Segment Information

9 Months Ended

Jul. 29, 2011

Segment Information

Segment Information

NOTE 7: SEGMENT INFORMATION

Based on the nature of our products, technology, manufacturing processes, customers and regulatory environment, we aggregate our operating segments into two reportable segments: Coatings and Paints. We are required to report segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources. We evaluate the performance of operating segments and allocate resources based on profit or loss from operations before interest expense and taxes (EBIT).

The Coatings segment aggregates our industrial and packaging product lines. Industrial products include a broad range of decorative and protective coatings for metal, wood and plastic. Packaging products include both interior and exterior coatings used in metal packaging containers, principally food containers and beverage cans. The products of this segment are sold throughout the world.

The Paints segment aggregates our consumer paints and automotive refinish product lines. Consumer paints includes interior and exterior decorative paints, primers, varnishes, high-performance floor paints and specialty decorative products, such as enamels, aerosols and faux varnishes, for the do-it-yourself and professional markets in Australia, China, New Zealand and North America. In September 2010, we acquired Wattyl Limited which expanded our distribution of consumer paints into Australia and New Zealand primarily through independent dealers, hardware chains, home centers and company-owned stores (see Note 3).

Our remaining activities are included in All Other. These activities include specialty polymers and colorants that are used internally and sold to other coatings manufacturers, as well as furniture protection plans and gelcoats and related products. All Other also includes our corporate administrative expenses. These administrative expenses include amortization expense, certain environmental-related expenses and other expenses not directly allocated to any other operating segment.

It is not practicable to obtain the information needed to disclose revenues attributable to each of our identified product lines within our reportable segments.

In the following table, sales between segments are recorded at selling prices that are below market prices, generally intended to recover internal costs. Segment EBIT includes income realized on inter-segment sales. Comparative third quarter and year-to-date results on this basis are as follows:

	Three Months Ended						Nine Months Ended
	July 29, 2011			July 30, 2010			July 29, 2011			July 30, 2010
Net Sales:
Coatings	$	560,759		$	484,247		$	1,526,284		$	1,317,659
Paints		441,553			323,206			1,195,884			860,615
All Other		98,277			95,422			266,655			248,247
Less Intersegment Sales		(30,107	)		(28,960	)		(83,208	)		(76,673	)
Total Net Sales	$	1,070,482		$	873,915		$	2,905,615		$	2,349,848
EBIT
Coatings	$	67,806		$	80,496		$	178,544		$	185,868
Paints		42,079			38,577			100,556			118,570
All Other		255			1,950			(6,603	)		(17,764	)
Total EBIT	$	110,140		$	121,023		$	272,497		$	286,674
Interest	$	15,801		$	14,322		$	46,846		$	43,433
Income before Income Taxes	$	94,339		$	106,701		$	225,651		$	243,241