SHERWIN WILLIAMS CO, 10-K filed on 2/25/2015
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Jan. 31, 2015
Jun. 30, 2014
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
SHERWIN WILLIAMS CO 
 
 
Entity Central Index Key
0000089800 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2014 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 20,077,799,869 
Entity Common Stock, Shares Outstanding
 
94,894,689 
 
Statements of Consolidated Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Statement [Abstract]
 
 
 
Net sales
$ 11,129,533 
$ 10,185,532 
$ 9,534,462 
Cost of goods sold
5,965,049 
5,568,966 
5,328,236 
Gross profit
5,164,484 
4,616,566 
4,206,226 1
Percent to net sales
46.40% 
45.30% 
44.10% 
Selling, general and administrative expenses
3,822,966 
3,467,681 
3,259,648 1
Percent to net sales
34.30% 
34.00% 
34.20% 
Other general expense - net
37,482 
2,519 
5,248 
Impairment of trademarks
 
 
4,086 
Interest expense
64,205 
62,714 
42,788 
Interest and net investment income
(2,995)
(3,242)
(2,913)
Other (income) expense - net
(15,400)
936 
(9,940)
Income before income taxes
1,258,226 
1,085,958 
907,309 
Income taxes
392,339 
333,397 
276,275 1
Net income
$ 865,887 
$ 752,561 
$ 631,034 
Net income per common share:
 
 
 
Basic (in dollars per share)
$ 8.95 
$ 7.41 
$ 6.15 
Diluted (in dollars per share)
$ 8.78 
$ 7.26 
$ 6.02 
Statements of Consolidated Income and Comprehensive Income Statements of Consolidated Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Net income
$ 865,887 
$ 752,561 
$ 631,034 
Foreign currency translation adjustments
(103,441)
(46,748)
(7,403)
Net actuarial gains (losses) and prior service costs arising during period
(56,536)1
85,051 1
(6,192)1
Less: amortization of net actuarial losses and prior service costs included in Net pension costs
8,980 2
10,933 2
10,973 2
Employee benefit plans
(47,556)
95,984 
4,781 
Unrealized holding gains (losses) arising during period
366 3
134 3
123 3
Less: reclassification adjustments for (gains) losses included in net income
(283)4
(25)4
(12)4
Unrealized net gains (losses) on available-for-sale securities
83 
109 
111 
Other comprehensive (loss) income
(150,914)
49,345 
(2,511)
Comprehensive income
$ 714,973 
$ 801,906 
$ 628,523 
Statements of Consolidated Income and Comprehensive Income (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Statement [Abstract]
 
 
 
After tax charge to earnings for DOL settlement
 
 
$ 49,163 
Cost of goods sold increase due to DOL settlement
 
 
16,000 
Increase to selling, general, and administrative expense due to DOL settlement
 
 
64,000 
Decrease to income tax expense due to DOL settlement
 
 
(30,837)
Per share impact IRS settlement (in dollars per share)
 
 
$ 0.47 
Statement of Comprehensive Income [Abstract]
 
 
 
Net actuarial gains (losses) and prior service costs arising during period, tax
24,954 
(63,343)
2,846 
Amortization of net actuarial losses and prior service costs included in Net pension costs, tax
(2,712)
(7,643)
(13,350)
Unrealized holding gains (losses) arising during period, tax
(228)
(84)
(77)
Reclassification adjustments for (gains) losses included in net income, tax
$ 178 
$ 17 
$ 7 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Current assets:
 
 
 
Cash and cash equivalents
$ 40,732 
$ 744,889 
$ 862,590 
Accounts receivable, less allowance
1,130,565 
1,097,751 
1,032,508 
Inventories:
 
 
 
Finished goods
841,784 
779,057 
732,359 
Work in process and raw materials
191,743 
191,758 
187,965 
Total inventory
1,033,527 
970,815 
920,324 
Deferred income taxes
109,087 
104,496 
126,730 
Other current assets
252,869 
240,766 
207,086 
Total current assets
2,566,780 
3,158,717 
3,149,238 
Goodwill
1,158,346 
1,178,687 
1,156,005 
Intangible assets
289,127 
313,299 
347,553 
Deferred pension assets
250,144 
302,446 
249,911 
Other assets
420,625 
407,975 
366,134 
Property, plant and equipment:
 
 
 
Land
125,691 
125,131 
102,336 
Buildings
698,202 
715,096 
677,944 
Machinery and equipment
1,952,037 
1,838,590 
1,750,729 
Construction in progress
59,330 
62,563 
56,582 
Total gross property, plant and equipment
2,835,260 
2,741,380 
2,587,591 
Less allowances for depreciation
1,814,230 
1,719,997 
1,621,695 
Total net property, plant and equipment
1,021,030 
1,021,383 
965,896 
Total Assets
5,706,052 
6,382,507 
6,234,737 
Current liabilities:
 
 
 
Short-term borrowings
679,436 
96,551 
69,035 
Accounts payable
1,042,182 
998,484 
922,999 
Compensation and taxes withheld
360,458 
337,637 
314,892 
Accrued taxes
86,744 
79,504 
52,104 
Current portion of long-term debt
3,265 
502,948 
3,689 
Other accruals
508,581 
513,433 
513,717 
Total current liabilities
2,680,666 
2,528,557 
1,876,436 
Long-term debt
1,122,715 
1,122,373 
1,632,165 
Postretirement benefits other than pensions
277,892 
268,874 
320,223 
Other long-term liabilities
628,309 
688,168 
614,109 
Shareholders’ equity:
 
 
 
Common stock - $1.00 par value: 94,704,173, 100,129,380 and 103,270,067 shares outstanding at December 31, 2014, 2013 and 2012, respectively
114,525 
112,902 
111,623 
Preferred stock - convertible, no par value: 40,406 and 101,086 shares outstanding at December 31, 2013 and 2012, respectively
 
40,406 
101,086 
Unearned ESOP compensation
 
(40,406)
(101,086)
Other capital
2,079,639 
1,847,801 
1,673,788 
Retained earnings
2,424,674 
1,774,050 
1,226,467 
Treasury stock, at cost
(3,150,410)
(1,639,174)
(849,685)
Cumulative other comprehensive loss
(471,958)
(321,044)
(370,389)
Total shareholders’ equity
996,470 
1,774,535 
1,791,804 
Total Liabilities and Shareholders’ Equity
$ 5,706,052 
$ 6,382,507 
$ 6,234,737 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Financial Position [Abstract]
 
 
 
Common stock, par value (usd per share)
$ 1 
$ 1 
$ 1 
Common stock, shares outstanding
94,704,173 
100,129,380 
103,270,067 
Preferred stock, par value (usd per share)
$ 0 
$ 0 
$ 0 
Preferred stock, shares outstanding
0 
40,406 
101,086 
Statements of Consolidated Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
OPERATING ACTIVITIES
 
 
 
Net income
$ 865,887 
$ 752,561 
$ 631,034 
Adjustments to reconcile net income to net operating cash:
 
 
 
Depreciation
169,087 
158,763 
152,217 
Amortization of intangible assets
29,858 
29,031 
26,985 
Impairment of trademarks and goodwill
 
 
4,086 
Provisions for environmental-related matters
36,046 
(2,751)
6,736 
Provisions for qualified exit costs
13,578 
4,682 
2,734 
Deferred income taxes
(19,038)
27,775 
(10,422)
Defined benefit pension plans net cost
990 
20,641 
20,309 
Stock-based compensation expense
64,735 
58,004 
54,348 
Net (decrease) increase in postretirement liability
(718)
5,233 
3,666 
Decrease in non-traded investments
63,365 
57,261 
72,861 
Loss on disposition of assets
1,436 
5,207 
3,454 
Other
203 
(27,214)
(18,349)
Change in working capital accounts:
 
 
 
(Increase) in accounts receivable
(80,252)
(41,473)
(33,578)
(Increase) decrease in inventories
(101,112)
25,031 
19,929 
Increase (decrease) in accounts payable
78,603 
34,685 
(51,124)
Increase (decrease) in accrued taxes
13,187 
11,314 
(70,264)
Increase in accrued compensation and taxes withheld
29,513 
24,435 
63,697 
(Decrease) increase in refundable income taxes
(36,601)
13,244 
(32,967)
DOL settlement accrual
 
(80,000)
80,000 
Other
(20,029)
43,804 
11,000 
Costs incurred for environmental-related matters
(9,676)
(12,539)
(31,689)
Costs incurred for qualified exit costs
(10,882)
(7,419)
(4,577)
Other
(6,652)
(16,509)
(12,200)
Net operating cash
1,081,528 
1,083,766 
887,886 
Investing Activities
 
 
 
Capital expenditures
(200,545)
(166,680)
(157,112)
Acquisitions of businesses, net of cash acquired
 
(79,940)
(99,242)
Proceeds from sale of assets
1,516 
3,045 
9,677 
Increase in other investments
(111,021)
(94,739)
(95,778)
Net investing cash
(310,050)
(338,314)
(342,455)
FINANCING ACTIVITIES
 
 
 
Net increase (decrease) in short-term borrowings
591,423 
31,634 
(284,839)
Proceeds from long-term debt
1,474 
473 
999,697 
Payments of long-term debt
(500,661)
(10,932)
(14,000)
Payments of cash dividends
(215,263)
(204,978)
(160,939)
Proceeds from stock options exercised
100,069 
69,761 
221,126 
Income tax effect of stock-based compensation exercises and vesting
68,657 
47,527 
104,858 
Treasury stock purchased
(1,488,663)
(769,271)
(557,766)
Other
(24,111)
(17,522)
(21,559)
Net financing cash
(1,467,075)
(853,308)
286,578 
Effect of exchange rate changes on cash
(8,560)
(9,845)
(2,115)
Net (decrease) increase in cash and cash equivalents
(704,157)
(117,701)
829,894 
Cash and cash equivalents at beginning of year
744,889 
862,590 
32,696 
Cash and cash equivalents at end of year
40,732 
744,889 
862,590 
Taxes paid on income
310,039 
200,748 
223,329 
Interest paid on debt
$ 67,306 
$ 61,045 
$ 41,551 
Statements of Consolidated Shareholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock
Preferred Stock
Unearned ESOP Compen-sation
Other Capital
Retained Earnings
Treasury Stock
Cumulative Other Comprehensive Loss
Beginning Balance at Dec. 31, 2011
$ 1,516,919 
$ 107,454 
$ 160,273 
$ (160,273)
$ 1,297,625 
$ 756,372 
$ (276,654)
$ (367,878)
Shareholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income
631,034 
 
 
 
 
631,034 
 
 
Other comprehensive (loss) income
(2,511)
 
 
 
 
 
 
(2,511)
Treasury stock purchased
(557,766)
 
 
 
 
 
(557,766)
 
Redemption of preferred stock
   
 
(59,187)
59,187 
 
 
 
 
Stock options exercised
205,861 
3,867 
 
 
217,259 
 
(15,265)
 
Income tax effect of stock compensation
104,858 
 
 
 
104,858 
 
 
 
Restricted stock and stock option grants (net activity)
54,348 
302 
 
 
54,046 
 
 
 
Cash dividends -- $2.20, $2.00 and $1.56 per common share in December 31, 2014, 2013 and 2012, respectively
(160,939)
 
 
 
 
(160,939)
 
 
Ending Balance at Dec. 31, 2012
1,791,804 
111,623 
101,086 
(101,086)
1,673,788 
1,226,467 
(849,685)
(370,389)
Shareholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income
752,561 
 
 
 
 
752,561 
 
 
Other comprehensive (loss) income
49,345 
 
 
 
 
 
 
49,345 
Treasury stock purchased
(769,271)
 
 
 
 
 
(769,271)
 
Redemption of preferred stock
   
 
(60,680)
60,680 
 
 
 
 
Stock options exercised
49,543 
1,128 
 
 
68,633 
 
(20,218)
 
Income tax effect of stock compensation
47,527 
 
 
 
47,527 
 
 
 
Restricted stock and stock option grants (net activity)
58,004 
151 
 
 
57,853 
 
 
 
Cash dividends -- $2.20, $2.00 and $1.56 per common share in December 31, 2014, 2013 and 2012, respectively
(204,978)
 
 
 
 
(204,978)
 
 
Ending Balance at Dec. 31, 2013
1,774,535 
112,902 
40,406 
(40,406)
1,847,801 
1,774,050 
(1,639,174)
(321,044)
Shareholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income
865,887 
 
 
 
 
865,887 
 
 
Other comprehensive (loss) income
(150,914)
 
 
 
 
 
 
(150,914)
Treasury stock purchased
(1,488,663)
 
 
 
 
 
(1,488,663)
 
Redemption of preferred stock
   
 
(40,406)
40,406 
 
 
 
 
Stock options exercised
77,496 
1,423 
 
 
98,646 
 
(22,573)
 
Income tax effect of stock compensation
68,657 
 
 
 
68,657 
 
 
 
Restricted stock and stock option grants (net activity)
64,735 
200 
 
 
64,535 
 
 
 
Cash dividends -- $2.20, $2.00 and $1.56 per common share in December 31, 2014, 2013 and 2012, respectively
(215,263)
 
 
 
 
(215,263)
 
 
Ending Balance at Dec. 31, 2014
$ 996,470 
$ 114,525 
$ 0 
$ 0 
$ 2,079,639 
$ 2,424,674 
$ (3,150,410)
$ (471,958)
Statements of Consolidated Shareholders' Equity (Parenthetical)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dividends paid per common share (in dollars per share)
$ 2.20 
$ 2.00 
$ 1.56 
Significant Accounting Policies
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES
Consolidation. The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, “the Company”). Inter-company accounts and transactions have been eliminated.
Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those amounts.
Nature of operations. The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe and Asia.
Reportable segments. See Note 18 for further details.
Cash flows. Management considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.
Short-term investments: The carrying amounts reported for Short-term investments approximate fair value.
Investments in securities: Investments classified as available-for-sale are carried at market value. See the recurring fair value measurement table on page 45.
Non-traded investments: The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These non-traded investments have been identified as variable interest entities. However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the investments are not consolidated. The Company uses the effective yield method to determine the carrying value of the investments. Under the effective yield method, the initial cost of the investments is amortized over the period that the tax credits are recognized. The carrying amounts of the investments, included in Other assets, were $223,935, $210,779 and $223,701 at December 31, 2014, 2013 and 2012, respectively. The liabilities recorded on the balance sheets for estimated future capital contributions to the investments were $198,776, $198,761 and $218,688 at December 31, 2014, 2013 and 2012, respectively.
Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.
Long-term debt (including current portion): The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company's publicly traded debt and non-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. See Note 7.

 
December 31,
 
2014
 
2013
 
2012
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Publicly traded debt
$
1,120,924

 
$
1,160,280

 
$
1,620,646

 
$
1,614,739

 
$
1,630,056

 
$
1,706,487

Non-traded debt
5,056

 
4,812

 
4,675

 
4,430

 
5,798

 
5,600



Derivative instruments: The Company utilizes derivative instruments as part of its overall financial risk management policy. The Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months in 2014, 2013 and 2012, primarily to hedge against value changes in foreign currency. See Note 13. There were no material derivative contracts outstanding at December 31, 2014, 2013 and 2012.
Fair value measurements. The following tables summarize the Company’s assets and liabilities measured on a recurring and non-recurring basis in accordance with the Fair Value Measurements and Disclosures Topic of the ASC:

Assets and Liabilities Reported at Fair Value on a Recurring Basis

 
Fair Value at
December 31,
2014
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Deferred compensation plan asset (a)
$
23,870

 
$
1,140

 
$
22,730

 
 
Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan liability (b)
$
34,443

 
$
34,443

 
 
 
 
(a)
The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $22,715.
(b)
The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.
Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis. Except for the acquisition-related fair value measurements described in Note 2 which qualify as level 2 measurements, there were no assets and liabilities measured at fair value on a nonrecurring basis in 2014.
Accounts receivable and allowance for doubtful accounts. Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. The Company recorded an allowance for doubtful accounts of $53,770, $54,460 and $47,667 at December 31, 2014, 2013 and 2012, respectively, to reduce Accounts receivable to their estimated net realizable value. The allowance was based on an analysis of historical bad debts, a review of the aging of Accounts receivable and the current creditworthiness of customers. Account receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowances for doubtful collection of accounts are related to the creditworthiness of accounts and are included in Selling, general and administrative expenses.
Reserve for obsolescence. The Company recorded a reserve for obsolescence of $90,712, $97,523 and $88,356 at December 31, 2014, 2013 and 2012, respectively, to reduce Inventories to their estimated net realizable value. 
Goodwill. Goodwill represents the cost in excess of fair value of net assets acquired in business combinations accounted for by the purchase method. In accordance with the Impairments Topic of the ASC, goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate potential impairment. See Note 4.
Intangible assets. Intangible assets include trademarks, non-compete covenants and certain intangible property rights. As required by the Goodwill and Other Intangibles Topic of the ASC, indefinite-lived trademarks are not amortized, but instead are tested annually for impairment, and between annual tests whenever an event occurs or circumstances indicate potential impairment. See Note 4. The cost of finite-lived trademarks, non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:
 
Useful Life
Finite-lived trademarks
5 years
Non-compete covenants
3 – 5 years
Certain intangible property rights
3 – 19 years

Accumulated amortization of finite-lived intangible assets was $303,902, $279,102 and $260,065 at December 31, 2014, 2013 and 2012, respectively. See Note 4.
Impairment of long-lived assets. In accordance with the Property, Plant and Equipment Topic of the ASC, management evaluates the recoverability and estimated remaining lives of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. See Notes 4 and 5.
Property, plant and equipment. Property, plant and equipment is stated on the basis of cost. Depreciation is provided by the straight-line method. Depreciation and amortization are included in the appropriate Cost of goods sold or Selling, general and administrative expense caption on the Statements of Consolidated Income. Included in Property, plant and equipment are leasehold improvements. The major classes of assets and ranges of annual depreciation rates are:
Buildings
2.5% – 20.0%
Machinery and equipment
5.0% – 20.0%
Furniture and fixtures
10.0% – 33.3%
Automobiles and trucks
10.0% – 33.3%

Standby letters of credit. The Company occasionally enters into standby letter of credit agreements to guarantee various operating activities. These agreements provide credit availability to the various beneficiaries if certain contractual events occur. Amounts outstanding under these agreements totaled $23,442, $25,896 and $22,845 at December 31, 2014, 2013 and 2012, respectively.
Product warranties. The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary. Changes in the Company’s accrual for product warranty claims during 2014, 2013 and 2012, including customer satisfaction settlements during the year, were as follows:
 
2014
 
2013
 
2012
Balance at January 1
$
26,755

 
$
22,710

 
$
22,071

Charges to expense
37,879

 
33,265

 
28,590

Settlements
(36,911
)
 
(29,220
)
 
(27,951
)
Balance at December 31
$
27,723

 
$
26,755

 
$
22,710


Environmental matters. Capital expenditures for ongoing environmental compliance measures were recorded in Property, plant and equipment, and related expenses were included in the normal operating expenses of conducting business. The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms. See Notes 8 and 13.
Employee Stock Purchase and Savings Plan and preferred stock. The Company accounts for the Employee Stock Purchase and Savings Plan (ESOP) in accordance with the Employee Stock Ownership Plans Subtopic of the Compensation – Stock Ownership Topic of the ASC. The Company recognized compensation expense for amounts contributed to the ESOP, and the ESOP used dividends on unallocated preferred shares to service debt. Unallocated preferred shares held by the ESOP were not considered outstanding in calculating earnings per share of the Company. During 2014, the Company redeemed all remaining preferred shares for cash. See Note 11.
Defined benefit pension and other postretirement benefit plans. The Company accounts for its defined benefit pension and other postretirement benefit plans in accordance with the Retirement Benefits Topic of the ASC, which requires the recognition of a plan’s funded status as an asset for overfunded plans and as a liability for unfunded or underfunded plans. See Note 6.
Stock-based compensation. The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. See Note 12.
Foreign currency translation. All consolidated non-highly inflationary foreign operations use the local currency of the country of operation as the functional currency and translated the local currency asset and liability accounts at year-end exchange rates while income and expense accounts were translated at average exchange rates. The resulting translation adjustments were included in Cumulative other comprehensive loss, a component of Shareholders’ equity.
Cumulative other comprehensive loss. At December 31, 2014, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $354,384, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $118,167 and unrealized net gains on marketable equity securities of $593. At December 31, 2013 and 2012, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $250,943 and $204,195, respectively, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $70,611 and $166,595, respectively, and unrealized gains on marketable equity securities of $510 and $401, respectively.
Revenue recognition. All revenues were recognized when products were shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue was reasonably assured at the time of recognition.
Customer and vendor consideration. The Company offered certain customers rebate and sales incentive programs which were classified as reductions in Net sales. Such programs were in the form of volume rebates, rebates that constituted a percentage of sales or rebates for attaining certain sales goals. The Company received consideration from certain suppliers of raw materials in the form of volume rebates or rebates that
constituted a percentage of purchases. These rebates were recognized on an accrual basis by the Company as a reduction of the purchase price of the raw materials and a subsequent reduction of Cost of goods sold when the related product was sold.
Costs of goods sold. Included in Costs of goods sold were costs for materials, manufacturing, distribution and related support. Distribution costs included all expenses related to the distribution of products including inbound freight charges, purchase and receiving costs, warehousing costs, internal transfer costs and all costs incurred to ship products. Also included in Costs of goods sold were total technical expenditures, which included research and development costs, quality control, product formulation expenditures and other similar items. Research and development costs included in technical expenditures were $50,019, $47,042 and $44,648 for 2014, 2013 and 2012, respectively. The settlement gain related to the titanium dioxide litigation reduced 2014 Costs of goods sold by $21,420. See Note 9.
Selling, general and administrative expenses. Selling costs included advertising expenses, marketing costs, employee and store costs and sales commissions. The cost of advertising was expensed as incurred. The Company incurred $299,201, $262,492 and $247,469 in advertising costs during 2014, 2013 and 2012, respectively. General and administrative expenses included human resources, legal, finance and other support and administrative functions.
Earnings per share. Shares of preferred stock held in an unallocated account of the ESOP (see Note 11) and common stock held in a revocable trust (see Note 10) were not considered outstanding shares for basic or diluted income per common share calculations. All references to “shares” or “per share” information throughout this report relate to common shares and are stated on a diluted per common share basis, unless otherwise indicated. Basic and diluted net income per common share were calculated using the two-class method in accordance with the Earnings Per Common Share Topic of the ASC. Basic net income per common share amounts were computed based on the weighted-average number of common shares outstanding during the year. Diluted net income per common share amounts were computed based on the weighted-average number of common shares outstanding plus all dilutive securities potentially outstanding during the year. See Note 15.
Impact of recently issued accounting standards. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, "Revenue Recognition - Revenue from Contracts with Customers," which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard is effective for interim and annual periods beginning after December 15, 2016, and either full retrospective adoption or modified retrospective adoption is permitted. The Company is in the process of evaluating the impact of the standard.
Acquisitions
ACQUISITIONS
ACQUISITIONS
On September 16, 2013, the Company entered into a definitive Stock Purchase Agreement and completed the acquisition of the U.S./Canada business of Consorcio Comex, S.A. de C.V. (Comex). The U.S./Canada business of Comex focuses on the manufacture and sale of paint and paint related products through retail service centers under various proprietary brands. The acquisition strengthens the ability of the Paint Stores Group and Consumer Group to serve customers in key geographic markets. The acquisition resulted in the recognition of intangible assets of $4,696. Final asset valuation adjustments resulted in a realized gain of $6,198 which was included in Other (income) expense for the year ended December 31, 2014. The acquisition of the U.S./Canada business of Comex has been accounted for as a purchase and the results of operations have been included in the consolidated financial statements since the date of acquisition.
On April 3, 2014, the Company terminated the Stock Purchase Agreement entered into on November 9, 2013 and subsequently amended and restated for the acquisition of the Mexico business of Comex pursuant to the terms of the agreement.
The following unaudited pro-forma summary presents consolidated financial information as if the U.S./Canada business of Comex had been acquired at the beginning of 2013. The unaudited pro-forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisitions taken place on January 1, 2013 or the future results of operations of the combined companies under ownership and operation of the Company.
 
2014
 
2013
Net sales
$
11,129,533

 
$
10,540,181

Net income
865,887

 
725,774

Net income per common share:
 
 
 
Basic
8.95

 
7.13

Diluted
8.78

 
6.98

Inventories
INVENTORIES
INVENTORIES
Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method. The following presents the effect on inventories, net income and net income per common share had the Company used the first-in, first-out (FIFO) inventory valuation method adjusted for income taxes at the statutory rate and assuming no other adjustments. Management believes that the use of LIFO results in a better matching of costs and revenues. This information is presented to enable the reader to make comparisons with companies using the FIFO method of inventory valuation. During 2014, 2013 and 2012, certain inventories accounted for on the LIFO method were reduced, resulting in the liquidation of certain quantities carried at costs prevailing in prior years. The 2014 and 2013 liquidations increased net income by $196 and $169, respectively, while the 2012 liquidations reduced net income by $160.
 
2014
 
2013
 
2012
Percentage of total
inventories on LIFO
76
%
 
75
%
 
75
%
Excess of FIFO over
LIFO
$
331,867

 
$
337,214

 
$
357,303

Increase in net
income due to LIFO
3,230

 
12,299

 
13,365

Increase in net
income per common
share due to LIFO
.03

 
.12

 
.13

Goodwill, Intangible and Long-Lived Assets
GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS
GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS
During 2013 and 2014, the Company recognized acquired customer relationships and finite-lived trademarks of $3,311 and $1,385, respectively, related to the acquisition of the U.S./Canada business of Comex. The customer relationships and finite-lived trademarks are being amortized over 7 years from the date of acquisition. The Company initially recognized $1,885 of goodwill and $466 of indefinite-lived trademarks in 2013, but subsequently adjusted these amounts to zero based on final asset valuations completed in 2014.
During 2012 and 2013, the Company recognized $60,027 of goodwill and $968 of indefinite-lived trademarks related to the 2012 acquisitions of Geocel and Pulanna. Acquired customer relationships, finite-lived trademarks, intellectual property and covenants not to compete recognized in these acquisitions valued at $25,120, $13,000, $4,955 and $1,335, respectively, are being amortized over periods ranging from 3 to 15 years from the date of acquisition.
In accordance with the Property, Plant and Equipment Topic of the ASC, whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable or the useful life may have changed, impairment tests are to be performed. Undiscounted cash flows are to be used to calculate the recoverable value of long-lived assets to determine if such assets are impaired. Where impairment is identified, a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets, is to be used to determine the fair value for the assets to measure any potential impairment. No material impairments were recorded in 2014, 2013 and 2012.
In accordance with the Goodwill and Other Intangibles Topic of the ASC, goodwill and indefinite-lived intangible assets are tested for impairment annually, and interim impairment tests are performed whenever an event occurs or circumstances change that indicate an impairment has more likely than not occurred. October 1 has been established for the annual impairment review. At the time of impairment testing, values are estimated separately for goodwill and trademarks with indefinite lives using a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets. An optional qualitative assessment may alleviate the need to perform the quantitative goodwill impairment test when impairment is unlikely. The Company used the qualitative assessment for each of its reporting units in 2014, 2013 and 2012.
The annual impairment reviews performed as of October 1, 2014 and 2013 did not result in any goodwill or trademark impairment. The 2012 impairment review resulted in trademark impairments in the Paint Stores Group and Global Finishes Group of $3,400 and $686, respectively, and no goodwill impairment. The trademark impairments related primarily to the planned conversion of various acquired brands and are reported as a separate line in the Statements of Consolidated Income.
Amortization of finite-lived intangible assets is as follows for the next five years: $26,379 in 2015, $20,297 in 2016, $15,706 in 2017 and $14,052 in 2018 and $12,711 in 2019.
A summary of changes in the Company’s carrying value of goodwill by Reportable Segment is as follows:
Goodwill
Paint Stores
Group
 
Consumer
Group
 
Global
Finishes
Group
 
Latin America
Coatings Group
 
Consolidated
Totals
Balance at January 1, 2012 (a)
$
286,998

 
$
689,279

 
$
120,350

 
$
11,381

 
$
1,108,008

Acquisitions
 
 
17,357

 
24,707

 
 
 
42,064

Currency and other adjustments
(214
)
 
(344
)
 
7,230

 
(739
)
 
5,933

Balance at December 31, 2012 (a)
286,784

 
706,292

 
152,287

 
10,642

 
1,156,005

Acquisitions
1,885

 
 
 
17,963

 
 
 
19,848

Currency and other adjustments
(1,369
)
 
(2,941
)
 
8,048

 
(904
)
 
2,834

Balance at December 31, 2013 (a)
287,300

 
703,351

 
178,298

 
9,738

 
1,178,687

Currency and other adjustments
(1,866
)
 
(1,145
)
 
(17,287
)
 
(43
)
 
(20,341
)
Balance at December 31, 2014 (a)
$
285,434

 
$
702,206

 
$
161,011

 
$
9,695

 
$
1,158,346

(a)
Net of accumulated impairment losses of $8,904 ($8,113 in the Consumer Group and $791 in the Global Finishes Group).
A summary of the Company’s carrying value of intangible assets is as follows: 
 
Finite-lived intangible assets
 
Trademarks
with indefinite
lives
 
Total
intangible
assets
 
Software
 
All other
 
Subtotal
 
December 31, 2014
 
 
 
 
 
 
 
 
 
Weighted-average amortization period
8 years

 
12 years

 
11 years

 
 
 
 
Gross
$
126,258

 
$
317,005

 
$
443,263

 
 
 
 
Accumulated amortization
(88,384
)
 
(215,518
)
 
(303,902
)
 
 
 
 
Net value
$
37,874

 
$
101,487

 
$
139,361

 
$
149,766

 
$
289,127

December 31, 2013
 
 
 
 
 
 
 
 
 
Weighted-average amortization period
8 years

 
10 years

 
9 years

 
 
 
 
Gross
$
114,404

 
$
327,962

 
$
442,366

 
 
