Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SHERWIN WILLIAMS CO |
Entity Central Index Key | 89,800 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2017 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 93,410,169 |
Statements of Consolidated Inco
Statements of Consolidated Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 3,735,817 | $ 3,219,525 | $ 6,497,204 | $ 5,793,549 |
Cost of goods sold | 1,998,761 | 1,583,624 | 3,416,874 | 2,895,803 |
Gross profit | $ 1,737,056 | $ 1,635,901 | $ 3,080,330 | $ 2,897,746 |
Percent to net sales | 46.50% | 50.80% | 47.40% | 50.00% |
Selling, general and administrative expenses | $ 1,145,492 | $ 1,048,496 | $ 2,155,667 | $ 2,045,169 |
Percent to net sales | 30.70% | 32.60% | 33.20% | 35.30% |
Other general expense - net | $ 1,775 | $ 2,733 | $ 2,051 | $ 20,287 |
Amortization | 28,918 | 5,584 | 35,088 | 11,366 |
Interest expense | 56,729 | 40,878 | 82,424 | 66,610 |
Interest and net investment income | (3,091) | (952) | (4,371) | (1,439) |
Other (income) expense - net | (1,770) | (52) | (6,137) | 174 |
Income from continuing operations before income taxes | 509,003 | 539,214 | 815,608 | 755,579 |
Income taxes | 148,352 | 161,150 | 215,805 | 212,639 |
Net income from continuing operations | 360,651 | 378,064 | 599,803 | 542,940 |
Loss from discontinued operations (see Note 3) | ||||
Income taxes | 41,540 | 41,540 | ||
Net loss from discontinued operations | (41,540) | 0 | (41,540) | 0 |
Net income | $ 319,111 | $ 378,064 | $ 558,263 | $ 542,940 |
Basic net income per common share | ||||
Continuing operations (in dollars per share) | $ 3.89 | $ 4.12 | $ 6.47 | $ 5.93 |
Discontinued operations (in dollars per share) | (0.45) | 0 | (0.45) | 0 |
Net income per common share (in dollars per share) | 3.44 | 4.12 | 6.02 | 5.93 |
Diluted net income per common share | ||||
Continuing operations (in dollars per share) | 3.80 | 3.99 | 6.34 | 5.76 |
Discontinued operations (in dollars per share) | (0.44) | 0 | (0.44) | 0 |
Net income per common share (in dollars per share) | $ 3.36 | $ 3.99 | $ 5.90 | $ 5.76 |
Average shares outstanding - basic (in shares) | 92,841,148 | 91,788,734 | 92,695,853 | 91,632,297 |
Average shares and equivalents outstanding - diluted (in shares) | 94,968,636 | 94,669,751 | 94,697,439 | 94,305,997 |
Comprehensive income | $ 349,288 | $ 284,060 | $ 579,378 | $ 467,946 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Current assets: | |||
Cash and cash equivalents | $ 210,049 | $ 889,793 | $ 402,656 |
Accounts receivable, less allowance | 2,377,874 | 1,230,987 | 1,473,078 |
Inventories: | |||
Finished goods | 1,468,671 | 898,627 | 975,366 |
Work in process and raw materials | 386,266 | 169,699 | 176,866 |
Total net inventory | 1,854,937 | 1,068,326 | 1,152,232 |
Deferred income taxes | 57,162 | 155,407 | |
Other current assets | 411,141 | 381,030 | 300,569 |
Total current assets | 4,854,001 | 3,627,298 | 3,483,942 |
Goodwill | 7,178,113 | 1,126,892 | 1,144,700 |
Intangible assets | 6,002,534 | 255,010 | 247,070 |
Deferred pension assets | 224,695 | 225,529 | 246,090 |
Other assets | 568,138 | 421,904 | 471,618 |
Property, plant and equipment: | |||
Land | 259,415 | 115,555 | 119,608 |
Buildings | 961,870 | 714,815 | 708,573 |
Machinery and equipment | 2,595,633 | 2,153,437 | 2,109,786 |
Construction in progress | 134,518 | 117,126 | 100,508 |
Total gross property, plant and equipment | 3,951,436 | 3,100,933 | 3,038,475 |
Less allowances for depreciation | 2,061,519 | 2,005,045 | 1,966,218 |
Total net property, plant and equipment | 1,889,917 | 1,095,888 | 1,072,257 |
Total Assets | 20,717,398 | 6,752,521 | 6,665,677 |
Current liabilities: | |||
Short-term borrowings | 51,904 | 40,739 | 59,203 |
Accounts payable | 1,783,648 | 1,034,608 | 1,289,406 |
Compensation and taxes withheld | 395,867 | 398,045 | 311,111 |
Accrued taxes | 320,890 | 76,765 | 230,294 |
Current portion of long-term debt | 701,101 | 700,475 | 2,179 |
Other accruals | 898,503 | 578,547 | 733,020 |
Total current liabilities | 4,151,913 | 2,829,179 | 2,625,213 |
Long-term debt | 10,751,284 | 1,211,326 | 1,909,217 |
Postretirement benefits other than pensions | 253,434 | 250,397 | 251,812 |
Deferred income taxes | 2,467,348 | 73,833 | 131,447 |
Other long-term liabilities | 702,159 | 509,345 | 501,359 |
Shareholders’ equity: | |||
Common stock | 117,071 | 116,563 | 116,259 |
Other capital | 2,606,757 | 2,488,564 | 2,412,599 |
Retained earnings | 4,448,788 | 4,049,497 | 3,616,095 |
Treasury stock, at cost | (4,262,120) | (4,235,832) | (4,236,235) |
Cumulative other comprehensive loss | (519,236) | (540,351) | (662,089) |
Total shareholders' equity | 2,391,260 | 1,878,441 | 1,246,629 |
Total Liabilities and Shareholders’ Equity | $ 20,717,398 | $ 6,752,521 | $ 6,665,677 |
Consolidated Balance Sheets (U4
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
Common stock, shares outstanding (in shares) | 93,410,169 | 93,013,031 | 92,221,707 |
Condensed Statements of Consoli
Condensed Statements of Consolidated Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 558,263 | $ 542,940 |
Adjustments to reconcile net income to net operating cash: | ||
Loss from discontinued operations | 41,540 | 0 |
Depreciation | 94,965 | 86,724 |
Amortization of intangible assets | 35,088 | 11,366 |
Amortization of inventory step-up | 36,278 | |
Stock-based compensation expense | 35,866 | 31,948 |
Amortization of credit facility and debt issuance costs | 2,940 | 25,691 |
Provisions for qualified exit costs | 12,828 | 1,422 |
Provisions for environmental-related matters | 1,629 | 20,536 |
Defined benefit pension plans net cost | 10,554 | 9,948 |
Net change in postretirement liability | (7,422) | 961 |
Other | (7,598) | 1,833 |
Change in working capital accounts - net | (239,495) | (211,572) |
Costs incurred for environmental-related matters | (6,059) | (6,716) |
Costs incurred for qualified exit costs | (8,904) | (4,155) |
Other | 25,660 | (943) |
Net operating cash | 586,133 | 509,983 |
INVESTING ACTIVITIES | ||
Capital expenditures | (83,635) | (114,081) |
Acquisitions of businesses, net of cash acquired and divestiture (see Note 3) | (8,806,282) | |
Proceeds from sale of assets | 37,131 | 2,039 |
Increase in other investments | (11,444) | (36,950) |
Net investing cash | (8,864,230) | (148,992) |
FINANCING ACTIVITIES | ||
Net (decrease) increase in short-term borrowings | (228,785) | 15,318 |
Proceeds from long-term debt | 7,984,375 | |
Payments of long-term debt | (176) | (84) |
Payments for credit facility and debt issuance costs | (45,454) | (61,433) |
Payments of cash dividends | (158,934) | (155,721) |
Proceeds from stock options exercised | 79,157 | 43,708 |
Other | (26,420) | (12,645) |
Net financing cash | 7,603,763 | (170,857) |
Effect of exchange rate changes on cash | (5,410) | 6,778 |
Net (decrease) increase in cash and cash equivalents | (679,744) | 196,912 |
Cash and cash equivalents at beginning of year | 889,793 | 205,744 |
Cash and cash equivalents at end of period | 210,049 | 402,656 |
Income taxes paid | 121,115 | 73,636 |
Interest paid | $ 31,816 | $ 66,583 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (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 U.S. 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. There have been no significant changes in critical accounting policies since December 31, 2016 . Accounting estimates were revised as necessary during the first six months of 2017 based on new information and changes in facts and circumstances. Certain amounts in the 2016 condensed consolidated financial statements have been reclassified to conform to the 2017 presentation. See Note 14 for information on the changes in the Company's reportable segments. 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. The final year-end valuation of inventory is based on a cycle count program or an annual physical inventory count performed during the third and fourth quarters. For further information on inventory valuations and other matters, refer to the consolidated financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2016 . The consolidated results for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 . |
Impact of Recently Issued Accou
Impact of Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Effective January 1, 2017, the Company adopted the Accounting Standard Update (ASU) No. 2015-17, "Balance Sheet Classification of Deferred Taxes," which eliminates the requirement for separate presentation of current and non-current portions of deferred tax. Subsequent to adoption, all deferred tax assets and deferred tax liabilities are presented as non-current on the balance sheet. The changes have been applied prospectively as permitted by the ASU and prior years have not been restated. The adoption of this ASU does not have a material effect on the Company's results of operations, financial condition or liquidity. In March 2017, the Financial Accounting Standards Board (FASB) issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs." The standard requires the service component of pension and other postretirement benefit expense to be presented in the same income statement lines as other employee compensation costs, however, the other components will be presented outside of operating income. In addition, only the service cost component will be eligible for capitalization in assets. The standard is effective starting in 2018, with early adoption permitted. Retrospective application is required for the guidance on the income statement presentation. Prospective application is required for the guidance on the cost capitalization in assets. The Company is in the process of evaluating the impact of the standard. In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment.” This standard simplifies the accounting for goodwill impairment by eliminating the Step 2 requirement to calculate the implied fair value of goodwill. Instead, if a reporting unit's carrying amount exceeds its fair value, an impairment charge will be recorded based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard will be applied prospectively and is effective for impairment tests performed after December 15, 2019, with early adoption permitted. The standard is not expected to have a material effect on the Company's results of operations, financial condition or liquidity. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which consists of a comprehensive lease accounting standard. Under the new standard, assets and liabilities arising from most leases will be recognized on the balance sheet. Leases will be classified as either operating or financing, and the lease classification will determine whether expense is recognized on a straight line basis (operating leases) or based on an effective interest method (financing leases). The new standard is effective for interim and annual periods starting in 2019. A modified retrospective transition approach is required with certain practical expedients available. The Company has made significant progress with its assessment process, and anticipates this standard will have a material impact on its consolidated balance sheet. While the Company continues to assess all potential impacts of the standard, it currently believes the most significant impact relates to recording lease assets and related liabilities on the balance sheet for its retail operations in The Americas Group. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance for certain aspects of recognition, measurement and disclosure of financial instruments. The standard is effective for interim and annual periods starting in 2018, and early adoption is not permitted. Although the Company continues to assess the potential impacts of the standard, it currently believes that the main impact will be that changes in fair value of marketable securities currently classified as available-for-sale will be recognized in earnings rather than in other comprehensive income. The standard is not expected to have a material effect on the Company's results of operations, financial condition or liquidity. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which consists of a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard is effective for interim and annual periods beginning after December 15, 2017. The Company has made significant progress with its assessment process. In addition, the Company is currently developing plans for enhancements to its information systems and internal controls in response to the new rule requirements. Although the Company previously disclosed that it planned to adopt the standard using the full retrospective method of adoption, due to the recent acquisition of The Valspar Corporation (Valspar) (see Note 3), the Company now expects to adopt the standard using the modified retrospective method. The Company is in the process of evaluating the impact on the results of operations, financial condition, liquidity and disclosures. In addition to expanded disclosures regarding revenue, this pronouncement may impact timing of recognition in some arrangements with variable consideration or contracts for the sale of goods or services. