2001 Annual Report - Investor Relations - Sherwin Williams

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CONSOLIDATED BALANCE SHEETS(Thousands of Dollars)December 31,2001 2000 1999AssetsCurrent assets:Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 118,814 $ 2,896 $ 18,623Accounts receivable, less allowance . . . . . . . . . . . . . . . . . . . . . . . 523,278 594,162 606,046Inventories:Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530,916 597,472 591,912Work in process and raw materials . . . . . . . . . . . . . . . . . . . . . 101,847 106,255 111,476632,763 703,727 703,388Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,672 104,662 108,899Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,418 146,092 141,143Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,506,945 1,551,539 1,578,099Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 672,397 705,547 1,039,555Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247,489 259,085 274,924Deferred pension assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393,587 364,351 334,094Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,819 147,769 94,464Property, plant and equipment:Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,447 65,546 62,517Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,418 431,524 431,802Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,024,701 980,560 913,346Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,070 52,779 40,2621,564,636 1,530,409 1,447,927Less allowances for depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 891,948 808,030 736,251672,688 722,379 711,676Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,627,925 $ 3,750,670 $ 4,032,812Liabilities and Shareholders’ EquityCurrent liabilities:Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 106,854Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 454,410 448,799 $ 458,919Compensation and taxes withheld . . . . . . . . . . . . . . . . . . . . . . . . 141,640 137,211 140,934Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 111,852 12,920 119,949Other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,854 334,891 335,691Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,597 74,568 85,396Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,141,353 1,115,243 1,140,889Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503,517 620,675 621,957Postretirement benefits other than pensions . . . . . . . . . . . . . . . . . . . 209,963 208,673 206,591Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285,328 334,215 364,843Shareholders’ equity:Preferred stock - convertible, participating, no par value:168,305 shares outstanding at December 31, 2001 . . . . . . . . . . 168,305Unearned ESOP compensation . . . . . . . . . . . . . . . . . . . . . . . . . . (168,305)Common stock - $1.00 par value: 153,978,356, 159,558,335and 165,663,601 shares outstanding at December 31, 2001,2000 and 1999, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . 208,031 206,848 206,309Other capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,643 158,650 150,887Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,120,927 1,948,753 2,020,851Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (837,284) (678,778) (533,891)Cumulative other comprehensive loss . . . . . . . . . . . . . . . . . . . . . (204,553) (163,609) (145,624)Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,487,764 1,471,864 1,698,532Total Liabilities and Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . $ 3,627,925 $ 3,750,670 $ 4,032,812See notes to consolidated financial statements.30
STATEMENTS OF CONSOLIDATED CASH FLOWS(Thousands of Dollars)Year ended December 31,2001 2000 1999Operating ActivitiesNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 263,158 $ 16,026 $ 303,860Adjustments to reconcile net income to net operating cash:Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . 352,040Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,187 108,906 105,350Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,677 (26,886) 21,170Provisions for qualified exit costs . . . . . . . . . . . . . . . . . . . . . . . . 5,302 3,304 6,331Impairment charges-net on assets held for disposal . . . . . . . . . . . 6,402 4,719 1,309Provisions for environmental-related matters . . . . . . . . . . . . . . . . 5,609 16,334Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . 38,911 51,124 50,394Defined benefit pension plans net credit . . . . . . . . . . . . . . . . . . . . (29,366) (29,629) (28,083)Income tax effect of ESOP on other capital . . . . . . . . . . . . . . . . . 22,902Net increase in postretirement liability . . . . . . . . . . . . . . . . . . . . . 2,990 3,682 3,428Foreign currency related losses . . . . . . . . . . . . . . . . . . . . . . . . . . 2,277 2,115 3,333Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,101 9,980 15,546Change in working capital accounts:Decrease (increase) in accounts receivable . . . . . . . . . . . . . . . . . . 61,497 21,264 (28,212)Decrease (increase) in inventories . . . . . . . . . . . . . . . . . . . . . . . . 72,132 6,188 (24,420)Increase (decrease) in accounts payable . . . . . . . . . . . . . . . . . . . . 10,233 (21,790) 60,487Increase (decrease) in accrued taxes . . . . . . . . . . . . . . . . . . . . . . . 31,468 (11,744) 6,019Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,035 (22,645) 3,650Unusual tax-related payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (65,677)Increase in long-term accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . 419 10,005 15,715Payments for environmental - related matters . . . . . . . . . . . . . . . . . (17,565) (9,105) (15,808)Payments for qualified exit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,326) (6,173) (15,529)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,280 1,963 (13,808)Net operating cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561,646 463,344 487,066Investing ActivitiesCapital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82,572) (132,778) (134,171)Acquisitions of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,162) (60,108) (15,427)Increase in other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,614) (51,163) (23,435)Proceeds from sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,866 7,670 9,409Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,590 (16,659) (298)Net investing cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90,892) (253,038) (163,922)Financing ActivitiesNet (decrease) increase in short-term borrowings . . . . . . . . . . . . . . . (106,854) 106,854Increase in long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,487Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,210) (116,344) (98,982)Payments of cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90,984) (88,124) (80,954)Proceeds from stock options exercised . . . . . . . . . . . . . . . . . . . . . . . 17,798 6,419 7,107Treasury stock purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (157,088) (146,857) (145,806)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (786) 3,898 (2,225)Net financing cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (354,124) (225,667) (320,860)Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . (712) (366) (2,794)Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . 115,918 (15,727) (510)Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . 2,896 18,623 19,133Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . $ 118,814 $ 2,896 $ 18,623Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 129,435 $ 156,514 $ 153,890Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,769 64,400 61,868See notes to consolidated financial statements.31
Page 1: The Sherwin-Williams Company2001 AN
Page 4 and 5: SUMMARY OF Operating SegmentsPaint
Page 6 and 7: Christopher M. ConnorChairman and C
Page 8 and 9: letter to shareholdersnegative year
Page 10 and 11: Alfred LewisCity Manager, Paint Sto
Page 12 and 13: Fred KoneckiCase PackerChicago, Ill
Page 15 and 16: Automotive finishes segmentThe Sher
Page 17 and 18: International Coatings segmentShare
Page 19 and 20: TITUSVILLE,FLA. -➛A shortage of A
Page 21 and 22: SUBSIDIARIESForeignCoatings S.r.L.C
Page 23 and 24: Management’s Discussion and Analy
Page 25 and 26: MANAGEMENT’S DISCUSSION AND ANALY
Page 31: STATEMENTS OF CONSOLIDATED INCOME(T
Page 35 and 36: NOTES TO CONSOLIDATED FINANCIAL STA
Page 49 and 50: Directors, Officers, Operating Pres

2001 Annual Report - Investor Relations - Sherwin Williams

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