Reportable Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

REPORTABLE SEGMENT INFORMATION

REPORTABLE SEGMENT INFORMATION

The Company reports segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Disclosures Topic of the ASC. The Company has determined that it has four reportable operating segments: Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group (individually, a "Reportable Segment" and collectively, the “Reportable Segments”).

(Thousands of dollars)	Three Months Ended September 30, 2014
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings Group		Administrative			Consolidated Totals
Net external sales	$	2,027,485	$	385,238		$	536,261	$	200,367	$	1,219		$	3,150,570
Intersegment transfers			802,249			2,097		10,297		(814,643		)
Total net sales and intersegment transfers	$	2,027,485	$	1,187,487		$	538,358	$	210,664	$	(813,424	)	$	3,150,570
Segment profit	$	431,840	$	78,956	(1)	$	60,751	$	11,792				$	583,339
Interest expense										$	(16,025	)	(16,025		)
Administrative expenses and other										(93,266		)	(93,266		)
Income before income taxes	$	431,840	$	78,956		$	60,751	$	11,792	$	(109,291	)	$	474,048

	Three Months Ended September 30, 2013
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings Group			Administrative			Consolidated Totals
Net external sales	$	1,763,404	$	366,845		$	507,284	$	208,645		$	1,239		$	2,847,417
Intersegment transfers			689,319			2,437		9,170			(700,926		)
Total net sales and intersegment transfers	$	1,763,404	$	1,056,164		$	509,721	$	217,815		$	(699,687	)	$	2,847,417
Segment profit	$	359,352	$	73,065	(1)	$	44,536	$	(983	)				$	475,970
Interest expense											$	(15,394	)	(15,394		)
Administrative expenses and other											(73,114		)	(73,114		)
Income before income taxes	$	359,352	$	73,065		$	44,536	$	(983	)	$	(88,508	)	$	387,462

⁽¹⁾ Segment profit includes $9,064 and $8,340 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during the third quarter of 2014 and 2013, respectively.

	Nine Months Ended September 30, 2014
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings  Group		Administrative			Consolidated Totals
Net external sales	$	5,270,080	$	1,143,893		$	1,578,497	$	563,975	$	3,676		$	8,560,121
Intersegment transfers			2,114,891			5,712		30,346		(2,150,949		)
Total net sales and intersegment transfers	$	5,270,080	$	3,258,784		$	1,584,209	$	594,321	$	(2,147,273	)	$	8,560,121
Segment profit	$	953,962	$	222,532	(2)	$	162,093	$	27,439				$	1,366,026
Interest expense										$	(48,793	)	(48,793		)
Administrative expenses and other										(247,878		)	(247,878		)
Income before income taxes	$	953,962	$	222,532		$	162,093	$	27,439	$	(296,671	)	$	1,069,355

	Nine Months Ended September 30, 2013
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings  Group		Administrative			Consolidated Totals
Net external sales	$	4,537,849	$	1,069,085		$	1,507,626	$	610,271	$	3,643		$	7,728,474
Intersegment transfers			1,855,226			7,469		29,081		(1,891,776		)
Total net sales and intersegment transfers	$	4,537,849	$	2,924,311		$	1,515,095	$	639,352	$	(1,888,133	)	$	7,728,474
Segment profit	$	822,037	$	206,079	(2)	$	132,929	$	20,712				$	1,181,757
Interest expense										$	(45,774	)	(45,774		)
Administrative expenses and other										(199,253		)	(199,253		)
Income before income taxes	$	822,037	$	206,079		$	132,929	$	20,712	$	(245,027	)	$	936,730

⁽²⁾ Segment profit includes $24,389 and $22,618 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during the first nine months of 2014 and 2013, respectively.

In the reportable segment financial information, Segment profit was total net sales and intersegment transfers less operating costs and expenses. Domestic intersegment transfers were accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs. International intersegment transfers were accounted for at values comparable to normal unaffiliated customer sales. The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the Reportable Segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

Net external sales and segment profit of all consolidated foreign subsidiaries were $571.9 million and $33.3 million, respectively, for the third quarter of 2014, and $523.7 million and $18.2 million, respectively, for the third quarter of 2013. Net external sales and segment profit of these subsidiaries were $1.678 billion and $88.0 million, respectively, for the first nine months of 2014, and $1.572 billion and $50.2 million, respectively, for the first nine months of 2013. Long-lived assets of these subsidiaries totaled $577.7 million and $674.5 million at September 30, 2014 and September 30, 2013, respectively. Domestic operations accounted for the remaining net external sales, segment profits and long-lived assets. No single geographic area outside the United States was significant relative to consolidated net external sales, income before taxes, or consolidated long-lived assets.

Export sales and sales to any individual customer were each less than 10 percent of consolidated sales to unaffiliated customers during all periods presented.