Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2023 |
Document Transition Report | false |
Entity File Number | 1-04851 |
Entity Registrant Name | THE SHERWIN-WILLIAMS COMPANY |
Entity Incorporation, State or Country Code | OH |
Entity Tax Identification Number | 34-0526850 |
Entity Address, Address Line One | 101 West Prospect Avenue |
Entity Address, City or Town | Cleveland, |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44115-1075 |
City Area Code | 216 |
Local Phone Number | 566-2000 |
Title of 12(b) Security | Common Stock, par value of $0.33-1/3 per share |
Trading Symbol | SHW |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 257,148,607 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Document Fiscal Year Focus | 2023 |
Entity Central Index Key | 0000089800 |
Current Fiscal Year End Date | --12-31 |
STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 6,240.6 | $ 5,872.3 | $ 11,683 | $ 10,871 |
Cost of goods sold | 3,368.3 | 3,423.3 | 6,389.8 | 6,369.1 |
Gross profit | $ 2,872.3 | $ 2,449 | $ 5,293.2 | $ 4,501.9 |
Percent to net sales | 46% | 41.70% | 45.30% | 41.40% |
Selling, general and administrative expenses | $ 1,760 | $ 1,597.6 | $ 3,453 | $ 3,083.1 |
Percent to net sales | 28.20% | 27.20% | 29.60% | 28.40% |
Other general (income) expense - net | $ (32.5) | $ 4.4 | $ (22) | $ 6.9 |
Impairment | 34 | 0 | 34 | 0 |
Interest expense | 111.7 | 92.9 | 221 | 181.3 |
Interest income | (7.2) | (1.3) | (10.7) | (2.2) |
Other (income) expense - net | (5.8) | 15.5 | (9) | 31.8 |
Income before income taxes | 1,012.1 | 739.9 | 1,626.9 | 1,201 |
Income taxes | 218.4 | 162 | 355.8 | 252.3 |
Net income | $ 793.7 | $ 577.9 | $ 1,271.1 | $ 948.7 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 3.10 | $ 2.24 | $ 4.96 | $ 3.67 |
Diluted (in dollars per share) | $ 3.07 | $ 2.21 | $ 4.90 | $ 3.61 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 256 | 258.1 | 256.3 | 258.5 |
Diluted (in shares) | 258.9 | 261.8 | 259.3 | 262.5 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 793.7 | $ 577.9 | $ 1,271.1 | $ 948.7 | |
Other comprehensive income (loss), net of tax: | |||||
Foreign currency translation adjustments | [1] | 19.9 | (173.1) | 60.1 | (216.7) |
Pension and other postretirement benefit adjustments: | |||||
Amounts reclassified from AOCI | [2] | (4.5) | 1.5 | (9) | 2.5 |
Unrealized net gains on cash flow hedges: | |||||
Amounts reclassified from AOCI | [3] | (0.9) | (1) | (1.8) | (2) |
Other comprehensive income (loss) | 14.5 | (172.6) | 49.3 | (216.2) | |
Comprehensive income | $ 808.2 | $ 405.3 | $ 1,320.4 | $ 732.5 | |
[1]The three months ended June 30, 2023 and 2022 include unrealized (losses) gains, net of taxes, of $(8.6) million and $30.8 million, respectively, related to net investment hedges. The six months ended June 30, 2023 and 2022 include unrealized (losses) gains, net of taxes, of $(12.8) million and $38.9 million, respectively, related to net investment hedges. See Note 14 for additional information.[2]Net of taxes of $1.3 million and $(0.6) million for the three months ended June 30, 2023 and 2022, respectively. Net of taxes of $3.0 million and $(0.8) million for the six months ended June 30, 2023 and 2022, respectively.[3]Net of taxes of $0.3 million and $0.4 million for the three months ended June 30, 2023 and 2022, respectively. Net of taxes of $0.6 million and $0.7 million for the six months months ended June 30, 2023 and 2022, respectively. |
STATEMENTS OF CONSOLIDATED CO_2
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | ||
Foreign currency translation adjustments | [1] | $ 19.9 | $ (173.1) | $ 60.1 | $ (216.7) |
Pension and other postretirement benefit adjustments, amounts reclassified from other comprehensive income, tax | 1.3 | (0.6) | 3 | (0.8) | |
Unrealized net gains on cash flow hedges, amounts reclassified from other comprehensive income, tax | 0.3 | 0.4 | 0.6 | 0.7 | |
Net investment hedge | |||||
Foreign currency translation adjustments | $ (8.6) | $ 30.8 | $ (12.8) | $ 38.9 | |
[1]The three months ended June 30, 2023 and 2022 include unrealized (losses) gains, net of taxes, of $(8.6) million and $30.8 million, respectively, related to net investment hedges. The six months ended June 30, 2023 and 2022 include unrealized (losses) gains, net of taxes, of $(12.8) million and $38.9 million, respectively, related to net investment hedges. See Note 14 for additional information. |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 209.4 | $ 198.8 | $ 312.6 |
Accounts receivable, net | 3,117.8 | 2,563.6 | 2,982.5 |
Inventories | 2,439 | 2,626.5 | 2,411.6 |
Other current assets | 584.4 | 518.8 | 552.8 |
Total current assets | 6,350.6 | 5,907.7 | 6,259.5 |
Property, plant and equipment, net | 2,442.5 | 2,207 | 1,961.9 |
Goodwill | 7,446.5 | 7,583.2 | 7,106.1 |
Intangible assets | 3,934.4 | 4,002 | 3,955.1 |
Operating lease right-of-use assets | 1,869.2 | 1,866.8 | 1,842.4 |
Other assets | 1,122.9 | 1,027.3 | 927.8 |
Total assets | 23,166.1 | 22,594 | 22,052.8 |
Current liabilities: | |||
Short-term borrowings | 806.2 | 978.1 | 2,012 |
Accounts payable | 2,489.7 | 2,436.5 | 2,992.9 |
Compensation and taxes withheld | 700.5 | 784.5 | 587.6 |
Accrued taxes | 308 | 197.4 | 185.6 |
Current portion of long-term debt | 499.5 | 0.6 | 0.6 |
Current portion of operating lease liabilities | 436.1 | 425.3 | 418.1 |
Other accruals | 1,099.1 | 1,138.3 | 1,001.4 |
Total current liabilities | 6,339.1 | 5,960.7 | 7,198.2 |
Long-term debt | 9,095.7 | 9,591 | 8,593.6 |
Postretirement benefits other than pensions | 139.3 | 139.3 | 257.5 |
Deferred income taxes | 710.9 | 681.6 | 754 |
Long-term operating lease liabilities | 1,503.2 | 1,512.9 | 1,483.1 |
Other long-term liabilities | 1,746.8 | 1,606.4 | 1,541.8 |
Shareholders’ equity: | |||
Common stock - $0.33-1/3 par value: 0.0 million, 258.9 million and 259.2 million shares outstanding at June 30, 2023, December 31, 2022 and June 30, 2022, respectively | 91.4 | 91.2 | 91 |
Other capital | 4,044.6 | 3,963.9 | 3,880.3 |
Retained earnings | 4,481.5 | 3,523.2 | 2,763.3 |
Treasury stock, at cost | (4,335.1) | (3,775.6) | (3,595.4) |
Accumulated other comprehensive loss | (651.3) | (700.6) | (914.6) |
Total shareholders' equity | 3,631.1 | 3,102.1 | 2,224.6 |
Total liabilities and shareholders’ equity | $ 23,166.1 | $ 22,594 | $ 22,052.8 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.33 |
Common stock, shares outstanding (in shares) | 257.1 | 258.9 | 259.2 |
STATEMENTS OF CONDENSED CONSOLI
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING ACTIVITIES | ||
Net income | $ 1,271.1 | $ 948.7 |
Adjustments to reconcile net income to net operating cash: | ||
Depreciation | 146.1 | 130.3 |
Non-cash lease expense | 225 | 208.4 |
Amortization of intangible assets | 166.7 | 156.5 |
Gain on divestiture of business | (20.1) | 0 |
Impairment | 34 | 0 |
Amortization of credit facility and debt issuance costs | 4.5 | 3.3 |
Stock-based compensation expense | 46 | 53.7 |
Amortization of non-traded investments | 39.7 | 21.4 |
(Gain) loss on sale or disposition of assets | (20.8) | 2.2 |
Provisions for environmental-related matters | 13.3 | 4.7 |
Provisions for restructuring | 15.3 | 0 |
Defined benefit pension plans net cost | 1.7 | 2.8 |
Other postretirement benefit plan net cost | (9) | 0 |
Deferred income taxes | (27.1) | (24.2) |
Other | 5.1 | 9.2 |
Change in working capital accounts - net | (239.1) | (668.1) |
Change in operating lease liabilities | (226.4) | (209.4) |
Costs incurred for environmental-related matters | (12.4) | (12) |
Other | (119) | 12.2 |
Net operating cash | 1,294.6 | 639.7 |
INVESTING ACTIVITIES | ||
Capital expenditures | (416) | (235.8) |
Acquisitions of businesses, net of cash acquired | (23.2) | (211.8) |
Proceeds from divestiture of business | 33 | 0 |
Proceeds from sale of assets | 47.2 | 14.9 |
Other | (58.9) | (41.2) |
Net investing cash | (417.9) | (473.9) |
FINANCING ACTIVITIES | ||
Net (decrease) increase in short-term borrowings | 1,248.5 | |
Net (decrease) increase in short-term borrowings | (171.6) | |
Payments of long-term debt | 0 | (260.2) |
Payments of cash dividends | (312.8) | (307.1) |
Proceeds from stock options exercised | 35.3 | 26.3 |
Treasury stock purchased | (535.9) | (703.5) |
Proceeds from treasury stock issued | 0 | 22 |
Proceeds from real estate financing transactions | 140.2 | 0 |
Other | (24.8) | (34) |
Net financing cash | (869.6) | (8) |
Effect of exchange rate changes on cash | 3.5 | (10.9) |
Net increase in cash and cash equivalents | 10.6 | 146.9 |
Cash and cash equivalents at beginning of year | 198.8 | 165.7 |
Cash and cash equivalents at end of period | 209.4 | 312.6 |
Income taxes paid | 305.6 | 177.2 |
Interest paid | $ 219.7 | $ 177.9 |
STATEMENTS OF CONSOLIDATED_SHAR
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Millions | Total | Common Stock | Other Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2021 | $ 2,437.2 | $ 90.8 | $ 3,793 | $ 2,121.7 | $ (2,869.9) | $ (698.4) |
Shareholders' Equity [Roll Forward] | ||||||
Net income | 370.8 | 370.8 | ||||
Other comprehensive income (loss) | (43.6) | (43.6) | ||||
Treasury stock purchased | (407.1) | (407.1) | ||||
Treasury stock issued | 22 | 11 | 11 | |||
Stock-based compensation activity | 5.6 | 0.2 | 38.3 | (32.9) | ||
Other adjustments | 0.3 | 0.4 | (0.1) | |||
Cash dividends | (150.9) | (150.9) | ||||
Ending balance at Mar. 31, 2022 | 2,234.3 | 91 | 3,842.7 | 2,341.5 | (3,298.9) | (742) |
Beginning balance at Dec. 31, 2021 | 2,437.2 | 90.8 | 3,793 | 2,121.7 | (2,869.9) | (698.4) |
Shareholders' Equity [Roll Forward] | ||||||
Net income | 948.7 | |||||
Other comprehensive income (loss) | (216.2) | |||||
Ending balance at Jun. 30, 2022 | 2,224.6 | 91 | 3,880.3 | 2,763.3 | (3,595.4) | (914.6) |
Beginning balance at Mar. 31, 2022 | 2,234.3 | 91 | 3,842.7 | 2,341.5 | (3,298.9) | (742) |
Shareholders' Equity [Roll Forward] | ||||||
Net income | 577.9 | 577.9 | ||||
Other comprehensive income (loss) | (172.6) | (172.6) | ||||
Treasury stock purchased | (296.4) | (296.4) | ||||
Stock-based compensation activity | 41.5 | 41.5 | ||||
Other adjustments | (3.9) | (3.9) | 0.1 | (0.1) | ||
Cash dividends | (156.2) | (156.2) | ||||
Ending balance at Jun. 30, 2022 | 2,224.6 | 91 | 3,880.3 | 2,763.3 | (3,595.4) | (914.6) |
Beginning balance at Dec. 31, 2022 | 3,102.1 | 91.2 | 3,963.9 | 3,523.2 | (3,775.6) | (700.6) |
Shareholders' Equity [Roll Forward] | ||||||
Net income | 477.4 | 477.4 | ||||
Other comprehensive income (loss) | 34.8 | 34.8 | ||||
Treasury stock purchased | (301.7) | (301.7) | ||||
Stock-based compensation activity | 10.4 | 0.1 | 33.8 | (23.5) | ||
Other adjustments | 0.3 | 0.3 | ||||
Cash dividends | (156.5) | (156.5) | ||||
Ending balance at Mar. 31, 2023 | 3,166.8 | 91.3 | 3,998 | 3,844.1 | (4,100.8) | (665.8) |
Beginning balance at Dec. 31, 2022 | 3,102.1 | 91.2 | 3,963.9 | 3,523.2 | (3,775.6) | (700.6) |
Shareholders' Equity [Roll Forward] | ||||||
Net income | 1,271.1 | |||||
Other comprehensive income (loss) | 49.3 | |||||
Ending balance at Jun. 30, 2023 | 3,631.1 | 91.4 | 4,044.6 | 4,481.5 | (4,335.1) | (651.3) |
Beginning balance at Mar. 31, 2023 | 3,166.8 | 91.3 | 3,998 | 3,844.1 | (4,100.8) | (665.8) |
Shareholders' Equity [Roll Forward] | ||||||
Net income | 793.7 | 793.7 | ||||
Other comprehensive income (loss) | 14.5 | 14.5 | ||||
Treasury stock purchased | (234.2) | (234.2) | ||||
Stock-based compensation activity | 47.5 | 0.1 | 47.5 | (0.1) | ||
Other adjustments | (0.9) | (0.9) | ||||
Cash dividends | (156.3) | (156.3) | ||||
Ending balance at Jun. 30, 2023 | $ 3,631.1 | $ 91.4 | $ 4,044.6 | $ 4,481.5 | $ (4,335.1) | $ (651.3) |
STATEMENTS OF CONSOLIDATED_SH_2
