Document 3JKeDado4ZY1Np1k7gjdnZd0n

I 0007--SWP--035155 Tabia of Contents Financial Hlghlighte....................................................... 1 Letter to Shareholders.................................................. 2 Focus: Future........................................................................ 4 Financial Review.......................................................... S Financial Statements....................................................... 10 Mnafemeat's Disrasioa of Operadoas.......................... IP The Year in Review..................................................... 21 Coatings Group Auxiliaries Group Chetaieals GMnp Sbavin-WlUana Canada rnom International Coatings DUncun sad Officers..................................................... 30 Subsidiaries, Licensees aad Planes........ bride Back Cesar Annual Moating The annual need* of Shewhnldeis wi* be held at IMP A.M.. Oeesnifear 17.173. riOaShwrian Oesriori HcesI, Public Spoon. Cbsalad. Ohio Annual Raport on Form 10-K The Company'a Anneel Report ca Form IfrK. which will be filed with the Secsritles sad Fschtp Cotnanlarina. srill he sreilahb n> shareholders without change on inquest Kx WiUlan P. him, Secretary The Shenrin-WUbnw Ce. 101 Prospect Avenne, N. W. Cleveland, Ohio 441 IS I I ! The Oewrind Tran OMpsnp Ossriari.OUe The Out Haiii-- Rarit. M.A. Nnr Ysth. Near York The aswM men cnwpaqr New Tort, Nssr Yitk S.4i% BttssiraDm, IfK 4 US* Due 1999 The Oavdead final Cawpsey 0007-SWP-035156 0007-SWP-000116577 .. - ...sir Financial Highlight* - Net sales................................. Income before income taxes.. Income taxes........................... Net income............................. Cash dividends deeland: r^nm--n--ae ............................. Common............................. Per common sham: Net income......................... Dividends paid ................... woraoi i'jptiw. .......... *.... Ratio of current assets to cuncnt I Capital expenditures....................................................................... Prevision for depreciation ............................................................. Thousands ofOoitars August 31 1975 $866,853 50,233 21,649 28,58! 1974 5802,266 57,614 28,335 29.279 1.092 11,832 1.102 10,746 5.11 2.20 287,711 3.89 ml 27,902 12.750 5.24 2.00 227.626 2.75 m I 20,553 13,555 0007-SWP-035157 0007-SWP-000116578 . . . . ....... i Letter to Shareholders ::rtrv.,'. 7 ;v:, tv" a. 77.,;.. 777"; ................. . 1 Hie twelve (Booths of our fiscal year, from Augutt, 1974 to September, 1975, were perhaps the wont twelve mooths of economic neesskm since the 1930's. la this dttokxwing economic environment, our sales rose to s new high of $866,853,000 or 8.1% over last fiscal year. However, in the case of many projects, the increased sales dollars were due to price increarea, with total unit sake actually below th* previous year. Even with these price incrascs, we wen not able to recover ail of our rapidly rising c o m of raw materials, wages, salaries and energy. Operating margins wen lower than last yew. Befbre-tax income from opciwtons ne off $21,409,000 or 29.9*. This was before corporate expenses which warn slightly lowsr dm hot year. Ae after-tax goto of $9,317,000 on die sale of our titanium dioxide opcntioBS Increased our act profit id $21,5883)00 or $5.11 per cuawea ihsra, competed so 15.24 par common share last yew. The titiaiam dioxide sale accounted for $1.73 per share exminp in fiscal 197$. The effects of the economic envinmnsne wen particularly noticeable in our large Coalings Croup. Seim doUsn advanced to 1597.502.000 or a 6.1* gain. However, gillons of paint sold actually dropped by almost 12*. Most of this wu in finishes for construction, msiuleuanrs and durable goods -- markets that were soft ill year. Missive inventory liquidation in the industry made it impomibk to raise prices to cover increased costs. Our program a> increase retail sales continued to gain momentum, even in the face ofslower consumer spending. Retail sales in the Coatings Group were up approximately 18* for the yew. weft ahead of the foduuy experience and retail sales in general. We continued to haw outstanding success in automotive rafiniabes with sates hi that market increasing by slightly more than 22*. The strategy to broadin our marital in deeoradng^elated products continued m move forward with wall covering* aad carpeting contributing over S80.0d0.000 in sales. On the 6.1* sales increase, the Coatings Croup before-tax operating profits dropped 55.2* to $18,436,000. 2 However, die griloa volume drop ia paint sales accounted for more dan $18,000,000 of the profit shortfall aid production cutbacks W the phots for over $6,000,000. We have no indication that our marfcst shwt lui became ls>. and it has increased in retail and automotive refinishes. With the durable goods industry and construction picking up somewhat to fiscal 1976, we fed it will be a much better yew for profits in coatings. IntheChemicalsCroupourursttgyofmoving into specialty chemicals whan w* have particutar strength* is succeeding, la spire of a (bopof 19.6* to tonnage sales ofchrmicals. dollar sales wereup 10.4* *>$69.301,OOOwdpre-tax profits were up 1.4*to$8,728,000. Demand was veiy few in(he lawhalfof(he yew but should strengthen w the economy improves and (he invcntoiy Hquhiwton nsu he conren. la the Auxiliaria* Oroup, includtog Hadley Adhesives, while tham wm aom* shifting around of demand during the year, volume changes tended to offset each other. As a retail the group achieved a sales gain of 11.7* and a before-taa profit Inrtrare of 16.0*. Sprayoa Products struggled throughout (he year with increasing material cows, lower CMsumw demand aad the ozone depletion comrovessy. fortunately, most of die products packaged by Sprayon use a propellant other than ths ftuowMrtwn types involved In the comrovessy. The subaidlaiy was able t achtovu a sales gato of 17.8*. but before-(ax operating profit was 16.7* under Iasi fiscal year. International Coatinpcontiauadto make matketing progress ssHh a sales gain of 33.8*. However, pre-tax profits dropped $9073100 at a result of adverse currency exchange rales and higher tovcwmeH to dtvttopiag new markets. The Sharwia-Williams Company of Canada. Limited, had sales of 554,1483)00. an tocnase of 6.8*. As a measure of their continuing improvemeat, pre-tax operating profits were up 18.1*. However, the domestic company's share of pre-tax profits was $1,169,000. down 26.8*. This J^paniy cams about because a now-recurring gain wa included in 0007-SWP-035158 0007-SWP-000116579 1974 results and we suffered an advent change in currency exchange me* In 1979. fa sptae of dm difficufeiM of operating in a rapidly deteriorating economic environment and the disappointing operating nxuHi far the year, we continued to pursue dm foOowiag strategies instituted a few yean ego to assure the short and long-term heahby growth of your Company: 1- To moee oik 'afbusinesses that do motfit Into oar hmp-term strategies. This was exemplified by the sale of the titanium dioxide operations in October, 1974 and fae announced sale of mort of thit assets of Tho Osborn Manufacturing Company in October. 1973. 2. To photo oat obsolete, tnegkieM eperatioot. We dosed two small paint plants, one In Los Apprise, the other in Toronto. Cwiada. 3. TobaUdfarcer, montjfOmplamforproduct! that fit boo ear management bmwdtmu end ttdmkat opertitr. The construction of dm Richmond automotive reflnisbes plant is on schedule, and we annotinred an option on land ha Huntington, hufitna. as a possible site far a new wrest-baaed paint plant now on the drawing boards. The projects to double our capacity in pa-ctesol and saccharin am moving ahead. An expansion and coat reduction project b proceeding at ow Elgin. Dlinais. comaiaar operation. 4. To continue ear strong marhting thnut and broaden the rrlattd product liner joM through onr company owned merer. We opened a pilot 27.000 square bat Decorating World in Cheriotto. North Carollaa. tad ate adding eootideraMy more selling floor ipac* in near and taawdeled stone. Total ratail sales continue to climb rapidly, and sales of non-pah! iteraa in the Coatings (keep exceed 3163,000,000. 3. To Improve thefinancial strength ofthe Company. We issued 530,000,000 in new tong-term debt in WUUrO.ii.nr ftHnr WlrtswC. (las Bjuntht Ykt FmUm December, 1974. Thfa, together with redeploymem of assets, allowed us to increase onr current ratio to 3.89 to 1, compared to 2.73 to I last year. Short-term borrowings were down 913.000.000 or 414. Accounts payable were down $3,300,000 or 219. Even with much higher costs, inventories were up only 2*9. computed to Imt year's increase of 3491. Receivables wete actually down approximately 291 in spite of an - 3.19b inciease fa sales. Capital expenditures increased to $27,900,000 or 369b. fa To eombme to employ oar hnmaa assets more tgkiendj. Sake per employee increased to S41.500 and haw fartnmed 6391 in the last five yean. Aa the aconouty mown we be) due The Shcrwin. WBUsme Company wil be wcli poaitioned to get a larger share ofthoaa eapandfag markets aa aa efficient producer and ae a fiaxfefa, innovative ntatkemr. Having reach*! retirement age. Mr. John 0. Wright retired m e director ia July, 1973 ifter 19 yesre of service on oar Board. We wig miss Mr- Wright's wire counsel but feel faettuum in having Dr. Robert D. Burrell. Professor of Business Administration it the Harvard University Graduate School of Business Administration, es a new director. Wo were saddened by the death of Mr. Arthur W. Stoudel# Honorary Director sod former Chief Executive Officer, who passed eway fa April. 