REPORTABLE SEGMENT INFORMATION

The Company reports its 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 Reporting Topic of the ASC. The Company has determined that it has three reportable operating segments: The Americas Group, Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments).



(Thousands of dollars)	Three Months Ended September 30, 2018
	The Americas Group		Consumer Brands Group		Performance Coatings Group		Administrative			Consolidated Totals
Net external sales	$	2,665,663	$	770,543	$	1,294,579	$	685		$	4,731,470
Intersegment transfers	233		936,281		4,474		(940,988		)
Total net sales and intersegment transfers	$	2,665,896	$	1,706,824	$	1,299,053	$	(940,303	)	$	4,731,470

Segment profit	$	577,738	$	83,941	$	104,868				$	766,547
California litigation expense							$	(136,333	)	(136,333		)
Interest expense							(92,281		)	(92,281		)
Administrative expenses and other							(121,980		)	(121,980		)
Income from continuing operations before income taxes	$	577,738	$	83,941	$	104,868	$	(350,594	)	$	415,953



	Three Months Ended September 30, 2017
	The Americas Group		Consumer Brands Group		Performance Coatings Group		Administrative			Consolidated Totals
Net external sales	$	2,539,256	$	723,341	$	1,242,336	$	2,087		$	4,507,020
Intersegment transfers	1,184		860,181		4,709		(866,074		)
Total net sales and intersegment transfers	$	2,540,440	$	1,583,522	$	1,247,045	$	(863,987	)	$	4,507,020

Segment profit	$	525,577	$	70,427	$	59,615				$	655,619
Interest expense							$	(91,593	)	(91,593		)
Administrative expenses and other							(136,304		)	(136,304		)
Income from continuing operations before income taxes	$	525,577	$	70,427	$	59,615	$	(227,897	)	$	427,722




	Nine Months Ended September 30, 2018
	The Americas Group		Consumer Brands Group		Performance Coatings Group		Administrative			Consolidated Totals
Net external sales	$	7,371,135	$	2,204,668	$	3,891,678	$	2,791		$	13,470,272
Intersegment transfers	506		2,657,614		16,888		(2,675,008		)
Total net sales and intersegment transfers	$	7,371,641	$	4,862,282	$	3,908,566	$	(2,672,217	)	$	13,470,272

Segment profit	$	1,485,027	$	249,072	$	339,828				$	2,073,927
California litigation expense							$	(136,333	)	(136,333		)
Interest expense							(277,335		)	(277,335		)
Administrative expenses and other							(402,634		)	(402,634		)
Income from continuing operations before income taxes	$	1,485,027	$	249,072	$	339,828	$	(816,302	)	$	1,257,625




	Nine Months Ended September 30, 2017
	The Americas Group		Consumer Brands Group		Performance Coatings Group		Administrative			Consolidated Totals
Net external sales	$	6,928,657	$	1,583,148	$	2,487,884	$	4,535		$	11,004,224
Intersegment transfers	5,544		2,420,356		15,740		(2,441,640		)
Total net sales and intersegment transfers	$	6,934,201	$	4,003,504	$	2,503,624	$	(2,437,105	)	$	11,004,224

Segment profit	$	1,363,488	$	202,405	$	179,072				$	1,744,965
Interest expense							$	(174,017	)	(174,017		)
Administrative expenses and other							(327,618		)	(327,618		)
Income from continuing operations before income taxes	$	1,363,488	$	202,405	$	179,072	$	(501,635	)	$	1,243,330

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 that 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 of all consolidated foreign subsidiaries were $951.8 million and $964.6 million for the third quarter of 2018 and 2017, respectively. Net external sales of all consolidated foreign subsidiaries were $2.890 billion and $1.987 billion for the nine months ended 2018 and 2017, respectively. Long-lived assets of these subsidiaries totaled $3.367 billion and $1.725 billion at September 30, 2018 and September 30, 2017, respectively. The increase in net external sales and long-lived assets is primarily due to the Acquisition. 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 during all periods presented.

For further details on the Company's Reportable Segments, see Note 18 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.