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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
COMMISSION FILE NUMBER 1-4851
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THE SHERWIN-WILLIAMS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO
(State or other jurisdiction of incorporation or organization)
34-0526850
(I.R.S. Employer Identification No.)
101 PROSPECT AVENUE, N.W., CLEVELAND, OHIO
(Address of principal executive offices)
44115-1075
(Zip Code)
(216) 566-2000
Registrant's telephone number, including area code
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Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
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9.875% Debentures due 2016 New York Stock Exchange
Common Stock, Par Value $1.00 New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
At January 31, 1999, 170,621,431 shares of common stock were outstanding,
net of treasury shares. The aggregate market value of such voting stock held by
non-affiliates on January 31, 1999 was $4,338,266,811.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 1998 ("1998 Annual Report") are incorporated by reference into
Parts I, II and IV of this report.
Portions of the Proxy Statement for the 1999 Annual Meeting of Shareholders
("Proxy Statement") are incorporated by reference into Part III of this report.
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
The Sherwin-Williams Company, founded in 1866 and incorporated in 1884, is
engaged in the manufacture, distribution and sale of coatings and related
products to professional, industrial, commercial and retail customers primarily
in North and South America. As used in this report, the terms
"Sherwin-Williams", "Company" and "Registrant" mean The Sherwin-Williams Company
and its consolidated subsidiaries unless the context indicates otherwise.
BASIS OF REPORTABLE SEGMENTS
Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures
about Segments of an Enterprise and Related Information", was adopted by the
Company effective December 31, 1998. SFAS No. 131 requires an enterprise to
report segment information utilizing an approach referred to as the "management
approach" which is based on reporting segment information in the same way that
management internally organizes its business for assessing performance and
making decisions regarding allocation of resources. One of the characteristics
identified by SFAS No. 131 that must be considered in the determination of
reportable segments is the regular review of performance by the enterprise's
chief operating decision maker. The Company's chief operating decision maker has
been identified as the Chief Executive Officer because he has final authority
over performance assessment and resource allocation decisions. Each reportable
segment identified by the Company meets the SFAS No. 131 characteristic for the
management approach as well as other SFAS No. 131 characteristics of earning
revenue and incurring expenses in carrying out a business activity and making
discrete financial information about the business component available to the
chief operating decision maker.
Because of the global, diverse operations of the Company, the chief
operating decision maker regularly receives discrete financial information about
each operating segment as well as a significant amount of additional financial
information about certain aggregated divisions, operating units and subsidiaries
of the Company. The chief operating decision maker uses all such financial
information for performance assessment and resource allocation decisions. In
accordance with the objective of SFAS No. 131, the Company has determined that
it is organized as three reportable segments -- Paint Stores, Coatings and
Other -- each described in further detail below. Factors considered in
determining the three operating segments of the Company include the nature of
the business activity, existence of managers responsible for the operating
activities and information presented to the Board of Directors. Information
about net sales, operating profits and assets attributable to the United States
and to all foreign consolidated subsidiaries can be found on pages 10 and 11 of
the 1998 Annual Report, which is incorporated herein by reference. Revenues and
operating profits attributable to any individual country outside the United
States are not material.
In addition to the three operating segments, the Company and certain
consolidated subsidiaries have corporate headquarters which are not considered
an operating segment. Corporate expenses include administrative expenses of the
headquarters sites, interest expense which is unrelated to real estate leasing
activities, investment income, certain foreign currency transaction losses
related to dollar-denominated debt and other financing activities, certain
provisions for disposition and environmental-related matters, and other expenses
which are not directly associated with any operating segment. Corporate assets
consist primarily of cash, investments, deferred pension assets and headquarters
property, plant and equipment. These Corporate expenses and assets reconcile
operating segment data to total consolidated income before income taxes,
identifiable assets, capital expenditures and depreciation.
The Company evaluates the performance of operating segments and allocates
resources based on profit or loss from operations before income taxes, excluding
Corporate expenses and financing gains and losses. Intersegment transfers are
accounted for at values comparable to normal unaffiliated customer sales.
Operating profit includes realized profit on intersegment transfers. The
accounting policies of the reportable segments are the same as those described
in Note 1 -- Significant Accounting Policies on page 24 of the 1998 Annual
Report, which is incorporated herein by reference. The adoption of SFAS No. 131
did not change the composition of the
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reportable segments of the Company. Therefore, no restatements of comparative
information for earlier periods is required to reflect the current presentation.
PAINT STORES SEGMENT
The Paint Stores Segment consists of four geographically divided
divisions -- Eastern, Southeastern, Mid Western and South Western -- each having
the same business activity of selling identical national and similar regional
products through company-operated specialty paint stores to the same types of
customers. The Segment consisted of 2,254 stores in the United States, Canada
and Puerto Rico on December 31, 1998. A map on the inside back cover of the 1998
Annual Report shows the approximate geographical separation of each division and
the number of paint stores in each state, province and Puerto Rico.
The Paint Stores Segment is the exclusive North American marketer and
seller of Sherwin-Williams(R) branded architectural coatings, industrial
maintenance and marine products, industrial original equipment manufacturer
(OEM) product finishes and related items produced by the Coatings Segment. In
addition, this Segment markets and sells Con-Lux(R), Old Quaker(TM),
Mercury(TM), Brod Dugan(TM), Pro-Line(R), SeaGuard(R), JetGlo(R), AcryGlo(R),
other control-branded coatings, and related products also manufactured by the
Coatings Segment. Complementary coatings and associated products manufactured by
third parties are sold through the Paint Stores Segment to complete its product
offering.
