SUMMARY OF Operating SegmentsPaint StoresConsumerAutomotiveFinishesInternationalCoatingsPRODUCTS SOLDPaints, stains, caulks, applicators,wallcoverings,floorcoverings, spray equipmentand related productsMARKETS SERVEDDo-It-Yourselfers, professionalpainting contractors,home builders, propertymanagers, architects, interiordesigners, industrial,marine, aviation, flooringand original equipmentmanufacturer (OEM)product finishesMAJOR BRANDS SOLD<strong>Sherwin</strong>-<strong>Williams</strong> ® , Con-Lux ® , Old Quaker ,Mercury ® , Brod Dugan ® ,Mautz ® , Pro-Line ® , Sea-Guard ® , ArmorSeal ® ,Kem ® Hi-Temp, Cook ,Sher-Wood ® , Powdura ® ,Polane ® and Kem Aqua ®OUTLETS2,573 <strong>Sherwin</strong>-<strong>Williams</strong>stores in North AmericaPRODUCTS SOLDBranded, private label andlicensed brand paints,stains, varnishes, industrialproducts, wood finishingproducts, applicators, corrosioninhibitors, aerosolsand related productsMARKETS SERVEDDo-It-Yourselfers, professionalpainting contractorsand industrial maintenanceMAJOR BRANDS SOLDDutch Boy ® , Krylon ® ,Minwax ® , Cuprinol ® ,Thompson’s ® Water Seal ® ,Formby’s ® , Red Devil ® ,Pratt & Lambert ® , MartinSenour ® , H&C , WhiteLightning ® , Dupli-Color ®and Rubberset ®OUTLETSLeading mass merchandisers,home centers, independentpaint dealers, hardwarestores, automotiveretailers and industrial distributorsin North AmericaPaint StoresConsumerAutomotive FinishesPRODUCTS SOLDHigh performance interiorand exterior coatings forthe automotive, fleet andheavy truck markets, aswell as thousands of associatedproductsMARKETS SERVEDAutomotive jobbers,wholesale distributors,collision repair facilities,dealerships, fleet ownersand refinishers, productionshops, body buildersand original equipmentmanufacturersMAJOR BRANDS SOLD<strong>Sherwin</strong>-<strong>Williams</strong> ® , MartinSenour ® , Western ® ,Lazzuril , Excelo , Baco and ScottWarren OUTLETS174 company-operatedbranches in the UnitedStates, Canada, Jamaicaand Chile, and other operationsin the United States,Canada, Mexico, Brazil,Jamaica, Chile and ItalyPRODUCTS SOLDArchitectural paints,stains, varnishes, industrialmaintenance products,aerosols, product finishes,wood finishing productsand related productsMARKETS SERVEDDo-It-Yourselfers, professionalpainting contractors,independent dealers,industrial maintenanceand OEM product finishesMAJOR BRANDS SOLD<strong>Sherwin</strong>-<strong>Williams</strong> ® , DutchBoy ® , Krylon ® , Kem-Tone ® , Martin Senour ® ,Pratt & Lambert ® ,Minwax ® , Sumare ,Ronseal , Globo ,Pulverlack ® , Colorgin ,Andina , Tri-Flow ,Thompson’s ® Water Seal ®and Marson OUTLETSDistribution in more than20 countries throughwholly-owned subsidiaries,joint ventures andlicensees of technology,trademarks and tradenames,including 52 company-operatedarchitecturaland industrial stores inChile and BrazilInternational CoatingsNet External Sales By Operating Segment2
Financial Highlights(thousands of dollars except per share data)<strong>2001</strong> 2000 1999Net sales $5,066,005 $5,211,624 $5,003,837Net income before impairment (1) 263,158 309,654 303,860Less: Impairment of long-lived assets, net of tax 293,628Net income 263,158 16,026 303,860Per share:Net income before impairment - diluted (1) 1.68 1.90 1.80Less: Impairment of long-lived assets, net of tax 1.80Net income - diluted 1.68 .10 1.80Net income - basic 1.69 .10 1.81Cash dividends .58 .54 .48Book value 9.66 9.22 10.25Average shares outstanding (thousands) 155,557 161,912 167,925Return on sales (1) 5.2% 5.9% 6.1%Return on net operating assets employed (ronae) (2) 27.5% 29.8% 29.8%Return on beginning shareholders’ equity (1) 17.9% 18.2% 17.7%Earnings before interest, taxes, depreciation and amortization (ebitda) (1) $ 627,174 $ 717,503 $ 707,030Free cash flow (3) $ 388,090 $ 242,442 $ 271,941Total debt to capitalization 29.3% 33.5% 30.4%Interest coverage (1) 8.8x 9.0x 9.0xCurrent ratio 1.3 1.4 1.4Total technical expenditures (4) $ 86,222 $ 83,627 $ 78,1896000500040003000322041334881Sales(millions of dollars)4934500452125066200010000199519961997199819992000<strong>2001</strong>2.01.51.18Net income per share - diluted (1)1.901.801.501.571.331.681.00.50.0199519961997199819992000<strong>2001</strong>(1) Based on net income before the impairment of long-lived assets charge in 2000, net of tax. See Note 2, page 35.(2) Based on income before taxes, and the impairment of long-lived assets charge in 2000, divided by average net accountsreceivable, inventories, property, plant and equipment and accounts payable.(3) Net operating cash less capital expenditures and payments of cash dividends.(4) See Note 1, page 34, for a description of technical expenditures.3