by higher volumes of 1.8%, including the contribution from the André Koch acquisition completed in October 2023, and contributions of 0.5% from CoverFlexx, partially offset by lower average selling price and product mix of 0.2%. The following trends impacted our segment net sales performance for the nine months ended September 30, 2024:

- *Performance Coatings:* Net sales increased 2.1% for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023. The increased net sales were driven by contributions of 0.8% from the CoverFlexx acquisition, higher sales volumes of 0.7%, including the contribution from the André Koch acquisition, higher average selling price and product mix of 0.5% and an offsetting impact from currency fluctuations.
- *Mobility Coatings:* Net sales increased 1.9% for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023. The increased net sales were driven by higher sales volumes of 3.8%, partially offset by lower average selling price and product mix of 1.4% and a headwind from unfavorable foreign currency translation of 0.5% driven by fluctuations of the Brazilian Real and Chinese Yuan, partially offset by fluctuations of the Euro, compared to the U.S. Dollar.

Our business serves four end-markets globally with net sales for the three and nine months ended September 30, 2024 and 2023, as follows:

*(In millions)*

| Performance Coatings | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 % change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 % change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Refinish | $554 | $529 | 4.7% | $1,619 | $1,547 | 4.6% |
| Industrial | 323 | 327 | (1.3)% | 993 | 1,012 | (1.8)% |
| Total Net sales Performance Coatings | 877 | 856 | 2.4% | 2,612 | 2,559 | 2.1% |
| **Mobility Coatings** |  |  |  |  |  |  |
| Light Vehicle | 340 | 342 | (0.4)% | 1,036 | 1,001 | 3.6% |
| Commercial Vehicle | 103 | 111 | (7.7)% | 317 | 327 | (3.1)% |
| Total Net sales Mobility Coatings | 443 | 453 | (2.2)% | 1,353 | 1,328 | 1.9% |
| Total Net sales | $1,320 | $1,309 | 0.8% | $3,965 | $3,887 | 2.0% |

#### 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, Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 5 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 3 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 nine months ended September 30, 2024, we prepaid $75 million of the outstanding principal amount of the 2029 Dollar Term Loans. See Note 16 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

During the nine months ended September 30, 2024, we repurchased 2.8 million shares of our common stock for total consideration of $100 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.

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 16 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 16 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

### 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 September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $1,320 | $1,309 | $11 | 0.8% | $3,965 | $3,887 | $78 | 2.0% |
| Volume effect |  |  |  | 0.6% |  |  |  | 1.8% |
| Impact of CoverFlexx |  |  |  | 1.6% |  |  |  | 0.5% |
| Price/Mix effect |  |  |  | (1.1)% |  |  |  | (0.2)% |
| Exchange rate effect |  |  |  | (0.3)% |  |  |  | (0.1)% |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Net sales primarily increased due to the following:

n Contributions from the CoverFlexx acquisition

n Higher sales volumes including the contribution from the André Koch acquisition

Partially offset by:

n Lower average selling prices and product mix driven by Mobility Coatings

n Unfavorable impacts of currency translation driven by fluctuations of the Mexican Peso and Brazilian Real, partially offset by fluctuations of the Euro, Chinese Yuan and British Pound, compared to the U.S. Dollar

#### Nine months ended September 30, 2024 compared to the nine months ended September 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 enterprise resource planning ("ERP") system implementation in North America

n Contributions from the CoverFlexx acquisition

Partially offset by:

n Lower average selling prices and product mix driven by Mobility Coatings, partially offset by higher average selling prices and product mix in Performance Coatings

n Impacts of currency translation were immaterial driven by offsetting currency fluctuations

28

### Cost of sales

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Cost of sales | $858 | $886 | $(28) | (3.2)% | $2,614 | $2,692 | $(78) | (2.9)% |
| % of net sales | 65.0% | 67.7% |  |  | 65.9% | 69.3% |  |  |

#### Three months ended September 30, 2024 compared to the three months ended September 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 $13 million related to our multi-year ERP system implementation and productivity programs

n Lower operating expenses

n Favorable impacts of currency translation of 0.5% driven by fluctuations of the Mexican Peso and Brazilian Real, partially offset by fluctuations of the Euro and Chinese Yuan, compared to the U.S. Dollar

n Decrease of $5 million in inventory charges related to obsolescence, quality and yield loss in manufacturing