Paint, applicators, wallcoverings, floorcoverings, spray equipment and
associated products are marketed and sold by store personnel and direct sales
representatives to the do-it-yourself customer, professional painting
contractor, home builder, property manager, industrial maintenance and marine
customer, aviation market, OEM customer, and product finishing job shop
customer. The loss of any single customer would not have a material adverse
effect on the business of this Segment.
During 1998, the Segment opened 59 net new stores, remodeled 67 and
relocated 40. There were 39 net new stores opened in 1997 and 23 in 1996. Many
new national and regional architectural products, industrial maintenance and
marine products and industrial OEM product finishes were introduced by this
Segment in 1998. This Segment was successful in obtaining thousands of new
customers and contracts in 1998.
The stores were technologically enhanced in 1998 with the completion of a
satellite network which electronically links all stores. Stores now have the
capability of sharing perpetual inventory information for better product
availability and consistent pricing for national and regional customers. Over
$27.9 million in capital expenditures were made in 1998 by the Paint Stores
Segment to open new stores, remodel existing facilities, purchase productivity
improving equipment and complete the satellite network project.
In 1999, the Segment plans to open approximately 65 net new stores,
continue to introduce new technologically leading products and capture further
enhancements from the satellite network project. Upgraded computers will improve
the color matching and tinting processes, improving customer service. Expanded
use of the Internet at the Segment's new web site, www.sherwin-williams.com,
will enable customers and vendors to get information and conduct business
electronically. A new architectural product under the brand Duration(TM) will be
introduced in the spring of 1999. This will be the Paint Stores Segment's finest
exterior latex house paint and will provide exceptional durability and
protection against peeling and cracking. To further extend the WoodClassics(TM)
interior wood finishing system, a low odor, fast drying, waterborne varnish is
being added to this line. Two additional primers are being added to the highly
successful Preprite(TM) family of primers. Low Temp 35(TM) primer and caulk will
also be added and provide extensions to the leading low temperature technology
product line. In all, over 50 new products will be introduced into the market
this year by this Segment.
A new advertising campaign has been developed and will begin airing in the
second quarter of 1999. This campaign capitalizes on the strong brand name
recognition and quality perception inherent in the Sherwin-Williams name. It
will focus on the store rather than any individual product, be more attractive
to female customers who are the primary paint buying decision makers, and be
skewed to a younger audience who comprise the highest percentage of
do-it-yourself customers. The campaign theme is "Ask How, Ask Now, Ask Sherwin-
Williams". This advertising campaign continues the successful "Ask
Sherwin-Williams" theme introduced 16 years ago.
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COATINGS SEGMENT
The Coatings Segment consists of domestic operating units and foreign
operations. Each domestic and foreign operating unit manufactures, distributes
and sells coatings and other similar products to the same types of customers. At
December 31, 1998, the Segment consisted of a network of 119 company-operated
wholesale automotive branches in the United States and 144 foreign stores and
branches in Canada, Mexico, Jamaica, Chile and Brazil. A map on the inside back
cover of the 1998 Annual Report shows the geographical demographics and the
number of stores and branches in each state, province or country.
The Coatings Segment develops, manufactures and distributes architectural
paint, stains, varnishes, industrial maintenance products, product finishes,
marine coatings, aviation coatings, wood finishing products, paint applicators,
motor vehicle finish, refinish and touch-up products, corrosion inhibitors, and
paint-related products worldwide. In addition, a wide variety of cleaning
products and custom, industrial and automotive aerosols are filled, packaged,
distributed and sold by this Segment throughout the world. The Coatings Segment
employs a wide variety of trade names and trademarks worldwide in pursuit of its
business. Sherwin-Williams(R), Dutch Boy(R), Krylon(R), Minwax(R), Ronseal(TM),
Cuprinol(R), Thompson's(R), Formby's(R), Red Devil(R), Kem-Tone(R), Martin
Senour(R), Pratt & Lambert(R), H&C(R), White Lightning(R), Western(R),
Dupli-Color(R), Rust Tough(R), Rubberset(R), Sprayon(R), Moly-White(R),
Cello(R), Tri-Flow(TM), Colorgin(TM), Globo(TM), Andina(TM), Lazzuril(TM),
Excelo(TM), and Marson(TM) are some of the trade names and trademarks that have
high national and international customer recognition and collectively contribute
significantly to the internal and external sales of the Coatings Segment.
In North America, Sherwin-Williams(R) branded and other control-branded
architectural coatings, stains, varnishes, industrial maintenance products, wood
finishing products, product finishes, marine coatings, aviation coatings, paint
applicators, aerosols, adhesives and related products are manufactured solely
for the Paint Stores Segment. Approximately 35 percent of the total sales of the
Coatings Segment in 1998 represented products sold through the Paint Stores
Segment. Sherwin-Williams(R) branded and other control-branded automotive finish
and refinish products are distributed throughout North America solely by the
Coatings Segment through its network of wholesale automotive branches.
Some other branded and private label coatings, stains, varnishes, wood
finishing products, motor vehicle finish, refinish and touch-up products, paint
applicators, aerosols and related products are manufactured for and distributed
through many of the leading regional, national and international mass
merchandisers, home centers, independent dealers, automotive chains, automotive
jobbers, industrial maintenance distributors, independent jobbers, wholesale
distributors, automotive body shops, automotive dealerships, fleet owners and
refinishers, production shops, body builders and manufacturers requiring a
factory-applied finished product. Sales and marketing of these branded and
private label products is performed by a direct sales staff. The products
distributed through these third party customers are intended for purchase by the
ultimate end-user of the product, such as the do-it-yourself customer,
professional painter, contractor, and industrial and commercial maintenance
account. Cleaning products and custom, industrial and automotive aerosols
produced by this Segment are distributed through the homecare products,
institutional, insecticide and industrial markets.