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends (in dollars per share) | $ 0.605 | $ 0.605 | $ 0.60 | $ 0.60 | $ 1.21 | $ 1.20 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, the Company) have been prepared in accordance with U.S. generally accepted accounting principles (US GAAP) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company has historically experienced, and expects to continue to experience, variability in quarterly results. The results of operations for the three and six months ended June 30, 2023 are not indicative of the results to be expected for the full year as business is seasonal in nature with the majority of Net sales for the Reportable Segments traditionally occurring during the second and third quarters. However, periods of economic uncertainty can alter the Company's seasonal patterns. Since December 31, 2022, a ccounting estimates were revised as necessary during the first six months of 2023 based on new information and changes in facts and circumstances. Certain amounts in the condensed consolidated financial statements for the three and six months ended June 30, 2022 have been reclassified to conform to the 2023 presentation. The following represents updates to certain significant accounting policy disclosures. For further details on the Company’s significant accounting policies, see Note 1 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Reportable Segments During the first quarter of 2023, the Company realigned its organizational structure to manage the Latin America architectural paint business within the Consumer Brands Group. Previously, the Latin America architectural paint business was managed within The Americas Group; however, Latin America architectural demand and service model trends are shifting to align more closely with the Consumer Brand Group’s strategy. As a result of the change, The Americas Group has been renamed the Paint Stores Group which now focuses on the core U.S., Canada and Caribbean region stores business. All reported segment information herein, including comparable prior periods, include the Latin America architectural paint business within the Consumer Brands Group. See Notes 7 and 20 for additional information. Real Estate Financing The Company has entered into certain sale-leaseback agreements that do not qualify as asset sales and were accounted for as real estate financing transactions. These arrangements primarily consist of our new headquarters currently under construction. During the second quarter of 2023, the Company received $72.2 million pursuant to the transaction for a total amount in 2023 of $138.7 million. See Note 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for more information concerning real estate financing. Supply Chain Financing As part of our strategy to manage working capital, we have entered into agreements with various financial institutions that act as intermediaries between the Company and certain suppliers. The Company is not a party to agreements between the suppliers and the financial institutions. These arrangements provide participating suppliers the option to settle outstanding Accounts payable incurred by the Company in the normal course of business early at a discount and do not impact our rights and obligations with suppliers, including amounts due and scheduled payment terms. Under the terms of our agreements, the Company confirms the validity of each supplier invoice to the respective financial institution upon receipt. On the invoice due date, the Company settles the outstanding amount with the respective financial institution. Liabilities associated with these arrangements are recorded in Accounts payable on the Consolidated Balance Sheets and amounted to $242.3 million, $258.1 million and $267.1 million at June 30, 2023, December 31, 2022 and June 30, 2022, respectively. Non-Traded Investments The Company has invested in the U.S. affordable housing and historic renovation real estate markets and certain other investments that have been identified as variable interest entities which qualify for certain tax credits. 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 ASC, the investments are not consolidated. The carrying value of the investments is recorded in Other assets. The liabilities for the estimated future capital contributions are recorded in Other accruals and Other long-term liabilities. The following table summarizes the balances related to the investments: June 30, December 31, June 30, 2023 2022 2022 Other assets $ 605.0 $ 587.0 $ 528.1 Other accruals 53.9 89.8 48.4 Other long-term liabilities 530.8 476.5 470.4 |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Adopted Effective January 1, 2023, the Company adopted Accounting Standards Update (ASU) 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This ASU requires disclosure about an entity’s use of supplier finance programs, including the key terms of the programs and the obligations outstanding at the end of the reporting period. The adoption of ASU 2022-04 did not affect the Company’s financial position, results of operations or cash flows as the standard only impacts financial statement footnote disclosures. See Note 1 for additional information. In addition, a required rollforward of activity within the programs will be disclosed prospectively beginning with the annual period ending December 31, 2024. Effective January 1, 2023, the Company adopted ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers.” This ASU requires an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The adoption of ASU 2021-08 did not have a material impact on the Company’s financial position, results of operations or cash flows. Not Yet Adopted |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Acquisitions Closed in Prior Year In April 2022, the Company completed the acquisition of the European industrial coatings business of Sika AG. In July 2022, the Company completed the acquisitions of Gross & Perthun GmbH, Dur-A-Flex, Inc. and Powdertech Oy Ltd. In December 2022, the Company completed the acquisition of Industria Chimica Adriatica S.p.A. (ICA). The acquired businesses are reported within the Company’s Performance Coatings Group. During 2023, the Company revised the purchase price allocation from Goodwill to the various net assets acquired through its 2022 acquisition of ICA. Goodwill decreased $149.6 million and deferred tax liabilities increased $59.0 million, offset by an increase in finite-lived intangible assets of $192.7 million, with the remaining purchase price allocated to various other assets acquired and liabilities assumed in the transaction. There was no material impact on previously reported financial results from these adjustments. Furthermore, in accordance with certain purchase agreements, the Company paid $22.9 million in 2023 related to holdbacks for acquisitions completed in prior years. The Company has finalized the purchase price allocation for Sika AG and expects to complete this process for the remaining 2022 acquisitions within the allowable measurement period. The results of operations for the acquisitions have been included in the consolidated financial statements since the respective acquisition dates. Pro forma results of operations have not been presented as the impact on the Company’s consolidated financial results is not material. Pending Acquisition During the fourth quarter of 2022, the Company signed an agreement to acquire German-based Specialized Industrial Coatings Holding (SIC Holding), a Peter Möhrle Holding and GP Capital UG venture comprised of Oskar Nolte GmbH and Klumpp Coatings GmbH. The transaction is subject to customary closing conditions and is expected to close in 2023. The acquired business will be reported within the Company’s Performance Coatings Group. Divestitures Closed The Company completed the divestiture of a non-core domestic aerosol business within the Consumer Brands Group in April 2023. This transaction resulted in the recognition of a $20.1 million gain within the Administrative segment. This gain was recorded within the Other general (income) expense - net caption in the Statements of Consolidated Income during the second quarter of 2023. Pending |
HELD FOR SALE
HELD FOR SALE | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
HELD FOR SALE | HELD FOR SALE During the second quarter of 2023, the Company determined the China architectural business within the Consumer Brands Group reportable segment met the criteria to be classified as held for sale in accordance with the Property, Plant, and Equipment Topic of the ASC. The assets and liabilities held for sale as of June 30, 2023 are measured at the lower of carrying value or fair value less cost to sell and were determined to not meet the criteria of a discontinued operation as the pending divestiture did not represent a strategic shift for the Company. Depreciation and amortization expense was not recorded for the period in which the long-lived assets were classified as held for sale. Following the prescribed order of impairment testing, the Company first reviewed individual tangible and intangible assets under their applicable Topic of the ASC to determine if their carrying value was higher than their respective fair value. As a result, the Company recorded an impairment charge of $6.9 million within the Consumer Brands Group related to China architectural trademarks using the royalty savings valuation method. For more information on the Company’s Goodwill and Intangible Assets critical accounting policy, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The Company then compared the updated carrying value of the assets and liabilities comprising the disposal group as a whole to its respective fair value which was determined to be equal to the selling price, less costs to sell. As a result of this comparison, the Company recorded an additional impairment charge of $27.1 million within the Administrative segment in the second quarter of 2023 and classified the remaining assets as Other current assets and remaining liabilities as Other accruals at June 30, 2023. The disposal group is classified as level 2 in the fair value hierarchy as it is based on a specific price and other observable inputs for similar items with no active market. The assets, liabilities and valuation adjustment held for sale at June 30, 2023 were as follows: June 30, 2023 Tangible assets $ 22.5 Intangible assets 93.3 Valuation adjustment (27.1) Total assets $ 88.7 Total liabilities $ 20.9 |
RESTRUCTURING
RESTRUCTURING | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In the fourth quarter of 2022, the Company announced a business restructuring plan (Restructuring Plan) to simplify the Company’s operating model and portfolio of brands within the Consumer Brands Group and to reduce costs in all regions in the Consumer Brands Group, Performance Coatings Group and the Administrative segment. The actions taken under the Restructuring Plan better position the Company to continue to add long-term shareholder value. Key focus areas within the Consumer Brands Group include the China architectural business, aerosol portfolio and optimization of the overall retail portfolio. Multiple alternatives were considered to determine the course of action related to the focus areas. The Company ultimately determined that divestiture, rather than restructuring, of the China architectural business and a non-core domestic aerosol business was the highest and best use of resources to drive long-term shareholder value. For more information on these divestitures, see Note 3. As a result of continuing evaluation in the second quarter of 2023, the Company determined that these divestitures and previous actions under the Restructuring Plan achieved the original objectives of the focus areas. Accordingly, and in conjunction with other restructuring actions during 2023, there is no additional expense expected to be incurred under the Restructuring Plan. The following table summarizes the activity and remaining liabilities associated with the Restructuring Plan: Consumer Brands Performance Administrative Total Balance at January 1, 2023 $ 25.6 $ 16.1 $ — $ 41.7 Provisions: Severance and related costs (1) 3.6 (0.2) 1.3 4.7 Other qualified costs (2) 10.6 — — 10.6 Total 14.2 (0.2) 1.3 15.3 Payments, currency and other adjustments (31.8) (8.8) (1.3) (41.9) Balance at June 30, 2023 $ 8.0 $ 7.1 $ — $ 15.1 Restructuring Plan Expense: Total expense incurred to date $ 39.8 $ 22.0 $ 1.3 $ 63.1 Additional expense expected — — — — Total expected expense $ 39.8 $ 22.0 $ 1.3 $ 63.1 (1) Severance and related costs were recorded in Selling, general and administrative expenses. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Included in Inventories were the following: June 30, December 31, June 30, 2023 2022 2022 Finished goods $ 1,924.7 $ 1,957.7 $ 1,812.1 Work in process and raw materials 514.3 668.8 599.5 Inventories $ 2,439.0 $ 2,626.5 $ 2,411.6 The Company primarily uses the last-in, first-out (LIFO) method of valuing inventory. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs are subject to the final year-end LIFO inventory valuation. In addition, interim inventory levels include management’s estimates of annual inventory losses due to shrinkage and other factors. For further information on the Company’s inventory valuation, see Note 5 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