1973. He served The Sberwfa-WIDfami Coaopeny as an active employee for 38 years and retired as a director in 1966. Mr. Steudel was responsfak far much of the success of the Company over the hut half cetthny. Cleveiaod, Ohio October 24. 1975 President 0.007-SWP-03 5159 0007-SWP-000116580 0007-SWP-000116581 Focus: Future In troubled economic times, there is temptation to discootimre planned developmental pragnms that bring no immediate economic |ain. Yet. to abandon the (utnte for tile sake of the present can beself-defeating. One ofthe basic aimsofany successful enterprise mustbe to msure its own survival. That can best be done by focusing a portion of the assets and energies of the business on the (bum. This we have elected to do. Amid die strains and frustrations of a very difficult year, we are continuing! wideansyofprograms we believe will edd to tomomw's strengths. Singled out for consideration here are four such ongoing programs that have as their purpose the future. Junior Advisory Committee to dm Praridtnt Begun m IWO, theJuniorAdvisoryCemminec involve! 14younger employees in acontinuing appraisal of any company related subjects that could contribute to growth and profitability. Membership, largelydatsmhwdbythe committee itself, b limitedsalaried employees who are kssthsn3Syesnofa*e.Two-yeartentuinsurethetthecommitteeisregulriy renewed, bringing in new people with new ideas and new points of view. The primary purpose of the commiuee is to tap the creativity, imagination and specialized know-how ofyounger employees. And thatpurpose b bring accomplished. Since its inception, membata have studied and made lecommcnrtntioea cn subjects ranging Item new products through company organization arid environmental concents. Many of their recommendations have been adopted or adapted for fbUow-duosgh by management. The committee has proved a fruitfolcbrnnelofcommuninrioas between younger employees snd senior managaaMat. It has given dm company dm benefits ofa thoroughly "now" approach toholiness. Bhasgiven themembers useful insights lhalhelpadvsncetheir own careen and spur the company's progress. 0007-SWP-O35161 0007-SWP-000116582 Tuition Aid Program For more than ten yean the company has encouraged salaried employees to continue their formal education to help them expand theircareerhorizons. Much ofthisencouragement has been through the Tuition Aid Program under which the company presides foil reimbursement for tuition and fees when an employee successfully completes an approved course Presently, several hundred employees are studying tinder the program, sharpening their skills in a satiety ofdisciplines. Since itwasestablished, theprogram has proved particularly attractive to technical personnel who recognize iiaja convenient way to keep abreast ofadvances in their specialties. In recent years, an inceeasiitg number of female clerical personnel ate study mg the business sciences as a step up thecareerladder. Managerial personnel are also pursuing advanced degrees to broaden their contributions to company efficiency and growth. Not the least of the program's success is found in its use as a reeniitmeec tool, enabling the company to attract competent, ambitious people to its tanka. Tuition Aid is part of a broader concept of encouraging learning among employees. This concept also inclndason-the-jobtraining, participation in seminars and short courses, and careful placement of employees in assignments in which they can make foil use of their talents to progress. Through such personal progress, the company also grows. The Open Management Concept In a constant search for ways to make day-today tasks mote meaningful and rewarding for employees, the company is experimenting with an Open Management Concept. Cnder this concept, as much decision making as possible is assigned directly to employees. This calls for mutual understanding and confidence among all the people concerned Accordingly, employees are given total information on company alma for a given location Thu. involves, among other consfcfanriuoa. clarification of marketing plana, return on investment 6 0007-SWP-035162 0007-SWP-000116583 goals and future plans, ft also involves giving employees wide flexibility in performing tasks li means erasing traditional work boundaries in the interest of achieving overall objectives At the locations where this approach has evolved, managers have assumed the rule of -.cnvultanu. sharing their knowledge and experience freely with others. The employees .hcmselvcs largely establish how tasks are to be accomplished and the time frame in wmch they mist be done. They decide haw best the full "people resources" can be brought to hear on problems where and when these arise. . Given responsibility for setting goals as well as achieving them, employ ees vt orkmg under an Open ManagementConcept have shown exceptional ingenuity and initiative. As one employee summed it up: "Almost every day we surprise ourselves with what we can do." Store Management Information System .Accurate tad timely iofonnatioa is the touchstone to effective management. To assure Mich information inourstores as well as at headquarters, a new Store Management information Sy oem is being developed.The system employs sophisticated electronic hardware to give store managers an up-date on operations on demand, ft also relieves stem personnel of much detailed clerical work to free them for more efficient use of their time. Basically, the hardware is acash registerthat, amongotherfunctions, automatically vompuiev such informationasprice extensions,discounts andsales taxes, and collects data that allow s uv io classify and summarize sales and keep a perpetual inventory forcertain types ofproducts <m our central computer facilities. All the information stored in the point-of-sale device is immediately accessible to 'he m-mc manager, ftisalso immediately available toheadquarters at selected intervals. The sy-tem. -nil .n the developmem stage, is presently in place inaone-store pilotoperation In January. ir.Mii be extended to ill notes in a selected division. By mkM97S. the system tv expected :u ne operational nation-wide. New srwederee- eefilteliC fo ImWatea af lie ght Stent Meaegimeee eel CaryChak. eeeegwef mekeeeeae. OUle-Uere. The aw bee hem laftimarteoSyewei aieBerinheeMeiten.lB<enaieelm eeder Imlipen hr ante Ihea a yaae. 0007-SWP-03S163 0007-SWP-000116584 j Financial Ravisw The Following table presents sales and pre-tax operating Income for eachoFtheoperating groups forthe fiscal yean 1975 and 1974. andthechanges thatoccurred In 197S as compared 10 1974. Corporate expanses including interest andetttaiageneral adminisintive expenses are shown separately. The total of the income figures after deducting the corporate expenses agues with the incomebefore income taxesrepotted in the Statements of Consolidated Income. im Saha coatings........................... 5937.502 AvxltMre................. ........ 9T.3J4 Chsinkals......................... e.i Shrem-WSliMu Cm*....... 34,144 Sanyo*............................ 21.4M hvurlwl .................. Z4.4M Cnemb UM.IU Gaia oa laic of AWMl r Tied 6*.** It.)* 1.0* 44* 2.7* 24* 100.0* adVrv Tare SIS.434 13.471 1.72* 1.1*9 37* 1.4)3 30.213 r Tatrt Sataa ' 347* " 3342.94) AK 17437 17.4* 2.3* t.9* 2.9* 4247) 50.71* i3.M 11.231 1000* 3402444 I2.72S (13.714) sssxxs r toil 70.2* 10.3* 7.1* 4.3* 2.3* 3-3* 100.0* Irtn Tnre 341.114 14.792 SMS 1437 t.171 2J44 71,42* _ (H414) 33741* if Tatrt 57.4* 234* 12.0* 22* t.e* ).)* tooo* --L'~~ Sataa 3)4433 10.2)3 4421 ).4M 3.390 4.177 3.*4s4$.3.*7 Mm* Tana (S2247II 2.S7V 120 t-azas HVSl l?l l*t.J0l 12.724 I.M0 IS 7,JX|( Sales Consolidated net sales in fiscal year 1975 amoutned S866.8S3.000 compared io S803.2fi6.000 hi 1974. This is a leooid High and represents an 8.1% htcreart over dm prior fiscal year. Income Coiiiolidaied net income totalled S2S3B8.000 or SS. 11 per common share after providing for preferred dividend*. Included in consolidated net income this year is an after-tax gain at S9.3I7.000 generated horn tfaa sale of our Ashtabula titaniimi dioxide ipuehat. Excluding tMe profit. net incMMwaiSI9.271.000oeS3.38 per common than. These results eompin fiscal 1974 mi Income of $29,279,000 m $5.24 per common sham after preftmd dividends. Currency Conversion The changing value of various currencies vis-a-vis the dollar cream some adjurtmeoti to the final profits as a consequence of converting local cutrencic* to dedtar values. In total, the net effect oa 1975 nAtr-ax incocne vn a reduction of approximately 59 par common shirt compared to an addition of approximately !< per common shave in 8 1974. The advnran cfemge in the etamey conversion rata had t paitieufedy dissottfeg effect In reporting the sales and income of The Sherwta-WiBiami Company of Canada. Limited, fa) 1974, the parent company's share of the Canadian company's pre-tax incoma of 51.597.000 as reported in dm nhte htdudad agpvoxinuMly SI52.000 thin to a favonMe cuitency exchange me. la fiscal 1975. there wee in advene change in tfca coovcrsion rate which earned the patent company's share of pre-tax income to he reduced by approximately $365,000 to the figure of SI.169.000 shown in the able. Taxes The provision for income taxes for fiscal year 1975 amounts to $21,645,000. This represents an effective tax me of 43.1% (49.2% to 1974) as compared to the statutory Federal income tax me of 4i%. The difference in 1975 was thie prindprily m the capM gains rare afforded the gain on the snln of dm Ashtabuh operations. Stare and focal income tarns have been reclassified from com and expanse* to income taxes in 1974 to conform with dm 1973 ptaicniUm. Taxes other than income taxes continued to rise, fo total, thee* ether taxes amounted to $20,182,000. up from $18,793,000 in 1974. 