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On June 1, 2017, the Company completed the acquisition of Valspar at $113 per share in an all cash transaction for a total purchase price of $8.9 billion , net of divestiture proceeds of $431.0 million . As previously disclosed, on April 11, 2017, the Company and Valspar entered into a definitive agreement with Axalta Coating Systems Ltd. to divest the assets related to Valspar's North American industrial wood coatings business. The divestiture was also completed on June 1, 2017, and is reported as a discontinued operation with no pre-tax gain or loss but includes the tax expense effect of this separate transaction. Proceeds of $431.0 million were received for the divested assets sold. The divestiture resulted in a tax provision of $41.5 million , which reduced basic and diluted net income per common share for the three and six months ended June 30, 2017 by $.45 and $.44 , respectively. The Valspar acquisition expands the Company's diversified array of brands and technologies, expands its global platform and adds new capabilities in its packaging and coil segments. The preliminary allocation of the fair value of the Valspar acquisition is summarized in the table below. Allocations are based on the acquisition method of accounting and in-process third-party valuation appraisals. The allocation of the fair value will be finalized within the allowable measurement period. (Millions of dollars) Cash $ 127.8 Accounts receivable 817.5 Inventories 695.5 Indefinite-lived trademarks 1,140.0 Finite-lived intangible assets 4,629.8 Goodwill 6,067.7 Property, plant and equipment 824.8 All other assets 253.6 Accounts payable (553.2 ) Long-term debt (1,603.7 ) Deferred taxes (2,461.9 ) All other liabilities (1,003.8 ) Total $ 8,934.1 Total, net of cash $ 8,806.3 Finite-lived intangible assets include customer relationships of $3.0 billion and intellectual property and technology of $1.6 billion , which are being amortized over weighted average amortization periods ranging from 15 to 22 years. Based on the preliminary purchase accounting, goodwill of $4.6 billion and $1.5 billion was recognized in the Performance Coatings Group and the Consumer Brands Group, respectively, and relates primarily to expected synergies. The Company's Net sales and Income from continuing operations for the three months ended June 30, 2017 include sales of $381.0 million and a profit before tax of $46.6 million related to the Valspar acquisition. Net income from continuing operations includes approximately $23.0 million of intangibles amortization expense and $36.3 million of inventory step-up amortization included in cost of sales. During the six months ended June 30, 2017 and 2016 , the Company incurred transaction and integration related SG&A expense of $31.6 million and $35.6 million , respectively, and interest expense of $41.5 million and $26.6 million , respectively, related to the acquisition of Valspar. The following pro forma information presents consolidated financial information as if Valspar had been acquired at the beginning of 2016. Pro forma adjustments have been made to exclude Valspar's North American industrial wood coatings business results and certain transaction and integration costs from all periods presented. Interest expense has been adjusted as though total debt outstanding at June 30, 2017 had been outstanding at January 1, 2016. Each quarter presented includes intangible amortization expense of approximately $68.9 million resulting from the preliminary purchase accounting. The full $108.8 million of inventory step-up amortization resulting from the preliminary purchase accounting asset step-up has been included in the first quarter of 2016 to reflect the pro forma transaction date of January 1, 2016, and thus the inventory step-up amortization of $36.3 million recorded in the second quarter of 2017 has been excluded. The unaudited pro forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisition taken place on January 1, 2016, nor is it it meant to be indicative of future results of operations of the combined companies under the ownership and operation of the Company. (Thousands of dollars except per share data) Three Months Ended Six Months Ended 2017 2016 2017 2016 Net sales $ 4,439,801 $ 4,315,822 $ 8,148,329 $ 7,794,545 Net income from continuing operations 402,503 402,810 600,970 477,581 Net income per common share from continuing operations: Basic $ 4.34 $ 4.39 $ 6.48 $ 5.21 Diluted $ 4.24 $ 4.25 $ 6.35 $ 5.06 |
Dividends
Dividends | 6 Months Ended |
Jun. 30, 2017 | |
Dividends [Abstract] | |
DIVIDENDS | DIVIDENDS Dividends paid on common stock for each of the first two quarters of 2017 and 2016 were $.85 per common share and $.84 per common share, respectively. |
Changes in Cumulative Other Com
Changes in Cumulative Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
CHANGES IN CUMULATIVE OTHER COMPREHENSIVE LOSS | CHANGES IN CUMULATIVE OTHER COMPREHENSIVE LOSS The following tables summarize the changes in Cumulative other comprehensive loss for the six months ended June 30, 2017 and 2016 : (Thousands of dollars) Foreign Currency Translation Adjustments Pension and Other Postretirement Benefit Adjustments Unrealized Net Gains on Available-for-Sale Securities Unrealized Net Gains (Losses) on Cash Flow Hedges Total Cumulative Other Comprehensive (Loss) Income Balance at December 31, 2016 $ (501,277 ) $ (125,096 ) $ 1,015 $ 85,007 $ (540,351 ) Amounts recognized in Other comprehensive loss (1) 51,250 870 (30,754 ) 21,366 Amounts reclassified from Other comprehensive loss (2) 385 8 (644 ) (251 ) Net change 51,250 385 878 (31,398 ) 21,115 Balance at June 30, 2017 $ (450,027 ) $ (124,711 ) $ 1,893 $ 53,609 $ (519,236 ) (1) Net of taxes of $(537) for unrealized net gains on available-for-sale securities and $18,895 for unrealized net losses on cash flow hedges. (2) Net of taxes of $(195) for pension and other postretirement benefit adjustments, $(5) for realized losses on the sale of available-for-sale securities and $396 for realized gains on cash flow hedges. (Thousands of dollars) Foreign Currency Translation Adjustments Pension and Other Postretirement Benefit Adjustments Unrealized Net (Losses) Gains on Available-for-Sale Securities Unrealized Net Losses on Cash Flow Hedges Total Cumulative Other Comprehensive (Loss) Income Balance at December 31, 2015 $ (482,629 ) $ (104,346 ) $ (120 ) $ (587,095 ) Amounts recognized in Other comprehensive loss (3) 31,935 455 $ (107,948 ) (75,558 ) Amounts reclassified from Other comprehensive loss (4) 439 125 564 Net change 31,935 439 580 (107,948 ) (74,994 ) Balance at June 30, 2016 $ (450,694 ) $ (103,907 ) $ 460 $ (107,948 ) $ (662,089 ) (3) Net of taxes of $(282) for unrealized net gains on available-for-sale securities and $66,721 for unrealized net losses on cash flow hedges. (4) Net of taxes of $(45) for pension and other postretirement benefit adjustments and $(78) for realized losses on the sale of available-for-sale securities. |
Product Warranties
Product Warranties | 6 Months Ended |
Jun. 30, 2017 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTIES | PRODUCT WARRANTIES Changes in the Company’s accrual for product warranty claims during the first six months of 2017 and 2016 , including customer satisfaction settlements, were as follows: (Thousands of dollars) 2017 2016 Balance at January 1 $ 34,419 $ 31,878 Charges to expense 16,434 15,763 Settlements (16,698 ) (14,755 ) Acquisition 110,461 Balance at June 30 $ 144,616 $ 32,886 Warranty accruals of $110.5 million were acquired in connection with the Valspar acquisition. This amount includes warranties for certain products under extended furniture protection plans. In the U.S., revenue related to furniture protection plans is deferred and recognized over the contract life. For further details on the Company’s accrual for product warranty claims, see Note 1 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Exit or Disposal Activities
Exit or Disposal Activities | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
EXIT OR DISPOSAL ACTIVITIES | EXIT OR DISPOSAL ACTIVITIES Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC. Qualified exit costs primarily include post-closure rent expenses, incremental post-closure costs and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated. Concurrently, property, plant and equipment is tested for impairment in accordance with the Property, Plant and Equipment Topic of the ASC, and if impairment exists, the carrying value of the related assets is reduced to estimated fair value. Additional impairment may be recorded for subsequent revisions in estimated fair value. In the six months ended June 30, 2017 , four stores in The Americas Group and two branches in the Performance Coatings Group were closed due to lower demand or redundancy. Due to the Valspar acquisition, the Company has acquired exit or disposal cost reserve accruals and recorded severance and related cost provisions in the month of June. The following table summarizes the activity and remaining liabilities associated with qualified exit costs at June 30, 2017 : (Thousands of dollars) Exit Plan Balance at December 31, 2016 Acquired Balances Provisions in Cost of Goods Sold or SG&A Actual Expenditures Charged to Accrual Balance at June 30, 2017 Administrative segment acquisition-related restructuring in 2017: Severance and related costs $ 9,883 $ (3,761 ) $ 6,122 Consumer Brands Group facilities shutdown in 2016: Severance and related costs $ 907 $ 4 2,823 (3,632 ) 102 Performance Coatings Group stores shutdown in 2016: Severance and related costs 136 2,271 8 (296 ) 2,119 Other qualified exit costs 269 5 94 (143 ) 225 The Americas Group stores shutdown in 2015: Other qualified exit costs 195 10 (205 ) Consumer Brands Group facilities shutdown in 2015: Severance and related costs 632 (3 ) 629 Other qualified exit costs 629 (3 ) 626 Performance Coatings Group stores shutdown in 2015: Severance and related costs 396 10 406 Other qualified exit costs 433 427 (405 ) 455 Severance and other qualified exit costs for facilities shutdown prior to 2015 1,908 92 (456 ) 1,544 Totals $ 3,848 $ 4,456 $ 12,828 $ (8,904 ) $ 12,228 For further details on the Company’s exit or disposal activities, see Note 5 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Health Care, Pension and Other
Health Care, Pension and Other Benefits | 6 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
HEALTH CARE, PENSION AND OTHER BENEFITS | HEALTH CARE, PENSION AND OTHER BENEFITS Shown below are the components of the Company’s net periodic benefit cost (credit) for domestic defined benefit pension plans, foreign defined benefit pension plans and postretirement benefits other than pensions: (Thousands of dollars) Domestic Defined Benefit Pension Plans Foreign Defined Benefit Pension Plans Postretirement Benefits Other than Pensions 2017 2016 2017 2016 2017 2016 Three Months Ended June 30: Net periodic benefit cost: Service cost $ 5,459 $ 5,489 $ 2,287 $ 1,198 $ 471 $ 561 Interest cost 7,191 6,643 1,864 2,081 2,593 2,753 Expected return on assets (11,299 ) (12,567 ) (2,008 ) (1,846 ) Amortization of: Prior service cost (credit) 340 301 (1,645 ) (1,645 ) Actuarial loss (gain) 1,662 1,153 (97 ) 504 5 Settlement gain (9,332 ) Net periodic benefit cost $ 3,353 $ 1,019 $ 2,046 $ 1,937 $ (7,908 ) $ 1,669 Six Months Ended June 30: Net periodic benefit cost (credit): Service cost $ 10,772 $ 10,978 $ 4,205 $ 2,539 $ 1,014 $ 1,122 Interest cost 13,601 13,286 3,502 4,161 5,236 5,505 Expected return on assets (21,608 ) (25,134 ) (3,772 ) (3,692 ) Amortization of: Prior service cost (credit) 681 602 (3,290 ) (3,290 ) Actuarial loss (gain) 3,323 2,305 (150 ) 865 16 Settlement (gain) loss 4,038 (9,332 ) Net periodic benefit cost (credit) $ 6,769 $ 2,037 $ 3,785 $ 7,911 $ (6,356 ) $ 3,337 The Company acquired new benefit plans in each category above as a result of the Valspar acquisition. The costs (credits) for these plans for the month of June 2017 are included in the tables above and are not significant. The settlement gain recognized in the second quarter of 2017 relates to the termination of a life insurance benefit plan. The settlement loss recognized in the first quarter of 2016 relates to the wind up of an acquired Canada plan. For further details on the Company’s health care, pension and other benefits, see Note 6 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Other Long-Term Liabilities
Other Long-Term Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Environmental Remediation Obligations [Abstract] | |