LONG-LIVED ASSETS | LONG-LIVED ASSETS Included in Property, plant and equipment, net were the following: June 30, December 31, June 30, 2023 2022 2022 Land $ 264.3 $ 263.0 $ 255.3 Buildings 1,049.1 1,199.3 1,137.2 Machinery and equipment 3,339.5 3,230.2 3,124.8 Construction in progress 732.2 496.1 330.5 Property, plant and equipment, gross 5,385.1 5,188.6 4,847.8 Less allowances for depreciation 2,942.6 2,981.6 2,885.9 Property, plant and equipment, net $ 2,442.5 $ 2,207.0 $ 1,961.9 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the Company’s outstanding debt: June 30, December 31, June 30, 2023 2022 2022 Long-term debt (including current portion) $ 9,595.2 $ 9,591.6 $ 8,594.2 Short-term borrowings 806.2 978.1 2,012.0 Total debt outstanding $ 10,401.4 $ 10,569.7 $ 10,606.2 Short-Term Borrowings On February 28, 2023, the Company amended its credit agreement dated August 2, 2021, as amended, to extend the maturity of $125.0 million of the commitments available for borrowing and obtaining the issuance, renewal, extension, and increase of a letter of credit under the credit agreement from June 20, 2023 to December 20, 2027. On May 1, 2023, the Company amended its credit agreement dated May 9, 2016, as amended, to extend the maturity of $125.0 million of the commitments available for borrowing and obtaining the issuance, renewal, extension, and increase of a letter of credit under the credit agreement from June 20, 2023 to June 20, 2028. The Company’s available capacity under its committed credit agreements is reduced for amounts outstanding under its domestic commercial paper program, various credit agreements and letters of credit. At June 30, 2023 , the Company had unused capacity under its various credit agreements of $2.874 billion. The following table summarizes the Company’s short-term borrowings: June 30, December 31, June 30, 2023 2022 2022 Short-term borrowings: Domestic commercial paper $ 805.6 $ 938.5 $ 1,708.8 Revolving credit facility — — 250.0 Foreign facilities 0.6 39.6 53.2 Total $ 806.2 $ 978.1 $ 2,012.0 Weighted average interest rate: Domestic commercial paper 5.4 % 4.6 % 1.7 % Revolving credit facility — % — % 2.6 % Foreign facilities 11.4 % 6.7 % 6.5 % For further details on the Company’s debt, including available credit facilities and related agreements, see Note 8 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | PENSION AND OTHER POSTRETIREMENT BENEFITS The following table summarizes the components of the Company’s net periodic benefit cost (credit) for domestic and foreign defined benefit pension plans and other postretirement benefits: Domestic Foreign Other 2023 2022 2023 2022 2023 2022 Three Months Ended June 30: Service cost $ 0.8 $ 1.2 $ 1.0 $ 1.7 $ 0.2 $ 0.3 Interest cost 1.1 0.8 2.8 0.9 1.8 1.6 Expected return on assets (1.9) (1.9) (3.1) (2.5) Amortization of prior service cost (credit) 0.4 0.3 (6.0) (0.1) Amortization of actuarial (gains) losses (0.3) 0.9 0.1 1.0 Net periodic benefit cost (credit) $ 0.4 $ 0.4 $ 0.4 $ 1.0 $ (3.9) $ 2.8 Six Months Ended June 30: Service cost $ 1.6 $ 2.5 $ 2.1 $ 3.3 $ 0.3 $ 0.6 Interest cost 2.3 1.6 5.7 2.9 3.7 3.0 Expected return on assets (3.7) (3.8) (6.2) (5.1) Amortization of prior service cost (credit) 0.7 0.5 (0.1) (0.1) (12.0) (0.2) Amortization of actuarial (gains) losses (0.7) 1.0 0.1 2.1 Net periodic benefit cost (credit) $ 0.9 $ 0.8 $ 0.8 $ 2.0 $ (7.9) $ 5.5 Service cost is recorded in Cost of goods sold and Selling, general and administrative expenses. All other components are recorded in Other (income) expense - net. For further details on the Company’s pension and other postretirement benefits, see Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES | 6 Months Ended |
Jun. 30, 2023 | |
Environmental Remediation Obligations [Abstract] | |
OTHER LONG-TERM LIABILITIES | OTHER LONG-TERM LIABILITIES The operations of the Company, like those of other companies in its 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, regulations and requirements 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, which are mostly undiscounted, are determined based on currently available facts regarding each site. If the reasonably estimable 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, including as a result of sites progressing through investigation and remediation-related activities, upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. At June 30, 2023 and 2022, the Company had accruals reported on the balance sheet as Other long-term liabilities of $240.7 million and $269.2 million , respectively. Estimated costs of current investigation and remediation activities of $50.2 million and $45.9 million are included in Other accruals at June 30, 2023 and 2022 , 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 $85.9 million higher than the minimum accruals at June 30, 2023. Additionally, costs for environmental-related activities may not be reasonably estimable at early stages of investigation and therefore would not be included in the unaccrued maximum amount. Four of the Company’s currently and formerly owned manufacturing sites (Major Sites) account for the majority of the accrual for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at June 30, 2023 . At June 30, 2023 , $248.6 million, or 85.4% of the total accrual, related directly to the Major Sites. In the aggregate unaccrued maximum of $85.9 million at June 30, 2023 , $60.9 million, or 70.9%, related to the Major Sites. The significant cost components of this liability continue to be related to remedy implementation, regulatory agency interaction, and project management and other costs. While different for each specific environmental situation, these components generally each account for approximately 85%, 10%, and 5%, respectively, of the accrued amount and those percentages are subject to change over time. 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. The largest and most complex of the Major Sites is the Gibbsboro, New Jersey site (Gibbsboro) which comprises the substantial majority of the environmental-related accrual. Gibbsboro, a former manufacturing plant, and related areas, which ceased operations in 1978, has had various areas included on the National Priorities List since 1999. This location has soil, sediment, waterbodies, and groundwater contamination related to the historic operations of the facility. Gibbsboro has been divided by the Environmental Protection Agency (EPA) into six operable units (OUs) based on location and characteristics, whose investigation and remediation efforts are likely to occur over an extended period of time. Each of the OUs are in various phases of investigation and remediation with the EPA that provide enough information to reasonably estimate cost ranges and record environmental-related accruals. The most significant assumptions underlying the reliability and precision of remediation cost estimates for the Gibbsboro site are the type and extent of future remedies to be selected by the EPA and the costs of implementing those remedies. The remaining three Major Sites comprising the majority of the accrual include (1) a multi-party Superfund site that (a) has received a record of decision from the federal EPA and is currently in the remedial design phase for one OU, (b) has received a record of decision from the federal EPA for an interim remedy for another OU, and (c) has a remedial investigation ongoing for another OU, (2) a closed paint manufacturing facility that is in the operation and maintenance phase of remediation under both federal and state EPA programs, and (3) a formerly-owned site containing warehouse and office space that is in the remedial investigation/design phase under a state EPA program. Each of these three Major Sites are in phases of investigation and remediation that provide sufficient information to reasonably estimate cost ranges and record environmental-related accruals. Excluding the Major Sites discussed above, no sites are individually material to the total accrual balance. There are multiple, future events yet to occur, including further remedy selection and design, remedy implementation and execution, and securing applicable governmental agency approvals, all of which have the potential to contribute to the uncertainty surrounding these future events. As these events occur and to the extent that the cost estimates of the environmental remediation change, the existing reserve will be adjusted. 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. Unasserted claims could have a material effect on the Company's loss contingency as more information becomes available over time. At June 30, 2023 , the Company did not have material loss contingency accruals related to unasserted claims. Management does not expect that a material portion of unrecognized loss contingencies will be recoverable through insurance, indemnification agreements or other sources. 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. Moreover, 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 length 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 indeterminate amount of time to conduct investigation activities at any site, the indeterminate amount of time to obtain environmental agency approval, as necessary, with respect to investigation and remediation activities, and the indeterminate 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 | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 have sought 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 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. The Company will continue to vigorously defend against any additional lead pigment and lead-based paint litigation that may be filed, including utilizing all avenues of appeal, if necessary. 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. Except with respect to the litigation in California discussed below, the Company has not accrued any amounts for such litigation because the Company does not believe it is probable that a loss has occurred, and the Company believes it is not possible to estimate the range of potential losses as 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. 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, cash flow, 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; the County of Santa Clara, California, and other public entities in the State of California; and Lehigh and Montgomery Counties in Pennsylvania. Except for the Santa Clara County, California proceeding in which the Company reached a court-approved agreement in 2019 after nearly twenty years of litigation, and the pending Pennsylvania proceedings, all of these legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings. Pennsylvania Proceedings . Two proceedings in Pennsylvania were initiated in October 2018. The Pennsylvania counties of Montgomery and Lehigh filed complaints against the Company and several other former lead-based paint and lead pigment manufacturers in the Courts of Common Pleas of Montgomery County and Lehigh County, respectively. In both actions, the counties request declaratory relief establishing the existence of a public nuisance and the defendants’ contribution to it, the abatement of an ongoing public nuisance arising from the presence of lead-based paint in housing throughout the applicable county, an injunction against future illicit conduct, and the costs of litigation and attorneys’ fees. After the defendants removed the actions to federal court and the actions were remanded to state court, the defendants filed preliminary objections on December 21, 2020, seeking to dismiss the complaints with prejudice. In the Lehigh County action, the trial court denied the defendants’ preliminary objections on August 6, 2021. Defendants filed a motion to amend the order to allow an interlocutory appeal or, in the alternative, for reconsideration. The trial court denied the defendants’ motion on September 13, 2021. On September 27, 2021, the Company answered the complaint, asserted new matter and affirmative defenses, alleged counterclaims against Lehigh County, and filed a third-party complaint against certain County officials, other owners of pre-1980 housing, and lead abatement contractors who have been cited for violating state or local laws. On October 13, 2021, the defendants filed with the Superior Court, one of Pennsylvania’s intermediate appellate courts, a petition for permission to appeal the trial court’s order denying the defendants’ preliminary objections. On November 17, 2021, the Superior Court transferred the appeal to the Commonwealth Court, another one of Pennsylvania’s intermediate appellate courts. In the Montgomery County action, the trial court denied the defendants’ preliminary objections on October 15, 2021. The defendants filed a motion to amend the order overruling their preliminary objections to allow an interlocutory appeal, which the trial court granted on November 9, 2021. On December 3, 2021, the defendants filed a petition for permission to appeal with the Commonwealth Court. The Commonwealth Court granted the defendants’ petitions for permission to appeal in both the Montgomery County and Lehigh County actions on February 18, 2022, and stayed all proceedings in the trial courts pending the appellate court proceedings. The parties filed their respective briefs in both actions, and o ral argument occurred on December 14, 2022. On May 5, 2023, the Commonwealth Court reversed both trial courts’ orders denying the defendants’ preliminary objections and remanded the cases for entry of an order dismissing the actions. On June 5, 2023, Montgomery and Lehigh Counties each filed a petition for allowance of appeal in the Supreme Court of Pennsylvania. The Company filed its opposition briefs on June 20, 2023. Litigation seeking damages from alleged personal injury. The Company and other companies are or have been defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. The current proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint. The plaintiffs generally seek compensatory damages and have invoked Wisconsin’s risk contribution 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 United States District Court for the Eastern District of Wisconsin consolidated three cases (Ravon Owens v. American Cyanamid, et al., Cesar