Outside North America, coatings, motor vehicle refinish products, paint
applicators, aerosols, adhesives and related products are manufactured under a
number of different brands and sold through various marketing channels. The
Coatings Segment manufactures, distributes and sells its products through
wholly-owned subsidiaries, joint ventures and licensees of technology,
trademarks and trade names. At December 31, 1998, this Segment included 23
foreign wholly-owned subsidiaries in 12 foreign countries, three foreign joint
ventures and 16 licensing agreements in 15 foreign countries. The majority of
the sales from licensees and subsidiaries is in South America, the Segment's
most important international market.
The Coatings Segment has sales to certain customers that, individually, may
be a significant portion of an operating unit's revenues. However, the loss of
any single customer would not have a material adverse effect on the overall
business of the Segment. All of the Company's technical expenditures occurred in
the Coatings Segment. A brief description of technical expenditures and amounts
spent for research and development appear on page 24 of the 1998 Annual Report,
which is incorporated herein by reference. Most of the Company's capital
expenditures related to ongoing environmental compliance measures are incurred
by this Segment.
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During 1998, the Coatings Segment's operations and administration was
affected by the consolidation of the Consumer Brands, Coatings, Transportation
Services and Diversified Brands Divisions. The consolidation was precipitated
from customer expectations for improved service, the necessity to lower
operating costs, the need to invest in additional advertising/promotional
support for high market share brands and the need for additional field service
personnel to support the customers' business. The majority of the consolidation
effort was completed by year-end and a new sales and marketing organization has
been established to provide proper focus to the key brands as well as this
Segment's large, diverse customer base. The Coatings Segment performed below
expectations in 1998 in its Dutch Boy(R) and Thompsons(R) retail brands although
certain other brands and markets performed well. The Minwax(R) brand met
expectations and the automotive products sold directly to body shop customers
exceeded expectations. The automotive topcoat business expanded its original
equipment manufacturer presence, particularly in the in-mold coatings and the
interior coatings business, with the Hydro-One(TM) and Hydro-Swade(TM) product
lines. Quality and service improvements in the product finishes business unit
translated into improved financial results for 1998.
The business climate throughout South America was difficult in 1998 causing
business rationalization of certain operations to occur. Consolidation of
production from facilities acquired in 1997 to previously existing manufacturing
facilities occurred in Chile. A resin plant for emulsions was put into operation
at the Sao Paulo, Brazil manufacturing site to reduce the costs of selected raw
materials. Portions of other Brazilian manufacturing facilities were closed
temporarily to contain production costs until the economies begin to improve and
previous production capacity needs are once again required. In spite of the
harsh economic climate, most foreign operations managed to increase market share
and solidify their market positions.
In 1999, new products will be introduced to improve market penetration at
our core customers. A new line of waterbase interior stains and an aerosol stain
will be introduced under the Minwax(R) brand. Automotive aerosol products will
be added such as truck bed, hi-heat and engine enamel products. The Segment will
increase advertising and promotional support for the Thompson's(R) brand wood
protector, stains and toners. All paint category products under the Dutch Boy(R)
private label and licensed brands will receive added support and commitment from
the field service/merchandising organization. The Coatings Segment plans to
improve its penetration and support at certain customers with increased service
and plans to pursue new distribution with focused direct advertising initiatives
of brands and product categories. The Segment will continue to pursue and
develop new international business in order to better compete on a global basis
and to continue to grow market share. Genesis(TM) high solids urethane systems
for heavy truck and bus application for original equipment manufacturers will be
launched during the second quarter of 1999.
Internationally in 1999, the less-than-favorable economic conditions in
South America are expected to continue, making cost reductions a focal point of
the business. Selling prices will be increased where it makes sense and where
our competitive position will not be compromised. Additionally, new product
introductions, repositioning of product lines, entry into new markets and a
broadening of distribution will be necessary to achieve planned goals. Further
reduction of manufacturing and administrative costs in Brazil and Chile is
necessary. Consolidation of manufacturing and administrative functions of
acquired businesses in these two countries will help reduce costs.
OTHER SEGMENT
The Other Segment is responsible for the acquisition, development, leasing
and management of properties for use by the Company and others, generally within
the United States. Obtaining real estate in the proper location, at the
appropriate cost, is a critical component for achieving the desired operating
success, particularly for paint stores and distribution service centers. Sales
are represented by external leasing revenue and intersegment transfers which are
accounted for at values comparable to normal unaffiliated customer leasing
rates.
At the end of 1998, there were 221 retail properties owned or leased by
this Segment, representing over 1,859,000 square feet of space, of which 218
locations were leased to the Paint Stores Segment. Retail properties which are
conducive to the sale of paint and associated products and where external rental
opportunities can be profitably operated are maintained by this Segment. Such
properties include 135 freestanding buildings, for
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exclusive use by the Paint Stores Segment, and 86 multi-tenant properties.
Multi-tenant properties are usually smaller "strip" shopping centers with
adequate parking and, generally, the paint store will be located at the end of
the shopping area for the most convenient access. The paint store must be easily
accessible to professional painters and contractors with sufficient access to
pickup and delivery areas. In 1999, the Segment does not anticipate significant
growth in the number of owned retail properties needed by the Paint Stores
Segment. The occupancy rate for external retail space was 80.5 percent at
December 31, 1998.
In addition to the Segment's retail properties, at the end of 1998 there
were 22 owned and 2 leased non-retail properties consisting of office buildings,
distribution service centers, idle manufacturing facilities and vacant land.
