| REPORTABLE SEGMENT INFORMATION |
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 the allocation of resources in accordance with the Segment Reporting Topic of the ASC. The Company determined it has three reportable segments: Paint Stores Group, Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments). Refer to Note 23 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for further details on the Company’s Reportable Segments. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2024 | | | Paint
Stores
Group | | Consumer
Brands
Group | | Performance
Coatings
Group | | Administrative | | Consolidated
Totals | | Net sales | $ | 3,650.2 | | | $ | 790.5 | | | $ | 1,720.0 | | | $ | 1.8 | | | $ | 6,162.5 | | | Intersegment transfers | — | | | 1,412.2 | | | 6.4 | | | (1,418.6) | | | — | | | Total net sales and intersegment transfers | $ | 3,650.2 | | | $ | 2,202.7 | | | $ | 1,726.4 | | | $ | (1,416.8) | | | $ | 6,162.5 | | | | | | | | | | | | | Segment profit | $ | 895.9 | | | $ | 165.5 | | | $ | 259.7 | | | | | $ | 1,321.1 | | | Interest expense | | | | | | | $ | (103.4) | | | (103.4) | | | Administrative expenses and other | | | | | | | (194.9) | | | (194.9) | | | Income before income taxes | $ | 895.9 | | | $ | 165.5 | | | $ | 259.7 | | | $ | (298.3) | | | $ | 1,022.8 | | | | | | | | | | | | | Three Months Ended September 30, 2023 | | | Paint
Stores
Group | | Consumer
Brands
Group | | Performance
Coatings
Group | | Administrative | | Consolidated
Totals | | Net sales | $ | 3,537.1 | | | $ | 854.8 | | | $ | 1,724.2 | | | $ | 0.6 | | | $ | 6,116.7 | | | Intersegment transfers | — | | | 1,359.1 | | | 49.3 | | | (1,408.4) | | | — | | | Total net sales and intersegment transfers | $ | 3,537.1 | | | $ | 2,213.9 | | | $ | 1,773.5 | | | $ | (1,407.8) | | | $ | 6,116.7 | | | | | | | | | | | | | Segment profit | $ | 917.5 | | | $ | 101.6 | | | $ | 279.7 | | | | | $ | 1,298.8 | | | Interest expense | | | | | | | $ | (101.9) | | | (101.9) | | | Administrative expenses and other | | | | | | | (187.9) | | | (187.9) | | | Income before income taxes | $ | 917.5 | | | $ | 101.6 | | | $ | 279.7 | | | $ | (289.8) | | | $ | 1,009.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2024 | | | Paint
Stores
Group | | Consumer
Brands
Group | | Performance
Coatings
Group | | Administrative | | Consolidated
Totals | | Net sales | $ | 10,143.1 | | | $ | 2,445.8 | | | $ | 5,208.3 | | | $ | 4.1 | | | $ | 17,801.3 | | | Intersegment transfers | — | | | 4,073.9 | | | 50.2 | | | (4,124.1) | | | — | | | Total net sales and intersegment transfers | $ | 10,143.1 | | | $ | 6,519.7 | | | $ | 5,258.5 | | | $ | (4,120.0) | | | $ | 17,801.3 | | | | | | | | | | | | | Segment profit | $ | 2,296.2 | | | $ | 523.3 | | | $ | 798.9 | | | | | $ | 3,618.4 | | | Interest expense | | | | | | | $ | (317.2) | | | (317.2) | | | Administrative expenses and other | | | | | | | (465.0) | | | (465.0) | | | Income before income taxes | $ | 2,296.2 | | | $ | 523.3 | | | $ | 798.9 | | | $ | (782.2) | | | $ | 2,836.2 | | | | | | | | | | | | | Nine Months Ended September 30, 2023 | | | Paint
Stores
Group | | Consumer
Brands
Group | | Performance
Coatings
Group | | Administrative | | Consolidated
Totals | | Net sales | $ | 9,894.9 | | | $ | 2,673.3 | | | $ | 5,228.9 | | | $ | 2.6 | | | $ | 17,799.7 | | | Intersegment transfers | — | | | 4,046.2 | | | 159.1 | | | (4,205.3) | | | — | | | Total net sales and intersegment transfers | $ | 9,894.9 | | | $ | 6,719.5 | | | $ | 5,388.0 | | | $ | (4,202.7) | | | $ | 17,799.7 | | | | | | | | | | | | | Segment profit | $ | 2,293.5 | | | $ | 305.7 | | | $ | 771.3 | | | | | $ | 3,370.5 | | | Interest expense | | | | | | | $ | (322.9) | | | (322.9) | | | Administrative expenses and other | | | | | | | (411.7) | | | (411.7) | | | Income before income taxes | $ | 2,293.5 | | | $ | 305.7 | | | $ | 771.3 | | | $ | (734.6) | | | $ | 2,635.9 | | | | | | | | | | | |
In the reportable segment financial information, Segment profit represents each reportable segment’s Income before income taxes. Due to the nature of the Company’s integrated manufacturing operations and centralized administrative and information technology support, a substantial amount of allocations are made to determine segment financial information. Domestic intersegment transfers are primarily accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs for paint products. Non-paint domestic and all international intersegment transfers are primarily accounted for at values comparable to normal unaffiliated customer sales. All intersegment transfers are eliminated within the Administrative function. In 2023, absorbed manufactured cost standards for domestic intersegment transfers were established inclusive of forecasted cost reductions from planned initiatives for which unfavorable deviations were recognized within the Consumer Brands Group. The manufactured cost standards established at the beginning of 2024 did not include forecasted cost reductions.Net sales of all consolidated foreign subsidiaries were $1.124 billion and $1.105 billion for the three months ended September 30, 2024 and 2023, respectively. Net external sales of all consolidated foreign subsidiaries were $3.370 billion and $3.342 billion for the nine months ended September 30, 2024 and 2023, respectively. Long-lived assets of these subsidiaries totaled $3.631 billion and $3.217 billion at September 30, 2024 and 2023, respectively. Domestic operations accounted for the remaining Net sales and long-lived assets. No single geographic area outside the United States was significant relative to consolidated Net sales, Income before income taxes or consolidated long-lived assets. Export sales and sales to any individual customer were each less than 10% of consolidated Net sales in 2024 and 2023. For further details on the Company’s Reportable Segments, see Note 23 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
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