Ladies and gentlemen, thank you for standing by. Welcome to the Axalta Coating Systems Second Quarter 2015 Earnings Conference Call. Presenting today will be Charlie Shaver, Chairman and Chief Executive Officer; and Robert Bryant, Executive Vice President and Chief Financial Officer. At this time all participants are in a listen only mode. A brief question and session will follow the formal presentation. [Operator Instructions] Today’s call is being recorded. Replays of this conference call will be available through August 18, 2015. Those listening after August 18, 2015 should please note that the information provided in this recording will not be updated, and it is possible that the information will no longer be current. At this time, I will turn the call over to Chris Mecray, Vice President, Investor Relations for Axalta Coating Systems for a few brief legal notices. Please go ahead.

Thank you and good morning, everyone. This is Chris Mecray, Axalta’s VP of Investor Relations. We appreciate your interest in Axalta and welcome you to our second quarter 2015 financial results conference call. Joining us today are Charlie Shaver, Chairman and CEO; and Robert Bryant, EVP and CFO. This morning, we announced our Q2 2015 financial results and posted a slide presentation to the Investor Relations section of our website at axaltacs.com which we’ll be referencing during this call. Both the prepared remarks and discussion during this call may contain forward-looking statements, reflecting the company’s current view of future events and the potential effect on Axalta’s operating and financial performance. These statements involve uncertainties and risks, which may cause actual results to differ materially from those forward-looking statements. The company is under no obligation to provide subsequent updates to these forward-looking statements. This presentation also contains certain non-GAAP financial measures. The appendix to the presentation, which again is available on our website, contains reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding forward-looking statements and non-GAAP financial measures, please refer to our filings with the SEC. I’d like to now turn the call over to Charlie. Go ahead.

Thanks, Chris, and good morning to everyone thanks for joining us today. We’re pleased to be sharing our second quarter 2015 results with you. I will begin with some of the highlights from the quarter and a brief update on our strategic focus and our progress today. I’ll then turn it over to Robert who will provide a little more detail on our results and also our updated full year outlook. We’ll then open up the lines to take any of your questions. So if you would refer to slide 3 of our presentation. I am pleased to be able to share our solid results from the second quarter of 2015. These results mark the fourth set of financials we’ve released to the public company and the overall picture for Axalta remains one of steady progress towards our operating and financial goals. On the sales front from a financial perspective our second quarter was on plan. Net sales increased by 8% over last year’s second quarter including negative foreign currency translation impact of about 11%. This is puts on track relative to our revenue guidance for the year and volume growth in the second quarter was nearly 5% with a positive contribution for both segments consistent overall with the first quarter results and reflect our expectation some shift towards growth acceleration from our transportation segment as the year continues to progress. In the area of global demand we believe our sales results is a good reflection of continued solid demand for our products across each of our end markets. They consider related to the combi remains positive in North America and firming a bit in EMEA at least for Western Europe. Of course the world is in uniform economically strong either today. We think that when as were case in…

Thanks, Charlie, and good morning, everyone. Please turn to slide five of our earnings presentation we will find our Q2 consolidated results. For the second quarter of 2015, constant currency net sales increased 8.2% over the prior year driven primarily by volume growth as well as select average selling price increases. Foreign currency translation impacted reported net sales by 11.1% in the quarter mainly from the devaluation of the euro and currency in certain Latin America jurisdictions. On a sequential basis, the currency impact was nearly even with the last quarter overall. Axalta sales volumes on a consolidated basis grew 4.8% over Q2, 2014 reflecting growth across all regions and all segments. In North America, volumes were up 5% led primarily by Transportation Coatings’ growth. In Asia-Pacific, volumes were up 12% also driven by solid growth of over 25% in Transportation Coatings in the region. Latin America in spite of the generally constrained regional economic demand environment saw volumes increased 4% led by refinished and continued solid commercial vehicle production. EMEA volumes increased 2% from moderate expansion in most end markets and in spite of ongoing headwinds from Russia and Eastern Europe. Excluding Russian and Eastern Europe our EMEA net sales increased 5.6% in Q2 excluding FX impacts. With a positive price contribution in the quarter of 3.4% overall we see that net sales were delivered largely from incremental customer demand in each segment as well as our continued focus on globalization of products and strong execution across each end markets. Second quarter adjusted EBITDA increased 15.6% year-over-year to $255 million from $221 million driving largely by strong volumes and improved mix as well as price benefit and lower fixed manufacturing costs from our ongoing productivity initiatives. Variable margins benefited from moderate raw material cost relief in Q2 as we…

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question today comes from Ramanan Sivalingam from Deutsche Bank. Please proceed with your question.

Morning, guys. Just quick question on price. Very strong performance when you look at Q2, especially versus Q1. Can you talk to the drivers of that? Was it predominantly FX-related or there’s organic purse in there?