Occasionally, such properties are acquired or developed to provide the lowest
cost alternative for expansion of distribution operations by the Coatings
Segment. Locations that have been utilized profitably in the past which can no
longer contribute to the Company's future plans are offered for sale or lease.
If a location is no longer in usable condition, all buildings on the property
are razed and the vacant land is then offered for sale or lease. During 1998,
buildings on two such properties were completely demolished and the first phase
of a demolition plan was completed on a third property. Sales agreements are
currently being pursued for three facilities with anticipated sale dates in
1999. Gains and losses from the sale of property is not a significant operating
factor utilized by the chief operating decision maker in determining the
performance of this Segment. Additional facilities will become part of the Other
Segment's assets in 1999 as manufacturing ceases. The occupancy rate for
external non-retail office space was 91.2 percent at December 31, 1998.
RAW MATERIALS AND PRODUCTS PURCHASED FOR RESALE
Raw materials and fuel supplies are generally available from various
sources in sufficient quantities that the Coatings Segment does not anticipate
any significant sourcing problems during 1999. There are sufficient suppliers of
each product purchased for resale that the Paint Stores Segment and the Coatings
Segment do not anticipate any significant sourcing problems during 1999.
SEASONALITY
The majority of the sales for the Paint Stores Segment and Coatings Segment
traditionally occur during the second and third quarters. There is no
significant seasonality in sales for the Other Segment.
TRADEMARKS AND TRADE NAMES
Customer recognition of trademarks and trade names collectively contribute
significantly to the sales of the Company. The Paint Stores Segment is
identified with names such as Sherwin-Williams(R), SuperPaint(R), Pro Mar(R),
EverClean(R), Glas-Clad(R), Perma-Clad(R), Old Quaker(TM), Pro-Line(R),
SeaGuard(R), JetGlo(R), AcryGlo(R), Con-Lux(R), Mercury(TM) and Brod-Dugan(TM).
The Coatings Segment employs a variety of trade names and trademarks in
marketing its products, such as Sherwin-Williams(R), Thompson's(R), Dutch
Boy(R), Kem-Tone(R), Martin Senour(R), Cuprinol(R), Pratt & Lambert(R),
Globo(TM), Andina(TM), H&C(R), Lazzuril(TM), Excelo(TM), Western(R),
Colorgin(TM), Rubberset(R), Dupli-Color(R), Rust Tough(R), Sprayon(R),
Minwax(R), White Lightning(R), Krylon(R), Cello(R), Moly-White(R), Formby's(R),
Red Devil(R), Tri-Flow(TM), Marson(TM) and Ronseal(TM).
PATENTS
Although patents and licenses are not of material importance to the
business of the Company as a whole, the international operations of the Coatings
Segment derive a portion of their income from the license of technology,
trademarks and trade names to foreign companies.
BACKLOG AND PRODUCTIVE CAPACITY
Backlog orders are not significant in the business of any Segment.
Sufficient productive capacity currently exists to fulfill the Company's needs
for paint and coatings products through 1999.
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COMPETITION
The Company experiences competition from many local, regional, national and
international competitors of various sizes in the manufacture, distribution and
sale of its coatings and related products. The Company is a leading manufacturer
and retailer of coatings and related products to professional, industrial,
commercial and retail customers, however, the Company's competitive position
varies for its different products and markets. In the Paint Stores Segment,
competitors include other paint and wallpaper stores, mass merchandisers, home
centers, independent hardware stores, hardware chains and manufacturer-operated
direct outlets. Product quality, service and price determine the competitive
advantage for this Segment. In the Coatings Segment, competitors include
manufacturers and distributors of branded and private labeled coatings products.
Technology, product quality, product innovation, breadth of product line,
technical expertise, distribution, service and price are the key competitive
factors for this Segment.
EMPLOYEES
The Company employed 24,822 persons at December 31, 1998.
ENVIRONMENTAL COMPLIANCE
For additional information regarding environmental matters, see pages 13
and 14 of the 1998 Annual Report under the caption entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Notes 1, 4 and 9 of the Notes to Consolidated Financial Statements on pages 24,
26 and 29, respectively, of the 1998 Annual Report, which is incorporated herein
by reference.
SEGMENT INFORMATION AND FOREIGN OPERATIONS
For additional information regarding the Company's reportable segments and
foreign operations, see the financial table and the notes thereto on pages 10
and 11 of the 1998 Annual Report, which is incorporated herein by reference.
Additional information regarding risks attendant to foreign operations is set
forth on pages 14 and 16 of the 1998 Annual Report under the caption entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which is incorporated herein by reference.
FORWARD-LOOKING STATEMENTS
Certain statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations", "Reportable Segment Information"
and elsewhere in this report constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements are based upon
management's expectations and beliefs concerning future events and discuss,
among other things, anticipated future performance and revenues, expected growth
and future business plans. Words and phrases such as "expects", "anticipates",
"believes", "will likely result", "will continue", "plans to" and similar
expressions are intended to identify forward-looking statements. Readers are
cautioned not to place undue reliance on any forward-looking statements.
