Reportable Segment Information

6 Months Ended

Jun. 30, 2011

Reportable Segment Information [Abstract]

REPORTABLE SEGMENT INFORMATION

NOTE 13—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. Two operating segments are aggregated to form the Global Finishes Group Reportable Operating Segment (GFG) in accordance with the quantitative thresholds within ASC 280-10-50-12. Management is closely monitoring the quantitative thresholds and the performance trends within GFG on an ongoing basis. Revised Reportable Operating Segments will be established if quantitative thresholds are exceeded for a sustained basis.

(Thousands of dollars)
	Three Months Ended June 30, 2011
						Global Finishes
	Paint Stores Group		Consumer Group			Group		Administrative			Consolidated Totals
Net external sales	$	1,299,047	$	375,634		$	678,871	$	1,199		$	2,354,751
Intersegment transfers				576,422			6,621		(583,043	)
Total net sales and intersegment transfers	$	1,299,047	$	952,056		$	685,492	$	(581,844	)	$	2,354,751
Segment profit	$	206,631	$	61,371	*	$	46,070				$	314,072
Interest expense								$	(11,747	)		(11,747	)
Administrative expenses and other									(45,309	)		(45,309	)
Income before income taxes	$	206,631	$	61,371		$	46,070	$	(57,056	)	$	257,016
	Three Months Ended June 30, 2010
						Global Finishes
	Paint Stores Group		Consumer Group			Group		Administrative			Consolidated Totals
Net external sales	$	1,244,979	$	410,216		$	486,547	$	1,322		$	2,143,064
Intersegment transfers				515,886			4,542		(520,428	)
Total net sales and intersegment transfers	$	1,244,979	$	926,102		$	491,089	$	(519,106	)	$	2,143,064
Segment profit	$	211,959	$	80,694	*	$	39,954				$	332,607
Interest expense								$	(26,340	)		(26,340	)
Administrative expenses and other									(47,019	)		(47,019	)
Income before income taxes	$	211,959	$	80,694		$	39,954	$	(73,359	)	$	259,248

* Segment profit includes $6,861 and $6,402 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during the second quarter of 2011 and 2010, respectively.

	Six Months Ended June 30, 2011
						Global Finishes
	Paint Stores Group		Consumer Group			Group		Administrative			Consolidated Totals
Net external sales	$	2,228,314	$	670,564		$	1,309,037	$	2,422		$	4,210,337
Intersegment transfers				994,570			12,492		(1,007,062	)
Total net sales and intersegment transfers	$	2,228,314	$	1,665,134		$	1,321,529	$	(1,004,640	)	$	4,210,337
Segment profit	$	275,488	$	102,462	**	$	82,880				$	460,830
Interest expense								$	(22,422	)		(22,422	)
Administrative expenses and other									(86,679	)		(86,679	)
Income before income taxes	$	275,488	$	102,462		$	82,880	$	(109,101	)	$	351,729

	Six Months Ended June 30, 2010
						Global Finishes
	Paint Stores Group		Consumer Group			Group		Administrative			Consolidated Totals
Net external sales	$	2,095,892	$	702,365		$	907,646	$	2,643		$	3,708,546
Intersegment transfers				869,722			8,999		(878,721	)
Total net sales and intersegment transfers	$	2,095,892	$	1,572,087		$	916,645	$	(876,078	)	$	3,708,546
Segment profit	$	259,715	$	118,159	**	$	62,956				$	440,830
Interest expense								$	(37,909	)		(37,909	)
Administrative expenses and other									(84,214	)		(84,214	)
Income before income taxes	$	259,715	$	118,159		$	62,956	$	(122,123	)	$	318,707

** Segment profit includes $11,809 and $10,421 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during the first six months of 2011 and 2010, 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 Operating 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 $507.1 million and $34.4 million, respectively, for the second quarter of 2011, and $337.4 million and $24.0 million, respectively, for the second quarter of 2010. Net external sales and segment profit of these subsidiaries were $977.1 million and $61.8 million, respectively, for the first six months of 2011, and $619.1 million and $48.2 million, respectively, for the first six months of 2010. Long-lived assets of these subsidiaries totaled $671.1 million and $271.4 million at June 30, 2011 and June 30, 2010, 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.