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Ohio
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34-0526850
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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101 West Prospect Avenue
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Cleveland,
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Ohio
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44115-1075
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, Par Value $1.00
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SHW
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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The Americas Group: Sherwin-Williams®, Cashmere®, Colorgin®, Duration®, Emerald®, Harmony®, Kem Tone®, Loxon®, Metalatex®, Novacor®, Paint Shield®, ProClassic®, ProIndustrial™, ProMar®, SuperDeck®, SuperPaint®, Woodscapes®
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•
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Consumer Brands Group: Cabot®, Duckback®, Dupli-Color®, Dutch Boy®, Geocel®, HGTV HOME® by Sherwin-Williams, Huarun®, Krylon®, Minwax®, Pratt & Lambert®, Purdy®, Ronseal®, Solver®, Thompson’s® WaterSeal®, Valspar®, Wattyl®, White Lightning®
|
•
|
Performance Coatings Group: Sherwin-Williams®, Acrolon®, AcromaPro®, ATX®, AWX Performance Plus™, DeBeer®, Dimension®, Duraspar®, EcoDex®, Envirolastic®, Euronavy®, Excelo®, EzDex®, Fastline®, Firetex®, Fluropon®, Heat-Flex®, House of Kolor®, Huarun®, Kem Aqua®, Lazzuril®, Macropoxy®, Martin Senour®, ML Campbell®, Perma-Clad®, Planet Color®, Polane®, Powdura®, Sayerlack®, Sher-Wood®, Sumaré®, Ultra™, ValPure® , Valspar®
|
•
|
general business conditions, strengths of retail and manufacturing economies and growth in the coatings industry;
|
•
|
changes in general domestic economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations;
|
•
|
changes in raw material and energy supplies and pricing;
|
•
|
changes in our relationships with customers and suppliers;
|
•
|
our ability to successfully integrate past and future acquisitions into our existing operations, as well as the performance of the businesses acquired;
|
•
|
competitive factors, including pricing pressures and product innovation and quality;
|
•
|
our ability to attain cost savings from productivity initiatives;
|
•
|
risks and uncertainties associated with our expansion into and our operations in Asia, Europe, South America and other foreign markets, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest and other external economic and political factors;
|
•
|
the achievement of growth in foreign markets, such as Asia, Europe and South America;
|
•
|
increasingly stringent domestic and foreign governmental regulations, including those affecting health, safety and the environment;
|
•
|
inherent uncertainties involved in assessing our potential liability for environmental-related activities;
|
•
|
other changes in governmental policies, laws and regulations, including changes in tariff policies, as well as changes in accounting policies and standards and taxation requirements (such as new tax laws and new or revised tax law interpretations);
|
•
|
the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation, and the effect of any legislation and administrative regulations relating thereto; and
|
•
|
adverse weather conditions or impacts of climate change, natural disasters and public health crises.
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;
|
•
|
increase our vulnerability to adverse economic or industry conditions;
|
•
|
limit our ability to obtain additional financing in the future to enable us to react to changes in our business; or
|
•
|
place us at a competitive disadvantage compared to businesses in our industry that have less debt.
|
|
|
Manufacturing
|
|
Distribution
|
||||
|
|
Leased
|
Owned
|
Total
|
|
Leased
|
Owned
|
Total
|
Consumer Brands Group
|
|
|
|
|
|
|
|
|
Asia
|
|
1
|
5
|
6
|
|
1
|
3
|
4
|
Australia and New Zealand
|
|
|
3
|
3
|
|
1
|
4
|
5
|
Canada
|
|
1
|
2
|
3
|
|
1
|
|
1
|
Europe
|
|
1
|
3
|
4
|
|
2
|
3
|
5
|
Jamaica
|
|
|
1
|
1
|
|
|
1
|
1
|
Latin America
|
|
3
|
6
|
9
|
|
4
|
5
|
9
|
United States
|
|
5
|
29
|
34
|
|
8
|
3
|
11
|
Total
|
|
11
|
49
|
60
|
|
17
|
19
|
36
|
|
|
|
|
|
|
|
|
|
Performance Coatings Group
|
|
|
|
|
|
|
|
|
Africa
|
|
|
1
|
1
|
|
|
1
|
1
|
Asia
|
|
2
|
5
|
7
|
|
2
|
4
|
6
|
Europe
|
|
5
|
20
|
25
|
|
5
|
13
|
18
|
Latin America
|
|
|
5
|
5
|
|
1
|
7
|
8
|
United States
|
|
1
|
9
|
10
|
|
1
|
9
|
10
|
Total
|
|
8
|
40
|
48
|
|
9
|
34
|
43
|
•
|
the Mid Western Division operated 1,125 paint stores primarily located in the midwestern and upper west coast states;
|
•
|
the Eastern Division operated 879 paint stores along the upper east coast and New England states;
|
•
|
the Canada Division operated 248 paint stores throughout Canada;
|
•
|
the Southeastern Division operated 1,143 paint stores principally covering the lower east and gulf coast states, Puerto Rico, Virgin Islands, Grenada, Trinidad and Tobago, St. Maarten, Jamaica, Curacao, Aruba, St. Lucia and Barbados;
|
•
|
the South Western Division operated 1,043 paint stores in the central plains and the lower west coast states; and
|
•
|
the Latin America Division operated 320 paint stores in Uruguay, Brazil, Chile, Peru, Mexico and Ecuador.
|
Name
|
Age
|
Present Position
|
John G. Morikis
|
56
|
Chairman and Chief Executive Officer, Director
|
David B. Sewell
|
51
|
President and Chief Operating Officer
|
Allen J. Mistysyn
|
51
|
Senior Vice President - Finance and Chief Financial Officer
|
Jane M. Cronin
|
52
|
Senior Vice President - Corporate Controller
|
Mary L. Garceau
|
47
|
Senior Vice President, General Counsel and Secretary
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Thomas P. Gilligan
|
59
|
Senior Vice President - Human Resources
|
James R. Jaye
|
53
|
Senior Vice President - Investor Relations and Corporate Communications
|
Joel D. Baxter
|
59
|
President & General Manager, Global Supply Chain Division, Consumer Brands Group
|
Aaron M. Erter
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46
|
President, Performance Coatings Group
|
Peter J. Ippolito
|
55
|
President, The Americas Group
|
Period
|
|
Total
Number of
Shares
Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number
of Shares
Purchased as
Part of a
Publicly
Announced Plan
|
|
Maximum Number
of Shares
that May
Yet Be
Purchased Under
the Plan
|
|||||
October 1 – October 31
|
|
|
|
|
|
|
|
|
|||||
Share repurchase program (1)
|
|
250,000
|
|
|
$
|
576.00
|
|
|
250,000
|
|
|
8,550,000
|
|
Employee transactions (2)
|
|
759
|
|
|
$
|
562.89
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|||||
November 1 – November 30
|
|
|
|
|
|
|
|
|
|||||
Share repurchase program (1)
|
|
75,000
|
|
|
$
|
569.25
|
|
|
75,000
|
|
|
8,475,000
|
|
Employee transactions (2)
|
|
1,282
|
|
|
$
|
593.83
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 1 – December 31
|
|
|
|
|
|
|
|
|
|||||
Share repurchase program (1)
|
|
25,000
|
|
|
$
|
574.63
|
|
|
25,000
|
|
|
8,450,000
|
|
Employee transactions (2)
|
|
657
|
|
|
$
|
577.32
|
|
|
|
|
N/A
|
|
|
Total
|
|
|
|
|
|
|
|
|
|||||
Share repurchase program (1)
|
|
350,000
|
|
|
$
|
574.46
|
|
|
350,000
|
|
|
8,450,000
|
|
Employee transactions (2)
|
|
2,698
|
|
|
$
|
581.11
|
|
|
|
|
N/A
|
|
(1)
|
All shares are purchased through the Company’s publicly announced share repurchase program. There is no expiration date specified for the program. The Company had remaining authorization at December 31, 2019 to purchase 8,450,000 shares.
|
(2)
|
All shares were delivered to satisfy the exercise price and/or tax withholding obligations by employees who exercised stock options or had shares of restricted stock vest.
|
(millions of dollars, except per common share data)
|
2019
|
|
2018
|
|
2017 (1)
|
|
2016
|
|
2015
|
||||||||||
Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
17,900.8
|
|
|
$
|
17,534.5
|
|
|
$
|
14,983.8
|
|
|
$
|
11,855.6
|
|
|
$
|
11,339.3
|
|
Cost of goods sold
|
9,864.7
|
|
|
10,115.9
|
|
|
8,265.0
|
|
|
5,934.3
|
|
|
5,779.7
|
|
|||||
Selling, general and administrative expenses
|
5,274.9
|
|
|
5,033.8
|
|
|
4,797.6
|
|
|
4,140.3
|
|
|
3,885.7
|
|
|||||
Amortization
|
312.8
|
|
|
318.1
|
|
|
206.8
|
|
|
25.4
|
|
|
28.2
|
|
|||||
Interest expense
|
349.3
|
|
|
366.7
|
|
|
263.5
|
|
|
154.1
|
|
|
61.8
|
|
|||||
Income from continuing operations before income taxes (2)
|
1,981.8
|
|
|
1,359.7
|
|
|
1,469.3
|
|
|
1,595.2
|
|
|
1,549.0
|
|
|||||
Net income from continuing operations (3)
|
1,541.3
|
|
|
1,108.7
|
|
|
1,769.5
|
|
|
1,132.7
|
|
|
1,053.8
|
|
Financial Position
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable - net
|
$
|
2,088.9
|
|
|
$
|
2,018.8
|
|
|
$
|
2,104.6
|
|
|
$
|
1,231.0
|
|
|
$
|
1,114.3
|
|
Inventories
|
1,889.6
|
|
|
1,815.3
|
|
|
1,742.5
|
|
|
1,068.3
|
|
|
1,018.5
|
|
|||||
Working capital - net
|
109.8
|
|
|
46.8
|
|
|
419.8
|
|
|
798.1
|
|
|
515.2
|
|
|||||
Property, plant and equipment - net
|
1,835.2
|
|
|
1,776.8
|
|
|
1,877.1
|
|
|
1,095.9
|
|
|
1,041.8
|
|
|||||
Total assets (4)
|
20,496.2
|
|
|
19,134.3
|
|
|
19,899.5
|
|
|
6,752.5
|
|
|
5,778.9
|
|
|||||
Long-term debt
|
8,050.7
|
|
|
8,708.1
|
|
|
9,885.7
|
|
|
1,211.3
|
|
|
1,907.3
|
|
|||||
Total debt
|
8,685.2
|
|
|
9,343.7
|
|
|
10,520.6
|
|
|
1,952.5
|
|
|
1,950.0
|
|
|||||
Shareholders’ equity
|
4,123.3
|
|
|
3,730.7
|
|
|
3,647.9
|
|
|
1,878.4
|
|
|
867.7
|
|
Per Share Information
|
|
|
|
|
|
|
|
|
|
||||||||||
Average shares outstanding - diluted (thousands)
|
93,447
|
|
|
94,988
|
|
|
94,927
|
|
|
94,488
|
|
|
94,543
|
|
|||||
Book value
|
$
|
44.75
|
|
|
$
|
40.07
|
|
|
$
|
38.86
|
|
|
$
|
20.20
|
|
|
$
|
9.41
|
|
Net income from continuing operations - diluted (5)
|
16.49
|
|
|
11.67
|
|
|
18.64
|
|
|
11.99
|
|
|
11.15
|
|
|||||
Cash dividends
|
4.52
|
|
|
3.44
|
|
|
3.40
|
|
|
3.36
|
|
|
2.68
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|||||
Return on sales
|
8.6
|
%
|
|
6.3
|
%
|
|
11.8
|
%
|
|
9.6
|
%
|
|
9.3
|
%
|
Asset turnover
|
0.9
|
x
|
|
0.9
|
x
|
|
0.8
|
x
|
|
1.8
|
x
|
|
2.0
|
x
|
Return on assets
|
7.5
|
%
|
|
5.8
|
%
|
|
8.9
|
%
|
|
16.8
|
%
|
|
18.2
|
%
|
Return on equity (6)
|
41.3
|
%
|
|
30.4
|
%
|
|
94.2
|
%
|
|
130.5
|
%
|
|
105.8
|
%
|
Dividend payout ratio (7)
|
38.7
|
%
|
|
18.5
|
%
|
|
28.4
|
%
|
|
30.1
|
%
|
|
30.6
|
%
|
Total debt to capitalization
|
67.8
|
%
|
|
71.5
|
%
|
|
74.3
|
%
|
|
51.0
|
%
|
|
69.2
|
%
|
Current ratio
|
1.0
|
|
|
1.0
|
|
|
1.1
|
|
|
1.3
|
|
|
1.2
|
|
Interest coverage (8)
|
6.7
|
x
|
|
4.7
|
x
|
|
6.6
|
x
|
|
11.4
|
x
|
|
26.1
|
x
|
Net working capital to sales
|
0.6
|
%
|
|
0.3
|
%
|
|
2.8
|
%
|
|
6.7
|
%
|
|
4.5
|
%
|
Effective income tax rate (9)
|
22.2
|
%
|
|
18.5
|
%
|
|
25.1
|
%
|
|
29.0
|
%
|
|
32.0
|
%
|
General
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) (10)
|
$
|
2,906.0
|
|
|
$
|
2,322.7
|
|
|
$
|
2,224.6
|
|
|
$
|
1,946.8
|
|
|
$
|
1,809.3
|
|
Capital expenditures
|
328.9
|
|
|
251.0
|
|
|
222.8
|
|
|
239.0
|
|
|
234.3
|
|
|||||
Total technical expenditures (11)
|
224.6
|
|
|
253.9
|
|
|
215.7
|
|
|
153.3
|
|
|
150.4
|
|
|||||
Advertising expenditures
|
355.2
|
|
|
357.8
|
|
|
374.1
|
|
|
351.0
|
|
|
338.2
|
|
|||||
Repairs and maintenance
|
135.8
|
|
|
131.7
|
|
|
115.8
|
|
|
99.5
|
|
|
98.7
|
|
|||||
Depreciation
|
262.1
|
|
|
278.2
|
|
|
285.0
|
|
|
172.1
|
|
|
170.3
|
|
|||||
Shareholders of record (total count)
|
5,659
|
|
|
6,244
|
|
|
6,470
|
|
|
6,787
|
|
|
6,987
|
|
|||||
Number of employees (total count)
|
61,111
|
|
|
59,740
|
|
|
59,257
|
|
|
49,054
|
|
|
46,911
|
|
|||||
Sales per employee (thousands of dollars)
|
$
|
293
|
|
|
$
|
294
|
|
|
$
|
253
|
|
|
$
|
242
|
|
|
$
|
242
|
|
Sales per dollar of assets
|
0.87
|
|
|
0.92
|
|
|
0.75
|
|
|
1.76
|
|
|
1.96
|
|
(1)
|
2017 includes Valspar financial results since June 1, 2017.
|
(2)
|
2019 includes acquisition-related costs of $389.3 million, non-cash trademark impairment charges of $122.1 million, domestic pension plan settlement expense of $32.4 million, as well as a Brazil indirect tax credit of $50.8 million and a benefit from the resolution of the California litigation of $34.7 million. 2018 includes acquisition-related costs of $484.4 million, environmental expense provisions of $167.6 million, California litigation expense of $136.3 million and domestic pension plan settlement expense of $37.6 million. 2017 includes acquisition-related costs of $488.6 million.