OTHER LONG-TERM LIABILITIES | OTHER LONG-TERM LIABILITIES The Company initially provides for estimated costs of environmental-related activities relating to its past operations and third party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are determined based on currently available facts regarding each site. If the best estimate of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is provided. At June 30, 2017 , the unaccrued maximum of the estimated range of possible outcomes is $86.1 million higher than the minimum. The Company continuously assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Actual costs incurred may vary from these 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. Included in Other long-term liabilities at June 30, 2017 and 2016 were accruals for extended environmental-related activities of $160.2 million and $143.0 million , respectively. Estimated costs of current investigation and remediation activities of $30.4 million and $22.5 million are included in Other accruals at June 30, 2017 and 2016 , respectively. Other accruals in the second quarter of 2017 increased $10.5 million due to environmental-related liabilities the Company assumed as a part of the preliminary opening balance sheet of Valspar and is subject to measurement period adjustments. Three of the Company’s currently and formerly owned manufacturing sites account for the majority of the accrual for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at June 30, 2017 . At June 30, 2017 , $149.9 million , or 78.6 percent of the total accrual, related directly to these three sites. In the aggregate unaccrued maximum of $86.1 million at June 30, 2017 , $70.5 million , or 81.8 percent , related to the three manufacturing sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and monitoring will likely be required at each site. Management cannot presently estimate the ultimate potential loss contingencies related to these sites or other less significant sites until such time as a substantial portion of the investigation at the sites is completed and remedial action plans are developed. In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties. Management expects these contingent environmental-related liabilities to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain environmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities. For further details on the Company’s Other long-term liabilities, see Note 8 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2017 | |
Loss Contingency, Information about Litigation Matters [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 seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company has also been a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints that seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company has not settled any material lead pigment or lead-based paint litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief. Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail. Adverse court rulings or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful. Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. With respect to such litigation, including the public nuisance litigation, the Company does not believe that it is probable that a loss has occurred, and it is not possible to estimate the range of potential losses as there is no prior history of a loss of this nature and there is no substantive information upon which an estimate could be based. In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties. Public nuisance claim litigation . The Company and other companies are or were defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by the State of Rhode Island, the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Chicago, Illinois, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California. Except for the Santa Clara County, California proceeding, all of these legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings. The proceedings initiated by the State of Rhode Island included two jury trials. At the conclusion of the second trial, the jury returned a verdict finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law. The Santa Clara County, California proceeding was initiated in March 2000 in the Superior Court of the State of California, County of Santa Clara. In the original complaint, the plaintiffs asserted various claims including fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance, and violations of California’s Business and Professions Code. A number of the asserted claims were resolved in favor of the defendants through pre-trial proceedings. The named plaintiffs in the Fourth Amended Complaint, filed on March 16, 2011, are the Counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura, the Cities of Oakland and San Diego and the City and County of San Francisco. The Fourth Amended Complaint asserted a sole claim for public nuisance, alleging that the presence of lead pigments for use in paint and coatings in, on and around residences in the plaintiffs’ jurisdictions constitutes a public nuisance. The plaintiffs sought the abatement of the alleged public nuisance that exists within the plaintiffs’ jurisdictions. A trial commenced on July 15, 2013 and ended on August 22, 2013. The court entered final judgment on January 27, 2014, finding in favor of the plaintiffs and against the Company and two other defendants (ConAgra Grocery Products Company and NL Industries, Inc.). The final judgment held the Company jointly and severally liable with the other two defendants to pay $1.15 billion into a fund to abate the public nuisance. The Company strongly disagrees with the judgment. On February 18, 2014, the Company filed a motion for new trial and a motion to vacate the judgment. The court denied these motions on March 24, 2014. On March 28, 2014, the Company filed a notice of appeal to the Sixth District Court of Appeal for the State of California. The filing of the notice of appeal effects an automatic stay of the judgment without the requirement to post a bond. The appeal is fully briefed. On July 14, 2017, the Sixth District Court of Appeal scheduled the date for oral argument on the appeal for August 24, 2017. The Company expects the Sixth District Court of Appeal to issue its ruling within 90 days following oral argument. The Company believes that the judgment conflicts with established principles of law and is unsupported by the evidence. The Company has had a favorable history with respect to lead pigment and lead-based paint litigation, particularly other public nuisance litigation, and accordingly, the Company believes that it is not probable that a loss has occurred and it is not possible to estimate the range of potential loss with respect to the case. Litigation seeking damages from alleged personal injury . The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint and claims for damages allegedly incurred by the children’s parents or guardians. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These proceedings include purported claims by individuals, groups of individuals and class actions. The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action in state court against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants included strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability, except that liability can be joint and several) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. The case ultimately proceeded to trial and, on November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff appealed and, on December 16, 2010, the Wisconsin Court of Appeals affirmed the final judgment in favor of the Company and other defendants. Wisconsin is the only jurisdiction to date to apply a theory of liability with respect to alleged personal injury (i.e., risk contribution/market share liability) that does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation. Although the risk contribution liability theory was applied during the Thomas trial, the constitutionality of this theory as applied to the lead pigment cases has not been judicially determined by the Wisconsin state courts. However, in an unrelated action filed in the United States District Court for the Eastern District of Wisconsin, Gibson v. American Cyanamid, et al., on November 15, 2010, the District Court held that Wisconsin’s risk contribution theory as applied in that case violated the defendants’ right to substantive due process and is unconstitutionally retroactive. The District Court's decision in Gibson v. American Cyanamid, et al., was appealed by the plaintiff to the United States Court of Appeals for the Seventh Circuit. On July 24, 2014, the United States Court of Appeals for the Seventh Circuit reversed the judgment and remanded the case back to the District Court for further proceedings. On January 16, 2015, the defendants filed a petition for certiorari in the United States Supreme Court seeking that Court's review of the Seventh Circuit's decision, and on May 18, 2015, the United States Supreme Court denied the defendants' petition. The case is currently pending in the District Court. Three cases also currently pending in the United States District Court for the Eastern District of Wisconsin (Ravon Owens v. American Cyanamid, et al., Cesar Sifuentes v. American Cyanamid, et al., and Glenn Burton, Jr. v. American Cyanamid, et al.) are being prepared for trial, although no trial dates have been set by the District Court. In Yasmine Clark v. The Sherwin-Williams Company, et al., the Wisconsin Circuit Court, Milwaukee County, on March 25, 2014, held that the application to a pending case of Section 895.046 of the Wisconsin Statutes (which clarifies the application of the risk contribution theory) is unconstitutional as a violation of the plaintiff’s right to due process of law under the Wisconsin Constitution. On August 21, 2014, the Wisconsin Court of Appeals granted defendants' petition to hear the issue as an interlocutory appeal. On September 29, 2015, the Wisconsin Court of Appeals certified the appeal to the Wisconsin Supreme Court for its determination. Oral argument before the Wisconsin Supreme Court occurred on April 5, 2016. On April 15, 2016, the Wisconsin Supreme Court published its decision, deciding in a 3 to 3 split decision to remand the case back to the Wisconsin Court of Appeals for its consideration. The Wisconsin Court of Appeals dismissed the appeal on September 20, 2016 and remanded the case back to the Wisconsin Circuit Court for further proceedings. On April 18, 2017, the parties entered into a stipulation and order of dismissal without prejudice. On April 26, 2017, the Wisconsin Circuit Court dismissed the case without prejudice. Insurance coverage litigation . The Company and its liability insurers, including certain underwriters at Lloyd’s of London, initiated legal proceedings against each other to primarily determine, among other things, whether the costs and liabilities associated with the abatement of lead pigment are covered under certain insurance policies issued to the Company. The Company’s action, filed on March 3, 2006 in the Common Pleas Court, Cuyahoga County, Ohio, is currently stayed and inactive. The liability insurers’ action, which was filed on February 23, 2006 in the Supreme Court of the State of New York, County of New York, has been dismissed. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Company has not recorded any assets related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual. Therefore, an ultimate loss in the insurance coverage litigation without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on the Company’s results of operation, liquidity or financial condition. As previously stated, however, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. |
Other
Other | 6 Months Ended |
Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | |
OTHER | OTHER Other general expense - net Included in Other general expense - net were the following: (Thousands of dollars) Three Months Ended Six Months Ended 2017 2016 2017 2016 Provisions for environmental matters - net $ 1,110 $ 2,507 $ 1,629 $ 20,536 Loss (gain) on sale or disposition of assets 665 226 422 (249 ) Total $ 1,775 $ 2,733 $ 2,051 $ 20,287 Provisions for environmental matters - net represent site-specific 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 9 for further details on the Company’s environmental-related activities. The loss (gain) on disposition of assets represents net realized losses (gains) associated with the sale or disposal of fixed assets previously used in the conduct of the primary business of the Company. Other (income) expense - net Included in Other (income) expense - net were the following: (Thousands of dollars) Three Months Ended Six Months Ended 2017 2016 2017 2016 Dividend and royalty income $ (1,198 ) $ (999 ) $ (3,042 ) $ (2,165 ) Net expense from banking activities 2,513 2,108 4,985 4,371 Foreign currency transaction related losses (gains) 976 1,819 (2,610 ) 3,509 Other income (5,937 ) (5,450 ) (10,897 ) (10,330 ) Other expense 1,876 2,470 5,427 4,789 Total $ (1,770 ) $ (52 ) $ (6,137 ) $ 174 Foreign currency transaction related losses (gains) represent net realized losses (gains) on U.S. dollar-denominated liabilities of foreign subsidiaries and net realized and unrealized losses (gains) from foreign currency option and forward contracts. There were no material foreign currency option and forward contracts outstanding at June 30, 2017 and 2016 . Other income and Other expense included 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, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate for income from continuing operations was 29.1 percent and 26.5 percent for the second quarter and first six months of 2017 , respectively, compared to 29.9 percent and 28.1 percent for the second quarter and first six months of 2016 , respectively. The Company recorded an income tax provision of $41.5 million in the second quarter of 2017 related to the divestiture of Valspar's North American industrial wood coatings business, which is reported as a discontinued operation. See Note 3. Excluding the impact of share-based payments, the effective tax rate was 32.7 percent for both the second quarter and first six months of 2017 compared to 32.1 percent for both the second quarter and first six months of 2016 . During the second quarter of 2017, the Company recorded a preliminary deferred income tax liability of approximately $2.4 billion based on the preliminary purchase price accounting for Valspar and is subject to measurement period adjustments. At December 31, 2016 , the Company had $32.8 million in unrecognized tax benefits, the recognition of which would have an effect of $27.7 million on the effective tax rate. Included in the balance of unrecognized tax benefits at December 31, 2016 was $2.6 million related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to federal audits of partnership investments and expiring statutes in federal, foreign and state jurisdictions. In the second quarter of 2017, the Company acquired $19.9 million of unrecognized tax benefits as a part of the preliminary opening balance sheet of Valspar and is subject to measurement period adjustments. The Company classifies all income tax related interest and penalties as income tax expense. At December 31, 2016 , the Company had accrued $9.3 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, 2016 during the first six months of 2017 with the exception of the unrecognized tax benefits recorded as a part of the acquisition of Valspar. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The IRS is currently auditing refund claims that the Company filed for the 2010, 2011 and 2012 tax years and the 2014 and 2015 tax years of a Valspar subsidiary. During the second quarter of 2017, the IRS informed the Company that it will commence an audit of the 2014 and 2015 tax years by the end of 2017. As of June 30, 2017 , the federal statute of limitations has not expired for the 2013, 2014 and 2015 tax years. As of June 30, 2017 , the Company is subject to non-U.S. income tax examinations for the tax years of 2010 through 2016. In addition, the Company is subject to state and local income tax examinations for the tax years 2003 through 2016. |