Forward-looking statements are necessarily subject to risks, uncertainties and
other factors, many of which are outside the control of the Company, that could
cause actual results to differ materially from such statements. These
uncertainties and other factors include such things as: general business
conditions, strengths of retail economies and the growth in the coatings
industry; competitive factors, including pricing pressures and product
innovation and quality; raw material availability and pricing; changes in the
Company's relationships with customers and suppliers; the ability of the Company
to successfully integrate recent and future acquisitions into its existing
operations; changes in general domestic economic conditions such as inflation
rates, interest rates and tax rates; risks and uncertainties associated with the
Company's expansion into foreign markets, including inflation rates, recessions,
foreign currency exchange rates, foreign investment and repatriation
restrictions and other external economic and political factors; increasingly
stringent domestic and foreign governmental regulations including those
affecting the environment; inherent uncertainties involved in assessing the
Company's potential liability for environmental remediation-related activities;
the impact of the Year 2000; the outcome of pending and future litigation and
other claims; and unusual weather conditions.
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Any forward-looking statement speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information, future events
or otherwise.
ITEM 2. DESCRIPTION OF PROPERTY
The Company's corporate headquarters are located in Cleveland, Ohio. The
Company's principal manufacturing and distribution facilities operated by the
Coatings Segment are located as set forth below. The Company believes its
manufacturing and distribution facilities are well-maintained and are suitable
and adequate, and have sufficient productive capacity, to meet its current
needs.
Manufacturing facilities
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Arlington, Texas Owned Memphis, Tennessee Leased
Baltimore, Maryland Owned Memphis, Tennessee Owned
Bedford Heights, Ohio Owned Morrow, Georgia Owned
Chicago, Illinois Owned Olive Branch, Mississippi Owned
Clifton, New Jersey Owned Ontario, California Leased
Coffeyville, Kansas Owned Orlando, Florida Owned
Columbus, Ohio Owned Richmond, Kentucky Owned
Crisfield, Maryland Leased Rockford, Illinois Leased
Deshler, Ohio Owned San Diego, California Leased
Edison, New Jersey Owned Spartanburg, South Carolina Leased
Elk Grove, Illinois Owned Victorville, California Owned
Emeryville, California Owned Wichita, Kansas Owned
Ennis, Texas Leased Arica, Chile Owned
Flora, Illinois Owned Buenos Aires, Argentina Owned
Fort Wayne, Indiana Leased Fort Erie, Ontario, Canada Owned
Fountain Inn, South Carolina Owned Kingston, Jamaica Owned
Garland, Texas Owned Mexico City, Mexico Owned
Greensboro, North Carolina (2) Owned Quilpue, Chile Leased
Harrisburg, Pennsylvania Leased Santiago, Chile (2) Owned
Havre de Grace, Maryland Owned Sao Paulo, Brazil (5) Owned
Holland, Michigan Owned Sheffield, England Owned
Lawrenceville, Georgia Owned Texcocco, Mexico Owned
Distribution facilities
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Bedford Heights, Ohio Leased Buenos Aires, Argentina Owned
Buford, Georgia Leased Kingston, Jamaica Owned
Cranberry Run, Maryland Leased Mexico City, Mexico Owned
Dayton Valley, Nevada Owned Moncton, Nova Scotia, Canada Leased
Effingham, Illinois Leased Montreal, Quebec, Canada Owned
Fredericksburg, Pennsylvania Owned San Juan, Puerto Rico Leased
Indianapolis, Indiana Leased Santiago, Chile Leased
Reno, Nevada Leased Santiago, Chile (2) Owned
Reno, Nevada Owned Sao Paulo, Brazil (5) Owned
Richmond, Kentucky Owned Scarborough, Ontario, Canada Owned
Waco, Texas Leased Vaughan, Ontario, Canada Leased
Winter Haven, Florida Owned Zaragoza, Mexico Owned
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In addition, the Coatings Segment included 119 company-operated wholesale
automotive branches, of which one was owned, in the United States and 144 leased
company-operated stores and branches in Canada, Mexico, Chile, Brazil and
Jamaica at December 31, 1998.
The operations of the Paint Stores Segment included 2,254 company-operated
stores in the United States, Canada and Puerto Rico at December 31, 1998. All
stores are leased locations with 218 being leased from the Company's Other
Segment. The Paint Stores Segment is divided into four separate operating
divisions, each of which is responsible for the stores located within its
geographical region. At the end of 1998, the Mid Western Division operated 628
stores primarily located in the midwestern and upper west coast states and
western Canada, the Eastern Division operated 468 stores along the upper east
coast and New England states and eastern Canada, the Southeastern Division
operated 603 stores principally covering the lower east and gulf coast states
and Puerto Rico, and the South Western Division operated 555 stores in the
plains and the lower west coast states. The Paint Stores Segment opened 59 net
new stores in 1998 and relocated 40.
All property within the Other Segment is owned by the Company except for
four land leases and two warehouse leases.
For additional information regarding real property leases, see Note 8 of
the Notes to Consolidated Financial Statements on page 29 of the 1998 Annual
Report, which is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
For information regarding environmental matters and other legal
proceedings, see pages 13 and 14 of the 1998 Annual Report under the caption
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Notes 1, 4 and 9 of the Notes to Consolidated
Financial Statements on pages 24, 26 and 29, respectively, of the 1998 Annual
Report, which is incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders
during the fourth quarter of 1998.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following is information regarding the Executive Officers at February
28, 1999.
Name Age Present Position
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John G. Breen 64 Chairman and Chief Executive Officer, Director
Thomas A. Commes 56 President and Chief Operating Officer, Director
Larry J. Pitorak 52 Senior Vice President -- Finance, Treasurer and
Chief Financial Officer
John L. Ault 53 Vice President -- Corporate Controller
Christopher M. Connor 42 President, Paint Stores Group
Michael A. Galasso 51 President & General Manager, Automotive
Division
Thomas E. Hopkins 41 Vice President -- Human Resources
Conway G. Ivy 57 Vice President -- Corporate Planning and
Development
Joseph M. Scaminace 45 President, Consumer Group
Louis E. Stellato 48 Vice President, General Counsel and Secretary
Mr. Breen has served as Chairman and Chief Executive Officer since June
1986 and has served as a Director since April 1979.