|
(3)
|
2019 includes after-tax acquisition-related costs of $299.6 million, after-tax trademark impairment charges of $93.1 million, tax credit investment loss of $74.3 million and after-tax domestic pension settlement expense of $25.0 million, partially offset by an after-tax Brazil indirect tax credit of $33.3 million and after-tax benefit from the resolution of the California litigation of $26.1 million. 2018 includes after-tax acquisition-related costs of $394.4 million, after-tax environmental expense provisions of $126.1 million, after-tax California litigation expense of $103.4 million and after-tax domestic pension plan settlement expense of $28.3 million. 2017 includes a one-time income tax benefit of $668.8 million from deferred income tax reductions resulting from the Tax Act (see Note 19 of Item 8) and includes after-tax acquisition-related costs of $329.4 million.
|
(4)
|
Total assets at December 31, 2019 includes operating lease right-of-use assets due to the adoption of ASU 2016-02, "Leases", effective January 1, 2019. See Note 2 to the Consolidated Financial Statements in Item 8.
|
(5)
|
2019 includes charges of $3.21 per share for acquisition-related costs, $1.00 per share for non-cash trademark impairment charges, a tax credit investment loss of $0.79 per share and domestic pension plan settlement expense of $0.27 per share, partially offset by a Brazil indirect tax credit of $0.36 per share and a benefit from the resolution of the California litigation of $0.28 per share. 2018 includes charges of $4.15 per share for acquisition-related costs, $1.32 per share for environmental expense provisions, $1.09 per share for California litigation expense and $0.30 per share for domestic pension settlement expense. 2017 includes a one-time benefit of $7.04 per share from deferred income tax reductions resulting from the Tax Act (see Note 19 of Item 8) and a charge of $3.47 per share for acquisition-related costs.
|
(6)
|
Based on net income and shareholders' equity at beginning of year.
|
(7)
|
Based on cash dividends per common share and prior year's diluted net income per common share.
|
(8)
|
Ratio of income from continuing operations before income taxes and interest expense to interest expense.
|
(9)
|
Based on income from continuing operations before income taxes. 2017 excludes impact of one-time income tax benefit primarily related to Tax Cuts and Jobs Act.
|
(10)
|
EBITDA is a non-GAAP measure which management believes enhances the understanding of the Company's operating performance. See the Non-GAAP Financial Measures section within this Item 6 for additional information.
|
(11)
|
See Note 1 to the Consolidated Financial Statements in Item 8 for additional information.
|
(millions of dollars)
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income from continuing operations
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
Interest expense
|
349.3
|
|
|
366.7
|
|
||
Income taxes
|
440.5
|
|
|
251.0
|
|
||
Depreciation
|
262.1
|
|
|
278.2
|
|
||
Amortization
|
312.8
|
|
|
318.1
|
|
||
EBITDA from continuing operations
|
2,906.0
|
|
|
2,322.7
|
|
||
Trademark impairment
|
122.1
|
|
|
|
|||
Brazil indirect tax credit
|
(50.8
|
)
|
|
|
|||
California litigation expense
|
(34.7
|
)
|
|
136.3
|
|
||
Domestic pension plan settlement expense
|
32.4
|
|
|
37.6
|
|
||
Environmental expense provision
|
|
|
167.6
|
|
|||
Integration costs
|
81.8
|
|
|
157.7
|
|
||
Adjusted EBITDA
|
$
|
3,056.8
|
|
|
$
|
2,821.9
|
|
|
Year Ended
|
||||||||
|
December 31, 2019
|
||||||||
|
Pre-Tax
|
Tax
Effect (3) |
After-Tax
|
||||||
Diluted net income per share
|
|
|
$
|
16.49
|
|
||||
|
|
|
|
||||||
Trademark impairment
|
$
|
1.31
|
|
$
|
.31
|
|
1.00
|
|
|
Brazil indirect tax credit
|
(.54
|
)
|
(.18
|
)
|
(.36
|
)
|
|||
California litigation expense provision reduction
|
(.37
|
)
|
(.09
|
)
|
(.28
|
)
|
|||
Tax credit investment loss
|
|
(.79
|
)
|
.79
|
|
||||
Domestic pension plan settlement expense
|
.35
|
|
.08
|
|
.27
|
|
|||
Total other adjustments
|
.75
|
|
(.67
|
)
|
1.42
|
|
|||
|
|
|
|
||||||
Integration costs (1)
|
.88
|
|
.19
|
|
.69
|
|
|||
Acquisition-related amortization expense (2)
|
3.29
|
|
.77
|
|
2.52
|
|
|||
Total acquisition-related costs
|
$
|
4.17
|
|
$
|
.96
|
|
3.21
|
|
|
|
|
|
|
||||||
Adjusted diluted net income per share
|
|
|
$
|
21.12
|
|
|
Year Ended
|
||||||||
|
December 31, 2018
|
||||||||
|
Pre-Tax
|
Tax
Effect (3) |
After-Tax
|
||||||
Diluted net income per share
|
|
|
$
|
11.67
|
|
||||
|
|
|
|
||||||
California litigation expense
|
$
|
1.44
|
|
$
|
.35
|
|
1.09
|
|
|
Environmental expense provision
|
1.75
|
|
.43
|
|
1.32
|
|
|||
Domestic pension plan settlement expense
|
.40
|
|
.10
|
|
.30
|
|
|||
Total other adjustments
|
3.59
|
|
.88
|
|
2.71
|
|
|||
|
|
|
|
||||||
Integration costs (1)
|
1.65
|
|
.10
|
|
1.55
|
|
|||
Acquisition-related amortization expense (2)
|
3.44
|
|
.84
|
|
2.60
|
|
|||
Total acquisition-related costs
|
$
|
5.09
|
|
$
|
.94
|
|
4.15
|
|
|
|
|
|
|
||||||
Adjusted diluted net income per share
|
|
|
$
|
18.53
|
|
(1)
|
Integration costs consist primarily of professional service expenses, salaries and other employee-related expenses dedicated directly to the integration effort, and severance expense. These costs are included in Selling, general and administrative and other expenses and Cost of goods sold.
|
(2)
|
Acquisition-related amortization expense consists primarily of the amortization of intangible assets related to the Valspar acquisition and is included in Amortization.
|
(3)
|
The tax effect is calculated based on the statutory rate and the nature of the item, unless otherwise noted.
|
|
Year Ended December 31, 2019
|
||||||||||||||
|
The Americas Group
|
Consumer Brands
Group |
Performance Coatings
Group |
Administrative
|
Total
|
||||||||||
Net external sales
|
$
|
10,171.9
|
|
$
|
2,676.8
|
|
$
|
5,049.2
|
|
$
|
2.9
|
|
$
|
17,900.8
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
2,056.5
|
|
$
|
373.2
|
|
$
|
379.1
|
|
$
|
(827.0
|
)
|
$
|
1,981.8
|
|
as a % of Net external sales
|
20.2
|
%
|
13.9
|
%
|
7.5
|
%
|
|
11.1
|
%
|
||||||
|
|
|
|
|
|
||||||||||
Trademark impairment
|
|
5.1
|
|
117.0
|
|
|
122.1
|
|
|||||||
Brazil indirect tax credit
|
|
|
|
(50.8
|
)
|
(50.8
|
)
|
||||||||
California litigation expense provision reduction
|
|
|
|
(34.7
|
)
|
(34.7
|
)
|
||||||||
Domestic pension plan settlement expense
|
|
|
|
32.4
|
|
32.4
|
|
||||||||
Total other adjustments
|
—
|
|
5.1
|
|
117.0
|
|
(53.1
|
)
|
69.0
|
|
|||||
|
|
|
|
|
|
||||||||||
Integration costs (1)
|
|
|
|
81.8
|
|
81.8
|
|
||||||||
Acquisition-related amortization expense (2)
|
|
91.2
|
|
215.5
|
|
0.8
|
|
307.5
|
|
||||||
Total acquisition-related costs
|
—
|
|
91.2
|
|
215.5
|
|
82.6
|
|
389.3
|
|
|||||
|
|
|
|
|
|
||||||||||
Adjusted segment profit
|
$
|
2,056.5
|
|
$
|
469.5
|
|
$
|
711.6
|
|
$
|
(797.5
|
)
|
$
|
2,440.1
|
|
as a % of Net external sales
|
20.2
|
%
|
17.5
|
%
|
14.1
|
%
|
|
13.6
|
%
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
The Americas Group
|
Consumer Brands
Group |
Performance Coatings
Group |
Administrative
|
Total
|
||||||||||
Net external sales
|
$
|
9,625.1
|
|
$
|
2,739.1
|
|
$
|
5,166.4
|
|
$
|
3.9
|
|
$
|
17,534.5
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
1,898.4
|
|
$
|
261.1
|
|
$
|
452.1
|
|
$
|
(1,251.9
|
)
|
$
|
1,359.7
|
|
as a % of Net external sales
|
19.7
|
%
|
9.5
|
%
|
8.8
|
%
|
|
7.8
|
%
|
||||||
|
|
|
|
|
|
||||||||||
California litigation expense
|
|
|
|
136.3
|
|
136.3
|
|
||||||||
Environmental expense provision
|
|
|
|
167.6
|
|
167.6
|
|
||||||||
Domestic pension plan settlement expense
|
|
|
|
37.6
|
|
37.6
|
|
||||||||
Total other adjustments
|
—
|
|
—
|
|
—
|
|
341.5
|
|
341.5
|
|
|||||
|
|
|
|
|
|
||||||||||
Integration costs (1)
|
|
|
|
157.7
|
|
157.7
|
|
||||||||
Acquisition-related amortization expense (2)
|
|
110.9
|
|
215.8
|
|
|
326.7
|
|
|||||||
Total acquisition-related costs
|
—
|
|
110.9
|
|
215.8
|
|
157.7
|
|
484.4
|
|
|||||
|
|
|
|
|
|
||||||||||
Adjusted segment profit
|
$
|
1,898.4
|
|
$
|
372.0
|
|
$
|
667.9
|
|
$
|
(752.7
|
)
|
$
|
2,185.6
|
|
as a % of Net external sales
|
19.7
|
%
|
13.6
|
%
|
12.9
|
%
|
|
12.5
|
%
|
(1)
|
Integration costs consist primarily of professional service expenses, salaries and other employee-related expenses dedicated directly to the integration effort, and severance expense. These costs are included in Selling, general and administrative and other expenses and Cost of goods sold.
|
(2)
|
Acquisition-related amortization expense consists primarily of the amortization of intangible assets related to the Valspar acquisition and is included in Amortization.
|
|
Year Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
Net Sales:
|
|
|
|
|
|
|||||
The Americas Group
|
$
|
10,171.9
|
|
|
$
|
9,625.1
|
|
|
5.7
|
%
|
Consumer Brands Group
|
2,676.8
|
|
|
2,739.1
|
|
|
(2.3
|
)%
|
||
Performance Coatings Group
|
5,049.2
|
|
|
5,166.4
|
|
|
(2.3
|
)%
|
||
Administrative
|
2.9
|
|
|
3.9
|
|
|
(25.6
|
)%
|
||
Total
|
$
|
17,900.8
|
|
|
$
|
17,534.5
|
|
|
2.1
|
%
|
|
Year Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
Income Before Income Taxes:
|
|
|
|
|
|
|||||
The Americas Group
|
$
|
2,056.5
|
|
|
$
|
1,898.4
|
|
|
8.3
|
%
|
Consumer Brands Group
|
373.2
|
|
|
261.1
|
|
|
42.9
|
%
|
||
Performance Coatings Group
|
379.1
|
|
|
452.1
|
|
|
(16.1
|
)%
|
||
Administrative
|
(827.0
|
)
|
|
(1,251.9
|
)
|
|
33.9
|
%
|
||
Total
|
$
|
1,981.8
|
|
|
$
|
1,359.7
|
|
|
45.8
|
%
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less Than
1 Year
|
|
1–3 Years
|
|
3–5 Years
|
|
More Than
5 Years
|
||||||||||
Long-term debt
|
|
$
|
8,539.2
|
|
|
$
|
430.1
|
|
|
$
|
1,435.6
|
|
|
$
|
500.4
|
|
|
$
|
6,173.1
|
|
Interest on Long-term debt
|
|
3,416.8
|
|
|
244.3
|
|
|
462.4
|
|
|
411.7
|
|
|
2,298.4
|
|
|||||
Operating leases
|
|
1,961.1
|
|
|
430.3
|
|
|
692.5
|
|
|
436.4
|
|
|
401.9
|
|
|||||
Short-term borrowings
|
|
204.7
|
|
|
204.7
|
|
|
|
|
|
|
|
||||||||
California litigation accrual
|
|
76.7
|
|
|
12.0
|
|
|
24.0
|
|
|
24.0
|
|
|
16.7
|
|
|||||
Real estate financing transactions
|
|
218.4
|
|
|
14.0
|
|
|
28.1
|
|
|
30.2
|
|
|
146.1
|
|
|||||
Purchase obligations (1)
|
|
88.0
|
|
|
88.0
|
|
|
|
|
|
|
|
||||||||
Other contractual obligations (2)
|
|
222.1
|
|
|
132.6
|
|
|
50.0
|
|
|
18.0
|
|
|
21.5
|
|
|||||
Total contractual cash obligations
|
|
$
|
14,727.0
|
|
|
$
|
1,556.0
|
|
|
$
|
2,692.6
|
|
|
$
|
1,420.7
|
|
|
$
|
9,057.7
|
|
(1)
|
Relate to open purchase orders for raw materials at December 31, 2019.
|
(2)
|
Relate primarily to estimated future capital contributions to investments in the U.S. affordable housing and historic renovation real estate partnerships and various other contractual obligations.