Net Income Per Common Share
Net Income Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | NET INCOME PER COMMON SHARE Basic and diluted earnings per share are calculated using the treasury stock method. (Thousands of dollars except per share data) Three Months Ended Six Months Ended 2017 2016 2017 2016 Basic Average common shares outstanding 92,841,148 91,788,734 92,695,853 91,632,297 Net income Continuing operations $ 360,651 $ 378,064 $ 599,803 $ 542,940 Discontinued operations (2) (41,540 ) — (41,540 ) — Net income $ 319,111 $ 378,064 $ 558,263 $ 542,940 Basic net income per common share Continuing operations $ 3.89 $ 4.12 $ 6.47 $ 5.93 Discontinued operations (2) (0.45 ) — (0.45 ) — Net income per common share $ 3.44 $ 4.12 $ 6.02 $ 5.93 Diluted Average common shares outstanding 92,841,148 91,788,734 92,695,853 91,632,297 Stock options and other contingently issuable shares (1) 2,055,422 2,318,192 1,935,690 2,114,844 Non-vested restricted stock grants 72,066 562,825 65,896 558,856 Average common shares outstanding assuming dilution 94,968,636 94,669,751 94,697,439 94,305,997 Net income Continuing operations $ 360,651 $ 378,064 $ 599,803 $ 542,940 Discontinued operations (2) (41,540 ) — (41,540 ) — Net income $ 319,111 $ 378,064 $ 558,263 $ 542,940 Diluted net income per common share Continuing operations $ 3.80 $ 3.99 $ 6.34 $ 5.76 Discontinued operations (2) (0.44 ) — (0.44 ) — Net income per common share $ 3.36 $ 3.99 $ 5.90 $ 5.76 (1) Stock options and other contingently issuable shares excludes 16,013 and 47,273 shares due to their anti-dilutive effect for the three and six months ended June 30, 2016 . There are no shares excluded for the three and six months ended June 30, 2017 . (2) Relates to the divestiture of Valspar's North American industrial wood coatings business. See Note 3. |
Reportable Segment Information
Reportable Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENT INFORMATION | REPORTABLE SEGMENT INFORMATION The Company reports segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Disclosures Topic of the ASC. Upon completion of the Valspar acquisition in the second quarter of 2017 (see Note 3), the Company made important changes to its organizational and reporting structure that resulted in establishing three new reportable segments. The Americas Group reportable segment includes the Company's previous Paint Stores Group and Latin America Coatings Group, along with a specialty retail business of Valspar. The Americas Group operates stores in the United States, Canada, Latin America, and the Caribbean islands servicing the needs of architectural and industrial painting contractors and do-it-yourself homeowners. The Americas Group sells a variety of architectural paints, coatings and related products through dedicated dealers, home centers, distributors, hardware stores and other retailers throughout Latin America. The Consumer Brands Group reportable segment includes the Company's previous Consumer Group along with Valspar's previous Consumer Paints segment, excluding Valspar's automotive refinishes products business. The Consumer Brands Group supplies a broad portfolio of branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers and distributors throughout North America, as well as in Australia, China and Europe. The Consumer Brands Group also supports the Company's other businesses around the world with new product research and development, manufacturing, distribution and logistics. The Performance Coatings Group reportable segment includes the Company's previous Global Finishes Group and Valspar's previous Coatings Group segment. The Performance Coatings Group also includes Valspar's automotive refinishes products business, which was previously reported under Valspar's Consumer Paints segment. Valspar’s North American industrial wood coatings business, which was previously reported under the Valspar's Coatings Group segment, was divested. The Performance Coatings Group develops and sells industrial coatings for wood finishing and general industrial (metal and plastic) applications, automotive refinish, protective and marine coatings, coil coatings, packaging coatings and performance-based resins and colorants worldwide. In addition, a specialty coatings business previously in the Company's Consumer Group is now included in the Performance Coatings Group. Prior period segment reporting has been adjusted to reflect the updated reportable segments. (Thousands of dollars) Three Months Ended June 30, 2017 The Americas Group Consumer Brands Group Performance Coatings Group Administrative Consolidated Totals Net external sales $ 2,437,655 $ 536,441 $ 761,094 $ 627 $ 3,735,817 Intersegment transfers 2,020 864,337 7,231 (873,588 ) Total net sales and intersegment transfers $ 2,439,675 $ 1,400,778 $ 768,325 $ (872,961 ) $ 3,735,817 Segment profit $ 532,687 $ 76,064 $ 62,345 $ 671,096 Interest expense $ (56,729 ) (56,729 ) Administrative expenses and other (105,364 ) (105,364 ) Income from continuing operations before income taxes * $ 532,687 $ 76,064 $ 62,345 $ (162,093 ) $ 509,003 * Income from continuing operations before income taxes for the Consumer Brands Group and Performance Coatings Group includes inventory step-up amortization of $14.5 million and $21.8 million , respectively, and intangibles amortization of $5.7 million and $17.2 million , respectively, based on the preliminary purchase accounting. Income from continuing operations before income taxes for the Administrative segment includes $26.6 million of acquisition-related expenses included in SG&A. Three Months Ended June 30, 2016 The Americas Group Consumer Brands Performance Administrative Consolidated Totals Net external sales $ 2,241,566 $ 462,473 $ 514,198 $ 1,288 $ 3,219,525 Intersegment transfers 9,960 763,956 6,025 (779,941 ) Total net sales and intersegment transfers $ 2,251,526 $ 1,226,429 $ 520,223 $ (778,653 ) $ 3,219,525 Segment profit $ 499,347 $ 103,157 $ 70,377 $ 672,881 Interest expense $ (40,878 ) (40,878 ) Administrative expenses and other (92,789 ) (92,789 ) Income from continuing operations $ 499,347 $ 103,157 $ 70,377 $ (133,667 ) $ 539,214 Six Months Ended June 30, 2017 The Americas Group Consumer Brands Performance Administrative Consolidated Totals Net external sales $ 4,389,401 $ 859,807 $ 1,245,548 $ 2,448 $ 6,497,204 Intersegment transfers 4,361 1,560,175 11,031 (1,575,567 ) Total net sales and intersegment transfers $ 4,393,762 $ 2,419,982 $ 1,256,579 $ (1,573,119 ) $ 6,497,204 Segment profit $ 837,911 $ 131,978 $ 119,457 $ 1,089,346 Interest expense $ (82,424 ) (82,424 ) Administrative expenses and other (191,314 ) (191,314 ) Income from continuing operations $ 837,911 $ 131,978 $ 119,457 $ (273,738 ) $ 815,608 ** Income from continuing operations before income taxes for the Consumer Brands Group and Performance Coatings Group includes inventory step-up amortization of $14.5 million and $21.8 million , respectively, and intangibles amortization of $5.7 million and $17.2 million , respectively, based on the preliminary purchase accounting. Income from continuing operations before income taxes for the Administrative segment includes $31.6 million of acquisition-related expenses included in SG&A. Six Months Ended June 30, 2016 The Americas Consumer Brands Performance Administrative Consolidated Totals Net external sales $ 3,982,060 $ 827,093 $ 981,830 $ 2,566 $ 5,793,549 Intersegment transfers 18,653 1,377,586 7,981 (1,404,220 ) Total net sales and intersegment transfers $ 4,000,713 $ 2,204,679 $ 989,811 $ (1,401,654 ) $ 5,793,549 Segment profit $ 751,953 $ 163,030 $ 123,050 $ 1,038,033 Interest expense $ (66,610 ) (66,610 ) Administrative expenses and other (215,844 ) (215,844 ) Income from continuing operations $ 751,953 $ 163,030 $ 123,050 $ (282,454 ) $ 755,579 In the reportable segment financial information, Segment profit was total net sales and intersegment transfers less operating costs and expenses. Domestic intersegment transfers were accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs. International intersegment transfers were accounted for at values comparable to normal unaffiliated customer sales. The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the reportable segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment. As of June 30, 2017, identifiable assets for The Americas Group, Consumer Brands Group, Performance Coatings Group and Administrative segments were $2.262 billion , $5.739 billion , $11.239 billion and $1.477 billion , respectively. These amounts include preliminary purchase accounting adjustments for Goodwill and Intangibles. The allocation of the fair value will be finalized within the allowable measurement period. As of June 30, 2016, identifiable assets for The Americas Group, Consumer Brands Group, Performance Coatings Group and Administrative segments were $2.142 billion , $2.328 billion , $829.0 million and $1.367 billion , respectively. Net external sales and segment profit of all consolidated foreign subsidiaries were $603.3 million and $.7 million , respectively, for the second quarter of 2017 , and $454.5 million and $17.1 million , respectively, for the second quarter of 2016 . Net external sales and segment profit of all consolidated foreign subsidiaries were $1.022 billion and $14.5 million , respectively, for the six months of 2017 , and $855.2 million and $27.3 million , respectively, for the six months of 2016 . Long-lived assets of these subsidiaries totaled $1.698 billion and $506.8 million at June 30, 2017 and June 30, 2016 , respectively. The increase in net external sales and long-lived assets is primarily due to the Valspar acquisition. Domestic operations accounted for the remaining net external sales, segment profits and long-lived assets. No single geographic area outside the United States was significant relative to consolidated net external sales, income before taxes, or consolidated long-lived assets. Export sales and sales to any individual customer were each less than 10 percent of consolidated sales to unaffiliated customers during all periods presented. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
