Document 5kmr0Zoa4NZV4wXG0yJ9b8RbV

0007-SWP-034994 Change -- At Sharnin-Miiliiama- eamtmalmr olu* - : chang* * sontiAuoui.C*aja ia "avitabl* in prosuet* oroeaaaaa. man/ra >'S n *h information on *tiica euamaw sac a.e*a > oaaad Method* o* ehailanging ana mot:/atmg aace-a alas change. In raeognitien a this. * mult ant-s Sit* ana *mp'cy a van*iy of programa to aavaiop j ptosia to th* M ai*nt of **/ eaoaOiiitia*. Wo invito your attantion to a apociai taction cl tint report an pagaa 23.2*. ana 23. *lticn toila how tftaa# aaciting cnallangta of Chang* ara viewed ana wait win m our Company. 1 Financial Nigmigna uattaMo saamfiMm l Ooarating *anlaw Financial avi*w tl Csnaokoata* inaam* tl ConaoiiaatM laianc* Ifwat ta Can*a'i*tn*Siiar*noieM lowly 10 lavit* ano Aaancatmn of Pvnaa tr Nat** tc Fmancm Siawmams Accavntama Naeert M Fin* r*arFinance/ lumw/y Imtiatmp an* M*na*J* Chan** M Canadian luiamlaiy Financial lumma/y Oi*i*<*n* IwlMiCiarwa an* ticamaaa IP 'OOueia an* ant* Dinctoi* aro ONic*n Annual Meeting ; The annual moating of Sharaholdera will be held at i fO:M A.M, Oacam--f tr, tw at ma juafatw / Ci*v*iand Hpaat Subtle Square, Cleveland. Ohio. 0007-SWP-034995 0007-SWP-000116415 1 * Ht.UH m > t*rsn :* petw m *** a n m T 9 mm* at t*t >* it (** Ca Financial Highlights Not h im Incoma Bafcrs income is x m....................... Incoma tanaa--Umtad Sim* <nd foreign . . Nm income. .................................... Cm* dnridtndi dedamd: Preferred . ............................................. . Common .................................... Par Common Sham: Net income ....................... . Caah flow................................................. Dividends paid .... Working capital . . .................. .. Ratio of current h im to currant ItaMiMO . . Capital awanditurM Proviaioni lor depreciation .... August 31 IMS 1966 4SS.1tt.13* 30 *71.731 11 629.912 1fl.B*1.t19 482.526 660 36.271 090 17 201 235 16.909.063 1.0*1175 10.690163 299*44 10.616810 3 SIS 200 169679.404 *70 tot 3072* -0 1.26s IS 3 36 511 200 162.916 649 ' * 93 101 31 303 399 7 80S 2?1 0007-SWP-034996 0007-SWP-000116416 * To Our Shareholders Oeepne reaching tha htghaet leva! oI taiat in ow hiatoty on a vary tatwfaetorv takra gain of 9.*tt earning* on com mon theme, afterproviaion for preferred dhndande.declined from *3.36 to 13.29 par there. Tha meraaao in doilara of graae profit manning from incraaetd talee valunra waa offtar by tha affact of inflation on wagaa and Miariaa. intaraal tana othor than ladarai. depreciation, and tha pra-opandng eeavoftha tHamum dmiida plantTfiaaaaaat ineroaaaa warn antiepatad with tha aieapoon of tha rata of intaraal on borrewad monay. which adyanead gmady bayond our axpactaaona aartiar in tha fncal yaar. Tha upward tftruat of coata ganamty. together with a reduced rata of talaa gam, waa patdculariy acuta in tha fowtli quart*. Tha annra paint induaoy axpenenced dleappointing antanor paint iaiaa by raaaen of tha extremely wot waathar in virtually aH part* of tha cowwy from April threugh July. Whia iha affact of coat meraataa for tha yaar aa a whota waa modamtad by a healthy inornate over tha pravraua yaar m tha mvaaanant tax credit not aN of tha additional corn could bo weovamd through pnea mcrataaa er pip. ductnn atficianoaa. 2 It ia laaaonabla te axpact mh*nonary pmium to contmuo in 1970. However, wa look for tome decline m tna rata of inflation. Tha. tegathor with a itgmlicam srop in the wart-up cena of now faabuat. should h*a a Military affact on oporatfoira. florthraa yaara wa have looked forward to fiteti 1970 tha yaw m which wo could achieve a damonatnble turn* round in earning*. However, it a virtually impowibla to maaaura ihoextant to which ahort-iorm uncanamtiaa in tha acunomy may make tha turn.around difficult to achiavt. Aa an iMuabatien. tha houomg induatry tha moment it m a pmraM racaaaion d! ia own. although it m widely racogniaad that tha leng-tantt houamg autlaek a axtramaly bright Intummary, our profit ptemra for Nicai 1970 cantart round dra(avalof buauwaa activity ganaraUy, tha laval of paraonal tpendlng. and tha availability of mongagt money m the mantha ahaad-pameuiaify nan tpnng and lummar, aart it w that perioddrat mow of our eamingt ara achieved. While there are indication* of aomatoftaning in tha con. turner tacwr of our buain-- wa are happy to rapert that our taioa of induatnal fmithat. charmcala tnd eontamart eommua to bo vary good. Wa axpact tfwaa waaa to lamam wrong, even if tha economy thould baaema iota buoyant 0007--SWP--034997 0007-SWP-000116417 Oaspits my immadiota uncertainties, we look 10 the future with confidence. Thu confidence is bated on our fatth in tho underlying strength of our Company. T1m strength m m out people. modemtrad and upended faolrtm. technology. unpatallalad distribution systam and tho strong demand for our products wtnck suraly liaa ahead. At tho Annual Shareholders' Meeting In December 1961. two now director* wato rlaetad. Mr. Allan C. Holmes. p pattnar m tha law fam of Jon#*, Oar. Cocklav fc ftaavia, auetaadad Mr. Arthur W. Staudal who radiad ham tho Board and la now an honorary mambar of tha board. Mr. WaMar 0. Spanear aueeaadad Mr. 9.9. CpoHdoa, Jr. who haa rawed. Thera waia thraa important menegament change* mada dunrid tha focal yaar. In addition to baeomingadiractor. Mr. WaMerO. Spancar waa rlaetad Executive Vica Oraudant Mr. Spincar. who m Forty-two yaara of aga. haa baan anaciatid with tha Company imc* 1949. Ha haa baan Managar of Shanmnweiiama pianta in Vanaxuala. intiah CokimbM and Clava* land. SuMaguantty. ha waa Ganaral Managar of Chicago Qponnont--tha Company'! Isigast. Ha than ittumad to tha Company * haadquartaraaa Qanaral Managar of Manu facturing and wad prior to hia oiaaant goamon. Vice President--Oparaoend Mr. Arthur 9. Hohon war rlaetad Vica Prasidsnt k Trch. meal Adviaor to tha Piawdant Mr. Holton waa. for many years. Technical Director tor paint varmah and lacouar product! and ia wcM known throughout tha mduatty for hia technical contnbuttona. Mr. George ScMaudackar. formerly Piasidant of Maumaa Chemical Company, waa appotmad Ganaral Managar of thanawaonaciiPatadChamicaiaOiviaion, Mr. Schlaudackar bringa to ttoa naw laapenaibilhy a wealth of experience m aH aroaa of thia impenan aaomant of our btwnata. On behalf of tha Directors I taka pleasure m expressing to our 20.242 amptoyaoa our appraciacion tor thau eo-. oparamn and loyalty in an exceedingly dilfttuH yaar. President i 0007-SMP-034998 0007-SWP-000116418 0007-SWP-000116419 Operating Review % Th* Company* *100X100.000 program tot expanding and modemwng manufacturing laciWia* it neanng earn* platan, in tha thro* years tinea th# program art* begun. *17.000.000 he* been inamed in compieced phyacal facihtiea. Another *9.400.000 m tomrtunad to protect* now under way and the balance of earmarked funda end be commuted durmg the earning fiacai year. Among the maiertoctUtiat that cam* into usa during the 1989 fiscal year were the new alkah Mu* plant; the A. W. Steudei Technical Center. tn* rawamped iaame antcydndo plant: and the enlarged production toedmat of The Lowe Brother* Co. Dtvifion at Dayton. Ohio. faaaional pemtst and industrial mamtananca market tna mdusmal product finishes market, and the autemonva after-market Increased sale* war* achravao m ail area*. The program tor modemning a number of Companyoperated branch** was continued during the yaai. Mer* than twenty war* enlatgad and eonvartad into eomolet* decorating centert offering, m addition to pimms --painting tools. wiHoaoar. hard hoof cowering*, carpeting, diaoene*. deoorativ* sccsisone*. unpemtod furmtui* and related items. Thaea item* for paint apcfication. and hem* and eommareial dacoration, accounted tor 19.4* of consoli dated sale*. Conatrucbon of the *21.900.000 titanium dioxide pigmant plant at Ashtabula was acmpimd lata in the fiacai year and prahmmary nan-up operations wees begun m August. The operation of the pient on achadule end * a now producing pigtnent of aery leffectoty duality. Protects currsntiy under way include the addWon of production end wewhouee tocilWae of our Sprayon Products. me. tubeidiary at Sedtord Heigha. OMo. which i* expected to be oparetional in irud-February 1970. and caM-addmonai warehouse apace at Sprayon * Anaheen. form* location, which i* *chduled tor completion in tM>- Ounng the fiscal yaat. 32 new branch** were opened. 