 
 
Accumulated amortization
(77,018
)
 
(202,084
)
 
(279,102
)
 
 
 
 
Net value
$
37,386

 
$
125,878

 
$
163,264

 
$
150,035

 
$
313,299

December 31, 2012
 
 
 
 
 
 
 
 
 
Weighted-average amortization period
8 years

 
12 years

 
11 years

 
 
 
 
Gross
$
107,779

 
$
337,089

 
$
444,868

 
 
 
 
Accumulated amortization
(66,106
)
 
(193,959
)
 
(260,065
)
 
 
 
 
Net value
$
41,673

 
$
143,130

 
$
184,803

 
$
162,750

 
$
347,553

Valuation and Qualifying Accounts and Reserves (Schedule II)
Valuation and Qualifying Accounts and Reserves (Schedule II)
Valuation and Qualifying Accounts and Reserves
(Schedule II)
Changes in the allowance for doubtful accounts were as follows: 
(thousands of dollars)
2014
 
2013
 
2012
Beginning balance
$
54,460

 
$
47,667

 
$
51,747

Amount acquired through acquisitions
 
 
896

 
226

Bad debt expense
34,810

 
31,192

 
20,922

Uncollectible accounts written off, net of recoveries
(35,500
)
 
(25,295
)
 
(25,228
)
Ending balance
$
53,770

 
$
54,460

 
$
47,667

Exit or Disposal Activities
EXIT OR DISPOSAL ACTIVITIES
EXIT OR DISPOSAL ACTIVITIES
Management is continually re-evaluating the Company’s operating facilities, including acquired operating facilities, against its long-term strategic goals. Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC. Provisions for qualified exit costs are made at the time a facility is no longer operational. Qualified exit costs primarily include post-closure rent expenses or costs to terminate the contract before the end of its term and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated.
Concurrently, property, plant and equipment is tested for impairment in accordance with the Property, Plant and Equipment Topic of the ASC, and if impairment exists, the carrying value of the related assets is reduced to estimated fair value. Additional impairment may be recorded for subsequent revisions in estimated fair value. Adjustments to prior provisions and additional impairment charges for property, plant and equipment of closed sites being held for disposal are recorded in Other general expense – net.
During 2014, 7 facilities and 24 stores and branches were closed due to lower demand or redundancy. In addition, the Global Finishes Group exited its business in Venezuela. Provisions
for severance and other qualified exit cost of $280, $4,809 and $4,767 were charged to the Paint Stores Group, Consumer Group and Global Finishes Group, respectively. Provisions for severance and other qualified exit costs related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2014 of $3,722 were recorded.
During 2013, 5 facilities and 16 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit cost of $1,004, $598, $278 and $123 were charged to the Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group, respectively. Provisions for severance and other qualified exit costs and adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2013 of $2,679 were recorded.
During 2012, 19 stores and branches were closed due to
lower demand or redundancy. Provisions for severance and other qualified exit cost of $7,363 and $313 were charged to the Global Finishes Group and Paint Stores Group, respectively. There were no provisions for severance and other qualified exit costs charged to the Consumer Group or Latin America Coatings Group. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2012 of $(4,942) were recorded.
At December 31, 2014, a portion of the remaining accrual for qualified exit costs relating to facilities shutdown prior to 2012 is expected to be incurred by the end of 2015. The remaining portion of the ending accrual for facilities shutdown prior to 2012 primarily represented post-closure contractual expenses related to certain owned facilities which are closed and being held for disposal. The Company cannot reasonably estimate when such matters will be concluded to permit disposition.
The tables on the following pages summarize the activity and remaining liabilities associated with qualified exit costs:
Exit Plan
 
Balance at
December 31,
2013
 
Provisions in
Cost of goods
sold or SG&A
 
Actual
expenditures
charged to
accrual
 
Balance at
December 31,
2014
Paint Stores Group stores shutdown in 2014:
 
 
 
 
 
 
 
 
Other qualified exit costs
 
 
 
$
280

 
 
 
$
280

Consumer Group facilities shutdown in 2014:
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
4,028

 
$
(1,296
)
 
2,732

Other qualified exit costs
 
 
 
781

 
 
 
781

Global Finishes Group exit of business in 2014:
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
2,500

 
(2,396
)
 
104

Other qualified exit costs
 
 
 
2,267

 
(1,187
)
 
1,080

Paint Stores Group facility shutdown in 2013:
 
 
 
 
 
 
 
 
Severance and related costs
 
$
977

 
2,126

 
(2,449
)
 
654

Other qualified exit costs
 
 
 
1,499

 
(294
)
 
1,205

Consumer Group facilities shutdown in 2013:
 
 
 
 
 
 
 


Severance and related costs
 
598

 
97

 
(695
)
 

Global Finishes Group stores shutdown in 2013:
 
 
 
 
 
 
 


Severance and related costs
 
33

 
 
 
(5
)
 
28

Other qualified exit costs
 
220

 
 
 
(82
)
 
138

Latin America Coatings Group facilities
shutdown in 2013:
 
 
 
 
 
 
 
 
Severance and related costs
 
123

 
 
 
(123
)
 

Paint Stores Group stores shutdown in 2012:
 
 
 
 
 
 
 
 
Other qualified exit costs
 
244

 
 
 
(51
)
 
193

Global Finishes Group facilities shutdown in 2012:
 
 
 
 
 
 
 


Severance and related costs
 
2,177

 
 
 
(1,863
)
 
314

Other qualified exit costs
 
83

 
 
 
 
 
83

Other qualified exit costs for facilities
shutdown prior to 2012
 
1,365

 
 
 
(441
)
 
924

Totals
 
$
5,820

 
$
13,578

 
$
(10,882
)
 
$
8,516

Exit Plan
 
Balance at
December 31,
2012
 
Provisions in
Cost of goods
sold or SG&A
 
Actual
expenditures
charged to
accrual
 
Adjustments to
prior provisions
in Other general
expense - net
 
Balance at
December 31,
2013
Paint Stores Group stores shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
$
1,004

 
$
(27
)
 
 
 
$
977

Consumer Group facilities shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
598

 
 
 
 
 
598

Global Finishes Group branches shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
278

 
(25
)
 
 
 
253

Latin America Coatings Group facilities
shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
123

 
 
 
 
 
123

Paint Stores Group stores shutdown in 2012:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
$
313

 
 
 
(68
)
 
$
(1
)
 
244

Global Finishes Group facilities shutdown in 2012:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
2,236

 
2,533

 
(2,592
)
 
 
 
2,177

Other qualified exit costs
 
3,430

 
83

 
(3,530
)
 
100

 
83

Global Finishes Group branches shutdown in 2011:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
290

 
 
 
(222
)
 
 
 
68

Other qualified exit costs for facilities
shutdown prior to 2011
 
2,288

 
 
 
(955
)
 
(36
)
 
1,297

Totals
 
$
8,557

 
$
4,619

 
$
(7,419
)
 
$
63

 
$
5,820


Exit Plan
 
Balance at
January 1, 2012
 
Provisions in
Cost of goods
sold or SG&A
 
Actual
expenditures
charged to
accrual
 
Adjustments to
prior provisions
in Other general
expense - net
 
Balance at
December 31,
2012
Paint Stores Group stores shutdown
in 2012:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
 
 
$
313

 
 
 
 
 
$
313

Global Finishes Group facility shutdown
in 2012:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
3,933

 
$
(1,697
)
 
 
 
2,236

Other qualified exit costs
 
 
 
3,430

 
 
 
 
 
3,430

Consumer Group manufacturing facilities
shutdown in 2011:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
$
197

 
 
 
(133
)
 
$
(64
)
 
 
Paint Stores Group stores shutdown
in 2011:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
156

 
 
 
(144
)
 
(12
)
 
 
Global Finishes Group branches shutdown
in 2011:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
129

 
 
 
(134
)
 
5

 
 
Other qualified exit costs
 
470

 
 
 
(180
)
 
 
 
290

Global Finishes Group branches shutdown
in 2010:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
955

 
 
 
(133
)
 
 
 
822

Other qualified exit costs for facilities
shutdown prior to 2010
 
8,493

 
 
 
(2,156
)
 
(4,871
)
 
1,466

Totals
 
$
10,400

 
$
7,676

 
$
(4,577
)
 
$
(4,942
)
 
$
8,557

Pension, Health Care and Postretirement Benefits Other Than Pensions
PENSION, HEALTH CARE AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
PENSION, HEALTH CARE AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides pension benefits to substantially all employees through primarily noncontributory defined contribution or defined benefit plans and certain health care and life insurance benefits to domestic active employees and eligible retirees. In accordance with the Retirement Benefits Topic of the ASC, the Company recognizes an asset for overfunded defined benefit pension or other postretirement benefit plans and a liability for unfunded or underfunded plans. In addition, actuarial gains and losses and prior service costs of such plans are recorded in Cumulative other comprehensive loss, a component of Shareholders’ equity. The amounts recorded in Cumulative other comprehensive loss will continue to be modified as actuarial assumptions and service costs change, and all such amounts will be amortized to expense over a period of years through the net pension cost (credit) and net periodic benefit cost.
Health care plans. The Company provides certain domestic health care plans that are contributory and contain cost-sharing features such as deductibles and coinsurance. There were 21,239, 19,440 and 18,609 active employees entitled to receive benefits under these plans at December 31, 2014, 2013 and 2012, respectively. The cost of these benefits for active employees, which includes claims incurred and claims incurred but not reported, amounted to $202,787, $174,588 and $163,011 for 2014, 2013 and 2012, respectively.
Defined contribution pension plans. The Company’s annual contribution for its domestic defined contribution pension plan was $32,384, $27,803 and $25,147 for 2014, 2013 and 2012, respectively. The contribution percentage ranges from two percent to seven percent of compensation for covered employees based on an age and service formula. Assets in employee accounts of the domestic defined contribution pension plan are invested in various investment funds as directed by the participants. These investment funds did not own a significant number of shares of the Company’s common stock for any year presented.
The Company’s annual contribution for its foreign defined contribution pension plans, which is based on various percentages of compensation for covered employees up to certain limits, was $4,592, $1,428 and $4,621 for 2014, 2013 and 2012, respectively. Assets in employee accounts of the foreign defined contribution pension plans are invested in various investment funds. These investment funds did not own a significant number of shares of the Company’s common stock for any year presented.
Defined benefit pension plans. The Company has one salaried and one hourly domestic defined benefit pension plan, and twenty-one foreign defined benefit pension plans, including three Canadian plans acquired in connection with the 2013 acquisition of Comex's U.S./Canada business. All participants in the domestic salaried defined benefit pension plan prior to January 1, 2002 retain the previous defined benefit formula for computing benefits with certain modifications for active employees. Eligible domestic salaried employees hired or re-hired between January 1, 2002 and September 30, 2011 became participants in the revised domestic salaried defined benefit pension plan upon completion of six months of service. All employees who became participants on or after January 1, 2002 and before January 1, 2005 were credited with certain contribution credits equivalent to six percent of their salary. All employees who became participants on or after January 1, 2005 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised, and all employees who become participants on or after January 1, 2002 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Contribution credits are converted into units to account for each participant’s benefits. Participants will receive a variable annuity benefit upon retirement or a lump sum distribution upon termination (if vested). The variable annuity benefit is subject to the hypothetical returns achieved on each participant’s allocation of units from investments in various investment funds as directed by the participant. Contribution credits to the revised domestic salaried defined benefit pension plan are being funded through existing plan assets. Effective October 1, 2011, the domestic salaried defined benefit pension plan was frozen for new hires, and all newly hired U.S. non-collectively bargained employees are eligible to participate in the Company’s domestic defined contribution plan.
In connection with the 2013 acquisition of Comex's U.S./Canada business, the Company acquired a domestic defined benefit pension plan (Comex Plan). The Comex Plan was merged into the Company's salaried defined benefit pension plan as of November 29, 2013 and was frozen for new participants as of December 31, 2013. Accrued benefits and vesting service under the Comex Plan were credited under the Company's domestic salaried defined benefit pension plan.
At December 31, 2014, the domestic salaried and hourly defined benefit pension plans were overfunded, with a projected benefit obligation of $653,338, fair value of plan assets of $896,071 and excess plan assets of $242,733. The plans are
funded in accordance with all applicable regulations at December 31, 2014 and no funding will be required in 2015. At December 31, 2013, the domestic salaried and hourly defined benefit pension plans were overfunded, with a projected benefit obligation of $582,036, fair value of plan assets of $870,386 and excess plan assets of $288,350. At December 31, 2012, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $313,964, fair value of plan assets of $559,552 and excess plan assets of $245,588, and the domestic hourly defined benefit pension plan was underfunded, with a projected benefit obligation of $152,863, fair value of plan assets of $144,011 and a deficiency of plan assets of $8,852.
At December 31, 2014, seventeen of the Company’s foreign defined benefit pension plans were unfunded or underfunded, with combined accumulated benefit obligations, projected benefit obligations, fair values of net assets and deficiencies of plan assets of $143,324, $171,841, $117,623
and $54,218, respectively. An increase of $11,527 from 2013 in the combined projected benefit obligations of all foreign defined benefit pension plans was primarily due to changes in plan assumptions.
The Company expects to make the following benefit payments for all domestic and foreign defined benefit pension plans: $64,067 in 2015; $64,285 in 2016; $64,940 in 2017; $65,478 in 2018; $65,636 in 2019; and $286,119 in 2020 through 2024. The Company expects to contribute $6,281 to the foreign plans in 2015.
The estimated net actuarial losses and prior service costs for the defined benefit pension plans that are expected to be amortized from Cumulative other comprehensive loss into the net pension costs in 2015 are $5,311 and $1,310, respectively.
The following table summarizes the components of the net pension costs and Cumulative other comprehensive loss related to the defined benefit pension plans:
 
Domestic
Defined Benefit Pension Plans
 
Foreign
Defined Benefit Pension Plans
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Net pension costs:
 
 
 
 
 
 
 
 
 
 
 
Service costs
$
21,342

 
$
23,176

 
$
19,061

 
$
5,261

 
$
5,039

 
$
3,654

Interest costs
26,266

 
18,444

 
17,442

 
10,422

 
7,940

 
6,927

Expected returns on plan assets
(51,293
)
 
(42,937
)
 
(44,841
)
 
(10,836
)
 
(7,487
)
 
(6,799
)
Amortization of prior service costs
1,837

 
1,823

 
1,591

 
 
 
 
 
 
Amortization of actuarial losses
 
 
13,147

 
22,205

 
1,413

 
1,716

 
1,022

Ongoing pension (credits) costs
(1,848
)
 
13,653

 
15,458

 
6,260

 
7,208

 
4,804

Settlement (credits) costs
 
 
 
 
 
 
(3,422
)
 
(220
)
 
47

Net pension (credits) costs
(1,848
)
 
13,653

 
15,458

 
2,838

 
6,988

 
4,851

Other changes in plan assets and projected benefit
obligation recognized in Cumulative other comprehensive loss (before taxes):
 
 
 
 
 
 
 
 
 
 
 
Net actuarial losses (gains) arising during the year
47,785

 
(90,669
)
 
(26,459
)
 
21,792

 
(5,487
)
 
14,131

Prior service costs during the year
2,242

 
1,756

 
2,495

 
 
 
 
 
 
Amortization of prior service costs
(1,837
)
 
(1,823
)
 
(1,591
)
 
 
 
 
 
 
Amortization of actuarial losses
 
 
(13,147
)
 
(22,205
)
 
(1,413
)
 
(1,716
)
 
(1,022
)
Exchange rate (loss) gain recognized during year
 
 
 
 
 
 
(7,988
)
 
819

 
1,464

Total recognized in Cumulative other
comprehensive loss
48,190

 
(103,883
)
 
(47,760
)
 
12,391

 
(6,384
)
 
14,573

Total recognized in net pension costs (credits)
and Cumulative other comprehensive loss
$
46,342

 
$
(90,230
)
 
$
(32,302
)
 
$
15,229

 
$
604

 
$
19,424


The Company employs a total return investment approach for the domestic and foreign defined benefit pension plan assets. A mix of equities and fixed income investments are used to maximize the long-term return of assets for a prudent level of risk. In determining the expected long-term rate of return on defined benefit pension plan assets, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies. The target allocations for plan assets are 45 – 65 percent equity securities and 30 – 40 percent fixed income securities.
The following tables summarize the fair value of the defined benefit pension plan assets at December 31, 2014, 2013 and 2012:
 
Fair Value at
December 31,
2014
 
Quoted Prices in 
Active Markets for Identical
Assets
(Level 1)
 
Significant Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable 
Inputs
(Level 3)
Investments at fair value:
 
 
 
 
 
 
 
Short-term investments (a)
$
14,846

 
 
 
$
14,846

 
 
Equity investments (b)
739,358

 
$
404,542

 
334,816

 
 
Fixed income investments (c)
285,042

 
141,529

 
143,513

 
 
Other assets (d)
44,469

 
 
 
28,435

 
$
16,034

 
$
1,083,715

 
$
546,071

 
$
521,610

 
$
16,034

 
 
 
 
 
 
 
 
 
Fair Value at
December 31,
2013
 
Quoted Prices in
Active Markets for Identical
Assets
(Level 1)
 
Significant Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
Investments at fair value:
 
 
 
 
 
 
 
Short-term investments (a)
$
15,055

 
$
1,941

 
$
13,114

 
 
Equity investments (b)
736,873

 
419,779

 
317,094

 
 
Fixed income investments (c)
255,927

 
125,377

 
130,550

 
 
Other assets (d)
47,494

 
 
 
29,553

 
$
17,941

 
$
1,055,349

 
$
547,097

 
$
490,311

 
$
17,941

 
 
 
 
 
 
 
 
 
Fair Value at
December 31,
2012
 
Quoted Prices in
Active Markets for Identical
Assets
(Level 1)
 
Significant Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
Investments at fair value:
 
 
 
 
 
 
 
Short-term investments (a)
$
68,795

 
 
 
$
68,795

 
 
Equity investments (b)
490,993

 
$
243,553

 
247,440

 
 
Fixed income investments (c)
239,558

 
131,276

 
108,282

 


Other assets (d)
37,230

 
 
 
18,380

 
$
18,850

 
$
836,576

 
$
374,829

 
$
442,897

 
$
18,850


(a)
This category includes a full range of high quality, short-term money market securities.
(b)
This category includes actively managed equity assets that track primarily to the S&P 500.
(c)
This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.
(d)
This category consists of venture capital funds.
The following tables summarize the changes in the fair value of the defined benefit pension plan assets classified as level 3 at December 31, 2014, 2013 and 2012: 
 
Balance at
December 31,
2013
 
Dispositions
 
Realized and Unrealized Gains
 
Balance at
December 31,
2014
Other assets
$
17,941

 
$
(4,320
)
 
$
2,413

 
$
16,034

 
 
 
 
 
 
 
 
 
Balance at
December 31,
2012
 
Dispositions
 
Realized and Unrealized Gains
 
Balance at
December 31,
2013
Other assets
$
18,850

 
$
(4,068
)
 
$
3,159

 
$
17,941

 
 
 
 
 
 
 
 
 
Balance at
January 1, 
2012
 
Dispositions
 
Realized and Unrealized Gains
 
Balance at
December 31,
2012
Other assets
$
20,900

 
$
(3,827
)
 
$
1,777

 
$
18,850


Included as equity investments in the domestic defined benefit pension plan assets at December 31, 2014 were 300,000 shares of the Company’s common stock with a market value of $78,912, representing 8.8 percent of total domestic plan assets. Dividends received on the Company’s common stock during 2014 totaled $660.
The following table summarizes the obligations, plan assets and assumptions used for the defined benefit pension plans, which are all measured as of December 31:
 
Domestic
Defined Benefit Pension Plans
 
Foreign
Defined Benefit Pension Plans
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Accumulated benefit obligations
at end of year
$
648,480

 
$
577,736

 
$
460,591

 
$
203,610

 
$
187,670

 
$
142,769

Projected benefit obligations:
 
 
 
 
 
 
 
 
 
 
 
Balances at beginning of year
$
582,036

 
$
466,827

 
$
410,029

 
$
222,996

 
$
168,758

 
$
141,465

Service costs
21,342

 
23,176

 
19,061

 
5,261

 
5,039

 
3,654

Interest costs
26,266

 
18,444

 
17,442

 
10,422

 
7,940

 
6,927

Actuarial losses (gains)
68,748

 
(5,488
)
 
48,346

 
32,551

 
5,939

 
17,532

Acquisitions of businesses and other
2,242

 
113,174

 
2,496

 
(10,062
)
 
39,622

 
(975
)
Effect of foreign exchange
 
 
 
 
 
 
(18,987
)
 
1,549

 
6,633

Benefits paid
(47,296
)
 
(34,097
)
 
(30,547
)
 
(7,657
)
 
(5,851
)
 
(6,478
)
Balances at end of year
653,338

 
582,036

 
466,827

 
234,524

 
222,996

 
168,758

Plan assets:
 
 
 
 
 
 
 
 
 
 
 
Balances at beginning of year
870,386

 
703,563

 
614,463

 
184,963

 
133,013

 
118,060

Actual returns on plan assets
72,256

 
128,117

 
119,647

 
20,240

 
20,316

 
10,201

Acquisitions of businesses and other
725

 
72,803

 
 
 
3,958

 
36,106

 
6,205

Effect of foreign exchange
 
 
 
 
 
 
(13,859
)
 
1,379

 
5,025

Benefits paid
(47,296
)
 
(34,097
)
 
(30,547
)
 
(7,657
)
 
(5,851
)
 
(6,478
)
Balances at end of year
896,071

 
870,386

 
703,563

 
187,645

 
184,963

 
133,013

Excess (deficient) plan assets over
projected benefit obligations
$
242,733

 
$
288,350

 
$
236,736

 
$
(46,879
)
 
$
(38,033
)
 
$
(35,745
)
Assets and liabilities recognized in the
Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Deferred pension assets
$
242,733

 
$
288,350

 
$
245,588

 
$
7,411

 
$
14,096

 
$
4,323

Other accruals
 
 
 
 
 
 
(810
)
 
(1,126
)
 
(869
)
Other long-term liabilities
 
 

 
(8,852
)
 
(53,480
)
 
(51,003
)
 
(39,199
)
 
$
242,733

 
$
288,350

 
$
236,736

 
$
(46,879
)
 
$
(38,033
)
 
$
(35,745
)
Amounts recognized in Cumulative other
comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Net actuarial losses
$
(107,057
)
 
$
(59,272
)
 
$
(163,088
)
 
$
(47,574
)
 
$
(35,183
)
 
$
(41,567
)
Prior service costs
(6,448
)
 
(6,043
)
 
(6,110
)
 
 
 
 
 
 
 
$
(113,505
)
 
$
(65,315
)
 
$
(169,198
)
 
$
(47,574
)
 
$
(35,183
)
 
$
(41,567
)
Weighted-average assumptions used to
determine projected benefit obligations:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.95
%
 
4.65
%
 
3.73
%
 
3.92
%
 
4.89
%
 
4.58
%
Rate of compensation increase
4.00
%
 
4.00
%
 
4.00
%
 
3.70
%
 
4.31
%
 
4.08
%
Weighted-average assumptions used to
determine net pension costs:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.65
%
 
3.73
%
 
4.40
%
 
4.89
%
 
4.58
%
 
4.94
%
Expected long-term rate of
return on assets
6.00
%
 
6.00
%
 
7.50
%
 
5.58
%
 
5.67
%
 
6.04
%
Rate of compensation increase
4.00
%
 
4.00
%
 
4.00
%
 
4.31
%
 
4.08
%
 
4.04
%

 
Postretirement Benefits Other Than Pensions. Employees of the Company hired in the United States prior to January 1, 1993 who are not members of a collective bargaining unit, and certain groups of employees added through acquisitions, are eligible for health care and life
insurance benefits upon retirement, subject to the terms of the unfunded plans. There were 4,443, 4,419 and 4,402 retired employees entitled to receive such postretirement benefits at December 31, 2014, 2013 and 2012, respectively.


The following table summarizes the obligation and the assumptions used for postretirement benefits other than pensions:
 
Postretirement Benefits Other than Pensions
 
2014
 
2013
 
2012
Benefit obligation:
 
 
 
 
 
Balance at beginning of year - unfunded
$
286,651

 
$
338,134

 
$
316,795

Service cost
2,434

 
3,061

 
2,943

Interest cost
12,782

 
12,183

 
13,520

Actuarial loss (gain)
27,757

 
(50,593
)
 
18,961

Plan amendments
(19,043
)
 
(2,503
)
 
 
Benefits paid
(15,432
)
 
(13,631
)
 
(14,085
)
Balance at end of year - unfunded
$
295,149

 
$
286,651

 
$
338,134

Liabilities recognized in the Consolidated Balance Sheets:
 
 
 
 
 
Postretirement benefits other than pensions
$
(277,892
)
 
$
(268,874
)
 
$
(320,223
)
Other accruals
(17,257
)
 
(17,777
)
 
(17,911
)
 
$
(295,149
)
 
$
(286,651
)
 
$
(338,134
)
Amounts recognized in Cumulative other comprehensive loss:
 
 
 
 
 
Net actuarial losses
$
(36,044
)
 
$
(8,287
)
 
$
(62,814
)
Prior service costs
21,043

 
2,503

 
328

 
$
(15,001
)
 
$
(5,784
)
 
$
(62,486
)
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
 
Discount rate
3.90
%
 
4.60
%
 
3.70
%
Health care cost trend rate - pre-65
7.00
%
 
7.50
%
 
8.00
%
Health care cost trend rate - post-65
6.50
%
 
6.50
%
 
8.00
%
Prescription drug cost increases
6.50
%
 
7.00
%
 
8.00
%
Employer Group Waiver Plan (EGWP) trend rate
8.00
%
 
 
 
 
Weighted-average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
Discount rate
4.60
%
 
3.70
%
 
4.40
%
Health care cost trend rate - pre-65
7.50
%
 
8.00
%
 
8.00
%
Health care cost trend rate - post-65
6.50
%
 
8.00
%
 
8.00
%
Prescription drug cost increases
7.00
%
 
8.00
%
 
8.00
%

The following table summarizes the components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions:
 
Postretirement Benefits Other than Pensions
 
2014
 
2013
 
2012
Net periodic benefit cost:
 
 
 
 
 
Service cost
$
2,434

 
$
3,061

 
$
2,943

Interest cost
12,782

 
12,183

 
13,520

Amortization of actuarial losses
 
 
3,934

 
1,715

Amortization of prior service credit
(503
)
 
(328
)
 
(656
)
Net periodic benefit cost
14,713

 
18,850

 
17,522

Other changes in projected benefit obligation recognized in
Cumulative other comprehensive loss (before taxes):
 
 
 
 
 
Net actuarial loss (gain)
27,757

 
(50,593
)
 
18,961

Prior service credit arising during the year
(19,043
)
 
(2,503
)
 
 
Amortization of actuarial losses
 
 
(3,934
)
 
(1,715
)
Amortization of prior service credit
503

 
328

 
656

Total recognized in Cumulative other comprehensive loss
9,217

 
(56,702
)
 
17,902

Total recognized in net periodic benefit cost and
Cumulative other comprehensive loss
$
23,930

 
$
(37,852
)
 
$
35,424





The estimated net actuarial losses and prior service (credits) for postretirement benefits other than pensions that are expected to be amortized from Cumulative other comprehensive loss into net periodic benefit cost in 2015 are $1,011 and $(4,529), respectively.
The assumed health care cost trend rate and prescription drug cost increases used to determine the net periodic benefit cost for postretirement health care benefits for 2015 both decrease in each successive year until reaching 5.0 percent in 2022. The assumed health care and prescription drug cost trend rates have a significant effect on the amounts reported for the postretirement health care benefit obligation. A one-percentage-point change in assumed health care and prescription drug cost trend rates would have had the following effects at December 31, 2014:
 
One-Percentage Point
 
Increase
 
(Decrease)
Effect on total of service and interest cost components
$
23

 
$
(66
)
Effect on the postretirement benefit obligation
$
734

 
$
(1,697
)



Prior to the 2013 Patient Protection and Affordable Care Act (PPACA), the Company offered retiree prescription drug coverage under Medicare Part D and was entitled to a tax-free retiree drug subsidy (RDS). In accordance with the accounting guidance related to the Medicare Act included in the Retirement Benefits Topic of the ASC, the effects of the RDS resulted in a $21,400 reduction of the accumulated postretirement benefit obligation for benefits attributed to past service, which was recognized prospectively beginning July 1, 2004. During 2012, this recognition resulted in a $5,712 reduction of the net periodic benefit cost, which consisted of changes in actuarial experience and reductions in interest cost of $5,278 and $434, respectively. There is no expense impact in years after 2012 due to the elimination of the tax deduction previously allowed for the RDS. Subsequent to the passing of the PPACA, the Company's retiree prescription drug coverage was restructured as an EGWP, and the benefits provided to plan participants remain substantially the same.
The Company expects to make retiree health care benefit cash payments and to receive government reimbursements as follows:
 
Retiree Health
Care Benefits
 
Government Reimbursement
 
Expected Cash
Payments - Net
2015
$
19,563

 
$
(2,305
)
 
$
17,258

2016
20,759

 
(2,474
)
 
18,285

2017
22,000

 
(2,667
)
 
19,333

2018
22,884

 
(2,888
)
 
19,996

2019
23,486

 
(3,107
)
 
20,379

2020 through 2024
115,694

 
(16,779
)
 
98,915

Total expected benefit cash payments
$
224,386

 
$
(30,220
)
 
$
194,166

Debt
DEBT
DEBT
Long-term debt
 
Due Date
 
2014
 
2013
 
2012
1.35% Senior Notes
2017
 
$
699,460

 
$
699,277

 
$
699,091

4.00% Senior Notes
2042
 
298,595

 
298,545

 
298,493

7.375% Debentures
2027
 
119,369

 
119,366

 
129,060

7.45% Debentures
2097
 
3,500

 
3,500

 
3,500

2.02% to 8.00% Promissory Notes
Through 2029
 
1,791

 
1,685

 
2,109

3.125% Senior Notes
2014
 
 
 