|
|
|
Amount of Commitment Expiration Per Period
|
||||||||||||||||||
Commercial Commitments
|
|
Total
|
|
Less Than
1 Year
|
|
1–3 Years
|
|
3–5 Years
|
|
More Than
5 Years
|
||||||||||
Standby letters of credit
|
|
$
|
61.3
|
|
|
$
|
61.3
|
|
|
|
|
|
|
|
||||||
Surety bonds
|
|
105.1
|
|
|
105.1
|
|
|
|
|
|
|
|
||||||||
Total commercial commitments
|
|
$
|
166.4
|
|
|
$
|
166.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at January 1
|
$
|
57.1
|
|
|
$
|
151.4
|
|
|
$
|
34.4
|
|
Charges to expense
|
32.5
|
|
|
31.7
|
|
|
39.7
|
|
|||
Settlements
|
(47.3
|
)
|
|
(57.8
|
)
|
|
(53.1
|
)
|
|||
Acquisition, divestiture and other adjustments
|
|
|
|
(68.2
|
)
|
|
130.4
|
|
|||
Balance at December 31
|
$
|
42.3
|
|
|
$
|
57.1
|
|
|
$
|
151.4
|
|
Index to Consolidated Financial Statements
|
|
|
|
|
Page
|
Report of Management on Internal Control Over Financial Reporting
|
|
|
|
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
|
|
|
|
Report of Management on the Consolidated Financial Statements
|
|
|
|
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements
|
|
|
|
Statements of Consolidated Income
|
|
|
|
Statements of Consolidated Comprehensive Income
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
Statements of Consolidated Cash Flows
|
|
|
|
Statements of Consolidated Shareholders' Equity
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of dollars, except per share data)
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
17,900.8
|
|
|
$
|
17,534.5
|
|
|
$
|
14,983.8
|
|
Cost of goods sold
|
9,864.7
|
|
|
10,115.9
|
|
|
8,265.0
|
|
|||
Gross profit
|
8,036.1
|
|
|
7,418.6
|
|
|
6,718.8
|
|
|||
Percent to net sales
|
44.9
|
%
|
|
42.3
|
%
|
|
44.8
|
%
|
|||
Selling, general and administrative expenses
|
5,274.9
|
|
|
5,033.8
|
|
|
4,797.6
|
|
|||
Percent to net sales
|
29.5
|
%
|
|
28.7
|
%
|
|
32.0
|
%
|
|||
Other general expense - net
|
39.1
|
|
|
189.1
|
|
|
20.9
|
|
|||
Amortization
|
312.8
|
|
|
318.1
|
|
|
206.8
|
|
|||
Impairment of trademarks
|
122.1
|
|
|
|
|
|
2.0
|
|
|||
Interest expense
|
349.3
|
|
|
366.7
|
|
|
263.5
|
|
|||
Interest and net investment income
|
(25.9
|
)
|
|
(5.2
|
)
|
|
(8.6
|
)
|
|||
California litigation expense
|
(34.7
|
)
|
|
136.3
|
|
|
|
|
|||
Other expense (income) - net
|
16.7
|
|
|
20.1
|
|
|
(32.7
|
)
|
|||
Income from continuing operations before income taxes
|
1,981.8
|
|
|
1,359.7
|
|
|
1,469.3
|
|
|||
Income tax expense (credit)
|
440.5
|
|
|
251.0
|
|
|
(300.2
|
)
|
|||
Net income from continuing operations
|
1,541.3
|
|
|
1,108.7
|
|
|
1,769.5
|
|
|||
Loss from discontinued operations
|
|
|
|
|
|
||||||
Income taxes
|
|
|
|
|
|
|
41.6
|
|
|||
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
(41.6
|
)
|
|||
Net income
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,727.9
|
|
|
|
|
|
|
|
||||||
Basic net income per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
16.79
|
|
|
$
|
11.92
|
|
|
$
|
19.04
|
|
Discontinued operations
|
|
|
|
|
(.44
|
)
|
|||||
Net income per share
|
$
|
16.79
|
|
|
$
|
11.92
|
|
|
$
|
18.60
|
|
|
|
|
|
|
|
||||||
Diluted net income per share
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
16.49
|
|
|
$
|
11.67
|
|
|
$
|
18.64
|
|
Discontinued operations
|
|
|
|
|
(.44
|
)
|
|||||
Net income per share
|
$
|
16.49
|
|
|
$
|
11.67
|
|
|
$
|
18.20
|
|
|
|
|
|
|
|
(millions of dollars)
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,727.9
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Foreign currency translation adjustments (1)
|
(49.8
|
)
|
|
(254.3
|
)
|
|
148.0
|
|
|||
|
|
|
|
|
|
||||||
Pension and other postretirement benefit adjustments:
|
|
|
|
|
|
||||||
Amounts recognized in Other comprehensive (loss) income (2)
|
(5.1
|
)
|
|
(13.5
|
)
|
|
48.0
|
|
|||
Amounts reclassified from Other comprehensive (loss) income (3)
|
22.3
|
|
|
31.3
|
|
|
(7.8
|
)
|
|||
|
17.2
|
|
|
17.8
|
|
|
40.2
|
|
|||
|
|
|
|
|
|
||||||
Unrealized net gains on available-for sale securities:
|
|
|
|
|
|
||||||
Amounts recognized in Other comprehensive (loss) income (4)
|
|
|
|
|
|
|
2.1
|
|
|||
Amounts reclassified from Other comprehensive (loss) income (5)
|
|
|
|
|
|
|
(0.8
|
)
|
|||
|
—
|
|
|
—
|
|
|
1.3
|
|
|||
|
|
|
|
|
|
||||||
Unrealized net (losses) gains on cash flow hedges
|
|
|
|
|
|
||||||
Amounts recognized in Other comprehensive (loss) income (6)
|
|
|
|
|
|
(30.8
|
)
|
||||
Amounts reclassified from Other comprehensive (loss) income (7)
|
(8.7
|
)
|
|
(6.2
|
)
|
|
(3.2
|
)
|
|||
|
(8.7
|
)
|
|
(6.2
|
)
|
|
(34.0
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, net of tax
|
(41.3
|
)
|
|
(242.7
|
)
|
|
155.5
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
1,500.0
|
|
|
$
|
866.0
|
|
|
$
|
1,883.4
|
|
(1)
|
The year ended December 31, 2019 includes unrealized gains of $1.1 million, net of taxes, related to the net investment hedge.
|
(2)
|
Net of taxes of $1.3 million, $6.8 million and $(19.3) million in 2019, 2018 and 2017, respectively.
|
(3)
|
Net of taxes of $(7.3) million, $(10.2) million and $4.7 million in 2019, 2018 and 2017, respectively.
|
(4)
|
Net of taxes of $(1.2) million in 2017.
|
(5)
|
Net of taxes of $0.4 million in 2017.
|
(6)
|
Net of taxes of $18.8 million in 2017.
|
(7)
|
Net of taxes of $2.8 million, $2.1 million and $2.0 million in 2019, 2018 and 2017, respectively.
|
(millions of dollars, except share data)
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
161.8
|
|
|
$
|
155.5
|
|
|
$
|
204.2
|
|
Accounts receivable, less allowance
|
2,088.9
|
|
|
2,018.8
|
|
|
2,104.6
|
|
|||
Inventories:
|
|
|
|
|
|
||||||
Finished goods
|
1,509.6
|
|
|
1,426.4
|
|
|
1,356.5
|
|
|||
Work in process and raw materials
|
380.0
|
|
|
388.9
|
|
|
386.0
|
|
|||
|
1,889.6
|
|
|
1,815.3
|
|
|
1,742.5
|
|
|||
Other current assets
|
491.4
|
|
|
354.9
|
|
|
355.7
|
|
|||
Total current assets
|
4,631.7
|
|
|
4,344.5
|
|
|
4,407.0
|
|
|||
Property, plant and equipment:
|
|
|
|
|
|
||||||
Land
|
242.1
|
|
|
244.6
|
|
|
254.7
|
|
|||
Buildings
|
1,044.2
|
|
|
979.1
|
|
|
962.1
|
|
|||
Machinery and equipment
|
2,952.1
|
|
|
2,668.5
|
|
|
2,573.0
|
|
|||
Construction in progress
|
144.0
|
|
|
147.9
|
|
|
177.0
|
|
|||
|
4,382.4
|
|
|
4,040.1
|
|
|
3,966.8
|
|
|||
Less allowances for depreciation
|
2,547.2
|
|
|
2,263.3
|
|
|
2,089.7
|
|
|||
|
1,835.2
|
|
|
1,776.8
|
|
|
1,877.1
|
|
|||
Goodwill
|
7,004.8
|
|
|
6,956.7
|
|
|
6,814.3
|
|
|||
Intangible assets
|
4,734.5
|
|
|
5,201.6
|
|
|
6,002.4
|
|
|||
Operating lease right-of-use assets
|
1,685.6
|
|
|
|
|
|
|||||
Deferred pension assets
|
43.0
|
|
|
270.7
|
|
|
296.7
|
|
|||
Other assets
|
561.4
|
|
|
584.0
|
|
|
502.0
|
|
|||
Total Assets
|
$
|
20,496.2
|
|
|
$
|
19,134.3
|
|
|
$
|
19,899.5
|
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Short-term borrowings
|
$
|
204.7
|
|
|
$
|
328.4
|
|
|
$
|
633.7
|
|
Accounts payable
|
1,876.3
|
|
|
1,799.4
|
|
|
1,791.5
|
|
|||
Compensation and taxes withheld
|
552.7
|
|
|
504.5
|
|
|
508.2
|
|
|||
Accrued taxes
|
85.7
|
|
|
80.8
|
|
|
79.9
|
|
|||
Current portion of long-term debt
|
429.8
|
|
|
307.2
|
|
|
1.2
|
|
|||
California litigation accrual
|
12.0
|
|
|
136.3
|
|
|
|
|
|||
Current portion of operating lease liabilities
|
371.6
|
|
|
|
|
|
|||||
Other accruals
|
989.1
|
|
|
1,141.1
|
|
|
972.7
|
|
|||
Total current liabilities
|
4,521.9
|
|
|
4,297.7
|
|
|
3,987.2
|
|
|||
Long-term debt
|
8,050.7
|
|
|
8,708.1
|
|
|
9,885.7
|
|
|||
Postretirement benefits other than pensions
|
263.0
|
|
|
257.6
|
|
|
274.7
|
|
|||
Deferred income taxes
|
969.9
|
|
|
1,130.9
|
|
|
1,419.6
|
|
|||
Long-term operating lease liabilities
|
1,370.7
|
|
|
|
|
|
|||||
Other long-term liabilities
|
1,196.7
|
|
|
1,009.3
|
|
|
684.4
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common stock - $1.00 par value:
|
|
|
|
|
|
||||||
92,144,839, 93,116,762 and 93,883,645 shares outstanding
|
|
|
|
|
|
||||||
at December 31, 2019, 2018 and 2017, respectively
|
119.4
|
|
|
118.4
|
|
|
117.6
|
|
|||
Other capital
|
3,153.0
|
|
|
2,896.4
|
|
|
2,723.2
|
|
|||
Retained earnings
|
7,366.9
|
|
|
6,246.5
|
|
|
5,458.4
|
|
|||
Treasury stock, at cost
|
(5,836.5
|
)
|
|
(4,900.7
|
)
|
|
(4,266.4
|
)
|
|||
Accumulated other comprehensive loss
|
(679.5
|
)
|
|
(629.9
|
)
|
|
(384.9
|
)
|
|||
Total shareholders’ equity
|
4,123.3
|
|
|
3,730.7
|
|
|
3,647.9
|
|
|||
Total Liabilities and Shareholders’ Equity
|
$
|
20,496.2
|
|
|
$
|
19,134.3
|
|
|
$
|
19,899.5
|
|
(millions of dollars)
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,727.9
|
|
Adjustments to reconcile net income to net operating cash:
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
|
|
|
|
|
|
41.6
|
|
|||
Depreciation
|
262.1
|
|
|
278.2
|
|
|
285.0
|
|
|||
Non-cash lease expense
|
370.8
|
|
|
|
|
|
|
|
|||
Amortization of intangible assets
|
312.8
|
|
|
318.1
|
|
|
206.8
|
|
|||
Amortization of inventory purchase accounting adjustments
|
|
|
|
|
|
|
113.8
|
|
|||
Loss on extinguishment of debt
|
14.8
|
|
|
|
|
|
|||||
Impairment of trademarks
|
122.1
|
|
|
|
|
|
2.0
|
|
|||
Amortization of credit facility and debt issuance costs
|
9.2
|
|
|
12.1
|
|
|
8.3
|
|
|||
Provisions for environmental-related matters
|
23.0
|
|
|
176.3
|
|
|
15.4
|
|
|||
Provisions for qualified exit costs
|
8.8
|
|
|
14.9
|
|
|
50.5
|
|
|||
Deferred income taxes
|
(131.1
|
)
|
|
(143.4
|
)
|
|
(620.7
|
)
|
|||
Defined benefit pension plans net cost
|
43.1
|
|
|
36.4
|
|
|
18.2
|
|
|||
Stock-based compensation expense
|
101.7
|
|
|
82.6
|
|
|
90.3
|
|
|||
Net decrease in postretirement liability
|
(14.4
|
)
|
|
(15.9
|
)
|
|
(17.9
|
)
|
|||
Decrease in non-traded investments
|
82.3
|
|
|
72.5
|
|
|
65.7
|
|
|||
Loss on sale or disposition of assets
|
16.1
|
|
|
12.8
|
|
|
5.5
|
|
|||
Other
|
15.8
|
|
|
(13.8
|
)
|
|
1.1
|
|
|||
Change in working capital accounts:
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
(73.2
|
)
|
|
18.4
|
|
|
(49.9
|
)
|
|||
(Increase) in inventories
|
(75.5
|
)
|
|
(119.5
|
)
|
|
(90.0
|
)
|
|||
Increase in accounts payable
|
36.2
|
|
|
113.8
|
|
|
166.7
|
|
|||
Increase (decrease) in accrued taxes
|
5.1
|
|
|
2.7
|
|
|
(20.9
|
)
|
|||
Increase in accrued compensation and taxes withheld
|
49.6
|
|
|
4.6
|
|
|
11.3
|
|
|||
(Increase) decrease in refundable income taxes
|
(47.8
|
)
|
|
20.1
|
|
|
(15.5
|
)
|
|||
(Decrease) increase in California litigation accrual
|
(59.6
|
)
|
|
136.3
|
|
|
|
|
|||
Other
|
18.8
|
|
|
(46.7
|
)
|
|
16.3
|
|
|||
Change in operating lease liabilities
|
(368.4
|
)
|
|
|
|
|
|
|
|||
Costs incurred for environmental-related matters
|
(26.1
|
)
|
|
(17.7
|
)
|
|
(13.8
|
)
|
|||
Costs incurred for qualified exit costs
|
(12.8
|
)
|
|
(21.2