7 were aouued m the Netherlands. 31 were closed or eonaoiioatid with sxietmg branch**; and Ilf war* re located. A flexible program such at this it essential m order to recognise and anmiieat* change* m in* market place. At the fiscal year's and. tharo ware 1,999 branch** in operation. Effective at the beginning of tho 1999 fiscal veer, all laamd department operation* were consolidated into * Corporate Leased Department Onnsran, The number or unns wee expanded to 323 end the selea gam achieved Other construction protects now in procaaa are sxoontion of main production faciltoaa at Chicogo and addmonai production luioc at tha llgm comauwr plant. Paaif. Vamdn and iacouar Thi*largan*agmantofourbuaia*a accounted for 92-*% of coneohdnad taiee for 1999. In gatwral. the aagment i*rvas tour different market areae: consumer market, pro- duratg the year waa very gratifying. Sale* to tho protoaawnal pomtmg market continue to grow at a vary satisfactory raw. A significantly greater portion of salsa wes mad* to the larger painting eomrsetor orgsmtstiOA* end to mduatnai mamtenanco departments of pient*. Further prograse ares made in gening met* architectural firm* to specify our paints, this >s a onset result of our merossed promotional afton with architects. i.a-- wiMiuyiiS.1.nywwnwumronanus-* mu m mu tvs* w k m w u m ........wo aaawia tsaaaiimw iwww. % 0007-SWP-035000 iffHMI *** f 5* * Arf*|pw n 44 . :**? > '*Tf S.rM'tf* "* t i ** frirr r :t During the 1M9 fiscal veer, our aatat of industrial firwahM continued to grow wbotantiaMv.Tho ectrvitiMOf tho Indus trial Mot Oepoitmonii of the Acme and Co mo Diviner* woro merged into tho Corporate Industrial Sain Program. Tho optmng of tho naM A. W. Staudal Toehncal Camar, which providm development and tachmcal mrvicm m tho inducmai and trod# coarmgi ana. mm another significant forward stop. Thtt now facility has technical mt v ic o tabomtome davotod to standard industrial fimshas. euttomood industrial coatings, roams. fimafMO for furniture and ochor forost product*. and automotive fimshae. It else mchidae a Customer Appbcettona Laboratorv equipped to apply fmqhM to customero' products by slmest ovary known type of aopheabon method. The Canter is the central technical service facility m the Company's network of in dustrial coatings tachmcal sonnet loOoresonM s o o n tho country. Tho now Center rspresents an invmtmsnt of over S4.000.0Min budding and equipment Itis proaendy staffed by 1S2 chamois, technicians and other staked personnel At tht Qreensboie. North Carolina plant wham wa manufacture furniture finohaa. pieducbaw capacity wee increased approximately one-thud during tho fiscal yaar. Tho ospsnaweiadMigitod to mast tht increased damandc for wood finohoo. Automotive rcfiniching sales of Sharwin-Williama. Mcmn-Senout Acme end Nogem had e significant mcmsM. Th w m the result of the fine setae effort plus outstanding technical advancM in our product lines. Four eddmorwl Sherwin-Wiltiems branch service wemhousM were ooaned dunng tho year to serve this important and last-growing morkot. a Among tho principal now or unproved oraducs -:roducad dunng tho IMS focal year were- Kam-Namal interior Ians cmuliion snamul w m intro duced after eahatonvt fMcerch end fold toning. A lino of colors matching those in Super Kern-Tone will bo marketed early in the 1S70 focal year late* products continue to incmOM m popularity among paint users. lam* Ho u m Aarnr benefited from further tsearch and devalopmant that resultad m mom uniform film build, improved hiding eharseteneoca tnd buut-m application eonool to maum proper him thtcknoM. Kam-Gard lire retardant paint moved from market tooting to fuM-team production and dstnbution. Induttnal lama Mtraf finish is a diract-io-motal latex pawn that rpetdi industrial mamisnenca painting. Improved Coal Tar tpaxr Ceaaogt warn introduced for apccialitcd apphemeno such m oowtr plants. sewage disposal plants and other tamtanon yaac. TImm eoenngs moot aH sir pollution control reaummonw of tuning local ordmoncot. Cowartlad Artnrsian tnamal for factory coating ol aluminum window franwe and other archuiscturai com ponents poor to sMomaly. m a new addition to our Fowamtad Imo for alacwdspeaitmg parnton all surfaces --even thoM of eomptax ihepe. Parmadad 1900. Tho Industrial Coatings Division has introduced a silicone polyester finish callid Permedad HOD. Th finish hoe outstanding color ratonben and chalk rcsdiancs. and tome the other two Smear Fimshet --Supatclad 1100. vtnyl etasnaaland Flueieelad >S00. fluorocarbonreaui-baaad coating. ThaM imiehM offer the commercial and industrial era-enginaerid. precoated 0007-SWP-035001 0007-SWP-000116421 building market a complete knp of finishes. All finishes can be applied by production lino rollor coating or by conventional spray to fill and uw requtremanta. Thaaa ranga from haaw industrial and chemical manufacturing feeiktiei to warshouse and manufacturing buddings. and largo apartmant and eommarcial structural. These thiao finishes eompata with and arc raplaeing such eonvantionai artanor aurfacaa aa anodized aluminum, porcelain anamal and plaatic lammatao. Aeryltt loimil Mining Color* wort introduced by our automotive rehnithing laiea organization. The fuM line of muting colon enabled the letiniaher to match ear manu facturers' standard colors through aanpto mammae. Chomeah A new division, known as "Sharwm-WIHIama Chamr- eais. a Division of The Sharwm-WiHiama Co.", bacama operational on September 1. 1961. Ttua now dnrwon consoiidatat and ume* *H sales. tsehmeal and manufactunng activities of the Sharwm-WiHiama Pigments. Coton SChomtcaM Department and tha formor Maumoa Chemi cal Co. lubwdiafy. During tha year, production of eanatn low-orefit e*gmonta wpp diacontmuad so more rsspprch. dovolopmont and production effort could bo dayotad n those pigmams and colon which would provido for gnotor growth and profitability. This has nacaaanatad eanatn canvomone m dry color production facSitiea at Chicago at a coat of about >500.000. These changes. which am eipactad to result m marked production economies, arenownoonngeompiooon. Output of the alkali btuo plant, which want on stream in December 1MI. * ahead of scheduleand wo aspect that during tho 1970 fiacil year, it will bo at tho raw originally scheduled for 1572. Expanded sale* of para-eraaof. demeetieeiiy ind spread, have required a considarable stap-up m predLctbn "' hat bean accomplished with little additional *. vstmant in our plant Tha demand for this useful. =uo rg block chemical ia expected to continue strong in the yean ahead. Aa a result of a change m the technology of manufactur ing blank colorTV tubes, wo havo converted our AsntaoUa banum ehermcala plant to the manufacture ol itronrum earbonaw and other itrontium chemicals. SalM of oigmoms. chamwala and colon amounted to 10.3% of total eontmidsted sale*. MWaf Contoinor* Salsa of metal centarntrs continued to grow during tha year, and acceuntad far 4.8%of total salts. Bacauae of tho continuing bright proapocta m this arta. a substantial xpaniiofl of praducoon faciktiaa ia under way at tha Elgin plant Tho 10.000 square-loot addition >s dHigned to oceommodsw throe now production lines, two of whicn are anpaetad to bo m operation m ttia fail of 1970 The thud lino wdl bo insulted a later date. In July 1999. tho new research and dovatopmant canter for tho Container Department waa opened at Countrywide. Mine*, which permits epnsohdsiion of all conuinar taaoareh pod developmant activity, as wall as production engineering functions m a smgla structure. Dunng tho 1959 f . <1 year. 61 4% of tha total hiomans wore mod* to ..side customers a* compared to 59.1% during the fiscal year IMS. 0007-SWP-035002 0007-SWP-000116422 Othir Operation* Th* Bubbersat Company. Sprayon Products. Inc. and ma Dathtar Products Onrmen all had aalaa garni ova# flip previous vaar. Salaa of Hi m comoamaa art included m tha overall total of PauitVarmth 4 Lacquer tale*. Tha Qibom Manufacturing Company accounted for 3.AH of eonaolidatad tala*. Thay aehiavad satisfactory growth ovar tha pner yaar in both aalaa and earnings. During tha yaar. Oibern icgumd Sehmit* It Ludwig, Frankanbarg, Germany fxpansion of Sehmit* 4 Ludwig's faciimaa undar way tomoraaaa MbaiantiaUy than pro* duenon capability and to gwa tham now preducta da* valooad by Oabom winch will panne furthar penetration of thair markets. /nramadipnaf Operation* Wa continue 10 foeui incraaaad attention on our mtar* national bunnoM and orocpccta for improved aalaa and aaminga are ancouraging. Cia.5harwin-WiMiamt.5-A deC.V--Mexico aontinuaa 10 achieve ngmficant game m both aalaa and net profit*. Tine eonaolidatad tubndiery opened aavan now branch#*, bringing tha total to thmy-on#. in tha Natharlanda. Varffsbnakan halaton N.V. and Varfchanue Zaitt N. V. ate minufactuien and dittnbutaia of quality trade paint*, with manufacturing factktiaa at Zaiat Wa aeouirad thaaa companies during tha year to make our brM move to manufacture and tatac paint >n Cureoa. The Ralston Company opantea aavan branch stores and thii gives us the opportunity to tost In Iwopo the morchandwng mochoda which have proved so sue* easeful m tha U S.A. Our unconaolidatad tubudiary in Brazil, winla aidl pro fitable. wat Is m to than in tha prior yaar bacauaa of ad vene economic condition* m that country. a The conpnuad growth of aatabiiahad iieantatt munad n incraaaad royalty income from this source Wa zzrduded eight addmonaOlcansa* agreements--on* *en m Bolivia. Cnglandt Franco. Itafy. Japan. Sa k i- r-c twain Chile. tabor Aa/atron* and Manpower Oavafopmanr At yaar and wa employed 20.242 people. WO am mi* proving our personnel planning program designed to insure that tha talents of our employees are developed and so pited moateffectively.Thu program provide* graanr oppor tunity for sit employe** whilo permitting prudent control of compensation cons During tha year, ever 3.000 super visor*, branch managata. plant foreman and othnr parson, nal took part in training programs devoted to tha davaioomahi of than managerial skill*. Mora than 400 smpiovaas racawad financial aid m work-related schooling. Addi tionally. 290 management people were trainee ns Benefit Commumeatoie. The*function to acquaint all tmpiaytas with the Company'* benefit programs on a patson-topMOft basis. in cooperation with tha Federal Manpower Aijmmistrstion. we trained and placad 1B0 hard-core unemployed m permanent )ebe during the yaar undar tha Nanonni Alliance of Buawaaaman (NAB) JOBS Program. Our retention m* was 7% bettor than the national avarago. This effort unH continue during the current focal year. Again this year our labor relations watt qiutn satisfac tory- Thaw woo a throo-waak wo* stoppage at ano of our paint plants anting out of group bargaining. Other oamt compamae in the same ares ware wniiarlv effected. How ever. this did net nwtanaUv imped* operations. Mott maior union contracts now m affect w* continue to and beyond June 1B70. O007-SWP-CI35003 0007-SWP-000116423 Financial Review Slht Consolidated ret mIm in fiscal 1999 amounted t o MtS. 139. >34. compared to a52.52S.690 m 1944 This >s the highest level of Miss aver achieved by the Company end represents an mersase of 9 *4 ever the pner vaar. tvery msjor division or araa of the business contributed to this ineraaM. Coniehdated n earnings wtallsd *11.941.919. Afttf provision lor prsfwred dividends. this aounralant to 13 29 par common share as compared to *3.39 par com* non there last year. Mstor factors effecting earnings m 1999 ars commarttad on m the President > latter to Shareholders on pages 2 and 3 of this report Tt*n U. S. and foreign lanes amounted to *11.929.912. The investment tae credit was *2.722.339 compared to *1.039.993 m 1999- Since w* reduced the tea promton by the investment taa credit, mis lubetsntiat mereete. togather with the foreign taa credit issuited h i a much lower effective taa rata. The federal surcharge taa imountad to * 21 par com mon than, the same aa last year. Taxes other than federal have continued to naa signiflcanriy m the last five yean. In fiscal 1999. these taaaa meretaad to *11.370.293 from *10.394394 in 1994 m MiUJOMt rue II- u. t ana roe(h im ornta run Orwdbntfr A total of *11.696.039 in dividends waa dac<aro .n haeel 1999. common dividend! amounting to *13 $50 163 and preferred dividends amounting to *1 0*5.'. *i Centmon stock cash dividende for fiscal 1963 are at -ha annual rata of *2.00 ear share. The Company has paid cash dividende in every veer unce 1399. it has bean the policy ef the Company 'or merry yeeis to pay dividends on a Quarterly Basie. in m u-- tl^ COMMON -- _---------- - If VM0 4# 7 raimiii " Human mouunos a-- -- edema -- M -- -- -- iMt as it H II Capita/ fxpendfturas expenditure* during 1999 for property, plant and equipment amounted tp *30.721.719 compared with *31.303.399 tar 1964 Depreciation and amomiatnn totalled *9.263.119. up from *7.194271 in 1134 Capital expenditure* for fiscal 1970 hava bean oudgeted t liigmfv morn than *21.000.000. which includes * carry over of appreiimnily *9.404000 from uneomoioted pre<*c 0007-SWP-035004 0007-SWP-000116424 Working Ctfi'tH Current tsMts. lea* current Habiiiti** it the and o< lueal 1969 wet* 1169 675.34 compand with 1162916.649 it tna do** of <966. The currant ratio for fitcal viar 1969 wit A 79 to 1 The utilization of and not addition to working caoitai. ta thown m the Statement of Carnal* dated Source and Application of Fundi on 0090 <6. in U.I0W WOeKMO CAMTIk j m-- -- i:i-=- 100-- ih ta ee ee Common Shotofiokiori Equity Again m 1961. common tharaholdara* equity, in both deiiara and on a per-iMra bam. meraanl Total com* man ihireholdan'aauity rota 17.936.364to a20Z.S62.S61, pat-ahara equity roaa from >36.64 par atiam to >36.06. common uamoimar caamr m Miuiona w*-- -- MO -- --------------------------------------------------------- !------------------1 mi < it ta aa TottiAuou An increaae of >31942.396 brought tool aeaon of the Company to >367.374.467 in 1666. Owing the peat five yean, ataata nave mcmiaad 46.7%. zsa-- 00-- -- mi ae at ta ta 10 Comnt and tong-Term fminting In addition to uniting bane and long.turn otot -h Comsany nai me eaeacitv to obtain tuen ado>tionai Vot at may oa naaoao to finance operatic"! <n an oraany wav Under the tarma of a Credit Agreement with a group SI banka, than .a available to the Company, urtii Oecemoer 31. 1970. a revolving credit m the aggregate amount of >25.000.000. On or before Oecember 31. 1970 :ne Company may replace any owtanding revolving credit none with tone notat payable m tu equal temi-anruai initaMmema. The Company alao hat available, until November 15 1973. a (uro-doller revolving commitment III the a-cu"! of >3.000.000. Thit waa arranged in connection .*. . earn aequnraeno m Europe. That portion of long*tefm debt conaiatmg of saca'-.