Partially offset by:

n Higher sales volumes including contributions from the André Koch and CoverFlexx acquisitions

n Higher operating expenses due primarily to increased labor costs

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 $13 million related to our multi-year ERP system implementation and productivity programs

n Lower operating expenses

n Decrease of $5 million in inventory charges related to obsolescence, quality and yield loss in manufacturing

Partially offset by:

n Lower average selling prices and product mix driven by Mobility Coatings

#### Nine months ended September 30, 2024 compared to the nine months ended September 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 $23 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 Favorable impacts of currency translation of 0.2% driven by fluctuations of the Chinese Yuan and Brazilian Real, partially offset by fluctuations of the Euro, British Pound and Polish Zloty, compared to the U.S. Dollar

n Decreased expense of $3 million associated with utilization at certain manufacturing sites

Partially offset by:

n Higher sales volumes including contributions from the André Koch and CoverFlexx acquisitions

n Higher operating expenses due primarily to increased labor costs

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 $23 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 Lower average selling prices and product mix driven by Mobility Coatings, partially offset by higher average selling prices and product mix in Performance Coatings

29

### Selling, general and administrative expenses

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Selling, general and administrative expenses | $211 | $209 | $2 | 1.0% | $631 | $625 | $6 | 1.0% |

#### Three months ended September 30, 2024 compared to the three months ended September 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 $5 million in commissions resulting from changes to certain contractual arrangements

n Impacts of currency translation were immaterial when compared to the prior year period

#### Nine months ended September 30, 2024 compared to the nine months ended September 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 $16 million in commissions resulting from changes to certain contractual arrangements

n Favorable impacts of currency translation of 0.2% driven by fluctuations of the Chinese Yuan compared to the U.S. Dollar

### Other operating charges

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Other operating charges | $15 | $13 | $2 | 15.4% | $78 | $22 | $56 | 254.5% |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Other operating charges increased primarily due to the following:

n Increase of $9 million in termination benefits and other employee-related costs associated with the 2024 Transformation Initiative

n Increase of $2 million in acquisition-related costs

Partially offset by:

n $10 million third-party consultant costs in the prior year period related to productivity programs

#### Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Other operating charges increased primarily due to the following:

n Increase of $63 million in termination benefits and other employee-related costs associated with the 2024 Transformation Initiative

n Increase of $6 million in acquisition-related costs

n $4 million in environmental remediation costs recognized in the current year period

Partially offset by:

n $10 million third-party consultant costs in the prior year period related to productivity programs

n $7 million impairment charge recognized in the prior year period related to the exit of a non-core business category in the Mobility Coatings segment

30

### Research and development expenses

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Research and development expenses | $19 | $18 | $1 | 5.6% | $55 | $56 | $(1) | (1.8)% |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Research and development expenses remained generally consistent:

n Impacts of currency translation were immaterial when compared to the prior year period

#### Nine months ended September 30, 2024 compared to the nine months ended September 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 September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Amortization of acquired intangibles | $24 | $20 | $4 | 20.0% | $68 | $66 | $2 | 3.0% |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Amortization of acquired intangibles increased due to the following:

n Increased amortization of $3 million associated with assets acquired in the past 12 months

n Impacts of currency translation were immaterial when compared to the prior year period

#### Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Amortization of acquired intangibles increased primarily due to the following:

n Increased amortization of $6 million associated with assets acquired in the past 12 months

Partially offset by:

n Reduced amortization of $5 million from certain intangible assets reaching the end of their useful lives during 2023 and 2024, primarily relating to intangibles from the 2013 DuPont Performance Coatings acquisition

n Impacts of currency translation were immaterial when compared to the prior year period

31

### Interest expense, net

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest expense, net | $54 | $55 | $(1) | (1.8)% | $158 | $158 | $— | —% |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Interest expense, net remained generally consistent primarily due to the following:

n Favorable impact of $6 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 September 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

Nearly entirely offset by:

- Unfavorable impact of $9 million attributable to our 2031 Dollar Senior Notes which were issued in November 2023
- Unfavorable impact of $2 million attributable to the borrowings against our Revolving Credit Facility during June 2024

n Impacts of currency translation were immaterial when compared to the prior year period

#### Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Interest expense, net remained generally consistent primarily due to the following:

n Favorable impact of $15 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 September 30, 2024, partially offset by the increased variable interest rate

- Favorable impact of $15 million attributable to the redemption in November 2023 of our Euro-denominated Senior Notes due in 2025

n Impacts of currency translation were immaterial when compared to the prior year period

Offset by:

- Unfavorable impact of $28 million attributable to our 2031 Dollar Senior Notes which were issued in November 2023
- Unfavorable impact of $2 million attributable to the borrowings against our Revolving Credit Facility during June 2024

### Other (income) expense, net

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Other (income) expense, net | $(3) | $5 | $(8) | 160.0% | $4 | $15 | $(11) | 73.3% |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Other (income) expense, net changed due to the following:

n Favorable impact of foreign exchange gains and losses of $7 million when compared with the prior year period, including expenses from the remeasurement of net monetary assets denominated in the Argentinian Peso and Turkish Lira due to a significant devaluation in the prior year period

n $4 million debt extinguishment and refinancing-related costs recognized in the prior year period as part of the repricing of our 2029 Dollar Term Loans

Partially offset by:

n Decreased miscellaneous income, net of $3 million

32

#### Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Other expense, net decreased due to the following:

n Favorable impact of foreign exchange gains and losses of $11 million when compared with the prior year period, including expenses from the remeasurement of net monetary assets denominated in the Argentinian Peso and Turkish Lira due to a significant devaluation in the prior year period.

n Decreased debt extinguishment and refinancing-related costs of $4 million driven by $3 million in expenses for prepayments and repricing of our 2029 Dollar Term Loans in the current year compared to the $7 million in expenses for prepayments and repricing on our 2029 Dollar Term Loans in the prior year period

Partially offset by:

n Decreased miscellaneous income, net of $4 million

### Provision for income taxes

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Income before income taxes | $142 | $103 | $357 | $253 |
| Provision for income taxes | 40 | 30 | 103 | 58 |
| Statutory U.S. Federal income tax rate | 21.0% | 21.0% | 21.0% | 21.0% |
| Effective tax rate | 28.6% | 28.6% | 28.9% | 22.9% |
| Effective tax rate vs. statutory U.S. Federal income tax rate | 7.6% | 7.6% | 7.9% | 1.9% |

| Items impacting the effective tax rate vs. statutory U.S. federal income tax rate | (Favorable) Unfavorable Impact Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Earnings generated in jurisdictions where the statutory rate is different from the U.S. Federal rate (1) | $(2) | $(8) | $(17) | $(23) |
| Changes in valuation allowance (2) | (30) | 7 | — | 20 |
| Foreign exchange losses (gains), net | 7 | 1 | (1) | 1 |
| Non-deductible expenses and interest | 2 | 1 | 4 | 3 |
| Changes in unrecognized tax benefits | 7 | 4 | 11 | (1) |
| Other - net (3) | 24 | 1 | 22 | 1 |

(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. The activity during the three and nine months ended September 30, 2024 includes a $26 million favorable impact related to the write off of an expired Netherlands net operating loss carryforward.

(3) The activity during the three and nine months ended September 30, 2024 includes a $26 million unfavorable impact related to the write off of an expired Netherlands net operating loss carryforward.

### SEGMENT RESULTS

The Company's products and operations are managed and reported in two operating segments: Performance Coatings and Mobility Coatings. See Note 18 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 September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $877 | $856 | $21 | 2.4% | $2,612 | $2,559 | $53 | 2.1% |
| Impact of CoverFlexx |  |  |  | 2.4% |  |  |  | 0.8% |
| Volume effect |  |  |  | (0.2)% |  |  |  | 0.7% |
| Price/Mix effect |  |  |  | —% |  |  |  | 0.5% |
| Exchange rate effect |  |  |  | 0.2% |  |  |  | 0.1% |
| Adjusted EBITDA | $221 | $200 | $21 | 11.0% | $640 | $550 | $90 | 16.3% |
| Adjusted EBITDA Margin | 25.3% | 23.3% |  |  | 24.5% | 21.5% |  |  |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Net sales increased primarily due to the following:

n Contributions from the CoverFlexx acquisition

n Favorable impacts of currency translation due primarily to fluctuations of the Euro and British Pound, partially offset by fluctuations of the Mexican Peso and Brazilian Real, compared to the U.S. Dollar

Partially offset by:

n Lower sales volumes driven by unfavorable macro trends, partially offset by new body shop wins

Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:

n Decreased variable input costs due to deflationary benefits

n Decreased costs of $8 million related to our multi-year ERP system implementation and productivity programs

n Contributions from the CoverFlexx acquisition

n Decrease of $5 million in inventory charges related to obsolescence, quality and yield loss in manufacturing