|
)
|
|
(45.4
|
)
|
|||
Other
|
96.6
|
|
|
(86.6
|
)
|
|
(68.3
|
)
|
|||
Net operating cash
|
2,321.3
|
|
|
1,943.7
|
|
|
1,884.0
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(328.9
|
)
|
|
(251.0
|
)
|
|
(222.8
|
)
|
|||
Acquisitions of businesses, net of cash acquired
|
(77.3
|
)
|
|
|
|
|
(8,810.3
|
)
|
|||
Proceeds from sale of assets
|
6.9
|
|
|
38.4
|
|
|
47.2
|
|
|||
Increase in other investments
|
(63.3
|
)
|
|
(39.0
|
)
|
|
(61.5
|
)
|
|||
Net investing cash
|
(462.6
|
)
|
|
(251.6
|
)
|
|
(9,047.4
|
)
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
||||||
Net (decrease) increase in short-term borrowings
|
(122.8
|
)
|
|
(300.9
|
)
|
|
356.3
|
|
|||
Proceeds from long-term debt
|
1,332.8
|
|
|
|
|
|
8,275.2
|
|
|||
Payments of long-term debt
|
(1,875.8
|
)
|
|
(852.6
|
)
|
|
(1,852.8
|
)
|
|||
Payments for credit facility and debt issuance costs
|
(13.6
|
)
|
|
(5.2
|
)
|
|
(49.4
|
)
|
|||
Payments of cash dividends
|
(420.8
|
)
|
|
(322.9
|
)
|
|
(319.0
|
)
|
|||
Proceeds from stock options exercised
|
154.6
|
|
|
90.7
|
|
|
143.6
|
|
|||
Treasury stock purchased
|
(778.8
|
)
|
|
(613.3
|
)
|
|
|
|
|||
Proceeds from real estate financing transactions
|
7.2
|
|
|
225.3
|
|
|
|
||||
Other
|
(129.2
|
)
|
|
32.2
|
|
|
(39.8
|
)
|
|||
Net financing cash
|
(1,846.4
|
)
|
|
(1,746.7
|
)
|
|
6,514.1
|
|
|||
Effect of exchange rate changes on cash
|
(6.0
|
)
|
|
5.9
|
|
|
(36.3
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
6.3
|
|
|
(48.7
|
)
|
|
(685.6
|
)
|
|||
Cash and cash equivalents at beginning of year
|
155.5
|
|
|
204.2
|
|
|
889.8
|
|
|||
Cash and cash equivalents at end of year
|
$
|
161.8
|
|
|
$
|
155.5
|
|
|
$
|
204.2
|
|
Taxes paid on income
|
$
|
407.5
|
|
|
$
|
292.2
|
|
|
$
|
419.7
|
|
Interest paid on debt
|
336.1
|
|
|
368.0
|
|
|
220.6
|
|
(millions of dollars, except per share data)
|
Common
Stock
|
|
Other
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance at January 1, 2017
|
$
|
116.6
|
|
|
$
|
2,488.5
|
|
|
$
|
4,049.5
|
|
|
$
|
(4,235.8
|
)
|
|
$
|
(540.4
|
)
|
|
$
|
1,878.4
|
|
Net income
|
|
|
|
|
1,727.9
|
|
|
|
|
|
|
1,727.9
|
|
||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
155.5
|
|
|
155.5
|
|
||||||||||
Stock-based compensation activity
|
1.0
|
|
|
232.4
|
|
|
|
|
(30.6
|
)
|
|
|
|
202.8
|
|
||||||||
Other adjustments
|
|
|
2.3
|
|
|
|
|
|
|
|
|
2.3
|
|
||||||||||
Cash dividends -- $3.40 per share
|
|
|
|
|
(319.0
|
)
|
|
|
|
|
|
(319.0
|
)
|
||||||||||
Balance at December 31, 2017
|
117.6
|
|
|
2,723.2
|
|
|
5,458.4
|
|
|
(4,266.4
|
)
|
|
(384.9
|
)
|
|
3,647.9
|
|
||||||
Net income
|
|
|
|
|
1,108.7
|
|
|
|
|
|
|
1,108.7
|
|
||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(242.7
|
)
|
|
(242.7
|
)
|
||||||||||
Adjustment to initially adopt ASU 2016-01
|
|
|
|
|
2.3
|
|
|
|
|
(2.3
|
)
|
|
—
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
(613.3
|
)
|
|
|
|
(613.3
|
)
|
||||||||||
Stock-based compensation activity
|
0.8
|
|
|
172.4
|
|
|
|
|
(21.0
|
)
|
|
|
|
152.2
|
|
||||||||
Other adjustments
|
|
|
0.8
|
|
|
|
|
|
|
|
|
0.8
|
|
||||||||||
Cash dividends -- $3.44 per share
|
|
|
|
|
(322.9
|
)
|
|
|
|
|
|
(322.9
|
)
|
||||||||||
Balance at December 31, 2018
|
118.4
|
|
|
2,896.4
|
|
|
6,246.5
|
|
|
(4,900.7
|
)
|
|
(629.9
|
)
|
|
3,730.7
|
|
||||||
Net income
|
|
|
|
|
1,541.3
|
|
|
|
|
|
|
1,541.3
|
|
||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(41.3
|
)
|
|
(41.3
|
)
|
||||||||||
Adjustment to initially adopt ASU 2016-02
|
|
|
|
|
(8.4
|
)
|
|
|
|
|
|
(8.4
|
)
|
||||||||||
Adjustment to initially adopt ASU 2018-02
|
|
|
|
|
8.3
|
|
|
|
|
(8.3
|
)
|
|
—
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
(778.8
|
)
|
|
|
|
(778.8
|
)
|
||||||||||
Treasury stock transferred from defined benefit pension plan
|
|
|
|
|
|
|
(131.8
|
)
|
|
|
|
(131.8
|
)
|
||||||||||
Stock-based compensation activity
|
1.0
|
|
|
254.5
|
|
|
|
|
(25.2
|
)
|
|
|
|
230.3
|
|
||||||||
Other adjustments
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|||||||||
Cash dividends -- $4.52 per share
|
|
|
|
|
(420.8
|
)
|
|
|
|
|
|
(420.8
|
)
|
||||||||||
Balance at December 31, 2019
|
$
|
119.4
|
|
|
$
|
3,153.0
|
|
|
$
|
7,366.9
|
|
|
$
|
(5,836.5
|
)
|
|
$
|
(679.5
|
)
|
|
$
|
4,123.3
|
|
Buildings
|
4.0% – 20.0%
|
Machinery and equipment
|
10.0% – 20.0%
|
Furniture and fixtures
|
6.7% – 33.3%
|
Automobiles and trucks
|
10.0% – 33.3%
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at January 1
|
$
|
57.1
|
|
|
$
|
151.4
|
|
|
$
|
34.4
|
|
Charges to expense
|
32.5
|
|
|
31.7
|
|
|
39.7
|
|
|||
Settlements
|
(47.3
|
)
|
|
(57.8
|
)
|
|
(53.1
|
)
|
|||
Acquisition, divestiture and other adjustments
|
|
|
|
(68.2
|
)
|
|
130.4
|
|
|||
Balance at December 31
|
$
|
42.3
|
|
|
$
|
57.1
|
|
|
$
|
151.4
|
|
Cash
|
|
$
|
129.1
|
|
Accounts receivable
|
|
817.5
|
|
|
Inventories
|
|
684.4
|
|
|
Indefinite-lived trademarks
|
|
614.3
|
|
|
Finite-lived intangible assets
|
|
4,922.9
|
|
|
Goodwill
|
|
5,888.8
|
|
|
Property, plant and equipment
|
|
840.7
|
|
|
All other assets
|
|
235.1
|
|
|
Accounts payable
|
|
(553.2
|
)
|
|
Long-term debt
|
|
(1,603.5
|
)
|
|
Deferred taxes
|
|
(1,915.9
|
)
|
|
All other liabilities
|
|
(1,120.8
|
)
|
|
Total
|
|
$
|
8,939.4
|
|
Total, net of cash
|
|
$
|
8,810.3
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at January 1
|
|
$
|
7.1
|
|
|
$
|
13.4
|
|
|
$
|
3.8
|
|
Acquired balances
|
|
|
|
|
|
4.5
|
|
|||||
Provisions in Cost of goods sold or SG&A
|
|
8.8
|
|
|
14.9
|
|
|
50.5
|
|
|||
Actual expenditures charged to accrual
|
|
(12.8
|
)
|
|
(21.2
|
)
|
|
(45.4
|
)
|
|||
Balance at December 31
|
|
$
|
3.1
|
|
|
$
|
7.1
|
|
|
$
|
13.4
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Percentage of total inventories on LIFO
|
72
|
%
|
|
72
|
%
|
|
71
|
%
|
|||
Excess of FIFO over LIFO
|
$
|
339.8
|
|
|
$
|
377.1
|
|
|
$
|
288.2
|
|
Goodwill
|
The Americas Group
|
|
Consumer Brands
Group
|
|
Performance Coatings
Group
|
|
Consolidated
Totals
|
||||||||
Balance at January 1, 2017 (1)
|
$
|
285.4
|
|
|
$
|
699.9
|
|
|
$
|
141.6
|
|
|
$
|
1,126.9
|
|
Acquisition
|
2,276.1
|
|
|
1,473.2
|
|
|
1,925.9
|
|
|
5,675.2
|
|
||||
Currency and other adjustments
|
(5.9
|
)
|
|
60.1
|
|
|
(42.0
|
)
|
|
12.2
|
|
||||
Balance at December 31, 2017 (1)
|
2,555.6
|
|
|
2,233.2
|
|
|
2,025.5
|
|
|
6,814.3
|
|
||||
Acquisition adjustments
|
(273.9
|
)
|
|
(413.3
|
)
|
|
900.8
|
|
|
213.6
|
|
||||
Currency and other adjustments
|
(25.1
|
)
|
|
(66.1
|
)
|
|
20.0
|
|
|
(71.2
|
)
|
||||
Balance at December 31, 2018 (1)
|
2,256.6
|
|
|
1,753.8
|
|
|
2,946.3
|
|
|
6,956.7
|
|
||||
Acquisitions
|
|
|
|
|
|
|
14.2
|
|
|
14.2
|
|
||||
Currency and other adjustments
|
|
|
|
0.1
|
|
|
33.8
|
|
|
33.9
|
|
||||
Balance at December 31, 2019 (1)
|
$
|
2,256.6
|
|
|
$
|
1,753.9
|
|
|
$
|
2,994.3
|
|
|
$
|
7,004.8
|
|
(1)
|
Net of accumulated impairment losses of $19.4 million ($10.5 million in The Americas Group, $8.1 million in the Consumer Brands Group and $0.8 million in the Performance Coatings Group).
|
|
Finite-Lived Intangible Assets
|
|
Trademarks
With
Indefinite
Lives (1)
|
|
Total
Intangible
Assets
|
||||||||||||||||||||||
|
Software
|
|
Customer Relationships
|
|
Intellectual Property
|
|
All Other
|
|
Subtotal
|
|
|||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross
|
$
|
166.4
|
|
|
$
|
3,062.8
|
|
|
$
|
1,730.3
|
|
|
$
|
312.9
|
|
|
$
|
5,272.4
|
|
|
|
|
|
||||
Accumulated amortization
|
(134.8
|
)
|
|
(527.5
|
)
|
|
(223.5
|
)
|
|
(260.5
|
)
|
|
(1,146.3
|
)
|
|
|
|
|
|||||||||
Net value
|
$
|
31.6
|
|
|
$
|
2,535.3
|
|
|
$
|
1,506.8
|
|
|
$
|
52.4
|
|
|
$
|
4,126.1
|
|
|
$
|
608.4
|
|
|
$
|
4,734.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross
|
$
|
165.2
|
|
|
$
|
3,103.7
|
|
|
$
|
1,730.3
|
|
|
$
|
315.0
|
|
|
$
|
5,314.2
|
|
|
|
|
|
||||
Accumulated amortization
|
(127.3
|
)
|
|
(326.3
|
)
|
|
(137.0
|
)
|
|
(256.2
|
)
|
|
(846.8
|
)
|
|
|
|
|
|||||||||
Net value
|
$
|
37.9
|
|
|
$
|
2,777.4
|
|
|
$
|
1,593.3
|
|
|
$
|
58.8
|
|
|
$
|
4,467.4
|
|
|
$
|
734.2
|
|
|
$
|
5,201.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross
|
$
|
165.0
|
|
|
$
|
3,361.7
|
|
|
$
|
1,774.0
|
|
|
$
|
329.4
|
|
|
$
|
5,630.1
|
|
|
|
|
|
||||
Accumulated amortization
|
(116.6
|
)
|
|
(129.6
|
)
|
|
(51.7
|
)
|
|
(257.5
|
)
|
|
(555.4
|
)
|
|
|
|
|
|||||||||
Net value
|
$
|
48.4
|
|
|
$
|
3,232.1
|
|
|
$
|
1,722.3
|
|
|
$
|
71.9
|
|
|
$
|
5,074.7
|
|
|
$
|
927.7
|
|
|
$
|
6,002.4
|
|
(1)
|
Trademarks with indefinite lives as of December 31, 2019 is net of accumulated impairment losses of $122.1 million. There were no material accumulated impairment losses as of December 31, 2018 and 2017.
|
|
Due Date
|
|
2019
|
|
2018
|
|
2017
|
||||||
3.45% Senior Notes (1)
|
2027
|
|
$
|
1,486.8
|
|
|
$
|
1,485.0
|
|
|
$
|
1,483.2
|
|
4.50% Senior Notes (1)
|
2047
|
|
1,230.1
|
|
|
1,229.4
|
|
|
1,228.6
|
|
|||
2.95% Senior Notes
|
2029
|
|
790.7
|
|
|
|
|
|
|
||||
2.75% Senior Notes (1)
|
2022
|
|
757.1
|
|
|
1,242.9
|
|
|
1,240.8
|
|
|||
3.80% Senior Notes
|
2049
|
|
542.5
|
|
|
|
|
|
|
||||
3.125% Senior Notes (1)
|
2024
|
|
497.0
|
|
|
496.3
|
|
|
495.6
|
|
|||
2.25% Senior Notes (1)
|
2020
|
|
428.6
|
|
|
1,496.0
|
|
|
1,493.1
|
|
|||
4.20% Senior Notes (2)
|
2022
|
|
411.3
|
|
|
416.8
|
|
|
422.4
|
|
|||
3.45% Senior Notes
|
2025
|
|
398.0
|
|
|
397.6
|
|
|
397.3
|
|
|||
4.55% Senior Notes
|
2045
|
|
394.3
|
|
|
394.1
|
|
|
393.9
|
|
|||
3.95% Senior Notes (2)
|
2026
|
|
359.3
|
|
|
360.8
|
|
|
362.4
|
|
|||
4.00% Senior Notes
|
2042
|
|
296.4
|
|
|
296.3
|
|
|
296.1
|
|
|||
Floating Rate Loan
|
2021
|
|
251.9
|
|
|
257.4
|
|
|
269.2
|
|
|||
3.30% Senior Notes (2)
|
2025
|
|
249.4
|
|
|
249.3
|
|
|
249.2
|
|
|||
4.40% Senior Notes (2)
|
2045
|
|
239.2
|
|
|
238.7
|
|
|
238.3
|
|
|||
7.375% Debentures
|
2027
|
|
119.1
|
|
|
119.0
|
|
|
119.0
|
|
|||
0.92% Fixed Rate Loan
|
2021
|
|
22.4
|
|
|
22.9
|
|
|
23.9
|
|
|||
7.45% Debentures
|
2097
|
|
3.5
|
|
|
3.5
|
|
|
3.5
|
|
|||
0.53% to 8.00% Promissory Notes
|
Through 2027
|
|
2.9
|
|
|
3.3
|
|
|
3.7
|
|
|||
7.25% Senior Notes (2)
|
2019
|
|
|
|
|
306.0
|
|
|
319.4
|
|
|||
Term Loan
|
2022
|
|
|
|
|
|
|
|
847.3
|
|
|||
Total (3)
|
|
|
8,480.5
|
|
|
9,015.3
|
|
|
9,886.9
|
|
|||
Less amounts due within one year
|
|
|
429.8
|
|
|
307.2
|
|
|
1.2
|
|
|||
Long-term debt
|
|
|
$
|
8,050.7
|
|
|
$
|
8,708.1
|
|
|
$
|
9,885.7
|
|
(1)
|
Senior notes issued in 2017 to fund the acquisition of Valspar.
|
(2)
|
Senior notes acquired in 2017 through the acquisition of Valspar.
|
(3)
|
Net of capitalized debt issuance costs of $50.6 million, $49.1 million and $57.9 million at December 31, 2019, 2018 and 2017, respectively.