Ram, yeah, I think as we – this is Robert. As we come in at last quarter, typically our average selling prices increased each year due to the introduction of higher value-added new products, technological innovation and process efficiencies our products can create for our customers. But the quarterly cadence of those price increases can vary for a whole host of regions, including changes in the price adjustment calendar, mix of regional revenue, mix of end market revenue, timing differences between the valuation of price increases and higher inflation countries, and of course product mix itself. So, in particular with regard to Q2, we experienced higher average selling prices actually in three out of our four regions, including certain high inflation countries where larger than normal price increases were necessary to offset internal inflation that had accumulated during part of Q1 as well as Q2. And this was consistent with our past business practices.

Got it. That’s very helpful. And then European volumes look pretty strong, particularly ex-Russia. Just curious to know what you’re seeing early in Q3 there. Is Russia getting better or how are you seeing some of the trends overall?

Yeah, Ram, it’s Charlie. As we’ve noted in first quarter we actually saw the year get off to a little bit of a slow start in January and February where we’ve seen sequential improvement really since then I would say as we completed the second quarter certainly Western Europe and Southern Europe that kind of led the way in recovery. And I would say pretty steady right now. We’re real pleased with at the way, the way the year is going pretty consistent with plan and again – after having a little bit of a slow start earlier in the year I think we’re, certainly things seem to have settled down and underlying customer demand seems to be good.

That’s very helpful. Thank you.

Thanks Ram.

Thank you. Our next question today is coming from Jeff Zekauskas from JPMorgan. Please proceed with your question.

Hi, good morning.

Good morning Jeff.

Hi, of your $200 million and eventual cost savings, how much comes from employee reduction?

Well we had several buckets of the 200 and in terms of overall rationalization of our operations Jeff whether that physical assets or whether that’s work force it is a component, but it is not the largest component.

Okay. And then are there any areas in where your prices are sequentially down are there any areas where you accept prices to be sequentially down in the third quarter?

I think from a market, from a market perspective as well as what we’re seeing in terms of our pricing we don’t have any expectations to that price.

Okay great. Thank you so much.

Thanks Jeff.

Thank you. Our next question today is coming from Bob Koort from Goldman Sachs. Please proceed with your question.

Thanks gentlemen. Good morning.

Good morning Bob.

Good morning Bob.

I thought I heard you say something I found sort of curious which was that Latin America was leading the refinish volumes during the quarter. And I was wondering if you could just maybe remind us of what sensitivity you typically see in the refinish market to broader economic conditions?

We had a strong performance by our Latin America team across the region, and again I think we highlighted in the first quarter some of the seasonal or situational factors that kind of led to Q1 not being as strong as we had expected in particular in the refinish business and I think we saw some of that volume and some of that demand come back in the second quarter.

Yeah Bob, this is John. I will just add on that, I think you know Mexico continues to be a good country for us and even though we had a fairly grim view on Brazil as far as OEM and overall industrial GDP, clearly we are seeing our industrial and refinish business do well down there.

I am sure you sensed maybe as you’ve talked with investor there tends to be some growing angst about what’s happening in China, but it appears that based on your loading of new plans you are doing just fine, I am wondering on the refinished side, as the economy maybe slows a little bit, the consumers there little bit more cautions will that effect you business at all?

Yeah I think you are correct on the China OEM. I think one hand on the OEM side, we, the China slow down as far as new build on cars, that’s been coming over the last year or two, so we kind of factored some of that into our plans this year and as we said in the comments as we are not unaffected by that, I think overall our plans today pretty much contemplated the mix between existing business and new business. On the refinished side and starting in China, you still got 24 million new vehicles being pumped into the refinish market there with a lot of those being more mainstream and premium segment cars, so we haven’t, we certainly at least up to this point have not seen any fall off in refinish marketplace there. Again we grow from a smaller base there then we do on our OEM business, but we certainly haven’t. We have seen dealers talking about overall cash management, dealer inventory they’re dealing with all those issues that congenitally could affect some of the dealers shops there. When we look at our overall mix of business, we think refinish certainly lease up to this point. We haven’t seen any slowdown there in our growth plans.

Great. Thanks for the help.

Thank you. And next question please coming from Ghansham Panjabi from Robert W. Baird. Please proceed with your question.

Hi, good morning. This is actually Matt Krieger sitting in for Ghansham. How are you guys doing?

How are you Matt, good morning.

Hi Matt.

Good, good. My first question is given the strong result, can you guys describe the flow business into the second quarter while highlighting any significant new business wins or any potential go forward from the back half of the year just trying to get a better sense of what drove the very strong results?

Sure. So with regard to second quarter I think we’ve talked about before in the refinish business in particular. The exact timing from month-to-month or from quarter-to-quarter from a demand perspective. The difference of weaker one month one way or the other can make a difference in terms of how much we see from a volume perspective come in. And I think we saw strong volume performance in the second quarter strong price performance and then certainly at the variable margin level – at the fixed cost level we saw some pretty significant improvements in our business as we continue to drive Axalta Way through the organization. And I think in Q3 just given the strength of the performance in the quarter particular in June sequentially when we look at the business we thought it might be helpful to provide some guidance on how we see Q3 shaping up in particular based on some of the refinished demand patterns that we saw this year.