 
 
499,912

 
 
 
$
1,122,715

 
$
1,122,373

 
$
1,632,165


Maturities of long-term debt are as follows for the next five years: $3,265 in 2015; $678 in 2016; $700,150 in 2017; $153 in 2018 and $156 in 2019. Interest expense on long-term debt was $56,408, $57,949 and $36,188 for 2014, 2013 and 2012, respectively.
Among other restrictions, the Company’s Notes, Debentures and revolving credit agreement contain certain covenants relating to liens, ratings changes, merger and sale of assets, consolidated leverage and change of control as defined in
the agreements. In the event of default under any one of these arrangements, acceleration of the maturity of any one or more of these borrowings may result. The Company was in compliance with all covenants for all years presented.
On December 4, 2012, the Company issued $700,000 of 1.35% Senior Notes due 2017 and $300,000 of 4.00% Senior Notes due 2042. The Senior Notes are covered under a shelf registration filed with the Securities and Exchange Commission (SEC) on December 16, 2009. The proceeds are being used for general corporate purposes, including repayment of short-term borrowings and financing acquisitions.
Short-term borrowings. At December 31, 2014, borrowings outstanding under the domestic commercial paper program totaled $625,860 and were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 0.3% at December 31, 2014. At December 31, 2013 and 2012, there were no borrowings outstanding under the domestic commercial paper program. Borrowings outstanding under various foreign programs of $53,576, $96,551 and $69,035 at December 31, 2014, 2013 and 2012, respectively, were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 6.0%, 7.8% and 2.8% at December 31, 2014, 2013 and 2012, respectively.
On September 19, 2012, Sherwin-Williams Luxembourg S.à r.l., a wholly-owned subsidiary of the Company, entered into a €95,000 (Euro) five-year revolving credit facility. This facility replaced the existing €97,000 (Euro) credit facility. On June 29, 2012, Sherwin-Williams Canada Inc., a wholly-owned subsidiary of the Company, entered into a new CAD 75,000 five-year credit facility which replaced the existing credit facility. On March 18, 2013, the aggregate amount of this credit facility was increased to CAD 150,000. These credit facilities are being used for general corporate purposes, including refinancing indebtedness and for acquisitions.
On January 30, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit of up to an aggregate availability of $500,000. On April 23, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. On November 14, 2012, the Company entered into a three-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. The three credit agreements entered into in 2012 replace prior credit facilities that matured in 2012 and 2011. At December 31, 2014, 2013 and 2012, there were no borrowings outstanding under any of these credit agreements.
The Company uses a revolving credit agreement primarily to satisfy its commercial paper program’s dollar for dollar liquidity requirement. On July 8, 2011, the Company entered into a five-year $1.05 billion revolving credit agreement. The credit agreement allows the Company to extend the maturity of the facility with two one-year extension options and to increase the aggregate amount of the facility to $1.30 billion, both of which are subject to the discretion of each lender.
Other Long-term Liabilities
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES
The operations of the Company, like those of other companies in our industry, are subject to various domestic and
foreign environmental laws and regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on the Company for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements upon the Company and the industry in the future. Management believes that the Company conducts its operations in compliance with applicable environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.
The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites (including sites which were previously owned and/or operated by businesses acquired by the Company). In addition, the Company, together with other parties, has been designated a potentially responsible party under federal and state environmental protection laws for the investigation and remediation of environmental contamination and hazardous waste at a number of third-party sites, primarily Superfund sites. In general, these laws provide that potentially responsible parties may be held jointly and severally liable for investigation and remediation costs regardless of fault. The Company may be similarly designated with respect to additional third-party sites in the future.
The Company initially provides for estimated costs of environmental-related activities relating to its past operations and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are determined based on currently available facts regarding each site. If the best estimate of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is provided. The Company continuously assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Included in Other long-term liabilities at December 31, 2014, 2013 and 2012 were accruals for extended environmental-related activities of $114,281, $86,647 and $97,220, respectively. Included in Other accruals at December 31, 2014, 2013 and 2012 were accruals for estimated costs of current investigation and remediation activities of $16,868, $15,385 and $17,101, respectively.
Actual costs incurred may vary from the accrued estimates due to the inherent uncertainties involved including, among others, the number and financial condition of parties involved with respect to any given site, the volumetric contribution which may be attributed to the Company relative to that attributed to other parties, the nature and magnitude of the wastes involved, the various technologies that can be used for remediation and the determination of acceptable remediation with respect to a particular site. If the Company’s future loss contingency is ultimately determined to be at the unaccrued maximum of the estimated range of possible outcomes for every site for which costs can be reasonably estimated, the Company’s accrual for environmental-related activities would be $89,733 higher than the minimum accruals at December 31, 2014.
Two of the Company’s currently and formerly owned manufacturing sites account for the majority of the accrual for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at December 31, 2014. At December 31, 2014, $82,707, or 63.1 percent of the total accrual, related directly to these two sites. In the aggregate unaccrued maximum of $89,733 at December 31, 2014, $57,927, or 64.6 percent, related to the two manufacturing sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and monitoring will likely be required at each site.
Management cannot presently estimate the ultimate potential loss contingencies related to these sites or other less significant sites until such time as a substantial portion of the investigation at the sites is completed and remedial action plans are developed. In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.
Management expects these contingent environmental-related liabilities to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain environmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities.
The Asset Retirement and Environmental Obligations Topic of the ASC requires a liability to be recognized for the fair value of a conditional asset retirement obligation if a settlement date and fair value can be reasonably estimated. The Company recognizes a liability for any conditional asset retirement obligation when sufficient information is available to reasonably estimate a settlement date to determine the fair value of such a liability. The Company has identified certain conditional asset retirement obligations at various current and closed manufacturing, distribution and store facilities. These obligations relate primarily to asbestos abatement, hazardous waste Resource Conservation and Recovery Act (RCRA) closures, well abandonment, transformers and used oil disposals and underground storage tank closures. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated costs of these obligations were accrued and are not significant. The recording of additional liabilities for future conditional asset retirement obligations may result in a material impact on net income for the annual or interim period during which the costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its conditional asset retirement obligations will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time over which sufficient information may become available regarding the closure or modification of any one or group of the Company’s facilities. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.
Litigation
LITIGATION
LITIGATION
In the course of its business, the Company is subject to a variety of claims and lawsuits, including, but not limited to, litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, the Company accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and the amount of any such loss cannot be reasonably estimated, any potential liability ultimately determined to be attributable to the Company may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred.
Lead pigment and lead-based paint litigation. The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is and has been a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs’ claims have been based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company has also been a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints that seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company has not settled any material lead pigment or lead-based paint litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.
Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail. Adverse court rulings or
determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.
Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. With respect to such litigation, including the public nuisance litigation, the Company does not believe that it is probable that a loss has occurred, and it is not possible to estimate the range of potential losses as there is no prior history of a loss of this nature and there is no substantive information upon which an estimate could be based. In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties.
Public nuisance claim litigation. The Company and other companies are or were defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by the State of Rhode Island, the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Chicago, Illinois, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California. Except for the Santa Clara County, California proceeding, all of these legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.
The proceedings initiated by the State of Rhode Island included two jury trials. At the conclusion of the second trial, the jury returned a verdict finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law.
The Santa Clara County, California proceeding was initiated in March 2000 in the Superior Court of the State of California, County of Santa Clara. In the original complaint, the plaintiffs asserted various claims including fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance, and violations of California’s Business and Professions Code. A number of the asserted claims were resolved in favor of the defendants through pre-trial proceedings. The named plaintiffs in the Fourth Amended Complaint, filed on March 16, 2011, are the Counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura, the Cities of Oakland and San Diego and the City and County of San Francisco. The Fourth Amended Complaint asserted a sole claim for public nuisance, alleging that the presence of lead pigments for use in paint and coatings in, on and around residences in the plaintiffs’ jurisdictions constitutes a public nuisance. The plaintiffs sought the abatement of the alleged public nuisance that exists within the plaintiffs’ jurisdictions. A trial commenced on July 15, 2013 and ended on August 22, 2013. The court entered final judgment on January 27, 2014, finding in favor of the plaintiffs and against the Company and two other defendants (ConAgra Grocery Products Company and NL Industries, Inc.). The final judgment held the Company jointly and severally liable with the other two defendants to pay $1.15 billion into a fund to abate the public nuisance. The Company strongly disagrees with the judgment.
On February 18, 2014, the Company filed a motion for new trial and a motion to vacate the judgment. The court denied these motions on March 24, 2014. On March 28, 2014, the Company filed a notice of appeal to the Sixth District Court of Appeal for the State of California. The filing of the notice of appeal effects an automatic stay of the judgment without the requirement to post a bond. The Company believes that the judgment conflicts with established principles of law and is unsupported by the evidence. The Company has had a favorable history with respect to lead pigment and lead-based paint litigation, particularly other public nuisance litigation, and accordingly, the Company believes that it is not probable that a loss has occurred and it is not possible to estimate the range of potential loss with respect to the case.
Litigation seeking damages from alleged personal injury. The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint and claims for damages allegedly incurred by the children’s parents or guardians. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These proceedings include purported claims by individuals, groups of individuals and class actions.
The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action in state court against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants included strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability, except that liability can be joint and several) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. The case ultimately proceeded to trial and, on November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff appealed and, on December 16, 2010, the Wisconsin Court of Appeals affirmed the final judgment in favor of the Company and other defendants.
Wisconsin is the only jurisdiction to date to apply a theory of liability with respect to alleged personal injury (i.e., risk contribution/market share liability) that does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation. Although the risk contribution liability theory was applied during the Thomas trial, the constitutionality of this theory as applied to the lead pigment cases has not been judicially determined by the Wisconsin state courts. However, in an unrelated action filed in the United States District Court for the Eastern District of Wisconsin, Gibson v. American Cyanamid, et al., on November 15, 2010, the District Court held that Wisconsin’s risk contribution theory as applied in that case violated the defendants’ right to substantive due process and is unconstitutionally retroactive. The District Court's decision in Gibson v. American Cyanamid, et al., was appealed by the plaintiff to the United States Court of Appeals for the Seventh Circuit. On July 24, 2014, the United States Court of Appeals for the Seventh Circuit reversed the judgment and remanded the case back to the District Court for further proceedings. On January 16, 2015, the defendants filed a petition for certiorari in the United States Supreme Court seeking that Court's review of the Seventh Circuit’s decision. Also, in Yasmine Clark v. The Sherwin-Williams Company, et al., the Wisconsin Circuit Court, Milwaukee County, on March 25, 2014, held that the application to a pending case of Section 895.046 of the Wisconsin Statutes (which clarifies the application of the risk contribution theory) is unconstitutional as a violation of the plaintiff’s right to due process of law under the Wisconsin Constitution. On April 8, 2014, defendants filed a petition requesting the Wisconsin Court of Appeal to hear the issue as an interlocutory appeal. On August 21, 2014, the Wisconsin Court of Appeal granted defendants' petition.
Insurance coverage litigation. The Company and its liability insurers, including certain underwriters at Lloyd’s of London, initiated legal proceedings against each other to primarily determine, among other things, whether the costs and liabilities associated with the abatement of lead pigment are covered under certain insurance policies issued to the Company. The Company’s action, filed on March 3, 2006 in the Common Pleas Court, Cuyahoga County, Ohio, is currently stayed and inactive. The liability insurers’ action, which was filed on February 23, 2006 in the Supreme Court of the State of New York, County of New York, has been dismissed. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Company has not recorded any assets related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual. Therefore, an ultimate loss in the insurance coverage litigation without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on
the Company’s results of operation, liquidity or financial condition. As previously stated, however, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued.

Department of Labor (DOL) leveraged ESOP settlement. On February 20, 2013, the Company reached a settlement with the DOL of the DOL's investigation of transactions related to the Company's ESOP that were implemented on August 1, 2006 and August 27, 2003. The DOL had notified the Company, among others, of potential enforcement claims asserting breaches of fiduciary obligations and sought compensatory and equitable remedies. The Company resolved all ESOP related claims with the DOL by agreeing, in part, to make a one-time payment of $80,000 to the ESOP, resulting in a $49,163 after tax charge to earnings in the fourth quarter of 2012. The Company made this required $80,000 payment to the ESOP during the first quarter of 2013.

Government tax assessment settlements related to Brazilian operations. Charges totaling $28,711 and $2,873 were recorded to Cost of goods sold and SG&A, respectively, during the second and third quarters of 2013. The charges were primarily related to import duty taxes paid to the Brazilian government related to the handling of import duties on products brought into the country for the years 2006 through 2012. The Company elected to pay the taxes through an existing voluntary amnesty program offered by the government to resolve these issues rather than contest them in court. The after-tax charges were $21,858 for the full year 2013. The Company's import duty process in Brazil was changed to reach a final resolution of this matter with the Brazilian government.
Litigation related to Consorcio Comex. As previously disclosed, the Company entered into a definitive Stock Purchase Agreement (as subsequently amended and restated, the “Purchase Agreement”), with Avisep, S.A. de C.V. (“Avisep”) and Bevisep, S.A. de C.V. (“Bevisep”) to, among other things, acquire the Mexico business of Consorcio Comex, S.A. de C.V. (the "Acquisition"). Under the terms of the Purchase Agreement, either the Company or Avisep and Bevisep had the right to terminate the Purchase Agreement in the event that the closing of the Acquisition did not occur on or prior to March 31, 2014 and such party was not in material breach of the Purchase Agreement.
On April 3, 2014, the Company sent notice to Avisep and Bevisep that the Company was terminating the Purchase Agreement. On April 3, 2014, the Company filed a complaint for declaratory judgment in the Supreme Court of the State of New York, New York County, requesting the court to declare that the Company had used commercially reasonable efforts as required under the Purchase Agreement and has not breached the Purchase Agreement. On August 7, 2014, the case was removed by Avisep and Bevisep to the United States District Court for the Southern District of New York. On April 11, 2014, Avisep and Bevisep initiated an arbitration proceeding against the Company in the International Court of Arbitration contending that the Company breached the Purchase Agreement by terminating the Purchase Agreement and not utilizing commercially reasonable efforts under the Purchase Agreement, which allegedly caused Avisep and Bevisep to incur damages. The Company believes that the claims are without merit and intends to vigorously defend against such claims.
Titanium dioxide suppliers antitrust class action lawsuit. The Company is a member of the plaintiff class related to Titanium Dioxide Antitrust Litigation that was initiated in 2010 against certain suppliers alleging various theories of relief arising from purchases of titanium dioxide made from 2003 through 2012. The Court approved a settlement less attorney fees and expense, and the Company timely submitted claims to recover its pro-rata portion of the settlement. There was no specified deadline for the claims administrator to complete the review of all claims submitted. In October 2014, the Company was notified that it would receive a disbursement of settlement funds, and the Company received a pro-rata disbursement net of all fees of approximately $21,420. The Company recorded this settlement gain in the fourth quarter of 2014.
Capital Stock
CAPITAL STOCK
CAPITAL STOCK
At December 31, 2014, there were 300,000,000 shares of common stock and 30,000,000 shares of serial preferred stock authorized for issuance. Of the authorized serial preferred stock, 3,000,000 shares are designated as cumulative redeemable serial preferred and 1,000,000 shares are designated as convertible serial preferred stock. See Note 11. Under the amended and restated 2006 Equity and Performance Incentive Plan (2006 Employee Plan), 19,200,000 common shares may be issued or transferred. See Note 12. An aggregate of 10,304,816, 12,121,210 and 13,558,565 shares of common stock at December 31, 2014, 2013 and 2012, respectively, were reserved for future grants of restricted stock and the exercise and future grants of option rights. See Note 12. Common shares outstanding shown in the following table included 487,075, 486,138 and 484,872 shares of common stock held in a revocable trust at December 31, 2014, 2013 and 2012,
respectively. The revocable trust is used to accumulate assets for the purpose of funding the ultimate obligation of certain non-qualified benefit plans. Transactions between the Company and the trust are accounted for in accordance with the Deferred Compensation – Rabbi Trusts Subtopic of the Compensation Topic of the ASC, which requires the assets held by the trust be consolidated with the Company’s accounts.
 
 
Common Shares
in Treasury
 
Common Shares
Outstanding
Balance at January 1, 2012
3,601,159

 
103,854,234

Shares tendered as payment for option rights exercised
7,766

 
(7,766
)
Shares issued for exercise of option rights
 
 
4,140,822

Shares tendered in connection with grants of restricted stock
143,979

 
(143,979
)
Net shares issued for grants of restricted stock
 
 
26,756

Treasury stock purchased
4,600,000

 
(4,600,000
)
Balance at December 31, 2012
8,352,904

 
103,270,067

Shares tendered as payment for option rights exercised
2,697

 
(2,697
)
Shares issued for exercise of option rights
 
 
1,127,942

Shares tendered in connection with grants of restricted stock
116,897

 
(116,897
)
Net shares issued for grants of restricted stock
 
 
150,965

Treasury stock purchased
4,300,000

 
(4,300,000
)
Balance at December 31, 2013
12,772,498

 
100,129,380

Shares tendered as payment for option rights exercised
7,229

 
(7,229
)
Shares issued for exercise of option rights
 
 
1,423,395

Shares tendered in connection with grants of restricted stock
108,352

 
(108,352
)
Net shares issued for grants of restricted stock
 
 
191,979

Treasury stock purchased
6,925,000

 
(6,925,000
)
Balance at December 31, 2014
19,813,079

 
94,704,173

Stock Purchase Plan and Preferred Stock
STOCK PURCHASE PLAN AND PREFERRED STOCK
STOCK PURCHASE PLAN AND PREFERRED STOCK
As of December 31, 2014, 33,958 employees contributed to the Company’s ESOP, a voluntary defined contribution plan available to all eligible salaried employees. Participants are allowed to contribute, on a pretax or after-tax basis, up to the lesser of twenty percent of their annual compensation or the maximum dollar amount allowed under the Internal Revenue Code. The Company matches one hundred percent of all contributions up to six percent of eligible employee contributions. Such participant contributions may be invested in a variety of investment funds or a Company common stock fund and may be exchanged between investments as directed by the participant. Participants are permitted to diversify both future and prior Company matching contributions previously allocated to the Company common stock fund into a variety of investment funds.
The Company made contributions to the ESOP on behalf of participating employees, representing amounts authorized by employees to be withheld from their earnings, of $109,036, $97,381 and $88,363 in 2014, 2013 and 2012, respectively. The Company’s matching contributions to the ESOP charged to operations were $74,574, $67,428 and $142,791 for 2014, 2013 and 2012, respectively. The 2012 Company contributions include $80,000 related to the DOL Settlement. See Note 9 for additional information on the DOL Settlement.
At December 31, 2014, there were 12,456,468 shares of the Company’s common stock being held by the ESOP, representing 13.2 percent of the total number of voting shares outstanding. Shares of Company common stock credited to each member’s account under the ESOP are voted by the trustee under instructions from each individual plan member. Shares for which no instructions are received are voted by the trustee in the same proportion as those for which instructions are received.
On August 1, 2006, the Company issued 500,000 shares of convertible serial preferred stock, no par value (Series 2 Preferred stock) with cumulative quarterly dividends of $11.25 per share, for $500,000 to the ESOP. The ESOP financed the acquisition of the Series 2 Preferred stock by borrowing $500,000 from the Company at the rate of 5.5 percent per annum. This borrowing was payable over ten years in equal quarterly installments. Each share of Series 2 Preferred stock was entitled to one vote upon all matters presented to the Company’s shareholders and generally voted with the common stock together as one class. The Series 2 Preferred stock was held by the ESOP in an unallocated account. As the value of compensation expense related to contributions to the ESOP was earned, the Company
had the option of funding the ESOP by redeeming a portion of the preferred stock or with cash. Contributions were credited to the members’ accounts at the time of funding. The Series 2 Preferred stock was redeemable for cash or convertible into common stock or any combination thereof at the option of the ESOP based on the relative fair value of the Series 2 Preferred and common stock at the time of conversion. At December 31, 2014, 2013 and 2012, there were no allocated or committed-to-be released shares of Series 2 Preferred stock outstanding. In 2013 and 2012, the Company redeemed for cash 60,681 and 59,187 shares of Series 2 Preferred stock, respectively. The fair value of the Series 2 Preferred stock is based on a conversion/redemption formula outlined in the preferred stock terms. At December 31, 2013 and 2012, the fair value of the Series 2 Preferred stock was $86,309 and $210,773, respectively. In 2014, the Company redeemed for cash the remaining 40,406 shares of Series 2 Preferred stock.
Stock-Based Compensation
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
The amended and restated 2006 Employee Plan authorizes the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 19,200,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or canceled. The Employee Plan permits the granting of option rights, appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible employees. At December 31, 2014, no appreciation rights, performance shares or performance units had been granted under the 2006 Employee Plan.
The 2006 Stock Plan for Nonemployee Directors (Nonemployee Director Plan) authorizes the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 200,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or are canceled. The Nonemployee Director Plan permits the granting of option rights, appreciation rights, restricted stock and restricted stock units to members of the Board of Directors who are not employees of the Company. At December 31, 2014, no option rights, appreciation rights or restricted stock units had been granted under the Nonemployee Director Plan.
The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The tax benefits associated with these share-based payments are classified as financing activities in the Statements of Consolidated Cash Flows.
At December 31, 2014, the Company had total unrecognized stock-based compensation expense of $76,099 that is expected to be recognized over a weighted-average period of 1.00 year. Stock-based compensation expense during 2014, 2013 and 2012 was $64,735, $58,004 and $54,348, respectively. The Company recognized a total income tax benefit related to stock-based compensation expense of $24,816, $22,368 and $20,948 during 2014, 2013 and 2012, respectively. The impact of total stock-based compensation expense, net of taxes, on net income reduced Basic and Diluted net income per common share by $.41 and $.40 during 2014, respectively.
Option rights. The fair value of the Company’s option rights was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:
 
2014
 
2013
 
2012
Risk-free interest rate
1.47%
 
1.37%
 
.78%
Expected life of option rights
5.10 years
 
5.10 years
 
5.11 years
Expected dividend yield
of stock
1.19%
 
1.32%
 
1.43%
Expected volatility of stock
.223
 
.281
 
.274

The risk-free interest rate is based upon the U.S. Treasury yield curve at the time of grant. The expected life of option rights was calculated using a scenario analysis model. Historical data was used to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding option rights. The expected dividend yield of stock is the Company’s best estimate of the expected future dividend yield. Expected volatility of stock was calculated using historical and implied volatilities. The Company applied an estimated forfeiture rate of 2.60 percent to the 2014 grants. This rate was calculated based upon historical activity and is an estimate of granted shares not expected to vest. If actual forfeitures differ from the expected rate, the Company may be required to make additional adjustments to compensation expense in future periods.
Grants of option rights for non-qualified and incentive stock options have been awarded to certain officers, key employees and nonemployee directors under the 2006 Employee Plan and the 2003 Stock Plan. The option rights generally become exercisable to the extent of one-third of the optioned shares for each full year following the date of grant and generally expire ten years after the date of grant. Unrecognized compensation expense with respect to option rights granted to eligible employees amounted to $39,413 at December 31, 2014. The unrecognized compensation expense is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted-average period of 1.03 years.
The weighted-average per share grant date fair value of options granted during 2014, 2013 and 2012, respectively, was $43.11, $41.91 and $32.74. The total intrinsic value of exercised option rights for employees was $195,097, $129,742 and $298,883, and for nonemployee directors was $0, $525 and $1,412 during 2014, 2013 and 2012, respectively. The total fair value of options vested during the year was $32,313, $28,658 and $25,879 during 2014, 2013 and 2012, respectively. There
were no outstanding option rights for nonemployee directors for 2014 and 2013. The outstanding option rights for nonemployee directors were 3,500 for 2012. The Company issues new shares upon exercise of option rights or granting of restricted stock.
A summary of the Company’s non-qualified and incentive stock option right activity for employees and nonemployee directors, and related information for the years ended December 31 is shown in the following table:
 
2014
 
2013
 
2012
 
Optioned
Shares
 
Weighted-
Average
Exercise
Price
Per Share
 
Aggregate
Intrinsic
Value
 
Optioned
Shares
 
Weighted-
Average
Exercise
Price
Per Share
 
Aggregate
Intrinsic
Value
 
Optioned
Shares
 
Weighted-
Average
Exercise
Price
Per Share
 
Aggregate
Intrinsic
Value
Outstanding beginning
of year
6,484,592

 
$
96.25

 
 
 
6,748,126

 
$
79.39

 
 
 
9,857,695

 
$
60.31

 
 
Granted
672,565

 
224.65

 
 
 
898,728

 
179.67

 
 
 
1,089,240

 
152.93

 
 
Exercised
(1,421,045
)
 
70.71

 
 
 
(1,127,942
)
 
61.46

 
 
 
(4,140,822
)
 
53.40

 
 
Forfeited
(31,617
)
 
158.92

 
 
 
(33,278
)
 
115.24

 
 
 
(57,730
)
 
78.01

 
 
Expired
(4,603
)
 
86.66

 
 
 
(1,042
)
 
79.73

 
 
 
(257
)
 
72.65

 
 
Outstanding end of year
5,699,892

 
$
117.31

 
$
830,647

 
6,484,592

 
$
96.25

 
$
563,554

 
6,748,126

 
$
79.39

 
$
494,699

Exercisable at end of year
4,095,246

 
$
87.79

 
$
717,691

 
4,424,674

 
$
71.86

 
$
492,689

 
4,245,891

 
$
61.43

 
$
386,484


 
The weighted-average remaining term for options outstanding at the end of 2014, 2013 and 2012, respectively, was 6.57, 6.75 and 6.99 years. The weighted-average remaining term for options exercisable at the end of 2014, 2013 and 2012, respectively, was 5.63, 5.71 and 5.79 years. Shares reserved for future grants of option rights and restricted stock were 4,604,924, 5,636,618 and 6,810,439 at December 31, 2014, 2013 and 2012, respectively.
Restricted stock. Grants of restricted stock, which generally require three years of continuous employment from the date of grant before vesting and receiving the stock without restriction, have been awarded to certain officers and key employees under the 2006 Employee Plan. The February 2014, 2013 and 2012 grants consisted of a combination of performance-based awards and time-based awards. The performance-based awards vest at the end of a three-year period based on the Company’s achievement of specified financial goals relating to earnings per share. The time-based awards vest at the end of a three-year period based on continuous employment. Unrecognized compensation expense with respect to grants of restricted stock to eligible employees amounted to $35,519 at December 31, 2014 and is being amortized on a straight-line basis over the vesting period and is expected to be recognized over a weighted-average period of 0.93 years.
Grants of restricted stock have been awarded to nonemployee directors under the Nonemployee Plan. These grants generally vest and stock is received without restriction to the extent of one-third of the granted stock for each year following the date of grant. Unrecognized compensation expense with respect to grants of restricted stock to nonemployee directors amounted to $1,167 at December 31, 2014 and is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted-average period of 0.93 years.
A summary of grants of restricted stock to certain officers, key employees and nonemployee directors during each year is as follows:
 
2014
 
2013
 
2012
Restricted stock granted
201,412

 
172,406

 
301,856

Weighted-average per share
fair value of restricted stock
granted during the year
$
191.60

 
$
163.63

 
$
99.47



A summary of the Company’s restricted stock activity for the years ended December 31 is shown in the following table:
 
2014
 
2013
 
2012
Outstanding at beginning
of year
749,382

 
919,748

 
1,304,891

Granted
201,412

 
172,406

 
301,856

Vested
(294,438
)
 
(334,750
)
 
(412,859
)
Forfeited
(1,080
)
 
(8,022
)
 
(274,140
)
Outstanding at end of year
655,276

 
749,382

 
919,748

Other
OTHER
OTHER
Other general expense - net. Included in Other general expense - net were the following:
 
2014
 
2013
 
2012
Provisions for environmental
matters - net
$
36,046

 
$
(2,751
)
 
$
6,736

Loss on disposition of assets
1,436

 
5,207

 
3,454

Net expense (income) of exit or disposal activities
 
 
63

 
(4,942
)
Total
$
37,482

 
$
2,519

 
$
5,248


Provisions for environmental matters–net represent initial provisions for site-specific estimated costs of environmental investigation or remediation and increases or decreases to environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Environmental-related accruals are not recorded net of insurance proceeds in accordance with the Offsetting Subtopic of the Balance Sheet Topic of the ASC. See Note 8 for further details on the Company’s environmental-related activities.
The loss on disposition of assets represents net realized losses associated with the disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company.
The net expense (income) of exit or disposal activities includes changes to accrued qualified exit costs as information becomes available upon which more accurate amounts can be reasonably estimated, initial impairments of carrying value and additional impairments for subsequent reductions in estimated fair value of property, plant and equipment held for disposal. See Note 5 for further details on the Company’s exit or disposal activities. 
Other (income) expense - net. Included in Other (income) expense - net were the following:
 
2014
 
2013
 
2012
Dividend and royalty income
$
(4,864
)
 
$
(5,904
)
 
$
(4,666
)
Net expense from
financing activities
11,367

 
9,829

 
9,220

Foreign currency transaction related losses (gains)
3,603

 
7,669

 
(3,071
)
Other income
(37,524
)
 
(22,684
)
 
(21,074
)
Other expense
12,018

 
12,026

 
9,651

Total
$
(15,400
)
 
$
936

 
$
(9,940
)

The Net expense from financing activities includes the net expense relating to changes in the Company’s financing fees.
Foreign currency transaction related losses (gains) represent net realized losses (gains) on U.S. dollar-denominated liabilities of foreign subsidiaries and net realized and unrealized losses (gains) from foreign currency option and forward contracts. There were no material foreign currency option and forward contracts outstanding at December 31, 2014, 2013 and 2012.
Other income and Other expense included items of revenue, gains, expenses and losses that were unrelated to the primary business purpose of the Company. Other income for the year ended December 31, 2014 included a $6,336 gain on the early termination of a customer agreement recorded in the Global Finishes Group and a $6,198 realized gain resulting from final asset valuations related to the acquisition of the U.S./Canada business of Comex recorded in the Administrative segment. There were no other items within Other income or Other expense that were individually significant.
Income Taxes
INCOME TAXES
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using the enacted tax rates and laws that are currently in effect. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2014, 2013 and 2012 were as follows:
 
