Axalta Coating Systems Ltd.

04/30/2026 | Press release | Distributed by Public on 04/30/2026 10:14

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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, 2025.
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 "expect," "expects," "expected," "believe," "intended," "estimate," "estimated," "designed to," "likely," "could," "would," "may," "will," "future" and "plans," 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, including related to any new or existing tariffs imposed by the U.S. and any retaliatory actions from other countries, geopolitical (including the current conflict in the Middle East and related effects on commodity prices) and technological factors outside of our control, as well as risks related to the proposed Merger with AkzoNobel (including our ability to consummate the Merger and realize the anticipated benefits thereof), execution of, and assumptions underlying, our tariff mitigation strategies, capital allocation strategy and future share repurchases (if any), our previously-announced global transformation initiative (the "2024 Transformation Initiative"), 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, 2025 as well as "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 and in other documents that we have filed with, or furnished to, the U.S. Securities and Exchange Commission (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, 2025, 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 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 42 manufacturing facilities, four technology centers, 50 customer training centers and approximately 12,300 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 over 5,000 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. The 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 decreased 0.6%, including a 5.7% benefit from favorable foreign currency translation, for the three months ended March 31, 2026 compared with the three months ended March 31, 2025. The decreased net sales were driven by lower sales volumes of 6.2%, furthered by lower average selling prices and unfavorable product mix of 1.1%, partially offset by contributions of 1.0% from acquisitions completed during 2025 and 2026 in the Performance Coatings segment (the "Recent Acquisitions"). The following trends impacted our segment net sales performance for the three months ended March 31, 2026:
•Performance Coatings: Net sales decreased 2.4% for the three months ended March 31, 2026 compared with the three months ended March 31, 2025. The decreased net sales were driven by lower sales volumes of 7.9%, furthered by lower average selling prices and unfavorable product mix of 1.8%, partially offset by contributions of 1.6% from the Recent Acquisitions and favorable foreign currency translation of 5.7% driven by fluctuations of the Euro and Mexican Peso, in each case compared to the U.S. Dollar.
•Mobility Coatings: Net sales increased 2.8% for the three months ended March 31, 2026 compared with the three months ended March 31, 2025. The increased net sales were driven by favorable foreign currency translation of 5.8% driven by fluctuations of the Euro, Mexican Peso, Chinese Yuan and Brazilian Real, in each case compared to the U.S. Dollar, and furthered by higher average selling prices and favorable product mix of 0.1%, partially offset by lower sales volumes of 3.1%.
Our business serves four end-markets globally with net sales for the three months ended March 31, 2026 and 2025, as follows:
(In millions) Three Months Ended
March 31, 		2026 vs 2025
2026 2025 % change
Performance Coatings
Refinish $ 498 $ 511 (2.7) %
Industrial 304 311 (2.0) %
Total Net sales Performance Coatings 802 822 (2.4) %
Mobility Coatings
Light Vehicle 349 340 2.9 %
Commercial Vehicle 103 100 2.5 %
Total Net sales Mobility Coatings 452 440 2.8 %
Total Net sales $ 1,254 $ 1,262 (0.6) %
Proposed Merger with Akzo Nobel N.V.
During November 2025, we entered into a Merger Agreement with AkzoNobel, providing for the combination of the Company and AkzoNobel in an all-stock merger. See Note 1 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
Middle East Conflict
The conflict in the Middle East within Iran has increased the level of economic and political uncertainty globally. While our operations in the Middle East region do not constitute a material portion of our business, a significant escalation or expansion of economic disruption, countries subject to sanctions or the conflict's current scope, or a prolonged continuation of the conflict's current scope, could have a material adverse effect on our results of operations, financial condition and cash flows. We are actively monitoring the broader global economic impact on commodities from the current conflict, including the price and supply of raw materials, transportation costs and utilities, among others.
Capital and Liquidity Highlights
During the three months ended March 31, 2026, we prepaid $50 million of the outstanding principal amount of the 2029 Dollar Term Loans. See Note 15 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, 2025.
