Ladies and gentlemen thank you for standing by and welcome to Axalta's Second Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. A question-and-answer session will follow the presentation by management. Today's call is being recorded and replays will be available through August 1st. Those listening after today's call should please note that the information provided in the recording will not be updated and therefore, may no longer be current. I would now turn the call over to Chris Mecray. Please go ahead sir.

Good morning. This is Chris Mecray, VP of Investor Relations. Thank you for joining the call today to review our second quarter 2019 financial results and for your interest in Axalta. Joining me today are Robert Bryant, CEO; and Sean Lannon, CFO. We released our financial results this morning and posted a slide presentation to the Investor Relations section of our website at axalta.com which we'll be referencing during this call. Both our prepared remarks and discussion today 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 and actual results may differ materially from those forward-looking statements. Please note that the company is under no obligation to provide updates to these forward-looking statements. This presentation also contains various non-GAAP financial measures. In the appendix we've included 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'll now turn the call over to Robert.

Thanks Chris. Good morning and thanks for joining us to review Axalta's second quarter financial results. We're very happy to report a quarter with stable topline sales growth ex-FX, expanded consolidated margins, and strong operating profit and earnings performance supplemented by excellent corresponding cash flow. Underlying drivers remain broadly consistent with our first quarter results notably including acceleration in average price-cost gap closures as well as ongoing progress with Axalta Way productivity savings, which remain on track for our 2019 targets. As you are aware Axalta's Board of Directors announced in June that we are conducting a review of strategic alternatives. The Board and management remain committed to maximizing value for our shareholders. As I'm sure you can appreciate we're not prepared to share any incremental information regarding that review at this time and we thank you for your patience until we can share any conclusions. Shifting to operating highlights for the quarter, as you can see on Page 3, consolidated constant currency net sales were stable in Q2. A reported 4.5% decline included a 3.5% negative foreign exchange impact as well as a 0.9% negative M&A impact, driven by the sale of our interest in a previously consolidated joint venture in China which we noted on our April earnings call and included in our updates to our full year guidance. The flat organic net sales included lower volumes offset by equally strong price mix effects. Performance Coatings net sales were flat before currency effects and increased 1.2% before M&A-related impacts. Transportation Coatings net sales decreased 2.4% ex-FX driven by lower Light Vehicle global production volumes. Price mix in Light Vehicle showed solid and encouraging positive acceleration as we continued to work with customers to adequately compensate for the ongoing raw material inflation experienced over the last two years. We…

Thanks, Robert and good morning. Turning to slide four. Consolidated constant currency net sales decreased 1% year-over-year, including a flat result in Performance Coatings and a decrease of 2.4% in Transportation Coatings. Excluding M&A impacts, which incorporate the sale of the interest in the consolidated JV in China, consolidated net sales would have been flat with Performance Coatings posting a 1.2% increase. The top line result was driven principally by solid ongoing price mix outcomes offset by volume pressure across most end markets and regions. On the pricing side, Axalta posted ongoing strong recapture within Performance Coatings and acceleration within Transportation Coatings driven by sequential uptick in Light Vehicle which is our third sequential quarter with positive price recapture. FX translation was a 3.5% headwind for the period and the drop through impact of this was largely consistent with our overall corporate margins. Key sources of pressure included the Euro, Renminbi and Brazilian Real. Q2 adjusted EBIT of $197 million was a 9% increase from the prior year and margins improved 210 basis points to 17.1%. This result was driven by strong price mix drop through as well as continued productivity benefits including a benefit from stock based compensation forfeitures in the quarter. Our bottom line growth was delivered despite volume headwinds across most end markets the ongoing FX impact and raw material inflation at mid-single digit percent increases at the adjusted EBIT level, albeit at moderating rates against prior year comparisons as anticipated. Turning to slide 5. Performance Coatings second quarter net sales were flat year-over-year excluding a 3.5% negative FX impacts and up 1.2% excluding the JV sale-related impacts previously noted. Organic growth drivers included a 4.7% increase in average price mix offset partially by a 3.5% decrease in volume. Refinish produced second quarter constant currency net sales…

At this time, we’ll be conducting a question-and answer-session. [Operator Instructions] Our first question comes from the line of Paretosh Misra with Berenberg. Please proceed with your question.

Thank you. Can you elaborate on the -- this 3.6% price mix contribution in the Light Vehicle's business? I'm actually curious about the mix part like how big is the mix component within this 3.6%? And what's driving that? And is that sustainable?