Sifuentes v. American Cyanamid, et al., and Glenn Burton, Jr. v. American Cyanamid, et al.) for purposes of trial. A trial was held in May 2019 and resulted in a jury verdict for the three plaintiffs in the amount of $2.0 million each for a total of $6.0 million against the Company and two other defendants (Armstrong Containers Inc. and E.I. du Pont de Nemours). After post-trial motions resulted in the damages award to plaintiff Glenn Burton, Jr. being reduced to $800,000, the Company filed a notice of appeal with the Seventh Circuit. On April 15, 2021, the Seventh Circuit reversed the judgments and held that the Company was entitled to judgment as a matter of law on all claims filed by the three plaintiffs . The plaintiffs filed a petition with the Seventh Circuit on April 27, 2021, seeking a rehearing en banc and, in the alternative, a request for certification of questions to the Wisconsin Supreme Court. The plaintiffs’ petition was denied on May 12, 2021. On May 20, 2021, the Company and the three other defendants filed motions for summary judgment to dismiss the claims of all plaintiffs then pending in the Eastern District of Wisconsin as a result of the Seventh Circuit’s decision in favor of the Company in the Owens, Sifuentes and Burton cases. On March 3, 2022, the district court granted summary judgment in favor of the Company and the other defendants on all claims then pending in the district court. On March 31, 2022, the plaintiffs filed a motion seeking to alter or amend the judgment. Briefing on the motion concluded, and the district court denied the plaintiffs’ motion to alter or amend the judgment on August 16, 2022. On September 15, 2022, the plaintiffs filed notices of appeal with the Seventh Circuit, seeking to appeal the district court’s summary judgment in favor of the Company and the other defendants. The plaintiffs filed their brief in support on December 9, 2022. The defendants filed their brief in opposition on February 22, 2023. On March 24, 2023, the plaintiffs filed their reply brief, which included a motion to certify issues to the Wisconsin Supreme Court. On March 31, 2023, the defendants filed a motion to strike and response in opposition to plaintiffs’ motion to certify. On April 7, 2023, the plaintiffs filed a response in opposition to defendants’ motion to strike. On April 14, 2023, the defendants filed a reply in support of their motion to strike. Oral argument is set for September 26, 2023. On August 24, 2021, the plaintiff in Arrieona Beal v. Armstrong Containers, Inc., et al. filed an amended complaint in Milwaukee County Circuit Court, naming the Company and other alleged former lead pigment manufacturers as defendants pursuant to the risk contribution liability theory. The defendants answered the plaintiff’s complaint on December 17, 2021. On March 2, 2022, the plaintiff filed a motion for declaratory judgment seeking to clarify Wisconsin law following the Seventh Circuit’s decision in favor of the Company in the Owens, Sifuentes and Burton cases, to which the Company responded on April 15, 2022. Prior to filing its response to the declaratory judgment motion, the Company removed the case to the Eastern District of Wisconsin on March 25, 2022. The plaintiff filed a motion to remand the case to the state circuit court on April 7, 2022, which the Company opposed. On May 10, 2022, the plaintiff filed a motion for sanctions related to the Company’s removal of the case to federal court, to which the Company responded on May 27, 2022. Insurance coverage litigation. The Company and its liability insurers, including certain underwriters at Lloyd’s of London, initiated legal proceedings against each other to 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 insurers’ action, which was filed on February 23, 2006 in the Supreme Court of the State of New York, County of New York, was dismissed. The Company’s action, filed on March 3, 2006 in the Common Pleas Court, Cuyahoga County, Ohio, previously was stayed and inactive. On January 9, 2019, the Company filed an unopposed motion to lift the stay with the trial court, which was granted, allowing the case to proceed. On June 28, 2019, the Company and its liability insurers each filed separate motions for summary judgment seeking various forms of relief. The trial court entered an order on December 4, 2020, granting the insurers’ motion for summary judgment, denying the Company’s motion, and entering final judgment in favor of the insurers. The trial court sided with the Company on all of the issues presented, except one. On December 21, 2020, the Company filed a notice of appeal to the Court of Appeals of Cuyahoga County, Ohio, Eighth Appellate District, and the insurers filed cross-appeals. On September 1, 2022, the appellate court reversed the trial court’s grant of summary judgment, finding in favor of the Company on its appeal and against the insurers on their cross-appeal, and remanded the case to the trial court for further proceedings. On September 12, 2022, the insurers applied to the appellate court for reconsideration of its decision, en banc review, or certification of an appeal to the Ohio Supreme Court, which the Company opposed. On September 30, 2022, the appellate court denied the insurers’ applications for reconsideration and certification. On January 9, 2023, the appellate court denied the insurers’ application for en banc review. On February 21, 2023, the insurers filed with the Ohio Supreme Court a notice of appeal and memorandum in support of jurisdiction, to which the Company responded in opposition on March 22, 2023. On May 9, 2023, the Ohio Supreme Court accepted the insurers’ appeal. The insurers filed their merit brief with the Ohio Supreme Court on July 17, 2023. Briefing is scheduled to be completed in September 2023. 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, except with respect to the litigation in California discussed above, 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. Other litigation. On December 18, 2019, the New Jersey Department of Environmental Protection, the Commissioner of the New Jersey Department of Environmental Protection, and the Administrator of the New Jersey Spill Compensation Fund |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Dividends The following table summarizes the dividends declared and paid on common stock: 2023 2022 Cash Total Cash Total First Quarter $ 0.605 $ 156.5 $ 0.60 $ 150.9 Second Quarter 0.605 156.3 0.60 156.2 Total $ 1.21 $ 312.8 $ 1.20 $ 307.1 Treasury Stock The Company acquires its common stock for general corporate purposes through its publicly announced share repurchase program. As of June 30, 2023, the Company had remaining authorization from its Board of Directors to purchase 42.9 million shares of its common stock. The table below summarizes share repurchases during the three and six months ended June 30, 2023 and 2022: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Treasury stock purchases (in millions) $ 234.2 $ 296.4 $ 535.9 $ 703.5 Treasury stock purchases (shares) 1,000,000 1,100,000 2,300,000 2,550,000 Average price per share $ 234.15 $ 269.49 $ 232.98 $ 275.89 In February 2022, the Company received proceeds of $22.0 million in conjunction with the issuance of treasury shares to fund Company contributions to the domestic defined contribution pension plan. Other Activity During the six months ended June 30, 2023, 384,767 stock options were exercised at a weighted average price per share of $92.75. In addition, 301,651 restricted stock units vested during the same period. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2023 | |
Statement of Other Comprehensive Income [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (loss) (AOCI), including the reclassification adjustments for items that were reclassified from AOCI to net income, are shown below. Foreign Pension and Unrealized Total Balance at December 31, 2022 $ (810.8) $ 78.3 $ 31.9 $ (700.6) Amounts recognized in AOCI 60.1 60.1 Amounts reclassified from AOCI (9.0) (1.8) (10.8) Balance at June 30, 2023 $ (750.7) $ 69.3 $ 30.1 $ (651.3) Foreign Pension and Unrealized Total Balance at December 31, 2021 $ (702.1) $ (32.2) $ 35.9 $ (698.4) Amounts recognized in AOCI (216.7) (216.7) Amounts reclassified from AOCI 2.5 (2.0) 0.5 Balance at June 30, 2022 $ (918.8) $ (29.7) $ 33.9 $ (914.6) |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | DERIVATIVES AND HEDGING Net Investment Hedges The Company has U.S. Dollar to Euro cross currency swap contracts with various counterparties to hedge the Company's net investment in its European operations. The outstanding contracts as of June 30, 2023 are summarized in the table below. Contract Date Notional Maturity Date February 13, 2020 $ 500.0 June 1, 2024 November 8, 2021 162.7 June 1, 2027 March 28, 2023 150.0 August 8, 2024 June 28, 2023 200.0 August 8, 2025 During the term of the contracts, the Company will pay fixed-rate interest in Euros and receive fixed-rate interest in U.S. Dollars, thereby effectively converting a portion of the Company's U.S. Dollar denominated fixed-rate debt to Euro denominated fixed-rate debt. The following table summarizes amounts recognized in the Consolidated Balance Sheets for cross currency swap contracts. See Note 15 for additional information on the fair value of these contracts. June 30, December 31, June 30, 2023 2022 2022 Other assets $ — $ 9.1 $ 15.4 Other accruals 5.0 — — Other long-term liabilities 2.8 — — The changes in fair value of the cross currency swap contracts are recognized in the foreign currency translation adjustments component of AOCI. The following table summarizes the unrealized (losses) gains for the three and six months ended June 30, 2023 and 2022. Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 (Losses) gains $ (11.3) $ 40.8 $ (16.9) $ 51.5 Tax effect 2.7 (10.0) 4.1 (12.6) (Losses) gains, net of taxes $ (8.6) $ 30.8 $ (12.8) $ 38.9 Derivatives Not Designated as Hedging Instruments |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Fair Value Measurements and Disclosures Topic of the ASC applies to the Company’s financial and non-financial assets and liabilities. The guidance applies when other standards require or permit the fair value measurement of assets and liabilities. Under the guidance, assets and liabilities measured at fair value are categorized as follows: Level 1: Quoted prices in active markets for identical assets Level 2: Significant other observable inputs Level 3: Significant unobservable inputs Except for the acquisition related fair value measurements described in Note 3, the assets held for sale described in Note 4, and the reporting unit impairment analysis described in Note 7, there were no assets and liabilities measured at fair value on a nonrecurring basis. The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis, categorized using the fair value hierarchy. June 30, 2023 December 31, 2022 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Deferred compensation plan assets $ 87.0 $ 48.5 $ 38.5 $ 74.1 $ 43.7 $ 30.4 Qualified replacement plan assets — 29.8 29.8 Net investment hedge asset — 9.1 9.1 $ 87.0 $ 48.5 $ 38.5 $ — $ 113.0 $ 73.5 $ 39.5 $ — Liabilities: Net investment hedge liability $ 7.8 $ 7.8 $ — The deferred compensation plan assets consist of the investment funds maintained for the future payments under the Company’s executive deferred compensation plans, which are structured as rabbi trusts. The investments are marketable securities accounted for under the Debt and Equity Securities Topics 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 was $75.0 million and $67.2 million at June 30, 2023 and December 31, 2022, respectively. The qualified replacement plan assets consisted of investment funds maintained for future contributions to the Company’s domestic defined contribution pension plan. During the first quarter of 2023, the remaining balance was fully utilized to fund the Company’s domestic defined contribution pension plan. The cost basis of the investment funds was $29.8 million at December 31, 2022 and the fair value was based on quoted prices multiplied by the number of shares. The net investment hedge asset and liability represent the fair value of outstanding cross currency swaps (see Note 14). The fair value is based on a valuation model that uses observable inputs, including interest rate curves and foreign currency rates. The table below summarizes the carrying amounts and fair values of the Company's debt. The Company's publicly traded debt and non-publicly traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. June 30, 2023 December 31, 2022 Carrying Fair Carrying Fair Publicly traded debt $ 9,594.3 $ 8,464.9 $ 9,590.0 $ 8,382.3 Non-publicly traded debt 0.9 0.9 1.6 1.5 |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Company manufactures and sells paint, stains, supplies, equipment and floor covering through company-operated stores, branded and private label products through retailers, and a broad range of industrial coatings directly to global manufacturing customers through company-operated branches. A large portion of the Company’s revenue is recognized at a point in time and made to customers who are not engaged in a long-term supply agreement or any form of contract with the Company. These sales are paid for at the time of sale in cash, credit card or on account with the vast majority of customers having terms between 30 and 60 days, not to exceed one year. Many customers who purchase on account take advantage of early payment discounts offered by paying within 30 days of being invoiced. The Company estimates variable consideration for these sales on the basis of both historical information and current trends to estimate the expected amount of discounts to which customers are likely to be entitled. The remaining revenue is governed by long-term supply agreements and related purchase orders (contracts) that specify shipping terms and aspects of the transaction price including rebates, discounts and other sales incentives, such as advertising support. Contracts are at standalone pricing. The performance obligation in these contracts is determined by each of the individual purchase orders and the respective stated quantities, with revenue being recognized at a point in time when obligations under the terms of the agreement are satisfied. This generally occurs with the transfer of control of our products to the customer. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Refer to Note 20 for the Company's disaggregation of net sales by Reportable Segment. As the Reportable Segments are aligned by similar economic factors, trends and customers, this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Approximately 80% of the Company’s net external sales are in the Company’s North America region (which is comprised of the United States, Canada and the Caribbean region), slightly less than 10% in the EMEAI region (Europe, Middle East, Africa and India), with the remaining global regions accounting for the residual balance. No country outside of the United States is individually significant. The Company has made payments or given credits for various incentives at the beginning of a long-term contract where future revenue is expected and before satisfaction of performance obligations. Under these circumstances, the Company recognizes a contract asset and amortizes these prepayments over the expected benefit life of the long-term contract typically on a straight-line basis. The majority of variable consideration in the Company’s contracts include a form of volume rebate, discounts, and other incentives, where the customer receives a retrospective percentage rebate based on the amount of their purchases. In these situations, the rebates are accrued as a fixed percentage of sales and recorded as a reduction of net sales until paid to the customer per the terms of the contract. Forms of variable consideration such as tiered rebates, whereby a customer receives a retrospective price decrease dependent on the volume of their purchases, are calculated using a forecasted percentage to determine the most likely amount to accrue. Management creates a baseline calculation using historical sales and then utilizing forecast information, estimates the anticipated sales volume each quarter to calculate the expected reduction to sales. The remainder of the transaction price is fixed as agreed upon with the customer, limiting estimation of revenues including constraints. The Company’s Accounts receivable and current and long-term contract assets and liabilities are summarized in the following table. Accounts Receivable, Contract Contract Contract Contract Balance sheet caption: Accounts receivable, net Other Other Other Other long-term Balance at December 31, 2022 $ 2,563.6 $ 43.8 $ 117.7 $ 292.9 $ 7.1 Balance at June 30, 2023 3,117.8 46.0 141.4 267.2 8.6 The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the contractual performance obligation and the associated payment. Provisions for estimated returns are established and the expected costs continue to be recognized as contra-revenue when the products are sold. The Company only offers an assurance type warranty on products sold, and there is no material service to the customer beyond fixing defects that existed at the time of sale and no warranties are sold separately. Warranty liabilities are excluded from the table above. Amounts recognized from deferred revenue were not material. The Company records a right of return liability within each of its operations to accrue for expected customer returns. Historical actual returns are used to estimate future returns as a percentage of current sales. Obligations for returns and refunds were not material individually or in the aggregate. Allowance for Credit Losses The Company's primary allowance for credit losses is the allowance for doubtful accounts. The allowance for doubtful accounts reduces the Accounts receivable balance to the estimated net realizable value. The Company reviews the collectibility of the Accounts receivable balance each reporting period and estimates the allowance based on historical bad debt experience, aging of accounts receivable, current creditworthiness of customers, current economic factors, as well as reasonable and supportable forward-looking information. Accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowances for doubtful accounts are included in Selling, general and administrative expenses. The following table summarizes the movement in the Company's allowance for doubtful accounts: Six Months Ended 2023 2022 Beginning balance $ 56.6 $ 48.9 Bad debt expense 32.4 36.5 Uncollectible accounts written off, net of recoveries (12.3) (13.6) Ending balance $ 76.7 $ 71.8 |
OTHER
OTHER | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER | OTHER Other general (income) expense - net Included in Other general (income) expense - net were the following: Three Months Ended Six Months Ended 2023 2022 2023 2022 Provisions for environmental matters - net $ 0.6 $ 4.1 $ 13.3 $ 4.7 Gain on divestiture of business (see Note 3) (20.1) — (20.1) — (Gains) losses on sale or disposition of assets (16.2) 0.3 (20.8) 2.2 Other 3.2 — 5.6 — Other general (income) expense - net $ (32.5) $ 4.4 $ (22.0) $ 6.9 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 10 for further details on the Company’s environmental-related activities. The (Gains) losses on sale or disposition of assets represents net realized (gains) losses associated with the sale or disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company. There were no items within the Other caption that were individually significant. Other (income) expense - net Included in Other (income) expense - net were the following: Three Months Ended Six Months Ended 2023 2022 2023 2022 Investment (gains) losses $ (15.5) $ 8.2 $ (18.7) $ 14.9 Net expense from banking activities 3.9 3.0 7.8 5.9 Foreign currency transaction related losses 16.8 6.2 23.6 10.3 Miscellaneous pension (credit) expense (5.1) 1.0 (10.2) 1.9 Other income (15.8) (10.4) (30.4) (17.9) Other expense 9.9 7.5 18.9 16.7 Other (income) expense - net $ (5.8) $ 15.5 $ (9.0) $ 31.8 Investment (gains) losses primarily relate to the change in market value of the investments held in the deferred compensation plan and qualified replacement plan. See Note 15 for additional information on the fair value of these investments. Foreign currency transaction related losses (gains) include the impact from foreign currency transactions and net realized losses (gains) from foreign currency option and forward contracts. See Note 14 for additional information regarding these foreign currency contracts. Miscellaneous pension (credit) expense consists of the non-service components of net periodic benefit cost (credit). See Note 9. Other income and Other expense includes items of revenue, gains, expenses and losses that were unrelated to the primary business purpose of the Company. There were no other items within the Other income or Other expense caption that were individually significant. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate was 21.6% and 21.9% for the second quarter and first six months of 2023, respectively, compared to 21.9% and 21.0% for the second quarter and first six months of 2022, respectively. The effective tax rate was less favorably impacted by tax benefits related to employee share based payments in the first six months of 2023 than in the same period last year. The other significant components of the Company’s effective tax rate were consistent year over year. At December 31, 2022, the Company had $242.4 million in unrecognized tax benefits, the recognition of which would have an effect of $230.3 million on the effective tax rate. Included in the balance of unrecognized tax benefits at December 31, 2022 was $92.7 million related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. The Company classifies all income tax related interest and penalties as income tax expense. At December 31, 2022, the Company had accrued $36.6 million for the potential payment of income tax interest and penalties. There were no significant changes to any of the balances of unrecognized tax benefits at December 31, 2022 during the six months ended June 30, 2023. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The IRS audited the Company's 2013 through 2016 income tax returns. As a result of these audits, certain adjustments have been agreed upon with the IRS. The Company continues to evaluate its position and believes that it is adequately reserved for any potential exposure. The IRS is currently auditing the Company’s 2017, 2018 and 2019 income tax returns. As of June 30, 2023, the federal statute of limitations had not expired for the 2013 through 2022 tax years. At June 30, 2023, the Company is subject to non-U.S. income tax examinations for the tax years of 2014 through 2022. In addition, the Company is subject to state and local income tax examinations for the tax years 1998 through 2022. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic and diluted net income per share are calculated using the treasury stock method. Three Months Ended Six Months Ended 2023 2022 2023 2022 Basic Net income $ 793.7 $ 577.9 $ 1,271.1 $ 948.7 Average shares outstanding 256.0 258.1 256.3 258.5 Basic net income per share $ 3.10 $ 2.24 $ 4.96 $ 3.67 Diluted Net income $ 793.7 $ 577.9 $ 1,271.1 $ 948.7 Average shares outstanding assuming dilution: Average shares outstanding 256.0 258.1 256.3 258.5 Stock options and other contingently issuable shares (1) 2.9 3.7 3.0 4.0 Average shares outstanding assuming dilution 258.9 261.8 259.3 262.5 Diluted net income per share $ 3.07 $ 2.21 $ 4.90 $ 3.61 (1) There were 2.0 million and 2.8 million of stock options and other contingently issuable shares excluded due to their anti-dilutive effect for the three and six months ended June 30, 2023, respectively. There were 1.0 million of stock options and other contingently issuable shares excluded due to their anti-dilutive effect for the three and six months ended June 30, 2022. |
REPORTABLE SEGMENT INFORMATION
REPORTABLE SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
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. As mentioned in Note 1, the Company realigned the Latin America architectural paint business during the first quarter of 2023. While this changed the composition of certain reportable segments, the Company determined it continues to have three reportable segments: Paint Stores Group (formerly known as The Americas Group), Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments). Refer to Note 23 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for further details on the Company's Reportable Segments. Certain information within the Form 10-K Reportable Segment Information Note impacted by the realignment has been revised herein. Three Months Ended June 30, 2023 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 3,498.7 $ 945.8 $ 1,794.9 $ 1.2 $ 6,240.6 Intersegment transfers — 1,433.7 61.3 (1,495.0) — Total net sales and intersegment transfers $ 3,498.7 $ 2,379.5 $ 1,856.2 $ (1,493.8) $ 6,240.6 Segment profit $ 849.3 $ 110.3 $ 272.7 $ 1,232.3 Interest expense $ (111.7) (111.7) Administrative expenses and other (108.5) (108.5) Income before income taxes $ 849.3 $ 110.3 $ 272.7 $ (220.2) $ 1,012.1 Three Months Ended June 30, 2022 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 3,181.0 $ 900.0 $ 1,790.3 $ 1.0 $ 5,872.3 Intersegment transfers — 1,427.6 53.3 (1,480.9) — Total net sales and intersegment transfers $ 3,181.0 $ 2,327.6 $ 1,843.6 $ (1,479.9) $ 5,872.3 Segment profit $ 684.0 $ 79.9 $ 196.8 $ 960.7 Interest expense $ (92.9) (92.9) Administrative expenses and other (127.9) (127.9) Income before income taxes $ 684.0 $ 79.9 $ 196.8 $ (220.8) $ 739.9 Six Months Ended June 30, 2023 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 6,357.8 $ 1,818.5 $ 3,504.7 $ 2.0 $ 11,683.0 Intersegment transfers — 2,687.1 109.8 (2,796.9) — Total net sales and intersegment transfers $ 6,357.8 $ 4,505.6 $ 3,614.5 $ (2,794.9) $ 11,683.0 Segment profit $ 1,376.0 $ 204.1 $ 491.6 $ 2,071.7 Interest expense $ (221.0) (221.0) Administrative expenses and other (223.8) (223.8) Income before income taxes $ 1,376.0 $ 204.1 $ 491.6 $ (444.8) $ 1,626.9 Six Months Ended June 30, 2022 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 5,672.3 $ 1,752.2 $ 3,444.4 $ 2.1 $ 10,871.0 Intersegment transfers — 2,567.2 105.6 (2,672.8) — Total net sales and intersegment transfers $ 5,672.3 $ 4,319.4 $ 3,550.0 $ (2,670.7) $ 10,871.0 Segment profit $ 1,112.8 $ 161.4 $ 341.3 $ 1,615.5 Interest expense $ (181.3) (181.3) Administrative expenses and other (233.2) (233.2) Income before income taxes $ 1,112.8 $ 161.4 $ 341.3 $ (414.5) $ 1,201.0 In the reportable segment financial information, Segment profit was total net sales and intersegment transfers less operating costs and expenses. 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. Net external sales of all consolidated foreign subsidiaries were $1.150 billion and $1.121 billion for the three months ended June 30, 2023 and 2022, respectively. Net external sales of all consolidated foreign subsidiaries were $2.237 billion and $2.198 billion for the six months ended June 30, 2023 and 2022, respectively. Long-lived assets of these subsidiaries totaled $3.348 billion and $2.833 billion at June 30, 2023 and 2022, respectively. Domestic operations accounted for the remaining net external sales and long-lived assets. No single geographic area outside the United States was significant relative to consolidated net external sales, income before taxes or consolidated long-lived assets. Export sales and sales to any individual customer were each less than 10% of consolidated sales in 2023 and 2022. For further details on the Company's Reportable Segments, see Note 23 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||||