|
|
Domestic
Defined Benefit Pension Plans
|
|
Foreign
Defined Benefit Pension Plans
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Net pension cost (credit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
3.5
|
|
|
$
|
7.3
|
|
|
$
|
21.7
|
|
|
$
|
5.9
|
|
|
$
|
8.2
|
|
|
$
|
7.0
|
|
Interest cost
|
4.8
|
|
|
32.2
|
|
|
31.1
|
|
|
9.4
|
|
|
9.5
|
|
|
8.2
|
|
||||||
Expected return on plan assets
|
(5.3
|
)
|
|
(53.0
|
)
|
|
(48.3
|
)
|
|
(10.3
|
)
|
|
(10.8
|
)
|
|
(9.0
|
)
|
||||||
Amortization of prior service cost
|
1.4
|
|
|
3.5
|
|
|
1.4
|
|
|
|
|
|
|
|
|||||||||
Amortization of actuarial losses
|
|
|
|
|
|
|
6.2
|
|
|
1.0
|
|
|
1.5
|
|
|
1.8
|
|
||||||
Ongoing pension cost (credit)
|
4.4
|
|
|
(10.0
|
)
|
|
12.1
|
|
|
6.0
|
|
|
8.4
|
|
|
8.0
|
|
||||||
Settlement cost (credit)
|
32.4
|
|
|
37.6
|
|
|
(2.0
|
)
|
|
0.3
|
|
|
(0.4
|
)
|
|
0.1
|
|
||||||
Curtailment cost
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net pension cost
|
36.8
|
|
|
28.4
|
|
|
10.1
|
|
|
6.3
|
|
|
8.0
|
|
|
8.1
|
|
||||||
Other changes in plan assets and projected benefit
obligation recognized in AOCI (before taxes):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial (gains) losses arising during the year
|
(22.0
|
)
|
|
29.9
|
|
|
(65.8
|
)
|
|
13.2
|
|
|
(5.1
|
)
|
|
(14.0
|
)
|
||||||
Prior service cost arising during the year
|
3.1
|
|
|
4.6
|
|
|
0.8
|
|
|
|
|
|
|
|
|||||||||
Amortization of actuarial losses
|
|
|
|
|
|
|
(6.2
|
)
|
|
(1.0
|
)
|
|
(1.5
|
)
|
|
(1.8
|
)
|
||||||
Amortization of prior service cost
|
(1.4
|
)
|
|
(3.5
|
)
|
|
(1.4
|
)
|
|
|
|
|
|
|
|||||||||
(Loss) gain recognized for settlement
|
(32.4
|
)
|
|
(37.6
|
)
|
|
2.0
|
|
|
(0.3
|
)
|
|
0.4
|
|
|
(0.1
|
)
|
||||||
Prior service cost recognized for curtailment
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
|
||||||||||
Loss arising from curtailment
|
|
|
(0.8
|
)
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
||||||||
Exchange rate gain (loss) recognized during the year
|
|
|
|
|
|
|
1.0
|
|
|
(2.0
|
)
|
|
4.2
|
|
|||||||||
Total recognized in AOCI
|
(52.7
|
)
|
|
(8.2
|
)
|
|
(70.6
|
)
|
|
12.2
|
|
|
(8.2
|
)
|
|
(11.7
|
)
|
||||||
Total recognized in net pension cost and AOCI
|
$
|
(15.9
|
)
|
|
$
|
20.2
|
|
|
$
|
(60.5
|
)
|
|
$
|
18.5
|
|
|
$
|
(0.2
|
)
|
|
$
|
(3.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value at December 31, 2019
|
|
Quoted Prices
in Active Markets for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Investments at fair value:
|
|
|
|
|
|
|
|
||||||
Equity investments (1)
|
$
|
115.7
|
|
|
$
|
7.9
|
|
|
$
|
107.8
|
|
|
|
Fixed income investments (2)
|
173.4
|
|
|
29.7
|
|
|
143.7
|
|
|
|
|||
Other assets (3)
|
36.6
|
|
|
|
|
36.6
|
|
|
|
||||
Total investments in fair value hierarchy
|
325.7
|
|
|
$
|
37.6
|
|
|
$
|
288.1
|
|
|
|
|
Investments measured at NAV or its equivalent (4)
|
88.3
|
|
|
|
|
|
|
|
|||||
Total investments
|
$
|
414.0
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Fair value at December 31, 2018
|
|
Quoted Prices in Active Markets for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||
Investments at fair value:
|
|
|
|
|
|
|
|
||||||
Equity investments (1)
|
$
|
215.8
|
|
|
$
|
124.0
|
|
|
$
|
91.8
|
|
|
|
Fixed income investments (2)
|
609.9
|
|
|
462.8
|
|
|
147.1
|
|
|
|
|||
Other assets (3)
|
38.4
|
|
|
|
|
38.4
|
|
|
|
||||
Total investments in fair value hierarchy
|
864.1
|
|
|
$
|
586.8
|
|
|
$
|
277.3
|
|
|
|
|
Investments measured at NAV or its equivalent (4)
|
166.4
|
|
|
|
|
|
|
|
|||||
Total investments
|
$
|
1,030.5
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Fair value at December 31, 2017
|
|
Quoted Prices in Active Markets for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||
Investments at fair value:
|
|
|
|
|
|
|
|
||||||
Equity investments (1)
|
$
|
515.0
|
|
|
$
|
409.9
|
|
|
$
|
105.1
|
|
|
|
Fixed income investments (2)
|
380.9
|
|
|
146.8
|
|
|
234.1
|
|
|
|
|||
Other assets (3)
|
39.2
|
|
|
|
|
39.2
|
|
|
|
||||
Total investments in fair value hierarchy
|
935.1
|
|
|
$
|
556.7
|
|
|
$
|
378.4
|
|
|
|
|
Investments measured at NAV or its equivalent (4)
|
533.5
|
|
|
|
|
|
|
|
|||||
Total investments
|
$
|
1,468.6
|
|
|
|
|
|
|
|
(1)
|
This category includes actively managed equity assets that track primarily to the S&P 500.
|
(2)
|
This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.
|
(3)
|
This category includes real estate and pooled investment funds.
|
(4)
|
This category includes pooled investment funds and private equity funds that are measured at NAV or its equivalent using the practical expedient. Therefore, these investments are not classified in the fair value hierarchy.
|
|
Domestic
Defined Benefit Pension Plans
|
|
Foreign
Defined Benefit Pension Plans
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Accumulated benefit obligations
at end of year
|
$
|
97.2
|
|
|
$
|
521.0
|
|
|
$
|
913.4
|
|
|
$
|
331.7
|
|
|
$
|
280.0
|
|
|
$
|
308.2
|
|
Projected benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balances at beginning of year
|
$
|
524.7
|
|
|
$
|
916.2
|
|
|
$
|
632.8
|
|
|
$
|
315.8
|
|
|
$
|
349.6
|
|
|
$
|
206.9
|
|
Service cost
|
3.5
|
|
|
7.3
|
|
|
21.7
|
|
|
5.9
|
|
|
8.2
|
|
|
7.0
|
|
||||||
Interest cost
|
4.8
|
|
|
32.2
|
|
|
31.1
|
|
|
9.4
|
|
|
9.5
|
|
|
8.2
|
|
||||||
Actuarial losses (gains)
|
4.4
|
|
|
(13.6
|
)
|
|
68.0
|
|
|
36.2
|
|
|
(21.0
|
)
|
|
(4.0
|
)
|
||||||
Acquisition
|
|
|
|
|
|
246.9
|
|
|
|
|
|
|
|
115.1
|
|
||||||||
Contributions and other
|
3.1
|
|
|
3.8
|
|
|
0.8
|
|
|
0.7
|
|
|
1.6
|
|
|
1.4
|
|
||||||
Settlements
|
(429.3
|
)
|
|
(379.1
|
)
|
|
(43.4
|
)
|
|
(6.6
|
)
|
|
(6.3
|
)
|
|
(0.8
|
)
|
||||||
Effect of foreign exchange
|
|
|
|
|
|
|
7.8
|
|
|
(16.3
|
)
|
|
22.9
|
|
|||||||||
Benefits paid
|
(8.2
|
)
|
|
(42.1
|
)
|
|
(41.7
|
)
|
|
(8.5
|
)
|
|
(9.5
|
)
|
|
(7.1
|
)
|
||||||
Balances at end of year
|
103.0
|
|
|
524.7
|
|
|
916.2
|
|
|
360.7
|
|
|
315.8
|
|
|
349.6
|
|
||||||
Plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balances at beginning of year
|
777.0
|
|
|
1,188.6
|
|
|
847.0
|
|
|
253.5
|
|
|
280.0
|
|
|
165.0
|
|
||||||
Actual returns on plan assets
|
31.7
|
|
|
9.6
|
|
|
182.0
|
|
|
33.3
|
|
|
(4.9
|
)
|
|
16.3
|
|
||||||
Acquisition
|
|
|
|
|
|
244.7
|
|
|
|
|
|
|
|
|
82.3
|
|
|||||||
Contributions and other
|
|
|
|
|
|
|
7.7
|
|
|
8.3
|
|
|
6.1
|
|
|||||||||
Settlements
|
(429.3
|
)
|
|
(379.1
|
)
|
|
(43.4
|
)
|
|
(6.6
|
)
|
|
(6.3
|
)
|
|
(0.8
|
)
|
||||||
Transfer related to plan termination
|
(245.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Effect of foreign exchange
|
|
|
|
|
|
|
8.7
|
|
|
(14.1
|
)
|
|
18.2
|
|
|||||||||
Benefits paid
|
(8.2
|
)
|
|
(42.1
|
)
|
|
(41.7
|
)
|
|
(8.5
|
)
|
|
(9.5
|
)
|
|
(7.1
|
)
|
||||||
Balances at end of year
|
125.9
|
|
|
777.0
|
|
|
1,188.6
|
|
|
288.1
|
|
|
253.5
|
|
|
280.0
|
|
||||||
Excess (deficient) plan assets over
projected benefit obligations
|
$
|
22.9
|
|
|
$
|
252.3
|
|
|
$
|
272.4
|
|
|
$
|
(72.6
|
)
|
|
$
|
(62.3
|
)
|
|
$
|
(69.6
|
)
|
Assets and liabilities recognized in the
Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred pension assets
|
$
|
22.9
|
|
|
$
|
252.3
|
|
|
$
|
272.4
|
|
|
$
|
20.1
|
|
|
$
|
18.4
|
|
|
$
|
24.3
|
|
Other accruals
|
|
|
|
|
|
|
(2.3
|
)
|
|
(2.7
|
)
|
|
(2.5
|
)
|
|||||||||
Other long-term liabilities
|
|
|
|
|
|
|
|
(90.4
|
)
|
|
(78.0
|
)
|
|
(91.4
|
)
|
||||||||
|
$
|
22.9
|
|
|
$
|
252.3
|
|
|
$
|
272.4
|
|
|
$
|
(72.6
|
)
|
|
$
|
(62.3
|
)
|
|
$
|
(69.6
|
)
|
Amounts recognized in AOCI:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial losses
|
$
|
(2.0
|
)
|
|
$
|
(56.4
|
)
|
|
$
|
(64.8
|
)
|
|
$
|
(37.9
|
)
|
|
$
|
(25.7
|
)
|
|
$
|
(33.9
|
)
|
Prior service costs
|
(7.4
|
)
|
|
(5.7
|
)
|
|
(5.5
|
)
|
|
|
|
|
|
|
|||||||||
|
$
|
(9.4
|
)
|
|
$
|
(62.1
|
)
|
|
$
|
(70.3
|
)
|
|
$
|
(37.9
|
)
|
|
$
|
(25.7
|
)
|
|
$
|
(33.9
|
)
|
Weighted-average assumptions used to
determine projected benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.44
|
%
|
|
3.60
|
%
|
|
3.60
|
%
|
|
2.17
|
%
|
|
3.04
|
%
|
|
2.73
|
%
|
||||||
Rate of compensation increase
|
3.00
|
%
|
|
3.17
|
%
|
|
3.33
|
%
|
|
3.08
|
%
|
|
3.65
|
%
|
|
3.69
|
%
|
||||||
Weighted-average assumptions used to
determine net pension costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.60
|
%
|
|
3.60
|
%
|
|
4.15
|
%
|
|
3.04
|
%
|
|
2.73
|
%
|
|
3.88
|
%
|
||||||
Expected long-term rate of
return on assets
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
4.09
|
%
|
|
3.84
|
%
|
|
4.75
|
%
|
||||||
Rate of compensation increase
|
3.17
|
%
|
|
3.33
|
%
|
|
3.30
|
%
|
|
3.65
|
%
|
|
3.69
|
%
|
|
4.33
|
%
|
|
Postretirement Benefits Other than Pensions
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Benefit obligation:
|
|
|
|
|
|
||||||
Balance at beginning of year - unfunded
|
$
|
274.6
|
|
|
$
|
290.8
|
|
|
$
|
265.1
|
|
Service cost
|
1.5
|
|
|
2.0
|
|
|
2.1
|
|
|||
Interest cost
|
11.2
|
|
|
10.2
|
|
|
10.8
|
|
|||
Acquisition
|
|
|
|
|
|
|
17.0
|
|
|||
Actuarial loss (gain)
|
12.8
|
|
|
(9.1
|
)
|
|
11.6
|
|
|||
Plan amendments
|
|
|
|
(0.1
|
)
|
|
|
|
|||
Benefits paid
|
(19.6
|
)
|
|
(19.2
|
)
|
|
(15.8
|
)
|
|||
Balance at end of year - unfunded
|
$
|
280.5
|
|
|
$
|
274.6
|
|
|
$
|
290.8
|
|
Liabilities recognized in the Consolidated Balance Sheets:
|
|
|
|
|
|
||||||
Postretirement benefits other than pensions
|
$
|
(263.0
|
)
|
|
$
|
(257.6
|
)
|
|
$
|
(274.7
|
)
|
Other accruals
|
(17.5
|
)
|
|
(17.0
|
)
|
|
(16.1
|
)
|
|||
|
$
|
(280.5
|
)
|
|
$
|
(274.6
|
)
|
|
$
|
(290.8
|
)
|
Amounts recognized in AOCI:
|
|
|
|
|
|
||||||
Net actuarial losses
|
$
|
(45.1
|
)
|
|
$
|
(32.8
|
)
|
|
$
|
(44.1
|
)
|
Prior service credits
|
1.1
|
|
|
6.1
|
|
|
12.6
|
|
|||
|
$
|
(44.0
|
)
|
|
$
|
(26.7
|
)
|
|
$
|
(31.5
|
)
|
Weighted-average assumptions used to determine benefit obligation:
|
|
|
|
|
|
||||||
Discount rate
|
3.22
|
%
|
|
4.21
|
%
|
|
3.61
|
%
|
|||
Health care cost trend rate - pre-65
|
6.38
|
%
|
|
6.69
|
%
|
|
7.00
|
%
|
|||
Health care cost trend rate - post-65
|
5.25
|
%
|
|
4.94
|
%
|
|
5.00
|
%
|
|||
Prescription drug cost increases
|
9.00
|
%
|
|
9.75
|
%
|
|
11.00
|
%
|
|||
Employer Group Waiver Plan (EGWP) trend rate
|
9.00
|
%
|
|
9.75
|
%
|
|
11.00
|
%
|
|||
Weighted-average assumptions used to determine net periodic benefit cost:
|
|
|
|
|
|
||||||
Discount rate
|
4.21
|
%
|
|
3.61
|
%
|
|
4.10
|
%
|
|||
Health care cost trend rate - pre-65
|
6.69
|
%
|
|
7.00
|
%
|
|
6.00
|
%
|
|||
Health care cost trend rate - post-65
|
4.94
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
|||
Prescription drug cost increases
|
9.75
|
%
|
|
11.00
|
%
|
|
10.50
|
%
|
|
Postretirement Benefits Other than Pensions
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net periodic benefit cost (credit):
|
|
|
|
|
|
||||||
Service cost
|
$
|
1.5
|
|
|
$
|
2.0
|
|
|
$
|
2.1
|
|
Interest cost
|
11.2
|
|
|
10.2
|
|
|
10.8
|
|
|||
Amortization of actuarial losses
|
0.5
|
|
|
2.3
|
|
|
|
|
|||
Amortization of prior service credit
|
(5.0
|
)
|
|
(6.6
|
)
|
|
(6.6
|
)
|
|||
Net periodic benefit cost
|
8.2
|
|
|
7.9
|
|
|
6.3
|
|
|||
Settlement credit
|
|
|
|
|
|
(9.3
|
)
|
||||
Net periodic benefit cost (credit)
|
8.2
|
|
|
7.9
|
|
|
(3.0
|
)
|
|||
|
|
|
|
|
|
||||||
Other changes in projected benefit obligation recognized in
AOCI (before taxes):
|
|
|
|
|
|
||||||
Net actuarial loss (gain) arising during the year
|
12.8
|
|
|
(9.0
|
)
|
|
11.6
|
|
|||
Prior service credit arising during the year
|
|
|
|
(0.1
|
)
|
|
|
|
|||
Amortization of actuarial losses
|
(0.5
|
)
|
|
(2.3
|
)
|
|
|
|
|||
Settlement cost
|
|
|
|
|
|
|
9.3
|
|
|||
Amortization of prior service credit
|
5.0
|
|
|
6.6
|
|
|
6.6
|
|
|||
Total recognized in AOCI
|
17.3
|
|
|
(4.8
|
)
|
|
27.5
|
|
|||
Total recognized in net periodic benefit cost and AOCI
|
$
|
25.5
|
|
|
$
|
3.1
|
|
|
$
|
24.5
|
|
|
Expected Cash
Payments
|
||
2020
|
$
|
17.5
|
|
2021
|
16.8
|
|
|
2022
|
17.2
|
|
|
2023
|
17.2
|
|
|
2024
|
18.7
|
|
|
2025 through 2029
|
88.3
|
|
|
Total expected benefit cash payments
|
$
|
175.7
|
|
|
|
2019
|
2018
|
2017
|
||||||
Operating lease cost (1)
|
|
$
|
452.9
|
|
$
|
552.7
|
|
$
|
464.6
|
|
Short-term lease cost (2)
|
|
39.7
|
|
|
|
|||||
Variable lease cost
|
|
73.6
|
|
68.2
|
|
63.3
|
|
|||
|
|
|
|
|
||||||
Operating cash outflows from operating leases (2)
|
|
$
|
430.9
|
|
|
|
||||
Leased assets obtained in exchange for new operating lease liabilities (2)
|
|
$
|
346.4
|
|
|
|
(1)
|
Operating lease cost for comparative periods includes short-term lease cost in accordance with ASC 840 disclosure requirements.