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. The Company did not have any fair value measurements unrelated to purchase accounting for its non-financial assets and liabilities during the second quarter . Deferred compensation assets and liabilities of $23,830 were acquired in connection with the Valspar acquisition. See Note 3. 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: (Thousands of dollars) Quoted Prices in Active Significant Fair Value at Markets for Significant Other Unobservable June 30, Identical Assets Observable Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Deferred compensation plan assets (1) $ 53,562 $ 28,700 $ 24,862 Liabilities: Deferred compensation plan liabilities (2) $ 64,001 $ 64,001 (1) 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 Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $49,638 . (2) The deferred compensation plan liabilities are the Company’s liabilities under its executive deferred compensation plan. The liabilities represent the fair value of the participant shadow accounts, and the value is based on quoted market prices. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The table below summarizes the carrying amount and fair value of the Company’s publicly traded debt and non-publicly traded debt in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. The fair values of the Company’s publicly traded debt are based on quoted market prices. The fair values of the Company’s non-publicly traded debt are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company’s publicly traded debt and non-publicly traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. (Thousands of dollars) June 30, 2017 June 30, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Publicly traded debt $ 9,448,274 $ 9,660,353 $ 1,906,672 $ 2,021,174 Non-publicly traded debt 2,004,111 1,863,095 4,724 4,451 On June 2, 2017 the Company closed its previously announced exchange offers and consent solicitations (collectively, the "Exchange Offer") for the outstanding senior notes of Valspar. Pursuant to the Exchange Offer, the Company issued an aggregate principal amount of approximately $1.478 billion (collectively the "Exchange Notes"). The Exchange Notes are unsecured senior obligations of the Company. The Company did not receive any cash proceeds from the issuance of the Exchange Notes. The Exchange Notes are summarized in the table below. (Thousands of dollars) Due Date Principal 7.250% Senior Notes 2019 $ 277,176 4.200% Senior Notes 2022 385,909 3.300% Senior Notes 2025 235,324 3.950% Senior Notes 2026 331,342 4.400% Senior Notes 2045 248,354 $ 1,478,105 On May 16, 2017, the Company issued $6.0 billion of senior notes (collectively the "New Notes") in a public offering. The net proceeds from the issuance of the New Notes were used to fund the acquisition of Valspar. The New Notes are summarized in the table below. (Thousands of dollars) Due Date Principal 2.250% Senior Notes 2020 $ 1,500,000 2.750% Senior Notes 2022 1,250,000 3.125% Senior Notes 2024 500,000 3.450% Senior Notes 2027 1,500,000 4.500% Senior Notes 2047 1,250,000 $ 6,000,000 As previously disclosed, the interest rate locks entered into in 2016 settled in March 2017 resulting in a pretax gain of $87.6 million recognized in Cumulative other comprehensive loss. This gain is being amortized from Cumulative other comprehensive loss to a reduction of interest expense over the terms of the New Notes. For the three months ended June 30, 2017 , the amortization of the unrealized gain reduced interest expense by $1.0 million . In April 2016, the Company entered into agreements for a $7.3 billion Bridge Loan and a $2.0 billion Term Loan as committed financing for the Valspar acquisition. See Note 3. On June 1, 2017, the Company terminated the agreement for the Bridge Loan and borrowed the full $2.0 billion on the Term Loan. The Term Loan is pre-payable without penalty and carries a 5 year maturity with a variable interest rate of London Interbank Offered Rate plus an additional 1.25% or approximately 2.36% interest rate for the month of June 2017. During the first six months of 2017, the Company amended the five -year credit agreement entered into in May 2016 to increase the aggregate availability to $500.0 million . The credit agreement will be used for general corporate purposes. There were no borrowings outstanding under this credit agreement at June 30, 2017. |
Non-Traded Investments
Non-Traded Investments | 6 Months Ended |
Jun. 30, 2017 | |
Non-Traded Investments [Abstract] | |
NON-TRADED INVESTMENTS | NON-TRADED INVESTMENTS The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These non-traded investments have been identified as variable interest entities. However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary. In accordance with the Consolidation Topic of the ASC, the investments are not consolidated. For affordable housing investments entered into prior to the January 1, 2015 adoption of ASU No. 2014-01, the Company uses the effective yield method to determine the carrying value of the investments. Under the effective yield method, the initial cost of the investments is amortized to income tax expense over the period that the tax credits are recognized. For affordable housing investments entered into on or after the January 1, 2015 adoption of ASU No. 2014-01, the Company uses the proportional amortization method. Under the proportional amortization method, the initial cost of the investments is amortized to income tax expense in proportion to the tax credits and other tax benefits received. The carrying amount of the affordable housing and historic renovation investments, included in Other assets, was $212.1 million and $226.3 million at June 30, 2017 and 2016 , respectively. The liability for estimated future capital contributions to the investments was $170.4 million and $186.9 million at June 30, 2017 and 2016 , respectively. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (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 U.S. 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. |
Reclassifications | Certain amounts in the 2016 condensed consolidated financial statements have been reclassified to conform to the 2017 presentation. |
Inventory | 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. The final year-end valuation of inventory is based on a cycle count program or an annual physical inventory count performed during the third and fourth quarters. For further information on inventory valuations and other matters, refer to the consolidated financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2016 . |
Impact of Recently Issued Accounting Pronouncements | Effective January 1, 2017, the Company adopted the Accounting Standard Update (ASU) No. 2015-17, "Balance Sheet Classification of Deferred Taxes," which eliminates the requirement for separate presentation of current and non-current portions of deferred tax. Subsequent to adoption, all deferred tax assets and deferred tax liabilities are presented as non-current on the balance sheet. The changes have been applied prospectively as permitted by the ASU and prior years have not been restated. The adoption of this ASU does not have a material effect on the Company's results of operations, financial condition or liquidity. In March 2017, the Financial Accounting Standards Board (FASB) issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs." The standard requires the service component of pension and other postretirement benefit expense to be presented in the same income statement lines as other employee compensation costs, however, the other components will be presented outside of operating income. In addition, only the service cost component will be eligible for capitalization in assets. The standard is effective starting in 2018, with early adoption permitted. Retrospective application is required for the guidance on the income statement presentation. Prospective application is required for the guidance on the cost capitalization in assets. The Company is in the process of evaluating the impact of the standard. In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment.” This standard simplifies the accounting for goodwill impairment by eliminating the Step 2 requirement to calculate the implied fair value of goodwill. Instead, if a reporting unit's carrying amount exceeds its fair value, an impairment charge will be recorded based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard will be applied prospectively and is effective for impairment tests performed after December 15, 2019, with early adoption permitted. The standard is not expected to have a material effect on the Company's results of operations, financial condition or liquidity. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which consists of a comprehensive lease accounting standard. Under the new standard, assets and liabilities arising from most leases will be recognized on the balance sheet. Leases will be classified as either operating or financing, and the lease classification will determine whether expense is recognized on a straight line basis (operating leases) or based on an effective interest method (financing leases). The new standard is effective for interim and annual periods starting in 2019. A modified retrospective transition approach is required with certain practical expedients available. The Company has made significant progress with its assessment process, and anticipates this standard will have a material impact on its consolidated balance sheet. While the Company continues to assess all potential impacts of the standard, it currently believes the most significant impact relates to recording lease assets and related liabilities on the balance sheet for its retail operations in The Americas Group. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance for certain aspects of recognition, measurement and disclosure of financial instruments. The standard is effective for interim and annual periods starting in 2018, and early adoption is not permitted. Although the Company continues to assess the potential impacts of the standard, it currently believes that the main impact will be that changes in fair value of marketable securities currently classified as available-for-sale will be recognized in earnings rather than in other comprehensive income. The standard is not expected to have a material effect on the Company's results of operations, financial condition or liquidity. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which consists of a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard is effective for interim and annual periods beginning after December 15, 2017. The Company has made significant progress with its assessment process. In addition, the Company is currently developing plans for enhancements to its information systems and internal controls in response to the new rule requirements. Although the Company previously disclosed that it planned to adopt the standard using the full retrospective method of adoption, due to the recent acquisition of The Valspar Corporation (Valspar) (see Note 3), the Company now expects to adopt the standard using the modified retrospective method. The Company is in the process of evaluating the impact on the results of operations, financial condition, liquidity and disclosures. In addition to expanded disclosures regarding revenue, this pronouncement may impact timing of recognition in some arrangements with variable consideration or contracts for the sale of goods or services. |
Acquisitions Acquisitions (Tabl
Acquisitions Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Acquisition Fair Value | (Millions of dollars) Cash $ 127.8 Accounts receivable 817.5 Inventories 695.5 Indefinite-lived trademarks 1,140.0 Finite-lived intangible assets 4,629.8 Goodwill 6,067.7 Property, plant and equipment 824.8 All other assets 253.6 Accounts payable (553.2 ) Long-term debt (1,603.7 ) Deferred taxes (2,461.9 ) All other liabilities (1,003.8 ) Total $ 8,934.1 Total, net of cash $ 8,806.3 |
Schedule of Pro Forma Consolidated Financial Information | The unaudited pro forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisition taken place on January 1, 2016, nor is it it meant to be indicative of future results of operations of the combined companies under the ownership and operation of the Company. (Thousands of dollars except per share data) Three Months Ended Six Months Ended 2017 2016 2017 2016 Net sales $ 4,439,801 $ 4,315,822 $ 8,148,329 $ 7,794,545 Net income from continuing operations 402,503 402,810 600,970 477,581 Net income per common share from continuing operations: Basic $ 4.34 $ 4.39 $ 6.48 $ 5.21 Diluted $ 4.24 $ 4.25 $ 6.35 $ 5.06 |
Changes in Cumulative Other C25
Changes in Cumulative Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Changes in cumulative other comprehensive loss | The following tables summarize the changes in Cumulative other comprehensive loss for the six months ended June 30, 2017 and 2016 : (Thousands of dollars) Foreign Currency Translation Adjustments Pension and Other Postretirement Benefit Adjustments Unrealized Net Gains on Available-for-Sale Securities Unrealized Net Gains (Losses) on Cash Flow Hedges Total Cumulative Other Comprehensive (Loss) Income Balance at December 31, 2016 $ (501,277 ) $ (125,096 ) $ 1,015 $ 85,007 $ (540,351 ) Amounts recognized in Other comprehensive loss (1) 51,250 870 (30,754 ) 21,366 Amounts reclassified from Other comprehensive loss (2) 385 8 (644 ) (251 ) Net change 51,250 385 878 (31,398 ) 21,115 Balance at June 30, 2017 $ (450,027 ) $ (124,711 ) $ 1,893 $ 53,609 $ (519,236 ) (1) Net of taxes of $(537) for unrealized net gains on available-for-sale securities and $18,895 for unrealized net losses on cash flow hedges. (2) Net of taxes of $(195) for pension and other postretirement benefit adjustments, $(5) for realized losses on the sale of available-for-sale securities and $396 for realized gains on cash flow hedges. (Thousands of dollars) Foreign Currency Translation Adjustments Pension and Other Postretirement Benefit Adjustments Unrealized Net (Losses) Gains on Available-for-Sale Securities Unrealized Net Losses on Cash Flow Hedges Total Cumulative Other Comprehensive (Loss) Income Balance at December 31, 2015 $ (482,629 ) $ (104,346 ) $ (120 ) $ (587,095 ) Amounts recognized in Other comprehensive loss (3) 31,935 455 $ (107,948 ) (75,558 ) Amounts reclassified from Other comprehensive loss (4) 439 125 564 Net change 31,935 439 580 (107,948 ) (74,994 ) Balance at June 30, 2016 $ (450,694 ) $ (103,907 ) $ 460 $ (107,948 ) $ (662,089 ) (3) Net of taxes of $(282) for unrealized net gains on available-for-sale securities and $66,721 for unrealized net losses on cash flow hedges. (4) Net of taxes of $(45) for pension and other postretirement benefit adjustments and $(78) for realized losses on the sale of available-for-sale securities. |