2014
 
2013
 
2012
Deferred tax assets:
 
 
 
 
 
Exit costs, environ-mental and other
similar items
$
56,441

 
$
45,322

 
$
45,403

Deferred employee
benefit items
55,765

 
32,600

 
93,039

Other items (each
less than 5 percent
of total assets)
85,841

 
53,727

 
73,388

Total deferred
tax assets
$
198,047

 
$
131,649

 
$
211,830

Deferred tax liabilities:
 
 
 
 
 
Depreciation and
amortization
$
227,765

 
$
214,696

 
$
202,891


Netted against the Company’s other deferred tax assets were valuation allowances of $1,725, $7,390 and $11,474 at December 31, 2014, 2013 and 2012, respectively. These reserves resulted from the uncertainty as to the realization of the tax benefits from foreign net operating losses and other foreign assets. The Company has $30,750 of domestic net operating loss carryforwards acquired through acquisitions that have expiration dates through the tax year 2037 and foreign net operating losses of $60,943. The foreign net operating losses are related to various jurisdictions that provide for both indefinite carryforward periods and others with carryforward periods that range from the tax years 2019 to 2034.
Significant components of the provisions for income taxes were as follows:
 
2014
 
2013
 
2012
Current:
 
 
 
 
 
Federal
$
308,283

 
$
229,997

 
$
207,791

Foreign
53,045

 
42,543

 
51,264

State and local
50,049

 
33,082

 
27,642

Total current
411,377

 
305,622

 
286,697

Deferred:
 
 
 
 
 
Federal
(14,974
)
 
30,384

 
8,692

Foreign
(7,361
)
 
(9,041
)
 
(16,964
)
State and local
3,297

 
6,432

 
(2,150
)
Total deferred
(19,038
)
 
27,775

 
(10,422
)
Total provisions for
income taxes
$
392,339

 
$
333,397

 
$
276,275


The provisions for income taxes included estimated taxes payable on that portion of retained earnings of foreign subsidiaries expected to be received by the Company. The effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of the Income Taxes Topic of the ASC, was $(1,887) in 2014, $4,411 in 2013 and $7,572 in 2012. A provision was not made with respect to $3,683 of retained earnings at December 31, 2014 that have been invested by foreign subsidiaries. The unrecognized deferred tax liability related to those earnings is approximately $539.
Significant components of income before income taxes as used for income tax purposes, were as follows:
 
2014
 
2013
 
2012
Domestic
$
1,113,527

 
$
969,790

 
$
712,873

Foreign
144,698

 
116,168

 
194,436

 
$
1,258,225

 
$
1,085,958

 
$
907,309


A reconciliation of the statutory federal income tax rate to the effective tax rate follows: 
 
2014
 
2013
 
2012
Statutory federal
income tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Effect of:
 
 
 
 
 
State and local
income taxes
2.8

 
2.4

 
1.8

Investment vehicles
(2.5
)
 
(2.1
)
 
(2.1
)
Domestic production
activities
(2.5
)
 
(2.2
)
 
(1.9
)
Other - net
(1.6
)
 
(2.4
)
 
(2.4
)
Effective tax rate
31.2
 %
 
30.7
 %
 
30.4
 %

The 2014 state and local income tax component of the effective tax rate increased compared to 2013 primarily due to an increase in domestic income before income taxes in 2014 compared to 2013. The tax benefit related to investment vehicles increased in 2014 compared to 2013 due to an increase in income tax credits recognized and the favorable impact of the Company's capital position in these investments. The domestic production activities component of the effective tax rate increased due to an increase in qualified production activities income as well as an increase in domestic taxable income in 2014 compared to 2013.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The IRS commenced an examination of the Company's U.S. income tax returns for the 2010, 2011 and 2012 tax years in the fourth quarter of 2013. Fieldwork is expected to be completed during 2015. At this time, the Company has determined that an insignificant refund is due for issues under
review during this audit period. The refunds relate to tax credits not recognized on the returns when initially filed and the reversal of adjustments made to depreciation in prior audit cycles.
As of December 31, 2014, the Company is subject to non-U.S. income tax examinations for the tax years of 2007 through 2014. In addition, the Company is subject to state and local income tax examinations for the tax years 2004 through 2014.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
2014
 
2013
 
2012
Balance at beginning
of year
$
30,997

 
$
28,119

 
$
29,666

Additions based on
tax positions related
to the current year
3,370

 
3,480

 
3,760

Additions for tax
positions of prior
years
4,428

 
5,059

 
7,392

Reductions for tax
positions of prior
years
(2,349
)
 
(3,378
)
 
(6,583
)
Settlements
(4,089
)
 
(103
)
 
(1,139
)
Lapses of Statutes
of Limitations
(797
)
 
(2,180
)
 
(4,977
)
Balance at end of year
$
31,560

 
$
30,997

 
$
28,119


Included in the balance of unrecognized tax benefits at December 31, 2014, 2013 and 2012 is $28,208, $27,767 and $25,011 in unrecognized tax benefits, the recognition of which would have an effect on the effective tax rate.
Included in the balance of unrecognized tax benefits at December 31, 2014 is $4,372 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to federal audits of partnership investments, assessed state income tax audits, federal and state settlement negotiations currently in progress and expiring statutes in federal, foreign and state jurisdictions.
The Company classifies all income tax related interest and penalties as income tax expense. During the years ended December 31, 2014 and 2013, there was an increase in income tax interest and penalties of $2,144 and $103, respectively. In the 2012 tax year, there was a release of $1,532. At December 31, 2014, 2013 and 2012, the Company accrued $5,732, $6,246 and $6,178, respectively, for the potential payment of interest and penalties.
Net Income Per Common Share
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE 
 
2014
 
2013
 
2012
Basic
 
 
 
 
 
Average common shares outstanding
96,190,101

 
100,897,512

 
101,714,901

 
 
 
 
 
 
Net income
$
865,887

 
$
752,561

 
$
631,034

Less net income allocated to unvested restricted shares
(4,892
)
 
(4,596
)
 
(5,114
)
Net income allocated to common shares
$
860,995

 
$
747,965

 
$
625,920

Net income per common share
$
8.95

 
$
7.41

 
$
6.15

Diluted
 
 
 
 
 
Average common shares outstanding
96,190,101

 
100,897,512

 
101,714,901

Stock options and other contingently issuable shares (a)
1,885,334

 
2,151,359

 
2,215,528

Average common shares outstanding assuming dilution
98,075,435

 
103,048,871

 
103,930,429

 
 
 
 
 
 
Net income
$
865,887

 
$
752,561

 
$
631,034

Less net income allocated to unvested restricted shares
assuming dilution
(4,804
)
 
(4,509
)
 
(5,008
)
Net income allocated to common shares assuming dilution
$
861,083

 
$
748,052

 
$
626,026

Net income per common share
$
8.78

 
$
7.26

 
$
6.02


(a)
Stock options and other contingently issuable shares excludes 608,477, 842,354 and 1,047,734 shares at December 31, 2014, 2013 and 2012, respectively, due to their anti-dilutive effect.
The Company has two classes of participating securities: common shares and restricted shares, representing 99% and 1% of outstanding shares, respectively. The restricted shares are shares of unvested restricted stock granted under the Company’s restricted stock award program. Unvested restricted shares granted prior to April 21, 2010 received non-forfeitable dividends. Accordingly, the shares are considered a participating security and the two-class method of calculating basic and diluted earnings per share is required. Effective April 21, 2010, the restricted stock award program was revised and dividends on performance-based restricted shares granted after this date are deferred and payment is contingent upon the awards vesting. Only the time-based restricted shares, which continue to receive non-forfeitable dividends, are considered a participating security. Basic and diluted earnings per share are calculated using the two-class method in accordance with the Earnings Per Share Topic of the ASC.
Summary of Quarterly Results of Operations (Unaudited)
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) 
 
2014
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
 
Full Year
Net sales
$
2,366,556

 
$
3,042,995

 
$
3,150,570

 
$
2,569,412

 
$
11,129,533

Gross profit
1,065,901

 
1,409,653

 
1,470,955

 
1,217,975

 
5,164,484

Net income
115,457

 
291,447

 
326,240

 
132,743

 
865,887

Net income per common share - basic
1.16

 
3.00

 
3.42

 
1.40

 
8.95

Net income per common share - diluted
1.14

 
2.94

 
3.35

 
1.37

 
8.78


Net income in the fourth quarter was increased by inventory adjustments. Gross profit increased by $21,077 ($.13 per share), primarily as a result of adjustments based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related cost adjustments. Gross profit was also increased by $21,420 ($.13 a share) as a result of the TiO2 settlement. Selling, general and administrative expenses decreased $14,141 ($.09 a share) related to compensation and benefit expense adjustments. Other general expense net was increased by $25,012 ($.16 a share) as a result of provision for environmental related matters - net.
 
2013
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
 
Full Year
Net sales
$
2,167,168

 
$
2,713,889

 
$
2,847,417

 
$
2,457,058

 
$
10,185,532

Gross profit
962,851

 
1,233,579

 
1,295,958

 
1,124,178

 
4,616,566

Net income
116,185

 
257,287

 
262,966

 
116,123

 
752,561

Net income per common share - basic
1.13

 
2.51

 
2.61

 
1.16

 
7.41

Net income per common share - diluted
1.11

 
2.46

 
2.55

 
1.14

 
7.26


Net income in the fourth quarter was increased by inventory adjustments. Gross profit increased by $14,938 ($.09 per share), primarily as a result of adjustments based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related cost adjustments.
.
Operating Leases
OPERATING LEASES
OPERATING LEASES
The Company leases certain stores, warehouses, manufacturing facilities, office space and equipment. Renewal options are available on the majority of leases and, under certain conditions, options exist to purchase certain properties. Rental expense for operating leases, recognized on a straight-line basis over the lease term in accordance with the Leases Topic of the ASC was $376,914, $327,592 and $310,109 for 2014, 2013 and 2012, respectively. Certain store leases require the payment of contingent rentals based on sales in excess of specified minimums. Contingent rentals included in rent expense were $52,379, $44,084 and $39,340 in 2014, 2013 and 2012, respectively. Rental income, as lessor, from real estate leasing activities and sublease rental income for all years presented was
not significant. The following schedule summarizes the future minimum lease payments under noncancellable operating leases having initial or remaining terms in excess of one year at December 31, 2014:
2015
$
296,875

2016
254,608

2017
204,898

2018
156,495

2019
113,968

Later years
287,929

Total minimum lease payments
$
1,314,773

Reportable Segment Information
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 allocation of resources in accordance with the Segment Reporting 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”). Factors considered in determining the four Reportable Segments of the Company include the nature of business activities, the management structure directly accountable to the Company’s chief operating decision maker (CODM) for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors. The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative segment. See pages 6 through 15 of this report for more information about the Reportable Segments.
The Company’s CODM has been identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each Reportable Segment as well as a significant amount of additional financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessment and resource allocation decisions. The CODM evaluates the performance of and allocates resources to the Reportable Segments based on profit or loss before income taxes and cash generated from operations. The accounting policies of the Reportable Segments are the same as those described in Note 1 of this report.
The Paint Stores Group consisted of 4,003 company-operated specialty paint stores in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten, Jamaica, Curacao, Aruba and St. Lucia at December 31, 2014. Each store in this segment is engaged in the related business activity of selling paint, coatings and related products to end-use customers. The Paint Stores Group markets and sells Sherwin-Williams® branded architectural paint and coatings, protective and marine products, OEM product finishes and related items. These products are produced by manufacturing facilities in the Consumer Group. In addition, each store sells selected purchased associated products. The loss of any single customer would not have a material adverse effect on the business of this segment. During 2014, this segment opened 95 net new stores, consisting of 109 new stores opened (95 in the United States, 9 in Canada, 2 in Puerto Rico, 1 in Trinidad, 1 in Jamaica and 1 in St. Lucia) and 14 stores closed (11 in the United States and 3 in Canada). In 2013 and 2012, this segment opened or acquired 388 and 70 net new stores, respectively. A map on the cover flap of this report shows the number of paint stores and their geographic location. The CODM uses discrete financial information about the Paint Stores Group, supplemented with information by geographic region, product type and customer type, to assess performance of and allocate resources to the Paint Stores Group as a whole. In accordance with ASC 280-10-50-9, the Paint Stores Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.
The Consumer Group develops, manufactures and distributes a variety of paint, coatings and related products to third-party customers primarily in the United States and Canada and the Paint Stores Group. Approximately 66 percent of the total sales of the Consumer Group in 2014 were intersegment transfers of products primarily sold through the Paint Stores Group. Sales and marketing of certain controlled brand and private labeled products is performed by a direct sales staff. The products distributed through third-party customers are intended for resale to the ultimate end-user of the product. The Consumer Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment. This segment incurred most of the Company’s capital expenditures related to ongoing environmental compliance measures at sites currently in operation. The CODM uses discrete financial information about the Consumer Group, supplemented with information by product types and customer, to assess performance of and allocate resources to the Consumer Group as a whole. In accordance with ASC 280-10-50-9, the Consumer Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.
The Global Finishes Group develops, licenses, manufactures, distributes and sells a variety of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products in North and South America, Europe and Asia. This segment meets the demands of its customers for a consistent worldwide product development, manufacturing and distribution presence and approach to doing business. This segment licenses certain technology and trade names worldwide. Sherwin-Williams® and other controlled brand products are distributed through the Paint Stores Group and this segment’s 300 company-operated branches and by a direct sales staff and
outside sales representatives to retailers, dealers, jobbers, licensees and other third-party distributors. During 2014, this segment opened 1 new branch in the United States and closed 1 branch in the United States resulting in no net change. At December 31, 2014, the Global Finishes Group consisted of operations in the United States, subsidiaries in 34 foreign countries and income from licensing agreements in 16 foreign countries. The CODM uses discrete financial information about the Global Finishes Group reportable segment, supplemented with information about geographic divisions, business units and subsidiaries, to assess performance of and allocate resources to the Global Finishes Group as a whole. In accordance with ASC 280-10-50-9, the Global Finishes Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of this report shows the number of branches and their geographic locations.
The Latin America Coatings Group develops, licenses, manufactures, distributes and sells a variety of architectural paint and coatings, protective and marine products, OEM product finishes and related products in North and South America. This segment meets the demands of its customers for consistent regional product development, manufacturing and distribution presence and approach to doing business. Sherwin-Williams® and other controlled brand products are distributed through this segment’s 276 company-operated stores and by a direct sales staff and outside sales representatives to retailers, dealers, licensees and other third-party distributors. During 2014, this segment opened 3 new stores in South America and closed 9 (7 in South America and 2 in Mexico) for a net decrease of 6 stores. At December 31, 2014, the Latin America Coatings Group consisted of operations from subsidiaries in 9 foreign countries, 4 foreign joint ventures and income from licensing agreements in 7 foreign countries. The CODM uses discrete financial information about the Latin America Coatings Group, supplemented with information about geographic divisions, business units and subsidiaries, to assess performance of and allocate resources to the Latin America Coatings Group as a whole. In accordance with ASC 280-10-50-9, the Latin America Coatings Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of this report shows the number of stores and their geographic locations.
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 of all consolidated foreign subsidiaries were $2,203,804, $2,129,626 and $2,049,814 for 2014, 2013 and 2012, respectively. Segment profit of all consolidated foreign subsidiaries was $115,629, $106,166 and $158,377 for 2014, 2013 and 2012, respectively. The decrease in segment profit in 2013 was primarily due to Brazil tax assessments and unfavorable currency rate changes. Additionally, 2014 segment profit was adversely impacted by unfavorable currency rate changes. Domestic operations accounted for the remaining net external sales and segment profits. Long-lived assets consisted of Property, plant and equipment, Goodwill, Intangible assets, Deferred pension assets and Other assets. The aggregate total of long-lived assets for the Company was $3,139,272, $3,223,790 and, $3,085,499 at December 31, 2014, 2013 and 2012, respectively. Long-lived assets of consolidated foreign subsidiaries totaled $551,364, $648,908 and $616,869 at December 31, 2014, 2013 and 2012, respectively. Total Assets of the Company were $5,706,052, $6,382,507 and $6,234,737 at December 31, 2014, 2013 and 2012, respectively. Total assets of consolidated foreign subsidiaries were $1,359,991, $1,625,422 and $1,598,996, which represented 23.8 percent, 25.5 percent and 25.6 percent of the Company’s total assets at December 31, 2014, 2013 and 2012, respectively. No single geographic area outside the United States was significant relative to consolidated net sales or operating profits. Export sales and sales to any individual customer were each less than 10 percent of consolidated sales to unaffiliated customers during all years presented.
In the reportable segment financial information that follows, Segment profit was total net sales and intersegment transfers less operating costs and expenses. Identifiable assets were those directly identified with each reportable segment. The Administrative segment assets consisted primarily of cash and cash equivalents, investments, deferred pension assets and headquarters property, plant and equipment. The margin for each reportable segment was based upon total net sales
and intersegment transfers. Domestic intersegment transfers were 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 were accounted for at values comparable to normal unaffiliated customer sales. All intersegment transfers are eliminated within the Administrative segment.
(millions of dollars)
2014
 
Paint Stores
Group
 
Consumer
Group
 
Global
Finishes
Group
 
Latin America
Coatings
Group
 
Administrative
 
Consolidated
Totals
Net external sales
$
6,852

 
$
1,421

 
$
2,081

 
$
771

 
$
5

 
$
11,130

Intersegment transfers
 
 
2,745

 
8

 
40

 
(2,793
)
 
 
Total net sales and
intersegment transfers
$
6,852

 
$
4,166

 
$
2,089

 
$
811

 
$
(2,788
)
 
$
11,130

Segment profit
$
1,201

 
$
253

 
$
201

 
$
40

 
 
 
$
1,695

Interest expense
 
 
 
 
 
 
 
 
$
(64
)
 
(64
)
Administrative expenses and other
 
 
 
 
 
 
 
 
(373
)
 
(373
)
Income before income taxes
$
1,201

 
$
253

 
$
201

 
$
40

 
$
(437
)
 
$
1,258

Reportable segment margins
17.5
%
 
6.1
%
 
9.6
%
 
4.9
%
 
 
 
 
Identifiable assets
$
1,602

 
$
1,883

 
$
874

 
$
427

 
$
920

 
$
5,706

Capital expenditures
87

 
45

 
16

 
8

 
45

 
201

Depreciation
58

 
48

 
28

 
9

 
26

 
169

 
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
Paint Stores
Group
 
Consumer
Group
 
Global
Finishes
Group
 
Latin America
Coatings
Group
 
Administrative
 
Consolidated
Totals
Net external sales
$
6,002

 
$
1,342

 
$
2,005

 
$
832

 
$
5

 
$
10,186

Intersegment transfers
 
 
2,409

 
9

 
39

 
(2,457
)
 
 
Total net sales and
intersegment transfers
$
6,002

 
$
3,751

 
$
2,014

 
$
871

 
$
(2,452
)
 
$
10,186

Segment profit
$
991

 
$
242

 
$
170

 
$
39

 
 
 
$
1,442

Interest expense
 
 
 
 
 
 
 
 
$
(63
)
 
(63
)
Administrative expenses and other
 
 
 
 
 
 
 
 
(293
)
 
(293
)
Income before income taxes
$
991

 
$
242

 
$
170

 
$
39

 
$
(356
)
 
$
1,086

Reportable segment margins
16.5
%
 
6.5
%
 
8.4
%
 
4.5
%
 
 
 
 
Identifiable assets
$
1,668

 
$
1,762

 
$
964

 
$
485

 
$
1,504

 
$
6,383

Capital expenditures
73

 
40

 
15

 
7

 
32

 
167

Depreciation
55

 
45

 
29

 
10

 
20

 
159

 
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
Paint Stores
Group
 
Consumer
Group
 
Global
 Finishes
Group
 
Latin America
Coatings
Group
 
Administrative
 
Consolidated
Totals
Net external sales
$
5,410

 
$
1,322

 
$
1,961

 
$
836

 
$
5

 
$
9,534

Intersegment transfers
 
 
2,320

 
7

 
47

 
(2,374
)
 
 
Total net sales and
intersegment transfers
$
5,410

 
$
3,642

 
$
1,968

 
$
883

 
$
(2,369
)
 
$
9,534

Segment profit
$
862

 
$
217

 
$
147

 
$
81

 

 
$
1,307

Interest expense
 
 
 
 
 
 
 
 
$
(43
)
 
(43
)
Administrative expenses and other
 
 
 
 
 
 
 
 
(357
)
(1) 
(357
)
Income before income taxes
$
862

 
$
217

 
$
147

 
$
81

 
$
(400
)
 
$
907

Reportable segment margins
15.9
%
 
6.0
%
 
7.5
%
 
9.2
%
 
 
 
 
Identifiable assets
$
1,374

 
$
1,701

 
$
987

 
$
485

 
$
1,688

 
$
6,235

Capital expenditures
67

 
47

 
14

 
9

 
20

 
157

Depreciation
49

 
43

 
30

 
10

 
20

 
152

(1) 
Includes $80 pre-tax charge related to DOL Settlement. See Note 9.
Significant Accounting Policies (Policies)
Consolidation 
Consolidation. The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, “the Company”). Inter-company accounts and transactions have been eliminated.
Use of estimates 
Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those amounts.
Nature of operations 
Nature of operations. The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe and Asia.
Cash flows 
Cash flows. Management considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Cash and Cash equivalents 
Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.
Short-term investments 
Short-term investments: The carrying amounts reported for Short-term investments approximate fair value.
Investments in securities 
Investments in securities: Investments classified as available-for-sale are carried at market value. See the recurring fair value measurement table on page 45.
Non-traded investments 
Non-traded investments: The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These non-traded investments have been identified as variable interest entities. However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the investments are not consolidated. The Company uses the effective yield method to determine the carrying value of the investments. Under the effective yield method, the initial cost of the investments is amortized over the period that the tax credits are recognized.
Short-term borrowings and Long-term debt (including current portion) 
Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.
Long-term debt (including current portion): The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.
Derivative instruments 
Derivative instruments: The Company utilizes derivative instruments as part of its overall financial risk management policy. The Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months in 2014, 2013 and 2012, primarily to hedge against value changes in foreign currency. See Note 13.
Fair value measurements 
Fair value measurements. The following tables summarize the Company’s assets and liabilities measured on a recurring and non-recurring basis in accordance with the Fair Value Measurements and Disclosures Topic of the ASC:

Assets and Liabilities Reported at Fair Value on a Recurring Basis

 
Fair Value at
December 31,
2014
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Deferred compensation plan asset (a)
$
23,870

 
$
1,140

 
$
22,730

 
 
Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan liability (b)
$
34,443

 
$
34,443

 
 
 
 
(a)
The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $22,715.
(b)
The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.
Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis. Except for the acquisition-related fair value measurements described in Note 2 which qualify as level 2 measurements, there were no assets and liabilities measured at fair value on a nonrecurring basis in 2014.
Accounts receivable and allowance for doubtful accounts 
Accounts receivable and allowance for doubtful accounts. Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. The Company recorded an allowance for doubtful accounts of $53,770, $54,460 and $47,667 at December 31, 2014, 2013 and 2012, respectively, to reduce Accounts receivable to their estimated net realizable value. The allowance was based on an analysis of historical bad debts, a review of the aging of Accounts receivable and the current creditworthiness of customers. Account receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowances for doubtful collection of accounts are related to the creditworthiness of accounts and are included in Selling, general and administrative expenses.
Reserve for obsolescence 
Reserve for obsolescence. The Company recorded a reserve for obsolescence of $90,712, $97,523 and $88,356 at December 31, 2014, 2013 and 2012, respectively, to reduce Inventories to their estimated net realizable value. 
Goodwill 
Goodwill. Goodwill represents the cost in excess of fair value of net assets acquired in business combinations accounted for by the purchase method. In accordance with the Impairments Topic of the ASC, goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate potential impairment. See Note 4.
Intangible assets 
Intangible assets. Intangible assets include trademarks, non-compete covenants and certain intangible property rights. As required by the Goodwill and Other Intangibles Topic of the ASC, indefinite-lived trademarks are not amortized, but instead are tested annually for impairment, and between annual tests whenever an event occurs or circumstances indicate potential impairment. See Note 4. The cost of finite-lived trademarks, non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:
 
Useful Life
Finite-lived trademarks
5 years
Non-compete covenants
3 – 5 years
Certain intangible property rights
3 – 19 years

Impairment of long-lived assets 
Impairment of long-lived assets. In accordance with the Property, Plant and Equipment Topic of the ASC, management evaluates the recoverability and estimated remaining lives of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. See Notes 4 and 5.
Property, plant and equipment 
Property, plant and equipment. Property, plant and equipment is stated on the basis of cost. Depreciation is provided by the straight-line method. Depreciation and amortization are included in the appropriate Cost of goods sold or Selling, general and administrative expense caption on the Statements of Consolidated Income. Included in Property, plant and equipment are leasehold improvements. The major classes of assets and ranges of annual depreciation rates are:
Buildings
2.5% – 20.0%
Machinery and equipment
5.0% – 20.0%
Furniture and fixtures
10.0% – 33.3%
Automobiles and trucks
10.0% – 33.3%
Standby letters of credit 
Standby letters of credit. The Company occasionally enters into standby letter of credit agreements to guarantee various operating activities. These agreements provide credit availability to the various beneficiaries if certain contractual events occur.
Product warranties 
Product warranties. The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary.
Environmental matters 
Environmental matters. Capital expenditures for ongoing environmental compliance measures were recorded in Property, plant and equipment, and related expenses were included in the normal operating expenses of conducting business. The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms. See Notes 8 and 13.
Employee Stock Purchase and Savings Plan and preferred stock 
Employee Stock Purchase and Savings Plan and preferred stock. The Company accounts for the Employee Stock Purchase and Savings Plan (ESOP) in accordance with the Employee Stock Ownership Plans Subtopic of the Compensation – Stock Ownership Topic of the ASC. The Company recognized compensation expense for amounts contributed to the ESOP, and the ESOP used dividends on unallocated preferred shares to service debt. Unallocated preferred shares held by the ESOP were not considered outstanding in calculating earnings per share of the Company. During 2014, the Company redeemed all remaining preferred shares for cash. See Note 11.
Defined benefit pension and other postretirement benefit plans 
Defined benefit pension and other postretirement benefit plans. The Company accounts for its defined benefit pension and other postretirement benefit plans in accordance with the Retirement Benefits Topic of the ASC, which requires the recognition of a plan’s funded status as an asset for overfunded plans and as a liability for unfunded or underfunded plans. See Note 6.
Stock-based compensation 
Stock-based compensation. The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. See Note 12.
Foreign currency translation 
Foreign currency translation. All consolidated non-highly inflationary foreign operations use the local currency of the country of operation as the functional currency and translated the local currency asset and liability accounts at year-end exchange rates while income and expense accounts were translated at average exchange rates. The resulting translation adjustments were included in Cumulative other comprehensive loss, a component of Shareholders’ equity.
Cumulative other comprehensive loss 
Cumulative other comprehensive loss. At December 31, 2014, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $354,384, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $118,167 and unrealized net gains on marketable equity securities of $593. At December 31, 2013 and 2012, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $250,943 and $204,195, respectively, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $70,611 and $166,595, respectively, and unrealized gains on marketable equity securities of $510 and $401, respectively.
Revenue recognition 
Revenue recognition. All revenues were recognized when products were shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue was reasonably assured at the time of recognition.
Customer and vendor consideration 
Customer and vendor consideration. The Company offered certain customers rebate and sales incentive programs which were classified as reductions in Net sales. Such programs were in the form of volume rebates, rebates that constituted a percentage of sales or rebates for attaining certain sales goals. The Company received consideration from certain suppliers of raw materials in the form of volume rebates or rebates that
constituted a percentage of purchases. These rebates were recognized on an accrual basis by the Company as a reduction of the purchase price of the raw materials and a subsequent reduction of Cost of goods sold when the related product was sold.
Costs of goods sold 
Costs of goods sold. Included in Costs of goods sold were costs for materials, manufacturing, distribution and related support. Distribution costs included all expenses related to the distribution of products including inbound freight charges, purchase and receiving costs, warehousing costs, internal transfer costs and all costs incurred to ship products. Also included in Costs of goods sold were total technical expenditures, which included research and development costs, quality control, product formulation expenditures and other similar items.
Selling, general and administrative expenses 
Selling, general and administrative expenses. Selling costs included advertising expenses, marketing costs, employee and store costs and sales commissions. The cost of advertising was expensed as incurred. The Company incurred $299,201, $262,492 and $247,469 in advertising costs during 2014, 2013 and 2012, respectively. General and administrative expenses included human resources, legal, finance and other support and administrative functions.
Earnings per share 
Earnings per share. Shares of preferred stock held in an unallocated account of the ESOP (see Note 11) and common stock held in a revocable trust (see Note 10) were not considered outstanding shares for basic or diluted income per common share calculations. All references to “shares” or “per share” information throughout this report relate to common shares and are stated on a diluted per common share basis, unless otherwise indicated. Basic and diluted net income per common share were calculated using the two-class method in accordance with the Earnings Per Common Share Topic of the ASC. Basic net income per common share amounts were computed based on the weighted-average number of common shares outstanding during the year. Diluted net income per common share amounts were computed based on the weighted-average number of common shares outstanding plus all dilutive securities potentially outstanding during the year. See Note 15.
Impact of recently issued accounting policies 
Impact of recently issued accounting standards. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, "Revenue Recognition - Revenue from Contracts with Customers," which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard is effective for interim and annual periods beginning after December 15, 2016, and either full retrospective adoption or modified retrospective adoption is permitted. The Company is in the process of evaluating the impact of the standard.
Inventories 
Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method. The following presents the effect on inventories, net income and net income per common share had the Company used the first-in, first-out (FIFO) inventory valuation method adjusted for income taxes at the statutory rate and assuming no other adjustments. Management believes that the use of LIFO results in a better matching of costs and revenues.
Significant Accounting Policies (Tables)
Carrying amount and fair value of debt 
The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company's publicly traded debt and non-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. See Note 7.