Good morning Paretosh and thanks for your question. In terms of the price achievements -- price mix achievement of 3.6% in the quarter, the majority of that is price and only a small amount of that is mix.

Got it. And maybe just as a follow-up on the Refinish business, what -- can you elaborate a bit more about what are the volume trends that you're seeing? It sounds like you saw some weakness in North America and emerging market. Do you expect that to continue?

Well, I think as your question points out, when you think about Refinish, we have to look at it as a global market and actually our largest market for Refinish is actually in Europe. And as far as growth markets goes -- go our emerging markets are our largest potential growth area as we move forward. Specifically, if we talk about North America, the volume trends that we've seen there as we've explained in prior calls is predominantly driven by the shift from solventborne to waterborne coatings as well as the growth that we see in the MSO segments of the North America Refinish market. Those shops are just on average more efficient than average shops that are not owned by MSOs, and therefore they use slightly less paint from a volumetric perspective. So as we continue to innovate both in terms of the productivity of the product as well as the services that we provide we capture what is given up there on a volumetric perspective in price mix. And then the third element has to do with behavior we see in the distribution channel and as we've highlighted previously distribution in terms of lowering their cost structure both at an operating level as well as a working capital level is a trend that we have seen continue in the industry given the consolidation as well as distributor's desire to increase their margin.

Got it. Thanks. And good luck with everything.

Thank you, Paretosh.

Our next question comes from the line of Christopher Parkinson with Credit Suisse. Please proceed with your question.

Thank you. This is Harris Fein on for Chris. I'm just curious how should we be thinking about the need for you to implement additional pricing specifically in Transportation Coatings versus just letting this price increase that you had in 2Q roll through the next few quarters?

If we look at the – what's happened over the last couple of years in terms of Refinish margins have been negatively impacted by fairly dramatic raw material inflation at a period in time when prices did not go up very much in the overall market. We're now seeing traction in terms of having those conversations with our Light Vehicle customers in terms of price increases and we had several of those discussions come to fruition and be realized actually in the first quarter, although it wasn't an impact of a full quarter. So you see a pickup in the first quarter of what's going on in the second quarter. And in addition, what you also see in Light Vehicle is just the ongoing impact of several other changes that we've made in terms of moving more customers to be on an index as well as other surcharge mechanisms. So the progress that we've seen there in the second quarter is not a one-time event. We would expect to see that on an ongoing basis, but perhaps not at exactly the same level. Specifically, with regard to second quarter, it's approximately roughly half price and roughly half mix effect in the second quarter for Light Vehicle.

Got it. And just as a follow-up. In terms of the destocking that you saw in Refinish during the quarter, could you just point us any indictors that gives you confidence that that does represent any deceleration in demand from declining frequency and that it is just destocking? Thank you.

Given our close relationship with the end customers at the body shop level, we have a very good feel for what's going on in the repair shops. And what we can see there is the amount of activity at the repair shop level as well as just the size of the – and growth of the car park and accident rates give us confidence that the end market is actually continuing to perform as we had originally expected. And what you're just really seeing is the continued push by distribution to become more efficient.

Got it. Thank you.

Our next question comes from the line of Ghansham Panjabi with Baird. Please proceed with your question.

Hey, guys. Good morning. I guess, first-off going back to auto Refinish and sort of looking back in the last couple of years had volumes drawback for the industry played out the way you thought they would across your major regions sort of separating us some of the unique destocking elements that you've been impacted with? And then going forward what you think is reasonable for industry volume specific to Refinish on an ongoing basis across your major regions?

Ghansham as we look at that, I think the important thing to remember is that when you look at the Refinish business you really need to look at it at a net sales level, just structurally as the business operates. And in your customer base you're trying to push towards higher and higher productivity coating systems. So whether you're in Europe or whether you're in Southeast Asia or North America everybody is under pressure to become more efficient. So if you look at just volume trends, I think we'll be missing a very important part of the story. You really have to look at overall sales. And I think compared to our expectations, we've actually seen at a net sales level the overall end market growth that we would have expected. And I think we'll continue to see that growth in particular in emerging markets as you see the car parks and increasing grow – and increasing penetration of the middle class and growth of the middle class in those emerging markets.

Understood. And so as you disaggregate the comment on net sales how much do you think price – how much do you think mix has impacted that component as you kind of think about volume mix and so on the evolution of higher productive coatings et cetera? What do you think the mix component is if you disaggregate that?