0007-SWP-035164 0007-SWP-000116585 Financial Review Dividends Total dividends of $12,924,000 were declared is fiscal 1973. Dividends os common sleek amounted la S 11.332,000 tod dividends as picfarad slack amounted to $1,092,000. Common stock cash dividends for fiscal 1973 were ai the annual rate of $2.20 per common sham as compared to $2.00 per common sham in fiscal 1974. The Company has paid dividends in every year since 1883. Capital Expenditures Expenditures during fiscal year 1973 fa property, plant and equipment amounted to $27,902,000 compand with $20,333,000 in fiscal 1974. The budfea for the 1974 fiscal year provides fa aa increase in expenditures to a level of Just over $47,000,000. A major portion of the incmam represents proposed expenditures for new and enlarged raamrfactttrinf facilities and father expansion end modemizarion of our branch store system. Deprectadeo nt fiscal 1973 was $12,730,000 competed to $13,355,000 in the previous year. General Financial Condition During the yew. $50,000,000 issue of 9.45ft Debentures Due 1999 wee sold. Them funds combined with those generated from operations and final the Ashtabula sale allowed us to improve our working capital position end increase our investment in fixed assets. Working capital si August 31. 1973 amounted to $287.711.000 up from $227,626,000 to 1974. The mio of current asset! to cunent liabilities we* 3.89 to 1. Tbit i* an improvement over Inst yew's cunent ratio of 2.7S to I. Accounts receivable decraeaed modestly an compered to last yew primarily tea result of a slight weektniag of sales in the last few weeks of tbit yew nlwive u the heavy sales volume during the same period last yew. Chit fastis continued to be well within a norms] and acceptable range. Tout inventory increased S4.S42.000 or 2.2ft over lest yew. The increase of I5.lft in finished product Inventories was due entirely to inflationary factors. Actual physical quantities in inventoty were loww this yew dtan law. The 18.9* decrease in worit in process and raw mneriel inveatorin rcpwiitnfy t Nduedoi of jfwcfwi temporarily stockpiled because of the shortages experienced during die second half of last fiscal yew. Durioi the 1973 fiscal year, $2,000,000 principal amount of the Company's 3.45ft Debenture* Oik 1992 were repurchased by the Company, briefing total repurchase* to $12,185,000 prfaipd amount. In April 1975, $2,000,000 in principal amount of these bonds were used to meet the third annuel sinking find payment. At August 31, 1975. $6,183,000 principal amount of bonds wne held in (he Treasury, li is the present intention of the Company to u* such bonds to meet Omit sinking fond requirements. During the year, the Company amended its Revolving Credit Agreemeat (educing die committed amount from $75,000,000 to $30,000,000. No borrowings were outstanding under this secernent at August 31. 1973. A note payable of $4,842,000 shown on the Consolidated Balance Sheets tepmsents bank financing obtained by The Sherwio*Williams Company of Canada. Limited, during fiscal 1975. Effective September I. 1975, the Company sold n approximate book value substantially all of die assets of The Osborn Manufacturing Company fa cash which will be utilized in other business areas. Retirement Plans Substantially ail employees of the Company and its dommtic subsidiaries participate in non-contributory pension plans. Tbs Company's pension expense for fiscal 1975 was $9,000,000 compand to $9,063,000 m 1974. Employees Stock Purchase and Savings Plan Slightly less than 7,300 salaried employees currently ate paiticipating. through ngulw payroll deductions, in the Stock Furchaie and Savings Han which was started April 1. 1969. Under die Ran, dm employees have the option of directing that their contributions be invested in amounts ranging from 30ft in the Common Stock of the Company end 30ft in Federal government securities, up to 100ft in the Company's Common Stock. Effective January 1. 1973. the Company increased its contribution to the fund from 25ft of the employees' contributions to 30ft . with oil Company contributions being invested in the Company's Common Stock. At August 31. 1973. 577,830 shares of Common Stock, representing approximately I0.7ft of the total number of shares outstanding, wete held in this employee fond. 0007-SWP-035165 3 0007-SWP-000116586 I THS SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES Statements of Consolidated Incoma . >- Net sales............................................................ Cain on sale of Ashtabula operations.............. Other income--net........................................ Costs and expenses: ' Cost of products sold.................................... Sailing, general and administrative expenses Interns.......................................................... Income Before Income Taxes Income taxes: Payable currently.............................................................................................. Deferred........................................................................................................... Met income per sham of Cmnnum Slock: Pritnaty................................................ Fuly diluted........................................ Net Income Thousands of Dotlan Year Ended August JF 1975 ' S866.8S3 12.728 3.272 8*2,853 1974 $802,266 -01.993 804.259 576.122 244.518 11.980 832.620 30.233 513.037 225.524 8.084 746.645 57,614 20.572 1.073 21.645 S 28.588 24.297 1.924 28.335 5 29 279 S_5JI S 4.49 $ 5.24 S 4.59 See noses so consolidated financial statements. Board of Directors The Stwrwin-Wiliim Company Cleveland. Ohio Accountants' Report We have eumioed Ac ceeaoHdaled bafaace sheets efThe Shsnvi*-Willisms Compsay and wbudisnes j ot 4gut 31. 1975. Md AufUil Jl. 1974. and the relotd ceneolidaied stateemMs of income. staetfeoUas' equity and elunyea in financial position hr the yean then coded. Oareamniaaeiaas were made m accetdaace wi* penentty accepted auJiung standard. and. actordlnsiy. wdudadsuchusesofdieicoguatias recordsand such etherauditing psecedotas as cconsidered actcvsaiy m ihc la cur opinioa. the RnaaciU statements referred above presens fairly the consofidased financial po-nnm of The Shenria-W'diiam Cotnpeay and subsidiaries -4U|wi 31.1975. and AupostJI. 1974. ami thecuandidaied results.if their operations and changes in dak Itaaacial position far the year* then ended, in coefomuty *ith general!) accepted anounimp principles applied oa a coosistcnt basis. Cleveland. Ohio October 20.1975 0007-SWP-035166 IA 0007-SWP-000116587 SB THE SHEBWIN-WIUIAMS COMPANY AND SUBSIDIARIES Statement! of Change* In Consolidated Ftnenclal Position Thousands of Dollars Vest Ended August 31 ' Souret of Funds From operations: Net income................................................................... . Add back dunes to operations not requiring (kinds: Ptovisioa for depreciation....................................... . Increase in noaeurant deferred income tenet ____ Funds Provided From Operations....................... . Proceeds from sale of 9.45* debentures........................ Proceeds from note payable............ ............................. . Proceeds from sale of stock under stock option plan..., Netbook value of Ashtabula noncunent suets sold less gain included la net income......................................... Appdeation ofFunds CmI dividends.............................................. Additions so property, plant and equipment. net of normal retirements............ ........... Purchase of 3.45* dentures.................... Increase ia noncunent note tcceivsbla........ Increase ia woridng capital.......................... Other -- net................................................... Changer m Working Caphol - Inertast (Dtertasa) Cash aod short-term investments......................................... ....................... Note receivable........... .......... .............................................................................. Trade accounts receivable............................................................................. Inventories ......................................................................................... ............ Rcfiudilih income taxes................................................................. .............. Short-term borrowings............................................................... ................... Trade accounts payable................................................................... .............. Compensatkia and amounts withheld................................................... ........ Pension, interest and other accruals............................. ............................. Income taxes.................................................................................................... Other--net.......................................... ........................................................ Increase in Working Capital 1975 1 1974 S 28.583 | 12.750 536 41.874 50.000 4.842 211 1 j | : 16.283 $113,210 5 29.279 13.555 2,724 45,558 -0-0-0- -0- S 45,558 S 12,924 . S 11.848 27,582 2.000 6.400 60.0*9 4,219 $113,210 "B" 1 " 19.242 1.955 -010.777 1.736 S 45.558 ars *es* 5 11.392 8.600 (2.058) 4.842 6.042 14.955 8.823 2.959 (647) 3.113 2.064 ' $ 60,085 I $01,707) -021.890 56.525 -0- (29.742) 110.949) (2.665) (10.486) (2.591) 502 S 10.777 I I lI 99m WIH 19 OOPSCIVIBMBB h h w e w li 0007--SWP--035167 0007-SWP-000116588 THE SMERWIN-WILLJAMS COMPANY ANO SUBSIDIARIES Statements of Consolidated Shareholders' Equity Balance at September t, 1973 ................................................ Subsidiary's fepuKhaa* of its preferred sharer...................... Net income ...................................................................... .. Cash dividends declared: Series A preferred stock -- 54.00 per share...................... Series B preferred stock -- 54.40 per share...................... Common -- 52.00 per slum .............................................. fefatte at August 31,1974 Serial Prefened Stock 5 9.130 -- -- -- -- -- 9.130 Thousands of Dollars Common Stock 533.724 Other Capital S 4.603 -- 91 -- * -- -- -- 33.724 -- -- -- -- 4.694 Retained Earnings $216,342 (82) 29.279 (291) (81 n (10.746) 233.691 Common Stock in Treasury S (690) -- -- -- (690) Common stock issued: 3,493 shares upon exercise of stock options; ad, 1.138 sad 7,725 shares upon conversion of 671 and 4,830 shares of Series A and Series B pftfrnd stock, respectively.......................................... ..... iiKgnit i 11...................................................................... Cash dividends declared: Series A preferred stock -- 54.00 per stare...................... Series B preferred nock -- 54.40 par than ...................... Common -- $2.20 par share............................................... Bataua at August 31. 1973 U) -- -- -- 5 5,934 90 317 28.388 -- -- -- 533.814 -- -- -- S 3.011 (290) (802) (11.832) 5249.333 -- -- -- 5 (690) See note* to coaaofidaied financial statemeale. 12 0007-SWP-035168 0007-SWP-000116589 THE SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES Ctonoofldatad Baianc* Shaats Thousands ofDollars August )1 Amts Cwrrtnt Asuts Cash.................. ......................................... Sboit-term investments .............................. Note receivable........................................... Trade accounts receivable, Icn alio*incas ($2,057 in 197$; $2,007 in 1974).......... Inventories: Finished products.......................... Woik in procesi and raw materials rRMH CUpCMCI Rerandabls income taxes Older Aam Note receivable....................................................... Receivables, advances and other islets................ Co* in excess of net assets of businesses acquired Total Cumat Assets Property, Plant end Equipment ............................. Buildings.................................... Machinery and equipmees........ Coratrocnoo in pragma.......... Less allowances for depreciation LinbflHks and Shareholders' eeequity Cumin LiabiUtiit Short-<enn borrowings........................................ Trade accounts payable.................................. Comjsetuation and amounts withheld................ Pension, interest and other *^"'^*.................. Taxes, other than income taxes.......................... Income taxes........................................................ Long-Term Debt Total Curnre Liabilities 3.43% Debentures (exclusive of $6,183 in treasury In 1975 sad 1974) ..................... 6.25% Convertible subordinated debentures.... 9.43% Debentures............................................. Note payable........................................................ DeferredIncomeTaxes .................................. deserves -forpensions and other items -- Minority Interest In Subsidiaries.................... Shareholders' Equity "Serial Pretested -- without par value . Common-- $$.25 par value.............. Other capital............................................ Retained earnings.................................... Less o o m of Common Stock is nensiny See notes to consolidated financial statements. 1975 S $.407 8.030 $.600 119,240 159.317 --J&SZ2 22$.189 $.799 6.042 317,327 6.400 8.733 2.324 17,437 5,138 81,482 172.031 16.882 276,253 1?7,9_LQ 148.343 $333.127 1974 $ 4.063 1.000 -0- 121.298 138.638 84.709 223.347 7.699 .0337.409 -06.096 ___ 2j 324 8.420 6.025 83.707 176.151 9.379 273.262 123.528 149,734 S315.563 $ 21,391 27.903 18.691 21.944 4.897 4.788 99,616 37.813 40.000 30,000 4.842 132,637 14,363 4,579 5.488 8.934 33,814 5.011 249.353 297.114 690 .msu $333.127 3 36.346 36.728 21.650 21.297 5,861 7.901 129.783 39.813 40.000 o. -079.815 13.827 3.902 5.687 9,130 33.724 4.694 233.691 281.239 690 280.349 $315,363 13 0007-SMP-035169 0007-SWP-000116590 THK SHERVflH.WH.UAMS COMUANV AND SUBSIDIARIES Notes to Consolidated Financial Statements Yon Eadnd Amat 31,197$ nod August 31,1974 NOTE A-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Tha consolidated finsneisJ statements include nil signilicm subsidiaries tad intercompany transactions have been eliminated. Current assets and current liabilities of foreign subsidiaries aremasUredatthe me*ofexchange in efisctMthtcfoaeorihn period. All other assets, liabilities rod foarehoidan* equity am tnastated at historical rates ofexchange. Revenue and expense accoono m tnuilamd at the sa in effect at the dote of the period, exeept for depneitdou which la translated atthe met in effect when the respective assetswen acquired. Osin* orfosses bum foreign canaocy tnnslatkfosan iadudad inocherincome. Ptoparry, plant and equipment la stated on the hatia of coat. Provisions for depneiatioa arc baaed oa annual rates calculated to atMrtise the coat ofdepreciable asset* over their estimated economic lives, computed principally by the straight-line method. Inventories an stated at lower of cost (average or flnt-in, fhst-out method) or market Short-etna investments ate stated at cost which approxi mates ramket. Com in excessofnet assetsofbusinesses acquired is not befog amortized because in the opinion ofmanagement then has bean no decrease in value. Research and development costs an charged to opantions as incuned. NOT* 1 -- INCOME TAXES The Company has recognizad tha debited income tax liabilities nod benefits resulting bom timing differences be tween financial and tax accounting, relatiag principally to de preciation and reserves. It is the Company's intention toreinvest undistributed eamtags of foreign subsidiaries; accordingly, no deferred income taxes have been provided thereon. At August 31. 1973, such nndistnbuied caminga amounted to approxi mately SU.143,000. Investment tax credits (accounted for by the flow-through method) aggregated 5801.000 ra 1973 and 5982.000 in 1974. The provision for income taxes represents an effective tax rate of 43.1% (49.2% in 1974) as compered to the statutory Federal income tax rata of4g%. The difference in 1973 was due principally to foe capital gains rase afforded the gain on the sale of foe Ashtabula operations. Stare and local income taxes have been reclassified born costs and expenses to income tuns in 1974 toconform with ds* 1975 pretontstion. NOTE C -- LONG-TERM DEBT The 3.43% Debentures Due 1992,6.23% Cooveitibie Sub ordinated Debentures Due 1993 aad the 9.43% Debentures Due 1999 are redeemable in whole or in pan it foe option of the Company at foe rates of 103.00%. 104.39% and 109.43%, reipectiveiy. and it declining rates to 100% in 1987.1990 and 1994, respectively. The related indentures require annual sink ing fond payments of 52.000,000 for each of foe issues. The 1973 requirement of 52,000.000 on the 5.45%Dcbennires wai satisfied bom debentures held in treasury, and the Company intends to make tha 1976 payment in foe lama manner. Annual sinking fond payments will commcocs in 1981 and 1980 for die 6.25% Debenture* and 9.43% Debentures, respectively. The Convertibb Subordhtrerd Debentures are convertible into CoouDua Stock at s eoevenioa price of 546 a share, subject so adjustment In certain events. The note payable. bearing interest it I % above prime, is due Febrnmy. 1980. Under a credit agreement with o group of nine banks, the Company meybctrowuptoSJ0.000.000until October!. 1977. Amounts outstanding under foe agreement re that time may be convened to term loon* payable io sixteen equal quarter-annual installments commencing Jammy 3.1978. Interest rates would vary bom foe prime me to %% above prune. A commitment foe of V4% is due on the unused portion until October 3. 1977 No borrowings were outstanding under this agreement at August 31.1973. The credit agreement includes certain restrictive cox enjntvus to additional botrowings and the maintenance of working capi tal of net less than 5130.000.000. NOTE D--CAPITAL STOCK The Company has authorized 1,500,000 shares of Serial Preferred Stock end 15,000.000 shires of Common Stock. Outstanding shares for foe S4.00 Cumulative Convertible Pre ferred Stock. Series A.54.40CumulativeConvertible Preferred Stock. Scries B and Common Stock are 72.026 shires 172.697 in 1974). 179.463 shares (184.293 in 1974) and 3.410.161 shares (5.395.780 in 1974). The Common Stock outstanding in 1973 and 1974 includes 22.500 shares held in treasury The shares of 5cries A snd Series B preferred stock are convertible at base conversion prices of 537.93 and 362 50 per sham ofCommon Stock, respectively, based on a value of S1Q0 per share of preferred stock forthis purpose. The holders ot the preferred stock are entitled to one vote for each share. The Company may redeem the Senes A preferred stock until March, 1976 at 5102.50 pet share arid declining annually to 5100 par shme in 1980and thereafter, and foeSenes B preferred stock M 8103.85 until December, 1975 and at declining amounts to $100 in 1981 snd thereafter. The aggregate prefer ence ofthe Serial Plcbmd Stock in involuntary liquidation for 1975 and 1974 is $29,149.000 end 525.699.000. respectively At August 31. 