|
(2)
|
Disclosure was not required for comparative periods under ASC 840.
|
Year Ending December 31,
|
|
||
2020
|
$
|
430.3
|
|
2021
|
377.1
|
|
|
2022
|
315.4
|
|
|
2023
|
248.5
|
|
|
2024
|
187.9
|
|
|
Thereafter
|
401.9
|
|
|
Total lease payments
|
1,961.1
|
|
|
Amount representing interest
|
(218.8
|
)
|
|
Present value of operating lease liabilities
|
$
|
1,742.3
|
|
|
Shares
in Treasury
|
|
Shares
Outstanding
|
||
Balance at January 1, 2017
|
23,577,411
|
|
|
93,013,031
|
|
Shares tendered as payment for option rights exercised
|
16,545
|
|
|
(16,545
|
)
|
Shares issued for exercise of option rights
|
|
|
969,936
|
|
|
Shares tendered in connection with vesting of restricted stock units
|
82,777
|
|
|
(82,777
|
)
|
Balance at December 31, 2017
|
23,676,733
|
|
|
93,883,645
|
|
Shares tendered as payment for option rights exercised
|
1,159
|
|
|
(1,159
|
)
|
Shares issued for exercise of option rights
|
|
|
661,599
|
|
|
Shares tendered in connection with vesting of restricted stock units
|
52,144
|
|
|
(52,144
|
)
|
Net shares issued for vesting of restricted stock units
|
|
|
149,821
|
|
|
Treasury stock purchased
|
1,525,000
|
|
|
(1,525,000
|
)
|
Balance at December 31, 2018
|
25,255,036
|
|
|
93,116,762
|
|
Shares tendered as payment for option rights exercised
|
3,838
|
|
|
(3,838
|
)
|
Shares issued for exercise of option rights
|
|
|
901,878
|
|
|
Shares tendered in connection with vesting of restricted stock units
|
55,095
|
|
|
(55,095
|
)
|
Net shares issued for vesting of restricted stock units
|
|
|
160,132
|
|
|
Treasury stock purchased
|
1,675,000
|
|
|
(1,675,000
|
)
|
Shares transferred from defined benefit pension plan (1)
|
300,000
|
|
|
(300,000
|
)
|
Balance at December 31, 2019
|
27,288,969
|
|
|
92,144,839
|
|
(1)
|
Shares were transferred from the Company's terminated domestic defined benefit pension plan surplus assets in connection with the plan's termination. See Note 8. In accordance with ASC 715, the transferred shares are treated as treasury stock.
|
|
2019
|
|
2018
|
|
2017
|
|||
Risk-free interest rate
|
1.64
|
%
|
|
2.99
|
%
|
|
1.97
|
%
|
Expected life of option rights
|
5.05 years
|
|
|
5.05 years
|
|
|
5.05 years
|
|
Expected dividend yield of stock
|
.87
|
%
|
|
.89
|
%
|
|
0.85
|
%
|
Expected volatility of stock
|
.232
|
|
|
.211
|
|
|
.213
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
|
Optioned
Shares
|
|
Weighted-
Average
Exercise
Price
Per Share
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|
Optioned
Shares
|
|
Weighted-
Average
Exercise
Price
Per Share
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|
Optioned
Shares
|
|
Weighted-
Average
Exercise
Price
Per Share
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||||||||||||
Outstanding at
beginning of year
|
4,485,249
|
|
|
$
|
238.53
|
|
|
|
|
4,646,313
|
|
|
$
|
204.33
|
|
|
|
|
5,163,709
|
|
|
$
|
163.61
|
|
|
|
||||||
Granted
|
498,886
|
|
|
549.32
|
|
|
|
|
565,336
|
|
|
410.00
|
|
|
|
|
689,506
|
|
|
377.84
|
|
|
|
|||||||||
Exercised
|
(902,166
|
)
|
|
171.37
|
|
|
|
|
(662,218
|
)
|
|
137.03
|
|
|
|
|
(1,154,698
|
)
|
|
123.16
|
|
|
|
|||||||||
Forfeited
|
(40,312
|
)
|
|
380.13
|
|
|
|
|
(60,288
|
)
|
|
327.08
|
|
|
|
|
(49,977
|
)
|
|
267.02
|
|
|
|
|||||||||
Expired
|
(1,928
|
)
|
|
345.68
|
|
|
|
|
(3,894
|
)
|
|
238.26
|
|
|
|
|
(2,227
|
)
|
|
236.97
|
|
|
|
|||||||||
Outstanding at
end of year
|
4,039,729
|
|
|
$
|
290.45
|
|
|
$
|
1,184.0
|
|
|
4,485,249
|
|
|
$
|
238.53
|
|
|
$
|
704.2
|
|
|
4,646,313
|
|
|
$
|
204.33
|
|
|
$
|
955.8
|
|
Exercisable at
end of year
|
2,973,656
|
|
|
$
|
226.51
|
|
|
$
|
1,061.7
|
|
|
3,274,780
|
|
|
$
|
188.48
|
|
|
$
|
671.3
|
|
|
3,288,237
|
|
|
$
|
156.43
|
|
|
$
|
833.9
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Outstanding at beginning of year
|
290,402
|
|
|
335,796
|
|
|
397,326
|
|
Granted
|
131,275
|
|
|
116,636
|
|
|
112,647
|
|
Exchanged Valspar awards (net of forfeitures)
|
|
|
|
|
|
|
51,009
|
|
Vested
|
(168,730
|
)
|
|
(150,576
|
)
|
|
(215,433
|
)
|
Forfeited
|
(4,775
|
)
|
|
(11,454
|
)
|
|
(9,753
|
)
|
Outstanding at end of year
|
248,172
|
|
|
290,402
|
|
|
335,796
|
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Other Postretirement Benefits Adjustments
|
|
Unrealized Net Gains on Available-for-Sale Securities
|
|
Unrealized Net (Losses) Gains on Cash Flow Hedges
|
|
Total
|
||||||||||
Balance at January 1, 2017
|
$
|
(501.3
|
)
|
|
$
|
(125.1
|
)
|
|
$
|
1.0
|
|
|
$
|
85.0
|
|
|
$
|
(540.4
|
)
|
Amounts recognized in AOCI
|
148.0
|
|
|
48.0
|
|
|
2.1
|
|
|
(30.8
|
)
|
|
167.3
|
|
|||||
Amounts reclassified from AOCI
|
|
|
(7.8
|
)
|
|
(0.8
|
)
|
|
(3.2
|
)
|
|
(11.8
|
)
|
||||||
Balance at December 31, 2017
|
(353.3
|
)
|
|
(84.9
|
)
|
|
2.3
|
|
|
51.0
|
|
|
(384.9
|
)
|
|||||
Adjustment to initially adopt ASU 2016-01
|
|
|
|
|
(2.3
|
)
|
|
|
|
(2.3
|
)
|
||||||||
Amounts recognized in AOCI
|
(254.3
|
)
|
|
(13.5
|
)
|
|
|
|
|
|
(267.8
|
)
|
|||||||
Amounts reclassified from AOCI
|
|
|
31.3
|
|
|
|
|
(6.2
|
)
|
|
25.1
|
|
|||||||
Balance at December 31, 2018
|
(607.6
|
)
|
|
(67.1
|
)
|
|
—
|
|
|
44.8
|
|
|
(629.9
|
)
|
|||||
Reclassifications from AOCI to Retained earnings for adoption of ASU 2018-02
|
|
|
(19.3
|
)
|
|
|
|
11.0
|
|
|
(8.3
|
)
|
|||||||
Amounts recognized in AOCI
|
(49.8
|
)
|
|
(5.1
|
)
|
|
|
|
|
|
(54.9
|
)
|
|||||||
Amounts reclassified from AOCI
|
|
|
22.3
|
|
|
|
|
(8.7
|
)
|
|
13.6
|
|
|||||||
Balance at December 31, 2019
|
$
|
(657.4
|
)
|
|
$
|
(69.2
|
)
|
|
$
|
—
|
|
|
$
|
47.1
|
|
|
$
|
(679.5
|
)
|
•
|
Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.
|
•
|
Short-term investments: The carrying amounts reported for short-term investments approximate fair value.
|
•
|
Investments in securities: Investments classified as available-for-sale are carried at fair market value. See the recurring fair value measurements table below.
|
•
|
Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.
|
•
|
Long-term debt (including current portion): The fair values of the Company’s publicly traded debt 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-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. See the debt table below.
|
|
Fair Value at December 31,
2019 |
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|||||||
Deferred compensation plan assets (1)
|
$
|
61.1
|
|
|
$
|
29.9
|
|
|
$
|
31.2
|
|
|
|
|
Net investment hedge asset (2)
|
1.5
|
|
|
|
|
1.5
|
|
|
|
|||||
|
$
|
62.6
|
|
|
$
|
29.9
|
|
|
$
|
32.7
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities:
|
|
|
|
|
|
|
|
|||||||
Deferred compensation plan liabilities (3)
|
$
|
76.9
|
|
|
$
|
76.9
|
|
|
|
|
|
|||
|
$
|
76.9
|
|
|
$
|
76.9
|
|
|
—
|
|
|
—
|
|
(1)
|
The deferred compensation plan assets consists 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 quotes. The cost basis of the investment funds is $54.8 million.
|
(2)
|
The net investment hedge asset is the fair value of the cross currency swap (see Note 1). The fair value is based on a valuation model that uses observable inputs, including interest rate curves and foreign currency rate.
|
(3)
|
The deferred compensation plan liabilities are the Company’s liabilities under its deferred compensation plans. The liabilities represent the fair value of the participant shadow accounts, and the value is based on quoted market prices in active markets for identical assets.