-aa rememe unchanged at >90.000.000 Theae diper*.rat were laauad in 1967 and are due m 1992 Intiirat: savio.e aenv-annuaiiy ia at an annual rate of 5 *5*1. Aotkotnont Mono Subatamiolty all employee* of the Company and :> domeabo aubaidianae participate m noncentnbutory canawn plane. The Company * penmen axpenaa for fueai 1966 was *4,740.312. reprtMntrrg normal ceat and amottiutwn of unfunded pnor aervwe cent over thirty yearn. Comnbutiena to the funde m fneal 1966 war* *3.696.498. tmofoyoo'i Stock AmcAeae Ptoa During the v*4t. the Company launched an ampiovae nook pwehaaa and aawngt plan for leianed paraonnat TMe plan enable* amployeet to pwehoao the Company ! common itock through regular payroll deduction!, it de nied, 1 portion of aavmga can be mveated m a govern ment Meumiee fund. At pteaera. the Company eomnbotet an amount aoual to 29% of each member'! contribution Mom than 7.300 employee*. aoptoumaMfy 73% of all thoae eligible, elected to paiticipate m the plan Of the total enrollment. 63% photo the option of having 100"* of thaw aavmga invaited in Company nock. Stock for the plan n purehaead by the Truatae on the pen maifcet. 0007-SMP-035005 0007-SWP-000116425 Statement of * Consolidated `Ctre HE SHESWIN-WIUIAMS And Cense' ca:ac SLcs : v >j Year nd*d August 31 NatMlM Other incoma--nat . . .... .... Costs and aspansaa fmdudmg depreciation computed principally on tha straight-line method o1 9.289,119 in 1988 and <7.888.271 in 1968): Coat of products sold ....................... Sailing, ganarai and administrative aapansas Pennon*--Not* ................................ ........................... Ipiaraat ............................................................................ Incoma Bellom Ineema Taaaa Income wM: United Suuea--Note : Payable currently............................................................................ Oelerred ............................................................................ Foreign . ....................... Nat Income 1969 t49S.139.1M 1.319.843 498,487.777 310.692.298 144.6291247 4.740312 9.764.189 468,961046 30,471.731 9.621000 601779 1.191137 11.629.912 t 18.641.619 'ses <4S2.S:!'c3 1 830 CCS 48* 178.886 278692.082 132.161.993 3 899.489 3.382 089 417.901869 3f.271.0U 14.800.000 1.420.000 1.061.239 17.291.239 a 19.991893 Nat income par common atwo- based on average number at share* outstanding during tlw year................................ See note* to conaoiidatad financial statements. a 3.29 a * 338 0007-SWP-035006 0007-SWP-000116426 Consolidated * Balarce Sheet Ouqwil 31 CVranr Jh m CMh Short-tarm inraatmanta-et coat .... rrada accouiita 'teaivabla, lata ailowancaa til 292.000 in i960; tl 234 000 in 1909) invanteftt--at lowtf of can (avaraga at firtt-m. firit-aut mathod) or marital: Fimahad marchandit* .Vom >n ptocaaa. *aw mitanala and luoDhat * Ptoaid anoaraaa Atcovarabit ladaral ineorna taxaa .. Dtftrrad (adaroi incoma tax**--Not* Total C amAaaata Invtttmina W OthrrAUHt Common tnaraa at Via Sharwin-WilKam* Company of Canada. Limitad--at coat Now A ....................... Racawablaa. advaneaa and miacaWanootw othar aaaata 3-cpty. Mam mtf fcuwnanc--oath* ba* of eott und. Building* Machinery and aouipmant ... .. Lata altowaneaa lor depreciation '969 t 11 400.919 O-- 96.799 991 '939 12.112?:*: ' ::'3ic 51 478 337 99.329,439 40 666094 139 990.920 9.999.079 2.169.749 2.209.199 210904.339 90.9167169 41 647 63' 132.419.016 4 092363 ^-0- 2,3164.387 204 366 036 4.192.766 2699.621 9092.697 4.162.766 3.219.941 7 399.707 9.141.676 62.092199 190.390.094 217.992922 92769.090 134.797.472 1397.374497 41190149 50.927 691 131 235.3'3 115.923.309 74 279 990 112.947 399 *324432101 '2 0007-SWP-03S007 0007-SWP-000116427 THE SHEaWIN-WILLiAMS COMPANY And Consolidated Subsidiaries Liabilitios and Shareholders' Equity Currant U*M>tret NomwAli Trad* aceDuma payable Payrolls, eompansatran and ether accruals Dividends payable on preferred stock Taxes, other than income taxes income taxes Total Currant liabilities loop. Tern) Owbt S 48% Debentures due m 1993 with annus! payments of 12,000.000 commencing in 1973 . Revolving credit notes payable--Note C . Deferred Aedarat/nceme fare*--Note i ShvM&nf fgiwty Capital stock--Norn D and 0; Serial preferred without per value Common -tl.28 par value . Other eaprtai................................ Retained earning*. . Ion coat of common share* in treasury See notes to consolidated financial ttatamants August 31 198# s 2.917.030 13.991390 29.048.549 27732* 3.105.861 -0- 44.929.994 - i960 s-- 15866 34$ 1 $735 074 74500 2576.098 4414 798 41.467.386 50.000.000 25000000 75.000 000 6 403.759 2974.934 50000000 3000.000 53.000000 3.793199 3.281.742 9.199.430 31341190 1.247,141 194.779312 220.904.747 97.799 221489 0397.374,497 9.344 360 33.210 756 900.173 177 833531 220 998J20 39033 220.949 787 *324432101 0007"SUP"035008 3 0007-SWP-000116428 Statement of * Consolidated Shareholders Equity BALANCE AT SEPTEMBER 1. 19B7 Sanaa B preferred nock issued upon aaareiaa of slock option* . ... Common Slock isauad Conversion of Sanaa A grefaned aiock Exereiae of atoek opnona Nat incoma . . ... C*ah dividanda declared: Sanaa A preferred stock-- adOO paranoia........................................................................... Common--S2.00 per shat* ... ... Pooled company poor to merger........................... Purctiaia of common aharaa for ireaaury ... BALANCE AT AUGUST 31.196B . .. . Sanaa B orafanad stock: Share* isauad upon aaercia* of stock options ............................... Cask m lieu of fractional aharaa ............................................ ..... , . . Common Stock isauad. Conversion of Sanaa A orafatrad stock ....................................................................... Conversion of Sanaa B preferred neck ........................................................................ Eseroaa of nock oooene................................................................... Nat income ................................................................................ Cash dividanda dadarad: Sanaa A preferred stock-- SAOO par share................................................................................ Sanaa B preferred stock at an annual raw of S4 40 Parana* . .................................................... ........................................................................ Common--S2.00 per share............................................................... Purchaaa of common aharaa forwaasury ............................................. BALANCE AT AUGUST 1BM31. ........................................................... S** nom to consolidated financial Stitementa. ... Stnal Starrso Stock Shuras VS'US 283264 *9 37? ?C 120 ' zzc >34B) -- u aoc _ .aa .. -- 263i036~ _ 9 344 360 375 (145) 13.322 (5.15* (5SD (3.171) -- 09.57* (137 518 -- -- 2SI.B44 -- . S9 195 43- 4 0007-SWP-035009 0007-SWP-000116429 THE SHERWIN-WILLIAMS COMPANY And Consolidated Subsidiaries Common Stock Share* Value 0 S 303.752 *33149.450 3- - ;> 550 9319 -- 3.625 58,691 -- * -- }~ 5.313.721 -- -- 33.210.756 Other Capital *227.212 3.645 31.175 33X141 -- _ -- -- -- 600.173 fteteineo Commit *170.513.115 Common Stock in Troewry Skva* Valua 0* * -0- Total *213.289.737 -- -- 1X989.993 -- ^r -- -- - 4.945 -0-- 399922 -- 1X989863 (299.444) (10.919.910) (75X493) -- 177.93X531 -- -- (900) (900) * -- (39.033) (39.033) (299.444) (10.816.510) (793.493) (39.033) 220.949.757 i) - 91 a 0.192 13.914 -- -- __ -- -- 9.334,749 __ 14.241 -- - (9.439) -- 5.739 36.700 69.992 -- 13.937 9X919 930X11 -- -- -- -- 19X41.919 ---- -- -- *3X342.159 -- -- *1.247.941 (297.247) (747.929) (10.99X993) -- *194.779.312 ---- 27,593 -- -- (14590) ---- -0- ---- 0- -- -- 817.173 -- 1X941.819 -- (1.100) (1.900) -- -- (9X793) (697.799) (297.247) (747.929) (10.950.993) (5X793) *22X48X991 