1975 tad 1974. an sggregste of 1.535.347 shares and 1.369,721 shim, respectively, were reserved for conversion ofSerial Preferred Stock, Convertible Subordinated Debentures sod exercise of stock options. 14 0007-SWP-035170 0007-SWP-000116591 NOTE E -- NET INCOME PER COMMON SHARE Primary net income per common dime has been computed based on the average number of shares outstanding during die year after deducting from net income the dividend requirements of the Serial Preferred Stock. Fully diluted net income per common share asiumes the convenioh of Series A and B prefemd stock and 6.2i* Con vertible Subordinated Debentures (after adding so net income interest on the debentures net of income taxes) and axtreiss of dilutive outstanding stock options. NOTE F --RETIREMENT PLANS Substantially all employees of the Company and its domestic and Canadian subsidiaries who meet certain requirements as to age and length of service, participeit in non-contributory pen sion plus. The Company's condoning policy is to accrae pen sion fund contributions, representing normal cost and amortiza tion of unfunded prior service cost over 30 yean. Pension expense was S9.000.000 in 1975 and 59.063.000 in 1974. For four of the pinna in 1973, the actuiriilly computed value of vested benefits at the most recent actuarial determination date exceeded the asset* of the pension bad and the related balance sheet accrual by approximately S11,738.000. For the other plaits, vested benefits are fully funded. The value of the pension fund assets was determined using market values at August 31, 1975. In accordance with the provisions of the Employee Retire ment Income Security Act of 1974. the Company will make certain amendments to the provisions at its peasion plans and has made certain changes in the methods of actuarial deter mination of pension costa. The effect at the required changes on the unfunded vested benefits and future pension expense is not expected to be materiel as related to consolidated operating results. NOTE G -- LEASES l Thousands ofDollars) Total rental expense, pnmanly for retail stores, warehouses and equipment for the years ended August 31 amounted to: 1975 1974 Financing leases: Minimum rentals.......................... S 3.770 Contingent rentals................ 605 S 3.099 500 Operating leases: Minimum rentals...................... Contingent rentals .................... 4.373 22.184 925 3.599 19.260 1.668 Total rental expense............ 23.109 M7.484 20.928 SM.327_ The contingent rentals are based on additional usage of equipment and agreements based on sale* in excess of specified minimum*. The future minimum rental commitments as of August 31. 1975 for all noncancclable leases are as follows: 1976 1977 197$ 1979 1980 1981-1985 1986-1990 1991-1995 Thereafter Total SI9.586 15.417 10.933 7.547 3.011 11.102 2.01? 838 1.000 Financing Lh k s S 3.225 2.414 1,274 699 701 2,093 1.46? 941 993 Operating Leases 516,361 13.003 9.659 6.848 4.3(0 9.009 550 (103) 7 The majority ofthe leases have renewal options beyond the current lease expiration dates. The present value of noncapitalized financing leases is not material. Likewise, the impact on net income ifsuch leases had been capitalized would not be material. NOTE H -- STOCK OPTIONS Under the Company's stock option plan for cerium officers and key employees, options are granted at prices not less than fair market value of the shares at date of gram and become exercisable to the extent of one-fifth of the optioned shores for each full year of employment following the date oi grant, expiring ten years after date of grant. fai 1975. options were granted for 42,000 shares. No options were granted in 1974. During 1975. options for 5.495 shires (none in 1974) were exercised atxn aggregate price ofS311.000 and options for 5,900 shares (31.910 in 1974) were cancelled. At August 31. 1975, options for 181.871 shares 1151.366 in 1974) were outstanding at an aggregate price of S6.656.000 ($5,834,000 in 1974). options for 109.581 shares 188.136 in 1974) were exercisable, and 92.438 shares (133.538 in 1974) wefi reserved for future grams. NOTE I -- SALE OF ASHTABULA OPERATIONS During the year, the Company sold its titanium dioxide pig ment operations locaud it Ashtabula. Ohio. The after-tax gain on the sale of (he Ashtabula operation* amounts to S9.317.000 or S1.7J par common share. NOTE J -- SUBSEQUENT EVENT Effective September I, 1975, the Company has sold at ap proximate hook value substantially all of die assets of The Osborn ManufacturingCompany forcash which will be utilized in ether business areas, included in the 1973 consolidated statement of income is net income of St .430.000 related to the operation! sold. The disposition of these operations will not mmenally affect future consolidated results because of the ex pected return on the redeployed funds. 0007-SWP-035171 !5 0007-SWP-000116592 THE SHERWIH-WIU.1AMS COMPANY AND SUBSIDIARIES Cash Fta* IN MILLIONS nut Eantap m4 DfcWn* hr Cm i Han IN DOLLARS T"T aClfMll >i N M D^v mMm IN MILLIONS l mmr~r 1 iiii * i iii IVTI |t?J JCAHT4L IIWKUII4 WtJ rT* omuivnov IHM i f him ( !\ MILLIONS 0007-SWP--035172 0007-SWP-000116593 THE SHfftWM-WMJLIAMS COMPANY AND3UUIDUAIU FIv b-Ymt Comparison Thousands ofDollar* Year Ended August 31 1975 Net sale* ..................................... 5866,853 CM of pmdects sold (A)............................ 576,122 Interest expense......................................... 11,980 Income before iacome taxes and ntraoniiiary chirp (A).................................... 50,233 income taxes (A) ................................................... 21,6*5 Income before extoatdinaqr chary*................ 28,588 Extraordinary cheep................ .......................... -0- Net income.............................................................. 28,588 Income par share of Common Stock: Incomebefore exttaonfinaiy efaaifs.................. Net income......................................................... 3.11 3.11 Amace number of shares of Common Stock oiiiitaiidbg'.......................... 3,377,695 Income u percent of sales...................................... 3.30% 1974 $802,266 513,037 6,084 57,614 28.335 29.279 -029479 5.24 5.24 5473080 3.65% 1973 $764,729 430,791 6,424 1972 $638,285 418,098 6.238 43,346 20.844 24402 -024,302 39.932 19,435 20.497 (2460) 18437 4.36 4.36 3.63 3.21 5467,735 3428424 3.48% 2.77% 1971 $590,969 379.423 6,399 30.451 IS.I10 15,341 -015441 2.68 2.68 5415471 2.60% Return on invested capital -- Common Sack (B). 10.79% 11.87% 10.47% 7.94% 6.72% Cash dividends declared: Preferred............................................................. Common.............................................................. $ 1,092 11,832 S 1,102 10,746 $ 1.102 $ 1.107 10.736 10.639 $ 1.110 10.631 Cash dividends per share of Common Stock.................................................... 2.20 2.00 2.00 2.00 2.00 Number of shareholders: Preferred............................................................. Common (C)........................................................ 993 10.405 1.024 10.423 I.DIS 9.832 1.630 9453 1.027 9.903 (deferred and common shareholdcii* equity........... $296,424 52*0449 $263,109 $249,222 5241.680 Common shareholders' equity................................ POrshare.................. 271.276 30.44 254,850 47.43 237.410 44.23 223,456 *1.9* 215.7B8 40.60 Capital expenditures...................................... 27,902 20453 16.042 17.354 13.278 Provision for depreciation...................................... 12,730 13455 12.869 12,519 12433 Working apical ...................................................... 287,711 227,626 216.849 208,256 201.523 Ratio of current assets a current liabilities............ 3.89 a I 2.75 a l 3.98 at 4.05 a 1 4.35 a 1 Total assets.......................... ................ ............... $553,127 $515,563 $440,805 $424,631 $411,164 Number of employees ............................................ 20,192 22,080 21.6*6 21,908 21.480 (A) Stare and local income taxes have been redasaified from costs and expenses a income taxes in prior year* a conform with da 1975 presentation. (B) Based on eomaon ahareholdan' equity sc beginning of yea. (Q b addition a the registered thiwbnldan. dare were beneficial shareholders panicipoiing b the Company's Stock Purehas* and Savtnp Plan for salaried employees (7.273 in 1973; 7,1061* 1974; 6,793 in 1973; 6,732 in 1972; sad 6,802 b 1971). 0007-SWP-035173 0007-SWP-000116594 THi SMERWttt-WILUAMS COMPANY AND SUBStDUfMCg BrM Description of tho Butinasc Tbe Slwrwin-Williams Company is a dlversiilsd maAating tad maaaftctiKtag otgariyaloB. Headqtiartas an in Clew* hod. Ohio, with pleas, offica* tad other ftcdidn located throughout ds United Stoss aad Canada and in svcnl other counBies. the company abo own* tod nprrtlti none ia the United Ssttt, Ctajda, Mexico, Brazil, Jamaica, The Netherlands aad Belgium. The company is organized la six opsatuggroups. Thetaan: CoatiHgi. which tnuufacturs aad aatfcas paisa, vsaiahaa, rasnsls, lacqucn aad allied paodacs, aad makes palming accessories aowafl a waBcovariaga. floorcoeaiagaaidottar decorating materials; AaxMariti. which manulhctutes aad makes metal containers aad paiat applicatofs and operates a graphic as division; Chtmioals. which produces and makes saccharin aad apadalty chemicals for a wide variety of mas; ftarwfca-WUUarni CaWd, which maaufacatrst palm predaes and makes dam along with decorating items throughout CttMiMiSprayoa Products, which is a euatom aerosol packaga and elanatariB^aaroiolanwielri-- < -------- aad/aenatowUCoedngt. whichdfaecs operations ofcomi ap pises la fiaaigi i CfUMt of Products Sold mt Met. varnishes, lacquan and allied macriala.................................... Paint application aad decoration products purchased (hr resale...................... 