Reportable Segment Information

6 Months Ended

Jun. 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 June 30, 2014
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings Group		Administrative			Consolidated Totals
Net external sales	$	1,882,592	$	433,356		$	544,597	$	181,221	$	1,229		$	3,042,995
Intersegment transfers			766,080			2,202		9,927		(778,209		)
Total net sales and intersegment transfers	$	1,882,592	$	1,199,436		$	546,799	$	191,148	$	(776,980	)	$	3,042,995
Segment profit	$	375,857	$	92,488	(1)	$	54,865	$	5,660				$	528,870
Interest expense										$	(16,374	)	(16,374		)
Administrative expenses and other										(83,266		)	(83,266		)
Income before income taxes	$	375,857	$	92,488		$	54,865	$	5,660	$	(99,640	)	$	429,230

	Three Months Ended June 30, 2013
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings Group		Administrative			Consolidated Totals
Net external sales	$	1,606,509	$	393,660		$	513,524	$	198,991	$	1,205		$	2,713,889
Intersegment transfers			658,202			3,740		9,691		(671,633		)
Total net sales and intersegment transfers	$	1,606,509	$	1,051,862		$	517,264	$	208,682	$	(670,428	)	$	2,713,889
Segment profit	$	332,972	$	79,042	(1)	$	54,462	$	856				$	467,332
Interest expense										$	(15,069	)	(15,069		)
Administrative expenses and other										(71,379		)	(71,379		)
Income before income taxes	$	332,972	$	79,042		$	54,462	$	856	$	(86,448	)	$	380,884

⁽¹⁾ Segment profit includes $8,891 and $8,108 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during the second quarter of 2014 and 2013, respectively.

	Six Months Ended June 30, 2014
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings  Group		Administrative			Consolidated Totals
Net external sales	$	3,242,595	$	758,655		$	1,042,236	$	363,609	$	2,456		$	5,409,551
Intersegment transfers			1,312,642			3,615		20,049		(1,336,306		)
Total net sales and intersegment transfers	$	3,242,595	$	2,071,297		$	1,045,851	$	383,658	$	(1,333,850	)	$	5,409,551
Segment profit	$	522,122	$	143,576	(2)	$	101,342	$	15,647				$	782,687
Interest expense										$	(32,768	)	(32,768		)
Administrative expenses and other										(154,612		)	(154,612		)
Income before income taxes	$	522,122	$	143,576		$	101,342	$	15,647	$	(187,380	)	$	595,307

	Six Months Ended June 30, 2013
	Paint Stores Group		Consumer Group			Global Finishes Group		Latin America Coatings  Group		Administrative			Consolidated Totals
Net external sales	$	2,774,446	$	702,240		$	1,000,342	$	401,627	$	2,402		$	4,881,057
Intersegment transfers			1,165,906			5,031		19,912		(1,190,849		)
Total net sales and intersegment transfers	$	2,774,446	$	1,868,146		$	1,005,373	$	421,539	$	(1,188,447	)	$	4,881,057
Segment profit	$	462,685	$	133,014	(2)	$	88,393	$	21,695				$	705,787
Interest expense										$	(30,380	)	(30,380		)
Administrative expenses and other										(126,139		)	(126,139		)
Income before income taxes	$	462,685	$	133,014		$	88,393	$	21,695	$	(156,519	)	$	549,268

⁽²⁾ Segment profit includes $15,325 and $14,278 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during the first six 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 $576.7 million and $32.0 million, respectively, for the second quarter of 2014, and $531.6 million and $5.6 million, respectively, for the second quarter of 2013. Net external sales and segment profit of these subsidiaries were $1.106 billion and $54.7 million, respectively, for the first six months of 2014, and $1.048 billion and $31.2 million, respectively, for the first six months of 2013. Long-lived assets of these subsidiaries totaled $614.6 million and $596.5 million at June 30, 2014 and June 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.