0007-SWP-035010 0007-SWP-000116430 Statement of Consolidated Source & and Application of Funds TH Sh e r w in -Wil l ia ms c o mp a n y And ConooMitoa Suoudianes So u k * of fundi From operation* Nn meoma Frovaton lor depreciation ., Incraaaa h i rwMmffl deferred Moral ineom* Una . Insraaaa in revolving credit netaa . Proceed* *gm*ala of naeliiawad under (lock ognon elan .... Application of Fundt Caeh dnndanda declared ...................... Addition! to property. plant and equipment not of ratiramanta ...................... Lata utihMtion of tlwiMemi maaatmantt dloeatad to plant and equrpmont m the prior year. . . - Noneurrem matt acquired through aeduamona .... Addition to worlnng eipital................................................. Ottiar--not. .............................................................. Saa nctaa conaoiidatad finansM wwinint Yw Indad Augutt 31 1969 ( 19.641.819 9.269.119 690.972 26,987.910 22,000.000 644.736 91.202.246 1996 ( 18 989.663 7899 271 1 *20.000 28.299 13* 3000000 *011167 31 696 901 * tl.696.036 30.029.394 -030.029.394 2041.606 6.796.635 661173 91,201246 11 669`4*7 30 942 371 29.000.000 5.942.371 -0~ 13.693.440 991.943 t 31.698901 0007-SWP-035011 0007-SWP-000116431 Notes to Consolidated Financial Statements August 31 *969 * n o t e a -p p in c ip l is or c o n s o l id a t io n The Consoioattd financial cratamantt include til ngmficant lubenluna**icn The Shtrvmn-William* Company8f Canada, limned fmaiemy owned) The Company* oaunv m rtw coniOhdatednetiMotoof tnotMbaMhaty amounted to e7.4St 111 m Auguit 31. INS. which meiudw undmnouted eammge tinea acouit'tion of *4 NS IDS. Pet the row KNM Auguat ]1 1 NS the Comoetty'* equity m tin iwNmhiM earnings *** U3 04S. Dividend* racowod Owing th* yo*r, maudod n othof .neon*, turn 1114,130. 'nrarcomoany traniecrion* hv* boon #limtnoNd. Aomen*io r#tN of exchange hava boon uioO to irantlera fotoign cunoncy amount into JnitoO Sum doilai*. oral oho offoe* wao not ngmficant. NOTE t-INCOMC TAXIS in icoorOlfic* uwtn I rocont aoimen Of tho Accounting hnnoolot Soord of th* American inoonrt* of Cwofiad Pukka Accountant* on too auoeooon. tho Comeany hot racoonmd Wo defamed income to* :>ebiti*s and bonofw waultin* turn timing difforonew boMwon fmanciaf and tao accounting. Canain of than* timing diffaranen had prowouoly boon to* ssttad on a not-of-rax ban* and in ISOS. without tffoctlng '-ncom*. tho Company ratogmtad mo defatted too boo*lit! rt3.4S4.301) MlnSutoSM id the** odfatanew. Th* tsss * nancial atatomont* navy boon rootend to toflact tht* change and cartam other toafaaaiBaaifana. The ineamo toe prcncion ha* boon raducod by inviMtihont tea credit* of approaimaiofy *2.722.000m IMS and *1 030.000 i* ISM u*mg th* how-through method. NOTI C -klVOLVINO ChlDIT under mo Mia of * Cradit Agreement * gtoup of bonk* n*v# m*o* avoilobl* to th* Comgomr until Oacombar 31. 1 f?0l revolving eradit aggregating <29 000 000 C' or ;* /;'* Decernoar 3V 1ST0 wo Company m*v '*ei*e* erv mg revolving eradif not#* vwtn term -em pane * * > > MUM lamunnuki mitalimant* Tn# C/MH Agi**-f' n< in# Company to maintain conKhidarad not c,,nun: met o nnt io n then *100.000900. NOTI D--CAPITAL STOCX TO# fottewinp toSlo 0t# forth Wo tuthoncid and nut* hero* of tho vanou* o w n of itoen *< August ji 1S43 SH4HIS Serial Preferred Stock, ad 00 Cumulofnw Convattibl# Prafonod Slock. Son** A d 40 Cumufcwd Conyombio . Profaned Stock, So n S Common Stock Authonnd 1 sooooo ututd TCOdS ISdTSS is 000 000 3.33d TdS The ahama of Sanaa A and Sanaa t profaned acock ire con vertible at beat convernon h k h of SOOO cl *42 SO per hate of Coaonon Steak, roaoectivoly. taking *eh than of otofonod nook at *100 for th eutooM. The ntiioar* of tho ptefaned Mock are antidad to on* vote lot each there. The Camoiny moyradoom the Sanw A orafanad ttock commahaing m t ITS at alOd oar tharo and at o declining amount ach near to It 00 p mam m 1SS0 and ihnroaftar and tnn Sorias orafanad MOCk at *112 unol Oocomoor INS and at declining cmanna ts *100 m INI and maroohor The aggre gate owMonM of th* SonM Ptofotrad Stoek in invotuntoty liquidodoa m *23.304.400. At AuguM 11. INS on oggrasm of 9N.230 iharao of Common Stock worn tooonrid for eonvowon of S#nt Pmfwrod Stock and aiarciM of atoek cpnoni 0007-SWP-035012 0007-SWP-000116432 THE SHERWIN-WILLIAMS COMPANY And Consolidated Subsidiaries '-nnwanii* i i-w m m * 11 *| m< ' -w" w *<* Hw in mini. NOTE E-AETIREMINr TUNS Substantially ill emafavata of the Company and its do mestic wbwdianaa who moot etrwn mqwrwnent* M M to# end length of lervice. participate in nonconmbutory pension plans- Tho Company s policy is to ecetue contnogtiont for ns pension funos representing npnnai eost and amomtmn of unfunded pnor aannea coats ovar 30 years. At dipmoat recant actuarial determination dates, the assets of die pension funds and the balance sheet accrual aacaadad the ectuenahy com puted value of vested benefits NOTE f-LCASES Branches. offices end certain warehouses end pidnts wo leased for venous periods The rental eaponee of leased premises for me yesv enoeo August 31. ISM. rggmgetsc apomaiinetalv tieSOO.OOa Apptanmetely 11% of these rentals relate to leasee eapmng in five yearn or lees NOTE S-STOCK OPTIONS At Aufutt 31. ISM there were 137 SOT car---on irarss reserved for isauaneo to officers end key emiv*a .row a steak opkdn plan. Options wo granted it pners -e: mi t-an the fwr mwkot value of tho shwee it act# af grant T-e aot'ons wo s iw c imMo to tho aslant of one-half or one-t>ftn af rm ootroned chwso for each fuH yaar af employment 'allowing tha data of grant and eapnt fnra or tan yoata aftw data of gram In addition, notions for S3S shwes of dm SA SO Cm- anva Convertbit Preferred Hock. Senes were aasrc.sao<e end outstanding at 073.30 per there. Dunng IMS oenena for 373 shares were eaateiaad. These options eapao in 1370 A summery of the aacton transactions tor common mares dunng dm year follows: At begmnrng of year. Optwna outstanding . . ..................... httarvaO *o future options................................. .... Changst dunng ttm vast: Oeuone grams*................................................... Option# boeoming asawaau# . Ostmnsaaatcwad.......................................... Option# cencalad.............................................. .. .. .... Ai and of voar- Optiona outstanding ... Options eierosable. ftesenred for future epnone. ... .. Shares 13,730 13.430 33.330 3323 MM7 SM OPTION P3ICE8 her Share Total 40.21 to aafSO M.3MS33 MwkM Pneee 4l.S3SerM.S0 43.433 40JSW 4030 40.3* to 4330 40.21m 80.30 402BM 4300 8M.730 I.0M34A 117,173 138330 e 383733 1 343 S3S 70 374 403.341 4.374.331 i 0007-SWP-035013 0007-SWP-000116433 Accountants' Report oaitfsf Oncan Th# lhrnn-Wa>am Camaany Clamlaaa. Oltia W* nam aaanwna an taniatitaiid tnonenl iwmMi at Th* Cw b u t anti ttmaMmi tub. MahrMT<*iMAa|Ml1.1M> Out mmInman mm inaba In Mcarrttnrt with mnantv ice--lid imoKirg tunaarta. ana MdgOad *ucK inn at an ttfumin| neaMa ana tueli attwr hrfana pracMurw. M * cwiBdara* nacaanw n an cannnttaataa, Wa awwuay maaa a amlar anamnanan at tin tantainataa tinaooai Mamia tat taa otounaMia mat* w out oaman. an actaananinn batantt anaat ana wtaanan at inaana. wannaMan' minty. ana tauxa ana aaal*eaan at tunaa mat Wriy an yanaaaoami NnanaMt aanaan at Tin <lnmm>MHHniin Camaany ana inmakaawa tulnainn at buayat H. IWfc ana Bn iitattiaa mutta a* Man taantini. ahanfaa m taatahantn mvny. ana taotaa ana iMtlaaaan at tunaa tar an mat ann anaat *n cantannty wmth aanatatly accitwd aoaauntmf pnneona aaaaaa an a kaaa aanaaiant ata ant at an atacaana mat. CtamtanA Otua oetaaat ta, tM 'i 0007-SWP--035014 0007-SWP-000116434 i I Cam Flow 30 23 n 19 '0 I 'N VMLkiCNS Caoitii InoonOiiufM ana Sooracatian 30 ..