1973 Yea Eadad A|w< it 1973 1972 63* 3 <3* 20* 2|* 21* 1971 64* 20* Operating Group Tabls (TkowmairtfD*Omn) w* un J it m Coanaa............................ * ofwm .. Awulunw............................. ftofMa)......................... Qwmetb............................. ftvfual...... .......... SharmwWUMaw CaaSa........ ftdmi......................... ftgfwW laHnwneal Sand Cm. Tool. E:Mm Mhn Mm taa Nw NS Nm Mb Am Mat urrjn uw SII.4M nun MM 30.74 141.114 Mii.es J7.4* 72Jft S29.IM S47.m 71.0ft 72.9* SM444 3423,391 73.1ft 32.1ft ST.esa 11.M IM9I njun Idas i.m 2UI 704*3 10.0* 114*7 lUft 60497 Uft 10430 21.9ft 30,417 e.j 69.301 .m tun dot 47.401 1.0* 17.4* 7.M 12.0ft 6.1 *1 4i.l72 (l.**T 924(4 .1* 7.1* (4.1ft) r..tft SS.I4I i.i* 30,714 IJ*7 4I.M7 ut m Ut 6.1* S2 he* .9* 6.2ft H4 34.94# 1.9* 6.3ft S.4M 2.7* fie ia.es l.ftk 2.1* 1,171 11.420 1.6ft 24ft 24*0 I0.M1 3.* 1.6* 1.942 14.191 4.0ft 2.4* 24.44C 1,419 11.291 2.144 14410 1414 I2JM 1.234 J1,4*7 wwwJttiSl KO.O* m--its sun ie*o* --jMiai,tass liil --2JS 71421 MM --its .1304,729 1004ft --its 54*119 100.0ft - i J8UH 1004ft _ 2J* 44.4*3 100.0ft i.** _U*0.*f 00.0ft 11,721 (12,714) _ (14JII4) (MM3 (*,7*1) 529.143 31.2* 7451 21.3ft C55tt> (90ft) 511 1.4* 1.470 40ft 1.499 4.1 36.U4 100.0ft (6.417) jms jyjj| ia 0007-SWP-03S174 0007-SWP-000116595 THE SHEKWNMMUMMS COMPANY AMO MMDMMES MANAGEMENTS OISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS The following ire ManagemcnTs operational comments highlighting significant events and reasons for change during th* cumm yaar a* wall at the 1974 year. They an intended to be aaad in conjunction with the Note* to Financial Statements and an a compltmeat to th* Rvo-Year Comparative Financial Summmy on page 17. CM 1971 Compared to feat 1974 Comottduad not silci wen iki MfbMt is Am UflHy of the Corporation at $166,153,000 and tapraaent a $6*4*7,000, or 1.1%, inaaaro over last yarn. Tha 197$ aalea neiaan is primarily doe to higher setting price* tinea nnat of the GosporitioD's produet line* mgistarad dacmaam in unit volume. Coaiolidated coat of products aald incnaaad 12.31$ and may be attributed primarily to the effects of utAadoe since the biuincsa of the Company, maanred in terms of volume of products produced and sold, was generally lees than 1974. A* a consequence of th* higher coats of tear materials, labor, and packaging, not all of which could be recovered thmogb higher tailing pricas, gross profit as a petcentage to net tales declined. Consolidated pn-ux income baton the gain ea solo of Ashtabula operations for 197$ was S37.30S.000. a daettna of 34.9% from last yam's record high. The rata of change in opanting profits did nos keep pact with dm percentage gate in sales in 1973. Refit margin* wen tinder pnesun throughout the year, primarily th* result of tow levels of production and highly price competitive Buckets. This environment did nor permit setting price inemmei to be implemented to (he degree or frequency needed in mtoutaia 1974*s profit margins. Th* pre-tax gain of $12,721,000 resulted from the sale to tha SCM Corporation of oar farmer Ashtabula titanium dioxida operation*. CnnsoHduad net income ia J97J of S2t.$M,000 daettnad a modest 2.4% from last year. Interest aspens* inenmad $3,196,000 from fit* preceding year, principally tha isaoh of dm $$0,000,000 9.43% Debentures Pu* 1999 issued in December 1974 and to * lesaer extent contimiad high shori-urm interest naas. Ram expats inemnad $2,997,000, or 12.1%, during tfan year, with dm largast segment of the tncmast cantaring in new and relocated Coatings retail atoms and a corninuing growth in existing sues*. Contributing to a letter dagroc war* inetaatad data proemiing equiptneot tenuis and the expanding kaaad truck flaat. Introduction or the Coatings Group aew Deafer orgSBizatice, combined with th* pmtmtation of th* Gmporma Identity firepan, comprise the lergeet segment of the S3J36.000 advertising expense inmuen............................ Th* Company'i effective tax me declined principally baeauss of the gsia of S12.72S.000 from tha sale of AahttMa opamiooi. a portion of wldch was taxad at the tower capital gatoi mo. IS* $6,690,000, or 23.6%, decline in laeom* cum principally meuhs from the comMnarion of tow* proms income and tha abov* capital gain. final 1974 Cropmf to PM 1973 roiunlklared salts beronad I3.t% due id selling price itinamee end to a teaser extern added volume. The Company's Ann major sroupe (Coatings. Auxiliaries, and Chemicals) eootribuMd dm larger portion. Saks of the Coatings Group roes 104%, with all mqjor paint segments end decorating sal** showing gain*. Sain* inctuses in the Auxilisries Group of $17,002,000 (24.0%) wem obuaned in ett divisions, with tha Container Divisioe contnbuting heavily with a sales increase of $9,017,000, or 22.5%. Zinc oxide, saccharin, and emsol products led the Chemical* Group with a 30.3% sales tncromo. Consolidated com of products sou increased I3.S% due to production cost mcramii end to a lesser extern added volume. AH Groups experienced gramer peoduction costs due mtinly to higher priced row nuatrials; incmased wages, salaries, and employe* benefits: and production scheduling peobtaa* da* to taw mauritis shortages. The Company experienced a 10.3% rise in selling, genmal and admiaturariro expenses, while th* exponsei as a peroeotags of seies improved to 2S.3% is compared to 29.1% in fiscal 1973. tamest expanse rose $1,660,000 (25.1%) as tarolt oftocroaaad shon-tsro botrowiap r higher interest mas. principally mad to finance increased levels of tovemeriee and tecsivdblsB. Inrnms taaee incmased over 1973 bp 36,912.000 (35.7%) primarily became taxable income tonamsd by SI1.619.000. or 26.6%. 0007-SNP-035175 19 fr THE SHERWIN-WILLIAMS COMPANY ANO SUUSIOIAfllES Quarterly Markat and OMdand Information Common Stock ($6.23 par value) / $4.40 Cumulative Coovatt&k Preferred Stack, Strita B (without par value) ---------l?a_----------- -------1.174------ __ Shate, Low Fhat $32 $25* $39* $29* Stcood 39* 31* 34ft 27* Third 44* 39* 40* 56 Fourth 45ft 37 39* 29* DMdaada Per Short 1975 19Td $ .55 $ .50 .55 .50 .55 .50 .55 .50 Fint Second Third Fourth 56* 66 76 74 52* 56 64 61 67* 65* 64 64* 59 60 62* 52 1.10 1.10 1.10 1.10 1.10 1.10 1 10 1.10 Cornmot Stock rad *4.40 CumtUdvt ConvactMt Fttfootd Stock. Striae B we mM on the New York Stock Exchanft. The $4.00Cumulative Coovntibit Preferred Stock. Sanaa A I* net actively traded and no Mamrieal market pricae art available. Quarterly dividroda of $1.00 par than have been paid in fiacal 1975 and 1974 for Saritt A pnfocrad mock. i 20 0007--SWP--035176 0007-SWP-000116597 --* Th Year in Review Operation* ia fiscal 1975 reflected a sales and earnings patten not dissimilar to the experience of other participants ia tno of our major markets. Profit margins, particularly is our large Coatings Group, were under pressure most of the year, primarily as a result of lower levels of demand. Price increases simply could not offset rapidly rising coats. Management of the finance* of your Company continues to improve and is better organized to employ ks resources more effectively. Larger, more efficient production facilities have been given high priority u pan of our business strategy to give us a competitive edge and to place us in a better position to provide our goods and services to the market plan. The ongoing Corporate Identity Program concluded its introductory year, focusing activities on the more highly visible aspects of the Corporation's image. Active consumer markets were given a high priority as retail stores in those markets received new signs and were modified to reflect innovative concepts of marketing. The Company, as will become obvious in the reports that follow, is no longer tied so closely to one basic major area of activity. As tire Coatings segment suffered earnings erosion, other segments, notably the Auxiliaries''Group with continued support from die Chemicals Group, wen able to make up some of the earnings slack. The better balance of markets served should, in the yean ahead, allow us to react and adapt to changes among these various markets. Such planned and balanced growth will continue to be the objective in the yean ahead, for it is only through such growth that we can provide adequate rewards for all who identify wife the enterprise -- shareholders, employees, customers and the public at large. 