Net income | $ 793.7 | $ 477.4 | $ 577.9 | $ 370.8 | $ 1,271.1 | $ 948.7 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, the Company) have been prepared in accordance with U.S. generally accepted accounting principles (US GAAP) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. |
Real Estate Financing | Real Estate FinancingThe Company has entered into certain sale-leaseback agreements that do not qualify as asset sales and were accounted for as real estate financing transactions. These arrangements primarily consist of our new headquarters currently under construction. During the second quarter of 2023, the Company received $72.2 million pursuant to the transaction for a total amount in 2023 of $138.7 million. See Note 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for more information concerning real estate financing. |
Supply Chain Financing | Supply Chain Financing |
Non-Traded Investments | Non-Traded InvestmentsThe Company has invested in the U.S. affordable housing and historic renovation real estate markets and certain other investments that have been identified as variable interest entities which qualify for certain tax credits. 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 ASC, the investments are not consolidated. |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Adopted Effective January 1, 2023, the Company adopted Accounting Standards Update (ASU) 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This ASU requires disclosure about an entity’s use of supplier finance programs, including the key terms of the programs and the obligations outstanding at the end of the reporting period. The adoption of ASU 2022-04 did not affect the Company’s financial position, results of operations or cash flows as the standard only impacts financial statement footnote disclosures. See Note 1 for additional information. In addition, a required rollforward of activity within the programs will be disclosed prospectively beginning with the annual period ending December 31, 2024. Effective January 1, 2023, the Company adopted ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers.” This ASU requires an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The adoption of ASU 2021-08 did not have a material impact on the Company’s financial position, results of operations or cash flows. Not Yet Adopted |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The carrying value of the investments is recorded in Other assets. The liabilities for the estimated future capital contributions are recorded in Other accruals and Other long-term liabilities. The following table summarizes the balances related to the investments: June 30, December 31, June 30, 2023 2022 2022 Other assets $ 605.0 $ 587.0 $ 528.1 Other accruals 53.9 89.8 48.4 Other long-term liabilities 530.8 476.5 470.4 |
HELD FOR SALE (Tables)
HELD FOR SALE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The assets, liabilities and valuation adjustment held for sale at June 30, 2023 were as follows: June 30, 2023 Tangible assets $ 22.5 Intangible assets 93.3 Valuation adjustment (27.1) Total assets $ 88.7 Total liabilities $ 20.9 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes the activity and remaining liabilities associated with the Restructuring Plan: Consumer Brands Performance Administrative Total Balance at January 1, 2023 $ 25.6 $ 16.1 $ — $ 41.7 Provisions: Severance and related costs (1) 3.6 (0.2) 1.3 4.7 Other qualified costs (2) 10.6 — — 10.6 Total 14.2 (0.2) 1.3 15.3 Payments, currency and other adjustments (31.8) (8.8) (1.3) (41.9) Balance at June 30, 2023 $ 8.0 $ 7.1 $ — $ 15.1 Restructuring Plan Expense: Total expense incurred to date $ 39.8 $ 22.0 $ 1.3 $ 63.1 Additional expense expected — — — — Total expected expense $ 39.8 $ 22.0 $ 1.3 $ 63.1 (1) Severance and related costs were recorded in Selling, general and administrative expenses. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Included in Inventories were the following: June 30, December 31, June 30, 2023 2022 2022 Finished goods $ 1,924.7 $ 1,957.7 $ 1,812.1 Work in process and raw materials 514.3 668.8 599.5 Inventories $ 2,439.0 $ 2,626.5 $ 2,411.6 |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Included in Property, plant and equipment, net were the following: June 30, December 31, June 30, 2023 2022 2022 Land $ 264.3 $ 263.0 $ 255.3 Buildings 1,049.1 1,199.3 1,137.2 Machinery and equipment 3,339.5 3,230.2 3,124.8 Construction in progress 732.2 496.1 330.5 Property, plant and equipment, gross 5,385.1 5,188.6 4,847.8 Less allowances for depreciation 2,942.6 2,981.6 2,885.9 Property, plant and equipment, net $ 2,442.5 $ 2,207.0 $ 1,961.9 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table summarizes the Company’s outstanding debt: June 30, December 31, June 30, 2023 2022 2022 Long-term debt (including current portion) $ 9,595.2 $ 9,591.6 $ 8,594.2 Short-term borrowings 806.2 978.1 2,012.0 Total debt outstanding $ 10,401.4 $ 10,569.7 $ 10,606.2 |
Schedule of Short-term Debt | The following table summarizes the Company’s short-term borrowings: June 30, December 31, June 30, 2023 2022 2022 Short-term borrowings: Domestic commercial paper $ 805.6 $ 938.5 $ 1,708.8 Revolving credit facility — — 250.0 Foreign facilities 0.6 39.6 53.2 Total $ 806.2 $ 978.1 $ 2,012.0 Weighted average interest rate: Domestic commercial paper 5.4 % 4.6 % 1.7 % Revolving credit facility — % — % 2.6 % Foreign facilities 11.4 % 6.7 % 6.5 % |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Summary of the Components of the Net Pension Costs and Cumulative Other Comprehensive Loss Related to the Defined Benefit Pension Plans | The following table summarizes the components of the Company’s net periodic benefit cost (credit) for domestic and foreign defined benefit pension plans and other postretirement benefits: Domestic Foreign Other 2023 2022 2023 2022 2023 2022 Three Months Ended June 30: Service cost $ 0.8 $ 1.2 $ 1.0 $ 1.7 $ 0.2 $ 0.3 Interest cost 1.1 0.8 2.8 0.9 1.8 1.6 Expected return on assets (1.9) (1.9) (3.1) (2.5) Amortization of prior service cost (credit) 0.4 0.3 (6.0) (0.1) Amortization of actuarial (gains) losses (0.3) 0.9 0.1 1.0 Net periodic benefit cost (credit) $ 0.4 $ 0.4 $ 0.4 $ 1.0 $ (3.9) $ 2.8 Six Months Ended June 30: Service cost $ 1.6 $ 2.5 $ 2.1 $ 3.3 $ 0.3 $ 0.6 Interest cost 2.3 1.6 5.7 2.9 3.7 3.0 Expected return on assets (3.7) (3.8) (6.2) (5.1) Amortization of prior service cost (credit) 0.7 0.5 (0.1) (0.1) (12.0) (0.2) Amortization of actuarial (gains) losses (0.7) 1.0 0.1 2.1 Net periodic benefit cost (credit) $ 0.9 $ 0.8 $ 0.8 $ 2.0 $ (7.9) $ 5.5 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Dividends Payable | The following table summarizes the dividends declared and paid on common stock: 2023 2022 Cash Total Cash Total First Quarter $ 0.605 $ 156.5 $ 0.60 $ 150.9 Second Quarter 0.605 156.3 0.60 156.2 Total $ 1.21 $ 312.8 $ 1.20 $ 307.1 |
Schedule of Share Repurchases | The table below summarizes share repurchases during the three and six months ended June 30, 2023 and 2022: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Treasury stock purchases (in millions) $ 234.2 $ 296.4 $ 535.9 $ 703.5 Treasury stock purchases (shares) 1,000,000 1,100,000 2,300,000 2,550,000 Average price per share $ 234.15 $ 269.49 $ 232.98 $ 275.89 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Statement of Other Comprehensive Income [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) (AOCI), including the reclassification adjustments for items that were reclassified from AOCI to net income, are shown below. Foreign Pension and Unrealized Total Balance at December 31, 2022 $ (810.8) $ 78.3 $ 31.9 $ (700.6) Amounts recognized in AOCI 60.1 60.1 Amounts reclassified from AOCI (9.0) (1.8) (10.8) Balance at June 30, 2023 $ (750.7) $ 69.3 $ 30.1 $ (651.3) Foreign Pension and Unrealized Total Balance at December 31, 2021 $ (702.1) $ (32.2) $ 35.9 $ (698.4) Amounts recognized in AOCI (216.7) (216.7) Amounts reclassified from AOCI 2.5 (2.0) 0.5 Balance at June 30, 2022 $ (918.8) $ (29.7) $ 33.9 $ (914.6) |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The outstanding contracts as of June 30, 2023 are summarized in the table below. Contract Date Notional Maturity Date February 13, 2020 $ 500.0 June 1, 2024 November 8, 2021 162.7 June 1, 2027 March 28, 2023 150.0 August 8, 2024 June 28, 2023 200.0 August 8, 2025 Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 (Losses) gains $ (11.3) $ 40.8 $ (16.9) $ 51.5 Tax effect 2.7 (10.0) 4.1 (12.6) (Losses) gains, net of taxes $ (8.6) $ 30.8 $ (12.8) $ 38.9 |
Schedule of Derivative Instruments Fair Value | The following table summarizes amounts recognized in the Consolidated Balance Sheets for cross currency swap contracts. See Note 15 for additional information on the fair value of these contracts. June 30, December 31, June 30, 2023 2022 2022 Other assets $ — $ 9.1 $ 15.4 Other accruals 5.0 — — Other long-term liabilities 2.8 — — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis, categorized using the fair value hierarchy. June 30, 2023 December 31, 2022 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Deferred compensation plan assets $ 87.0 $ 48.5 $ 38.5 $ 74.1 $ 43.7 $ 30.4 Qualified replacement plan assets — 29.8 29.8 Net investment hedge asset — 9.1 9.1 $ 87.0 $ 48.5 $ 38.5 $ — $ 113.0 $ 73.5 $ 39.5 $ — Liabilities: Net investment hedge liability $ 7.8 $ 7.8 $ — |
Schedule of Debt | The table below summarizes the carrying amounts and fair values of the Company's debt. The Company's publicly traded debt and non-publicly traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. June 30, 2023 December 31, 2022 Carrying Fair Carrying Fair Publicly traded debt $ 9,594.3 $ 8,464.9 $ 9,590.0 $ 8,382.3 Non-publicly traded debt 0.9 0.9 1.6 1.5 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Accounts Receivables and Current and Long-term Contract Assets and Liabilities | The Company’s Accounts receivable and current and long-term contract assets and liabilities are summarized in the following table. Accounts Receivable, Contract Contract Contract Contract Balance sheet caption: Accounts receivable, net Other Other Other Other long-term Balance at December 31, 2022 $ 2,563.6 $ 43.8 $ 117.7 $ 292.9 $ 7.1 Balance at June 30, 2023 3,117.8 46.0 141.4 267.2 8.6 |
Schedule of Allowance For Doubtful Accounts | The following table summarizes the movement in the Company's allowance for doubtful accounts: Six Months Ended 2023 2022 Beginning balance $ 56.6 $ 48.9 Bad debt expense 32.4 36.5 Uncollectible accounts written off, net of recoveries (12.3) (13.6) Ending balance $ 76.7 $ 71.8 |
OTHER (Tables)
OTHER (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Other General (Income) Expense - Net | Included in Other general (income) expense - net were the following: Three Months Ended Six Months Ended 2023 2022 2023 2022 Provisions for environmental matters - net $ 0.6 $ 4.1 $ 13.3 $ 4.7 Gain on divestiture of business (see Note 3) (20.1) — (20.1) — (Gains) losses on sale or disposition of assets (16.2) 0.3 (20.8) 2.2 Other 3.2 — 5.6 — Other general (income) expense - net $ (32.5) $ 4.4 $ (22.0) $ 6.9 |