Mr. Commes has served as President and Chief Operating Officer since June
1986 and has served as a Director since April 1980. Mr. Commes intends to retire
on March 16, 1999.
8
10
Mr. Pitorak has served as Senior Vice President -- Finance, Treasurer and
Chief Financial Officer since April 1992.
Mr. Ault has served as Vice President -- Corporate Controller since January
1987.
Mr. Connor has served as President, Paint Stores Group since August 1997
prior to which he served as President & General Manager, Diversified Brands
Division commencing April 1994. From September 1992 to April 1994, Mr. Connor
served as Senior Vice President -- Marketing, Paint Stores Group.
Mr. Galasso has served as President & General Manager, Automotive Division
since June 1997 prior to which he served as Vice President &
Director -- Operations, Automotive Division commencing May 1992.
Mr. Hopkins has served as Vice President -- Human Resources since August
1997 prior to which he served as Vice President -- Human Resources, Paint Stores
Group commencing February 1996. From November 1989 to February 1996, Mr. Hopkins
served as Director of Human Resources, Paint Stores Group.
Mr. Ivy has served as Vice President -- Corporate Planning and Development
since April 1992.
Mr. Scaminace has served as President, Consumer Group since July 1998 prior
to which he served as President & General Manager, Coatings Division commencing
June 1997. From April 1994 to June 1997, Mr. Scaminace served as President &
General Manager, Automotive Division prior to which he served as President &
General Manager, Diversified Brands Division commencing September 1985.
Mr. Stellato has served as Vice President, General Counsel and Secretary
since July 1991.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Sherwin-Williams common stock is listed on the New York Stock Exchange and
traded under the symbol SHW. The number of shareholders of record at January 31,
1999 was 11,858. Information regarding market prices and dividend information
with respect to Sherwin-Williams common stock is set forth on page 35 of the
1998 Annual Report under the caption entitled "Quarterly Stock Prices and
Dividends," which is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
(Millions of Dollars, except per share data)
1998 1997 1996(a) 1995(b) 1994(b)
- ---------------------------------------------------------------------------------
OPERATIONS
Net Sales $4,934 $4,881 $ 4,133 $ 3,274 $ 3,100
Net Income 273 261 229 201 187
FINANCIAL POSITION
Total assets $4,065 $4,036 $ 2,995 $ 2,141 $ 1,962
Long-term debt 730 844 143 24 20
PER COMMON SHARE DATA
Net income -- basic(c) $ 1.58 $ 1.51 $ 1.34 $ 1.18 $ 1.08
Net income -- diluted(c) 1.57 1.50 1.33 1.17 1.07
Cash dividends .45 .40 .35 .32 .28
(a) Pre-acquisition amounts for Thompson Minwax Holding Corp., acquired on
January 7, 1997 using the purchase method of accounting, are not included.
Therefore, amounts are not comparable to 1997 and beyond. See Note 2 of the
Notes to Consolidated Financial Statements on page 25 of the 1998 Annual
Report, which is incorporated herein by reference, for further acquisition
and merger information.
(b) Pre-acquisition amounts for Thompson Minwax Holding Corp. and Pratt &
Lambert United, Inc., acquired on January 7, 1997 and January 10, 1996,
respectively, using the purchase method of accounting, are not included.
Therefore, amounts are not comparable to 1996 and beyond. See Note 2 of the
Notes to
9
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Consolidated Financial Statements on page 25 of the 1998 Annual Report,
which is incorporated herein by reference, for further acquisition and
merger information.
(c) Amounts reflect adoption of Statement of Financial Accounting Standards No.
128, "Earnings Per Share", effective December 31, 1997. All amounts shown
for periods prior to adoption have been restated. See Note 1 and Note 15 of
the Notes to Consolidated Financial Statements on pages 24 and 33,
respectively, of the 1998 Annual Report, which are incorporated herein by
reference, for further per share information.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is set forth on pages 12 through 17
of the 1998 Annual Report under the caption entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations," which is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The information required by this item is set forth on page 14 of the 1998
Annual Report under the caption entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and in Note 1 of the Notes to
Consolidated Financial Statements on page 24 of the 1998 Annual Report, which is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is set forth on pages 20 through 33 of
the 1998 Annual Report under the captions entitled "Statements of Consolidated
Income," "Consolidated Balance Sheets," "Statements of Consolidated Cash Flows,"
"Statements of Consolidated Shareholders' Equity," and "Notes to Consolidated
Financial Statements," which is incorporated herein by reference. Unaudited
quarterly data is set forth in Note 14 of the Notes to Consolidated Financial
Statements on pages 32 and 33 of the 1998 Annual Report, which is incorporated
herein by reference. The Report of Independent Auditors is set forth on page 12
of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding Directors is set forth under the caption entitled
"Election of Directors" in the Proxy Statement, which is incorporated herein by
reference.
The information regarding Executive Officers is set forth under the caption
entitled "Executive Officers of the Registrant" in Part I of this report, which
is incorporated herein by reference.
The information regarding certain significant employees is set forth under
the captions entitled "Corporate Officers" and "Operating Managers" in the Proxy
Statement, which is incorporated herein by reference.
The information regarding compliance with Section 16 of the Securities
Exchange Act of 1934 is set forth under the caption entitled "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Proxy Statement, which is
incorporated herein by reference.