|
|
December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying Amount
|
|
Fair
Value
|
|
Carrying Amount
|
|
Fair
Value
|
||||||||||||
Publicly traded debt
|
$
|
8,203.2
|
|
|
$
|
8,735.8
|
|
|
$
|
8,731.7
|
|
|
$
|
8,330.2
|
|
|
$
|
8,742.7
|
|
|
$
|
9,054.3
|
|
Non-traded debt
|
277.3
|
|
|
270.7
|
|
|
283.6
|
|
|
272.7
|
|
|
1,144.2
|
|
|
1,088.6
|
|
|
Accounts Receivable, Less Allowance
|
|
Contract Assets (Current)
|
|
Contract Assets (Long-Term)
|
|
Contract Liabilities (Current)
|
|
Contract Liabilities (Long-Term)
|
||||||||||
Balance sheet caption:
|
Accounts receivable
|
|
Other current assets
|
|
Other assets
|
|
Other accruals
|
|
Other liabilities
|
||||||||||
Balance at January 1, 2019
|
$
|
2,018.8
|
|
|
$
|
51.7
|
|
|
$
|
215.4
|
|
|
$
|
277.1
|
|
|
$
|
17.9
|
|
Balance at December 31, 2019
|
2,088.9
|
|
|
50.5
|
|
|
178.2
|
|
|
242.8
|
|
|
10.4
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Provisions for environmental matters - net
|
$
|
23.0
|
|
|
$
|
176.3
|
|
|
$
|
15.4
|
|
Loss on sale or disposition of assets
|
16.1
|
|
|
12.8
|
|
|
5.5
|
|
|||
Total
|
$
|
39.1
|
|
|
$
|
189.1
|
|
|
$
|
20.9
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Dividend and royalty income
|
$
|
(12.0
|
)
|
|
$
|
(4.3
|
)
|
|
$
|
(7.6
|
)
|
Loss on extinguishment of debt (see Note 7)
|
14.8
|
|
|
|
|
|
|||||
Net expense from banking activities
|
10.7
|
|
|
9.7
|
|
|
9.8
|
|
|||
Foreign currency transaction related losses
|
19.7
|
|
|
7.5
|
|
|
0.5
|
|
|||
Domestic pension plan settlement expense
|
32.4
|
|
|
37.6
|
|
|
|
|
|||
Miscellaneous pension expense (income)
|
8.0
|
|
|
(10.8
|
)
|
|
(15.7
|
)
|
|||
Indirect tax credits
|
(38.7
|
)
|
|
|
|
|
|||||
Other income
|
(32.8
|
)
|
|
(32.2
|
)
|
|
(32.6
|
)
|
|||
Other expense
|
14.6
|
|
|
12.6
|
|
|
12.9
|
|
|||
Total
|
$
|
16.7
|
|
|
$
|
20.1
|
|
|
$
|
(32.7
|
)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Exit costs, environmental and other similar items
|
$
|
83.5
|
|
|
$
|
84.5
|
|
|
$
|
50.2
|
|
Employee related and benefit items
|
129.3
|
|
|
97.0
|
|
|
104.1
|
|
|||
Operating lease liabilities
|
430.6
|
|
|
|
|
|
|||||
Other items
|
204.0
|
|
|
161.6
|
|
|
113.2
|
|
|||
Total deferred tax assets
|
847.4
|
|
|
343.1
|
|
|
267.5
|
|
|||
|
|
|
|
|
|
||||||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
1,232.6
|
|
|
1,303.6
|
|
|
1,506.7
|
|
|||
LIFO inventories
|
80.5
|
|
|
64.5
|
|
|
66.5
|
|
|||
Operating lease right-of-use assets
|
417.8
|
|
|
|
|
|
|||||
Other items
|
28.1
|
|
|
29.5
|
|
|
49.7
|
|
|||
Total deferred tax liabilities
|
1,759.0
|
|
|
1,397.6
|
|
|
1,622.9
|
|
|||
|
|
|
|
|
|
||||||
Net deferred tax liabilities
|
$
|
911.6
|
|
|
$
|
1,054.5
|
|
|
$
|
1,355.4
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
440.1
|
|
|
$
|
288.8
|
|
|
$
|
269.3
|
|
Foreign
|
71.1
|
|
|
53.2
|
|
|
53.5
|
|
|||
State and local
|
60.4
|
|
|
52.4
|
|
|
39.3
|
|
|||
Total current
|
571.6
|
|
|
394.4
|
|
|
362.1
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(83.7
|
)
|
|
(102.1
|
)
|
|
(486.6
|
)
|
|||
Foreign
|
(32.3
|
)
|
|
(35.3
|
)
|
|
(42.3
|
)
|
|||
State and local
|
(15.1
|
)
|
|
(6.0
|
)
|
|
(91.8
|
)
|
|||
Total deferred
|
(131.1
|
)
|
|
(143.4
|
)
|
|
(620.7
|
)
|
|||
Total provisions (credits) for income taxes
|
$
|
440.5
|
|
|
$
|
251.0
|
|
|
$
|
(258.6
|
)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
1,899.6
|
|
|
$
|
1,309.3
|
|
|
$
|
1,415.6
|
|
Foreign
|
82.2
|
|
|
50.4
|
|
|
53.7
|
|
|||
|
$
|
1,981.8
|
|
|
$
|
1,359.7
|
|
|
$
|
1,469.3
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of year
|
$
|
89.5
|
|
|
$
|
59.0
|
|
|
$
|
32.8
|
|
Additions from the Valspar acquisition
|
|
|
|
12.4
|
|
|
18.9
|
|
|||
Additions based on tax positions related to the current year
|
14.9
|
|
|
12.9
|
|
|
6.8
|
|
|||
Additions for tax positions of prior years
|
107.9
|
|
|
11.0
|
|
|
4.0
|
|
|||
Reductions for tax positions of prior years
|
(3.6
|
)
|
|
(2.0
|
)
|
|
(1.2
|
)
|
|||
Settlements
|
|
|
|
(1.4
|
)
|
|
(0.3
|
)
|
|||
Lapses of statutes of limitations
|
(5.7
|
)
|
|
(2.4
|
)
|
|
(2.0
|
)
|
|||
Balance at end of year
|
$
|
203.0
|
|
|
$
|
89.5
|
|
|
$
|
59.0
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Basic
|
|
|
|
|
|
||||||
Average shares outstanding
|
91,803,528
|
|
|
92,992,457
|
|
|
92,908,638
|
|
|||
|
|
|
|
|
|
||||||
Net income:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,769.5
|
|
Discontinued operations
|
|
|
|
|
|
|
(41.6
|
)
|
|||
Net income
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,727.9
|
|
|
|
|
|
|
|
||||||
Basic net income per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
16.79
|
|
|
$
|
11.92
|
|
|
$
|
19.04
|
|
Discontinued operations
|
|
|
|
|
|
|
(0.44
|
)
|
|||
Net income per share
|
$
|
16.79
|
|
|
$
|
11.92
|
|
|
$
|
18.60
|
|
|
|
|
|
|
|
||||||
Diluted
|
|
|
|
|
|
||||||
Average shares outstanding
|
91,803,528
|
|
|
92,992,457
|
|
|
92,908,638
|
|
|||
Stock options and other contingently issuable shares (1)
|
1,601,213
|
|
|
1,938,586
|
|
|
1,931,157
|
|
|||
Non-vested restricted stock grants
|
42,101
|
|
|
57,027
|
|
|
87,418
|
|
|||
Average shares outstanding assuming dilution
|
93,446,842
|
|
|
94,988,070
|
|
|
94,927,213
|
|
|||
|
|
|
|
|
|
||||||
Net income:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,769.5
|
|
Discontinued operations
|
|
|
|
|
|
|
(41.6
|
)
|
|||
Net income
|
$
|
1,541.3
|
|
|
$
|
1,108.7
|
|
|
$
|
1,727.9
|
|
|
|
|
|
|
|
||||||
Diluted net income per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
16.49
|
|
|
$
|
11.67
|
|
|
$
|
18.64
|
|
Discontinued operations
|
|
|
|
|
|
|
(0.44
|
)
|
|||
Net income per share
|
$
|
16.49
|
|
|
$
|
11.67
|
|
|
$
|
18.20
|
|
(1)
|
Stock options and other contingently issuable shares excludes 449,167, 28,321 and 638,795 shares at December 31, 2019, 2018 and 2017, respectively, due to their anti-dilutive effect.
|
|
2019
|
||||||||||||||||||
|
The Americas Group
|
|
Consumer Brands
Group
|
|
Performance Coatings Group
|
|
Administrative
|
|
Consolidated
Totals
|
||||||||||
Net external sales
|
$
|
10,171.9
|
|
|
$
|
2,676.8
|
|
|
$
|
5,049.2
|
|
|
$
|
2.9
|
|
|
$
|
17,900.8
|
|
Intersegment transfers
|
|
|
|
3,607.0
|
|
|
116.2
|
|
|
(3,723.2
|
)
|
|
—
|
|
|||||
Total net sales and intersegment transfers
|
$
|
10,171.9
|
|
|
$
|
6,283.8
|
|
|
$
|
5,165.4
|
|
|
$
|
(3,720.3
|
)
|
|
$
|
17,900.8
|
|
Segment profit
|
$
|
2,056.5
|
|
|
$
|
373.2
|
|
|
$
|
379.1
|
|
|
|
|
|
$
|
2,808.8
|
|
|
California litigation expense adjustment
|
|
|
|
|
|
|
$
|
34.7
|
|
|
34.7
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
$
|
(349.3
|
)
|
|
(349.3
|
)
|
|||||||
Administrative expenses and other
|
|
|
|
|
|
|
(512.4
|
)
|
|
(512.4
|
)
|
||||||||
Income before income taxes
|
$
|
2,056.5
|
|
|
$
|
373.2
|
|
|
$
|
379.1
|
|
|
$
|
(827.0
|
)
|
|
$
|
1,981.8
|
|
% to net external sales
|
20.2
|
%
|
|
13.9
|
%
|
|
7.5
|
%
|
|
|
|
|
|||||||
Identifiable assets
|
$
|
5,399.1
|
|
|
$
|
5,600.8
|
|
|
$
|
8,175.6
|
|
|
$
|
1,320.7
|
|
|
$
|
20,496.2
|
|
Capital expenditures
|
73.3
|
|
|
133.4
|
|
|
84.2
|
|
|
38.0
|
|
|
328.9
|
|
|||||
Depreciation
|
72.2
|
|
|
81.1
|
|
|
70.9
|
|
|
37.9
|
|
|
262.1
|
|
|||||
Amortization
|
4.8
|
|
|
90.3
|
|
|
212.9
|
|
|
4.8
|
|
|
312.8
|
|
|
2018
|
||||||||||||||||||
|
The Americas Group
|
|
Consumer Brands
Group
|
|
Performance Coatings
Group
|
|
Administrative
|
|
Consolidated
Totals
|
||||||||||
Net external sales
|
$
|
9,625.1
|
|
|
$
|
2,739.1
|
|
|
$
|
5,166.4
|
|
|
$
|
3.9
|
|
|
$
|
17,534.5
|
|
Intersegment transfers
|
0.5
|
|
|
3,460.2
|
|
|
22.4
|
|
|
(3,483.1
|
)
|
|
|
||||||
Total net sales and intersegment transfers
|
$
|
9,625.6
|
|
|
$
|
6,199.3
|
|
|
$
|
5,188.8
|
|
|
$
|
(3,479.2
|
)
|
|
$
|
17,534.5
|
|
Segment profit
|
$
|
1,898.4
|
|
|
$
|
261.1
|
|
|
$
|
452.1
|
|
|
|
|
$
|
2,611.6
|
|
||
California litigation expense
|
|
|
|
|
|
|
$
|
(136.3
|
)
|
|
(136.3
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
$
|
(366.7
|
)
|
|
(366.7
|
)
|
|||||||
Administrative expenses and other
|
|
|
|
|
|
|
(748.9
|
)
|
|
(748.9
|
)
|
||||||||
Income before income taxes
|
$
|
1,898.4
|
|
|
$
|
261.1
|
|
|
$
|
452.1
|
|
|
$
|
(1,251.9
|
)
|
|
$
|
1,359.7
|
|
% to net external sales
|
19.7
|
%
|
|
9.5
|
%
|
|
8.8
|
%
|
|
|
|
|
|||||||
Identifiable assets
|
$
|
4,070.9
|
|
|
$
|
5,385.3
|
|
|
$
|
8,535.2
|
|
|
$
|
1,142.9
|
|
|
$
|
19,134.3
|
|
Capital expenditures
|
69.5
|
|
|
95.7
|
|
|
60.8
|
|
|
25.0
|
|
|
251.0
|
|
|||||
Depreciation
|
72.3
|
|
|
88.8
|
|
|
77.6
|
|
|
39.5
|
|
|
278.2
|
|
|||||
Amortization
|
4.8
|
|
|
97.5
|
|
|
210.7
|
|
|
5.1
|
|
|
318.1
|
|
|
2017
|
||||||||||||||||||
|
The Americas Group
|
|
Consumer Brands
Group
|
|
Performance Coatings
Group
|
|
Administrative
|
|
Consolidated
Totals
|
||||||||||
Net external sales
|
$
|
9,117.3
|
|
|
$
|
2,154.7
|
|
|
$
|
3,706.1
|
|
|
$
|
5.7
|
|
|
$
|
14,983.8
|
|
Intersegment transfers
|
6.0
|
|
|
3,162.1
|
|
|
22.4
|
|
|
(3,190.5
|
)
|
|
—
|
|
|||||
Total net sales and intersegment transfers
|
$
|
9,123.3
|
|
|
$
|
5,316.8
|
|
|
$
|
3,728.5
|
|
|
$
|
(3,184.8
|
)
|
|
$
|
14,983.8
|
|
Segment profit
|
$
|
1,769.5
|
|
|
$
|
202.8
|
|
|
$
|
262.8
|
|
|
|
|
$
|
2,235.1
|
|
||
Interest expense
|
|
|
|
|
|
|
$
|
(263.5
|
)
|
|
(263.5
|
)
|
|||||||
Administrative expenses and other
|
|
|
|
|
|
|
(502.3
|
)
|
|
(502.3
|
)
|
||||||||
Income from continuing operations before income taxes
|
$
|
1,769.5
|
|
|
$
|
202.8
|
|
|
$
|
262.8
|
|
|
$
|
(765.8
|
)
|
|
$
|
1,469.3
|
|
% to net external sales
|
19.4
|
%
|
|
9.4
|
%
|
|
7.1
|
%
|
|
|
|
|
|||||||
Identifiable assets
|
$
|
4,358.9
|
|
|
$
|
5,816.0
|
|
|
$
|
8,264.8
|
|
|
$
|
1,459.8
|
|
|
$
|
19,899.5
|
|
Capital expenditures
|
69.2
|
|
|
95.1
|
|
|
36.8
|
|
|
21.7
|
|
|
222.8
|
|
|||||
Depreciation
|
75.0
|
|
|
91.8
|
|
|
69.0
|
|
|
49.2
|
|
|
285.0
|
|
|||||
Amortization
|
4.1
|
|
|
60.7
|
|
|
135.3
|
|
|
6.7
|
|
|
206.8
|
|
|
2019
|
||||||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
|
Full Year (1)
|
||||||||||
Net sales
|
$
|
4,040.9
|
|
|
$
|
4,877.8
|
|
|
$
|
4,867.7
|
|
|
$
|
4,114.4
|
|
|
$
|
17,900.8
|
|
Gross profit
|
1,735.1
|
|
|
2,181.4
|
|
|
2,225.6
|
|
|
1,894.0
|
|
|
8,036.1
|
|
|||||
Net income
|
245.2
|
|
|
471.0
|
|
|
576.5
|
|
|
248.6
|
|
|
1,541.3
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
2.67
|
|
|
$
|
5.13
|
|
|
$
|
6.28
|
|
|
$
|
2.71
|
|
|
$
|
16.79
|
|
Diluted
|
$
|
2.62
|
|
|
$
|
5.03
|
|
|
$
|
6.16
|
|
|
$
|
2.66
|
|
|
$
|
16.49
|
|
|
2018
|
||||||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
|
Full Year (1)
|
||||||||||
Net sales
|
$
|
3,965.0
|
|
|
$
|
4,773.8
|
|
|
$
|
4,731.5
|
|
|
$
|
4,064.2
|
|
|
$
|
17,534.5
|
|
Gross profit
|
1,686.9
|
|
|
2,038.6
|
|
|
2,010.4
|
|
|
1,682.7
|
|
|
7,418.6
|
|
|||||
Net income
|
250.1
|
|
|
403.6
|
|
|
354.0
|
|
|
101.0
|
|
|
1,108.7
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
2.68
|
|
|
$
|
4.34
|
|
|
$
|
3.80
|
|
|
$
|
1.09
|
|
|
$
|
11.92
|
|
Diluted
|
$
|
2.62
|
|
|
$
|
4.25
|
|
|
$
|
3.72
|
|
|
$
|
1.07
|
|
|
$
|
11.67
|
|
(1)
|
The sum of the quarterly earnings per share data may not equal the full year amount as the computations of the weighted average shares outstanding for each quarter and the full year are calculated independently.
|
(a)(1)
|
Financial Statements
|
(millions of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
45.9
|
|
|
$
|
53.0
|
|
|
$
|
40.5
|
|
Bad debt expense
|
53.1
|
|
|
38.2
|
|
|
42.7
|
|
|||
Uncollectible accounts written off, net of recoveries
|
(62.5
|
)
|
|
(45.3
|
)
|
|
(30.2
|
)
|
|||
Ending balance
|
$
|
36.5
|
|
|
$
|
45.9
|
|
|
$
|
53.0
|
|
(millions of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
73.5
|
|
|
$
|
44.1
|
|
|
$
|
17.3
|
|
Additions (deductions) (1)
|
7.4
|
|
|
10.6
|
|
|
(0.5
|
)
|
|||
Acquired balances
|
3.7
|
|
|
18.8
|
|
|
27.3
|
|
|||
Ending balance
|
$
|
84.6
|
|
|
$
|
73.5
|
|
|
$
|
44.1
|
|
2.
|
|
|
|
|
|
3.
|
(a)
|
|
|
|
|
|
(b)
|
|
|
|
|
4.
|
(a)
|
|
|
|
|
|
(b)
|
|
|
|
|
|
(c)
|
|
(d)
|
|
|
|
|
|
(e)
|
|
|
|
|
|
(f)
|
|
|
|
|
|
(g)
|
|
|
|
|
|
(h)
|
|
|
|
|
|
(i)
|
|
|
|
|
|
(j)
|
|
|
|
|
|
(k)
|
|
|
|
|
|
(l)
|
|
|
|
|
|
(m)
|
|
|
|
|
|
(n)
|
|
|
|
|
|
(o)
|
|
|
|
|
|
(p)
|
|
|
|
|
|
(q)
|
|
|
|
|
|
(r)
|
|
|
|
|
|
(s)
|
|
|
|
|
|
(t)
|
|
|
|
|
|
(u)
|
|
|
|
|
|
(v)
|
|
|
|
|
|
(w)
|
|
|
|
|
|
(x)
|
|
|
|
|
|
(y)
|
|
|
|
|
|
(z)
|
|
|
|
|
|
(aa)
|
|
|
|
|
|
(bb)
|
|
|
|
|
|
(cc)
|
|
|
|
|
|
(dd)
|
|
|
|
|
|
(ee)
|
|
|
|
|
|
(ff)
|
|
|
|
|
|
(gg)
|
|
|
|
|
|
(hh)
|
|
|
|
|
|
(ii)
|
|
|
|
|
|
(jj)
|
|
|
|
|
|
(kk)
|
|
|
|
|
|
(ll)
|
|
|
|
|
|
(mm)
|
|
|
|
|
|
(nn)
|
|
|
|
|
|
(oo)
|
|
|
|
|
10.