0007-SWP-035177 21 0007-SWP-000116598 0007-SWP-000116599 Th* Coating* Qroup The markedly lower demand for paint product* during the new. imaginative methodofmerchandising andabroudrang* of depressed period dictated lower production levels and with the decorating products has been well received. Sales have been extremely competitive pricing activity, combined to reduce very close to the targets established. We are continually Coating* Croup earnings during the year. Although total tales ' monitoring operations so we may quickly capitalize on the increased 6.1%. gallons of product sold declined almost 12*. lesson* learned there. and pre-tax earnings were off $5.2* from the previous year. The enlarging end modernizing of company-operated stores We art confident this ihaip earnings drop it a short-arm condoned throughout the year. As the economy improves, this aberration that doe* not indicate any tong-term damage to our activity win increase. In fiscal 1973. we opened 13 new stores: market position. In fact, during the year we improved our salsa 22 were remodeled or expanded; 37 were relocated: and we I position in the key retailing market through both ourstores and independent dealcn. We enjoyed similar success in the closed 99 iow-preft units that were not settable for renovation or enlargement As a result, a local of 1.709 notes were in automotive refinishes market through our automotive service opentienatyereend. centers and through Independent distributors. As pert of cur long-range consumer product emphasis, we fin the mull eras, our sales of paint and other decorative have opened three individually designed prototype stores fut ! products rose almost IS*, significantly above the increase ia VetmoM. Massachusetts and Wisconsin) so that we can, in thenational ratai] avenge. Thisw due directly toewofecton: effect, test marks! different letailitif concepts involving store introduction of such new. highly competitive paint offerings ia layout, flxturing, merchandising, etc. Out of this program, we the Style Perfect line; and the continued broedening of our believe, will cornea comporitt idee of the typical metchandise line* in fleer coverings, will coverings, draperies Sherwin-Willtutt store of the future. end decorative accessories. This broedeningproved periculsriy rtwsrding thisyear.While tots!tut*sale*ofourmanufactured products increased in dollar value by 3.0*. our sales of other merchandise increased by 12.6*. We took leather decisive step in the area of sales through independent pilotretailers. We createda completely new Imeof paint ptodocu tailored specifically to die needs of independent dealersin ntnnsofquality, breadthof line andpneing. This line, hMay. I9fS. ourOeroraubf Werti pilot installation was available oaly to these merchants, is backed by sophisticated Opened at Charlotte. North Carolina. Our offering there of a merchandising support plus a national advertising program. 0007--SWP-035179 0007-SWP-000116600 This mw to goea to marine under die brand name MatteSeaour, a weil-respected name in pent dui bis for many yew had ouauadtogeonsuinar acceptance forhigh quality and fuhioa. To support it, we have organized an cutely new Martifrteioor dealermarketingorganization with management attuned u die need* of the independent dealer. Titosuccessfiil launchingofthispugnm is evidencedby the jales response fro rctailm and consumers dike. Dunn} the secondhalfofthe teal ye*, following die introduction ofnew merchandise to our private label accounts and die Mmtto-Senonr bawd u independent dealers, sales were increased 20.3W in thissegment, a*opposed loidecline in salts during the tea half. Ourcoetinuiag efforts wm also rewaided to the automotive reflaishmotet Thishighly specialized mitket issupplied with Sberwto*Williams brand product! dnouph our own automotive teflaiehat seevtoa cental sod jobbers. The Mittin-Scnour. Aetna mid Kogan bnnds po to market through major Independent wuhousa distributors. A sales mereate of over 22* indieatee the very strong response ofourcustomers in dus field and, dwt, thecoutinutog strength ofourshare of market. In torch* support of (Us expanding maritet. me opened ns additional automotive neflniahas servicecenters during the year. This nted to 62 the numba of centers now in operation. The gnnenl todwotal market end the building industry market both suffered severely in the recession period. Despite highly coopctilive pricing and quality offerings. our unu decreases in these markets wets such as to more than offset the gains to other areas. However, because of our competitive ourkedag, we are confident that we retained our market >hare Our efforts to the architectural Raid are still expanding In much of Iha country we coatinuc to hold a preferred position amoog architectural specifiers. Otr specialized color planning strvicn for manufacturing plants, schools, hospitals, hotels and office buildings coarinaaa to grow. Research and development to the coatings oca centered largely on low energy/tow temperatnre cum systems. These include water reducible, high solids. electrodeposmoa and catalysed systetni. Wd have also continued to seek substitute raw materials, particularly rapteeaments tor ttooa darived from petroleum. A patent epplirallrin haabeea filedoawhat may well prove to be a major breakthrough to thia ana. U involves a variety of row mmariili derived from starch rether chan petroleum. These m* 9mm turn ll| toa k Wv "WWteahwf" pehttdea la a MarUaS*aaar tote's autora Ware m laato f. Curias, (mm * mritototethrea and Kara* ft, Laatoan. aba pnatoMl-eaaMiaa hate lw ttoada greaar. iaiWal At aar aMterte aarte antor la MesiMd VUU*a, Okie, naaaear NarWM Ouaa atetoa a ntewar'i until Hat raeatnenatl a<Miaa (htotoat Our iiliiaiUi'i until nalirlaClartate. Otoa H>ttyihaaaca- Tim la TVIiiiii i ............... Hi eatery. 24 0007-SWP-035180 0007-SWP-000116601 IB unique miterssisfind spplicition to bakingeniroels and powder Included Osborn's interestin sconcert to the United Kingdom. coatings and as adjuncts to air-diying latex paints, tile use ofa We aw retaining certain German assets of tha company. renewable resource such as starch provides advantages in economics, processing and performance. Investigation of the possibilities in this development is' being continued. Advertising in fiscal 1975expandedthe thttoaofhalpisgtha customer solvedecorating probiamt. Inthecomingyearempha sis will be given to promoting the decorating cencar image. Capital expenditures during fiscs! 1973 wen approximately The Graphic Arts Division during the past ye* installed a major new humidification system to improve quality control oa all pap* products. A new computer-operated photo eompoaitioa unit has also been installed which gives the division for d* Hint time'automatic typesetting capability. This year's Annual Report is a example of the division's expenbe. Type for rids report was set on our new equipment, $17 million compared mSIO.S miUlon in 197*. The 1973 totd - and st was printed oo our pratree. was lower than projected because of delays in materials deliveries and various engineering revisions. Capitalexpaadfoues ford* AaxUiaricaOroup in fiscal 1975 totalled approximately $3.1 mUUoa. Expenditures in fiscal During the new fiscs! yesr we ire budgeting expenditures of 1976areexp*tadto be$9.3 mffikn. all ofwhich will be used to SZ). million with emphasis on t laige number of aew notes, catty through variota improvement* now underway. epmplation of tha Richmond plant, aan of construction ofthe etmtisiott coadng* plant, and the devetopam of new potm-of-sale data collection tyneta fora number of awtt dwt witirrauh in Improved managementcontrol by providing more accurateinformation more quickly. Hadlay Adhashras is sill befog operated * a venture. Howuvar.saks and earnings *e includedin the financial review of6* Auxiliaries Group. The divisionsuffered t small loss as it coatinrod to incur costs rotated to the resBucturing of the business along linet constat* with our long-range plans. Fuiti*rsteps arebring taken to strengthen tha division s retail ! Thn AuxlltarlM Oroup sake. A new setting organisation has bean established whkh gives muck tabid* coverage of retail outlets that ate prime prospects far do-k-youtself adhesives end ocher materials Saksofthe Auxiliaries Croupreadieda record level in fiscal 1973. rising 1 1.7% above the tales of last yeas. Pre-tax produced by die division. Slmil* efforts are being made to strengthen industrial Saks on a industry-by-'mdiutry basts. operating earnings rare 16.0%, also reaching record level. The Container Division was the primary contributor to the group's 197} eaminp increase. Sales were up 21.7% overthu previous year, accounting for 61.1% of group salet. The division's sales outside die company now total approximately 77% of all its container tales. I Additions were begun sc the Elgin container plant in fitly. 1973. which shouldbecompleted m ayesr. We menow meting to convert litis plant's aerosol tines to production ofa new type of welded sidwaem cans. This chanpa win etimiaattdM possibility of even minute quantities of lead in the aerostri containers, will increase the lithography ante eveiltbie to the end user rod will reduce the ntinufactaring coat of tha container. This work should take approximately two yeas. We have also begun e major program ia On Elgin plant to convertthe Udtogrephic press Unestoallrtviokt cure apwation. One line tat bean completely converted, and wotk is progressing on the other. This change wtH result ia ilgniflcuat natural gas savings and willenabk the pluc to more than meet Environmental Protection Agaeey standards. We expact in extend tbit type of curing operation to other container plank. The new Applicator Division formed last ye* accountad far 7.9% of total group salas. Tha grease* ana of sales improvement wasfat spray equipment, where wehave tacomea sijpsiiicant factor in the total naricet. In October. 1973. waianouncad thesale for cash toQiddUigt A Lewis, lee. ofthedomestic aadFrench assets tad businessof TheOsborn ManufacturingCo. subsidiary. The tntuaetlon alio 25 0007-SWP-035181 0007-SWP-000116602 Th* Chemical* Group Sales ofthe Chemicals Group were up 10.6% in fiscal 197S, sad pra-tataamiafs were 1.4% above those ofa yearago. This' wsa a crodilabb performance la view of general economic conditions sad the lower demand which resulted in fewer pounds of product being shipped than in the ptevioua year. ' The titanium dioxide opentioaf were told in October. 