10
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ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is set forth on pages 7 through 17 of
the Proxy Statement and under the captions entitled "Compensation of Directors"
and "Compensation Committee Interlocks and Insider Participation" in the Proxy
Statement, which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this item is set forth under the captions
entitled "Security Ownership of Management" and "Security Ownership of Certain
Beneficial Owners" in the Proxy Statement, which is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements
The following consolidated financial statements of the Company
included in the 1998 Annual Report are incorporated by reference in
Item 8. The Report of Independent Auditors is set forth on page 12
of this report.
(i) Statements of Consolidated Income for the years ended
December 31, 1998, 1997 and 1996 (page 20 of the 1998 Annual
Report)
(ii) Consolidated Balance Sheets at December 31, 1998, 1997 and
1996 (page 21 of the 1998 Annual Report)
(iii) Statements of Consolidated Cash Flows for the years ended
December 31, 1998, 1997 and 1996 (page 22 of the 1998 Annual
Report)
(iv) Statements of Consolidated Shareholders' Equity for the
years ended December 31, 1998, 1997 and 1996 (page 23 of the
1998 Annual Report)
(v) Notes to Consolidated Financial Statements for the years
ended December 31, 1998, 1997 and 1996 (pages 24 through 33
of the 1998 Annual Report)
(2) Financial Statement Schedule
Schedule No. II -- Valuation and Qualifying Accounts and
Reserves for the years ended December 31, 1998, 1997 and
1996 is set forth on page 12 of this report. All other
schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange
Commission are not required under the related instructions
or are inapplicable and therefore have been omitted.
(3) Exhibits
See the Exhibit Index on page 15 of this report.
(b) Reports on Form 8-K -- The Company filed a Current Report on Form 8-K, dated
November 6, 1998, reporting under Item 5 that T.A. Commes, President and
Chief Operating Officer and a member of the Board of Directors of the
Company, intends to retire in the spring of 1999.
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REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
The Sherwin-Williams Company
Cleveland, Ohio
We have audited the accompanying consolidated balance sheets of The
Sherwin-Williams Company and subsidiaries as of December 31, 1998, 1997 and
1996, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1998. Our audits also included the financial statement schedule listed in the
Index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
The Sherwin-Williams Company and subsidiaries at December 31, 1998, 1997 and
1996, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
/s/ Ernst & Young LLP
Cleveland, Ohio
January 25, 1999
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(SCHEDULE II)
Changes in the allowance for doubtful accounts are as follows:
1998 1997 1996
- --------------------------------------------------------------------------------------------
Beginning balance $ 26,891 $ 22,631 $ 15,154
Bad debt expense 15,176 15,741 19,095
Net uncollectible accounts written off (16,674) (11,481) (11,618)
- --------------------------------------------------------------------------------------------
Ending balance $ 25,393 $ 26,891 $ 22,631
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Activity related to other asset reserves:
1998 1997 1996
- --------------------------------------------------------------------------------------------
Beginning balance $153,580 $111,921 $ 83,897
Charges to expense 52,103 49,499 28,838
Other additions (deductions) (2,077) (7,840) (814)
- --------------------------------------------------------------------------------------------
Ending balance $203,606 $153,580 $111,921
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Charges to expense consist primarily of amortization of goodwill and
intangibles. Other additions (deductions) consist primarily of actual costs
incurred and balance sheet reclassifications and, in 1997, removal of
fully-amortized items.
12
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 10th day of
March, 1999.
THE SHERWIN-WILLIAMS COMPANY
By: /s/ L. E. STELLATO
---------------------------------
L. E. Stellato, Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities
indicated on March 10, 1999.
* J. G. BREEN Chairman and Chief Executive Officer,
- ----------------------------------------------------------- Director (Principal Executive Officer)
J. G. Breen
* T. A. COMMES President and Chief Operating Officer,
- ----------------------------------------------------------- Director
T. A. Commes
* L. J. PITORAK Senior Vice President -- Finance,
- ----------------------------------------------------------- Treasurer and Chief Financial Officer
L. J. Pitorak (Principal Financial Officer)
* J. L. AULT Vice President -- Corporate Controller
- ----------------------------------------------------------- (Principal Accounting Officer)
J. L. Ault
* J. M. BIGGAR Director
- -----------------------------------------------------------
J. M. Biggar
* J. C. BOLAND Director
- -----------------------------------------------------------
J. C. Boland
* D. E. COLLINS Director
- -----------------------------------------------------------
D. E. Collins
* D. E. EVANS Director
- -----------------------------------------------------------
D. E. Evans
* R. W. MAHONEY Director
- -----------------------------------------------------------
R. W. Mahoney
* W. G. MITCHELL Director
- -----------------------------------------------------------
W. G. Mitchell
* A. M. MIXON, III Director
- -----------------------------------------------------------
A. M. Mixon, III
* C. E. MOLL Director
- -----------------------------------------------------------
C. E. Moll
13
15
* H. O. PETRAUSKAS Director
- -----------------------------------------------------------
H. O. Petrauskas
* R. K. SMUCKER Director
- -----------------------------------------------------------
R. K. Smucker
* The undersigned, by signing his name hereto, does sign this report on behalf
of the designated Officers and Directors of The Sherwin-Williams Company
pursuant to Powers of Attorney executed on behalf of each such Officer and
Director.
By: /s/ L. E. STELLATO March 10, 1999
- -----------------------------------------------------------
L. E. Stellato, Attorney-in-fact
14
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EXHIBIT INDEX
3. (a) Amended Articles of Incorporation, as amended April 25,
1997, filed as Exhibit 3(i) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31,
1997, and incorporated herein by reference.