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
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Net sales
$ 1,254 $ 1,262 $ (8) (0.6) %
Volume effect (6.2) %
Price/Mix effect (1.1) %
Exchange rate effect 5.7 %
Impact of the Recent Acquisitions 1.0 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Net sales decreased primarily due to the following:
n Lower sales volumes driven primarily by North America Performance Coatings
n Lower average selling prices and unfavorable product mix primarily in Performance Coatings
Partially offset by:
n Favorable impacts of currency translation driven by fluctuations of the Euro, Mexican Peso, Chinese Yuan and Brazilian Real, in each case compared to the U.S. Dollar
n Contributions from the Recent Acquisitions
Cost of sales
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Cost of sales $ 838 $ 829 $ 9 1.1 %
% of net sales 66.8 % 65.7 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Cost of sales increased primarily due to the following:
n Unfavorable impacts of currency translation of 5.3% driven by fluctuations of the Euro, Mexican Peso, Chinese Yuan and Brazilian Real, in each case compared to the U.S. Dollar
n Contributions from the Recent Acquisitions
n Increased freight costs
Partially offset by:
n Lower sales volumes driven primarily by North America Performance Coatings
n Lower variable input costs
Cost of sales as a percentage of net sales increased primarily due to the following:
n Lower average selling prices and unfavorable product mix primarily in Performance Coatings
n Increased freight costs
Partially offset by:
n Lower variable input costs
Selling, general and administrative expenses
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Selling, general and administrative expenses $ 200 $ 202 $ (2) (1.0) %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Selling, general and administrative expenses decreased primarily due to the following:
n Lower operating expenses, inclusive of contributions from savings initiatives
Partially offset by:
n Unfavorable impacts of currency translation of 5.4% due primarily to fluctuations of the Euro, Mexican Peso and Chinese Yuan, in each case compared to the U.S. Dollar
n Contributions from the recent acquisitions
Other operating charges
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Other operating charges $ 26 $ 14 $ 12 85.7 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Other operating charges increased primarily due to the following:
n Increase of $20 million in merger and acquisition-related costs, primarily driven by the Merger with AkzoNobel
Partially offset by:
n Decrease of $7 million in termination benefits and other employee-related costs primarily as a result of significantly higher costs associated with the 2024 Transformation Initiative in the prior year period
Research and development expenses
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Research and development expenses $ 18 $ 17 $ 1 5.9 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
n Research and development expenses remained generally consistent and impacts of currency translation were immaterial compared to the prior year period
Amortization of acquired intangibles
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Amortization of acquired intangibles $ 26 $ 24 $ 2 8.3 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Amortization of acquired intangibles increased primarily due to the following:
n Increased amortization of $1 million associated with assets acquired in the past 12 months
n Unfavorable impacts of currency translation of 4.2% due primarily to fluctuations of the Euro, compared to the U.S. Dollar
Interest expense, net
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Interest expense, net $ 38 $ 44 $ (6) (13.6) %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Interest expense, net decreased primarily due to the following:
n Favorable impact attributable to lower principal and decreased variable interest rate on our 2029 Dollar Term Loans
Other expense, net
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Other expense, net $ 3 $ 3 $ - - %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
n Other expense, net remained generally consistent and impacts of currency translation were immaterial when compared to the prior year period.
Provision for income taxes
Three Months Ended
March 31,
2026 2025
Income before income taxes $ 105 $ 129
Provision for income taxes 14 30
Statutory income tax rate 15.0 % 15.0 %
Effective tax rate
13.7 % 23.0 %
Effective tax rate vs. statutory income tax rate (1.3) % 8.0 %
(Favorable) Unfavorable Impact
Three Months Ended
March 31,
Items impacting the effective tax rate vs. statutory income tax rate 2026 2025
Earnings generated in jurisdictions where the income tax rate is different from the statutory rate (1)
$ 3 $ 2
Changes in valuation allowance (2)
4 8
Foreign exchange losses, net (2) (1)
Non-deductible expenses and interest
7 1
Changes in unrecognized tax benefits (3)
(14) (1)
(1) For the three months ended March 31, 2026, earnings generated in jurisdictions where the statutory rate is different from the Bermuda rate is primarily related to earnings in Brazil, Germany, and the United States. For the three months ended March 31, 2025, earnings generated in jurisdictions where the statutory rate is different from the Bermuda statutory tax rate is primarily related to earnings in the United States and Switzerland.