Other Expense (Income) - Net | Included in Other (income) expense - net were the following: Three Months Ended Six Months Ended 2023 2022 2023 2022 Investment (gains) losses $ (15.5) $ 8.2 $ (18.7) $ 14.9 Net expense from banking activities 3.9 3.0 7.8 5.9 Foreign currency transaction related losses 16.8 6.2 23.6 10.3 Miscellaneous pension (credit) expense (5.1) 1.0 (10.2) 1.9 Other income (15.8) (10.4) (30.4) (17.9) Other expense 9.9 7.5 18.9 16.7 Other (income) expense - net $ (5.8) $ 15.5 $ (9.0) $ 31.8 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted net income per share are calculated using the treasury stock method. Three Months Ended Six Months Ended 2023 2022 2023 2022 Basic Net income $ 793.7 $ 577.9 $ 1,271.1 $ 948.7 Average shares outstanding 256.0 258.1 256.3 258.5 Basic net income per share $ 3.10 $ 2.24 $ 4.96 $ 3.67 Diluted Net income $ 793.7 $ 577.9 $ 1,271.1 $ 948.7 Average shares outstanding assuming dilution: Average shares outstanding 256.0 258.1 256.3 258.5 Stock options and other contingently issuable shares (1) 2.9 3.7 3.0 4.0 Average shares outstanding assuming dilution 258.9 261.8 259.3 262.5 Diluted net income per share $ 3.07 $ 2.21 $ 4.90 $ 3.61 (1) There were 2.0 million and 2.8 million of stock options and other contingently issuable shares excluded due to their anti-dilutive effect for the three and six months ended June 30, 2023, respectively. There were 1.0 million of stock options and other contingently issuable shares excluded due to their anti-dilutive effect for the three and six months ended June 30, 2022. |
REPORTABLE SEGMENT INFORMATION
REPORTABLE SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Three Months Ended June 30, 2023 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 3,498.7 $ 945.8 $ 1,794.9 $ 1.2 $ 6,240.6 Intersegment transfers — 1,433.7 61.3 (1,495.0) — Total net sales and intersegment transfers $ 3,498.7 $ 2,379.5 $ 1,856.2 $ (1,493.8) $ 6,240.6 Segment profit $ 849.3 $ 110.3 $ 272.7 $ 1,232.3 Interest expense $ (111.7) (111.7) Administrative expenses and other (108.5) (108.5) Income before income taxes $ 849.3 $ 110.3 $ 272.7 $ (220.2) $ 1,012.1 Three Months Ended June 30, 2022 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 3,181.0 $ 900.0 $ 1,790.3 $ 1.0 $ 5,872.3 Intersegment transfers — 1,427.6 53.3 (1,480.9) — Total net sales and intersegment transfers $ 3,181.0 $ 2,327.6 $ 1,843.6 $ (1,479.9) $ 5,872.3 Segment profit $ 684.0 $ 79.9 $ 196.8 $ 960.7 Interest expense $ (92.9) (92.9) Administrative expenses and other (127.9) (127.9) Income before income taxes $ 684.0 $ 79.9 $ 196.8 $ (220.8) $ 739.9 Six Months Ended June 30, 2023 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 6,357.8 $ 1,818.5 $ 3,504.7 $ 2.0 $ 11,683.0 Intersegment transfers — 2,687.1 109.8 (2,796.9) — Total net sales and intersegment transfers $ 6,357.8 $ 4,505.6 $ 3,614.5 $ (2,794.9) $ 11,683.0 Segment profit $ 1,376.0 $ 204.1 $ 491.6 $ 2,071.7 Interest expense $ (221.0) (221.0) Administrative expenses and other (223.8) (223.8) Income before income taxes $ 1,376.0 $ 204.1 $ 491.6 $ (444.8) $ 1,626.9 Six Months Ended June 30, 2022 Paint Stores Consumer Brands Performance Administrative Consolidated Net external sales $ 5,672.3 $ 1,752.2 $ 3,444.4 $ 2.1 $ 10,871.0 Intersegment transfers — 2,567.2 105.6 (2,672.8) — Total net sales and intersegment transfers $ 5,672.3 $ 4,319.4 $ 3,550.0 $ (2,670.7) $ 10,871.0 Segment profit $ 1,112.8 $ 161.4 $ 341.3 $ 1,615.5 Interest expense $ (181.3) (181.3) Administrative expenses and other (233.2) (233.2) Income before income taxes $ 1,112.8 $ 161.4 $ 341.3 $ (414.5) $ 1,201.0 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Proceeds from real estate financing transactions | $ 72.2 | $ 138.7 | ||
Supplier finance obligations | $ 242.3 | $ 242.3 | $ 258.1 | $ 267.1 |
BASIS OF PRESENTATION - Schedul
BASIS OF PRESENTATION - Schedule of Variable Interest Entities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Variable Interest Entity [Line Items] | |||
Other accruals | $ 1,099.1 | $ 1,138.3 | $ 1,001.4 |
Other long-term liabilities | 1,746.8 | 1,606.4 | 1,541.8 |
VIEs | |||
Variable Interest Entity [Line Items] | |||
Other assets | 605 | 587 | 528.1 |
Other accruals | 53.9 | 89.8 | 48.4 |
Other long-term liabilities | $ 530.8 | $ 476.5 | $ 470.4 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2023 USD ($) employee | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||
Gain (loss) on disposition of business | $ 20.1 | $ 0 | $ 20.1 | $ 0 | |
Non-core Domestic Aerosol Business | |||||
Business Acquisition [Line Items] | |||||
Gain (loss) on disposition of business | $ 20.1 | ||||
China Architectural Business | |||||
Business Acquisition [Line Items] | |||||
Revenue from divestiture | $ 100 | ||||
Number of employees | employee | 300 | ||||
Industria Chimica Adriatica S.p.A. | |||||
Business Acquisition [Line Items] | |||||
Decrease in goodwill | 149.6 | ||||
Increase in deferred tax liabilities | 59 | ||||
Increase in finite lived assets | 192.7 | ||||
Prior Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire businesses | $ 22.9 |
HELD FOR SALE - Narrative (Deta
HELD FOR SALE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Long-Lived Assets Held-for-Sale [Line Items] | ||||
Impairment | $ 34 | $ 0 | $ 34 | $ 0 |
Administrative | ||||
Long-Lived Assets Held-for-Sale [Line Items] | ||||
Impairment | 27.1 | |||
Consumer Brands Group | ||||
Long-Lived Assets Held-for-Sale [Line Items] | ||||
Impairment | $ 6.9 |
HELD FOR SALE - Balance Sheet (
HELD FOR SALE - Balance Sheet (Details) - Held-for-Sale $ in Millions | Jun. 30, 2023 USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Tangible assets | $ 22.5 |
Intangible assets | 93.3 |
Valuation adjustment | (27.1) |
Total assets | 88.7 |
Total liabilities | $ 20.9 |
RESTRUCTURING (Details)
RESTRUCTURING (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | $ 41.7 |
Provisions for Severance and related costs | 15.3 |
Payments, currency and other adjustments | (41.9) |
Restructuring reserve, ending balance | 15.1 |
Total expense incurred to date | 63.1 |
Additional expense expected | 0 |
Total expected expense | 63.1 |
Provisions for Severance and related costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 4.7 |
Other qualified costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 10.6 |
Other qualified costs | Selling, General and Administrative Expenses | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 5.7 |
Other qualified costs | Cost of Goods Sold | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 4.9 |
Administrative | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 0 |
Provisions for Severance and related costs | 1.3 |
Payments, currency and other adjustments | (1.3) |
Restructuring reserve, ending balance | 0 |
Total expense incurred to date | 1.3 |
Additional expense expected | 0 |
Total expected expense | 1.3 |
Administrative | Provisions for Severance and related costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 1.3 |
Administrative | Other qualified costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 0 |
Consumer Brands Group | Operating Segments | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 25.6 |
Provisions for Severance and related costs | 14.2 |
Payments, currency and other adjustments | (31.8) |
Restructuring reserve, ending balance | 8 |
Total expense incurred to date | 39.8 |
Additional expense expected | 0 |
Total expected expense | 39.8 |
Consumer Brands Group | Operating Segments | Provisions for Severance and related costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 3.6 |
Consumer Brands Group | Operating Segments | Other qualified costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | 10.6 |
Performance Coatings Group | Operating Segments | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 16.1 |
Provisions for Severance and related costs | (0.2) |
Payments, currency and other adjustments | (8.8) |
Restructuring reserve, ending balance | 7.1 |
Total expense incurred to date | 22 |
Additional expense expected | 0 |
Total expected expense | 22 |
Performance Coatings Group | Operating Segments | Provisions for Severance and related costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | (0.2) |
Performance Coatings Group | Operating Segments | Other qualified costs | |
Restructuring Reserve [Roll Forward] | |
Provisions for Severance and related costs | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Inventory Disclosure [Abstract] | |||
Finished goods | $ 1,924.7 | $ 1,957.7 | $ 1,812.1 |
Work in process and raw materials | 514.3 | 668.8 | 599.5 |
Inventories | $ 2,439 | $ 2,626.5 | $ 2,411.6 |
LONG-LIVED ASSETS (Details)
LONG-LIVED ASSETS (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 5,385.1 | $ 5,188.6 | $ 4,847.8 |
Less allowances for depreciation | 2,942.6 | 2,981.6 | 2,885.9 |
Property, plant and equipment, net | 2,442.5 | 2,207 | 1,961.9 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 264.3 | 263 | 255.3 |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,049.1 | 1,199.3 | 1,137.2 |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,339.5 | 3,230.2 | 3,124.8 |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 732.2 | $ 496.1 | $ 330.5 |
DEBT - Outstanding Debt (Detail
DEBT - Outstanding Debt (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Disclosure [Abstract] | |||
Long-term debt (including current portion) | $ 9,595.2 | $ 9,591.6 | $ 8,594.2 |
Short-term borrowings | 806.2 | 978.1 | 2,012 |
Total debt outstanding | $ 10,401.4 | $ 10,569.7 | $ 10,606.2 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | May 01, 2023 | Feb. 28, 2023 |
Debt Instrument [Line Items] | |||
Unused borrowing capacity, amount | $ 2,874 | ||
August 2021 Credit Agreement | Line of credit | |||
Debt Instrument [Line Items] | |||
Line of credit facility, current borrowing capacity | $ 125 | ||
May 2016 Credit Agreement | Line of credit | |||
Debt Instrument [Line Items] | |||
Line of credit facility, current borrowing capacity | $ 125 |
DEBT - Short-term Borrowings (D
DEBT - Short-term Borrowings (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | |||
Short-term borrowings | $ 806.2 | $ 978.1 | $ 2,012 |
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term borrowings | 806.2 | 978.1 | 2,012 |
Domestic commercial paper | Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term borrowings | $ 805.6 | $ 938.5 | $ 1,708.8 |
Weighted average interest rate | 5.40% | 4.60% | 1.70% |
Revolving credit facility | Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term borrowings | $ 0 | $ 0 | $ 250 |
Weighted average interest rate | 0% | 0% | 2.60% |
Foreign facilities | Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term borrowings | $ 0.6 | $ 39.6 | $ 53.2 |
Weighted average interest rate | 11.40% | 6.70% | 6.50% |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.2 | $ 0.3 | $ 0.3 | $ 0.6 |
Interest cost | 1.8 | 1.6 | 3.7 | 3 |
Amortization of prior service cost (credit) | (6) | (0.1) | (12) | (0.2) |
Amortization of actuarial (gains) losses | 0.1 | 1 | 0.1 | 2.1 |
Net periodic benefit cost (credit) | (3.9) | 2.8 | (7.9) | 5.5 |
Domestic Defined Benefit Pension Plan | Defined Benefit Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.8 | 1.2 | 1.6 | 2.5 |
Interest cost | 1.1 | 0.8 | 2.3 | 1.6 |
Expected return on assets | (1.9) | (1.9) | (3.7) | (3.8) |
Amortization of prior service cost (credit) | 0.4 | 0.3 | 0.7 | 0.5 |
Net periodic benefit cost (credit) | 0.4 | 0.4 | 0.9 | 0.8 |
Foreign Defined Benefit Pension Plans | Defined Benefit Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1.7 | 2.1 | 3.3 |
Interest cost | 2.8 | 0.9 | 5.7 | 2.9 |
Expected return on assets | (3.1) | (2.5) | (6.2) | (5.1) |
Amortization of prior service cost (credit) | (0.1) | (0.1) | ||
Amortization of actuarial (gains) losses | (0.3) | 0.9 | (0.7) | 1 |
Net periodic benefit cost (credit) | $ 0.4 | $ 1 | $ 0.8 | $ 2 |
OTHER LONG-TERM LIABILITIES (De
OTHER LONG-TERM LIABILITIES (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 USD ($) ManufacturingSite operable_unit | Jun. 30, 2022 USD ($) | |
Loss Contingencies [Line Items] | ||
Accruals for extended environmental-related activities | $ 240.7 | $ 269.2 |
Estimated costs of current investigation and remediation activities included in other accruals | 50.2 | $ 45.9 |
Amount by which unaccrued maximum of estimated range exceeds minimum | $ 85.9 | |
Number of manufacturing sites accounting for the majority of the accrual for environmental-related activities | ManufacturingSite | 4 | |
Accruals for environmental-related activities of sites | $ 248.6 | |
Percentage of accrual for environmental-related activities related to sites | 85.40% | |
Remaining number of manufacturing sites | ManufacturingSite | 3 | |
Gibbsboro, New Jersey | ||
Loss Contingencies [Line Items] | ||
Number of operable units | operable_unit | 6 | |
Remedy Implementation | ||
Loss Contingencies [Line Items] | ||
Regulatory agency significant cost components liability | 85% | |
Regulatory Agency Interaction | ||
Loss Contingencies [Line Items] | ||
Regulatory agency significant cost components liability | 10% | |
Project Management and Other Costs | ||
Loss Contingencies [Line Items] | ||
Regulatory agency significant cost components liability | 5% | |
Environmental Related Activities, Major Sites | ||