 
December 31,
 
2014
 
2013
 
2012
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Publicly traded debt
$
1,120,924

 
$
1,160,280

 
$
1,620,646

 
$
1,614,739

 
$
1,630,056

 
$
1,706,487

Non-traded debt
5,056

 
4,812

 
4,675

 
4,430

 
5,798

 
5,600

Assets and Liabilities Reported at Fair Value on a Recurring Basis 
Assets and Liabilities Reported at Fair Value on a Recurring Basis

 
Fair Value at
December 31,
2014
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Deferred compensation plan asset (a)
$
23,870

 
$
1,140

 
$
22,730

 
 
Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan liability (b)
$
34,443

 
$
34,443

 
 
 
 
(a)
The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $22,715.
(b)
The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.
Amortized cost of non-compete covenants and certain intangible property rights 
The cost of finite-lived trademarks, non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:
 
Useful Life
Finite-lived trademarks
5 years
Non-compete covenants
3 – 5 years
Certain intangible property rights
3 – 19 years
Classes of assets and ranges of annual depreciation rates 
The major classes of assets and ranges of annual depreciation rates are:
Buildings
2.5% – 20.0%
Machinery and equipment
5.0% – 20.0%
Furniture and fixtures
10.0% – 33.3%
Automobiles and trucks
10.0% – 33.3%
Company's accrual for product warranty claims 
Changes in the Company’s accrual for product warranty claims during 2014, 2013 and 2012, including customer satisfaction settlements during the year, were as follows:
 
2014
 
2013
 
2012
Balance at January 1
$
26,755

 
$
22,710

 
$
22,071

Charges to expense
37,879

 
33,265

 
28,590

Settlements
(36,911
)
 
(29,220
)
 
(27,951
)
Balance at December 31
$
27,723

 
$
26,755

 
$
22,710

Acquisitions (Tables)
Summary of pro-forma consolidated financial information
The following unaudited pro-forma summary presents consolidated financial information as if the U.S./Canada business of Comex had been acquired at the beginning of 2013. The unaudited pro-forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisitions taken place on January 1, 2013 or the future results of operations of the combined companies under ownership and operation of the Company.
 
2014
 
2013
Net sales
$
11,129,533

 
$
10,540,181

Net income
865,887

 
725,774

Net income per common share:
 
 
 
Basic
8.95

 
7.13

Diluted
8.78

 
6.98

Inventories (Tables)
Inventories
The 2014 and 2013 liquidations increased net income by $196 and $169, respectively, while the 2012 liquidations reduced net income by $160.
 
2014
 
2013
 
2012
Percentage of total
inventories on LIFO
76
%
 
75
%
 
75
%
Excess of FIFO over
LIFO
$
331,867

 
$
337,214

 
$
357,303

Increase in net
income due to LIFO
3,230

 
12,299

 
13,365

Increase in net
income per common
share due to LIFO
.03

 
.12

 
.13

Goodwill, Intangible and Long-Lived Assets (Tables)
Carrying value of goodwill by reportable segment 
A summary of changes in the Company’s carrying value of goodwill by Reportable Segment is as follows:
Goodwill
Paint Stores
Group
 
Consumer
Group
 
Global
Finishes
Group
 
Latin America
Coatings Group
 
Consolidated
Totals
Balance at January 1, 2012 (a)
$
286,998

 
$
689,279

 
$
120,350

 
$
11,381

 
$
1,108,008

Acquisitions
 
 
17,357

 
24,707

 
 
 
42,064

Currency and other adjustments
(214
)
 
(344
)
 
7,230

 
(739
)
 
5,933

Balance at December 31, 2012 (a)
286,784

 
706,292

 
152,287

 
10,642

 
1,156,005

Acquisitions
1,885

 
 
 
17,963

 
 
 
19,848

Currency and other adjustments
(1,369
)
 
(2,941
)
 
8,048

 
(904
)
 
2,834

Balance at December 31, 2013 (a)
287,300

 
703,351

 
178,298

 
9,738

 
1,178,687

Currency and other adjustments
(1,866
)
 
(1,145
)
 
(17,287
)
 
(43
)
 
(20,341
)
Balance at December 31, 2014 (a)
$
285,434

 
$
702,206

 
$
161,011

 
$
9,695

 
$
1,158,346

(a)
Net of accumulated impairment losses of $8,904 ($8,113 in the Consumer Group and $791 in the Global Finishes Group).
Carrying value of intangible assets 
A summary of the Company’s carrying value of intangible assets is as follows: 
 
Finite-lived intangible assets
 
Trademarks
with indefinite
lives
 
Total
intangible
assets
 
Software
 
All other
 
Subtotal
 
December 31, 2014
 
 
 
 
 
 
 
 
 
Weighted-average amortization period
8 years

 
12 years

 
11 years

 
 
 
 
Gross
$
126,258

 
$
317,005

 
$
443,263

 
 
 
 
Accumulated amortization
(88,384
)
 
(215,518
)
 
(303,902
)
 
 
 
 
Net value
$
37,874

 
$
101,487

 
$
139,361

 
$
149,766

 
$
289,127

December 31, 2013
 
 
 
 
 
 
 
 
 
Weighted-average amortization period
8 years

 
10 years

 
9 years

 
 
 
 
Gross
$
114,404

 
$
327,962

 
$
442,366

 
 
 
 
Accumulated amortization
(77,018
)
 
(202,084
)
 
(279,102
)
 
 
 
 
Net value
$
37,386

 
$
125,878

 
$
163,264

 
$
150,035

 
$
313,299

December 31, 2012
 
 
 
 
 
 
 
 
 
Weighted-average amortization period
8 years

 
12 years

 
11 years

 
 
 
 
Gross
$
107,779

 
$
337,089

 
$
444,868

 
 
 
 
Accumulated amortization
(66,106
)
 
(193,959
)
 
(260,065
)
 
 
 
 
Net value
$
41,673

 
$
143,130

 
$
184,803

 
$
162,750

 
$
347,553

Exit or Disposal Activities (Tables)
Summary of activity and remaining liabilities associated with qualified exit costs
The tables on the following pages summarize the activity and remaining liabilities associated with qualified exit costs:
Exit Plan
 
Balance at
December 31,
2013
 
Provisions in
Cost of goods
sold or SG&A
 
Actual
expenditures
charged to
accrual
 
Balance at
December 31,
2014
Paint Stores Group stores shutdown in 2014:
 
 
 
 
 
 
 
 
Other qualified exit costs
 
 
 
$
280

 
 
 
$
280

Consumer Group facilities shutdown in 2014:
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
4,028

 
$
(1,296
)
 
2,732

Other qualified exit costs
 
 
 
781

 
 
 
781

Global Finishes Group exit of business in 2014:
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
2,500

 
(2,396
)
 
104

Other qualified exit costs
 
 
 
2,267

 
(1,187
)
 
1,080

Paint Stores Group facility shutdown in 2013:
 
 
 
 
 
 
 
 
Severance and related costs
 
$
977

 
2,126

 
(2,449
)
 
654

Other qualified exit costs
 
 
 
1,499

 
(294
)
 
1,205

Consumer Group facilities shutdown in 2013:
 
 
 
 
 
 
 


Severance and related costs
 
598

 
97

 
(695
)
 

Global Finishes Group stores shutdown in 2013:
 
 
 
 
 
 
 


Severance and related costs
 
33

 
 
 
(5
)
 
28

Other qualified exit costs
 
220

 
 
 
(82
)
 
138

Latin America Coatings Group facilities
shutdown in 2013:
 
 
 
 
 
 
 
 
Severance and related costs
 
123

 
 
 
(123
)
 

Paint Stores Group stores shutdown in 2012:
 
 
 
 
 
 
 
 
Other qualified exit costs
 
244

 
 
 
(51
)
 
193

Global Finishes Group facilities shutdown in 2012:
 
 
 
 
 
 
 


Severance and related costs
 
2,177

 
 
 
(1,863
)
 
314

Other qualified exit costs
 
83

 
 
 
 
 
83

Other qualified exit costs for facilities
shutdown prior to 2012
 
1,365

 
 
 
(441
)
 
924

Totals
 
$
5,820

 
$
13,578

 
$
(10,882
)
 
$
8,516

Exit Plan
 
Balance at
December 31,
2012
 
Provisions in
Cost of goods
sold or SG&A
 
Actual
expenditures
charged to
accrual
 
Adjustments to
prior provisions
in Other general
expense - net
 
Balance at
December 31,
2013
Paint Stores Group stores shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
$
1,004

 
$
(27
)
 
 
 
$
977

Consumer Group facilities shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
598

 
 
 
 
 
598

Global Finishes Group branches shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
278

 
(25
)
 
 
 
253

Latin America Coatings Group facilities
shutdown in 2013:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
123

 
 
 
 
 
123

Paint Stores Group stores shutdown in 2012:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
$
313

 
 
 
(68
)
 
$
(1
)
 
244

Global Finishes Group facilities shutdown in 2012:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
2,236

 
2,533

 
(2,592
)
 
 
 
2,177

Other qualified exit costs
 
3,430

 
83

 
(3,530
)
 
100

 
83

Global Finishes Group branches shutdown in 2011:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
290

 
 
 
(222
)
 
 
 
68

Other qualified exit costs for facilities
shutdown prior to 2011
 
2,288

 
 
 
(955
)
 
(36
)
 
1,297

Totals
 
$
8,557

 
$
4,619

 
$
(7,419
)
 
$
63

 
$
5,820


Exit Plan
 
Balance at
January 1, 2012
 
Provisions in
Cost of goods
sold or SG&A
 
Actual
expenditures
charged to
accrual
 
Adjustments to
prior provisions
in Other general
expense - net
 
Balance at
December 31,
2012
Paint Stores Group stores shutdown
in 2012:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
 
 
$
313

 
 
 
 
 
$
313

Global Finishes Group facility shutdown
in 2012:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
 
 
3,933

 
$
(1,697
)
 
 
 
2,236

Other qualified exit costs
 
 
 
3,430

 
 
 
 
 
3,430

Consumer Group manufacturing facilities
shutdown in 2011:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
$
197

 
 
 
(133
)
 
$
(64
)
 
 
Paint Stores Group stores shutdown
in 2011:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
156

 
 
 
(144
)
 
(12
)
 
 
Global Finishes Group branches shutdown
in 2011:
 
 
 
 
 
 
 
 
 
 
Severance and related costs
 
129

 
 
 
(134
)
 
5

 
 
Other qualified exit costs
 
470

 
 
 
(180
)
 
 
 
290

Global Finishes Group branches shutdown
in 2010:
 
 
 
 
 
 
 
 
 
 
Other qualified exit costs
 
955

 
 
 
(133
)
 
 
 
822

Other qualified exit costs for facilities
shutdown prior to 2010
 
8,493

 
 
 
(2,156
)
 
(4,871
)
 
1,466

Totals
 
$
10,400

 
$
7,676

 
$
(4,577
)
 
$
(4,942
)
 
$
8,557



Pension, Health Care and Postretirement Benefits Other Than Pensions (Tables)
Health care, pension and other benefits 
The following table summarizes the components of the net pension costs and Cumulative other comprehensive loss related to the defined benefit pension plans:
 
Domestic
Defined Benefit Pension Plans
 
Foreign
Defined Benefit Pension Plans
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Net pension costs:
 
 
 
 
 
 
 
 
 
 
 
Service costs
$
21,342

 
$
23,176

 
$
19,061

 
$
5,261

 
$
5,039

 
$
3,654

Interest costs
26,266

 
18,444

 
17,442

 
10,422

 
7,940

 
6,927

Expected returns on plan assets
(51,293
)
 
(42,937
)
 
(44,841
)
 
(10,836
)
 
(7,487
)
 
(6,799
)
Amortization of prior service costs
1,837

 
1,823

 
1,591

 
 
 
 
 
 
Amortization of actuarial losses
 
 
13,147

 
22,205

 
1,413

 
1,716

 
1,022

Ongoing pension (credits) costs
(1,848
)
 
13,653

 
15,458

 
6,260

 
7,208

 
4,804

Settlement (credits) costs
 
 
 
 
 
 
(3,422
)
 
(220
)
 
47

Net pension (credits) costs
(1,848
)
 
13,653

 
15,458

 
2,838

 
6,988

 
4,851

Other changes in plan assets and projected benefit
obligation recognized in Cumulative other comprehensive loss (before taxes):
 
 
 
 
 
 
 
 
 
 
 
Net actuarial losses (gains) arising during the year
47,785

 
(90,669
)
 
(26,459
)
 
21,792

 
(5,487
)
 
14,131

Prior service costs during the year
2,242

 
1,756

 
2,495

 
 
 
 
 
 
Amortization of prior service costs
(1,837
)
 
(1,823
)
 
(1,591
)
 
 
 
 
 
 
Amortization of actuarial losses
 
 
(13,147
)
 
(22,205
)
 
(1,413
)
 
(1,716
)
 
(1,022
)
Exchange rate (loss) gain recognized during year
 
 
 
 
 
 
(7,988
)
 
819

 
1,464

Total recognized in Cumulative other
comprehensive loss
48,190

 
(103,883
)
 
(47,760
)
 
12,391

 
(6,384
)
 
14,573

Total recognized in net pension costs (credits)
and Cumulative other comprehensive loss
$
46,342

 
$
(90,230
)
 
$
(32,302
)
 
$
15,229

 
$
604

 
$
19,424

Fair value of the defined benefit pension plan assets 
The following tables summarize the fair value of the defined benefit pension plan assets at December 31, 2014, 2013 and 2012:
 
Fair Value at
December 31,
2014
 
Quoted Prices in 
Active Markets for Identical
Assets
(Level 1)
 
Significant Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable 
Inputs
(Level 3)
Investments at fair value:
 
 
 
 
 
 
 
Short-term investments (a)
$
14,846

 
 
 
$
14,846

 
 
Equity investments (b)
739,358

 
$
404,542

 
334,816

 
 
Fixed income investments (c)
285,042

 
141,529

 
143,513

 
 
Other assets (d)
44,469

 
 
 
28,435

 
$
16,034

 
$
1,083,715

 
$
546,071

 
$
521,610

 
$
16,034

 
 
 
 
 
 
 
 
 
Fair Value at
December 31,
2013
 
Quoted Prices in
Active Markets for Identical
Assets
(Level 1)
 
Significant Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
Investments at fair value:
 
 
 
 
 
 
 
Short-term investments (a)
$
15,055

 
$
1,941

 
$
13,114

 
 
Equity investments (b)
736,873

 
419,779

 
317,094

 
 
Fixed income investments (c)
255,927

 
125,377

 
130,550

 
 
Other assets (d)
47,494

 
 
 
29,553

 
$
17,941

 
$
1,055,349

 
$
547,097

 
$
490,311

 
$
17,941

 
 
 
 
 
 
 
 
 
Fair Value at
December 31,
2012
 
Quoted Prices in
Active Markets for Identical
Assets
(Level 1)
 
Significant Other
Observable 
Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
Investments at fair value:
 
 
 
 
 
 
 
Short-term investments (a)
$
68,795

 
 
 
$
68,795

 
 
Equity investments (b)
490,993

 
$
243,553

 
247,440

 
 
Fixed income investments (c)
239,558

 
131,276

 
108,282

 


Other assets (d)
37,230

 
 
 
18,380

 
$
18,850

 
$
836,576

 
$
374,829

 
$
442,897

 
$
18,850


(a)
This category includes a full range of high quality, short-term money market securities.
(b)
This category includes actively managed equity assets that track primarily to the S&P 500.
(c)
This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.
(d)
This category consists of venture capital funds.
Changes in the fair value of the defined benefit pension plan assets classified as level 3 
The following tables summarize the changes in the fair value of the defined benefit pension plan assets classified as level 3 at December 31, 2014, 2013 and 2012: 
 
Balance at
December 31,
2013
 
Dispositions
 
Realized and Unrealized Gains
 
Balance at
December 31,
2014
Other assets
$
17,941

 
$
(4,320
)
 
$
2,413

 
$
16,034

 
 
 
 
 
 
 
 
 
Balance at
December 31,
2012
 
Dispositions
 
Realized and Unrealized Gains
 
Balance at
December 31,
2013
Other assets
$
18,850

 
$
(4,068
)
 
$
3,159

 
$
17,941

 
 
 
 
 
 
 
 
 
Balance at
January 1, 
2012
 
Dispositions
 
Realized and Unrealized Gains
 
Balance at
December 31,
2012
Other assets
$
20,900

 
$
(3,827
)
 
$
1,777

 
$
18,850

Obligations, plan assets and assumption used for defined benefit pension plan 
The following table summarizes the obligations, plan assets and assumptions used for the defined benefit pension plans, which are all measured as of December 31:
 
Domestic
Defined Benefit Pension Plans
 
Foreign
Defined Benefit Pension Plans
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Accumulated benefit obligations
at end of year
$
648,480

 
$
577,736

 
$
460,591

 
$
203,610

 
$
187,670

 
$
142,769

Projected benefit obligations:
 
 
 
 
 
 
 
 
 
 
 
Balances at beginning of year
$
582,036

 
$
466,827

 
$
410,029

 
$
222,996

 
$
168,758

 
$
141,465

Service costs
21,342

 
23,176

 
19,061

 
5,261

 
5,039

 
3,654

Interest costs
26,266

 
18,444

 
17,442

 
10,422

 
7,940

 
6,927

Actuarial losses (gains)
68,748

 
(5,488
)
 
48,346

 
32,551

 
5,939

 
17,532

Acquisitions of businesses and other
2,242

 
113,174

 
2,496

 
(10,062
)
 
39,622

 
(975
)
Effect of foreign exchange
 
 
 
 
 
 
(18,987
)
 
1,549

 
6,633

Benefits paid
(47,296
)
 
(34,097
)
 
(30,547
)
 
(7,657
)
 
(5,851
)
 
(6,478
)
Balances at end of year
653,338

 
582,036

 
466,827

 
234,524

 
222,996

 
168,758

Plan assets:
 
 
 
 
 
 
 
 
 
 
 
Balances at beginning of year
870,386

 
703,563

 
614,463

 
184,963

 
133,013

 
118,060

Actual returns on plan assets
72,256

 
128,117

 
119,647

 
20,240

 
20,316

 
10,201

Acquisitions of businesses and other
725

 
72,803

 
 
 
3,958

 
36,106

 
6,205

Effect of foreign exchange
 
 
 
 
 
 
(13,859
)
 
1,379

 
5,025

Benefits paid
(47,296
)
 
(34,097
)
 
(30,547
)
 
(7,657
)
 
(5,851
)
 
(6,478
)
Balances at end of year
896,071

 
870,386

 
703,563

 
187,645

 
184,963

 
133,013

Excess (deficient) plan assets over
projected benefit obligations
$
242,733

 
$
288,350

 
$
236,736

 
$
(46,879
)
 
$
(38,033
)
 
$
(35,745
)
Assets and liabilities recognized in the
Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
Deferred pension assets
$
242,733

 
$
288,350

 
$
245,588

 
$
7,411

 
$
14,096

 
$
4,323

Other accruals
 
 
 
 
 
 
(810
)
 
(1,126
)
 
(869
)
Other long-term liabilities
 
 

 
(8,852
)
 
(53,480
)
 
(51,003
)
 
(39,199
)
 
$
242,733

 
$
288,350

 
$
236,736

 
$
(46,879
)
 
$
(38,033
)
 
$
(35,745
)
Amounts recognized in Cumulative other
comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Net actuarial losses
$
(107,057
)
 
$
(59,272
)
 
$
(163,088
)
 
$
(47,574
)
 
$
(35,183
)
 
$
(41,567
)
Prior service costs
(6,448
)
 
(6,043
)
 
(6,110
)
 
 
 
 
 
 
 
$
(113,505
)
 
$
(65,315
)
 
$
(169,198
)
 
$
(47,574
)
 
$
(35,183
)
 
$
(41,567
)
Weighted-average assumptions used to
determine projected benefit obligations:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.95
%
 
4.65
%
 
3.73
%
 
3.92
%
 
4.89
%
 
4.58
%
Rate of compensation increase
4.00
%
 
4.00
%
 
4.00
%
 
3.70
%
 
4.31
%
 
4.08
%
Weighted-average assumptions used to
determine net pension costs:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.65
%
 
3.73
%
 
4.40
%
 
4.89
%
 
4.58
%
 
4.94
%
Expected long-term rate of
return on assets
6.00
%
 
6.00
%
 
7.50
%
 
5.58
%
 
5.67
%
 
6.04
%
Rate of compensation increase
4.00
%
 
4.00
%
 
4.00
%
 
4.31
%
 
4.08
%
 
4.04
%
Obligation and the assumptions used for postretirement benefits other than pensions 
The following table summarizes the obligation and the assumptions used for postretirement benefits other than pensions:
 
Postretirement Benefits Other than Pensions
 
2014
 
2013
 
2012
Benefit obligation:
 
 
 
 
 
Balance at beginning of year - unfunded
$
286,651

 
$
338,134

 
$
316,795

Service cost
2,434

 
3,061

 
2,943

Interest cost
12,782

 
12,183

 
13,520

Actuarial loss (gain)
27,757

 
(50,593
)
 
18,961

Plan amendments
(19,043
)
 
(2,503
)
 
 
Benefits paid
(15,432
)
 
(13,631
)
 
(14,085
)
Balance at end of year - unfunded
$
295,149

 
$
286,651

 
$
338,134

Liabilities recognized in the Consolidated Balance Sheets:
 
 
 
 
 
Postretirement benefits other than pensions
$
(277,892
)
 
$
(268,874
)
 
$
(320,223
)
Other accruals
(17,257
)
 
(17,777
)
 
(17,911
)
 
$
(295,149
)
 
$
(286,651
)
 
$
(338,134
)
Amounts recognized in Cumulative other comprehensive loss:
 
 
 
 
 
Net actuarial losses
$
(36,044
)
 
$
(8,287
)
 
$
(62,814
)
Prior service costs
21,043

 
2,503

 
328

 
$
(15,001
)
 
$
(5,784
)
 
$
(62,486
)
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
 
Discount rate
3.90
%
 
4.60
%
 
3.70
%
Health care cost trend rate - pre-65
7.00
%
 
7.50
%
 
8.00
%
Health care cost trend rate - post-65
6.50
%
 
6.50
%
 
8.00
%
Prescription drug cost increases
6.50
%
 
7.00
%
 
8.00
%
Employer Group Waiver Plan (EGWP) trend rate
8.00
%
 
 
 
 
Weighted-average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
Discount rate
4.60
%
 
3.70
%
 
4.40
%
Health care cost trend rate - pre-65
7.50
%
 
8.00
%
 
8.00
%
Health care cost trend rate - post-65
6.50
%
 
8.00
%
 
8.00
%
Prescription drug cost increases
7.00
%
 
8.00
%
 
8.00
%
Components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions 
The following table summarizes the components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions:
 
Postretirement Benefits Other than Pensions
 
2014
 
2013
 
2012
Net periodic benefit cost:
 
 
 
 
 
Service cost
$
2,434

 
$
3,061

 
$
2,943

Interest cost
12,782

 
12,183

 
13,520

Amortization of actuarial losses
 
 
3,934

 
1,715

Amortization of prior service credit
(503
)
 
(328
)
 
(656
)
Net periodic benefit cost
14,713

 
18,850

 
17,522

Other changes in projected benefit obligation recognized in
Cumulative other comprehensive loss (before taxes):
 
 
 
 
 
Net actuarial loss (gain)
27,757

 
(50,593
)
 
18,961

Prior service credit arising during the year
(19,043
)
 
(2,503
)
 
 
Amortization of actuarial losses
 
 
(3,934
)
 
(1,715
)
Amortization of prior service credit
503

 
328

 
656

Total recognized in Cumulative other comprehensive loss
9,217

 
(56,702
)
 
17,902

Total recognized in net periodic benefit cost and
Cumulative other comprehensive loss
$
23,930

 
$
(37,852
)
 
$
35,424

Significant effect on amounts reported for service and interest rate component and postretirement health care benefit obligation 
A one-percentage-point change in assumed health care and prescription drug cost trend rates would have had the following effects at December 31, 2014:
 
One-Percentage Point
 
Increase
 
(Decrease)
Effect on total of service and interest cost components
$
23

 
$
(66
)
Effect on the postretirement benefit obligation
$
734

 
$
(1,697
)
Retiree health care benefit cash payments 
The Company expects to make retiree health care benefit cash payments and to receive government reimbursements as follows:
 
Retiree Health
Care Benefits
 
Government Reimbursement
 
Expected Cash
Payments - Net
2015
$
19,563

 
$
(2,305
)
 
$
17,258

2016
20,759

 
(2,474
)
 
18,285

2017
22,000

 
(2,667
)
 
19,333

2018
22,884

 
(2,888
)
 
19,996

2019
23,486

 
(3,107
)
 
20,379

2020 through 2024
115,694

 
(16,779
)
 
98,915

Total expected benefit cash payments
$
224,386

 
$
(30,220
)
 
$
194,166

Debt (Tables)
Long-term Debt
Long-term debt
 
Due Date
 
2014
 
2013
 
2012
1.35% Senior Notes
2017
 
$
699,460

 
$
699,277

 
$
699,091

4.00% Senior Notes
2042
 
298,595

 
298,545

 
298,493

7.375% Debentures
2027
 
119,369

 
119,366

 
129,060

7.45% Debentures
2097
 
3,500

 
3,500

 
3,500

2.02% to 8.00% Promissory Notes
Through 2029
 
1,791

 
1,685

 
2,109

3.125% Senior Notes
2014
 
 
 
 
 
499,912

 
 
 
$
1,122,715

 
$
1,122,373

 
$
1,632,165

Capital Stock (Tables)
Capital Stock
 
Common Shares
in Treasury
 
Common Shares
Outstanding
Balance at January 1, 2012
3,601,159

 
103,854,234

Shares tendered as payment for option rights exercised
7,766

 
(7,766
)
Shares issued for exercise of option rights
 
 
4,140,822

Shares tendered in connection with grants of restricted stock
143,979

 
(143,979
)
Net shares issued for grants of restricted stock
 
 
26,756

Treasury stock purchased
4,600,000

 
(4,600,000
)
Balance at December 31, 2012
8,352,904

 
103,270,067

Shares tendered as payment for option rights exercised
2,697

 
(2,697
)
Shares issued for exercise of option rights
 
 
1,127,942

Shares tendered in connection with grants of restricted stock
116,897

 
(116,897
)
Net shares issued for grants of restricted stock
 
 
150,965

Treasury stock purchased
4,300,000

 
(4,300,000
)
Balance at December 31, 2013
12,772,498

 
100,129,380

Shares tendered as payment for option rights exercised
7,229

 
(7,229
)
Shares issued for exercise of option rights
 
 
1,423,395

Shares tendered in connection with grants of restricted stock
108,352

 
(108,352
)
Net shares issued for grants of restricted stock
 
 
191,979

Treasury stock purchased
6,925,000

 
(6,925,000
)
Balance at December 31, 2014
19,813,079

 
94,704,173

Stock-Based Compensation (Tables)
Option rights 
The fair value of the Company’s option rights was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:
 
2014
 
2013
 
2012
Risk-free interest rate
1.47%
 
1.37%
 
.78%
Expected life of option rights
5.10 years
 
5.10 years
 
5.11 years
Expected dividend yield
of stock
1.19%
 
1.32%
 
1.43%
Expected volatility of stock
.223
 
.281
 
.274
Company's non-qualified and incentive stock option right activity for employees and nonemployee directors 
A summary of the Company’s non-qualified and incentive stock option right activity for employees and nonemployee directors, and related information for the years ended December 31 is shown in the following table:
 
2014
 
2013
 
2012
 
Optioned
Shares
 
Weighted-
Average
Exercise
Price
Per Share
 
Aggregate
Intrinsic
Value
 
Optioned
Shares
 
Weighted-
Average
Exercise
Price
Per Share
 
Aggregate
Intrinsic
Value
 
Optioned
Shares
 
Weighted-
Average
Exercise
Price
Per Share
 
Aggregate
Intrinsic
Value
Outstanding beginning
of year
6,484,592

 
$
96.25

 
 
 
6,748,126

 
$
79.39

 
 
 
9,857,695

 
$
60.31

 
 
Granted
672,565

 
224.65

 
 
 
898,728

 
179.67

 
 
 
1,089,240

 
152.93

 
 
Exercised
(1,421,045
)
 
70.71

 
 
 
(1,127,942
)
 
61.46

 
 
 
(4,140,822
)
 
53.40

 
 
Forfeited
(31,617
)
 
158.92

 
 
 
(33,278
)
 
115.24

 
 
 
(57,730
)
 
78.01

 
 
Expired
(4,603
)
 
86.66

 
 
 
(1,042
)
 
79.73

 
 
 
(257
)
 
72.65

 
 
Outstanding end of year
5,699,892

 
$
117.31

 
$
830,647

 
6,484,592

 
$
96.25

 
$
563,554

 
6,748,126

 
$
79.39

 
$
494,699

Exercisable at end of year
4,095,246

 
$
87.79

 
$
717,691

 
4,424,674

 
$
71.86

 
$
492,689

 
4,245,891

 
$
61.43

 
$
386,484

Summary of grants of restricted stock to certain officers, key employees and non-employee directors 
A summary of grants of restricted stock to certain officers, key employees and nonemployee directors during each year is as follows:
 
2014
 
2013
 
2012
Restricted stock granted
201,412

 
172,406

 
301,856

Weighted-average per share
fair value of restricted stock
granted during the year
$
191.60

 
$
163.63

 
$
99.47

Summary of the Company's restricted stock activity 
A summary of the Company’s restricted stock activity for the years ended December 31 is shown in the following table:
 