(2) Changes in valuation allowance primarily relate to operations in Luxembourg, the Netherlands, and the United Kingdom.
(3) During the three months ended March 31, 2026, the Company recorded a tax benefit of $15 million related to the release of unrecognized tax benefits resulting from ongoing discussions with tax authorities in jurisdictions where we have open audits.
SEGMENT RESULTS
The Company's products and operations are managed and reported in two operating segments: Performance Coatings and Mobility Coatings. See Note 17 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
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Net sales
$ 802 $ 822 $ (20) (2.4) %
Volume effect (7.9) %
Price/Mix effect (1.8) %
Exchange rate effect 5.7 %
Impact of the Recent Acquisitions 1.6 %
Adjusted EBITDA $ 180 $ 197 $ (17) (9.3) %
Adjusted EBITDA Margin 22.4 % 24.1 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Net sales decreased primarily due to the following:
n Lower sales volumes across both end-markets due primarily to unfavorable macro trends in North America
n Lower average selling prices and product mix in the refinish end-market
Partially offset by:
n Favorable impacts of currency translation due primarily to fluctuations of the Euro and Mexican Peso, in each case, compared to the U.S. Dollar
n Contributions from the Recent Acquisitions
Adjusted EBITDA and Adjusted EBITDA margin decreased primarily due to the following:
n Lower sales volumes across both end-markets due primarily to unfavorable macro trends in North America
n Lower average selling prices and product mix in the refinish end-market
Partially offset by:
n Favorable impacts of currency translation due primarily to fluctuations of the Euro, Mexican Peso and Swiss Franc, in each case, compared with the U.S. Dollar
n Contributions from the Recent Acquisitions
n Lower operating expenses, inclusive of contributions from savings initiatives
n Lower variable input costs
Mobility Coatings Segment
Three Months Ended
March 31, 		2026 vs 2025
2026 2025 $ Change % Change
Net sales $ 452 $ 440 $ 12 2.8 %
Exchange rate effect 5.8 %
Price/Mix effect 0.1 %
Volume effect (3.1) %
Adjusted EBITDA $ 79 $ 73 $ 6 9.0 %
Adjusted EBITDA Margin 17.5 % 16.5 %
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Net sales increased primarily due to the following:
n Favorable impacts of currency translation driven by fluctuations of the Euro, Mexican Peso, Chinese Yuan and Brazilian Real, in each case compared to the U.S. Dollar
Partially offset by:
n Lower sales volumes across both end-markets
Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the following:
n Lower variable input costs
n Favorable impacts of currency translation driven by fluctuations of the Euro, Mexican Peso, Chinese Yuan and Brazilian Real, in each case compared to the U.S. Dollar
n Lower operating expenses, inclusive of contributions from cost savings initiatives
Partially offset by:
n Lower sales volumes across both end-markets
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 March 31, 2026, availability under the Revolving Credit Facility was $770 million, net of $30 million of letters of credit 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"). Our remaining available borrowing capacity under other lines of credit in certain non-U.S. jurisdictions totaled $63 million at March 31, 2026.
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 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. Our 2027 Dollar Senior Notes have a principal amount of $500 million, bear interest at 4.750% and are due on June 15, 2027. Considering current market interest rates and the proposed merger with AkzoNobel, we may intentionally not repay or refinance these Senior Notes prior to June 15, 2026 which would require these 2027 Dollar Senior Notes to be classified as current liabilities on our condensed consolidated balance sheets beginning with the period ending June 30, 2026. Regardless of this decision, we expect to repay or refinance the 2027 Dollar Senior Notes prior to or on their maturity date.