Loss Contingencies [Line Items] | ||
Amount by which unaccrued maximum of estimated range exceeds minimum | $ 60.9 | |
Percentage of aggregate unaccrued maximum related to sites | 70.90% |
LITIGATION (Details)
LITIGATION (Details) $ in Millions | 1 Months Ended | 6 Months Ended | |||
May 20, 2021 plaintiff | Apr. 15, 2021 plaintiff | May 31, 2019 USD ($) defendant plaintiff | Oct. 31, 2018 case | Jun. 30, 2023 USD ($) case | |
Pennsylvania Proceedings | |||||
Loss Contingencies [Line Items] | |||||
Number of proceedings initiated | case | 2 | ||||
Ravon Owens v. American Cyanamid, et al., Cesar Sifuentes v. American Cyanamid, et al., and Glenn Burton, Jr. v. American Cyanamid, et al. | |||||
Loss Contingencies [Line Items] | |||||
Number of cases consolidated | case | 3 | ||||
Number of plaintiffs | plaintiff | 3 | 3 | |||
Amount awarded per plaintiff | $ 2 | ||||
Amount awarded to plaintiffs | $ 6 | ||||
Number of additional defendants | defendant | 2 | ||||
Damages sought | $ 0.8 | ||||
Dijonae Trammell, et al. v. American Cyanamid, et al. | |||||
Loss Contingencies [Line Items] | |||||
Number of plaintiffs | plaintiff | 3 |
SHAREHOLDERS' EQUITY - Dividend
SHAREHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Equity [Abstract] | ||||||
Cash dividends (in dollars per share) | $ 0.605 | $ 0.605 | $ 0.60 | $ 0.60 | $ 1.21 | $ 1.20 |
Total dividends | $ 156.3 | $ 156.5 | $ 156.2 | $ 150.9 | $ 312.8 | $ 307.1 |
SHAREHOLDERS' EQUITY - Narrativ
SHAREHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | |
Feb. 28, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining number of shares authorized to be repurchased (in shares) | 42,900,000 | ||
Proceeds from treasury stock issued | $ 22 | $ 0 | $ 22 |
Stock options exercised (in shares) | 384,767 | ||
Stock options, weighted average price (in dollars per share) | $ 92.75 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units vested (in shares) | 301,651 |
SHAREHOLDERS' EQUITY - Summariz
SHAREHOLDERS' EQUITY - Summarize of Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Equity [Abstract] | ||||
Treasury stock purchases (in millions) | $ 234.2 | $ 296.4 | $ 535.9 | $ 703.5 |
Treasury stock purchases (in shares) | 1,000,000 | 1,100,000 | 2,300,000 | 2,550,000 |
Average price per share (in dollars per share) | $ 234.15 | $ 269.49 | $ 232.98 | $ 275.89 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Shareholders' Equity [Roll Forward] | ||
Beginning balance | $ 3,102.1 | $ 2,437.2 |
Amounts recognized in AOCI | 60.1 | (216.7) |
Amounts reclassified from AOCI | (10.8) | 0.5 |
Ending balance | 3,631.1 | 2,224.6 |
Total | ||
Shareholders' Equity [Roll Forward] | ||
Beginning balance | (700.6) | (698.4) |
Ending balance | (651.3) | (914.6) |
Foreign Currency Translation Adjustments | ||
Shareholders' Equity [Roll Forward] | ||
Beginning balance | (810.8) | (702.1) |
Amounts recognized in AOCI | 60.1 | (216.7) |
Ending balance | (750.7) | (918.8) |
Pension and Other Postretirement Benefits Adjustments | ||
Shareholders' Equity [Roll Forward] | ||
Beginning balance | 78.3 | (32.2) |
Amounts reclassified from AOCI | (9) | 2.5 |
Ending balance | 69.3 | (29.7) |
Unrealized Net Gains on Cash Flow Hedges | ||
Shareholders' Equity [Roll Forward] | ||
Beginning balance | 31.9 | 35.9 |
Amounts reclassified from AOCI | (1.8) | (2) |
Ending balance | $ 30.1 | $ 33.9 |
DERIVATES INSTRUMENTS AND HEDGI
DERIVATES INSTRUMENTS AND HEDGING - Summarizes of Outstanding Contracts (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Euro Cross Currency Swap 1 | |
Derivative [Line Items] | |
Notional Value | $ 500 |
Euro Cross Currency Swap 2 | |
Derivative [Line Items] | |
Notional Value | 162.7 |
Euro Cross Currency Swap 3 | |
Derivative [Line Items] | |
Notional Value | 150 |
Euro Cross Currency Swap 4 | |
Derivative [Line Items] | |
Notional Value | $ 200 |
DERIVATED AND HEDGING - Summari
DERIVATED AND HEDGING - Summarizes of Derivate Instruments Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Derivative [Line Items] | |||
Derivative asset, statement of financial position [extensible enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | Other Assets, Noncurrent |
Derivative liability, statement of financial position [extensible enumeration] | Other long-term liabilities | Other long-term liabilities | Other long-term liabilities |
Cross Currency Swap Contract | |||
Derivative [Line Items] | |||
Net investment hedge asset | $ 0 | $ 9.1 | $ 15.4 |
Other accruals | 5 | 0 | 0 |
Other long-term liabilities | $ 2.8 | $ 0 | $ 0 |
DERIVATES INSTRUMENTS AND HED_2
DERIVATES INSTRUMENTS AND HEDGING - Summarizes of Unrealized Gains (Losses) (Details) - Cross Currency Swap Contract - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Derivative [Line Items] | ||||
(Losses) gains | $ (11.3) | $ 40.8 | $ (16.9) | $ 51.5 |
Tax effect | 2.7 | (10) | 4.1 | (12.6) |
(Losses) gains, net of taxes | $ (8.6) | $ 30.8 | $ (12.8) | $ 38.9 |
DERIVATES INSTRUMENTS AND HED_3
DERIVATES INSTRUMENTS AND HEDGING - Narrative (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Foreign currency forward contracts | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount | $ 0 | $ 0 | $ 0 |
FAIR VALUE MEASURMENTS - Schedu
FAIR VALUE MEASURMENTS - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value Measurements on a Recurring Basis - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Net investment hedge asset | $ 0 | $ 9.1 |
Total assets, fair value | 87 | 113 |
Level 1 | ||
Assets: | ||
Total assets, fair value | 48.5 | 73.5 |
Level 2 | ||
Assets: | ||
Net investment hedge asset | 9.1 | |
Total assets, fair value | 38.5 | 39.5 |
Level 3 | ||
Assets: | ||
Total assets, fair value | 0 | 0 |
Deferred compensation plan assets | ||
Assets: | ||
Plan assets | 87 | 74.1 |
Deferred compensation plan assets | Level 1 | ||
Assets: | ||
Plan assets | 48.5 | 43.7 |
Deferred compensation plan assets | Level 2 | ||
Assets: | ||
Plan assets | 38.5 | 30.4 |
Qualified replacement plan assets | ||
Assets: | ||
Plan assets | 0 | 29.8 |
Qualified replacement plan assets | Level 1 | ||
Assets: | ||
Plan assets | 29.8 | |
Net Investment Hedge Liability | ||
Liabilities: | ||
Net investment hedge liability | 7.8 | $ 0 |
Net Investment Hedge Liability | Level 2 | ||
Liabilities: | ||
Net investment hedge liability | $ 7.8 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - Level 2 - Fair Value Measurements on a Recurring Basis - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Deferred compensation plan assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost basis of investment funds | $ 75 | $ 67.2 |
Qualified replacement plan assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost basis of investment funds | $ 29.8 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Carrying Amount | Publicly traded debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 9,594.3 | $ 9,590 |
Carrying Amount | Non-publicly traded debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0.9 | 1.6 |
Total | Publicly traded debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 8,464.9 | 8,382.3 |
Total | Non-publicly traded debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 0.9 | $ 1.5 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Revenue, performance obligation, description of payment terms | 30 and 60 days, |
North America | Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Concentration of credit risk percentage | 80% |
EMEAI Region | Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Concentration of credit risk percentage | 10% |
REVENUE - Summarized of Account
REVENUE - Summarized of Accounts Receivable and Current and Long-term Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Revenue from Contract with Customer [Abstract] | |||
Accounts Receivable, Less Allowance | $ 3,117.8 | $ 2,563.6 | $ 2,982.5 |
Contract Assets (Current) | 46 | 43.8 | |
Contract Assets (Long-Term) | 141.4 | 117.7 | |
Contract Liabilities (Current) | 267.2 | 292.9 | |
Contract Liabilities (Long-Term) | $ 8.6 | $ 7.1 |
REVENUE - Allowance For Doubtfu
REVENUE - Allowance For Doubtful Accounts (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 56.6 | $ 48.9 |
Bad debt expense | 32.4 | 36.5 |
Uncollectible accounts written off, net of recoveries | (12.3) | (13.6) |
Ending balance | $ 76.7 | $ 71.8 |
OTHER - Other General (Income)
OTHER - Other General (Income) Expense - Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | ||||
Provisions for environmental matters - net | $ 0.6 | $ 4.1 | $ 13.3 | $ 4.7 |
Gain on divestiture of business | (20.1) | 0 | (20.1) | 0 |
(Gains) losses on sale or disposition of assets | (16.2) | 0.3 | (20.8) | 2.2 |
Other | 3.2 | 0 | 5.6 | 0 |
Other general (income) expense - net | $ (32.5) | $ 4.4 | $ (22) | $ 6.9 |
OTHER - Other Expense (Income)
OTHER - Other Expense (Income) - Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | ||||
Investment (gains) losses | $ (15.5) | $ 8.2 | $ (18.7) | $ 14.9 |
Net expense from banking activities | 3.9 | 3 | 7.8 | 5.9 |
Foreign currency transaction related losses | 16.8 | 6.2 | 23.6 | 10.3 |
Miscellaneous pension (credit) expense | (5.1) | 1 | (10.2) | 1.9 |
Other income | (15.8) | (10.4) | (30.4) | (17.9) |
Other expense | 9.9 | 7.5 | 18.9 | 16.7 |
Other (income) expense - net | $ (5.8) | $ 15.5 | $ (9) | $ 31.8 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 21.60% | 21.90% | 21.90% | 21% | |
Unrecognized tax benefits | $ 242.4 | ||||
Unrecognized tax benefits adjusted | 230.3 | ||||
Amount of unrecognized tax benefits where significant change is reasonably possible | 92.7 | ||||
Accrued income tax interest and penalties | $ 36.6 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Basic | ||||||
Net income | $ 793.7 | $ 477.4 | $ 577.9 | $ 370.8 | $ 1,271.1 | $ 948.7 |
Average shares outstanding (in shares) | 256 | 258.1 | 256.3 | 258.5 | ||
Basic net income per share (in dollars per share) | $ 3.10 | $ 2.24 | $ 4.96 | $ 3.67 | ||
Diluted | ||||||
Net income | $ 793.7 | $ 477.4 | $ 577.9 | $ 370.8 | $ 1,271.1 | $ 948.7 |
Average shares outstanding assuming dilution: | ||||||
Average shares outstanding (in shares) | 256 | 258.1 | 256.3 | 258.5 | ||
Stock options and other contingently issuable shares (in shares) | 2.9 | 3.7 | 3 | 4 | ||
Average shares outstanding assuming dilution (in shares) | 258.9 | 261.8 | 259.3 | 262.5 | ||
Diluted net income per share (in dollars per share) | $ 3.07 | $ 2.21 | $ 4.90 | $ 3.61 | ||
Stock options and other contingently issuable shares with anti-dilutive effects (in shares) | 2 | 1 | 2.8 | 1 |
REPORTABLE SEGMENT INFORMATIO_2
REPORTABLE SEGMENT INFORMATION - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Net sales | $ 6,240.6 | $ 5,872.3 | $ 11,683 | $ 10,871 |
Consolidated Foreign Subsidiaries | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,150 | 1,121 | 2,237 | 2,198 |
Long-lived assets | $ 3,348 | $ 2,833 | $ 3,348 | $ 2,833 |
REPORTABLE SEGMENT INFORMATIO_3
REPORTABLE SEGMENT INFORMATION - Reportable Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 6,240.6 | $ 5,872.3 | $ 11,683 | $ 10,871 |
Segment profit | 1,232.3 | 960.7 | 2,071.7 | 1,615.5 |
Interest expense | (111.7) | (92.9) | (221) | (181.3) |
Administrative expenses and other | (108.5) | (127.9) | (223.8) | (233.2) |
Income before income taxes | 1,012.1 | 739.9 | 1,626.9 | 1,201 |
Intersegment transfers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (1,495) | (1,480.9) | (2,796.9) | (2,672.8) |
Administrative | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1.2 | 1 | 2 | 2.1 |
Administrative and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (1,493.8) | (1,479.9) | (2,794.9) | (2,670.7) |
Interest expense | (111.7) | (92.9) | (221) | (181.3) |
Administrative expenses and other | (108.5) | (127.9) | (223.8) | (233.2) |
Income before income taxes | (220.2) | (220.8) | (444.8) | (414.5) |
Paint Stores Group | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 3,498.7 | 3,181 | 6,357.8 | 5,672.3 |
Paint Stores Group | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 3,498.7 | 3,181 | 6,357.8 | 5,672.3 |
Segment profit | 849.3 | 684 | 1,376 | 1,112.8 |
Income before income taxes | 849.3 | 684 | 1,376 | 1,112.8 |
Consumer Brands Group | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 945.8 | 900 | 1,818.5 | 1,752.2 |
Consumer Brands Group | Intersegment transfers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,433.7 | 1,427.6 | 2,687.1 | 2,567.2 |
Consumer Brands Group | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,379.5 | 2,327.6 | 4,505.6 | 4,319.4 |
Segment profit | 110.3 | 79.9 | 204.1 | 161.4 |
Income before income taxes | 110.3 | 79.9 | 204.1 | 161.4 |
Performance Coatings Group | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,794.9 | 1,790.3 | 3,504.7 | 3,444.4 |
Performance Coatings Group | Intersegment transfers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 61.3 | 53.3 | 109.8 | 105.6 |
Performance Coatings Group | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,856.2 | 1,843.6 | 3,614.5 | 3,550 |
Segment profit | 272.7 | 196.8 | 491.6 | 341.3 |
Income before income taxes | $ 272.7 | $ 196.8 | $ 491.6 | $ 341.3 |