-- 11 *Utt....... amteiATioM 30 21 20 ' it 10 i i'-.e*.* U **. 'Ml `Ml -Mr -Ml m W -IM -Mr -Ml Ml Eammga md Ovioono* For Common Snaro 'JO <00 3.10 300 taPMNOI 210 2.00 19i WVIOWWO '00 90 'Mi- -m -nr m nw 'Ur* ilMS- V-tir ' IS 4Hi OnpooiMn el Fm-tax ineomo ... ii11" ;......... ....................... to !* : 36 ii 20 1* i 19 : ! 'W <mi nor "" -m v m -- :m ... SCiJiP " ss'&et* -Mt CoflMMMdtWtSalM s=------------------------------------------ no *x 310 300 290 200 110 <00 -Ml -MO 'MT 'MO WMtUONt Dtn#UH#n 0* To* NMflW ... VBA* INOSO *UOOtT II 'Ml ] APW WmOlWHHM j 0 1211% MMMMOM I WMII WF* ( jn^TMIMM ' 0 23M "Ii*O"M**H*WWW *\8 * 'MPlMM* 'MO 0007-SWP-035015 0007-SWP-000116435 Five-Year * ** Comparison A THE SHERWIN-WILLIAMS COMPANY And Conaoiidttod Subsidiaries Yaar tndad *jgut 31 Nat ulM Income baton income imt Income taaaa-United Statea and toraipn Nat income Earmnga oar abare al Common Sack . . Caan flaw par mart ol Cawwwan Stack Samrnpa aa pareant of aalaa . flatum an invoated capitalCommon Stock (2). . Caab dmdandi declared: rrsPiW Common . .... each dwManda par aflara of Common Stack................. Number of ahamhoMata: Profaned......................... Common............................. Profaned and cammen haraboldara' acuity Common themhoWarn' aoumr. Oar abate......................... Capital aapandinma . Prowaiona to dapmcianon . . Warkms capital (currant aaaata torn aunant liabMaa) . . . Mans of c u p imh ms is cunsit lisW<ttSS Total aaaata......................... Numoar of amptayaao . . . 1**1 mh us.i3a 30.471 731 `u 432528.440 34.271 ON 1447 41740* 220 34 324*14 1*4* 403 430 44* 1 *13.333 MS 372 011 SM 40 375 MS 1M2SJ12 it.ui.ais 17.2SI.23S 15SS5SS3 17.141421 11.3452*3 11.244.04* 22*4524* 1*12* 519 21 249.130 3.2* 3.M 3.44 *0* 3 74 S.I* 3.74% S.I1 420* 4N 4M* *2* 9 !** 4M 5'I*-. SOI* SSS* 151S* 12*1* 12 32* a 1.041175 iaaso.ua a 2*4.444 IO.S14.S10 a 274.0*7 10.3t9.H7 a .09*40431 t 370 1 20 1.7*41*S 2 200 200 110 17011) 1.07S 527*0) 1.2N 4.2S2 n 1.0*4 M 7.913 2*1 7.43* amcu.ati 2ttHUt1 3505 30.721.711 *.2*ai ia 225*45747 1S5S451S7 34.M 31.3023N 7.445271 >2122*5737 1*5*40337 352* 2I.M52M 5*75007 305219.04* 175412444 13.S7 12444.101 5415714 a200.3M.M3 100 OM*0* 31 40 7 44571* S.0SS.231 1S5S754U 142S1544S 144.221.*14 1351*7.314 131 3*2*11 4.7*101 t3S7.374.4S7 2a242 4*3 to 1 324.432101 14,403 577 to 1 305*727*4 15*33 54* Ml 245075434 152S7 470 tel 240.303. **1 171*0 -----a a u i 2mmammmmm (1 > Adpiatad for 3 to 1 atecfc apMc aMattma OmiM 5 1 M5 (2) Iwd on common MiMMn' apuky m bapmnlnf at ymm. (3) in addition the 5271 wglwwrt iMntisMii* twin w eparaaimttalv 7.220 banafjcm attoaUntdata1 ptmtipttin* " tflo Comotny'i ateck wflnw and living* Men for aalaried amionto 0007-SWP-035016 0007-SWP-000116436 0007--SWP-035017 0007-SWP-000116437 , initiating and * Managing Change m I The Sherwin-WiHiama Company commuted to tho proposition mat the ap<m of inquwy. examination and inno vation mutt permeate ad areas of our boamaaa. Accord ingly. we m applying tho scientific. investigativeapproach to producta. procaaaaa. markaurtg and dittnbution. managamam mfonnation asnncae. and personnel development in these, as well as other areas, the mtsmetion between monarch and application is invariably continuous. An txtmphm Awduces In tho Ninataon Fifbas. wo wart marketing auccaaafuUy two product Imaa of refimailing matanala tor motor vehiclaa onaalacouartypaandthaothotananamallormulanon. tach had diatmet propamaa and each its own dlstinet advamagaa. So tbs queeuon waa poaad to dm waaareh staff-- it taehnplogieallv and aconomwailv toaa* ibla to cambma tha daarrabla propamaa of toeh into a smgia preduatIf ao. tho benefits m euttomen would bo twofold: they would anioy all tho apaad of alaequarsystarn and charaeienaoca of an enamal finish, and mvantory raquimmants would bo metanaHv toducod. Such a product would atao banoftt tho Company by nummamg manufac turing changaovota and atoafchaapmg dupkcationa. fiaasamn waa undawakan m tha ataa of aetyiie icaina ainea thaee aaamad to oftor a promiaing approach to tho proptam. Aa tho ttudwa progressed. ananaon waa alao davotod to tha ptgmanti and other ingredients raguaod m tho aought-for formulation. Attar conaidombto effort and tan#, a pdot batch of a totally now typo of automotrvo finish waa roadytorfiold tasting. This waaan aaryheenamel which m dhnnedy different from tho acrylic laequara ovadabla foraoma yearn. Tho development tuff took the maurial into the hold. eamoi^nsqe^^Mn apian^^twifeM^p dso ^uwgm Mt^^pdg^^ifmlaawteimMi^a h mm|piwtrnr^nwuwtpwamoai stehsAv anos * fIwwiruaiiaawuhiimlnogMshfiofippsnopfnilaowrgrago^ tN--ru-rynr Mk----pftnoaintan.r AaefkntwevropaMv dopnbeOirkOioi dimpoof vngivMnsMf onooiwo oy a fMiyMf nwrair ov in# nation'a major Buck float oparatora. At first. "Aerylyd" waa produced only in standard ham cotor*. it aeon bacama swdant that a line of cotoia that could bo eonvamandy mtamuxed to piovido custom colon was neeaaaary to mam demand. Again tho maaatah staff took on tho problem and aoivad it with a Imo of fifteen "Aerylyd" Muting Colors by moans of which ktamlty hundreds of euatom eclota bacama availablo. tWiMW Mm na mia mw a UMur-nW m. miM<vM-UM'W<MlllllMllMHW Than the aaaich turned to tha application of "Aerylyd" to pasasngsr am*. Ham the color mater mg problem was made oven mom complan by the wide army of cetera uaad m tha mduetry. Tha maaarchsm mat tha challenge and me develogment team provided tha technical service that made "Acrvtvd" a preferred material mi auto refiruslung hops everywhere. Shortly thereafter reeaareh personnel passed another ugmfieam mseatone m "Aerylyd" petfdnnanca. They warn able to adapt the highly successful bawl acrylic ream (on whwh a patam has boon granted) for use m tha popular metallic automobile finishes. Outing tho past year that achievement nas come to toll fruition m a line of acrylic enamel mixing color* that per mits ample intermix matching of major car manufacturers' atandem eotom dating back to HI* medals and forward to tho H70 medals. In addition, an almont unlimited rang* of euatom metallic cotoia ean be as readily mad*. Out of tha aaareh that lad to "Aerylyd" cam* another product--"Kemaciylic-B~. which hat found wide accept ance at an equipment fimah among urban transit systems, and railroads and atrimae. Wo tab this sucease story of "Aerylyd" in dolad merely to iDuanaw our continuing raaoarch and dovoiepmont altort. Similar prajaes and ptograme am eoncaivad and fePowad through conatamry. These extand into aH Sherwm-WWiomb product ima*--such as interior and exterior house paints, industrial Hamm, cencarnara. ptomams. colom. chemical*. aatoaol packaging, paint application tools and power driven industrial brush**. An fxtmpto in Anetuat Tha actamifie. investigative approach alto appiiaa to process raaaairh and davatoomant. For mom Man thirty year*. phtlukc anhydnda has bean uaad sxtanarvety aa a bate raw mstanai lor mama uaad in pamt. Mem mesntty. raaaamh and development by acwnbsta in our Gltamcala Division has maultad in a uniquely lenple and patantad procaas for the manufacture of a highly functional chamical called matoic anhydnee. derived from phthafic anhydnda. Thm is uaad in large volume aa a vamsPle mwmadiam tor the manufacture of a number of eharmeals. Now a nawhr complatad "fourth generation" continuous proiili bl tiW Ctncumsn plant produces isateic anhydride m high purity dwedy from moltan pmhaitc anhydnda. 