2014
 
2013
 
2012
Outstanding at beginning
of year
749,382

 
919,748

 
1,304,891

Granted
201,412

 
172,406

 
301,856

Vested
(294,438
)
 
(334,750
)
 
(412,859
)
Forfeited
(1,080
)
 
(8,022
)
 
(274,140
)
Outstanding at end of year
655,276

 
749,382

 
919,748

Other (Tables)
Other general expense - net 
Included in Other general expense - net were the following:
 
2014
 
2013
 
2012
Provisions for environmental
matters - net
$
36,046

 
$
(2,751
)
 
$
6,736

Loss on disposition of assets
1,436

 
5,207

 
3,454

Net expense (income) of exit or disposal activities
 
 
63

 
(4,942
)
Total
$
37,482

 
$
2,519

 
$
5,248

Other expense (income) - net 
. Included in Other (income) expense - net were the following:
 
2014
 
2013
 
2012
Dividend and royalty income
$
(4,864
)
 
$
(5,904
)
 
$
(4,666
)
Net expense from
financing activities
11,367

 
9,829

 
9,220

Foreign currency transaction related losses (gains)
3,603

 
7,669

 
(3,071
)
Other income
(37,524
)
 
(22,684
)
 
(21,074
)
Other expense
12,018

 
12,026

 
9,651

Total
$
(15,400
)
 
$
936

 
$
(9,940
)
Income Taxes (Tables)
Components of deferred tax assets and liabilities 
Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2014, 2013 and 2012 were as follows:
 
2014
 
2013
 
2012
Deferred tax assets:
 
 
 
 
 
Exit costs, environ-mental and other
similar items
$
56,441

 
$
45,322

 
$
45,403

Deferred employee
benefit items
55,765

 
32,600

 
93,039

Other items (each
less than 5 percent
of total assets)
85,841

 
53,727

 
73,388

Total deferred
tax assets
$
198,047

 
$
131,649

 
$
211,830

Deferred tax liabilities:
 
 
 
 
 
Depreciation and
amortization
$
227,765

 
$
214,696

 
$
202,891

Components of the provisions for income taxes 
Significant components of the provisions for income taxes were as follows:
 
2014
 
2013
 
2012
Current:
 
 
 
 
 
Federal
$
308,283

 
$
229,997

 
$
207,791

Foreign
53,045

 
42,543

 
51,264

State and local
50,049

 
33,082

 
27,642

Total current
411,377

 
305,622

 
286,697

Deferred:
 
 
 
 
 
Federal
(14,974
)
 
30,384

 
8,692

Foreign
(7,361
)
 
(9,041
)
 
(16,964
)
State and local
3,297

 
6,432

 
(2,150
)
Total deferred
(19,038
)
 
27,775

 
(10,422
)
Total provisions for
income taxes
$
392,339

 
$
333,397

 
$
276,275

Components of income before income taxes and minority interest used for income tax purpose 
Significant components of income before income taxes as used for income tax purposes, were as follows:
 
2014
 
2013
 
2012
Domestic
$
1,113,527

 
$
969,790

 
$
712,873

Foreign
144,698

 
116,168

 
194,436

 
$
1,258,225

 
$
1,085,958

 
$
907,309

Reconciliation of the statutory federal income tax rate to the effective tax rate 
A reconciliation of the statutory federal income tax rate to the effective tax rate follows: 
 
2014
 
2013
 
2012
Statutory federal
income tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Effect of:
 
 
 
 
 
State and local
income taxes
2.8

 
2.4

 
1.8

Investment vehicles
(2.5
)
 
(2.1
)
 
(2.1
)
Domestic production
activities
(2.5
)
 
(2.2
)
 
(1.9
)
Other - net
(1.6
)
 
(2.4
)
 
(2.4
)
Effective tax rate
31.2
 %
 
30.7
 %
 
30.4
 %
Reconciliation of unrecognized tax benefits 
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
2014
 
2013
 
2012
Balance at beginning
of year
$
30,997

 
$
28,119

 
$
29,666

Additions based on
tax positions related
to the current year
3,370

 
3,480

 
3,760

Additions for tax
positions of prior
years
4,428

 
5,059

 
7,392

Reductions for tax
positions of prior
years
(2,349
)
 
(3,378
)
 
(6,583
)
Settlements
(4,089
)
 
(103
)
 
(1,139
)
Lapses of Statutes
of Limitations
(797
)
 
(2,180
)
 
(4,977
)
Balance at end of year
$
31,560

 
$
30,997

 
$
28,119

Net Income Per Common Share (Tables)
Computation of net income per common share
 
2014
 
2013
 
2012
Basic
 
 
 
 
 
Average common shares outstanding
96,190,101

 
100,897,512

 
101,714,901

 
 
 
 
 
 
Net income
$
865,887

 
$
752,561

 
$
631,034

Less net income allocated to unvested restricted shares
(4,892
)
 
(4,596
)
 
(5,114
)
Net income allocated to common shares
$
860,995

 
$
747,965

 
$
625,920

Net income per common share
$
8.95

 
$
7.41

 
$
6.15

Diluted
 
 
 
 
 
Average common shares outstanding
96,190,101

 
100,897,512

 
101,714,901

Stock options and other contingently issuable shares (a)
1,885,334

 
2,151,359

 
2,215,528

Average common shares outstanding assuming dilution
98,075,435

 
103,048,871

 
103,930,429

 
 
 
 
 
 
Net income
$
865,887

 
$
752,561

 
$
631,034

Less net income allocated to unvested restricted shares
assuming dilution
(4,804
)
 
(4,509
)
 
(5,008
)
Net income allocated to common shares assuming dilution
$
861,083

 
$
748,052

 
$
626,026

Net income per common share
$
8.78

 
$
7.26

 
$
6.02


(a)
Stock options and other contingently issuable shares excludes 608,477, 842,354 and 1,047,734 shares at December 31, 2014, 2013 and 2012, respectively, due to their anti-dilutive effect.
Summary of Quarterly Results of Operations (Tables)
Summary of quarterly results of operations
 
2014
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
 
Full Year
Net sales
$
2,366,556

 
$
3,042,995

 
$
3,150,570

 
$
2,569,412

 
$
11,129,533

Gross profit
1,065,901

 
1,409,653

 
1,470,955

 
1,217,975

 
5,164,484

Net income
115,457

 
291,447

 
326,240

 
132,743

 
865,887

Net income per common share - basic
1.16

 
3.00

 
3.42

 
1.40

 
8.95

Net income per common share - diluted
1.14

 
2.94

 
3.35

 
1.37

 
8.78

 
2013
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
 
Full Year
Net sales
$
2,167,168

 
$
2,713,889

 
$
2,847,417

 
$
2,457,058

 
$
10,185,532

Gross profit
962,851

 
1,233,579

 
1,295,958

 
1,124,178

 
4,616,566

Net income
116,185

 
257,287

 
262,966

 
116,123

 
752,561

Net income per common share - basic
1.13

 
2.51

 
2.61

 
1.16

 
7.41

Net income per common share - diluted
1.11

 
2.46

 
2.55

 
1.14

 
7.26

Operating Leases (Table)
Future minimum lease payments under noncancellable operating leases
The following schedule summarizes the future minimum lease payments under noncancellable operating leases having initial or remaining terms in excess of one year at December 31, 2014:
2015
$
296,875

2016
254,608

2017
204,898

2018
156,495

2019
113,968

Later years
287,929

Total minimum lease payments
$
1,314,773

Reportable Segment Information (Tables)
Reportable segment information
(millions of dollars)
2014
 
Paint Stores
Group
 
Consumer
Group
 
Global
Finishes
Group
 
Latin America
Coatings
Group
 
Administrative
 
Consolidated
Totals
Net external sales
$
6,852

 
$
1,421

 
$
2,081

 
$
771

 
$
5

 
$
11,130

Intersegment transfers
 
 
2,745

 
8

 
40

 
(2,793
)
 
 
Total net sales and
intersegment transfers
$
6,852

 
$
4,166

 
$
2,089

 
$
811

 
$
(2,788
)
 
$
11,130

Segment profit
$
1,201

 
$
253

 
$
201

 
$
40

 
 
 
$
1,695

Interest expense
 
 
 
 
 
 
 
 
$
(64
)
 
(64
)
Administrative expenses and other
 
 
 
 
 
 
 
 
(373
)
 
(373
)
Income before income taxes
$
1,201

 
$
253

 
$
201

 
$
40

 
$
(437
)
 
$
1,258

Reportable segment margins
17.5
%
 
6.1
%
 
9.6
%
 
4.9
%
 
 
 
 
Identifiable assets
$
1,602

 
$
1,883

 
$
874

 
$
427

 
$
920

 
$
5,706

Capital expenditures
87

 
45

 
16

 
8

 
45

 
201

Depreciation
58

 
48

 
28

 
9

 
26

 
169

 
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
Paint Stores
Group
 
Consumer
Group
 
Global
Finishes
Group
 
Latin America
Coatings
Group
 
Administrative
 
Consolidated
Totals
Net external sales
$
6,002

 
$
1,342

 
$
2,005

 
$
832

 
$
5

 
$
10,186

Intersegment transfers
 
 
2,409

 
9

 
39

 
(2,457
)
 
 
Total net sales and
intersegment transfers
$
6,002

 
$
3,751

 
$
2,014

 
$
871

 
$
(2,452
)
 
$
10,186

Segment profit
$
991

 
$
242

 
$
170

 
$
39

 
 
 
$
1,442

Interest expense
 
 
 
 
 
 
 
 
$
(63
)
 
(63
)
Administrative expenses and other
 
 
 
 
 
 
 
 
(293
)
 
(293
)
Income before income taxes
$
991

 
$
242

 
$
170

 
$
39

 
$
(356
)
 
$
1,086

Reportable segment margins
16.5
%
 
6.5
%
 
8.4
%
 
4.5
%
 
 
 
 
Identifiable assets
$
1,668

 
$
1,762

 
$
964

 
$
485

 
$
1,504

 
$
6,383

Capital expenditures
73

 
40

 
15

 
7

 
32

 
167

Depreciation
55

 
45

 
29

 
10

 
20

 
159

 
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
Paint Stores
Group
 
Consumer
Group
 
Global
 Finishes
Group
 
Latin America
Coatings
Group
 
Administrative
 
Consolidated
Totals
Net external sales
$
5,410

 
$
1,322

 
$
1,961

 
$
836

 
$
5

 
$
9,534

Intersegment transfers
 
 
2,320

 
7

 
47

 
(2,374
)
 
 
Total net sales and
intersegment transfers
$
5,410

 
$
3,642

 
$
1,968

 
$
883

 
$
(2,369
)
 
$
9,534

Segment profit
$
862

 
$
217

 
$
147

 
$
81

 

 
$
1,307

Interest expense
 
 
 
 
 
 
 
 
$
(43
)
 
(43
)
Administrative expenses and other
 
 
 
 
 
 
 
 
(357
)
(1) 
(357
)
Income before income taxes
$
862

 
$
217

 
$
147

 
$
81

 
$
(400
)
 
$
907

Reportable segment margins
15.9
%
 
6.0
%
 
7.5
%
 
9.2
%
 
 
 
 
Identifiable assets
$
1,374

 
$
1,701

 
$
987

 
$
485

 
$
1,688

 
$
6,235

Capital expenditures
67

 
47

 
14

 
9

 
20

 
157

Depreciation
49

 
43

 
30

 
10

 
20

 
152

(1) 
Includes $80 pre-tax charge related to DOL Settlement. See Note 9.
Significant Accounting Policies - Non-Traded Investments (Details Textual) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Non Traded Investments (Textual) [Abstract]
 
 
 
Carrying amount of the investments, included in other assets
$ 223,935 
$ 210,779 
$ 223,701 
Liability for estimated future capital contributions to the investments
$ 198,776 
$ 198,761 
$ 218,688 
Significant Accounting Policies - Long-term Debt (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Publicly Traded Debt [Member]
 
 
 
Financial Instruments
 
 
 
Carrying Amount
$ 1,120,924 
$ 1,620,646 
$ 1,630,056 
Fair Value
1,160,280 
1,614,739 
1,706,487 
Non-Traded Debt [Member]
 
 
 
Financial Instruments
 
 
 
Carrying Amount
5,056 
4,675 
5,798 
Fair Value
$ 4,812 
$ 4,430 
$ 5,600 
Significant Accounting Policies - Fair Value Measurements on Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
 
Assets:
 
Deferred compensation plan asset
$ 1,140 1
Liabilities:
 
Deferred compensation plan liability
34,443 2
Significant Other Observable Inputs (Level 2) [Member]
 
Assets:
 
Deferred compensation plan asset
22,730 1
Fair Value Measurements (Textual) [Abstract]
 
Cost basis of the investment funds
22,715 
Estimate of Fair Value Measurement [Member]
 
Assets:
 
Deferred compensation plan asset
23,870 1
Liabilities:
 
Deferred compensation plan liability
$ 34,443 2
Significant Accounting Policies (Details 2)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Amortization cost of non-compete covenants and certain intangible property rights
 
 
 
Useful life
11 years 
9 years 
11 years 
Finite-lived Trademarks [Member]
 
 
 
Amortization cost of non-compete covenants and certain intangible property rights
 
 
 
Useful life
5 years 
 
 
Minimum [Member] |
Non-Compete Covenants [Member]
 
 
 
Amortization cost of non-compete covenants and certain intangible property rights
 
 
 
Useful life
3 years 
 
 
Minimum [Member] |
Certain Intangible Property Rights [Member]
 
 
 
Amortization cost of non-compete covenants and certain intangible property rights
 
 
 
Useful life
3 years 
 
 
Maximum [Member] |
Non-Compete Covenants [Member]
 
 
 
Amortization cost of non-compete covenants and certain intangible property rights
 
 
 
Useful life
5 years 
 
 
Maximum [Member] |
Certain Intangible Property Rights [Member]
 
 
 
Amortization cost of non-compete covenants and certain intangible property rights
 
 
 
Useful life
19 years 
 
 
Significant Accounting Policies (Details 3)
12 Months Ended
Dec. 31, 2014
Buildings [Member] |
Minimum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
2.50% 
Buildings [Member] |
Maximum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
20.00% 
Machinery and equipment [Member] |
Minimum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
5.00% 
Machinery and equipment [Member] |
Maximum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
20.00% 
Furniture and fixtures [Member] |
Minimum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
10.00% 
Furniture and fixtures [Member] |
Maximum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
33.30% 
Automobiles and trucks [Member] |
Minimum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
10.00% 
Automobiles and trucks [Member] |
Maximum [Member]
 
Classes of assets and ranges of annual depreciation rates
 
Annual depreciation rate on assets
33.30% 
Significant Accounting Policies Accounting Policies - Warranties (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Company's accrual for product warranty claims
 
 
 
Balance at January 1
$ 26,755 
$ 22,710 
$ 22,071 
Charges to expense
37,879 
33,265 
28,590 
Settlements
(36,911)
(29,220)
(27,951)
Balance at December 31
$ 27,723 
$ 26,755 
$ 22,710 
Significant Accounting Policies (Details Textual) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 3 Months Ended
Dec. 31, 2014
Contract
Dec. 31, 2013
Contract
Dec. 31, 2012
Contract
Dec. 31, 2014
Titanium Dioxide Antitrust Litigation [Member]
Loss Contingencies [Line Items]
 
 
 
 
Settlement gain related to litigation settlement
 
 
 
$ 21,420 
Significant Accounting Policies (Textual) [Abstract]
 
 
 
 
Number of derivative contracts outstanding
0 
0 
0 
 
Allowance for doubtful accounts
53,770 
54,460 
47,667 
 
Inventory valuation reserves
90,712 
97,523 
88,356 
 
Accumulated amortization of finite-lived intangible assets
303,902 
279,102 
260,065 
 
Amounts outstanding under standby letter of credit agreements
23,442 
25,896 
22,845 
 
Cumulative other comprehensive loss included adjustments for foreign currency translation
354,384 
250,943 
204,195 
 
Prior service costs and net actuarial losses related to pension and other postretirement benefit plans
118,167 
70,611 
166,595 
 
Unrealized net gains on marketable equity securities and derivative instruments used in cash flow hedges
(593)
(510)
(401)
 
Research and development costs included in technical expenditures
50,019 
47,042 
44,648 
 
Advertising cost
$ 299,201 
$ 262,492 
$ 247,469 
 
Acquisitions (Details) (Acquisition of Comex US Canada Business [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Sep. 16, 2013
Business Acquisition [Line Items]
 
 
 
Recognized intangible assets
 
 
$ 4,696 
Summary of pro-forma consolidated financial information
 
 
 
Net sales
11,129,533 
10,540,181 
 
Net income
865,887 
725,774 
 
Net income per common share:
 
 
 
Basic (in dollars per share)
$ 8.95 
$ 7.13 
 
Diluted (in dollars per share)
$ 8.78 
$ 6.98 
 
Administrative [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Realized gain on final asset valuations
$ 6,198 
 
 
Inventories (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Inventory Disclosure [Abstract]
 
 
 
Impact on Net income of liquidations
$ (196)
$ (169)
$ 160 
Inventories
 
 
 
Percentage of total inventories on LIFO
76.00% 
75.00% 
75.00% 
Excess of FIFO over LIFO
331,867 
337,214 
357,303 
Increase in net income due to LIFO
$ 3,230 
$ 12,299 
$ 13,365 
Increase in net income per common share due to LIFO (in dollars per share)
$ 0.03 
$ 0.12 
$ 0.13 
Valuation and Qualifying Accounts and Reserves (Schedule II) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Beginning balance
$ 54,460 
$ 47,667 
$ 51,747 
Amount acquired through acquisitions
 
896 
226 
Bad debt expense
34,810 
31,192 
20,922 
Uncollectible accounts written off, net of recoveries
(35,500)
(25,295)
(25,228)
Ending balance
$ 53,770 
$ 54,460 
$ 47,667 
Goodwill, Intangible and Long-Lived Assets (Details Textual) (USD $)
12 Months Ended 24 Months Ended 12 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Acquisition of Comex US Canada Business [Member]
Dec. 31, 2013
Acquisition of Comex US Canada Business [Member]
Dec. 31, 2013
Acquisitions of Geocel and Pulanna [Member]
Dec. 31, 2012
Acquisitions of Geocel and Pulanna [Member]
Minimum [Member]
Dec. 31, 2012
Acquisitions of Geocel and Pulanna [Member]
Maximum [Member]
Dec. 31, 2013
Paint Stores Group [Member]
Dec. 31, 2013
Global Finishes Group [Member]
Dec. 31, 2012
Global Finishes Group [Member]
Dec. 31, 2014
Global Finishes Group [Member]
Dec. 31, 2012
Consumer Group [Member]
Dec. 31, 2014
Consumer Group [Member]
Dec. 31, 2014
Customer Relationships [Member]
Acquisition of Comex US Canada Business [Member]
Dec. 31, 2012
Customer Relationships [Member]
Acquisitions of Geocel and Pulanna [Member]
Dec. 31, 2012
Intellectual Property [Member]
Acquisitions of Geocel and Pulanna [Member]
Dec. 31, 2012
Noncompete Agreements [Member]
Acquisitions of Geocel and Pulanna [Member]
Dec. 31, 2014
Trademarks [Member]
Dec. 31, 2013
Trademarks [Member]
Dec. 31, 2014
Trademarks [Member]
Acquisition of Comex US Canada Business [Member]
Dec. 31, 2012
Trademarks [Member]
Acquisitions of Geocel and Pulanna [Member]
Dec. 31, 2012
Trademarks [Member]
Paint Stores Group [Member]
Dec. 31, 2012
Trademarks [Member]
Global Finishes Group [Member]
Dec. 31, 2014
Trademarks [Member]
Acquisition of Comex US Canada Business [Member]
Dec. 31, 2013
Trademarks [Member]
Acquisition of Comex US Canada Business [Member]
Dec. 31, 2013
Trademarks [Member]
Acquisitions of Geocel and Pulanna [Member]
Goodwill, Intangible and Long-Lived Assets (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3,311,000 
$ 25,120,000 
$ 4,955,000 
$ 1,335,000 
 
 
$ 1,385,000 
$ 13,000,000 
 
 
 
 
 
Weighted Average useful life of finite-lived intangible assets (in years)
 
 
 
 
7 years 
 
3 years 
15 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill Recognized
 
19,848,000 
42,064,000 
0 
1,885,000 
60,027,000 
 
 
1,885,000 
17,963,000 
24,707,000 
 
17,357,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived Intangible Assets Acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
466,000 
968,000 
Finite-lived intangible assets
139,361,000 
163,264,000 
184,803,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,400,000 
686,000 
 
 
 
Goodwill impairment
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
Accumulated impairment
8,904,000 
 
 
 
 
 
 
 
 
 
 
791,000 
 
8,113,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Goodwill Intangible and Long Lived Assets (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of finite-lived Intangible assets for the year 2015
26,379,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of finite-lived Intangible assets for the year 2016
20,297,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of finite-lived Intangible assets for the year 2017
15,706,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of finite-lived Intangible assets for the year 2018
14,052,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of finite-lived Intangible assets for the year 2019
$ 12,711,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill, Intangible and Long-Lived Assets (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Carrying value of goodwill by reportable operating segment
 
 
 
Goodwill, Beginning Balance
$ 1,178,687 
$ 1,156,005 
$ 1,108,008 1
Acquisitions
 
19,848 
42,064 
Currency and other adjustments
(20,341)
2,834 
5,933 
Goodwill, Ending Balance
1,158,346 
1,178,687 
1,156,005 
Paint Stores Group [Member]
 
 
 
Carrying value of goodwill by reportable operating segment
 
 
 
Goodwill, Beginning Balance
287,300 
286,784 
286,998 1
Acquisitions
 
1,885 
 
Currency and other adjustments
(1,866)
(1,369)
(214)
Goodwill, Ending Balance
285,434 
287,300 
286,784 
Consumer Group [Member]
 
 
 
Carrying value of goodwill by reportable operating segment
 
 
 
Goodwill, Beginning Balance
703,351 
706,292 
689,279 1
Acquisitions
 
 
17,357 
Currency and other adjustments
(1,145)
(2,941)
(344)
Goodwill, Ending Balance
702,206 
703,351 
706,292 
Global Finishes Group [Member]
 
 
 
Carrying value of goodwill by reportable operating segment
 
 
 
Goodwill, Beginning Balance
178,298 
152,287 
120,350 1
Acquisitions
 
17,963 
24,707 
Currency and other adjustments
(17,287)
8,048 
7,230 
Goodwill, Ending Balance
161,011 
178,298 
152,287 
Latin America Coating Group [Member]
 
 
 
Carrying value of goodwill by reportable operating segment
 
 
 
Goodwill, Beginning Balance
9,738 
10,642 
11,381 1
Currency and other adjustments
(43)
(904)
(739)
Goodwill, Ending Balance
$ 9,695 
$ 9,738 
$ 10,642 
Goodwill, Intangible and Long-Lived Assets (Details 1) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Carrying value of intangible assets
 
 
 
Weighted-average amortization period
11 years 
9 years 
11 years 
Gross
$ 443,263 
$ 442,366 
$ 444,868 
Accumulated amortization
(303,902)
(279,102)
(260,065)
Net value
139,361 
163,264 
184,803 
Trademarks with indefinite lives
149,766 
150,035 
162,750 
Total intangible assets
289,127 
313,299 
347,553 
Software [Member]
 
 
 
Carrying value of intangible assets
 
 
 
Weighted-average amortization period
8 years 
8 years 
8 years 
Gross
126,258 
114,404 
107,779 
Accumulated amortization
(88,384)
(77,018)
(66,106)
Net value
37,874 
37,386 
41,673 
All Other [Member]
 
 
 
Carrying value of intangible assets
 
 
 
Weighted-average amortization period
12 years 
10 years 
12 years 
Gross
317,005 
327,962 
337,089 
Accumulated amortization
(215,518)
(202,084)
(193,959)
Net value
$ 101,487 
$ 125,878 
$ 143,130 
Exit or Disposal Activities Exit or Disposal Activities (Textuals) (Details) (USD $)
12 Months Ended
Dec. 31, 2014
store
facility
Dec. 31, 2013
store
facility
Dec. 31, 2012
store
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Number of facilities closed
7 
5 
 
Stores and branches closed
24 
16 
19 
Provisions in cost of goods sold or SG&A
$ 13,578,000 
$ 4,619,000 
$ 7,676,000 
Adjustments to prior provisions in Other general expense - net
 
63,000 
(4,942,000)
Global Finishes Group [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Provisions in cost of goods sold or SG&A
4,767,000 
278,000 
7,363,000 
Consumer Group [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Provisions in cost of goods sold or SG&A
4,809,000 
598,000 
0 
Paint Stores Group [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Provisions in cost of goods sold or SG&A
280,000 
1,004,000 
313,000 
Latin America Coatings Group [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Provisions in cost of goods sold or SG&A
 
123,000 
0 
Facilities Closed Down Prior to 2014 [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Provisions in cost of goods sold or SG&A
3,722,000 
 
 
Facilities Closed Down Prior to 2013 [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Provisions in cost of goods sold or SG&A
 
2,679,000 
 
Facilities Closed Down Prior to 2012 [Member]
 
 
 
Exit or Disposal Activities (Textual) [Abstract]
 
 
 
Adjustments to prior provisions in Other general expense - net
 
 
$ (4,942,000)
Exit or Disposal Activities (Details) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
$ 5,820,000 
$ 8,557,000 
$ 10,400,000 
Provisions in Cost of goods sold or SG&A
13,578,000 
4,619,000 
7,676,000 
Actual expenditures charged to accrual
(10,882,000)
(7,419,000)
(4,577,000)
Adjustments to prior provisions in Other general expense - net
 
63,000 
(4,942,000)
Ending Balance
8,516,000 
5,820,000 
8,557,000 
Facilities Shutdown Prior to 2012 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
1,365,000 
 
 
Actual expenditures charged to accrual
(441,000)
 
 
Ending Balance
924,000 
 
 
Facilities Shutdown Prior to 2011 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
2,288,000 
 
Actual expenditures charged to accrual
 
(955,000)
 
Adjustments to prior provisions in Other general expense - net
 
(36,000)
 
Ending Balance
 
1,297,000 
 
Facilities shutdown Prior to 2010 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
 
8,493,000 
Actual expenditures charged to accrual
 
 
(2,156,000)
Adjustments to prior provisions in Other general expense - net
 
 
(4,871,000)
Ending Balance
 
 
1,466,000 
Paint Stores Group [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
280,000 
1,004,000 
313,000 
Consumer Group [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
4,809,000 
598,000 
0 
Global Finishes Group [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
4,767,000 
278,000 
7,363,000 
Latin America Coatings Group [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
 
123,000 
0 
Other qualified exit costs [Member] |
Paint Stores Group [Member] |
Stores Shutdown In 2014 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
280,000 
 
 
Ending Balance
280,000 
 
 
Other qualified exit costs [Member] |
Paint Stores Group [Member] |
Facility Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
1,499,000 
 
 
Actual expenditures charged to accrual
(294,000)
 
 
Ending Balance
1,205,000 
 
 
Other qualified exit costs [Member] |
Paint Stores Group [Member] |
Stores shutdown in 2012 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
244,000 
313,000 
 
Provisions in Cost of goods sold or SG&A
 
 
313,000 
Actual expenditures charged to accrual
(51,000)
(68,000)
 
Adjustments to prior provisions in Other general expense - net
 
(1,000)
 
Ending Balance
193,000 
244,000 
313,000 
Other qualified exit costs [Member] |
Paint Stores Group [Member] |
Stores shutdown in 2011 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
 
156,000 
Actual expenditures charged to accrual
 
 
(144,000)
Adjustments to prior provisions in Other general expense - net
 
 
(12,000)
Other qualified exit costs [Member] |
Consumer Group [Member] |
Facility Shutdown In 2014 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
781,000 
 
 
Ending Balance
781,000 
 
 
Other qualified exit costs [Member] |
Global Finishes Group [Member] |
Exit of Business in 2014 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
2,267,000 
 
 
Actual expenditures charged to accrual
(1,187,000)
 
 
Ending Balance
1,080,000 
 
 
Other qualified exit costs [Member] |
Global Finishes Group [Member] |
Stores Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
220,000 
 
 
Actual expenditures charged to accrual
(82,000)
 
 
Ending Balance
138,000 
 
 
Other qualified exit costs [Member] |
Global Finishes Group [Member] |
Facility shutdown in 2012 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
3,430,000 
 
Provisions in Cost of goods sold or SG&A
 
83,000 
3,430,000 
Actual expenditures charged to accrual
 
(3,530,000)
 
Adjustments to prior provisions in Other general expense - net
 
100,000 
 
Ending Balance
83,000 
83,000 
3,430,000 
Other qualified exit costs [Member] |
Global Finishes Group [Member] |
Branches shutdown in 2011 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
290,000 
470,000 
Actual expenditures charged to accrual
 
(222,000)
(180,000)
Ending Balance
 
68,000 
290,000 
Other qualified exit costs [Member] |
Global Finishes Group [Member] |
Branches shutdown in 2010 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
 
955,000 
Actual expenditures charged to accrual
 
 
(133,000)
Ending Balance
 
 
822,000 
Severance and related costs [Member] |
Paint Stores Group [Member] |
Stores Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
 
1,004,000 
 
Actual expenditures charged to accrual
 
(27,000)
 
Ending Balance
 
977,000 
 
Severance and related costs [Member] |
Paint Stores Group [Member] |
Facility Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
977,000 
 
 
Provisions in Cost of goods sold or SG&A
2,126,000 
 
 
Actual expenditures charged to accrual
(2,449,000)
 
 
Ending Balance
654,000 
 
 
Severance and related costs [Member] |
Consumer Group [Member] |
Facility Shutdown In 2014 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
4,028,000 
 
 
Actual expenditures charged to accrual
(1,296,000)
 
 
Ending Balance
2,732,000 
 
 
Severance and related costs [Member] |
Consumer Group [Member] |
Facility Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
598,000 
 