Okay you’ve a couple.

Yeah Matt I would just add one comment on that which is, it was not driven by any anticipated price increases by distributors or anything like that. So we did see some relatively strong distributor volume that they – a lot people contemplated a good strong summer season in a couple of these regions. And I think we certainly seeing that bear out, but I’m like Robert I think it was prudent to say we believe some of that was just balancing between the end of Q2 and beginning of Q3.

Okay that’s useful, thank you. And then considering crude oil volatility during second quarter. Can you guys describe the raw material cost environment during second quarter and then provide your outlook kind of for the back half of the year broke out between third quarter and fourth quarter?

Yeah, overall Matt just in terms of raw material, I think sequentially quarter-on-quarter I think we commented that we saw in Q1 modest raw material savings. In Q2, we saw those pick up a little bit, I think we would still characterizes those overall savings as modest. And as we look into Q3 of course it’s really the prices that you negotiated in Q1 that we’re going to see flowing through the financial statements given the lag an inventory and sales that would be going into Q3. So the different between $60 and $40 barrel oil you know is obviously we don’t think from a negotiation perspective its material of our suppliers as was the drop from $100 to $60.

Okay great, that’s it from me. Thanks.

Thanks.

Thank you. [Operator Instructions]. Our next question is coming from Eugene Fedotoff from KeyBanc Capital Markets. Please proceed with your question.

Good morning guys. Congratulation on a nice quarter and thanks for taking my questions. Just a follow-up on some of the sales slipping into 2Q from 3Q can you quantify it for us?

I think what we tried to do there and if you look at the guidance that we provided in our earnings release as well as in our presentation. We tried to indicate from an EBITDA perspective correspondingly about how much about of that we’ve expected affect Q3. So again I think from our full year EBITDA so we’re expecting 23% to 25% of that to occur in the third quarter.

Okay. Just on top of follow-up questions from price increases in performance coatings, are you seeing your competitors raising prices as well and your expectations for second half of the year as far as prices are you expecting more prices being passed through or prices should serve stabilized at current levels?

As far as competitors I can only comment on what we kind of hear and see at the marketplace. And clearly we see competitors announcing price increases and as we go through the year. So we can – only guess what they’re actually gaining, but we certainly see the price announcements. And I think one of the reasons that we continue to do price increases in this business are two-fold one, we still have certain raw materials that are increasing. We highlighted before like pigments, isocyanates certain products that – have different supply demand dynamics but rather than just oil. And then second of all we continue to rollout new coatings, new innovative systems that are priced differently than other ones. So as we go through the year, there is all type of actions that are taking place in our portfolio as well theirs. So I do think though that as we look at pricing around the world, we continue to raise price across our segments and again every segment, every country is a little bit different, it all averages out but in some cases we are recovering inflation, we are recovering currency and in other cases just recovering changes in products or raw material. So I’ll let Robert comment on these specifics but we do expect we are on a normal cadence as we’re going through this year and different brands go at different times, sometimes we might move that from one quarter to another just depending on what competitors might be doing or when we’re seeing increases in our business. But I would say, as we go half way through the year right now, we continue on our normal cadence. The only exception being in some of the high inflation countries where we’ve seen currency changes and those tend to be economies where we adjust much more frequently anyway so – there is nothing new there but those cadences tend to be dictated by what’s going on with the currencies there. So I think as we go through the year, nothing new and again I think we certainly hear and see as a marketplace, our competitors managing their business probably not too distant more than us, Robert any comments?

John, I think you covered all the points.

Thanks for the color and just the last question on consulting fees, are you expecting to see more consulting fees in the second half?

Yes we will continue to see consulting fees in the second half of the year as we continue to make our way through the exhaustive way. Year-to-date in terms of onetime cost, we have about $30 million in onetime cost, about two thirds of that is related to severance and one third of that is related to consulting, and I think in the back half of the year we would expect to spend a somewhat similar amount and then in 2016 we expect and opt to taper down quite significantly.

Thank you.

Thank you. We have reached the end of our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments.

All right, thank you. Hopefully, our presentation this morning was informative. I know it was a little bit lengthy on the front end but we hope to try to give you most information that you need to adapt your numbers and your models. Again very pleased with our quarter and while there is a lot macro economic factors out there buffeting the year, I would characterize it as what coming through the halfway mark of the year that I am pleased to report Axalta overall pretty much on plan, something’s up, something’s down but overall, I think we’re certainly pleased to see the volume growth. Pleased to see the sustained activity we’ve got on cost management, in raw material focus so there’s always a second half of the year I’m really pleased fully at this point and look forward to discussing things with you as we go to the next quarter. So we that, thank you again operator, and I appreciate everybody on call this morning. Thank you.

Thank you. And it does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.