Well, we've certainly seen an increase in waterborne coatings. Much of that in developed markets is really driven by the just the natural evolution of the market. Then you have some markets where it's more regulatory driven such as China and then you're seeing other countries really push on the environmental regulatory side of the equation. So therefore, we think that there's going to continue to be a push towards waterborne. But waterborne isn't the right solution necessarily for every situation and every body shop. So we do have high solids low VOC solventborne product that's the leading product in that category in the industry that has also experienced strong growth. So I think overall we would expect to see the Refinish industry grow globally and each market and then we also expect to see some of the shifts that we had talked about in terms of more solventborne or less solventborne to more waterborne and then even in some jurisdictions that are predominantly solventborne an increase in the use of high solids low VOC solventborne.

Okay. And just one final one. Understanding you're very limited on what you could say on the strategic review. But during this period, how should we sort of think about capital allocation as it relates to your free cash flow generation for 2019? Thanks so much.

I think nothing really changes as far as capital priorities. I think we remain focused on our M&A efforts. I think we're going to continue to drive the internal and organic projects those high-return projects that we've continued to voice-over and we'll continue to look at opportunistic share buyback. And to the extent, we're accomplishing something from an – M&A perspective. We'll continue to build cash on the balance sheet heading towards our net leverage target of 2.5 times. So that's kind of how we think about capital priorities today regardless of the strategic review.

Thank you very much.

Our next question comes from the line of Mike Sison with KeyBanc. Please proceed with your question.

Hey, guys. Nice quarter. I think I heard you say that your guidance for the second half is 25%, third quarter 26% of the outlook fourth quarter so you'll have an acceleration into the fourth quarter. Could you maybe talk about some of the drivers of why the fourth quarter is going to be stronger than the third quarter?

We do see raw materials moderating as we get into the back half of the year so that's one big contributor. And then from an FX perspective we also see a little bit of strengthening. And last thing and not as notable but we do see our comps from an LV perspective improving slightly in the fourth quarter.

In the last component Mike would be the usual process of accumulating cost savings through the year which usually are most impactful and helpful in the fourth quarter.

Got it. And just a quick one on Commercial Vehicle it's been – sounds like it continues to see good growth for you guys, anything in particular driving that? Is it new products market share gains just kind of your thoughts on that segment?

Yeah. The big driver is just the Americas heavy-duty truck market continues to do extremely well and given our market penetration there we're benefiting from that.

Great. Thank you.

Our next question comes from line of David Begleiter with Deutsche Bank. Please proceed with your question.

This is David Huang here for David. I guess, first as gross deflating the second half where are you at risk for pricing pressure? And I guess can Light Vehicle sustain pricing in a environment of weakened market demand and low raw materials?

Yeah, I think…

Could you repeat your question? I'm sorry. You came down -- you came through quite softly. We got part of your question, but not all of it.

I guess, how do you think about second half gross are expected to deflate? Where are you at risk for pricing pressure? And when you think about Light Vehicle, can Light Vehicle sustain pricing in a environment of weak macro demand and lower raw materials environment?

I think as we look at our markets we do see raw material headwinds easing throughout the second half of the year based on purchases that we've made up till now. So barring a shock here and a big uptick in the third quarter in terms of what we're buying that would flow through in the fourth quarter. There still are headwinds. It's just that they're lower. So we still have year-over-year inflation. And as such I think our customer base understands our need to recoup that inflation. And with regard to Light Vehicle, the gap in price capture to offset the raw material inflation that has occurred there over the last really 2.5 years now, two years is quite substantial. And so while there's been good progress on price increase there to offset those costs, there still needs to be more to offset more of the margin decrement that's occurred over the last two years.

Thanks. And then how do you think about your 2020 EBITDA relative to your 2019 expectation?

At this point we haven't provided any guidance on 2020. Our regular cadence is to do that towards the end of the year so you can expect that towards the end of 2019.

Thanks.

Your next question comes from line of P.J. Juvekar with Citi. Please proceed with your question.

This is Eric Petrie on for P.J. China auto sales were weak in the quarter, but do you by the view that auto dealer inventories in China have declined in the -- are now back to normal? And then what is your order book looking like?

Yeah. So we don't typically carry an order book or certainly one that we discuss in automotive that's a relative just-in-time delivery business and automotive manufacturers will carry generally a couple of weeks inventory that we're consistently replenishing. So our visibility into that short-term is about two weeks. We certainly discuss with our customers what their plans are longer-term. We are aware that inventories in China are now quite low, which should be or at least could be helpful to the outlook for demand there, but we remain relatively cautious in terms of our guidance construct with regard to any acceleration of the China market at this point.