 
Provisions in Cost of goods sold or SG&A
97,000 
598,000 
 
Actual expenditures charged to accrual
(695,000)
 
 
Ending Balance
   
598,000 
 
Severance and related costs [Member] |
Consumer Group [Member] |
Manufacturing facilities shutdown in 2011 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
 
197,000 
Actual expenditures charged to accrual
 
 
(133,000)
Adjustments to prior provisions in Other general expense - net
 
 
(64,000)
Severance and related costs [Member] |
Global Finishes Group [Member] |
Exit of Business in 2014 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
2,500,000 
 
 
Actual expenditures charged to accrual
(2,396,000)
 
 
Ending Balance
104,000 
 
 
Severance and related costs [Member] |
Global Finishes Group [Member] |
Stores Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
33,000 
 
 
Actual expenditures charged to accrual
(5,000)
 
 
Ending Balance
28,000 
 
 
Severance and related costs [Member] |
Global Finishes Group [Member] |
Branches Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Provisions in Cost of goods sold or SG&A
 
278,000 
 
Actual expenditures charged to accrual
 
(25,000)
 
Ending Balance
 
253,000 
 
Severance and related costs [Member] |
Global Finishes Group [Member] |
Facility shutdown in 2012 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
2,177,000 
2,236,000 
 
Provisions in Cost of goods sold or SG&A
 
2,533,000 
3,933,000 
Actual expenditures charged to accrual
(1,863,000)
(2,592,000)
(1,697,000)
Ending Balance
314,000 
2,177,000 
2,236,000 
Severance and related costs [Member] |
Global Finishes Group [Member] |
Branches shutdown in 2011 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
 
 
129,000 
Actual expenditures charged to accrual
 
 
(134,000)
Adjustments to prior provisions in Other general expense - net
 
 
5,000 
Severance and related costs [Member] |
Latin America Coatings Group [Member] |
Facility Shutdown in 2013 [Member]
 
 
 
Summary of activity and remaining liabilities associated with qualified exit costs
 
 
 
Beginning Balance
123,000 
 
 
Provisions in Cost of goods sold or SG&A
 
123,000 
 
Actual expenditures charged to accrual
(123,000)
 
 
Ending Balance
    
$ 123,000 
 
Pension Health Care and Postretirement Benefits Other Than Pensions (Details Textual) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2014
employee
PensionPlan
Dec. 31, 2013
employee
Dec. 31, 2012
employee
Dec. 31, 2014
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2013
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2012
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2011
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2014
Foreign Pension Plan [Member]
Dec. 31, 2013
Foreign Pension Plan [Member]
Dec. 31, 2012
Foreign Pension Plan [Member]
Dec. 31, 2011
Foreign Pension Plan [Member]
Dec. 31, 2014
Domestic Salaried Plan Between January 1, 2002 and September 30, 2011 [Member]
Dec. 31, 2014
Domestic Salaried Plan Between January 1, 2002 and December 31, 2004 [Member]
Dec. 31, 2014
Domestic Salaried Plan After December 31, 2004 [Member]
Minimum [Member]
Dec. 31, 2014
Domestic Salaried Plan After December 31, 2004 [Member]
Maximum [Member]
Dec. 31, 2014
Revised Domestic Salaried Plan After December 31, 2001 [Member]
Minimum [Member]
Dec. 31, 2014
Revised Domestic Salaried Plan After December 31, 2001 [Member]
Maximum [Member]
Dec. 31, 2014
Domestic salaried and hourly defined benefit pension plan [Member]
Dec. 31, 2013
Domestic salaried and hourly defined benefit pension plan [Member]
Dec. 31, 2012
Domestic salaried defined benefit pension plan [Member]
Dec. 31, 2012
Domestic hourly defined benefit pension plan [Member]
Dec. 31, 2014
Unfunded or underfunded foreign defined benefit pension plans [Member]
Dec. 31, 2014
Defined Benefit Pension [Member]
Dec. 31, 2014
Postretirement Benefits Other than Pensions [Member]
Dec. 31, 2013
Postretirement Benefits Other than Pensions [Member]
Dec. 31, 2012
Postretirement Benefits Other than Pensions [Member]
Dec. 31, 2011
Postretirement Benefits Other than Pensions [Member]
Dec. 31, 2014
Canada [Member]
PensionPlan
Dec. 31, 2014
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2013
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2012
Domestic Defined Benefit Pension Plans [Member]
Dec. 31, 2014
Domestic Defined Benefit Pension Plans [Member]
Minimum [Member]
Dec. 31, 2014
Domestic Defined Benefit Pension Plans [Member]
Maximum [Member]
Dec. 31, 2014
Foreign Pension Plan [Member]
Dec. 31, 2013
Foreign Pension Plan [Member]
Dec. 31, 2012
Foreign Pension Plan [Member]
Health Care Plans [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of active employees entitled to receive benefits under health care plans
21,239 
19,440 
18,609 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of benefits includes claims incurred and claims incurred but not reported under health care plans
$ 202,787 
$ 174,588 
$ 163,011 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Contribution Pension Plans [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributions by company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
32,384 
27,803 
25,147 
 
 
4,592 
1,428 
4,621 
Contributions by company (as a percentage)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
7.00% 
 
 
 
Number of Domestic salaried defined benefit pension plan
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Domestic hourly defined benefit pension plan
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Foreign defined benefit pension plans
21 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 
 
 
 
 
 
 
 
 
Threshold service requirement for defined benefit pension plan eligibility
 
 
 
 
 
 
 
 
 
 
 
6 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee matching contribution (as a percentage)
 
 
 
 
 
 
 
 
 
 
 
 
6.00% 
2.00% 
7.00% 
2.00% 
7.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Benefit Obligation
 
 
 
648,480 
577,736 
460,591 
 
203,610 
187,670 
142,769 
 
 
 
 
 
 
 
 
 
 
 
143,324 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Projected benefit obligation
 
 
 
653,338 
582,036 
466,827 
410,029 
234,524 
222,996 
168,758 
141,465 
 
 
 
 
 
 
653,338 
582,036 
313,964 
152,863 
171,841 
 
295,149 
286,651 
338,134 
316,795 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
1,083,715 
1,055,349 
836,576 
896,071 
870,386 
703,563 
614,463 
187,645 
184,963 
133,013 
118,060 
 
 
 
 
 
 
896,071 
870,386 
559,552 
144,011 
117,623 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Excess/(deficiency) of plan assets
 
 
 
242,733 
288,350 
236,736 
 
(46,879)
(38,033)
(35,745)
 
 
 
 
 
 
 
242,733 
288,350 
245,588 
(8,852)
(54,218)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of foreign defined benefit pension plans unfunded or underfunded
17 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase in combined projected benefit obligations primarily due to changes in plan assumptions
 
 
 
 
 
 
 
 
11,527 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Cash Payments - Net 2015
19,563 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64,067 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Cash Payments - Net 2016
20,759 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64,285 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Cash Payments - Net 2017
22,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64,940 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Cash Payments - Net 2018
22,884 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,478 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Cash Payments - Net 2019
23,486 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,636 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Cash Payments - Net 2020 through 2024
115,694 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
286,119 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated future employer contributions
 
 
 
 
 
 
 
6,281 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of actuarial losses (gains)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,311 
1,011 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of prior service cost (credit)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,310 
(4,529)
 
 
 
 
 
 
 
 
 
 
 
 
Target allocation percentage of plan assets in equity securities, minimum
45.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Target allocation percentage of plan assets in equity securities, maximum
65.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Target allocation percentage of plan assets fixed income securities, minimum
30.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Target allocation percentage of plan assets fixed income securities, maximum
40.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity investment in domestic defined benefit pension plan assets, shares
 
 
 
300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market value of common shares invested in defined benefit pension plan assets
 
 
 
78,912 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share equity investments in the domestic defined benefit pension plan assets (as a percentage)
 
 
 
8.80% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends received on the common stock
 
 
 
660 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retired employees entitled to receive postretirement benefits
4,443 
4,419 
4,402 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined benefit plan ultimate health care cost trend rate and Prescription drug cost increase rate (as a percentage)
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year in which health care cost trend rate and prescription drug cost rate reaches ultimate trend rate
2022 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction in accumulated postretirement benefit obligation for subsidy
21,400 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of subsidy on net period postretirement benefit cost
0 
0 
5,712 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of subsidy on amortization of actuarial experience gain
0 
0 
5,278 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of subsidy on interest cost
$ 0 
$ 0 
$ 434 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension, Health Care and Postretirement Benefits Other Than Pensions (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Investments at fair value:
 
 
 
 
Fair value of plan assets
$ 1,083,715 
$ 1,055,349 
$ 836,576 
 
Short-term Investments [Member]
 
 
 
 
Investments at fair value:
 
 
 
 
Fair value of plan assets
14,846 1
15,055 1
68,795 1
 
Equity investments [Member]
 
 
 
 
Investments at fair value:
 
 
 
 
Fair value of plan assets
739,358 2
736,873 2
490,993 2
 
Fixed Income Investments [Member]
 
 
 
 
Investments at fair value:
 
 
 
 
Fair value of plan assets
285,042 3
255,927 3
239,558 3
 
Other Assets [Member]
 
 
 
 
Investments at fair value:
 
 
 
 
Fair value of plan assets
44,469 4
47,494 4
37,230 4
 
Domestic Defined Benefit Pension Plans [Member]
 
 
 
 
Net pension costs:
 
 
 
 
Service costs
21,342 
23,176 
19,061 
 
Interest costs
26,266 
18,444 
17,442 
 
Expected returns on plan assets
(51,293)
(42,937)
(44,841)
 
Amortization of prior service costs
1,837 
1,823 
1,591 
 
Amortization of actuarial losses
 
13,147 
22,205 
 
Ongoing pension (credits) costs
(1,848)
13,653 
15,458 
 
Net pension (credits) costs
(1,848)
13,653 
15,458 
 
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
 
 
 
 
Net actuarial losses (gains) arising during the year
47,785 
(90,669)
(26,459)
 
Prior service costs during the year
2,242 
1,756 
2,495 
 
Amortization of prior service costs
(1,837)
(1,823)
(1,591)
 
Amortization of actuarial losses
 
(13,147)
(22,205)
 
Total recognized in Cumulative other comprehensive loss
48,190 
(103,883)
(47,760)
 
Total recognized in net pension costs (credits) and Cumulative other comprehensive loss
46,342 
(90,230)
(32,302)
 
Investments at fair value:
 
 
 
 
Fair value of plan assets
896,071 
870,386 
703,563 
614,463 
Foreign Pension Plan [Member]
 
 
 
 
Net pension costs:
 
 
 
 
Service costs
5,261 
5,039 
3,654 
 
Interest costs
10,422 
7,940 
6,927 
 
Expected returns on plan assets
(10,836)
(7,487)
(6,799)
 
Amortization of actuarial losses
1,413 
1,716 
1,022 
 
Ongoing pension (credits) costs
6,260 
7,208 
4,804 
 
Settlement (credits) costs
(3,422)
(220)
47 
 
Net pension (credits) costs
2,838 
6,988 
4,851 
 
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
 
 
 
 
Net actuarial losses (gains) arising during the year
21,792 
(5,487)
14,131 
 
Amortization of actuarial losses
(1,413)
(1,716)
(1,022)
 
Exchange rate (loss) gain recognized during year
(7,988)
819 
1,464 
 
Total recognized in Cumulative other comprehensive loss
12,391 
(6,384)
14,573 
 
Total recognized in net pension costs (credits) and Cumulative other comprehensive loss
15,229 
604 
19,424 
 
Investments at fair value:
 
 
 
 
Fair value of plan assets
$ 187,645 
$ 184,963 
$ 133,013 
$ 118,060 
Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 1) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
$ 1,083,715 
$ 1,055,349 
$ 836,576 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
521,610 
490,311 
442,897 
Significant Unobservable Inputs (Level 3) [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
16,034 
17,941 
18,850 
Fair Value, Inputs, Level 1 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
546,071 
547,097 
374,829 
Short-term Investments [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
14,846 1
15,055 1
68,795 1
Short-term Investments [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
14,846 1
13,114 1
68,795 1
Short-term Investments [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
 
1,941 1
 
Equity Funds [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
739,358 2
736,873 2
490,993 2
Equity Funds [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
334,816 2
317,094 2
247,440 2
Equity Funds [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
404,542 2
419,779 2
243,553 2
Fixed Income Investments [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
285,042 3
255,927 3
239,558 3
Fixed Income Investments [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
143,513 3
130,550 3
108,282 3
Fixed Income Investments [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
 
 
   
Fixed Income Investments [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
141,529 3
125,377 3
131,276 3
Other Assets [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
44,469 4
47,494 4
37,230 4
Other Assets [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at end of year
28,435 4
29,553 4
18,380 4
Other Assets [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
 
Changes in fair value of defined benefit pension plan assets classified as level 3
 
 
 
Balances at beginning of year
17,941 4
18,850 4
20,900 
Dispositions
(4,320)
(4,068)
(3,827)
Realized and Unrealized Gains
2,413 
3,159 
1,777 
Balances at end of year
$ 16,034 4
$ 17,941 4
$ 18,850 4
Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 2) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Plan assets:
 
 
 
Balances at end of year
$ 1,083,715 
$ 1,055,349 
$ 836,576 
Assets and liabilities recognized in the Consolidated Balance Sheets:
 
 
 
Deferred pension assets
250,144 
302,446 
249,911 
Other accruals
(508,581)
(513,433)
(513,717)
Other long-term liabilities
(628,309)
(688,168)
(614,109)
Domestic Defined Benefit Pension Plans [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Accumulated benefit obligations at end of year
648,480 
577,736 
460,591 
Projected benefit obligations:
 
 
 
Balances at beginning of year
582,036 
466,827 
410,029 
Service costs
21,342 
23,176 
19,061 
Interest costs
26,266 
18,444 
17,442 
Actuarial losses (gains)
68,748 
(5,488)
48,346 
Acquisitions of businesses and other
2,242 
113,174 
2,496 
Benefits paid
(47,296)
(34,097)
(30,547)
Balances at end of year
653,338 
582,036 
466,827 
Plan assets:
 
 
 
Balances at beginning of year
870,386 
703,563 
614,463 
Actual returns on plan assets
72,256 
128,117 
119,647 
Acquisitions of businesses and other
725 
72,803 
 
Benefits paid
(47,296)
(34,097)
(30,547)
Balances at end of year
896,071 
870,386 
703,563 
Excess (deficient) plan assets over projected benefit obligations
242,733 
288,350 
236,736 
Assets and liabilities recognized in the Consolidated Balance Sheets:
 
 
 
Deferred pension assets
242,733 
288,350 
245,588 
Other long-term liabilities
 
   
(8,852)
Total
242,733 
288,350 
236,736 
Amounts recognized in Cumulative other comprehensive loss:
 
 
 
Net actuarial losses
(107,057)
(59,272)
(163,088)
Prior service costs
(6,448)
(6,043)
(6,110)
Total recognized in Cumulative other comprehensive loss
(113,505)
(65,315)
(169,198)
Weighted-average assumptions used to determine projected benefit obligations:
 
 
 
Discount rate
3.95% 
4.65% 
3.73% 
Rate of compensation increase
4.00% 
4.00% 
4.00% 
Weighted-average assumptions used to determine net pension costs:
 
 
 
Discount rate
4.65% 
3.73% 
4.40% 
Expected long-term rate of return on assets
6.00% 
6.00% 
7.50% 
Rate of compensation increase
4.00% 
4.00% 
4.00% 
Foreign Pension Plan [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Accumulated benefit obligations at end of year
203,610 
187,670 
142,769 
Projected benefit obligations:
 
 
 
Balances at beginning of year
222,996 
168,758 
141,465 
Service costs
5,261 
5,039 
3,654 
Interest costs
10,422 
7,940 
6,927 
Actuarial losses (gains)
32,551 
5,939 
17,532 
Acquisitions of businesses and other
(10,062)
39,622 
(975)
Effect of foreign exchange
(18,987)
1,549 
6,633 
Benefits paid
(7,657)
(5,851)
(6,478)
Balances at end of year
234,524 
222,996 
168,758 
Plan assets:
 
 
 
Balances at beginning of year
184,963 
133,013 
118,060 
Actual returns on plan assets
20,240 
20,316 
10,201 
Acquisitions of businesses and other
3,958 
36,106 
6,205 
Effect of foreign exchange
(13,859)
1,379 
5,025 
Benefits paid
(7,657)
(5,851)
(6,478)
Balances at end of year
187,645 
184,963 
133,013 
Excess (deficient) plan assets over projected benefit obligations
(46,879)
(38,033)
(35,745)
Assets and liabilities recognized in the Consolidated Balance Sheets:
 
 
 
Deferred pension assets
7,411 
14,096 
4,323 
Other accruals
(810)
(1,126)
(869)
Other long-term liabilities
(53,480)
(51,003)
(39,199)
Total
(46,879)
(38,033)
(35,745)
Amounts recognized in Cumulative other comprehensive loss:
 
 
 
Net actuarial losses
(47,574)
(35,183)
(41,567)
Total recognized in Cumulative other comprehensive loss
$ (47,574)
$ (35,183)
$ (41,567)
Weighted-average assumptions used to determine projected benefit obligations:
 
 
 
Discount rate
3.92% 
4.89% 
4.58% 
Rate of compensation increase
3.70% 
4.31% 
4.08% 
Weighted-average assumptions used to determine net pension costs:
 
 
 
Discount rate
4.89% 
4.58% 
4.94% 
Expected long-term rate of return on assets
5.58% 
5.67% 
6.04% 
Rate of compensation increase
4.31% 
4.08% 
4.04% 
Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 3) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Liabilities recognized in the Consolidated Balance Sheets:
 
 
 
Postretirement benefits other than pensions
$ (277,892)
$ (268,874)
$ (320,223)
Other accruals
(508,581)
(513,433)
(513,717)
Weighted-average assumptions used to determine benefit obligation:
 
 
 
Employer Group Waiver Plan (EGWP) trend rate (as a percentage)
8.00% 
 
 
Postretirement Benefits Other than Pensions [Member]
 
 
 
Benefit obligation:
 
 
 
Balances at beginning of year
286,651 
338,134 
316,795 
Service costs
2,434 
3,061 
2,943 
Interest costs
12,782 
12,183 
13,520 
Actuarial loss (gain)
27,757 
(50,593)
18,961 
Plan amendments
(19,043)
(2,503)
 
Benefits paid
(15,432)
(13,631)
(14,085)
Balances at end of year
295,149 
286,651 
338,134 
Liabilities recognized in the Consolidated Balance Sheets:
 
 
 
Postretirement benefits other than pensions
(277,892)
(268,874)
(320,223)
Other accruals
(17,257)
(17,777)
(17,911)
Total
(295,149)
(286,651)
(338,134)
Amounts recognized in Cumulative other comprehensive loss:
 
 
 
Net actuarial losses
(36,044)
(8,287)
(62,814)
Prior service costs
21,043 
2,503 
328 
Total recognized in Cumulative other comprehensive loss
$ (15,001)
$ (5,784)
$ (62,486)
Weighted-average assumptions used to determine benefit obligation:
 
 
 
Discount rate
3.90% 
4.60% 
3.70% 
Health care cost trend rate - pre-65 (as a percentage)
7.00% 
7.50% 
8.00% 
Health care cost trend rate - post-65 (as a percentage)
6.50% 
6.50% 
8.00% 
Prescription drug cost increases (as a percentage)
6.50% 
7.00% 
8.00% 
Weighted-average assumptions used to determine net periodic benefit cost:
 
 
 
Discount rate
4.60% 
3.70% 
4.40% 
Health care cost trend rate - pre-65 (as a percentage)
7.50% 
8.00% 
8.00% 
Health care cost trend rate - post-65 (as a percentage)
6.50% 
8.00% 
8.00% 
Prescription drug cost increases (as a percentage)
7.00% 
8.00% 
8.00% 
Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 4) (Postretirement Benefits Other than Pensions [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Postretirement Benefits Other than Pensions [Member]
 
 
 
Net pension costs:
 
 
 
Service costs
$ 2,434 
$ 3,061 
$ 2,943 
Interest costs
12,782 
12,183 
13,520 
Amortization of actuarial losses
 
3,934 
1,715 
Amortization of prior service credit
(503)
(328)
(656)
Net pension (credits) costs
14,713 
18,850 
17,522 
Other changes in projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
 
 
 
Net actuarial losses (gains) arising during the year
27,757 
(50,593)
18,961 
Prior service costs during the year
(19,043)
(2,503)
 
Amortization of actuarial losses
 
(3,934)
(1,715)
Amortization of prior service credit
503 
328 
656 
Total recognized in Cumulative other comprehensive loss
9,217 
(56,702)
17,902 
Total recognized in net pension costs (credits) and Cumulative other comprehensive loss
$ 23,930 
$ (37,852)
$ 35,424 
Pension Health Care And Postretirement Benefits Other Than Pensions (Details 5) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Significant effect on amounts reported for service and interest rate component and postretirement health care benefit obligation
 
Effect on total of service and interest cost components, One-Percentage-Point, Increase
$ 23 
Effect on total of service and interest cost components, One-Percentage-Point, Decrease
(66)
Effect on the postretirement benefit obligation One-Percentage-Point, Increase
734 
Effect on the postretirement benefit obligation One-Percentage-Point, Decrease
(1,697)
Retiree health care benefit cash payments
 
Expected Cash Payments, 2015
19,563 
Medicare Prescription Reimbursement, 2015
(2,305)
Defined Benefit Plan, Expected Cash Payments, Net, 2015
17,258 
Expected Cash Payments, 2016
20,759 
Medicare Prescription Reimbursement, 2016
(2,474)
Defined Benefit Plan, Expected Cash Payments, Net, 2016
18,285 
Expected Cash Payments, 2017
22,000 
Medicare Prescription Reimbursement, 2017
(2,667)
Defined Benefit Plan, Expected Cash Payments, Net, 2017
19,333 
Expected Cash Payments, 2018
22,884 
Medicare Prescription Reimbursement, 2018
(2,888)
Defined Benefit Plan, Expected Cash Payments, Net, 2018
19,996 
Expected Cash Payments, 2019
23,486 
Medicare Prescription Reimbursement, 2019
(3,107)
Defined Benefit Plan, Expected Cash Payments, Net, 2019
20,379 
Expected Cash Payments, 2020 through 2024
115,694 
Medicare Prescription Reimbursement, 2020 through 2024
(16,779)
Defined Benefit Plan, Expected Cash Payments, Net, 2020 through 2024
98,915 
Expected Benefit Cash Payments
224,386 
Medicare Prescription Reimbursement
(30,220)
Expected Benefit Cash Payments, Net
$ 194,166 
Debt (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Long-term debt
 
 
 
Long-term debt
$ 1,122,715 
$ 1,122,373 
$ 1,632,165 
1.35% Senior notes due 2017 [Member]
 
 
 
Long-term debt
 
 
 
Long-term debt
699,460 
699,277 
699,091 
4.00% Senior notes due 2042 [Member]
 
 
 
Long-term debt
 
 
 
Long-term debt
298,595 
298,545 
298,493 
7.375% Debentures due 2027 [Member] |
Subordinated Debentures Subject To Mandatory Redemption [Member]
 
 
 
Long-term debt
 
 
 
Long-term debt
119,369 
119,366 
129,060 
7.45% Debentures due 2097 [Member] |
Subordinated Debentures Subject To Mandatory Redemption [Member]
 
 
 
Long-term debt
 
 
 
Long-term debt
3,500 
3,500 
3,500 
2.02% to 8.00% Promissory Notes Through 2029 [Member]
 
 
 
Long-term debt
 
 
 
Long-term debt
1,791 
1,685 
2,109 
3.125% Senior notes due 2014 [Member]
 
 
 
Long-term debt
 
 
 
Long-term debt
 
 
$ 499,912 
Debt (Details Textual) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 4, 2012
1.35% Senior notes due 2017 [Member]
Dec. 4, 2012
4.00% Senior notes due 2042 [Member]
Additional Debt (Textual) [Abstract]
 
 
 
 
 
Maturities of long-term debt 2015
$ 3,265,000 
 
 
 
 
Maturities of long-term debt 2016
678,000 
 
 
 
 
Maturities of long-term debt 2017
700,150,000 
 
 
 
 
Maturities of long-term debt 2018
153,000 
 
 
 
 
Maturities of long-term debt 2019
156,000 
 
 
 
 
Interest expense on long-term debt
56,408,000 
57,949,000 
36,188,000 
 
 
Debt (Textual) [Abstract]
 
 
 
 
 
Issue of debt securities
 
 
 
$ 700,000,000 
$ 300,000,000 
Debt instrument interest rate (as a percentage)
 
 
 
1.35% 
4.00% 
Debt (Details Textual 1)
12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2012
USD ($)
Contract
Dec. 31, 2014
USD ($)
Dec. 31, 2013
USD ($)
Nov. 14, 2012
Three year credit agreement [Member]
Dec. 31, 2014
Three year credit agreement [Member]
Nov. 14, 2012
Three year credit agreement [Member]
USD ($)
Jul. 8, 2011
Five year senior unsecured revolving credit agreement [Member]
Dec. 31, 2014
Five year senior unsecured revolving credit agreement [Member]
Jul. 8, 2011
Five year senior unsecured revolving credit agreement [Member]
USD ($)
Dec. 31, 2014
Three year senior unsecured revolving credit agreement [Member]
Dec. 31, 2014
Domestic Commercial Paper Program [Member]
USD ($)
Dec. 31, 2013
Domestic Commercial Paper Program [Member]
USD ($)
Dec. 31, 2012
Domestic Commercial Paper Program [Member]
USD ($)
Dec. 31, 2014
Foreign Programs [Member]
USD ($)
Dec. 31, 2013
Foreign Programs [Member]
USD ($)
Dec. 31, 2012
Foreign Programs [Member]
USD ($)
Sep. 19, 2012
Sherwin Williams Luxembourg [Member]
EUR (€)
Sep. 19, 2012
Sherwin Williams Luxembourg [Member]
EUR (€)
Jun. 29, 2012
Sherwin Williams Canada Inc [Member]
Mar. 18, 2013
Sherwin Williams Canada Inc [Member]
CAD ($)
Jun. 29, 2012
Sherwin Williams Canada Inc [Member]
CAD ($)
Jan. 30, 2012
Five Year Agreement Dated January 30, 2012 [Member]
Jan. 30, 2012
Five Year Agreement Dated January 30, 2012 [Member]
USD ($)
Apr. 23, 2012
Five year agreement dated April 23, 2012 [Member]
Apr. 23, 2012
Five year agreement dated April 23, 2012 [Member]
USD ($)
Jul. 8, 2011
Amended Senior Unsecured Revolving Credit [Member]
extension
Jul. 8, 2011
Amended Senior Unsecured Revolving Credit [Member]
USD ($)
Debt (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-term borrowing outstanding
$ 69,035,000 
$ 679,436,000 
$ 96,551,000 
 
 
 
 
 
 
 
$ 625,860,000 
$ 0 
$ 0 
$ 53,576,000 
$ 96,551,000 
$ 69,035,000 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
 
 
 
 
 
 
 
 
 
0.30% 
 
 
6.00% 
7.80% 
2.80% 
 
 
 
 
 
 
 
 
 
 
 
Covenant terms
 
 
 
 
On January 30, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit 
 
 
On April 23, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit 
 
On November 14, 2012, the Company entered into a three-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum letter of credit facility
 
 
 
 
 
250,000,000 
 
 
1,050,000,000 
 
 
 
 
 
 
 
 
95,000,000 
 
150,000,000 
75,000,000 
 
500,000,000 
 
250,000,000 
 
1,300,000,000 
Line of Credit Facility, Number of Extensions Allowed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
Line of Credit Facility, Extension Period Allowed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
Number of credit agreements
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term (in years)
 
 
 
3 years 
 
 
5 years 
 
 
 
 
 
 
 
 
 
5 years 
 
5 years 
 
 
5 years 
 
5 years 
 
 
 
Aggregate amount of credit facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
97,000,000 
 
 
 
 
 
 
 
 
 
 
Long-term borrowing outstanding
$ 0 
 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Long-Term Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
ManufacturingSite
Dec. 31, 2013
Dec. 31, 2012
Other Long-Term Liabilities (Textual) [Abstract]
 
 
 
Accruals for extended environmental-related activities
$ 114,281 
$ 86,647 
$ 97,220 
Estimated costs of current investigation and remediation activities included in other accruals
16,868 
15,385 
17,101 
Amount by which unaccrued maximum of estimated range exceeds minimum accruals
89,733 
 
 
Number of manufacturing sites accounting for the majority of the accrual for environmental-related activities
2 
 
 
Accruals for environmental-related activities of sites accounting for the majority of the accrual for environmental-related activities
82,707 
 
 
Percentage of accrual for environmental-related activities related to sites accounting for the majority of the accrual for environmental-related activities
63.10% 
 
 
Amount by which unaccrued maximum of estimated range exceeds minimum
89,733 
 
 
Amount of unaccrued maximum related to sites accounting for the majority of the accrual for environmental-related activities
$ 57,927 
 
 
Percentage of aggregate unaccrued maximum related to sites accounting for the majority of the accrual for environmental-related activities
64.60% 
 
 
Litigation (Details) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Jan. 27, 2014
Abatement of Alleged Public Nuisance [Member]
defendant
Jun. 30, 2008
Trial by Jury, State of Rhode Island [Member]
defendant
jury_trial
Jan. 27, 2014
Santa Clara County, California Proceeding [Member]
Dec. 31, 2014
Titanium Dioxide Antitrust Litigation [Member]
Sep. 30, 2013
Cost of Sales [Member]
Sep. 30, 2013
Selling, General and Administrative Expenses [Member]
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of Jury Trials
 
 
 
 
 
 
2 
 
 
 
 
Number of additional defendants
 
 
 
 
 
 
2 
 
 
 
 
Number of additional plaintiffs
 
 
 
 
 
2 
 
 
 
 
 
Amount payable jointly and severally for litigation
 
 
 