23 0007-SWP-035018 0007-SWP-000116438 I Th# mot operation from <w matntii to finished bagged product. earned oul m fully automated. High-capacity unit requiring vary few operator* per shift. lutoic anhydride is used caetwefy in the eyntheers of two important praduett of the Chemical* Oivisicn--sac charin end methyl amhfamlata. in addition, it m marketed world-wide for use m the manufacture of agneulturai chemical*. never and perfume ingredient! and a vanity of other mduemal and pharmaceutical end product*. Aa a result of our market development efforts, hundred* of customers' laharatone* are engaged m research prefects involving isatoie anhydride and such investigations lead annually to die aopearanet of dorent of publication* and patann. Commererelueticn of rhtaa invention* w espected to mere**# gieidy th* demand for iterate anhydride m future yearn. Thi* development of leeme anhydride iHuetratee the value of the investigative approach in chemical precseamg. Although, of necaeamr. procaea research and develop* mom at Sherwin-Wiiiiamsia directed chiefly to cur own production neadl. it m not (muted to thorn. W* conatendv contnbut* hold technical service in the internet of improv ing th# eocene* wiuen our customer* employ h i uung our products. To illustrate we have developed a monitoring metremerit lor the tiectrodeooaition of pemt (p prccee* Itmtler to electroplating of macalt). Th# monitorgrveeueen a# th# eiectredoooeman procet* more ptocao control over the Braces* toed. Similarly, we have investigated end can recommend to our agneulturai chemical customers, pwceeie* by which certain of the chamretl* whch we manufacture can be most effectively unreduced into kepid fenHaei*. m Mtrktting end Oiunbation Profitable marketing of our many end diverse products also require* moarch and devewpment Change* in cue* tome* needs end buying habit* oeeid continuously end am coming at an ever latter pecs. Th* aim of our research effort i* to enncipat* th* direction of such changes. Our deveiepment effort seeks to make our marketing method* immedieteiv responsive to thorn. 2* How due 'it earned out it moat top*rent m th* operation of our largo network of Comoany-oeareted branches itry ing consumer*, painting contractor*, datltra. and largo commercial and mOuemei paint vttrt. Th* opening, reloca tion and eapeneum of aonne** in that* branches ar the result of continuing morket atudiae These iugn*i not only where changes should bo mad*, but else wn*t specific action* should bo taken. On* particularly sensitive and eonemcnv* mammanc of markat retaarah t the area of eonaumar pemt tale* our Corpoteto Marketing Advisory Council. This * selected group of silo* rapraeoniaovet end branch menogera from aH pan* ef the country, who regularly report on consumer preference* end competitive challenge# m their ernes of operairon. Thu Council i* a ferule source cf suggestion* for new products end changes in earning product*, a* well a* market developments and morehandiwng trend*. In themere apseMined tegmenta of our buemsee. markat analyaia is a continuing function of setts management. Staff-developed computer technique* aid in tint effort, providina pm-point information on mduam* in which customers and potential customer* are engaged. This permn* rapid evatuedofl of changing industry trends and thee relationship the specific preduct ncodc ot customera end potential cusramera. 0007-SWP-035019 0007-SWP-000116439 Advcniatng pragramc and tcchmouae am aiao auPiect 10 continuing mMeroh. The >i reflected m the ahift m emonan in low of our indmtntl edvtrtieing and the chingat in media now bang taatad m certain oonaumcr market*. ftwaW in ACanaptmeaf InfemtHan lanwM Accurate. up-to-the-minute inteimedon on ovary aapoei or ooomMno ia aaiamul for management to function effectively. The information rongea overt broad ictctrum. including production achetfuling. coot central, equipment uhiiittion. coat tyatamo. inventory management return on invootmont rtudiee. internal profit projacnona and tfia andvaa and loracaadng of financial ncaOa. Thic Rat doaa not aafiauct tfia araaa in when infomiation la needed It ia offered only ea an mdlccoon of thaccopa of the effort Pivevotra ago. m onticipttion of the growing compdwty of informational nacda wa upgraded to the moat modem and laplniticatcd typo of eomputaia and attendant comrnumcationo evatomt. Thia inatabadon haa bean aypindad conaidarablv and now amende to ninatoan locaoonc with in tfw Company. Thta raauftad from raiaarch into tha naura of the inter, motion moat uaafui in the conduct of the buaaiaca and on tha forni tucb information altould toko. (aantplaa of wfiat haa came out of thweearah are many. Our Factory Invontory Management Program, for cacmcd. baa enabled ua to raduca invemonae markedly at coma loeatlonc; the branch inventory Management Fragrant Haa racuHcd in more balanced etoeka m the bnncfiaa aa mat wa are cow to give our branch cuitomcr improved eervieee. AOBRNIWnfr iHHRwn 108 QWOpMWra praQRInl H DW area of infwmeoan Hava biought nodaoabw gaina in production lavalllng. mora efficient uaa of aqwgmam improved production achoduhngand maiaaacurate macaura Dim n mum on nwonmni ipponOOi * Our raaaarah into waya to gathermfonnaoon more qwebly and accurately and m more uaafui form ongoing. Wo eapect thw effort rocononuo to improvo Sib quiliiy of kitetmtben on whioh monagamant ecciaionc are haaad frampfN in Ferronnaf People make our Company They mdta it go. They make t grow. Honeo. many of tha moat baatc concama of tha buemaaa canter around amploycca: how id attract ana moovoto thorn: how to hotp them develop the* caotbiinieo to they can taka on the mcraaaad ratpenviOiiiaaa which Company growth gcncrotcc. Bccauac thcat arc queetiana for whtch the cncwcra era ever-changing. wo era cpphwnp continuing raccoreh affort to them. That effort rangaa tram in-dacth atudy of raennting programs to continuing racppraiacl of poraonnai policicc and practice*. to regular racvducbon of paining, orgcnnaoonal and companaaopn approcehac. The mutefaceted approach hae brought about advancement m ail of thaaaanae. Typically, now in-iervica acminan have been davalopad to upgrade tha akild of aupcrwcofi end mcnegara all laved. Other m-eervtce programa have bean initiated and atiangthanad In euch divergent araaa aa finance and prod uct information. Tha highly meeeathd Tuition Aid Program commute to provide mtoractad empioyeac the opponuniry to aherpan died duke end broaden thaa hointone through further academic atudy. Nacondy wa completed an "Employee Ocanion Anaiyait Survey" daaignart to prawdofurther irraght into aapaaoona of employeaa engaged in the marketing ingmarn of our buemaaa. Tha anowera have tuggeated a number of waya to give ampieyack a graatar aanaa of idantifieation with coraerota goad. The tamo ipmt of inguay > dtdma to tha deveioomam of a coporata-wida "Invantory of Emptayaa SkiMa." Through thia wa aapact be kept mora fully aware of employee eapaMkiaa to wa may continue out long eetaOhened practiea of promoting from within the Company whonawor the w fcaaibla. Wa ora confident that our commitment to innovation wiM benefit every phaie of out butmoa* and fetter tha growth to whan tha orgi-nation it dedicated. a 0007-SWP-035020 n 0007-SWP-000116440 THE SHERWIN-WILLIAMS COMPANY OF CANADA. LIMITED AND SUBSIDIARIES *pmntin Canadian Ooilan ConsoNdatsd Balsncs Shwt CANADIAN Antt CunmAtmt Caah..................................................................................... Trada aeeouma racttoabto u m aHowaneaa far douMM oeeaum of 4153400 m 1*5* arid II53400 in 155* . Othf icoouw iictwiMi ............................... , *----r--tT"r ** r*1-------r' ~rrr fr npi or flm-in.lWI-qw mmriod) or martut: PMahad mareiiaridiaa ........................................ . . Wad* to praaam mm mawriala and o^pHii. . . . Prepaid eapanaaa.................. .... RaaovanMo hwome taaaa ........................... . . Toul Currant Aaaata /wmwMWMwB^flwttS^^Awtf *d*r^^5P MUMP Common aharoa a# The Camr Whim Load Campari? of Canada Landed (50% --nod) atcaai.................. rTWpWnJt rWE MV I^RPMa^^an Ml D^HH *46 OOH* M................................................................... .... yj|0|f|gg MBoNnsvyMlBQuipVMflt >** LiAbilitiM. ^WuHaIaPiSS I/IJMpMISSUIWnp Capital Stock, Owtoptobar*. Trade aaoooma and Surplus lofdMaataofa 1941 a 54474 IM2.41|6jo0 44*4340 2414407 11.2ft.247 524442 272.544 20.431421 200.000 44414 244414 407.442 4*14775 4100473 4.404744 4437.344 4254134*0 4 4.024707 3J44N3 7*47** 44742* -0- 41204*4 1.7242*3 5*1400 194* 4 57.175 7.545.313 3340*5 41510*3 2.446.454 11047.73* 514644 20408.140 200400 4142* -----26433 807.442 4611431 7.77164* MltlM ~4.674.i44 gljElgS 8 14*403* 4.43437* 444.4** 303411 11473 -0-- 40*7.4** 14*4*52 533400 I i MMNt 1400,000 224.7V 104*4552 224.720 - 1H.474.T4 ..i s t o b t 14,251.5*4 aatjujao &m i i.iaaamoCadaaanaiaoiauiTiiiii i.a an areiOmaa Dam Wwn> *"- ndr 11.700044 m aaaam at Ota aamdm daaaT*a tanaWa aamnaaM.no dim* at am* nftmwa n we aamam nmmaaai aapm 31. IMP i 24 0007-SWP-035021 0007-SWP-000116441 i SUBSIDIARY Statements of Consoldatad Income and Earned Surplus Yst tnds* August 31 I860 1888 Incam* Not solas............................................................... 142.830.420 80.000 *41.071.212 50.000 Oadgctieno Oom ineomo: Co* of products aoM.................................... Si Nm^ (RMVll MVl MMiiiiiihd ttpuiNi Cofvt^mtf (nd fowwMflt ^muoft cost . . im*oit*8P8nso............................ Caserns' ramunaianwi........................... Ineanw Mm Incomo Texas ifMfeCSOnR*l^Mr tOStUm^^BUr f*l8o^p* rSir*lal H^^^H*0P0O. .O.s.eeasaslsaaa 1t.MQ.1t0 27.000236 12800118 82087* *22381 118.388 923,738 *1,121,212 28.883.288 12816.240 $66,070 388.480 88.833 3P.820.Mt 1,800.2*3 18.000 lass oMf'PtwUd in prior v im ..................................... 78.000 818.000 Mil 578,736 il 782.2*3 I I Pr BnOmTvIfBlaPIlmM*a* IWm d8*vapmP8a*MeHJHa*^tPioVfVi iens*eiBk00i*d*^a^W* jVOMHmawbV h miiiMWbe ii^jwwa E*m*d Bilaipp il bopliHiiiio ri yoor.............................................. I10.87B.B7* II10.2S1.BS1 i Surplus |ioMw nvpn Sisim* ivBwh i uimhpP *................. .... * t 878,730 7822*3 II mWi pniPwi 11.188.612 ' 11.0*278* ftotarrad >7.00 par ah**...................................................... MUOO 2*2200 Common II .00 par iliaM...................................................... 224720 --224222 *60.820 *68,820 B*l*ioo a aw* olyaor *10680.002 til0.876.67* Accountants' Report Tadte IharaMMam Tna Ottawa-***-- CeatQmy * CaaaOai Ua*eO Wa vise* i--meO Ota aamaMaHO Manaa mass * Tka SWwta-Ofl*-- faaiaav *1 > mat Papa*81,1860 and a* m*o aa*asa * I avail mm * 8* as--**p w* Maur afOiai iWdvMai laanaaO aaaWan at The Msneat. i * *88*H1. i860 *80*a mum 1 **8 aaaaandns a---- apoM aa ' `^wsaS' 27 0007-SWP-035022 0007-SWP-000116442 Divisions, Subsidiaries and Licensees Acme Quality P*wts Osshlar Products Divisions '.V W .awronca 4 Company The 0*0 IrottlM Company Hogan Patni Products John Lucas ft Comoany The Martm-Senour Company Consolidated Subsidiaries Maumae Chemical Company The Osborn Manufacturing Company OomMtlc: Foreign: RubbeigetCcmpany . Inc. Campania Sharwm-Williams. S. A. do C. V. Mims City. 0. P. Mauco Rubbaiaet Compony (Canada). Limned Gnvenhurtt. Omano. Canada Varfflsbnafcan ASlaton N. V. The Shsfwin-WiHiama Co. of Puerto Also. me. San Juan. Puerto Rico The Sharwm. WWama Co. (Waal Indies}. Lid. Kinpnai>.Jmpaa Shanam-WWiame (luropa) Socials Anonyms SetaMB A Ludwig und Comp.. Pair* Tochnthor Mnaan Om Pienhenbesp. Otssap Verfchomia Safas N. V. Swat, Nodtsdanps Unconsolidated Subsidiaries Sharwtn-WiUiama do fraail S/A Timas a Vsmues........................................ Sao Paula Smart The Sherwm-WISiame Company of Canada. Limited....................................Monacal. Canada Tho Canada Palm Company. Imbed................... .............................. Tha (. Mania Company. Umnad.......................................................... Toronta < Tho Lows Srothars Company. Lannad.................. Toronta Canada The Mamn-Sanaut Company, UmbiB . . . ........................... .... MawwaL Canada The Wmmpog Paint B Qiaos Compony. Limbed ....... i Tha Conor Whits Load Company of Canada Umnad (SOU earned uncsnaaHdaiad).......................................................... Licensees Abtlabolsget Syd-fornfae (Sweden) `Astral Sts' Oo Pointuroa Vsmsa at Inersa 0'lmpnmario (Prance) Donald Maaphatsen group Ltd. (tnptmd) >aWM --1---- rtfMlMferol w S. A. (Bolivia) `MontscatmiCdiaoaIpA(Italy) ' Nippon Paint Company. LML (Japan) Pinturaa Andina S. A. (Chda) Shorwai-Wllamo Argentina Industrie y CommsaW. S. A. Shanom-WWIama da Cslambia 8. A. Sharroin.W*ama del Sounder. S. A. enpseMivMPie rs-n--N---n--ir--- . mu Phanmn-wiPama impppinsa ma Sharodn-WSPamodeCanaroAmotiaaSi Sharorin-WWaana lapsra'i. S. A. Shaiwin-WPIama VanaaaMna C. A. Pintuns Cvar. Lida (ChPe) *Cad Coatings 20 0007-SWP-035023 0007-SWP-000116443 Products and Plants Principal Products Puna . fnimoli V*.--urt* -icauari Sw"-t > )*riai Soaoaitiac Zinc Pigmanta Lithopor* unaaad 0)1 Matal Containo* Induttnal Powar-Dnvan Sruihas Sanum Charmed* Colorad Pigment* Coat Tar and Petroiaum intarmadiataa StrontiumCharmed* Foundry MaciMwy and Equipment Faatietdaa Organic Chdrmcda Titanum Qiosdo Pigment* . TaxrUa Printing and Oyaing Coiora Paint Inahaa flollata and Olhar Painting ctaaaoriaa Domestic Plants Anaheim. Cahfomta Aahtabuta. Ohio (two) Sadtord Height*. Ohio Sound Brook. Ntw Jariay Chicago. iMinoia (tow) Cincinnati. Ohio Ctavaiand. Oimo (thrsa) CoffayviSo. Kanaaa Crafiaid. Maryland Dayton. Ohio DaaMar. Ohio Oaaoh. Michigan Elgin. iHinoia Garland. Taaaa AviifmedsMv^iswabs Snvl^wci tIiwma ciuf GraanaBoro. North Carolina Handation. Kantucky Hubbard. Ohio Coe Angatas California Monow. Georgia Newark. NawJaraay Nm Vortt Naw Vent Oddand. California Pioaburgh. Pannaytvania San Laandrob CaMomia Forgign Plants Seyemon. Puerto Aleo Prankanbsg. Qarmany Oravanhurat Canada Masco City, Moaico Montreal. Canada (two) Sao PautauSratt Toronto. Canada Vancouver. Canada Winnipeg, Cancdc Zaiat, Watharianda Printing Division North Oknatad. Ohio Rgstweh Contor Chicago. IHinoia Tho A.W. Stsudol Tschnietl Contgr Chicago. IKnot* 0007--SWP--035024 0007-SWP-000116444 * THE SHERWIN-WILLIAMS COMPANY dotiRdadin '** f. EXECUTIVE OFFICES 5i .a.-ue.N. .v..C'a*a ana.C* e-uvs Directors E. Calm Baldwin *nv*K* md CWf OMc k John N Bauman On-w "* CWtncw OMcar WMaMamrCaraaraaan KaWt S. Sanaon fimiM hn Atedam OiMM fhamiaai Cwaemnn wh* hwkandaMaaar AC*. WMNvB. Boyar HaanM* SM CMnw Richard 8-BuB mv ^fwipe Wiliam C. Fin* if<iVi<Va ^Ma|AmMBMB Hobart d. Hmmf MM AlMM John A. HiM *aa Lift B Caauahy C*. Officers E. Coin Baldwin hiHWWCatlAlMW OUHtr Wahw 0 Spancar limawWahwW Manty 0. Laatar John 5. Bnacnw tgaiai lihww BL^^^^aa Richard 0. Bui y 0mmmand Ctmtmm ^hraaaar at ACarnatmd Wiliam C. Nna TRANSW AGENTS t m cmmiaa rum Ctwaami. OaaMand. Ofte REGISTRAR* Canudi Unman tana at Oartland. Clararand. Oma 30 Allan C. -toimat hnntt -aaa Oat CacklarA haiwt *ijomaa Vietat Hell. Jr. headed Tha Caadrae nn A *uMar Ca Haney D. Laatar CaMa lima flba^aaa_ARaRM John S. Biaaeon BewarMaa AawdMT RobartW. RamadaM CAantan aal CAat Aaaaava OMIar raa laat Ohm Oaa Camaany WHat 0. Bpanear Cmauam Mm AaaMrnr John 0. Wright Chatman aUCWIwaM OMhnr TRW Ida. Arthur W. Staudal hman ftfuamr AithurB. Holton I^R M^W Bka^Aaaa Sidney Un( waa Aaamant taura Owati VtofilA. HoWa JamoaftCaia naaawar Alan O.Chtlda SaaMoy and Banararaenaar trank H. Clark AaaMaar Raaawwand Aanaaant Bantam Tiuai Camaany. Haw To*. N. V Marfan Qirwtmy TUiar Cawijany at Mm YaW. Dm Yam. N. Y * 0007-SWP-035025 0007-SWP-000116445 " ** * .* .4- I 0007--SWP-035026 0007-SWP-000116446 0007-SWP-035027 0007-SWP-000116447 Tha SharwJn-WHIlama Company 10lAaiPM<AMnwN.W,,Ct<MiMltf.(yil94411S 0007-SWP-03502B 0007-SWP-000116448