Thank you. And secondly could you just talk a little bit about the Industrial end market demand? And what you saw that did well or better or worse in the regions, especially the noted strength in Asia Pacific?

I think as others have seen in broader industrials as well as in coatings in the second quarter, we did see a softening in demand. And for us we've been experiencing an outsized growth in that end-market for a while. We did see some market softening in the second quarter. As we go through our markets not too dissimilar from perhaps what others have commented in the wood business residential starts and remodels in the market were down about 5%. Fortunately, we've been able through new products, new customer gains and price increases to offset a large portion of that. In the coil business, we have been impacted by lower demand in construction --agriculture and also lower steel imports have also dampened demands there somewhat. However, we do have a number of new products that have been launched in that market segment and more throughout the course of the year. So I think we're also fairly optimistic about our position within the coil market. Our Energy Solutions business, what we see there is volumes down low-single digits, but price mix up mid-single digits. We have strengthened China given that the growth in that market there and that's been offsetting the softer demand that we see in Europe. And then in our powder business, volumes have been flatter through the second quarter, but we have had price mix up in that business. So the global price increases that we've had there and some of the new business gains have really enabled us to offset some of the slowness that we saw in North America and EMEA and China is also a market that in the second quarter performed well for us.

Great. Thank you.

Your next question comes from the line of Aleksey Yefremov with Nomura Instinet. Please proceed with your question.

Good morning. This is Matt Skowronski on for Aleksey. In Refinish last quarter you touched on how you saw some sales wins in the Americas. Were these fully implemented during 2Q? And if they weren't, how should we think about that cadence in the coming quarters?

So we've had very good commercial performance including some new business that is in the process of being converted. The conversion of that business actually takes time because you go on a shop-by-shop basis and convert each shop over to a new paint supplier. So we expect to see that benefit be relatively small this year but have a much larger impact next year.

Thank you for that. And then just touching on something that you commented on earlier. In terms of raw materials, you mentioned you're pretty far along closing the gap in Light Vehicle or at least you made progress. Will that gap with raw materials and the price be completely closed by the end of the year?

No. So we're still, I would say early innings as it relates to Light Vehicle and just to correct something that was said earlier. The pricing you're actually seeing come through this quarter, it's predominantly price versus mix. So I just wanted to correct that point, but we still have a fair amount of work to do on the pricing side. And you've seen in the last three quarters, we've gotten price with that accelerating this quarter but there's still work to be done. And when you bridge over the performance, we are largely caught up on the performance side.

Thank you.

Our next question comes from the line of Laurent Favre with Exane. Please proceed with your question.

Yes, good morning all. Two questions please. The first one on the raw material side. Can you give us a bit of an indication on what pressure or where are you seeing steel pressure into the second half on HDIs and things like that? And then the second question on the strategic review, I appreciate that you don't want to speculate on the outcome but I was wondering if you could share anything on the process itself? For instance, have you hired consultants too? And are you sharing info with them on your business and are you asking them to look at what you could improve on your business itself? Or are you mostly doing it yourselves and getting in bankers to think about the M&A outcomes? Thank you.

Laurent on your second question, we won't be commenting on any of the details of the strategic review at this time. I think what we've said publicly is pretty much all we're going to say about that for now. On your first question and looking at the raw material basket, just a little color by category. I think for Q3 at least we see resin prices finally starting to be flat, which is an improvement over our earlier expectation of slight inflation. In isocyanates, we do continue to see price pressure there and expect them to be up year-over-year third quarter to third quarter. Solvents, we expect to be for the most part flat in the third quarter. Monomers is a category we do see -- due to some supply tightness there, we do continue to expect prices to be up. Pigments as it's usually the case kind of up. And then on additive side, we are seeing some relief there in the additive category with prices flattening out at least for the moment in particular the entire basket in the overall category is just reflective of where oil price has been. So again still headwind overall for us, but a lessening headwind compared to prior quarters.

And just to add two other notables that we've noted in prior quarters. We're still assuming about $30 million in headwinds as it relates to tariffs and you recall with oil really spiking in October of last year before we started to see the change, we're sitting on some high dollar inventory at the end of 2018 that largely turned in the first quarter of 2019.

Thank you.

Our next question comes from the line of Josh Spector with UBS. Please proceed with your question.