Product Warranties (Tables)
Product Warranties (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Product Warranties Disclosures [Abstract] | |
Company's accrual for product warranty claims | Changes in the Company’s accrual for product warranty claims during the first six months of 2017 and 2016 , including customer satisfaction settlements, were as follows: (Thousands of dollars) 2017 2016 Balance at January 1 $ 34,419 $ 31,878 Charges to expense 16,434 15,763 Settlements (16,698 ) (14,755 ) Acquisition 110,461 Balance at June 30 $ 144,616 $ 32,886 |
Exit or Disposal Activities (Ta
Exit or Disposal Activities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of activity and remaining liabilities associated with qualified exit costs | The following table summarizes the activity and remaining liabilities associated with qualified exit costs at June 30, 2017 : (Thousands of dollars) Exit Plan Balance at December 31, 2016 Acquired Balances Provisions in Cost of Goods Sold or SG&A Actual Expenditures Charged to Accrual Balance at June 30, 2017 Administrative segment acquisition-related restructuring in 2017: Severance and related costs $ 9,883 $ (3,761 ) $ 6,122 Consumer Brands Group facilities shutdown in 2016: Severance and related costs $ 907 $ 4 2,823 (3,632 ) 102 Performance Coatings Group stores shutdown in 2016: Severance and related costs 136 2,271 8 (296 ) 2,119 Other qualified exit costs 269 5 94 (143 ) 225 The Americas Group stores shutdown in 2015: Other qualified exit costs 195 10 (205 ) Consumer Brands Group facilities shutdown in 2015: Severance and related costs 632 (3 ) 629 Other qualified exit costs 629 (3 ) 626 Performance Coatings Group stores shutdown in 2015: Severance and related costs 396 10 406 Other qualified exit costs 433 427 (405 ) 455 Severance and other qualified exit costs for facilities shutdown prior to 2015 1,908 92 (456 ) 1,544 Totals $ 3,848 $ 4,456 $ 12,828 $ (8,904 ) $ 12,228 |
Health Care, Pension and Othe28
Health Care, Pension and Other Benefits (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of net periodic benefit costs for pension and other employee benefit plans | Shown below are the components of the Company’s net periodic benefit cost (credit) for domestic defined benefit pension plans, foreign defined benefit pension plans and postretirement benefits other than pensions: (Thousands of dollars) Domestic Defined Benefit Pension Plans Foreign Defined Benefit Pension Plans Postretirement Benefits Other than Pensions 2017 2016 2017 2016 2017 2016 Three Months Ended June 30: Net periodic benefit cost: Service cost $ 5,459 $ 5,489 $ 2,287 $ 1,198 $ 471 $ 561 Interest cost 7,191 6,643 1,864 2,081 2,593 2,753 Expected return on assets (11,299 ) (12,567 ) (2,008 ) (1,846 ) Amortization of: Prior service cost (credit) 340 301 (1,645 ) (1,645 ) Actuarial loss (gain) 1,662 1,153 (97 ) 504 5 Settlement gain (9,332 ) Net periodic benefit cost $ 3,353 $ 1,019 $ 2,046 $ 1,937 $ (7,908 ) $ 1,669 Six Months Ended June 30: Net periodic benefit cost (credit): Service cost $ 10,772 $ 10,978 $ 4,205 $ 2,539 $ 1,014 $ 1,122 Interest cost 13,601 13,286 3,502 4,161 5,236 5,505 Expected return on assets (21,608 ) (25,134 ) (3,772 ) (3,692 ) Amortization of: Prior service cost (credit) 681 602 (3,290 ) (3,290 ) Actuarial loss (gain) 3,323 2,305 (150 ) 865 16 Settlement (gain) loss 4,038 (9,332 ) Net periodic benefit cost (credit) $ 6,769 $ 2,037 $ 3,785 $ 7,911 $ (6,356 ) $ 3,337 |
Other (Tables)
Other (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | |
Other general expense - net | Included in Other general expense - net were the following: (Thousands of dollars) Three Months Ended Six Months Ended 2017 2016 2017 2016 Provisions for environmental matters - net $ 1,110 $ 2,507 $ 1,629 $ 20,536 Loss (gain) on sale or disposition of assets 665 226 422 (249 ) Total $ 1,775 $ 2,733 $ 2,051 $ 20,287 |
Other (income) expense - net | Included in Other (income) expense - net were the following: (Thousands of dollars) Three Months Ended Six Months Ended 2017 2016 2017 2016 Dividend and royalty income $ (1,198 ) $ (999 ) $ (3,042 ) $ (2,165 ) Net expense from banking activities 2,513 2,108 4,985 4,371 Foreign currency transaction related losses (gains) 976 1,819 (2,610 ) 3,509 Other income (5,937 ) (5,450 ) (10,897 ) (10,330 ) Other expense 1,876 2,470 5,427 4,789 Total $ (1,770 ) $ (52 ) $ (6,137 ) $ 174 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of net income per common share | (Thousands of dollars except per share data) Three Months Ended Six Months Ended 2017 2016 2017 2016 Basic Average common shares outstanding 92,841,148 91,788,734 92,695,853 91,632,297 Net income Continuing operations $ 360,651 $ 378,064 $ 599,803 $ 542,940 Discontinued operations (2) (41,540 ) — (41,540 ) — Net income $ 319,111 $ 378,064 $ 558,263 $ 542,940 Basic net income per common share Continuing operations $ 3.89 $ 4.12 $ 6.47 $ 5.93 Discontinued operations (2) (0.45 ) — (0.45 ) — Net income per common share $ 3.44 $ 4.12 $ 6.02 $ 5.93 Diluted Average common shares outstanding 92,841,148 91,788,734 92,695,853 91,632,297 Stock options and other contingently issuable shares (1) 2,055,422 2,318,192 1,935,690 2,114,844 Non-vested restricted stock grants 72,066 562,825 65,896 558,856 Average common shares outstanding assuming dilution 94,968,636 94,669,751 94,697,439 94,305,997 Net income Continuing operations $ 360,651 $ 378,064 $ 599,803 $ 542,940 Discontinued operations (2) (41,540 ) — (41,540 ) — Net income $ 319,111 $ 378,064 $ 558,263 $ 542,940 Diluted net income per common share Continuing operations $ 3.80 $ 3.99 $ 6.34 $ 5.76 Discontinued operations (2) (0.44 ) — (0.44 ) — Net income per common share $ 3.36 $ 3.99 $ 5.90 $ 5.76 (1) Stock options and other contingently issuable shares excludes 16,013 and 47,273 shares due to their anti-dilutive effect for the three and six months ended June 30, 2016 . There are no shares excluded for the three and six months ended June 30, 2017 . (2) Relates to the divestiture of Valspar's North American industrial wood coatings business. See Note 3. |
Reportable Segment Information
Reportable Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Reportable segment information | (Thousands of dollars) Three Months Ended June 30, 2017 The Americas Group Consumer Brands Group Performance Coatings Group Administrative Consolidated Totals Net external sales $ 2,437,655 $ 536,441 $ 761,094 $ 627 $ 3,735,817 Intersegment transfers 2,020 864,337 7,231 (873,588 ) Total net sales and intersegment transfers $ 2,439,675 $ 1,400,778 $ 768,325 $ (872,961 ) $ 3,735,817 Segment profit $ 532,687 $ 76,064 $ 62,345 $ 671,096 Interest expense $ (56,729 ) (56,729 ) Administrative expenses and other (105,364 ) (105,364 ) Income from continuing operations before income taxes * $ 532,687 $ 76,064 $ 62,345 $ (162,093 ) $ 509,003 * Income from continuing operations before income taxes for the Consumer Brands Group and Performance Coatings Group includes inventory step-up amortization of $14.5 million and $21.8 million , respectively, and intangibles amortization of $5.7 million and $17.2 million , respectively, based on the preliminary purchase accounting. Income from continuing operations before income taxes for the Administrative segment includes $26.6 million of acquisition-related expenses included in SG&A. Three Months Ended June 30, 2016 The Americas Group Consumer Brands Performance Administrative Consolidated Totals Net external sales $ 2,241,566 $ 462,473 $ 514,198 $ 1,288 $ 3,219,525 Intersegment transfers 9,960 763,956 6,025 (779,941 ) Total net sales and intersegment transfers $ 2,251,526 $ 1,226,429 $ 520,223 $ (778,653 ) $ 3,219,525 Segment profit $ 499,347 $ 103,157 $ 70,377 $ 672,881 Interest expense $ (40,878 ) (40,878 ) Administrative expenses and other (92,789 ) (92,789 ) Income from continuing operations $ 499,347 $ 103,157 $ 70,377 $ (133,667 ) $ 539,214 Six Months Ended June 30, 2017 The Americas Group Consumer Brands Performance Administrative Consolidated Totals Net external sales $ 4,389,401 $ 859,807 $ 1,245,548 $ 2,448 $ 6,497,204 Intersegment transfers 4,361 1,560,175 11,031 (1,575,567 ) Total net sales and intersegment transfers $ 4,393,762 $ 2,419,982 $ 1,256,579 $ (1,573,119 ) $ 6,497,204 Segment profit $ 837,911 $ 131,978 $ 119,457 $ 1,089,346 Interest expense $ (82,424 ) (82,424 ) Administrative expenses and other (191,314 ) (191,314 ) Income from continuing operations $ 837,911 $ 131,978 $ 119,457 $ (273,738 ) $ 815,608 ** Income from continuing operations before income taxes for the Consumer Brands Group and Performance Coatings Group includes inventory step-up amortization of $14.5 million and $21.8 million , respectively, and intangibles amortization of $5.7 million and $17.2 million , respectively, based on the preliminary purchase accounting. Income from continuing operations before income taxes for the Administrative segment includes $31.6 million of acquisition-related expenses included in SG&A. Six Months Ended June 30, 2016 The Americas Consumer Brands Performance Administrative Consolidated Totals Net external sales $ 3,982,060 $ 827,093 $ 981,830 $ 2,566 $ 5,793,549 Intersegment transfers 18,653 1,377,586 7,981 (1,404,220 ) Total net sales and intersegment transfers $ 4,000,713 $ 2,204,679 $ 989,811 $ (1,401,654 ) $ 5,793,549 Segment profit $ 751,953 $ 163,030 $ 123,050 $ 1,038,033 Interest expense $ (66,610 ) (66,610 ) Administrative expenses and other (215,844 ) (215,844 ) Income from continuing operations $ 751,953 $ 163,030 $ 123,050 $ (282,454 ) $ 755,579 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
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: (Thousands of dollars) Quoted Prices in Active Significant Fair Value at Markets for Significant Other Unobservable June 30, Identical Assets Observable Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Deferred compensation plan assets (1) $ 53,562 $ 28,700 $ 24,862 Liabilities: Deferred compensation plan liabilities (2) $ 64,001 $ 64,001 (1) 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 Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $49,638 . (2) The deferred compensation plan liabilities are the Company’s liabilities under its executive deferred compensation plan. The liabilities represent the fair value of the participant shadow accounts, and the value is based on quoted market prices. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Carrying amount and fair value of debt | The table below summarizes the carrying amount and fair value of the Company’s publicly traded debt and non-publicly traded debt in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. The fair values of the Company’s publicly traded debt are based on quoted market prices. The fair values of the Company’s non-publicly traded debt are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company’s publicly traded debt and non-publicly traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. (Thousands of dollars) June 30, 2017 June 30, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Publicly traded debt $ 9,448,274 $ 9,660,353 $ 1,906,672 $ 2,021,174 Non-publicly traded debt 2,004,111 1,863,095 4,724 4,451 |
Schedule of long-term debt instruments | The New Notes are summarized in the table below. (Thousands of dollars) Due Date Principal 2.250% Senior Notes 2020 $ 1,500,000 2.750% Senior Notes 2022 1,250,000 3.125% Senior Notes 2024 500,000 3.450% Senior Notes 2027 1,500,000 4.500% Senior Notes 2047 1,250,000 $ 6,000,000 The Exchange Notes are summarized in the table below. (Thousands of dollars) Due Date Principal 7.250% Senior Notes 2019 $ 277,176 4.200% Senior Notes 2022 385,909 3.300% Senior Notes 2025 235,324 3.950% Senior Notes 2026 331,342 4.400% Senior Notes 2045 248,354 $ 1,478,105 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Jun. 01, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||||
Pre-tax gain or loss from discontinued operations | ||||||||
Income taxes discontinued operations | $ 41,540,000 | $ 41,540,000 | ||||||
Discontinued operations- basic (in dollars per share) | $ (0.45) | $ 0 | $ (0.45) | $ 0 | ||||
Discontinued operations- diluted (in dollars per share) | $ (0.44) | $ 0 | $ (0.44) | $ 0 | ||||
Goodwill | $ 7,178,113,000 | $ 1,144,700,000 | $ 7,178,113,000 | $ 1,144,700,000 | $ 1,126,892,000 | |||
Net sales | 3,735,817,000 | 3,219,525,000 | 6,497,204,000 | 5,793,549,000 | ||||
Profit before tax | 509,003,000 | 539,214,000 | 815,608,000 | 755,579,000 | ||||
Amortization of intangible assets | 28,918,000 | 5,584,000 | 35,088,000 | 11,366,000 | ||||
Amortization of inventory step-up | 36,278,000 | |||||||
Interest expense related to acquisition | 56,729,000 | 40,878,000 | 82,424,000 | 66,610,000 | ||||
North American industrial wood coatings business | Discontinued operations | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from divested assets sold | $ 431,000,000 | |||||||
Pre-tax gain or loss from discontinued operations | $ 0 | |||||||
Valspar Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition purchase price (in dollars per share) | $ 113 | |||||||
Enterprise value | $ 8,900,000,000 | |||||||
Finite-lived intangible assets | 4,629,800,000 | |||||||
Goodwill | 6,067,700,000 | |||||||
Net sales | 381,000,000 | |||||||
Profit before tax | 46,600,000 | |||||||