1974, beesnsa they didnot fit iatoourloni-rante chemical maitetiB| and manufacturing objectives. The (bads rulimd from the sale w beingeaedtoadvantage India areasofthe business in which we will coadoue to< Fiscal 1979 brought wide swings in the demand for most of our products. When teed with generally reduced sales levels, our custoanars teected by teduciog Inventories significantly. We, intun, warn toreedtoctmail production. Parvctesd. for example, wae in amcmcly shoa supply arty in the year, by suiaeaar, the pare nuael plant was idla fat a matter ofweeks. Sinilar cfreaiamneeS caused etutailiaaat of xute oxide production far te dm indaauy and ntanuteture of organic chemicals fat dyesarffand pigmanr production. Production of chemicals teaplentaral sad uset followed the same Hand but with i less Miow effect on Pawand far saccharin coorinues strong, and our production capacity his now ronchad the point where we keep pace. Over the pan few yean we bat* expanded our production capacity sevenl fold. Our Cincinnati plattis today the wotid'i largest producer of saccharin. and we m currently modifying Its production apabilitic* to provide e wider variety of product InGermany,Lowi Sherwin-Wtlliams baabegun construction of an snd^sjdMt pbM which will be on stream withie one year. The aew ptam will be supplied with pan-ctcsol from our Chicago facility. Oar anw Gamin plane is visible evidence of our longstanding InwnW In the enthoxident business. TheTextileChetnicelsDivision wasaffected wryearly in the year by a worsening economy but also enjoyed an earlier recovery than manyofnur apsndons. Thenet resulthas been a modest impmuemnnt in ovnrall sales and earnings tor 1973. This past yew. this Avhdan wee able to tenet quickly to a lumber of tamUa nanfremfi needs far trend-setting x fashioM. For example, we wotted closely with one major producer to famutam and supply the chemicals used by the mills in producing the now popular "wished out" fabrics. The Flavor andFtsgrsnceDivision is actively participating in a numberofnewdevelopments by majorcompanies in the food, cosmetics, snap sad eandln Industries. We hive developed a inter of sproielsy prodncci allied wife our flavin for the rteenmed beverage industry. mfchtisste ret nllemCstmMdiyssr>y>lwAwnisrPlvMii ............ i tprsy gro. INS HefaIrndSMsmtrisrslswMIsevNnsettmaMe ttsWi isfte r ths "Tlmr Crip" briic .airf 0007-SWP-035182 0007-SWP-000116603 Capital expenditures of$3.3 million in 1975 compare to54.1 million in 1974. We antieipale there expenditures to approximate $6.0 million m the nee fiscal year as we complete several major expansion programs- Sh*rwin-William* Canada Measured in Canadian funds and before Consolidation, the Canadian sabstdiary recorded an 11.7* increaae in sales in fiscal 1975, and pre-tax operating income rose 9. I*. Salat through branch Metes continued to show progress, increasing 17.74 fkoraayev ago. An imxaaae was achieved in many product categories, including point, wall coverings and associated decorating and mabiMiianca Unas. Paint atlas were bolstered through the introduction of the Style hetfiScc line which is enjoying good c o o mu mt accepttnen. The numberofstores inoperatian attheaidofthefiscal year stood at 126, whichii adecrease ofdunestorescompand so last year. Emphasis in Hit stem program continues to he an increased selling area and more retail-oriented locations. Independent deaden, through whom sizeable portion of trade sales ptoducB art sold, scared a 4.64 sales increase dutmg the year. Private label sales declined slightly as customers for thess products adjusted invewories in line with market conditions. However, automotiverefinish sales through jobbers rose 25,44 from the previous year. Industrial sties declined 2.54, reflecting the slowdown in many industries supplied by the Chemical Coatings Division, indications are that perfonnance in this segment of the market will improve during the 1976 fiscal year. Research and development activity continued to center on lefomulatMaof products to cope with raw material shortages and requirementsoftheHarardnus Products Act. Emphasis wu also given to further development of powder coatings, particularly at they might be applied to wood substrates. The Winnipeg Pah* ft data Company reverted the downward trend in sales of fiscal 1974 and showed improved results With an 11.74 sales gaie. This was achieved despite the gemnlly unfavorable conditions in the building industry. The E. HarrisCompany Diviiioe experienceda 64 decline in salts, a direct result of the drop off fat activity hi the silk screen industry which is one of the division's principal markets. The coatings plant M Toronto was closed in August. It was not deemed advisable to stumpstoup-date this small, outmoded plant in view ofthe cost involved. Expended production in the Montrealand Winnipeg plants will serve dw market adequately. Capital expenditure* in fuca! 1975 amounted so $739,000 compered to $662,000 in the previous year. It is expected that 0007-SWP-035183 0007-SWP-000116604 ' (Mraetor* E. Colin Baldwin iM-Am^CWaa^AtliwI ItaSMa-WBItonCa. Keiths. Bmaon framehe OfMifNgmCMfiif GaooC- Bmwar fmUtm >CH>--,bt ftidued 0. Boll mw rw rrwwmtm rRfT,o^^bnKeM,rtTD. Buzzed Gramm Seta* af Badam Vineleeeailna HaradtMveoby Ronald F. Garioy Green HtttaMM -CeeKa(i WHHam I. Da Lancey Fmlim md Oitftucwirt Ogktf KjpylHf CtefMBM WUHam C. Fha f Ni John A. HiU CWnm^atztMiO ffdBplQj Cs^BWiM of AfMfKO AUen C. Hofaaes Maaafi*f Fmmm fata. Da?. a*ie * fogae. Aaoraerv Victor Hek. Jr. The OoBty-- Tht Kiibbw C--ni) WiUiaa Moooan Gwen Wee Aeerdmr-aeattenet Robert W. Ramadan enrW - Fmemtrfy Chmrmm Tin Em OMe Cm Caien--y Geoi>e F. Schbudedur wwf rW ITVM0V " UMRW Wider 0. Spencer frtadtm aae Outturn** Qgktr Officer* Wider 0. Spencer ' `PrintiUm'mti Ch^CanUm Ofiear William C. Fine Cwreiiw Wn ArnAet Richard 0. But fewer tW nraeliae - Wantwtat Virjil A. HoiKj freer war ftwWne -tMeWeade Ronald F. Curiey Gmf tteftetter. fteAp WIlUam Moooan Cm* Mar tanriaar - 4eaMM> OooneF. SddMdedcar Grerp Met OMtMear - CamMk AlaaD. ChHdc Wee heMw aarf Cnee Cewaaef JaneoF. Cole Wee WoMrar aeOTkeaeamr Richard R, Qae Wee Praam*-Aenaaaef Billy H. Devil Wee Frvelwi Oertenea - Carnage green IUWmUM/I ILt BI tKaapkiWee Wee heiiea - Bew*eHr Hamid E. Spitzcr Wre rneena ana TKikMcmt Otrmar . CaaWlftOeea Robert A. Tachennen Wee Praam* Gnermeae -- Caanaae fiver Michael D. Webb Wee fremltie - mnraaaea* Caaaa|i William P. lamao fatrvaary RobaatCafai Onaea Wre Praam* -Peneeaet Jobe R. Skinaar Aeataan Wee AeaMi* Mania J. Donetan Maaaneeep Frank C. KoHadi kirfawo rrveaarer Thomaa R. Mfltikb iulaaelariar; 30 0007-SWP-035184 0007-SWP-000116605 SuMdiarhw Plant* The Oibora Manufacturing Company ,. Th Osborn MtauftcturiRf International Company 'The Sherwin-Williams Company of Europe, Inc. Shtrwin-Williams International Company > Sprtyoo Products. Inc. -- *-- Compailla Sherwio-Williams, S.A. do C.V., Mexico City, D.P., Mexico Ralston B.V., Zeist, Netherlands Rnbbenet Company (Cuodo) Limited, Giswenhant, Ontario, Csntda Schmitt nod Ludwig GmbH, Freshenberg. Germany Sberwio-WiBiams Belgium SA, Broearia, Belgium Sherwin-WUliams (Ctribbuos) N.V* Curacao, Netherlands Antilles Tho Sherwio-Williams Company of Coaodo. Limited, Montreal Canada Tbo Sherwia-Williams Co. of Puerto Rico, be* San Juan, Puerto Rice The Shenria-WHUam* Company Rewuroe* Limited, Kingston, Jamalca Sherwin-Williams do Bruit 9/A--Ttntas e Veroizn, Sto Paulo, Bnztt Shetwia-wnuains (Wen ladle*) Limited, Klagrtoa, Jamaica Sodtt* Aaonyme das Machinal Osborn, Park. Prance PotwmUlo Ptairta Anaheim. California Bedford Heights, Ohio Chicago, Illinois Cincinnati, Ohio Cleveland, Ohio CoSbyvilla, Kansu CrislMd, Maryland Danbury, Connecticut Dtytoo, Ohio Dcshlcr, Ohio Detroit, Michigan Elgin. Itllsofa Fulton. Kentucky (SOX or leu owned) The Caiter White Load Compuy of Canada limited, Montreal. Canada Desdix Brushes Limited, Chepstow, Monmouthshire, Etigiaod Load Shcrwin-Waiienu CmbH. Waldkmibwg, Germany P. T. Unions Chemicals * Castings Ltd* Djakarta, Indonesia Nippon Sherwin-Williams Chemicals Co., Ltd* Osaka, Japan Roan -- The Osborn MaaudKtariag CmbH, Franktnberg, Germany Sherwin-Williams da Plasm*. S.A* Panama Gty, Panama Uaimaa (Hong Kong) Limited, Hong Kong Garland. Texas Gibbsboro, New Jersey Greensboro, North Carolina Henderson. Kentucky Hubbard. Ohio Morrow, Georgia Newark, New Jersey North Olmsted. Ohio Oakland, California Aktiebolaget SYD-Fcroiss (Sweden) Astral St* de Printums, Vends et Edema dTmprimerie (France) Pontiac, Illinois C. A. Qislmka Integrada (Venexuela) San Leandro, California C. A. Vtnetoiane de Pigatntos (Venemeia) China Faint Mlfc. Co. (1M) Ltd. (Hong Kong) Donald Macphetsoa Croup. Ltd. (England) FSbrien Naeiooal da Pintutas "EspiatboT KA. (Bolivia) FSbrica Nadonal de Piinures Sherwin-WiffitiM da Colomhia &A. (Colombia) Foreign Ptenta Industriu Quintieu Ptocoloe IA. (Spain) Nippon Paint Company, Ltd. (Japan) Bayamdn. Puerto Rico Oxy Foundry Equipment Djvtssoa (England) Peimurm IdSales RA. (Haiti) Piatuna Aadian S.A. (Chile) Fmnfcenberg, Germany Cravenhurst, Canada Sherwia-William* Argentina Industrial y Comma! SA. (Aigantiaa) Shaiwia-Wiltiama dal Ecuador Fabrics Naoonai da Pintueu S.A. (Ecuador) Sherwin-WilliamsPeruana SA. (Pan) Kingston. Jamaica, W.J, Mexico City, Mexico Sherwia-Williams Philippines. loe. (Philippines) Montreal, Caoada Shetwia-WiUiams da Centro America. SA. {El Salvador) Sherwin-Williams de Cotta Rkn, 5.A. (Cotta Rica) Shcrwin-WilBams Veneroiana CA. (Veaeuais) Monmouthshire, England Panama City, Panama Shinto Paint Co* Ltd. (Japan) Talyo Chnki Company, Ltd. (Japan) Taubmaaa ladutrim Limitad (Australia) I i Taubmaaa Intenarinaal (NX) Ltd. (New Zaaland) Sio Paulo, Brazil Winnipeg, Canada Zeist, Netherlands 0007-SWP-03518S 0007-SWP-000116606 Th Sb*wifl-WiMflw Company 101 ftn^mi Awnua. N.W. OavH. OIn o 44110 Pham (214) 544-2000 0007-SWP-0351B6 0007-SWP-000116607 S': i^W^AKi*naWliaiaS!!S4.'*