|
**(a)
|
|
|
|
|
|
**(b)
|
|
|
|
|
|
**(c)
|
|
|
|
|
|
**(d)
|
|
|
|
|
|
**(e)
|
|
|
|
|
|
**(f)
|
|
|
|
|
|
**(g)
|
|
|
|
|
|
**(h)
|
|
|
|
|
|
**(i)
|
|
|
|
|
|
**(j)
|
The Sherwin-Williams Company Executive Disability Income Plan filed as Exhibit 10(g) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991 (SEC File Number 001-04851), and incorporated herein by reference.
|
|
|
|
|
**(k)
|
|
|
|
|
|
**(l)
|
|
|
|
|
|
**(m)
|
|
|
|
|
|
**(n)
|
|
|
|
|
|
**(o)
|
|
|
|
|
|
**(p)
|
|
|
|
|
|
**(q)
|
|
|
|
|
|
**(r)
|
|
|
|
|
|
**(s)
|
|
|
|
|
|
**(t)
|
|
|
|
|
|
**(u)
|
|
|
|
|
|
**(v)
|
|
|
|
|
|
*
|
Certain exhibits and schedules have been omitted and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request.
|
|
**
|
Management contract or compensatory plan or arrangement.
|
THE SHERWIN-WILLIAMS COMPANY
|
||
|
|
|
By:
|
/S/
|
MARY L. GARCEAU
|
|
|
Mary L. Garceau, Secretary
|
*
|
The undersigned, by signing her name hereto, does sign this report on behalf of the designated officers and directors of the Company pursuant to powers of attorney executed on behalf of each such officer and director and filed as an exhibit to this report.
|
By:
|
/S/
|
MARY L. GARCEAU
|
|
February 21, 2020
|
|
|
Mary L. Garceau, Attorney-in-fact
|
|
|
–
|
To approve (i) the sale, exchange, lease, transfer or other disposition by the Company of all, or substantially all, of its assets or business to a related corporation or an affiliate of a related corporation, (ii) the consolidation of the Company with or its merger into a related corporation or an affiliate of a related corporation, (iii) the merger into the Company of a related corporation or an affiliate of a related corporation, or (iv) a combination or majority share acquisition in which the Company is the acquiring corporation and the Company’s voting shares are issued or transferred to a related corporation or an affiliate of a related corporation or to shareholders of a related corporation or an affiliate of a related corporation;
|
–
|
To approve any agreement, contract or other arrangement with a related corporation providing for any of the transactions described in the foregoing subparagraph; or
|
–
|
To effect any amendment of the Company’s articles of incorporation which changes the voting provisions described above.
|
1.
|
Definitions. The following terms shall have the following meanings for all purposes of this Agreement:
|
2.
|
Agreement to Lease.
|
Subsidiary
|
State of
|
Acquire Sourcing, LLC
|
DE
|
Comex North America, Inc.
|
DE
|
Contract Transportation Systems Co.
|
DE
|
CTS National Corporation
|
DE
|
Omega Specialty Products & Services LLC
|
OH
|
Plasti-Kote Co., Inc.
|
OH
|
Sherwin-Williams Realty Holdings, Inc.
|
IL
|
SWIMC LLC
|
DE
|
The Sherwin-Williams Acceptance Corporation
|
NV
|
The Sherwin-Williams Headquarters Company
|
OH
|
The Sherwin-Williams Manufacturing Company
|
OH
|
The Sherwin-Williams US Licensing Company
|
DE
|
Valspar Specialty Paints, LLC
|
DE
|
Subsidiary
|
Incorporation
|
Compania Sherwin-Williams, S.A. de C.V.
|
Mexico
|
Dongguan Lilly Paint Industries Ltd
|
China
|
EPS B.V.
|
Netherlands
|
EPS Polidrox Industria e Comercio de Resinas Ltda
|
Brazil
|
EPS (Shanghai) Trading Co., Ltd.
|
China
|
Geocel Limited
|
UK
|
Guangdong Valspar Paints Manufacturing Co Ltd.
|
China
|
Invercolor Bologna Srl
|
Italy
|
Invercolor Ltd
|
UK
|
Invercolor Roma Srl
|
Italy
|
Invercolor Torino Srl
|
Italy
|
Invercolor Toscana Srl
|
Italy
|
Inver East Med S.A.
|
Greece
|
Inver France SAS
|
France
|
Inver GmbH
|
Germany
|
Inver Industrial Coating SRL
|
Romania
|
Inver Polska Spó³ka Z O.O
|
Poland
|
Inver Spa
|
Italy
|
Isocoat Tintas e Vernizes Ltda
|
Brazil
|
Isva Vernici Srl
|
Italy
|
Oy Sherwin-Williams Finland Ab
|
Finland
|
Pinturas Condor S.A.
|
Ecuador
|
Pinturas Industriales S.A.
|
Uruguay
|
Piton Paints Limited
|
St. Lucia
|
Plasti-kote Limited
|
UK
|
Productos Quimicos y Pinturas, S.A. de C.V.
|
Mexico
|
PT Sherwin-Williams Indonesia
|
Indonesia
|
PT Valspar Indonesia
|
Indonesia
|
Quest Automotive Products UK Limited
|
UK
|
Quetzal Pinturas, S.A. de C.V.
|
Mexico
|
Ronseal (Ireland) Limited
|
Ireland
|
Sherwin-Williams Argentina I.y C.S.A.
|
Argentina
|
Sherwin-Williams Aruba VBA
|
Aruba
|
Sherwin-Williams (Australia) Pty. Ltd.
|
Australia
|
Sherwin-Williams Automotive Mexico S.de R.L.de C.V.
|
Mexico
|
Sherwin-Williams Balkan S.R.L.
|
Romania
|
Sherwin-Williams Bel Unitary Enterprise
|
Belarus
|
Sherwin-Williams (Belize) Limited
|
Belize
|
Sherwin-Williams Benelux NV
|
Belgium
|
Sherwin-Williams Canada Inc.
|
Canada
|
Sherwin-Williams (Caribbean) N.V.
|
Curacao
|
Sherwin-Williams Cayman Islands Limited
|
Grand Cayman
|
Sherwin-Williams Chile S.A.
|
Chile
|
Sherwin-Williams Coatings India Private Limited
|
India
|
Sherwin-Williams Coatings S.a r.l.
|
Luxembourg
|
Sherwin Williams Colombia S.A.S.
|
Columbia
|
Sherwin-Williams Czech Republic spol. s r.o
|
Czech Republic
|
Sherwin-Williams Denmark A/S
|
Denmark
|
Sherwin-Williams Deutschland GmbH
|
Germany
|
Sherwin-Williams Diversified Brands Limited
|
UK
|
Sherwin-Williams do Brasil Industria e Comercio Ltda.
|
Brazil
|
Sherwin-Williams France Finishes SAS
|
France
|
Sherwin-Williams (Ireland) Limited
|
Ireland
|
Sherwin-Williams Italy S.r.l.
|
Italy
|
Sherwin-Williams (Malaysia) Sdn. Bhd.
|
Malaysia
|
Sherwin-Williams (Nantong) Company Limited
|
China
|
Sherwin-Williams (Nantong) Coatings Technology Co., Ltd.
|
China
|
Sherwin-Williams Norway AS
|
Norway
|
Sherwin-Williams Paints Limited Liability Company
|
Russia
|
Sherwin-Williams Peru S.R.L.
|
Peru
|
Sherwin-Williams Pinturas de Venezuela S.A.
|
Venezuela
|
Sherwin-Williams Poland Sp. z o.o
|
Poland
|
Sherwin-Williams Protective & Marine Coatings
|
UK
|
Sherwin-Williams (S) Pte. Ltd.
|
Singapore
|
Sherwin-Williams Services (Malaysia) Sdn. Bhd.
|
Malaysia
|
Sherwin-Williams (Shanghai) Limited
|
China
|
Sherwin-Williams Spain Coatings S.L.
|
Spain
|
Sherwin-Williams Sweden AB
|
Sweden
|
Sherwin-Williams (Thailand) Co., Ltd.
|
Thailand
|
Sherwin-Williams UK Coatings Limited
|
UK
|
Sherwin-Williams (Vietnam) Limited
|
Vietnam
|
Sherwin-Williams (West Indies) Limited
|
Jamaica
|
Spanyc Paints Joint Stock Company
|
Vietnam
|
Syntema I Vaggeryd AB
|
Sweden
|
Taiwan Valspar Co., Ltd.
|
Taiwan
|
The Valspar (Asia) Corporation Limited
|
Hong Kong
|
The Valspar (Australia) Corporation Pty. Ltd.
|
Australia
|
The Valspar Corporation Limitada
|
Brazil
|
The Valspar (Finland) Corporation Oy
|
Finland
|
The Valspar (France) Corporation S.A.S.
|
France
|
The Valspar (France) Research Corporation SAS
|
France
|
The Valspar (Malaysia) Corporation Sdn Bhd
|
Malaysia
|
The Valspar (Nantes) Corporation S.A.S.
|
France
|
The Valspar (Singapore) Corporation Pte. Ltd
|
Singapore
|
The Valspar (South Africa) Corporation (Pty) Ltd
|
South Africa
|
The Valspar (Spain) Corporation S.R.L.
|
Spain
|
The Valspar (Switzerland) Corporation AG
|
Switzerland
|
The Valspar (Thailand) Corporation Ltd.
|
Thailand
|
The Valspar (UK) Corporation Limited
|
UK
|
The Valspar (Vietnam) Corporation Ltd.
|
Vietnam
|
TOB Becker Acroma Ukraine
|
Ukraine
|
UAB Sherwin-Williams Baltic
|
Lithuania
|
Valspar Aries Coatings, S. de R.L. de C.V.
|
Mexico
|
Valspar Automotive Australia Pty Limited
|
Australia
|
Valspar Automotive (UK) Corporation Limited
|
UK
|
Valspar B.V.
|
Netherlands
|
Valspar Coatings (Guangdong) Co., Ltd.
|
China
|
Valspar Coatings (Shanghai) Co. Ltd.
|
China
|
Valspar Coatings (Tianjin) Co., Ltd
|
China
|
Valspar D.o.o Beograd
|
Serbia
|
Valspar (India) Coatings Corporation Private Limited
|
India
|
Valspar Industries GmbH
|
Germany
|
Valspar Industries (Ireland) Ltd.
|
Ireland
|
Valspar Industries (Italy) S.r.l.
|
Italy
|
Valspar LLC
|
Russia
|
Valspar Mexicana, S.A. de C.V.
|
Mexico
|
Valspar Paint (Australia) Pty Ltd
|
Australia
|
Valspar Paint (NZ) Limited
|
New Zealand
|
Valspar Powder Coatings Limited
|
UK
|
Valspar Rock Company Limited (Japan)
|
Japan
|
Valspar (Shanghai) Management Co., Ltd.
|
China
|
Valspar (Uruguay) Corporation S.A.
|
Uruguay
|
Valspar (WPC) Pty Ltd
|
Australia
|
ZAO Sherwin-Williams
|
Russia
|
Registration Number
|
Description
|
333-233215
|
The Sherwin-Williams Company Form S-3 Registration Statement
|
333-217457
|
The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 19, 2017) Form S-8 Registration Statement
|
333-218406
|
The Valspar Corporation Amended and Restated 2015 Omnibus Equity Plan Form S-8 Registration Statement
|
333-219654
|
The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan, (Amended and Restated Effective as of January 1, 2016) Form S-8 Registration Statement
|
333-166365
|
The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (as Amended and Restated as of February 17, 2015) Form S-8 Registration Statement
|
333-152443
|
The Sherwin-Williams Company Employee Stock Purchase and Savings Plan Form S-8 Registration Statement
|
333-133419
|
The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan and The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors Form S-8 Registration Statement
|
333-129582
|
The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan, The Sherwin-Williams 2005 Key Management Deferred Compensation Plan and The Sherwin-Williams Company 2005 Director Deferred Fee Plan Form S-8 Registration Statement
|
333-105211
|
The Sherwin-Williams Company Employee Stock Purchase and Savings Plan Form S-8 Registration Statement
|
333-66295
|
The Sherwin-Williams Company Deferred Compensation Savings Plan, The Sherwin-Williams Company Key Management Deferred Compensation Plan and The Sherwin-Williams Company Director Deferred Fee Plan Form S-8 Registration Statement
|
Signature
|
|
|
|
Title
|
|
|
|
|
|
/s/ John G. Morikis
|
|
|
|
Chairman and Chief Executive Officer, Director (Principal Executive Officer)
|
John G. Morikis
|
|
|
|
|
|
|
|
|
|
/s/ Jane M. Cronin
|
|
|
|
Senior Vice President – Corporate Controller
(Principal Accounting Officer)
|
Jane M. Cronin
|
|
|
|
|
|
|
|
|
|
/s/ Allen J. Mistysyn
|
|
|
|
Senior Vice President – Finance and Chief
Financial Officer (Principal Financial Officer)
|
Allen J. Mistysyn
|
|
|
|
|
|
|
|
|
|
/s/ Kerrii B. Anderson
|
|
|
|
Director
|
Kerrii B. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ Arthur F. Anton
|
|
|
|
Director
|
Arthur F. Anton
|
|
|
|
|
|
|
|
|
|
/s/ Jeff M. Fettig
|
|
|
|
Director
|
Jeff M. Fettig
|
|
|
|
|
|
|
|
|
|
/s/ David F. Hodnik
|
|
|
|
Director
|
David F. Hodnik
|
|
|
|
|
|
|
|
|
|
/s/ Richard J. Kramer
|
|
|
|
Director
|
Richard J. Kramer
|
|
|
|
|
|
|
|
|
|
/s/ Susan J. Kropf
|
|
|
|
Director
|
Susan J. Kropf
|
|
|
|
|
|
|
|
|
|
/s/ Christine A. Poon
|
|
|
|
Director
|
Christine A. Poon
|
|
|
|
|
|
|
|
|
|
/s/ Michael H. Thaman
|
|
|
|
Director
|
Michael H. Thaman
|
|
|
|
|
|
|
|
|
|
/s/ Matthew Thornton III
|
|
|
|
Director
|
Matthew Thornton III
|
|
|
|
|
|
|
|
|
|
/s/ Steven H. Wunning
|
|
|
|
Director
|
Steven H. Wunning
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of The Sherwin-Williams Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 21, 2020
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/s/ John G. Morikis
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John G. Morikis
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Chairman and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of The Sherwin-Williams Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 21, 2020
|
|
/s/ Allen J. Mistysyn
|
|
|
|
Allen J. Mistysyn
|
|
|
|
Senior Vice President-Finance and
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|
|
|
Chief Financial Officer
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Dated:
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February 21, 2020
|
|
/s/ John G. Morikis
|
|
|
|
John G. Morikis
|
|
|
|
Chairman and Chief Executive Officer
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Dated:
|
February 21, 2020
|
|
/s/ Allen J. Mistysyn
|
|
|
|
Allen J. Mistysyn
|
|
|
|
Senior Vice President - Finance and Chief
Financial Officer
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