 
 
 
 
$ 1,150,000,000 
 
 
 
DOL settlement accrual
80,000,000 
80,000,000 
 
(80,000,000)
80,000,000 
 
 
 
 
 
 
After tax charge to earnings for DOL settlement
 
49,163,000 
 
 
49,163,000 
 
 
 
 
 
 
Import tax examination, liability adjustment from settlement with taxing authority
 
 
 
 
 
 
 
 
 
28,711,000 
2,873,000 
Import tax examination, liability adjustment from settlement with taxing authority, after tax
 
 
21,858,000 
 
 
 
 
 
 
 
 
Settlement gain related to litigation settlement
 
 
 
 
 
 
 
 
$ 21,420,000 
 
 
Capital Stock (Details)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Capital Stock (Textual) [Abstract]
 
 
 
Common stock authorized
300,000,000 
 
 
Preferred stock authorized
30,000,000 
 
 
Common stock reserved for future grants of restricted stock
10,304,816 
12,121,210 
13,558,565 
Common stock held in revocable trust
487,075 
486,138 
484,872 
Schedule of Capital Stock
 
 
 
Common Shares Outstanding, ending
94,704,173 
100,129,380 
103,270,067 
2006 Employee Plan [Member]
 
 
 
Capital Stock (Textual) [Abstract]
 
 
 
Number of shares authorized under Employee Plan
19,200,000 
 
 
Treasury Stock [Member]
 
 
 
Schedule of Capital Stock
 
 
 
Common Shares in Treasury, beginning
12,772,498 
8,352,904 
3,601,159 
Shares tendered as payment for option rights exercised
7,229 
2,697 
7,766 
Shares tendered in connection with grants of restricted stock
108,352 
116,897 
143,979 
Treasury stock purchased
6,925,000 
4,300,000 
4,600,000 
Common Shares in Treasury, ending
19,813,079 
12,772,498 
8,352,904 
Common Stock [Member]
 
 
 
Schedule of Capital Stock
 
 
 
Common Shares Outstanding, beginning
100,129,380 
103,270,067 
103,854,234 
Shares tendered as payment for option rights exercised
(7,229)
(2,697)
(7,766)
Shares issued for exercise of option rights
1,423,395 
1,127,942 
4,140,822 
Shares tendered in connection with grants of restricted stock
(108,352)
(116,897)
(143,979)
Net shares issued for grants of restricted stock
191,979 
150,965 
26,756 
Treasury stock purchased
(6,925,000)
(4,300,000)
(4,600,000)
Common Shares Outstanding, ending
94,704,173 
100,129,380 
103,270,067 
Cumulative Preferred Stock [Member]
 
 
 
Capital Stock (Textual) [Abstract]
 
 
 
Preferred stock authorized
3,000,000 
 
 
Convertible Preferred Stock [Member]
 
 
 
Capital Stock (Textual) [Abstract]
 
 
 
Preferred stock authorized
1,000,000 
 
 
Stock Purchase Plan and Preferred Stock (Details Textual) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
vote
employee
Dec. 31, 2013
Dec. 31, 2012
Aug. 1, 2006
Stock Purchase Plan and Preferred Stock (Textual) [Abstract]
 
 
 
 
 
 
Employees contributed to company's ESOP
 
 
33,958 
 
 
 
Participants contribution on a pretax basis only of their annual compensation, maximum (as a percentage)
 
 
20.00% 
 
 
 
Percentage of matching contribution to ESOP Plan by employer
 
 
100.00% 
 
 
 
Maximum percentage of eligible contribution plan up to which employer contributes
 
 
6.00% 
 
 
 
Company contributions to ESOP on behalf of participating employees representing amounts authorized by employees to be withheld from their earnings on pre-tax basis
 
 
$ 109,036 
$ 97,381 
$ 88,363 
 
Company's matching contributions to the ESOP
 
 
74,574 
67,428 
142,791 
 
DOL settlement
80,000 
80,000 
 
(80,000)
80,000 
 
Employee stock ownership plan common stock shares held in ESOP (in shares)
 
 
12,456,468 
 
 
 
Percentage of total voting shares outstanding held by the ESOP
 
 
13.20% 
 
 
 
Employee stock ownership plan ESOP series 2 preferred stock contributed to ESOP (in shares)
 
 
 
 
 
500,000 
Employee stock ownership plan ESOP series 2 preferred stock par value (usd per share)
 
 
 
 
 
$ 0 
Cumulative quarterly dividends per share on convertible serial preferred stock (in usd per share)
 
 
 
 
 
$ 11.25 
Value of Series 2 Preferred stock issued to ESOP
 
 
 
 
 
500,000 
Amount borrowed for acquisition of Series 2 Preferred stock
 
 
 
 
 
500,000 
Interest rate on amount borrowed for acquisition of Series 2 Preferred stock
 
 
 
 
 
5.50% 
Term for payment of borrowed amount for acquisition of Series 2 Preferred stock in equal quarterly payments (in years)
 
 
10 years 
 
 
 
Number of votes for each Series 2 Preferred share under ESOP
 
 
1 
 
 
 
Allocated or committed to be released shares of Series 2 Preferred stock outstanding (in shares)
 
0 
0 
0 
0 
 
Number of redeemed shares of Series 2 Preferred stock
 
 
40,406,000 
60,681,000 
59,187,000 
 
Fair value of Series 2 Preferred stock
 
$ 210,773 
 
$ 86,309 
$ 210,773 
 
Stock- Based Compensation (Details Textual) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
right
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Unrecognized stock-based compensation expense
$ 76,099 
 
 
 
Unrecognized stock-based compensation expense, Weighted-average period recognition
11 months 30 days 
 
 
 
Stock-based compensation expense
64,735 
58,004 
54,348 
 
Income tax benefit related to stock-based compensation expense
24,816 
22,368 
20,948 
 
Reduction in Basic Net Income per common share due to stock-based compensation expense
$ 0.41 
 
 
 
Reduction in Diluted Net Income Per Common Share Due to Stock Based Compensation Expense
$ 0.40 
 
 
 
Portion of option rights generally becoming exercisable to the extent of optioned shares
0.33 
 
 
 
Expiration period
10 years 
 
 
 
Award vesting period
3 years 
 
 
 
Weighted-average per share fair value of option rights granted during the year, Optioned Shares
$ 43.11 
$ 41.91 
$ 32.74 
 
Fair Value of Options Vested
32,313 
28,658 
25,879 
 
Outstanding option rights
5,699,892 
6,484,592 
6,748,126 
9,857,695 
Weighted average remaining term for options outstanding (in years)
6 years 6 months 24 days 
6 years 9 months 1 day 
6 years 11 months 27 days 
 
Weighted average remaining term for options exercisable (in years)
5 years 7 months 16 days 
5 years 8 months 15 days 
5 years 9 months 15 days 
 
Shares reserved for future grants of option rights restricted stock, Optioned Shares
4,604,924 
5,636,618 
6,810,439 
 
Employees [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Intrinsic value of exercised option rights
195,097 
129,742 
298,883 
 
Non-Employee Directors [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Intrinsic value of exercised option rights
0 
525 
1,412 
 
Non-employee Plan [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Number of appreciation rights, restricted stock units, performance shares or performance units granted
0 
 
 
 
Award vesting period
3 years 
 
 
 
Outstanding option rights
0 
0 
3,500 
 
Stock Option [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Unrecognized stock-based compensation expense
39,413 
 
 
 
Unrecognized stock-based compensation expense, Weighted-average period recognition
1 year 0 months 10 days 
 
 
 
Estimated Forfeiture Rate
2.60% 
 
 
 
Restricted Stock [Member] |
Employees [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Unrecognized stock-based compensation expense
35,519 
 
 
 
Unrecognized stock-based compensation expense, Weighted-average period recognition
11 months 6 days 
 
 
 
Restricted Stock [Member] |
Non-Employee Directors [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Unrecognized stock-based compensation expense
$ 1,167 
 
 
 
Unrecognized stock-based compensation expense, Weighted-average period recognition
11 months 4 days 
 
 
 
Performance Shares [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Service period required for vesting of grants
3 years 
 
 
 
Time Shares [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Award vesting period
3 years 
 
 
 
2006 Employee Plan [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Number of shares authorized under Employee Plan
19,200,000 
 
 
 
Number of appreciation rights, restricted stock units, performance shares or performance units granted
0 
 
 
 
Number of shares authorized under 2006 Equity and Performance Incentive Plan
200,000 
 
 
 
2006 Employee Plan [Member] |
Restricted Stock [Member]
 
 
 
 
Stock-Based Compensation (Textual) [Abstract]
 
 
 
 
Service period required for vesting of grants
3 years 
 
 
 
Stock-Based Compensation (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Option rights
 
 
 
Risk-free interest rate
1.47% 
1.37% 
0.78% 
Expected life of option rights
5 years 1 month 6 days 
5 years 1 month 6 days 
5 years 1 month 10 days 
Expected dividend yield of stock
1.19% 
1.32% 
1.43% 
Expected volatility of stock
22.30% 
28.10% 
27.40% 
Company's non-qualified and incentive stock option right activity for employees and nonemployee directors
 
 
 
Outstanding beginning of the year, Optioned Shares
6,484,592 
6,748,126 
9,857,695 
Granted, Optioned Shares
672,565 
898,728 
1,089,240 
Exercised, Optioned Shares
(1,421,045)
(1,127,942)
(4,140,822)
Forfeited, Optioned Shares
(31,617)
(33,278)
(57,730)
Expired, Optioned Shares
(4,603)
(1,042)
(257)
Outstanding end of the year, Optioned Shares
5,699,892 
6,484,592 
6,748,126 
Exercisable at end of year, Optioned Shares
4,095,246 
4,424,674 
4,245,891 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
 
 
 
Outstanding beginning of the year, Weighted- Average Exercise Price Per Share (in usd per share)
$ 96.25 
$ 79.39 
$ 60.31 
Granted, Weighted- Average Exercise Price Per Share (in usd per share)
$ 224.65 
$ 179.67 
$ 152.93 
Exercised, Weighted- Average Exercise Price Per Share (in usd per share)
$ 70.71 
$ 61.46 
$ 53.40 
Forfeited, Weighted- Average Exercise Price Per Share (in usd per share)
$ 158.92 
$ 115.24 
$ 78.01 
Expired, Weighted- Average Exercise Price Per Share (in usd per share)
$ 86.66 
$ 79.73 
$ 72.65 
Outstanding end of the year, Weighted- Average Exercise Price Per Share (in usd per share)
$ 117.31 
$ 96.25 
$ 79.39 
Exercisable at end of year, Weighted- Average Exercise Price Per Share (in usd per share)
$ 87.79 
$ 71.86 
$ 61.43 
Outstanding end of year, Aggregate Intrinsic Value
$ 830,647 
$ 563,554 
$ 494,699 
Exercisable at end of year, Aggregate Intrinsic Value
$ 717,691 
$ 492,689 
$ 386,484 
Stock- Based Compensation (Details 1) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Summary of grants of restricted stock to certain officers, key employees and non-employee directors
 
 
 
Restricted stock granted (in shares)
201,412 
172,406 
301,856 
Restricted Stock [Member]
 
 
 
Summary of grants of restricted stock to certain officers, key employees and non-employee directors
 
 
 
Restricted stock granted (in shares)
201,412 
172,406 
301,856 
Weighted-average fair value of restricted stock granted during the year (in usd per share)
$ 191.60 
$ 163.63 
$ 99.47 
Stock- Based Compensation (Details 2)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Summary of the Company's restricted stock activity
 
 
 
Outstanding at beginning of year
749,382 
919,748 
1,304,891 
Granted
201,412 
172,406 
301,856 
Vested
(294,438)
(334,750)
(412,859)
Forfeited
(1,080)
(8,022)
(274,140)
Outstanding at end of year
655,276 
749,382 
919,748 
Other (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Other general expense - net
 
 
 
Provisions for environmental matters - net
$ 36,046 
$ (2,751)
$ 6,736 
Loss on disposition of assets
1,436 
5,207 
3,454 
Net expense (income) of exit or disposal activities
 
63 
(4,942)
Total
37,482 
2,519 
5,248 
Other expense (income) - net
 
 
 
Dividend and royalty income
(4,864)
(5,904)
(4,666)
Net expense from financing activities
11,367 
9,829 
9,220 
Foreign currency transaction related losses (gains)
3,603 
7,669 
(3,071)
Other income
(37,524)
(22,684)
(21,074)
Other expense
12,018 
12,026 
9,651 
Total
$ (15,400)
$ 936 
$ (9,940)
Other (Textual) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
OptionPlan
Contract
Dec. 31, 2013
Contract
OptionPlan
Dec. 31, 2012
Contract
OptionPlan
Dec. 31, 2014
Global Finishes Group [Member]
Dec. 31, 2014
Administrative [Member]
Acquisition of Comex US Canada Business [Member]
Segment Reporting Information [Line Items]
 
 
 
 
 
Gain on early termination of customer agreement
 
 
 
$ 6,336 
 
Realized gain on final asset valuations
 
 
 
 
$ 6,198 
Number of foreign currency option outstanding
0 
0 
0 
 
 
Number of foreign forward contracts outstanding
0 
0 
0 
 
 
Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Deferred tax assets:
 
 
 
Exit costs, environ-mental and other similar items
$ 56,441 
$ 45,322 
$ 45,403 
Deferred employee benefit items
55,765 
32,600 
93,039 
Other items (each less than 5 percent of total assets)
85,841 
53,727 
73,388 
Total deferred tax assets
198,047 
131,649 
211,830 
Deferred tax liabilities:
 
 
 
Depreciation and amortization
227,765 
214,696 
202,891 
Current:
 
 
 
Federal
308,283 
229,997 
207,791 
Foreign
53,045 
42,543 
51,264 
State and local
50,049 
33,082 
27,642 
Total current
411,377 
305,622 
286,697 
Deferred:
 
 
 
Federal
(14,974)
30,384 
8,692 
Foreign
(7,361)
(9,041)
(16,964)
State and local
3,297 
6,432 
(2,150)
Total deferred
(19,038)
27,775 
(10,422)
Total provisions for income taxes
$ 392,339 
$ 333,397 
$ 276,275 
Income Taxes (Details 1) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Components of income before income taxes as used for income tax purposes
 
 
 
Domestic
$ 1,113,527 
$ 969,790 
$ 712,873 
Foreign
144,698 
116,168 
194,436 
Total
1,258,225 
1,085,958 
907,309 
Reconciliation of the statutory federal income tax rate to the effective tax rate
 
 
 
Statutory federal income tax rate
35.00% 
35.00% 
35.00% 
Effect of State and local income taxes
2.80% 
2.40% 
1.80% 
Effect of Investment vehicles
(2.50%)
(2.10%)
(2.10%)
Effect of Domestic production activities
(2.50%)
(2.20%)
(1.90%)
Effect of Other - net
(1.60%)
(2.40%)
(2.40%)
Effective tax rate
31.20% 
30.70% 
30.40% 
Reconciliation of unrecognized tax
 
 
 
Balance at beginning of year
30,997 
28,119 
29,666 
Additions based on tax positions related to the current year
3,370 
3,480 
3,760 
Additions for tax positions of prior years
4,428 
5,059 
7,392 
Reductions for tax positions of prior years
(2,349)
(3,378)
(6,583)
Settlements
(4,089)
(103)
(1,139)
Lapses of Statutes of Limitations
(797)
(2,180)
(4,977)
Balance at end of year
$ 31,560 
$ 30,997 
$ 28,119 
Income Taxes (Details Textual) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
Valuation reserves for other deferred tax assets
$ 1,725 
$ 7,390 
$ 11,474 
Domestic net operating loss carryforward
30,750 
 
 
Foreign net operating losses carryforward
60,943 
 
 
Effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of the Income Taxes Topic of the ASC
(1,887)
4,411 
7,572 
Retained earnings invested by foreign subsidiaries for which provision was not made
3,683 
 
 
Undistributed foreign earnings
539 
 
 
Unrecognized tax benefits adjusted
28,208 
27,767 
25,011 
Amount of unrecognized tax benefits where significant change is reasonably possible
4,372 
 
 
Income tax interest and penalties
2,144 
103 
1,532 
Accrued income tax interest and penalties
$ 5,732 
$ 6,246 
$ 6,178 
Net Income Per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
class
Dec. 31, 2013
Dec. 31, 2012
Basic
 
 
 
 
 
 
 
 
 
 
 
Average common shares outstanding (in shares)
 
 
 
 
 
 
 
 
96,190,101 
100,897,512 
101,714,901 
Net income
$ 132,743 
$ 326,240 
$ 291,447 
$ 115,457 
$ 116,123 
$ 262,966 
$ 257,287 
$ 116,185 
$ 865,887 
$ 752,561 
$ 631,034 
Less net income allocated to unvested restricted shares
 
 
 
 
 
 
 
 
(4,892)
(4,596)
(5,114)
Net income allocated to common shares
 
 
 
 
 
 
 
 
860,995 
747,965 
625,920 
Net income per common share - basic (in dollars per share)
$ 1.40 
$ 3.42 
$ 3.00 
$ 1.16 
$ 1.16 
$ 2.61 
$ 2.51 
$ 1.13 
$ 8.95 
$ 7.41 
$ 6.15 
Diluted
 
 
 
 
 
 
 
 
 
 
 
Average common shares outstanding (in shares)
 
 
 
 
 
 
 
 
96,190,101 
100,897,512 
101,714,901 
Stock options and other contingently issuable shares (in shares)
 
 
 
 
 
 
 
 
1,885,334 1
2,151,359 1
2,215,528 1
Average common shares outstanding assuming dilution (in shares)
 
 
 
 
 
 
 
 
98,075,435 
103,048,871 
103,930,429 
Net income
132,743 
326,240 
291,447 
115,457 
116,123 
262,966 
257,287 
116,185 
865,887 
752,561 
631,034 
Less net income allocated to unvested restricted shares assuming dilution
 
 
 
 
 
 
 
 
(4,804)
(4,509)
(5,008)
Net income allocated to common shares assuming dilution
 
 
 
 
 
 
 
 
$ 861,083 
$ 748,052 
$ 626,026 
Net income per common share - diluted (in dollars per share)
$ 1.37 
$ 3.35 
$ 2.94 
$ 1.14 
$ 1.14 
$ 2.55 
$ 2.46 
$ 1.11 
$ 8.78 
$ 7.26 
$ 6.02 
Net Income Per Common Share (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding, anti-dilutive
 
 
 
 
 
 
 
 
608,477 
842,354 
1,047,734 
Classes of participating securities
 
 
 
 
 
 
 
 
2 
 
 
Percent common shares representing outstanding shares
99.00% 
 
 
 
 
 
 
 
99.00% 
 
 
Percent restricted shares representing outstanding shares
1.00% 
 
 
 
 
 
 
 
1.00% 
 
 
Summary of Quarterly Results of Operations (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Increase in gross profit per share
$ 0.13 
 
 
 
$ 0.09 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 2,569,412 
$ 3,150,570 
$ 3,042,995 
$ 2,366,556 
$ 2,457,058 
$ 2,847,417 
$ 2,713,889 
$ 2,167,168 
$ 11,129,533 
$ 10,185,532 
$ 9,534,462 
Gross profit
1,217,975 
1,470,955 
1,409,653 
1,065,901 
1,124,178 
1,295,958 
1,233,579 
962,851 
5,164,484 
4,616,566 
4,206,226 1
Net income
132,743 
326,240 
291,447 
115,457 
116,123 
262,966 
257,287 
116,185 
865,887 
752,561 
631,034 
Net income per common share - basic (in dollars per share)
$ 1.40 
$ 3.42 
$ 3.00 
$ 1.16 
$ 1.16 
$ 2.61 
$ 2.51 
$ 1.13 
$ 8.95 
$ 7.41 
$ 6.15 
Net income per common share - diluted (in dollars per share)
$ 1.37 
$ 3.35 
$ 2.94 
$ 1.14 
$ 1.14 
$ 2.55 
$ 2.46 
$ 1.11 
$ 8.78 
$ 7.26 
$ 6.02 
Summary of Quarterly Results of Operations (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Increase in gross profit
21,077 
 
 
 
14,938 
 
 
 
 
 
 
Increase in gross profit, per share
$ 0.13 
 
 
 
$ 0.09 
 
 
 
 
 
 
Decrease in Selling, general and administrative expenses
 
 
 
 
(14,141)
 
 
 
 
 
 
Decrease in Selling, general and administrative expenses per share
 
 
 
 
$ (0.09)
 
 
 
 
 
 
Increase In Other General Expense, Net
25,012 
 
 
 
 
 
 
 
 
 
 
Increase In Other General Expense, Net, Per Share
$ 0.16 
 
 
 
 
 
 
 
 
 
 
Titanium Dioxide Antitrust Litigation [Member]
 
 
 
 
 
 
 
 
 
 
 
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Settlement gain related to litigation settlement
$ 21,420 
 
 
 
 
 
 
 
 
 
 
Increase in gross profit per share
$ 0.13 
 
 
 
 
 
 
 
 
 
 
Summary of Quarterly Results of Operations (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Increase in gross profit, per share
$ 0.13 
 
 
 
 
 
 
 
 
 
 
Operating Leases (Details Textual) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Operating Leases (Textual) [Abstract]
 
 
 
Rental expenses
$ 376,914 
$ 327,592 
$ 310,109 
Contingent rental included in rent expense
$ 52,379 
$ 44,084 
$ 39,340 
Operating Leases (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Future minimum lease payments under noncancellable operating leases
 
2015
$ 296,875 
2016
254,608 
2017
204,898 
2018
156,495 
2019
113,968 
Later years
287,929 
Total minimum lease payments
$ 1,314,773 
Reportable Segment Information (Details Textual) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
segment
Dec. 31, 2013
Dec. 31, 2012
Segment Reporting Information [Line Items]
 
 
 
 
 
DOL settlement accrual
$ 80,000 
$ 80,000 
 
$ (80,000)
$ 80,000 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Number of reportable operating segments
 
 
4 
 
 
Long lived assets
 
3,085,499 
3,139,272 
3,223,790 
3,085,499 
Identifiable assets
 
6,234,737 
5,706,052 
6,382,507 
6,234,737 
Consolidated foreign subsidiaries assets
 
1,598,996 
1,359,991 
1,625,422 
1,598,996 
Percent of assets of consolidated foreign subsidiaries to Company's assets
 
25.60% 
23.80% 
25.50% 
25.60% 
Export sales and sales to individual customer
 
 
less than 10 percent of consolidated sales to unaffiliated customers 
 
 
Foreign Countries [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Net external sales
 
 
2,203,804 
2,129,626 
2,049,814 
Segment profit
 
 
115,629 
106,166 
158,377 
Long lived assets
 
$ 616,869 
$ 551,364 
$ 648,908 
$ 616,869 
Paint Stores Group [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Number of company-operated stores
 
 
4,003 
 
 
Number of net new stores
 
 
95 
388 
70 
New stores opened
 
 
109 
 
 
Number of stores closed
 
 
14 
 
 
Paint Stores Group [Member] |
United States of America [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
95 
 
 
Number of stores closed
 
 
11 
 
 
Paint Stores Group [Member] |
Canada [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
9 
 
 
Number of stores closed
 
 
3 
 
 
Paint Stores Group [Member] |
Puerto Rico [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
2 
 
 
Paint Stores Group [Member] |
Trinidad [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
1 
 
 
Paint Stores Group [Member] |
Jamaica [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
1 
 
 
Paint Stores Group [Member] |
St. Lucia [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
1 
 
 
Consumer Group [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Percent of sales of one group Including Inter segment transfers represented Products sold through other stores group
 
 
66.00% 
 
 
Global Finishes Group [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Number of company-operated stores
 
 
300 
 
 
Number of subsidiaries in foreign countries
 
 
34 
 
 
Income from licensing agreements in number of foreign countries
 
 
16 
 
 
Global Finishes Group [Member] |
United States of America [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
New stores opened
 
 
1 
 
 
Number of stores closed
 
 
1 
 
 
Decrease in branches
 
 
0 
 
 
Latin America Coatings Group [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Number of company-operated stores
 
 
276 
 
 
New stores opened
 
 
3 
 
 
Number of stores closed
 
 
9 
 
 
Decrease in branches
 
 
(6)
 
 
Number of subsidiaries in foreign countries
 
 
9 
 
 
Income from licensing agreements in number of foreign countries
 
 
7 
 
 
Number of foreign Joint ventures
 
 
4 
 
 
Latin America Coatings Group [Member] |
South America [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Number of stores closed
 
 
7 
 
 
Latin America Coatings Group [Member] |
Mexico [Member]
 
 
 
 
 
Reportable Segment Information (Textual) [Abstract]
 
 
 
 
 
Number of stores closed
 
 
2 
 
 
Reportable Segment Information (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
$ 11,130,000,000 
$ 10,186,000,000 
$ 9,534,000,000 
Income before income taxes
 
 
1,258,226,000 
1,085,958,000 
907,309,000 
Identifiable assets
 
6,234,737,000 
5,706,052,000 
6,382,507,000 
6,234,737,000 
Capital expenditures
 
 
200,545,000 
166,680,000 
157,112,000 
Depreciation
 
 
169,087,000 
158,763,000 
152,217,000 
DOL settlement
80,000,000 
80,000,000 
 
(80,000,000)
80,000,000 
Paint Stores Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
6,852,000,000 
6,002,000,000 
5,410,000,000 
Consumer Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
1,421,000,000 
1,342,000,000 
1,322,000,000 
Global Finishes Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
2,081,000,000 
2,005,000,000 
1,961,000,000 
Latin America Coatings Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
771,000,000 
832,000,000 
836,000,000 
Administrative [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
5,000,000 
5,000,000 
5,000,000 
Intersegment Eliminations [Member] |
Consumer Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
2,745,000,000 
2,409,000,000 
2,320,000,000 
Intersegment Eliminations [Member] |
Global Finishes Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
8,000,000 
9,000,000 
7,000,000 
Intersegment Eliminations [Member] |
Latin America Coatings Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
40,000,000 
39,000,000 
47,000,000 
Intersegment Eliminations [Member] |
Administrative [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
(2,793,000,000)
(2,457,000,000)
(2,374,000,000)
Operating Segments [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
11,130,000,000 
10,186,000,000 
9,534,000,000 
Segment profit
 
 
1,695,000,000 
1,442,000,000 
1,307,000,000 
Interest expense
 
 
(64,000,000)
(63,000,000)
(43,000,000)
Administrative expenses and other
 
 
(373,000,000)
(293,000,000)
(357,000,000)
Income before income taxes
 
 
1,258,000,000 
1,086,000,000 
907,000,000 
Identifiable assets
 
 
5,706,000,000 
 
 
Capital expenditures
 
 
201,000,000 
167,000,000 
157,000,000 
Depreciation
 
 
169,000,000 
159,000,000 
152,000,000 
Operating Segments [Member] |
Paint Stores Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
6,852,000,000 
6,002,000,000 
5,410,000,000 
Segment profit
 
 
1,201,000,000 
991,000,000 
862,000,000 
Income before income taxes
 
 
1,201,000,000 
991,000,000 
862,000,000 
Reportable segment margins
 
 
17.50% 
16.50% 
15.90% 
Identifiable assets
 
1,374,000,000 
1,602,000,000 
1,668,000,000 
1,374,000,000 
Capital expenditures
 
 
87,000,000 
73,000,000 
67,000,000 
Depreciation
 
 
58,000,000 
55,000,000 
49,000,000 
Operating Segments [Member] |
Consumer Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
4,166,000,000 
3,751,000,000 
3,642,000,000 
Segment profit
 
 
253,000,000 
242,000,000 
217,000,000 
Income before income taxes
 
 
253,000,000 
242,000,000 
217,000,000 
Reportable segment margins
 
 
6.10% 
6.50% 
6.00% 
Identifiable assets
 
1,701,000,000 
1,883,000,000 
1,762,000,000 
1,701,000,000 
Capital expenditures
 
 
45,000,000 
40,000,000 
47,000,000 
Depreciation
 
 
48,000,000 
45,000,000 
43,000,000 
Operating Segments [Member] |
Global Finishes Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
2,089,000,000 
2,014,000,000 
1,968,000,000 
Segment profit
 
 
201,000,000 
170,000,000 
147,000,000 
Income before income taxes
 
 
201,000,000 
170,000,000 
147,000,000 
Reportable segment margins
 
 
9.60% 
8.40% 
7.50% 
Identifiable assets
 
987,000,000 
874,000,000 
964,000,000 
987,000,000 
Capital expenditures
 
 
16,000,000 
15,000,000 
14,000,000 
Depreciation
 
 
28,000,000 
29,000,000 
30,000,000 
Operating Segments [Member] |
Latin America Coatings Group [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
811,000,000 
871,000,000 
883,000,000 
Segment profit
 
 
40,000,000 
39,000,000 
81,000,000 
Income before income taxes
 
 
40,000,000 
39,000,000 
81,000,000 
Reportable segment margins
 
 
4.90% 
4.50% 
9.20% 
Identifiable assets
 
485,000,000 
427,000,000 
485,000,000 
485,000,000 
Capital expenditures
 
 
8,000,000 
7,000,000 
9,000,000 
Depreciation
 
 
9,000,000 
10,000,000 
10,000,000 
Operating Segments [Member] |
Administrative [Member]
 
 
 
 
 
Reportable segment information
 
 
 
 
 
Total net sales and intersegment transfers
 
 
(2,788,000,000)
(2,452,000,000)
(2,369,000,000)
Segment profit
 
 
 
 
   
Interest expense
 
 
(64,000,000)
(63,000,000)
(43,000,000)
Administrative expenses and other
 
 
(373,000,000)
(293,000,000)1
(357,000,000)
Income before income taxes
 
 
(437,000,000)
(356,000,000)
(400,000,000)
Identifiable assets
 
1,688,000,000 
920,000,000 
1,504,000,000 
1,688,000,000 
Capital expenditures
 
 
45,000,000 
32,000,000 
20,000,000 
Depreciation
 
 
$ 26,000,000 
$ 20,000,000 
$ 20,000,000