Hey, guys. Within performance, I was wondering could you breakdown the volume change year-on-year for the Refinish versus Industrial?

Yes. Josh, we haven't typically provided a bridge at that level. So we have noted the 3.5% lower volume offset by a higher price mix for the segment. We did have some decline in volume in Refinish offset by improved mid single-digit price mix and likewise some decline in volume in Industrial offset very well that price mix as well.

Okay. And then on performance, I guess, if I look at what you did from an EBIT standpoint in the quarter and I look at prior years typically quarter-on-quarter into the September quarter is around maybe a $10 million decline sequentially. If I look at the guide that you have today, there's maybe closer to a $15 million $20 million decline. And I guess I think with some of the mix efforts and maybe a little bit of price benefit that it might have been more like a normal decline into the quarter. Curious what would be potentially driving that higher sequential decline versus what we typically see?

It's challenging to look at it on that basis in part because prior years had a lot of moving parts notably including the distributor destocking that occurred in 2017 and there was some correction for that in 2018 and the development of price mix in the segment over the last couple of years. So doing that particular type of analysis is a little bit challenging. So I prefer you think about it in terms of the current year dynamics predominantly. But you are correct that it is normal and typically seasonal to see a little bit of a step down 2Q to 3Q.

Okay. Thanks.

Our next question comes from the line of Laurence Alexander with Jefferies. Please proceed with your question.

Hi, everyone. This is Dan Rizzo on for Laurence. How are you?

Hey, Dan.

If we think about how -- shifting Refinish customers to the coating systems to the higher margin coating systems, how does that process work? Is it -- I mean what's the length of it? Is it kind of involved or is there something that they accept? Or do you have to do a lot -- like kind of teach things?

It varies. If someone is switching from waterborne to solvent-borne there is an investment that's required in the paint booths. There is also training that's required of painters because the paint actually sprays differently. So if your question is kind of waterborne to solvent-borne, it's a fair amount of training and really kind of there's got to be a certain amount of throughput or there is a breakeven level where it makes sense for a shop to be solvent-borne or to be waterborne just based on the overall economics and outlook of the shop. Now if you're talking about switching from one competitor's paint system to another competitor's paint system, even if they're both waterborne or even if they're both solvent-borne, they spray differently. So there's also education and training that's required in that scenario.

So it takes number of months to years to kind of do the switch over? How does that work?

A switch over of a body shop can be done in a weekend. The training and getting people up to an acceptable level of performance can take a few months. But again, it's largely a function of the quality of the painters. If we have painters that have been in the business for a while and highly skilled the process moves quite quickly. If you're in the shop where you've had a lot of painter turnover, the process may take longer.

Okay. And then just one other question and then if we think about auto OEM trends what we're seeing in Light Vehicle, do you have any initial thoughts on Q4? And is there any likelihood of extended winter shut downs potentially for your customers?

As we think about our updated guidance and kind of going back to the January guide, we started off the year expecting to be slightly up. At the end of the first quarter, IHS was showing down 0.9% and now we're down at 3.7% based on what was recently published. So we're not expecting any sort of acceleration. I think as you look at our new top-line guidance it's now reflecting further volume declines following largely the IHS guidance.

Thank you very much, guys.

Our next question comes from the line of Jeff Zekauskas with JPMorgan. Please proceed with your question.

Good morning. This is Silke Kueck for Jeff. How are you?

Good morning, Silke.

When you look at the restructuring announcement by the large auto OEM customers in terms of geographic turning down like a footprint in manufacturing, how do you think that might touch your business? And is that something that would be -- is that something you see like in 2020 or something that's like a longer term issue? Or do you think that's something that you feel this year?

Silke, its Chris. You know, there's actually been a series of announcements in different parts of the world. Probably the easiest way to answer that is that there is actually some impact in 2019 from announcements that were made last year including in North America and a little bit in Europe there's probably still some incremental impact that could occur in 2020 from announcements that have occurred this year. In some cases we are not affected so it really is plant by plant. When I looked at it in detail I was relatively pleased at the direct impact to us relative to what I -- essentially first figured when I read those announcements. So overall while we can't completely duct the reality of some plant shutdowns globally, I would say that the impact to Axalta is moderate.

Okay. Secondly, I was wondering whether you can speak about your cash flows like you said the free cash flow was sort of like $30 million for the first six months. How do you think you'll get to your target full year end? And at what working capital changes do you expect to get those numbers?