Amortization of intangible assets | 23,000,000 | |||||||
Amortization of inventory step-up | 36,300,000 | |||||||
Interest expense related to acquisition | 41,500,000 | 26,600,000 | ||||||
Pro forma amortization of intangible assets | 68,900,000 | $ 68,900,000 | $ 68,900,000 | $ 68,900,000 | ||||
Pro forma inventory step-up amortization | 36,300,000 | $ 108,800,000 | ||||||
Valspar Corporation | Performance Coatings Group | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 4,600,000,000 | |||||||
Amortization of intangible assets | 17,200,000 | 17,200,000 | ||||||
Amortization of inventory step-up | 21,800,000 | 21,800,000 | ||||||
Valspar Corporation | Consumer Brands Group | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 1,500,000,000 | |||||||
Amortization of intangible assets | 5,700,000 | 5,700,000 | ||||||
Amortization of inventory step-up | 14,500,000 | 14,500,000 | ||||||
Valspar Corporation | Customer relationships and intellectual property and technology | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average amortization period | 15 years | |||||||
Valspar Corporation | Customer relationships and intellectual property and technology | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired finite-lived intangible assets, weighted average amortization period | 22 years | |||||||
Valspar Corporation | Customer relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 3,000,000,000 | |||||||
Valspar Corporation | Intellectual property and technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 1,600,000,000 | |||||||
Administrative | Valspar Corporation | SG&A | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition transaction expenses | $ 26,600,000 | $ 31,600,000 | ||||||
Acquisition integration expense | $ 35,600,000 |
Acquisitions - Schedule of Allo
Acquisitions - Schedule of Allocation of Acquisition Fair Value (Details) - USD ($) $ in Thousands | Jun. 01, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Allocation of the fair value of consideration transferred: | ||||
Goodwill | $ 7,178,113 | $ 1,126,892 | $ 1,144,700 | |
Total, net of cash | 8,806,282 | |||
Valspar Corporation | ||||
Allocation of the fair value of consideration transferred: | ||||
Cash | $ 127,800 | |||
Accounts receivable | 817,500 | |||
Inventories | 695,500 | |||
Indefinite-lived trademarks | 1,140,000 | |||
Finite-lived intangible assets | 4,629,800 | |||
Goodwill | 6,067,700 | |||
Property, plant and equipment | 824,800 | |||
All other assets | 253,600 | |||
Accounts payable | (553,200) | |||
Long-term debt | (1,603,700) | |||
Deferred taxes | (2,461,900) | $ (2,400,000) | ||
All other liabilities | (1,003,800) | |||
Total | 8,934,100 | |||
Total, net of cash | $ 8,806,300 |
Acquisitions - Schedule of Pro
Acquisitions - Schedule of Pro Forma Consolidated Financial Information (Details) - Valspar Corporation - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Net sales | $ 4,439,801 | $ 4,315,822 | $ 8,148,329 | $ 7,794,545 |
Net income from continuing operations | $ 402,503 | $ 402,810 | $ 600,970 | $ 477,581 |
Net income per common share from continuing operations: | ||||
Basic (in dollars per share) | $ 4.34 | $ 4.39 | $ 6.48 | $ 5.21 |
Diluted (in dollars per share) | $ 4.24 | $ 4.25 | $ 6.35 | $ 5.06 |
Dividends (Details)
Dividends (Details) - $ / shares | 3 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | |
Dividends [Abstract] | ||||
Dividends paid on common stock (in dollars per share) | $ 0.85 | $ 0.85 | $ 0.84 | $ 0.84 |
Changes in Cumulative Other C38
Changes in Cumulative Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Changes in Net Other Comprehensive (Loss) Income [Roll Forward] | ||
Beginning balance | $ 1,878,441 | |
Ending balance | 2,391,260 | $ 1,246,629 |
Tax benefit (expense) for unrealized net losses (gains) on available-for-sale securities before reclassifications | (537) | (282) |
Tax benefit (expense) for unrealized net losses (gains) on cash flow hedges | 18,895 | 66,721 |
Tax expense (benefit) related to pension and other postretirement benefit plans | (195) | (45) |
Tax benefit for realized losses on the sale of available-for-sale securities for amounts reclassified from other comprehensive loss | (5) | (78) |
Tax expense on realized gains on cash flow hedges. | 396 | |
Foreign Currency Translation Adjustments | ||
Changes in Net Other Comprehensive (Loss) Income [Roll Forward] | ||
Beginning balance | (501,277) | (482,629) |
Amounts recognized in other comprehensive loss | 51,250 | 31,935 |
Net change | 51,250 | 31,935 |
Ending balance | (450,027) | (450,694) |
Pension and Other Postretirement Benefit Adjustments | ||
Changes in Net Other Comprehensive (Loss) Income [Roll Forward] | ||
Beginning balance | (125,096) | (104,346) |
Amounts reclassified from other comprehensive loss | 385 | 439 |
Net change | 385 | 439 |
Ending balance | (124,711) | (103,907) |
Unrealized Net (Losses) Gains on Available-for-Sale Securities | ||
Changes in Net Other Comprehensive (Loss) Income [Roll Forward] | ||
Beginning balance | 1,015 | (120) |
Amounts recognized in other comprehensive loss | 870 | 455 |
Amounts reclassified from other comprehensive loss | 8 | 125 |
Net change | 878 | 580 |
Ending balance | 1,893 | 460 |
Unrealized Net Gains (Losses) on Cash Flow Hedges | ||
Changes in Net Other Comprehensive (Loss) Income [Roll Forward] | ||
Beginning balance | 85,007 | |
Amounts recognized in other comprehensive loss | (30,754) | (107,948) |
Amounts reclassified from other comprehensive loss | (644) | |
Net change | (31,398) | (107,948) |
Ending balance | 53,609 | (107,948) |
Total Cumulative Other Comprehensive (Loss) Income | ||
Changes in Net Other Comprehensive (Loss) Income [Roll Forward] | ||
Beginning balance | (540,351) | (587,095) |
Amounts recognized in other comprehensive loss | 21,366 | (75,558) |
Amounts reclassified from other comprehensive loss | (251) | 564 |
Net change | 21,115 | (74,994) |
Ending balance | $ (519,236) | $ (662,089) |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Company's accrual for product warranty claims | ||
Balance at January 1 | $ 34,419 | $ 31,878 |
Charges to expense | 16,434 | 15,763 |
Settlements | (16,698) | (14,755) |
Acquisition | 110,461 | |
Balance at June 30 | $ 144,616 | $ 32,886 |
Exit or Disposal Activities (De
Exit or Disposal Activities (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)storebranch | Jun. 30, 2016USD ($) | |
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | $ 3,848 | |
Acquired Balances | 4,456 | |
Provisions in Cost of Goods Sold or SG&A | 12,828 | |
Actual Expenditures Charged to Accrual | (8,904) | $ (4,155) |
Balance at June 30, 2017 | $ 12,228 | |
Performance Coatings Group | ||
Exit or Disposal Activities (Textual) [Abstract] | ||
Branches closed | branch | 2 | |
The Americas Group | ||
Exit or Disposal Activities (Textual) [Abstract] | ||
Stores closed | store | 4 | |
Severance and related costs | Consumer Brands Group | Stores Shutdown in 2016 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | $ 907 | |
Acquired Balances | 4 | |
Provisions in Cost of Goods Sold or SG&A | 2,823 | |
Actual Expenditures Charged to Accrual | (3,632) | |
Balance at June 30, 2017 | 102 | |
Severance and related costs | Consumer Brands Group | Stores Shutdown in 2015 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Acquired Balances | 632 | |
Actual Expenditures Charged to Accrual | (3) | |
Balance at June 30, 2017 | 629 | |
Severance and related costs | Performance Coatings Group | Stores Shutdown in 2016 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | 136 | |
Acquired Balances | 2,271 | |
Provisions in Cost of Goods Sold or SG&A | 8 | |
Actual Expenditures Charged to Accrual | (296) | |
Balance at June 30, 2017 | 2,119 | |
Severance and related costs | Performance Coatings Group | Stores Shutdown in 2015 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Acquired Balances | 396 | |
Provisions in Cost of Goods Sold or SG&A | 10 | |
Balance at June 30, 2017 | 406 | |
Other qualified exit costs | Facilities Shutdown prior to 2015 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | 1,908 | |
Acquired Balances | 92 | |
Actual Expenditures Charged to Accrual | (456) | |
Balance at June 30, 2017 | 1,544 | |
Other qualified exit costs | Consumer Brands Group | Stores Shutdown in 2015 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Acquired Balances | 629 | |
Actual Expenditures Charged to Accrual | (3) | |
Balance at June 30, 2017 | 626 | |
Other qualified exit costs | Performance Coatings Group | Stores Shutdown in 2016 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | 269 | |
Acquired Balances | 5 | |
Provisions in Cost of Goods Sold or SG&A | 94 | |
Actual Expenditures Charged to Accrual | (143) | |
Balance at June 30, 2017 | 225 | |
Other qualified exit costs | Performance Coatings Group | Stores Shutdown in 2015 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | 433 | |
Acquired Balances | 427 | |
Actual Expenditures Charged to Accrual | (405) | |
Balance at June 30, 2017 | 455 | |
Other qualified exit costs | The Americas Group | Stores Shutdown in 2015 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Balance at December 31, 2016 | 195 | |
Provisions in Cost of Goods Sold or SG&A | 10 | |
Actual Expenditures Charged to Accrual | (205) | |
Balance at June 30, 2017 | ||
Administrative | Severance and related costs | Acquisition-related restructuring in 2017 | ||
Summary of activity and remaining liabilities associated with qualified exit costs | ||
Provisions in Cost of Goods Sold or SG&A | 9,883 | |
Actual Expenditures Charged to Accrual | (3,761) | |
Balance at June 30, 2017 | $ 6,122 |
Health Care, Pension and Othe41
Health Care, Pension and Other Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Domestic Defined Benefit Pension Plans | ||||
Net periodic benefit cost: | ||||
Service cost | $ 5,459 | $ 5,489 | $ 10,772 | $ 10,978 |
Interest cost | 7,191 | 6,643 | 13,601 | 13,286 |
Expected return on assets | (11,299) | (12,567) | (21,608) | (25,134) |
Amortization of: | ||||
Prior service cost (credit) | 340 | 301 | 681 | 602 |
Actuarial loss (gain) | 1,662 | 1,153 | 3,323 | 2,305 |
Net periodic benefit cost | 3,353 | 1,019 | 6,769 | 2,037 |
Foreign Defined Benefit Pension Plans | ||||
Net periodic benefit cost: | ||||
Service cost | 2,287 | 1,198 | 4,205 | 2,539 |
Interest cost | 1,864 | 2,081 | 3,502 | 4,161 |
Expected return on assets | (2,008) | (1,846) | (3,772) | (3,692) |
Amortization of: | ||||
Actuarial loss (gain) | (97) | 504 | (150) | 865 |
Settlement (gain) loss | 4,038 | |||
Net periodic benefit cost | 2,046 | 1,937 | 3,785 | 7,911 |
Postretirement Benefits Other than Pensions | ||||
Net periodic benefit cost: | ||||
Service cost | 471 | 561 | 1,014 | 1,122 |
Interest cost | 2,593 | 2,753 | 5,236 | 5,505 |
Amortization of: | ||||
Prior service cost (credit) | (1,645) | (1,645) | (3,290) | (3,290) |
Actuarial loss (gain) | 5 | 16 | ||
Settlement (gain) loss | (9,332) | (9,332) | ||
Net periodic benefit cost | $ (7,908) | $ 1,669 | $ (6,356) | $ 3,337 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) $ in Millions | Jun. 30, 2017USD ($)ManufacturingSite | Jun. 30, 2016USD ($) |
Other Long-Term Liabilities (Textual) [Abstract] | ||
Amount by which unaccrued maximum of estimated range exceeds minimum | $ 86.1 | |
Accruals for extended environmental-related activities | 160.2 | $ 143 |
Estimated costs of current investigation and remediation activities included in other accruals | $ 30.4 | $ 22.5 |
Number of manufacturing sites accounting for the majority of the accrual for environmental-related activities | ManufacturingSite | 3 | |
Accruals for environmental-related activities of three sites | $ 149.9 | |
Percentage of accrual for environmental-related activities related to three sites | 78.60% | |
Amount of unaccrued maximum related to three sites | $ 70.5 | |
Percentage of aggregate unaccrued maximum related to three sites | 81.80% | |
Valspar Corporation | ||
Other Long-Term Liabilities (Textual) [Abstract] | ||
Estimated costs of current investigation and remediation activities included in other accruals | $ 10.5 |
Litigation (Details)
Litigation (Details) $ in Millions | Jan. 27, 2014USD ($)defendant | Jul. 01, 2008jury_trialdefendant | Jun. 30, 2017cases |
Trial by Jury, State of Rhode Island | |||
Loss Contingencies [Line Items] | |||
Number of jury trials | jury_trial | 2 | ||
Number of additional defendants | 2 | ||
Santa Clara County, California Proceeding | |||
Loss Contingencies [Line Items] | |||
Number of additional defendants | 2 | ||
Amount payable jointly and severally for litigation | $ | $ 1,150 | ||
Pending litigation | Personal Injury | |||
Loss Contingencies [Line Items] | |||
Number of pending cases | cases | 3 |
Other (Details)
Other (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($)contractoption_plan | Jun. 30, 2016USD ($)contractoption_plan | Jun. 30, 2017USD ($)contractoption_plan | Jun. 30, 2016USD ($)contractoption_plan | |
Other general expense (income ) - net | ||||
Provisions for environmental matters - net | $ 1,110 | $ 2,507 | $ 1,629 | $ 20,536 |
Loss (gain) on sale or disposition of assets | 665 | 226 | 422 | (249) |
Total | 1,775 | 2,733 | 2,051 | 20,287 |
Other (income) expense - net | ||||
Dividend and royalty income | (1,198) | (999) | (3,042) | (2,165) |
Net expense from banking activities | 2,513 | 2,108 | 4,985 | 4,371 |