Partially offset by:

n Lower sales volumes driven by unfavorable macro trends, partially offset by new body shop wins

n Less effective coverage of fixed costs as a result of lower sales volume

#### Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Net sales increased primarily due to the following:

n Contributions from the CoverFlexx acquisition

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 Impacts of currency translation were immaterial driven by offsetting currency fluctuations

Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:

n Decreased variable input costs due to deflationary benefits

n Decreased costs of $15 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

n Contributions from the CoverFlexx acquisition

n Decrease of $4 million in inventory charges related to obsolescence, quality and yield loss in manufacturing

34

### Mobility Coatings Segment

|  | Three Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change | Nine Months Ended September 30, 2024 | 2023 | 2024 vs 2023 $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $443 | $453 | $(10) | (2.2)% | $1,353 | $1,328 | $25 | 1.9% |
| Volume effect |  |  |  | 2.1% |  |  |  | 3.8% |
| Price/Mix effect |  |  |  | (3.0)% |  |  |  | (1.4)% |
| Exchange rate effect |  |  |  | (1.3)% |  |  |  | (0.5)% |
| Adjusted EBITDA | $70 | $61 | $9 | 14.3% | $201 | $151 | $50 | 33.8% |
| Adjusted EBITDA Margin | 15.7% | 13.4% |  |  | 14.9% | 11.3% |  |  |

#### Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Net sales decreased primarily due to the following:

n Lower average selling prices and product mix driven by contractual raw material pass-through impacts in the light vehicle end-market

n Unfavorable impacts of currency translation driven by fluctuations of the Brazilian Real and Mexican Peso, partially offset by fluctuations of the Euro and Chinese Yuan, compared to the U.S. Dollar

Partially offset by:

n Higher sales volumes driven by the light 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 Decreased costs of $5 million related to our multi-year ERP system implementation and productivity programs

n Higher sales volumes driven by new business wins in the current period

Partially offset by:

n Lower average selling prices and product mix driven by contractual raw material pass-through impacts in the light vehicle end-market

#### Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Net sales increased primarily due to the following:

n Higher sales volumes partially driven by new business wins in the current period and 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 across both end-markets, including raw material pass-through impacts in the light vehicle end-market

n Unfavorable impacts of currency translation driven by fluctuations of the Brazilian Real and Chinese Yuan, partially offset by fluctuations of the 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 partially driven by new business wins in the current period 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 $8 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 Lower average selling prices and product mix across both end-markets, including raw material pass-through impacts in the light 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.

At September 30, 2024, availability under the Revolving Credit Facility was $673 million, net of $22 million of letters of credit outstanding and $105 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 September 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 $60 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, any loans outstanding on our Revolving Credit Facility, 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 15 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 and 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 and an incremental $30-$40 million to be realized in 2025 with the full run-rate expected to be realized during 2026. See Note 5 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

### Cash Flows

*(In millions)*

| Net cash provided by (used for): Operating activities: | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net income | $254 | $195 |
| Depreciation and amortization | 207 | 207 |
| Amortization of deferred financing costs and original issue discount | 6 | 7 |
| Debt extinguishment and refinancing-related costs | 3 | 7 |
| Deferred income taxes | 10 | (8) |
| Realized and unrealized foreign exchange losses, net | 12 | 21 |
| Stock-based compensation | 21 | 19 |
| Impairment charges | — | 15 |
| Interest income on swaps designated as net investment hedges | (10) | (9) |
| Other non-cash, net | 5 | 25 |
| Net income adjusted for non-cash items | 508 | 479 |
| Changes in operating assets and liabilities | (166) | (190) |
| Operating activities | 342 | 289 |
| Investing activities | (374) | (65) |
| Financing activities | (90) | (252) |
| Effect of exchange rate changes on cash | (10) | (19) |
| Net increase (decrease) in cash | $(132) | $(47) |

36

### Nine months ended September 30, 2024

#### Net Cash Provided by Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2024 was $342 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $508 million. This was partially offset by net uses of working capital of $166 million, for which the most significant drivers were increases in prepaid expenses and other assets, inventories and accounts and notes receivable of $106 million, $54 million and $16 million, respectively, as well as decreases in accounts payable of $18 million. These outflows were driven primarily by payments of BIPs, increased production and timing of collections from and payments to customers and vendors. These outflows were partially offset by increases in other liabilities of $30 million largely driven by accruals related to the 2024 Transformation Initiative.