Yes. I mean, we continue to drive working capital improvement. I mean, year-to-date we're fairly happy on where we're tracking against the full year guide. But as you bridge June to December the big areas of opportunity that we're driving towards are accounts receivable and inventory. AR just by a function of seasonality. That typically comes in but we expect that to tighten even more compared to the prior year, but we're on track to hit the guidance on why we're reconfirming the outlook that we provided last April.

So you think you'll go from like 30 to 475 by year end?

So we're reconfirming the range of 430 to 470…

Okay.

…for our free cash flow.

Okay. And the last question I have is that I was wondering whether you can talk about like the timing of the announcement of the strategic review? Like what prompted that and why now?

So Silke we've been asked quite a bit as you can imagine during the second quarter about that and essentially all we can say is that the Board made that announcement June 2019 and we haven't added anything specific to the context around that timing.

Okay. Thanks very much.

Thanks, Silke.

Our next question comes from line of Vincent Andrews with Morgan Stanley. Please proceed with your question.

Hi, guys. This is actually Steve on for Vincent. I just had maybe a question on the macro level. Looks like you guys cut your IP assumption from like 2.1 to 1.5, but your sales guidance was coming down quite bit more. So -- maybe if you could just bridge the delta in those two revisions that would be helpful?

Can you clarify the 2.1 referring to what?

Industrial production your assumption there?

Okay. Yes. I mean essentially you have an effect both on Industrial and Light Vehicle from that reduced Industrial production guidance, which is some of the underlying driver behind the outlook of those businesses, but maybe jump in if we miss anything in your question.

Yeah. I mean the biggest change -- so we did provide the macros in the deck, but the biggest change for the top line guide is really volumes within Light Vehicle, following IHS. We are seeing some headwinds as far as Industrial, but the broad change relates to the Light Vehicle.

Okay. That’s helpful. Thank you.

Our next question comes from line of Steve Byrne with Bank of America Merrill Lynch. Please proceed with your question.

Hi, guys. This is actually Luke Washer on for Steve. I wanted to touch on the inventory destocking in your Refinish business. Where do you think the distributors are in the stocking process? And do you expect this to continue in the back half of 2019 and then kind of into 2020?

It's difficult to say. I think the distributors overall are, as we said before, looking to become more efficient both in their operating cost structure as well as in the amount of working capital and where they are exactly on their process is something that I think you have to ask them. But I think at the end market, the end market level again, we're seeing strong growth and overall globally, we had good price -- I'm sorry, we had good overall growth at 3.6%. And I think again, it's important that everybody not lose sight of the fact that we're in a global Refinish market, and within that market Europe is actually our largest market and North America is our second largest market. The area of the most amount of growth over the next five to 10 years will be Asia and emerging markets. So, I think it's just important to keep that full picture in context.

Sure. That's helpful. And last question. You guys did quite well on the margins for your Performance Coatings, 300 bps. Could you maybe break out a little bit more on how much of that was driven by price mix versus actual price increases and maybe productivity enhancements?

Yeah. So on price mix, generally speaking, it was about 50-50 as far as actual price versus mix. We don't actually quantify productivity by end market, but we are continuing to see the benefits of Axalta Way, and you see that dropping through to margins.

Great. Thank you very much.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And now, I would like to turn the call back to Robert Bryant for closing remarks.

Thank you. I just wanted to highlight that the second quarter was a very strong quarter for us. We executed extremely well. We achieved 4% price mix overall and that includes price realization in both segments and across all four regions. And in particular, our efforts to offset raw material inflation with price increases in Light Vehicle should through clearly in the quarter with price mix of a positive 3.6%. We're also seeing raw material inflation headwinds finally starting to ease somewhat. So, the higher pricing, the lower raw material inflation, and the continued strong contribution from our Axalta Way cost reduction program, is having a great impact on our profitability and our margins. Adjusted EBIT itself increased 9% year-over-year, and our adjusted EBIT margin expanded by 210 basis points. So if you flow that through to net income, net income also increased by 9% year-over-year and our adjusted earnings per share increased 13%, which was further aided by our share buyback. Although Industrial demand and Light Vehicle builds are expected to be lower in Q3 and Q4, we believe that the strong performance of our Refinish and Commercial Vehicle businesses, our price increases, the easing of raw material inflation, and our cost reduction programs will position us well to hit our full year profitability goals. So, just wanted to provide that overall summary and perspective on the second quarter here. And thank you very much for joining us today and we look forward to updating you again on our progress in October.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.