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 finance programs are more fully described in Note 14 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Cash Flows
Three Months Ended
March 31,
(In millions) 2026 2025
Net cash provided by (used for):
Operating activities:
Net income $ 91 $ 99
Depreciation and amortization 76 70
Amortization of deferred financing costs and original issue discount 2 2
Deferred income taxes 11 8
Realized and unrealized foreign exchange (gains) losses, net (4) 8
Stock-based compensation 7 5
Interest income on swaps designated as net investment hedges (3) (3)
Other non-cash, net 2 (1)
Net income adjusted for non-cash items 182 188
Changes in operating assets and liabilities (114) (162)
Operating activities 68 26
Investing activities (53) (44)
Financing activities (61) (8)
Effect of exchange rate changes on cash (3) 8
Net decrease in cash $ (49) $ (18)
Three months ended March 31, 2026
Net Cash Provided by Operating Activities
Net cash provided by operating activities for the three months ended March 31, 2026 was $68 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $182 million. This was partially offset by changes in operating assets and liabilities of $114 million, for which the most significant drivers were decreases in other accrued liabilities of $96 million as well as increases in accounts and notes receivable, prepaid expenses and other assets and inventories of $32 million, $27 million and $20 million, respectively. These outflows were driven primarily by seasonal cash payments for variable incentive compensation, payments of BIPs and rebates, timing of collections from customers and decreased sales volumes. These outflows were partially offset by increases in accounts payable of $90 million driven by the timing of payments to vendors.
Net Cash Used for Investing Activities
Net cash used for investing activities for the three months ended March 31, 2026 was $53 million. The primary uses were for purchases of property, plant and equipment of $50 million and business acquisitions of $8 million, partially offset by $4 million of payments received on customer loans and $3 million from interest proceeds from swaps designated as net investment hedges, which are discussed further in Note 16 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 three months ended March 31, 2026 was $61 million. The primary use was for prepayments of $50 million of the outstanding principal amount of the 2029 Dollar Term Loans, cash outflows of $6 million primarily due to stock-based compensation withholding tax settlements and contractual debt repayments of $5 million.
Other Impacts on Cash
Currency exchange impacts on cash for the three months ended March 31, 2026 were unfavorable by $3 million, which was driven primarily by fluctuations of the Euro and Indian Rupee, partially offset by fluctuations in the Brazilian Real, in each case compared to the U.S. Dollar.
Three months ended March 31, 2025
Net Cash Provided by Operating Activities
Net cash provided by operating activities for the three months ended March 31, 2025 was $26 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $188 million. This was partially offset by changes in operating assets and liabilities of $162 million, for which the most significant drivers were decreases in other accrued liabilities of $106 million, as well as increases in prepaid expenses and other assets, inventories and accounts and notes receivable of $59 million, $37 million and $18 million, respectively. These outflows were driven primarily by seasonal cash payments for variable incentive compensation, payments of BIPs and rebates, increased production and timing of collections from customers. These outflows were partially offset by increases in accounts payable of $66 million driven by the timing of payments to vendors.
Net Cash Used for Investing Activities
Net cash used for investing activities for the three months ended March 31, 2025 was $44 million. The primary uses were for purchases of property, plant and equipment of $43 million and a business acquisition of $6 million, partially offset by proceeds of $3 million from interest proceeds from swaps designated as net investment hedges.
Net Cash Used for Financing Activities
Net cash used for financing activities for the three months ended March 31, 2025 was $8 million. The primary use was for contractual debt repayments of $5 million.
Other Impacts on Cash
Currency exchange impacts on cash for the three months ended March 31, 2025 were favorable by $8 million, which was driven primarily by the fluctuations of the Euro and Brazilian Real, in each case compared to the U.S. Dollar.
Financial Condition
We had cash and cash equivalents at March 31, 2026 and December 31, 2025 of $608 million and $657 million, respectively. Of these balances, $489 million and $555 million were maintained in non-U.S. jurisdictions as of March 31, 2026 and December 31, 2025, 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 cash flow from operations 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, cash flow from operations and available borrowing capacity under our Senior Secured Credit Facilities. Based on our forecasts, we believe that cash flow from operations, 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 or pre-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 and is subject to restrictions in the Merger Agreement. 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 rate environments may increase our interest expense and weaken our financial condition.
Our indebtedness, including the Senior Secured Credit Facilities, Senior Notes and short-term borrowings, is more fully described in Note 15 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, 2025.
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 $770 million at both March 31, 2026 and December 31, 2025, all of which may be borrowed by us without violating any covenants under the Credit Agreement or the indentures governing the Senior Notes.
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, 2025. There have been no 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, 2025.
Off-Balance Sheet Arrangements
See Note 5 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, 2025.
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