#### Net Cash Used for Investing Activities

Net cash used for investing activities for the nine months ended September 30, 2024 was $374 million. The primary uses were $290 million for the acquisition discussed in Note 3 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, purchases of property, plant and equipment of $78 million and $21 million for the disbursements to customers for loans which primarily have a repayment period of five years, partially offset by proceeds of $10 million from interest proceeds from swaps designated as net investment hedges, which are discussed further in Note 17 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

#### Net Cash Used for Financing Activities

Net cash used for financing activities for the nine months ended September 30, 2024 was $90 million. The primary uses were purchases of our common stock of $100 million, prepayments of $80 million of the outstanding principal amount of the Revolving Credit Facility and $75 million of the outstanding principal amount of the 2029 Dollar Term Loans, contractual debt repayments of $16 million and payments of $5 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. The primary financing inflow was from borrowing $185 million against our Revolving Credit Facility.

#### Other Impacts on Cash

Currency exchange impacts on cash for the nine months ended September 30, 2024 were unfavorable by $10 million, which was driven primarily by the fluctuations of the Mexican Peso and Brazilian Real compared to the U.S. Dollar.

### Nine months ended September 30, 2023

#### Net Cash Provided by Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2023 was $289 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $479 million. This was partially offset by net uses of working capital of $190 million, for which the most significant drivers were increases in accounts and notes receivable and prepaid expenses and other assets of $213 million and $68 million, respectively, driven primarily by the timing of collections and payments of BIPs. These outflows were partially offset by decreases in inventories of $66 million as a result of lower production levels due to intentionally managing inventory levels, and increases in accounts payable of $17 million.

#### Net Cash Used for Investing Activities

Net cash used for investing activities for the nine months ended September 30, 2023 was $65 million. The primary use was for purchases of property, plant and equipment of $105 million, partially offset by proceeds of $38 million from settlements on, and interest from, swaps designated as net investment hedges.

#### Net Cash Used for Financing Activities

Net cash used for financing activities for the nine months ended September 30, 2023 was $252 million. The primary uses were prepayments of $150 million of the outstanding principal amount of the 2029 Dollar Term Loans, contractual repayments of $52 million on borrowings, purchases of our common stock totaling $50 million, payments of $9 million for fees associated with refinancing our 2024 Dollar Term Loans and repricing our 2029 Dollar Term Loans and payments totaling $8 million for acquisition-related consideration, partially offset by proceeds of $9 million from a short-term borrowing and $7 million net cash received from our stock-based compensation program. The 2029 Dollar Term Loans repricing in August 2023 resulted in $197 million of constructive financing cash inflows and corresponding constructive financing cash outflows.

#### Other Impacts on Cash

Currency exchange impacts on cash for the nine months ended September 30, 2023 were unfavorable by $19 million, which was driven primarily by the fluctuations of the Euro and Russian Ruble, partially offset by the Mexican Peso, compared to the U.S. Dollar.

### Financial Condition

We had cash and cash equivalents at September 30, 2024 and December 31, 2023 of $567 million and $700 million, respectively. Of these balances, $457 million and $462 million were maintained in non-U.S. jurisdictions at September 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)*

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| 2029 Dollar Term Loans | $1,702 | $1,786 |
| Revolving Credit Facility | 105 | — |
| 2027 Dollar Senior Notes | 500 | 500 |
| 2029 Dollar Senior Notes | 700 | 700 |
| 2031 Dollar Senior Notes | 500 | 500 |
| Short-term and other borrowings | 55 | 62 |
| Unamortized original issue discount | (13) | (17) |
| Unamortized deferred financing costs | (24) | (27) |
| Total borrowings, net | 3,525 | 3,504 |
| Less: |  |  |
| Short-term borrowings | 3 | 7 |
| Current portion of long-term borrowings | 17 | 19 |
| Long-term debt | $3,505 | $3,478 |

Our indebtedness, including the Senior Secured Credit Facilities, Senior Notes and short-term borrowings, is more fully described in Note 16 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 $673 million and $528 million at September 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.

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 16 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 16 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 3 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 16 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we have made prepayments during the nine months ended September 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, of which $80 million was repaid at September 30, 2024. 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 6 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.

## Market risk

As filed, 178 characters.

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.

## Controls and procedures

As filed, 1,392 characters.

### 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 September 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 September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 178 characters.

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.

Filed Oct 30, 2024.
Source: SEC EDGAR, the filing index for accession 0001616862-24-000065. Last ingested by Listed: Nov 6, 2026, 18:21 ET. No prices; not investment advice.