Axalta Coating Systems Ltd

Our effective income tax rates for the three months ended March 31, 2025 and 2024 are as follows:

The lower effective tax rate for the three months ended March 31, 2025 was primarily due to the 2025 favorable impact of changes in unrecognized tax benefits, as well as the unfavorable 2024 tax impacts of the 2024 Transformation Initiative pre-tax charges, which did not repeat in 2025.

The effective tax rate for the three months ended March 31, 2025 differs from the Bermuda statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded unfavorable impacts for earnings in jurisdictions where the statutory rate is higher than the Bermuda statutory rate and for changes in the valuation allowance. These adjustments were primarily offset by the favorable adjustments for decreases in unrecognized tax benefits and foreign currency exchange losses.

For the three months ended March 31, 2025, the effect of the Organization for Economic Cooperation and Development’s (OECD) Pillar Two framework, which imposes, among other items, a minimum tax rate of 15%, resulted in incremental tax expenses as compared to the same period in 2024. The incremental increase did not have a significant impact on our condensed consolidated financial statements for the three months ended March 31, 2025.