(b) Regulations of the Company, as amended, dated April 27,
1988, filed as Exhibit 4(b) to Post-Effective Amendment No.
1, dated April 29, 1988, to Form S-8 Registration Statement
Number 2-91401, and incorporated herein by reference.
4. (a) Indenture between the Company and Chemical Bank, as Trustee,
dated as of February 1, 1996, filed as Exhibit 4(a) to Form
S-3 Registration Statement 333-01093, dated February 20,
1996, and incorporated herein by reference.
(b) 364-Day Revolving Credit Agreement, dated January 3, 1997,
between the Company, Texas Commerce Bank National
Association, as Administrative Agent, The Chase Manhattan
Bank, as Competitive Advance Facility Agent, and the
financial institutions which are signatories thereto, filed
as Exhibit 99.2 to Form 8-K, dated January 7, 1997, and
incorporated herein by reference.
(c) Amendment No. 2 to 364-Day Revolving Credit Agreement, dated
January 1, 1999, between the Company, Texas Commerce Bank
National Association, as Administrative Agent, The Chase
Manhattan Bank, as Competitive Advance Facility Agent, and
the financial institutions which are signatories thereto
(filed herewith).
(d) Five Year Revolving Credit Agreement, dated January 3, 1997,
between the Company, Texas Commerce Bank National
Association, as Administrative Agent, The Chase Manhattan
Bank, as Competitive Advance Facility Agent, and the
financial institutions which are signatories thereto, filed
as Exhibit 99.1 to Form 8-K, dated January 7, 1997, and
incorporated herein by reference.
(e) Amendment No. 2 to Five Year Revolving Credit Agreement,
dated January 3, 1999, between the Company, Texas Commerce
Bank National Association, as Administrative Agent, The
Chase Manhattan Bank, as Competitive Advance Facility Agent,
and the financial institutions which are signatories thereto
(filed herewith).
(f) Indenture between Sherwin-Williams Development Corporation,
as issuer, the Company, as guarantor, and Harris Trust and
Savings Bank, as Trustee, dated June 15, 1986, filed as
Exhibit 4(b) to Form S-3 Registration Statement Number
33-6626, dated June 20, 1986, and incorporated herein by
reference.
(g) Rights Agreement between the Company and The Bank of New
York, as successor Rights Agent to KeyBank National
Association, dated April 23, 1997, filed as Exhibit 1 to
Form 8-A, dated April 24, 1997, and incorporated herein by
reference.
10. *(a) Form of Director and Corporate Officer Indemnity Agreement
filed as Exhibit 10(a) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, and
incorporated herein by reference.
*(b) Employment Agreements with J.G. Breen, T.A. Commes and C.G.
Ivy filed as Exhibit 28(b) to Form S-3 Registration
Statement Number 33-22705, dated June 24, 1988, and
incorporated herein by reference.
*(c) Amendments to Employment Agreements with J.G. Breen, T.A.
Commes and C.G. Ivy filed as Exhibit 10(c) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, and incorporated herein by reference.
*(d) Agreement (covenant not to compete), dated November 13,
1999, between the Company and T.A. Commes (filed herewith).
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*(e) Forms of Severance Pay Agreements, filed as Exhibit 10(b) to
the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997, and incorporated
herein by reference.
*(f) Schedule of Certain Executive Officers who are Parties to
the Severance Pay Agreements in the forms referred to in
Exhibit 10(e) filed as Exhibit 10 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September
30, 1998, and incorporated herein by reference.
*(g) The Sherwin-Williams Company Deferred Compensation Savings
Plan filed as Exhibit 10(d) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
and incorporated herein by reference.
*(h) Amendment No. 1 to The Sherwin-Williams Company Deferred
Compensation Savings Plan filed as Exhibit 10(f) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, and incorporated herein by
reference.
*(i) The Sherwin-Williams Company Key Management Deferred
Compensation Plan (1994 Amendment and Restatement) filed as
Exhibit 10(g) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, and
incorporated herein by reference.
*(j) Form of Executive Disability Income Plan filed as Exhibit
10(g) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and incorporated herein
by reference.
*(k) Form of Executive Life Insurance Plan filed as Exhibit 10(h)
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991, and incorporated herein by
reference.
*(l) Form of The Sherwin-Williams Company Management Compensation
Program filed as Exhibit 10(l) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, and incorporated herein by reference.
*(m) The Sherwin-Williams Company 1994 Stock Plan, as amended and
restated in its entirety, effective April 23, 1997, filed as
Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1997, and
incorporated herein by reference.
*(n) The Sherwin-Williams Company 1997 Stock Plan for Nonemployee
Directors, dated April 23, 1997, filed as Exhibit 10(b) to
the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1997, and incorporated
herein by reference.
*(o) The Sherwin-Williams Company Director Deferred Fee Plan
(1997 Amendment and Restatement), dated April 23, 1997,
filed as Exhibit 10(a) to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1997, and
incorporated herein by reference.
*(p) Split-Dollar Agreement, dated March 25, 1996, among the
Company, National City Bank and John G. and Mary Breen filed
as Exhibit 10(q) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, and
incorporated herein by reference.
*(q) The Sherwin-Williams Company Estate Protection Plan Trust,
dated November 15, 1996, between the Company and National
City Bank filed as Exhibit 10(r) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1996, and incorporated herein by reference.
13. Portions of the 1998 Annual Report to Shareholders
incorporated herein by reference (filed herewith).
21. Subsidiaries (filed herewith).
23. Consent of Ernst & Young LLP, Independent Auditors (filed
herewith).
24. Powers of Attorney (filed herewith).
27. Financial Data Schedule.
*Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
16