Foreign currency transaction related losses (gains) | 976 | 1,819 | (2,610) | 3,509 |
Other income | (5,937) | (5,450) | (10,897) | (10,330) |
Other expense | 1,876 | 2,470 | 5,427 | 4,789 |
Total | $ (1,770) | $ (52) | $ (6,137) | $ 174 |
Number of foreign currency options outstanding | option_plan | 0 | 0 | 0 | 0 |
Number of foreign forward contracts outstanding | contract | 0 | 0 | 0 | 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 01, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effective tax rate percent continuing operations | 29.10% | 29.90% | 26.50% | 28.10% | ||
Income taxes | $ 41,540,000 | $ 41,540,000 | ||||
Unrecognized tax benefits | $ 32,800,000 | |||||
Unrecognized tax benefits adjusted | 27,700,000 | |||||
Amount of unrecognized tax benefits where significant change is reasonably possible | 2,600,000 | |||||
Accrued income tax interest and penalties | $ 9,300,000 | |||||
Increase (decrease) in accrued income tax interest and penalties | $ 0 | $ 0 | ||||
Before Impact of Accounting Standards Update 2016-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effective tax rate percent continuing operations | 32.70% | 32.10% | 32.70% | 32.10% | ||
Valspar Corporation | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred income tax liability | $ 2,400,000,000 | $ 2,400,000,000 | $ 2,461,900,000 | |||
Unrecognized tax benefits acquired | $ 19,900,000 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic | ||||
Average common shares outstanding (in shares) | 92,841,148 | 91,788,734 | 92,695,853 | 91,632,297 |
Continuing operations | $ 360,651 | $ 378,064 | $ 599,803 | $ 542,940 |
Discontinued operations | (41,540) | 0 | (41,540) | 0 |
Net income | $ 319,111 | $ 378,064 | $ 558,263 | $ 542,940 |
Basic net income per common share | ||||
Continuing operations (in dollars per share) | $ 3.89 | $ 4.12 | $ 6.47 | $ 5.93 |
Discontinued operations (in dollars per share) | (0.45) | 0 | (0.45) | 0 |
Net income per common share (in dollars per share) | $ 3.44 | $ 4.12 | $ 6.02 | $ 5.93 |
Diluted | ||||
Average common shares outstanding (in shares) | 92,841,148 | 91,788,734 | 92,695,853 | 91,632,297 |
Stock options and other contingently issuable shares (in shares) | 2,055,422 | 2,318,192 | 1,935,690 | 2,114,844 |
Non-vested restricted stock grants (in shares) | 72,066 | 562,825 | 65,896 | 558,856 |
Average common shares outstanding assuming dilution (in shares) | 94,968,636 | 94,669,751 | 94,697,439 | 94,305,997 |
Diluted net income per common share | ||||
Continuing operations (in dollars per share) | $ 3.80 | $ 3.99 | $ 6.34 | $ 5.76 |
Discontinued operations (in dollars per share) | (0.44) | 0 | (0.44) | 0 |
Net income per common share (in dollars per share) | $ 3.36 | $ 3.99 | $ 5.90 | $ 5.76 |
Average common shares outstanding, anti-dilutive (in shares) | 0 | 16,013 | 0 | 47,273 |
Reportable Segment Informatio47
Reportable Segment Information - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||||
New reportable segments | segment | 3 | ||||
Reportable Segment Information (Textual) [Abstract] | |||||
Identifiable assets | $ 20,717,398 | $ 6,665,677 | $ 20,717,398 | $ 6,665,677 | $ 6,752,521 |
Net external sales | 3,735,817 | 3,219,525 | 6,497,204 | 5,793,549 | |
Segment profit | 509,003 | 539,214 | 815,608 | 755,579 | |
Foreign subsidiaries | |||||
Reportable Segment Information (Textual) [Abstract] | |||||
Net external sales | 603,300 | 454,500 | 1,022,000 | 855,200 | |
Segment profit | 700 | 17,100 | 14,500 | 27,300 | |
Long-lived assets | 1,698,000 | 506,800 | 1,698,000 | 506,800 | |
The Americas Group | |||||
Reportable Segment Information (Textual) [Abstract] | |||||
Identifiable assets | 2,262,000 | 2,142,000 | 2,262,000 | 2,142,000 | |
Net external sales | 2,437,655 | 2,241,566 | 4,389,401 | 3,982,060 | |
Consumer Brands Group | |||||
Reportable Segment Information (Textual) [Abstract] | |||||
Identifiable assets | 5,739,000 | 2,328,000 | 5,739,000 | 2,328,000 | |
Net external sales | 536,441 | 462,473 | 859,807 | 827,093 | |
Performance Coatings Group | |||||
Reportable Segment Information (Textual) [Abstract] | |||||
Identifiable assets | 11,239,000 | 829,000 | 11,239,000 | 829,000 | |
Net external sales | 761,094 | 514,198 | 1,245,548 | 981,830 | |
Administrative | |||||
Reportable Segment Information (Textual) [Abstract] | |||||
Identifiable assets | 1,477,000 | 1,367,000 | 1,477,000 | 1,367,000 | |
Net external sales | $ 627 | $ 1,288 | $ 2,448 | $ 2,566 |
Reportable Segment Informatio48
Reportable Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reportable segment information | ||||
Total net sales and intersegment transfers | $ 3,735,817 | $ 3,219,525 | $ 6,497,204 | $ 5,793,549 |
Segment profit | 671,096 | 672,881 | 1,089,346 | 1,038,033 |
Interest expense | (56,729) | (40,878) | (82,424) | (66,610) |
Administrative expenses and other | (105,364) | (92,789) | (191,314) | (215,844) |
Income from continuing operations before income taxes | 509,003 | 539,214 | 815,608 | 755,579 |
Amortization of inventory step-up | 36,278 | |||
Amortization of intangible assets | 28,918 | 5,584 | 35,088 | 11,366 |
The Americas Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 2,437,655 | 2,241,566 | 4,389,401 | 3,982,060 |
Consumer Brands Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 536,441 | 462,473 | 859,807 | 827,093 |
Performance Coatings Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 761,094 | 514,198 | 1,245,548 | 981,830 |
Operating segments | The Americas Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 2,439,675 | 2,251,526 | 4,393,762 | 4,000,713 |
Segment profit | 532,687 | 499,347 | 837,911 | 751,953 |
Income from continuing operations before income taxes | 532,687 | 499,347 | 837,911 | 751,953 |
Operating segments | Consumer Brands Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 1,400,778 | 1,226,429 | 2,419,982 | 2,204,679 |
Segment profit | 76,064 | 103,157 | 131,978 | 163,030 |
Income from continuing operations before income taxes | 76,064 | 103,157 | 131,978 | 163,030 |
Operating segments | Performance Coatings Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 768,325 | 520,223 | 1,256,579 | 989,811 |
Segment profit | 62,345 | 70,377 | 119,457 | 123,050 |
Income from continuing operations before income taxes | 62,345 | 70,377 | 119,457 | 123,050 |
Administrative and intersegment transfers | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | (872,961) | (778,653) | (1,573,119) | (1,401,654) |
Administrative | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 627 | 1,288 | 2,448 | 2,566 |
Intersegment transfers | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | (873,588) | (779,941) | (1,575,567) | (1,404,220) |
Intersegment transfers | The Americas Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 2,020 | 9,960 | 4,361 | 18,653 |
Intersegment transfers | Consumer Brands Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 864,337 | 763,956 | 1,560,175 | 1,377,586 |
Intersegment transfers | Performance Coatings Group | ||||
Reportable segment information | ||||
Total net sales and intersegment transfers | 7,231 | 6,025 | 11,031 | 7,981 |
Segment reconciling items | ||||
Reportable segment information | ||||
Interest expense | (56,729) | (40,878) | (82,424) | (66,610) |
Administrative expenses and other | (105,364) | (92,789) | (191,314) | (215,844) |
Income from continuing operations before income taxes | (162,093) | $ (133,667) | (273,738) | $ (282,454) |
Valspar Corporation | ||||
Reportable segment information | ||||
Income from continuing operations before income taxes | 46,600 | |||
Amortization of inventory step-up | 36,300 | |||
Amortization of intangible assets | 23,000 | |||
Valspar Corporation | Consumer Brands Group | ||||
Reportable segment information | ||||
Amortization of inventory step-up | 14,500 | 14,500 | ||
Amortization of intangible assets | 5,700 | 5,700 | ||
Valspar Corporation | Performance Coatings Group | ||||
Reportable segment information | ||||
Amortization of inventory step-up | 21,800 | 21,800 | ||
Amortization of intangible assets | 17,200 | 17,200 | ||
Valspar Corporation | Selling, General and Administrative Expenses | Administrative | ||||
Reportable segment information | ||||
Acquisition related expenses included in SG&A | $ 26,600 | $ 31,600 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Fair value, measurements, recurring | |
Fair Value Measurements (Textual) [Abstract] | |
Cost basis of the investment funds | $ 49,638 |
Quoted prices in active markets for identical assets (Level 1) | Fair value, measurements, recurring | |
Assets: | |
Deferred compensation plan assets | 28,700 |
Liabilities: | |
Deferred compensation plan liabilities | 64,001 |
Significant other observable inputs (Level 2) | Fair value, measurements, recurring | |
Assets: | |
Deferred compensation plan assets | 24,862 |
Fair Value | Fair value, measurements, recurring | |
Assets: | |
Deferred compensation plan assets | 53,562 |
Liabilities: | |
Deferred compensation plan liabilities | 64,001 |
Valspar Corporation | |
Assets: | |
Deferred compensation plan assets | 23,830 |
Liabilities: | |
Deferred compensation plan liabilities | $ 23,830 |
Debt (Details)
Debt (Details) - USD ($) | Jun. 01, 2017 | Mar. 31, 2017 | May 31, 2016 | Jun. 30, 2017 | Jun. 02, 2017 | May 16, 2017 | Jun. 30, 2016 | Apr. 30, 2016 |
Designated as hedging instrument | Interest rate contract | Cash flow hedging | ||||||||
Financial Instruments | ||||||||
Gain recognized in other comprehensive loss | $ 87,600,000 | |||||||
Bridge loan | Line of Credit | Bridge Credit Agreement | ||||||||
Financial Instruments | ||||||||
Maximum borrowing capacity | $ 7,300,000,000 | |||||||
Senior Notes | Exchange Notes | ||||||||
Financial Instruments | ||||||||
Long-term debt issued | $ 1,478,000,000 | |||||||
Senior Notes | New Notes | ||||||||
Financial Instruments | ||||||||
Long-term debt issued | $ 6,000,000,000 | |||||||
Publicly traded debt | Carrying Amount | ||||||||
Financial Instruments | ||||||||
Fair Value | $ 9,448,274,000 | $ 1,906,672,000 | ||||||
Publicly traded debt | Fair Value | ||||||||
Financial Instruments | ||||||||
Fair Value | 9,660,353,000 | 2,021,174,000 | ||||||
Non-publicly traded debt | Carrying Amount | ||||||||
Financial Instruments | ||||||||
Fair Value | 2,004,111,000 | 4,724,000 | ||||||
Non-publicly traded debt | Fair Value | ||||||||
Financial Instruments | ||||||||
Fair Value | 1,863,095,000 | $ 4,451,000 | ||||||
Line of Credit | Term Credit Agreement | ||||||||
Financial Instruments | ||||||||
Maximum borrowing capacity | $ 2,000,000,000 | |||||||
Borrowings outstanding | $ 2,000,000,000 | |||||||
Term (in years) | 5 years | |||||||
Line of Credit | May 2016, 5 Year Credit Agreement | ||||||||
Financial Instruments | ||||||||
Maximum borrowing capacity | 500,000,000 | |||||||
Borrowings outstanding | 0 | |||||||
Term (in years) | 5 years | |||||||
Interest Expense | ||||||||
Financial Instruments | ||||||||
Amortization of the unrealized gain reduced interest expense | $ 1,000,000 | |||||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Term Credit Agreement | ||||||||
Financial Instruments | ||||||||
LIBOR basis spread | 1.25% | |||||||
Effective interest rate percentage | 2.36% |
Debt - Schedule of long-term de
Debt - Schedule of long-term debt instruments (Details) - Senior Notes - USD ($) $ in Thousands | Jun. 02, 2017 | May 16, 2017 |
Exchange Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,478,105 | |
7.250% Exchange Notes due in 2019 | ||
Debt Instrument [Line Items] | ||
Principal | $ 277,176 | |
Senior notes stated interest rate percentage | 7.25% | |
4.200% Exchange Notes due in 2022 | ||
Debt Instrument [Line Items] | ||
Principal | $ 385,909 | |
Senior notes stated interest rate percentage | 4.20% | |
3.300% Exchange Notes due in 2025 | ||
Debt Instrument [Line Items] | ||
Principal | $ 235,324 | |
Senior notes stated interest rate percentage | 3.30% | |
3.950% Exchange Notes due in 2026 | ||
Debt Instrument [Line Items] | ||
Principal | $ 331,342 | |
Senior notes stated interest rate percentage | 3.95% | |
4.400% Exchange Notes due in 2045 | ||
Debt Instrument [Line Items] | ||
Principal | $ 248,354 | |
Senior notes stated interest rate percentage | 4.40% | |
New Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 6,000,000 | |
2.250% New Notes due in 2020 | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,500,000 | |
Senior notes stated interest rate percentage | 2.25% | |
2.750% New Notes due in 2022 | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,250,000 | |
Senior notes stated interest rate percentage | 2.75% | |
3.125% New Notes due in 2024 | ||
Debt Instrument [Line Items] | ||
Principal | $ 500,000 | |
Senior notes stated interest rate percentage | 3.125% | |
3.450% New Notes due in 2027 | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,500,000 | |
Senior notes stated interest rate percentage | 3.45% | |
4.500% New Notes due in 2047 | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,250,000 | |
Senior notes stated interest rate percentage | 4.50% |
Non-Traded Investments (Details
Non-Traded Investments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Non Traded Investments (Textual) [Abstract] | ||
Carrying amount of the investments, included in other assets | $ 212.1 | $ 226.3 |
Liability for estimated future capital contributions to the investments | $ 170.4 | $ 186.9 |